PGPIC to Expand Footprint in Europe

The Persian Gulf Petrochemical Industries Company aims to increase petrochemical exports to European markets by 40% in the coming months, the chief executive of PGPIC said on Friday.

"PGPIC has resumed the export of strategic petrochemical commodities to Europe, yet due to banking restrictions, especially money transfers to and from Iran, the volume is not considerable," Adel Nejad-Salim was quoted as saying by IRNA.

Nejad-Salim stressed that not only reclaiming but also raising Iran's petrochemical market share in Europe tops PGPIC agenda.

"PGPIC's products are being exported to other target destinations worldwide, including the Middle and Far East as well as Africa, South and Latin America without any difficulties," the CEO said without elaboration.

According to the official, a large amount of petrochemical products should be exported to foreign markets because domestic consumption is limited, hence serious negotiations are being held with potential customers to provide them with their much-needed supplies.

“The cost of exporting petrochemical products is expected to decline, as negotiations are underway with shipping companies to provide petrochemical units with better logistical facilities in the near future to boost export competition,” he said.  

Founded in 2010 by National Petrochemical Company, PGPIC is an Iranian holding company active in investment and management of petrochemical complexes and chemical companies. Some 30% of Iran's petrochemical goods were exported to Europe in pre-sanctions period. Nonetheless, the volume dwindled to an all-time low of 5%, as the international sanctions intensified against Iran.

According to First Vice President Es’haq Jahangiri, petrochemicals account for one of the main non-oil exports, which explains why hurdles on the road to expand exports ought to be removed as soon as possible.

Jahangiri believes that a roadmap should be developed to boost non-oil exports, especially in the petrochemical sector, which is the country's second largest industry after oil and gas.

Ahmad Mahdavi, the head of Iran's Association of Petrochemical Industry Corporation, recently said Iran is planning to raise the share of petrochemical products in its non-oil exports to 35%.

"The share of petrochemical products in non-oil exports reached 33% from 28%" in the previous Iranian year that ended on March 19, the official said.

Iran's nominal petrochemical production capacity is close to 60 million tons a year, with annual output at 40.5 million tons, 44.5 million tons and 45.6 million tons over the past three years. The volume is expected to reach 50 million tons this year.

Iran also plans to double its output capacity by 2020 to 120 million tons a year and to 180 million tons per annum in nearly a decade. The country was freed from most international restrictions in January that had largely shut it out of the global trade, financial and banking system, and limited foreign investment in its key economic projects, including petrochemical plants.