Orpic, the Sultanate’s refining and petrochemicals flagship, plans to establish a worldwide network of offices to support the marketing of the huge quantities of polymers that will be produced when its Liwa Plastics mega venture comes on stream in 2020. As a first step, the wholly government-owned entity has set up a new outfit to secure markets for the company’s output of polymers — notably polyethylene and polypropylene — an estimated 1.5 million tonnes of which will be produced annually when the $6.4 billion Liwa Plastics Industrial Complex (LPIC) is operational, a senior company executive said.
“We have created a new legal entity, namely Orpic Polymer Plastics, which will be fully owned by Orpic and tasked with selling the company’s polymer output in international markets,” said Gilles Rochas (pictured), General Manager – Polymer Marketing. “Offices will be opened in key export markets, such as China, Singapore, India, Turkey and so on. Our goal is to have a global marketing footprint by 2020,” Rochas added.
Speaking to the Observer, Rochas said Orpic’s decision to directly oversee the marketing of its polymer output — as opposed to the conventional practice of securing long-term offtake arrangements — is designed to ensure optimum returns for the company. By cutting out the middlemen from the marketing and supply chain, Orpic is not only assured better margins on its products, but crucially it can also work towards building longer-term, mutually beneficial relationships with key buyers, he noted.
Among the geographical regions being looked at as potential markets for Orpic’s polymer output is Asia where China, well-known for its strong appetite for polyethylene, is particularly promising, says Rochas.
Also prospective are countries such as India, Pakistan and Sri Lanka with Orpic hoping to leverage the Sultanate’s geographical proximity and long-standing historical ties with these nations to secure markets for its feedstock. Other regions identified as equally promising include East Africa, the Middle East and North America, he said.
The executive noted however that given the current global economic environment, the business of securing lucrative markets for Orpic’s polymer output will not be without its share of challenges.
“One key challenge is to carefully ascertain the demand/supply situation in target markets around the world, especially in light of today’s ever-changing market environment. Markets are constantly influenced by trends, such as shale gas dynamics in the US, for instance, the coal-to-ethanol business in China, the situation in Europe, and so on. One needs to understand the macroeconomics of this industry in order to be able to identify the market you want to target,” the General-Manager explained. Side-by-side with its efforts to find export markets for its output, Orpic Polymer Plastics will also look to support the growth of downstream industries that will source its feedstock requirements from Liwa Plastics, according to Rochas.
In this regard, he listed three scenarios that if suitably explored and developed could open up an attractive domestic market for locally produced polymer. The first concerns Orpic’s own requirement of bags and pallets, the production of which will necessitate sizable quantities of polymer as raw material, said Rochas.
“We also need to attract investors in downstream plastics industries in Oman who can export their goods to international markets. For its part, Orpic will be ready to provide technical and marketing know-how in order to make it attractive for investors to operate in the Sultanate.”
Additionally, Orpic is also looking to support the development of new plastics-based products and thereby help generate new demand for its feedstock. One potential area being looked at is the pharmaceutical and healthcare sector where polymer-based packaging is seen as promising.
“We see the potential for Oman developing into an innovation hub for polymer-based product applications in areas like pharmaceuticals, and so on,” he added.