Overview on Egyptian Petrochemicals Market - · PDF fileOverview on Egyptian Petrochemicals...

Overview on

Egyptian

Petrochemicals

Market

Chemical Eng./ Ihab Yahia

Marketing Research Dpt.Head

Sidi Kerir Petrochemicals Co.- SIDPEC [email protected]

LinkedIn: Ihab Yahia

1

8th Petchem arabia 2013 12-15 May 2013 - Abu Dhabi -UAE

mailto:[email protected]

Outlines

(A) Egypt Basic Information.

(B) Petrochemicals in Egypt: 1- History of the industry in Egypt. 2- Downstream market size. 3- Downstream external trade. 4- Growth opportunities. 5- Egyptian opportunities. 6- Case studies

(C) Conclusion.



• Location: North East Africa

• Area: total: 1,001,450 sq km

• Population: 85.3 million (2012 est.)

(Urban : 53% - Rural: 47%)

• Real GDP growth rate:

5.1% (2010)- 2% (2012)

• GDP OER(Official Exchange Rate)* :

$255 Billion USD (2012 )

A nation's GDP at official exchange rates (OER) is the home-currency-denominated annual GDP figure divided by the bilateral average US exchange rate with that country in that year

(A) Egypt Basic Information

Source: The Central Intelligence Agency 3


Petrochemicals (excluding fertilizers) represents:

3% of GDP

and 12% of total Egyptian industries

Plastics consumption in Egypt: 25 kg for each citizen

Demand for polyolefin: 2.07 million tones in 2012

Natural gas - production: 61.33 billion cu m (2010 est.)

rank no. 16 globally

Gas reserves: 2.186 trillion cu m (1 January 2012 est.)

rank no. 17 globally

Source: The Central Intelligence Agency


Historical background Petrochemicals in Egypt :

1940`s

1984

1987

October 2000

2001

1940`s : Petrochemicals industry started when the first

ammonia plant was built in Suez.

1984 : production of Linear Alkyl benzene

in Amerya Petroleum Co.

1987 : The first Egyptian direct Investment in Petrochemicals

was in start up of the Egyptian Petrochemicals company for

producing PVC in Alexandria.

October 2000 : start up of SIDPEC plant for producing PE

(Egyptene) totally dependent on Egyptian natural gas.

in Alexandria.

2001 : start up of OPC plant for producing Polypropylene in

Suez.


. Market Size3 Supply and Demand :.i. 3

Egypt produce 28% of plastics material consumed annually

In 2006 Egypt consumed 1.64 million tons

In 2012 Egypt consumed 2.07 million tons

Average growth rate of market demand = 6% annually

Growth rate

Balance Consumption (2012)

Thousand tons

Product

7% 65% imported 555 Polyethylene (PE)

6% Totally imported 220 Polyethylene Terephthalate (PET)

7% 60% imported 440 Polypropylene (PP)

5 % 70% imported

(Resin+compound) 270 Polyvinyl Chloride (PVC)

6% Totally imported 110 Polystyrene (PS)

Source: SIDPEC Market research



Egypt imports nearly 100% of Engineering plastics material .

Engineering Plastics represent 11% of the Egyptian Plastics demand.

(As commonly called in the Egyptian market)

Growth rate

Balance Consumption (2012)

Thousand tons

Product

7% 90 % imported 80 Acrylic Fiber

4%

To

tall

y im

po

rted

20 Ethylene Vinyl Acetate (EVA) (resin)

10% 105 Acrylonitrile Butadiene Styrene (ABS)

5% 5 Styrene-Acrylonitrile (SAN)

N/A 10 Others

N/A Nearly 100%

imported

220 Total Engineering plastics

consumption:

3.i. Supply and Demand : (continued)


:2012 . ii Urea production and Export in Egypt in 3

Source: Abu Qir Fertilizers


.iii Egyptian Polyolefin downstream external trade balance3

90.942 482.354 1266.775

860.358

1445.781

3112.086

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Imports

Exports

Million USD

•Exports value growth rate was increasing over the period greater than

Imports.

•The trade balance shows a considerable deficit over the period

Source: Trade Map (International trade center)


. Growth opportunities:4

IHS 3rd petrochemicals conference Cairo Oct. 2012

Growth Oportunity

Populat.

Million

GDP

k$/capita Kg/ capita

Demand

mill tons

AAGR %/yr

2012-17

Turkey PE

74.5 8.4 18.8 1,404 3.8

PP 23.6 1,760 5.4

Egypt PE

83.9 1.5 5.5 0.464 4.7

PP 3.9 0.326 5.7


. a. Egyptian opportunities:5


• Industry Fundamentals

– Upstream feedstock integration

– Horizontal integration: upgrade by products

– Refinery – Petrochemicals

– Economy of scale

• Strategic Alliances with existing producers

– Alternative product supply (scrap and rebuild)

– Offer domestic market access in exchange of feedstock

– Local NGL developments



• Develop a domestic market

– Compounding

– Pipes and fittings for the surrounding region

– Packaging for the fishing and agriculture sector

– More fibres related developments

• Private sector

– How to stimulate the private sector

– Automotive Parts Production

– Clear investment guidelines attract foreign investments

. b. Egyptian opportunities:5


. Case studies 6

6.1- Undergoing initiation.

• Upgrading by products :

SIDPEC polyethylene wax project

• Introducing Researches to commercial scale

New R&D organisation

• SIDPEC Marketing mix improvement.


6.2- Diversify feedstock (future cases).

• Naphta cracking

Tahrir petrochemicals complex this olefin complex should produce:

1.3 million t/y ethylene, 1.3 million t/y polyethylene

600,000 t/y propylene, 210,000 t/y butadiene.

Tahrir Petrochemicals should also include aromatic facilities to deliver 420,000 t/y

benzene.

• Gas to olefin GTO

This project targets optimizing the Egyptian natural gas usage,

1 million T/Y of olefins ( Ethylene and Propylene)and to produce 1 million T/Y of Poly-

olefins

• Shale gas in Egypt are a non-marine deposition and non deposition likely to be oil

prone which has a very low potential.


SIDPEC Markets -6.3

• SIDPEC is the sole producer of HDPE and LLDPE resin in EGYPT with

the trade name Egyptene where it is manufactured under Innovene license.

• SIDPEC annual production capacity is (220 thousand tons) from HDPE

and supposed LLDPE but the latter is out of production plan due to some

feasible and technical reasons.

Export

50%

Local

50%

2006 / 2007

Export

40%

Local

60%

2009 / 2010


SIDPEC`s HDPE allocations trend :

Export

30%

Local

70%

2011 / 2012


36% 41% 31%

295 329 456

31% 27% 16%

342 490

926

SIDPEC

Marketing

Plan realized

percentage

from A

Total SIDPEC

received

inquiries

(thousand

tons) - A

SIDPEC Local & Export Market position


SIDPEC Local Market Position

SIDPEC Marketing Plan

realized percentage from B

HD&LLD PE Local consumption

(thousand tons) – B


SIDPEC Local & Export Market position

SIDPEC Export Market Position

62% 30%

5% 2% 1%

Europe Asia Africa S.America N.America

SIDPEC export reached

59 countries.

But due to the increased

demand from the Local market

SIDPEC reduced the export

quota.

The pie chart represent

percentage of 2010 allocations

by continent as a destination.




(C) Conclusion

•The ability of balancing feedstock limitations by project

integration and by-product upgrading

•Develop an optimal portofolio for meeting demand

•Exports is the short term fix

• Domestic market is the long term wealth


I would like to give thanks to

WRA-conferences and Clarion Events

Also to My managers in SIDPEC

for granting this opportunity .

Chemical Eng./ Ihab Yahia

Marketing Research Department Head

Sidi Kerir Petrochemicals Co.- SIDPEC

[email protected]

LinkedIn: Ihab Yahia


mailto:[email protected]

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