Saudi plastic: Foreign investment attraction
The low cost of plastics raw materials, a dramatic rise in demand and a liberal investment regime all contribute the to favorable investment environment Saudi Arabia offers for foreign plastics companies.
According to US-Saudi Business Council, joint ventures have been set up in both upstream and downstream plastics industries. In 1998, out of the 399 joint venture and foreign industrial units operating in the Kingdom a total of 102 units specialized in chemical and plastic products. The total capital invested in these ventures was 7.7 billion Saudi riyals ($2.05 billion).
Part of an overall economic diversification program, the Saudi plastics industry was pushed forward in the past decade. Starting with one plastic manufacturing unit in 1956, the industry grew to 108 factories in 1986, a figure currently standing at 500, according to recent reports in Al-Hayat daily. The turning point for the sector was marked in 1987, when the state-owned Saudi Basic Industries Corporation (SABIC) started producing plastic resins.
Local plastic consumption grew from 65,000 tons in 1986 to 700,000 tons in 2000, with a per capita consumption leap of nearly 700 percent taking place between 1978 and 1998.
Official statistics indicate that average per capita of plastics consumption in the kingdom currently stands at 43 kilograms per annum, a rate higher than that of many Asian countries, and by far the highest in the Middle East, where the average rate for the same year was 15 kilograms. ― (MENA Report)
© 2001 Mena Report (www.menareport.com)