Austria to Be European Conduit for Iranian Petrochem Products

Austria to Be European Conduit for Iranian Petrochem ProductsAustria to Be European Conduit for Iranian Petrochem Products

Petrochemical Commercial Company, the largest supplier of Iran's petrochemicals to the international markets, has signed a memorandum of understanding with an Austrian delegation on the export of products to European countries, PCC’s managing director announced on Monday.

“PCC has recently held talks with an Austrian economic delegation to bolster the export of petrochemical products to EU countries, which eventually resulted in the signing of an agreement,” Mehdi Sharifi Niknafs was also quoted as saying by Shana.   

With more than 25 years of experience, PCC is one of the major companies in the Middle East and involved in marketing and selling petrochemical products to domestic and foreign markets.

"Based on the MoU, PCC is to embark on a joint venture with Austrians to export products to even other European countries via Vienna," Niknafs added.

Pointing to the trivial bilateral trade between the two countries, the official said that under the framework of MoU, Iran aims to deliver petrochemical products to European countries, including Slovakia, Czech Republic and Bulgaria, by setting up a distribution hub in Austria.

Niknafs noted that the company has recently held a joint meeting with Pakistani traders, hoping that negotiations would help ramp up bilateral trade in the near future.

“In the last Iranian year [ended March 19, 2016], PCC has exported5.5 million tons of petrochemical products worth $3.5 billion,” he said, referring to the fact that it was named as Iran’s largest exporter of the year.

Iran produced more than 46 million tons of petrochemical commodities in the last Iranian year, of which 19 million tons worth $9.5 billion were exported.

Petrochemical products are Iran’s second biggest source of income after crude oil, but officials are confident that Iran can earn more from petrochemicals than it makes from oil.   

The Persian Gulf country aims to sell 93 million tons of petrochemicals worth $61 billion under the sixth five-year development plan (2016-21). In line with the plan, petrochemical projects worth $37 billion have been offered to foreign and domestic investors.

According to the PCC chief, the company’s last year exports indicated a 35-40% rise in volume but equal value compared with the previous year, blaming the oil price plunge and its consequent deteriorating effects on petrochemicals’ prices.

“The prices of petrochemicals abide by international factors, but the costs of production are higher in Iran because of the banking, insurance and logistical restrictions remaining from the sanctions against the country,” he said.

"Following the removal of sanctions on Jan. 16, the costs incurred by the country have decreased but some limitations regarding letters of credit, letters of guarantee and choosing special petrochemical-carrier vessels are still in place," he said.

NIknafs also urged Iranian officials and industrialists to hold international specialized exhibitions to further demonstrate Iran’s abilities in petrochemical industry in the post-sanctions era.