To overcome the effects of slower demand growth in China on prices and margins and add value to chemicals output, the UAE will need to focus its attention on expanding its downstream plastic conversion industry, according to United Arab Emirates Petrochemicals Report Q4 2010 released on Thursday. The Gulf Cooperation Council (GCC) accounts for just 2 percent of the global plastics conversion market, but annual growth is expected to reach 9-11 percent, making it one of the fastest growing regions over the medium term, it noted. Data from SABIC, GCC consumption of plastics has grown from 19 kg per capita in 2000 to 39 kg per capita in 2010 and should reach the kind of levels seen in a developed market like Japan by 2020. Packaging is the fastest growing segment, followed by construction and wire and cable. The report, released by companiesandmarkets.com, added that the expansion of the Borouge complex in 2010 is prompting a massive increase in petrochemicals capacities in Abu Dhabi. The second phase of the Borouge complex at Ruwais, Abu Dhabi, began production in mid-2010 with a 540,000tpa PE unit coming onstream in July. In Q410, an olefins conversion unit producing 752,000tpa propylene, which together with 50,000tpa of propylene delivered from Adnoc's refinery, will be used to feed the two Borstar PP units with combined capacity of 800,000tpa. Borouge 2 will triple Borouge's polyolefins capacity to 2mn tpa when it becomes fully operational. An additional 2.5mn tpa is scheduled online in 2013, following the completion of Borouge 3. The new capacity will be marketed mainly to the Middle East and Asia Pacific, targeting high-end applications in the pipe and high performance packaging areas. This will be followed in 2013 by a third stage, Borouge 3, which will have capacities of 1.43 million tpa PE and 960,000tpa PP supplied by a 1.5tpa ethane cracker, with $4.6 billion worth of construction contracts signed in Q210. With domestic demand likely to continue to outstrip supply, China will remain a net polymers importer over the medium term and the largest importer in the world. By 2014, China could represent 35 percent of the global PP market and 20 percent of global PE demand. However, China will become increasingly self-sufficient. In terms of polymer capacities, we forecast a 1.65 million tpa increase in Chinese PE capacity and a 1.49 million tpa increase in PP in 2010, ensuring polymer market self-sufficiency should approach 75 percent PE and exceed 100 percent PP. Consequently, the Emirati industry will require an expansion of the domestic and regional plastics conversion industry. Meanwhile, the struggling government developer responsible for Dubai's manmade islands hopes to complete its multibillion-dollar debt restructuring by year's end, the company's CEO said Thursday. A successful resolution would bring a further measure of closure to Dubai's financial crisis. The developer, Nakheel, is the main property arm glomerate Dubai World.