Yousef Al-Benyan, Vice Chairman and CEO of SABIC
The 2021 earnings outlook for the GCC petrochemical industry is promising, with chemical output expected to grow another one percentage point or more, according to
Yousef Al-Benyan, Vice Chairman and CEO, Saudi Basic Industries Corp. (
SABIC), and Chairman, Gulf Petrochemicals and Chemicals Association (GPCA).
“It is time to take the foot off the brake and step on the accelerator as the pandemic has not spared our industry,” he said in his speech at the 15th annual GPCA Forum in Dubai.
The global petrochemical industry has been long creating more than $1 trillion value over the last two decades. The value chain has met upstream and downstream sides, which will unlikely change.
According to the World Bank, GCC economies are expected to return to an aggregate growth of 2.2% in 2021, buoyed by global economic recovery, projected at 5.6%, including the revival of global oil demand and international oil prices.
Higher oil output combined and improved oil price outlook boost fiscal revenues in the region, as hydrocarbons generate significant revenue for the GCC. This, combined with strong economic and manufacturing activity in China, represents the GCC’s largest export market.
However, global petrochemical value evaporated as demand and oil prices plummeted, Al-Benyan stated, adding that the world sustained a 3% drop in global GDP in 2020.
He said that digital technology was a “lifesaver” in the early days of the COVID-19 pandemic.
“When it comes to creating value in the chemical and petrochemical industry, we are just starting to scratch the surface, he noted, adding that climate change is a “huge challenge” for the industry.
The pandemic showed closely how greenhouse gas emissions matched steps with commercial productivity. The global CO2 emission dropped by about 6% in 2020 relative to 2019.
“It has since picked up to pre-pandemic level with 2021 likely to see the second-largest global CO2 emission; therefore the pressure to decarbonize the global economy is growing.”
The utility and transport sectors were early movers, providing a clear policy direction and capital allocation.
“Hence, it is time for our industry, as decarbonization is attractive for upstream and gas companies.”
He called upon the companies to make their operations reliable as customers want firms to prioritize sustainability.
“Banks and other lenders are evaluating us on how we manage our sustainability. The overall result is acceleration that puts much more pressure on our industry to keep pace,” Al-Benyan stated.
The reinvention of the chemical industry should also draw upon non-digital technology, such as alternative feedstocks, new catalysts, and renewable electricity sources that enable the industry to develop recyclable or bio-based products and to decarbonize its chemical plants, he noted.
Beyond the chemical sector, the entire regional economy will need to transform itself and “circularize” its value chains, leaving no loose ends through which carbon can escape, Al- Benyan concluded.
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