Petrochemicals deter growth of textiles in Saudi Arabia

18 Feb '13

2 min read

The Kingdom of Saudi Arabia has a huge petrochemical industry, but it has not translated into growth of downstream textile industry in the country.

By 2015, the overall output of Saudi petrochemical industry is likely to cross 80 million tons, Ali Al-Naimi, Minister of Petroleum and Mineral Resources, had said recently during the Gulf Petrochemicals and Chemicals Association Forum in Dubai.

However, the growth of downstream industries like textiles is still at its nascent stage in Saudi Arabia.

The high prices of raw materials and higher cost of human resources are the main factors that hinder the growth of the downstream textile industry, according to experts.

The high cost of raw materials is attributed to lack of competition, as Saudi Basic Industries Corp (SABIC) is the only company that determines the prices of all petrochemical products in the country.

Similarly, the high cost of labour is attributed to Saudization programmes launched by the Ministry of Labour.

However, downstream industries such as the textile industry can be developed if the Government establishes companies and small and medium enterprises (SMEs) for the purpose, Fadhul Albuainain, an economist told Arab News.

According to him, raising the domestic production of downstream industries will result in creation of new employment opportunities.

It would also reduce the Kingdom’s dependence on export of crude oil and petrochemical products, he adds.

Fibre2fashion News Desk - India