GLOBAL OVERVIEW: The world chemical industry is one of the most important manufacturing sectors with an annual turnover of approximately US $1,500 billion. The main players in chemical sector are from USA, Western Europe and Japan while emerging players are from China, Eastern Europe and Eastern Asia.
According to the results of recent surveys, Western Europe is the world leader in chemical industry, which has a share of 36% of total chemical sales. The graph below shows world Chemical Sales in different regions. Source: Chemical Engineering Journal (year 2000). The chart below shows the distribution of sales of chemicals produced by the Western European countries. Seven West European countries contributed more than 88% Chemical turn over as shown below.
PAKISTAN: At the time of independence, chemical industry in Pakistan was practically non-existent. Over the years, some traditional sectors have developed, however the Chemical Industry in Pakistan is still at a very nascent stage. In early 50's PIDC was set-up by the Government, for industrialisation of the country. As a result, a large chemical estate comprising Pak American.
Fertilisers Maple Leaf Cement, Antibiotics (Penicillin) and Pak Dyes & Chemicals, was established at Iskanderabad (Daudkhel), district Mianwali. This estate played an important role and served as a nucleus for chemical industry in Pakistan. In 1960's, another chemical complex was set up in private sector at Kala Shah Kaku, Lahore, Chemical factories also started emerging at Karachi due to the investment friendly policies which gave confidence to the investor.
In early 1970's, private industries were nationalised with the result that the fast growing chemical sector started to decline. The growth of chemical sector could never pick up.
The imports of chemicals are on increase in value and volume terms. This indicates the vast potential for the chemical industry in Pakistan. There were some investments in the recent years in the production of Pure Terephthalic Acid (PTA), fertilisers, polyesters and Poly vinyl Chloride (PVC). However investment in the petrochemicals complex and other chemicals are urgently required to be self-reliant in basic organic and inorganic chemicals.
It is to be noted that huge capacities for petrochemical manufacturing are available in the neighbouring countries of Middle East, Far East and Iran. Experts opine that a Petrochemical Complex should have been set-up when the tariff protection was highest. However, ways and means need to be found, as setting up of a Petrochemical Complex would result in hundreds of downstream small and medium enterprises. Some selected chemical sectors have developed to meet the local demand. They include fertilisers, Polyesters, PTA, PVC and some basic chemicals.
Total investment in chemical industry stands at around Rs 360 billion as shown below:
CHEMICAL IMPORTS: Pakistan's total imports have exceeded US $10 billion out of which chemicals imports constitute approximately US $2 billion. A detailed list of the main chemicals imported during recent past (1997-98 to 2001-02) along with their quantities & values in attached as Annexure-VI.
The import value of chemicals remained about 17% of total imports during the last nine year and it was 15.5% in the year 2001-02. This situation calls for special attention to the development of the chemical sector that constitutes one of the major portions of Pakistan's import bill. Performance of Top 20 Chemical Companies.
The import data of 2001-02 based on the major categories of chemicals is presented below. It is noted that five top imports are of organic chemicals (including petrochemicals), plastics & resins, pharmaceuticals, pesticides and fertilisers. This suggests the direction of future investments in the chemical sector in Pakistan.
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