Strategic Trade Insights: The GCC Chemical Industry’s Global Reach

The chemical industry in the Gulf Cooperation Council (GCC) has experienced substantial growth over the last decade, driven by its export-oriented nature. This growth is supported by several critical factors, including low feedstock costs and strategic location that provides access to key export markets. These advantages have enabled the industry to capitalize on its competitive advantage and maximize growth opportunities.

In 2022, the total export value of GCC chemicals reached an impressive USD 89.5 billion, with a volume of 82.4 million tons. Over the past decade, the value of chemical exports has grown by 67.3%, reflecting the industry’s dynamic expansion and increasing global demand for its products.

The GCC’s chemical industry relies on free trade and interconnected global value chains. It trades with approximately 170 countries worldwide, demonstrating its extensive reach and integration into the global market. China, India, and Europe are the top trade partners for GCC chemicals, highlighting the region’s strategic trade relationships with leading economies globally.

Until recently, the GCC region primarily pursued unilateral trade agreements. However, the adoption of Free Trade Agreements (FTAs) is now increasingly recognized as beneficial for GCC economic growth and the sustainability of the regional chemical industry. FTAs have the potential to raise living standards, promote economic growth, connect people and businesses, attract foreign investments, and foster innovation in manufacturing. These advantages enable governments and companies to enhance the industry’s sustainability through improved revenues, higher job creation, and the development of more innovative technologies.

Currently, potential FTAs between the GCC and major partners, such as China, Turkey, and the UK, are under consideration. While these agreements present significant opportunities, they also pose certain risks for the chemical industry. For more detailed analysis on the topic, read GPCA’s latest papers:

The GCC chemical industry continues to leverage its strengths to maintain and expand its presence in the global market, contributing significantly to the region’s economic growth and development.

GCC Chemical Industry Trade by The Numbers

The GCC’s export oriented nature has resulted in a substantial industrial growth over the last decade. Low feedstock cost a strategic location to access key export markets are critical factors aiding the industry to capitalization its competitive advantage and maximize growth

USD 89.5 billion GCC export value in 2022: 82.4 million tons

67.3% growth in chemical export value over the past decade

23.7 billion Commodity polymers were the GCC’s most exported chemicals

Largest export partners: China (17.9 Billion) India (14.9 Billion)

Trade with approximately 170 countries

As the region’s largest export market, China accounts for 19% of total GCC chemical exports.

GCC chemical exports in 2022

Reached almost USD 20 billion to India

Exceeded USD 6 billion to Turkey

A GCC FTA with China, India, and Turkey could generate a welfare effect of USD 23.25 billion.

And potential consumer surplus of USD 25.3 billion.

GCC-India Trade Relations:

Approximately 10 million tons of plastic waste is generated in the GCC each year, but only about 10% of this waste is recycled, reused, or recovered (GPCA)​.

Global supply of recycled plastics cannot meet demand yet, with recycling rates remaining low at 10-20%​ (GPCA)​.

A GCC-China FTA would increase petrochemical exports to China by USD 1.1 billion.

Employment and Economic Impact:

Chemical exports to India accounted for 21.1% in 2022

Positive total trade effect of USD 292.6 million from a potential GCC-India FTA

GCC-Turkey Trade Relations:

Chemical exports to Turkey reached an all-time high of USD 5.6 billion (2019-2022).

Growth of approximately 133% in chemical exports to Turkey during this period.