Unlocking the potential of an all-encompassing industry

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Encompassing a wide range of diverse and complex sectors — such as textile, fertilisers, petrochemicals, pharmaceutical and consumer goods — the chemical industry plays a vital role in the national economy. It accounts for 3% of Pakistan's overall GDP and 16% of the manufacturing GDP.

Even though the future of Pakistan's chemical industry looks promising, driven by growing demand for chemicals in various sectors, it faces several challenges, as follows:

1) Heavy reliance on imported chemical products, including intermediates and raw materials, is increasing the cost of production and making the industry vulnerable to fluctuation in global commodity prices, leading to trade imbalance. 2) High cost of power is hindering growth in the industry. 3) Use of outdated technology is affecting the quality of products and leading to higher costs. 4) Research and development is crucial for innovation and producing high-value chemicals, but there is minimal investment in this area. 5) Poor production practices and inefficient disposal of waste is causing health hazards like pollution and unhealthy working conditions.

There is thus the need to develop a committed group of professionals to address these challenges and capitalise on the opportunities available for growth.

The most important target should be to produce a range of essential chemical and agricultural products locally so as to cut reliance on imports. Here one can learn a thing or two from China which has been successful in rapidly expanding its chemical manufacturing sector on a large scale. China has invested in many industrial projects under the framework of CPEC, and can help Pakistan create industrial hubs to manufacture products locally without relying on imports of petrochemicals, polymers, etc. China can assist Pakistan by providing the latest technology that can help chenille industries in manufacturing high-quality products of international standard. Collaboration with Chinese companies can provide Pakistani manufacturers with access to new markets, advanced technology, experienced management and investment opportunities.

China, having vast reserves of raw materials, can ensure supplies to Pakistan's chemical industry, which can help local manufacturers produce low cost goods and maintain consistency in production. Based on China's successful model, Pakistan can establish specialised industrial parks for chemical companies. These parks would offer shared resources, utilities and waste management systems, increasing efficiency and reducing costs for businesses. China can help Pakistan enhance skills of its employees through joint training programmes. This will enable Pakistan to build a skilled workforce capable of growth in the industry.

To maximise the benefits of collaboration with China and realise the full potential of the chemical industry, Pakistan needs to take some proactive steps, as follows:

a) Ensure stable and affordable energy supply by investing in renewable energy sources; b) invest in research and development facilities and come up with indigenous solutions to help reduce reliance on foreign technology and products, be cost-effective, and create job opportunities for Pakistani researchers, engineers and scientists; c) implement investor-friendly policies by introducing tax incentives such as tax breaks and exemptions, as well as subsidies, to attract Chinese investors, in particular; d) promote public-private partnerships by inviting private companies to participate in the development of local chemical industry; it can help mobilise resources and expertise for large-scale chemical projects in the country.

Pakistan's chemical industry has a vast potential for economic growth and development. Entering into partnership with China, in particular, can unlock this potential. By improving infrastructure, sharing technology and working together, Pakistan can overcome its challenges and become a major player in the global chemical industry.