Background and Challenge

A leading manufacturer of specialty equipment for the refining and petrochemical industries was looking to identify potential growth opportunities in the Gulf Cooperation Council (GCC) region, with a focus on equipment, data and analytics services, and engineering, procurement and construction (EPC) services, including aftermarket support. But to do so they needed a better understanding of the refining and petrochemicals industry market dynamics in the Middle East. Given the limited data available, the company enlisted L.E.K. Consulting to help develop a market fact base for product and service trends in the GCC.

Approach and Recommendations

L.E.K. took a fundamentals-first approach in evaluating market dynamics. We began with a review of capital spending levels, customer purchasing trends and competitor positioning. We conducted interviews with leading national oil companies (NOCs) and international oil companies (IOCs) in the GCC, as well as with global equipment manufacturers. Going beyond a basic market analysis, we developed a set of factors for the company to consider as part of its manufacturing footprint strategy. Among these was an assessment of the level of localization that would be required in light of the GCC region’s push to promote local goods and services, including Saudi Arabia’s In-Kingdom Total Value Add (IKTVA) program.


Our client developed a commercial strategic plan based on the observations and recommendations included in our analysis. This analysis provided a detailed evaluation of market dynamics, offered guidelines for what level of localization to take in the region and provided a strategy for strengthening relationships with NOC and EPC customers. 

Related Insights