New book documents history of GCC petrochemical industry

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Updated 16 March 2016

New book documents history of GCC petrochemical industry

The discovery of huge oil supplies in the Arabian Gulf triggered an international struggle for the control of the oil fields. This East and West rivalry led to the creation of OPEC and to the development of petrochemical enterprises in the countries of the Arabian Gulf, Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.
In his book ‘Molecules, Mind and Matter: How the Arabian Gulf Became a Global Petrochemical Hub’, Dr. Abdulwahab Al-Sadoun who began his career as a senior researcher at SABIC Research and Development Center in Saudi Arabia gives a firsthand account of the establishment and growth of this petrochemical industry.
“Knowing that the story of this success is as yet unrecorded, I decided to write this volume…The purpose of this book is to describe the key milestones in the journey that led to the development of a globally competitive industry in the desert of Arabia”.
The title “Molecules, Mind and Matter” is not fortuitous; it strongly highlights the role played by outstanding individuals who not only had a vision for the region but also the resolve to make it happen.
It is difficult to believe how in less than fifty years desert dwellers left their tents and mud brick houses for an urban lifestyle which few had ever imagined. However, the author rightly points out that it would be wrong to think the GCC countries succeeded primarily because of the presence of oil and gas reserves. A number of oil producing countries have failed to develop their countries and improve the lives of their citizens at the scale of those of the GCC.
Oil was discovered in the Arabian Gulf countries during 1930s but until the 1950s the production was largely dominated by foreign companies. However, in the 1960s, governments in the GCC recognized the strategic need to diversify their national economies, to reduce direct dependence on oil, and to make use of the gases linked to the production of oil.
Kuwait was the first country in the Arabian Gulf to establish in 1964 a chemical plant, Kuwait Chemical Fertilizer Company followed by Saudi Arabia with the creation of SAFCO (Saudi Arabian Fertilizer Company) in 1969. But from 1975 onwards, Saudi Arabia would lead the way under the impulse of Crown Prince Fahd whose primary goal was to modernize the Kingdom.
Petromin a state owned equivalent of the private, foreign-owned Aramco was set up in 1962 by Crown Prince Faisal with the task to develop a petrochemical industry. Crown Prince Fahd took the bold decision in 1975 to hand over the development of the petrochemical industry from Petromin to the Ministry of Industry and Electricity headed by the visionary and charismatic Ghazi Al-Gosaibi.
Saudi Arabian Basic Industries Corporation better known as SABIC was created by royal decree in 1976 and Abdulaziz Al-Zamil, an outstanding entrepreneur, became its first managing director.
“It is significant that Al-Gosaibi established SABIC as a corporation rather than as a government entity. It signaled the intent to involve the private sector in the new enterprise. In his memoirs, “Yes, (Saudi) Minister: A life in Administration”, Al-Gosaibi refers to SABIC as his favorite daughter. He personally wrote its bylaws, and the company reflected his philosophy of management. Even the company’s acronym name was his invention, conveying in Arabic the notion of “molding” or “manufacturing”.
Furthermore, two key principles were behind SABIC’s remarkable success: empowering young Saudi employees and ensuring that SABIC would operate as a commercial company thus avoiding the red tape associated with governmental bodies.
The government of Saudi Arabia also took three major decisions to boost the development of its petrochemical industry, namely building two industrial cities in Jubail and Yanbu, setting up a master gas system to reuse efficiently the gas flared during petroleum production and finally, providing easy financing for industrial ventures.
Flouting western skepticism regarding its marketing capacity, SABIC showed that its desire to be a global marketer was build in its very DNA. By 1990, the company had proved that it achieved within ten years what the petrochemical industry in the Houston area took eighty years to build.
“It was plain that Saudi Arabia, the largest of the six GCC states, was enjoying one of history’s greatest stories of industrial success. SABIC, a government majority-owned enterprise created to reduce reliance on volatile oil revenues was becoming a major global petrochemical producer”.
At the onset of the new millennium, the market witnessed a shift with the emergence of new trading partners in Asia such as Malaysia, South Korea and Thailand and a fall in prices affecting the profitability of Saudi producers. It became imperative for SABIC to search for technological innovation to be more competitive without jeopardizing the quality of its products and to secure new markets.
After 2000, SABIC focused on managing key assets abroad. One of its most important acquisitions was the purchase of Scientific Design in 2003 and General Electric’s Advanced Materials division in 2007. This move helped SABIC increase its ethylene glycol production, enrich its portfolio of products and also strengthen its know-how in polymer technology.
The establishment of overseas operations has played a key role in SABIC’s exemplary growth since 2000. Between 2000 and 2014, despite the 2008 global financial crisis, the petrochemical industry has showed an annual 9 percent growth compared to the 2.9 percent growth of the global chemical industry.
Presently, the chemical industry of the GCC can boast of a 20 percent share of the global production capacity of key commodity petrochemicals:
“This is indeed an impressive global position, one in which the regional industry can take great pride, especially since as recently as the 1980s the GCC was a net importer of chemicals. Today it is a net exporter serving markets in 180 countries…In the last decade alone, both production and exports have grown more than six fold in value terms, driven upward by growth in volume and an increase in prices. As direct contributor to the regional economy but also as an enabling industry that is driving broad economic development”.
Molecules, Mind and Matter recounts the birth and the meteoric development of the petrochemical industry in the Arabian Gulf. Behind the facts and figures, the author highlights the outstanding role played by a few remarkable individuals, which provide the reader with some fascinating insight into this epic story. At the end of the book, we long to know more about these exceptional entrepreneurs and statesmen who had the vision, the resolve and the capacity to develop a petrochemical industry in the Arabian Gulf.
Faced with a decline in oil prices, the slowdown of the Chinese economy and the nuclear deal with Iran, the GCC countries need to make the right choices to increase their global market share. Moreover, they must keep on investing in new technologies and developing innovative capabilities to retain their competitive edge. Maintaining the focus on higher value products is a priority which also raises the hope of generating a further growth of the GCC petrochemical industries in the years to come.


Solid gold toilet stolen from English stately home

Updated 14 September 2019

Solid gold toilet stolen from English stately home

  • Toilet was created by Italian artist Maurizio Cattelan and estimated to be worth around £1 million
  • A 66-year-old man was arrested following the burglary at Blenheim Palace

LONDON: A gang of thieves on Saturday stole an 18-carat gold toilet from Britain’s Blenheim Palace, police said, causing flooding that damaged the world-famous stately home.
The fully-functioning toilet, dubbed “America,” was created by Italian artist Maurizio Cattelan and estimated to be worth around £1 million.
A 66-year-old man was arrested following the burglary, which took place before dawn at the 18th-century estate near Oxford, southern England.
The toilet was one of the star attractions in an exhibition of Cattelan’s works that opened on Thursday at the palace, a UNESCO World Heritage Site.
Visitors were able to book time slots to use it — but only for three minutes each, to limit the queues.
More than 100,000 people used the loo during the year it was on display at New York’s Guggenheim Museum.
“The offenders broke into the palace overnight and left the scene at about 4.50am (0350 GMT). No-one was injured during the burglary,” police said in a statement.
Detective Inspector Jess Milne of Thames Valley Police said she believed “a group of offenders used at least two vehicles” — and left a mess behind them.
“The piece of art that has been stolen is a high-value toilet made out of gold that was on display at the palace,” she said.
“Due to the toilet being plumbed into the building, this has caused significant damage and flooding.”
Blenheim Palace said it was “saddened by this extraordinary event, but also relieved no-one was hurt.”
It closed on Saturday but said it would reopen on Sunday.

The palace is home to the 12th duke of Marlborough and his family, and was also the birthplace of British wartime leader Winston Churchill.
The duke’s brother, Edward Spencer-Churchill, who founded the Blenheim Art Foundation, said last month he was relaxed about security around the gold toilet.
“It’s not going to be the easiest thing to nick,” he told The Times newspaper.
“Firstly, it’s plumbed in and secondly, a potential thief will have no idea who last used the toilet or what they ate. So no, I don’t plan to be guarding it.”
He added: “Despite being born with a silver spoon in my mouth I have never had a shit on a golden toilet, so I look forward to it.”
Cattelan, who is known for his provocative art, has previously described the golden toilet as “one-percent art for the 99 percent.”
The Guggenheim had offered the loo on loan to US President Donald Trump, but he declined.
The Italian artist’s exhibition at Blenheim runs until October 27 and includes a taxidermied horse hoisted onto the ceiling of an ornate reception room.
Blenheim has previously hosted exhibitions of work by Ai WeiWei, Yves Klein, Jenny Holzer, Michelangelo Pistoletto and Lawrence Weiner.
Police said they were looking at CCTV footage to help them in the search for the gold toilet, adding that nothing else was believed to have been stolen.