Karoun Petchem Rivals Shell, BASF
Toluene Diisocyanate (TDI) and Modified Methyl Diphenyl Diisocyanate (MDI) are two strategic products in the petrochemical industry. They are raw materials for flexible and inflexible sponges. They are used in upholstery, car manufacturing, thermal and insulation industries. Given global demand for these products which require sophisticated technologies and big investment, few countries and companies have engaged themselves in producing TDI and MDI. Iran's petrochemical industry, which recently joined producers of TDI and MDI, is now rivaling companies like Shell and BASF.
Karoun Petrochemical Plant is among petrochemical plants located in Mahshahr Special Economic Petrochemical Zone. It has managed to produce TDI and MDI for the first time in the Middle East.
Ali-Reza Seddiqizadeh, CEO of Karoun Petrochemical Co., said the first phase of this plant was launched in collaboration with Sweden's Komator for an annual production of 40,000 tons of TDI.
"Several years have passed since the first phase of this plant started work and currently this phase is running at full production capacity," he said.
Seddiqizadeh predicted that 70% of TDI produced at the Karoun plant would be enough to meet domestic demand for this product, adding that the remaining 30% would be exported to other countries.
He said that a large number of Asian countries particularly in the Middle East and West Asia regions, and several European, African and American countries are among buyers of the Karoun plant's products.
"For instance, I can refer to Italy, Germany, Sweden, Russia, Greece, India, Turkey, Pakistan, Iraq, Kenya, Nigeria and Peru," he said, adding that Iraq is the main destination for Karoun's exports.
Thanks to the operation of the first phase of Karoun Petchem Co., Iran had not been importing MDI and TDI over the past two years.
Phase 2 on Trial Run
Seddiqizadeh said the second phase of the petrochemical plant had started tentative production with an output capacity of 40,000 tons of MDI a year.
"This product is being produced for the first time not only in the Middle East, but also in West Asia," he said. He added that commercial production of MDI was to start next year.
Seddiqizadeh said Phase 2 of this plant would be also producing 30,000 tons a year of aniline as a middle product and pre-feedstock for MDI. He said that Iran would be also able to export aniline.
He said 350 million euros would be invested for designing, building and launching both phases of Karoun Petchem Plant. He added that Iranian specialists handled a significant part of the second phase of the project without the presence of foreign experts.
Continued Cooperation with Licensers
Seddiqizadeh touched on cooperation with Komator, particularly after Iran's nuclear deal with six world powers took effect in January 2016. The deal is known as the Joint Comprehensive Plan of Action (JCPOA).
"At beginning, Komator was licensor and also owned a 30% share of Karoun Petchem Co., but some four years ago it transferred all its shares to Bandar Imam Petrochemical Co.," he said.
"But generally speaking our relations with this Swedish company, as the licensor of Karoun units, have been on the right path both during years of sanctions and post-JCPOA and we have had no problems with receiving technical services from this company," he added.
Seddiqizadeh said although Iran faced restrictions in procuring catalysts and spare parts during years of sanctions, this problem was resolved after sanctions were lifted due to the JCPOA implementation.
He said that the second phase of this petrochemical plant would come online in February, adding that sustained supply of MDI would start in the first half of next Iranian year which starts in March.
Seddiqizadeh said MDI has eight grades, adding that Karoun was supplying three grades demanded by market.
He referred to Shell and BASF as two rivals for Iran in MDI and TDI production. "Given the quality of petrochemical products supplied by Karoun we can rival these companies in world markets," he said.
$300mn Annual Savings
Seddiqizadeh said Iran had ended importing these two products due to its self-sufficiency in production, adding: "With the domestic manufacturing of these products and ending their imports, $300 million is saved annually in the country."
He highlighted some environmental measures and savings at this plant, saying: "The process of our production is such that we have the highest consumption of catalysts and since the catalysts we consume are mainly precious metals (palladium and platinum), we are under heavy costs."
"Therefore, in a bid to reduce catalyst consumption and save hard currency, we developed a project with the help of domestic specialists, which enabled us to recycle a significant portion of consumed catalysts through reverse engineering," said Seddiqizadeh.
"We are also seeking to replace palladium and platinum with nickel in catalyst production in order to reduce costs, as do Shell and BASF," he added.
"Our main objective is to bring both phases of Karoun Petrochemical Plan to their full capacity this and next year, and in the future we will definitely move to enhance our production capacity given the safety of margins and demand in the market," said Seddiqizadeh.