Petrochem collaboration essential for GCC supply chain say experts

Arabian Gulf chemical industry must collaborate in supply chain to remain globally competitive
Dr. Abdulwahab Al Sadoun, secretary general, GPCA.
Dr. Abdulwahab Al Sadoun, secretary general, GPCA.

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Collaboration in the supply chain will be absolutely key to retain the global competitiveness of the Arabian Gulf chemical industry, according to a new report to be released by the Gulf Petrochemicals and Chemicals Association (GPCA).

With over 83 per cent of GCC petrochemical output destined for export to over 100 countries worldwide, the industry has the longest supply chain on a global level, making supply chain efficiency a crucial factor for maintaining the industry’s competitive advantage.

Cost optimisation will be particularly important as the average cost associated with GCC chemical supply chains represents about 30% of landed product prices, which has a significant impact on chemical companies’ bottom line.

The report is based on findings of the GPCA Supply Chain Collaboration Survey 2018, which gauged the views of 19 GPCA member companies who collectively account for 75 per cent of the total chemical output by volume in the Arabian Gulf.

According to the survey, 52.6 per cent of respondents see potential in securing various competitive advantages through intensifying collaboration.

A staggering 95 per cent of the respondents said their organization is taking strategic steps to improve collaboration with Logistics Service Providers (LSPs), with 84.2 per cent seeing collaboration with LSPs as a crucial tool to enhance operational efficiency and optimise costs.

An additional 26 per cent of respondents identified mutual benefits and risk sharing as a driver for collaboration.

Dr. Abdulwahab Al Sadoun, secretary general, GPCA, said: “The survey results testify to the clear commitment by GPCA member companies to intensify collaboration with supply chain partners, particularly LSPs.”

“With the pace of industry change accelerating in the coming years, collaboration throughout the value chain will be particularly important to realize and maintain the competitive advantage of the chemical industry in the Arabian Gulf,” he said.

“As senior industry leaders prepare to converge in Dubai on 9-10 May for the 10th GPCA Supply Chain Conference, collaboration is coming into acute focus, confirming the need for more cost efficient, streamlined and collaborative supply chains which drive value creation and bottom line results,” Al Sadoun added.

The survey also highlighted trust, leadership commitment, talent, communication, asset sharing and technology collaboration as key components to maximising the potential of collaboration within supply chain partners.

Technology especially enhances data availability, visibility and the agility of supply chains.

The full report will be released during the 10th GPCA Supply Chain Conference taking place in the InterContinental, Dubai Festival City, UAE, under the theme ‘Collaboration for growth: A cultural transformation’.

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