In an interview with Iran, the CEO of the Persian Gulf Petrochemical Industries Company (PGPIC) discusses high-level consensus-building, repairing the value chain, ensuring sustainable feedstock, and attracting investment as key steps toward strengthening the global position of this strategic industry.
Iran’s petrochemical sector—one of the main engines of national production, exports, and foreign-currency generation—now stands at a decisive moment in its history. Overcoming its structural challenges requires high-level consensus across state institutions, repairing the value chain, structural decision-making, and a forward-looking approach to feedstock, capital, and technology. In this in-depth conversation, Mohammad Shariatmadari, CEO of PGPIC, reflects on his first year managing the country’s largest petrochemical holding and outlines his strategy for resolving upstream bottlenecks in feedstock supply, addressing long-standing disputes stemming from rushed privatizations, advancing corporate governance, and shaping the future trajectory of this strategic industry. What follows is an account of a year spent redefining social responsibility and moving toward a globally competitive industrial model.
Question: You said upon taking office that your mission was to build consensus and resolve upstream challenges facing the holding. What are these challenges, and how much progress has been made after nearly a year?
Answer: After years of service in various branches of government—including the Ministry of Commerce, the Executive Vice Presidency, the Ministry of Industry, Mine and Trade, and the Ministry of Welfare—I accepted the leadership of PGPIC with the goal of addressing the upstream challenges of this vast industrial complex, challenges that require consensus-building, dialogue, and decision-making at the highest levels of governance.
Our first step was to draw on collective wisdom—bringing together experts, specialists, and industry thinkers—to develop a clear framework of short-, medium-, and long-term solutions. Over the past year, with God’s grace and the support of forward-thinking officials, industry experts, and experienced advisors, we have managed to untangle several major knots.
One of the most significant challenges was the long-standing “utility dispute,” which had cast a shadow over the petrochemical industry and the stock market for years. Through extensive negotiations led by the National Petrochemical Company (NPC), this issue was resolved in a “win–win” agreement for the entire industry. A key outcome of this agreement is joint cooperation to reduce the country’s energy imbalance—an issue that had strained relations between two major petrochemical entities for nearly a decade. This agreement between Zagros Petrochemical Company (one of the largest methanol producers) and Persian Gulf Mobin Energy Company (the main utility provider in Assaluyeh) marks a major step toward improving efficiency, ensuring stable electricity supply, and completing the petrochemical value chain.
We also reached a satisfactory resolution to the legal dispute between Mehr Petrochemical Company (a PGPIC subsidiary) and Jam Petrochemical Company. Given the presence of foreign investment in Mehr, prolonging this dispute could have had serious negative consequences for the country.
Our core strategy is to repair the deep fragmentation caused by ill-considered privatizations that turned Iran’s petrochemical industry into a “cluster of islands.” To address this, we have launched extensive negotiations to reconnect units and restore the value chain. I am confident that if this cooperation succeeds, the industry will witness transformative developments.
Another major step was coordinating PGPIC, the Competition Council, and NPC to address the structural challenge of feedstock supply through a resolution from the Supreme Economic Coordination Council.
Question: Before taking charge of this major industrial group, what was your perception of its challenges and capacities, and how has that perception changed after a year of direct experience?
Answer: In my previous roles, I interacted with the petrochemical sector in various ways. As Minister of Commerce, we dealt with petrochemical markets, products, and exports. At the Ministry of Industry, Mine and Trade, the role of petrochemical companies in production and downstream investment was a major concern. At the Ministry of Labor and Social Welfare, petrochemical companies under Shasta and other pension funds were central to our work.
Yet over the past year at PGPIC, I encountered new realities—untapped capacities and opportunities. Across both headquarters and production sites, I have seen remarkable talent, creativity, and capability that inspire confidence in the future of this industry. With such valuable human capital, serving in this organization is truly an honor, and I am certain PGPIC has the potential to cultivate dozens of world-class managers.
Question: From a realistic managerial perspective, what are the most critical challenges facing Iran’s petrochemical industry today?
Answer: I have repeatedly emphasized that the root cause of the industry’s problems lies in the fragmentation of the value chain—a phenomenon I sometimes jokingly call the “Big Bang.” The rushed and unprofessional privatization of petrochemical units shattered the value chain.
As a result, managers today worry whether new projects will have stable feedstock after completion, or whether their products will remain economically viable. Unfortunately, no effective regulatory framework was established to mitigate the consequences of these privatizations.
For years, the industry suffered from a lack of foresight and the absence of a strong regulatory body. However, with Dr. Abbaszadeh—an expert rising from within the industry—now in senior leadership at NPC, we are more hopeful about restoring NPC’s regulatory role.
Additionally, with improved coordination between PGPIC, the Ministry of Oil, the Ministry of Labor, and other industry stakeholders, we hope to overcome the negative effects of this fragmentation.
Beyond this, the two other major challenges are sustainable feedstock supply and project financing. Without a stable feedstock structure, years of investment are at risk. Financing is equally critical, as delays in project execution lead to waste of financial and human resources.
Question: Over the past year, you identified two strategic priorities: securing sustainable feedstock and financing projects through innovative methods. How much progress has been made?
Answer: Our core idea for sustainable feedstock is to secure as much of it as possible from upstream sources through direct investment. We have pursued two parallel paths.
First, given the constraints facing the Ministry of Oil and the National Iranian Gas Company, we decided to invest directly in upstream extraction and production. We held constructive talks with the Minister of Oil regarding PGPIC’s participation in developing the Kish gas field. Projects such as the Darkhovin pipeline in West Karun are also part of our medium-term upstream plans. Additionally, flare-gas recovery projects in West Karun (Howeyzeh Gas Refinery) and East Karun (Bidboland Gas Refining Company) align with this strategy.
Second, due to electricity and energy imbalances, we launched a trilateral cooperation framework between PGPIC, the Ministry of Oil, and the Ministry of Energy. Under this framework, we are investing in renewable energy and a 5,000‑MW power generation program. The first photovoltaic unit in Bidboland will be inaugurated soon.
On financing, we shifted toward modern financial instruments. We established a Financial Council composed of leading experts—including former ministers, central bank governors, and stock market heads. Through this strategy, the capital market has become a major financing source: 6 trillion tomans last year and 12 trillion tomans this year.
PGPIC’s market value—around one quadrillion tomans—serves as a key asset for financing major projects, including developing a “new Assaluyeh” in Makran Region. We also issued €150 million in euro-denominated Murabaha bonds and $70 million in dollar-denominated Murabaha bonds. Preparations are underway for an additional $980 million in foreign-currency bonds to complete seven ongoing projects.
In banking, we signed multiple agreements, including a $2 billion contract with Bank Mellat and Bank Tejarat for renewable energy investments. We also began talks with regional and Chinese banks to form financing consortia. Additionally, a 50‑trillion‑toman financing agreement with Bank Refah is underway for priority projects.
Question: Given the strategic role of petrochemical companies in national production, exports, and foreign-currency earnings, what steps are needed for policymakers to fully appreciate and support this industry?
Answer: An industry that drives the national economy deserves support proportional to its importance. The key concern among petrochemical stakeholders is whether their needs are adequately reflected in policymaking.
In a year designated as “Investment for Production,” the petrochemical sector—acting as the locomotive of the economy—should be a central destination for investment and financing.
The Supreme Leader’s directive to resolve feedstock challenges, issued during a visit to scientific and technological achievements, reflects his strategic understanding of the industry’s importance. The President has also shown strong commitment to addressing petrochemical challenges, including revising feedstock pricing.
Engineers and managers in this industry—who kept production running even during the harshest conditions, including the recent war imposed by the Zionist regime—expect policymakers to support this path of development.
Question: What steps have you taken to institutionalize transparency, accountability, and corporate governance within the holding?
Answer: From day one, I emphasized that all decision-making processes must be transparent and accessible to the public and economic stakeholders. We implemented multiple mechanisms to enhance transparency, including revising procurement regulations and restructuring bidding processes.
We also launched a comprehensive managerial evaluation and development system to minimize hiring outside formal recruitment channels. Between July 2023 and June 2024, around 320 individuals were recruited through formal examinations.
Corporate governance committees have been established, including the Appointments Committee chaired by Dr. Qorbanzadeh, representing Justice Shares. This committee ensures managerial appointments based on scientific and technical criteria. Similarly, the Audit Committee now requires specialized auditors for internal audits.
Question: Media reports highlight significant investment in research and development. How successful have you been in building an innovation ecosystem?
Answer: From the outset, we believed that production units without strong R&D are destined to decline. The key to productivity, efficiency, and sustainable transformation lies in research. With support from the Vice Presidency for Science and Technology, the Ministry of Science, and the Ministry of Oil, we began designing a technological transformation roadmap.
We established a non-governmental Research and Technology Fund and a corporate venture capital (CVC) firm to support knowledge-based companies and deepen domestic manufacturing. The fund began with 1 trillion tomans and is now being expanded to 5 trillion tomans.
Events such as PetroTech and PetroChem attracted hundreds of knowledge-based companies and innovators. R&D investment in PGPIC has increased 2.5-fold, with 2% of total sales allocated to R&D. At this year’s PetroTech, 350 technological needs were presented to more than 300 knowledge-based companies.
Question: PGPIC recently rose from 18th to 12th place in the ICIS global ranking. How was this achieved?
Answer: According to ICIS, although companies like SABIC, Sinopec, and PetroChina are larger in scale, PGPIC outperformed them in profitability, capital efficiency, margins, and operational risk.
Despite energy imbalances and sanctions, PGPIC achieved 103% of its production target in 2024 and 105% of its sales target in the first nine months of the year, even amid the war imposed by the Zionist regime. R&D spending also increased by 6%.
Domestic assessments, including those by the Industrial Management Organization, ranked PGPIC as Iran’s top company in sales, profitability, exports, and market value.
A major strategic shift has been moving beyond a purely commercial model toward active participation in the value chain. This includes focusing on end-use markets, improving netback sales, reforming pricing structures, and integrating production, logistics, and marketing. The holding’s commercial arm has introduced digital B2B marketing and AI-driven tools, including an online marketplace, improving transparency and efficiency.
During the national energy imbalance, this company played a key role by supplying around 1 million tons of heavy cuts for power plants and 2 million tons of reformate—equivalent to 6 million tons of gasoline production.
Question: You have emphasized the importance of human capital. What steps have you taken to support and develop this asset?
Answer: I firmly believe that the true strength of PGPIC lies in its skilled, capable, and creative workforce—an asset more valuable than any material resource. The company’s resilience in production, exports, and global competitiveness, even under sanctions and international constraints, is a testament to the engineering talent and dedication of its people.