New Study: South Africa Petrochemicals Report Q1 2016

The South African petrochemicals industry is in recession and it could take at least two years before returning to growth as key petrochemicals sectors flatline in a difficult operating environment. The sector is the worst affected area of an economy that is enduring sub-2% growth and falling competitiveness.

In the January-August period of 2015, basic chemicals rose just 0.1% y-o-y, while plastic fell 3.1% and rubber declined 0.4%. The decline in plastic and rubber output abated from May, but while rubber looked as if it was on an upwards trend, the plastics sector looked set for another year of contraction in 2015. The factors causing the decline include poor domestic market performance, lower international petrochemicals prices and rising costs of inputs, including raw materials and labour.

The automotive and construction sectors, which are the largest polymers-consuming industries, are set for lacklustre growth amid poor business confidence and the declining value of the rand. Additionally, the industrial sector is beset with labour strike action and power supply interruptions that are undermining productivity and stunting growth over the short term. In the long term the structure of the economy will need to be reorientated, perhaps to serve a small, but growing industrial base in Africa.

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The low value of the rand, coupled with low oil prices, has not helped lift local petrochemicals output, which will track poor GDP growth figures in the near term.

In 2016, construction is set to grow 3.6%, while the automotive sector will rise 2.3%, growth rates that represent a stand-still for a developing economy and will undermine consumption of polymers and rubbers.

The South Africa Petrochemicals Report has been researched at source, and features BMI Research's market assessment and independent forecasts for key petrochemicals sub-sectors. The report also analyses the impact of regulatory changes, recent developments and the background macroeconomic outlook and features competitive landscapes comparing companies by products and services, sales, market share, investments, projects, partners and expansion strategies.

BMI's South Africa Petrochemicals Report provides industry professionals and strategists, sector analysts, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the South African petrochemicals industry.

Key Benefits

* Benchmark BMI's independent petrochemicals industry forecasts to test other views - a key input for successful budgetary and planning in the South African petrochemicals market.
* Target business opportunities and risks in the South African petrochemicals sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in South Africa.
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