Plans to Integrate Small Petrochemical Complexes

Plans to Integrate Small Petrochemical Complexes
Plans to Integrate Small Petrochemical Complexes

Plans have been made to integrate small petrochemical enterprises into one large privately-run entity within a decade, an official at the National Petrochemical Company said.

“Iran's petrochemical industry is going through a transitional period toward privatization. The most serious challenge is to guarantee the return on investment, which small firms do not seem to be capable of pulling off single-handedly," Mohammad Hassan Peyvandi, deputy director of NPC, also told ISNA.

Peyvandi believes that small companies cannot assure foreigners of their high investment return unless they are part of large conglomerates with no financial constraints.

According to the official, Iran's potential for investment and growth in the petrochemical sector is unrivaled, yet it is necessary to develop infrastructures.

"Having access to huge natural gas reserves, sharing a coastline with the Persian Gulf and the Sea of Oman, and being located in the vicinity of international markets have given the state a competitive advantage and encouraged foreigners to transfer their cutting-edge technology to Iran," he said.

Pointing to the active presence of foreign companies in Iran to sell their products sooner or later, he noted that it will turn out to be a blessing in disguise for domestic producers, as they will be forced to manufacture quality goods so as to not lose their market share to foreign producers.

Stressing that Iran's petrochemical production volume will exceed 180 million tons by 2025, Peyvandi said, "Provision of natural gas as feedstock for experiencing such a rise is no big deal for Iran. However, Saudi Arabia cannot fulfill such a goal as it lacks the much-needed feedstock, so it has to invest in downstream industries."

According to Marzieh Shahdaei, managing director of NPC, lack of integrity among active petrochemical industries necessitates the creation of a "national brand" like National Petrochemical Company.

Commenting on Saudi Arabia's success in selling petrochemical commodities, she noted that all their products are being commercialized under the same name.

"To retake our lost market share, we also need to commercialize our products by integrating active industries in this field. As long as petrochemical complexes are individually involved in undertaking their initiatives, we cannot compete with Saudi Arabia's SABIC whose ambitious plans for expansion are matched by an infrastructure of manufacturing plants, distribution centers, offices and storage facilities worldwide," she said.    

  Coop. With China, Egypt

Removal of anti-Iran sanctions is gradually coming to the aid of the Persian Gulf country to develop its petrochemical projects, the latest of which are plans to cooperate with China and Egypt. According to Mehr News Agency, Iran has signed a contract with China National Technical Import & Export Corporation—aka CNTIC—on the construction of Mehran Petrochemical Complex in Ilam Province.

Eurasian Business Briefing news website reported on Thursday that CNTIC has agreed to invest about $1.9 billion in Mehran petrochemical plant. The plant's output will include a wide range of petrochemicals such as propylene, phenol formaldehyde resin, polyol and acrylic acid.

Established in 1952, CNTIC is a Chinese large-scale state-owned enterprise with main businesses in technology trade, project contracting and project management integrated service. Chinese investors had earlier undertaken the financing of two other petrochemical complexes in Masjed Soleyman and Bushehr.

The plan will pave the way for expanding the downstream oil industry in the region and supplying raw materials to industrial units nationwide. The complex is designed based on the cutting-edge technology of Germany, Britain, Denmark and France.

Upon the completion of the petrochemical complex, Iran will no more need to import raw materials for its downstream petrochemical and polymer industries.

Mehran Petrochemical Complex is slated to become operational in 40 months and create 3,000 direct and indirect jobs.

Parviz Sahafzadeh, deputy head of Iran’s Association of Petrochemical Industry Corporation, also said on Friday that Iran is ready to resume the export of petrochemical products to Egypt, announcing that an Iranian delegation is due to travel to the North African Arab country to participate in the petrochemical workgroup of D-8 Organization of Economic Corporation, which will be held in the next four weeks.

“Before the imposition of sanctions, Iranian petrochemical and polymer products were exported to Egypt,” he said.

Sahafzadeh said diversification of petrochemical and polymer markets is the country’s policy in the post-sanctions era.