RECORDER REPORT

LAHORE: The Pakistan Chemical Manufacturers Association (PCMA) has proposed to set up a Naphtha Cracker Complex that would develop downstream of chemical industry by producing hundreds of the high value chemicals within Pakistan.

PCMA Chairman Mian Muhammad Adrees stated this in a proposal submitted to the PM of Pakistan and added that the proposed Naphtha Cracker Complex or Crude- Naphtha Cracker Petrochem (CNCP) would have an impact of up to US $3 billion import substitution in first year of its inception.

According to the proposal, the global chemical industry is a $4 trillion enterprise that impacts nearly every sector of the economy. The chemical businesses have prime significance in virtually every nation, driving innovation in six continents and supporting more than 20 million jobs.

Unfortunately, downstream industry of Pakistan is dependent on imports due to absence of even a single cracker complex whereas India established its first cracker in 1992 and currently it owns eight crackers. Iran, despite the sanctions, has been able to put in place seven. Singapore owns five huge capacity state-of-the-art crackers while Saudi Arabia owns 12. Pakistan chemical imports constitute around 17 percent of the total import bill, he added.

Although we have made considerable progress in basic inorganic chemicals like soda ash, caustic soda, sulphuric acid and chlorine with sufficient production capacity, the lack of availability of other chemicals including petrochemicals leads to dependence on imports which surely does not benefit the economy. The chemical imports in 2015 amounted to over US $5-6 billion and each year there is an average increase of 5-8 percent, he maintained.

Mian Muhammad Adrees underlined that a key pre-requisite for any chemical industry is Petrochem-Naphtha Cracker Complex. With the provision of proposed complex or CNCP from Pakistani context, the downstream of chemical industry will move and hundreds of new chemicals will be produced locally with fresh doses of investments.

With a CNCP facility installed, targeting high value chemicals in the initial phase, the imports would gradually decrease with a single first year impact of around $2-3 billion worth of import substitution. This will be followed by a multiplier effect with the growth of more downstream chemical industry as more feedstock become available from the cracker facility.

The PCMA has created a concept paper for first ever CNCP of Pakistan. Owing to its high cost; around US $3-5 billion, the association members cannot take on this project from their resources. But, being a crucial project of strategic importance for Pakistan, the CNCP has unlimited opportunities of investment in extremely viable businesses mostly in SME sector.