Construction Starts for Global Chemical Industry in 2009 Remains Steady

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Researched by Industrial Info Resources (Sugar Land, Texas)--As the world's economic woes continue to linger and expand, concerns fill our minds and promote the anxiety we have as individuals for our financial future. Most of the industrialized nations are tied to the U.S. stock markets either by listings or major ownership of companies on the exchanges, and this uncertainty can grip and bend even the most solid and confident CEO, creating a ripple effect throughout industry sectors. With this in mind, industrial confidence (compared to consumer confidence) can assist in lifting the weight of the recession as some companies decide to stay the course of their long-term investment plans.

Industrial Info is currently tracking almost 250 international Chemical Processing Industry (CPI) projects that are slated to begin construction in 2009. The combined investment for all of these projects, should they follow through with construction, is more than $55 billion. These projects range from petrochemicals to plastics to fertilizers and are located on every continent.

China leads the way with new CPI investment for 2009 with more than $22 billion set to be spent in expanding its industrial chemical production across 106 projects. Although China's GDP might be slipping a bit, it hopes to continue to provide jobs for its ever-growing population and increase commodities to sell to fuel its economy. China is a country in which the government owns, regulates and invests in its major industries, and the CPI is high on the Communist Party's list. Experts have been saying that China will own the polyvinyl chloride (PVC) market in 2009. Industrial Info has reported on seven grassroot PVC plants to be built in China next year with a total investment value (TIV) of $675 million and a combined output capacity of 1.7 million metric tons per year of new capacity once these plants are operational.

In India, Industrial Info is tracking 32 projects in the CPI with an overall TIV of more than $5 billion. The products range from petrochemicals to plastic resins to caustic chemicals. Major companies that are sponsoring these expansions include Oil & Natural Gas Corporation Limited (BSE:500312) (New Delhi, India), Reliance Industries Limited (BSE:500325) (Mumbai), Essar Global Limited (Mumbai) and GAIL (India) Limited (BSE:532155) (New Delhi) and Indian Oil Corporation Limited (BSE530965) (New Delhi).

On the other side of the world, Brazil is expecting heavy investment to the tune of $6.3 billion across 16 projects. The largest of the projects will be the ethylene plant built by Petrobras (NYSE:PBR) (Rio de Janeiro, Brazil) in Itaborai. An estimated investment of $1 billion is expected for the ethylene plant alone, which will be accompanied by an ethylene glycol unit, a polypropylene unit, a paraxylene unit, a styrene unit, a benzene unit, a polyethylene unit and polyethylene terephthalate unit and a purified terephtalic acid unit. All together, the TIV for the Itaborai site is estimated at more than $5 billion, which represents a majority of the CPI spending that has currently been identified.

The Middle East, Russia, Southeast Asia and Trinidad & Tobago are all expected to see billions in CPI investment throughout 2009. Only time will tell, given the situation of the global economy that is so intertwined among countries, if the plans will be implemented and executed. Given that the CPI is so large and connected, one could only hope that progress will reign, providing jobs not only for those employed by chemical manufacturers but also for the many skilled laborers and engineering and construction firms that will be selected and hired to build these new facilities across the world.

Industrial Info Resources (IIR) is a marketing information service specializing in industrial process, energy and financial related markets with products and services ranging from industry news, analytics, forecasting, plant and project databases, as well as multimedia services.