built and three renovated in preparation
for the soccer World Cup in 2022.
The GCC countries also have ambitious plans to diversify their economies
by becoming less dependent on revenues
from oil and petrochemical exports. This
is to be achieving by branching out into
downstream manufacturing using petrochemical derivatives as raw materials
for a variety of consumer and industrial
products which will open up new sectors
for industrial coatings.
At the same time Iran is going through
an economic revival following the lifting
of sanctions in the wake of an international deal on its nuclear plans, boosting
coatings sales across a range of sectors.
For European and other investors in
the Gulf coatings market, the only major
concern are that the continued volatility
of the global oil market could undermine
the Gulf economies once again. Also there
is the danger that political strife, particularly between the Arab countries and Iran,
could also trigger an economic crisis.
“The Gulf economies are on the way
up at the moment and hopefully that will
continue,” said Jarkko Mattila, export di-
rector at Tikkurila of Finland, which has
just been expanding into the Gulf. “But
an economic downturn throughout the
region could happen quite rapidly.”
Tikkurila is moving into Gulf region
for the first time with the launch in 2016
of a number of decorative, wood, flooring
and industrial coatings through a distrib-
utor based in Dubai in the UAE.
“One of our main reasons for entering the Middle East is the stagnation
in the coatings market in Europe,” explained Mattila. “We are well established
in Europe, particularly Eastern Europe,
including Russia. We’ve also been doing
well in China. Now it is time to take advantage of the opportunities in the Gulf.”
By contrast most of the European
companies which are currently strengthening their presence in the Gulf have been
in the region for many years.
Jotun of Norway has just inaugurated
a coating plant in Oman 40 years after it
opened its first production facility in the
region in Dubai.
Now it is a major force in the Gulf’s
market for oil and gas, marine and other
protective coatings as well as having
made big inroads into the regional deco-
rative paints sector.
It is currently positioning itself to benefit from the diversification of the region’s
economies. The opening of the new facility in Oman showed the company’s
“commitment to the country’s ambition
to develop into a diversified economy
with increased investments and focus in
the manufacturing sector,” said Anwar Ali
Sultan, Jotun Paints Oman’s chairman.
Hempel, the Danish protective and
decorative coatings producer, is aiming to
open in 2017 an expansion of a plant at
Jeddah’s Second Industrial City in Saudi
Arabia in which it will consolidate all its
output for the country’s coatings market.
The company is planning to use the additional capacity to double its market share
in Saudi Arabia, which in line with the
dominant size of its economy is the biggest coatings market in the GCC.
In neighboring Kuwait, Hempel is due
to bring on stream a new coatings plant
in 2017 which will replace an existing
plant in the country built in the 1960s af-
ter the company first entered the Middle
East market. The unit which will have
45 percent more capacity will reinforce
Hempel’s leading position in the coun-
try’s coatings sector.
AkzoNobel which has a number of
powder coatings plants in the region has
recently set up three joint ventures in
the Gulf with local partners to help it
maintain a double-digit average growth
in GCC coatings sales.
Like most other European coatings
companies in the GCC, it follows a sustainability strategy with the emphasis
on products which reduce carbon footprints and have low emissions of volatile organics compounds (VOCs)
Despite their continued reliance on
crude oil exports, the GCC states have
been becoming increasingly aware of
the need to protect the environment.
The Gulf is a “fast growing region
(which) ensures that companies adopt
and follow a strict sustainability agenda,” Peter Tomlinson, managing director of AkzoNobel Middle East, said in a
recent interview with a local newspaper.
However as the GCC countries
move downstream into the manufacture of electrical and electronic
appliances, automobiles and their components and even oil and petrochemical
tankers, they want to create their own
indigenous coatings industry. This will
have the advantage of being able to produce coatings from local petrochemical-derived raw materials.
In Saudi Arabia, which has the most
far reaching plans for downstream industries, Sadara Chemical Co., a recently
inaugurated $20 billion giant petrochemicals complex at Jubail Industrial
City with 26 manufacturing units is already producing coatings and adhesives
The project is a joint venture between
Saudi Aramco, the state oil company, and
Dow Chemical with Dow providing research support through the building of a
Dow Middle East R&D Centre at a top
This could be the pattern of the future
in the Gulf. European and other Western
companies will be expected to supply not
just quality coatings but also the expertise and technologies to help GCC businesses make their own high performance
coatings as well. CW
on the way up at
the moment and
hopefully that will
continue. But an
region could happen