Engro Polymer and Chemicals Limited (EPCL) announced expansion plans for its PVC production plant – a chemical used in making numerous plastic products including credit cards, toys and construction materials like water and sewerage pipes via issuance of right shares – according to a bourse filing today.
EPCL, which remains the industry leader with 73% market share in Pakistan, disclosed adding a new PVC production line after demand for the chemical continued to surge significantly in the country.
PVC prices (averaged at $904 per ton) strengthened on the back of healthy demand in the region in the third quarter of 2017
The board of directors announced that the company intends to carry out a right shares issue at a premium.
The total amount of proposed rights issue will be utilized to fund the addition of new PVC Plant of 100,000 MT and VCM plant debottlenecking of 50,000, taking the total capacity to 295,000 ton per annum and increasing production of VCM (the raw material).
The overall Capital Expenditure (CAPEX) for the project is approximately Rs 7.6 billion, which will be partially funded through the issuance of right shares of approximately Rs 5.4 billion.
The board further resolved that it shall approve and announce the actual right issue date very soon.
EPCL’s script at the bourse was trading at Rs 29.31, down by -2.30% with a turnover of 3.10 million shares.
Engro Polymer 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’.