Impressive progress in petchems

▶ Pointing the way to the future with plans to be a dominant player

Abu Dhabi’s economic development strategy has many facets, but top of the list are managing the country’s natural oil wealth to create a diverse economy and a workforce with the skills that will be needed for a post-oil world, whenever that may come.

At first glance, an expansion of a petrochemicals plant in Abu Dhabi’s Western Region might not seem an obvious road to a shiny future economy of personal flying vehicles and robotic home helps. After all, petrochemicals are associated with the “sunset industry” of petroleum, right?

However, the petrochemicals industry is probably best viewed as part of the transition to a world when transport has moved on from oil to batteries, and a crucial one at that. As Mark Garrett, chief executive of Borealis, points out, cars that run on batteries still will be made of the same petrochemicals-based material as those that run on petrol.

Indeed, the technology that has been developed at Borealis – headquartered in Vienna, but mostly owned by the Abu Dhabi government – involves innovative techniques including combining polypropylene with long or short glass fibres to produce extra strong components that help to “lightweight” vehicles, whether they are big petrol-guzzling SUVs or Teslas.

On one level, the doubling of plant capacity at Ruwais will have a direct and obvious impact on the local economy, employing tens of thousands of workers. There will be perhaps up to 700 additional jobs added to Borouge’s current 3,000-strong work force.

But it’s also worth remembering that many of those workers will have crucial science, technology, engineering and maths (Stem) skills, boosting the country’s R&D capacity. Others will develop algorithms to work out the best world market arbitrage for their markets. Others still will be scouring the fast-growing Asian markets for opportunities.

Any of these new workers may be the future entrepreneurs that the UAE needs to help build up its new industries. The industrial strategy is clear; but Abu Dhabi National Oil Company (Adnoc), the majority owner of Borouge, would also have paid attention to what is happening in the near-to-medium-term business environment.

It would previously have been unheard of for the fourth phase of the Borouge expansion to have gone through less than a year after the third phase was fully onstream. The new sense of urgency comes as the leadership of Adnoc, and indeed in Abu Dhabi as a whole, recognise that time is of the essence.

To be a survivor in an industry like petrochemicals means positioning yourself to be a dominant player one or two decades down the road.

So expect to see more similar expansions of Abu Dhabi’s petrochemicals capacity in the near future.