Chemical companies need to rethink global positioning to remain competitive

Chemical companies need to rethink global positioning

Chemical companies in Qatar and the wider GCC region are facing increased competition from the rest of the world, and coupled with diminishing availability of local resources, GCC manufacturers must take action to ensure growth. These are the key findings according to a report developed by KPMG in partnership with the Gulf Petrochemicals and Chemicals Association (GPCA).

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Chemical companies in Qatar and the wider GCC region are facing increased competition from the rest of the world, and coupled with diminishing availability of local resources, GCC manufacturers must take action to ensure growth. These are the key findings according to a report developed by KPMG in partnership with the Gulf Petrochemicals and Chemicals Association (GPCA).

Until recently chemicals companies in the GCC, were clear global leaders in the sector. Significantly advantaged by an abundance of feedstock (largely natural gas and the by-products of hydrocarbon exploration) and modern processing plants with state-of-the-art technology, the region was undoubtedly a success story of economic and industrial development.

However, with increasing competition, boosted by the boom in shale gas production, the drop in oil prices and western countries closing the gap on innovation, GCC based chemical companies must look closely at what drives success, and act on this to ensure that they remain a force to be reckoned with among their global peers.

However, Gopal Balasubramaniam, Head of Energy and Natural Resources for KPMG Middle East and South Asia (MESA) and partner at KPMG in Qatar notes that it is not all doom and gloom for the manufacturers in the region: “Whilst the dominance of chemical companies in the region is perhaps not as strong as it has been in previous decades, growth can be achieved provided action is taken to ensure competitiveness and resilience.”

The report highlights a number of factors, which play a key role in ensuring success. Developing a global strategy (as opposed to one focused purely on creating volume and providing domestic needs) ensures that the business is taking advantage of opportunities not available at home. Identifying and addressing organizational and operational efficiencies can also have a positive impact on chemical company’s sustainability, competitiveness and bottom line.

Evaluating and adapting marketing and sales strategy to align with current market conditions also plays and important role in future viability.

Gopal continued: “the future for chemical companies in the Middle East region isn’t only reliant on large capital investment in new technology. We have seen significant investment in innovation and sourcing alternative base materials from competitors in recent years and regional businesses need to evaluate their current activities carefully and focus on improvements, enhancements and efficiencies to thrive moving forward”.

©2017 KPMG LLC, a limited liability company registered with Qatar Financial Centre Authority (QFCA) and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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