Engro Polymer starts caustic soda flake production

Will produce 20,000 MT per year; chemical is widely used in textile sector

KARACHI: Engro Polymer and Chemicals Limited has announced that it has commenced production at its caustic flake line of 20,000 MT per year.

“On December 28, 2017, Engro Polymer and Chemicals announced entering into caustic flaker business by setting up a new production line of 20,000 MT per annum. In relation thereto, we are pleased to announce that commercial operation of the new production line has been achieved,” the company said in a notice sent to the Pakistan Stock Exchange (PSX) on Monday.

Caustic flake - the updated version of caustic soda - has a better shelf life as compared to caustic soda. “The chemical is widely used in the textile sector of Pakistan where due to export orders, demand fluctuation occurs time to time,” said Aba Ali Habib analyst Zubair Jatoi.

“Existing caustic soda is in liquid form, which does not have a long shelf life, whereas flake is in powder form,” said Shankar.

Caustic flake is sold at a price higher by Rs10,000 to Rs15,000 compared to the liquid, which costs Rs55,000 to Rs60,000 per ton, due to its shelf life and easy mobility, according to Shankar Talreja, an analyst at Topline Securities.

“This will help the company capture textile market in the southern region,” Jatoi said, adding that Pakistan’s textile sector was expected to embark on expansion plans of up to $1 billion, so the company came into the market at the right time.

“The addition of caustic soda flakes to the existing product portfolio will further consolidate the company’s position and will enable the company to capitalise on the proximity advantage for the southern domestic market and export avenues,” said Company Secretary Khawaja Haidar Abbas.



“The southern market, Sindh and Balochistan, is generally catered to by Punjab-based chemical companies, which the company is targeting due to its proximity,” said Talreja. Engro Polymer’s plant is situated in the vicinity of Port Qasim so it is the company’s primary target.

The company could easily target the region at competitive prices, he said. In this region, it can get the benefit of ports and export the commodity without bearing additional transport costs unlike Punjab-based companies.

In late December 2017, the board of directors of Engro Polymer approved a capital expenditure of approximately Rs10.3 billion. The expansion plan included polyvinyl chloride (PVC), one of the core products of the company, a common, strong but lightweight plastic used in construction, which has an additional capacity of 100,000 MT (taking total capacity to 295,000 MT per year). 

Published in The Express Tribune, April 23^rd, 2019.

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