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Iran's plan to buy petrochemical units in other countries turns into disaster

Business Materials 29 August 2015 13:19 (UTC +04:00)

Baku, Azerbaijan, Aug. 29

By Umid Niayesh - Trend:

Iran's petrochemical unit in Philippines is operating at a loss, CEO of the National Iranian Petrochemical Company Abbas Sheri Moqaddam said.

Iran bought share of a petrochemical unit in Philippines in 2007, in order to send surplus ethylene to the country for producing polyethylene. Polyethylene is used in the mining, agriculture, marine, chemical storage and food industries.

Later however, Iran faced ethylene shortage inside the country, Sheri Moqaddam explained, the official IRNA news agency reported Aug. 29.

Iran bought 60 percent of a polyethylene plant in Mariveles, Bataan (northwest of Manila, Philippines) in order to produce 275,000 metric tons of high density polyethylene annually for export to Iran and Southeast Asian countries as well as EU markets. The output was planned to be increased to 400,000 metric tons in five years.

Iran was expecting to export ethylene, but now it can not even supply its domestic petrochemical units with ethylene, Sheri Moqaddam said.

Considering this unsuccessful experience, buying petrochemical units outside the country is not on the agenda, the official further said.

"The idea of transferring some part of the activities abroad is correct itself, but it is not economically justified for the time being."

As for the petrochemical unit in Philippines, Iran is looking to sell it, said Sheri Mogaddam.

Before the imposed sanctions on Iran, the country was exporting about 21.226 million tons of petrochemical products worth $15 billion.

But the figure decreased to 14.492 million tons in a fiscal year corresponding to 2012 and this level remained unchanged until last year, when the figure increased by 18.8 million tons.

During the first four months of the current fiscal year, started on March 21, Iran exported 8.171 million tons, while the production volume stood at 15.66 million metric tons.

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