Engro Polymer and Chemical Limited (EPCL) has announced a delay in the launch of its hydrogen peroxide project, a crucial bleaching agent widely used in the textile industry. The delay is attributed to challenges in importing the necessary plant and machinery, aggravated by the ongoing foreign exchange crisis in Pakistan. An official from the company told The Express Tribune that the project was originally scheduled for a 2023 launch with an estimated cost of $35 million but now faces cost escalations due to the significant devaluation of the Pakistani rupee against the US dollar. EPCL Manufacturing Vice President Mahmood Siddiqui on Wednesday said EPCL remains committed to initiating the project “as soon as the import of machinery becomes possible”. In its latest quarterly financial statement filed with the Pakistan Stock Exchange (PSX), EPCL cited macroeconomic conditions as the primary reason for the delays in the hydrogen peroxide project. The company’s 2022 annual report also acknowledged the adverse impact of supply chain disruptions and equipment delivery delays caused by an extended lockdown in China. Furthermore, the recent restrictions on import letter of credit (LC) establishment by the State Bank of Pakistan (SBP) could potentially further affect the project’s timelines, he said. EPCL officials disclosed that Pakistan currently imports 14,000 tonnes of hydrogen peroxide annually, while the EPCL’s installed capacity stands at 28,000 tonnes per year. The import cost of the chemical amounts to approximately $500-600 per tonne. EPCL is not the sole player in Pakistan’s hydrogen peroxide market, as other companies are also engaged in its production and marketing within the country. The company’s officials noted that substantial investments in expanding and enhancing domestic polyvinyl chloride (PVC) production have created an opportunity for Pakistan to earn $300 million through the export of surplus volumes and value-added products. With Pakistan’s per capita PVC consumption at 1.2 kg compared to the global average of 6.1 kg, the EPCL anticipates growth in per capita consumption driven by increasing income levels, urbanisation, and robust domestic manufacturing in the years ahead. EPCL has invested over $188 million in plant expansion and upgrade projects since 2015, aiming to improve efficiency, reliability, and diversification of operations. EPCL’s Chief Commercial Officer, Muhammad Idrees, highlighted the company’s collaboration with TDAP to explore global markets for exporting value-added PVC downstream products. EPCL has already made exports worth $48 million to Turkish and Middle Eastern markets in the past two years. Published in The Express Tribune, June 1st, 2023. Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.
source https://tribune.com.pk/story/2419648/engro-polymer-delays-hydrogen-peroxide-project
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