Mohamed H. Al-Mady , vice

Report
SAUDI PETROCHEMICALS: BUILDING VALUE
THROUGH COMPETITIVENESS
26th January, 2015
Key Enablers for
Competitiveness
VALUE THROUGH COMPETITIVENESS
Government policies
and support
Increased efficiency
and value chains
Innovation and
sustainability
Value Contribution
Creating value for the national economy
Direct, indirect and induced
employment
Major weight to Tadawul
(KSA stock exchange)
Dividend payments
Support base for KSA’s
downstream industry
Innovation and knowledge
eco systems through
research and technology
(R&T) and Application
Development Centers in
KSA and globally
Solid base for the growth of
service industries, e.g.,
insurance, banking, logistics
State of the art assets
Cash payments to service
sector
No. 1
ESSENTIAL ENABLERS OF COMPETITIVENESS
Key Enablers for Competitiveness
Government policies
and support
• Feedstock allocation at
competitive prices.
• Competitive infrastructure -port facilities and services.
• Increasing economic
diversity through Saudi
national industrialization
program.
• Funding through Public
Investment Fund, Human
Resources Development
Fund, SAIIC.*
Increased efficiency and
value chains
• Industry has created more
than 50 value chains across
a wide range of products.
• Today’s value chains more
sophisticated than those of
petrochemicals, steel,
cement.
• National Industrial Cluster
Program leading
development of Saudi auto
industry.
Innovation and sustainability
• Innovations in products,
applications and technologies.
• Nineteen global technology and
innovation centers, with four in
KSA.
• Open innovation through
collaboration with first tier
universities and customers.
• Innovation portfolio (10,000
patents).
• Special Industrial Zones
(SEZs).
• SABIC aspires to reduce
energy intensity and
greenhouse gases 25% by
2025.
• Human capital development
though undergraduate and
graduate scholarships and
training programs.
• Promotion of small to
medium-sized enterprises
(SMEs).
• Coordinating operations with
Saudi Energy Efficiency
program.
• Sustainable solutions across the
value chain.
*SAIIC = Saudi Arabian Industrial Investment Company
No. 2
KSA Petrochemical Industry Value contribution
VALUE CONTRIBUTION TO NATIONAL ECONOMY
Contribution to GDP
• In 2013 domestic petrochemical industry was 4.3% of GDP or 43% of total
manufacturing value addition to GDP.
• Market capitalization of listed petrochemical companies 32% of Tadawul (stock
exchange).*
Assets and Market
capitalization
• Industry created state of the art technology asset base of SR 600 bn.
• In 2013, listed Petrochemical Co.’s market capitalization was 20.5% of GDP.
Direct payments to
Saudis and Saudi
entities**
• In 2013, estimated direct cash payments of SR 42.5 bn to Saudi entities,
including SR 20.1 bn in dividends and SR 4.5 bn Zakat and social insurance.
• Cash payments to domestic services companies like insurance, banking, and
logistics approximately SR 6.6 bn.
* In the first half of 2014.
** Excluding payments for feedstock, power and gas.
No. 3
VALUE CONTRIBUTION TO NATIONAL ECONOMY (CONT.)
KSA Petrochemical Industry Value contribution
• Direct employment of 35,000.
Employment
creation and Saudi
Salary payments
• Direct annual salary and benefits payments to Saudi employees SR 11.3 bn.
• McKinsey estimates total employment of 280,0000 (Direct + Indirect supplier or
contractor + indirect customer + induced).
• Annual Indirect and Induced Saudi salary payments approx. SR 13 bn.
• The industry made large investments in training institutes, research and
technology, and Application Development Centers.
Research and
technology
• SABIC’s SPADC, which cost of SR 472 mn and houses 180 scientists, acts as
building block for knowledge, skills and to drive downstream development.
• Large investments made by Aramco, SIPCHEM, Tasnee and others on training,
research and technology centers.
Added value of
petrochemicals
industry
• Huge amount of value created directly and indirectly germinating from KSA’s
Petrochemical industry.
• The value created by petrochemicals industry – as opposed to the direct export of
all feedstock – is estimated by be US$34 bn annually.
No. 4
CONCLUSION
•
Saudi Arabia’s petrochemical industry is a major contributor to GDP,
employment creation, new investments, financial markets and a key
constituent of the downstream as a result of:
•
Feedstock competitiveness;
•
Supportive government policies;
•
Constantly improving efficiency;
•
Commitment to innovation and sustainability.
No. 5
THANK YOU

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