QAPCO’s VC & CEO Dr. Mohammed Yousef Al Mulla, reveals the company’s ambitious growth strategy and explains how it’s leading the drive for localisation
The first half of 2014 was, unsurprisingly, riddled with dire news from Europe’s struggling refining and petrochemicals industry. Shutdowns across that region continued to haunt its downstream players as margins were squeezed and capacity utilization remained worryingly low.
North America’s shale boom and China’s slowing pace of economic growth coupled with the latter’s development of coal-to-chemicals production, also had stakeholders talking about the future of the industry.
But the GCC’s petrochemicals industry remains steadfast in its pursuit of growth and capacity expansion. Qatar Petrochemical Company (QAPCO), a joint venture between Industries Qatar (80%) and Total Petrochemicals of France (20%), for example, actually saw 2013 revenues grow by 15.6% compared to the previous year, with profits growing 6.7%.
“2013 was a record-breaking year for us on all fronts,” says Dr. Mohammed Yousef Al Mulla, vice chairman & CEO of QAPCO, in an exclusive interview with Refining & Petrochemicals Middle East magazine. Without a doubt, this phenomenal growth was due to the 38% growth in Low-density Polyethylene production that followed the commissioning of the company’s new LDPE 3 plant at the end of 2012.
In many ways, the turmoil in Europe presented new opportunities for companies like QAPCO which were able to benefit from relatively high LDPE prices caused by the shutdowns elsewhere. “Our strong production supported by resilient LDPE prices created the rise in net profits and increase in revenues,” he says.
“Growth and strategic investment plans in infrastructure defined our success in 2013 and now position us to achieve our vision of becoming a global leader in petrochemicals,” he says. And it is clear that the company is still in heavy pursuit of this vision.
Late last year, Qatar Petroleum (QP) and QAPCO signed the Front-End Engineering Design (FEED) contract with Tecnimont SpA, for the construction of the Al Sejeel Petrochemical Complex to be built in Ras Laffan Industrial City.
The project, scheduled for completion in 2018, will feature one of the world’s largest mixed-feed steam crackers and is designed to produce 2.2 million MTPA of polymers including PE and PP resins.
“We are proud to have developed over the years, our local petrochemical expertise and strong know-how, which has allowed us to be entrusted to develop alongside with Qatar Petroleum this ambitious and unique project,” says Dr. Al Mulla.
Indeed, this massive project will not only strengthen the country’s position as a petrochemical producer, but it will also ensure that it continues to add value to its hydrocarbon wealth.
The Al Sejeel Petrochemical Complex, to be built in RasLaffan will include a mixed-feed steam cracker with the feedstock coming from natural gas projects located in the north of Qatar. It will substantially add to the economic growth in the country and will be producing ethylene, high-density polyethylene; linear low-density polyethylene, polypropylene, and butadiene.
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Indeed the Al Sejeel project could not come at a better time for Qatar as the country looks to develop a stronger Small-Medium Enterprise economy by providing more manufacturers with competitively priced materials for production.
As Dr. Abdulwahab Al-Sadoun, secretary general of the Gulf Petrochemicals and Chemicals Association points out, “the development of economic clusters has become somewhat of a catalyst for the growth of related businesses and organizations.”
“Al Sejeel will also strengthen the development of the country’s downstream sector, thus creating many opportunities for SMEs and converters, it is certainly a strategic step to further achieve economic diversification,” he says.
As the region looks to developing more innovative and high value products, paving the way for smaller, more agile enterprises will be necessary. In 2012, the country combined commercial registration and registration with the chamber of Commerce and Industry at a one-stop shop in order to facilitate and encourage SME creation, but organisations such as the GPCA have made it clear that there is still room and need for SMEs.
“Growing our business through partnerships and joint ventures is also a critical outlet for our success,” says Dr. Al Mulla.
“Our investments and ventures target Qatar’s petrochemicals and derivatives industries to bring new opportunities and support the development of associated products.”
Last year for example, the company supported Qatar Plastic Products Company’s, one of its associates, diversification ambitions to create high value construction and landscaping materials such as the new Wood-Plastic composites that will belaunched onto the market at the end of this year.
Of course, this drive to develop a larger SME base is part in parcel with Qatar’s push to increase employment opportunities and career prospects for young Qataris.
“We have witnessed the tremendous progress achieved by our petrochemical industry, resting on the capabilities and skills developed by local talent,” says Al-Mulla.
By building the country’s human resources, QAPCO aims to continue optimising the value of its natural resources.
The country has increased production capacity by almost 20% since 2008, and plans to continue developing higher-value goods in the future.
“We are proud to be one of the early movers and pioneers, as one of the first petrochemical companies established in the region. Product development, investment in R&D, proximity to key markets, strong customer service, and strategic grades have allowed us to increase our global market share over the years,” says Al Mulla.
“Now, Made in Qatar petrochemicals are all over the world, and hopefully they will continue to grow into the future.”
Factbox:
– 15.6% QAPCO’s revenue growth from 2012 to 2013.
– 6.7% QAPCO’s profit growth from 2012 to 2013.
– 2.2 mn MTPA The Al Sejeel project is expected to produce this many polymers.
