Speaking to NIPNA, Mohammad Motaghi, Director of
Downstream Development at NPC, emphasized the role of integrated value chains
in achieving the goals of Iran’s Vision 1404 and the country’s “resistance
economy” strategy — a model aimed at self-reliance and economic resilience.
Feedstock Shortages and Future Capacity Growth
Motaghi noted that despite the petrochemical
sector’s nominal production capacity of 97 million tonnes per year, full
utilization remains limited due to persistent feedstock shortages, especially
in gas supply, which constitutes about 60% of the sector’s input. This
imbalance stems from ongoing mismatches in gas production and consumption in
recent years.
However, with new projects underway, NPC
anticipates total production capacity to reach approximately 131 million tonnes
by the end of Iran’s Seventh Five-Year Development Plan. By focusing on
completing existing projects and securing reliable feedstock, the country could
transition to producing higher-value products, boosting exports and curbing
imports.
Strategic Role of Downstream Industries
Motaghi said that downstream petrochemical
industries, by using domestically produced feedstocks, enhance local value
creation, reduce import dependency, and drive technology transfer. “They
provide a resilient and self-sufficient framework for national economic growth,
reinforcing the country’s capacity to withstand external pressures,” he said.
He added that the development of downstream
supply chains also fosters employment and strengthens domestic industrial
ecosystems, making them a strategic pillar of Iran’s long-term economic
strategy.
Addressing Structural Challenges
Among the key challenges to downstream growth,
Motaghi cited incomplete value chains, unstable feedstock supply, liquidity
shortages, energy imbalances, and credit access limitations. In response, NPC
is pursuing several initiatives:
- Launching value chain completion projects (e.g., the
ethylene oxide unit at Marun Petrochemical).
- Increasing credit-based supply volumes on commodity
exchanges.
- Supporting domestic and foreign investors.
- Developing credit supply mechanisms and exploring
financial tools for feedstock procurement and raw material trading.
Policy Reform Needed to Attract Investment
Motaghi also highlighted how rigid pricing
policies and currency volatility have slowed downstream investment and
technology development. “When pricing mechanisms fail to account for rising
variable costs, they erode profitability and investor confidence,” he said.
He stressed the need to introduce risk management
tools, stabilize monetary policy, and encourage domestic production of raw
materials, citing international examples of countries that successfully shielded
their industries from currency shocks through financial innovations and price
flexibility.
Private Sector Engagement and Industry Dialogue
Motaghi noted NPC’s close cooperation with 27
downstream industry associations, 21 distribution cooperatives, and major
syndicates in pharmaceuticals, agriculture, and chemicals. “We maintain active
engagement with the Iran National Polymer Industries Association, one of the
country’s largest trade bodies, to address production challenges and improve
material supply,” he said.
He concluded that sustained collaboration with
the private sector and reforms in energy, feedstock, and financial frameworks
are essential to unlocking the full potential of Iran’s downstream
petrochemical industry and ensuring its role as a cornerstone of economic
resilience.