The need for chemicals and allied products is enormous in Pakistan, as it is a necessity in our day-to-day life. From the things we use like plastic or metals or wood or food that we eat have been processed by chemicals and insecticides. The medicines that we need or the clothes that we wear like polyester or other manmade fibres have all one thing in common Chemicals.
Now where exactly is Pakistan on the world map of chemicals? Honestly, Pakistan is not a developed country and hence is weak in the chemical sector.
We are forced to import all chemicals for all our needs. Chemicals for pesticides, agricides, fertilisers, treated seeds for agriculture industry, explosives and the mining industry, pharmaceuticals industry, treatment for garment industry, marking roads and highways, paint industry, all man-made fibres, the printing industry, etc.
Our country has a good number of talented people in the shape of chemical engineers and scientists; yet a serious national policy has not evolved, so most of our well-educated need to seek employment abroad.
Recent examples of focused growth in the chemical sector has been witnessed in China and India which have pushed back the traditional big sources of the chemical world like Germany, France, UK, Holland and USA.
India and China are growing by leaps and bounds and a PhD in one of the chemical disciplines can be found at more or less the equivalent of Rs 18,000 a month and that is one of the incentives that is drawing international investors' attention.
Pakistan's import of chemicals and allied products, including crude, is about 40 percent of our annual import bill and it is felt that this can be reduced over time with the growth of our own industry in that sector and still bring in additional hard currency through exports.
How do we go about this: planning both at the federal and provincial levels will need to be controlled and guaranteed for a period of time. Causes like inflation, higher rates of energy, particularly electricity, manpower and utilities infrastructure will need to be taken into consideration and put in place.
This is one reason where, for example China has had the vision since the 60s and 70s and it is today on top of the world's growing economy. Major investments now go into China for this reason, which is the highest in the world, attracting 8 percent of the total global foreign direct investment.
The global giants of the chemical world like Exxon-Mobil, Basf, BP, Ciba, Mitsui, Mitsubishi, Dow, Pfizer, Gsk, Bayer, Roche, Merck, Schering, Chevron, Monsanto, etc have all found it attractive to invest or have a major presence and stake in China.
Apart from the need for money, our second biggest need will be the acquisition and permission to acquire technologies. Assuming we will need to divide our priorities in a manner that it supports our shot and long-term goals in becoming industrialised and to start becoming visible in the short term.
We can short list our priorities out of four sectors where we have immediate potential:
-- Use of coal and minerals for building up a whole world of chemicals and fuel, from paint to petrol to ordinary aspirin.
-- The agricultural sector where we need to develop our existing fertiliser industry that comes mostly from natural gas and phosphate rocks to start manufacturing some ingredients that goes into agricides and pesticides.
-- Basic chemicals. Here we are doing some actual manufacturing of caustic soda and soda ash, which are largely indigenous and expand further into that area as a lot more basic chemicals are still imported.
-- In the petroleum industry most of the work still remains to be done even 56 years after independence. We do not do much with the crude that we pump out of our wells or with the crude that is imported except to most immediate needs, only while the Naphtha is exported mostly to the chemical plants in the Far East.
The most essential part of the petrochemical industry starts onwards only after a Naphtha cracker is in place. We do not have a Naphtha cracker. Yes, the world has an over capacity of Naphtha crackers but it is a necessity that can be termed as a national need and Pakistan has to have one big Naphtha cracker to produce the basic feed stocks to ignite Pakistani interest in the world of chemistry.
In the paramount national interest there are industries that need to be set up indeed and Naphtha cracker is one of them. For example, we don't have any production of pharmaceutical substances in the country though some converters and researchers do exist. But again from imported intermediates and chemicals as we do not have basic manufacturing of chemicals for industries like pharmaceuticals, textiles, food and beverage, plastic and rubber, paint, explosives, electronic goods, construction, packaging, oil, gas, coal, etc.
In neighbouring Middle East countries, due to good management and the presence of oil, we have seen in our own short life span a massive growth in the chemical industry in Saudi Arabia, Qatar, Kuwait, UAE, Malaysia and Singapore due to availability of hydro-carbons (from crude oil), while Pakistan may not have as much oil but it has plenty of hydro-carbons in the form of either the liquid crude oil being pumped out or coal with reserves of about 200 billion tons, which at current market value can be said to be worth over US $6 trillion in the south of Pakistan alone.
Coal itself can be converted into liquid through an industrial process and becomes a replacement of crude oil. One good practical example of this is South Africa, which has built one of the world's largest petrochemicals' complex based on coal. At ordinary petrol stations one can get one's car filled up with petrol/gasoline derived from coal.
With an enhanced national policy on chemicals in place, after considering all aspects, it is but natural that investment will flow in when profits are visible.
Pakistan can flourish but it needs to focus in the right direction at the right time. There is no shortage of good people Pakistan may not emerge as an industrialized country without carrying out research in the chemical sector.
Urgent steps needed to do so locally and internationally but the attraction towards investment in Pakistan has indeed been extremely low.
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