How China and India drive Qatar’s chemicals industry?

Qatar’s chemical industry expansion plans are based on the assumption that demand will continue to increase in many emerging markets such as China and India, a new report has shown.

Qatar has announced plans to scale up petrochemical production from 10mn tonnes per year (tpy) to 23mn tpy, said Dun & Bradstreet in its “Qatar Economy Insight”.

The focus of growth in Qatar has shifted to the non-hydrocarbon sector and one of the key industries that are benefiting from Qatar’s need to diversify away from “upstream” hydrocarbon sector is chemicals, the report said.

Future plans involve expansion in ethylene capacity and its derivatives through improving capacity in existing plants as well as building new ones with partnerships.

In addition, Qapco’s third low-density polyethylene plant has been officially opened, allowing Qatar to boost its output to 700,000 tpy.

One of the key drivers of the petrochemicals industry in Qatar is the availability of cheap gas, Dun & Bradstreet said.

Additionally, the state-owned Economic Zones Company has adopted the development of three economic zones within Doha and its suburbs with an authorised capital of $1.35bn.

The new economic zones are set to target value added manufacturing including downstream petrochemicals, the report said.

The manufacturing sector, including the refining and chemicals sector represented 9.9% of Qatar’s nominal GDP in 2012. The value added contribution of the manufacturing sector to economy in 2012 is estimated at $18.2bn, out of which the chemicals sector represented 35.5% or $6.7bn, the report said.

The establishment of new producers and capacity expansions by the existing producers have led to an average increase in capacity growth of 17.5% a year from 2008 to 2012, the report said.

Qatar is the second largest fertiliser producer in the GCC (Gulf Co-operation Council) region. With annual production capacity of 10.7mn tonnes in 2012, Qatar accounted for 35% of the GCC capacity.

Qatar’s fertiliser production is concentrated around nitrogen fertilisers. The country is also the largest urea and the second largest ammonia producer in the region. With two major expansions commencing production in Qatar over the past years, the country’s current fertiliser plant is the largest single urea and ammonia facility in the world.

Qatar’s polymer production is focused on polyethylene and accounted for 8% of the GCC’s total polymers capacity in 2012.

While capacity expansion in Qatar has continued over the past five years at an average rate of 10.6%, it was slower than other GCC countries.

Qatar is the second largest exporter of chemicals in the GCC representing 17% of the GCC’s chemicals exports.

With capacity expansions taking place over the past decade, Qatar’s chemicals exports have grown at an average rate of 13.7% a year since 2002.

Fertilisers and petrochemicals account for the majority of Qatar’s chemicals exports.

Qatar imported 1.8mn tonnes of chemicals in 2012, the majority of which are inorganic chemicals and specialties, particularly industrial additives and paints and inks.

The chemicals import growth rate in Qatar is one of the highest in the region – over the past decade it has grown at an average 19.8% a year.

The chemicals sector in Qatar, according to Dun & Bradstreet, employed more than 9,600 employees in 2012, accounting for 7% of the region’s total workforce in the sector. Page 3