Matco Foods to set up corn starch plant
Matco Foods announced on Thursday that it would set up a corn starch manufacturing plant at an estimated cost of Rs1.38 billion at a Special Economic Zone (SEZ) in Punjab while availing a five-year tax holiday.
The starch is not only used in making a number of food dishes but is also utilised in industrial manufacturing processes to produce pharmaceutical, textile goods, paper and board and adhesives.
“The board of directors in its meeting held on Thursday, December 24, 2020, approved the plan of corn starch business at the Allama Iqbal Industrial Estate SEZ, Faisalabad,” Company Secretary Danish Ahmed said in a notification sent to the Pakistan Stock Exchange (PSX).
“Pakistani industries consume around 250,000 tons of corn starch per year,” Company Director Faizan Ali Ghori said while talking to The Express Tribune. “Besides, the starch manufacturers in the country export around 30,000 tons per year as well.”
Some of the industries import the raw material but the quantity brought from abroad stands at just 2,000 tons annually, he added.
“We plan to set up the plant in Faisalabad because corn is grown over a large area in Punjab and a majority of textile manufacturing units are located in Faisalabad,” another company official said.
The new plant would not only cater to the local requirement but would also enhance country’s exports and fuel import substitution, he said.
Ghori said that the company would start work on the project next year (in 2021) and begin commercial production in the middle of 2022. “The project will be set up through a mix of 30% equity and 70% debt,” he said. The debt will include the concessionary financing which the SBP offers under the Temporary Economic Refinance Facility (TERF).
The central bank set up a fund worth Rs100 billion in March to aid industries in establishing new projects during difficult times due to the Covid-19 pandemic, however, the funding can be availed no later than December 31, 2020.
Ghori underlined that the use of starch was expected to increase in Pakistan with exponential growth being foreseen in the textile sector. “The sector is being operated at full capacity these days and many operators have decided to expand their production lines.”
During the day, Matco Foods’ share price hit its upper limit of 7.5%, or up by Rs1.69, to close at Rs24.27 with 1.3 million shares changing hands at the PSX. The board has authorised the chief executive and executive directors to secure and negotiate the purchase of plant site/ land in Faisalabad for corn starch and apply for and obtain all requisite approvals/ no-objection certificates (NOCs) in this regard.
Published in The Express Tribune, December 25th, 2020.
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