Port Qasim, Pakistan
The project is a new PVC plant in Port Qasim, which is a little over 50km from the city of Karachi in Pakistan. The new plant will be located in Karachi's industrial district.
The PVC plant is owned by a joint venture called Engro Asahi Polymer & Chemicals Limited. This joint venture was set up by Asahi Glass Company, Mitsubishi Corporation and a local firm called Engro Chemical Pakistan Limited. The three companies' equity stakes in the enterprise are 30%, 20% and 50% respectively. Engro Chemical Pakistan, main partner in the enterprise, is listed on the Karachi stock exchange. One of its main businesses in the past has been the manufacture of fertilisers. The PVC project is an indication that the company is trying to move up the value chain, to products with less volatile prices.
PVC PLANT CONSTRUCTED BY TEC
The project was initiated in 1997, construction began in December of that year and, although it was mechanically completed in 1999, the plant was inaugurated in February 2000. The PVC capacity of the plant is 100,000t/yr.
The main contract was awarded to Toyo Engineering Corporation (TEC) and Mitsubishi, both well-known Japanese companies. Its estimated as being $44 million in value, although the total cost is about $80 million. TEC may have been helped in winning the order by its previous relationship with the largest equity partner, Engro Chemical Pakistan Ltd, for which it constructed a urea plant. The process technology for the PVC plant is licensed from Mitsui Chemical, the Japanese company.
The firm now markets its PVC resin under the brand name Sabz. The main markets for its product are Pakistan itself, the Middle East and South East Asia. According to the company, its first full year of exports (the year 2000) can be expected to see export revenues of about $20 million.
VCM PLANT PLANNED
The partners may also be interested in founding a vinyl chloride monomer (VCM) plant at a later stage. It is believed that a feasibility study has already been undertaken into this. If constructed, the VCM plant could supply feedstock to the PVC plant with little transport costs and total security of supply.
In 1999, the sister company of Engro Chemical (Engro Paktank Terminal, a joint venture with the chemicals and oil logistics firm) completed a VCM storage facility at a cost of $6 million. This is to accommodate the import of feedstock for the PVC plant. The VCM facility consists of a marine loading arm, two 3,750t/yr pressurised spheres, magnetic drive transfer pumps and VCM detection systems. This storage facility would not necessarily fall into disuse if the Pakistani plant did indeed construct a VCM plant since the company has also floated the idea of expanding its PVC production. However, plans to expand the Port Qasim facilities are still vague, so it is not clear what mix of PVC expansion, VCM production and storage of feedstock would be required.
To finance the project, the joint venture has had some help from the International Finance Corporation (which is part of the World Bank).
Pakistan's economy has sustained some damage in recent years, which may have affected its PVC markets. As a result of a military coup and the testing of a nuclear weapon, sanctions were imposed, most notably by the USA. This has affected general economic growth, and therefore levels of demand for PVC. This is likely to make the Port Qasim plant more aggressive in export markets, especially the recovering markets of the Far East.