Introduction to NPCs Office for Downstream Petrochemical Industries

The NPC's Office for Development of Downstream Petrochemical Industries

The implementation of new petrochemical projects has increased the volume and the variety of products, preparing the grounds for developing downstream industries that use petrochemical products as their raw material and complete the value chain of the industry.

The increase in activities of the private sector in downstream areas related to oil, gas and petrochemicals along with better cooperation between the downstream and upstream industries create higher added values and employment, boost resistance economy and pave the ground for the competitive presence of Iranian products in global markets.

The emergence of petrochemicals in the country goes back to the years 1971 to 1976 and mainly included small multi-story workshops which consisted of a few extruders, producing household products such as ductwork, power cord, key switch (backlit) and the like. The feed for these workshops were often supplied by PVC imports, especially from Japan. After the end of Iraq's war on Iran in the late 1980s and after the commissioning of the units of Bandar Imam Petrochemical Company, domestic polymer producers in Iran began to expand and the relevant unions and cooperatives were established for coordination of the units and rationing their needs.

Considering the importance of these industries in the country's economic growth and in line with the development of complementary petrochemical industries, NPC Office for the Development of Downstream Petrochemical Industries was established in 2002 with the aim of directing, supporting and protecting investment in the petrochemical downstream sector.

Downstream Petrochemical Industries
The industries which use petrochemical products as their raw materials are called petrochemical downstream petrochemical. They can be divided into two categories:

- Intermediate materials: Raw materials used for manufacturing consumer products. Intermediate materials are important for the completion and improvement of the petrochemical product chain and manufacturing consumer products such as 2-EthylHexanol, etc.

- Consumer products such as automobile parts, pipes, polyethylene fittings, etc.

Downstream Petrochemical Industries Categories
1- Plastics
2- Rubber
3- Paint and resin
4- Fertilizers and toxins
5- Chemicals and solvents
6- Fibers and textile
7- Cosmetics & hygiene products
8- Composite
9- Synthetic medicines

Mission of the Office

Policy-making and facilitating the completion promotion of the value chain of petrochemical products, based on the development vision of petrochemical industry

Goals of the Office

1- Devising a comprehensive development plan for downstream petrochemical industries
2- Improving business atmosphere
3- Supporting investment in downstream industries
4- Helping to remove obstacles downstream industries might face and planning to make maximum use of the existing potentials
5- Attracting and channeling investments into downstream petrochemical industries by presenting technical, economic and market information to potential investors
6- Coordination with relevant institutions and winning their support for helping the expansion of downstream petrochemical industries
7- Identifying and introducing job opportunities within the industries
8- Carrying out market development work and introducing new markets to downstream petrochemical industries community
9- Bringing about balanced development through attending to less-developed areas
10- Facilitating the investment process by improving coordination between relevant organizations

Responsibilities of the Office

Policy-making:

1- Collaborating with relevant departments in the formulation and implementation of integration plans of the organization's macro and micro policies in up-, mid- and down-stream petrochemicals in line with the goals of sustainable development of NPC and the country

2- Cooperating in the formulation of strategic and executive plans in the field of complementary petrochemical industry in order to complete the value chain of petrochemical products and to gain access to domestic and foreign markets.

3- Coordination and cooperation with the Ministry of Petroleum, the Ministry of Industry, Mine and Trade,  petrochemical companies, down-stream production companies, petrochemicals distribution cooperatives and unions to propose and follow up the approval and implementation of bills, laws and regulations.

Research and Projects

1- Supervising the preparation and editing of feasibility studies (FS) formulated for petrochemical supplementary industries and other studies in this field, in line with updating the existing technical and commercial knowledge.
2- Conducting industrial, geographic and indigenous research and monitoring of the country in order to evaluate the potentials for creating industrial townships, petrochemical parks in line with completing the value chain of petrochemical products, developing industrial clusters and providing advisory services to potential applicants in this field.
3- Proposing and pursuing the provision of facilities and incentives necessary for attracting domestic and foreign investors .
4- Providing consultancy services over exports and export markets of downstream petrochemical products.
5- Facilitating the development and updating process technologies in line with directing the petrochemical downstream industries to turn into knowledge-based businesses.

Petrochemical products market regulation

1- Determining the basic price of petrochemical products and submitting the respective reports to the Mercantile Exchange and the Customs Administration.
2- Determining the minimum supply of petrochemical products to the Mercantile Exchange in order to maintain the stability of the market and provide feed for the downstream petrochemical companies, monitor the procedures in order to verify the implementation of feed supply and correspond with the judicial authorities about companies that fail to comply.
3- Coordination with petrochemical companies during overhauls and production stoppages, in order to meet market requirements.
4- Supervising the distribution of petrochemicals and supplying domestic needs in addition to verifying the distribution process.
5- Market analysis of petrochemicals and materials produced in the downstream industries market.
6- Notifying the petrochemical supplementary industries of the overhaul plans of petrochemical complexes.
7- Determining the specifications of petrochemical products to provide new grades on the Mercantile Exchange, as well as to identify the required grades of local and global markets in order to suggest the most appropriate production plans to petrochemical complexes.

Facilitating

1- Coordination and cooperation with distributive cooperatives, unions, non-governmental Specialized Township and Supplementary Industries Administration and other related organizations to facilitate the distribution of products and production in the downstream industries
2- Facilitating supply of feed, technology, technical knowledge, sales and exports for petrochemical downstream industries

Benefits of Downstream Petrochemical Industries

1- Preventing the sale of raw materials, contributing to the increase of non-oil exports and realization of resistance economy
2- Nation-wide capacity building for petrochemicals, diversification and moving to help prevent population and industrial concentration
3- Generating higher added value
4- Helping the fair distribution of wealth in the country
5- Helping the increase national security, especially in border areas
6- Driving national economy
7- Requiring less financial resources for investment compared with mid- and up-stream industries
8- Higher rate of return on investment compared with basic and mid-stream petrochemical industries
9- The potential to expand the export of downstream petrochemical finished products in the regional markets
10- Preparing the ground for attracting foreign investment especially that of Iranian expatriates as well as the wandering capital inside the country
11- Developing and strengthening nationwide associations
12- Capacity to create more jobs with lower cost compared with basic and mid-stream petrochemical industries
13- Utilizing the inexpensive labor and talented graduates in areas related to downstream petrochemical industries
14- The possibility of using home businesses and engaging in production with no need for setting up factories
15- Requiring simpler and more widely accessible technical knowledge compared with up-stream petrochemical industries and requiring a shorter timespan for building production plants
16- Requiring smaller amount of utilities such as water, electricity, steam, etc.
17- Developing the industries relying on petrochemicals such as the car industry, construction industry, etc.
18- Enjoying the existing potentials of the regional markets
19- Diversity of downstream products such as plastic, rubber, paint and resin, adhesive, composite, detergents, etc.
20- Enjoying relative advantage in terms of local availability of some of raw materials the industry requires
21- Lower emission of air pollutants compared with other manufacturing industries