Preparing for increased demand for petrochemical production
Global economic woes are eating into petrochemical profits, but Exxon Mobil Chemical Co. believes demand for advanced plastics and other products made from chemicals will only grow in coming years amid the world’s push for sustainability and rising incomes worldwide.Exxon continues to be one of the best-managed companies in the world. The company appears to avoid the spikes and declines in market conditions by studying the data and reacting before the situation becomes critical. I am reminded of the Chinese ideogram for "crisis" as two characters, the first being "trouble" and the second being "opportunity."
The number of people making enough to be considered middle class is expected to rise from just over 2 billion today to 5 billion over the next 15 years, propelling petrochemical demand 4 percent higher per year, faster than the overall demand for energy and the world’s gross domestic product. China and India could see a three-fold increase in per-capita income through 2040.
The world is changing rapidly, and even though today’s market is sluggish and U.S. petrochemical producers are losing their price advantage over international rivals, a downturn is no time to waste, said Exxon Mobil Chemical President Neil Chapman.
“What we as an industry have to do is be ready to meet that demand,” Chapman said at the IHS World Petrochemical Conference in downturn Houston on Wednesday. “We need speed to react. The time to build a facility … we have to learn to be faster. We have to learn to bring projects to market much faster.”
Exxon Mobil is spending billions to expand a major petrochemical facility in Baytown amid $160 billion in petrochemical investments across the United States. The Irving-based oil giant, Chapman said, has dramatically changed the way it has approached logistics in recent years, moving from Excel spreadsheets to highly sophisticated software that tracks each of its containers around the world.
“You have to look at every possible stage in the development process, (and ask) how can you do it faster and make sure you get the necessary value out of it?” Chapman said. “There’s no magical solution.”