According to a report from the NPC, Behzad Mohammadi spoke Monday at the third conference on Iran's Petrochemical Industry Value Chain. He listed feed supply, market access, risk management and new technologies as essential for completing the value chain. He emphasized that these items must be taken seriously, stating that even with these requirements, how they are implemented still needs discussion.

He stressed that, frankly, the industry's track record in developing the petrochemical value chain is not acceptable. "My discussion begins with three key questions: Have we had a suitable development roadmap? Do our managers have the ability to use this map correctly? And finally, have we been successful in its execution?" he said.

Essential requirements for petrochemical industry development

The Kimia Group CEO emphasized three essential requirements for development: "First, having a forward-looking and comprehensive roadmap that intelligently considers the market and feed, while also accounting for risks. Second, the need for capable managers familiar with this map; managers who can properly utilize these programs in key positions within holdings. The third requirement is precise and efficient execution; an execution that goes beyond documents and plans and leads to the practical achievement of goals."

Mohammadi said these three conditions must be met simultaneously. "Development will not happen with only two of them, and even if all three are provided but not executed correctly, the industry will still face serious challenges," he said.

He noted that the development roadmap must be designed intelligently and include all industry requirements, including feed, market, risks and technology. "Only then will the development path be clear and reliable," he added.

Necessity of keeping the value chain development map updated

The Kimia Group CEO said the National Petrochemical Co. has two main missions: "First, completing and updating chain development maps, like the propylene chain, whose current capacity of 900,000 tons is less than the actual need and requires coordination and attention to feed and market. Second, returning to upstream and guiding the oil industry to supply feed."

Mohammadi said one main solution is supplying cheap feed from refineries, and negotiations have begun with the Bandar Abbas refinery for this purpose. "Creating a feed advantage upstream can be the engine for value chain development," he said.

He emphasized the National Petrochemical Co.'s role, saying, "If the National Petrochemical Co. can seriously enter this field and take charge of guiding projects, a major transformation will occur in the industry."

Semi-private companies have money, but lack efficiency

The Kimia Group CEO offered three key solutions for value chain development: First, the National Petrochemical Co. must be the architect and leader. Second, driver projects based on existing feed should be the basis for investment. Third, creating an advantage in upstream feed, especially propylene, is essential.

Mohammadi discussed the role of semi-private and private sector investment, stating, "Semi-private companies have a lot of money, but they do not know the real value of capital and spend it easily. In contrast, the private sector obtains capital with difficulty and spends it with great care and precision. Therefore, it can be said that semi-private capital is, in practice, less productive."

"This fundamental difference between semi-private and private capital must be considered in the industry's macro decision-making. Otherwise, the country's financial resources will not be directed properly," he said.

Petrochemical 'Showcase Projects' are a major development error

The Kimia Group CEO criticized the petrochemical development process: "We have made many mistakes on the path of development and, instead of paying attention to need and advantage, under pressure from local representatives and officials, projects have been executed without proportionality to feed and market. This showcase approach ultimately led to projects that were neither economically justified nor technically sound."

Mohammadi said projects without downstream attachments are another industry problem. "The petrochemical industry can become a driving engine for the economy when projects are defined and executed with downstream attachments. Merely inaugurating large projects without attention to the complementary chain only means imprisoning capital and losing national opportunities," he added.

He pointed to the importance of proper project execution: "Most of our problems are due to poor execution. In project management, there are four main indicators: time, cost, quality and resources. But time is the deadliest factor. Long delays not only increase costs but also destroy the economic justification of projects."

Utilizing the private sector's capabilities

The Kimia Group CEO said that if real development is sought, "we must reform the method of resource allocation and use the private sector's capabilities to speed up project execution."

He recalled that, as the head of the National Development Fund noted, more than $17 billion of the fund's resources have not returned due to prolonged projects. "This means national capital is tied up in projects whose timelines are deadly and heartbreaking," Mohammadi said.

He identified the petrochemical industry's main challenges as the lack of a comprehensive roadmap, a lack of capable and courageous managers, and a lack of proper project execution. "Unless these three essential requirements are reformed, the country's vast resources will remain locked in unfinished and long-term projects," he stated.

Referring to the government's key role in guiding the industry, Mohammadi said, "The National Petrochemical Co. is in the commanding position of the industry. Moreover, one of the government's most important responsibilities is to provide the necessary infrastructure for attracting investment because today the country's conditions are such that investment has become difficult, international communications are limited, and access to technical knowledge faces serious problems. A foundation must be laid to make investment and development in the petrochemical industry easier."

Government's role in creating an investment environment

The Kimia Group CEO emphasized that creating an investment environment and providing infrastructure to attract capital are among the government's duties. "But on the other side, the corporate sector, companies must act with courage," he said. "Enterprises must realistically review projects, from market to technology and economics. If a project is not justified, it should not start. But if it is, it must be executed decisively and quickly."

Referring to the private sector's role, Mohammadi added, "The private sector has always shown more speed and precision in executing projects. If you look at Chabahar, you will see what a transformation has occurred in the past two years. Sometimes, executing a project in an area means moving a civilization."

In conclusion, he discussed Kimia Group's activities: "Kimia Group has defined its development chain. For example, we take the feed from petrochemicals and direct it toward producing medicines and more advanced products. This means having a clear roadmap and moving on the path to completing the value chain. It is this perspective that can transform the future of the country's petrochemical industry."