IMPACT OF MACRO ENVIRONMENT ON

CHEMICAL INDUSTRY IN PAKISTAN

INTRODUCTION

Pakistan has a well-organized system for imports and exports of chemical materials which are then converted into more
than 70,000various products, for industry as well as the consumer goods that people depend on in their daily life.
Economically the market of chemicals is divided into four main categories:
Basic Chemicals: which are the commodity materials including flexible material, Polymers, Petrochemicals and other
derivatives and inorganic chemicals which makes.10 35-37% of the chemical market.
 Life Sciences Include differentiated chemical and biological substances, pharmaceuticals, health products, and crop
protection chemicals makes 30% of the chemical market.
 Specialty Chemicals These are high value-added chemicals with diverse end-product market. Products include
electronic chemicals, industrial gases, adhesives, sealants and catalysts. Specialty Chemicals are sometimes referred to as
“fine chemicals” make 11 20-25% of the chemical market.
 Consumer Products include soap, detergents, and cosmetics are only 10% of the chemical market.
PESTLE ANALYSIS
  Growth Rate
 Govt Type & Policy  Inflation
 Funding, Grant & Initiatives  Labor Cost
 Infrastructure  Business Cycle
 Tax Policy  Energy Cost
 Regulation
 Services
 Education
 Culture Norms
 Income Distribution
 Population
 Lifestyle
 Fashion  Emerging Technology
 Culture  Web information
 Communication
 Regional Law  Weather green & Ethical issues
 Law Enforcement  Pollution, waste, recycling
 Court System  Resource Management
 Employment Law  Workforce Health
 Regulation  Climate Change
PORTER’S FIVE FORCES
Threat of New Entrants Bargaining Power of Suppliers
Low and Will Remain Low Moderate and Will Remain Moderate
Government regulations and patents Chemical industry relies on supplies from a few
Significant capital requirements large corporations (such as those in
Incumbents have superior efficiency and quality in petrochemicals industry)
production that may be difficult to imitate Chemical producers have limited substitutes for
Intense R&D and human capital requirements inputs
Most suppliers are not dependent on their sales
Industry Rivalry to chemical manufacturers
High and Increasing
Large number of competitors all competing for market share.

All are global competitors little room for expansion.

All benefiting from economies of scale, so competing on price.
Little differentiation among current players
High fixed costs, and high exit costs.
Threat of Substitutes
Bargaining Power of Buyers Weak and Will Remain Weak
Moderate and Will Remain Moderate Buyers tend to need specific chemicals as inputs
Chemicals are important inputs to many industries There really are no similar substitutes for
Those in chemical industry have many end-customers; chemicals
don’t rely on one customer Even if another chemical can be used, it is most
The products (chemicals) are not greatly differentiated likely produced by the same Industry Players.
Usually purchased through long-term contracts, so
switching costs are high
CONCLUSION

In order to enhance the chemical industry Pakistan must adopt the policy of “self-reliance”. Instead of relying on
foreign designs and engineering it must improve its own production and ensure high quality of chemical products.
Pakistan must work towards integrated approach. It must bring four worlds of a society together which are traders,
universities, research and development and production partners. This will bring innovation and must utilize its youth
which has fresh minds and great ideas to enhance the chemical industry resulting in qualitative and quantitative
perfection in the chemical products.
Pakistan is capable of producing high technological products all it needs is a little bit of effort in improvement of
administrative capabilities and induction of new technology and support from government to put things in order.
Submitted BY:
Fazal Rehman
Syed Hamza
Submitted To:
Sheikh Salman CH.Abdullah
Sufyaan Khan