The booming demand for petrochemicals in China is encouraging joint ventures that demonstrate global co-operation, a new report by business intelligence expert GlobalData has found.
The new report* found that companies from the developed world are working with developing market China to match their advanced technology with newly expanding petrochemicals opportunities in the country.
The petrochemicals industry has undergone rapid changes in the last decade, witnessing China surpassing North America and Europe as the largest petrochemical consumer due to impressive demand from its large population. Growing Chinese demand provides joint venture opportunities for petrochemicals producers from other regions, and many planned projects in the region are established under joint ventures.
China's government has focused on industrialization and urbanization, leading to the recent development of the Chinese petrochemicals industry. China's attempts to match production capacity to the growing demand necessitates the construction of additional petrochemical plants, which provides joint venture opportunities for foreign companies, making the country a catalyst of growth within the global petrochemicals industry. It has become crucial for some major petrochemical producers to develop a presence in China, in order to benefit from significant revenue and maintain a place in the modern market.
Petrochemicals companies worldwide rely upon joint ventures to cope with changing business dynamics in the industry. While Europe and North America suffered significantly from the global economic crisis, the effects were relatively mild in China due to strong government support and resilient end-use sectors. A significant increase has therefore occurred in joint ventures during the last five years, seeing European and North American companies sharing their advanced petrochemicals production technologies with within the Asia-Pacific's lucrative developing market.
The Asia-Pacific was home to 27 new joint venture deals during 2010, representing a majority 58% share of global joint venture deals in the year – and this number is only likely to increase.
GlobalData analysis states that demand in China for basic petrochemicals and major plastics stood at 124.703 million metric tons per annum (mmtpa) in 2010, and is forecast to reach 215.033 mmtpa by 2015 at a Compound Annual Growth Rate (CAGR) of 11.5%. Basic petrochemicals and major plastics production increased from 29.475 mmtpa in 2000 to 95.952 mmtpa in 2010 at a CAGR of 12.5%, and is expected to reach 164.642 mmtpa in 2015.
* Joint Ventures in the Petrochemical Industry - Key Strategy to Manage Globalization
The study, from the company's Petrochemical Research Group, provides an in-depth analysis of the joint venture trends in the global petrochemical industry. It explains the reasons for the increase in joint ventures in the Asia-Pacific and Middle East region. The study provides a detailed analysis of recent joint venture deals, as well as details of important active companies in joint venture deals across the globe. It also provides historic and future forecasts of basic petrochemicals and major plastics production in China and the Middle East. The report highlights the importance of joint venture deals to manage globalization. The report is built using data and information sourced from proprietary databases, primary and secondary research, and in-house analysis by GlobalData's research team of industry experts.
GlobalData is a leading global business intelligence provider offering advanced analytics to help clients make better, more informed decisions every day. Our research and analysis is based on the expert knowledge of over 700 qualified business analysts and 25,000 interviews conducted with industry insiders every year, enabling us to offer the most relevant, reliable and actionable strategic business intelligence available for a wide range of industries.