The global chemical industry experienced significant growth in 2024, expanding by 3.9% and outpacing overall industrial production. However, regional disparities remain, with China leading the surge while the U.S. and Europe struggle with stagnation and demand slowdowns. As global supply chains shift, Pakistan’s chemical sector must adopt strategic reforms, investment-driven policies, and industrial innovation to stay competitive.

Global Chemical Industry: 2024 Performance

• China remains the dominant player, contributing 86% of global chemical growth with a 6.8% production increase.
• Asia (excluding China) saw a 5.6% growth, driven by India’s rebound (+1.8%) after stagnation in 2023.
• The European Union struggled, with chemical production rising only 1.6%, hindered by weak demand.
• The United States saw 0% growth, marking the second consecutive year of stagnation.
• Middle Eastern chemical production rose by 2.5%, with Saudi Arabia and Iran leading the region.

Pakistan’s Chemical Industry: Opportunities & Challenges

With $7 billion in annual chemical imports, Pakistan remains heavily dependent on foreign raw materials and petrochemicals. The growth of Asia’s chemical sector and increasing regional trade opportunities present a critical moment for Pakistan to reduce its reliance on imports and strengthen domestic production.

Key focus areas for Pakistan’s chemical industry growth include:
✔ Investment in a Naphtha Cracker Complex to establish a local supply chain for petrochemicals.
✔ Trade diversification by leveraging regional partnerships with China, India, and the Middle East.
✔ Sustainability & innovation through green chemistry and digital transformation to remain competitive.
✔ Industrial policy support, including tariff rationalization and incentives for local manufacturers.

As global supply chains evolve, Pakistan’s chemical industry must align with international trends by focusing on local production, export expansion, and industrial innovation. By investing in infrastructure, policy reforms, and trade partnerships, Pakistan can secure its position as a rising player in the global chemical market.

Source:

• (https://report.basf.com/2024/en/fundamentals-of-the-group/basf-groups-business-year/economic-environment/chemical-industry.html)
• (https://wits.worldbank.org/CountryProfile/en/Country/PAK/Year/LTST/TradeFlow/Import/Partner/by-country/Product/28-38_Chemicals)
• (https://tradingeconomics.com/?utm_source=chatgpt.com)