EghtesadOnline: Petrochemical companies are in the lead in generating foreign currency revenue at a time when Iran’s economy is under US sanctions and struggling with forex shortages.
In a talk with IRIB, Ahmad Mahdavi, secretary of the Petrochemical Industry Contractors Guild Association, said currency generated by petrochemical exports in the present fiscal year (ends March 2022) was 76% higher than the corresponding period last year.
“Petrochemical companies earned more than $40 billion in export since fiscal 2018-19,” he said, referring to the year when the US administration under Donald Trump abandoned the landmark Iran nuclear deal and imposed tough new sanctions.
Apart from export income, petrochemical firms supplied 19.5 million tons to the domestic market since early 2018 until now. The value of petrochemicals sold to the domestic downstream industries was $17.5 billion in the mentioned period, Mahdavi said.
Since the beginning of the current fiscal year, they sold goods worth $4 billion to local companies and injected $9.2 billion or equivalent into the Nima market, he said, referring to the special trade platform where export firms sell their overseas proceeds to importers.
Earlier in the week, the Oil Minister Javad Oji predicated the amount of forex offer at Nima would reach $12 billion by the time the current fiscal year is out come March.
The higher forecast is linked to the increase in commodity prices in international markets. Oji called for boosting investment in the lucrative petrochemical industry.
In the same vein, the managing director of the Persian Gulf Petrochemical Industries Company (PGPIC) Jafar Rabi’e said this sector accounts for half of the foreign currency offered via Nima.
Rabi’e was addressing the press on Wednesday after meeting with privatization authorities to discuss ceding the remaining stake of the government in PGPIC.
Supporting the privatization policy, he said the giant company’s position improved after it went public in 2012.
The major complex was founded in 2011 comprising 15 companies of which six were in the red, he said.
“None of the subsidiaries are now loss-making after eight years and all are making profit,” he was quoted as saying by IRNA.
Juxtaposing the PGPIC’s financial health pre- and post- privatization, the official noted that the total profit of subsidiaries jumped from 32 trillion rials ($110 million) in 2012 to 450 trillion rials ($1.5 billion) in the last calendar year, up fifteen-fold.
“This is predicted to rise to an estimated 700 trillion rials ($2.4b) this year.”
The company’s capital has increased over the years since inception. It was 2.5 trillion rials ($8.6m) in 2012, 287 trillion rials ($990m) last year and is expected to reach 500 trillion rials ($1.7b) by the yearend.
The company has been prominent in repaying its foreign currency debt after joining the stock market. “The company had piled up forex debts to the tune of $4 billion before privatization. Now it is less than $209 million,” Rabi’e said.
The Iranian Privatization Organization has finalized plans to divest the remaining shares of the government in PGPIC and intends to offer the stake in in three blocks next week.
The PGPIC is reportedly worth 3,500 trillion rials ($12 billion) and the government total share is 18%.
IPO says offering shares in blocks is convenient and has been decided on the premise that retail offers of shares will be to the detriment of the bourse as it would negatively impact the liquidity flow into the crisis-hit market.
PGPIC is the biggest consortium of Iranian petrochemical producers. With a market capitalization worth 2,898 trillion rials ($10 billion), the giant complex is the largest company listed on the Tehran Stock Exchange.