Gulf petrochemical makers need to step up their efforts in research and development to catch up with more established competitors, said the head of the region’s top producer.
Two threats – a shale boom in North America that has fuelled a chemicals revival and a crunch on gas resources in the Arabian Gulf – are putting pressure on regional producers, said Mohammed Al Mady, the chief executive of Saudi Basic Industries, also known as Sabic.
“In the Middle East and here in the GCC we are much behind,” said Mr Al Mady, on the sidelines of a Gulf Petrochemicals & Chemicals Association conference in Dubai. “To catch up we have to really do more. We have to go after start-ups, we have to open up innovation with universities and collaborative innovation, we have to localise our innovation capabilities around the world and try to get the best knowledge in the regions we operate in.”
Last quarter the world’s fourth biggest polyolefins producer missed analysts’ earnings estimates, reporting a 5.7 per cent increase in fourth-quarter net profit to 6.16 billion Saudi riyals (Dh6.03bn).
Mr Al Mady, who has previously said Sabic hoped to enter the North American shale industry this year, said the company would be open to buying start-ups in regions including the Middle East.
“Wherever we have a gap in technology, we will look into niche companies that will fill our innovation gap,” he said. “When it’s a start-up hopefully we can get them when they are young – if they are old they become more expensive.”
New chemicals can take as long as a decade to develop, compared with the months it take to launch a new smartphone design, said Mr Al Mady, adding that “the petrochemical industry is no Facebook or Twitter”.
ayee@thenational.ae
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