Consolidation is key, says BCG consultant

Consolidation is key, says BCG consultant 29.11.2017

Industry consolidation will not only help producers in the GCC region improve their com­petitiveness but also support the economic development of the region, according to Mirko Rubeis, Partner and Managing Director at The Boston Consult­ing Group.

Consolidation will allow GCC producers to “build scale” in certain products and help develop market leadership, he explained at the consultancy’s Annual Forum Day 0 seminar.

This is especially important as GCC petrochemical producers are facing several challenges, such as increasing competi­tion from US shale producers, lower oil prices and increasing self-sufficiency in China, he added.

Consolidation will also the GCC market players to develop focused portfolios in areas such as specialty chemicals, while reducing cost through scale and synergies.

Moreover, consolidation will help increase the competitiveness of smaller, stand-alone companies and create “regional champi­ons” in some product segments which will be better able to compete with global peers.

Merging capabilities will also increase the competitive ad­vantage of production clusters such as the large sites in Saudi Arabia’s Yanbu and Jubail, he said.

Consolidation in the GCC industry can also be broadened into different avenues other than through mergers and acquisi­tions, Rubeis concluded.

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