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APIC 2014: Transformation—a map redrawn

12:30 AM MDT | May 16, 2014 | Natasha Alperowicz in Pattaya

The main day of this year’s Asia Petrochemical Industry Conference (APIC), now taking place at Pattaya, Thailand, dealt with changes the industry currently faces and their impact on Asian players. The theme of this year's APIC is Transformation, A map redrawn. The proceedings commenced with introductions by the chairmen of the petrochemical industry associations of APIC’s members, Thailand, Japan, India, South Korea, Malaysia, Singapore and Taiwan.
In his opening remarks, Ekarat Thongtawach, chairman of the Petrochemical Club, Federation of Thai Industry, said that the global petrochemical industry has changed significantly. Geopolitical uncertainty is impacting economies in some parts of the world as are high petrochemical feedstock costs, particularly in Asia. Petrochemical players, particularly in North America, have an immense competitive advantage. These changes are not all negative, however, and will provide opportunities. “We cannot simply ignore the changes but embrace and understand them,” he says.
Yoshimitsu Kobayashi, chairman of Japan Petrochemical Industry Association, echoes Ekarat’s views. “New production capacity based on associated gas from Middle East oil fields, shale gas from North America, and other natural gas, offers improved cost competitiveness and represents a major challenge to Asian petrochemical industries, which tend to rely more on higher-priced naphtha as their raw material. At the same time, we can see this situation as a unique opportunity to pursue game-changing innovations and build a high-value-added petrochemical industry that shifts the axis in butane-butene fraction and aromatic compounds.”
Asia’s high-cost petrochemical feedstocks dominated discussions. Preston Chen, chairman of the Petrochemical Industry Association of Taiwan, says that the cost of producing one ton of ethylene from shale gas feedstock is $350 compared with $1,500 when using naphtha. At APIC, he also spoke about environmental challenges the industry is facing. In Taiwan, the Kuo Kuang petrochemical project has been canceled on environmental grounds, he says.
Kamal Nanavaty, v.p. of the Chemicals & Petrochemical Manufacturers’ Association of India, says  that petrochemical consumption in Asia/Pacific this year is projected to grow 4.5–5.0%. He also calls on the industry to embrace change. “The petrochemical landscape is undergoing a transformation, which has already started altering the fundamentals of this industry, and it is vital that we gear up to face the coming changes and the challenges thrown up by these changes,” he says.

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