H2O2 market faces challenges
Pakistan’s textile exports have recently shown a remarkable year-on-year increase of 25.53%. Revenues in 2022 have reached $19.32 billion as compared to $15.3 billion last year. Researchers and economic experts are forecasting this robust growth will continue into the future as well, provided that the government and policymakers realign textile policies with the evolving needs of the sector. The textile industry is the biggest contributor to Pakistan’s national exports, accounting for a share of over 60%.
Textile raw materials and energy resources are equally crucial for the economy and their supply must be made available in abundance and at competitive prices. Hydrogen peroxide (H2O2) is one of the key raw materials for the textile industry, especially for the manufacturers of towels, bed sheets and other cotton products. Around 80% of the traded quantity of this colourless fluid in Pakistan is consumed for textile bleaching. The remaining is consumed in industries, such as agriculture, mining, pulp and paper processing, tetrapacked food and beverages, electronics, water purification, home and personal care products and cosmetics.
Since hydrogen peroxide also acts as a popular disinfectant, its demand during and after the Covid-19 pandemic grew significantly. Hydrogen peroxide is also used in municipal wastewater applications to reduce the biochemical oxygen and chemical oxygen demand for industrial wastewater. “The most important aspect of hydrogen peroxide is that it is environmentally friendly,” said Descon OxyChem Limited CEO Mohsin Zia. Zia explained that the “chemical simply decomposes into oxygen and water and is colourless and non-corrosive.
It creates no hazardous waste and is preferred by many industries as an oxidising and bleaching agent since it is the least damaging to textile fibre strands.” It also does not strip away fabric dyes, as compared to chlorine-based bleaching agents. Chlorine agents, albeit cost effective, are a lot more damaging to fabrics and are also harmful for humans with their carcinogenic properties. “Unfortunately, the H2O2 market in Pakistan faces massive challenges that limit production. These include inconsistent supply and price fluctuations due to a debilitating energy crisis.
In addition, the dumping of this chemical at below-cost prices from foreign countries leads to loss of foreign exchange and diverts demand from local industry,” Zia added. Descon is the largest producer of hydrogen peroxide in Pakistan. As per Zia, the enterprise has played a pivotal role in the successful turnaround of Pakistan’s textile sector, despite the impact of the Covid-19 pandemic and urban lockdowns. This was enabled by the government’s focus on export-led industries and enhancements in the textile policy, he said.
“Over the decades, this sector has remained quite feeble. However, as the global demand for H2O2 is rising, the company is now ready to make large-scale investments. The company has added a new plant to increase capacity by 25% with a commitment towards sustainable socio-economic growth,” he noted. Zia said that he has frequently highlighted the advantages of encouraging and enabling bigger domestic production volumes, stating that Pakistan uses around 90,000-100,000 tons of H2O2 per annum, out of which around 60,000- 64,000 tons are indigenously produced, while the remaining quantity is imported.
“The company also strives to ensure the highest possible level of safety in handling of this chemical as it is quite volatile if exposed to substances such as metals, leather and alkali reagents,” he emphasised. Zia added that Pakistan needs to produce increasingly larger quantities of this valuable liquid, to increase self-reliance, stabilise cost of production and ensure uninterrupted supplies, to build the capacity of the textile sector. “In order to do so, the benefits extended to the textile sector need to be expanded, to encourage investment and availability of this chemical at competitive rates,” he underscored.