ISLAMABAD, March 7: The government is considering establishing a “fully integrated chemical industry in Pakistan” to achieve higher economic growth and lessen foreign dependence on import of a vast range of chemical products.

The ministry of petroleum and natural resources, in partnership with the private sector, has been proposed to undertake an action plan which would cost Rs72 billion to also help achieve self-sufficiency and development of agriculture sector.

“There are many proposals currently being looked into to set up a fully integrated chemical industry,” said a source.

However, he said the federal government would have to consult all stakeholders, including the provinces, before finally arriving at any consensus about setting up of a fully integrated chemical industry in the country.

The Pakistan Institute of Development Economics (PIDE) and the Higher Education Commission (HEC) have formulated recommendations to improve the overall economy, including promotion of an effective chemical industry.

Both the organisations believe that local chemical industry should be based both on domestic demand as well as export of surplus production to maintain full capacity utilisation of the plant.

There is also a need to examine optimum utilisation of the gas condensates presently being used as domestic fuel as alternative feed stock for the petro-chemical industry.

In this regard, it was stated that a world scale naphtha cracker requires more than a million tons of naphtha per year which should be made available through restructuring of existing refineries and new refineries.

Basic research should be handled separately by research institutes which have the expertise, resources and facilities to undertake such research.

These institutes be funded adequately to do a high quality job.

Rest of research and development should be focused on applied technology and transfer of technology integrated closely with the national industrial development projects.

Naphtha cracker is said to be critically important for indigenous manufacturing of a large number of chemicals and pharmaceuticals.

This includes manufacturing of rubber, polymers (like PVC LDPE / HDPE, polyester, PET etc.), synthetic fibres (nylon, PSF, PFY, etc.), pharmaceutical raw material (MEG, PAN, LAB, etc).

The inter-action of the local chemical industry and research and development centres must be created to proceed to indigenisation of technology.

The R&D institutes should be supported and strengthened and their linkages with the industry should be systematised.

Increasing the plant capacity, improved process control, reducing operational and maintenance costs, improving power and cooling water usage efficiencies, improving product quality and thus reducing fixed cost have been proposed as long-term measures for establishing a fully integrated chemical industry in the country.

It was also proposed by the PIDE and HEC that the chemical industry and the government should lay more emphasis on technology as an instrument of growth rather just addition of productive capacities and that innovation towards high performance products, concentrated brands and non-dusting brands should also be taken into consideration.

The PIDE and the HEC also proposed measures for effective development of Pharma industry for which human resource development is pre-requisite.