Saudi downstream industries need more government support

05 March 2014

Senior official calls for a swathe of new measures to help promote conversion industries in Saudi Arabia

A senior Saudi Arabian petrochemicals executive has outlined several key initiatives he believes will drive downstream growth in the kingdom’s key industrial sectors.

Speaking at the Saudi Downstream 2014 conference, Matough Jannah, managing director of operations and maintenance at the local National Petrochemical Industrial Company (Natpet), said government assistance was essential for downstream industries to thrive.

He cited a lack of private-sector engagement, feedstock pricing and availability, as well as potential over-supply of goods in the regional market as key points that could slow growth in the sector.

“For most downstream applications, the economies of scale of these projects means that they far outstrip regional demand,” he said. “To counter this, we need a strong export policy that will allow these companies to sell to foreign markets.” 

Jannah also proposed the enforcement of a transfer pricing mechanism for feedstock, a downstream public company to promote projects, as well as suggesting the formation of a commercial industrial development bank. He also warned that overpopulation in existing industrial areas could create secondary problems in housing and education.

“We need to put the infrastructure in place that can create these industrial areas across the country,” Jannah said. “We don’t want millions of Saudis living in a just a few areas.”

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