Grand vision

The Abu Dhabi Polymers Park will occupy 4.5 square kilometres of land at the Industrial City of Abu Dhabi, with total investment figure of US$4 billion being touted.

The park will host around 50 plastic product manufacturers, and is set to have conversion capacity of no less than one million tonnes per annum, of which the majority will be exported.

Regional polymer production capacity is expected to double to 33 million tonnes by 2011, and The park will be located to take advantage of the increase in raw material availability.

The park will host tenants that convert a wide variety of polymer resins into end products for the packaging, original equipment manufacturing, construction and infrastructure segments including value added goods such as pipes, cables and intermediate blow moulded containers.

Gustaf Akermark is senior advisor for petrochemicals at Abu Dhabi Basic Industries Corporation (ADBIC), and spoke exclusively with Petrochemicals Middle East at the launch of the Polymer Park.

“Part of my role as senior advisor is responsibility for the development of the Abu Dhabi Polymers Park,” he says.

Akermark brings a wealth of knowledge and 25 years experience of the downstream petrochemical industry to Abu Dhabi.

Prior to joining ADBIC, Akermark worked for Borealis, one of the largest European petrochemical producers and its predecessors Neste Chemicals and Unifos, holding positions in production, R&D and marketing.

He is confident that the park will be a success, and that regional market has the right mix of fundamentals to facilitate that.

“When you look at this region, and the UAE in particular, it’s quite clear that it’s a very business friendly environment. There’s a very strong support infrastructure in place and that’s being rapidly expanded year-on-year.”
 

Regional polymer production capacity is expected to double to 33 million tonnes by 2011, and The Park is uniquely placed to take advantage of the increase in raw material availability.

The Park will host tenants that convert a wide variety of polymer resins into end products for the packaging, original equipment manufacturing, construction and infrastructure segments including value added goods such as pipes, cables and intermediate blow moulded containers.

Growing global demand and an opportunity to move more value added elements of the petrochemical industry closer to source will be critical to enticing international companies to choose Abu Dhabi for their polymer developments.

“Part of the appeal will certainly be the timing. There is a long-term growth trend of around 5%, and part of that growth is organic, and part of it is attributable to increased substitution of plastics. Our opportunity is today. Borouge is expanding and that extra capacity will be a huge advantage to companies taking up tenancy in the Polymers Park.”

Further up the Gulf there’s even more capacity coming onstream.

Jubail is a good example of how Polymers can come into Abu Dhabi rather than sailing into deepwater for export to Asia.

“We’d like to see more of the value-added taking place here.”

The Middle East market is expected to double polymer supply capacity in just four years, providing access to competitively priced raw materials for plastic converters in the region.

Market assessments have shown cost advantages and growing market demand for a range of products including high density polyethylene (HDPE) and polypropylene pipes, building and construction applications such as geotextiles, geomembranes and artificial grass, consumer and industrial packaging, and plastic car components.

A good example of substitution is in automotive production, where the development of the right materials can deliver something cost effective and lightweight, which is ideal for that purpose.

Between 2009 and 2012 more than 20 million tonnes of plastics raw materials capacity will come on stream in the GCC region.
 

This represents half of the global planned capacity increase.

The region itself is a growing consumer of plastics, but is also strategically served by considerable hydrocarbon resources, a major bonus for the energy-intensive polymer conversion business.

“In the long-term Abu Dhabi is blessed with large energy resources, particularly sour gas which is likely to be developed in due course. Being close to an ample local energy resource isn’t something that can be said for other polymer conversion markets.”

At the project launch the board of directors said they expected to attract around US$4 billion of investment into the park, a huge amount for any project proposal.

“Yes, the project looks very ambitious, but we think the targets are realistic. Overall we hope to attract around 2% of the global polymer conversion growth, which is actually quite modest.”

The Middle East has long been an exporter of hydrocarbon products, but as the government in Abu Dhabi tries to wean the economy away from oil dependence, Akermark says the shift to developing a more integrated economy is a timely one.

“I certainly foresee a move towards the production of more finished goods for the region. Because of transportation costs, if we extend that idea to finished goods for export then the region would need to aim for quite high value goods. It would not be economical to send goods with a large air content such as water bottles to surrounding regions.”

However, the Gulf is a growing market, and with the population expected to continue growing at a rapid rate, there is plenty of potential to expand the local production of goods for the local market and capitalise on those value added goods rather than importing them from Asia.

The Abu Dhabi Polymers Park says it will offer investors tailored value added services making Abu Dhabi the ideal location for global plastic converters, but the vision behind the development extends further than that says Akermark.

“The Polymer Park will also be another channel through which human capital can be developed, and nurture a skills base through collaboration with the various training institutes in the region,” he concludes.