Overview on Egyptian Petrochemicals Market 1 Chemical Eng./ Ihab Yahia Marketing Research Dpt.Head Sidi Kerir Petrochemicals Co.- SIDPEC Ihab.yahia@sidpec.com LinkedIn: Ihab Yahia
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. 8 th Petchem arabia 2012 12-15 May 2013 - Abu Dhabi -UAE
(A) Egypt Basic Information 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 3 Source: The Central Intelligence Agency
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 : Petrochemicals industry started when the first ammonia plant was built in Suez. 1940`s 1984 : production of Linear Alkyl benzene 1984 in Amerya Petroleum Co. 1987 : The first Egyptian direct Investment in Petrochemicals was in start up of the Egyptian 1987 Petrochemicals company for producing PVC in Alexandria. October 2000 : start up of SIDPEC plant for producing PE (Egyptene) totally October dependent 2000 on Egyptian natural gas. in Alexandria. 2001 : start up of OPC 2001 plant for producing Polypropylene in Suez.
Source: SIDPEC Market research 3. Market Size 3.i. Supply and Demand : 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 Polyethylene (PE) Product Consumption (2012) Thousand tons 555 Balance 65% imported Growth rate 7% Polyethylene Terephthalate (PET) 220 Totally imported 6% Polypropylene (PP) 440 60% imported 7% Polyvinyl Chloride (PVC) 270 70% imported (Resin+compound) 5 % Polystyrene (PS) 110 Totally imported 6%
Totally imported Source: SIDPEC Market research 3.i. Supply and Demand : (continued) Egypt imports nearly 100% of Engineering plastics material. Engineering Plastics represent 11% of the Egyptian Plastics demand. (As commonly called in the Egyptian market) Acrylic Fiber Product Ethylene Vinyl Acetate (EVA) (resin) Acrylonitrile Butadiene Styrene (ABS) Styrene-Acrylonitrile (SAN) Others Total Engineering plastics consumption: Consumption (2012) Thousand tons 80 20 105 5 10 220 Balance 90 % imported Nearly 100% imported Growth rate 7% 4% 10% 5% N/A N/A
3. ii Urea production and Export in Egypt in 2012 : Source: Abu Qir Fertilizers
3.iii Egyptian Polyolefin downstream external trade balance Million USD 3112.086 Imports 1445.781 860.358 90.942 482.354 1266.775 Exports 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 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)
4. Growth opportunities: Growth Oportunity Populat. Million GDP k$/capita Kg/ capita Demand mill tons AAGR %/yr 2012-17 Turkey Egypt PE 18.8 1,404 3.8 74.5 8.4 PP 23.6 1,760 5.4 PE 5.5 0.464 4.7 83.9 1.5 PP 3.9 0.326 5.7 IHS 3 rd petrochemicals conference Cairo Oct. 2012
5. a. Egyptian opportunities: 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 IHS 3 rd petrochemicals conference Cairo Oct. 2012
5. b. Egyptian opportunities: 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 IHS 3 rd petrochemicals conference Cairo Oct. 2012
6. Case studies 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 Polyolefins Shale gas in Egypt are a non-marine deposition and non deposition likely to be oil prone which has a very low potential.
6.3- SIDPEC Markets 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. SIDPEC`s HDPE allocations trend : 2006 / 2007 2009 / 2010 2011 / 2012 Local 50% Export 50% Local 60% Export 40% Local 70% Export 30% Source: SIDPEC Market research
Source: SIDPEC Market research SIDPEC Local & Export Market position SIDPEC Local Market Position SIDPEC Marketing Plan realized percentage from B SIDPEC Marketing Plan realized percentage from A HD&LLD PE Local consumption (thousand tons) B 342 490 31% 27% 329 295 456 36% 41% 31% 926 16% Total SIDPEC received inquiries (thousand tons) - A
Source: SIDPEC Market research SIDPEC Local & Export Market position SIDPEC Export Market Position 5% 2% 1% 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. 30% 62% Europe Asia Africa S.America N.America
Source: SIDPEC Market research (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 Ihab.yahia@sidpec.com LinkedIn: Ihab Yahia