Mubasher: The chemicals industry in countries across the Arabian Gulf has recorded $77 billion in revenues in 2016, which is 3% lower than figures recorded in 2015, according to the secretary general of the Gulf Petrochemicals and Chemicals Association (GPCA).
This decline is mainly due to the fluctuation in international oil prices, Kuwait News Agency (KUNA) reported on Monday, citing Dr. Abdulwahab Al-Sadoun as saying.
Chemical industries in the GCC contributed around $43.8 billion to the six members’ economies last year, representing around 29% of manufacturing industries, the top official revealed.
Despite the decline in revenues, chemical production rose 8.5% to 158.8 million tonnes in 2016.
In Saudi Arabia, the chemical industry's contribution rose to 27% in 2016 from 23% the year before, making the Kingdom the largest chemical producer in the GCC with over two-thirds of total GCC output, a report by the GPCA showed.
These statements come only a day after Saudi Aramco, the largest oil company in the world announced entering into a $20 billion joint venture with Saudi Basic Industries Corp (SABIC) to convert oil into chemicals.
“We are looking at chemicals as a very attractive market for diversification,” Reuters reported citing Aramco CEO Amin Nasser as saying on Monday.
Earlier this week, Saudi Aramco and SABIC signed a preliminary deal to build a petrochemicals complex with operations to begin in 2025.
Coming in second in terms of the GCC’s chemicals industry was the UAE, whose contribution represented 17%, followed by Qatar with 5%, Kuwait and Oman with 4% each, and tailing the list was Bahrain with only a 2% contribution.
Al-Sadoun further highlighted that the chemical industry provides over 152,000 jobs across the GCC.
Commenting on the introduction of the value-added tax (VAT), the top official said that its impact would be “very limited” on the petrochemical industry, which has managed to maintain its prices despite the strong competition in the production of shale oil.
