Saudi pumping $63b into petrochem industry

Saudi Arabia is pumping nearly SR236 billion ($63 billion) into projects to boost its petrochemical industry and maintain its position as one of the world’s top chemicals producers, the National Commercial Bank (NCB) said in a new study The study said the Saudi petrochemical sector would continue to hold a considerable global market share of product categories that lie not too far downstream of its pronounced feedstock advantage. reported Saudi Gazette Tuesday. \"Producers’ low cost margins and recent profit growth will allow them to stay afloat during the supply glut and squeeze out higher-cost producers in Europe and North America,\" it noted, adding that \"this will open up acquisition opportunities for Saudi producers, and encourage diversification into more sophisticated derivatives production.\" The report said nearly 21 percent of the value of the 62 projects is in the execution stage while 33 percent is in the study phase and 18 percent is in the bidding stage, which shows that although capacity expansions are already being undertaken, larger industry growth and project development will be onstream after 2015. Projects \"on hold\" also form a significant share at 14.5 percent, it added.