Prudent policy for chemical industry sought

Experts believe policy will help substitute imports, save forex

LAHORE:

Pakistan has been importing chemicals worth $14 billion, which is 18% of total imports and the second biggest after fuel imports.

A prudent policy for the chemical industry could help substitute imports through domestic production and save foreign exchange, suggested speakers at a panel discussion at Pakistan’s first chemical expo on Wednesday.

The panel representing industrialists from the chemical and other relevant fields included Zafar Mehmood, Jahangir Piracha, Taimur Dawood, Mian M Adrees, Arshaduddin Ahmed, National Tariff Commission Chairperson Robina Ather and others.

The fundamental problem in the overall structure is the lack of value addition, thus imports need to be categorised for basic consumption, for value addition and for export, they said.

It was emphasised that imports for exports should be facilitated and the government should prefer industrialisation over trade under a five to 10-year plan.

“Eleven-month imports in FY22 stood at $72 billion,” said Mehmood, adding that focus should be on dependence of indigenous raw material.

There should be a policy to support local production of chemicals as it would save foreign exchange, he said.

Piracha was of the view that chemicals range everything from APIs to fertilisers therefore, Pakistan needs direction for import substitution.

The panel also discussed and sought reasons why exports were not increasing at par with imports and underlined that expensive utility rates were making local industries uncompetitive.

“Cost of doing business is ever increasing and conventional ways of exports along with limited value addition are hampering exports,” it reasoned.

Speakers also said that minerals that are exported against a value of just $4000 could fetch $20000 if sold as value added chemical.

Published in The Express Tribune, July 21^st, 2022.

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