In this period of low oil prices, what opportunities do you see for investors in Saudi Arabia?
Saudi Arabia is committed to diversifying its economy, seeking value-added industries that can benefit from the raw materials that come from its local petrochemical industry. As a long-term investor in the Kingdom, ExxonMobil is working to support the country in this endeavor, which will contribute toward creating new career opportunities for the increasing number of well-educated Saudis. While the plastics industry is well developed in the Kingdom, the rubber industry is still in its infancy and targeted for growth by the government. Our elastomers plant at KEMYA introduces new raw materials to the Kingdom, creating investment opportunities for Saudi and foreign industrialists seeking to produce closer to their final markets. With expertise acquired through 75 years of leadership in the synthetic rubber industry, ExxonMobil is working with the government to attract investors to manufacturing opportunities in Saudi Arabia. The government is developing incentives to encourage companies, both Saudi and foreign, to invest. In addition, construction of the first new rubber converter in the Kingdom is well under way, and a number of other projects are at final planning stages with MoUs signed with the government. It will take some years to create the full cluster of rubber converters, but ExxonMobil is proud of the role that KEMYA played in pioneering this industry in Saudi Arabia.
What are your expectations and goals for 2016 for ExxonMobil in Saudi Arabia?
Globally, demand for chemicals is expected to rise by 50% over the next 10 years, or about 4% a year on average. Demand for some specialty or differentiated chemicals will grow even faster. What has driven this rise in demand is the fact that plastics and other petrochemical products are integral to modern living standards. Here in the Middle East, the middle class is expected to grow by more than 20 million from 2010 to 2030. The rise of a middle class will create new demands for products made from chemicals—everything from home appliances to homebuilding materials to cars. To get a sense of the scale of how these changes will impact demand for chemicals, consider the following: The average new car is about 50% plastic by volume but only 10% of the weight. And by 2040, there will be 800 million more cars on the world's roads—double what there is today. With this in mind, SABIC and ExxonMobil constructed a new, multi-billion-dollar elastomers plant at KEMYA, which is coming online as we speak. The facilities are integrated with the existing Al-Jubail complex, and the new synthetic rubbers project represents a significant broadening of KEMYA's product portfolio. With a total investment of $3.4 billion, SABIC and ExxonMobil have added a new elastomers plant at KEMYA. The facilities are integrated with the existing Al-Jubail complex, and this new synthetic rubber project represents a significant broadening of KEMYA's product portfolio. The expansion of automotive markets in the Middle East and Asia-Pacific regions has created strong demand for synthetic rubber products in vehicles and tires. The specialty elastomers also will be used in other industries such as building and construction and appliances in end products such as electrical wire covering and insulation, seals, and belts. The facility employs commercially competitive, high-impact technologies, including proprietary ExxonMobil EPDM, thermoplastic elastomer, and halobutyl rubber technologies. The KEMYA elastomers facility demonstrates ExxonMobil and SABIC's commitment to foster a local rubber industry in Saudi Arabia that supports job creation, develops downstream industries, and helps diversify the national economy. The strategic partnership between SABIC and ExxonMobil provides the strength of industry-leading competitive assets, introduces new specialty products to the Kingdom, and offers global marketing and supply capability of exceptional quality. The new facility can help accelerate the growth and diversification of the Kingdom's industrial sector and provide local manufacturers with the building blocks to successfully compete domestically and internationally in markets for a wide range of products.