At the heart of the global chemical industry is Naphta derived from crude oil or coal or other hydrocarbons, at refining stage, that forms the basic feed stock of most larger scale activity falling under the head of 'Chemicals-Industry".
From fibres to textiles to pharmaceuticals to paints and varnishes to pesticides to metallurgy to explosives to contruction-materials to printing and other industries ,its mostly from this fountainhead that naphta is further processed or 'cracked' in downstream industries.
Like they say rightly, it is true that ' chemical is the mother of all industry' hence its about time this industry is declared as essential to national interest.
Pakistan is a relatively poorer country and can hardly afford to buy crude oil at current high international prices and then again, being un-able to add value to one of its most important ingredients ie the Naptha and hence the downstream chemicals.
We have more naphta available now than say 15 year ago. It is estimated that from our refineries we obtain about 1.6 to 2.0 million tons of Naphta, but unfortunately all of this valuable product has be sold/exported to areas which have naphta-crackers and then we ourselves buy-back the value added products ! ! The Far-East or Middle-East or India, Korea etc,all have Naphta-crackers in place.
To establish a good base of chemicals industry a quantity of even 1.4 million Naphta is said to be sufficient. We had missed the golden opportunity in the 60's but now it will be unpardonable if we do not wake up to set the house right.
It is heartening to see a new initiative by ISLAMABAD called "CHEMICAL VISION 2030 " and a lot of data/inputs are (again) being gathered by the newly formed ENGINEERING DEVELOPMENT BOARD ( old name Expert Advisory Board) under the federal Ministry of Industry ,Production and Special Initiatives, Islamabad. We all wish them success and pray that the initiative will bear rewards for the country and soon we will stop paying in hard-currency for the value-added goods from our own..... exported naphta.
Lets take another step forward. In North and South America & Europe there is a very strong and growing influence in getting a little away from this very expensive crude oil and its derivates and substitute it with cheaper Ethanol from corn, wheat,cane, waste plant/ wood etc.
This ethanol is partly replacing the expensive petrol / gasoline and will cost a lot cheaper because it will be US $6/- per gigajoule (unit of energy) instead of US $14/- per gigajoule for petrol. So that's less than half and we have plenty of wast from the sugar mills, maize stalks etc. This will also fall under activities of the Chemical Sector.
But Pakistan has something even better. Its Coal. But can we exploit it ? Will we be able to withstand the counter efforts by powerful oil lobby ? Lets hope we can.
Chemicals and allied products 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 and or the medicines like paracetamol or aspirin etc that we need or the clothes that we wear like polyester, nylon, acrylics or other man made fibers have all one thing in common - CHEMICALS.
This Pakistani needs will rapidly increase with expected growth forecasts in the per- capita income. Its already doubled in the last 5-6 years.
The global use of chemical started to rapidly increase about 300 years ago, with wood preservatives for ocean going vessels, to protection of crops, the mass use of gunpowder necessary for the colonisation period, the modern day use of high performance metals to high performing chips in computers, modern day medicines and research, to the paint and varnish on our wooden table, to the glossy finish on our new car, to the explosives used in warfare whether gun powder or TNT or nuclear, to the make-up items like lipstick, facial foundation, mascara etc are all made from the advancements in the use of chemicals.
The use of chemicals further boomed due to growing necessity, generated by economic growth in the last 100 years or so. Chemicals built nations by building the economies, particularly from the two ends of Asia, Japan in the east and Europe in the west. The advancement in chemical research made it possible for man to land on the moon ! Pakistan not yet really started on that road and hence is weak in the chemical sector.
WE ARE FORCED TO IMPORT ALL CHEMICALS FOR MOST OF OUR NEEDS:
-- Chemicals for our Defence industry.
-- Chemicals for Pesticides / agricides.
-- Chemicals for Explosives and mining industry.
-- Chemicals for our Pharmaceuticals industry.
-- Chemicals for treatment for our Garment industry.
-- Chemicals for marking our roads and highways.
-- Chemicals for our Paint industry.
-- Chemicals for man made Fibers.
-- Chemicals for Furniture industry.
-- Chemicals for Printing industry.
-- Chemicals for the Fertiliser industry
-- Chemicals for the Iron & Steel Mills
-- Chemicals for the Building industry
-- Chemicals for Dyes and Pigments Industry
-- Chemicals for the Telecom industry
As we grow in future we will also need to export finished and semi finished goods. Therefore our needs to develop above sectors cannot be over stated. Our country has a very good number of talented people in the shape of the Ph.Ds / chemical engineers and scientists, yet a serious national policy has not evolved, so most of our better educated seek employment abroad.Also the Universities are lacking higher studies in chemistry particularly in research and post doctorate in chemical sciences.
So far over the last 50 odd years, an ill defined chemical sector is on hold and that time and again we miss the bus towards growth of this sector. On the other hand, when the government does react, its with non-focused attention and in the past 50's-60's-70's -80's opted towards the policy of eg "protecting the industry by burdening the consumer ". That is not a good policy at all if the country ,and not the person, has to be developed.
India and China are growing by leaps and bounds due to higher education available at home ! That is one of the major incentives that is drawing international investors. We have our government corporation but none of them are really dedicated to the chemical industry as such. It is never too late and one can be a late starter and catch up as quickly as possible.
HOW DO WE GO ABOUT THIS: The planning, will need clear headed and impartial inputs. Key economic-factors need to be controlled and guaranteed for a period of time. This is one reason where, for example, China had developed the "Vision" early and they are today on top of the world's chemical industry driving the Economy.
Major investment go into China, which is the highest in the world, attracting over 12% of the total global foreign direct investments(FDI). The global giants of the chemical world like have found it attractive to invest or have major presence and stake in China and now into India too.
Apart from the need of money, our second biggest need will be the acquisition and permission to acquire, technologies. We will need to divide our priorities in a manner that it supports our short and long term goals in becoming industrialised chemically and to start becoming visible in the short term, we can short list our priorities out of four sectors, where we have immediate potential:
1. Use of Coal for building up a whole world of chemicals and fuel.
2. Basic Chemicals; here we are doing some actual manufacturing of caustic soda and soda ash etc which are largely indigenous and expand further into that area as a lot more basic chemicals are still imported.
3. In the petroleum industry most of the local oil companies are engaged only in trading activity .We do not do much with the crude that we pump out of our wells or with the crude that is imported, except to send it to the refineries to meet the most immediate needs only, while the main feedstock Naphtha is exported mostly to the chemical plants in the Far East. The most essential part of the petro-chemical industry starts onwards only after a Naphtha cracker is in place. We do not have a Naphtha cracker but it is a necessity that can be termed as a national need and Pakistan has to have at least one Naphtha cracker to produce the basic feed stocks to ignite Pakistani interest, in the world of Chemistry.
We don't have many producers of pharmaceutical-API substances in the country, though some pioneers do exist and they do need government support and understanding on issues that may be in paramount national interest like eg develop local manufacturing of Intermediates by special initiatives.
In neighbouring countries, we have seen in our own lifetime, a massive growth in chemical industry in Saudi Arabia, Iran,Qatar, Kuwait, U.A.E., Malaysia and Singapore and India. We have proven COAL with of about 200 billion tons, which at current market values can be said to be worth about US $6 trillion in the south of Pakistan alone.
Coal itself can be converted into liquid or gas 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 petrochemical complex based on coal. At ordinary petrol stations, one can get his 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, 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 locally and internationally but the attraction towards investment in Pakistan has indeed been very low.
Without great strides in the chemical sector, Pakistan will not emerge as an industrialised country and urgent steps are needed to be taken to see Pakistan emerging as an semi-industrialised country, in the short term.