Chemical industry in Asia
The evolutionary nature of the Specialty Chemicals business has meant that the traditionally dominant regions of North America, Europe and Japan have made way for fast growth in emerging Asian, South America and Middle Eastern & African economies. Asia-Pacific, in fact, is estimated as the largest, also the fastest growing, global market for Specialty Chemicals.
The Middle East is at the forefront of the changing global chemicals industry. The chemical industry in the Middle East is at a critical point in its development.
Middle East chemical companies are likely to become truly global players; continuing to have access to favorably priced raw materials, and potentially lower logistics costs due to greater proximity of the Middle East to growing Asian markets. The Middle East is in a prime location to tap into the emerging specialty chemicals market in China and the commodities market in Africa.
Container freights into China from the U.S., the other major exporter of polyethylene, work out to be around $90–130/t, at the higher end of this range from the U.S.G.C. In comparison, the Middle East is seeing a freight cost to China of around $15/t from Jebal Ali in Dubai and marginally higher from Saudi Arabia. The result is around $100/t lower freight.
The Middle East also enjoys somewhat smoother trading relations with China than is the case for the U.S. and better penetration into other Asian markets. This will ensure that in an all-out cost battle, it will be the U.S. who would be the first to flinch.
While several of the countries in the Middle East are possessive of an intent, if not a formal action plan, to develop elaborate systems of regulation, they are normally less advanced in this regard than their American, Asian-Pacific, and European counterparts; this is because they focus more on a system of permits and licenses to manage chemicals.
As a result, reduced attention was given to training on the safe handling of chemicals, provision of personal protective clothing and equipment, and training to understand the hazards of a particular job or chemical.
Growing population and changing climatic conditions have triggered water scarcity in the Middle East. Countries, including the UAE, Iraq, and Saudi Arabia, are particularly facing water scarcity problems and require immediate attention.
Given that some of the Middle East nations lack proper sanitation and water management systems, these countries have started opting for recycling and reusing wastewater by treating it using chemicals. The adoption of tertiary filtration is gaining traction because of its potential to raise the quality of the effluent before being discharged into the environment.
Azerbaijan is one of the Middle East countries that are continuously implementing water treatment solutions based on the use of chemicals as part of the efforts to focus on proper reuse of industrial wastewater.
Middle East countries such as Saudi Arabia, the United Arab Emirates, and Qatar have historically focused on upstream and midstream process industries, mainly in steel and aluminum, leveraging advantageous energy costs.
However, in recent years, government-led industrial diversification programs are engendering more downstream integration while boosting other industrial sectors (such as equipment manufacturing, aerospace, and defense), and ensuring positive socioeconomic impact.
The development strategies for these sectors are introducing customized enablers to the industrial ecosystems, facilitating growth throughout the different segments of the value chain. Furthermore, the restructuring of existing struggling assets (e.g., through consolidation) plays an important role in the healthy development of these sectors.
It can be said that all industries depend on chemical compounds to operate, and their supply is a basic necessity for any country.
According to statistics, most of the materials imported to the Middle East in recent years have been from India, China, Turkey, and Germany, with the largest share belonging to China, followed by India, Germany, and Turkey, respectively.
Imports and exports from these countries include laboratory chemicals, pharmaceutical grade, agricultural chemicals, and many more.
