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Iran Petchem Industry Offers $2 Billion Opportunity

Iran Petchem Industry Offers $2 Billion Opportunity
(Tuesday, June 27, 2023) 23:45

TEHRAN (NIPNA) -- Hassan Abbaszadeh, Planning and Development Manager of the National Petrochemical Company (NPC), revealed a $2 billion purchasing opportunity for domestic petrochemical manufacturers during a gathering of industry leaders today.

Highlighting the production achievements in the petrochemical sector, Abbaszadeh stated that approximately 70 million tons of petrochemical products were produced in the year 2023. He further emphasized that in the previous year, the company had spent $2 billion on currency purchases from petrochemical production companies, indicating a highly desirable capacity for domestic production.

Last year, exports of petrochemical products reached 28 million tons, valued at around $16 billion, while domestic sales accounted for 12 million tons.

Of the $16 billion in foreign exchange revenue generated by the petrochemical industry, $14 billion was allocated to the Central Bank to meet the country's foreign currency needs.

Abbaszadeh emphasized that the petrochemical industry incurs annual foreign exchange expenses that are not entirely utilized within the same year. He clarified that last year, the petrochemical industry incurred $3.5 billion in foreign exchange costs, including approximately $2 billion in manufacturing companies, $1 billion in external financing, and approximately $400 million in project parts procurement.

Regarding the $2 billion in foreign currency purchases made by manufacturing companies, Abbaszadeh expressed hope that this amount would decrease annually with the assistance of companies engaged in the conversion of imports to local production.

He also predicted a decrease in foreign exchange revenues for the petrochemical industry this year, citing factors such as a 30% drop in global petrochemical product prices compared to the previous year and an estimated $1 billion increase in domestic purchases.

Abbaszadeh stressed the importance of petrochemical companies honoring their foreign currency commitments to the Central Bank, as they have done in previous years.

He further highlighted the significance of inter-company feedstock supply in the value chain, stating that petrochemical companies must adhere to inter-company contracts to avoid disruptions in downstream production.

Referring to the importation of $2.1 billion worth of petrochemical products, Abbaszadeh mentioned that a value chain analysis and market studies had been conducted for these imported products, urging companies to focus on producing them domestically.

Regarding energy management, Abbaszadeh pointed out that petrochemical companies consumed approximately 39 million cubic meters of fuel gas alongside their daily intake of 25 million cubic meters of feedstock gas. He highlighted the considerable potential for fuel savings in these quantities.

Abbaszadeh called for special attention from the CEOs of petrochemical companies to strategic planning and management perspectives. He emphasized that while the National Petrochemical Company addresses these issues, CEOs should also have a keen focus on their business plans and market dynamics, avoiding a short-term business outlook.

The 33rd Summit of Petrochemical Company CEOs, attended by Morteza Shahmirzaei, CEO of the National Petrochemical Company, and CEOs of various petrochemical holdings, commenced today in Mashhad and is set to continue for two days. The event is hosted by Maroon Petrochemical Company, Aryasasol Petrochemical Company, and Ghadir Petrochemical Company.

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