Import from China, India: PCMA for steps to meet challenges of unavailability of raw materials

Pakistan Chemical Manufacturers Association (PCMA) has called for the permanent solution of the problems to be faced by the local industry due to unavailability of the imported raw materials from China and India.

Expressing the Association's viewpoint on this issue, PCMA Secretary General Iqbal Kidwai said that the government should evolve a plan to encourage domestic manufacturing of the imported raw materials in consultation with the local stakeholders.

The association has pointed out that our exporting industries like textile, leather, soap, oil and paint have slowed down the production process because of the suspension of imported raw materials from China due to corona crisis and from India due to imports' ban.

The imported raw materials to be used by the local industries for value additions have to consume huge amount of expensive foreign exchange thus creating a big trade deficit in external trade of the country. But, India, despite being permanent enemy of Pakistan is a competitive source of raw materials for Pakistan having about 8 in-house naphtha crackers. Whereas Pakistan has none of such chemical complex to produce a wide range of chemicals and chemical based raw materials. Besides India, China was the major source of providing raw materials for Pakistan that too has been blocked due to prevailing corona crisis, he said.

The Secretary General proposed to introduce an incentives-based scheme to encourage indigenous production of the raw industrial materials that were being imported from China and India. This may be the rightest time for the government to offer incentive package to investors for setting up domestic manufacturing of the materials and inputs which are currently being imported from abroad, he said. At present, window created due to Chinese crisis is exploited timely, the domestic manufacturing can increase and imports can be substituted in a big way saving considerable volume of foreign exchange, he said and maintained that the corona crisis had created a wide window for expansion of Halal food and chemicals production in Pakistan.

He further said that the chemical imports of Pakistan amounted to over US $10 billion, which is almost 17 percent of the total import bill and each year there is an average increase of percent on this account. These imports, a large part, consist of input raw materials for value addition. Current corona-virus exodus and ban on Indian imports have created crisis of survival of the domestic chemical industry, he added.

On the other hand the global chemical industry, at present, is a $5.7 trillion enterprise in which Pakistan's share is negligible. In petrochemical sector there was hardly any production primarily due to non-existence of any petrochemical cracker complex and the down-stream industry of Pakistan was dependent on imports. There is an urgent need at the government end to take cognizance of the crisis and find a sustainable solution to resolve the issue on emergent basis, he said.

He urged the government to offer appropriate incentives to the potential investors for encouraging domestic manufacturing to make the country self-reliant in the fields of industrial raw materials.