Engro Asahi Polymer Chemicals - Pakistan's sole polyvinyl chloride (PVC) producer has embarked on an ambitious US$221 mln expansion plan. Engro Asahi has secured loan amounting to US$150 mln, that will be utilized to partly fund expansion of its PVC plant and construction of a chlor-alkali complex adjacent to it.
The 100,000 tpa PVC plant is to be expanded by 50% to 150,000 tpa by Q3-08. The company will maintain an option to debottleneck the PVC capacity to 200,000 tpa at a later stage depending on market conditions. A 150,000-200,000 tpa vinyl chloride monomer (VCM) plant, a 200,000 tpa ethylene dichloride (EDC) plant and a 100,000 tpa caustic soda plant are projected to start up in H1-2009.
The balance US$71 mln will be financed through equity infusion. IFC [International Finance Corp] plans to infuse US$$20 mln equity into the company. Engro Chemicals and Mitsubishi Corp will contribute US$25 mln and US$3.5 mln to increase their equity in the joint venture. Engro Chemicals and Mitsubishi Corp currently have 80% and 20% equity respectively in Engro Asahi, following Engro Chemicals' buyout of a 30% stake from Asahi Glass earlier this year.