KARACHI: Engro Polymer & Chemicals Limited – the only company in Pakistan that produces poly-vinyl-chloride (PVC) – has announced that it will inject $9 million into expanding its plant capacity.
The new investment will increase the annual production capacity to 195,000 tons, up 14.7% from its current capacity of 170,000 tons. The project is expected to be completed by December 2017, according to a company notice sent to the Pakistan Stock Exchange on Friday.
Corporate results: Engro Foods’ earnings up 1.4%
The company’s share price rose 3.82% and closed at Rs18.19 on Friday. Overall, the benchmark KSE 100-share Index closed down 65 points at 46,633.
Energy shortages and load-shedding were some of the biggest impediments to the growth of PVC industry in Pakistan, Engro Polymer’s then CEO told The Express Tribune in July 2014.
With 170,000 tons of installed capacity, the company meets 80% of the PVC demand in the country, while the rest is met through imports. In the imported material, 10-12% comprises hazardous scrap of PVC.
Pakistan’s per capita PVC consumption is lower than regional standards. It stands at just 0.6-0.7 kg compared to 100% higher consumption in India and 16-17 kg in developed nations.
PVC is mainly used in manufacturing PVC pipes. Other sectors include artificial leather, shoes, rigid and soft sheets, garden hose, windows and doors, etc.
Engro Polymer is a subsidiary of Engro Corporation – one of the largest conglomerates in the country.
The company’s history dates back to 1994 when it was established as a joint venture with two Japanese companies. Later, perturbed with low margins, it decided to change the business model by producing PVC raw material in Pakistan and made an investment of $350 million.
Corporate results: Engro Corp’s profit grows 3% in Jan-Sep
After passing through three tough years, the company finally reported a net profit of Rs50 million in 2012, followed by earnings of Rs717 million in 2013.
The management had hoped that 2014 would also be a better year, but the company posted a loss of Rs1 billion and Rs649 million in 2014 and 2015, respectively.
courtesy : express tribune