cover story - multivie · cover story 10 | plastics engineering | june 2011 | dubai at night....

cover STORY

10 | PLASTICS ENGINEERING | JUNE 2011 | www.4spe.org

Dubai at night. iStock Photo

By Jennifer Markarian

hile the governments of the Middle East have

been much in the political news in recent

months, the region’s plastics industry has also

been making news, with the start-up of additional petrochemical

capacity and announcements of even more to come, as well as the

buildup of additive supply and polymer parks and innovation

centers focused on downstream processors.

Wwww.4spe.org | JUNE 2011 | PLASTICS ENGINEERING | 11


The plastics industry in the MiddleEast can be said to have started in the1980s with the construction of petro-chemical plants designed to takeadvantage of readily available feed-stocks that are a byproduct of theregion’s oil production.Petrochemicals production in theregion has continued to expand, withseveral polyolefin producers startingup plant expansions in the last twoyears and more planned for the nearfuture. Market research and polyolefinconsulting firm Townsend Solutions(Houston, Texas, USA), which wasscheduled to publish its annual globalreport on polyethylene (PE) andpolypropylene (PP) last month, esti-mates that annual polymer produc-tion in the region will grow from justover 24 million tonnes in 2011 tonearly 34 million by 2016. Borouge, ajoint venture between the Abu DhabiNational Oil Company and Austria-based Borealis, for example, tripled itsannual polyolefin production in AbuDhabi to 2 million tonnes in 2010,and plans to introduce an additional2.5 million tonnes of annual capacityby mid-2014.In the last ten years, regional gov-

ernments have initiated and fundedgrowth of the plastics industry in anew direction—downstream of poly-mer production. The GulfPetrochemicals & ChemicalsAssociation (GPCA) says that cur-rently, out of 25 million tons of plas-tic resins produced in the Gulf annu-ally, close to 3 million are convertedinto finished and semifinished indus-trial and consumer plastic products,and that the Gulf Countries are eagerto see more local processing.Industrial centers such as the AbuDhabi Polymer Park in the UnitedArab Emirates (UAE) (http://poly-merspark.com) and the Rabigh

Conversion Industrial Park(www.rabighcip.com) in Saudi Arabiaare designed to attract foreigninvestors to build world-scale process-ing facilities that will market signifi-cant portions of their products tolocal markets. Both investment in theparks and local consumption ofdownstream products have beengrowing more slowly than hoped,partly because of the global recession,says David Anderson, business direc-tor of Global Polyolefin Solutions atTownsend Solutions. Osama AlZamil, general manager for corporatebusiness development of the Saudi-based Zamil Group Holding Co.,which owns several companies in thedownstream polymer processingindustry, agrees that growth on theconverting side has been slow. Fromhis perspective, part of the problem isthat the market for specialty polymersis not growing locally, and that localconverters don’t have access to mar-kets in Europe and North America.However, Anderson says, local con-sumption may come, noting,“Growth rates that had been down inthe last couple years are back up tobetween 8% and 9% for both PE andPP, and the potential is there.”Governments hope that growth in

plastics processing will stimulate eco-nomic growth in the region and cre-ate employment opportunities for thegrowing population of underem-ployed young people. One source, forexample, estimates that 65% of theemployable population in SaudiArabia is under 30 years old. Thislarge demographic group is itself fuel-ing consumption of plastics, as youngpeople increasingly purchase cellphones, computers, and many moreof the modern conveniences availablein the developed world. The MiddleEast is also seeing urbanization, as

young workers move from rural areasto the cities, seeking work in indus-try. Urbanization drives growth inhousing and all types of infrastruc-ture, causing growth in plastics appli-cations like vinyl window profiles,pipes, and wire and cable. Upcomingprojects such as stadiums and relatedinfrastructure for the 2022 FIFAWorld Cup tournament in Qatar willadd to demand.Infrastructure is, therefore, a major

growth market for polyolefins in theMiddle East. Packaging also continuesto be a key market, both for local useand for exporting to China and India.Borouge says advanced packaging is agrowing area for polyolefins, in appli-cations like coextruded and laminatedstructures, shrink films, and green-house films. Townsend’s Andersonnotes that while primary food packag-ing is not yet widely established, it isexpected to grow in the future asprocessors of packaged “convenience”foods come into the region.

Compounded and engineering resins beginning to grow

As more technical applications likepipe, wire and cable, and rotomold-ing take off, manufacturers are look-ing beyond polyolefin resins, whichhave been the staple here, to com-pounded and engineering resins.Saudi Basic Industries Corp. (SABIC)and ExxonMobil recently announcedthat their joint venture to producesynthetic rubber and thermoplasticspecialty polymers in Jubail IndustrialCity, Saudi Arabia, has progressed tothe front-end engineering and designstage. Industry watchers anticipategreater capacity for a broader range ofpolymers in the coming years to sup-ply the growing downstream industry.Growth in more technical applica-

tions is helping the region’s com-pounders and masterbatch suppliers.Clariant Masterbatches’ plants in SaudiArabia and Pakistan started up in 1993to produce Clariant’s range of additive,

color, and black and white master-batches. Luigi Taglioretti, head ofIMEA [India, Middle East, Africa] forClariant, comments, “Local plants andapplication labs allow Clariant to offer

both quick delivery times and customersupport. We can also source carrierresins locally to help minimize coloringcosts for customers.” Clariant says thatinfrastructure growth will continue tocreate unprecedented demand for colorand additive masterbatches. Polymerfibers for textiles, which have a longtradition in the region, also continue tobe a strong market.Other growing uses for master-

batches include consumer goods andpackaging, as locally made productsreplace those imported from outsidethe region, and eventually will sup-port exports as well, says Taglioretti.He notes that Clariant has alreadyincreased capacity in both its MiddleEastern plants in anticipation ofgrowing demand. Clariant is promot-ing its CESA UV stabilizer master-batches to protect plastics such ascables or stadium seats from the

www.4spe.org | JUNE 2011 | PLASTICS ENGINEERING | 13

Spectators welcome. Qatar expects to host the FIFA World Cup football (soccer) tournamentin 2022. Photo courtesy of Clariant.

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region’s harsh climate conditions.The company also sees growing use

of its pelletized anti-termite master-batches, which have many advantagesover widely used insecticidal oils.“Pelletized masterbatches reduceinventory costs because it is not nec-essary to maintain a stock of oil-treat-ed PVC along with the untreatedcompound. The masterbatches areeasy and safe to handle, reducing[concerns about] employee healthand pollution, and it is easy to con-trol the total amount of additive usedto meet specific customer needs,” saysTaglioretti.In June 2010, Cabot opened a

plant for manufacturing black mas-terbatch in the Jebel Ali Free Zone inDubai in the United Arab Emirates(UAE). Sean Keohane, vice presidentand general manager for Cabot’sPerformance Segment, explains,“Within the Middle East there is

already a strong demand for polyeth-ylene and polypropylene compoundsfor use in building infrastructure forwater supply, electricity, and telecom-munications projects. These are keyapplications for black masterbatch.This new site offers significant quali-ty and service advantages to MiddleEast producers who are globalexporters of compounds.”

Meeting the needs of the growing compounding industry

A growing compounding industry alsomeans growing use of additives, min-erals, and compounding equipment,and global suppliers are taking notice.Coperion, which recently signed anagreement to build the materials-han-dling and compounding system forBorouge’s upcoming polyolefin plantexpansion, also plans to form a jointventure with Saudi Arabian company

Golden Wing. The JV, CoperionMiddle East, will optimize customerservice with faster response times andreplacement parts for compoundingcustomers, as well as offering projectexecution, says Coperion.Testing-equipment supplier

Dynisco recently announced that itwould hire new managers in theMiddle East to work more closelywith existing distributors and cus-tomers, learning their requirementsand developing products and servicesthat meet the unique needs of theregion. “The market in the MiddleEast is not as well developed as thatin Europe, but the potential exists forvery strong growth over the next fiveto ten years, and we want to positionourselves to catch that wave of devel-opment,” says Lorenz Kirberich, salesmanager for Dynisco PlasticsSegment in Europe.Additives producer Chemtura’s

joint venture with the Saudi ZamilGroup Holding Company, GulfStabilizers Industries (GSI), beganproduction of antioxidants and addi-tive blends in 2001. In April thisyear, GSI started up an expansionthat increased phenolic and phos-phate antioxidant capacity to 6000tons and almost doubled the plant’scapacity for non-dust blends(NDB™) to 16,000 tons.Chemtura’s NDBs offer a solid “pow-der-free solution” that has a strongposition in hot Middle Eastern cli-mates, where powdered additives areparticularly difficult to handle. Thenon-dusting, free-flowing prill cancontain standard or custom blends ofup to seven additives, including phe-nolic and phosphate antioxidants andUV stabilizers, for example.Another product long favored by

many players in the polymer industryis liquid phosphite antioxidants, whichDow facility in Turkey is well-positioned to serve the Middle East.

are easy to handle and dose. Chemturais in the process of launching its newliquid phosphite antioxidant, Weston705. This new technology will also beused to make a series of differentphosphite and phenolic antioxidantblends. “These liquid blends will usethe feeding systems already in place forliquid phosphites, and will replaceboth the individual phosphite and thepowdered phenolic, offering signifi-cant benefits to polymer producers inthe Middle East,” says Peter Smith,president of Chemtura’s antioxidantand UV stabilizers business. GSI plansto add capacity for liquid antioxidantsas well as another 8000 tons/yr ofNDB blends in the near future.“Significant expansions of polyolefinfacilities, as well as expected growth inthe compounding industry, are driv-ing demand for these antioxidants,”comments Smith. He adds that

growth in the region’s compoundingindustry is also expected to drivedemand for other additives such asflame retardants.Dow Plastics Additives, which has

been involved in the Middle Easternmarket for over 30 years, opened amanufacturing facility in GebzeKocaeli, Turkey, in January 2009.The plant has a nameplate capacity of40,000 metric tonnes of acrylicimpact modifiers used in buildingand construction applications. Whileit primarily serves the growingdomestic Turkish market, it is alsogeographically well-positioned toserve Russia and the other CIS coun-tries as well as the Middle East. Theimpact modifiers produced in Gebzewere specifically developed to meetthe needs of customers in theseregions, and had been sourced fromDow’s plant in France before 2009.

“Most processors here are relativelynew and often lack sophisticated pro-cessing technology, so they need arobust additive that allows a broadprocessing window,” explains RobinMadgwick, business market managerfor Europe, Middle East, and Africa.He adds that although the end mar-kets are relatively new, consumershere demand top quality, and theDow impact modifier helps proces-sors meet that need. Because of highmarket demand for Dow’s product,the Gebze plant has already filled thecapacity of one of two productionlines, and is preparing to start up thesecond line in the near future, saysMadgwick. He notes that althoughthe Middle East building marketdoesn’t use much vinyl siding, it has alarge and growing market for PVCwindow profiles. Dow also sees grow-ing use of both tin-based and non-

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heavy-metal heat stabilizers, lubri-cants, and impact modifiers for arange of plastics applications includ-ing packaging.Additives supplier BASF is also

strengthening its presence in theMiddle East to support the growingregional polymer industry. BASF cur-rently supplies customer specificantioxidant blends (CSB) to theMiddle East through a tolling agree-ment with Saudi Arabia’s Astra

Polymer Compounding Co., Ltd., aswell as through other global produc-tion facilities. In October 2010,BASF announced plans to build aproduction facility for CSBs inBahrain, and is currently in the finalplanning stages. “With the new pro-duction facility, in addition to ourtolling agreement, we will be able tosupport the fast growth of our cus-tomers in the Middle East regionwhile providing the flexibility in sup-

ply and service speed that our cus-tomers require,” says Hans W.Reiners, president of BASF’s perform-ance chemicals division.Tokyo-based additives supplier

Adeka recently announced acquisitionof a 49% stake in Al GhurairAdditives (Dubai, UAE). Therenamed Adeka Al Ghurair Additivesis building a plant in Abu DhabiIndustrial City, scheduled for comple-

GPCA Recognizes InnovatorsIn April, the Gulf Petrochemicals & Chemicals Association (GPCA) recognized several companies and individualswith its inaugural GPCA Plastics Innovation Awards, sponsored by the Saudi firm Tasnee, at a ceremony in Dubai.Green Vision (Saudi Arabia) won the award in the Plastic Products category for an “eco-friendly turf system” that

was developed to replace real grass in regions affected by droughts.Zamil Plastics (Saudi Arabia) won the award in the Processing and Conversion category for “a holistic system to

convert non-plastic parts to plastic parts to improve cost position for customers.”Taghleef Industries (Dubai) won the award in the Plastics and Environment category for its BOPLA sustainable

packaging film, made of fully biodegradable polylactic acid (PLA) resin.Naser S. Alghamdi and Krishna Prasad Rajan, both from Yanbu Industrial College (Saudi Arabia), won the award

in the Talents in Plastics category for their development of completely biodegradable biocomposite materials based ondate-palm fiber.

At GPCA Plastics Innovation Awards, April 2011: Robert Rossing, R&D director, Green Vision; Walid Al-Hamad, general manager, TasneeMarketing; Adel Al-Ghassab, CEO, Zamil Plastics; Dr. Mohammed Naser S. Alghamdi, Yanbu Industrial College; Dr. Abdulwahab Al-Sadoun,secretary general , GPCA; Hamad Al Terkait, vice chairman, GPCA; Mohamed Al-Mady, chairman, GPCA; Rashed Saif Al-Ghurair, chairman,Taghleef Industries; and Dr. Moayyed I. Al-Qurtas, GPCA board member and chairman of the GPCA Plastics Committee.

Continued on page 19 ➔


tion this summer, to produce “one-pack” polymer additive blends. Adekapredicts that the Mideast polymeradditives market will grow 10% peryear from an estimated $120 million.

Research centers and education initiativesfeed innovation

The Gulf Petrochemicals &Chemicals Association, which hostedits annual Plastics Summit in Apriland distributed Plastics InnovationAwards recognizing excellence inplastics conversion (see sidebar), saysthat a culture of innovation is criticalfor the region’s growth. Key playersin the region are doing their part tofoster innovation by building

research facilities and encouragingplastics education. Borouge’sInnovation Centre in Abu Dhabi,due to be completed by the end of2011, will work with the Europeaninnovation centers of Borealis as wellas with local and international educa-tional institutions such as thePetroleum Institute of Abu Dhabi tofurther develop the competence ofpolymer science in the United ArabEmirates, says the company. SABICis building the Sabic PlasticsApplication Development Center atthe Riyadh Techno Valley researchcomplex inside the King SaudUniversity campus, and expects to beoperational in 2012. Recently thecompany announced an agreement

to build a Research and InnovationCenter at the King AbdullahUniversity of Science andTechnology. Saudi Arabian producersTasnee and Saudi InternationalPetrochemical Company(SIPCHEM) have also establishedinnovation centers. In addition, non-profit educational initiatives includethe Higher Institute for PlasticsFabrication (www.hipf.edu.sa), inRiyadh, Saudi Arabia, and the GulfPlastics Pipe Academy, which has abranch in the HIPF facility and alsoin Borouge’s new innovation center.The Middle East is poised for growthnot only in petrochemical produc-tion, but also in research, develop-ment, and plastics innovation.

cover story - multivie · cover story 10 | plastics engineering | june 2011 | dubai at night....

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