Borouge, the petrochemical joint venture between Abu Dhabi National Oil Company and Austria's Borealis, is gaining ground in Pakistan despite growing regional competition for GCC plastics manufacturers.
One of Pakistan’s largest plastics manufacturer, Jilani Plastic, said that Borouge has captured a big chunk of its market. “Borouge’s priority is to capture the Pakistani market because it relies 100 per cent on polymer imports,” said Jehanzeb Jilani, the director of Jilani, at the Arabplast trade show in Dubai.
The company imports 72,000 tonnes of polymers each year for its packaging operations– of which 83 per cent is used for in-house operations, while the remainder is sold to customers that do not import the raw materials.
Mr Jilani said that five years ago, Saudi Basic Industries or Sabic, the Gulf's biggest petrochemical producer, was the main supplier to Pakistan but in the past couple of years, Borouge has drawn neck-and-neck with the industry leader.
He said that Sabic’s market share in Pakistan dwindled from 55 per cent to 35 per cent with Borouge also capturing 35 per cent and the remaining 30 per cent being sourced globally. “Borouge is expanding a lot and they’re penetrating the Pakistani market fast,” he said.
Gulf Arab petrochemical producers, including Borouge, are boosting production as governments seek to expand this source of revenue, create jobs and build a downstream industry.
Borouge will more than double its production to 4.5 million tonnes per annum of polyolefin (mtpa) this year.
According to the Pakistan Plastic Manufacturing Association, plastics is the fourth largest import and it is growing at an average of 15 per cent year-on-year.
Borouge will surpass the industry leader Sabic in less than three years, according to commercial distributor Haseeb Impex. “The quality is just as good and the pricing is competitive. The pricing strategy of Borouge has helped it grab the Pakistan market,” said Abdul Haseeb Shaikh, the director of Haseeb Impex.
He said that while there isn’t much of a price difference, any advantage helps.
Mr Shaikh added that as a commercial importer for trading purposes, Borouge was the better fit because shipments arrived quicker. He said that shipments from Saudi Arabia can take around 45 days, whereas shipments from the UAE arrive in less than half of that time.
Hazeem Al Suwaidi, Borouge’s regional senior vice president of exports, said that the Abu Dhabi company had been expanding to open new opportunities for the entire value chain.
“We have the right people, facilities, know-how and innovation capabilities to contribute significantly to the growing demand for quality plastics across the Middle East, Africa and Asia, and increase our contribution to the UAE economy, now and in the future.”
lgraves@thenational.ae
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