Qatar's booming economy holds bright future for industries

The ability to ride through the global financial crisis owing to decisive actions from its government has given the State of Qatar an enviable position in the world economy today. The emirate's economic growth has surpassed expectation and is expected to further move towards the 20% scale in 2011, with low inflation adding to the positive prospects.

According to the International Monetary Fund (IMF), continued strong public investment in infrastructure, improved productivity and increased non-hydrocarbon production could very well sustain growth in the medium- to long-term. Adding to the positive developments are government's fiscal policies supporting investment, capital accumulation and consumer spending. The government's decision to seek external financing by issuing bonds in 2009 has helped sustain public spending. The banking system has also remained highly profitable and well capitalised.

Ample support for industrial growth

Qatar recently celebrated its achievement of 77 million tonnes per annum (Mta) of liquefied natural gas (LNG) production capacity, further strengthening its position as the world's leading producer of LNG. This achievement forms part of the vision of HH the Emir of the State of Qatar, Sheikh Hamad bin Khalifa Al Thani, who set the target of 77 Mta capacity by the end of 2010. The 77 Mta Celebration Event, which was the State's highest profile energy industry event this year, was held at Ras Laffan Industrial City under the patronage and presence of HH the Emir Sheikh Hamad Bin Khalifa Al Thani, and was hosted by HE Abdulla bin Hamad Al Attiyah, the Deputy Premier and Minister of Energy and Industry, and Chairman of Qatar Petroleum.

The celebration highlighted years of investment in infrastructure and expertise that brought Qatar's LNG production from zero to being the world's biggest producer in a span of 14 years. The 20% GDP growth projection for this year is hinged on the additional LNG capacity, and such growth would support the manufacturing sector, construction/building industry, transportation and communication, as well as government and financial services.

Hosting large downstream companies

The government has been encouraging private participation in the delivery of products and services that it issued a decree establishing a Public Private Partnership (PPP) Department within the Ministry of Business and Trade. In particular, the petrochemical industry is attracting interests. Qatar held talks with companies such as Exxon, Royal Dutch Shell Plc and Chevron Phillips Chemical Co. for possible partnership in the construction of the two facilities. Qatar is using its gas reserves to run petrochemical, aluminium and fertiliser factories as it moves away from exporting LNG and crude oil. It plans to raise annual production of petrochemicals to 28 million tonnes by 2014. State-controlled Qatar Petroleum signed an agreement with Exxon last year to build a petrochemical complex that would be the emirate's biggest single energy-related project since Shell's Pearl gas-to-liquids plant.

Preliminary talks for a mixed-feedstock cracker are under way. The planned complex includes a 1.6 Mta steam cracker and its associate units include two 650 Mta polyethylene plants and a 700 Mta ethylene glycol facility. Expansion plans are also being finalised and will likely boost production of plastic products. Qatar Plastic Products Company (QPPC) plans to boost flexible packaging capacity to 13,000 tonnes this year. The expansion has been necessitated by rising demand from its major customers. QPPC is one of the biggest downstream companies manufacturing flexible packaging, using low-density polyethylene (LDPE). QPPC is a joint venture by Qatar Petrochemicals Company (QAPCO), Qatar Industrial Manufacturing CompanyJordan XII Slide