Joint Ventures in the Petrochemical Industry - Key Strategy to Manage Globalization

Report Summary

The petrochemicals industry has undergone rapid changes in last decade and now it is in transition phase. The focus of petrochemical companies towards attaining economies of scale and geographic expansion has led to the consolidation of the global petrochemical industry. Petrochemicals producers are looking to diversify their product portfolios and trying to reach demand rich geographies. This has led to increase number of partnership between companies of different region. Since European and North American producers are grappling with declining demand they are setting up joint venture with Asian or Middle East companies to sustain their profit margin. In the recent past majority of joint venture deals have happened in the Middle East and Asia Pacific. Asia Pacific was the most popular region to enter into joint venture deals in 2010. China has established itself as largest petrochemicals market owing to impressive demand from its large population. Demand of basic petrochemicals and major plastics was 124.703 MMtpa in 2010 and is expected to increase to 215.033 MMtpa in 2015 at a CAGR of 11.5%. To sustain in the difficult time, it is crucial to have presence in the growing Asian markets especially China. Due to this, there has been increase in number of joint ventures in Asia Pacific in last five years. The Middle East has also become a crucial geography in global petrochemicals industry. The Middle East governments provide subsidies on the feedstocks used for petrochemicals production which makes the production significantly cheaper compared to other region. This has made it difficult for producers in Europe and North America to compete against cheap petrochemicals production in the Middle East since the feedstock cost is much higher in these regions compared to the Middle East. To deal with this situation companies from other regions are increasingly partnering with Middle East companies to get cost advantage.

Scope

• Effect of economic slowdown on the global petrochemical industry
• Demand for basic petrochemicals and major plastics by volume in China.
• Planned capacity addition of under joint ventures.
• Major joint venture deals in the global petrochemicals industry in the year 2010.
• Major companies involved in joint venture deals

Reasons to Buy

• Understand the impact of economic crisis on the global petrochemical industry and how the increased demand from China has led to increase in number of joint ventures.
• Develop business strategies with the help of specific insights on joint venture deals in the global petrochemicals industry.
• Identify opportunities in the Asian and Middle East petrochemical industry.
• Increase future revenue and profitability with the help of insights on the future opportunities and critical success factors in the global petrochemical industry.

Table of Contents

1 Table of Contents
1.1 List of Tables
1.2 List of Figures

2 Introduction
2.1 Overview
2.2 GlobalData Report Guidance

3 Globalisation has Brought Structural Changes in the Global Petrochemicals Industry
3.1 China has Become the Largest Contributor to the Growth of Global Petrochemical Industry
3.1.1 Fast Growing Chinese Economy is Stimulating the Domestic Petrochemicals Industry
3.1.2 Demand for Petrochemicals in China has Grown Threefold in Last Decade
3.1.3 Rapidly Growing Demand Necessitated the Construction of More Petrochemical Complexes
3.1.4 Favorable Government Polices are Helping China to Gain Foreign Investment
3.2 Subsidized Feedstock has Turned the Middle East into Global Petrochemicals Hub
3.2.1 The Middle East has one of the Largest Gas Reserves in the World
3.2.2 The Middle East Petrochemicals Producers are Most Competitive Due to the Availability of Cheaper Feedstock
3.2.3 Petrochemicals Production in the Middle East has Doubled in Last Five Years

4 Companies Across the Globe are Focusing on Joint Ventures to Fulfill Supplementary Operations and Expand Geographically
4.1 Supplementary Operations Fulfill Mutual Objective of the Companies
4.2 Joint Ventures Increase the Geographic Base of Petrochemicals Companies
4.2.1 Asia Pacific is Leading in the Joint Venture Activities
4.2.2 China is the Most Attractive Market to Set up a Joint Venture
4.2.3 Middle East is Attracting Petrochemical Companies Due to Lower Cost of Production
4.2.4 Saturated Markets in North America and Europe Discourage Joint Ventures in the Regions

5 New Investments through Joint Ventures are Increasing in Asia Pacific and Middle East
5.1 Joint Venture Projects in Asia Pacific Expected to Increase in the Future
5.1.1 Number of Joint Ventures Deals in Asia Pacific have Increased after the Slowdown
5.1.2 One Third of Total Planned Projects in Asia Pacific are Set up by Joint Venture Companies
5.1.3 Asian Companies Dominate the Planned Project Investments under a Joint Venture
5.2 Joint Ventures in the Middle East Thrived in Last Five Years
5.2.1 Middle East Petrochemicals Industry Continued to Grow with Joint Investments in New Production Facilities
5.2.2 Majority of Planned Petrochemicals Projects in the Middle East are under Joint Venture
5.2.3 European Companies are Setting up Joint Ventures for Planned Projects in the Middle East
5.3 Declining Market in North America have Lowered the Joint Venture Deals in the Region
5.4 Number of Joint Ventures in Europe Declined Substantially after Economic Slowdown

6 Joint Venture Deals Occurred Across the Globe to Manage the Globalization
6.1 Ineos Enter into Joint Venture with Sinopec Yangzi Petrochemical Company to Construct China’s Largest Phenol Plant
6.2 ExxonMobil Chemical and Qatar Petroleum Announced Plan to Construct the World’s Largest Steam Cracker Plant
6.3 Asahi Kasei and Mitsubishi Unifying Cracker Operations to Secure Profitability
6.4 Braskem Enters into Joint Venture with Idesa to Construct the Second Largest Ethylene Plant in Latin America
6.5 Mitsui Chemicals and Teijin Formed a Joint Venture to Integrate PET Resin Plants
6.6 Joint Venture between Qurain Petrochemical and United Industries to Construct First PTA/PET Plant in Kuwait
6.7 LANXESS and Taiwan Synthetic Rubber Corporation (TSRC) to Start a Joint Venture in China
6.8 Dynasol Forms Joint Venture with Shanxi Northern Xing’an to Start its First Synthetic Rubber Plant in China
6.9 Kuo Group to Build Nitrile Rubber Plant in China through a Joint Venture with Jiangsu GPRO
6.10 Indian Oil Corporation (IOC) to Build an SBR Plant under a Joint Venture with TSRC and Marubeni

7 Companies Leading in Joint Venture Deals
7.1 The Dow Chemical Company
7.2 ExxonMobil Chemical Company
7.3 Royal Dutch Shell plc

8 Appendix
8.1 Definitions
8.1.1 Installed Plant Capacity
8.1.2 Key Feedstock
8.1.3 Process
8.1.4 Technology
8.2 Abbreviations
8.3 GlobalData’s Research Methodology
8.3.1 Coverage
8.3.2 Secondary Research
8.3.3 Primary Research
8.3.4 Expert Panel Validation
8.4 Contact Us
8.5 Disclaimer

List of Tables

Table 1: China Petrochemicals Industry, Total Output Value, $ bn, 2007-2011
Table 2: China Automotive Industry, Production Growth, %, 2001-2009
Table 3: China Petrochemicals Industry, Basic Petrochemicals and Plastic Demand, MMtpa,
2000- 2015
Table 4: Global Petrochemicals Industry, Basic Petrochemicals and Major Plastic Demand by Region, %, 2000-2010
Table 5: Petrochemicals Industry, China, Basic Petrochemicals and Major Plastic Production, MMtpa, 2000-2015
Table 6: Global Petrochemicals Industry, Basic Petrochemicals and Major Plastic Production Share by Region, %, 2000-2010
Table 7: Global Natural Gas Industry, Countries with Largest Natural Gas Reserves, Trillion Cubic Feet, 2011
Table 8: Petrochemicals Industry, Middle East and Africa, Basic Petrochemicals and Major Plastics Production, MMtpa, 2000-2015
Table 9: Global Petrochemicals Industry, Number of Joint Ventures by Region, %, 2010
Table 10: Asia Pacific Petrochemicals Industry, Joint Venture Details, 2010
Table 11: China Petrochemicals Industry, Joint Ventures, 2006-2010
Table 12: Middle East Petrochemicals Industry, Joint Venture Details, 2010
Table 13: North America Petrochemicals Industry, Major Plant Shut Down, 2008-2010
Table 14: European Petrochemicals Industry, Major Plant Shut Down, 2008-2010
Table 15: Petrochemicals Industry, Europe and North America, Joint Venture Details, 2010
Table 16: Asia Pacific Petrochemicals Industry, Number of Joint Ventures, 2006-2010
Table 17: Asia Pacific Petrochemicals Industry, Planned Project Ownership Status, %, 2011-2015
Table 18: Asia Pacific Petrochemicals Industry, Joint Venture Planned Project Segmentation by Region, %, 2011-2015
Table 19: Asia Pacific Petrochemicals Industry, Major Joint Venture Planned Project Details, 2011-2015
Table 20: Asia Pacific Petrochemicals Industry, Major Joint Venture Planned Project Details, 2011-2015 (Contd.)
Table 21: Asia Pacific Petrochemicals Industry, Major Joint Venture Planned Project Details, 2011-2015 (Contd.)
Table 22: Asia Pacific Petrochemicals Industry, Major Joint Venture Planned Project Details, 2011-2015 (Contd.)
Table 23: Petrochemicals Industry, Middle East and Africa, Number of Joint Ventures, 2006-2010
Table 24: Petrochemicals Industry, Middle East and Africa, Planned Project Equity Detail, %, 2011-2015
Table 25: Middle East Petrochemicals Industry, Joint Venture Planned Project Segmentation by Region, %, 2011-2015
Table 26: Petrochemicals Industry, Middle East and Africa, Major Joint Venture Planned Project Details, 2011-2015
Table 27: Petrochemicals Industry, Middle East and Africa, Major Joint Venture Planned Project Details, 2011-2015 (Contd.)
Table 28: Petrochemicals Industry, Middle East and Africa, Major Joint Venture Planned Project Details, 2011-2015 (Contd.)
Table 29: Petrochemicals Industry, Middle East and Africa, Major Joint Venture Planned Project Details, 2011-2015 (Contd.)
Table 30: North America Petrochemicals Industry, Number of Joint Ventures, 2006-2010
Table 31: Europe Petrochemicals Industry, Joint Venture Deals, 2006-2010
Table 32: Ineos Phenol and Sinopec YPC JV, Planned Project Details
Table 33: ExxonMobil and Qatar Petroleum JV, Planned Project Details
Table 34: Asahi Kasei and Mitsubishi Chemical Holdings Joint Venture, Complex Details, 2010
Table 35: Braskem and Idesa Group, Planned Project Details
Table 36: Mitsui Chemicals and Teijin Limited Joint Venture, Plant Details, 2010
Table 37: United Petrochemical Company, Planned Project Details
Table 38: LANXESS-TSRC (Nantong) Chemical Industrial Company Ltd., Planned Project Details
Table 39: Shanxi Northern Xing'an Chemical Industry and Dynasol Elastomeros Joint Venture, Planned Project Details
Table 40: INSA GPRO (Nanjing) Synthetic Rubber Co. Ltd., Planned Project Details
Table 41: Indian Oil Corporation, Planned Project Details
Table 42: The Dow Chemical Company, Major Joint Ventures
Table 43: The Dow Chemical Company, Major Joint Ventures (Contd.)
Table 44: The Dow Chemical Company, Major Joint Ventures (Contd.)
Table 45: ExxonMobil Chemical Company, Major Joint Ventures
Table 46: ExxonMobil Chemical Company, Major Joint Ventures (Contd.)
Table 47: ExxonMobil Chemical Company, Major Joint Ventures (Contd.)
Table 48: Royal Dutch Shell plc, Major Joint Ventures
Table 49: Royal Dutch Shell plc, Major Joint Ventures (Contd.)
Table 50: Royal Dutch Shell plc, Major Joint Ventures (Contd.)

List of Figures

Figure 1: Regional Advantages in Joint Ventures
Figure 2: China Petrochemicals Industry, Total Output Value, $ bn, 2007-2011
Figure 3: Petrochemicals Industry, China, Basic Petrochemicals and Major Plastic Demand, MMtpa, 2000- 2015
Figure 4: Global Petrochemicals Industry, Basic Petrochemicals and Major Plastic Demand by Region, %, 2000-2010
Figure 5: Petrochemicals Industry, China, Basic Petrochemicals and Major Plastic Production, MMtpa, 2000-2015
Figure 6: Global Petrochemicals Industry, Basic Petrochemicals and Major Plastic Production Share by Region, %, 2000-2010
Figure 7: Petrochemicals Industry, Middle East and Africa, Basic Petrochemicals and Major Plastics Production, MMtpa, 2000-2015
Figure 8: Global Petrochemicals Industry, Number of Joint Ventures by Region, %, 2010
Figure 9: China Petrochemicals Industry, Joint Ventures, 2006-2010
Figure 10: Asia Pacific Petrochemicals Industry, Number of Joint Ventures, 2006-2010
Figure 11: Asia Pacific Petrochemicals Industry, Planned Project Equity Detail, %, 2011-2015
Figure 12: Asia Pacific Petrochemicals Industry, Joint Venture Planned Project Segmentation by Region, %, 2011-2015
Figure 13: Petrochemicals Industry, Middle East and Africa, Number of Joint Ventures, 2006-2010
Figure 14: Petrochemicals Industry, Middle East and Africa, Planned Project Equity Detail, %, 2011-2015
Figure 15: Petrochemicals Industry, Middle East, Joint Venture Planned Project Segmentation by Region, %, 2011-2015
Figure 16: North America Petrochemicals Industry, Joint Venture Deals, 2006-2010
Figure 17: Europe Petrochemicals Industry, Joint Venture Deals, 2006-2010
Figure 18: MCT PET Resin Co., Ltd., Supply Chain for PET Bottle Grade Resin, 2011