Iran’s PCC to be fully privatised in two to three months – CEO

23 May 2011 06:55  [Source: ICIS news]

By Prema Viswanathan and Chow Bee Lin

TEHRAN (ICIS)--Iran's Petrochemical Commercial Co (PCC) is expected to be 100% privately owned in the next two to three months, PCC’s CEO and board member, Reza Hamzehlou said late on Sunday.

“The divestment was expected to be completed this month, but got slightly delayed on the account of some additional documentation sought by the Privatisation Commission of Iran,” Hamzehlou told ICIS at the sidelines of the two-day Iran Petrochemical Forum (IPF), which ended on 22 May.

The IPF was held in Tehran, Iran, from 21-22 May.

Hamzehlou said the Commission’s request was being attended to and that he is not expecting further delays in the privatisation process.

A 55% share of PCC is held by private investors, while the remaining 45% is owned by the Iranian government.

Iran’s state-owned petrochemical major, the National Petrochemical Co (NPC), is also seeking to be a privately owned company.

However, the privatisation in Iran is hindered by the absence of a solid legal framework for protecting private investments, an industry source said.

“Iranian businessmen will only speak in terms of three months because the legal framework and the currency value may not be the same after that,” the source added.

Article 44 of the Iranian constitution provides state-owned companies with the right to privatise, but the implementation of this provision is deterred by the absence of long-term legal guarantees for investors, said a second industry source.

Better infrastructure and a long-term guarantee of stable feedstock prices will be an additional incentive for investors to buy into state-owned petrochemical companies, the source added.

PCC is a key exporter of polyethylene (PE), urea, ammonia and methanol to Asia. Its main markets include China, India, Vietnam and Pakistan. The key products NPC produces include olefins, polymers, methanol, urea and aromatics.

For more on polyethylene and methanol, visit ICIS chemical intelligence
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