Chemical is the Mother of all Industry. Naphta derived from crude oil or coal or other hydrocarbons, forms the basic feed stock of most large scale activity falling under the head of "Chemicals-Industry".
From fibres to textiles to pharmaceuticals to paints, dyes and varnishes to pesticides to metallurgy to explosives to contruction-materials to printing and other industries, its mostly from this fountain-head that naphta is further processed or 'cracked' into downstream industries.
Therefore it is in the critical national interest that this industry be developed on top priority. Pakistan is a relatively poorer country and can hardly afford to buy crude oil at international prices and then again be un-able to add value to one of its most important ingredients ie the Naptha. We have more Naphta available now than say 15 years 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 been exported to areas which have naphta-crackers and then we ourselves buy-back the value added products eg Ethylene and Propylene after polymerisation in foreign lands ! ! India, the Far-East, the entire Middle-East, Korea, China,Thailand etc, have their own Naphta -crackers in place.
To establish a good base of chemicals industry a quantity of even 1.4 million Naphta is sufficient. We had missed the golden opportunity in the 60s and 80s but now it will be unpardonable if we do not wake up to set the house right. Firstly a new MINISTRY OF CHEMICALS type of body needs to be set up that includes major stake-holders also from the private sector.
This will definitely be a step forward and we hope to see it develop the sector to a level where one day, we have a dedicated and separate ministry for development of the very potential chemicals sector. A value far above normal thinking is achievable for harvesting. Lets take another quick step forward after the impact of high oil prices are beginning to take its toll on non "oil-revenue countries".
In North and South America & Europe there is a very strong and growing influence in getting a little away from the expensive crude oil and substitute it with cheaper agriculture produce ie Ethanol from corn, wheat, cane, waste plant/ wood etc. One has to wait and see where this road will lead to because the countries mentioned in this para all have surplus agricultural produce whereas we -Pakistanis - are importing wheat, sugar, meat, tea, milk, coffee, pulses etc.
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. That's less than half the cost and we may have waste the sugarcane, maize and wheat stalks etc which can be used to produce more ethanol. This also falls under activities of the Chemical Sector.
But Pakistan has something even better and of much more value! It is COAL! Coal or crude oil are actually substituting each other as hydrocarbons and have the same derivates! When our Government can pay unhindered and concentrated attention with a political will behind it, we can then actually exploit it to benefit our population and nation to raise the GDP to that of big advanced industrialised countries and where the per capita income exceeds 20-30 times our own.
This can be a dream come true in 5-10 years period. The big question remains. Can we exploit the coal fully? Do we have the political positioning? Will we be able to withstand the counter pressures from powerful lobbies?
Lets hope we can because there is no other way out from the misery of poverty that is seen now mostly in South Asia and Africa. Even the Middle-East has broken free from the bondage of poverty, over the last 30-35 years. So why not the South Asian nation: Pakistan?
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 our 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.
Pakistani needs will rapidly increase with expected growth forecasts in the per- capita income which may have already doubled in the last 5-6 years. Global use of chemical started to rapidly increase several hundred years ago, with the growth in European economies and incomes. The quality of life changed.
Need for many improvements forced developments in eg wood preservatives for ocean going vessels, to protection of crops, the mass use of gunpowder necessary for the colonisation of other continents, the modern day use of high performance metals and coating for supersonic aircrafts, to high performing chips in computers, modern day medicines, healthcare 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 has 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 Defence industry.
-- Chemicals for Pesticides / agricides.
-- Chemicals for Explosives and mining industry.
-- Chemicals for Pharmaceuticals industry.
-- Chemicals for Garment industry.
-- Chemicals for marking roads and highways.
-- Chemicals for Paint industry.
-- Chemicals for man made Fibers.
-- Chemicals for Furniture industry.
-- Chemicals for Printing industry.
-- Chemicals for Fertiliser industry
-- Chemicals for Iron & Steel Mills
-- Chemicals for Building industry
-- Chemicals for Dyes and Pigments Industry
-- Chemicals for Telecom industry
-- etc-etc.
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 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 serious research studies in chemistry particularly in post doctorate works in chemical sciences. Over the last 60 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 short-term policy of eg "protecting the industrialist by burdening the consumer". That is not a good policy at all if the country as a whole ,and not only the person, has to develop.
After Taiwan, Korea and other Asian tigers, it now India and China growing by leaps and bounds due to availability of highly educated people! And the Government in these countries listens to sane proposals. That is one of the major incentives which is drawing international investors. We have our corporation but none of them are actually 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 with clear directions.
WHERE SHOULD WE START? 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. The global giants of the chemical world 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, where we have immediate potential:
1. Use of Coal for building up a whole world of chemicals and fuels.
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 we import, 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 into 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 petro-chemical industry in Saudi Arabia, Iran, Qatar, Kuwait, U.A.E., Malaysia and Singapore,Thailand and India. We are an export destination for them. We have proven COAL reserves 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. Downstream chemical industry has flourished.
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 generally.
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 a semi-industrialised country, in the shorter term.
(The writer has hands on experience of over 35 years in the petrochemical sector and has travelled extensively all over the world and represented the industry on different forums: Khanzada Emran e-mail: khanzada.emran@gmail.com)