Reza Tofighi, secretary of the Association of
Masterbatch and Compound Producers, said in an interview with NIPNA that
classifying petrochemical and downstream products as “raw” contradicts existing
legal definitions and could lead to damaging export levies.
“The government is reviewing a list of raw and
semi-raw materials for export tariffs, but unfortunately petrochemical products
— and even downstream industries such as masterbatch and compound — have been
included,” Tofighi said. “According to Article 37 of the Law on Removing
Barriers to Production, raw materials refer to substances directly extracted
from nature, not those that have undergone industrial processing.”
He stressed that petrochemical goods pass through
multiple stages of processing and cannot be considered raw. “Certain viewpoints
in preparing this list have exposed the entire petrochemical industry and its
value chains to potential harm,” he added.
The list is reportedly being finalized by four
state bodies — the Ministry of Industry, Mine and Trade, the Ministry of
Economy, the Vice Presidency for Science and Technology, and the Customs
Administration. Tofighi urged the National Petrochemical Company (NPC) to
oppose the measure and use its influence within the Ministry of Petroleum and
other decision-making entities to block its approval.
“If approved, many petrochemical and polymer
exports will face restrictions, weakening the production chain and reducing the
competitiveness of Iranian industries in international markets,” he said.
Financing tools key to downstream growth
Tofighi also underscored the need for innovative
financial mechanisms to support working capital in downstream petrochemical
industries. “Financing is a vital parameter for industrial continuity, and
virtually all producers face challenges in this area,” he said. “Limited
resources define the boundaries of economic growth.”
He urged NPC to design and implement new
financing instruments aligned with Iran’s economic and regulatory framework,
drawing on global models.
One practical step, he said, would be expanding
credit-based transactions in the Iran Mercantile Exchange, where most
petrochemical products are already traded. “If buyers could obtain raw
materials on credit rather than paying upfront, the pressure from working
capital shortages would ease, accelerating development in the downstream
sector.”
Tofighi proposed that petrochemical producers
sell polymer materials on deferred payment terms, allowing repayment after
final product sales — a move he described as both effective and financially
sound.
“Globally, debt instruments play a key role in
industrial financing. But in Iran, over 80% of funding comes from bank loans
with fixed repayments and interest, which makes banks ill-suited as development
engines,” he said.
Citing international experience, Tofighi
emphasized that diverse financial tools are essential for private sector
growth. “If such mechanisms are introduced domestically, new opportunities will
open up for private investment and industrial expansion.”
Call for stronger role by NPC downstream office
Tofighi urged the NPC’s downstream industries
office to adopt a broader mission beyond market regulation. He said it should
focus on five key areas: ensuring raw material supply, facilitating finance,
developing workforce skills, conducting technical and economic studies, and
addressing export barriers.
“The downstream office should not limit itself to
market regulation. Just as there is a dedicated market regulation department,
there must also be an expert economic and financial team,” he said. “Industrial
growth is impossible without a scientific understanding of financial
instruments.”
He also warned that currency fluctuations pose
one of the greatest threats to manufacturing. “Sharp exchange rate volatility
harms production, even if some actors benefit from it temporarily. Such gains
are speculative, not productive, and do not contribute to real industrial
growth.”