By Ayesha Mudassar

ISLAMABAD, August 2 (INP-WealthPK): Leading chemical manufacturers are of the firm belief that a prudent policy can enable Pakistan to substitute imports through improving domestic production and saving precious foreign exchange.

The imports of chemicals jumped to $14 billion in the outgoing fiscal year 2021-22 compared to $9.2 billion recorded in 2020-21, posting an increase of 51.4%, reports WealthPK.

According to ICI Pakistan Limited, a chemical company, Pakistan’s chemical sector has immense potential but it is usually underinvested.

To establish domestic industry and substitute imports, huge investments, an effective plan of action, and competitive tax incentives are required.

In the opinion of Tufail Chemicals Limited, transparency and continuation of the policy are the most effective strategies to attract foreign investment. Investors are willing to invest but they require certain assurance from the government.

Engro Polymer and Chemicals, which has been playing a very important role in the country's overall chemical sector, plans to build a propane dehydrogenation (PDH)-polypropylene (PP) plant, which will replace current imports of about 500,000 tonnes or more, saving the company roughly $800 million annually.

The chemical industry provides essential raw materials to industries, including textiles, construction, automobile, pharmaceutical, fertiliser, food, agriculture, synthetic rubber, paper and packaging, leather and plastics.

The global market size of the chemical sector was $5.7 trillion in 2021. Malaysia, South Korea, India, China and Vietnam all have made large investments in refining and petrochemicals, which have greatly assisted them in achieving exceptional economic growth and prosperity.

Pakistan organised its first-ever chemical expo at the Expo Centre in Lahore, highlighting the sector's potential. The participants urged the government to implement a well-thought-out, long-term and transparent policy to attract multibillion-dollar investments in the sector.

Despite the huge size of the chemical industry, the number of companies is limited.

The absence of a chemical policy in Pakistan is unfortunately the main reason for the underinvestment in this sector of the economy.

Pakistan needs to concentrate on the development of the chemical industry to improve its inadequate refining capacity and reduce the country’s ever-rising import bill.

Restructuring tariffs, duties and provision of independent and regionally competitive policy could help the chemical industry to contribute its due share to the economic growth and reduce the country’s reliance on imports.

Credits: Independent News Pakistan—Wealthpk