Pakistan's sole PVC resin manufacturer eyes 'big opportunity' to supply construction materials to NEOM

Oct 18, 2023

https://arab.news/zcc7n

KARACHI: Engro Polymer and Chemicals Limited (EPCL), Pakistan's sole manufacturer of PVC resin material, said on Wednesday it is eyeing supply of the product for construction at Saudi Arabia's planned smart city NEOM which can help it earn $300 million in exports.

Neom, a $500 billion project, is a key element of the Saudi Vision 2030 plan as part of the kingdom's mission to diversify away from its oil-dependent economy. The project is estimated to create 380,000 jobs and contribute SAR180 billion to Kingdom's GDP. Saudi Arabia's flagship business and tourism development project at the Red Sea coast is expected to see massive construction in the coming months and years.

Polyvinyl chloride (PVC) resin is the raw material used to manufacture various construction materials. These include PVC pipes, Wood Plastic Composite (WPC) windows and furniture, Stone Plastic Composite (SPC) flooring, and cable insulation. PVC is also used to manufacture medical equipment.

"A big opportunity is knocking at the door in the form of Neom," Muhammad Farhan, general manager downstream business and market development at EPCL, told Arab News. Farhan was speaking at a media briefing at the Bin Qasim industrial zone in Pakistan's southern port city of Karachi.

"Neom is a $500 billion project that requires massive construction materials including PVC downstream products that are available in Pakistan," Farhan added.

"In fact, some of the Pakistani manufacturers have already bid for the supply of material to the kingdom."

Farhan said Pakistani manufacturers of PVC products had received overwhelming response from Saudi participants of the Big 5, a mega construction show held in Dubai in December 2022.

He said Saudis are exploring different options while manufacturers in the kingdom are looking for other manufacturers who can make products for them.

The EPCL official said the demand for the basic construction material, including cables and pipes, will increase in the first phase of construction at Neom and will keep booming for at least two years. Simultaneously, demand for value-added products for construction on the exterior, including SPC and WPC, will increase.

To take greater advantage of Neom's lucrative opportunities, Farhan said the government can play a vital role by engaging Saudi authorities and the Trade Development Authority of Pakistan (TDAP).

"We saw the interest of the Saudi participants in the value-added products – they want to import but they were also looking for investment in the kingdom for manufacturing and as a nation, we have access capacity and by utilizing that capacity we can avail the opportunity," he added.

Muhammad Idrees, EPCL's chief commercial officer, said the country is already exporting PVC resin to Gulf countries UAE. Bahrain, Oman, and Egypt because of the freight advantage.

"Engro has installed capacity of 300,000-ton resin production while the downstream industry has close to a million-ton capacity," Idrees said.

"The downstream PVC industry can fully utilize its excess capacity and earn $300 million in terms of export revenue by standardizing and improving the quality of finished products."

He said the $300 million PVC export potential could materialize within the next three to four years by the value-added industry through the export of surplus volumes and products.

Idrees said EPCL is collaborating with TDAP to explore global markets to export value-added PVC downstream products.

"In the last two years, the company exported surplus products worth $48 million to Turkiye and Middle Eastern markets, while import substitution of around $300 million contributed significantly toward solving Pakistan's balance of payments situation," he added.

Mahmood Siddiqui, vice president of manufacturing at EPCL, said the company has invested over $188 million since 2015 in plant expansion and other upgrade projects for higher efficiency, reliability, and diversification of operations.

Pakistan's per capita PVC consumption stands at 1.2 kg versus a global average of 6.1 kg. Per capita consumption growth, EPCL officials said, would be driven by rising per capita income, increasing urbanization, and robust domestic manufacturing in the coming years.

However, they said the company was facing challenges of importing equipment for additional plants as commercial banks refuse to open Letters of Credit (LCs) as Pakistan faces a dollar crunch amid a worsening economic crisis.

ISLAMABAD: Pakistan's finance minister said on Saturday a projection in the government's budget of 3.5 percent economic growth for the year ending in June 2024 was a "realistic target."

The target was "on the lower side," Ishaq Dar told a press conference in Islamabad, a day after presenting the budget for the fiscal year 2023-24.

The budget is being closely watched by the International Monetary Fund (IMF) as the South Asian country seeks further bailout money during an economic and balance of payments crisis.

In the year ending this month, Pakistan's gross domestic product (GDP) was projected to grow just 0.29 percent. The fiscal deficit for the following fiscal year was projected at 6.54 percent of GDP, according to the budget.

The country faces a series of economy crises, exacerbated by a stall in bailout funding from the IMF, which analysts said was unlikely to be significantly impressed by the budget.

In addition to requirements related to the currency and budget, Pakistan is required to secure firm and credible financing commitments to close the $6 billion gap in order to unlock funding under its long-delayed ninth IMF review. The government has gotten commitments of only $4 billion, mainly from Saudi Arabia and the United Arab Emirates.

KARACHI: Pakistani actor Shahroz Sabzwari has said his new movie, ‘Babylicious,’ with ex-wife Syra Yousuf will give "butterflies in your tummy," with the flick scheduled to be released on Eid Al-Adha.

Babylicious was announced in December last year when Yousuf and Sabzwari revealed the first look of the film, initially slated for a release in February 2023. The news came as a surprise for many, particularly after the real-life couple parted ways in 2020.

Nonetheless, the former couple this month began promotions for the film, which had been in the works since 2017 when Yousuf and Sabzwari were married to each other.

In an exclusive interview together with his ex-wife, Sabzwari, who plays the role of a college student Omar, told Arab News the film is "romantically entertaining."

"Go watch all the films but if you want butterflies in your tummy, watch Babylicious. Like true butterflies in your tummy if you really want to feel happy and sad at the same time. Watch Babylicious," he said, when asked what the picture will bring to viewers apart from other movies slated for release on Eid.

"If you want to cry a little and then get excited and jump on your seat then watch Babylicious. Otherwise, you can watch other films also."

The movie, shot in Karachi, Nawabshah and Bahrain, is written, directed and co-produced by Essa Khan, who described it as:

"Fun, date movie set in a super affluent Pakistani neverland where college students drive fancy new cars, have top brand wardrobes and lavish weddings."

But Yousuf believes Babylicious portrays romance in an "old school" manner and is very different than what "love means in today's time." She stars as Omar's college sweetheart, Sabiha.

"It's funny because we shot this movie over a span of five years," said Yousuf, who thought the former couple has "really changed" over the years.

"I’m kind of looking forward to see how that's going to turn out."

Sabzwari said the film is equally relatable to youngsters and their parents.

"Anyone who has fallen in love in their teens, or early 20s. Maybe, their first love. This film is for them," he said.

"It is also for the parents."

Babylicious is not the first time Yousuf and Sabzwari have worked together. The former real-life couple appeared in the sequel of cult-classic ‘Tanhaiyaan’ in 2012.

They mutually opted for divorce due to "irreconcilable" differences three years ago. The two have a daughter, Nooreh, who they co-parent, while Sabzwari later married Pakistani model Sadaf Kanwal.

The two shared they work hard on maintaining a "good equation" for their child that seeps into other areas of their lives too.

"Along with being very dedicated actors, we are also very dedicated parents. We both are very big on the responsibility we share," Yousuf said.

"It's mainly the fact that we work really hard on maintaining a good equation for our child. It just kind of leaks into other areas of our lives as well."

Asked if they would sign up for another project together, Yousuf said they were good "co-parenting."

"It was very smooth [working together in Babylicious] because we have known each other for a very long time," she shared. "So, we know what works, what doesn't work."

Sabzwari said people were "shocked" when they learnt the two actors were starring in a film.

"[They should] live and let live but it doesn't happen, which is okay," he said. "It was [a surprise] for a lot of people and that's why they’re going to go watch the film."

Babylicious, according to Sabzwari, does not have an international release planned yet, however, if the film does well at the box office, they hope to release it in the US, England and Dubai.

ISLAMABAD: Pakistan Prime Minister Shehbaz Sharif said on Saturday that a charter of economy was the "only way forward" for the political leadership to achieve prosperity for the Pakistani people, a day after the cash-strapped government presented budget for the next fiscal year.

PM Sharif's government, which succeeded that of former premier Imran Khan, has struggled with an unprecedented economic downturn since taking over last year, with talks with the International Monetary Fund (IMF) for the revival of the $6 billion bailout package yielding no result since December.

The draft budget envisaged $50.4 billion for the next fiscal year, starting July 1, a significant increase from last year's budget, aiming for a 6.5 percent deficit and allocating approximately 50 percent for interest payments.

"The economy direly needs reforms, which, in turn, can be undertaken in a stable political environment, for economic development is intrinsically linked to political stability," Sharif said on Twitter.

"It is here that the Charter of Economy appears to be the only way forward for our political parties to achieve prosperity for our people."

Sharif said the making of Budget 2023-24 was particularly a difficult task in view of the persistent challenges arising out of the floods-related relief and rehabilitation, global supply chain disruptions and geostrategic upheavals.

"Never-ending headwinds of political instability created by Imran Niazi damaged the economy and created uncertainty, as the country remained on the boil for well over a year," he added.

Khan, who was ousted in a parliamentary no-trust vote last year, has since launched a campaign against his political rivals, demanding snap nationwide polls. The ex-premier dissolved two provincial legislatures in an attempt to pressure the central government into announcing countrywide elections.

The political upheaval has compounded the countries the economic woes, with record inflation, fiscal imbalances and critical levels of reserves that cover barely a month of imports.

Sharif said a more balanced budget that levied no new tax could not have been possible within the existing constraints.

"Budget (FY23-24) represents the beginning of the process to fix the economy's long-term ailments. The coalition government has prioritized the right areas that have the potential to spur economic growth, attract investment and make the economy self-sufficient," he said.

"Mindful of the impact of inflation, the government has provided relief to public sector employees and pensioners in the form of pay raise of up to 35 percent and 17.5 percent respectively, and increased minimum wage to Rs. 32000."

Pakistan is currently in talks with bilateral creditors to restructure its debt, the cash strapped country's finance minister said on Friday.

Pakistan's IMF program ends this month with about $2.5 billion in funds yet to be released as it struggles to strike an agreement with the lender.

Bilateral creditors made up $37 billion of Pakistan's debt in the fiscal year 2021, out of which $23 billion is owed to China, according to an IMF country report released last year.

"We are in the process of engaging bilateral lenders to restructure debt," Finance Minister Ishaq Dar said in televised comments after the budget on Friday.

"No haircuts will be made... Interest will be serviced, and principal payments will be staggered."

ISLAMABAD: The Pakistan Meteorological Department (PMD) on Saturday alerted authorities in the Sindh and Balochistan provinces as a "very severe cyclonic storm" intensified above the Arabian Sea over the last 12 hours, laying at a distance of about 910 kilometers from Pakistan's commercial hub of Karachi.

The Arabian Sea, which borders the country's southern coastline, is susceptible to such weather systems. This week, a deep depression over the sea intensified into a cyclonic storm, Cyclone Biparjoy, with waves rising as high as about 28 feet.

"The Very Severe Cyclonic Storm (VSCS) ‘BIPARJOY’ over east-central Arabian Sea maintaining its intensity further tracked north-northeastward during past 12 hours and now lies near Latitude 16.7°N & Longitude 66.4°E at a distance of about 910km south of Karachi, 890km south of Thatta, and 990km southeast of Ormara," the PMD said in a statement on Saturday.

The favorable environmental conditions at the sea are intensifying the cyclone, but there is uncertainty regarding its direction owing to a shift in the upper-level steering winds of the storm, according to the global models’ final track forecast, with some experts saying it was heading to the Makran-North Oman coast while others indicating that it was moving toward the Indian Gujrat-Sindh coast.

"Given this uncertainty, the system is predicted to keep tracking further north/northeastward during the next 18-24 hours and then slightly recurve to the north-northwest," the PMD said, adding its cyclone warning center in Karachi was monitoring the system and would issue an update accordingly.

In a Twitter post, the Met Office also said that while the coastal areas of Pakistan were "not under threat" at the moment, it advised fishermen not to venture into the open sea from June 11 onward until the system is over as the Arabian Sea conditions could get "very rough," with high tides along the coast.

این ڈی ایم اے الرٹ- سائکلون بائپر جوائے pic.twitter.com/MSQYBpacqK

On Friday, Pakistan's National Emergency Operation Center (NEOC) said the country's coastal areas had "no major threats" from Biparjoy that was hovering over the Arabian Sea.

"There are currently no major threats to coastal areas in Pakistan. However, the cyclonic system may intensify further due to favorable environmental conditions," the state-run Radio Pakistan broadcaster reported, citing the NEOC.

"It has slightly changed course and is moving in a north-northeast direction, possibly drifting toward the Makran Coast of Pakistan."

The development came hours after Climate Change Minister Sherry Rehman said the country's coastal areas were likely to witness the impact of the cyclone, previously thought to be moving toward Oman.

"Of ‘Persistent intensity’ it is tracked as slowly moving in north-northeast direction, and may drift north-westwards toward Pakistan's Makran Coast. The environmental conditions supporting the system may intensify further," the minister said in a Twitter post.

"Fishermen are advised not to venture out into the open sea from Monday, 12 June onwards until the system has passed over the Arabian Sea," she added. "Conditions at sea may get very rough accompanied with high tides along the coast."

The developing situation was continuously being monitored in the NEOC, according to the report. The NDMA chief instructed the provincial disaster management authorities to conduct a local-level assessment of needs, deploy manpower and machinery, and work closely with all departments.

During the meeting, officials from the Sindh and Balochistan provinces that are home to the Makran Coast also shared progress on mass communication efforts, assessment and logistics support for areas at risk from the cyclone.

KARACHI: Pakistan is speaking to its bilateral creditors to restructure its debt, the cash strapped country's finance minister said on Friday.

Pakistan's IMF program runs out this month with about $2.5 billion in funds yet to be released as it struggles to strike an agreement with the lender, as it grapples with record inflation, fiscal imbalances and critical levels of reserves that cover barely a month worth of imports.

Bilateral creditors made up $37 billion of Pakistan's debt in the fiscal year 2021, out of which $23 billion is owed to China, according to an IMF country report released last year.

Minister Ishaq Dar said, "We are in the process of engaging bilateral lenders to restructure debt," speaking on Geo TV hours after presenting the country's national budget.

"No haircuts will be made... Interest will be serviced, and principal payments will be staggered," said Dar.

In order to unlock funding under its long-delayed 9th review, Pakistan is required to secure firm and credible financing commitments to close the $6 billion gap. The government has only been able to get commitments of $4 billion, mainly from Saudi Arabia and the United Arab Emirates.

The country has also rolled over debt from China as its reserves reach critical levels.