Value Creation (Strategies for the Chemical Industry) || Middle East: Opportunities and Challenges from the Rapid Emergence of a Global Petrochemical Hub
✍ Scribed by Budde, Florian; Felcht, Utz-Hellmuth; Frankemölle, Heiner
- Publisher
- Wiley-VCH Verlag GmbH & Co. KGaA
- Year
- 2008
- Weight
- 296 KB
- Edition
- 2
- Category
- Article
- ISBN
- 3527312668
No coin nor oath required. For personal study only.
✦ Synopsis
The global petrochemical landscape is evolving. New companies are appearing and expanding rapidly, taking advantage of low feedstock cost in the Middle East and low labor cost and fast-growing demand in Asia. Long-established Western companies are exiting, shrinking, or moving east, often in partnerships, to try to defend their stakes. Meanwhile, on the horizon, looms a set of new technologies that may transform the industry still further. This is all combining into a paradigm shift in petrochemicals as the West is abandoned for the East.
Such a shake-up will result in new winners and losers. Expanding upstream and downstream capacity, broadening the product portfolio, and extending geographic reach are all options for players active in the Middle East. At a time of rapid change and uncertainty, companies need to think clearly if they are to make the right strategic choices. The management tools are familiar: good business intelligence, clear microeconomic thinking, sound risk management, distinctive value propositions, and superior partnership skills; and management must also keep a close eye on the organizational challenges such as leadership and capability development, localization of the workforce, and changes in people's mindsets and behaviors for superior performance and execution. All are interlinked and therefore need to be applied rigorously and simultaneously if players are to succeed.
This chapter looks at the key structural changes in polyolefins, how the industry could make best use of attractive feedstock in the Middle East, and the implications for companies across the world (see also Chapter 6).
7.1 Turning to the East
The center of gravity of the polyolefin world is shifting eastwards, and chemical companies that want to stay in this business need to move and transform before their entire economic rationale is swept away (Fig. 7.1).