Sector News

Direct foreign investment in Iran’s petrochemical industry will reap benefits, says report

August 27, 2015
Chemical Value Chain

Direct foreign investment in Iran’s petrochemical sector could result in large returns for investors prepared to take risks.

A report by IHS Chemical said that investors who have the courage to assume relatively high levels of political risk and legal uncertainty can reap the benefits of low-cost feedstocks and access to major markets.

The existing petrochemical production capacity of Iran is estimated to be around 60 million metric tons (MMT).

The country’s petrochemical industry is primarily focused on utilising its ethane-rich natural gas resources, and the price of ethane is kept low by government mandate.

As per IHS estimates, lifting of sanctions would allow the country to expand production and export 1MMT of ethylene / polyethylene within one to two years.

IHS Chemical Europe, Middle East and Africa vice-president Michael Smith said: “If you are a global petrochemical producer looking at Iran for its investment and growth opportunity, and you can forget for a minute about the major business and political risks involved, it presents an attractive opportunity.

“Major chemical players are champing at the bit to explore the potential that Iran offers, but they will not be doing so haphazardly.

“These companies are used to operating in risky environments and managing significant risk, it’s the nature of the business, but the reward has to significantly outweigh the risk, which is something they will be assessing very carefully and deliberately.”

Iran unveiled a petrochemical expansion plan in the early 2000s to increase its annual production capacity from 9MMT in 2001 to 100MMT by 2015.

However, the country did not meet its target due to tight restrictions on the flow of capital and goods, as well as limited access to required technology, parts and materials.

“In the short-term of 12 of 24 months after sanctions are lifted, Iran will rapidly start taking advantage of easier access to foreign capital markets, trade financing, oil markets, and technology providers,” Smith added.

Source: Chemicals Technology

comments closed

Related News

February 4, 2023

Eastman acquires performance films company Ai-Red Technology

Chemical Value Chain

Eastman Chemical Co. (Kingsport, Tenn.) announced it has acquired Ai-Red Technology (Dalian) Co., Ltd., a manufacturer and supplier of paint protection and window film for auto and architectural markets in the Asia Pacific region.

February 4, 2023

BASF and StePac partner on chemical recycling MAP packs to fight food waste

Chemical Value Chain

BASF and Israeli packager StePac have joined forces to create the “next generation” of fresh produce packaging. BASF will provide StePac with greater flexibility to advance contact-sensitive packaging formats to a higher sustainability standard by supplying StePac with Ultramid Ccycled – a chemically recycled polyamide 6.

February 4, 2023

TotalEnergies and Intraplás partner on food-grade renewable biopolymer production

Chemical Value Chain

TotalEnergies’ biorefinery in La Mède, France, allows direct access to renewable feedstock for its drop-in RE:newable polymer range derived from bio-based products. The company claims these polymers retain virgin-like properties.

How can we help you?

We're easy to reach