Sherif Badran of Dow Chemical sees the Middle East region evolving into a more sophisticated market player and says the need for sustainability now drives this market forward
Demand for specialty chemicals will experience above-average growth in 2013 as the automotive and electronics sectors recover, say American Chemistry Council economists in their year-end review of the chemical industry. Global specialty chemical demand is likely to increase 3.1% this year, double its 2012 growth, and then rise another 4.2% in 2014, according to the trade association.
With this kind of anticipated growth for the year, Refining and Petrochemicals Middle East spoke to Sherif Badran, commercial director for Dow Middle East & Africa Chemicals and Performance Materials to find out how the company is projecting growth in the Middle East region.
There is a healthy demand for specialty chemicals in the Middle East, and this demand will continue to grow, especially in the construction and manufacturing sectors, says Badran whose portfolio of chemicals in the company include polyurethane, epoxies, amines, performance fluids, vinyl acetate monomers, acrylates, polyglycols, surfactants and fluids, propylene oxide /propylene glycol, chlorinated organics and glycol ethers.
These products all go into a multitude of industries such as water treatment, oil and gas and automotives. He explains that while local producers are still focusing on commodity products like olefins and polyolefins, major international companies are now shifting towards highly engineered products, mainly related to performance and specialty products.
Badran says Dow helped pioneer this shift years ago, by establishing a global business unit dedicated to performance products.
“The local market for performance products has been growing over the past years, with demand rising across the polyurethane systems, oil and gas, water and construction sectors,” he notes.
Additionally, the Middle East region is beginning to tackle sustainability issues in a real way, so Badran sees this as an opportunity for growth for Dow’s specialty chemicals, which help address these challenges.
Dow has been a newsmaker in the Middle East petrochemical industry in 2012 with the mammoth Sadara alliance.
Sadara, the world-scale integrated chemicals complex, is comprised of 26 manufacturing units, several of which constitute “mega projects” in themselves.
Once complete, the JV complex will be one of the world’s largest integrated chemical facilities, and the largest ever built in one single phase.
Sadara is expected to deliver annual revenues of approximately $10 billion within a few years of operation, while contributing significantly to Saudi Arabia’s industrial diversification.
The planned product portfolio will add value chains to the Kingdom’s vast natural resources and complement the existing chemical landscape.
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Ultimately, the JV will be instrumental in Saudi Arabia’s strategy to become not only a strategic chemicals and plastics producer, but also a hub for future downstream manufacturing.
But Badran notes that while the chemicals market is developing and expanding, there are some challenges that must be faced. One of the main challenges the region faces is the limited availability of products that can fulfill the needs of this growing market.
However, he says, Dow is taking steps to help address this, with current and proposed alliances paving the way for reinforcing its participation in the existing market.
Dow recently celebrated 75 years of polyurethane (PU) chemistry, and “as a mark of confidence in the local market”, the PU maker inaugurated a new PU Systems House plant in Jeddah, last April.
The plant is part of Dow’s global network of more than 30 Systems Houses around the world, and is the second in the MENA region. This facility will provide rigid foam systems to the construction industry.
In addition to this, Dow has reported that it will also be adding the first acrylic monomer production facility in the region when the Saudi Acrylic Monomer Company (SAMCO), a JV between Dow and Taste Sahara Olefins Company, comes online.
Majority of SAMCO’s production will supply the needs of downstream businesses to make products used in paints and coatings, adhesives, caulks, sealants, plastics additives, detergents additives and in industrial applications, among others.
“While generating hundreds of local jobs the asset, located in Jubail in Saudi Arabia’s Eastern Province, will manufacture products for local and regional markets,” says Badran.
Like most emerging economies, the Middle East region is expected to spend billions of dollars on infrastructure and rail projects in the coming years.
This is a huge market for companies like Dow to bring in their technologies into. The company is already aggressively marketing its Voraforce fast-cure LFI polyurethane systems.
This system is used in the “KIO” range of composite manhole covers which, according to the company product information, weigh 70 per cent less than traditional models, offer magnetic insulation, noise reduction, innate resistance to corrosion and 13 to 48 per cent lower CO2 emissions.
So, the chemical company is rallying around the Middle East’s governments call to sustainability offering solutions that can help them meet the acceptable levels worldwide.
“We are eagerly anticipating the emerging solar market in the region, since many countries in the region have made significant investments in renewable energy already,” says Badran.
He cites the example of the UAE’s concentrated solar power (CSP) plant — which uses mirrors to reflect sunlight onto receivers that collect solar energy and convert it to heat, usually to produce steam that drives a turbine to generate electricity.
Dow is awaiting further announcements to market its high differentiated performance fluids that are used to generate electricity from concentrated solar power (CSP). Finally, it seems the Middle East region owing to its huge growth potential is in the Dove’s strategy for success.
