January 2003 / No. 21

Petrochemicals

At the inaugural ceremonies marking the opening of Iran’s first international exhibition on polymer (Iran Plast 2000) three senior officials – First Vice President Mohammad-Reza Aref, Minister of Oil Bijan Namdar Zangeneh and the Managing-Director of Iran’s National Petrochemical Company (NPC) Mohammad-Reza Nematzadeh – addressed the audience. The following are excerpts from their speeches.

Mohammad-Reza Nematzadeh, NPC Managing Director: Despite increase in Iran’s polymer production capacity, its share in the global market remains at a mere 0.5%. Given the increase in the consumption of polymer in and out of the country during the past decade, the NPC has made extensive efforts to boost investment in polymer projects and utilize new technologies.

When polymer projects at Amir Kabir, Martyr Tondgooyan, Khuzestan, Maron, Pars, Jam companies and several other projects undertook by the private sector are operational in 2005, Iran’s capacity for production of basic polymers will rise to 5.3 million tons from the current 970,000 tons.

There are tenders for several other projects, including Ilam Petrochemical, and also for a PVC manufacturing unit with a capacity of more than 600,000 tons.

"Iran’s share in global petrochemical productivity was about 0.74% in 2000 and we plan to boost that to 2.8% in 2005"

The industrial production and consumption of polymer and plastic products started largely in the mid-twentith century but the trend has experienced a sharp increase in terms of volume and diversity during the past decade. The global polymer production stood at 175 million tons in 2000 thus registering a 6.6% growth compared with the 91 million tons in 1990. The predicted growth in polymer production for the first decade of the current century will be at least 4% with 234 million tons for 2010.

Iran produced polymers in 1970 at a PVC powder unit located in the southern port city of Abadan. That unit, with its capacity of 35,000 tons, was the only one in the country until 1978 when Arak, Tabriz, Urmieh petrochemical complexes along with three additional units owned by the private sector became operational. By then the country’s polymer production reached its current level of 970,000 tons per year.

Increased investment in Iran’s polymer industry prompted us to hold an annual international exhibition titled ‘Iran Plast’ in cooperation with the International Exhibitions Co. and a number of industrialists. ‘Iran Plast’ covers different aspects of polymer industry including raw materials, plastic parts, chemical industries, machinery and tools. We hope that the exhibition attended by domestic and foreign companies will pave the ground for a coordinated development of Iran’s upstream and downstream industries active in polymer production.

Mohammad-Reza Aref, First Vice President: The petrochemical industry and its offshoots play a major role in the country’s exports and value-added raw materials. Twelve development projects at a total investment of $21 billion will increase Iran’s oil output to 4.5 million barrels per day in three years.

The daily production of natural gas will also reach 220 million cubic meters in the next three years and the annual output of liquefied natural gas will be three million tons more than the current rate.

Iran holds 13% of petrochemical production in the Middle East but the share will grow to 31% by the end of the third development plan. The annual per capita of polymer products’ consumption in the world and Iran are 33.56 kilograms and 13.05 kilograms respectively.

Domestic companies should make more efforts to secure a proper place in the global market. Improvement in the country’s infrastructure is one of the main goals of the third development plan. Some parts of the country’s industry should be privatized and more investments are needed in both upstream and downstream industries. In Iran the government plays a major role in economic affairs but it should hand over some of its responsibilities to the private sector and assume more of a supervisory and supporting role.

Iran’s share in global petrochemical productivity was about 0.74% in 2000 and we plan to boost that to 2.8% in 2005. Skilled workforce, adequate investment and new technologies are the three basics of the petrochemical industry.   

Bejan Namdar Zangeneh, Minister of Oil: Enough funding has been allocated for petrochemical projects across the country. Under the third development plan the share of petrochemical production in the country’s gross domestic production (GDP) is to rise to 2.1% from the 1.1% of 1998. This share at the end of 2001 stood at 1.6% which surpassed predictions. The NPC welcomes domestic and foreign investments in its projects.

To achieve a balanced development in different parts of the country, the cabinet has approved a plan under which ethane and ethylene products from the country’s southern regions will be transferred via a pipeline to western provinces to attract state and private investments for the petrochemical projects from those provinces.

The NPC is ready to help downstream petrochemical firms export their products.