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Oman's OQ bullish on China's petrochem market

By LIU ZHIHUA and OUYANG SHIJIA | China Daily | Updated: 2024-06-18 09:17

An oil tanker is berthed at a port in Ningbo, Zhejiang province, in September. [Photo by Yao Feng/for China Daily]

China remains a key market for OQ, an Oman-based integrated energy company. A senior company executive emphasized the long-term positive fundamentals of the Chinese economy and its continuous expansion, saying it offers abundant opportunities for foreign companies like OQ.

In an exclusive interview with China Daily, Hilal Al Kharusi, chief executive of Commercial and Downstream at the energy giant, expressed the company's eagerness to grow together with China amid the country's increasing market openness and deepening green development.

The company officially entered China in 2010 and currently operates in 17 countries and regions around the world, with its polymers and chemical products sold in more than 85 countries and regions.

"We are very optimistic about our business prospects in China. The Chinese economy is continuously growing, and the Chinese government is implementing policies to boost consumption, with examples including promoting consumer goods trade-in programs and boosting spending in electric vehicles," said Kharusi.

"All will drive growth and create opportunities for OQ."

These policies will ensure that demand for household appliances and automobiles remains robust in China, generating more demand for OQ's products like polypropylene and polyethylene. The packaging industry, benefiting from the recovery of sectors like culture, entertainment and tourism, presents additional avenues for growth. Moreover, China's efforts to reduce resource waste will further drive demand for OQ's offerings, particularly in the development of reusable plastic packaging.

Kharusi highlighted that OQ aims to enrich its product portfolios and offer solutions tailored to Chinese consumers' evolving needs amid intense competition. To facilitate this, OQ has expanded its logistics operations, partnering with 10 ports in China to optimize shipment processes, enabling the company to sustainably accommodate the increased demand. That has led to the shortest lead time for shipments from the Middle East to China so far, ranging from 22 to 28 days.

The National Bureau of Statistics said on Monday that China's economy continued a recovery trend in May amid a steady rebound in demand.

Its value-added industrial output — a gauge of activity in the manufacturing, mining and utilities sectors — grew 5.6 percent in May from a year earlier after a 6.7 percent rise in April, said the NBS.

Retail sales, a key measure of consumer spending, rose 3.7 percent year-on-year in May versus a 2.3 percent increase in April.

"OQ always believes that the development of new quality productive forces will empower the Chinese energy sector's green low-carbon transition and facilitate the Chinese economy's high-quality development," the executive said.

Kharusi anticipates new cooperation opportunities between Oman and China in green, clean and new energy sectors, exemplified by strategic initiatives like the OQ HYPORT Duqm project. This collaboration aims to produce around 330,000 metric tons of green ammonia in phase one and over 650,000 tons in phase two.

"This will attract Chinese manufacturers and enable collaboration with Chinese investors who are interested," he said.

In pursuit of investment opportunities, OQ seeks to invest almost $40 billion in green sectors, with projects spanning Oman's southern, central and northern regions. The company's development of Ladayn Polymer Park, coupled with strategic agreements like the one signed during Chinaplas 2024 — an international plastics and rubber trade fair held in Shanghai in late April — demonstrates its commitment to fostering partnerships with Chinese investors and advancing mutual growth.

"We see a lot of Chinese investment flowing into the Middle East. I can imagine that energy must be one of the key sectors along with construction, infrastructure and agriculture. Chinese investors could play a major role in supplying these sectors in not only Oman but the Middle East," he said.

"When it comes to green sectors such as renewables, solar, wind and green hydrogen, Chinese enterprises will also play a major role."

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