Engro Polymer approves capital expenditure of Rs10.3 billion for new PVC plant, other projects

A bourse notification filed by Engro Polymer & Chemicals revealed its board of directors approved a capital expenditure of Rs10.3 billion for addition of new PVC Plant and various other projects.

The major capital expenditure approved by Engro Polymer’s BOD was for a new PVC plant having 100,000 MT (taking total capacity to 295,000 MT per annum) & VCM Plant debottlenecking of 50,000 MT per annum, with target completion in Q3 of 2020, the notification read.

This project will cost around Rs7.6 billion, which will be funded through the issuance of right shares of approximately Rs5.4 billion and remainder Rs2.2 billion will be funded via debt.

Other capital expenditures of Rs2.7 billion were also given go-ahead which would be funded through a mix of internal cash and debt, which includes “new product line by adding Caustic Flaker of 20,000 MT per annum. CAPEX of the project is approximately Rs 0.34 billion with target completion in Q4 of 2018”.

Also, the notification stated “Debottlenecking of Sodium Hypochlorite & Hydrochloric Acid Plants for local/export markets. CAPEX of the project is approximately Rs 0.15 billion with target completion in Q3 of 2018.”

Furthermore, Engro Polymer approved membrane replacement of current caustic soda plant to improve efficiency and production and the capital expenditure for this project is estimated to be around Rs0.6 billion, with a completion deadline of Q3 2018.

And Rs0.22 billion will be expended for upgradation of gas turbines to improve reliability and efficiency of power plant with completion deadline of Q3 2018. Around Rs1.39 billion has been allocated for other efficiency and reliability projects by the company and are expected to be completed within 2018, read the notification.

Engro Polymer & Chemicals Limited (EPCL) is the only fully integrated Chlor-Vinyl chemical complex in Pakistan. It is a subsidiary of Engro Corporation, involved in the manufacturing, marketing and distribution of quality Chlor-Vinyl allied products and PVC under brand name ‘SABZ’.

At the time of filing this report, Engro Polymer shares were trading at Rs29.52, down Rs1.55 and KSE-100 index was trading at 40,371.31 points, up 224.58 at 4:15 pm.