Laboratory Analytical Testing Services Market in the GCC—Outlook and Trends

1. Currently affected by the drop in oil prices, GCC countries will need to undergo a transformational shift to achieve desirable growth
2. In 2016, GCC market for laboratory analytical services was USD 721 Mn; CAGR expected until 2020 is 3%
3. Top 4 end-user segments drive the demand for the top services of material testing & analysis, chemical and microbiological analysis
4. Lab analytical service providers based out of Dubai (UAE) cater to 50+% requirements; inclusive of those of other GCC countries
5. Growing population and increasing imports boost market growth
6. Lab analytical services market to become a USD 811 Mn opportunity by 2020
7. Initiatives to develop halal clusters beneficial for overall market growth; service segments like food, cosmetics and personal care items to benefit
8. Dubai-based laboratory analytical service providers to retain dominant market standing throughout forecast period as GCC countries continue to rely on them
9. In 2015, SGS, Intertek and Bureau Veritas constituted ~47% of the overall market
10. 60+% share of “Others” translates to fragmented nature of market; intense price wars are a common feature
11. End-user companies directly engage with laboratory service providers for all service requirements; pertinent government entities mandate guidelines
12. New testing techniques/testing kits are being developed to reduce time taken to test samples
13. Pricing is derived based on number of samples and tests; usually, higher the volume of samples, lower is cost of test
14. End-user companies expect laboratory service providers to be certified; accreditation by the regulatory authorities renewed promptly
15. Lead time, proximity and industry references feature among the key criteria for vendor evaluation/selection
16. Upstream material tested onsite; downstream tested in labs; additional discounts expected by customers for more tests and samples
17. Agriculture, food & food services is the key segment to target for analytical services
18. End users conduct various tests like chemical and micro biological analysis as it is very important to determine foreign bodies and product quality
19. Samples tested in-house & also outsourced to rule out variations in results: have implications on product quality and also to avoid health hazards
20. Most of the end users follow USEPA/USFDA/APHA regulation standards
21. Regulations expected to increase the usage of laboratory services across end-user segments

1. Economic uncertainty to impact new O&G & construction projects; however, established/existing industrial base to continue laboratory analytical services
2. Market consolidation is a key market feature; Cosmetic testing is an emerging area
3. Scheduled plant maintenance activities to generate additional revenue; halal, cosmetic & FMCG to be emerging sectors

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