Petrochemical, gas firms increase investment in Middle East capacity
Access to energy drives more manufacturing plans for the region.
By Dave Hannon -- Purchasing, 4/3/2008 11:40:00 AM
The world’s largest industrial gas supplier, Air Liquide, said this week it plans to increase its investments in the Middle East to develop more production capacity closer to the region’s cheaper energy products.
“This region [the Middle East] will be very important,” said Air Liquide CEO Benoit Potier in Dubai recently, according to Bloomberg. “Energy is cheap and feedstock is available.” Potier made the announcement at the opening ceremony of the French industrial gases group's regional office for the Middle East.
And Air Liquide is certainly not alone in its interest in expanding production in the Middle East. In a recent Purchasing.com article, AMR Research’s Mickey North Rizza said one company told her that “By moving manufacturing to Europe they could save about 40% and manufacturing in the Middle East would save more than 80%, all due to the cost of natural gas and oil.
Mohamed al-Mady, the CEO of Saudi Basic Industries Corp. (SABIC) told Reuters that petrochemicals producers in the Middle East are among the primary benefactors of the region’s access to low-cost energy, especially in light of an expected demand surge from Asian markets for chemicals. He also said output from the Middle East will account for 17% of global output by the end of 2010 compared with 10% at the beginning of 2000.
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