Iranian Industry Official Calls for Greater Coordination Between Petchem Associations, NPC

Iranian Industry Official Calls for Greater Coordination Between Petchem Associations, NPC
(Monday, March 10, 2025) 15:43

TEHRAN (NIPNA) – The chairman of Iran’s PVC Pipe and Fittings Manufacturers Association has emphasized the need for increased coordination between industry associations and the National Petrochemical Company (NPC) to ensure balanced development across the petrochemical value chain.

In an interview with local media, Abbasali Motavaselian highlighted major challenges facing Iran’s downstream petrochemical sector, including energy imbalances, regulatory inconsistencies, raw material shortages, and inadequate investment in research and development (R&D).

“The lack of energy supply balance, inefficient regulatory policies, and raw material constraints have weakened the competitiveness of domestic producers, leading to the loss of significant value-added opportunities,” Motavaselian said.

Energy Imbalances Undermining Downstream Petrochemical Growth

Motavaselian pointed out that Iran is facing severe energy supply issues, with natural gas shortages reaching 280 million cubic meters per day during peak consumption periods and electricity deficits causing widespread outages.

“These imbalances not only affect industrial efficiency but also threaten economic stability. The petrochemical sector, which relies heavily on natural gas, has been one of the hardest-hit industries,” he noted.

He estimated that production disruptions caused by energy shortages have led to an estimated revenue loss of $7 billion for the petrochemical sector, reducing its attractiveness to investors and forcing many downstream facilities to shut down.

R&D Deficiencies and the Need for Innovation

Highlighting the crucial role of R&D in driving industry growth, Motavaselian cited global benchmarks showing that countries prioritizing innovation have secured greater market shares.

“In 2023, U.S. companies invested $808 billion in R&D, with annual growth in this sector reaching 3%. Meanwhile, Germany, despite lacking domestic hydrocarbon resources, has leveraged innovation to achieve $12 billion in petrochemical exports, securing a 9% global market share. In contrast, Iran’s share remains at just 0.7% due to over-reliance on raw material exports and low product diversity,” he explained.

He criticized Iran’s continued export of raw petrochemical materials at low prices instead of utilizing them to manufacture high-value downstream products.

“Currently, Iran’s upstream petrochemical production is twice the demand of the domestic downstream sector. However, regulatory inefficiencies and lack of structured policies have prevented the full utilization of these resources for value creation,” he added.

Challenges in the PVC Industry and Investment Needs

Motavaselian described the PVC industry as one of the most volatile polymer markets in Iran, with procurement challenges pushing buyers into competitive bidding wars, sometimes inflating prices by up to 26%.

“PVC is a strategic material that supports over nine industries, including healthcare, construction, automotive, and water infrastructure. In industrialized nations, nearly 70% of building and infrastructure pipes are made from PVC. However, supply chain inefficiencies in Iran have severely impacted domestic producers,” he said.

He noted that the global PVC industry is shifting its investment focus, with 80% of new production capacity in 2023 coming from China. Meanwhile, demand for PVC-based pipe and fittings is expected to grow at an annual rate of 6% through 2030, outpacing global economic growth and highlighting the need for strategic investments in Iran’s downstream sector.

Private Sector’s Appeal to the Government

Motavaselian called for urgent reforms to rebalance Iran’s petrochemical industry, arguing that misaligned development priorities between upstream and downstream sectors have hindered the competitiveness of Iran’s secondary petrochemical products in regional markets.

“With more effective government support, improved cooperation between upstream and downstream industries, and a proactive economic diplomacy approach, Iran can enhance its global standing by focusing on high-value-added products instead of raw material exports,” he stressed.

He also underscored the critical role of NPC in fostering collaboration between industry stakeholders, stating that previous instances of close cooperation between associations and regulators had led to mutually beneficial outcomes across the entire value chain.

“Utilizing collective industry expertise for decision-making will ensure sustainable growth and strengthen Iran’s petrochemical competitiveness on a global scale,” he concluded.


Email is required
Characters left: 500
Comment is required