The Evolution of Global Chemical Industry Pattern and Pakistan's Strategic Breakthrough Path

New Trend of Global Chemical Industry (2024)
the global chemical industry is characterized by significant regional differentiation:

• asian twin-engine drive: China contributed 86 per cent of global growth with 6.8 per cent output growth, while India, after a brief stagnation in 2023, renewed its strength, led the Asian (excluding China) sector to 5.6 per cent overall growth.
• Western markets under pressure: The European Union recorded only a slight increase of 1.6 per cent due to shrinking demand, while the United States fell into a zero-growth dilemma for the second year in a row, highlighting structural challenges in mature markets.
• The Rise of Middle East Strategy saudi Arabia and Iran lead regional growth, with 2.5 per cent capacity expansion demonstrating the determination of resource-based economies to transform.

Pakistan Chemical Industry Strategic Opportunity Matrix
as a highly dependent market with annual imports of $7 billion billion, Pakistan is facing three strategic windows:

1. import Substitution Tackling
   there is an urgent need to build a local olefin supply chain through the construction of a naphtha cracking complex, with the goal of reducing the import dependence of basic chemicals from the current 85% to less than 60%.
2. regional value chain integration
   leveraging on China's Belt and Road Initiative, the recovery of the Indian market and capacity expansion in the Middle East, we will establish a regional specialty chemicals production hub through cross-border capacity cooperation.
3. The Green Technology Revolution
   in the digital transformation, bio-based materials, carbon capture technology and other cutting-edge areas, it is planned to increase the proportion of green chemical output value to 25% within five years, and achieve an 18% reduction in energy consumption per unit of GDP.

Policy Empowerment and Industrial Upgrading Roadmap
the Government has formulated a "three-step" strategy:

• short term (1-2 years): Implement import tariff gradient adjustment, implement zero tariff policy on key equipment, and attract foreign investment to build 5 demonstration petrochemical parks.
• Medium Term (3-5 years): Establish a chemical technology innovation fund, focusing on supporting 12 technical research projects such as catalyst localization and process route optimization.
• Long term (5-10 years): Build a complete value chain from crude oil refining to high-end polymer production, and strive to increase the proportion of chemical exports in total commodity exports from the current 3% to 15%.

Industry Breakthrough Critical Path
through the three tracks of "local raw material substitution + regional market deep cultivation + technology intergenerational leap", Pakistan's chemical industry is expected to realize by 2030:

• import scale compressed by 40% to $4.2 billion
• domestic value added rate increased from 35% to 55%
• creation of 150000 highly skilled jobs
• among the 10 fastest growing countries in the global chemical industry