Iran Petchem Sales on Credit Reach 340 Trillion Rials in H1

Iran Petchem Sales on Credit Reach 340 Trillion Rials in H1
(Wednesday, October 18, 2023) 15:11

TEHRAN (NIPNA) - The National Petrochemical Company is actively promoting the sale of petrochemical products on credit, with plans to further increase this trend. It is anticipated that credit sales will continue to rise in the coming months, significantly contributing to the balanced development of the petrochemical industry and the completion of the value chain.

The development of complementary industries, in line with the petrochemical industry's value chain completion and corresponding to the development of upstream petrochemical industries in the country, has far-reaching implications. It not only ensures domestic supply but also curbs raw material exports, promotes self-sufficiency, employment, economic growth, and elevates Iran's position regionally and globally. Consequently, the National Petrochemical Company has placed balanced development of the petrochemical industry as one of the main priorities of the government's 13th term.

According to Morteza Shahmirzaei, the Deputy Minister of Petroleum and CEO of the National Petrochemical Company, the petrochemical industry has become the leader in credit sales of products, serving as a model for other industries. The introduction of petrochemical product credit sales on the commodity and energy exchange not only prevents rent-seeking but also ensures raw material supply for real producers of complementary industries.

The identification and elimination of obstacles to the production of downstream petrochemical industries that have been struggling or operating below their nominal capacity has been actively pursued by the National Petrochemical Company. One of the primary challenges for players in the complementary industries of the country was recognized as accessing liquidity and working capital for the procurement of raw materials.

Approximately 15,000 to 16,000 industrial units source their raw materials from petrochemical complexes, and it was discovered that 63% of these units faced difficulties in accessing working capital. As a result, increasing the sale of petrochemical products on credit through the commodity and energy exchange, utilizing all available capacities of petrochemical companies, was targeted to revitalize production units and facilitate the supply of materials needed by complementary industries in the value chain.

In pursuit of this goal, a memorandum of cooperation was signed on the sidelines of the 16th Iran Plast International Exhibition in September, between the National Petrochemical Company and the Small Industries and Industrial Parks Organization (ISIPO), particularly focused on the Small Industries and Industrial Parks Organization (ISIPO). This memorandum marked a milestone in the significant leap of the petrochemical and complementary industries in the country.

As a result, the trend of increasing credit sales of petrochemical products has continued. Approximately 40 trillion rials in Dey, 57 trillion rials in Bahman, more than 40 trillion rials in Esfand were supplied. In total, around 180 trillion rials in credit sales for the petrochemical industry were registered in the calendar year of 1401 which ended on March 20.

This strategy has continued in 1402, with more than 32 trillion rials in Farvardin, over 55 trillion rials units in Ordibehesht, more than 58 trillion rials units in Khordad, over 60 rillion rials units in Tir, and around 62000 trillion rials units in Shahrivar. Consequently, approximately 340 trillion rials in credit sales have been provided to downstream petrochemical industries in the first half of the year 1402. This has not only revitalized industrial units but has also accelerated the development of final products, maximized value-added, and increased employment in the country.

The petrochemical industry, with its diverse range of products, is one of the most profitable sectors, especially during the unjust sanctions. With this diversity and by expanding the spectrum of these products, particularly in complementary industries, a significant reduction in petrochemical product imports and an increase in final product exports can be achieved, thereby maximizing value-added production.

The National Petrochemical Company is actively promoting the sale of petrochemical products on credit and plans to further increase this trend in the coming months. This is expected to make a significant contribution to the balanced development of the petrochemical industry and the completion of the value chain.

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