Moving energy-intensive industries to the Gulf

New research from the McKinsey Global Institute (MGI) reveals that global energy demand is on a path to grow by 2.2 percent a year over the next 15 years.
Soaring energy prices in the West have made the Gulf an attractive location for multinational producers of energy-intensive commodities such as aluminum and petrochemicals.
But as homegrown companies improve their skills and technology and national leaders seek business partners that can help develop the economy and create jobs, many multinationals are failing to gain entry to the region.
To succeed, multinational companies must fully understand the needs of governments and other stakeholders in the Gulf and manage relationships with them during a potentially complex deal-making process.
Multinationals must then structure broad deals that offer value to all the government and business partners involved.

Exhibit 1: The GCC states account for nearly a quarter of worldwide announced capacity expansions planned over the next five years.
Exhibit 2: Natural gas costs much less in the Gulf region than in other markets.
Exhibit 3: Structural advantages make aluminum production 30 percent cheaper in the Gulf than in China or Western Europe.