Saudi Petrochemicals - NCBC

INDUSTRY OUTLOOKto grow at a CAGR of 2.6% during 2009-2015E, while LDPE prices are expected towitness a CAGR of 3.3% during the same period.Exhibit 10: Polyethylene prices (historic and forecasts)USD/mt2,2502,0001,7501,5001,2501,00075050025002005 2006 2008 2009 2011E 2012E 2014E 2015E 2017E 2018EHDPE LDPE EthyleneSource: Bloomberg, NCBC estimatesLow Density Polyethylene (LDPE)This is the low density version of polyethylene and therefore less hard, weaker butmore flexible then HDPE. LDPE, given its specifications, finds uses in products andpackaging such as foils, trays, plastic bags, and protective coating on paper andeven in textiles.Exhibit 11: Applications of LDPE%GP27%Cable InsulationGrade6%Heavy Duty Film13%High Clarity Film26%Hygienic Film28%Source: NIC Prospectus - Jacob ConsultancyLDPE SUPPLY DYNAMICSBetween 2003-2008 globalcapacity of LDPE grew at aCAGR of 2.4%Total global capacity of LDPE was over 22mn mtpa in 2008. By geography, Asia andEurope were the largest producer of LDPE with a global market share of over 20%each, followed by North America with a market share of over 10%. Since most ofthe new capacities are being developed in the Middle East and Asia, this region’scontribution to global capacity is expected to increase in the coming years.27 April 2010 SAUDI PETROCHEMICAL SECTOR12