GCC Petrochemical Research Study

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GCC petrochemicals companies are amongst the lowest cost manufacturers in the world owing to cheap feedstock and energy costs. Given their strategic location and development as a major transportation hub, GCC petrochemicals producers enjoy a huge competitive advantage over others.

Over the next few years, GCC countries will strive hard to prove their dominance in the petrochemical sector in an effort to diversify their economies away from Oil & Gas revenues. Development of large scale petrochemical complexes will serve the dual purpose of diversification as well as employment generation.

In this report we provide several metrics for GCC petrochemicals industry which includes historical trend and forecast of the GCC petrochemicals capacity, price movement of key petrochemical commodities, details of top ethylene producing countries and top global ethylene producers and value of GCC petrochemicals projects at different stages. The country profile sections for each GCC country apart from giving an overview of petrochemical industry also provides details of major petrochemical projects under execution for that country. The company profile section gives rich details of some major GCC petrochemicals companies in terms of stock performance, major shareholders, recent developments & updates, production capacities and important financial & risk metrics.

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GCC Petrochemical Research Study

  1. 1. GCC Sector Series 2013 Petrochemicals Getting Ready for the Next Wave or Running out of Gas? Research Highlights Examining the status of Petrochemicals sector in the Gulf Cooperation Council (GCC) countries, highlighting the growth drivers and investment opportunities
  2. 2. MARKAZ SECTOR RESEARCH GCC Petrochemicals - March 2013 Research M.R. Raghu CFA, FRM | Head of Research rmandagolathur@markaz.com Madhu Soothanan | Senior Research Analyst Humoud S. Al-Sabah | Analyst Halsabah@markaz.com Support Jenevivu Lasrado | Secretary, Research jlasrado@markaz.com Divya Karthik | Administration Manager Nael Aboul Huda | Manager, Media & Communications naboulhuda@markaz.com Disclaimer This report has been prepared and issued by Kuwait Financial Centre K.P.S.C (Markaz), which is regulated by the Capital Markets Authority and the Central Bank of Kuwait. The report is owned by Markaz and is privileged and proprietary and is subject to copyrights. Sale of any copies of this report is strictly prohibited. This report cannot be quoted without the prior written consent of Markaz. . Any user after obtaining Markaz permission to use this report must clearly mention the source as “Markaz “. The report is intended to be circulated for general information only and should not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any financial instruments or to participate in any particular trading strategy in any jurisdiction. The information and statistical data herein have been obtained from sources we believe to be reliable but no representation or warranty, expressed or implied, is made that such information and data is accurate or complete, and therefore should not be relied upon as such. Opinions, estimates and projections in this report constitute the current judgment of the author as of the date of this report. They do not necessarily reflect the opinion of Markaz and are subject to change without notice. Markaz has no obligation to update, modify or amend this report or to otherwise notify a reader thereof in the event that any matter stated herein, or any opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate, or if research on the subject company is withdrawn. This report may not consider the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. Investors are urged to seek financial advice regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in this report and to understand that statements regarding future prospects may not be realized. Investors should note that income from such securities, if any, may fluctuate and that each security’s price or value may rise or fall. Investors should be able and willing to accept a total or partial loss of their investment. Accordingly, investors may receive back less than originally invested. Past performance is not necessarily indicative of future performance. Kuwait Financial Centre S.A.K (Markaz) may seek to do business, including investment banking deals, with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. This report may provide the addresses of, or contain hyperlinks to, websites. Except to the extent to which the report refers to website material of Markaz, Markaz has not reviewed the linked site and takes no responsibility for the content contained therein. Such address or hyperlink (including addresses or hyperlinks to Markaz’s own website material) is provided solely for your convenience and information and the content of the linked site does not in any way form part of this document. Accessing such website or following such link through this report or Markaz’s website shall be at your own risk. For further information, please contact ‘Markaz’ at P.O. Box 23444, Safat 13095, Kuwait; Email: research@markaz.com ; Tel: 00965 1804800; Fax: 00965 22450647. Kuwait Financial Centre “Markaz” 2
  3. 3. MARKAZ SECTOR RESEARCH GCC Petrochemicals - March 2013 Table of Contents 1. Executive Summary ................................................................................................ 5 2. Introduction ........................................................................................................... 7 3. GCC Petrochemical Industry - Key Differentiating Factors ....................................... 10 4. Key Challenges: ................................................................................................... 12 5. Petrochemical Products ........................................................................................ 13 6. Expansion Plans ................................................................................................... 17 7. The Way Forward................................................................................................. 18 COUNTRY PROFILES .................................................................................................. 20 Saudi Arabia ........................................................................................................... 21 Qatar ..................................................................................................................... 24 UAE ....................................................................................................................... 26 Kuwait ................................................................................................................... 28 Oman ..................................................................................................................... 30 Bahrain .................................................................................................................. 32 COMPANY PROFILES .................................................................................................. 33 Saudi Basic Industries Corporation (SABIC) .............................................................. 34 Industries Qatar (IQ) .............................................................................................. 39 Saudi Arabian Fertilizer Company (SAFCO) ............................................................... 44 Boubyan Petrochemical Company ............................................................................ 48 Yanbu Petrochemical Company (YANSAB) ................................................................ 52 Appendix 1: Petrochemical Industry Process cycle ........................................................ 55 Appendix 2: Glossary .................................................................................................. 56 Appendix 3: GCC Petrochemical Companies - Snapshot ................................................ 58 Appendix 4: GCC Petrochemical Companies - Stock Performance – Annualized Returns .. 59 Appendix 5: Saudi Arabian Petrochemical Companies ................................................... 60 Appendix 6: Qatar Petrochemical Companies ............................................................... 62 Appendix 7: UAE Petrochemical Companies ................................................................. 62 Appendix 8: Kuwait Petrochemical Companies.............................................................. 63 Appendix 9: Oman Petrochemical Companies ............................................................... 63 Appendix 10: Bahrain Petrochemical Companies .......................................................... 63 Kuwait Financial Centre “Markaz” 3
  4. 4. MARKAZ SECTOR RESEARCH GCC Petrochemicals - March 2013 Tables Charts 1  GCC Petrochemicals Output (MTPA ) 1 Ethylene Capacities by Region (2009 Estimate) 2  GCC Petrochemical Milestones 2 Global Chemicals Cost Curve (Ethylene) 3  GCC Petrochemicals & Chemicals Output - 2011 3 Price movement of Crude, Natural Gas & Naphtha Rebased 4  Typical Regional Feedstocks 4 Prices of Key Petrochemical Commodities 5  Top Ethylene Producing Countries (‘000 tonnes capacity) 5 Manufacturing PMIs 6  Top 10 Global Ethylene Producers 6 GDP Growth Rates 7  GCC Petrochemicals & Chemicals Output (MTPA) 7 GCC Petrochemicals - Value of Investments & Stage (US$ mn) 8  Saudi Arabia - Petrochemical Projects Currently Under Execution 8 GDP level China 9  Prominent Petrochemical Companies Operating in Qatar 9 Total Production by Business Unit ‘000 metric tons 10  Qatar - Petrochemical Projects Currently Under Execution 10 FY12 Operating Segment Results 11  UAE - Petrochemical Projects Currently Under Execution Oman - Petrochemical Projects Currently Under 12  Execution       Cost of the full report: $500 For payment details please write to: info@e-marmore.com Or Kindly use our online payment gateway at www.e-marmore.com Kuwait Financial Centre “Markaz” 4
  5. 5. Marmore Subscription Options Report Type Subcription Type Annual Subcription Fee Maximum allowed paid reports download P.A. Infrastructure Research - GCC Power Aviation Water Roads and Railways Ports ICT Any new Intrastructure GCC report Infrastructure Research - Country wise Power (KSA) Power (Kuwait) Power (UAE) Power (Qatar) Ports (KSA) Ports (UAE) Ports (Qatar) Ports (Oman) Aviation (KSA) Aviation (UAE) Any new Intrastructure Country report GCC Sector Research GCC Asset Management GCC Banking GCC Petrochemicals GCC Healthcare GCC Metals and Mining GCC Education Any new GCC sector research Strategic Research Periodic Research GCC Corporate Earnings (Quarterly) GCC ERP (Quarterly) GCC Equity Research Statistics (Semi-Annual) GCC Market Outlook (Semi-Annual) Market Reports Daily Morning Brief Kuwait Daily Daily Fixed Income Update Oil & Gas Bulletin MENA Market Intelligence KSE Market Review Real Estate Market Commentary Monthly Market Review Regional Petroleum Projects Commentary MENA Real Estate Monthly Round Up International Market Update Standalone Price (US$) Subscription Options Primary Free 0 Selective US$ 1,000 5 Wide Access US$ 2,000 10 Unrestricted US$ 3,000 Unlimited 500 500 500 500 500 500 500 x x x x x x x                      250 250 250 250 250 250 250 250 250 250 250 x x x x x x x x x x x                                  500 500 500 500 500 500 500 Free x x x x x x x                          Free Free Free Free                 Free Free Free Free Free Free Free Free Free Free Free                                            
  6. 6. MARKAZ RESEARCH OFFERINGS Economic Research Infrastructure Research* Real Estate Research Sector Research* Capital Markets Research Bankrutcy in the GCC ( Jan-13) Power Country Reports GCC Banking Sector (2012) Periodic Research Including GCC in the MSCI EM Index (Oct12) Multiple directorships in KSA (Jan-13) KSA(2012) Kuwait(2012) GCC: Kuwait, KSA, Abu Dhabi, Dubai, Qatar GCC Demographics (July – 12) UAE(2012) Qatar(2012), Levant: Lebanon, Jordan, Syria Alpha Abound (Aug-12) GCC Petrochemicals GCC(2012) North Africa: Egypt, Algeria Ports International: USA GCC Healthcare Thematic Reports GCC Asset Management & Investment Banking Report 2012 MENA Unrest (Apr-11) UAE(2012) Qatar(2012) Oman(2012) GCC(2012) The New Regulations on Kuwait Investment Sector (Jun-10) Aviation GCC Supply Adjustments (Apr-09) UAE(2012) KSA(2012) GCC(2012) The “Vicious Square” Monetary Policy options for Kuwait (Feb-08) To Leap or To Lag: Choices before GCC Regulators (Apr-07) GCC(2012) Real Estate Perspectives ICT UAE 3 year property visa (Jul-11) GCC Leverage Risk (Nov-06) KSA(2012) Kuwait(2012) GCC(2012) Real Estate Market Commentary Monthly The Golden Portfolio (Sept-10) Market Review Regional Petroleum Projects Commentary Dubai Real Estate Meltdown (Feb-09) Infrastructure and Amenities (Sep-11) GCC Education GCC Women Investors GCC Media Unfolding of Oversupply in Abu Dhabi (Nov-11) MENA Real Estate Monthly Round Up GCC Banks - Done with Provisions? (Jan10) International Market Update Quarterly Shelter in a Storm (Mar-09) GCC Corporate Earnings GCC Equity Risk Premium Fishing in Troubled Waters (Dec-08) Semi-Annual Down and Out: Saudi Stock Outlook (Oct08) Water (Dec- Weekly KSE 15 Index (Sept-11) Missing the Rally (Jun-09) GCC Metals & Mining GCC Distressed Real Estate Opportunities (Sep-09) Diworsification: The GCC Oil Stranglehold (Jan-09) GCC for Fundamentalists 06) Oil & Gas Bulletin Persistence in Performance (Jun-10) GCC Real Estate Financing (Sep-09) (Mar- Markaz Kuwait Watch This Too Shall Pass (Jan-09) Kuwait Development Plan (Mar-11) Kuwait Capital Market Law 10) Kuwait Investment Sector (Mar-12) Kuwait Investment Sector (Sept-10) Got a CMA: What Next? (Feb-12) KSA(2012) Daily Fixed Income Update GCC Defensive Bellwether Stocks (Jan12) How is the GCC preparing for a AA+ World? (Sept-11) Stress Testing Kuwait Banks (May-11) Daily Markaz Daily Morning Brief GCC Market Outlook Mr. GCC Market-Manic Depressive (Sept08) To Yield or Not To Yield (May-08) Roads and Railways Banking Sweet spots (Apr-08) GCC(2012) China and India: Too Much Too Fast (Oct07) A Potential USD 140b Industry: Review of Asset Management Industry in Kuwait (Sep-07) A Gulf Emerging Portfolio: And Why Not? (Jun-07) Derivatives Market in GCC (Mar-07) Managing GCC Volatility (Feb-07) * Paid Category: Executive Summary and Table of Contents available for free download Website www.e-marmore.com Email research@markaz.com Contact Tel: +965 2224 8000 Ext. 1814, 1201 Fax: +965 2249 8740 Channel Partners Bloomberg - Type “MRKZ” Nooz Capital IQ Thomson Research Zawya Investor FactSet Research Connect Reuters Knowledge ISI Emerging markets TheMarkets.com

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