Pakistan to start producing PVC

Oct 23, 1997 02:00 AM

Asahi Glass, Mitsubishi and Engro Chemical Pakistan, a major fertiliser company of Pakistan, recently concluded the agreement at Karachi to establish a joint venture company to be engaged in the PVC business, the first PVC manufacturer in Pakistan.
The demand for PVC in Pakistan has been growing at 10 % per year for the past several years: the nation's PVC consumption for 1996 is estimated to be about 90,000 tons. There used to be a small local PVC manufacturer but it has already stopped producing and all the demands for PVC at present are relying on imports from Saudi Arabia, Iran, Thailand and other countries. Under each situation, Engro, which is the second largest fertiliser company in Pakistan and has been keen to diversify its business into PVC and other petrochemical industries, decided to cooperate with the two Japanese partners in producing and selling PVC in Pakistan.
Asahi Glass is one of the largest chlor-alkali manufacturers in Asia, having its chlor-alkali business in Indonesia and Thailand in addition to its own operation in Japan, and this project will be its third chlor-alkali overseas base.
Mitsubishi already has polyester fibre and polypropylene film businesses in Pakistan and this project will be its first major step into the petrochemical business in Pakistan.
The three companies are equity partners in the ratio of 50 %, 30 % and 20 % respectively in the joint venture company called Engro Asahi Polymer & Chemicals Ltd. (EAPCL). The total investment of this project is estimated at approximately $ 83 mm and the capital of EAPCL will be $ 37 mm. Asahi Glass and Mitsubishi's combined equity in the amount of $ 18.5 mm will constitute the largest investment so far made by Japanese companies for a joint venture in Pakistan. The president and executive vice president of EAPCL are planned to be nominated by Engro and Asahi respectively. Engro will also support EAPCL in the marketing area by providing its business know-how in Pakistan, while Asahi Glass will support EAPCL in the field of manufacturing PVC and Mitsubishi will support EAPCL as the supplier of vinyl chloride monomer (VCM), the main raw material of PVC.
The PVC plant of EAPCL, when constructed at Port Qasim Industrial Estate about 60 km east of Karachi, will produce 100,000 tpy under the technology license from Mitsui Chemicals Inc. The construction will start in this coming December and the commercial operation is targeted to start in December, 1999. EAPCL will import VCM in this plan but has a desire to expand its business toward upstream industries.

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