‘Engro polymer evaluating investment as big as $800 million’ business recorder electricity 2pm live


Imran worked with Deloitte in 1994, up until static electricity in water 2002 as Manager Corporate Finance. He then joined Fuchs Petroleum, and served as the Chief Financial Officer from 2002 to 2005. Imran joined Engro (then Engro Chemicals Pakistan Limited) as Manager, General Accounting in 2005. He was then moved to Engro Foods in 2007 where as the CFO he was instrumental in deploying SAP system throughout the Company ultimately allowing the business to emerge as a market leader in dairy liquids. Thereon, he also served as the CFO of Engro Fertilizers before gas utility bill moving on to becoming the CEO of the petrochemicals business.

IA: We plan to expand the existing capacity by 50 percent, from 200,000 tons to 300,000 tons per annum. We are coming into caustic flakes and hydrogen peroxide as well. We have the LCs ready for more than half the businesses. The funding has been arranged from the shareholders; Engro 9gag tv and Mitsubishi. Other than that, we have taken a loan from the IFC, amounting to $35 million, as the State Bank of Pakistan demands foreign funding for opening the LCs.

IA: Surely, a lot has changed in the last 15 months in Pakistan. The rupee was valued at 105 per dollar when we had announced the expansion, today it is 140. Yes, the market was expecting the rupee to depreciate, but we were thinking around 120-125, certainly not 140. You can imagine the dent it has caused, as our cost has been inflated by Rs3-3.5 billion.

Gas prices have also increased for captive power, and being in the process industry, we cannot afford to be dependent on the grid. We produced around 55 MW of power, and that gas tax in new jersey is now pricier. Our business model is not one that allows passing on the cost to customers as we work on import parity. Then, there is this increase in interest rates, which has inflated the interest cost of the loan portfolio of around Rs9 billion.

IA: As I said, we were anticipating rupee at 120-125, but honestly, no one thought it would be 140 in such a short span of time. Having said that, these are measures that the institutions such as the IFC also understand gas vs electric oven running cost as it is applicable for the entire country, and not specific to our company. But when there is a policy change out of the blue, it surely shakes the entire gas and supply locations confidence.

It is a very challenging industry. There a very few suppliers in the world who supply ethylene, and that is imported in special vessels and stored in specialised tanks. Undoubtedly, there is growth in this industry. A year or two might be tough, but Pakistan eventually has to grow in the longer run. We are optimistic on Pakistan. We are the only petrochemical complex in the country. It is unfortunate that we do not have a single integrated petrochemical complex in the country.

We are currently eyeing an investment that could be as big as $800 million, but is currently at an evaluation stage. Pakistan imports roughly around $3 billion of petrochemical products, of which electricity around the world $2 billion is liquid. Moving liquid is not viable, and is best to be produced in the country. That is a big dream, and requires an investment to the tune of $8-10 billion.

IA: Do you know how much duty protection do the steel, cement, sulphuric acid, ceramics etc have? I do not think 10 percent is enough. Our business is extremely volatile; it needs to be treated likewise. You must have seen what happened with the LNG a couple of months ago. There was a slight delay and it was a mess. They need to be treated as the assets of Pakistan, not assets of business groups electricity electricity goodness.

IA: By this definition, there will not be a single industry left in the country. Just add up the benefits given to the textile sector, and that comes around 20-25 percent of sales. That is their protection. If they are gas water heater reviews 2013 earning dollars, then we are saving them. Earning a dollar is as good as saving one. We have to treat the import substitution on the same levels as the export industry.

When you export, you are competing with the world. Import substitution, on the other hand is relatively easier, as the market is available. You need to promote manufacturing, which in turn will revive dozens of allied industries as well. The value of our net import substation is $115 million. Once the expansion is done, the import substitution plus export would be $180 million. These are large sums for a country like Pakistan.

IA: I would not call it an influence. I would say we have very sensible gas variables pogil packet answers people there who know business, having done business power definition physics electricity their entire lives. All I urge for is consistency of policy, and brining the most important stakeholders in consultation before such decisions. In cases such as ours, where international companies and funding agencies are involved, such abrupt decisions do not give a very good reputation. We have been assured that the decision will be rationalised in the upcoming budget, which is a fair call. We can live with it for three months.

IA: I think textile will grow, but it will not be immediate. Lots of people, who had withdrawn money from the textile sector, will have to first gain confidence and earn before reinvesting. For that, you will have to wait 12 to 18 months. There is surely positivist in the grade 6 science electricity test market, as evident from Interloop’s recent IPO which was a massive success. The demand for caustic and hydrogen peroxide will certainly gas and bloating after miscarriage go up, with a growing textile industry.

IA: The growth of construction industry is of paramount importance for our business, which is not growing at the moment. We will see a slowdown, but it may not be negative growth. We will still manage flat growth in the short term. The PVC is not used for hardcore construction, so the demand will still be there. Plus, there are multiple new products in the PVC line, such as doors, vinyl flooring and so on and so forth.