Dubai's Petrochem Middle East will invest up to $90 million to develop a new chemical terminal at Jebel Ali Port to expand its business in the region.
The company signed a 30-year lease agreement with DP World on the project, which is expected to help facilitate more trade to and from Dubai, said the port's operator.
“Despite the highly unstable market due to the pandemic, over the course of 2020 the GCC’s chemical output expanded by 1.5 per cent compared to a global decline of 2.6 per cent. These figures showcase the resilience of the sector and the potential it has,” Abdulla bin Damithan, chief executive and managing director of Jafza (Jebel Ai Free Zone) and DP World's UAE operations, said.
The new terminal is expected to be completed by the third quarter of 2023 and will have a capacity to store about 40,000 cubic metres of products, as well as distillation and processing units.
It will provide chemical raw materials in large volumes to traditional and new industries that are being set up in the UAE and is expected to contribute to more than $200m of new trade from Dubai per year, Mr Bin Damithan said.
Dubai's non-oil external trade grew 10 per cent in the first quarter to Dh354.4 billion ($96.5bn). Exports grew 25 per cent to Dh50.5bn, while imports rose 9 per cent to Dh204.8bn. The value of re-exports was up 5.5 per cent to Dh99bn, the Dubai Media Office said.
“The petrochemical industry is a priority sector for the country and the region. Jafza, due to its location, is a strategic access point to the Middle East, Africa and South Asia, contributing around 70 per cent of the UAE's foreign trade in petrochemical products,” Mr bin Damithan said.
Jebel Ali port supports more than 10,000 chemical manufacturers and traders, while the Jebel Ali Free Zone has a petrochemical cluster spreading over an area of 4 million square meters. It houses more than 500 petrochemical companies.
“Today, our annual turnover is over Dh2.5bn and with the new project, we are expecting short term and long-term gains of about 10-15 per cent of our investment,” Yogesh Mehta, chief executive of Petrochem Middle East, said.