Engro Fertilizers
Business

Engro chemical shines with 200m profits

KARACHI: Engro Polymer & Chemicals Limited – the only company in Pakistan that produces poly-vinyl-chloride (PVC) – has announced a net income of Rs200 million in the quarter ended on June 30, 2017, up 809% compared with Rs22 million in the same period of last year.
Earnings per share (EPS) jumped to Rs0.30 from an EPS of Rs0.03 in the period under review, according to a company notice sent to the Pakistan Stock Exchange (PSX).
The KSE-100 Index closed on Monday at 46,465, down 441 points or 0.88% while Engro Polymer share closed at Rs34.88, down 2%.
The six month (January to June 2017) net income of the company rose even higher to Rs1.05 billion, up 2,525% compared with Rs40 million in the same period of last year.
Engro Polymer, a subsidiary of Engro Corporation that is one of the largest private-sector conglomerates in the country, had announced to inject $9 million into expanding its plant capacity in December 2016.
The new investment will increase the annual production capacity to 195,000 tons, up 14.7% from its current capacity of 170,000 tons. The project is expected to be completed by December 2017.
With 170,000 tons of installed capacity, the company meets 80% of the PVC demand in the country, while the rest is met through imports. In the imported material, 10-12% comprises hazardous scrap of PVC.
Company officials say energy shortages and load-shedding were some of the biggest impediments to the growth of PVC industry in Pakistan.
The company’s history dates back to 1994 when it was established as a joint venture with two Japanese companies. Later, perturbed with low margins, it decided to change the business model by producing PVC raw material in Pakistan and made an investment of $350 million.
Pakistan’s per capita PVC consumption is lower than regional standards. It stands at just 0.6-0.7 kg compared to 100% higher consumption in India and 16-17 kg in developed nations.
PVC is mainly used in manufacturing PVC pipes. Other sectors include artificial leather, shoes, rigid and soft sheets, garden hose, windows and doors, etc.