Arco wants govt to diversify into petrochemicals

Stanley Opara

To cope with the current economic challenges facing the country, Arco Group Plc has urged the Federal Government to consider diversifying the economy through investments in the petrochemicals industry.

Owing to the prolonged slump in oil prices, which had resulted in dwindling revenue, the firm said Nigeria could not afford to vacillate this time over the implementation of a well-thought-out policy on diversification of the economy.

The Group Managing Director of Arco Group Plc, Mr. Alfred Okoigun, said this at the annual conference of the Institute of Directors in Abuja.

He was making a presentation on one of the topics for discussion during the conference, themed, ‘Refocusing Nigeria’s economy through the petrochemical industry’.

Okoigun said that China, Saudi Arabia and Malaysia that placed emphasis on the development of viable and sustainable petrochemical industries in the distant past and even in the era of oil boom, were now enjoying the cushion effect of their far-sighted policy decisions and implementation.

He said Japan and India that were non-oil and gas-producing countries had a head start on the establishment of petrochemical industrial complexes to the extent that they had been posting huge revenues from local consumption and exportation of petrochemical raw materials and finished products.

The Arco boss explained that in spite of their situations, Japan is the world’s third largest producer of petrochemicals and chemicals, while India is the 6th largest producer of petrochemicals in the world and holds the third position in Asia.

“It should not surprise anyone that China is the world’s largest producer of chemicals and petrochemicals today because it did not waste too much time dreaming about that game changer. The country moved steadily in the 1960s to associate the discovery of crude oil with the establishment of refineries and petrochemical plants. And between 1978 and 1998, China established large petrochemical bases and positioned three state-owned enterprises to steer and manage her petrochemical industries,” he added.

Three years ago, he said, China’s shipment of chemical and petrochemical products to her customers around the world amounted to $1.6tn while India’s export of the commodities fetched her $300bn during the same period.

He said despite the fact that the main raw material (gas)  needed to produce ethylene, propylene, carbon black, among others, was available in abundance in Nigeria, the country depended largely on foreign imports for its petrochemical needs and therefore, had yet to seize the opportunity to venture into a veritable area of diversification that could create massive job opportunities.

He identified corruption as the bane of the attempts to develop the country’s petrochemical industry and called for decisive steps by government to block all avenues through which investible funds disappeared into private pockets.

He pleaded with the government not to assume that it had become too late to reverse Nigeria’s misfortune in starting her own petrochemical industry.

“Since we now know that the current downturn in the world oil market will not go away quickly as it had happened in the past and that the growth in demand for petrochemical raw materials and finished products is likely to reach 40 per cent worldwide in 10 years, we must roll out the plans that had been formulated since the 70s, modify them and implement,” he said.

He suggested that Nigeria should have a well-defined and structured chemical and petrochemical policy that is properly integrated into the oil and gas industry and with realistic timelines for concrete actions.

He called for the establishment of more refineries, adding that the Dangote Refinery and petrochemical plants that were expected to start production in 2018 should serve as the harbinger of many more of such plants.

Okoigun stressed the need for the reactivation of the Ogidigben Gas Master Plan with a view to building petrochemical plants in gas-rich areas.

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