Engro Chemical Pakistan has signed a joint venture agreement with Asahi Glass Company and Mitsubishi Corporation, both of Japan, to form the local Engro Asahi Polymer & Chemicals. The new company will build a polyvinyl chloride (PVC) plant at Port Qasim.

The project will cost $80 million. Engro will provide 50 per cent of the $37 million equity, equivalent to $18.5 million, Asahi will provide $11.1 million, amounting to 30 per cent and Mitsubishi will invest the remaining $7.4 million. Long- term debt finance will total $39 million. This will include: $28.5 million in foreign currency financing, to be provided by the International Finance Corporation and the Commonwealth Development Corporation; and $10.5 million in local currency to be raised by ANZ Grindlays, Citibank, Faysal Bank, Al-Faysal Investment Bank and Habib Bank. The same banks will also provide $4 million in working capital.

An engineering, procurement and construction contract is expected to be finalised in the next few weeks, Engro says. Construction is scheduled for completion in 1999. The plant will produce 100,000 tonnes a year of suspension grade PVC resin. Output will be used in local manufacturing such as pipes, cables, footwear and artificial leather. All PVC requirements are currently imported. Engro says that it is considering a second phase of the project, which would produce vinyl chloride monomer, the main raw material for PVC (MEED 6:6:97).