Petrochemical sector, key to growth

On December 28, Iran and Germany signed a contract to construct a heavy polyethylene plant in the western Iranian province of Kermanshah. Mohammad-Reza Ne’matzadeh, the managing director of the National Petrochemical Company (NPC), stated that the plant would be constructed at a cost of 150 million euros, and that the private sector would be responsible for 70 percent of the management of the plant and the remainder would be handled by the NPC.

Iran’s petrochemical industry is a key to the country’s economic development. Besides creating value added, it also plays a very significant role in non-oil export development due to the Islamic Republic’s plentiful gas resources and skilled labor force.

The Iranian petrochemical industry produces a variety of products and it is projected that the industry’s volume of production will rise to 35 million tons by the end of the Third Socioeconomic and Cultural Development Plan (2000-2005). This increase would quickly cement Iran’s position in global markets.

Furthermore, it is predicted that the implementation of the 20-year Outlook Plan will cause the value of Iranian petrochemical products supplied to global markets to increase to $20 billion per annum, making the country’s petrochemical industry the world’s tenth largest, a significant jump from its current rank of eightieth.  

In the previous Iranian calendar year (March 21, 2003-March 19, 2004), the value of Iranian petrochemical products hit $2 billion, which constituted 25 percent of the country’s non-oil exports, and it is expected to reach $10 billion in the next two years.

The private sector plays a special role in this process of growth, since it is projected that the private sector will account for 50 percent of the investment in the Iranian petrochemical sector over the next ten years.

Given the economic advantages and its main feed, natural gas, the industry has put Iran in an economic growth mode. The country’s petrochemical sector will most likely continue to grow indefinitely, in light of the three main factors of Iran’s huge gas resources, domestic specialization, and ability to meet the requirements of the consumer market. Due to these factors, and particularly South Pars, which is the world’s largest gas field, the prospects for Iran’s petrochemical sector are very bright. 

FK/HG

End

MNA