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

May 23, 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: Hammad Azhar, who has served as Pakistan's finance and energy minister, says police and plain-clothed officials have burst into his home six times in recent weeks, smashed his belongings, and threatened his 82-year-old father, warning that his daughter would be abducted.

Last weekend, he said police and "unknown people" took his father to a police station and released him after they went through his phone for an hour.

Azhar, who is in hiding, says he is under pressure from a "fascist regime" to leave the political party of former Prime Minister Imran Khan, Pakistan Tehreek-e-Insaf (PTI).

"All this is being done because I continue to stand with my party and Imran Khan," he told Reuters by telephone.

Like other senior members of the PTI who have been arrested in recent weeks, in some cases several times, Azhar avoided directly naming the powerful army as being responsible.

Khan however has done so, throwing down the gauntlet to an institution that has ruled the country directly for three decades or exerted considerable influence on the civilian government.

"It is completely the establishment," the former cricket hero said in an interview. "Establishment obviously means the military establishment, because they are really now openly — I mean, it's not even hidden now — they’re just out in the open."

The government and police deny any coercion of Khan's supporters. An army spokesman did not respond to repeated requests for comment.

Azhar is wanted on terrorism charges for violent nationwide protests in May and no warrants were needed to raid his home, said Punjab police chief Usman Anwar. Azhar denies the charges.

Nuclear-armed Pakistan has been unsettled since Khan was ousted from office as prime minister in 2022 and launched street protests for fresh elections. A full-blown economic crisis, with runaway inflation, a plunge in the currency, and the possibility of a debt default, has added to the turmoil.

Khan's arrest on corruption charges in May, which he says was at the behest of the generals, led to violent nationwide protests, attacks on an air base, military buildings, including its army's headquarters, and the burning of a top general's home, allegedly by the former prime minister's supporters.

There has never been that kind of challenge to Pakistan's military, which has held sway over the country since independence in 1947 with a mixture of fear and respect.

Full-blown campaign

Nearly 5,000 of Khan's aides and supporters have been arrested since May 9, according to Interior Minister Rana Sanaullah. Rights groups have raised concerns over arbitrary arrests and forced disappearances.

Of the many pro-Khan parliamentarians arrested in the weeks-long crackdown, several have been re-arrested after securing bail from the courts.

All the leaders who have been set free have publicly distanced themselves from Khan, denounced the protests, and praised the military.

"The entire senior leadership is in jail," Khan said in the interview. "And the only ones who can now get out of jail are the ones who then say that we renounce being part of PTI."

His spokesman Iftikhar Durrani added: "It is a full-blown campaign to dismantle the party."

"(Party members’) families are being threatened with consequences — physical, mental and financial... to force a leader to quit," Durrani said.

When Reuters reached out to four of the released politicians for comment on their departures from the party, a former government minister replied in a WhatsApp message: "Situation doesn't allow."

One said he didn't want to talk about it, and the other two did not respond.

The first of the key aides to quit Khan's party was former Human Rights Minister Shireen Mazari, who was a close confidant of Khan.

She was arrested on May 11 in a police raid on her home, and a court ordered her release five days later. However, she was re-arrested just as she stepped out of jail and taken to another premises. This happened three more times.

Finally, on May 23, shortly after being released for a fifth time, she held a press conference announcing she was quitting politics. She was not re-arrested after that.

'Parting ways'

Fawad Chaudhry, a former information minister, and a close Khan aide, was arrested on May 10 outside the Supreme Court despite having protective bail. He was surrounded by police again after a court ordered his release a few days later.

"I have decided to take a break from politics, therefore, I have resigned from party position and parting ways from Imran Khan," Chaudhry said in a post on Twitter after he was finally released.

Other top aides who have been re-arrested despite release orders from courts include former Foreign Minister Shah Mahmood Qureshi and former ministers Ali Muhammad Khan, Shehryar Afridi, and Yasmin Rashid, who walked out of jail only to be redirected to a waiting police vehicle, which took them to another detention site.

"Yes, there is a lot of pressure, but I’m not ditching the party," another senior leader, Mehmood-ur-Rasheed, 69, told reporters in handcuffs as he appeared for a court appearance. He remains in custody.

He told a court last week that he had been tortured in custody, his lawyer Masood Gujjar said. Police deny torturing Rasheed.

Malaika Bukhari, a staunch Khan loyalist who exited the party in late May, cited the ordeal of being incarcerated in a "c-class" cell, where she spent about two weeks, in the summer heat.

C-class cells are small rooms usually crammed with multiple inmates without proper ventilation and a hole in the corner without a door to use as a toilet.

"I announce that I’m resigning from PTI and ending all association with the party," she said in a press conference, condemning the attacks on military property. She said she was doing so of her own volition.

People from Khan's party have said, like her, many of the others arrested in the crackdown were held in similar, if not worse, conditions.

Lawyers say political prisoners are usually entitled to B-class cells, which come with a clean toilet and other facilities such as newspapers and the availability of books.

Ali Zaidi, a former minister for maritime affairs, left the PTI late last month after spending over a week in a prison in the city of Jacobabad — often the hottest place on earth — where he was transferred after being re-arrested.

"I’ve decided, and it was a tough decision, that I will quit politics," he said, adding: "The armed forces are our pride."

Past campaigns

There has been no mention of Khan on local television since the government issued a directive last week not to give air time to "hate mongers, rioters, their facilitators, and perpetrators." It did not name Khan.

Most newspapers have also stopped covering him.

"Media has completely been muzzled," Khan said. "My name cannot be mentioned on media now. My PTI representatives cannot appear on the media anymore."

Critics and analysts say the crackdown replicates past military-led campaigns used to break other political parties in a country where no elected prime minister has ever completed a full term since independence.

Ahead of the 2018 elections which brought Khan to power, the outgoing party of former Prime Minister Nawaz Sharif had also alleged that the army was forcing its parliamentarians to switch sides to tip the scale in favor of the former cricket hero.

But the threats were veiled then, analysts said. Now the magnitude is higher and more open, largely because the military is outraged by the attacks on its assets, the analysts say.

Spokespersons for the military did not respond to requests for comment on this.

"The military is striking back with a vengeance," said Aqil Shah, an academic and author of the book "The Army and Democracy in Pakistan."

Outgoing army chief General Qamar Javed Bajwa said during his last days in office last year that the army had meddled in the country's politics for decades but had decided that it will no longer do so.

Khan has accused current army chief General Asim Munir of continuing Bajwa's campaign against him. The army has said the attacks on military installations on May 9 were "pre-planned" by Khan's party leaders and had resolved to bring to book everyone involved.

Khan is facing abetment charges, according to a police report seen by Reuters.

"The military is in command of operation ‘get PTI’," said Shah, the author.

"I think we’re seeing the PTI's controlled demolition," he said.

DADU: Noor Bibi lost her mother, her daughter and the roof over her head in the catastrophic floods that drowned Pakistan last summer.

One year later she remains homeless, living with the remnants of her family in spartan tents marking where the village of Sohbat Khosa was gutted by the deluge in southern Sindh province.

Noor, a farm worker approaching her 60s, prays for "someone with righteous thoughts that will help us build some good houses in an elevated place."

"If it flooded again, we would not bear such big losses," she told AFP.

But government pledges to rebuild flood-ravaged swathes of Pakistan so they are resilient to future extreme weather have largely failed to materialize.

The monsoon deluges of last summer submerged a third of the country, killing 1,700 people and displacing eight million more.

Climate change is making those seasonal rains heavier and more unpredictable, scientists say, raising the urgency of flood-proofing the country.

A failure to do so will be most acutely felt by the poor, who tend to live in the most vulnerable areas.

Here in Dadu district, which was heavily flooded, no rehabilitation is visible. Rare pieces of public infrastructure remain in disrepair and housing reconstruction is left to locals or NGOs.

In January, Islamabad announced a "Resilient Recovery, Rehabilitation and Reconstruction Framework" valued at $16.3 billion, but it remains confined to paper.

International donors have also pledged $9 billion, but most of the cash will come in the form of loans.

Villagers’ crops were swept away in the floods, depriving them of livelihoods that might have allowed them to pave their own way to recovery.

With pooled funds, the residents of Sohbat Khosa only raised enough for a toilet and water tank.

Their best hope is the Alkhidmat Foundation, a Pakistani NGO, which plans to build around 30 new homes.

"The government seems to not exist here, and if anything is done by the government, that is only corruption," said Ali Muhammad, a coordinator for Alkhidmat in Dadu.

Pakistan is currently mired in dual political and economic crises that have brought all public initiatives to a standstill.

But decades of entrenched corruption and mismanagement are also to blame.

"Building back better is expensive, and the amount of damage is colossal," Foreign Minister Bilawal Bhutto Zardari told AFP.

He said he "can't speak to what the federal government has done," but in Sindh province, controlled by his party, "we’ve started a couple of initiatives."

"One is the financing of the reconstruction of houses, through NGOs and charity organizations," he said.

However, Alkhidmat, like two other NGOs interviewed by AFP, has not received any public money and relies entirely on private funds.

Thanks to Alkhidmat's efforts, a few dozen homes have been built in the district, but it's nowhere near the two million damaged or destroyed in the floods.

The village of Bari Baital, submerged until November, is expected to eventually host 80 houses built by the foundation — far too few for its thousands of inhabitants.

To resist future rains they are raised on brick pillars, and built with reinforced roofs and water-resistant cement.

"People are completely unaware of climate change," said village teacher Imtiaz Ali Chandio.

All they know is that their village has been a "passage for floods for centuries," he said.

But moving is not an option, meaning the scenario will likely soon be repeated.

"Where else could we go?" asked Abdulrahim Brohi, who already weathered catastrophic floods in 2010. "Everything of ours is here."

"Somewhere else people won't accept us," added Brohi, who estimates his age to be between 50 and 60. "We don't have resources to rebuild our houses here, so how can we afford land somewhere else?"

Prized by tourists for its scenic mountain vistas, the Swat Valley in northwest Pakistan was also hit hard by last year's floods.

Hundreds of hotels, restaurants, businesses and homes perched on the banks of the Swat river were swept away as ferocious waters were funnelled down the ravine.

To prevent a repeat of the disaster, authorities have "imposed a complete ban on the construction of any sort of building on the river," said Irfanullah Khan Wazir, Swat's deputy commissioner.

Nonetheless, in Bahrain, a small resort town once half underwater, the government's writ is so weak that builders are riding roughshod over the ban.

A number of shops, restaurants and hotels have been renovated or rebuilt just meters from the coursing water. Even the mosque has been rebuilt on the same spot where it was heavily damaged.

"People are doing illegal construction on weekend nights, but [authorities] are not paying any heed — their silence is baffling," said hotel manager Zafar Ali.

His own property is under construction 20 meters (65 feet) from the river, in a zone he says is authorized.

It is now protected by a flood wall twice the height of the previous one. Economic considerations also prevented them from relocating away from their waterfront vantage.

"Tourists want to be able to open their windows and see the river outside," Ali said. "Those built further away struggle to cover their expenses."

Locals in Swat also condemned the inaction of authorities. The main road following the river has been reopened, but whole sections of tarmac remain torn away.

Compensation schemes have been limited to certain people who lost their homes. They are granted 400,000 rupees ($1,400), nowhere near enough to rebuild.

Muhammad Ishaq, a tailor in Bahrain, built his house near the river for easy access to the water. He watched as his home was swallowed by the floods, and has since been forced to move in with his father further up the mountainside.

Life there is harsher, he told AFP, but even if he manages to rebuild, he knows he "will have to stay away from the river."

ISLAMABAD: Police officers took away a Pakistani journalist, Zubair Anjum, from his home in the southern port city of Karachi, the broadcaster Anjum works for said on Tuesday, citing his family.

Two police vans and double-cabin vehicles arrived at Anjum's home near the Model Colony intersection late last night and took him away, according to Pakistan's Geo News channel.

Some of the police personnel were uniformed while others were in plain clothes.

"They asked for Zubair bhai and took him away at gunpoint. They also took along his mobile phone," Anjum's brother was quoted as saying.

"The police did not give any reason for the arrest. They did not even let him wear his slippers. We repeatedly kept asking what the matter was."

The policemen forced their way into Anjum's home and "manhandled" the family, according to the report. They also took away the digital video recorder (DVR) of a CCTV camera installed in the neighborhood.

Speaking to Geo News, Faisal Bashir Memon, senior superintendent of police (SSP) in Korangi district, said his force had no information about Anjum's arrest.

"Police from stations in the Korangi district have not arrested Anjum," Memon told the broadcaster. "We are investigating the incident."

Meanwhile, the police have lodged a case relating to Anjum's "disappearance" at the Model Colony police station, the report read.

Anjum's disappearance comes days after a prominent Pakistani human rights activist, Jibran Nasir, was "picked up" by about 15 men, dressed in plain clothes, in Karachi, his wife said. Nasir returned a day later, his cousin confirmed to Arab News, without divulging further details.

As a rights activist, Nasir raised alarm over the crackdown against former prime minister Imran Khan's party members and supporters over the violent protests that erupted after Khan's arrest on May 9.

The government denies reports it is illegally abducting dissenters, maintaining that only those who partook in violence and vandalism are being dealt with under the law.

Last month, Sami Abraham, a prominent Pakistani television journalist, went missing apparently because of his public support to Khan.

Abraham has long publicly opposed the government of Khan's successor, PM Shehbaz Sharif. Khan, who has been at loggerheads with the government and the military, was in office in 2018-2022 and was ousted in a no-confidence vote in parliament last year.

Abraham returned home days later on May 30. No one claimed responsibility for Abrahim's abduction, but it was widely believed that he was being held by the country's security agencies, which are often accused of abducting, harassing and torturing journalists. The security agencies deny the allegation.

Another pro-Khan TV journalist, Imran Riaz, went missing last month and has yet to be found.

ISLAMABAD: Pakistan's Foreign Minister Bilawal Bhutto-Zardari, who is on a three-day visit to Iraq, has stressed the need to enhance cooperation between the two countries, Pakistani state media reported on Tuesday.

The foreign minister attended Pakistan-Iraq Business Forum in Baghdad and a ceremony for the signing of a memorandum of understanding (MoU) between the Pakistani and Iraqi federations of chambers of commerce and industry.

"There is immense potential to increase trade and economic cooperation between Pakistan and Iraq," the state-run Radio Pakistan broadcaster reported.

"Both the countries need to transform the fraternal relationship into a partnership."

Pakistan would cooperate with Iraq in all fields, especially with business communities, to benefit from trade and investment opportunities, he assured.

The two sides signed a memorandum of understanding on this occasion.

"The MoU will facilitate linkages between business community of both countries," the Pakistani foreign office said.

Bhutto-Zardari arrived in Baghdad on a three-day visit Monday morning. During the visit, the foreign minister has held meetings with the Iraqi leadership and will lay the foundation stone of Pakistan's own embassy building in Iraq, according to the Pakistani foreign office.

On Monday, Pakistan and Iraq signed agreements to enhance cultural cooperation and abolish visas on diplomatic passports of both countries.

Relations between Pakistan and Iraq have received a boost with a number of ministerial-level exchanges in recent years.

In August last year, Iraq's Foreign Minister Dr. Fuad Hussein visited Islamabad to discuss ways to strengthen bilateral relations.

KARACHI: It was in 2020 that school and university friends Shershah Hassan and Waleed Amjad Islam began brainstorming a business idea that would help change people's lives.

Hassan, 26, and Islam, 25, came up with Kalpay, a Shariah-compliant buy-now-pay-later (BNPL) startup that is making waves globally and was featured on this year's prestigious Forbes "30 under 30 Asia" list.

Launched in June 2021, KalPay is already working with around 500 e-commerce merchants across multiple product and service categories, allowing customers to buy products and pay in three equal monthly installments using cards, e-wallets and bank transfers without any interest or extra charges.

Credit card penetration is less than 1 percent in Pakistan and almost 90 percent of transactions are done by cash. Pakistan has the third largest unbanked adult population globally, with about 100 million adults without a bank account in a population of 220 people, according to the World Bank. "The idea was generated back in 2020, we thought about a product that could help ease financing problems and offer solutions to basic banking problems," Hassan, who is the CEO and cofounder of KalPay, told Arab News in an interview on Monday.

"The drive was that I have to do my own business and the goal was that the work should be impact focused to improve the lives of consumers by giving them access to finance," he said. "That dream is being fulfilled."

After bootstrapping for around 9 months, Hassan raised investment in June 2021 and then left his job at a US company. In October of that year, he launched the startup along with his friend Islam. The funding came from local and foreign investors, including venture capital firms and angel investors from Saudi Arabia, Europe, Singapore and the United States.

"Currently KalPay is working on three verticals and providing BNPL ecommerce-based solutions through working with 500 companies and giving users access to easy financing," Hassan, who is an Accounting and Finance graduate from the Lahore University of Management Sciences (LUMS), said.

The KalPay chief said his firm offered financing between Rs2,000 to Rs500,000, that could be paid back in three installments. Two of its new verticals are KalPay Rasayi and KalPay Taleem, offering BNPL services on the purchase of productive assets like smartphones and laptops and fee payments for education and skill development services.

"If we are financing a laptop or a smartphone to a freelancer or Foodpanda rider, the laptop and smartphone are the source of income to them," Hassan explained. "That is how we are creating impact in society because these products could change the lives and future of people."

The startup's growth in terms of value and volume is in double digits on a month-on-month basis, and Hassan said he and his partner were planning further growth and consolidation.

Responding to a question about the rationale behind launching a Shariah-compliant product, Hassan said his research had revealed that a majority of people in Pakistan didn't want to engage in interest-based financing.

"Obviously our [Pakistani] market is Muslim majority, so while searching from a financing perspective, one thing came into the spotlight that some customers don't get financing because of religious concerns and I also wanted to have Shariah-compliant products," Hassan said, adding that the service was not only for Muslims.

Talking about the challenges of the business, especially amid record inflation in Pakistan, Hassan said:

"The cost of capital and cost of financing has substantially gone up [in Pakistan]. Of course, it is a tough market to operate and the risk remains that if you are giving a loan to someone today and after six months he won't be able to pay back."

The CEO admitted that some people defaulted but said the ratio remained in the single digit.

Commenting on the cofounders’ inclusion in the Forbes list, Hassan said it came as a surprise.

"It was a sort of surprise for me because they don't disclose before publication," he said. "It is an honor for me, my team and of course, for Pakistan."