Riyadh taps job potential
The kingdom is shifting its petrochemicals strategy from wealth creation to job creation
Saudi Arabia’s petrochemicals industry is the largest in the region and its chemicals exports ranked it 13th in the world in terms of volume in 2011. The kingdom’s closest petrochemicals rival in the GCC is Qatar, which is in 39th position. This has not stopped Riyadh pushing for further expansion in several key areas of the petrochemicals market.
Plans are being formed that will see several new schemes initiated across the kingdom. The reasons behind the projects have not been stated, but the potential for Riyadh to become a global superpower in chemicals production has been gathering momentum for some years.
The potential for Riyadh to become a global superpower in chemicals production has been gathering momentum for some years
In the past, production was usually concentrated on intermediate chemicals that could be easily exported to nations with large manufacturing bases such as India. That worked well up to a point, but when Riyadh shifted focus from wealth creation to job creation, it soon became apparent that another model was needed.
The decision was made to allow oil giant Saudi Aramco to enter the market and for new facilities to produce speciality chemicals so conversion companies could flourish. By doing this, the opportunity for greater job creation was established and industrial clusters are now becoming commonplace in the kingdom.
The latest plans are continuing this model, but are incorporating Saudi Arabia’s large refining assets to act as providers of feedstock. Another reason for this new wave of expansion might be that with non-conventional oil becoming more significant in global energy markets, Riyadh has decided to safeguard its vast natural resources.
Creating a diversified economy that maximises the full value-chain of its huge hydrocarbons reserves promises to not only ensure that Saudi Arabia continues to profit from its natural resources, but that it can also create the jobs it needs for its young population.