Monday, October 10, 2011

Chemical sector in Pakistan

Chemical sector plays a fundamental role in the economic development of any nation. The global business of chemical forms the structure of the modern world. It converts essential raw materials into more than 70,000 various products, for industry as well as the goods of consumers that people depend on in their daily life. The modern chemical industry can be divided into four wide categories, including basic chemicals, specialty chemicals, life sciences, and consumer products. The cause for its outstanding success is the constant scientific and technological advances and breakthroughs, which have led to the expansion of new products and procedures.
During the time of independence, chemical industry in Pakistan was almost non-existent. Some traditional sectors have been developed over the years.However; the Chemical Industry in Pakistan is still at an emerging phase.
As far as the classification of the Chemical industry development of Pakistan is concerned, it can be classified into two sectors.1) the primary sector and 2) the secondary sector. Primary sector industries are at a large-scale. They are capital intensive industries that comprise refineries, natural gas, petrochemicals, metallurgical and projects based on mineral. They also supply feed stocks to the secondary chemical industry. Secondary industries are based on feed stocks which are either derived from primary sector of industries, or other different sources of raw materials. These industries are less capital intensive and they are based on high, medium or less advanced technologies.
By tradition, exports from Pakistan are basically the goods produced with low technology, feed stocks including resources like cotton, textiles, readymade garments and leather. These include 60% of total exports. The composition and contribution in exports of average and high products based on technology, containing chemicals, petrochemicals and other manufactured products is very small. It has varied between 8-10% of total exports from Pakistan. On the other hand, Pakistan possesses a very high addiction of imports of goods which are high value-added, and are expensive. Chemicals, medicines, drugs, dyes, capital plant, equipment and machinery, jointly account for about 40% of total imports with an expected value of US$16.3 billion for the year 2007-2008. Accordingly, the trade balance has been constantly increasing and was US$20.9 billion in 2007/08.
Chemicals like pesticides, fertilizers and industrial and consumer chemicals have become very important in many economic activities. They are actively being used in the industrial, agricultural and consumer sectors of Pakistan.However, Unfortunately there are no centralized treatment facility anywhere in the country.
According to a recent Healthcare Report: Pakistan’s rank is 16 in BMI’s Asia Pacific Business Environment (BERs).When observed on international basis, the rank of Pakistan is 75 out of 83 surveyed markets. Pakistan is facing issues due to instability and other happenings but, due to its strategic importance, Pakistan's foreign allies are expected to do everything they can to ensure its stability. However, foreign drug makers are also expected to continue to take a cautious stance regarding direct investment in the country.
In 2010, the overall rate of medicine, drugs and over-the-counter medicines has been calculated up to PKR 159.2bn (US$1.79bn).It has been observed that the medicine sector could face huge losses in FY10/11.This might be the result of uncertainty in the industry.
All the way through to 2014, the value of market at consumer prices is expected to be at a compound annual growth rate (CAGR) of 7.13%. However, growth will only be 3.50% in US dollar terms, which would also proceed as prevention to foreign participation. The situation can improve over the ten-year forecast period, with CAGR rates as 8.84% and 6.98%, respectively.
Medicated drugs are expected to account at around 76- 78% for the five- and ten-year spans.
Besides, other business activities since years, different Chemicals are being imported and exported from Pakistan.
Discussing the consolidated figures for imports & exports such as chemicals, fertilizers, plastics, rubber, medicines, dyes & pigments, soaps & detergents, and the section of chemicals for the period from 2002-03 to 2008-09. Imports increased from 768 Million US $ in 2002-03 to 5,166 Million US $ in 2008-09 .On the other hand increment in exports was shown from 118 Million US $ in 2002-03 to 411 Million US $. Chemical shares in the total imports were about 15% while its share in exports was about 2.3%. The total imports of plants and equipment used for the manufacture of chemicals contributed about 23% of overall imports of Pakistan. The combined shares of the two categories like plants/equipments and chemicals were about 38% of country’s general imports and among major contributors of country’s imports. Pakistan’s trade deficit was about -- Billion US $ which has been increased to 17 Billion US $ in the year 2008-09.
According to the recent researches. For the time being, floods and political issues are expected to remain key features in Pakistan. From an economic point of view, it is expected that a decline in production and a provocation of price pressures will intensify stag factionary concerns, whereas modernization efforts will consume public funds for years to come. Besides that, the chemical industry has been involved in some crucial issues, especially after India blocked Chemical imports from Pakistan.
The Textile Processing is one of the most value-added, export-oriented as well as labor-intensive sectors of Textile Industry in Pakistan. The associated bodies with the textile processing opened three Regional/Zonal Offices in Faisalabad, Karachi, and Lahore/Gujranwala.

The total number of its associate units in the year 2009-10 was more than 450 spread all over Pakistan. The major object in the organization is to protect and promote the concerns of all persons who are dealing in the processing of textile products in Dyeing, Printing and Finishing.

For the recent development in the chemical sector of Pakistan, it must create its own capability and accomplish self-sufficiency in project design, engineering as well as the construction management required for the commercialization of technologies. There is a need to develop qualifications in the creation of medium and high technology based chemicals for export, along with the present industrial structure based on low technology resource based products. Above all, Pakistan must provide suitable inducements to entrepreneurs for the enlargement of an export-oriented chemical industry.