Petchem Industry: Pillar of National Economy

Petchem Industry: Pillar of National Economy
(Saturday, May 3, 2025) 09:18

TEHRAN (NIPNA) – The Investment Director of the National Petrochemical Company emphasized the strategic role of the petrochemical industry in Iran's economy, highlighting that it consumes only 8% of the nation's resources but plays a significant role in generating revenue and supplying a large portion of the country's foreign exchange needs.

Speaking at the "From Logistics to Value Creation in Petrochemical Exports" conference, held alongside the 7th Iran Expo 2025, Hamidreza Ajami stated, "In recent years, billions of dollars have been invested in the petrochemical industry, and nearly $100 billion in investment is projected for future development programs."

Ajami emphasized the strategic importance of the petrochemical sector, saying, "This industry not only generates significant income but also provides about half of the country's foreign exchange needs with just 8% of the national resources."

He continued, "For sustainable economic development, around 20% of the nation's development burden should be entrusted to the petrochemical industry. This is not only achievable, but past experiences have proven that, despite sanctions and challenges, this industry has made significant progress."

Ajami also pointed to the importance of downstream industries, explaining, "Every job created in the petrochemical industry leads to the creation of 30 jobs in downstream industries, and at every stage of processing, 100% added value is added to the products."

He highlighted that the petrochemical sector provides a cohesive set of economic value-creating opportunities from upstream to downstream, engineering to export markets, adding that it plays a key role in supplying foreign exchange.

Production Capacity Increases

Ajami also noted that Iran holds 32.2 trillion cubic meters of gas reserves, accounting for 30% of the world's total reserves, which presents a significant opportunity for the petrochemical industry. "Currently, 72 petrochemical complexes are active with a total capacity of 92 million tons. According to the development program, this number will rise to 141 complexes with a capacity of 141 million tons by the end of the 7th Development Plan, with a target of 199 million tons from 179 complexes by the end of the next eight-year program."

He highlighted Iran’s geopolitical position and regional transit capacities, noting that Georgia plays a vital role in export routes, connecting Asia and Europe via the Black Sea, the Persian Gulf, and the North-South Corridor.

Ajami further emphasized, "The regions of Mahshahr, Pars South, and Assaluyeh are the main hubs of petrochemical production in the country, and new special zones are planned for future development."

Impact of Disrupted Feedstock Supply

Ajami stressed the importance of comprehensive support for this strategic industry. He warned that any disruption in feedstock supply due to imbalances in other sectors could have widespread economic consequences, leading to a drop in revenues and affecting the country's financial flows, impacting small businesses, employee morale, and possibly even resulting in job cuts.

He called for greater attention from government bodies and related organizations, urging that the industry's importance be adequately highlighted in forums such as Iran’s joint chambers with other countries.

Ajami also pointed to existing incentives for investors, including tax exemptions and discounts up to 30% in special economic zones, making the industry attractive for investment.

Georgia as a Gateway for Petrochemical Exports to Europe

Ajami further emphasized the need for strategic planning to develop exports to Europe via Georgia, stating that Iran has exported about 300 tons of petrochemical products, mainly polymers, to Georgia, worth around $10 million. While acknowledging this as a significant achievement, he noted that it was not sufficient for an industry aiming for global expansion.

He mentioned that Georgia, with its young workforce and strategic location, could serve as both a target market and a transit hub for accessing European markets.

Ajami also identified opportunities for collaboration in the construction of petrochemical complexes in Georgia, particularly in the export of fertilizers, engineering equipment, and even the transfer of construction technology for such complexes through bilateral or trilateral cooperation with European countries.

 


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