ICI'S PTA PLANT STARTS COMMERCIAL PRODUCTION
A milestone in basic manufacturing
Oct 12 - 18, 1998
ICI Pakistan's Pure Terephthalic Acid (PTA) plant has started commercial production in June this year. The project has been completed at a cost of US$ 490 million. It is a joint venture of British conglomerate with DuPont. ICI Pakistan has entered into a joint venture agreement with DuPont to ensure retention of the crucial technology base and assure the continued stability, combativeness and future growth of the PTA business in Pakistan. A new company called Pakistan PTA (Pvt) has been incorporated for this purpose. ICI Pakistan's PTA plant is the fifth in DuPont business network. The first in the UK, operating since 1968. Currently there are two similar DuPont plants (formally owned by ICI) in operation at Taiwan in addition to others in China, Indonesia and India, using ICI/DuPont's licensed technology.
ICI Pakistan PTA plant is the first of its nature in the country. It has an installed capacity to produce 400,000 tonnes per annum. The plant has been built on a 100 acre plot at Port Qasin near Karachi. This will not only make Pakistan self sufficient in PTA, but, also has a potential to earn foreign exchange by exporting the commodity - though, in small quantity. The local consumers will get the product of international quality at competitive international prices reducing their headache of import and financial expenses incurred on carrying inventory.
PTA is an essential raw material for the production of polyester staple fibre (PSF) and PET bottles manufacturing. The main raw material used in the manufacture of PTA are Paraxylene and Acetic Acid. PTA plant has resulted into massive investment by other companies for providing other inputs/services. This includes an investment of US$ 25 million by BOC for industrial gases. Engro Pak Tank Terminal has established a jetty and liquid storage facility at a cost of US$ 60 million to receive and store Paraxylene and Acetic Acid.
ICI Pakistan, with the support of Port Qasim Authority (PQA), has built a 54 kilometer pipeline at a cost of US$ 30 million to source 81 cubic million gallons of water from Gujju canal for PQA for other industrial uses. In partnership with the Karachi Electric Supply Corporation (KESC) the first ever 220 kv connectivity in Pakistan has also been built at a cost of US$ 16 million.
The long-term financing arrangements for the project have been successfully completed with the closing of Rs. 2.7 billion facility from Habib Bank Limited (HBL) and Rs. 1 billion loan from National Bank of Pakistan.
The HBL facility is one of the single largest Pak rupee denominated long-term facility, raised in Pakistan and the largest Pak rupee funding in the history of ICI Pakistan. A specific permission from the State Bank of Pakistan was obtained to undertake this financing.
Besides attracting a massive direct foreign investment, the country will derive a variety of advantages from the establishment of PTA plant.
The prices of PTA in the international markets have remained highly volatile which have been affecting the competitiveness of local PSF manufacturers. PSF is a low cost substitute for cotton and can play a major role in improving the capacity utilisation of local spinning industry. The local manufacturing of PTA will also help in saving of about US$ 100 million through import substitution. The PTA plant has resulted into creation of more than 240 jobs besides providing employment opportunities in other support industries.
ICI Pakistan, a leader in industrial chemical and paints, manufacturers and sells diversified range of products including polyester staple fibre, soda ash agro-chemical and speciality chemicals. The Company also markets pharmaceuticals and animal health products. The Company has made its largest ever investment in PTA plant. At present ICI Pakistan is the fifth largest company listed at the Karachi Stock Exchange.
The interest of foreign investors in above mentioned projects is an evidence of their confidence in Pakistan and the policies followed in the country. The establishment of PTA plant will provide a major boost to textile industry in the country.