Engro Polymer to invest $6m in new chemical line

Will inject another $16m into new technology to reduce carbon footprint

KARACHI: Engro Polymer and Chemicals Limited will invest $22 million in a new chemical production line along with an upgrade of its existing PVC plant.

“The board of directors of Engro Polymer and Chemicals, in its meeting held on November 26, 2019, has approved the capital expenditure of approximately $22 million,” read a notice of the company sent to the Pakistan Stock Exchange on Wednesday.

The chemical company will invest $6 million in a new product line - linear alkylbenzene sulfonic acid (LABSA) - with an annual production capacity of 24,000 tons. The company has targeted to complete the project by the fourth quarter of 2021, the notice added.

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“Currently, the annual demand for LABSA in Pakistan stands at 110,000 tons, of which the domestic industry manages to supply 100,000 tons while the remaining 10,000 tons are imported,” said Arif Habib Limited analyst Rao Aamir Ali. “The company expects an uptick in LABSA demand by the time it completes the project.” Tufail Chemical Industries CEO Zubair Tufail said his company was also investing in the same product line. “Our project, having a capacity of 40,000 tons, will be completed in the next six months,” he revealed.

According to the United Nations’ Comtrade database, Pakistan’s import of miscellaneous chemical products stood at $801.49 million in 2018. On the other hand, the country’s import of organic chemicals stood at $2.76 billion in 2018. Pakistan Chemical Manufacturers Association Chairman Abrar Ahmed expressed pleasure over the new investment in the chemical sector, adding that it could promote import substitution in Pakistan.

The remaining $16 million will be invested by Engro Polymer in a new technology called high temperature direct chlorination (HTDC), which will increase power efficiency and reduce carbon footprint in its PVC plant. This project is expected to help reduce gas consumption by 10% in PVC manufacturing. It is also targeted to be completed in the fourth quarter of 2021. 

Published in The Express Tribune, November 28^th, 2019.

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