Market and raw material trends set the direction in the chemical industry. That is one of the reasons why the 2008/2009 crisis signaled the start of a paradigm shift in chemical plant engineering and construction. Traditional EPC suppliers (general contractors based in the Western industrialized nations) are facing increased competition from Asia. At the same time, the plant engineering teams at global chemical companies are intensifying their partnerships with EPCs and spreading the workload across the international engineering resource base.
The recent economic crisis is nothing more than a distant memory for the chemical engineering, procurement and construction sector. In 2011 alone, chemical projects valued at more than $150 billion worldwide were announced, with the construction work to be carried out over the next 3 to 4 years. Ever after that, the engineering teams are likely to remain busy. Between now and 2020, BASF is planning to invest US $ 30 to US $ 35 billion in new facilities.
The chemical industry is pursuing two general strategies. Producers of bulk chemicals (commodities) such as fertilizer and primary plastics including polyethylene and polypropylene which are used in foil production are locating production facilities near the sources of raw materials such as the Middle East. Working within the framework of the Sadara joint venture, DOW Chemical Company and Saudi Aramco began construction of an integrated chemical complex at Jubail (Saudi Arabia) last July. The $20 billion project is scheduled to begin producing 3 million MT of chemical products a year by 2016.
Engineering Industry Invests in Emerging Markets
Producers of special chemicals and high-performance plastics are setting up operations in the sales regions. Following investments by BASF, Bayer, Evonik and Lanxess in Asia running into the billions, more projects have been announced recently. Bayer plans to invest an additional €1.8 billion in Asia between now and 2015, and BASF has earmarked € 10 to € 12 billion for construction projects in emerging countries. Special chemical producers Evonik and Lanxess made headlines last year with projects such as the € 400 million butyl rubber investment (Lanxess) and a roughly €500 million methionine plant (Evonik) in Singapore.
However, the horizon extends beyond the emerging countries and Asia. Significant expansion is also taking place in Europe...
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