The capacity of Iranian petrochemical industry in 1988 stood at 5.5 million tons annually, its overall intermediary and final products at 880,000 tons, annual export of its products at 270,000 tons worth 26 million dollars and its domestic sale at around five billion rials. According to statistics of 1998, the output of this industry rose to 13 million tons per year, its export revenues to 559 million dollars and incomes from domestic sales to 2.8 billion dollars. Moreover, the rapid progress in various phases of a project on development of the South Pars gas field has made possible access to dual carbonate compounds as a suitable and cheap feedstock used in the process of ethylene production and other products and new petrochemical units consuming ethane gas instead of oil were designed and established.

The implementation of petrochemical investment plans between 1997 and 2003 with an average attraction rate of 12,000 billion rials per year showed a 34 percent growth. This is while that the average growth rate of investments in the country in the period under study stood at nine percent. It should be noted that in the said period, a large portion of investments resulted in implementation of around 30 petrochemical projects.

Due to the investments made in this sector, the production capacity of the petrochemical industry in 2004 climbed to 14.3 million tons, export of petrochemical products to over 5.302 tons and its export revenues to more than 1.681 billion dollars. It is predicted that with the commissioning of new petrochemical projects, the production of petrochemical products will reach 38.8 million tons this year of which 16.4 million tons can be sold.

The statistics released by the Petrochemical Commerce Company for the first six months of the current Iranian calendar year indicate that so far 2.851 million tons of various petrochemical products worth 1.039 billion dollars have been exported to various destinations across the globe, registering an increase of 226 million dollars compared to the similar period last year. The incomes from export of petrochemical products is expected to rise to three billion dollars by the year end once the targets set for this sector are attained. The incomes from domestic sales of these products are predicated to amount to 15,700 billion rials this year.

Role of petrochemical industry in development of domestic sectors

A comparison between the input-output tables in 1991 and 1999 indicates a 25 percent share of petrochemical industry in the growth of the national economy. A large quantity of chemical fertilizers and pesticides were sold to various units producing agricultural products, textiles, shoes, leather, plastic wares, synthetic fibers, foodstuff, animal food, pharmaceuticals, tire, metal products and automobiles. This shows the heavy dependence of consumer industries on petrochemical products.

Surveys show that the petrochemical industry in the period from 1997 and 2004, ranked first among other industries in implementing the import substitution strategy and that its expansion in coming years will play a key role in strengthening this trend. Activation of economy in deprived regions and reinvigorating strength of various regions across the country, creation of jobs during the implementation and commissioning of petrochemical plans and complexes and downstream industries as well as execution of engineering and designing operation using domestic research capability are among the outcomes of the development of this industry in recent years. Besides, such impacts are expected to become more evident in the years to come once the petrochemical complexes further expand given existing advantages for production of petrochemical products such as easy access to feedstock needed by the industry.

Role of petrochemical industry in generating value added

A survey of the 1989-1999 period indicates that the value added resulting from the activities of the National Petrochemical Company rose from 680 billion rials at the fixed prices of 1999, in 1989, to 4,000 billion rials in 1994, around 4,120 billion rials in 1995 and 3,570 billion rials in 1996.

The value added of the petrochemical industry in 1997 at the fixed prices of 1999 stood at around 3,800 billion rials, at around 3,110 billion rials in 1998 and 4,500 billion rials in 1999. This rate continued to grow in the next five years to an extent that from 2000 to 2004, the value added of the industry at the fixed prices of 1999, climbed from 7,400 billion rials to 11,820 billion rials, registering an increase of 1.5 percent. One should keep in mind that the increase in the value added was solely restricted to the activities of the National Petrochemical Company. Given the strong link between the petrochemical industry and consumer industries, the result of such an increase in value added will certainly leave positive effects on the national economy in the future.

Position of petrochemical industry in non-oil exports sector

Uplifting the position of the petrochemical industry in the non-oil exports sector was among the major achievement of the Third Five Year Economic Development Plan implemented from 2000 to 2004. The nominal production capacity of the petrochemical industry stood at 15.1 million tons in 2001. With the completion of an MTBE unit with a capacity of 500,000 tons, a polyethylene unit at Amir Kabir Petrochemical Complex with a capacity of 140,000 tons and rise in the production capacity of Fanavaran and Bu Ali complexes the nominal production capacity of the national petrochemical industry rose to 18.5 million tons per year in 2004.

The share of the National Petrochemical Company in the value of the country's non-oil exports increased from 2.7 percent in 1989 to 5.5 percent in 1994 and 12.6 percent in 1995. In 1997, the ratio reached 19.4 percent. It stood at 20 percent in 2000 and 22 percent in 2003. Presently, the exports of petrochemical products constitute over one fifth of the country's total non-oil exports.

The export of petrochemical products was valued at 29 million dollars in 1989 and the figure rose to 270 million dollars in 1994 and to 408 million dollars in 1995. It increased to 579 million dollars in 1999, 829 million dollars in 2000, 941 million dollars in 2002 and 1.22 billion dollars in 2003 which indicates an average growth rate of 16.8 percent.

It is predicted that with the completion of ongoing petrochemical projects, production and export of material with higher value added such as polymer and polyester material, engineering polymers, and raising the production of ethanol, the position of the national petrochemical industry will improve both in the region and the world. In fact, the petrochemical industry is now one of the important export-oriented industries of the country which plays a key role in the development of peripheral industries and transfer of technological know-how. (Concluded – Dispatches)