Engro Polymer and Chemicals Limited would be investing $22 million in a new chemical production line along with an up-gradation of its current PVC plant.
As per a notice, of the company sent to the Pakistan Stock Exchange, (the board of directors of Engro Polymer and Chemicals in the meeting that was held on the 26th of November 2019), has given approval to the capital expenditure of nearly $22 million.
The chemical firm would be investing $6 million in a new product line—linear alkylbenzene sulfonic acid—LABSA, with a yearly production capacity of 24,000 tons. The firm has targeted to complete the project by the 4th quarter of 2021, as per the notice.
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Presently the yearly demand for LABSA in Pakistan stands at 110,000 tons of which the domestic industry manages to provide 100,000 tons while the remaining 10,000 tons are imported, as informed by Arif Habib Limited analyst—Rao Aamir Ali.
The CEO of Zubari Tufail—Tufail Chemical Industries said that the firm anticipated an uptick in LABSA demand by the time it completes the project. He said that his company was also investing in the same product line. He further added that their project has got a capacity of 40,000 tons and would reach completion in the next 6 months.
As per the Comtrade database of the United Nations, the import of Pakistan of the miscellaneous chemicals products stands at $801.49 million in 2018. Besides that, the country’s import of the organize chemicals stood at $2.76 billion in 2018. Pakistan Chemical Manufacturers Association Chairman—Abrar Ahmed said he is pleased over the new investment in the chemical division, adding that it could boost the import substitution in Pakistan.
The remaining $16 million would be invested by Engro Polymer in a new technology called the high-temperature direct chlorination—HTDC, which would surge the power efficiency and decrease the carbon footprint in its PVC plant. The project is anticipated to reduce the gas consumption by 10percent in the manufacturing of PVC. It is also aimed to reach completion in the 4th quarter of 2021.
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