Work is progressing on the new joint venture polyvinyl chloride (PVC) resin plant of Engro Chemicals Pakistan after the finalisation of the finance package. The $83 million facility is being built at Port Qasim through a 49:51 debt/equity package, of which the debt portion has been made available by the World Bank, the Commonwealth Development Corporation, and a group of five international and local banks (see Finance).

The project, Engro Asahi Polymer & Chemicals, is 50 per cent owned by Engro and 50 per cent by Asahi Glass Company and Mitsubishi Corporation, both of Japan. Procurement work is being carried out by Japan's Toyo Engineering Corporation while Mitsubishi is doing the engineering and construction work.

Technology for the new facility, scheduled to come on line by December 1999, is being provided by Japan's Mitsui Chemicals. The plant will initially produce 100,000 tonnes a year (t/y) of PVC resin. Expansions will be carried out in subsequent phases and a backward integration of vinyl chloride monomer (VCM), the feedstock for PVC, is also envisaged. Initially, VCM will be imported from Mitsubishi and handled at the $65 million Engro Paktank Terminal, a 50:50 joint venture with Royal Pakhoed of the Netherlands, at Port Qasim.

Engro has also completed a study to set up a $100 million joint venture polypropylene resin project. At present, it is in talks with the government and potential partners to set up the facility which will have annual production capacity of 100,000 tonnes, to be sold in the local market. The project will reduce polypropylene imports.

A $6 million PVC pipes and fittings manufacturing plant with an annual capacity of 3,500 tonnes is also being built by the company. It is scheduled to be commissioned by the first half of 1999.

Work is due for completion by the end of September on a $72 million expansion programme to raise capacity at Engro's Daharki urea plant to 850,000 t/y from the present 750,000 t/y. Basic design has also been completed for the staged expansion to 1.2 million t/y. Work will start after the completion of the current expansion programme. In 1997, Engro made an after tax profit of Rs 1,202 million ($24 million), down 13 per cent from Rs 1,386 million ($27 million) in the previous year.