DOWNSTREAM PLASTIC MARKETS IN THE GCC

From Minds to Matter © 1

DOWNSTREAM PLASTIC MARKETS

IN THE GCC

www.hipro-consult.com

GPCA, DUBAI, 3rd APRIL 2012

AGENDA

IMPORT OF CONVERTED PLASTICS

INTRODUCTION

PLASTICS CONVERSION IN THE GCC

EXPORT OF CONVERTED PLASTICS

DEMAND FOR CONVERTED PLASTICS

From Minds to Matter

From Minds to Matter ©

Beirut

Riyadh

We are focused and specialized in Downstream plastics industry

Kanoo Building

Suite 202,Riyadh

Saudi Arabia

MGM BuildingTower

Hygia-pro,Beirut

Lebanon

• HIPRO Consulting is a multi-discipline consulting firm that provides economic, financial, and business management expertise

• Founded in 2007, with offices in Riyadh and Beirut

• Over the past Five years, HIPRO has worked with the Top leading Petrochemical and Plastic Downstream for the Middle-East

• Our focus is the growth of the

Middle-East manufacturing base .

HIPRO CONSULTING

GCC ECONOMIC INDICATORS - 2011

0

100

200

300

400

500

600

700

SAUDI UAE KUWAIT QATAR OMAN BAHRAIN

622

302

135 82 67

31

GDP, Billion $

GDP, Billion $

From Minds to Matter 4

Over 1.2 trillion USD

0

20

40

60

80

100

120

140

160

180

QATAR KUWAIT UAE BAHRAIN SAUDI OMAN

179

84

50

27 25 20

GDP/CAPITA, 000$

GDP/CAPITA, 000$


GCC ECONOMIC INDICATORS - 2011


GCC ECONOMIC P.E.S.T ANALYSIS

AGENDA

• Introduction

•Plastics Conversion in the GCC • Export of Converted Plastics

• Import of Converted Plastics

• Demand for Converted Plastics


MARKET SEGMENTATION

From Minds to Matter ©

Supply of Converted Plastic Product-Markets GCC

Pro

du

cts

• Stretch Wrap/Hood

• Shrink Wrap/Hood

• Heavy Duty Bags

• Industrial Liners & Drums

• Hygiene Packaging

• Caps & Closures

• Medical Packaging

• Disposable Healthcare

• Containers & Bottles

• Coated bags/sheets

• Lid & Covers

• Pails

• Bags

• Bakery Good

• Fish/Meat/Poultry

Packaging

• Frozen Food

• Snacks

• Caps & Closures

• Lids & Containers

• Cups & tubs

• Cling Film

• Produce Bags

• Beverage Packaging

• Retail Bags/Sacs

• Agri films/bags

• Furniture

• Electrical/Electronic

• Automotive

• Appliances

• Pipes & fittings

• Diapers & medical

• Textile & yarns

• Pallets, Crates, Boxes

• Toys

• Wire & Cable

Su

b-M

ark

et

1. Food

Packaging

2. Non- Food

Packaging

3. Non-

Packaging

GCC PLASTICS CONVERSION MARKET SEGMENTATION

27.6%

18.1%

54.2%

% OF MARKET

FOOD PACKAGING

NON FOOD PACKAGING

NON PACKAGING


TOTAL LOCAL CONVERSION OUTPUT = 3,036 KTONS

PLASTICS CONVERSION GCC BY SECTOR

1,390

781

445

294

126

0

200

400

600

800

1,000

1,200

1,400

1,600

PACKAGING CONSTRUCTION NON PACKAGING TEXTILE WIRE & CABLE

KTONS

KTONS


MARKET SECTOR PLASTIC CONVERSION - 2011

45.8%

25.7%

14.7%

9.7% 4.2%

% TOTAL MARKET

PACKAGING

CONSTRUCTION

NON PACKAGING

TEXTILES

WIRE&CABLE


RESIN CONSUMPTION GCC PLASTIC CONVERSION 2011

1,270

612

489

369

243

53

0

200

400

600

800

1,000

1,200

1,400

PE PP PVC PET PS ENG PLAST

KTONS

KTONS


RESIN CONSUMPTION PLASTIC CONVERSION 2011

41.8%

20.2%

16.1%

12.2%

8.0%

1.7%

% OF TOTAL RESIN

PE

PP

PVC

PET

PS

ENG PLASTFrom Minds to Matter 13

PROCESS PLASTIC CONVERSION 2011

936

535 515

317 298

143 126 79 72

15 0

100

200

300

400

500

600

700

800

900

1,000

KTONS

KTONS


PROCESS PLASTIC CONVERSION 2011

30.8%

17.6% 17.0%

10.4%

9.8%

4.7%

4.2% 2.6% 2.4% 0.5%

% OF TOTAL PROCESS FILM/FLEX PACK

PIPE/PROFILE

INJECTION MOLDING

YARN/WEAVING

SHEET EXT/FORM

BLOW MOLD

WIRE & CABLE

FOAM EXTRUSION

ROTO MOLD

EXTRUSION COATFrom Minds to Matter 15

AGENDA

• Introduction

• Plastics Conversion in the GCC

•Export of Converted Plastics

• Import of Converted Plastics



EXPORT 2011- GCC

PLASTIC CONVERTED PRODUCTS

0 500 1000 1500 2000 2500 3000 3500

EXPORT

TOTAL CONVERSION3,036

KTONS

KTONS

692


22.8%

EXPORT FOOD PACKAGING

140 135

33 21 22

0

20

40

60

80

100

120

140

160

BOPP/BOPET SHEETEXT/FORM

PET PREFORMS LAMINATES OTHERS

KTONS

KTONS


EXPORT NON FOOD PACKAGING

105

25 24

4

32

0

20

40

60

80

100

120

STRETCH FILM BOPP/BOPETFILMS

SHRINKFILM/HOOD

HEAVY DUTY SACS OTHERS

KTONS

KTONS


EXPORT NON PACKAGING

80

19 13

8 6 4

21

0

10

20

30

40

50

60

70

80

90

KTONS

KTONS


CONVERTED PLASTICS MAJOR EXPORTED PRODUCTS- 2011

165

135

105

80

33 24 21 19 13

0

20

40

60

80

100

120

140

160

180

KTONS

KTONS


EXPORT ORIENTATION FOR PLASTIC CONVERTERS -TARGET PRODUCTS


NON-WOVEN, WOVEN, YARN, CARPET

EXPORT

SHEET EXTRUSION &

FORMING

BOPP&BOPET FILMS

STRETCH FILM

GCC PLASTIC

CONVERTERS

•Low Resin Costs.

•Low Logistics Costs.

•Low Energy Costs

STRETCH FILM

AGENDA

• Introduction • Plastics Conversion in the GCC • Export of Converted Plastics

•Import of Converted Plastics



IMPORT CONVERTED PLASTICS - 2011

356

692

0 100 200 300 400 500 600 700 800

IMPORT

EXPORT

KTONS

KTONS


13.2% of demand in

GCC

IMPORT CONVERTED PLASTICS

FOOD PACKAGING

21

15

7

4

27

0

5

10

15

20

25

30

PVC CLING BOPP FILM BOPET FILM BARRIER FILMS OTHERS

KTONS

KTONS


IMPORT CONVERTED PLASTICS NON FOOD PACKAGING

12

8

5

22

0

5

10

15

20

25

PROTECTIVE FILMS MEDICAL BOPP/BOPET FILMS OTHERS

KTONS

KTONS


IMPORT CONVERTED PLASTICS NON PACKAGING

38 34

23 21 18 15 12

4

70

0

10

20

30

40

50

60

70

80

KTONS

KTONS


AGENDA

• Introduction • Plastics Conversion in the GCC • Export of Converted Plastics • Import of Converted Plastics

•Demand for Converted Plastics


GCC DEMAND CONVERTED PLASTICS 2011

3,036

2,702

2,500 2,600 2,700 2,800 2,900 3,000 3,100

LOCAL CONVERSION

MARKET DEMAND

KTONS

KTONS


GCC DEMAND CONVERTED PLASTICS 2011

20.8%

15.1%

64.0%

% OF TOTAL MARKET

FOOD PACKAGING NON FOOD PACKAGING NON PACKAGING30

SUPPLY/DEMAND BALANCE GCC -2011

1,390

781

445

294

126

1,010

841

545

204

102

0 500 1,000 1,500

PACKAGING

CONSTRUCTION

NON PACKAGING

TEXTILE

WIRE & CABLE

DEMAND,KT

SUPPLY,KT

31

NEW RESIN PROGRAMS GCC

ENGINEERING PLASTICS

Polycarbonate

PMMA

POM

Polyamide

ABS

EVA,

Metallocene

Higher Alpha Olefins,

SAP

Polyols, Isocyanate,

PU

TPO’s &

TPE’s

SBR

EPDM

PBR

Carbon Black

32

GROWTH OF GCC DOWNSTREAM PLASTICS INDUSTRY

PETROCHEMICAL TECHNICAL SUPPORT

GOVERNMENT SUPPORT

SKILL CENTERS & EDUCATION

CONVERTERS

33

DRIVERS FOR GROWTH

• The following are the steps that can accelerate the growth of plastics conversion in the GCC:

Provide good infrastructural and logistics facilities

including ports, roads, railways, etc… Since local demand in KSA would not be sufficient for

global size manufacturing unit, substantial export benefits will need to be provided.

Protect the investing company’s interest by helping

through associations the export and promotion on the product manufactured.

34

DRIVERS FOR GROWTH

Tax holidays for 10 years

Land should be made available at preferential rates

Provide utilities like power and water

Provide long term loans with low interest rates

Provide conductive environment to attract skilled labors

Set-up technical/vocational institutes to develop skilled local manpower


DOWNSTREAM PLASTIC MARKETS IN THE GCC

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