PREFACE The chemical industrial sector covers a very wide spectrum and while some areas like manufacture of chemical fertilizers and oil refining seem to have been well covered, other segments are yet to be developed. This study on the Prospects of Chemical Industry is aimed at suggesting the future course of action to promote the Chemical Sector as heart of strengthening the overall industrial base of Pakistan. It reviews the present status of Chemical Industry in Pakistan, analyses the import statistics, availability of raw materials and suitability of chemical plants locations. An effort has been made to review most of the sectors and to present an overall picture of the chemical process industry in Pakistan. Views of the various stakeholders including the top companies and entrepreneurs have been taken and necessary recommendations have been made for future policies. The study is indicative in nature, potential areas of investment have been highlighted, detailed feasibility study shall however, be required for each project. The manufacturing sector is considered the backbone of a country. The share of manufacturing sector in the GDP currently is around 18% in Pakistan. It is hoped that with the development of chemical industrial sector, share of manufacturing sector would significantly increase, contributing to the overall GDP. The development of the proposed chemical industries would save foreign exchange through import substitution, help in the development and growth of downstream small and medium industry, contribute in providing jobs and poverty alleviation. It is hoped that this study, like several others preceding this one, will bring up to date information to the professionals and investors alike. May Allah, Almighty accept our effort and bring industrialization and selfreliance to Pakistan.
April 2003
Experts Advisory Cell Islamabad
MESSAGE FROM MINISTER FOR INDUSTRIES & PRODUCTION The economy of Pakistan has seen considerable growth in various sectors over the past few years. However, certain important sectors are still underdeveloped which need special attention of the Government. Historically, Pakistan has concentrated on low tech to medium technology type of industries. The development of Hi-tech and Engineering industry has by and large been attached low priority. To meet the rapidly increasing requirement of chemicals, dyes and pigments, industrial raw materials and other allied chemical products, it has become important to disseminate comprehensive information for planning the development of Chemical & Petrochemical Industry in Pakistan. Realizing the importance of this sector, Ministry of Industries and Production assigned a study on “Prospects of Chemical Industry in Pakistan” to Experts Advisory Cell. The main thrust of the study is to review the existing status of chemical industry, the availability of local raw materials, supply and
demand situation and to formulate practical recommendations to attract investment in this sector. As Pakistan’s economy is largely dependent on products made from agricultural produce such as cotton and related textiles being a major source of foreign exchange earning constitutes about 60% of total exports. Therefore, the Government’s priority is to improve the yield of agricultural products through quality inputs such as fertilizers and pesticides at affordable prices. The manufacturing sector is considered as the engine of economic growth. The share of manufacturing sector in the GDP currently is 17.7% in Pakistan. It is hoped that with the development of chemical industrial sector, share of
manufacturing sector would significantly increase, contributing to the overall GDP growth. Most of the raw materials and intermediates for dyes and pigments, paint & varnishes, pesticides, plastic and plasticizers are being imported. These raw materials belong to or derived from Petrochemicals, which presently have no base in the country. I am fully convinced that no appreciable progress is possible in the chemical sector without indigenous production of petrochemicals and other chemicals. The petrochemical groups constitute more than 76% of total chemical group import bill, which was over Rs 125 billion for the year 2001-02 The development of the proposed chemical industries would save foreign exchange through import substitution, help in the development and growth of downstream small and medium industries and contribute in providing jobs and poverty reduction.
I have advised Experts Advisory Cell to circulate the report to all Industry stakeholders, Industry Associations and Chambers of Commerce & Industry to obtain their comments and recommendations so that a Chemical Vision is prepared for the approval of the Government. The Government of Pakistan is determined to facilitate local and foreign entrepreneurs. An important step taken by the Government is that one desk facility services have been made available to the investors initially at Karachi, Lahore, Rawalpindi, Islamabad and Peshawar. The study on “Prospects of Chemical Industry in Pakistan” prepared by Experts Advisory Cell is another step to facilitate investors. The Ministry and its support organizations are there to provide all possible assistance to investors to make their plans a success.
Liaquat Ali Jatoi
Minister for Industries &
MESSAGE FROM SECRETARY INDUSTRIES & PRODUCTION The GDP of Pakistan has two sectors. The commodity sector and services sector each having 49.1% and 50.9% share in the economy respectively. Agriculture occupies 24.1% share in the overall economy while the share of manufacturing in GDP is 17.7%. The Ministry of Industries & Production has since last few years strived hard to create conducive environment for the growth of the industry, optimum utilization of industrial capacities, value addition and wastage reduction. The study on “Prospects of Chemical Industry in Pakistan” Is another effort to further the mission of the Ministry. Pakistan’s major foreign exchange earnings are coming from export of cotton related products. However, Pakistan has not yet been able to even fully exploit the potential of value addition in the cotton sector which can multiply export earnings. Value addition is also required in chemicals, dyes and pigments which are generally petroleum based products. Pakistan’s
import
of
chemicals related products ranges
between US$ 1.52 to 2.00 billion per annum and represents 16 – 20% of the total imports. The per capita usage of petroleum
and
petroleum
products including plastics is very low
as
compared
developed
countries.
turnaround
of
with
the
With
the
economy,
per
capita income is now expected to increase. Efforts need to be made to increase the per capita income to US$ 900 – 1000 by year 2010. The share of manufacturing in the GDP of Pakistan is targeted to be raised to 25% from the present share of 17.7%. The target to achieve 15 million bales of cotton during the next
few
years
shall
require
increase in the development of fertilizer,
polyester
pesticides industry.
fibre
and
Leather industry is another major
contributor
export
of
towards
the
Cell.
The
developed
study
has
through
been
extensive
value
discussions with the stakeholders of
addition of leather sector also
the chemical sector. I hope this
requires quality chemical, dyes
effort shall significantly contribute
and pigments.
towards speeding up the process
Pakistan.
The
There is also a need to
of industrialization in this sector.
optimize the existing industrial base
The
study
has
identified
in the country and ensure different
some products based on supply
sub-sectors
and
operate
at
their
demand
gap.
Since
the
maximum capacity utilization and
feasibility
achieve maximum value addition
factors I therefore, recommend
in the agriculture products and by-
that
products
studies should be carried out to
e.g.
conversion
of
molasses and baggase to industrial
mainly
derived
chemicals from
are
detailed
on
many
techno-economic
check feasibility of these projects.
alcohol and paper respectively. Inorganic
depends
In the end I request the chemical
sector
stakeholders,
mineral
professionals and experts to study
resource. Appropriate utilization of
the report, recommendations and
mineral sector is required in order
come
to be self-reliant in chemicals.
suggestions
There is a big potential for export
Vision could be developed for the
of these mineral based chemicals
approval of the Government.
forward so
with that
valuable Chemical
also. The global trade of chemical sector is around 10% of the total world trade whereas in case of Pakistan it constitutes only 2.1% of our exports. All
the
above
factors
motivated us to initiate of the study on “Prospects of Chemical Industry in Pakistan” by the Experts Advisory April 2003
Secretary Industries & Production
ACKNOWLEDGEMENT This study on the Prospects of Chemical Industry in Pakistan covers twenty (20) sub-sectors. It was necessary to involve concerned stakeholders and experts in different sub-sectors to make the study useful. Therefore, various stakeholders, professionals, officials and industrialists were consulted on several occasions during the course of this study. The draft report was circulated in August 2002 to selected industrialists, professionals and institutions. Industry stakeholders showed keen interest and provided valuable comments and suggestions. The final report has been amended wherever necessary by incorporating these comments. Special thanks to Sheikh Mahmood Ahmad, Ex-chairman FCCCL, Adviser NUST, for his valuable input in finalizing the study especially the recommendations. Experts Advisory Cell (EAC) also acknowledges the cooperation and contribution rendered by the following valuable stakeholders from the public as well as private sector in compiling this report: o A.T.S. synthetic (Pvt.) Ltd., Lahore: Mian Anjum Nisar, Managing Director o BASF Pakistan (Pvt.) Ltd., Karachi: -
Qazi Sajid Ali, Managing Director Mr. Sajjad Saleem, Director Marketing
o Bombal Traders, Karachi: Sheikh Ghulam Ahmad Bombal, Managing Director o Colgate & Palmolive Pakistan Ltd., Karachi Mr. Sami H. Zaidi, Director o CropLife Pakistan, Karachi: Mr. Asif M. Khan, Chairman o Delta Industries (Pvt.) Ltd., Lahore:
Mr. Mohammad Sadiq, Head Chemical Unit o Dr. Farrukh S.M. Akhtar, Technical Advisor, Saudi Arabia o Engro Asahi Polymer & Chemicals Ltd., Karachi: Mr. Asif Qadir, President o Engro Chemical Pakistan Ltd., Karachi: Mr. Zafar A. Khan, President o Habib Sugar Mills, Karachi: Syed Tanviruddin Ahmad, Director Projects o ICI Pakistan Ltd., Karachi: - Mr. Azhar Ali Malik, Chief Executive - Mr. Pervaiz A. Khan, General Manager (Soda Ash Business) - Mr. Malik M. Akram, General Manager (Technical Engineering) - Mr. M. Afzal Jamil, Vice President PTA Manufacturing
&
o Industrial Chemicals (Pvt.) Ltd., Karachi: Mr. S. M. Zaheer Alam o Ittehad Chemicals Ltd., Lahore: Mr. Ghulam Mustafa Khattri, Chief Executive o Master Paint Industries (Pvt.) Ltd., Lahore: Mr. Sufi Muhammad Amir, Commercial Director o Mir & Associates, Industrial Consultants, Karachi: Mr. Amanullah Mir, Proprietor o National Fertilizer Corporation (NFC), Lahore: Mr. Abdul Mannan, General Manager (Tech. & Planning) o Olympia Chemicals Ltd., Lahore: - Mr. Monim Bokhari, Office Manager - Mr. Masood Khaliq o Pakistan Atomic Energy Commission, Islamabad: Mr. Khalil Qureshi, Head Fuel Cycle o Pakistan Council of Scientific and Industrial Research (PCSIR), Islamabad:
Dr. Anwar ul Haq, Chairman o Prime Chemicals (Pvt.) Ltd., Lahore: Mr. M. Nazir Chaudhry, Managing Director o Progressive Traders (Pvt.) Ltd., Karachi: Mr. Muhamamd Siddique Sheikh, Group Chairman o Qaiser LG Petrochemicals, Lahore: Mr. Irfan Qaiser, Director o Ravi Rayon Ltd., Lahore: Dr. Fayyaz A. Mian, Consultant o Sandal Dyestuff Industries (Pvt.) Ltd., Faisalabad: Dr. Salahuddin Munam, Director o Sitara Chemical Industries Ltd., Faisalabad: - Mian Muhammad Adrees, Chief Executive Officer. - Engr. Muhammad Khalil, Director Business Development - Mr. M. Yameen, Group Director Finance o Small & Medium Enterprises Development Authority, Lahore: Mr. Iqbal Mustafa, Chief Executive Officer o Technology Management International (Pvt.) Ltd., Lahore: Dr. W.M. Butt o Unilever Pakistan Ltd., Karachi: - Mr. Sher Afzal Mazari, Head of Corporate Affairs - Mr. M. Qaiser Alam, Supply Chain Development Manager - Mr. Basharat Ahmad, Corporate Affairs Manager EAC very gratefully acknowledges the very vital help provided by all above professionals, which enabled the finalization of this report.
April 2003
Experts Advisory Cell Islamabad.
Table of Contents Preface
Page No.
Acknowledgement Executive Summary ................................................................................. i Importance of Chemical Industry .......................................................... 1 Overview
............................................................................................. 3
Availability of Raw Material.................................................................. 10 Major Chemical Sub-sectors ................................................................. 15 o o o o o o o o o o o o o o o o o o o o o
Petrochemicals, BTX, Carbon Black, MEG ................................ 16 Fertilizers ............................................................................. 35 Synthetic Fibers .................................................................... 41 Alcohol from Molasses ........................................................... 52 Pesticides ............................................................................. 59 Plastics and Resins ................................................................ 67 Paints and Varnishes ............................................................. 85 Oleo Chemicals ..................................................................... 96 Soaps, Detergents and Cosmetics........................................... 99 Paper and Paper Board ........................................................ 109 Glass 123 Soda Ash and Sodium Bicarbonate........................................ 127 Caustic Soda, Chlorine and Related Products ......................... 131 Sulphuric Acid, Hydrochloric Acid and Nitric Acid .................... 136 Organic Chemicals............................................................... 139 Specialty Chemicals ............................................................. 145 Dyes and Pigments.............................................................. 147 Textile and Tannery Chemicals ............................................. 155 Water Treatment Chemicals ................................................. 159 Food Chemicals................................................................... 160 Essential Oils and Perfumes ................................................. 165
Recommendations .............................................................................. 166
Annexures: IIIIIIIVVVIVIIVIIIIX-
Coal Reserves in Pakistan .................................................... 172 Coal Analysis ...................................................................... 174 Mineral Resources of Pakistan .............................................. 175 Minerals for Chemical Industry ............................................. 176 Specialty Chemicals ............................................................. 185 Chemical Imports ................................................................ 194 Synopsis from Previous Reports............................................ 200 Company Profiles ................................................................ 221 Fertilizer Policy 2001 ........................................................... 289
Appendix: I.
Scope of Chemical Sector Development in Pakistan
Glossary of Abbreviations
EXECUTIVE SUMMARY
All over the world the chemical industry is a major contributor to the national economy, playing both direct and indirect role. In Pakistan while some segments of chemical industry have received due attention, others remain neglected. So far the investment in this field is estimated to be Rs 360 billion. Import of chemical related products constitute 20% which is around US$ 2 billion of total imports. Thus there is a vast potential for developing this sector through import substitution and self reliance. The objective of this study is to review the existing status of chemical industry, the availability of local raw materials, supply & demand situation and to consolidate practical recommendations to attract investment in this sector. As a result of immense consultation with stakeholders following additional objectives emerged for inclusion in the study. o Increase share of manufacturing in GDP from existing 18% (Partially
through
setting-up
Petrochemical
and
Chemical
Industries) to 25%. o Identify projects to become self reliant o Enhancing value addition within existing units of chemical / processing industry. The country has already suffered due to lack of investment in basic petrochemical and chemical industry. There is still time if the government takes corrective measure to improve the situation. Present Status Locally available resources of natural gas, petroleum and coal are being used mainly to meet the energy requirement of the country. They have not been utilized for the manufacturing of chemicals where in some cases value-
addition can be ten fold. The only exception is the use of natural gas to produce fertilizers. There exists vast potential to manufacture chemicals from reserves of indigenous natural gas, coal and minerals. Some organized chemical sectors are well developed. A few basic chemicals like sulfuric acid, caustic soda, soda ash and chlorine have sufficient installed capacities to meet the local demand. Most of the raw materials and intermediates for dyes & pigments, paints & varnishes, pesticides and plastics & plasticizers are being imported. These raw materials and intermediates mainly belong to or derived from petrochemicals, which have no base in Pakistan. Dyes & pigments are being produced locally but only partially meet the demand. Most of these raw materials are imported. Active ingredients used in pesticides & insecticides are not produced locally but about 30 units are involved in formulations based on imported raw materials. There is a strong need for domestic production of some active ingredients. Numerous units are involved in the production of soaps and detergents. However there is heavy dependence on the imported tallow for soaps and alkyl benzene, sulfonic acid for the production of detergents. The down stream industries of plastics, plasticizers and polyester are well developed but again depend on the imported petrochemical raw materials, i.e. olefins, poly olefins and Benzene, Toulene & Xylene (BTX). The petrochemical sector remained neglected in spite of numerous recommendations in the last three decades to setup a naphtha or hydro cracker. No appreciable progress is possible in the chemical sector without the indigenous production of petrochemical building blocks like olefins (ethylene, propylene, butadiene) and basic aromatics like BTX (benzene, toluene and xylene). Keeping in view the importance of the basic petrochemicals, setting up of a petrochemical complex is strongly recommended.
Petrochemicals As mentioned above, most of the basic petrochemicals are being imported whereas their local production is essential not only to boost the chemical sector but for the entire industrial sector as for instance in case of textile industry, polyester, viscose, dyes and bleaching agents play a pivotal role. Olefins and their derivatives are being imported in large quantities for their end-use in plastics, paints, dyes & pigments, pesticides, detergents and rubber products. Similarly, the import of BTX tops among the chemical group. Only a small installed capacity for BTX production exists in National Refinery, Karachi. The demand for xylene and toluene is substantial in the country. Xylene is used in large quantities for the manufacturing of PTA for polyesters and as a solvent in pesticides. A summarized import list of important chemical groups is presented in section-4. The list contains 11 chemical groups of which 6 belong to petrochemicals. These petrochemical groups constitute more than 76% of the total chemical group import bill of above Rs. 125 billion for the year 2001-02. It is thus essential to make an indepth study for the local manufacturing of petrochemicals. Organic Chemicals All organic chemicals are derived from petroleum, gas or agro based raw materials. At present, only few organic chemicals are being manufactured locally and that too in small quantities. There is urgent need to utilize the available molasses for conversion into value added organic chemicals and to examine techno commercial viability of setting up plants based on coal / oil / gas.
Inorganic Chemicals Inorganic chemicals are normally derived from mineral base, which is still an under- developed sector in Pakistan. Several minerals are available in the country but they have not been gainfully exploited. Salts of Sodium, Potassium, Magnesium, Barium, Chromium and Aluminum can be manufactured from the locally available ores if the infrastructure facilities at relevant mineral sites are developed. Presently large quantities of inorganic salts are being imported. Total imports of inorganic chemicals were more than Rs 5.08 billion in 2001-02. Atleast some of these can be produced by relatively simpler processes/technologies. Suggested Projects As a result of preliminary investigation, following projects are indicated for detailed techno-economic study. 1. Petrochemical Complex A detailed techno-economic study is necessary. This study can consider all possible routes including Natural gas, Associated gases, Naphtha, Molasses and Coal. Fertilizers In the next 10 years there will be a shortage of around 1.2 million MTPY of urea and 1.13 million MTPY of DAP. Therefore two plants of urea and DAP with average capacity of 600,000 MTPY each would be required to meet the future requirement of Fertilizer. Two urea plants are estimated to cost approx. US$ 700 million. Two plants of DAP can be established at around US$ 500 million. Thus, an investment of US$ 1.2 billion in this sector appears justified. o Manufacture of Phospahtic Fertilizer through Chlorine As stated above, the domestic demand for DAP shall be 1.13 million MTPY. Fauji-Jordan Fertilizer Company (FJFC) if revived can produce
450,000 MTPY. There would still be a huge shortage of 780,000 MTPY of DAP or any other Phosphatic Fertilizer. Phosphoric Acid can be produced using Hydrochloric acid (from locally available surplus chlorine) and locally available phosphate rock using Ishikawajima-Harima Heavy Industries (IHI) process. This phosphoric acid in turn can be used to produce Phosphatic Fertilizers. 3.
Polyester Fiber Keeping in view, a 8% annual growth rate in this sector by the year 2011,
almost 500,000 tons of Polyester Staple Fiber (PSF) capacity is required to be added to the existing capacity to meet the growing demand. The minimum economic size of the PSF plant is 150,000 tons per annum, as such at least three additional PSF plants can be expected to come on stream to absorb the demand. The additional capacity of PSF will also make feasible the establishment of a 300,000 MTPY capacity of PTA plant. A total investment of approximately US$ 511 million will be required by the year 2011 for installing additional capacity of 500,000 tons. 4.
Organic Chemicals from Molasses More than 2 million tons of molasses are available every year out of which
more than half is exported at a nominal rate of about Rs 2,000 per ton. Molasses is a by-product of local sugar industry and can be converted to value-added organic chemicals. The conversion of molasses to ethane can be the first step which will enhance value addition for sugar industry. Industrial
alcohol,
acetic
acid,
oxalic
acid,
citric
acid,
acetone,
pharmaceuticals, ether and ethyl acetate can be produced from molasses and then a chain of other organic chemicals can be manufactured. o Ethyl Alcohol
Ethyl Alcohol also known as Ethanol can be produced by fermentation of the molasses. There are 76 Sugar mills in Pakistan producing around 2 million MTPY molasses. Only nine distilleries exist to produce alcohol from the molasses out of which 5 are in operation. Normal Alcohol produced is 95% that is mostly being exported. Optimum size of distillery would be 50,000 to 80,000 litres / day capacity, this will be enough for about 2 sugar mills. A standard design and engineering package may be purchased from abroad and distilleries may be installed with local fabrication and packaging. o Gasohol Anhydrous Ethanol with increased concentration of 99.9% can be blended with gasoline, blend is called Gasohol and used as Automobile fuel. At present, there is no programme in the country to use Ethyl Alcohol as Gasohol in the automobiles. The present consumption of Petrol stands at 1.27 million tons per year. For a Gasohol programme, with 20% substitution of petrol by Ethyl Alcohol, there will be a reduction in import bill of crude oil. The quantity of Alcohol required would be 254 thousand tons. 5.
Manufacture of VCM (Vinyl Chloride Monomer) from Chlorine Gas Conventional use of chlorine is 60% in petrochemicals and 40% in the
production of other solvents. Engro Asahi has established PVC Resin manufacturing plant at Port Qasim. The manufacturing process is from the polymerization of VCM. VCM currently is being imported. This can be manufactured locally by utilizing the surplus chlorine available in the country and imported ethylene. Engro’s Chemical handling terminal can be used for the import of ethylene. Later as soon as petrochemical complex is set up, import of ethylene can be substituted by local production.
Ethylene chloride can therefore by produced as a basic raw material for Engro’s PVC Plant. 6.
Methanol Methanol is a petrochemical product produced by natural gas cracking.
Last five years import data is given below: Methanol Import Year 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03*
Quantity Litres (000) 24,012 19,771 27,196 33,763 34,069 20,877
Quantity M. Tons 19,210 15,817 21,757 27,010 27,255 16,702
*July-December
Value (Million Rs.) 238 184 233 438 376 268
Source: Federal Bureau of Statistics
Methanol is used as freezing point depressant and manufacture of petrochemical products like formaldehyde, Acetic acid, Methyl Tertiary Butyl Ether (MTBE), etc. The demand justifies setting up of a small unit meeting domestic demand. 7.
Paper from Bagasse or Cotton Sticks Bagasse is a by-product of sugar industry. It is not wasted but
traditionally being used by the sugar mills as a fuel for their boilers. A project to make paper from bagasse was initiated in 1980’s but did not materialize. Now with the possible exploitation of coal as cheaper fuel for boilers like coal, it is expected that bagasse could be made available for paper manufacturing. Paper will be a better value-added product as compared to burning of bagasse as fuel only. About 76 sugar mills in the country produce
millions of tons of bagasse, most of it should be converted to make paper and board. Similarly, thousands of tons of cotton sticks are available every year from the cotton crop. Presently, they are burnt as domestic fuel or wasted. They can be economically converted to pulp for making paper and paper-board. Wheat straw and river grass are already being used for paper making, more mills can be planned on these raw materials. 8.
Pesticides Pesticides have become essential for better output of the agricultural
products but this sector lacks a base in the country. The imports are rising, exceeding Rs 7 billion during 2001-02. It is not possible to manufacture all active ingredients in the country because of the absence of petrochemical base and the lack of required R&D facilities. However, a few major active ingredients can be manufactured utilizing Chinese experience. Special attention is required to be given to the insecticides, used for cotton, (about 71% of total consumption in the country) and their active ingredients (poisons) for their local manufacture. 9.
Hydrogen Peroxide Hydrogen peroxide is extensively used in textile processing and in excess
of 20,000 M. tons are being imported every year. Two existing plants in Pakistan, one in Nooriabad and other in Hattar, have closed down and all local demand is being met through imports. There is scope to establish a modern technology plant of about 17,000 MTPY capacity. The estimated cost of the project is US$21 million or Rs 1.26 billion. Hydrogen peroxide if set up within Ammonia complex can save some capital cost.
10.
Dyes & Pigments There is local manufacturing of dyes and pigments but large quantities are
still being imported. Total import of this group stood at about Rs 5.0 billion during 2001-02. The raw materials for this category are petrochemicals. 11.
Titanium Dioxide There are two industrial grades of titanium dioxide pigment (i) Rutile
grade used for the manufacture of paints and plastics and (ii) Anatase grade used in Polyester Fiber and paper industry. It looks practical to establish a 10,000 MTPY facility to manufacture anatase grade to cater needs of polyester fiber industry of Pakistan. Sulfuric acid one of the major raw materials is being manufactured in Pakistan and other material Ilmenite can be either imported or locally available Ilemenite can be upgraded. The capital cost is estimated to be around US$ 35 million. 12.
Alkyl Benzene Sulfonates (detergent base) The rising demand for detergents calls for setting up manufacturing
facilities for its basic ingredient like, dodecylbenzene or tri-decylbenzene sulfonate. There are few local producers based on imported raw materials. Presently, more than Rs 1.5 billion worth of surface acting agents are being imported. The proposed petrochemical complex in the country will provide benzene locally to produce alkyl benzene and then the alkyl benzene sulfonates. 13.
Essential Oils There is variety of essential oils and they find use in perfume and food
industry. The raw materials are leaves and flowers of natural plants available in Pakistan. These are high technology projects but purity of products gives value addition. Because of the abundant flora and fauna available, production of essential oils should be encouraged to substitute import of perfumes which are
more than Rs 0.5 billion per year. High quality essential oils can also be exported. In this regard collaboration with France can be beneficial. 14.
Inorganic Salts Large quantities of inorganic chemicals are being imported totaling Rs 5.8
billion. These chemicals include selected inorganic salts worth Rs 1 billion. Producing inorganic salts locally can save large foreign exchange. It is to be noted that minerals for these inorganic salts are available in Pakistan and they are relatively easier to manufacture. The costs for such projects are generally low because most of the expertise and engineering facilities are available locally. 15.
Manufacture Of Potassium Chlorate (KCLO3) As evident from imports in recent years, the present demand for KCL03 is
about 3000 MTPY. Virtually the entire demand is in the match industry, which is being met through imports. The manufacturing process for KCLO3 is based on the electrolysis of potassium chloride in the presence of sodium chloride. The total project cost of an economic sized plant with a capacity of 3000 MTPY is broadly estimated at Rs. 180-200 million based on a budgetary Chinese price. 16.
Manufacture of Basic Chromium Sulphate from Chromite (Cr2SO4) Presently the entire demand for Basic Chromium Sulphate (BCS) used for
leather tanning, is being met from imports as well as from local production. Considerable manufacturing capacity for BCS from chromite is presently unutilized due to the closure of two plants for various reasons. Barring small production of BCS from Chromite at Industrial Chemicals, Karachi. The entire local production of BCS is confined to the manufacture of BCS from imported sodium dichromate. This needs to be discouraged as the value addition in the case of BCS to be manufactured from Chromite is far greater than BCS produced from sodium dichromate. Moreover the foreign exchange savings are much
higher in the BCS production from Chromite as compared to BCS produced from sodium dichromate.
17.
Manufacture of Cigarette Filter Tows and other chemicals Ethyl Alcohol produced from Molasses can also be used for chain
production of Acetaldehyde, Acetic Acid, and Acetic Anhydride. Acetic Anhydride when reacted with cotton linters from ginning mills gives Polymers which may be used for production of x-ray films, Photo films, spectacle frames, cigarette filter tows. Cigarette filter tows import alone is around Rs. 1 billion which may be substitute following this chain production. 18.
Smokeless Coal for fuel Smokeless coal can be produced by proper blending of Coal, Calcium
Oxide and baggasse, all are abundantly available in Pakistan. This mixture does not produce smoke or smell on combustion and therefore it is more acceptable as domestic and industrial fuel. In 1989, M/s. JICA submitted a feasibility report titled “Feasibility Study Report on Smokeless Coal Briquettes” to the Ministry of Petroleum & Natural Resources and strongly recommended the use of smokeless briquettes in the country. JICA’s recommended actions are supported in order to utilize local coal resources. 19.
Manufacture of Gum Rosin and Turpentine Oil Vast forest of Pine trees exist in Hazara and Azad Kashmir. Gum
from these trees can be used for the production of Gum Rosin and Turpentine oil. Some sort of mechanism needs to be evolved to encourage auctioning of Pine tree areas for extraction of Gum instead of cutting them. Once gum is made available. The technology is available locally. This local manufacture can result in US$ 4 – 5 million saving of foreign exchange which is being spent in the import of Gum rosin and Turpentine.
20.
Manufacture of Vinyl Acetate Monomer and Butyl Acrylate
o Vinyl Acetate Monomer (VAM) VAM is used for the manufacture of Poly Vinyl Acetate (PVA) Emulsion. The current requirement of PVA Emulsion in the country is around 35,000 MTPY. VAM requirement for this is around 15,000 MTPY which is currently being imported in bulk.
o Butyl Acrylate Butyl Acrylate is used for the manufacture of Acrylic binders used in Textile, leather and paint industries. The current requirement of Acrylic binders in the country is around 20,000 M. Tons. For this about 10,000 MTPY of Butyl Acrylate is required which is being imported. o Prospects Both VAM and Butyl Acrylate can be manufactured locally if the feedstock i.e. Propylene and Ethylene is made available. These can be made available either through Petrochemical complex or import via land route.
1.
IMPORTANCE OF CHEMICAL INDUSTRY Because of the wide variety of products it is difficult to agree on a
common definition of the chemical industry across countries. In particular, fibers, rubber and plastic processing can be either included or excluded. Countries that include fibers in Chemical Industry are: Germany, UK, Italy, Spain, Netherlands, Ireland, Portugal, Greece, Sweden, Austria, Finland, Norway and Poland. Countries excluding fibers are France, Belgium and Denmark. Belgium also includes rubber and plastic products in the definition of chemical industry.
Chemicals are divided in two main categories from value addition point of view. Those produced in large and bulk quantities but with lower value addition are called Commodity Chemicals. Examples are fertilizers and soda ash, etc. Specialty Chemicals are those produced in smaller quantities with higher value addition. Examples are dyes & pigments, pharmaceuticals and enzymes, etc.
Chemical sector plays a vital role in the economic development of any country. Pakistan has not yet utilized potential of chemical sector. Realizing the importance of this sector, this study was initiated by the Experts Advisory Cell (EAC), as per directive of Minister and Secretary, Ministry of Industries and Production. The main objective of the study was to highlight the constraints in the development of the chemical industry, suggest policy recommendations and identify potential projects based on supply and demand gap as well as possible export considerations. Extensive discussions with experts, representatives of trade and industry and chemical engineers of repute has led to the conclusion that development of chemical industry is vitally important and a concerted effort must be made to cover the lost ground.
Chemical sector is diversified and covers a vast range of products. Following are the major end products under this sector:
o
Petrochemicals
o Soda
Ash
&
Sodium
Bicarbonate o
Fertilizers
o Caustic Soda & Chlorine
o
Synthetic Fibers
o Sulfuric Acid & Other acids
o
Alcohol from Molasses
o Organic Chemicals
o
Pesticides
o Dyes & Pigments
o
Plastics & Resins
o Textile & Tannery Chemicals
o
Paints & Varnishes
o Water Treatment Chemicals
o
Oleo Chemicals & Soaps,
o Food Chemicals
Detergents and Cosmetics o
Paper & Paper board
o
Glass
o Essential Oils
2. 2.1
OVERVIEW
GLOBAL The world chemical industry is one of the most important manufacturing
sectors with an annual turnover of approximately US$ 1,500 billion. The main players in chemical sector are from USA, Western Europe and Japan while emerging players are from China, Eastern Europe and Eastern Asia. According to the results of recent surveys, Western Europe is the world leader in chemical industry, which has a share of 36% of total chemical sales. The graph below shows World Chemical Sales in different regions.
WORLD CHEMICAL SALES 550
464
452
US $ Billion
450 350 225
250
184
150
63
50
50
LATIN AMERICA
EASTERN EUROPE
OTHER
Source: Chemical Engineering Journal (year 2000)
ASIA
JAPAN
USA
WESTERN EUROPE
-50
48
The chart below shows the distribution of sales of chemicals produced by the Western European countries. Seven West European countries contributed more than 88% chemical turn over as shown below.
9%
12%
11%
7%
12% 8%
17%
24%
Belgium
Itly
Great Britian
France
Germany
Spain
Netherlands
Others
The leading companies of the global chemical industry are BASF (Germany), Du Pont (U.S.A.), Dow Chemical (U.S.A.), Exxon Mobil (U.S.A.), Bayer
(Germany),
Total
Fina
Elf
(France),
Degussa
(Germany),
Shell
(U.K./Netherlands), ICI (U.K.), BP (U.K.), Akzo Nobel (Netherlands), Sumitomo Chemical (Japan), Mitsubishi Chemical (Japan) and Mitsui Chemicals (Japan).
The world chemical sales and profits of 20 leading companies are shown in table below. Performance of Top 20 Chemical Companies US$ Million
Company 1
BASF (Germany)
30,790.5
Operating Profits 2,604.6
2 3
Dupont (U.S.A) Dow Chemical (U.S.A) Exxon Mobil (U.S.A) Bayer (Germany) Total Final Elf (France) Degussa (Germany) ICI (UK) BP (UK) Akzo Noble (Netherlands) Sumitomo Chemical (Japan) Mitsui Chemicals (Japan) Dai-Nippon Ink & Chemicals (Japan) Equistar (U.S.A)
28,406.0 23,008.0
3,207.0 2,266.0
1,925.0 1,349.0
1,776.0 892.0
21,503.0 19,295.2 19,203.1
1,161.0 1,824.2 1,499.0
1,468.0 1,752.2 124.5
NA 949.9 460.7
15,584.1 11,746.7 11,247.0 9,364.3
619.1 874.8 760.0 769.3
1,034.6 438.2 1,585.0 470.8
499.4 266.8 NA 267.2
9,354.3
749.3
516.0
NA
8,720.3
505.8
570.9
NA
7,512.7
407.1
387.8
NA
7,495.0
334.0
NA
NA
DSM (Netherlands) Henkel (Germany) SABIC (Saudi Arabia Rhodia (France) Air Liquide (France) Union Carbide (U.S.A) TOTAL
7,295.0 7,215.8 7,119.8
620.0 599.8 1,620.7
566.6 782.2 NA
243.2 185.2 NA
6,835.3 6,590.1 6,526.0
457.0 1,028.2 596.0
463.4 836.6 459.0
195.3 87.8 152.0
264,812.2
22,502.9
18,075.1
6,950.3
4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Sales
Capital Spending 3,345.3
R&D Spending 974.8
Source: Chemical Engineering News July 2001
2.2
PAKISTAN At the time of independence, chemical industry in Pakistan was practically
non-existent. Over the years, some traditional sectors have developed, however the Chemical Industry in Pakistan is still at a very nascent stage. In early 50’s, PIDC was setup by the Government, for industrialization of the country. As a result, a large chemical estate comprising Pak American Fertilizers, Maple Leaf Cement, Antibiotics (Penicillin) and Pak Dyes & Chemicals, was established at Iskanderabad (DaudKhel), district Mianwali. This estate played an important role and served as a nucleus for chemical industry in Pakistan. In 1960’s, another chemical complex was set up in private sector at Kala Shah Kaku, Lahore. Chemical factories also started emerging at Karachi due to the investment friendly policies which gave confidence to the investors. In early 1970’s, private industries were nationalized with the result that the fast growing chemical sector started to decline. The growth of chemical sector could never pickup. The imports of chemicals are on increase in value and volume terms. This indicates the vast potential for the chemical industry in Pakistan. There were some investments in the recent years in the production of Pure Terephthalic Acid (PTA), fertilizers, polyesters and Poly Vinyl Chloride (PVC). However investments in the petrochemicals complex and other chemicals are urgently required to be self-reliant in basic organic and inorganic chemicals. It is to be noted that huge capacities for petrochemical manufacturing are available in the neighboring countries of Middle East, Far East and Iran. Experts opine that a Petrochemical Complex should have been set-up when the tariff protection was highest. However, ways and means need to be found, as setting
up of a Petrochemical Complex would result in hundreds of downstream small and medium enterprises. Some selected chemical sectors have developed to meet the local demand. They include fertilizers, Polyesters, PTA, PVC and some basic chemicals. Total investment in chemical industry stands at around Rs 360 billion as shown below. Investment in Chemical Sector 1947 to 2002
Sectors
Units
Fertilizers
10
87
Sugar
76
50
6
55
24
44
Synthetic Fibers + PTA Cement PVC + Others
1 (PVC)+ Others
35
Paper & Paper Board
97
28
Industrial Chemicals
18
22
155
7
31
11
Edible Oil Glass Pharmaceuticals
21
Total
360 Source: Respective Associations/Estimated figures
2.2.1 CHEMICAL IMPORTS Pakistan’s total imports have exceeded US$ 10 billion out of which chemicals imports constitute approximately US$ 2 billion. A detailed list of the main chemicals imported during recent past (1997-98 to 2001-02) along with their quantities & values is attached as Annexure-VI.
The import value of chemicals remained about 17% of total imports during the last nine years and it was 15.5% in the year 2001-02. This situation calls for special attention to the development of the chemical sector that constitutes one of the major portions of Pakistan’s import bill. Pakistan’s Imports US$ Million
Year
Total Imports
Import of Chemicals
Chemicals Import %age
1991-92 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99
9,253.3 9,963.2 8,561.6 10,401.4 11,804.8 11,894.8 10,116.4 9,431.7
1,468.9 1,493.9 1,494.0 1,587.4 2,187.4 1,981.4 1,791.5 1,812.0
15.9 15.0 17.5 15.3 18.5 16.7 17.7 19.2
1999-00
10,309.4
1,997.2
19.4
2000-01
10,728.9
1,903.9
17.7
2001-02
10,403.8
1,354.3
15.5
Source: Economic Survey 2001-02
The import data of 2001-02 based on the major categories of chemicals is presented below. It is noted that five top imports are of organic chemicals (including petrochemicals), plastics & resins, pharmaceuticals, pesticides and fertilizers. This suggests the direction of future investments in the chemical sector in Pakistan. Chemical related groups Import (Million Rs.)
Chemical Group Organic Chemicals
Imports 2000-01 38,150
Imports 2001-02 58,271
Plastics & Resins
20,743
13,559
Pharmaceuticals
13,965
5,670
Pesticides & others
11,448
6,790
Fertilizers
9,842
9,672
Paper & paper board
9,061
7,035
Dyeing & Tanning Chemicals
7,346
10,176
Inorganic Chemicals
5,364
5,083
Synthetic Fibers
4,543
3,522
39
36
1,190
1,935
121,691
121,749
Essential Oils Glass Total:
Source: Economic Survey 2001-02 & State Bank of Pakistan Annual Report 2001-02
3.
AVAILABILITY OF RAW MATERIAL Pakistan is rich in agriculture, has sufficient gas reserves,
reasonable oil and mineral resources including large coal reserves. The agricultural raw materials are not fully utilized in value added products while mineral raw materials are not exploited for lack of infrastructure. Concerted efforts and consistent policies are required to develop chemical industry based on agricultural and mineral raw materials. 3.1
Agro Based Raw Materials The agro-based chemicals are derived from the agriculture products and
livestock. They are used in the industry to produce various chemicals including alcohols, organic acids, edible oils, inedible fats, glycerin, gelatin etc. Pakistan being an agricultural country, these raw materials are available in abundance. The processing industry based on these raw materials has vast potential.
Following agro based raw materials and by products are available for conversion to chemicals. o
Molasses
o Starches
o
Bagasse
o Cotton Linters
o
Rice husk
o Wheat straw
o
Vegetable Seeds
o Wood
o
Animal fats and bones 3.2
Natural Gas Pakistan has proven gas reserves of 43.37 trillion cubic ft out of
which 15.78 trillion cubic ft has been consumed leaving 27.58 trillion cubic ft. of balance reserves as of year 2002. Present gas consumption based on last two years average is 900 billion cubic ft per year. There have been more discoveries of natural gas in the recent years. Substantial quantity of gas reserves are being used for domestic consumption, commercial purposes, industrial raw material and fuel.
NATURAL GAS CONSUMPTION BY SECTOR 2001-02 2.70% 4.90%
Power
0.90%
Gen. Industry
0.90% 38.20%
16.70%
Domestic Fertilizer (feed) Fertilizer (fuel) Commercial Cement Transport (CNG)
17.50% 18.40%
An appropriate percentage (i.e. around 10%) of local gas resources and the future gas imports from Tajikistan and Iran need to be dedicated for
producing value-added chemicals. Natural gas can be a raw material to produce Ethylene (through acetylene route), Methanol and several downstream products. 3.3
Petroleum Petroleum is another major source of several petrochemicals. World
wide 90 to 93% oil and gas is consumed for energy purposes and balance 7-10% is converted to petrochemicals. a)
Crude Oil Pakistan is deficient in crude oil resources. The left over oil reserves
are only 40.27* million Ton of Oil Equivalent (TOE) (300.2 million barrels). ∗
Pakistan‘s present annual production rate is 3.1 million TOE (63,500 barrels per day). Pakistan’s yearly requirement is 10.4* million TOE. Only 30% of the total crude oil requirement is therefore met by local crude production. Naphtha, an intermediate product from refinery, is important for the manufacture of petrochemicals. Pakistan produced 462,197 tons of naphtha* during 2001-02. 180,000 tons additional naphtha is available from Attock Refinery after the implementation of lead-free gasoline from July 2002. Present availability of naphtha is therefore, about 600,000 tons/year. b)
Associated Gases Associated gases contain higher hydrocarbons like Ethane, Propane
and Butane, etc which are produced from the oil fields in Punjab and Sindh. Presently, there are 0.6 trillion cubic ft (17.8 million TOE) reserves available and the production rate is 40 billion cubic ft (1,143,000 TOE) per year. These gases can be converted to ethylene, propylene etc. but the gathering of these gases at one point require large and complex pipeline system. However, the quantity is not enough for a viable project. ∗
Source: Energy Year Book 2002
3.4
Minerals Inorganic chemicals are mainly based on mineral resources and are used
for producing intermediate and final products. The main mineral reserves available in Pakistan for chemical industry are given below: o Coal
o Gypsum (Calcium Sulphate)
o Rock Phosphate
o Limestone (Calcium Carbonate)
o Iron
o Soapstone (Silicates)
o Sulfur (from Oil and Coal)
o Barite (Barium Sulphate)
o Magnesite (Magnesium Carbonate) o Chromites
o Rock salt (Sodium Chloride) o Copper
o Kaoline (China Clay) The development of Thar Coal Field (the largest reserves) require around 5 years time, therefore projects based on these reserves should have to be planned accordingly. Pakistan needs to concentrate on the development of Petrochemical and Chemical industry to utilize indigenouous coal, iron ore, phosphate rock reserves and rock salt. A list of mineral resources and their production in Pakistan is given in Annexure-III. The use of various minerals in the chemical industry is given in Annexure-IV. 3.5
Coal
A total of 185,173 million tons of estimated coal reserves are available in Pakistan with minable reserves of 1,982 million tons. Thar reserves in Sindh Province are 175,506 million tons out of which 1,620 million tons are minable. This coal having sulfur less than 3% and ash content with a range of 2.9 to 11.5% appear suitable for production of petrochemicals. Annexure I & II depict coal reserves and analysis of Pakistani coal.
COAL CONSUMPTION BY SECTOR 2001-02 Total: 4.24 Million Tonnes
5.90% Brick Kilns
21.60%
Coke Use Power
72.50%
Generally, the value addition in chemical industry is much more than other industrial sectors. It increases for commodity products to specialty and fine chemicals and it is normally 10 to 200 folds taking crude oil value as the base. Pakistan can exploit this situation only through vertical and horizontal integration. Although it is late yet no more time should be lost to develop petrochemical industry in Pakistan. Local gas and coal reserves are in abundance and they are of reasonable quality. Coal gasification technology to manufacture petrochemicals is being used in USA, European countries and South Africa. Technologies are available to manufacture chemicals from coal. Production of value-added chemicals can make the project economically feasible. A suitable technology may therefore, be acquired and used in Pakistan for Thar and Lakhra coal reserves.
4.
MAJOR CHEMICAL SUB-SECTORS Pakistan has progressed well in the traditional sectors of fertilizers,
sugar, cement, caustic soda, soda ash and sulfuric acid. Other potential areas are soaps, detergents, cosmetics, paints, dyes and pesticides. The petrochemical sector needs much more attention because basic raw materials used for several sub-sectors of chemical industry are not being manufactured in Pakistan, which is only possible after the development of petrochemical industry. Following sub-sectors have been discussed in the report: o Petrochemicals
o Soda Ash & Sodium Bicarbonate
o Fertilizers
o Caustic Soda & Chlorine
o Synthetic Fibers
o Sulfuric Acid & Other acids
o Alcohol from Molasses
o Organic Chemicals
o Pesticides
o Dyes & Pigments
o Plastics & Resins
o Textile & Tannery Chemicals
o Paints & Varnishes
o Water Treatment Chemicals
o Oleo Chemicals
o Food Chemicals
o Soaps,
Detergents
Cosmetics o Paper & Paper board o Glass
and
o Essential Oils
PETROCHEMICALS, BTX, CARBON BLACK, MEG Petrochemicals Petrochemical products currently form an essential base for production of wide range of industrial and consumer products. Petrochemical industry is termed as one of the fastest growing industrial sub-sector and has very well contributed to the objective of rapid progress and balanced expansion of manufacturing sector. Petrochemical products are broadly classified into two group i.e. basic and end-products. The basic product group includes ethylene, propylene, butadiene and aromatics, while the end-products include plastics, synthetic fibres and elastomers. The petrochemical products offer to a large extent an ideal substitute for conventional materials such as wood, metals, jute, natural rubber, etc. in which Pakistan is deficient. Therefore, there is substantial scope for development of petrochemical industry in Pakistan. At present, the petrochemical industry of Pakistan is limited to production of polyvinyl chloride (based on imported VCM), synthetic fibers, i.e. polyester, polyamide, aromatics (Benzene, Toluene, Xylene), Purified Terephthalic Acid (PTA) and carbon black. During last three decades repeated efforts have been made to develop a project capable of producing basic petrochemicals. In this connection numerous studies have been carried out for production of basic petrochemicals i.e. ethylene, propylene, etc. utilizing the alternate feed stocks i.e. naphtha, associated gases (ethane, propane), natural gas and molasses (a by product of
sugar industry). However, despite interest and efforts no significant development has taken place as far as production of basic petrochemicals are concerned. The factors responsible for non-development of basic petrochemical industry include: o High capacity of world scale basic petrochemical production facilities. o Complexity and high level of the technology involved. o High level of capital outlay required. o Market size limitations vis-à-vis world scale plants. o Relatively lower differential in tariffs of imported raw material and end products. Pakistan has no facility to produce basic petrochemicals like Ethylene, Propylene, Butadiene, Styrene, etc. and they are being imported in bulk. Out of long list of petrochemicals, only few are being produced locally. They include Pure Terephthalic Acid (PTA), BTX and carbon black. Petrochemicals provide raw materials for plastics, detergents, dyes, paints & varnishes and pesticides etc. They are also used as additives in the lubricating oils. Most of the specialty and fine chemicals belong to the petrochemical group. Their production and marketing is monopolized by few global giants. Pure Terephthalic Acid (PTA) Purified Terepthalic Acid (PTA) is basic raw material for production of polyesters. PTA is produced by oxidation of paraxylene in a solvent i.e. acetic acid. Till recently, all the PTA requirements of the country were met through imports. In 1998 ICI Pakistan setup PTA production facility at Port Qasim, Karachi. The facility is capable of producing 400,000 MTPY of PTA with an investment of US$ 450 million. The plant production during last four years
ranged between 175,832 to 397,000 metric tons. The current requirement of PTA is estimated to be around 450,000 metric tons. The requirement is being shared by local production and imports in ratio of 76:24. ICI is currently firmingup plans for de-bottlenecking of the facility aiming to increase the PTA production by 10-15%. The demand/supply pattern of PTA is presented below: Demand/Supply Pattern of PTA (Metric Tons)
Supply Year
Demand
Local
Imports
Exports
1998-99
395,747
175,832
219,915
-
1999-00
392,905
262,811
148,199
18,105
2000-01
366,934
329,143
128,257
90,465
2001-02
449,814
395,803
126,955
72,944
2002-03*
223,459
202,828
87,393
51,217
*July-December Source: ICI Pakistan
Aromatics (BTX) Aromatics constitute main classes of hydrocarbons. Three most important aromatics Benzene, Toluene and Xylene are commonly known as BTX. In Pakistan benzene is used for production of insecticides, toluene is used for production of Tri Nitro Toluene (TNT) and solvents. Xylene is produced as mixed Xylene, which is used as solvent in paint industry and for formulation of various pesticides and as surface coating agents.
Paraxylene and orthoxylene are derived from mixed Xylene. Paraxylene is used as a raw material for production of PTA while orthoxylene is used for production of phthalic anhydride. Historically, BTX requirements of the country have been met from local production and imports. The local production was from a small unit of National Refinery Limited. The unit has a capacity of 25,500 MTPY of Benzene, Toluene and Xylene. The unit uses reformat as feedstock. Throughout its existence the plant has been operating at lower capacity owing to operational and production economics. This unit is no longer in operation. After start of ICI’s PTA production facility paraxylene imports have been started. During the last two years the imports of paraxylene ranged between 250,000 to 300,000 metric tons. Orthoxylene imports started in early 1990s, when phthalic anhydride plant of Nimir Chemicals having capacity of 12,000 MTPY started production. During last three years the imports of orthoxylene ranged between 2,500 to 3,500 metric tons. BTX are the building blocks for PTA, polyesters, Nylon, DOP, polystyrene, explosives, detergents, phenol, aniline and other down stream products. Large quantities of Xylene and Toluene are being imported and total BTX imports were 312,791 tons with a value of Rs 7.9 billion during 2001-02. BTX Imports (M. Tons) (Million Rs.)
Year
Benzene Qty.
1997-98
49
Toluene
Value 2
Qty. 6,205
Xylene
Value 113
Qty. 14,827
Total (BTX)
Value 281
Qty. 21,081
Value 396
1998-99
27
2
8,360
143
131,163
2,171
139,530
2,316
1999-00
36
3
9,255
174
252,297
5,481
261,588
5,658
2000-01
50
1
14,117
311
252,940
6,917
267,107
7,229
2001-02
28
1
16,140
351
296,623
7,566
312,791
7,918
2002-03*
65
1
11,339
253
118,398
3,246
129,802
3,500
*July-Dec. Source: Federal Bureau of Statistics
World over various routes are being employed to obtain ethylene and they include naphtha cracker, associated gases, coal gasification, molasses and imported ethylene. The most viable route has to be determined for the situation in Pakistan. Carbon Black Carbon black is the general term for a number of jet black, sub micron size pigments, comprised essentially of pure carbon. Carbon black is primarily used as reinforcing and filling agent for manufacture of tyres and rubber products. Small volumes are also consumed in manufacture of dyes and printing ink. Carbon black’s requirement of the Country are being met by local production as well as imports. The local production is originating from National Petrocarbon plant located at Pipri, Pakistan Oil Complex. The plant is capable to produce around 10,000 metric tons per annum of various grades of carbon black. The plant uses carbon oil as feed stock being produced and supplied by National Refinery Limited (NRL). The market supply and demand pattern of carbon black is presented in table below: Demand and Supply Pattern of Carbon Black (M. Tons)
Year
Demand
1998-99
Supply Local
Imports
10,921
5,054
5,867
1999-00
11,369
6,153
5,216
2000-01
8,922
4,523
4,399
2001-02
8,212
5,148
3,064
2,638
1,587
2002-03*
3,274
*July-December Source: National Petrocarbon (Pvt.) Ltd. (2002-03*)
Historically very small quantity of carbon black has been exported. The carbon black market of Pakistan has remained limited owing to minimal expansion in local tyre/rubber products manufacturing capacity and its production. This is primarily due to large scale, legal as well as illegal imports of tyres in the country. Mono-ethylene Glycol (MEG) Mono-ethylene glycol (MEG) is one of the most important synthetic organic liquid used for manufacturing of polyester fiber and as anti-freezing agent. In Pakistan MEG is primarily being consumed as input for manufacturing of polyester fiber and yarn. The quantum of MEG being consumed as antifreezing agent is very small. At present, all the requirements of MEG are being met from imports. In 2001-02 122,000 metric tons of MEG was imported at a value of Rs. 3.12 billion (US$ 52.14 million). The imports during 1997 – 2002 are presented below: Imports of Mono-ethylene Glycol (MEG) (M. Tons) (Million Rs.)
Imports Year
Quantity
Value
1997-98
126,623
3,675
1998-99
166,792
3,251
1999-00
174,024
4,447
2000-01
174,943
4,828
2001-02
121,875
3,129
2002-03*
105,753
2,896
*July-December Source: Federal Bureau of Statistics
The MEG requirements during last decade have been increasing at an annual growth rate of 10%. By 2009-10 the MEG requirements will increase to 260,000 metric tons, which justify the setting up of a Petrochemical Complex. Demand Pattern The demand pattern of major petrochemical products during 2002-2010 is presented below: Demand Pattern of Major End-Petrochemicals (000 M. Tons)
Consumption Product
2001-02
Estimated Demand 2005-06
2009-10
Plastic (PE, PP, PVC & PS)
403.00
515.00
710.00
Synthetic
500.00
700.00
900.00
Fibres
(Polyester,
Acrylic & Viscose, etc) Polyester Inputs: •
PTA
450.00
570.00
720.00
•
MEG
160.00
220.00
330.00
20.00
25.00
30.00
Aromatics
BTX
Paraxylene Synthetic Rubber TOTAL
300.00
365.00
450.00
20.00
25.00
30.00
1,853.00
2,420.00
3,170.00
Source: Enar Petrotech Services
Future Prospects The table above justifies setting up of a Petrochemical complex, however the project shall be economical if a prudent policy is adopted and adequate incentives are offered. The need for establishing the facilities to manufacture basic petrochemical products has long been realized. All the previous reports on chemicals sector have recommended the establishment of a petrochemical complex through any viable route. The strongest of all recommendations was the setting up a Hydro Cracker or Naphtha cracker plant. The hydrocarbon resources of the country are largely being used for energy requirements i.e. fuel. These could be utilized for the manufacturing of high value-added petrochemicals. Natural gas is however also being used for the manufacture of ammonia, as an intermediate for the production of fertilizers. The import data provided in the table reveals that a major portion of Pakistan’s total imports consist of petrochemicals, i.e., ethylene, propylene, butadiene, benzene, toluene, xylene and their derivatives. It is thus, essential that serious efforts be made to manufacture these petrochemicals locally in order to save foreign exchange and to attain self-reliance. The downstream industries based on Petrochemical products such as paints, plastics, synthetic fibers, rubber, etc. have grown considerably. Therefore, the petrochemical complex is very much needed to meet the downstream growing demand in the country and to establish a strong backward integration for the development of other non-traditional sectors.
Dr. Farrukh Akhtar, a consultant prepared a report regarding the development of petrochemicals in Pakistan (Copy attached as appendix). He has focused on the importance of this sector and has suggested to prepare a road map for at least next 50 years. He has also emphasized on adopting a process of identifying future projects. World over various routes are being employed to obtain ethylene and they include naphtha, associated gas, coal gasification, molasses and imported ethylene. The most viable route has to be determined for the situation in Pakistan. Options for the production of petrochemicals, available to Pakistan, are detailed below:
o
Naphtha Cracker The technology for the production of petrochemicals from oil, by hydro
cracking or naphtha cracking, is well known and established. Naphtha is a refinery by-product of crude oil. These are hydrogenated to get the desired basic petrochemical olefins. It is also to be noted that Pakistan depends heavily on crude oil imports. Pakistan exported 392,411 MTPY of Naphtha during 2001-02. The naphtha cracker helps to make olefins (ethylene, propylene etc) and it has no direct role for the manufacturing of aromatics (BTX). The aromatics are separated from the reformat of an oil refinery. In order to know whether a naphtha cracker is viable in Pakistan, the demand for down stream products (olefins) has been assessed and analyzed below:
Demand for olefins and aromatics The requirement of all olefins and aromatics is presently being met through imports. The analysis of the import data for the year 2001-02 suggests that the equivalent demand of ethylene in the country is about 200,000 tons per year. The table below depicts the situation: Import data of Petrochemicals and equivalent Ethylene Demand
Imports 2001-02
(M. Tons) Equivalent Ethylene demand 96,576 96,576
Polyethylene
126,458
Equivalent Ethylene demand 126,458
Polypropylene
99,294
-
144,051
-
73,223
Butadiene
15,250
3,202
-
-
-
-
Polyvinyl
68,712
19,240
18,682
5,231
7,536
2,110
Styrene
11,771
3,138
13,907
3,707
7,460
1,988
Polystyrene
16,916
4,510
2,440
651
3,192
852
MEG
166,792
39,578
121,875
28,920
105,753
25,094
PVA
10,653
3,344
443
139
244
60
515,846
199,470
460,048
197,298
289,620
125,645
Products
Imports 1999-2000
Imports* 2002-03
158,650
Equivalent Ethylene demand 158,650
Chloride
Total *July-December
Source: Federal Bureau of Statistics
The present requirement is a naphtha cracker of 200,000 MTPY capacity (as the equivalent demand of ethylene). This plant will require to process about 650,000 tons per year naphtha while 600,000 MTPY is locally available. The plant shall yield the following products per year: o Ethylene
200,000 tons
o Propylene
126,000 tons
o Butadiene
74,000 tons
o Fuel Gas
116,000 tons
o Gasoline
124,000 tons
Total
640,000 tons
It is to be noted that naphtha plant capacity is defined by the output of ethylene from that plant. The cost of 200,000 M. tons naphtha cracker plant will be approximately US$ 225 million. The approximate cost of down stream polyethylene and polypropylene plants is likely to be US$ 400 million. Thus the total cost of the petrochemical complex based on naphtha cracker comes out to around US$ 625 million (courtesy Aftec (Pvt) Limited, Lahore). o
Gasification of Coal Another option for the manufacture of basic petrochemicals is the
gasification of coal. Numerous chemicals and fuels can be manufactured from the gasification of coal as illustrated in the diagram below. In late 1950’s, Pak American Fertilizers, Iskandarabad, Daudkhel was based on coal gasification technology supplied by Lurgi to produce Ammonia and Ammonium Sulfate fertilizer. Sasol of South Africa are reported to have developed a technology for the gasification of coal with high ash content. Sasol acquired the technology from Lurgi, Germany. South African coal reserves are largely bituminous with relatively high ash content (about 45%) and low sulfur content (1%). It is understood that Sasol or similar technology can be adopted for Pakistani coal reserves.
Coal Chemicals
Source: Shreve’s Chemical Process Industries
Sasol, South Africa has developed the processes for production of petrochemicals from coal by gasification. Coal under pressure and high temperature, in the presence of steam and oxygen is converted to raw gas. Condensate recovered from the subsequent cooling of gas, yields co-products such as tar and oil. Nitrogenous compounds (Ammonia), sulfur and phenolic compound are recovered. The purified synthesis gas after cooling is made available for conversion to synthetic fuels and or chemical production. The synthesis gas is cracked to produce ethylene, propylene and propane whereas aromatics like benzene, toluene and xylene are produced form coal-tar. In addition, fuel oil and diesel are produced. The advantage of SASOL process is that it can process low-grade coal and a number of high value chemicals are produced along with synthetic fuels. SASOL built their first coal gasification plant producing liquid products in 1955. After fifty years, SASOL produces the equivalent of 150,000 barrels per day of fuel and petrochemicals from coal via its indirect liquefaction process. SASOL manufactures more than 200 chemical products exporting to more than 70 countries around the world. The company has grown to have a turn over of 3.7 billion dollars from which more than 50% is generated from chemicals. It is strongly recommended to consider the coal gasification route and utilize the vast coal reserves for the production of high value petrochemicals. Suitable technologies are available in the world. Government initiatives are needed to start the chain of actions for providing infrastructure in the coal field area in order to consider utilization of local coal reserves. o Associated Gases Route Associated gases are another option to develop petrochemical base in Pakistan. 40,176 million cubic ft of associated gases in the year 2001-02 are
accompanied by about 100,000 MTPY of condensate from various fields in Sindh and Punjab. This condensate is rich in higher hydrocarbons, i.e. Ethane, Propane, etc. and can be used for the production of basic organic chemicals like ethylene, propylene etc. This route is cheaper than the naphtha cracker route and only requires dehydrogenation of ethane, propane etc. to convert them to ethylene, propylene etc. The limited supply of associated gases and collection of all condensate on one site are the main obstacles. o Natural Gas Route Natural gas with 96% methane can be used for the production of methanol,
ethylene,
acetylene,
subsequently
formaldehyde
and
other
petrochemicals. As a first step, natural gas is reformed to produce 8-9% acetylene in the synthesis gas. After the removal of acetylene, the left over synthesis gas can be used to manufacture methanol – an important building block for petrochemicals like Methyl Tertiary Butyl Ether (MTBE), etc. Sitara Chemicals Faisalabad planned a 30,000 MTPY Acetylene plant in 1997 based on the Chinese technology using natural gas as feedstock. The proposal also included the production of VCM & PVC from the excess Chlorine gas available. The project could not be materialized due to the non-availability of natural gas at the proposed site. A project is under consideration to import natural gas from central Asia. It may be helpful to find the composition of that gas at this stage for its use as feedstock for chemical industries.
Molasses Molasses is another source for petrochemical products. Pakistan must tap this resource as it is available in abundance. Due to its physical and chemical properties molasses can be mixed directly with other products or it can be used in more complex chemical processes for manufacture of high utility products. Details are as under: A)
Direct Utilization
o o o o
B)
C)
Distillery Industry
Other Products
Fertilizer (Mixed with Urea) Animal feed (Molasses meal, block & liquid). Coal Briquettes Fuel
o
Industrial Alcohol
o o
Anhydrous Alcohol Potable Alcohol
o o o o o o o o o o o
Gasohol Acetic Acid Acetone Butanol Citric Acid Lactic Acid Glycerol Yeast Monosodium Gluconate L-Lysine Itaconic Acid
o o o
Aconitic Acid Cigarette Filter Tows Many other derivative products for pharmaceutical
industry
and
plastic
The main utility may be as Gasohol blended with gasoline. Recommendations for Petrochemicals o
It is recommended that a separate study on manufacturing of petrochemicals should be conducted with the aim to determine the most viable route for the petrochemical production in Pakistan. The study should discuss merits and demerits based on all options given in the report.
o
It is important to note that Pakistani coal is higher in moisture content which may pose a limitation for its use in petrochemical manufacturing through Sasol technology. In that case, other technologies available from Shell or Texas etc should be considered.
o
A long term policy should also be prepared for the development of petrochemical sector in the country. This policy may become a part of the overall policy for the chemical sectors.
o
It is suggested that a master flow chart for the organic chemicals should be developed with the database. This database may be used for planning the petrochemical industry in Pakistan.
PETROCHEMICALS Building Blocks
Polyethylene Ethyl mercaptans
Ethanol
Alcohols Ethylene
Acetaldehyde
Acetic Acid
Vinyl Acetate Poly vinyl Alcohol
Ethylene Oxide
Ethylene Glycol
Oxalic Acid Ethanol amines
Vinyl Chloride
PVC
Ethy;ene Di Chloride
Chloro Ethylene 1EP Rubber Ethyl Acrylate
Acrylic Acid
Acrylic Esters
Naphtha Cracking Propylene Coal Gasification
Poly Propylene Iso Propanol
Acetone
Allyl Alcohol
Glycerine Propylene Oxide 2-Ethyl hexanol
Butyraldehyde
n-Butanol 2-Butene
Butadiene
Acrylonitrile
Adiponitrile
Polybutadiene
ABS Resins Caprolactum
Nylon-6
CycloHexanone
Nylon-12
Ethylbenzene
Styrene
Polysrytene
Cumene
Phenol
Aniline
Cyclohexane
BTX
Alkylbenzene
Sulphonation
Dimethyl Terephalate
TerePhalate Acid
Polyesters
Phthalic Anhydride
DOP
PVC Compound
ALTERNATE ROUTE FOR PETROCHEMICAL INDUSTRY PRODUCTS WHICH CAN BE PRODUCED FROM NATURAL
NATURAL GAS
CRACKING
A.
B.
ACETYLENE
SYNIHESIS GAS
A. ACETYLENE
HCL HYDROCHLORIC ACID
VINYL CHLORIDE CH2 =CH-CL
PVC
WATER H 20
ACETALDEHYDE AIC CH3CHO
ACETIC ACID CH3COOH
HYDROCHLORIC ACID HCl
ACRYLO NITRILE
CHLORINE CL2
IRI CHLORO ETHANE
RAW MATERIAL FOR ACRYLIC
B. SYNTHESIS GAS
i. SYNTHESIS GAS + H 2O
METHANOL
FORMALDEHYDE
ii. METHANOL + OXYGEN
iii. FORMALDEHYDE + UREA
UREA FORMALDEHYDE
FERTILIZERS Fertilizers are key input for agriculture. They improve the quality of crops in the form of high nutrient value and increase plant resistance to diseases and climatic conditions. The demand of fertilizer increases proportionately with the growing population. Nitrogen, Phosphorus and Potassium are major nutrients required by soil. These nutrients are provided by the following popular fertilizers. Urea, Calcium Ammonium Nitrate (CAN), Single Super Phosphate (SSP), Triple Super Phosphate (TSP), Nitro-Phosphate (NP), Di Ammonium Phosphate (DAP), Sulfate of Potash (SOP), NPK Urea represents 71% of total fertilizers consumed in Pakistan while DAP 15% and other fertilizers like CAN, NP, SSP and NPK have 14% share. Raw Materials & Process Raw materials used for the manufacture of fertilizers are ammonia, carbon dioxide, phosphate rock, phosphoric acid, sulfuric acid, limestone and potash. Ammonia is manufactured by reforming the methane in natural gas. Ammonia is then reacted with different materials to produce fertilizers containing Nitrogen. Ammonia & Nitric acid is used to produce Ammonium Nitrate. Phosphate rock or Phosphoric acid is necessary to produce phosphatic fertilizer. Sulphuric acid is reacted with crushed phosphate rock to produce SSP. Production Capacity Presently, there are ten operating fertilizer units in the country. Out of these, four units are in the public sector, while six are in the private sector. One of the private sector unit, Pak China, is closed. The average annual growth rate
in the sector was 7% during the last ten years. The share of fertilizer sector in GDP is around 0.4% and total investment in this sector is approximately Rs 87.0 billion. The capacities of existing fertilizer plants are given below: Capacities of Existing Fertilizer Plants (MTPY) Pr oduct
Plant 1
2 3 4 5 6
Urea
1982
695,000
Fauji Fertilizer Company-II, Goth Macchi (FFC-II)
Urea
1993
635,000
Pak Saudi Fertilizers, Mirpur Mathelo
Urea
1980
557,000
Urea
1998
550,000
DAP*
1998
450,000
Urea
1968
850,000
Urea
1998
346,000
Urea
1971
445,000
Urea*
1982
102,000
Urea
1962
92,400
CAN NP
1978 1979
450,000 304,500
SSP
1958
72,000
SSP
1989
90,000
NPK
2002
100,000
Fauji Jordon Fertilizer Company (FJFC), Karachi Engro Chemicals Pakistan Limited (ECPL), Dhaharki Pak American Fertilizers (PAFL), Daudkhel Dawood Hercules Chemicals Limited (DHCL), Lahore Pak China Fertilizers Ltd. (PCFL), Haripur Pak Arab Fertlizers Limited (PAFL), Multan
8
Lyallpur Chemicals & Fertilizers Ltd. (LCFL), Jaranwala Hazara Phosphate Fertilizers, Haripur Engro Chemical Pakistan Limited (ECPL), Karachi
10
Present Capacity
Fauji Fertilizer Company-I, Goth Macchi (FFC-I)
7
9
Year
5,738,900
Total * Closed
Source: Development Centre
National
Fertilizer
Fauji Jordan Fertilizer Company (FJFC), Karachi is the only plant designed to produce DAP fertilizer with annual capacity of 450,000 tons but it is closed since September 2001. Efforts are under way to restart the plant. Prices for nitrogenous fertilizers were deregulated in 1986 while phosphatic fertilizers were deregulated in 1993. Fertilizer Policy of 1989 offered incentives, such as duty free imports of plant and machinery, tax holiday for 8 years and lower rate of feed stock prices for 10 years, which
have helped
increasing the urea production capacity from 2.2 million tons in 1990s to 4.2 million tons today. Since 1990, an investment of over US$ 1.2 billion has been made in this Sector. Domestic fertilizer production meets 70-80% of local demand. The gap between fertilizer demand and domestic production is filled through imports. As the domestic production of fertilizer has registered a growth in recent years, the fertilizer imports declined by 10.45% in 2001-02. Import of Fertilizer (M. Tons)
Product
2000-01
2001-02
2002-03**
Urea
85,668
-
0
DAP
773,174
785,041
815,113
NP
46,596
3,718
-
Others *
52,533
69,085
28,345
957,971
857,844
843,458
Total
Source: National Fertilizer Development Centre * Includes AS, NPK, MOP, SOP ** July-December
The current consumption of fertilizer is about 129 Kg/hectare in Pakistan. The main consumption of urea fertilizer is for wheat followed by cotton, rice and sugarcane. Natural Gas The fertilizer sector is the second largest consumer of natural gas (2225%) after power sector (37.1%). Natural gas prices prevailing in Pakistan ranges between US$ 1.5 to 2.0 per MM Btu. Future Prospects National Fertilizer Development Center (NFDC) has estimated a growth rate of 2.5% for urea and 5% for DAP over the next ten years. The supply and demand position of the fertilizer products, namely Urea, DAP, SOP and MOP for the next 10 years is given below: Supply / Demand Position
( ‘000’ Tonnes )
Urea Year 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12
Supply 4,190 4,170 4,170 4,170 4,170 4,170 4,170 4,170 4,170 4,170 4,170
Demand 4,178 4,282 4,390 4,499 4,612 4,727 4,845 4,966 5,090 5,218 5,348
DAP Deficit/ Surplus 12 -112 -220 -329 -442 -557 -675 -796 -920 -1,048 -1,178
* Supply 67 450 450 450 450 450 450 450 450 450 450
Demand 970 1,019 1,069 1,123 1,179 1,238 1,300 1,365 1,433 1,505 1,580
Deficit/ Surplus -903 -569 -619 -673 -729 -788 -850 -915 -983 -1,055 -1,130
SOP/MOP Demand 40 44 48 53 59 64 71 78 86 94 104
*Presently DAP Plant is closed. Source: National Fertilizer Development Centre (2002) Excluding Pak China capacity of 102,000 tonnes.
Accordingly, urea shortage will be around 1.2 million MTPY and DAP shortage will be 1.13 million MTPY by 2011-12. Therefore two plants of urea and DAP each with average capacities of 600,000 MTPY shall be required to meet the future needs of the fertilizers. Two urea plants are estimated to cost approximately US$ 700 million while two plants of DAP can be established at around US$ 500 million. Thus making a total investment of US$ 1.2 billion in the coming ten years. Since fertilizer industry is a capital intensive industry therefore, foreign investments would be encouraged. In order to attract the investment, Government of Pakistan has announced Fertilizer Policy 2001 attached as annexure-IX. o Manufacture of Phospahtic Fertilizer through Chlorine As stated above, the domestic demand for DAP shall be 1.13 million MTPY. Fauji-Jordan Fertilizer Company (FJFC) if revived can produce 450,000 MTPY. There would still be a huge shortage of 380,000 MTPY of DAP or any other Phosphatic Fertilizer. Phosphoric Acid can be produced using Hydrochloric acid from locally available surplus chlorine and locally available phosphate rock using Ishikawajima-Harima Heavy Industries (IHI) process. This phosphoric acid in turn can be used to produce Phosphatic Fertilizers. M/s. Sitara Chemical Industries is already producing 10 MTPD of Phosphoric acid and have also produced Phosphatic Fertilizers. These fertilizers have successfully been used on different crops, results have been very encouraging. Based on this success M/s. Sitara has launched its Agri Division to promote this business further. Note: Approximately four M. Tons Hydrochloric acid is required to produce one M. ton of Phosphoric acid.
Tariff Structure Present tariff structure of Fertilizer is given in the table below.
S.No.
HS Code
Commodity Description
C. Duty 2002-03
1
2711.1100 Natural gas
5
2
9935.0000 Phosphatic Rock
0
Comments
C. Duty zero% for
3
2809.2010 Phosphoric Acid
10
phosphatic fertilizer vide SRO.358(1)/2002
Finished Products 4
3102.1000 Urea
5
5
3103.1000 Super-phosphates
5
6.
Diammonium 3105.3000 hydrogenorthophosphate (diammonium phosphate)
5
SYNTHETIC FIBERS Synthetic Fibers are important manufactured raw materials used in the production of blended yarn. These are blended with natural (cotton) or artificial/ Synthetic Staple Fibers for the manufacture of apparel/household textiles. Pakistan’s synthetic Fiber industry is currently producing Polyester and Acrylic Fibers. Chemi Group of Companies conceived a project with collaboration of Swiss and Chinese suppliers for manufacturing of Viscose Staple Fiber (VSF) with production capacity of 11,500 M. tons against total demand of around 26,000 – 28,000 MTPY. The unit namely Chemi Viscofibre is located in Nawabshah has been set up at a total cost of Rs 1.873 billion. The polyester staple Fiber industry has developed as the main synthetic fiber industry during the last decade in response to growing demand for synthetic fiber for the production of blended yarn. The polyester sector remains the largest and critical segment of Pakistan’s synthetic fiber industry. Production Capacity The total installed capacity for manufacture of Polyester Staple Fiber (PSF) is 620,000 MTPY. The country’s demand of PSF is being entirely met through local production. The PSF industry has been able to successfully substitute imports with the result that no significant PSF imports have been made during the last five years except for an average import of 10,000 – 12,000 tons of specialty fiber per annum. The installed capacities of major PSF producers are listed in table below: Installed Capacities of Major PSF Producers Company
Year of Establishment
Capacity, MTPY (2001-02)
Dewan Salman, Hattar, Haripur
1992
250,000
ICI Polyester, Sheikhupura
1982
114,000
Ibrahim Fiber, Faisalabad
1996
208,000
Rupali Polyester, Sheikhupura
1988
24,000
Pak Synthetic, Hub TOTAL CAPACITY
1991
24,000
620,000 Source: Dewan Salman Fiber & ICI Pakistan Ltd
Supply & Demand Local production, imports, consumption and actual growth rate of PSF during the last five years is as below: Sales, Import, Exports, Consumption & Growth Rate of PSF
(M.Tons) Description Dewan Salman Production
1998 100,215
1999 104,559
2000 108,770
96,822
106,747
189,385
1,328,727
240,000
Production
54,090
63,394
65,948
71,000
95,021
Sales
55,661
66,563
67,017
66,777
100,000
Rupali Polyester Ltd.
Production
22,676
20,652
23,241
22,400
23,569
Sales
22,889
20,646
23,139
21,830
22,000
Pak Synthetic Ltd.
Production
20,550
21,326
21,636
24,340
25,176
Sales
19,900
21,341
21,390
24,711
20,000
National Fibers Ltd., (Closed down) DHAN Fibres
Production Sales
-
-
-
-
-
Production
80,150
86,366
87,920
Sales
71,088
86,242
-
Ibrahim Fiber Ltd-1
Production
67,399
69,399
70,412
69,760
104,286
Sales
65,045
69,901
69,316
67,889
100,000
Total
Production
345,080
375,196
385,727
433,312
487,503
Sales
331,405
371,440
370,247
409,934
482,000
19,000 350,405
9,500 380,940
9,800 380,047
15,500 425,434
7,300 489,300
13%
8%
-0.24%
11%
13%
0
0
ICI Pakistan Ltd.
Imports Total PSF Consumption Actual Growth Rate EXPORT Ltd.
Raw Materials
2001 230,258
2002 229,787
Dhan taken over by Dewan Salman
0 0 11,537 Source: Dewan Salman Fiber
Polyester Fiber intermediates are derived from aromatics and olefin chains. These include Pure Terephthalic Acid (PTA), Mono Ethylene Glycol (MEG), Paraxylene (PX), and Acrylonitrile (ACN) for the manufacture of synthetic Fibers like Polyester Staple Fiber (PSF) and Acrylic Staple Fiber (ASF). PSF Manufacturing Process The primary raw materials for the manufacture of PSF are PTA and MEG; both are petrochemicals. PTA comes in powder form whereas MEG comes in liquid form. PTA is mixed with MEG to form slurry. The slurry then undergoes two chemical reactions namely esterification and poly-condensation forming Polyethylene Terephthalate, commonly called PET which can be converted either into chips, Fiber or filament yarn depending upon the end use. Local requirement of MEG is entirely met through imports while ICI now meets about 60-70% of the MEG MEG
PTA PTA
demand for PTA
Poly condensation: PET Poly condensation: Polyester Chips Polyester Polyester Staple Fibre Polyester filament Yarn Polyester Spun Yarn Fabrics POY/DTY/FDY Spun Containers/film Fabrics Fabric MEG and 0.015 kg of other chemicals are used.
PTA MEG
industry’s
through
its
400,000
MTPY
capacity plant at Port
Qasim.
To
produce one
Kg.
of PSF, 0.87 kg PTA,
0.375
0.870 kg /
/
Other Chemicals
0.375 kg 0.015 kg
1 kg of Polyester Fiber + waste
kg
Blending Ratio Polyester fiber is blended with cotton and other fibers (viscose, acrylic) to produce blended yarn to be used for the manufacture of gray cloth. Currently the common blending ratio used in Pakistan is 52% polyester and 48% cotton as compared to the international standards 65:35. Acrylic Staple Fiber There is only one unit of Dewan Salman Fiber producing acrylic staple Fiber. The plant has an installed capacity of 25,000 MTPY but is utilizing only 50% of the capacity at present. Polyester Filament Yarn (PFY) Industry The filament yarn industry uses polyester chips (Textile Grade) as raw material for manufacturing of synthetic fabrics/blended fabrics like suiting, shirting and sheeting. Currently, there are 21 units involved in the manufacturing of synthetic filament yarn with an installed capacity of around 105,000 MTPY. The local demand for polyester filament yarn is between 85,000 - 90,000 MTPY. Due to low prices of Filament Yarn, an import of 29,661 M. tons was made during 2001-02 as compared to 7,973 M. tons in 1998-99. The following tables depict name of companies producing polyester chips and polyester filament yarn alongwith annual production capacities: Polyester Chips Company Rupali Polyester, Sheikhupura
Product
Capacity, MTPY (2001-02)
Polyester chips-Textile grade
14,000
Novatex, Karachi
Polyester chips-Textile grade
40,000
Rupafil, Sheikhupura
Polyester chips-Textile grade
30,000
Total Polyester Chips
84,000
Polyester Filament Yarn Capacity, MTPY Company
(2001-02)
Status
A) Production based on PTA & MEG, as Raw Materials Rupali Polyester,
Sheikhupura
11,000
Operational
Rupafil Ltd.,
Sheikhupura
14,000
Operational
Hub
31,000
Gatron Ind. Ltd. I Garton Ind. Ltd. II, National Fibers Ltd.
Karachi
Total (A) B)
3,000
Operational Closed
59,000
Production based on Polyester Chips
Spintex
10,000
Operational
S. G. Fibers,
Karachi
9,000
Operational
Polyron Ltd.
Hub
4,000
Closed
Pak Fiber
Karachi
2,000
Closed
Progressive Fiber
Karachi
1,400
Partially closed
Fayaz Filament Ltd
Karachi
3,000
Partially closed
Tilon Limited
700
Operational
Bengal Fiber Ind. Ltd.
Karachi
3,000
Operational
Dilon Limited
Karachi
1,000
Operational
Kohi-Noor Fibers
Faisalabad
Operational 1,500
Ahsan Industry
600
Operational
Ahmad Factory
600
Operational
Tri-Star Polyester
Karachi
3,000
Sind Industries
Karachi
500
Operational
Indus Polyester
Karachi
2,000
Operational
Tawakkal Polyester
Karachi
1,600
Closed
Papa Sierra Fibers Ltd.
Hattar
2,100
Closed
Total (B)
Closed
46,000
Grand Total (A+B)
1,05,000
The end-user of synthetic filament yarn is the Art Silk industry or small power looms sector which is scattered all over the country as cottage industry. Nylon Filament Yarn Presently, only one unit is engaged in the manufacture of Nylon Yarn. Two units are already closed. The names and production capacities are depicted in table below: Nylon 6 Filament Yarn Company Bengal Fiber Industries, Karachi Dilon Ltd., Karachi Nilonm Nylon Mills Ltd.
Capacity MTPY 2001-02 1,000 1,800 800
Status Operational Closed Closed
Future Prospects The PSF sector has been growing at an average rate of 8% over the last four years. In addition, the increasing trend of shifting from 100 percent cotton yarn to blended yarn in the spinning sector augurs well for the PSF sector. The blending ratio, which is on the lower side in Pakistan as compared to international standards is another factor which could give further boost to the already growing PSF sector if higher blending ratios are encouraged. There is also a need to develop the room-furnishing segment i.e. curtains, bed sheets,
carpets etc. which consumes major portion of polyester and acrylic staple fibers produced globally. It is worth mentioning that ICI and Ibrahim Fibers have significantly enhanced their capacities during the current year and Dewan Salman is planning to expand its capacity by another 25,000 tons in the near future. This trend clearly indicates increasing demand for synthetic fibers. Keeping these factors in view and considering 8% annual growth rate in this sector, it can be seen that by the year 2011, almost 500,000 tons of PSF capacity is required to be added to the existing capacity to meet the growing demand. The minimum economic size of the PSF plant is 150,000 MTPY therefore, at least three additional PSF plants should come on stream to absorb the demand. The additional capacity of PSF shall require 300,000 tons of PTA which can be met through installation of equivalent facility for PTA production. A total investment of US$ 511 million will be required by the year 2011 for installing additional capacity of 500,000 M. tons of PSF. Tariff Structure The present tariff structure of Synthetic Fiber is given in the table below:
S.No. HS Code
Commodity Description
C. Duty 2002-03
Comments
POLYESTER SECTOR Raw Materials: 1
2902.4300 Para-Xylene
5
2
2915.2100 Acetic Acid
25
3 4
2905.3100 Mono Ethylene Glycol (MEG) 2917.3610 Pure Terephthalic Acid (PTA)
10 20
Semi Finished 5 6
3907.6010 Polyester Chips (Yarn Grade) 3907.6020 Polyester Chips (Bottle Grade)
20 25
C. duty 0% for ICI to manufacture PTA vide SRO 358(1)/02 C. duty 0% for ICI to manufacture PTA vide SRO 358(1)/02.
S.No. HS Code 7 8 10 11 12 13 14
15
16 17
Commodity Description
C. Duty 2002-03
Synthetic filament tow of polyesters 5503.2000 Polyester Staple Fiber (PSF) Sewing thread of synthetic 5401.1000 filament Sewing thread of synthetic 5508.1000 Fiber 5402.2000 High tenacity yarn of polyesters 5402.3300 Textured yarn: Of polyesters 5501.2000
Other yarn, single, untwisted or with a twist not exceeding 5402.4200 50 turns per meter: Of polyesters, partially oriented Polyester Filament yarn (Other yarn, single, untwisted 5402.4300 or with a twist not exceeding 50 turn/meter:) Other yarn, single, with a 5402.5200 twist exceeding 50 turns per meter: Of polyesters 5402.6200
Other yarn, multiple (folded) or cabled: Of polyesters
Comments
20 20 25 10 25 25 25
25
25 25
Finished 18 19 20
Finished fabric of polyester staple Fibers 61.03 Garments 5505.1000 Waste of synthetic Fibers 5513.3300
25 25 10
ACRYLIC SECTOR Raw Materials 1 2
2915.3200 Vinyl Acetate Monomer (VAM) 2916.1400 Methyl Acrylate Dimethly Formantide (DMF) – 3 2924.1000 Acrylic Amides 4 2926.1000 Acrylonitrile (ACN) Semi Finished TOW (Synthetic filament tow 5 5501.3000 of Acrylic)
5 5 5 5 20
15% vide Sro 358(1)/2002
S.No. HS Code 6
5501.9000
7
5506.3000
9
5508.1000
10
5509.5900
11
5509.6100
12
5509.6200
13
5509.6900
Commodity Description
C. Duty 2002-03
Other acrylic synthetic filament tow Acrylic Tops (Synthetic staple Fibers, carded, combed or otherwise processed for spinning) Sewing thread of synthetic Fiber Other yarn, of polyester staple Fibers Acrylic Spun Yarn (Other yarn, of acrylic or modacrylic staple Fibers mixed mainly or solely with wool or fine animal hair) Acrylic Spun Yarn (Other yarn, of acrylic or modacrylic staple Fibers mixed mainly or solely with cotton) Acrylic Spun Yarn (Other yarn, of acrylic or modacrylic staple Fibers)
10 20
15 16
Fabrics of acrylic or modacrylic staple Fibers Shawl, Blankets and Sweaters 6110.3000 of man-made Fibers 5505.1000 Waste of synthetic Fibers 55.15
10
10
15% vide SRO 358(1)/2002
10
15% vide SRO 358(1)/2002
10
15% vide SRO 358(1)/2002
25 25 10
NYLON SECTOR Raw Materials 1 2902.2000 Benzene 2 2917.1200 Adipic Acid Hexamethylenediamine and 3 2921.2200 its salts 4 2933.7100 Caprolactum
5 5 10 5
Intermediate 5
3908.1000 Polyamides (Nylon Chips)
15% vide Sro 358(1)/2002
10
Finished 14
Comments
10
S.No. HS Code
Commodity Description
C. Duty 2002-03
Comments
Semi Finished 6 7
8 10
Synthetic filament tow of nylon Synthetic staple Fibers, not carded, combed or otherwise 5503.1000 processed for spinning of nylon and polyamides Synthetic staple Fibers of 5506.1000 nylon or other polyamides processed Sewing thread of synthetic 5508.1000 Fiber 5501.1000
5 5
5 10
11
5402.1000, Nylon Filament Yarn high 3100,3200, tenacity 4100,6100,
20
12
Nylon Filament Yarn (Other yarn, single, with a twist 5402.5100 exceeding 50 turns per meter:)
5
13
Single Yarn & Multiple folded or cabled Yarn (Containing 5509.1100, 85% or more by weight of 1200 staple Fibers of nylon or other polyamides)
20
Finished 14
15 16
Woven fabrics obtained from high tenacity yarn of nylon or 5407.1000 other polyamides or of polyesters 61.00
Garments, parachute fabric, Tyres, Stockings
5505.1000 Waste of synthetic Fibers
25
25 10
VISCOSE RAYON SECTOR Raw Materials:
15% vide SRO.358(1)/2002
15% vide SRO.358(1)/2002
S.No. HS Code
Commodity Description
C. Duty 2002-03
1
4701.0000, 4702.0000, Wood Pulps 4703.0000
5
2
4706.1000 Cotton linters
5
Semi Finished 3
5502.0010
Artificial filament tow of viscose rayon
5
4
5502.0090
Artificial filament tow other than viscose rayon
10
5
5504.1000, Artificial staple Fiber of 9000 viscose rayon
7
5403.1000
8
Other yarn, single: Of viscose yarn, untwisted or with a 5403.3100 twist not exceeding 120 turns per meter
10
9
Other yarn, single: Of viscose 5403.3200 rayon, with a twist exceeding 120 turns per meter
5
10
Viscose Yarn (Other yarn, of polyester staple Fibers mixed 5509.5100 mainly or solely with artificial staple Fibers)
10
11
Viscose Yarn (Single yarn & Multiple (folded) or cabled 5510.1100, yarn) containing 85% or more 1200 by weight of artificial staple Fibers)
10
High tenacity yarn of viscose rayon
5 10
Comments
S.No. HS Code
Commodity Description
C. Duty 2002-03
Finished Products
12
13 14
Fabrics of polyester staple 5515.1100 Fibers mixed mainly or solely & with viscose rayon staple 5516.1100 Fibers 61.0000 Garments 5505.2000 Waste of artificial Fibers
25
25 10
Comments
ALCOHOL FROM MOLASSES Molasses is a thick liquid left after the removal of sucrose from the mother liquor in the sugar manufacturing process. As such it is a by-product of sugar industry. There are about 78 sugar mills in the country with a crushing capacity as given below in the table: Effective capacity and efficiency
(MTPY)
Season
Sugarcane crushing
Estimated Crushing Capacity
1997-98 1998-99 1999-00 2000-01 2001-02
41,012,473 42,994,911 28,982,711 29,403,721 36,708,638
52,895,109 55,157,140 55,163,129 55,163,129 55,163,129
Operating Efficiency, % 77.54 77.95 52.54 53.30 66.55
Source: Pakistan Sugar Mills Association Annual Report 2002
Availability of Molasses The present sugarcane crushing capacity provides an installed capacity of 5.2 million MTPY of sugar production, however capacity utilization is low and 3.2 million tons of sugar was produced in the year 2001-02. Currently, the industry has the capability of producing 2 – 2.5 million tons of molasses. This can vary depending upon the sugarcane production during the particular year. Molasses production for the last five years is given below. Production of Molasses (MTPY)
Year
Production
1997-98
1,995,788
1998-99
2,113,594
1999-00
1,397,378
2000-01
1,501,501
2001-02
1,822,961 Source:
Annual
Report
2002
Pakistan
Sugar
Mills
Association
The molasses has generally been exported rather than expanding the potential of value addition. Sugar Mills do not have proper storage facilities for molasses. Normally it is stored in open pits in the ground. These pits are exposed to atmospheric changes as well as dirt. Appropriate storage facility can fetch better export price till value addition proposals can be implemented. Around 70% of the molasses produced in Pakistan is exported (mainly to European countries). The balance is being used for industrial production of alcohol and poultry feeds. The processed form of molasses is industrial alcohol. The export of molasses for the last five years is given in the table below: Export of Molasses Quantity 000 Tons
Revenue Million Rs.
Revenue Million US$
1997-98
1,356
2,536
58.70
1998-99
1,835
1,974
42.17
1999-00
1,749
2,200
42.49
2000-01
1,119
2,459
42.24
2001-02
174
4,219
68.22
2002-03*
421
1,022
17.56
Years
*July-December
Source:
Federal
Bureau
of
Statistics
Pakistan can earn more foreign exchange if all the molasses is converted into Alcohol and other value added products.
Uses of Molasses Due to its physical and chemical properties molasses can be mixed directly with other products or it can be used in chemical processes for manufacture of value added products, details are as under: A)
Direct Utilization
B)
Distillery Industry
o Fertilizer (Mixed with Urea) o Animal feed (Molasses meal, block & liquid) o Coal Briquettes o Fuel
o Industrial Alcohol
o Anhydrous Alcohol o Potable Alcohol C)
Other Products
o o o o o o o o o o o
Gasohol Acetic Acid Acetone Butanol Citric Acid Lactic Acid Glycerol Yeast Monosodium Gluconate L-Lysine Itaconic Acid
o Aconitic Acid o Cigarette Filter Tows o Many other derivative products for pharmaceutical and plastic industry Ethyl Alcohol Ethyl Alcohol can be produced by fermentation of the molasses. Only nine distilleries exist in the country out of which five are in operation, one is under construction and the three are temporary closed as per detail given below.
Industrial Alcohol Production in Pakistan (Million Litres)
Name of distillery
Installed
Average Production
Capacity per per annum during annum A.
Operational
last three years
Installed
1 Capacity
15
2 Noon Sugar Mills Distillery
12
3 Shakargang Sugar Mills Distillery
10.38 5.89
7.5
4 Crescent Sugar Mills Distillery
10.5
5 Premier Sugar Mills Distillery
18.0
1.77 3.36 10.09
Khanaza Sugar Mills Distillery 70.5
33.66
Total B.
Under Construction 6 Al-Abbas Sugar Mills Distillery
C.
22.0
Idle Capacity 7 Northern Chemical
11.2
8 Thatta Sugar Mills Distillery
7.0
9 Hysons Sugar Mills Distillery
7.0
Total
25.2
The present availability of Ethyl Alcohol in Pakistan is extremely limited. Seven distilleries are operating with production capacity of 75 ,000 tons per year. Normal Alcohol produced is 95%, which is mostly being exported.
Optimum size of distillery would be 50,000 to 80,000 liters/day capacity, this will be enough for about two sugar mills. A standard design and engineering package may be purchased from abroad and distilleries may be installed with local fabrication.
Gasohol Anhydrous Ethanol with increased concentration of 99.9% can be blended with gasoline, blend is called Gasohol and used as Automobile fuel. It is already being used in other countries of the world like Brazil and USA. Recently India has issued legislation to use Gasohol as automobile fuel with special tax incentives. Use of Gasohol has the following advantages; o
Use of Gasohol would reduce dependence on imported Crude Oil.
o
Molasses is an important indigenous resource; its utilization in Gasohol programme would help increase employment in industrial and farm sectors.
o
Gasohol reduces Carbon Dioxide emissions from automobile and alleviates the problem of global warming by reducing green house gasses.
o
Ethyl Alcohol improves octane rating of Gasoline and thereby reduces dependence on High Octane Blending Component (HOBC) and Methyl Tertiary Butyl Ether (MTBE).
Gasohol use in Pakistan At present, there is no programme in the country to use Ethyl Alcohol as Gasohol in automobile. The present consumption of Petrol stands at 1.27 million tons per year. For a Gasohol programme, with 20% substitution of petrol by Ethyl Alcohol, the quantity of Alcohol required would be 254,000 tons. Pakistan has sufficient feedstock in the form of molasses to meet the requirement of Ethyl
Alcohol for National Gasohol Programme. Only half of the available molasses would be used to fulfill the requirement of this target. Manufacture of Cigarette Filter Tows and Other Chemicals Ethyl Alcohol produced from Molasses can also be used for chain production of Acetaldehyde, Acetic Acid, Acetic Anhydride. Acetic Anhydride when reacted with cotton linters from ginning mills gives Polymers which may be used for production of x-ray films, Photo films, spectacle frames, cigarette filter tows. Cigarette filter tows import alone is around Rs. 1 billion which may be substituted following this chain production. Industrial Alcohol o Present operating capacity is 70.5 million liters, whereas the actual average production per annum during the last three years has been 33.66 million litres i.e. 48% capacity utilization. o Capital cost of a new project is approximately Rs 250-300 million. Animal Feed o 50% consumption of molasses goes for feed stock world wide. o Best available option after Industrial Alcohol for Pakistan. o Very low investment. o Increased milk production by 1 Kg/day/animal. o Cost of molasses block is Rs 2.5/Kg/day/animal. o Additional earning of Rs 16/day/animal. Acetic Acid o Present operating capacity in the country is 7,000 MTPY i.e. Wah Nobel.
o Imports remain between 22,000 MTPY. o Presently imports are increasing due to requirement of ICI PTA plant (which are importing 15,000 - 20,000 tons/annum duty free). o As an immediate step, Ravi Rayon Ltd. may be revived to start consumption of molasses to manufacture products like Alcohol, Acetaldehyde, Acetic Acid, Acetic Anhydride, Acetone and Baker Yeast. Citric Acid o No manufacturing facility available in the country. o All requirements are being met through import. o Domestic requirement is around 3000 to 4000 ton/annum. o Cost of project is Rs. 2 billion to Rs 5 billion depending on the size of the project. o Requirement in country justifies one economic size plant. Coal Briquettes o Low capital cost i.e. Rs 5 to 7 million. o Pollution free. o Can be used in northern areas where natural gas is not available for domestic use. o Requirement of Brick Kilns can be met through Coal Briquettes. o Heating requirements of poultry industry can also be met through uses of coal briquettes. Recommendation o Instead of exporting the molasses in raw form, emphasis should be given to its value addition by setting up downstream industry for the manufacture of alcohol, Acetic acid, oxalic acid, ether and ethyl acetate, etc.
o Experts suggest that the government should make it mandatory for each sugar unit to set up down stream industry which can make sugar industry cost competitive and would also serve the policy of value addition.
PESTICIDES Agriculture productivity is largely dependent upon the use of pesticides. Huge losses in crop output caused by pest attack can be saved by proper and optimum use of pesticides. Pesticides are also used for household hygiene. Pesticides used for crop protection are classified according to their functions like insecticides, fungicides, rodenticides and weedicides etc. Pests can destroy approx. 40% crop in pre-harvest and post-harvest period and therefore the use of chemical compounds for the protection of plants from pests, diseases and weeds have attained great importance in agriculture. Besides the advantage of increasing the crop yield there are several disadvantages of using the pesticides. The excessive and continuous use of pesticides contaminates food grains and pollutes the underground water resources. The use of pesticides also kill the friendly pests and birds, alternate methods are being exploited. The biological method of pest control is claimed to be as effective as the use of synthetic pesticides. It is environment friendly and cost effective. In this method friendly pests are reared in controlled environment and then they are shifted and released in the crop area that needs protection. The friendly pests eat the eggs and larva of the harmful insects and thus provide plant protection. Various public sector organizations, such as Pakistan Agricultural Research Council (PARC) and private organizations, such as Eco-
Conservation Initiatives (ECI) Islamabad are involved in biological pest control programs. Presently, the basic manufacturing facilities for pesticides do not exist in the country. However there were two manufacturing units for the production of Dichloro Diphenyl Trichloro Ethane (DDT) and Benzene Hexa Chloride (BHC) in Pakistan, located at Kala Shah Kaku (Punjab) and Nowshera (NWFP). The total installed capacity of these two units for DDT and BHC were 2,020 and 2,310 MTPY respectively. These units are closed for last many years because both pesticides have been banned for use in Pakistan. Generally, Chlorine containing pesticides have been banned in the world. Pesticides used at present are either organic or inorganic in nature. Organic group contains natural plant oils, nicotine and pakerthsum as natural pesticide. It also contains synthetic pesticides as compound of chlorine like DDT, BHC and endrin, aldrine, dialdrine, heptachlor, etc. Twenty four (24) pesticides including above compounds have been banned in Pakistan because they were hazardous to human health and environment. Since pesticides were subsidized their imports remained under Government control till 1979 when 75% share was passed to private sector while remaining 25% was retained by the Government. However, since February 1985, all subsidies were withdrawn and private sector was fully made responsible for import, distribution and sales of pesticides throughout Pakistan except Baluchistan. Pesticides were allowed to be imported under generic names from 1991. This resulted in several times increase in pesticides business and improved the yield of all crops especially cotton. The formulation industry, which started in 1980s, got a real boost and developed in 1990s. In the year 2000, the local formulation exceeded the imported pesticides.
Production Capacity Presently, the installed capacity for the formulation of various types of pesticides is more than the local requirement. According to Ministry of Food, Agriculture and Livestock (MINFAL), there are about 30 companies involved in the formulation of pesticides. The local formulation products include liquid pesticides, powder and granules and contribute 67% in the local market. Most of the raw materials for formulation including active ingredients and pesticides in finished form are being imported. The sector growth rate is 3%. The installed capacities of the main 19 formulators is given below: Formulation Firm
Welgreen Chemicals, Lahore -
Repacking
Liquid
Solids
Granules
Liquid
Solids
Granules
Litre
Kgs.
Kgs
Litre
Kgs.
Kgs
-
-
-
8,000
-
-
Warble (Pvt.) Ltd., Multan
42,000
-
8,000
16,000
8,000
-
Reliance Chemicals, Karachi
12,000
2,000
-
12,000
4,000
-
FM United (Pvt.) Ltd., Lahore
16,000
-
-
20,000
10,000
-
Agrolet Chemical Industry, Multan
48,000
-
-
48,000
-
-
Agricides (Pvt.) Ltd., Karachi
3,000
4,000
-
3,000
4,000
-
Edgro (Pvt.) Ltd., Karachi
4,200
4,500
-
4,200
4,500
-
-
-
14,000
3,000
-
-
24,000
3,000
3,000
24,000
3,000
3,000
Granulars (Pvt.) Ltd., Karachi Pakistan Agro Chemical, Karachi
Syngenta, Karachi
(16,000+
(16000 +
8,000)
8000)
20,000
-
6,000
20,000
4,000
6,000
8,000
-
4,000
5,000
-
4,000
Union Agro Industries, Karachi
-
-
12,000
-
-
-
Bayer DAS (Pvt.) Ltd., Karachi
7,500
-
-
12,000
3,000
-
12,000
1,500
-
12,000
15,000
-
-
5,000
-
6,000
2,000
-
Pak China Chemicals, Lahore
96,000
-
-
96,000
-
-
AventisCrop Science, Karachi
22,500
-
-
30,000
2,500
-
(17000 +3000) R.B. Avari (Pvt.) Ltd., Karachi
Famy Industries, Karachi N.I.C.L., Karachi
Marvi Agrochem., Karachi
32,000
10,000
-
32,000
10,000
-
-
-
-
-
-
-
347,200
30,000
47,000
361,200
70,000
13,000
ICI Pakistan, Lahore (Close down formulation plant) Grand Total:
Source: Department of Plant Protection, M/o Food, Agriculture & Livestock
Import of Pesticides (Million Rs)
Year
1988
1999
2000
2001
2002
2003*
Value
6,960
7,324
4,971
7,741
6,790
2,193
*July-Dec.
Source: Department of Plant Protection, M/o Food, Agriculture &
Livestock
Liquid pesticides account for 95% of the total consumption. Remaining 5% are powder, dust or granules. Insecticides account for 88%, herbicides 11% and fungicides 1% of the total pesticides used for plant protection. Additional quantities of pesticides are used for public health and household. Supply & Demand Major use of pesticides is for the cotton crop, which consumes about 71% of the total pesticides used in Pakistan. The import of pesticides, local formulation and local demand is shown in the table below. Imports from China are on the rise presently catering for 60% demand. Imports, Demand & Local Formulation of Pesticides (M. Tons)
Pesticides
Local
Total
Year
Imports
Formulation
Demand
1998
22,765
18,811
41,576
1999
27,210
18,470
45,680
2000
19,764
41,535
61,299
2001
20,678
26,914
47,592
2002
27,099
42,794
69,893
2003*
13,111
16,763
29,874
*July-Dec.
Source: Department of Plant Protection, M/o Food, Agriculture &
Livestock.
Future Prospects This sector lacks production of base chemicals. It is not possible to manufacture all active ingredients in the country because of nonexistence of petrochemical base. However, few ingredients can be produced in Pakistan specially base chemicals used in the production of pesticides for the cotton crop. Around US$ 1.0 billion (Rs 60 billion) is spent on cotton crop every year from sowing to harvesting. The share of plant protection for cotton crop is 33% or US$ 0.33 billion. This shows the importance and need for local pesticides industry. The manufacturing of basic chemicals requires a comprehensive “Pesticides Policy” to encourage investors to invest in the industry and provide quality pesticides to farmers at affordable prices. Tariff Structure Present tariff structure of Pesticides is given in the table below: S.No.
HS Code
Commodity Description
C. Duty 2002-03
Technical Materials (Raw Materials) 1
Alpha cyano, 3-phenoxybenzyl (-) cis, trans 3-(2,2-diclord 2926.9010 vinyl) 2,2 dimethyl cyclopropane carboxylate
2
2926.9020
3
4
(S)-2-(4), chloro phenyl)-3 methyl butyrate Cyano, 3-phenony benzyl 2926.9030 2,2,3,3 tetra methyl cyclopropane carboxalate 2-N, N-Dimethyl amino-1 2930.2010 sodium thiosulphate, 3- thiosulfourropane
5
5 5
5
Comments
S.No.
HS Code
Commodity Description
C. Duty 2002-03
5
2930.9010
2 N, N-dimethyamino 1,3 disodium thiosulphate propane
5
6
2930.9020
O, S-dimethyl phosphoroamidothioate
5
7
2930.9030
S-S (2 dimethyl amino (trim ethylene) bis (thio carbamate)
5
8 9
10 11 12 13 14 15 16 17 18 19 20
Diafethiuran technical 2930.9040 itertbutyl) 3-2-6 disopropyl (4-phenoxyphenyl) thiourene O-O diethyl O- (3,5,6 trichloro 2930.9050 pyridinyl) phosphorothioate O-(4-bromo, 2-chloro phenyl) 2930.9060 o-ethyl s-propyl (phosphorothioate) O,O diethyl O-(3,5,6-trichloro 22930.9070 pyridyl) phosphorothioate
2932.9910
2,3-dihydro 2-2 dimethyl-7 benzofuranyl methyl carbamate
O, Diethyl, O (2, iso propyl-6 2933.5910 methyl-pyrimidin-4-YL) phosphoro thioate 1-Tert, butyl-3 2,6 iso propyl 42933.5920 phenoxy phenyl thiourean 6-Hexanelactam 2933.7100 (epsilon-caprolectam) Other (O-ethyl S, S-di-sec-butyl 2903.6900 Phosphoroddithioate) Cyclonic, Cyclenic or 2916.2000 Cycloterpenic monocarboxylic acids etc. Other (4-chloro 22918.9000 methylphenoxyacetic acid) Urines and their derivatives; 2924.2100 salts thereof Other Nitrile-function 2926.9090 compounds
5 5 5 5 5 5 5 5 10 10 10 10 10
Comments
S.No.
HS Code
Commodity Description
C. Duty 2002-03
21
2930.9010
2 N, N-dimethylamino 1,3 disodium thiosulphate propane
5
22
2930.9030
S, S 2-dimethylamino (trim ethylene) bis (thiocarbamate)
5
23 24
Other (0,0-dimethyl-O- (12930.9090 methyl-2-methylcarbamoylvinyl phosphate) Other lactones (4,5,6,72932.2900 tetrachloropthalide)
10 10
25
2,3-dihydro-2, 2-dimethyl-72932.9910 benzofuranyl (dibutylamine) thio) methyl carbamate
26
2933.2900
27
Other [3-(6-chloro-3-pyridinyl) 2933.3990 methyl]-2-thiazolidinylidene]cyan amide
10
28
Trnas-5- (4-chlorophenyl)-N2934.1000 cyclohexyl-4-methyl-2oxothiazolidine-3-Carboxamide
28
29
2934.9100 Furazolidone
10
30
Other: (S)-methy19-chloro-2,5dihydro-2[[methoxycarbonyl)[4 (trifluoromethoxy) 2934.9990 pheynyl]amino] carbonyl] indeno[1,2-e][1,3,4] oxadiazine-4a(3H)-carboxylate
10
Other (Heterocyclic compounds with nitrogen hetero-atoms only
5
10
Solvents: 31 32 33
Aromasol - H, Shellsol AB, 2707.5000 Solvesso 100%, Aromatic C9 Petroleum Solvent 2710.1949 Shellsol D70 (K) 2902.4100 Xylene
20 25 5
Comments
S.No.
HS Code
34
2902.4400
Commodity Description
35
Mixed Xylene isomers (Epichlorohydrine) 2905.3200 Propylene Glycol
36
2909.4900 Other (1-Methoxy 2-Propanol)
37 2914.1100 38 2914.2200 39 2914.2900 40 2917.3200 Emulsifiers:
Acetone Cyclohexanon Other (Isophorone) DOP
43 44
Other (Biopolymer AG/Xanthanm Gum) Animal or vegetable fats and 1518.0000 oils and their fractions 2905.3900 Other (Hexylene Glycol) 2926.9000 N-Methylpyrolidon
45
3402.1110 Sulphonic Acid (soft)
46
3402.1300
41 42
47 48
1302.3900
Non ionic organic surface-active agents (Emulsifiers) CAPB (Emulsifier 1371 A, 3402.1910 Sermul EA 88) Prepared waxes including 3404.9010 sealing waxes
C. Duty 2002-03 10 10 10 25 10 10 25
25 Rs 10800/MT 5 5 10 20 10 20
Finished Products
50
Mosquito coils, mats and the like 3808.1020 Naphthalene balls
51
3808.1030 Sex pheromone
20
52
3808.1040 Para dichlorobenzene blocks Preparations put up in retail 3808.1050 packing
25
54
3808.1060 Pesticides
5
55
3808.1070 Phosphatic insecticides
5
49
53
3808.1010
25 25
25
Comments
S.No.
HS Code
Commodity Description
C. Duty 2002-03
56
3808.1090 Other
25
57
3808.2000 Fungicides Herbicides, anti-sprouting 3808.3000 products and
5
59
3808.4000 Disinfectants
25
60
3808.9000 Other
25
58
Crop Life Pakistan
(formerly Pakistan Agricultural Pesticides Association, PAPA) 909-910, Park Avenue, P.E.C.H.S. Block-6, Sharah-e-Faisal, Karachi-75400 Phone: 92-21-4541572 Fax: 92-21-45461131 Email:
[email protected]
5
Comments
PLASTICS AND RESINS Plastics material being consumed in Pakistan includes thermoplastics and thermosetting resins. Among the thermoplastics category bulk consumption is of Polyethylene (PE), Polyvinyl Chloride (PVC), Poly Propylene (PP) and Polystyrene (PS). The thermosetting resins being consumed are urea formaldehyde, phenol formaldehyde,
melamine
formaldehyde
and
Polyester
resins.
The
total
consumption of major thermoplastics (i.e. PE, PVC, PP, PS) in 2001-02 was estimated to be 404,500 metric tons. With the exception of PVC, total requirements of thermoplastics are being met through imports. In 2001-02 import bill of thermoplastics (including VCM and styrene) was estimated to be over US$ 260.00 million. Supply and Demand A discussion on present and future demand pattern of each product group is presented in the following paragraphs. The product-wise breakup is given in the table below: (000 M. Tons)
Product
Consumption 2001-02
Estimated Demand 2004-05
2009-10
Polyethylene (PE)
157.50
235.00
340.00
Poly Propylene (PP)
144.00
150.00
205.00
Polyvinyl Chloride (PVC)
78.00
95.00
120.00
Polystyrene (PS)
23.40
35.00
45.00
402.90
515.00
710.00
TOTAL
Source: ENAR Petrotech Services
The thermoplastics consumption during last decade i.e. 1992-2002 has increased on an average @ 8.5% per annum. PE is the leading thermoplastic material being consumed with around 43% share in country’s thermoplastics consumption, PP and PVC enjoy shares of 29% and 21% respectively. The consumption of Polystyrene (PS) is relatively small as it has a share of around 6% in country’s thermoplastics consumption. PE, the leading thermoplastic material, has established its usage in packaging film, household articles, automotive and industrial parts. PP is used in the form of woven bags and cloth, household articles, furniture and packaging film, while the PVC usage include pipes, wires and cable, shoes sheets and resins. PS is being consumed in electrical and electronic parts, household articles, automotive parts and packing material. Pak Petrochemical Industries, Karachi is producing polystyrene from imported styrene. The polystyrene production capacity of the plant is 27,000 MTPY. Basic raw materials for this group are being imported. PVC resin and some plasticizers are being manufactured locally. PE, PP, PS resins are also imported to manufacture down stream products. The down stream plastic industry itself consists of thousands of units of all sizes in organized and un-organized sectors. A break down of plastic materials with growth and their end uses in industries are given below. Valika Chemicals, Karachi was producing polyethylene in 1960s, which has since closed down. Now there is no plant producing polyethylene or polypropylene. A plant, Northern Chemicals, was established near Fateh Jang in recent past for the production of PE resin but due to unknown reasons it could not initiate its production.
Breakdown of Plastic Materials with Growth Plastics
End Use Industries
Poly Vinyl Chloride (PVC) Polyethylene (PE) Polypropylene (PP) Polystyrene (PS)
Growth
Pipes, Artificial Leather, Cable Coating, Packaging, Footwear Film for Packaging, Bottles and Pipes
10% 27%
Woven Bags, Auto Parts, Packaging, Pipes House ware and Medical Applications and pipes House & Sanitary Wares, Auto Parts, Electrical Parts Source:
Plastic
17% 6% Manufacturers
Association
The import of plastic resins is very high because Pakistan lacks the petrochemical base. The following table depicts the import trend. Import trend of Plastic Resins (MTPY)
Year
Polyethylene
Polypropylene
Polystyrene
1997-98
94,300
85,700
11,800
1998-99
126,500
99,300
16,400
1999-00
122,900
102,500
14,000
2000-01
154,900
109,500
10,700
2001-02
157,472
144,051
7,755
2002-03*
96,576
73,223
3,192
*July-December CBR. Association
PVC Resin
Source:
Federal Bureau Of Statistics & Plastic Manufacturers
PVC is an important material used for wide range of applications. PVC is used for doors, windows, pipes & fittings, profiles, food packaging, furniture, electronic components, foot-wear and cables. The raw materials used to manufacture Poly Vinyl Chloride (PVC) resin are Vinyl Chloride Monomer (VCM) and Ethylene Di-Chloride. PVC resin is converted to various PVC compounds by blending it with Di-Octyl Ortho Phthalate (DOP), stabilizers and pigments. Pakistan PVC Ltd, Karachi which had a capacity of 6,000 MTPY is closed since 1997. This was a grass root plant to manufacture PVC through acetylene using Calcium Carbide as raw material. Engro Asahi Polymer & Chemicals started its production in December 1999 at Port Qasim, Karachi. It has an installed capacity of 100,000 MTPY. The project was completed at the cost of Rs 4.0 billion. The plant can produce 5 grades of PVC resin and is based on imported VCM. The production and export of PVC resin in the recent years is given below: PVC Production and Export (MTPY)
Year
Production
Export
2000
65,000
25,512
2001
68,600
12,900
2002
83,600
16,407 Source: Engro Asahi Polymer & Chemicals
The imports decreased since the commissioning of Engro Asahi PVC plant and are given below: Imports of PVC Resins (M. Tons)
Year 1997-98 1998-99
PVC Resin 48,026 68,213
1999-00 2000-01 2001-02 2002-03*
34,602 19,268 13,144 5,068
*July-December
Source: Federal Bureau of Statistics
DOP (Di-Octyl Ortho Phthalate) DOP is a general plasticizer, which is being manufactured by five big industrial units. The major raw materials used for the manufacture of DOP are Phthalic Anhydride and 2-Ethyl Hexanol. DOP is mixed with PVC resin to produce PVC compounds, which are used for further processing and manufacturing of PVC products. Present capacity of DOP is about 100,000 MTPY but the demand is only 35,000 MTPY. Nimir, Qaiser LG, ATS Synthetic, Ravi Chemicals and Shafi Chemicals are the major manufacturers of DOP. Production capacity of major DOP units (MTPY)
Name of Company
Capacity
Qaiser L. G.
Lahore
30,000
Shafi Chemical Industry Ltd.
Lahore
17,500
Nimir Chemicals Pakistan Ltd.
Lahore
15,000
A.T.S. Synthetic (Pvt.) Ltd.
Lahore
14,040
Ravi Chemicals
Lahore
5,000
TOTAL
81,540 Source: Manufacturers
Future Prospects The installed capacity is much more than the demand as such no immediate investment prospects. Polystyrene
There is only one unit in Pakistan, Pak Petrochemical Industries (Pvt.) Ltd., Karachi. This plant started production in 1987 with an initial capacity of 5,000 MTPY. The capacity was increased over the years and current capacity is 27,000 MTPY. Polystyrene is being produced from imported bulk styrene. They are producing three grades of polystyrene, which includes general purpose, high impact and expandable polystyrene. (M. Tons)
Year
Production
Import
Consumption
1997-98
1,470
11,798
13,268
1998-99
1,302
16,387
17,689
1999-00
1,017
14,452
15,469
2000-01
11,627
18,938
30,524
2001-02
16,394
7,756
23,398
Source: Federal Bureau of Statistics Pak Petrochemcial (Pvt.) Ltd.
Future Prospects The country’s present demand is around 35 - 40,000 MTPY. This plant caters to 75% of the country’s demand. Any future expansion would be easier for the existing plant as plant carries high technology and the cost of a new set up would run in million of dollars. However, styrene can be made available locally if a Petrochemical base is established. Unsaturated Polyester Resin These are used to make buttons and glass reinforced plastics. Their installed capacity is 14,000 MTPY while actual production is 3,000-4,000 MTPY. These are prepared from Phthalic anhydride, maleic anhydride, glycols, isophthalic acid and adipic acid.
Production Capacity The production capacity of the plants is as under: (MTPY)
Name of Company
Rated Capacity
Current Production 2001-02
Delta
Industries
(Pvt.) Lahore
2,400
1,100
BASF Pakistan Ltd.,
Karachi
3,600
1,500
BASFA,
Lahore
2,400
500
Al-Khair,
Karachi
2,400
500
Polymer Industries,
Gujranwala
1,200
380
1,200
120
480
40
13,680
4,140
Ltd.
Indu Resin Mirza Jee,
Karachi Multan
Total
Source: Delta Industries (Pvt.) Ltd.
Future Prospects The installed capacity is more than the demand which is around 5,000 MTPY as such there is no room for future investment at the present. Polyurethane Polyurethane is used for the manufacture of foam products such as Mattresses, Sofa cushions, car seats and other furniture applications. The main foam producers along with their production capacities are given below:
Unit Master Molty Foam (Pvt.) Ltd, Diamond Foam (Pvt.) Ltd.,
Karachi and Lahore Karachi and Lahore
Production Capacity 2,500 1,500
Al-khair Foam (Pvt.) Ltd., Uniforam (Pvt.) Mehran Foam (Pvt.) Ltd. Vohra Foam (Pvt.) Ltd., TOTAL
Lahore Lahore Karachi Karachi
1,000 500 600 300 6,400 Source: Respective Manufacturers
Raw Material Polyurethane is being manufactured by mixing Polyols and ISO cyanides in the ratio of 40:60. Both of these are being imported. Imports Imports of Polyurethane for the last five years is given below: Tons Million Rs.
Year 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03*
Quantity 1,091 1,206 1,801 2,206 2,583 1,307
Value 94 120 181 242 263 148
*July-Dec.
Future Prospects Keeping in view the import and local production, it is worthwhile to conduct a feasibility study for the manufacture of basic raw material for Polyurethane.
Alkyd Resin Alkyd resins are the most important class of protective coatings and they are used in the manufacture of enamel paints. The raw materials for making alkyd resin are Phthalic Anhydride, Soya oil, Coconut oil, Glycerine, Xylene etc.
Production Capacity Apart from a number of manufacturers in un-organized sector, there are thirteen known units manufacturing alkyd resins. Their production capacities are given below: (MTPM)
Manufacturing unit Delta Industries
Lahore
Nimir Resins Ltd.
Sheikhupura
Berger
Paints
Installed capacity 600
Production 580
551
228
266
171
Pakistan
Ltd. Royal Resin
Lahore
266
171
Complex Chemical,
Hattar
181
76
BASFA,
Lahore
85
38
85
38
Premier Resin
Lahore
Shalimar Polymer Ind.
Lahore
266
133
Shalimar Resin
Lahore
85
38
Millat Industries
Lahore
181
76
Champion Paint Ind.
Lahore
85
38
Crona,
Lahore*
48
19
Impex Resin
Lahore
181
38
2,880
1,644
Total *Temporary closed.
Source: Delta Industries (Pvt.)
Ltd.
Imports In spite of excessive installed capacity in the country, small quantity of Alkyd Resin is being imported as shown below in the table: (M. Tons) (Million Rs.)
Year 1997-98
Quantity
Value
101
10
1998-99 1999-00 2000-01 2001-02 2002-03*
53 70 57 139 24
*July-December
7 9 11 15 3 Source: Federal Bureau of
Statistics
Future Prospects The installed capacity is more than the demand which is around 5,000 MTPY as such there is no room for future investment at the present. BOPP Film (Biaxially Oriented Polypropylene) BOPP film is used in wrapping lamination and it is made from the polypropylene polymer. Three plants are manufacturing BOPP locally. Detail is as under: (MTPY)
Name
Capacity
Tri-Pak Films Ltd.
Hattar
Macpac Films Ltd.
Karachi
3,500
Metaplas (Pvt.) Ltd.
Karachi
3,000
TOTAL
12,000
18,500
Future Prospects Tri-Pak Films Ltd. are planning to put a new plant of BOPP film at Karachi having a capacity of 12,000 MTPY. This shall be completed within two years time. Metaplas (Pvt.) Ltd. are planning to expand the capacity by 7,000 MTPY. Keeping in view of the above expansion, the sector carries sufficient capacity to meet the local demand. Plastic Processing Industry Plastic materials are processed or fabricated into final products. As such, the processing industry serves as ‘go-between’ the plastic materials producers
and end-users. In many developing countries, the processing industry has preceded the plastic materials production, same is the case in Pakistan. Pakistan’s plastic processing industry consists of thousands of large, medium and small processors. The industry is divided into organized and unorganized sector and is equipped with imported and locally manufactured machinery. It produces various types of plastic products ranging from packaging film to pipes, wires and cables, industrial and automotive parts. The types of processes being employed by the industry include extrusion, blow and injection moulding and calendaring, etc. The total plastic materials processing capacity in the country is estimated to be around 500,000 MTPY. The estimated shares of major processes employed by the industry are as follows: Share in Total Processing Capacity Process %age share
Injection Moulding 50
Blow Moulding 10
Extrusion 15
Woven Bag 05
Packaging film & Misc. 20 Source:
ENAR
Total 100 Petrotech
Services
The injection and blow moulded products include household articles, automotive or industrial parts, bottles, containers, shoes, etc. The products made by employing extrusion process include packaging film, pipes, wires, cables and woven bags or cloths. Future Prospects Petrochemical complex if and when established can provide raw material for all these products for import substitution. Tariff Structure Present tariff structure of PVC and Polymers is given in the table below.
Poly Vinyl Chloride (PVC) Chain
S.No. HS Code
Commodity Description
Custom Duty 2002-03
Basic Raw Materials 1 2901.2100 Ethylene 2 2903.1500 Ethylene Dichloride (EDC) 3 2903.2100 Vinyl Chloride Monomer(VCM)
5 10 5
Chemicals and Catalysts 4 2907.2300 Bisphenol-A 5 2907.2900 Other Poly-Phenols 6 2915.9000 Other (catalyst peroxides) 7 2918.2900 Other Salicylic acid and its salts
10 10 10 10
8 9 10
Other(Organic derivative of hydrazine or hydoxylamine) 2930.9090 Other(organ-sulfur compounds) Poly vinyl alcohol( PVA) 3905.3000 suspension agent 2928.0090
Comments
10 10 10
11
3909.4000
Phenolic Resin (anti-fouling agent)
25
12
3824.9030
Prepared Binders (condensate treatment)
20
13
3824.9091
Other prepared binders (scale corrosion inhibitor) MDI
5
14
Other prepared binders (scale 3824.9099 corrosion inhibitor)
25
CD is 10% for pharmaceuticals vide SRO.372 (1)/2002.
25
10% duty on medical grade PVC if imported for disposable syringes vide SRO 358(1)/2002.
Intermediate
15
3904.1000 Polyvinyl Chloride (PVC)
S.No. HS Code 16
Custom Duty 2002-03
Commodity Description
3904.6900 Other polymers (PE, PP, etc.)
Comments
20
Raw Materials for PVC Compounds Phthalate Based Plasticizers 17 2917.3200 DOP (Dioctyl OrthoPhthalate) Dinonyl or didecyl ortho18 2917.3300 phthalate(DINP/DIDP) Others(Ester of Ortophtalate 19 2917.3400 acids)
25 25 25
Non-Phthalate based Plasticizers Compound platicizers for 20 3812.2000 rubber & plastics Other prepared binders (scale 21 3824.9091 corrosion inhibitor) MDI 22
3824.9099
25 5
Other prepared binders (scale corrosion inhibitor)
25
10%CD for pharmaceuticals vide SRO. 372(1)/2002.
Stabilizers (individually or as ‘one pack” systems) Anti-oxidising preparations & 23 3812.3000 20 compound stabilizers
S.No.
HS Code Commodity Description
Custom Duty 2002-03
Comments
Color Pigments 24 25
2803.0010
Carbon Black (Rubber grade)
2803.0020 Acetylene Black
25 10
5% CD on Acetylene Black for battery cells vide SRO. 358 (1)/2002.
S.No. 26 27
HS Code Commodity Description 2803.0090 Other Carbon Black 2823.1010 Titanium oxides
Custom Duty 2002-03 20 10
28
3204.1700
Pigments and Preparations thereon
20
29
3206.1100
Titanium Di Oxide(80% & above)
10
30
3206.1900 Other Titanium di-oxide
20
31
3206.2010 Chrome Yellow
20
32
3206.2090 Other Chrome Yellow
20
33
3206.4100 Ultramarine
20
34
3210.0020
Prepared water based pigments
Comments
10% CD for printing ink vide vide SRO.358 (1)/2002. 10% CD for printing ink vide vide SRO.358 (1)/2002. 10% CD for printing ink vide vide SRO.358 (1)/2002. 10% CD for printing ink vide vide SRO.358 (1)/2002. 10% CD for printing ink vide vide SRO.358 (1)/2002. 10% CD for printing ink vide vide SRO.358 (1)/2002.
20
Fillers 35
Other prepared binders 3824.9091 (scale corrosion inhibitor) MDI
36
Other prepared binders 3824.9099 (scale corrosion inhibitor)
37
2836.5000
Calcium Carbonate (plain)
5
25 10
10% CD for pharmaceuticals vide SRO.372 (1)/2002.
S.No. 38
HS Code Commodity Description 2836.????
Custom Duty 2002-03
Comments
Calcium Carbonate (coated)
Lubricants 39
Animal and Vegetable 1518.0000 Fats and Oils (Epoxidised Rs.10,800/MT Soyabeen Oil)
40
2712.2000
Paraffin Wax (Micro crystalline/other)
20
Semi Finished 41
3904.2200 PVC Compound
20
42
3915.3000 PVC Scrap
25
Tariff for Plastics (Polymers) S.No.
HS Code
Commodity Description
Custom Duty 2002-03
Basic Raw Materials 1 2901.2100 Ethylene 2 2901.2200 Propylene 3 2902.5000 Styrene
5 5 5
Intermediate Raw Materials 4 3901.1000 Polyethylene
20
5
3902.1000 Polypropylene
20
Semi Finished 6
3901.9000
Polyethylene Compounds
20
Comments
C. Duty @10 % for manufacture of disposable syringes & needles, vacuum flasks and printing ink vide SRO.358 (1)/2002.
7
Polypropylene 3902.3000 Copolymers
20
8
3902.9000
Polypropylene Compounds
20
9
3903.1100 Expandable polystyrene Other (General Purpose 3903.1900 and High Impact Polystyrene)
20
3903.9000 Others (MBS copolymer)
20
10
11
S.No. HS Code
Commodity Description
Finished 12 3920.2010 BOPP Films 13 3920.4300 Plastic Sheets (Rigid) 14 3920.4900 Plastic Films (Flexible) Plastic Sheets 15 3921.1100 (Polystyrene) Plastic Sheets (Vinyl 16 3921.1200 Chloride)
20
Custom Duty 2002-03
25
25
18
5906.9900 Semi Conducting Tape
25
Polypropylene woven sacks
Comments
25
3921.9000 Plastic Films (Other)
6305.3300
10% CD for audio / video cassettes vide SRO.358 (1)/2002. 10% duty if used for ribbons of typewriters/comput er printers. vide SRO.358(1)/2002.
25 25 25
17
19
10% CD for manufacture of printing ink vide SRO.358 (1)/2002. 10% CD for manufacture of printing ink vide SRO.358 (1)/2002.
25
C. Duty 10% for toe puff material & disposable syringes and 20% CD on aluminium foil PE laminated sheets vide SRO.358 (1)/2002 C. Duty 10% for import of Jumbo bags (One Ton or more) for ICI for packaging of PTA
vide SRO.358 (1)/2002
Glass Reinforced Fiber 1
6815.1000 Carbon fiber
5
2
7019.3100 Glass Fibers Mats
10
Tariff of Plasticizers / Resins
S.No. HS Code Commodity Description
Custom Duty 2002-03
Comments
Basic Raw Materials 1
1507.1000 Crude Soyabeen Oil
2
2902.4100 Ortho-Xylene
Rs.9,050/MT 5
Intermediates/Semi-Finished 3
1513.1100 Crude Coconut Oil
4
1516.1000 Hydrogenated Fat Oils
5 6 7
2707.3000 Xylole 2710.0000 Mineral Turpentine (MTT) 2823.0000 Titanium oxides 2-Ethyl Hexanol (Octyle 2905.1600 alcohol & isomers) Propylene Glycol 2905.3200 (Industrial) 2905.4200 Mono Pentaerythritol 2909.4100 Diethylene Glycol 2917.1400 Maleic Anhydride DOP (Dioctyl Ortho 2917.3200 Phthalate)
8 9 10 11 12 13
Rs.9,500/MT 10% CD for manufacture of Rs.10,200/MT drugs vide SRO.372 (1)/2002. 10 N/A 0 5 10 10 10 10 25
S.No. HS Code Commodity Description
Custom Duty 2002-03
14
2917.3500 Phthalic Anhydride
25
15
2917.3900 Isophthalic Acid(IPA)
10
16
2922.1900
Amino Ethyl/Ethanol Amine (Other)
10
17
3402.1300
Non-Ionic Surface Active Agent (Bulk)
Other Surface Active Agents(CAPB) 19 3907.5000 Alkyd Resin Un-Saturated Polyester 20 3907.9100 Resin End Use 21 3209.1000 Enamel Paint Other Paints/ 22 3209.9000 Emulsions/Hardeners/ Varnishes 18
3402.1910
20
Comments Customs Duty 20% f vide SRO.358 (1)/2002. Customs Duty 10% for manufacture of drugs vide SRO.372 (1)/2002.
Custom duty 5% for pesticides vide SRO.358(1)/2002 and 10% for drugs vide SRO.372(1)/ 2002.
10 25 25 25 25
23
3402.1200
Surface Active Agents (Bulk)
20
24
Organic surface Active 3402.9000 Agent (Detergents for Textile Industry)
20
Custom duty 5% for pesticides vide SRO.358(1)/2002 and 10% pharmaceutical products vide SRO.372 (1)/2002. Custom duty 20% on pearlizer and Sodium Lauryl ether vide SRO.358 (1)/2002 for Shampoo and 10% CD for drugs vide SRO.372
S.No. HS Code Commodity Description
Custom Duty 2002-03
Comments
(1)/2002.
Products of a kind used in Textile or like industries.
25
3809.9100
26
3823.1100 Stearic Acid
Pakistan Plastic Manufacturers Association
Mashriq Shopping Centre, 4th Floor ST-6/A Block 14, KDA Scheme No.24, Sir Shah Mohammad Suleman Road Karachi Tel: 92-21-4942336 Fax: 92-21-4944222
20 25
PAINTS AND VARNISHES Paints are colored & opaque coatings while varnishes are clear coatings. In Pakistan, they are categorized in three major segments. o Decorative – household paints. o Industrial & Automobile paints o Refinish Paints – For repair and renovations. The total market has been generally stagnant over the past 3-5 years. The industry is fragmented with a large number of manufacturers and outlets all over Pakistan. The market is predominantly unorganized. Raw Materials The raw materials for the manufacturing of paints and varnishes include resin binder chemicals such as Alkyd resins, Phthalic anhydride, Soya bean oil, Linseed oil, Coconut oil, Vinyl Acetate Monomer (VAM), Glycols, Poly Vinyl Acetate (PVA) emulsion, Nitrocellulose, Plasticizers, Stabilizers, Pigments such as Titanium Dioxide, Lithopone, Organic pigments, Iron Oxides, Chromes etc. and solvents such as Xylene, Toluene, Butyl Acetate, Methyl Acetate, Ketone, mineral spirits. Only 5% of the raw materials are locally available while 95% are imported. Production Capacity There are three major producers of paint in the country and they together meet the 45% local requirement. Remaining 50% demand is met by the unorganized sector and 5% through imports. The imports of paints are negligible and almost all demand is being met by local producers. Major local paint
manufacturers include ICI Pakistan, Berger Paints and Buxly Paints. There are over 400 units manufacturing paints and varnishes in the unorganized sector. Production of major local plants are given below: Production of Paints Million liters/year
Name of Company
2001
2002
ICI Pakistan
12.0
15.80
Berger Paints
7.5
8.20
Buxly Paints
1.0
1.10
19.5
25.10
Total
Source: Manufacturers
Note: The capacity of plant is indeterminable as it is a multi-product plant involving varying processes of manufacturing.
ICI Pakistan in Lahore is the biggest paint manufacturing plant in the country and actually caters for 30% of the local market. Its capacity is to produce 7 million liters per year water based paints, 2 million liters per year oil based paints and 1 million liters per year epoxy and poly urethane chlorinated resins, inorganic zinc silicates and acrylic paints. Berger Paints Pakistan Ltd. is the 2nd biggest paint manufacturing facility in Pakistan. It started its manufacturing facility in 1955 at Karachi. Berger can manufacture industrial and automotive paints also. At Buxly Paints, about 70% of paint produced is water based, 20 - 25% is oil based and 5% is special epoxy and poly urethane resin for industrial use.
Six manufacturers of decorative paints are ICI Pakistan, Berger Paints, Buxly Paints, Master Paints, Brighto & Gobbis. The industrial paints segment has a large number of applications and uses. Major players in this segment are ICI Pakistan and Berger Paints. Some industrial paints are imported. Import of Paints & Varnishes (M. Tons) (Million Rs.)
Year
Quantity
Value
1997-98
3,230
354
1998-99
3,281
385
1999-00
3,074
352
2000-01
3,364
485
2001-02
6,600
471
2002-03*
1,725
219
*July-December
Source:
Federal
Bureau
of
Statistics
The refinish segment caters the requirements for maintenance of vehicles. Major players in this segment are ICI Pakistan, Berger Paints and Champion Paints. Oxyplast Karachi has the facility to produce powder coating paints. The raw materials are Polyester resin, Epoxy resin, Barium Sulphate, Titanium Oxide and curing agents.
Supply & Demand Total demand in Pakistan is approx. 60 million liters and it is mostly met by local production. During 2001-02, the imports in this sector were around 5 million litres valued at Rs 471 million. The paint units reporting their production to the Federal Bureau of Statistics increased from 142 in 1997-98 to 306 in 2001-02, which represents about 75% of all units in the country. The historical production data for few years is given below: Production of Paints & Varnishes Year
Production of Paints & Varnishes Thousand Liters
M. Tons
1997-98
19,833
5,917
1998-99
21,149
6,501
1999-00
20,749
7,347
2000-01
33,152
10,922
2001-02
27,300
10,341
Source:
Federal
Bureau
of
Statistics
The decorative paints market has been declining since 1999. The documentation drive in 2000 caused a decline in volume and the industry remained stagnant in 2001. The market is expected to grow at a rate of 3%. The industrial paints market is rising primarily due to the increased demand from the automotive sector. This sector uses state of the art electrophoretic and basecoat-clear systems. These are high tech sophisticated systems requiring licensing from major Japanese companies.
The refinish paints demand is expected to remain stagnant or decline due to a shift to higher performance coatings. Nitrocellulose paints which were the mainstay are declining rapidly and are being replaced by 2 pack acrylicpolyurethane paints as the latter are more suited to repair painting of basecoatclear coat used by most automotive assemblers. Powder Coating Chemicals The recent trend in the world is to apply powder coating instead of liquid paints and there are a lot of chemicals required for preparation of metal sheet before powder coating. These chemicals are basically known as pre-treatment or phosphating chemicals, which include degreasing, phosphating Anodizing chemicals etc. There are a number of small units producing above chemicals in Lahore and Karachi catering to the local manufacturers of home appliance like Dawlance, Waves and Multinationals including car makers like Toyota, Honda, Suzuki, etc. Future Prospects The current production is sufficient for local demand. However, the raw material used in this sector are being imported and comes from Petrochemical base, setting up of a Petrochemical base would help backward integration in this sector resulting in industrial growth.
Pakistan Paint Manufacturers Association, ST-6/4, Block 14, Federal B Area, Karachi Phone: 92-21-6321103
Fax:92-21-2560468
Tariff Structure The present tariff structure of Paints is given in the table below:
S.No. HS Code Commodity Description
Custom Duty 2002-03
Comments
Raw Materials 1 2 3
1504.2000 Fish Oil 1506.0000 Other Animal Fats 1513.1900 Other
4
1515.1900 Linseed Oil Refined
5
1515.3000 Castor Oil Refined
6
1515.4000 Tung Oil
7
1516.2000 Vegetable fats & oils
8 9
1520.0000 Glycrine 2530.9090 Turkey Burnt Umber Zirconium ore & 2615.1000 concentrates 2707.3000 Xylole 2707.9910 Carbon black feedstock 2708.1000 Pitch 2714.9000 Glsonite -Asphalt
10 11 12 13 14
10 10 Rs.10,800/MT 10% CD for drugs Rs.10,800/MT vide SRO.416 (1)/2001 10% CD for drugs Rs.10,800/MT vide SRO.416 (1)/2001 Rs.10,800/MT 10% CD for drugs Rs.10,200/MT vide SRO.416 (1)/2001 25 20 5 10 10 10 25
15
2809.2010 Phosphoric Acid
10
16 17
2817.0000 Zinc Oxide 2824.1000 Litharge Sodium Floroborate 2826.9000 (Other) 2827.2000 Calcium Chloride 2833.2100 Magnesium Sulfate 2833.2990 Cobalt Sulfate 2839.1910 Sodium Silicate 2901.2200 Propylene 2902.3000 Toluene
10 10
18 19 20 21 22 23 24
5 5 10 10 10 5 5
C. Duty zero% for phosphatic fertilizer vide SRO. 358 (1)/2002.
S.No. HS Code Commodity Description 25 26 27 28 29 30 31 32 33
2902.5000 2905.1220 2905.1300 2905.1400 2905.3200 2905.4100 2905.4200 2905.4500 2906.2100
34
2907.2300
35
2909.4100
36
2909.4300
37
2909.4400
38 39 40 41 42 43 44 45 46
2909.4900 2912.1100 2912.6000 2914.1100 2914.1200 2914.1300 2914.2200 2914.2900 2914.4000
Styrene Isopropyl Alcohol N. Butanol ISO Butanol Proplene Glycol industrial Trimthylol Propane Mono Pentaerthritol Glycerine* (Glycerol) Benzyl Alcohol Bisphenol-A (DiphenylolPropane ) Di Ethylene Glycol Mono-Butyl Ethers of Ethylene glycol or of DiEthylene glycol Ethyl Carbinol Acetate/ Ethyl Glycol* N.Hexyl Cellosolve Formaldehyde Para-formaldehyde Acetone Methyl Ethyl Ketone Methyl Isobtyl Ketone Cyclo Hexanon-Sextn Isophrone Di-acetone Alcohol
Custom Duty 2002-03 5 10 5 5 10 10 10 25 10 10 10 10 10 10 10 10 25 10 10 10 10 10
47
2915.3100 Ethyl Acetate
20
48 49
2915.3200 Vinyl Acetate Monomer 2915.3300 n-Butyl Acetate Ethyl Glycol 2915.3990 Acetate/Celosolve Acetate Butyric acids,valeric 2915.6000 acids/their salts & esters. 2915.7010 Srearic Acid Other (Ester of acetic 2915.9000 acid)
5 25
50 51 52 53
Comments
10 10 25 10
10% CD for drugs vide SRO.372 (1)/2002
S.No. HS Code Commodity Description 54 55 56 57 58 59
2916.1100 Acrylic Acid 2-EHA (Ethyl Hexyl 2916.1200 Acrylate ) & Butyl Acrylate 2916.1300 Methacrylate 2916.1400 Methyl Methacrylate 2916.3110 Benzoic Acid 2917.1400 Maleic Anhydride
Custom Duty 2002-03 5 5 5 5 10 10
60
2917.3100 Di Butyl Phthalate
25
61
2917.3500 Phthalic Anhydride
25
62
2917.3900 ISO Phthalic Acid
10
63 64 65
2921.4200 Sulphanilic Acid 2921.5900 Di Amino Stilbene 2922.1200 Di Ethanol Amine Amino Ethyl Ethanol 2922.1900 Amine 2924.1000 Acrylic Amides 2926.1000 Acrylonitrile 2926.2000 Di Cynadiamide 2933.6100 Melamine Powder 2933.6900 Others (Cyanuric Chloride)
10 10 5
66 67 68 69 70 71 72
3204.1700
73
3204.2000
Pigments and Preparations thereon
76
Fluorescent Brightening Agent Other synthetic coloring 3204.9000 matter Titanium Di Oxide(80% & 3206.1100 above) 3206.1900 Other Titanium di-oxide
77
3206.2010 Chrome Yellow
74 75
Comments
10% CD for drugs vide SRO.372 (1)/2002 20% CD vide SRO.358(1)/2002 10% CD for drugs vide SRO.372 (1)/2002
10 5 5 10 10 10 20
10% CD for footware and printing ink vide SRO. 358(1)/2002
20 20 10 20 20
10% CD for printing ink vide SRO.358 (1)/2002
S.No. HS Code Commodity Description 78
3206.2090 Other Chrome Yellow
79
3302.9000
80
3402.1110 Sulphonic Acid (soft) Anionic surfactant in less 3402.1190 than 10kg packing
81
Mixture of Odoriferous Substances
Custom Duty 2002-03 20
20
25
3402.1300
Organic surface active agents-Nonionic
20
83
3404.2000
Waxes of poly Ethylene Glycol
10
84
3501.1000 Casein Enzymes for garment 3507.9000 washing
10
3806.1000 Rosin
20
87
3808.9000 Biocide Softeners & Dye fixing 3809.9100 agents 3809.9300 Finishing Agent for leather 3823.1300 Tall oil fatty acids 3823.1910 Palm Fatty Acid Distillate 3824.2000 Naphthanic Acid
25
89 90 91 92 93
Carboxy Methyl Cellulose 3912.3100 & its salts
94
3912.3900
Other carboxy-methyl cellulose
10% CD for drugs vide SRO.372 (1)/2002 10% CD for drugs vide SRO.372 (1)/2002
20
86
88
10% CD for printing ink vide SRO.358 (1)/2002 Customs Duty 10% for manufacture of toilet soap vide SRO.358 (1)/2002
10
82
85
Comments
CD @10% for manufacture of chemical resin vide SRO.358 (1)/2002
20 20 25 20 20 20 10
10% CD for drugs vide SRO.372 (1)/2002 10% CD for drugs vide SRO.372 (1)/2002
Semi-Finished 95
3206.4900 Inorganic Coloring Matters
25
10% CD for printing ink vide SRO.358 (1)/2002
S.No. HS Code Commodity Description
Custom Duty 2002-03
96
3206.5000 Inorganic Coloring Matters
25
97
3211.0000 Dryers
25
98 99
3212.9010 Paste 3214.1000 Resin Cement (putty)
20 25
100
3402.1300
101
3402.1910
Non- Ionic Surface Active Agents (Bulk)
102 103
Other Surface Active Agents (CAPB) 3403.9110 Fat Liquours 3404.9010 Paraffin Wax
104
3404.9090 Synthetic Wax
105
3808.2000
106
Anti Bacterial /Fungicide/ Biocides Other prepared binders 3824.9091 (scale corrosion inhibitor) MDI Other prepared binders (scale corrosion inhibitor)
20
Comments 10% CD for printing ink vide SRO.358 (1)/2002 10% CD for printing ink vide SRO.358 (1)/2002
C. Duty is 5% for pesticides vide SRO. 358(1)/2002 and 10% for drugs vide SRO.372 (1)/2002.
10 20 20 20
10% CD for printing ink vide SRO.358 (1)/2002
5 5
107
3824.9099
25
108
3904.1000 Polyvinyl Chloride (PVC)
25
109 110 111 112
3904.4000 3905.1200 3905.9000 3905.9100
Vinyl Chloride copolymers PVA/ Acrylic Copolymers Laroflex MP 35 Butryl Resin
20 25 20 20
113
3906.9090
Other (Acrylic Polymer in primary form)
20
114
3907.9100 Unsaturated polyster resin
25
10% CD for drugs vide SRO. 372(1)/2002. 10% CD for drugs vide SRO. 372(1)/2002. 10% C.Duty for disposable syringes vide SRO.358 (1)/2002
10% CD for drugs vide SRO.372(1)/2002.
S.No. HS Code Commodity Description 115 116 117 118 119 120
3907.3000 Epoxy Resin Polyester Resins Powder 3907.9900 Coating 3907.5000 Alkyd Resin 3909.2000 Melamine Resin 3909.4000 Phenolic Resin (Powdered) 3909.5000 Polyurethane Resin
Custom Duty 2002-03 20
Comments
25 25 25 25 20
121
3910.0000 Silicone Resin
10
122 123
3911.1010 Petroleum Resin 3911.9000 Other Petroleum Resin
20 20
124
3912.2000 Nitro Cellulose
20
125
7018.2000 Glass Microsphere
20
5% CD for manufacture of vacuum flask vide SRO. 358(1)/2002 and 10% for drugs vide SRO.372 (1)/2002
10% CD for printing ink vide SRO.358 (1)/2002
Finished 126
3208.1000
Paints and varnishes based on polyesters
127
3208.9000 Other Paints
128
3209.9000
129
3210.0090 Other Paints
Other Paints/Emulsions/ Hardeners/ Varnishes
25
25
25 25
10% Customs Duty for manufacture of PU paint vide SRO.358 (1)/2002.
OLEO CHEMICALS Oleo Chemicals are one of the important sectors of any modern economy, as these are used in various important consumer items. These comprise Distilled Fatty Acids (DFA), Fractionated Fatty Acids (FFA), Fatty Alcohols, Fatty Amines, Fatty Esters, Fatty Nitriles, etc. Oleo Chemicals are derived from various oils and fats and they are a renewable source. Almost all types of oils and fats may be used to produce oleo chemicals. The major advantage of oleo chemicals is their bio degradability. These are much more environment friendly as compared to other groups of chemicals. Oleo chemicals are used in soaps (laundry and detergent), shampoos, cosmetics, skin care products, pharmaceuticals, detergents, plastics and a number of other industries. Raw Materials The basic raw materials, most commonly used are, Palm Stearin, Soyabean Oil, Coconut Oil, Palm Kernel Oil, Tallow, Cottonseed Oil, Rapeseed Oil, etc. Some vegetable oils contain more of certain acids than other vegetable oil, so raw material selection depends upon type of products to be produced. Some important specifications, which influence the application of the particular oil, are: o Iodine Value (measure of degree of un-saturation), o Saponification Value (type of fatty acids present in an oil), o Acid Value (quantity of free fatty acids), o Titre (physical appearance of oil at room temperature).
All the above specifications depend upon the particular fatty acid composition of any oil. Technical Know How Globally, Italian and German companies are pioneers in commercial plants technical know how for oleo chemicals. Recently Malaysian companies are also progressing in this field and they have come up with a diversified application of fatty acids in various fields. At present, their research work is centered around Palm Oil and its derivatives. Pakistan has an opportunity to collaborate with such companies to acquire the necessary technical know, for processing and application of oleo chemicals. Manufacturers of Oleo Chemicals Crystal Chemicals, Lahore was the first oleochemical plant installed in Pakistan in 1987 and continued its operation till 1997. This plant was producing Stearic Acid and Soaps. Nimir Industrial Chemicals Limited, Lahore were the second to install an olechemical plant in the country in 1998. This plant is still operative and produces Stearic Acid and Distilled Fatty Acids. A third plant by the name of Gamalux Oleochemicals is being installed at Karachi. This plant shall produce Distilled Fatty Acids. There are other plants, being planned in Pakistan, which are expected to be installed in near future.
Future Prospects Oleochemicals are intermediate products, being used in various consumer products. So, Pakistan, being a population of 144 Million is naturally a major market for oelochemicals. So far, only Distilled Fatty Acids, Glycerin and Stearic Acid are being produced in Pakistan and these are being used in Soaps, Cosmetics, Rubber and Skin Care products. Pakistan’s present production capacities are capable of meeting only a fraction of country’s demand. No fractionated fatty acids, fatty alcohols and fatty esters are being produced in Pakistan so far. These products are highly value added and have specific applications in Cosmetics, Detergents and Skin Care products. So there is great scope of fractionated Fatty Acids, Fatty Alcohols and other highly value added oleochemicals in next decade. Similarly, the production base of Distilled Fatty Acids is likely to expand to many times in near future.
SOAPS, DETERGENTS AND COSMETICS Soaps Soaps and detergents are surface acting agents used for cleaning purposes. Basic raw materials for soap are tallow, palm stearin and caustic soda. These can be converted to: o Laundry Soap by adding fillers like soda ash, kaoline, silicate etc. o Carbolic Soap by adding fillers like silicate and components like crude coconut oil, RBD palm kernel oil etc. o Toilet Soap by adding components like crude coconut oil, RBD palm kernel oil, odoriferous materials. In order to manufacture toilet soaps, tallow or palm oil is consumed 80% while 20% of coconut oil or palm kernel oil is used. Laundry soap contains 7-8% coconut oil and the balance is tallow or palm oil by products. Production Capacity There are several units in the organized as well as unorganized sector involved in the manufacture of soap, both toilet and laundry. The yearly production data of toilet soap reported by 22 reporting units is listed below: Production of Toilet Soap (M. Ton)
Year
Toilet Soap
1997-98
73,051
1998-99
76,166
1999-00
83,335
2000-01
70,689
2001-02
75,774
2002-03*
50,000
*July-Dec.
Source: Federal Bureau of Statistics Unilever Pakistan Ltd. (2002-
03*)
Toilet soap market is expected to grow at a rate of 3%. Therefore, the projected demand of toilet soap in 2004-05 is 82,000 MTPY. Laundry soap segment will continue to decrease because of popularity of washing powders in urban areas. The demand has already fallen from 410,000 MTPY in 1997-98 to 349,000 MTPY in 2001-02. The projected demand for laundry soap in 2004-05 is likely to be 315,000 MTPY. Future Prospects for Export Pakistan with its large population coupled with the country’s strong local manufacturing base, experience and its location has a great potential for becoming an international player and large exporter of soap. The main raw materials for soap manufacturing besides Tallow are Palm Stearin (a more economical Tallow substitute), Palm Kernel Oil and Coconut Oil, for which the following duty structure prevails: Duty Structure Product Palm Stearin Palm Kernel Oil Coconut Oil
(Rs. /Ton)
Duty , 2002-03 10,800 10,800 (originally 15% ad. val.) 9,500 (originally 10% ad. val.)
Ad. Val. Duty 43% 33% 31%
Imported soap is charged a duty of only 25% whereas the duty on above raw material is 31-43%, leading to a serious policy anomaly in which local manufacturing industry is hurt.
If local manufacturers are allowed to import Palm Stearin, Palm Kernel Oil and Coconut oil at the same duty rate as tallow i.e. 10%, this will allow soap industry to compete more effectively against imported and smuggled soap and thereby grow the manufacturing base. This growth of the Pakistan Soap industry will provide the much needed impetus to Pakistan’s nascent Chemical Industry, which will then have a large domestic demand to cater for.
Detergents Basic raw materials for detergents are Linear Alkyl Benzene (LAB) Sulfonates, Sodium Sulfate, Sodium Silicate, Bleaching powder, Rock salt, Caustic soda and Soda ash. The demand is on rise in the urban areas due to ease of applications and effectiveness. Production Capacity Colgate-Palmolive is the leading manufacturer of Detergent Powders in the Country with present production capacity of 30,000 MTPY. They are the only manufacturer of Sulfonic acid in the country. The production capacity of Sulfonic acid based on SO3 Gas and Sulfur is 3,600 MTPY. This capacity is not sufficient to meet their present requirement and are importing around 3,000 ton of Sulfonic acid. The country’s total requirement for Sulfonic acid is estimated to be around 20,000 MTPY. Colgate-Palmolive (Pakistan) Ltd. has started work on a new plant to manufacture Sulfonic acid with an investment of Rs 200 million. With this expansion, they would have additional capacity of 20,000 tons of Sulfonic acid, which will be sufficient to meet the country’s demand. This plant can use both Branched Alkyl Benzene (BAB) and Linear Alkyl Benzene (LAB) to produce Sulfonic acid.
The installed capacity of detergent of Unilever Pakistan Ltd is 9,000 MTPY. Their actual production is around 12,000 MTPY. The production of detergents in the form of powder, bar and liquid as reported by 66 units is given in table below. Production of Detergents (M. Ton)
Year
Detergents
1997-98
42,172
1998-99
43,361
1999-00
52,642
2000-01
63,970
2001-02
77,359
2002-03*
50,000
*July-Dec. Statistics
Source:
Manufacturers
Federal
Bureau
of
Source:
Cosmetics Cosmetics sector covers tooth paste, shampoo, shaving cream, face cream, face powder and other face lifting beauty applications. The raw materials used are Talc, Calcium stearate, Kaolin, Zinc stearate, Magnesium Oxide/carbonate/stearate, Zinc Oxide, Sodium Laurl Sulphate, Beewax, Glyceryl monostearate, Methyl P-hydroxy Benzoate, Petroleum Jelly, Butyl and P-Hydroxy Benzoate, Stearic acid, Sodium Carboxy Methyl, essential oils and sorbitol. Unilever Pakistan, Colgate-Palmolive, Kohinoor Soap & Detergents and Wazir Ali Industries are major players in this sector. Small cosmetic manufacturing units are located in Mingora, Swat.
The yearly production of cosmetics reported by 76 units is given below: Production of Cosmetics (000 Containers)
Year
Cosmetics
1997-98
172,275
1998-99
206,592
1999-00
283,490
2000-01
384,699
2001-02
363,311 Source: Federal Bureau of Statistics
Future Prospects o Fatty acid and Glycerene are two basic oleo-chemicals with huge industrial potential for local use and export. These can be manufactured by setting up fat splitting units. The fat splitting unit can further produce semifinished soaps as raw material for supply to the numerous small soap factories in the country for further processing into ready to use soaps. The value addition for fat splitting unit can be as high as 40-50%. o The detergent industry has a lot of potential to grow. Sulfonated vegetable or petroleum materials are required by this industry as such the setting up of a few sulfonation factories is required. Pakistan Soap Manufacturers Association 148, Sunny Plaza, Hasrat Mohani Road, Karachi Tel: 92- 21- 2634648 Fax: 92- 21- 2634648 / 2563828
Tariff Structure Present tariff structure of Soaps, Detergents and Cosmetics is given in the table below:
S.No. HS Code
Custom Commodity Description Duty 2002-03 SOAP (Toilet & Laundry)
Comments
Raw Materials 1
1502.0000 Tallow Palm Stearine (subsitute of Tallow)
10 Customs Duty 15% if imported by OleoRs.9,500/MT chemical industry vide SRO 58(1)/2002
2
1511.9010
3
1513.1100 Crude Coconut Oil
Rs.9,500/MT
4
1513.2100 Crude Palm Kernel Oil
Rs.9,500/MT
5
1513.2900 RBD Palm Kernel Oil
Rs.10,800/MT
6
3823.1910 Palm Fatty Acid (Distillate)
20
7
3823.1920 Palm Acid Oil
20
8
3823.1990 Palm Kernel Fatty Distillate
25
Auxiliary Raw Materials (Soap) 9
1505.1090 Other (Lanolin)
10
1516.2000
11
1521.9010 Bee Wax
20
12
2707.6000 Cresylic Acid
20
13
2815.1100 Caustic Soda (Solid)
25
14
2909.5000 Other (Irgason DP300)
10
Vegetable fats & oil (Almond Oil)
20 Rs 10,200/MT
S.No. HS Code
Commodity Description
Custom Duty 2002-03
15
2915.2990 Other Potassium acetate
10
16 17
2918.1100 Sodium Lactate 2918.1400 Citric Acid Other Salicylic acid and its 2918.2900 salts
5 10
18 19
3204.1900 Pigment & Dye Colors
20
3204.2000
21
Mixture of Odoriferous 3302.9000 Substances (Perfumes)
22 23 24 25
Fluorescent Brightening Agent
3402.1200 Surface Active Agents (Bulk) 3802.9000 Activated Bleaching Earth 3807.0000 Wood Tar Oils (Oil of Cade) Other Carboxy-Methyl 3912.3900 cellulose
Finished 26 3401.1100 Toilet Soap 27
3401.1900 Laundry Soap
DETERGENTS Basic raw materials 1 3817.0000 Mixed Alkyl Benzene (MAB) Auxiliary Raw Materials 2 2507.0000 Kaolin 3 2833.1100 Di Sodium Sulfate 4 2835.3100 Sodium Triphosphate 5 2836.2000 Soda Ash
Comments
10 20
10% Customs Duty for manufacture of Printing Ink vide SRO.358 (1)/2002.
20 20 20 25 25 10
25 25
10 10 20 10 20
10% Customs Duty for soap industry vide SRO.358 (1)/2002.
S.No. HS Code 6
Commodity Description
2836.5000 Calcium Carbonate (Plain)
7
3204.1900 Pigment & Dye Colors
8
3204.2000
9
3302.9000
10
3402.1300
11 12
3404.2000 3507.9000
13
3809.9100
14
3912.3100
Fluorescent Brightening Agent Mixture of Odoriferous Substances Non lonic Surface active agents Polyethylene Glycol Wax Enzymes Products of a kind used in Textile or like industries. Carboxy methyl cellulose
Custom Duty 2002-03
Comments
10 20
10% Customs Duty for manufacture of Printing Ink vide SRO. 358(1)/2002.
20 20
10% Customs Duty for soap industry vide SRO.358 (1)/2002.
20 10 10 20 20
Intermediate 15 3402.1110 Sulphonic Acid (Soft) 16 3402.1190 Sulphonic acid (Hard)
10 25
Finished 17 3402.9000 Detergent (Powder, liquid)
20
SHAMPOO
Basic raw materials 1 1302.3200 Conditioning Ingredient Other synthetic coloring 2 3204.9000 matter (Dye)
25 20
3
3302.9000
Mixture of odoriferous substances
20
4
3402.1910
Other Surface Active Agents (CAPB)
10
10% Customs Duty for soap industry vide SRO.358 (1)/2002.
S.No. HS Code
Commodity Description
Anionic surfactant in less than 10kg packing
5
3402.1190
6
3504.0000 Protein Other prepared binders 3824.9091 (scale corrosion inhibitor) MDI Other prepared binders 3824.9099 (scale corrosion inhibitor) Other (Acrylic Polymer in 3906.9090 primary form) Styrene/Acrylic Co -Polymer 3906.9090 Emulsion (Styrene)
7 8 9 10
Finished Products 11 3305.1000 Shampoo
Custom Duty 2002-03
25
Comments 5% or 10% Customs Duty on active ingredients of pesticides vide SRO.358 (1)/2002.
10 5 25 20 20
25
TOOTHPASTE
Basic raw materials 1 3301.1900 Flavor (essential oils in bulk)
20
2
3302.9000
Flavor (Mixture of odoriferous substances)
20
3
3402.1990
Other anionic Surface active agents
20
4 5 6
3404.2000 Polyethylene Glycol Wax 3824.6000 Sorbitol Syrup 3912.3100 Corboxy-Methyl Cellulose
10 25 20
Finished Products 7
3306.9000 Toothpaste (Tube/Sachet)
25
10% on Mixture of odoriferous substances vide SRO 358(1)/2002. 5% or 10% Customs Duty on active ingredients of pesticides vide SRO.358 (1)/2002.
S.No. HS Code
Commodity Description
Custom Duty 2002-03
Comments
SKIN CREAM
Basic raw materials 1
2710.1995 Liquid Paraffin
2
2914.5000
3
Ketone-Phenols & Ketone with other Oxygen function Other (Carboxylic acid with 2918.9000 aldehyde or Ketone function)
25 10 10
4
2936.2900 Niacinamide
10
5
3206.1900 Other Titanium di-oxide
20
Mixture of odoriferous substances
6
3302.9000
20
7
3823.1100 Stearic Acid
25
8
3910.0000 Silicone
10
Finished Products 9
3304.9910 Skin Cream (Packed)
25
Customs Duty 10% for manufacture of toilet soap vide SRO.358 (1)/2002
PAPER & PAPER BOARD Production Capacity There are
around 100 units for the manufacturing of paper & paper
board while 12 more are under construction. Total installed capacity of existing units is 560,600 MTPY with an investment of Rs 27.6 billion. The technology used in Pakistan is low to medium with low efficiency. Approximately 70% of the mills are located in Punjab, 20% in Sindh and 10% in NWFP. Installed capacities and physical production of various type of Paper & Paper products of 26 units registered with Pakistan Pulp, Paper & Board Association are given in table below: (M. Tons) Paper Production
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03*
Writing/Printing Paper Wrapping/Packing paper Duplex Paper Board
83,428
81,801
90,725
101,565
113,321
53,775
24,008
18,020
20,696
4,612
9,323
18,779
74,917
90,496
107,831
149,105
147,425
105,096
Chip / Other Board
41,400
24,656
26,363
33,476
35,978
@11,899
Fluting paper
23,160
35,200
53,788
39,702
30,714
8,071
8,279
6,544
8,733
8,966
**40,165
Actual production
254,984
258,452
305,947
337,193
345,727
229,714
Installed Capacity
324,100
331,000
341,000
393,500
393,500
393,500
79
78
90
86
88
117
Other types of Paper
Capacity Utilization %
@Estimated *July-Dec. Source: Federal Bureau of Statistics **Includes White Duplex Board, Chip Board, flutting paper & other types of paper.
Raw Materials & Process The main raw materials used in Pakistan are wheat straw, bagasse, kahi grass, rice straw and wood pulp. The mechanical process is not suitable for these raw materials as it produces powder on grinding which reduces strength of the product. The chemical processes are considered practical for pulping of such short fibers. To manufacture paper, different types of pulps are blended in desired proportions in a stock-blending chest where imported long fiber wood pulp is also mixed. Sulphite Process dominates the local manufacturing process. Sodium Sulphite used for this process is produced locally. It is manufactured by reacting Sulphur dioxide gas with Soda Ash (Sodium Carbonate) solution. Sulphite Process is suitable for cooking wheat straw as it gives high yield up to 50% but it is not suitable for rice straw because of high silica content. Sodium Sulphite used in the process of pulping can be recovered at high cost which is economical for pulp with capacity of 100 M.T./day or above. The process water can also create pollution problems. The principal raw materials for manufacturing of Paper & Paper Board are pulps from wood, wastepaper and agricultural crop wastes. The agricultural wastes like bagasse, rice and wheat straws, cotton linters and cotton wastes are locally available. The chemicals used in various processes of pulping include calcium carbonate, soda ash, caustic soda, sulphur and chlorine, lime, sodium chlorate and sodium peroxide. Alum, starch, rosin, clay and other chemicals are also used at paper making stage, most of these are available locally. To produce paper and paperboard products about 15,000 – 17,000 MTPY of imported chemicals were used during the years 2000-01 and 2001-02. The percentage recovery of short fiber from various raw inputs is Bagasse 28 - 31%,
Wheat straw 33%, River grass 26%, Wood 40%, Cotton linter 85%, Waste Paper 75 - 80%. Wood pulp is imported while waste paper is available locally as well as imported. Supply & Demand During 2001-02, the sector produced Paper & Paper Board worth Rs 15 billion, contributing 2.37% to the total manufacturing sector value. Demand for Paper and Paperboard has shown a growth rate of 9% during the last 4 years. Data on aggregate demand, production and imports for the last five years is given in
table below:
Production, Imports and Demand of Paper & Paper Board Year 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03*
Production M. Tons 254,984 258,452 305,947 337,193 345,727 189,559
*July-December
Imports M. Tons 122,011 145,770 160,370 144,003 178,301 127,076
Demand Consumption M. Tons Kg/capita 376,995 2.87 404,222 3.01 466,317 3.39 481,196 3.45 524,028 3.69 316,635 2.60
Source: Pakistan Pulp Papers & Board Mills Association
Paper and paperboard products are imported from Finland, Canada, USA and China. Few companies have set up plants for manufacture of Medium Density Fiber (MDF) boards from bagasse but it can also be used to set up plants for writing paper and newsprints. List of manufacturers of Medium Density Fiber Board and their capacities are given below: (Cubic Meter)
Name of Manufacturer
Capacity
Al-Noor MDF Board Industries
Moro, Sindh
32,000
Chanab Particle Board
Alipur Chatta, Punjab
12,000
Sethi Board, G.T. Road,
Lahore, Punjab
22,000
Usman Punawala (Under Erection)
Karachi, Sindh
25,000
Newsprint is the major imported finished product followed by white duplex/coated board. Break-up of various types of paper & paperboard imported during the last five years is shown in table below: Import of Paper & Paper Board (M. Ton)
Year
Newsprint
1997-98 1998-99 1999-00 2000-01 2001-02 2002-03*
54,865 63,134 77,167 59,684 70,793 37,592
Other Paper Total & Paper Paper & Paper board board 67,146 122,011 82,636 145,770 83,203 160,370 84,319 144,003 107,508 178,301 89,484 127,076
*July-December ** Pulp, Recover waste Paper/Board
Pulp & Waste paper 50,798 39,955 33,863 35,519 54,922 **58,481
Source: Pakistan Pulp Paper & Board Mills Association
Production cost comprises of 58% for raw materials, 10% labor, 12% fuel & energy and 20% overheads. Future Prospects Baggasse is the residual by product of sugar industry. Traditionally it has been used in boilers as fuel by the sugar mills as no alternate source of fuel like gas or coal was available. The availability of cheap coal for power generation has motivated sugar mills to convert their power generation facilities to coal fired boilers. Only minor modifications in the boilers are required. Pakistan imports large quantities of newsprint paper. Their imports during last 3 years were 207,644 M. Tons. The Baggasse can be converted to newsprint paper. The technology is proven. A project was already planned but not
implemented, as alternate fuel for sugar mills was not available. Coal may be used as fuel for boilers and spared baggasse for value added newsprint paper. Tariff Structure The present tariff structure of Paper & Paper Board is given in the table below.
S.No.
HS Code
Commodity Description
C. Duty 2002-03
Comments
Raw Materials 1
2507.0000 Kaolin Clay
10
2 3 4 5
2509.0000 2818.2000 2818.3000 2836.2000
10 10 10 20
Cal. Carbonate Aluminum Oxide Alumina Soda Ash
6
3806.1000 Gum Rosin
7
3906.9090
Other (Acrylic Polymers in Primary Forms (Acusol)
Intermediate Products 8 5911.3100 Felts/Forming Fabrics<650 gsm 9
5911.3200 Felts/Forming Fabrics=>650 gsm Other textile products and 10 5911.9000 articles Finished Products
11
4901.9100 Prescribed Text Books
20
Duty at 10 & 15% if imported by resin and process industry vide SRO 358(1)/2002
20
5 10 20
5
Customs Duty at 0% on books, magazines, journals and newspapers vide SRO 358(1)/2002
S.No.
12
HS Code
Commodity Description
4901.9900 Other printed books
Raw Materials: Wood & Pulp 1 4701.0000 Mechanical wood pulp. Chemical wood pulp, dissolving 2 4702.0000 grades. 3 4703.1100 Coniferous (unbleached) 4 4703.1900 Non-coniferous (unbleached) Coniferous (semi-bleached or 5 4703.2100 bleached) Non-coniferous (semi-bleached 6 4703.2900 or bleached) 7 4704.1100 Coniferous (unbleached) 8 4704.1900 Non-coniferous (unbleached) Coniferous (semi-bleached or 9 4704.2100 bleached) 10 4704.2900 Non-coniferous 11 4705.0000 Semi-chemical wood pulp. 12 4706.1000 Cotton linters pulp Pulps of fibers derived from 13 4706.2000 recovered (waste and scrap) paper or paperboard. 14 4706.9100 Mechanical pulp 15 4706.9200 Chemical pulp 16 4706.9300 Semi-chemical pulp Unbleached Kraft paper or 17 4707.1000 paperboard or corrugated paper or paperboard 18
Other paper or paperboard made 4707.2000 mainly of bleached chemical pulp, not colored in the mass
C. Duty 2002-03
Comments
5
Customs Duty at 0% on books, magazines, journals and newspapers vide SRO 358(1)/2002
5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 5 10
10
S.No. 19 20 21 22
23 24
HS Code
Commodity Description
Paper or paperboard made 4707.3000 mainly of mechanical pulp (e.g. newspapers, journals) Other, including unsorted waste 4707.9000 and scrap 4801.0000 Newsprint, in rolls or sheets Hand-made paper and paper 4802.1000 board Paper and paperboard of a kind used as a base for photo4802.2000 sensitive, heat-sensitive or electro-sensitive paper or paperboard 4802.3000 Carbonizing base paper
25
Wallpaper base other paper and paperboard, not containing fibers obtained by a mechanical process 4802.4000 or of which not more than 10% by weight of the total fiber content consists of such fibers.
26
4802.5400
27
Paper and paper boards Weighing less than 40 g/m2 Paper and paper boards 4802.5500 Weighing 40 g/m2 or more but not more than 150 g/m2 Paper and paper boards Weighing more than 150 g/m2
28
4802.5800
29
Other paper and paperboard, of which more than 10% by weight 4802.6000 of the total fiber content consists of fibres obtained by a mechanical process.
C. Duty 2002-03 5 -10 5 -10 5 20
10 10
10
20 20 20
20
Comments
S.No.
HS Code
Commodity Description
C. Duty 2002-03
30
Toilet or facial tissue stock, towel or napkin stock and similar paper of a kind used for household or sanitary purposes, cellulose 4803.0000 wadding and webs of cellulose fibres, whether or not creped, crinkled, embossed, perforated, surface-decorated or printed, in rolls or sheets.
20
31
4804.1100 Kraft liner (Unbleached)
20
32
4804.1900 Other sack Kraft paper
20
33
4804.2100 Sack Kraft paper (Unbleached)
20
34 35
4804.2900 Other kraft paper 4804.3100 Unbleached kraft paper
20 20
36
Other kraft paper and 4804.3900 paperboard weighing more than 150 g/m2 but less than 225 g/m2
20
37
38
39 40
41
42 43 44
4804.4100 Unbleached Bleached uniformly throughout the mass and of which more than 4804.4200 95% by weight of the total fibre content consists of wood fibres obtained by a chemical process Other kraft paper and 4804.4900 paperboard weighing 225 g/m2 or more 4804.5100 Unbleached Bleached uniformly throughout the mass and of which more than 4804.5200 95% by weight of the total fibre content consists of wood fibres obtained by a chemical process 4804.5900 Other kraft paper Semi-chemical fluting paper 4805.1100 (corrugating medium) Multi-ply paper and paperboard. 4805.2100 Each layer bleached
20
20
20 20
20
20 20 0
Comments
S.No.
HS Code
45
4805.2200
46
4805.2300
47 48 49 50
4805.2900 4805.3000 4805.4000 4805.5000
51
4805.9100
52
4805.9200
53
4805.9300
54 55 56
4806.1000 4806.2000 4806.3000
57
4806.4000
58
4807.0000 internally with bitumen, tar or
59
4808.1000
60
61 62 63 64 65
Commodity Description With only one outer layer bleached Having three or more layers, of which only the two outer layers are bleached. Other Sulphite wrapping paper Filter paper and paperboard Felt paper and paperboard Other paper and paperboard, weighing 150 g/m2 or less Other paper and paperboard weighing more than 150 g/m2 but less than 225 g/m2. Other paper and paperboard, weighing 225 g/m2 or more. Vegetable parchment Greaseproof papers Tracing papers Glassine and other glazed transparent or transparent papers Paper and paperboard, laminated asphalt.
Corrugated paper and paper board, whether or not perforated
Sack kraft paper, creped or 4808.2000 crinkled, whether or not embossed or perforated. Other kraft paper, creped or 4808.3000 crinkled, whether or not embossed or perforated. 4808.9000 Other paper and paper board 4809.1000 Carbon or similar copying papers 4809.2000 Self-copy paper 4809.9000 Other, carbon paper
C. Duty 2002-03 0 0 0 20 10 20 20 20 20 20 25 25 25 20 25 25
25 25 25 25 25
Comments
S.No.
66
67
HS Code
Commodity Description
Paper and paperboard of a kind used for writing, printing or other graphic purposes not containing fibres obtained by a mechanical 4810.1100 process or of which not more than 10%by weight of the total fibre content consists of such fibres weighing not more than 150 g/m2 Weighing more than 150 g/m2 4810.1200 Paper and paper board
C. Duty 2002-03
0
0
68
4810.2200 Light-weight coated paper
25
69
25
76
4810.2900 Other Bleached uniformly throughout the mass and of which more than 95% by weight of the total fibres 4810.3100 content consists of wood fibres obtained by a chemical process, and weighing 150 g/m2 or less Bleached uniformly throughout the mass and of which more than 95% by weight of the total fibres 4810.3200 content consists of wood fibres obtained by a chemical process, and weighing 150 g/m2 4810.3900 Other 4810.9200 Multi-ply paper and paperboard 4810.9900 Other Tarred, bituminous or asphalted, 4811.1000 gummed or adhesive paper and paperboard 4811.4100 Self-adhesive
77
4811.4900 Other
25
70
71
72 73 74
78
4811.5910 Thermal fax paper
Comments
C. Duty at 20% on cost coated paper vide SRO 358(1)/2002
20
20
20 25 25 25 20
25
C. duty at 10% on insole board vide SRO 358(1)/2002
S.No.
HS Code
Commodity Description
C. Duty 2002-03
Comments C. duty at 10% on insole board & 20% on release base paper and silicon paper vide SRO 358(1)/2002
79
4811.5990 Other
25
80
Paper and paperboard, coated, impregnated or covered with 4811.6000 wax, paraffin wax, stearin, oil or glycerol
25
81
Other paper, paperboard, 4811.9000 cellulose wedding and webs of cellulose fibres
82
4812.0000
83
4813.1000
84
4813.2000
85 86
4813.9000 4814.1000
87
88
89 90 91 92
Filter blocks, slabs and plates, of paper pulp. Cigarette paper In the form of booklets or tubes Cigarette paper in rolls of a width not exceeding 5cm Other Ingrain paper
Wallpaper and similar wall coverings, consisting of paper coated or covered, on the face side 4814.2000 with a grained, embossed, colored, design printed or otherwise decorated layer of plastics Wallpaper and similar wall coverings, consisting of paper covered, on the faced side, with 4814.3000 plaiting material, whether or not bound together in parallel strands or woven
4814.9000 Other Floor coverings on a base of 4815.0000 paper or of paperboard, whether or not cut to size. 4816.1000 Carbon or similar copying papers 4816.2000 Self-copy paper
25
20 25 25 25 25
25
25
25 25 25 25
C. duty at 5% on electrolytic paper vide SRO 358(1)/2002
S.No. 93 94 95
HS Code
Commodity Description
C. Duty 2002-03
104
4816.3000 Duplicator stencils 4816.9000 Other 4817.1000 Envelopes Letter cards, plain post cards and 4817.2000 correspondence cards Boxes, pouches, wallets and writing compendiums, of paper or 4817.3000 paperboard, containing an assortment of paper stationery 4818.1000 Toilet paper Handkerchiefs, cleansing or facial 4818.2000 tissues and towels Tablecloths and serviettes sanitary towels and tampons, 4818.3000 napkins for babies and similar sanitary articles. Baby diapers in retail packing not 4818.4010 exceeding 75 pieces 4818.4090 Other Articles of apparel and clothing 4818.5000 accessories 4818.9000 Other
105
4819.1000
106
Folding cartons, boxes and cases, 4819.2000 of non corrugated paper or paperboard
25
107
4819.3000
Sacks and bags, having a base of a width of 40 cm or more
25
108
4819.4000
96
97 98 99
100
101 102 103
109
110
Cartons, boxes and cases, of corrugated paper or paperboard
Other sacks and bags, including cones Other packing containers, 4819.5000 including record sleeves Box files, letter trays, storage boxes and similar articles, of a 4819.6000 kind used in offices, shops or the like
25 25 25 25
25 25 25
25
25 20 25 25 25
25 25
25
Comments
S.No.
111 112 113 114 115 116
HS Code
Commodity Description
Registers, accounts books, note books, order books, receipt 4820.1000 books, letter pads, memorandum pads, diaries and similar articles 4820.2000 Exercise books Binders (other than book covers), 4820.3000 folders and file covers Manifold business forms and interleaved carbon sets Albums for samples or for 4820.5000 collections 4820.9000 Other 4820.4000
Paper or paperboard labels of all kinds (printed).
C. Duty 2002-03 25 25 25 25 25 25
117
4821.1000
118
4821.9000 Other
25
119
Bobbins, spools, cops and similar 4822.1000 supports of paper pulp, of a kind used for winding textile yarn
25
120
4822.9000 Other
25
121
4823.1200
122 123
4823.1900 Other 4823.2000 Filter paper and paperboard
25 25
124
Rolls, sheets and dials, printed for self-recording apparatus, 4823.4000 other paper and paperboard, of a kind used for writing, printing or other graphic purposes.
25
125
4823.6000
Trays, dishes, plates, cups and the like, of paper or paperboard
25
126
4823.7000
Moulded or pressed articles of paper pulp
25
Gummed or adhesive paper, in strips or rolls (self-adhesives)
Comments
25
25
Customs duty at 10% on medical grade paper vide SRO 358(1)/2002
S.No. 127 128 129
HS Code
Commodity Description
C. Duty 2002-03
4823.9010 Cards for jacquard machines Patterns, design cards for textile 4823.9020 and leather garments
5
4823.9090 Other
25
Pakistan Pulp Paper & Board Mills Association 402, Burhani Chamber, Abdullah Haroon Road, Karachi-74400 Phone: 92-21-7726150
5
Comments
GLASS Production Capacity Pakistani glass industry comprises of 37 units in organized sector. Around 12 major glass manufacturers are involved in producing sheet glass, containers and tubing. The production capacity of units range between 10 MTPD to 200 MTPD, 51% of these units are located in Punjab, 26% in Sindh, 20% in NWFP and 3% in Baluchistan. In addition to these, there are 25 units manufacturing pharmaceutical ampules and vials from neutral glass tubing. Eight units are producing auto glass products, art glass products, furniture etc. through enhanced processing of local and imported glass. More than 100 units are operating in the unorganized sector producing various glass products. These units are located in Karachi, Hyderabad, Multan and Lahore. 60% of these units produce small glass containers and tableware and the remaining units are involved in the production of bangles, beads, tiny glasses for dresses, furniture, crystal glass products, etc. Total investment in this sector is approximately Rs 10.5 billion. The sector produced glass products worth Rs 5.38 billion and contributed 1.20% to the total manufacturing sector value in year 2001-02. Raw Materials & Process Raw materials used in sheet glass manufacturing are same irrespective of types of processes and technology. Almost all raw materials are indigenous and abundantly available in the country. Raw materials used in glass manufacturing are silica sand, soda ash, dolomite, feldspar, salt cake, limestone and cullet. Silica sand and soda ash are the main raw materials while remaining are used in smaller quantities. Soda ash constitutes 85% of the raw material.
Supply & Demand The glass products have been grouped into four main categories. These are sheet glass, glass containers, electric bulbs and tubes and tableware. Actual production of various glass products during the last three years is as below: Production of various Glass products Year
Sheet Glass
Containers
Table wares
Bulbs & Tubes
Tons
Tons
Tons
Nos. in million
1997-98 1998-99 1999-00 2000-01 2001-02 2002-03* *July-December
75,742 78,085 80,500 63,264 64,045 45,493
105,021 117,936 114,805 90,326 90,464 38,093
14,710 18,464 23,632 19,634 21,341 ** 5,132
**From Tariq & Umer Glass
100 110 120 104 160 79 Source: Manufacturers
The average capacity utilization of the sector during last three years ranged between 57% to 64%. Demand/Supply Gap for Float and Sheet Glass Data on country’s demand, local supply and import during the last five years is tabulated below: (M. Ton)
Years
1998-
1999-
99
00
01
101,992
107,851
118,246
97,520
108,807
Local Supply
75,709
77,185
79,553
63,264
64,045
Demand/Supply
26,283
30,666
38,693
34,256
44,762
- Float Glass
20,395
21,441
28,732
26,763
34,097
- Other Sheet
5,888
9,225
9,961
7,493
10,665
Total Demand
1997-98
2000- 20001-02
Gap Imports
Total Import
26,283
30,666
38,693
34,256
44,762
Source: All Pakistan Glass Manufacturers Association
The increase in demand/supply gap during last three years was largely on account of non-existence of any facility for the production of float glass. However, it is expected that after coming into operation of one float glass unit, this gap will be significantly reduced. Import & Export The country imports float and other sheet glass i.e. wired / non-wired sheet glass, toughened safety glass and laminated glass, etc. to meet the domestic demand. Float glass non-wired is the major imported item ranging 60% to 70%, of total import of float and sheet glass. Other imported sheet glass includes toughened glass, laminated glass and mirror glass. Pakistan Safety Glass Limited, which came into operation in 1973 has facilities and technical know-how to further process locally produced sheet glass and imported float glass. Import and export data for last five years is tabulated in table below: (Million Rs)
Year
Imports
Exports
1997-98 1998-99 1999-00 2000-01 2001-02 2002-03*
1,039 1,320 1,578 1,394 1,935 708
75 93 99 75 202 117
*July-December
Source: Federal Bureau of Statistics
Major exports of glass products were mainly to Afghanistan, Kuwait, Vietnam, Saudi Arabia, Dubai and China. During 2002, total glass export constituted of containers 46% followed by Glass Sheet (36%).
Future Prospects The increase in supply demand gap during the last five years was largely on account of non-existence of facility for production of float glass. It is expected that one float glass unit of around 50,000 MTPY shall fulfill this gap. Tariff Structure The present tariff structure of Glass is given in the table below.
S.No.
HS Code
Commodity Description
Raw materials 1 2710.9900 Lubricating Oils, Others
C. Duty 2002-03 25
2
2836.2000 Soda Ash
20
3
3207.2000 Prepared Pigments
20
Others 4
2605.0000
5 6 7
2710.1949 2804.9000 2833.1100
8
3102.5000
Cobalt Oxide (Cobalt ores and concentrates.) Lubricating Oils, Others Selenium DI Sodium Sulphate Sodium Nitrate (Other Organic compounds)
9 6902.1090 Refractories & Refractory Mortar 10 7003.2000 Wired sheets Finished Products Glass tubes of quartz or other fused silica Float Glass Other float glass Glass Mirror Glass Bottles Glass Table Ware
11
7002.3100
12 13 14 15
7005.2100 7005.2900 7009.1000 7010.0000
16 17
7013.0000 7010.0000 Glass Bottles
5 25 5 20 5 10 25 20 25 25 25 25 25 25
Comments
Pakistan Glass Manufactuers Associaton 33-A, Street No. 13, Sector F-7/2, Islamabad Phone: 92-51-2825045/2825090 Fax:92-51-2825106
SODA ASH & SODIUM BICARBONATE Soda Ash is chemically Sodium carbonate and it is commonly known as dhobi soda or washing soda. Soda Ash is used in the manufacture of glass, soaps, detergents, sodium silicate, paper, caustic soda, paint, petroleum refining, inorganic chemicals. High density soda ash contains 99% sodium carbonate and low density soda ash contains 98% sodium carbonate. Only high density soda ash is used in the manufacturing of glass. Total investment in this sector is about Rs 6 billion. ICI Pakistan produces low as well as high density soda ash while Olympia Chemicals produces only low density soda ash. Raw Materials & Process Soda Ash is manufactured by Ammonia Solvey process forming sodium bicarbonate, which is calcined to sodium carbonate. Common Salt (sodium chloride) and limestone (calcium carbonate) are the basic raw materials. Production Capacity Total Soda ash production capacity is 265,000 tons per year. Both the plants producing soda ash are located in the Salt Range area. (MTPY)
o
ICI Pakistan, Khewra
o
Olympia Chemicals, Khushab
Total Soda Ash capacity Source: 2002
Manufacturers
225,000 40,000 265,000 Year:
The ICI plant is the oldest and largest operating plant in Pakistan. It was established in 1944 with a capacity of 18,000 MTPY. The capacity has been progressively increased to 225,000 MTPY in 2001 and it caters for nearly 80% of the local demand. ICI is planning an expansion of additional 100,000 MTPY by the year 2004-06. The Olympia Chemicals is a new plant with a capacity of 40,000 MTPY but likely to be doubled by 2003. The plant is based on Chinese technology with power generation from the locally available coal. The Solvay Process is applied for the production of soda ash. The plant started production in May 2000 with a capital cost of Rs 600 million. Sindh Alkalis Ltd with a capacity of 40,000 MTPY was established in 1966 in the public sector which is closed at present. Production in the country is given in the table below. The production figure for 2001-02 represents about 90% capacity utilization. The local capacity is meeting most of the local demand and imports are at minimum level. Soda Ash Production (M. Ton)
Year
Soda Ash Production
1997-98
240,300
1998-99
239,400
1999-00
245,700
2000-01
252,000
2001-02
240,000
2002-03*
118,836
*July-December
Source:
Federal
Bureau
of
Statistics
Future Prospects The projected demand is likely to grow by 3% in the next ten years. The additional demand is likely to be met through BMR of the existing plants. Sodium Bicarbonate At Present, only ICI Pakistan, Khewra has the capacity to produce 14,000 MTPY of Sodium Bicarbonate from the unit established in 1995. Sindh Alkalis Karachi had a capacity of 10,000 MTPY but the plant is not operating since 2000.
Sodium Bicarbonate is used in drugs manufacturing, bakery & food products and beverages.
Besides local production of about 14,000 MTPY,
following imports were also made in the recent years: (M. Tons) (Million Rs.)
Year
Quantity
Value
1997-98
2,429
22
1998-99
1,900
19
1999-00
10,123
86
2000-01
7,919
77
2001-02
12,037
121
2002-03*
6,098
56
*July-December Statistics
Future Prospects
Source: Federal Bureau of
The imports can be substituted through revival of Sindh Alkalis Plant or setting up of an additional plant of same capacity.
Tariff Structure The present tariff structure for the Soda Ash is given in the table below.
S.No.
HS Code
Commodity Description
Raw Materials 1 2501.0010 Salt -NaCl 2 2521.0000 Lime stone 3 2704.0010 Coke Intermediate Sodium Bicarbonate (Food 4 2836.3000 grade) Sodium Bicarbonate 5 2836.3000 (Pharma grade) Finished Soda Ash (Sodium 6 2836.2000 Carbonate) 7 2836.2000 Soda Ash (Dense) End Use 8 2827.2000 Calcium Chloride 9 2830.1000 Sodium Sulfide 10 2833.2300 Sulfates based on Chromium 11 2833.1100 Di Sodium Sulphate 12 2836.6000 Barium Carbonate 13 2839.1910 Sodium Silicate 14 2841.3000 Sodium Dichromate Tanning preparations based 15 3202.9010 on Chromium Sulfate Fluorescent Brightening 16 3204.2000 Agent 17 3402.2000 Detergents (retail & bulk) 18 0048.0000 Paper 19 0070.0500 Glass
Custom Duty 2002-03 25 20 5 20 20
20 20 5 10 25 20 10 10 25 25 20 25 5-25 25
Comments
CAUSTIC SODA, CHLORINE AND RELATED PRODUCTS Caustic Soda Caustic soda is chemically known as sodium hydroxide. It is generally supplied to other industries in the form of 50% solution of sodium hydroxide or solid flakes. Caustic soda is used in a number of industries like soaps, detergents, textile, paper and paper board, oil refining, vegetable and ghee, industrial water treatment and rubber reclaiming. Raw Materials & Process Sodium
Chloride
(common
salt)
is
the
main
raw
material
for
manufacturing caustic soda. The electrolysis of Sodium Chloride solution produces caustic soda with the extensive use of electricity. Three types of cells can be used for the electrolysis process. The membrane cells are the latest and most efficient while diaphragm and mercury cells have become outdated. The process also produces chlorine and hydrogen as by products. The economics of this industry depends on the utilization of chlorine in manufacture of products like PVC. The production cost of local caustic soda remains higher than international market due to very low utilization of chlorine and charging all costs on caustic soda products. Production Capacity Presently, there are two major plants producing around 200,000 MTPY of Caustic soda. New project at Sitara Chemicals has been commissioned in Oct 2002 while a new unit of 43,000 MTPY capacity at Ittehad Chemicals is expected to be completed in the year 2003. The table below presents the capacity of operating plants.
Capacity of Production Units (MTPY)
Plants
Capacity
Ittehad Chemicals, Kala Shah Kaku
66,000
Sitara Chemicals, Faisalabad
132,000
TOTAL
198,000
Source: Manufacturers
Year: 2002
Following three caustic soda plants were closed down since last many years. Sind Alkalies, Karachi
o
o Pakistan PVC, Karachi o Bela Chemicals, Hub Total:
3,500 MTPY 7,000 MTPY 15,000 MTPY 25,500 MTPY
Supply and Demand Import of Caustic Soda was very high in eighties and nineties. A high duty of Rs 7,200 per ton in 2000-01 and Rs 6,000 per ton in 2001-02 was imposed on the import of liquid caustic to discourage the imports and to protect the local caustic soda industry. Majority of caustic imports are in solid form as flakes. Production and Import Data of Caustic Soda (M. Tons)
Year
1997-98 1998-99 1999-00 2000-01
Production
Imports
115,700 120,400 141,300 145,500
1,300 4,400 8,900 4,200
2001-02 2002-03* *July-December
151,100 77,851
28,730 13,832
Source: Federal Bureau of Statistics 2001-02
Future Prospects Demand of Caustic Soda is expected to grow by 4%. The projected demand in next 10 years (2011-12) is expected to be 225,000 MTPY. With the commissioning of Sitara Chemicals (capacity of 66,000 MTPY) and expansion of Ittehad Chemicals (capacity of 43,000 MTPY) the production capacity shall be sufficient to meet the demand. Chlorine Chlorine is an essential and important by-product from the caustic soda plants. Production figures for the five years are given in table below:
Production of Chlorine Year
(M. Tons)
Chlorine
1997-98
9,800
1998-99
11,300
1999-00
14,200
2000-01
14,500
2001-02
15,104
2002-03*
32,044
*July-Dec.
Source: Federal Bureau of Statistics
2001-02
Approximately 89 tons of chlorine is produced with each 100 ton of caustic soda. Chlorine is sold in cylinders for water treatment and some of it is converted to downstream products like hydrochloric acid, bleaching powder, Fullers earth, Sodium hypo-chlorite, Ammonium Chloride and Ferric Chloride.
The remaining large quantity of Chlorine finds no use and at present it is being wasted by neutralization with lime. It is very important that available chlorine be utilized in making PVC for improving the economics of caustic plants. Alternately Hydrochloric acid (HCl) can be reacted with Phosphate rock for production of Phosphoric acid Pilot plant experiments have been conducted recently by Sitara Chemicals to produce Phosphatic fertilizers. If proved commercially successful, all the excess chlorine can find use in this application. This shall ultimately reduce cost of caustic soda.
Tariff Structure The present tariff structure for Caustic Soda is provided in the table below.
S.No.
HS Code
Commodity Description
Custom Duty 2002-03
Raw Materials 1 2501.0010
Rock Salt (NaCl)
25
2
2807.0000
Sulphuric acid; Oleum.
10
3
2511.1000
Natural barium sulphate (Nitrites)
10
Finished 4 2815.1100
Caustic Soda (Solid)
25
5
Caustic Soda (liquid)
Rs.7,000/MT
2815.1200
End Use Others (Toilet & laundry
6
3401.1900
7
3401.2000
Soap in other forms
8
0048.0000
Paper & Board
Soap)
25 25 5 – 25
Comments
SULFURIC ACID, HYDROCHLORIC ACID & NITRIC ACID Sulfuric Acid Sulfuric acid is an important chemical. Its demand is taken as a barometer of industry in any country. It is of great commercial importance for use in manufacture of fertilizers, other acids, heavy chemicals, dyes and pigments, lacquers, plastics, explosives, textile, paints, leather tanning, oil refining, water treatment, treatment of cotton seeds and other chemicals. It is generally marketed with 98% concentration. Raw Materials & Process Sulfur is the basic raw material. Sulfuric acid is manufactured by burning sulfur to sulfur dioxide. It is then converted to sulfur trioxide by catalytic oxidation. The resulting sulfur trioxide is absorbed in water to form sulfuric acid. Production Capacity (MTPY)
Capacity
Plants Lyallpur Chemicals & Fertilizers, Hazara Phosphate POF, PAEC Rawal Chemicals Amber Chemicals Attock Chemicals Rawal Chemicals Prime Chemicals Ittehad Chemicals Karsaz Chemicals Riaz Aslam Chemicals Crescent Chemicals Exide Pakistan limited Pak Chemicals Acid Ind. Pvt. Ltd. TOTAL
Jaranawala* Haripur* Wah Cantt.* D. G. Khan* Hattar Hattar Hattar Sheikhupura Sheikhupura Lahore Lahore Chunian Sukkur Karachi Karachi Karachi
33,000 36,300 3,300 8,250 8,250 6,600 16,500 10,000 10,000 3,300 3,300 6,600 10,000 16,500 24,000 26,400 222,300 *Mainly for captive use
First four listed plants are producing sulfuric acid for their captive use. Only surplus production is sold in the market. The reported production of sulfuric acid is listed below. The imports for this item were 5.7 metric tons in 2001-02. Production of Sulfuric Acid (MTPY)
Year
Sulfuric Acid
1997-98
28,100
1998-99
27,000
1999-00
57,700
2000-01
57,100
2001-02
59,200
2002-03*
16,776
*July-Dec. (Reported units)
Source: Federal Bureau of Statistics
Future Prospects Presently the installed capacity is in excess of local demand as such no investment potential exists at the moment.
Hydrochloric Acid Hydrochloric acid is produced on demand by Ittehad Chemicals and Sitara Chemicals from the excess chlorine by-product available with them. The production capacities of both plants are given below. Production Capacity (MTPD)
o Sitara Chemicals
800
o Ittehad Chemicals
500
TOTAL
1,300
Source: Manufacturers
Year: 2002
In the year 2001-02, only 38 metric tons of Hydrochloric acid was imported. Nitric Acid Nitric acid is produced by POF Wah and Pak Arab Fertilizers, Multan for their captive use. Small local demand is met through their surplus production. The latest production capacities of both plants are given below. Production Capacity (MTPY)
Pak Arab Fertilizers, Multan POF, Wah Cantt. TOTAL Source: Manufacturers
455,600 10,000 465,000 Year: 2002
ORGANIC CHEMICALS Acetic Acid Commercially, the acetic acid is usually produced by such chemical processes as the oxidation of acetaldehyde in air with the presence of catalyst. Acetaldehyde is itself formed from the oxidation of ethylene obtained from petroleum. One of the major uses of acetic acid is as an intermediate for making other chemicals. It can also be converted to acetic anhydride and acetate esters. Acetic anhydride is used to make acetate fibers and cellulose acetate, a plastic. Ethyl acetate is an important ester used as a solvent for varnishes and in nail polish remover. As a reagent, acetic acid is used to make synthetic, rubber, aspirin and other pharmaceuticals. It is also widely used as an acid and solvent. At present, there are three units in Pakistan. i) ii) iii)
Wah Nobel Acetates Ltd, (Wah) Ravi Rayon (Pvt.) Ltd. (Lahore) Midas Chemicals, (Raiwind Road, Lahore)
Wah Nobel: Wah Nobel was established with an investment of Rs 450 million including 140 million foreign exchange component, has a production capacity of 7,000 MTPY of Acetic Acid. The entire production is for captive use. Wah Nobel has production capacity of 6,000 MTPY of Ethyl and Butyl Acetates. Actual production of Ethyl, Butyl Acetates is around 1,800 MTPY each, due to lower demand in the country. Ravi Rayon Ltd.: Ravi Rayon has a production capacity of 3,000 MTPY of Acetic Acid. The plant was closed earlier and now is being revived.
Midas Chemicals: The plant is being established with a production capacity of 5,000 MTPY in Lahore, using Alcohol as a feedstock and soon will be in commercial production. The project is financed by Industrial Development Bank of Pakistan (IDBP) and is based on German technology. Production Capacity (MTPY)
S. No. 1.
Wah Nobel Acetates Ltd.
Wah
7,000
2.
Ravi Rayon (Pvt.) Ltd.
Lahore
3,000
3.
Midas Chemicals, Raiwind Road
Lahore
5,000
Name of Company
Capacity
TOTAL
15,000 Source: Respective Manufacturers
Import of Acetic Acid Acetic acid is also being imported. Import figures for the last five years are given below: (M.Tons) (Million Rs.)
Year
Quantity
Value
1997-98
3,311
95
1998-99
15,759
353
1999-00
22,871
496
2000-01
21,903
648
2001-02
22,033
654
2002-03*
11,009
312
*July-December Statistics
Source:
Federal
Bureau
of
Future Prospects Total installed capacity in the country as seen from the table above is 15,000 MTPY out of which 7,000 MTPY being produced by Wah Nobel is for their captive use, the remaining 8,000 MTPY is available for local market. Keeping in view the average import of last three years, i.e. 22,269 MTPY and 8,000 MTPY production capacity available in the country. There is a room for investment for the manufacture of 15,000 MTPY of Acetic Acid. Basic raw material is Molasses, which is available in abundance. It must be utilized for value addition. However, a feasibility study would be required for its viability in view of the reduction in import duty on Acetic Acid from 65% to 25% since 1998. Formic Acid Formic acid is mainly used as a neutralizing agent in leather and textile industry. Production Capacity Formic acid is being manufactured by Tufail Chemical Industries Ltd. Lahore with a capacity of 5,000 MTPY. The raw material used by them is Sodium Formate. Imports Imports of Formic acid are given in table below: Imports of Formic Acid (M. Tons) (Million Rs.)
Year
Quantity
Value
1997-98
3,271
92
1998-99
2,453
70
1999-00
3,616
94
2000-01
4,610
121
2001-02
3,903
109
2003-03*
2,342
63
*July-December
Source:
Federal
Bureau
of
Statistics
Future Prospects In addition to the local manufacture of 4,000 – 5,000 MTPY (by Tufail Chemical Industries Ltd.) an import of 3,500 – 4,500 MTPY is also being made which indicates that there is room for more investment, however a detailed techno-economic study is required.
Methanol Methanol is a petrochemical product produced during natural gas cracking. Last five years import data is given below: Methanol Import Year 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03* *July-December
Quantity Litres (000) 24,012 19,771 27,196 33,763 34,069 20,877
Quantity M. Tons 19,210 15,817 21,757 27,010 27,255 16,702 Statistics
Value (Million Rs.) 238 184 233 438 376 268
Source: Federal Bureau of
This is used as freezing point depressant and manufacture of petrochemical products like Formaldehyde, Acetic acid, Methyl Tertiary Butyl Ether (MTBE), etc. The demand justifies setting up of a small unit. Rice & Rice Husk Rice is an important staple food for Pakistanis and its production is above 4 million tons per year. Rice is being used to produce Glucose, Fructose and Maltose. However, rice husk is normally used as fuel and it is not being utilized for value addition. Rice husk can be used to manufacture furfural, which finds use in various applications of synthetic rubber, resins, perfumery, dyes, plastics and oil refineries, etc.
Formaldehyde 37% Formaldehyde is a raw material for the manufacture of Urea formaldehyde and Phenol formaldehyde. The raw material used for Formaldehyde is Methanol, which is being imported at the moment. Production Capacity There are six companies engaged in the manufacture of Formaldehydes in the country out of which three main players are Wah Nobel, Dynea Pakistan Ltd. and Super Chemicals Pakistan Limited. Wah Nobel are planning 15,000 MTPY increase in capacity by June 2004. Production capacity (MTPY)
S. No.
Company
1. 2. 3. 4. 5. 6.
Wah Nobel, Dynea Pakistan Ltd. Super Chemicals Ltd. Pakistan Resins Ltd. Izhar Enterprises Ltd. HTG Petrochemicals TOTAL
Capacity Wah Karachi Karachi Azad Kashmir Lahore Hub
15,000 39,000 30,000 12,000 9,000 6,000 111,000
Source: Manufacturers
Imports There are no imports of Formaldehyde in the country.
Demand and Supply Formaldehyde is mainly used for the manufacture of Glue for Chipboard, Plywood, Formica industry and Granular urea. Phenol formaldehyde is used for the manufacture of electrical and mechanical components. The demand in the market fluctuates between 70,000 MTPY to 90,000 MTPY. The available capacity is 111,000 MTPY, which will be increased to around 125,000 MTPY by Jan., 2004. This includes the recent expansion by M/s. Dyena Pakistan from 19,500 MTPY to 39,000 MTPY and increase of 15,000 MTPY by January 2004 of Wah Nobel. These expansions have been made in view of the anticipated increase in the chipboard, plywood and formica industry.
Future Prospects The existing capacity is already more than the current demand in the sector, so this sector carries no investment potential at the present. Its raw material is a petrochemical product, which may come from the proposed petrochemical complex.
SPECIALTY CHEMICALS Specialty Chemicals are those, which are developed and produced to fulfill exact requirement of a customer (tailor made products). These are made normally in batch process on a smaller scale and have high value addition. They are more technology oriented rather than being capital intensive. Specialty Chemicals cover a wide range of products. Their raw materials and intermediates are derived from various organic and inorganic chemicals. The raw materials such as Aniline, Phenol, O-Toluidine, Ethylene Oxide and Propylene Oxide are not being manufactured in Pakistan, due to economy of scale and lack of feed stocks. Intermediates such as Naphtaline Pyridones, Pyrazolones, Naphthol AS, H. Acids, O-Acid, K. Acid and ZR Acid, etc. are produced in medium to small industries catering to specialty chemicals industrial segment. These intermediates are not being manufactured in Pakistan because of absence of feedstock e.g. Benzene is a feed stock for Aniline which is a raw material for N-Methyl Aniline which in turn is an intermediate used for the production of Dyes, Pigments, Chemicals and resins, etc. A few intermediates are being manufactured in Pakistan such as Phathalic Anhydride for DOP by Nimir Chemicals, Wah Noble producing Acetic Acid and Acetic Acid Ester, PTA by ICI Pakistan for Polyester Fiber industry. Tufail Chemicals are producing Formic Acid. These have been discussed in the respective sectors.
Finished Products These raw materials and intermediates are used to produce a number of Specialty Chemicals in the following sectors:
o
Dyes & Pigments
o
Textile and Tannery Chemicals
o
Water Treatment Chemicals
o
Food Chemicals
o
Essential Oils
Each of the above sectors has been discussed separately in the following sections:
DYES & PIGMENTS Dyes are intensely coloured substances used for the coloration of various substrates including paper, leather, fur, hair, foods, drugs, cosmetics, waxes, greases, petroleum products, plastics and textile materials. They are retained in these items by physical adsorption, salt or metal complex formation, solutions mechanical retentions or by the formation of covalent bonds. Dyes are applied to textile fibers by two distinct processes, dyeing and printing, of which dyeing is much more extensively used. Dyes are classified in accordance with their chemical constitutions or their application to textile fibers and for other coloring purposes. Pigments are differentiated from the dyes, although they are for the same purpose of imparting color to the article. Pigments are insoluble liquors to color the surface of the material and imparting the opacity to it. Classification of Dyes Acid Dyes: Acid dyes are water soluble anionic dyes that are applied to nitrogenous fibers, such as wool, silk, nylon and modified acrylic fibers from acid or neutral baths. Acid dyes contain, as the active principle aromatic compounds including in their chemical structure, a chromo phonic group and a water-soluble group. The commercial dye appears in the form of the sodium salt normally standardized, diluted with anhydrous sodium sulfate. Acid dyes are not substantive to cellulosic fibers, chemically the acid dyes consist of Azo, anthraquinone, triphenylmethane, Amine etc.
Basic Dyes: The appeal of the basic dyes lies in their brilliant shades, some of them being fluorescent. Unfortunately their brilliance is not matched by their fastness. Basic dyes are applied to wool and silk for brightness. Basic dyes are water-soluble and dissociate into amines and colored actions. Disperse Dyes: Disperse dyes are colored organic compounds, which are only very slightly soluble in water and therefore, dying is carried out with aqueous dispersion. It is the most successful type of dye for coloration of cellulose acetate fibres and also used on polyamides, poly acrylonitriles, polyesters and cellulose triacetate. Reactive Dyes: The most recent technological contribution to textiles has been the development of reactive dyes. Reactive dyes are unique as they are the only class to dyes that actually form a chemical bond with textile fiber and this bond gives them their excellent wash fastness properties. They are highly soluble in water. The major substrate includes Cotton, Rayon, Wool, Silk and Nylon. Sulfur Dyes: These are amorphous, colloidal materials of high molecular weight and are of variable composition. Sulfur dyes are insoluble substances, which are brought into soluble form for dyeing by treatment with a hot solution containing alkali and sodium sulfide. Sulfur dyes are particularly rich in blacks of good value and shades. Vat Dyes: Vat dyes are complex organic molecules that are insoluble in water, but when their carboxyl groups are properly reduced in a solution of caustic soda to leuco, they exhibit an affinity for cellulosic fiber. The shades are of excellent wash fastness, chlorine fastness and light fastness.
Environment Aspects of Dyes The environmental impact of textile production is considerable. Most textiles are to be dyed and printed. More than 10,000 different dyes are available for this process and much is known about the potential dangers. The ETAD (Ecological and Toxicological Association of the Dyestuff manufacturing Industry) tested more than 4,000 dyes for acute toxicity and found that approximately 1 % of the dyes were toxic. The dyes involve certain chemicals that are hazardous to the human skin. Some Azo coloring agents have carcinogenic properties or may form amines (breakdown products) which have carcinogenic and mutagenic properties. Approximately 70% of all dyes used in the textile industry are Azo dyes. There are about 2000 different Azo dyes of which approximately 200-300 may be hazardous. Dyes Stuff Business and Textile Industry The Pakistan textile industry is traditionally based on the manufacture and export of spinning yarn and threads. Today around two hundred large and medium sized processing mills exist along with thousands of small dye houses. It is estimated that this industry consumes over 22,000 tons of dyestuff and pigments annually. The shares of different type of dyes consumed are given as follows: 34.27 %
o
o Acid dyes
09.00 %
o Sulfur dyes
07.65 %
o Basic dyes
05.77 %
o Direct dyes
03.07 %
o Vat dyes
02.24 %
o Pigments
23.00 %
o
Reactive dyes
Disperse dyes
15.00 %
Pigments are opaque colored objects and they are ground to very fine size for the manufacture of paints and printing ink. Pigments are always used with some oil based solvent. Production Capacity Small quantities of Direct Dyes and Pigment Dyes are being manufactured locally. The intermediates required for dyes are being imported especially from China. There are 6 units in the organized sector and 7 in unorganized sector involved in the production of dyestuff. M.B. Dyes, Gadoon are planning to increase their capacity by three times, which will become 3,600 MTPY by end of this year. The production capacity of the six main units is as given below:
(MTPY)
Company
Capacity
BASF
Karachi
25,000
Sandalbar
Faisalabad
8,500
Clariant
Karachi
5,500
M.B. Dyes
Gadoon Amazai
3,600*
Chemi Dyestuff Industries
Karachi
700
Gadoon Dyes Chemical
Gadoon Amazai
600
TOTAL
43,900
*Current capacity is 1,200 MTPY.
Source: Delta Industries (Pvt.)
Ltd.
Demand of Dyes & Pigments in Textile Industry (M. Tons) H. S. Code
Commodity
Import 2001-02
Production 2001-02
Consumption 2001-02
Import 2002-03*
Production 2002-03*
Consumption 2002-03*
3204.1100
Disperse Dyes
3,198
N.A.
-
1,734
N.A.
-
3204.1200
Acid Dyes
1,870
805
2,675
979
320
1,299
3204.1300
Basic Dyes
3204.1400
Direct Dyes
1,042
-
1,042
535
-
535
504
1,190
1,694
227
740
967
3204.1500
Vat Dyes
1,109
-
1,109
748
-
748
3204.1600
Reactive Dyes
4,692
2,500
7,192
3,195
975
4,170
3204.1905
Sulphur Dyes
1,745
-
1,745
1,261
-
1,261
3204.1700
Pigments & Prep.
2,823
2,450
5,273
1,650
1,350
3,000
16,983
**6,945
20,730
10,329
**3,385
TOTAL * July-December Industries Ltd. ** Excluding Chemi Dyestuff & Clariant
Source:
Sandal
11,978 Dyestuff
The imports of all types of Dyes & Pigments are given below in the table: Imports of Dyes & Pigments (M. Tons) (Million Rs.)
Year
Dyes
Pigments
Quantity
Value
Quantity
Value
1997-98
12,323
2,636
12,570
1,549
1998-99
12,970
2,888
11,660
1,709
1999-00
15,034
2,808
13,104
1,898
2000-01
14,413
2,801
12,158
1,891
2001-02
14,672
3,168
12,758
1,978
8,923
1,791
8,186
1,139
2002-03* *July-Dec.
Source: Federal Bureau of Statistics & CBR
Future Prospects There is local manufacturing of dyes and pigments but large quantities are still being imported. Total import of this group stood at Rs 5.0 billion during 1999-2000. Additionally, about Rs 0.4 billion worth of printing ink and paints were also imported. The raw materials for this category are petrochemicals. The petrochemical complex proposed may provide necessary intermediates & raw materials to this industry. There is a need to encourage and set up more dyes & pigment manufacturing units.
Titanium Di-Oxide (TiO2) There are two industrial grades of titanium dioxide pigment
1) Rutile
grade used for manufacture of paints and plastics 2) Anatase grade used in polyester fibre and paper industry. Rutile grade is normally manufactured via
chloride process from rutile ore and Anatase grade is manufactured via sulphate process using ilmenite ore. Rutile grade is capital and energy intensive project. This project is viable only for large scale manufacturer. Moreover, neighbouring Saudi Arabia has this facility which serves extensive market including Pakistan. Pakistan imports about 3,000 tonnes of TiO2 to manufacture paints and plastics. Current requirement of anatase grade titanium dioxide is approximately 10,000 MTPY. Therefore, it may be practical to establish a 10,000 MTPY facility to manufacture anatase grade to cater needs of polyester fibre industry of Pakistan. Saudi Company the National Titanium Dioxide Company may be approached to share the equity and facilitate the acquisition of technology. Sulphuric acid one of the major raw materials is being manufactured in Pakistan and other material ilmenite can be either imported or locally available ilemenite can be upgraded. The capital cost is estimated to be around US$ 35 million.
Pakistan Chemical & Dyes Merchants Associations Chemical Dye House, Rambhart Street, Jodia Bazar, Karachi-74000 Phone: 92-21-2432752 Fax: 92-21-2430117
Tariff Structure The present tariff structure for Dyes & Pigments is provided in the table given below.
S.No. HS Code
Raw Materials 1 2834.1000 2 2905.1600 3 2907.1500 4 2907.2100
Commodity Description
Sodium Nitrite 2 Ethyl Hexanol Napthols and their Salts Resorcinol and its Salts Others (Para Xylidine/Sulfamic Acid) Ethylenediamine and its Salts Others (Aceto Acetic Ortho Anisidine) Aniline Derivative and its Salts Diphenylamine and its derivatives; salts thereof.
Custom Duty 2002-03 10 5 10 10
5
2921.1900
6
2921.2100
7
2921.2900
8
2921.4200
9
2921.4400
10
1 - Naphthalene (Alphanaphthalamine), 22921.4500 Naphthylamine (betanaphthylamine) and their derivatives; salts thereof.
10
11
Others, Aromatic Polyamines 2921.4900 and their derivatives; salts thereof.
10
12 13 14 15 16 17
2921.5900 Other (Sodium naphthionate) 2922.1900 Other (Morpholine) Amino Hydroxynaphthalene 2922.2100 Sulphonic Acids and their Salts. Other oxygen function amino 2922.2900 compounds. 2922.4210 Mono Sodium Glutamate 4-Amino-4-Nitro Amino 2922.4400 Diphenyle-2-Sulfonic Acid
10 10 10 10 10
10 10 10 10 10 10
Comments
S.No. HS Code 18 19 20 21
2922.4900 2924.2900 2924.2990 2927.0090
22
2927.2900
23
2933.6900
24
2934.3000
25 26
2934.9990 3402.1110
Commodity Description Others Aceto Aceto Ortho Toluidine Others Others 6 Chloro 2-Amino Phenol 4Sulfonic Acid Others (Cyanuric Chloride) Compounds containing a phenothiazine ring system (whether or not hydrogenerated), not further fused. Others (metamol BX) Sulphonic Acid (soft)
27
3402.1300 Non-Ionic Emulsifiers
28
3804.0000
29 30
Residual lyes from the manufacture of wood pulp. Reax 85-A (Dispersing 3804.1000 agent) 3824.9099 Others (Prepared binders)
Finished Dyes 31 3204.1100 Disperse Dyes 32 3204.1200 Acid Dyes
Custom Duty 2002-03 10 N/A 10 5 N/A 10
10
10 10 20
N/A 25
20
34 35
3204.1400 Direct Dyes 3204.1600 Reactive Dyes
20 20
Pigments and Preparations thereon
10% CD for drugs vide SRO. 372(1)/2002.
20 20
3204.1300 Basic Dyes
3204.1700
10% CD for drugs vide SRO. 372(1)/2002.
10
33
36
Comments
20
10% CD for drugs vide SRO. 372(1)/2002
10% CD for foot ware and printing ink vide SRO. 358(1)/2002
TEXTILE & TANNERY CHEMICALS The textile industry uses a large number of textile chemicals for processing of different types of textile fibers, natural as well as synthetic. Total value of textile chemicals used in Pakistan is about Rs 2.0 billion annually. The chemicals used in the textile industry are soaps, detergents, caustic soda, softeners, wetting agents, emulsifiers, biocides, thickener, binders, acids, dyes & pigments, waterproofing agents, foam stabilizers, optical brighteners, stabilizers, hydrogen peroxide, bleaching powder, soda ash and sodium carbonate. Production Capacity There are several small units manufacturing textile chemicals but still large quantities are being imported. Followings are the capacities of textile and tannery chemicals of eight major producers.
(MTPY)
Company
Location
Capacity
Calariant
Jamshoro (Sindh)
20,000
BASF
Karachi
15,000
M.B. Dyes
Gadoon Amazai
12,000
Universal
Karachi
8,000
ICI
Karachi
6,700
Sandalbar
Faisalabad
6,000
Nimir Chemicals
Lahore
6,000
Delta Chemicals
Lahore
2,550
TOTAL Source: Respective Manufacturers
62,250 Year:
2002
Other companies like CIBA, Universal Karachi, Sandalbar Faisalabad, MB Dyes Gadoon, Penta Karachi, Beta Lahore are also producing textile chemicals. Optical brightener, a textile and paper chemical, is being manufactured by Delta Lahore and Clariant Faisalabad. Sodium Dichromate, a tannery chemical, is being manufactured locally. Nitro cellulose based lacquers and Fat liquors are also made locally by BASF for tanning industry. Hydrogen Peroxide Hydrogen peroxide is prepared by Anthraquinone Auto Oxidation Process. The process involves reforming of natural gas to obtain hydrogen gas. Hydrogen is then absorbed in anthraquinone solution to form a complex compound called hydroquinone. This compound is oxidized with oxygen to yield hydrogen peroxide. Finally, hydrogen peroxide formed is separated in water phase which is concentrated subsequently. Hydrogen peroxide is used in a number of industries as oxidizing, bleaching and sterilizing agent. It is safe and convenient to use because it is environment friendly chemical. It is mainly used in the bleaching of fibers whether cotton or wood pulp. It also enhances the absorbing capacity of fiber, thus suppressing the requirement of other chemicals. In Pakistan, it is widely used in the textile sector for bleaching, in food packaging, as a disinfectant and clinically in the pharmaceutical sector. The textile and fabric sector consumes about 90% hydrogen peroxide.
Imports Imports of Hydrogen Peroxide for the last five years is given below: Imports of Hydrogen Peroxide (M. Tons) (Million Rs.)
Year
Quantity
Value
1997-98
16,428
273
1998-99
16,252
241
1999-00
20,972
345
2000-01
22,882
450
2001-02
27,134
502
2002-03*
13,194
219
*July-December
Source: Federal Bureau of
Statistics
Future Prospects There are two hydrogen peroxide plants located in Nooriabad, Sindh and Hattar, NWFP but both have been closed down. Presently all demand is being met through imports only. There is good scope to establish a new plant of about 17,000 MTPY capacity. The estimated cost of the project is US$21 million or Rs 1.26 billion. All Pakistan Textile Mills Association Principal Office, APTMA House, 44-A, Lalazar off Moulvi Tamizuddin Khan Road, Karachi-74000 Tel: 111-700-000, 5610181 Fax: 92-21-5611305 Email:
[email protected] &
[email protected]
Pakistan Tanners Association
46-C, 21st Commercial Street, Phase-II Extension, Defence Housing Authority, Karachi Tel: 92-21-5880180 / 5880184 Fax:92-21-5880093
Tariff Structure Present tariff structure of Tannery Chemicals is given in the table below:
HS Code
1. 2.
Quebracho extract Wattle extract
20 20
3.
3201.1000 3201.2000 3201.9010
Acacia catechu (cutch) and gambier
25
4. 5. 6.
3201.9020 3201.9030 3201.9090
20 25 20
7.
3201.1000
8.
3202.9010
Oak or chestnut extract Gambier Other Synthetic organic tanning substances Tanning substances, tanning preparations
9.
2847.000 3202.9090
Hydrogen Peroxide
10
Other
20
10.
Commodity Description
Tariff 2002-03
S.No.
20 25
Comments
WATER TREATMENT CHEMICALS Several types of chemicals are used in the treatment of municipal and industrial water. They include corrosion inhibitors, oxygen scavengers, chlorine, alum, pH regulators, activated carbon and ion exchange resins. Most of these chemicals are being imported. Some simple chemicals like sulfuric acid, caustic soda, alums, chromates, activated carbon and chlorine are being manufactured locally. Some companies are involved in formulation of water chemicals from the imported chemicals.
FOOD CHEMICALS Food Chemicals can either be natural or synthetic. They are used to give colour to food, enhance taste and increase their shelf life etc. They can be classified in six main groups: o Preservatives o Colours o Flavour enhancers o Antioxidants o Stabilizers o Sweeteners A number of units are engaged in the manufacture of different Food Chemicals in Pakistan in organized as well as in un-organized sector. Two major units in organized sector are given below: Products & Capacity (MTPY)
S. No. 1.
Company
2.
Leiner Pak Gelatine Ltd., Lahore Kala Shah Kaku
Habib Arkady Ltd.
Products Karachi
o o o o o o
Sorbital Glucose Fructose Maltose Halal Gelatine Di-calcium Phosphate
Capacity 7,500 45,000 45,000 45,000 3,000 15,000
Source: Manufacturers
These products are used in food industry as well as for the preparation of animal feed. Imports The import of food chemicals for the last five years is given below: (M. Ton) (Million Rs.) Commodity
Food Essences Food Color Flavour Material TOTAL
1997-98 Qty Value
1998-99 Qty Value
10 17 175 202
8 11 227 246
5 6 91 102
4 5 135 144
1999-00 Val Qty ue 12 7 14 12 8 4 254 172 315 278 187 333 Qty
2000-01 2001-02 Value Qty Value 8 3 243 254
6 7 258 271
4 3 195 202
Source: Federal Bureau of Statistics
Future Prospects From the above figures it is evident that the major chunk of imports is of Flavour materials. It is recommended that a feasibility study may be conducted for their local manufacture.
Tariff Structure The present tariff structure for Food Chemicals is provided in the table given below:
S.No. HS Code
Commodity Description
Custom Duty 2002-03
Raw Materials 1 2 3
3302.1010 Flavours concentrates 3302.1090 Others 3302.9000 Others
20 20 20
Comments
ESSENTIAL OILS AND PERFUMES Essential oils are odoriferous organic volatile bodies of oil character. They are insoluble in water but freely soluble in alcohol, ether, minerals and fatty oils. They are composed of a number of chemical compounds like aldehydes, ketones, hydrocarbons, alcohols, oxides and lactones, etc. They are used in soaps and cosmetics, pharmaceuticals, confectionary, aerated water, attars, perfumery items, scented tobacco and aggarbati, etc. World standard Essential oils are not being manufactured in Pakistan. Manufacture of essential oil is scattered all over the country in un-organized sector using very low technology and without following any standard specifications. As such for high quality use, these oils are being imported. Import below:
The import of essential oils for the last five years is given in the table
(M. Ton) (Million Rs.) Commodity Essential oil of Orange Essential oil of Lemon Essential oil of Peppermint Essential Oil of other Citrus fruit Essential oil of Citronella Oil Eucalyptus Other essential oils TOTAL *July-December
1998-99 Qty Value 19 5
1999-00 Qty Value 18 5
2000-01 Qty Value 13 4
2001-02 Qty Value 14 4
2002-03* Qty Value 10 4
10
3
12
3
21
7
12
6
5
1
22
8
31
10
26
8
8
3
4
2
19
5
6
2
9
3
15
6
5
4
5
1
8
2
4
2
17
4
4
2
6 6 87
1 6 29
9 7 91
2 5 29
8 22 103
2 9 35
6 19 91
2 8 33
2 3 33
1 1 15
Besides the imports of the essential oils a large volume of perfumery items is also being imported as under: Import of Perfumery Items (M. Tons) (Million Rs.)
Year
Quantity
Value
1997-98
985
392
1998-99
1,202
515
1999-00
1,412
519
2000-01
1,451
690
2001-02
1,839
893 Source:
Federal
Bureau
of
Statistics
It can be seen from the above table that the import of perfumery items has progressively increased from Rs. 392 million to Rs 893 million from 1997 to 2002. Future Prospects The manufacture of essential oils of international standard requires high technology plants. The raw materials are leaves and flowers of natural plants, which are available in abundance in Pakistan. The manufacture of quality essential oils in Pakistan can open the door to the manufacturing of perfumes in the country. This will not only save the precious foreign exchange but will also generate employment and would result in industrial growth.
Tariff Structure Tariff structure of Essential Oils is provided in the table given below.
S.No.
HS Code
1 2 3 4 5 6 7 8
3301.1100 3301.1200 3301.1300 3301.1400 3301.1900 3301.2100 3301.2200 3301.2300
9
3301.2400
10 11 12 13 14 15
3301.2500 3301.2600 3301.2910 3301.2920 3301.2990 3301.3000
16
3301.9010
17
3301.9090
Commodity Description Of bergamot Of orange Of lemon Of lime Other Of geranium Of jasmin Of lavender or of lavandin Of peppermint (Mentha piperita) Of other mints Of vetiver Of citronella Of eucalyptus Other Resinoids Concentrates of essential oils Other
Tariff 2002-03 10 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20
Comments
5.
RECOMMENDATIONS The recommendations provided hereunder have been developed after
extensive discussions with the stakeholders of chemical industry. The forum of chemical industry stakeholders strongly believe that the chemical vision is a must in order to increase output in the agriculture sector like cotton, sugarcane and allied products and for value addition in agro based industry for example conversion of molasses to ethanol and citric acid. Agriculture also need a strong base of indigenous availability of fertilizers and pesticides at affordable prices to the farmers. Since cotton is not used alone man made fibers i.e. polyester fiber etc become important segment for value addition to Textile Industry. In view of the global competition it was considered that the viability of the projects should be judged at zero protection. The stakeholders unanimously agreed that the Raw Materials and intermediate Raw Materials should be available at globally competitive prices so that the final products are competitive not only in Pakistan but also globally.
Industrial Policy for Chemical Sector A comprehensive and consistent industrial chemical vision and policy is necessary for a period of at least next 20 – 25 years. The consistency of this policy needs to be ensured over its life.
Monitoring and Implementation Mechanism o
The progress on implementation of various visions and policies needs to be monitored periodically and at the highest level in the country and change made if parameters change. o Previous experience has indicated that change in government policy midstream results in colossal losses. This is particularly so in chemical industry which is capital intensive. Therefore, there should be no change in the government policy, which affects the industry badly.
Infrastructure The existing infrastructure at Port Qasim, EPZs, Special and other Industrial Zones need to be made self sufficient as far as requirement of power, gas, water and other relevant offsite facilities such as, waste water treatment etc are concerned. The government therefore, must increase spending on the infrastructure projects. Creation of such infrastructure facilities by the government shall reduce the project cost and enhance their viability. The prospects of setting up industrial zones along motorway should be seriously examined.
Other Infrastructure o
Provide 24 hours road transport facility from South to North and as concrete roads offer longer life compared to traditional coaltar roads and as the country is surplus in cement, feasibility of change over be examined.
o
Provide liberal and cheap loans for housing and put in place special financing line for mortgage finance for individuals and developers.
o
One window or one desk operation should just not remain a slogan and easy and speedier documentation for loans processing, utility connections etc should become a reality. Technology Upgradation
o
Develop technological base through local research and development.
o
Design and build strong industrial and engineering base through setting up design and engineering institutes so that they can provide local engineering industry with the engineering fabrication drawings.
o
Foreign designing and engineering firms may be asked to provide fabrication drawings of all the plants and machinery.
o
A technology development fund may be created to encourage local scientists and researchers for carrying out the R&D work.
o
Scientists and Researchers should be offered market based salaries.
o
Common facilities Centre for the SMEs should be built and financed by the government or foreign aid to provide services to large number of SMEs which may share a little portion of the cost of service. o Any restriction for obtaining foreign technology may be completely done away with.
Cost of Utilities Presently, the cheaper feed gas to the fertilizer industry is being cross subsidized by the industrial and commercial consumers. o
The development surcharge collected from gas producing fields is taken in the consolidated government funds. This surcharge should be used to promote chemical industry where special natural gas is the raw material.
o
The upfront cost of providing power, water and natural gas should be borne by the government to partially offset the high capital cost of setting up projects in Pakistan.
Human Resource Development Specialized courses within the discipline of chemical technology and chemical engineering be designed in consultation with the subsectors of the Chemical Industry like pesticides, Dyes and Pigments, Paints and Varnishes, Paper & Paper Board and Glass etc. Development Fund o There is a abundant liquidity available with banks at present. The government should therefore set up a special development fund for the Petrochemical and Chemical Industry to provide loans on easy terms. Financial Health of Existing Industrial Investors o The good financial health of existing industrial investors is a big motivation for the potential investors. The government should identify the sectors of the industries which are operating below capacity utilization and offer them special incentives to operate to the 100% capacity in order to have low cost of production.
Quality Control and Environment Standards o The private sector may be encouraged to come forward in various sectors to implement ISO standards and product specifications by Pakistan Standards and Quality Control Authority (PS&QCA). This shall re-inforce implementation of standards besides creating employment. o Government should encourage chemical industries to get ISO 14000 certification by making it mandatory for all units by year 2005. Incentives for value addition of intermediate by products being exported o The Sugar Industry has big potential of value addition through conversion of molasses to alcohol and ultimately to ethylene and Polyethylene or production of gasohol (gasoline + 20% ethanol). o The bassages (Sugar Industry by product) presently being used as fuel for the boilers need to be diverted to value added paper and paper board. o Naphtha a by product from the refineries is presently being exported. Its value addition to produce Petrochemicals need government’s support and incentives. o Local caustic soda is very expensive as compared to international market because of charging all cost of chlorine which is being wasted. Its appropriate utilization shall reduce cost of caustic soda which is a raw material / intermediate raw material for a number of industries. Taxes & Tariff a)
Rather than complete tax holiday, in order to encourage investment it is proposed that income tax may be charged as follows: o 10% for first 5 years o 15% for next 5 years o 20% for next 5 years o Overall tax rate should be brought down to 25%.
b)
o Zero tariff (through local manufacturers) on import of plant & equipment not locally manufactured. All chemicals made by the domestic industry should have lower sales tax (presently 15%).
c)
Import tariff on all primary and secondary raw materials used by Chemical sector be reduced to 5%.
d)
The local equipment manufacturing industry should be exempted from sales tax.
e)
All raw materials in Chemical Industry not manufactured / available locally should be subjected to higher sales tax (presently 20%).
f)
Adequate differential between imported raw material and finished product may be provided to local Chemical Industry to operate properly.
Interest Rate The interest rate on industrial loans may be revised as under:
o
Loan on locally manufactured machinery 5%.
o
Working capital loans 5%.
o
Long term loans 5%.
Establishment of Chemical Villages o Specialty chemicals are small projects with very high value addition. Government should identify locations and provide all infrastructure, good residential, recreational facilities & utility facilities to develop this area and encourage investors.
o
If a Petrochemical is to be based on associated gas containing ethane, potohar appears to be a good location. If we decide to
follow the molasses route, a place in Sindh or Punjab where large number of sugar mills are located may be ideal. Re-location of Plants o Chemical plants in China and Far Eastern countries are being closed down for their re-location. Government may offer incentives for their re-location to Pakistan after thorough survey of outmoded technology / residual life. General Recommendations o Provincial Government’s may be advised to set up special fund to develop infrastructure for exploration and utilization of local minerals like iron ore, phosphate rock and manganese ore etc. o Government may set up committees for revival of closed down / sick units of chemical industry and submit recommendations. o Government should allocate up to 10% of natural gas for setting up of industries where basic raw material is natural gas like petrochemical complex based on production of ethylene / polyethylene from associated gases. Government may consider special gas fields to dedicate for chemical industries. Gas may be priced equivalent to competing Middle East, Gulf countries & Saudi Arabia. o A strong database of various technologies and technology providers may be developed for Chemical Industries. o Cascading of tariff should continue for industrial growth in the country.
**********
Annexure-I
Summary of Coal Reserves of Pakistan
Coalfields
Seam Thickness Range (Meters)
RESERVES (Million tons) Measured Mineable Total
Coal-rank
BALUCHISTAN 1. Barkhan-Chamalar 2. Duki 3. Mach-Abegum 4. Sor Range-Degari 5. Pir Ismail Ziarat 6. Khost-Sharig-Harnai
0.3 – 2.0 0. – 2.3 0.6 – 1.3 0.3 – 1.3 0.4 – 0.7 0.3 – 2.3
54 1 14 9 15 2 13
32.4 0.6 8.4 5.4 9.0 1.2 7.8
217 6 50 23 50 12 76
HvCb to hvAb SubB to hvAb SubA to hvCb SubA to hbBb SubA to hvCb SubB to hvAb
PUNJAB 7. Makarwal 8. Salt Range
0.3 – 2.0 0.15 – 1.2
55 5 50
32.7 2.7 30.0
235 22 213
SubA to hvAb SubC to hvAb
SINDH 9. Lakhra 10. Sonda-Thatta 11. Jherruck 12. Ongar 13. Indus East 14. Meting-Jhimpir 15. Badin 16. Thar Coal
0.3 – 3.3 0.3 – 1.5 0.3 – 6.2 0.3 – 1.5 0.3 – 2.5 0.3 – 1.0 0.55 – 3.1 0.2 – 22.81
3,192 244 60 106 18 51 10 3 2,700
1,915.2 146.4 36.0 63.6 10.8 30.6 6.0 1.8 1,620.0
184,623 1,328 3,700 1,823 312 1,777 161 16 175,506
LigB to SubC SubC to hvBb SubC to hvCb LigB to SubA LigA to SubC LigA to SubC LigB to SubA
Status
Dev. Dev. Dev. Dev. Dev. Dev.
Dev. Dev.
Dev. Non-Dev. Non-Dev. Non-Dev. Non-Dev.
Dev. Non-Dev. Non-Dev.
NWFP 17. Hangu/Orakzai 18. Cherat/Gulla Khel
Coalfields AZAD KASHMIR 18. Kotili
0.43 – 0.6 0.8 – 1.2 Seam Thickness Range (Meters) 0.25 – 1.0
2 1 1
0.9 0.6 0.3
90 82 9
RESERVES (Million tons) Measured Mineable Total 1 0.6 9 1 0.6 9
SubA to hvAb SubC to hvAb Coal-rank
Dev.Dev.
Status
LigA to hvCb Dev.
Total
3,303
1,982
185,173
Source: Pakistan Energy Yearbook 2002
HvAb: High volatile A bituminous coal
SubA: Sub bituminous A coal
LigA: Lignite A coal
HvBb: High volatile B bituminous coal
SubB: Sub bituminous B coal
LigB: Lignite B coal
HvCb: High volatile C bituminous coal
SubC: Sub bituminous C coal
LigC: Lignite C coal
Annexure-II Range of Proximate Analysis of Pakistan Coal
Coal Fields
Moisture %
Volatile Carbon%
Fixed Carbon%
Ash %
Sulphur%
Caloric Value Cal/Kg.
BALOCHSITAN Barkhan-Chamalar Duki Mach-Abegum Sor-Range-Degari Pir Ismail Ziarat Khost-Sharig-Harnai
PUNJAB Makarwal Salt Range
1.1 3.5 7.1 3.9 6.3 1.7
– – – – – –
2.9 11.5 12.0 18.9 13.2 11.2
24.9 – 43.5 32.0 – 50.0 34.2 – 43.0 20.7 – 37.5 34.6 – 41.0 9.3 – 45.3
19.4 28.0 32.4 41.0 19.3 25.5
– – – – – –
47.1 42.0 41.5 50.8 42.5 43.8
9.1 – 36.5 5.0 – 38.0 9.6 – 20.3 4.9 – 17.2 10.3 – 37.5 9.3 – 34.0
3.0 4.0 3.2 0.6 3.2 3.5
– – – – – –
8.5 6.0 7.4 5.5 7.4 9.55
12,500 - 14,357 10,131 – 14,164 11,110 – 12,937 11,245 – 13,900 10,786 – 11,996 9,637 – 15,499
2.8 – 6.0 3.2 – 10.8
31.5 – 48.1 21.5 – 38.8
34.9 – 44.9 25.7 – 44.8
6.4 – 30.8 12.3 – 44.2
2.8 – 6.3 2.6 – 10.7
10,688 – 14,029 9,472 – 15,801
9.7 – 38.1 22.6 – 48.0 9.0 – 39.5 9.0 – 39.5 9.0 – 39.5 26.6 – 36.6 29.6 – 55.5
18.3 16.1 20.0 20.0 20.0 25.0 23.1
38.6 36.9 44.2 44.2 44.2 34.0 36.6
9.8 – 38.2 8.9 – 31.6 15.0 – 58.8 15.0 – 58.8 15.0 – 58.8 24.1 – 32.2 14.2 – 34.0
4.3 2.7 5.0 5.0 5.0 8.2 2.9
1.2 0.2 0.4 0.4 0.4 2.9 0.4
5,503 – 9,158 8,878 – 13,555 8,800 – 12,846 5,219 – 11,172 7,782 – 8,660 7,734 – 8,612 11,415 – 11,045
0.2 –2.5 0.1 – 7.1
16.2 – 33.4 14.0 – 31.2
21.8 – 49.8 37.0 – 76.9
5.3 – 43.4 6.1 – 39.0
1.5 – 9.5 1.1 – 3.5
10,500 – 14,149 9,386 – 142,171
0.2 – 6.0
5.1 – 32.0
26.3 – 69.3
3.3 – 50.0
0.3 – 4.8
7,336 – 12,338
SINDH Lakhra Sonda-Thatta Jherruck Ongar Indus East Meting-Jhimpir Thar Coal
NWFP
Handu/Orakzai Cherat/Gulla Khel
– – – – – – –
– – – – – – –
49 52.0 39.0 39.0 39.0 16.8 11.5
– – – – – – –
14.8 15.0 7.7 7.7 7.7 5.1 2.9
AZAK KASHMIR Kotli
Source: Pakistan Energy Yearbook 2002
Annexure-III
MINERAL RESOURCES OF PAKISTAN Production Minerals
China Clay Chromite
Reserves
4.9 million tons Large deposits
185 billion tons Very large Dolomite deposits Over 100 Fire Clay million tons Fullers Earth Large deposits 350 million Gypsum tons Anhydrite Very large Lime Stone deposits 12 million Magnesite tons Over 100 Rock Salt million tons Very large Silica Sand deposits 0.8 million Sulphur tons 0.6 million Soap Stone tons 30 million Baryte tons Over 74 Bauxite million tons Over 430 Iron Ore million tons 296 million Crude Oil barrels billion Natural Gas 492 cu. m. P*=Provisional (Jul-March)
Coal
Units
1997-98
1998-99
1999-00
2000-01
000 Tons
68
67
63
47
000 Tons
35
18
26
16
000 Tons
3,145
3,378
3,164
3,269
Million Tons 000 Tons
116
199
348
353
94
153
139
164
000 Tons
18
16
19
13
000 Tons
307
242
355
364
000 Tons
11,166
9,466
9,589
10,868
Million Tons 000 Tons
3.4
3.5
4.5
4.6
971
1,190
1,358
1,394
000 Tons
135
158
167
155
Million Tons 000 Tons
22
19
23
17
49
42
48
47
000 Tons
30
18
26
28
28.4
41.4
48.2
35.1
5.5
38.2
46.0
24.8
20.5
20.0
20.4
21.1
19.82
21.09
23.17
24.78
Million Tons Million Tons 000 barrels Billion Cu. m.
Source: Economic Survey 2001-02
2001-02 (P*)
Annexure-IV CHROMITE Chromite is the only important ore of chromium; crystals and pure forms are rare. It is also known as chrome iron ore and it has three grades called, Metallurgical grade, Refractory grade and Chemical grade. The various chemical compounds made from chromite are given below: •
Potassium dichromate (K2Cr2O7)
•
Lead chromate (PbCrO4), also known as chrome yellow
•
Chromic Oxide (Cr2O3), also known as chrome green
•
Di Chromates such as K2Cr2O7.
General Uses Alloys and Ferro alloys with steel, Refractory, Chrome-Magnesite bricks, Chemical Industry-Chrome pigments, chromates, di chromates, Chrome plating,
Hot extrusion dies, Spray coatings, Components of pumps & valves, Audio/Video recording tapes, Metallic film on semi conductor devices, Greases, Ceramics, Plastics, Surface alloys, Oxidizing agents, Catalyst for scientific experiments, Tanning of leather, In textile industries as mordant, Glass Industry, Pigments, For the Production of Chromic Acid, For Anodizing Aluminum
COAL Coal is an extremely heterogeneous material formed by geological process. Different grades are called Peat, Lignite, Sub-Bituminous, Bituminous and Anthracite. Coal is used as a source of energy, production of chemicals and coal gasification. 1.
Coal as a source of heat energy: It is widely used to generate heat energy for: Electricity generation, Steel production, Cement manufacturing Of all the electricity generated worldwide, about 37 % is produced using coal.
It is a reducing agent in the metallurgical industries, with 70 % of world steel production dependent on coal. 2.
Chemical products made from coal: Coal is an important source of raw material and several chemical products can
be produced from coal. Refined coal tar is used in the manufacture of a range of chemicals as listed below. Pitch, Creosote oil, Naphthalene, Phenol, Pyridine, Benzene, Toluene, Xylene
Ethylene, Propylene, Polyesters, Plastics, Synthesis Gas, Acetic Acid, Acetic Anhydride Ammonia gas recovered from coke ovens is used to manufacture ammonia salts, nitric acid and fertilizers. 3.
Coal Gasification: It is a process by which Coal is converted to gaseous products by reaction with
air, oxygen, steam or mixture of these. The resulting gas can be used as fuel gas or as synthesis gas for other chemical products.
C H I N A C L A Y (Kaolin) A white-burning aluminum silicate, which due to its great purity has a high fusion point and is the best refractory of all clays. Its composition: (Alumina, Silica, plus impurities and water). Chemicals made from China Clay and their uses: Aluminum Sulfate Sizing paper, lakes, alums, dyeing mordant, foaming agent in foams, cloth fireproofing, white leather tanning, catalyst in manufacturing ethane, pH control in paper industry, water proofing agent for concrete, clarifier for fats and oils, lubricating compositions, deodorizer and decolorizer in petroleum refining, sewage precipitating agent and for water purification, food additive. Aluminum Chloride Pharmaceuticals, cosmetics, pigments, special papers, photography, textile (wool) Aluminum Ethylate Reducing agent for aldehydes and ketones, polymerization catalyst. Aluminum Iodide Catalyst in organic synthesis. Aluminum Nitrate Textiles (mordant), leather tanning, manufacture of incandescent filaments, catalyst in petroleum refining, nucleonics, anticorrosion agent, antiperspirant.
G Y P S U M (Ca2SO4 2H2O) It is an abundantly found mineral, having monoclinic crystalline structure, clear white to gray, yellowish or brownish in colour.
Lustre is subvitreous to pearly,
hardness is 2 on Mohs scale, specific gravity is 2.3. It is calcined at 190-200oC to produce plaster of Paris. Gypsum is part of the calcium sulfate family of chemicals. The three important calcium sulfate compounds include: •
Gypsum:
Calcium Sulfate Dihydrate (CaSO4 -2H2O ).
•
Anhydrate:
Anhydrous Calcium Sulfate (CaSO4).
•
Plaster of Paris:
Calcium Hemi hydrate ( CaSO4-1/2H2O).
Uses Moulding and casting plaster, Fire proofing, Cement, Textile finishing, Tile and plaster, Source of sulfur and sulfuric acid, Polishing powders, Paints (white pigment, filler, drier), Paper (size filler, surface-coating), Dying and calico printing, Metallurgy (reduction of zinc minerals), Drying industrial gases, solids and many organic liquids, Quick setting cements, molds, and surgical casts, Wallboard, Food additive, Toothpaste, Medicine, Soil amender in the agricultural industry; to improve water penetration and increase the level of calcium in the soil
IRON ORES Iron ores are rocks or deposits from which iron can be extracted. Iron ores can also be used as important source of raw material for making various types of chemicals ; few of them are listed below ; Ferric hydroxide, Ferric chromate, Ferric, dichromate, Ferric citrate, Ferric nitrate, Ferric phosphate, Ferric sodium oxalate These chemicals have several industrial and domestic uses such as: Treatment of sewage and industrial wastes, Etching agent for engraving, Photography and printed circuitry, Mordant, Oxidizing, chlorinating, and condensing agent, Disinfectant, Pigment, Food additive, Water purification, Soil conditioner, Polymerization and condensation catalyst, Metal pickling, Metallurgy, Medicines
R O C K S A L T (NaCl) Rock salt is naturally occurring mineral in Salt Range region. It is also known as common salt and it is soluble in water and melts at 804oC. Salt is used for the manufacture of many industrial and inorganic chemicals and allied products. Chemical production is a major market for salt. 95% of salt used by the chemical industry is in the manufacture of soda ash, chlorine and caustic soda.
Some important chemicals made from rock salt •
Caustic soda: An element used in making glass, rayon, polyester and other synthetic
fibers, plastics, soaps and detergents. •
Chlorine: It is used primarily in producing polymers that are used in manufacture of plastics, synthetic fibers and synthetic rubber; also used in crude oil refining, for making pesticides; in household bleach, water treatment and sewage treatment.
•
Hydrogen: It is used in the production of ammonia, ethanol and aniline; hydrocracking, hydroforming and hydrofining of petroleum,
hydrogenation of vegetable oils,
hydrogenolysis of coal, reducing agent for organic synthesis and metallic ores, reducing atmosphere to prevent oxidation, etc. •
Liquid Sodium: In recent years, it is used as coolant, or heat exchanger, which is an essential element in the heat transfer process.
•
Metallic Sodium: It is used in making brass and bronze sodium cyanide,which in turn is used in making case-hardened steel and fumigating materials, in indigo and other synthetic dyes.
•
Sodium sulfate: Used extensively in the manufacture of pulp and paper, dyes and ceramic glazes.
•
Sodium carbonate:
(Soda Ash)
Used in manufacture of glass, pulp & paper and rayon. •
Hydrochloric acid: Used in making synthetic rubber and in cleaning gas and oil wells.
•
Sodium bicarbonate: Used in textile manufacturing, processing leather, making glass and bakery products.
•
Sodium nitrate: An ingredient in fertilizers and explosives.
General Uses Industrial Salt, Table Salt, Hide curing salt, Road stabilization salt, hemical intermediate,
Analytical
reagent,
Oxidizing
agent,
Electro
plating,
Mirrors,
Photography, Heat treatment of metals, Plasticisers in toothpaste, Varnish hardener, Food preservatives, Weedicide & Fungicide, Dyes/pigments, Pharmaceuticals, Zinc etching, Indelible ink, Textile dying, Bactericide and Algecide in swimming pools, Bleaches / detergents and cleaning compounds, For water and sewer treatment, Salt is used to fix and standardize dye batches in the textile industry, It is used in metal processing and secondary aluminum making, to remove impurities.
ROCK PHOSPHATE Rock Phosphate is a sedimentary rock composed chiefly of phosphate mineral. It is characterized by a tetrahedral ionic group of phosphate and oxygen P2O5. It is an important source of raw material for the manufacture of different chemicals. It has a number of uses as given below. Uses Fertilizers (SSP & TSP, NP, DAP), Chemicals (Phosphorus, phosphoric acid and its compounds), Poultry & stock feed iron smelting, Reducing agent, Analytical agent, Lube oil additives, Rubber additives, Flotation agents, Matches, To dope semi conductors, Catalyst, Chlorinating agent, Insecticides, Pigments, Mono & Di-calcium phosphate, Water treatment chemicals, Animal feeds
M A G N E S I T E (MgCO3) It is the mineral form of magnesium carbonate, usually massive and white, with hexagonal symmetry. Magnesite can be used as raw material for the manufacture of following different chemicals; Magnesium Acetate, Magnesium Amide, Magnesium Ammonia Phosphate, Magnesium Hydroxide, Magnesium Citrate (di basic), Magnesium Fluoride, Magnesium Fluosilicate, Magnesium Silicate, Magnesium Sulfate, Magnesium Sulfite, Magnesium Tri Silicate, Magnesium Gluconate, Magnesium Oleate
Uses of the above magnesite based chemicals Catalyst for polymerization, Fire retardant for fabrics, Fertilizer, Laxative, Dietary supplement, Concrete hardeners, Water proofing, Mothproofing, Magnesium Casting, Intermediate for obtaining magnesium metal, Sugar refining, Fuel oil additive, Sulfite pulp, Dentifrices, Color retention agent, Frozen desserts, Varnish driers, Lubricant for plasticizers, Emulsifying agent. Other uses Basic refractory furnaces lining, Mg chloride cement (quick setting), Mg SO4 (Epson salt), Mg CO3 /MgO (toilet products), Mg CO3 (heat insulation), Pharmaceutical compounds, Metallurgical processes, Photography, Antiseptic Agent, Deodoran, Rubber reinforcing agent, Inks, Free-running table salts, Textile printing, Insecticides, Ceramic, Glass, Bleaching, Filler in rubber and medicine, Fire proofing, Cosmetics, Paper pulp, Industrial odor absorbent, Filtering medium Anti caking agent, Fungicides, Analytical reagent
LIMESTONE Limestone is a widely occurred mineral. It is a sedimentary rock compound dominantly (more than 95% of CaCO3) principally in the form of calcite. Lime Stone has a number of uses. Uses
Calcium Oxide, Cement, Metallurgical use in blast furnace, Metallic calcium &
alloys used as reducing agents in production of Ur, Th, Zr & Cr , Manufacture of soda ash by ammonia soda process, Sugar processing to precipitate impurities, Paper & pulp, Glass manufacturing, Bleaching powder, Ceramics - as glaze, Textile, Floatation separation concentration, Sewage treatment, Agricultural uses, Soil stabilization, Road paving Mixture, Rock & Mineral wool, Optical use Iceland spar, Leather dressing, Varnish manufacturing, Calcium carbonate, Abrasive, C02 manufacture, Water treatment, Silica brick manufacture, Grease manufacture
Annexure-V
SPECIALTY CHEMICALS
Chemicals 1. Aliphatics: Acids, acid anhydrides, salts Succinic acid Succinic anhydride
Disodium succinate
Usages
Alkyd and polyester intermediate pharmaceutical intermediate Food additive, pharmaceutical and photochemical intermediate Organic intermediate Intermediate for synthetic resins, lubricants, detergents, hardener for epoxide resins
Dichloro succinic anhydride Hexyl succinic anhydride Hexenyl succinic anhydride Octyl succinic anhydride
Intermediate for synthetic resins, lubricants, detergents, hardener for epoxide resins
Octenyl succinic anhydride Nonyl succinic anhydride Nonenyl succinic anydride Decyl succinic anydride
Intermediate for synthetic resins, lubricants, detergents, hardener for epoxide resins
Decenyl succinic anhydride
Intermediate for synthetic resins, lubricants, detergents, hardener for synthetic resins.
Dodecenyl succinic anhydride Tetrapropenyl succinic anhydride
Intermediate for detergents, synthetic resins, lubricants, agrochemicals, hardener for epoxide resins.
Tetradecenyl succinic anhydride
Intermediate for detergents, synthetic resins, lubricants, hardener for epoxide resins
Maleic acid
Organic intermediate
Chloro maleic anhydride
Organic intermediate
Dicholoro maleic anhydride
Organic intermediate
Calciumfumarate
Food additive
Glyoxylic acid
Agrochemical and pharmaceutical intermediate
Thiodipropionic acid
nic intermediate, food additive antioxidant
Esters Dimethylsuccinate
Organic intermediate
Diethylsuccinate
Organic intermediate
Diisopropylsuccinate
Organic intermediate
Di-n-butylsuccinate
Organic intermediate
Diisobutylsuccinate
Organic intermediate
Di-tert. Butyl succcinate
Organic intermediate
Di-tert. Amyl succinate Di-tert.pentyl succinate
Organic intermediate
Di-2-ethylhexyl succinate Dioctylsuccinate
Organic intermediate
Dimethylacetyl succinate
Organic intermediate, starting material for manufacturing pyrazolone dyes (Tartrazine)
Diethyl acetyl-succinate
Organic intermediate, starting material for manufacturing pyrazolone dyes (Tartrazine)
Dimethyl succinylo-succinate 2,5Dihydroxy-1, 4-cyclo-hexandiene-1, 4-dicarboxylic acid dimethylester
Dyestuff intermediate (Quinacridone pigments)
Diethyl succinylo-succinate 2,5Dihydroxy-1, 4-cyclo-hexandiene-1, 4-dicarboxylic acid diethylester
Dyestuff intermediate (Quinacridone pigments)
Sodium di-n-butyl sulfosuccinate
Detergent
Sodium diisobutyl sulfosuccinate
detergent
Sodium di-n-octyl sulfosuccinate
Detergent
Sodium di-2-ethylhexyl sulfosuccinate
Detergent
Dimethylmaleate
Organic intermediate, monomer for copolymers
Diethylmaleate
Organic intermediate, monomer for copolymers
Di-n-butyl maleate
Monomer for copolymers
Diisobutylmaleate
Monomer for copolymers
Di-n-octyl maleate
Monomer for copolymers
Di-2-ethylhexyl maleate Dioctylmaleate
Monomer for copolymers
Bis-(2-hydroxy-ethyl) maleate
Organic intermediate, monomer for copolymers
Dimethylfumarate
Organic intermediate, monomer for copolymers
Diethylfumarate
Organic intermediate, monomer for copolymers
Di-n-butyl-fumarate
Monomer for copolymers
Di-n-octyl-fumarate
Monomer for copolymers
Di-2-ethyl-hexylfumarate Dioctylfumarate
Monomer for copolymers
Methyl 2-chloro-propionate Chloropropionic acid methylester
Organic intermediate
Methyl-2-methoxy-2-hydroxy acetate Glyoxylic acid methyl-ester hemiacetal
Organic intermediate
Aldehydes, ketones, acetals Glutardialdehyde Pentanedial Adipicdialdehyde Hexanedial
Desinfectant organic intermediate Desinfectant organic intermediate
Suberaldehyde Octanedial
Desinfectant organic intermediate
Methylglyoxal Pyruvic aldehyde
Organic intermediate
1,4-Cyclohexandione
Organic intermediate
Malondialdehyde tetra-methylacetal 1,1,3,3-Tetramethyoxy-propane
Organic intermediate
Succinic dialdehyde tetramethylacetal
Organic intermediate
Succinic dialdehyde dimethylacetal 2,5-Dimethoxy tetrahydrofuran
Organic intermediate
Methylglyoxal di-methylacetal
Pharmaceutical and agrochemical intermediate Pharmaceutical and agrochemical intermediate
Ethylglyoxaldimethyl-acetal
Chloroacetaldehyde-dimethylacetal
Organic intermediate
Chloroacetaldehyde-diethylacetal
Organic intermediate
Cyanoacetaldehyde dimethylacetal
Organic intermediate
Cyanoacetaldehyde diethyl acetal
Organic intermediate
Nitrogen compounds: amines, amides, nitriles, guanidine derivates 2, 5-Dichloropentyl-amine hydrochloride pharmaceutical intermediate 2,2,6,6-Tetra-(3-aminopropyl)hardener for epoxide cyclohexanone resins 3-Aminocrotonitrile Diacetonitrile
organic intermediate
N-tert. Butylacryl-amide
Comonomer for polyacrylamides
Diacetone acryl-amide
Comonomer for polyacrylamides
Isobutoxy methyl acrylamide
Succinimide
Comonomer for polyacrylamides Crosslinking agent for polymers Organic intermediate
Sodium succinimide
Organic intermediate
Pottasium succinimide
Organic intermediate
N-Chlorosuccinimide
Chlorinating agent in organic synthesis
N-Bromosuccinimide
Brominating agent in organic synthesis
2-Methylenglutaro-nnitrile
organic intermediate
Guanidine carbonate
Organic intermediate
Guanidine hydro-chloride
Organic intermediate
N, N’-Methylen-bis-acrylamide
Guanidine nitrate
Organic intermediate for explosives
Guanidine sulfate
Organic intermediate
Prim. Guanidine phosphate
Flame retardant
Sec. Guanidine phosphate
Flame retardant
Guanidine sulfamate
Organic intermediate, flame retardant
Guanidine acetate
Organic intermediate
Aminoguanidine bicarbonate
Organic intermediate
2. Aromatics: Acids, salts Aluminiumdibenzoate Vanillic acid Anthranilic acid 2-Aminobenzoic acid 2, 5-Diaminotere-phthalic acid (DATA) Methylene disalicylic acid (MDA)
Additive for poly olefines Organic intermediate Agrochemical and pharmaceutical intermediate dyestuff intermediate (Quinacridone pigments) Pharmaceutical intermediate
Esters n-Butylbenzoate
organic intermediate
Dimethylphthalate
Special plasticiser
Diethylphthalate
Special plasticiser
Dicyclohexylphthalate
Special plasticiser
Di-(methylcyclohexyl_ phthalate
Special plasticiser
Aldehydes Vanilline 4-Hydroxy-3-methoxybenzaldehyde
Organic intermediate, flavour and fragrance substance
Ethylvanilline 4-Hydroxy-3-ethoxybenzaldehyde Miscellaneous products 2-Aminobenzotrifluoride
Flavour and fragrance subsance dye-stuff intermediate
3. Hetrocycles: Hetrocycles with 1 nitrogen atom 3-Aminopyridine 2-Chloro-3-amino-pyridine 2,6-Dichloro-3-amino-pyridine 3-Methyl-5-amino-isoxazole
pharmaceutical intermediate pharmaceutical intermediate pharmaceutical intermediate organic intermediate
Hetrocycles with 2 nitrogen atoms 4(5)-Methylimidazole
organic intermediate
4-Methyl-5-hydroxymethylimidazole, hydrochloride
organic intermediate
Dimethylhydantoin
Organic intermediate
Carboxypyrazolone
Dye-stuff intermediate
Carbethoxypyrazolone
Dye-stuff intermediate
M-Aminocarboxy pyrazolone
Dye-stuff intermediate
M-Nitrocarboxy-pyrazolone
Dye-stuff intermediate
P-Nitrocarboxy-pyrazolone
Dye-stuff intermediate
Carboxypyrazolic acid-4 Pyrazolone t
Dye-stuff intermediate
1-(2’-Sulfophenyl)-3-carbethoxy-5pyrazolone
Dye-stuff intermediate
1-(4-Amino-2-sulfophenyl)-3-carboxy-5pyrazolone
Dye-stuff intermediate
Methylcarboxypyrazolic
Dye-stuff intermediate
Carboxypyrazolone-2,5-disulfonic acid
Dye-stuff intermediate
1-Phenyl-3-methyl-5-aminopyrazole
Dye-stuff intermediate
3,6-Dichloropyridazine
pharmaceutical intermediate pharmaceutical intermediate pharmaceutical intermediate pharmaceutical intermediate agrochemical intermediate
2-Aminopyrimidine 2-Amino-4-methyl-pyrimidine 2-Amino-4, 6-dimethyl-pyrimidine 2-Methylquinoxaaline Heterocycles with 3 nitrogen atoms 1,2,4-Triazole
agrochemical and pharmaceutical intermediate
Malamine phosphate
Flame retardant for synthetic resins
Melamine mono oxalate
Hardener for aminoplast resins Flame retardant for polyamide flame retardant
Melamine cyanurate 2-(Diethoxyphosphinyl ethyl)-guanamine Isocyanuric acid Gyanuric acid Trichloroisocyanurate TCIC
Sodium dichloroiso-cyanurate dihydrate
Organic intermediate for synthesis of isocyanurates Bleaching and scrubbling agent, desinfectant for water treatment, chlorinating agent in organic synthesis. Bleaching and scrubbling agent, desinfectant for water treatment
Tris-(2-hydroxyethyl)-isocyanurate THEIC Triallylisocyanurate TAIC
Modifier for polyester, alkyd and polyurethane resins Crosslinking agent for vinylpolymers and unsaturated polyesters
Bromotriallyl-isocyanurate (Br-TAIC)
Flame retardant for polypropylene, polystyrene, ABS and thermoplastic polyesters
Tris-(2-carboxy-ethyl) isocyanurate TCEIC
Component for alkyd resins, raw material for plasticisers and lubricants
Tris-(epoxypropyl) isocyanurate TEPIC Triglycidyliso-cyanurate
Component for epoxide resins
Tris-(3-aminopropyl) isocyanurate
Hardener for epoxide resins organic intermediate
1-Phenyl-3, 6-dimethyl-4-hydroxypyrazolo-pyridine 7-Amino-2, 5-dimethyl-pyrazolo (1,5-a)pyrimidine
organic and pharmaceutical intermediate
Annexure- VII REPORTS ON CHEMICAL INDUSTRY REPORT
AUTHOR
YEAR
1-
Development of Chemical Industry in Pakistan.
Development Institute Karachi
1975
2-
Potential for Traditional and Industrial Exports from Pakistan Report of Expert Working Group on Chemicals for 7th Five Year Plan (1988-93)
Chemical Consultants (Pakistan) Ltd. Pakistan
1976
S.S. Jafferi, Chairman Of the Working Group
1987
3.
4
Review of Chemical Industry In Pakistan
Investment Advisory Center of Pakistan
1990
5.
Chemical Industry in Pakistan
Industrial Research Services, Karachi
1992
6
Report of Sub Committee on Chemicals (Prime Minister’s high level committees)
Sub-committee
1996
7.
Report of the Working Group on Industrial development (Ninth Five Year Plan, 1998-2003)
Working Group
1997
8
Development of Nontraditional Industrial Sector – (Chemicals)
Sub-committee on Chemicals
1998
9.
Industrial Efficiency Improvement and Development Strategy Study – Chemical Sector Report of the Task force on Industrial Investment
Investment Advisory Cell of Pakistan and others
1998
Task Force by Punjab Government
2002
10.
Name of the Report:Development of Chemical Industry in Pakistan (1975-80)
Date of Completion:June, 1975 Objectives & Scope:The report was prepared for the Planning Division based on an agreement dated 14-11-1974. The objective was to prepare an outline for the development plan for the Chemical Industries for the Five Year Plan 1975-80. It covers all sectors relating to the chemical industry including pharmaceuticals.
Synopsis:The report presents a review of chemical industries up to mid 1974 and then assesses dynamics of development during the five year plan 1975-80. It consists of 138 pages divided in to 5 chapters. Chapter-1 describes the norms of planning and presents detailed targets in all chemical sectors. An investment target of Rs 1.8 billion for the chemical industry in 5 year plan was allocated to different sectors based on the international pattern. Thus, agro-based sector was allocated 20%, organic synthesis (including pesticides) 50%, mineral based compounds 10% and petroleum & gas based (including fertilizers) industries 20% of the target investment. Various projects were also proposed in each chemical sector to realize the five year plan.
Chapter-2 gives an overview of the global chemical industry with shares of various sectors. It also lists optimum economic sizes of some chemical plants. Chapter-3 includes a review of chemical industry in Pakistan giving number of units in each sector, employment, assets, production etc. Chapter-4 deals with techno-economic considerations of various chemical sectors. These sectors have been divided into agro based, pharmaceuticals, organics, mineral based and petrochemicals. Each sector has been discussed in detail including the raw materials, production, imports, final usages and investment involved. This section is the core of the report and includes valuable information / data. Chapter-5 includes bibliography and reference list.
Name of the Report:Potential for Traditional and Industrial Exports from Pakistan
Authors:-
Chemical Consultants (Pakistan) Ltd. Karachi
Date of Completion:March, 1976 Objectives & Scope:This report was prepared for the Planning Division and it also covers industries other than Chemical Industry. The report aimed at analyzing in detail the potentials of all type of industries in Pakistan.
Synopsis:The report is split in two volumes spreading over 524 pages. Volume-II of this report includes chemical industry and thus only this volume is under our review. Chapter-20 & 21 deals with the processing & chemical industries and export potential for these items. The following items related to chemical industry have been discussed in the report from the export potential point of view.
•
Ethyl alcohol
•
Paints & Varnishes
•
Soda Ash
•
Caustic Soda/Chlorine
•
Yeast
•
Citric acid
•
Furfural
•
Casein
•
Mono Sodium Glutamate
•
Oxalic acid
•
Sodium Nitrate and Nitrite
•
Activated earth
The availability of raw materials, agro based and mineral based, has also been discussed for the production of above chemicals. The report contains good analysis of export potential of Pakistani products.
Name of the Report:Report on Expert Working Group on Chemicals for 7th Five Year Plan (1988-93)
Authors:-
The Working Group on Chemicals, Petrochemicals, Fertilizers and Pesticides. The Working Group consisted of 24 members and 17 coopted members from government, public sector and private sector.
Date of Completion:March, 1987 Objectives & Scope:To review the prevailing situation of chemicals, petrochemicals, fertilizers, pesticides and pharmaceuticals sectors and to suggest new projects to encourage investment. Recommendations should also be on the transfer of technology, quality of products and competitiveness in the export market.
Synopsis:The report was prepared for the Planning Division and it comprises of 280 pages. The main report is spread over 47 pages and the rest comprises of four annexures. The
main
report
reviewed
situation
of
industry
in
chemicals,
petrochemicals, fertilizers and pesticides sectors and proposed new projects and set of recommendations for each sector. The proposals include setting up a naphtha cracker based on associated gasses and manufacturing of PVC from molasses.
Annexure-A of the report focuses on policy framework for 1988-2003. With the brief reviewing of the prevailing situation of the chemical industry, recommendations have been made for future development.
Annexure-B is a detailed analysis of the general chemical industry with proposed projects. 33 industries have been discussed with capacities production, imports and consumption in each case. The section contains useful data on above parameters. Annexure-C deals with petrochemical industry in detail in 50 pages. The installed capacities and production of all petrochemical plants are listed in this section. The demand patterns have been analyzed. Availability of raw materials has been discussed and future projects have been proposed based on various raw materials available in the country. Annexure-D covers the fertilizers sector in detail. It spreads over 52 pages and includes excellent data and information on this sector. The last part of this annexure deals with pesticides, its consumption and demand.
Name of the Report:Review of Chemical Industry of Pakistan
Authors:Investment Advisory Centre of Pakistan (A team comprising of chemical engineers, management and financial experts, economist and data analysts)
Date of Completion:March, 1990 Objectives & Scope:The
report
focuses
on
25
basic
chemicals
but
excludes
pharmaceuticals and petrochemicals. It assesses the existing situation of the chemical industry, supply & demand situation and impediments and proposes future strategy.
Synopsis:The report presents sectoral studies of 25 chemical industries based on 1988-89 situation. These industries include Soda Ash, Caustic Soda, Sulphuric Acid, Guar Gum, Sodium Silicate, Nitric Acid, Industrial Alcohol, Citric Acid, Fertilizer, Pesticides, Paints, Hydrogen peroxide, Dyes, Detergents, Essential Oils, Inks, Inedible oils/Fats, Industrial Gases, Synthetic Resin, etc. The report includes installed capacities, actual production, imports, demand analysis, prices and technology in all cases. Generally, 4 years production and import data have been discussed in the report. Names and capacities of major producers have also been included.
This report is an extensive study of the chemical sectors and it contains sufficient data in each case. The report is silent on impediments or strategical future plans.
Name of the Report:Chemical Industry in Pakistan
Authors:Industrial Research Service, Karachi
Date of Completion:January, 1992 Objectives & Scope:The objective of the report is to survey the existing chemical industry. The report covers basic chemicals, petrochemicals, fertilizers, pesticides and paints sectors.
Synopsis:The report is compiled by a team of experts, it contains data for past 5 – 10 years and it comprises of 316 pages. The global outlook covers unnecessary details on the performance of international companies but review of the local industry is more relevant. Basic chemicals in the report covers Soda Ash, Caustic Soda and Sulphuric Acid. The report discusses production, growth, capacity utilization, imports, demands and prices of these products along with their major producers. The discussion on petrochemicals includes the existing status of petrochemical facilities, plastic industry, production, import and demand in Pakistan. It discusses the opportunity of using the local naphtha to feed a naphtha cracker for the manufacture of petrochemicals. It also sees possibility of petrochemical production from natural gas, associated gases, molasses and coal. It has been stated that 3.9 tons of molasses are required to produce one ton of ethyl alcohol, 2.88 tons to produce one ton PVC and 2.98 tons to produce one ton of ethylene glycol. The report mentioned that there are no production facilities for the basic petrochemicals such as ethylene, propylene, butadiene and methanol. It has been suggested to install a naphtha cracker in the country based on the locally available naphtha.
The fertilizer sector has been discussed in detail with brief profiles of all fertilizer units. The production, import and demand of all types of fertilizers have been covered along with the fertilizer policy. Data on consumption, price, subsidy on fertilizers have been included for the past 5 – 10 years. The latest financial performance of Dh Chemicals, Engro Chemicals, FFC and NFC has been discussed in detail. The pesticides sector has been covered with description and data on the type of sprays, imports, sales and prices from 1980 to 1990. The report includes working results of few major players in this sector. M/s Ittehad Pesticides has been discussed as producer of BHC and DDT pesticides. The report discusses paints sector with its local production form 198384 and availability of its raw materials, which were mostly imported at that time. The report also includes data on imports and exports of paints. The company profiles and performance of ICI Berger Paints, Buxly Paints and Kausar Paints have been included in the report.
Name of the Report:Report of the Sub-committee on Chemicals
Authors:A sub-committee on Chemicals under the Prime Minister’s High Level Review Committee on Science & Technology.
Date of Completion:-
July 1996 Objectives & Scope:The sub-committee on Chemicals focused on the following major sectors of the Chemical Industry: •
Fertilizers
•
Basic Chemicals
•
Synthetic Fibers
•
Petrochemicals
The objective of the study was to review the existing situation and to make recommendations for improvement.
Synopsis:This is a 50 page report prepared by the sub-committee comprising of eminent industrialists and government officials. The report reviews the prevailing situation in the chemical sector and discusses its pitfalls specifically related to the dyes, petrochemicals and fertilizers sectors. The next section of the report deals with the capacities, production, consumption and major producers existing in 1995-96. Nitrogenous and Phosphatic Fertilizers, Soda Ash, Caustic Soda, Sulphuric Acid, Plastics, Aromatics (BTX), Carbon Black and all synthetic fibres have been discussed. By enabling the import data, the report indicates a promising potential for chemical industry in Pakistan. The future projects recommended by the sub-committee were the followings:
•
Naphtha cracker based on local / imported naphtha.
•
Soda Ash /Caustic Soda manufacturing from Rock Salt.
•
Hydrogen Peroxide 10,000 tons per year capacity.
•
Utilization of molasses for the manufacture of chemicals.
•
Manufacture of formic acid, acetic acid, barium carbonate, viscos rayon and petrochemicals.
•
Locally produced coaltar and asphalt to be used for the production of various enamels and protective coatings.
•
Use of local Bayrites and Magnesites for the manufacture of chemicals.
The report also makes recommendations on how to improve the engineering and R&D facilities in the country for the bigger role in the development of industry. PCSIR has come in spot light and suggestions have been made to make its role effective. The need of trained manpower for the chemical industry has been highlighted. It is recommended to create a coordination body between chemical industry and R&D organization for the development of this sector.
Name of the Report:Report of the Working Group on Industrial Development
Authors:The Working Group on the Industrial Development for the 9th Five Year Plan (1998-2003).
Date of Completion:August, 1997 Objectives & Scope:-
The report deals with the problems, policies, foreign investment and environment issues of all industries in Pakistan and suggests plans for 19982003.
Synopsis:The report was prepared by the Working Group for the Planning Commission. It reviews policy matters and proposes strategy for the period 1998-2003. Appendix-M of the report deals with the Chemical Industry and it focuses on the petrochemical sector. It includes microeconomic policy recommendations and investment possibilities in the petrochemical industry.
Name of the Report:Development of Non-traditional Industrial Sector paper on Chemicals
Authors:The sub-committee on chemicals by Board of Investment, Islamabad, comprising of the following: Mr. M. Idrees, Sitara Chemicals, Mr. Zafar Ahmad Khan, Engro Chemical, Mr. Ijaz Akbar, Islamabad.
Date of Completion:25 June, 1998
Objectives & Scope:The sub-committee was to prepare recommendations for the development of the non-traditional industrial sector (chemicals). To focus on macro issues which are limiting the development of chemical / petrochemical industry in Pakistan.
Synopsis:Three members of the sub-committee prepared separate papers on the above subject and they were compiled together to make a 90 page report. There is not much data in the report and all what is available is mostly for the year 1994-95. Mr. Muhammad Idrees, Chief Executive of Sitara Chemicals, is a prominent and successful industrialist. He discussed the technical and commercial problems of the chemical industry. After analyzing the import dependence of this sector, he suggested various actions necessary to revive the chemical industry. He stressed to implement the recommendations by the “Special Secretaries Committee” and reduce the tariff on plant and machinery to 3-7%. He highlighted the role of R&D organizations and suggested actions to re-enforce their role for the industry. He discussed the problems faced by the basic chemicals, dyes & petrochemicals sector. The capacities and outputs of Fertilizers, Basic Chemicals (Soda Ash, Caustic Soda, Sulphuric Acid), Petro-chemicals and Synthetic Fibres were discussed along with the future demand. Finally, he suggested the following projects to promote the chemical industry. a) Naphtha cracker based on imported naphtha. b) Production of acetylene, PVC, methanol from the natural gas.
c) Production of industrial alcohol, acetic acid, citric acid, ethylene, etc from molasses. d) Petrochemicals from gas condensate. e) Chlorine based chemicals like PVC, Calcium hypochlorite, Zinc chloride, Tin Tetrachloride, Ferric chloride, Calcium chloride, Bleaching earth, etc. The 2nd paper in the report is by Mr. Zafar Ahmad Khan, President & Chief Executive of Engro Chemical, Karachi. He discussed the prevailing status of the chemical industry at macro level. Availability of major raw materials like natural gas, ethane, molasses, crude oil and rock salt has been highlighted with a view to develop downstream chemical industry. He has highlighted the major bottlenecks to the growth and has suggested steps for the development of the chemical industry. 3rd paper in the report is by Mr. Ijaz Akbar, a chartered accountant by profession. He has analyzed the economics of various options of raw material for the chemical/petrochemical industry. He concluded that ethane is the cheapest raw material for the production of petrochemicals and the he thinks that ethane is abundantly available in natural gas/associated gases. Based on the above assumptions, he proposed a project to manufacture polyethylene from the ethane gas cracking. His observations on the availability of ethane for a polyethylene project were not correct.
Name of the Report:Industrial Efficiency Improvement and Development Strategy Study - Chemical subsector (Industrial Chemicals)
Authors:• • •
Investment Advisory Cell of Pakistan, Karachi United Consultants Ltd., Lahore IMG Consultants Pty. Ltd., Sydney, Australia
Date of Completion:August, 1998 Objectives & Scope:The objective of this series of 23 reports is to formulate a strategy, incorporating a consistent set of policies, which will enable rapid and efficient industrial development. The series covers engineering, chemical and textile sectors. The report under review is volume-12 on Industrial Chemicals.
Synopsis:This series of reports was prepared for the Planning Division and it was funded by the World Bank. The volume-12 deals with Industrial Chemicals divided into the following product classes:
•
Basic Industrial Chemicals
•
Salts and Intermediates
•
Specialty Chemicals and Dyes
•
Industrial Gases
•
Pesticides
•
Synthetic Resins
The report presents data on production, employment, input/output values for above chemical groups for 1985/86. Chapter-3 deals with production capacities, prices, raw materials, processes of manufacturing and backward & forward linkage for each chemical group mentioned above. Chapter-4 discusses the manufacturing processes being applied in the country. The salient features of each process have been mentioned and recommendations on technological requirement have been made. Some common characteristics of the available technologies have been discussed to highlight the development in process control, material handling, environment, research & development, quality control, productivity, etc. Chapter-5 discusses the role of government policies in development of various chemical sectors for achieving value addition and cost efficiency. All this analysis is based on 1985/86 data.
Chapter-6 evaluates the 1985-86 situations in respect of structure and technology. It reviews each chemical industry and recommends strategy for future planning.
Name of the Report:Report of the Task Force on Industrial Investment
Authors:The Task Force organized by the Ministry of Industries & Mineral Development, Punjab. It comprised of eleven eminent industrialists, traders, bankers, etc.
Date of Completion:January, 2002 Objectives & Scope:To study the factors impeding industrial investment in Punjab and recommend ways & means to attract investment.
Synopsis:The report discusses impediments to industry in detail. Also the factors adversely affecting full utilization of installed capacity have been covered. The report enlists proposals to attract investment in Pakistan especially from the overseas Pakistanis.
Prospects of Chemical Industry in Pakistan
A.T.S. Synthetic (Pvt.) Ltd. Kacha Road, Khana Nau, Lahore Tel : (92 – 042) 5270057-5271436-38 Fax :(92- 042) 5271439 Telex: 44202 ATS PK. Cable : “ATSINT”
M/s ATS Synthetic (Pvt) Ltd. was registered on 17/11/1993 as a Private Limited Company under the company ordinance 1984. It started its commercial production in the year 1996. The unit is engaged in the manufacture of different types of Artificial Leather, viz PVC Coated, PU Coated, PVC / PU Coated, PVC Sheets, PVC Flooring and DOP.
The raw materials used in the manufacturing line are PVC Resin, Polyurethane, Release Paper, DMF, Arbocel, DOP, PV/PC Fabric of different grades and colours, 2-Ehtyle Hexanol, Phthalic Anhydride & various types of Pigments / colours etc. The total investment made on the project stand at Rs.776.917 millions, out of which Rs.200 millions is self investment while Rs.576.917 millions have been invested after borrowing from different banks. The actual production of different items along with the installed capacity is given as under: Description
Installed Capacity/Year
Artificial Leather
5.4 million mtrs.
PVC Sheet
1092 M. Tons
DOP
14040 M. Tons
PVC Flooring
1.2 million mtrs.
221
Experts Advisory Cell
Prospects of Chemical Industry in Pakistan
Aventis CropScience Pakistan (Pvt.) LTD. Plot # 23, Sector # 22, Korangi Industrial Area, Karachi-74900 Tele: - 92-021-5060721-23, 5055041-42, Fax:- 92-021-5060638 e-mail: -
[email protected] Type of Industry/ Service :
Manufacturing and distribution of pesticides / insecticides / fungicides products all over Pakistan
Year of Establishment
:
1992
Plant Process Activity
: Formulation
Existing Production Capacity: (a) Installed capacity: 6.4 Mill. Ltr/Kg
(b) Actual Capacity (Y-2001): 2.4 Miln. Ltr/Kg
(c) Annual turn over (Y - 2001) (major products): Rs. 969.11 million.
List of Products AFUGAN 30 EC ALPHA CYPERMETHRIN ARELON 50 DISP. ALIETE BUCTRIL M CYPERMETHRIN 10 EC BASAMID DECIS D DECIS 2.5 EC DECTRAN 328 EC DERSAL 500 EC DITHANE DELTAPHOS DROPP ULTRA HOSTATHION 40 EC IPIFLOUR 40 EC KUMULUS-DF LARVIN 80 DF METHAMIDOPHOS
PREVICUR 607 SL PLANOFIX PANTHER PIX PUMA REGENT 50 SC RONSTAR 12 EC SCOUT X-TRA SHERPA 5 EC SUNSTAR15 WG SEVIN 85 SP SYSTOATE 40 EC THIODAN 35EC THIODAN 25 ULV TOLKAN 50 WP TEMIK 15 G THIOVIT 80 WP OCTAVE WP MITAC/OVASYN 20 EC
222
Experts Advisory Cell
Prospects of Chemical Industry in Pakistan
Azmat Polymers (Pvt.) Ltd. 185/1 Industrial Estate, Gadoon Amazai, Swabi, Tel:-(92-0938) 70368, Fax:-(92-0938) 70468
Product:
:
Phenolic Resin
Capacity:
:
900 M.T per anum
Raw Materials:
:
Phenol Paraformaldehyde Oxalic Acid Formaldehyde
P R O C E SS: Phenolic Resin is produced with the reaction of Phenol & Formaldehyde. It is an exothermic reaction, which is stimulated by adding catalyst i.e. Oxalic Acid. It is manufactured in a reaction vessel (Kettle) commonly used for producing various resins. The finished product is in crystalline form packed in PP Bags each of 25 Kgs.
223
Experts Advisory Cell
Prospects of Chemical Industry in Pakistan
BASF Pakistan (Private) Limited 46-A, Block – 6, P.E.C.H.S., Karachi – Pakistan. tele:- 021-4549171, Fax:- 021-4547815 e-mail:-
[email protected] BASF is a transnational company with a German heritage that welcomes cultural diversity. BASF in Pakistan continues to reinforce its position as a major player in the chemical industry of the country by investing in infrastructure developments and state-of-the-art technology. Following the introduction of the SAP based COSMOS software it is now possible to keep track of BASF's business throughout Asia-Pacific. The software provides a standard for all business transactions and processes, ranging from incoming orders to payment collection. BASF Pakistan is proud to be a part of this system, which serves 53 BASF companies in 14 countries. The Factory of BASF Pakistan (Pvt.) Ltd. conforms to BASF's uniform global safety policy based on modern technology, optimum organizational structures, a high level of training and a strong sense of responsibility among employees. The three Application Laboratories at the factory and an additional one in Sialkot provide support to our customers. BASF in Pakistan exemplifies the spirit of innovation and high quality products that benefit BASF customers worldwide. There are 127 employees working as a team in BASF Pakistan. As a local manufacturer, it has a sale of over 100 products which include a wide range of Textile and Leather pigments and auxiliaries as mentioned below: • • • • • • •
Leather Bating Agents, Wetting Agents, Resin Tanning Agents, Fat Liquors, Dyes, Pigments, Binders & Finishing Auxiliaries Textile Sizing Agents, Pre-Treatment Auxiliaries, Dyeing, Printing & Finishing Auxiliaries, Pigments for Printing Unsaturated Polyester Resin & Gel Coat. Total Plant Capacity Capacity Utilization Production System Production Process
: : : :
15,000 tons 80-85% Batch process polyimerization, standardization sulphitation, powder mixing, wet milling
Main Production Group:1. Dispersions 5. Fat liquors
2. Auxiliaries 6. Powder
3. Palatal
224
4. Pigment
Experts Advisory Cell
Prospects of Chemical Industry in Pakistan
Buxly Paints limited X/3, Manghopir Road, S.I.T.E., P.O. Box 3630, Karachi-75700 Tel: - (92-021) 2577702-5 Fax:- (92-021) 2560468 e-mail:-
[email protected]
Buxly is a wholly Pakistani company and its name is derived from the middle name of its late Founder Mr. Rahim Bux Khan Buxly’s first factory was established in 1948 in the Sindh Industrial Trading Estate, Karachi. The Company has since seen many ups and downs, in spite of which it is today the largest Pakistani paint manufacturer, with well established brands recognized nationwide as high quality products. Besides the widely distributed decorative/architectural paints, we manufacture a manifest variety of high performance coatings based on Epoxies, Polyurethanes, Silicones and for almost everything else in between. For over 34 colorful years, Buxly continues to be a technology leader in the Pakistani paint industry on account of which the company is the recipient of several international Quality Awards. With the recommencement of exports of sophisticated high-end coating, its commitment to consistent quality, innovation and improvement is further emphasized. As mentioned above Buxly manufactures the total range of decorative/architectural paints, which includes enamels, emulsions, exterior and foundation coating, wood lacquers, anti-corrosive and paints for swimming pools, sports area’s etc. In the non-conventional field, the company manufactures in following items:Chlorinated Rubber Based Coatings. Epoxies Heating Resisting Paints Polyurethanes Pretreatment Solutions Marine Coatings Aerospace Coatings Miscellaneous Industrial and specification paints. The production capacity is in excess of two million liters per annum.
225
Experts Advisory Cell
Prospects of Chemical Industry in Pakistan
BERGER PAINTS PAKISTAN LTD. D-31, South Avenue, S.I.T.E., Karachi – 75700 Tel:- (92-021) 2573711-22, UAN : 111-237-437 Fax:- (92-021) 2561069, 2562090 e-mail: -
[email protected]
The Berger name has been associated with paint manufacturing for almost two centuries. The BERGER group has worldwide affiliations, with companies operating in 46 countries. In Pakistan, the history of BERGER is as old as the history of organized paint manufacturing. The first Company to introduce premium quality paints in the country, BERGER started its operations in 1950. Initially, the paints were imported from the United Kingdom. It was in "1955 that a local manufacturing facility was established at Karachi. Ever since, the Company has met the growing demand through regular extensions in its product range, which has contributed to attract a healthy market share and has maintained a high reputation for consistent quality. BERGER PAINTS PAKISTAN became a public limited Company in 1974, when 49.8% of the shares were acquired by Pakistani investors with the remaining 50.2% being held by the U.K. parent Company, Jenson & Nicholson Limited. Soon afterwards, Jenson & Nicholson Limited was taken over by Hoechst, one of the world's major manufacturers of chemicals and allied products. Slotrapid Limited, a U.K. based Company with diversified business interests acquired the management of BERGER PAINTS PAKISTAN in 1991. Also in 1993, BERGER entered into a technical collaboration agreement with Nippon Paint Company of Japan. Nippon is acknowledged as one of the most sophisticated paint manufacturers in the world and ranks among the leaders of the paint industry. This collaboration has enabled BERGER to develop automotive and industrial paints conforming to exacting international standards. BERGER paints has also built up technical collaboration for decorative paints with BERGER Crowne of Akzo Nobel UK. With its Head Office at Karachi, BERGER PAINTS PAKISTAN has regional offices at Lahore and Islamabad as well as a wide network of distributors/ dealers and sales personnel at all major urban centres of the country.
226
Experts Advisory Cell
Prospects of Chemical Industry in Pakistan
List of Major Raw Materials Used
Description
H.S. Code
Aprox. Annual Requirement Qty/Tons
Acrylates Aluminum Pastes Chorinated Rubber Chrome Yellows Defomers
2915.3200 3212.9090 3905.9000 3206.2010 3824.9099
40 5 0.6 2 6
Dispersing Agents
3402.1310 3402.1910
15
Driers
3211.0000
1
Glycols Inorganic Coloring Matters
2905.3100 3206.4900 3206.5000
55 34
Lithophone Nitrocellulose Pentaerthritol Phthalic Anhydride Plasticizers Solvents
3206.4210 3912.2000 2906.4200 2917.3500 2917.3200 2905.1300
3 36 72 336 7 384
Synthetic Resins
3907.5000 3909.4090
22
Thickners Titinium Di Oxide Toluene VAM Water Base Pastes Xylole Tin Plates
3912.3900 3206.1100 2902.3000 2915.3200 3204.1700 2707.3000 7210.1200
0.6 600 204 276 528 528 1200
227
Experts Advisory Cell
Prospects of Chemical Industry in Pakistan
Production Details Description
Estimated Annual Production Liters (000)
VIP EMULSION ROBB. ENAMEL S. P. D. WEATHER COAT A/R SUPER MATT ENL. T. P. S. EAZY CLEAN ECONOMY EMULSION DUROCEM TIMBER COAT WATER BASED PUTTY OTHER DECORATIVE TOTAL DECORATIVE
550 780 1,750 320 170 200 80 40 75 230 220 230 4,645
INDUSTRIAL / AUTO/HONDA VITON (CAR PAINT GOVERNMENT / MARINE POWDER COATING T.P. CATAPHS R/MARKING
1,750 360 450 160 100
S. TOTAL
2,820
GRAND TOTAL
7,465
228
Experts Advisory Cell
Prospects of Chemical Industry in Pakistan
CLARIANT PAKISTAN LIMITED 1-A/1, Sector 20, Korangi Industrial Area, Karachi- 74900 Tel :- (92-021) 5046710-19 Fax:- (92-021) 5046712, 5032337
Clariant Pakistan Limited (CPL) is a 75% owned subsidiary of Clariant International Limited, Muttenz, Switzerland. In Switzerland, Clariant was formed as a bifurcation of Sandoz' Chemicals Division from the rest of its business, mainly pharmaceuticals, on 1st July 1995. In 1996 the Chemicals Division of the former Sandoz Pakistan Limited was carved out from the rest of Sandoz Pakistan Limited to form Clariant Pakistan Limited. As a result of the global acquisition of Hoechst AG, Germany's Specialty Chemicals Business by Clariant, Switzerland in 1997, CPL acquired the entire assets (excluding land) and liabilities of the Specialty Chemicals Business of former Hoechst Pakistan Limited. CPL is a public limited company quoted at Karachi Stock Exchange. It has the following manufacturing sites:Jamshoro, Sindh
Textile and Leather Chemicals, Dyes / Pigments, Emulsions for textiles, leather, paints, etc. and glue for the wood working industry.
Korangi, Karachi
Masterbatches (Plastic colouring material).
Thokar Niaz Beg, Lahore
Textile and Leather dyes.
Product Range and Productions Capacities: Chemicals and auxiliaries for textile, leather etc. Dyestuffs for textiles and leather Emulsions for textiles, leather paints etc including Glues, for wood working industry Masterbatches
: :
12,000 tons p.a 3,000 tons p.a
: :
17,000 tons p.a 1,800 tons p.a
Raw Materials: A large variety of raw materials are used in different combination for various products that originates from various countries.
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CHEMI-DYESTUFFS IND. (PVT.) LTD. D-4, South Avenue S.I.T.E, Karachi-75700, Tel:-(92-021) 2573940-2571403, Fax:- (92-021) 2562613 & (92-202) 32293 e-mail
[email protected] web site:- www.chemigroup.com
Chemi Group laid the foundation of Chemidyestuffs Industries (Pvt) Limited in 1987 as its own synthesis unit. The technology base of manufacturing the dyestuffs was acquired from Thai Ambica Chemicals Co. Ltd, Thailand and the technical know how assistance supplemented by its associates from Crompton and Knowels, USA. Over the years, CDIL has firmly consolidated its strength of manufacturing quality dyestuffs since 1987. The graph of enhancing the standard of quality control and expanding the parameters of products, research, design and development, is on constant rise, which is evident from its ever-expanding clientele base locally and internationally. A wide range of Chemifix Reactive, Chemicet & Chemicron Disperse and Direct dyestuffs and Pigment Preparation for textile and a series of shades in Acid and direct dyestuffs for leather industries are designed, processed and finished at CDIL's Plant at Hub Chowki, Baluchistan. This ability of manufacturing five complete ranges of diversified products, places CDIL at an exceptional level. It has also managed to promote its products range to almost all the leading textile units and has had received customers' appreciation for consistency in quality of international standards. It has a distinct honor of exporting its products to a couple of Asian, Far East and Middle Eastern countries during last two years and has been playing the role of promoting exports of Pakistani Products and creating opportunities for foreign exchange earnings. CDIL's recent ISO 9001 certification has ensured an absolute consistency in all the quality control matters, and has made its production stage more efficient for utilizing full scale cost saving advantages. The hallmark of CDIL’s products range is the price structure where special attention is being paid to pass on maximum economical advantage to the consumers. That is why the gap in the prices being charged by the multinational suppliers versus CDIL comes to an unbelievable comparison level, where you get an instant feeling of being overcharged for the products, which are readily available at half the prices and meet all the international quality standards and specifications. One such good reason of adhering t the international specifications is CDIL’s highly environment conscious approach, which, apart from its implementation at every production level, also filters down to an ambiance of its priority to all the environment related issues. The parameters of designing and developing new
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Products are well within the focus of user-friendly production and cost efficiency techniques. Present Production Capacity: At present our annual production capacity to produce dyestuffs, OBA & Pigment Emulsions is tabulated below: Dyestuffs
H.S. Code
Disperse Dyes Acid Dyes Direct Dyes Reactive Dyes Optical Brighteners Pigment Emulsions
3204.1100 3204.1200 3204.1400 3204.1600 3204.2000 3204.1700
Production capacity (MT.Per Year) 700 Metric Tons
300 Metric Tons
Expansion Program: To meet the future challenges, it has been planned to expand the existing production capacity and Plant expansion is underway. By the mid of 2003, the company we will be able to produce further dyestuff as fallows: Dyestuffs
H.S. Code
Production Capacity (MT. Per Year)
Disperse Dyes Acid Dyes Direct Dyes Reactive Dyes Optical Brighteners
3204.1100 3204.1200 3204.1400 3204.1600 3204.2000
700 Metric Tons
Pigment Emulsions
3204.1700
300 Metric Tons
After expansion the total per annum production capacity would be 2400 MT.
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Champion Paint Industries (Pvt.) Limited Hanjarwal, Multan Road, Lahore, Tel:-(92-042) 5420260-61, Fax:- (92-042) 5417878
RAW MATERIAL Resins, Pigments, Dry Colours, Chemicals (Solvents & Additive etc.)
PRODUCTS a)
Car repair N/C Paints.
b)
Decorative paints such as emulsion paint of different qualities and synthetic enamel.
c)
Industrial paints - such as Stoving paints, Sport Goods lacquers and Chemical resistant paints etc.
CAPACITY a)
Installed Capacity
:
4,25,000 Liters
b)
Annual production for the year 2000-2001
:
3,74,720.36 Liters
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DARBAR SOAP WORKS (PVT.) LTD. E-52, S.I.T.E., Karachi-75700 Tel:- (92-021) 2573612-4, Fax: (92-021) 2563828-2560900 e-mail:-
[email protected]
Established:
1949
Line Of Products:
Washing & Laundry Soap, Toilet Soap, Glycerine & Cooking Oil.
Famous Brands:
‘101’ (Translucent) ‘101’Special, ‘101’ (Family Lemon) Feroza, Maya (Brown)’101’ (Noodles) for Washing machine, Mona, Roop, Rainbow, Feroza Special (Toilet Soap).
Machinery Details:
1. 2. 3. 4. 5.
Quality Control:
It has a well-equipped laboratory where qualified chemists are always busy in testing from raw materials to finished products to control the quality parameters to ensure the standard of products.
Turnover:
In US Dollars over 60 million per annum. In Pakistan Rupees over 315 Million per annum.
History:
Darbar Soap Works(Pvt) Limited is a family company. It was established by Late Haji Abdul Karim in 1949. Initially semi –boiled soap was produced which was very popular in Sindh & Punjab Provinces. In 1963, first Italian Modern Automatic Plant was installed by the Grace of God. The company flourished and progressed continuously. At present, it has three finishing units capable of manufacturing every kind of soap. The Company is sharing major portion of market especially in Karachi, which are almost 45% of total sale of soaps.
Soap Plant G.Mazzoni (Italy) : 18 Tons per day Soap Plant Binnachi (Italy) : 54 Tons per day Z.K. Plant (Pakistan) : 18 Tons per day Cooking Oil Z.K. (Pakistan) : 30 Tons per day Glycerine Crude & Refined Plant.
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DELTA INDUSTRIES (PVT.) LIMITED Head office:- Akhawan House, 38-Shahrah-e-Sir, S.M.S. Agha Khan III, (Davis Road) Lahore-54000 Tel:- (042) 6372042-5, 6369933 Fax:-(042) 6369434 e-mail:
[email protected] Website:http//www/deltaindsutry.com
Factory Office:
14-1/2 Km. Lahore-Sheikhupura Road, Lahore Tel: 042-7970229, 7970630-31
DELTA Industries (Pvt.) Limited was incorporated as a private limited company in 1981, primarily for the manufacturing of Synthetic Resins and Allied Chemicals. It is an ISO certified company and comprises of the following four main production units which are adequately equipped with R&D facilities and are located at 14-1/2 KM. Lahore-Sheikhupura Road:i. ii. iii. iv.
Polymer Section Optical Brighteners/ Textile Chemicals Fortified Rosin PVA & Acrylic based Emulsions etc.
Products o o o o o o o
Surface Coating Resins Unsaturated Polyester Resin Optical Brighteners (Used in the Textile, Paper & Detergent Industries) Textile Auxiliaries Alpha Amylase ( For Textile Process Industry) Neutral and Acid Enzymes (For Garment Wash Industry) PVA & Acrylic based Chemicals(Used in the Paint and Textile Industries)
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Production of Alkyd
Rated Capacity 600
Current Production MT /Month 580
Production of Emulsion Rated Capacity 100
Current Production MT /Month 70
Production of Polyester
Rated Capacity 200
Current Production MT /Month 155
Production of Rosin Rated Capacity 190
Current Production MT /Month 160
Production of Textile
Rated Capacity 300
Current Production MT /Month 190
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Dynea Pakistan Limited (formerly Dyno Pakistan Ltd.) 2nd floor, Al-Hannan Centre, 55, Dar-ul-Aman Society, Block 7/8, Sharea Faisal, Karachi-75350 Tel: - (92-021) 4520132-5, Fax:- (92-021) 557167 e-mail: -
[email protected]
Alfred Noble founded Dyno A.S.A. of Norway in 1865. It is now a multinational with 100 wholly or partly owned companies in over 40 countries. Core business of Dyno Industries is commercial explosive, specially chemicals, and micro particles and plastics products. Almost 90% of Dyno turnover is generated outside of Norway. Dyno currently employees some 8,500 people. Dyno Pakistan Limited was formed in early 1982 as a joint venture between Habib Group of companies and Dyno industries A.S.A of Norway. It is a public limited company with the two initial founders being the major shareholders. Due to the changes in (Foreign Chemical Division) of the foreign partner, the name Dyno has been changed to Dynea as its new name has been incorporated under the Companies Ordinance effective from 30"'. July 2001. Dynea Pakistan Limited produces quality urea resin for use in industries like particleboard, chipboard, veneerboard and melamine resin for lamination industry. Together with its wholly owned subsidiary Visionite (Pvt) Limited, it is also the largest producer of moulding compound used for manufacturing dinner sets and electrical accessories. Joint Venture The joint venture brought together the technical know-how of Dyno Industries and the organizational and marketing ability, knowledge of local conditions and the reputation of the House of Habib. The complete project was financed through NORAD loan and equity contribution. A housing project was also set up through a grant from NORAD to provide comfortable housing for workers and amenities for the whole area. Technology Dynea Pakistan has access to and is using the latest technology in the field of amino resins available with Dynea Industries, who are recognized as leader in this field. Dynea's moulding compound technology was developed by Buss A.G. of Switzerland and is the latest in this field. 236
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Purpose of this industry Manufacturing of formaldehyde and aminoplast resins and of moulding compound were both pioneering ventures introduced for the first time in Pakistan. Now only a small quantity of moulding compound is imported into the country and there are no imports of formaldehyde or liquid resins. Tableware industry has grown 10 times because of the availability of locally manufactured raw material. These industries have also helped save huge foreign exchange for the country. Both Dynea as a corporation and Dynea Pakistan Limited as a company have singled out Health, Safety and Environment as being a high priority issue. Dynea Pakistan is actively working to: • •
Protect employees and local surroundings from environment damages. Manage its resources and assume its share of the environmental responsibility in relation to customer as well as supplier. Has vast experience of skilled & qualified staff & commitment to keep its customer's trust & respect by setting high standards in all areas of supply & services.
•
Sources of Supplies The raw material used by Dynea for its manufacturing purpose is local purchased as well as imported. The raw material generally comprise of the following: 1. 2. 3. 4. 5. 6. 7. 8.
Methanol Urea Melamine Cellulose Hexamine Adeka PPS Ammonium Sulfamate Others
Product Catalytic oxidation and dehydrogenation of Methanol, produce formaldehyde. It is mixed with water and air and then vaporizes the raw materials. The catalyst bed in the reactor consists of silver, which is regenerated and re-used. The formaldehyde product is drawn from the 1st circulation of the absorber. The main lines of product carried out by Dynea comprises of the following:
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a. b. c. d. e.
Formaldehyde - in various concentrations Urea in various concentrations Melamine - in various concentrations Moulding Compound Special Moulding Compound
UF Resin It is based upon the reaction of urea and formaldehyde solution. Urea and Formaldehyde is charged into the reactor and heated. After reaching the desired viscosity, the pH is adjusted and cooled before transferring it to the storage tanks. Amino Plast Moulding Compound The basic concept of the Moulding Compound process is to impregnate the cellulose or wood flour filler with resin and to condense the resin and dry the material to provide a moulding compound, and granulation completes the moulding material process. Rated Capacity and Production Resin Division
Rated Capacity M.Tons
Urea/Melamine Formaldehyde
:
34,000
Formaldehyde
:
39,000
Aminoplast Compound
:
2,000
Special Aminoplast Compound
:
2,000
Amino Plast Division
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ENGRO ASAHI POLYMER & CHEMICALS LTD. First floor, Bahria Complex 1, 24 M.T. Khan Road, Karachi –74000, Tel: PABX: (92-021) 5610610,5610617, 5610743,5610753 UAN : 111-411-411 Fax:-(92-021) 5611690
Engro Asahi Polymer and Chemicals Limited is the only manufacturer of suspension grade Polyvinyl Chloride (PVC) (PCT code 3904. 1000). It was set up as a joint venture among Engro Chemical Pakistan Limited, Asahi Glass Company Limited and Mitsubishi Corporation Limited. The company has its manufacturing facility at Port Qasim, Karachi with an installed capacity of 100,000 Metric Tons per annum of PVC. The plant is capable of producing 5 grades of PVC resin; AU 58, AU 60, AU72, AU67R and AU 67S. PVC resin is marketed under the brand name "SABZ." The project uses state of the art technology to ensure safe and efficient operations consistent with the highest environmental standards of the World Bank and the Governments of Pakistan and Sindh. The company is fully ISO 9001:2000 and ISO 14000 compliant. In addition to selling PVC locally, the company also exports the resin and in February 2001, the company was awarded the Export Trophy for achieving exports in nontraditional items. The main raw material for the product is VCM. Currently all VCM requirements are being met through imports. In addition certain catalysts and chemicals are also used, some of which are imported. In the year 2000, the company produced 65,100 MT and sold 36,577 MT in the domestic market, while 25,513 MT were exported. In 2001, production was 68,600 MT, domestic sales were 58,192 MT and exports 12,409 MT. The PVC industry in Pakistan is in its early stages of development. Previously all PVC requirements were being met solely through imports. PVC is a versatile plastic with a wide range of applications. PVC is used in doors and windows, pipes and fittings, profiles, food packaging, furniture, electronics, and geomembrane applications. Being the pioneer of the PVC industry in the country, the company has undertaken an intensive market development program, which is expected to considerably boost the local demand for PVC.
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Gulf Chemicals (Pvt.) Limited Plot No. C1-D5, Sector 16, Korangi Industrial Area, Karachi-74900 Tel : - (92-021) 5054301-2, 5062534 Fax: - (92-021) 5067193 E-mail :
[email protected]
The main activity of Gulf Chemicals (Pvt.) Ltd., is the manufacturing of tannery chemicals. Its specialties for leather industry include a number of finishing products and Wet End Products.
Finishing Products: • • • • • • • • •
Gulf Gulf Gulf Gulf Gulf Gulf Gulf Gulf Gulf
Bind Fix Ground Oil PU Resin Top Touch Wax
: : : : : : : : :
001, 11, 38, CT,FT,GE, MO, PO, Black SPL , CL 3,5,25,72,BES,CBC,CMM,CMP,OL,STK 44,CTL,GMS, GMW 14,18,75,81,82,84,85,86,87, 99K,189N,M7 12,68,91 BT, PGL, PRS 03,24,368,40,45. 50,BR,DIS,E,MAT,NP,SA
Wet end Products •
Gulf Ground
:
BES
•
Gulf Oil
:
012,44,CTL,LCN
•
Gulf Tan
:
20/E,70,BTN,SM, XRL
•
Gulf Wet
:
AW,FLP,FLR,GLC,K, UFB
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Habib Arkady Limited Al-Rehman Building, I.I Chundrigar Road, Karachi-74200 Tel:- (92-021)-2628181, 2629991 Fax:-(92-021)-2637965 e-mail:
[email protected] &
[email protected]
Conceived in 1979 and “ on stream” in 1983, HAL is a world pioneer in Production of rice based starch sugars and sweeteners, Associated with the Habib Group of Industries and incorporated in Pakistan, the company is listed on the Karachi Stock Exchange as well as the Lahore Stock Exchange. The Company has consistently expanded its product range which presently includes a wide array of glucose syrups, high maltose, high maltose syrup, dextrose monohydrate, sorbitol high fructose 42, as well as a range of rice protein concentrates for the human food and specialty feeds markets. Subsidiaries of HAL • •
Habib sorbitol (Pvt) Ltd. Habib Microfine (Pvt.) Ltd.
Products Starch sugars and Sweeteners Rice Syrups (Glucose) • High Maltose Rice syrup • High Fructose 42 Rice Syrup (HFRS-42) • Rice Sorbitol 70% solution • Dextrose Monohydrate (95 D.E.Rice Syrup Solids) • Specialty Rice Syrups • Rice Protein Concentrâtes All rice derived products manufactured by Habib Arkady Ltd. are KOSHER certified by Orthodox Union •
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ITTEHAD CHEMICALS LTD. 39-Empress Road, P.O. Box 1414, Lahore-54000, PABX: (92-042) 6306586-88 & 6306482, Fax (92-042) 6365697 e-mail:
[email protected]
Ittehad Chemicals Limited is the pioneer and one of the leading manufacturers of basic inorganic chemicals in Pakistan. The present line of products of ICL includes Caustic Soda (Solid, Liquid and Flakes) Liquid Chlorine, Hydrochloric Acid, Sodium Hypochlorite (Liquid Bleach), Zinc Sulphate Mono, Bleaching Earth, Sulphuric Acid and Lime; the later two are products for internal consumption only. The Factory was commissioned in 1964 under a private sector organization with an installed capacity of 60 MT of Caustic Soda and 54 MT/day of Chlorine. The technical know how of the plant was provided by Messrs. Oronzio DeNora of Italy. The first phase of expansion was carried out in 1969 which saw its capacity enhanced to 90 MT/day of Caustic and 81 MT/day of Chlorine. The unit, until then know as United Chemicals, was nationalized along with other Industries of Pakistan in 1972. It was renamed as Ittehad Chemicals by the Government and put under the control of state owned Federal Chemical and Ceramics Corporation Limited (FCCCL). The production capacity of Ittehad Chemicals Limited was further increased to 150 MT/day of Caustic and 135 MT/day of Chlorine in 1983. Ittehad Chemicals was ultimately privatized in July 1995 and its Management was taken over by a Karachi based Entrepreneur Group, the CHEMI GROUP OF INDUSTRIES. The privatization process of the industry undertaken by the Govt. served as a saline drip injected into a sick and feeble soul, which gradually but surely started showing signs of healthy progressive recovery and improvement. The next phase of expansion and modernization was undertaken soon after privatization, wherein the production capacity of Caustic Soda was enhanced to 190 MT/day and that of Chlorine to 171 MT/day. Not only that, greater emphasis was laid on optimization and effective utilization of all available resources which included raw material consumption, energy consumption, man power and minimization of wastage's. The company is aware of its responsibilities as a large manufacturing industry, wherein, it is required to take care of/look after the environment side of production as well. Keeping this factor in view we have chalked out plans for the 242
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effective utilization of the Chlorine to be generated through our expansion program. In order to keep pace with the changing scenario and advancement in management system, Ittehad Chemicals Ltd. acquired the International Standard Management System Certification ISO-9002 in March 2000. Not only that immediate working started on the revised version of the International Standard and within a record time of 8 months have achieved for ISO 9001:2000 Certification in March 2002. Further to meet the ever-growing demand of Caustic Soda in the Country, the company undertook the expansion project for Caustic Soda based on the Environment Friendly Ion Exchange Membrane Technology. The construction / expansion work on the project is in full swing and hopefully would go into production before the end of the current financial year (2002-2003). The Expansion Project will enable us to enhance our production capacity by another 163 MT per day. This increase in production will help us to meet the maximum demand of Caustic Soda in the Country. For this purpose an export oriented Calcium Chloride, Solidification / Flaking Plant with a production capacity of 40,000 MT per year is already in the advanced planning stage. To further contribute towards a cleaner environment plans are underway for setting up a 40 MW Power Generation Unit at Ittehad Chemicals Limited.
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ICI PAKISTAN Limited ICI House- 5 West Wharf P.O 4731 , Karachi 74000 Tele: (92-021) 2313717-22, Fax: (92-021) 2311739 Telegram: KEMICORPKARACHI Telex: 20770 ICIPK, 215631 ICIPK Website: http://www.ici.com.pk ICI in Pakistan, a leader in industrial chemicals and paints, manufactures and sells a diversified range of products. The Company's vision is to be the industry leader in creating value for customers, shareholders, suppliers and employees. A chemical company can be a major force in the development of a country. Through innovation and responsible application of its energies and skills, it can make a positive contribution to the industrialization, development and quality of life of the people it serves. ICI in Pakistan has played an active role in the Country's industrial development and progress, for well over half a century, and continues to do so, with investment in the future. ICI Pakistan Limited predecessors have been operating in the country well before independence. Its first manufacturing plant for Soda Ash in Khewra was established over fifty years ago. Since then, it has progressively moved to produce a diversified range of products including: • • • • •
Polyester fibre Decorative, refinish and industrial paints Sodium bicarbonate Agrochemicals Specialty chemicals
The Company also markets toll manufactured, pharmaceuticals and animal health products, in addition to a range of imported industrial chemicals and seeds. In June 1998 ICI Pakistan's latest investment in a USD 490 m plant to annually produce 400,000 tonnes of Pure Terephthalic Acid (PTA) was commissioned. Pure Terephthalic Acid (PTA) is a key raw material for the manufacture of polyester fibre, filament yarn, films and PET packaging. This was ICI Pakistan's largest single investment to-date. Among the immediate benefits of the PTA Plant has been the achievement of self-sufficiency in the primary raw material for the production of polyester staple fibre, with annual savings of about USD 100 million (at full capacity) through import substitution, and a considerable reinforcement of the polyester industry through backward integration in the 244
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product chain, which in turn helps strengthen the textile sector of the country, the mainstay of the export economy. In order to enable the PTA Business to pursue its strategy, it was demerged from ICI Pakistan in 2001, into a separate legal entity, Pakistan PTA Limited, quoted on the Karachi Stock Exchange. The shareholding structure of the company (as at 31 December 2001) is as follows: Shareholder
Percentage Shareholding
ICI Omicron BV (wholly owned subsidiary of ICI, plc) Institutions Pakistani Public & Foreign Funds
75.81% 11.05% 13.14%
ICI Pakistan Businesses Polyester Staple Fibre PSF is blended with cotton and other man-made fibers as viscose and acrylic to produce blended yarn. In 1982, ICI pioneered PSF manufacturing in Pakistan using Batch Polymer technology for which capacity was gradually raised to 29.7 thousand tons per annum (ktpa). In 1997 ICI added a 63 ktpa CP Polymer plant and one 31.5 ktpa spinning & processing line, raising polymer capacity to 92.7 ktpa but fibre capacity to 59.3 ktpa. The existing fibre lines were to be fed from the new CP Polymer plant, while the Batch Polymer plant with a capacity of 29.7 ktpa was to be used to manufacture POY Chips for the filament yarn industry. At the end of 1997, the Batch Polymer plant was shutdown as the market for POY chips suffered from over capacity. This excess polymer capacity of the Batch Polymer plant will now be utilized to release extra polymer to be converted to fibre by the addition of a new spinning and processing line at a cost of over Rs 1.3 billion, undertaken through the formation of a specific purpose Modaraba, Fayzan Manufacturing Modaraba, which will run the plant and use the excess polymer from ICI's polymer plant to produce over 44 ktpa of Polyester Fibre under a toll manufacturing agreement. The main raw materials used in the manufacture of PSF are PTA and mono ethylene glycol (MEG). The former is provided through the Group Company, Pakistan PTA Limited, while MEG is imported from the region. The future outlook for PSF demand is optimistic, based on factors including: • •
a growing local population; limited cotton acreage; 245
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• • • •
one of the lowest PSF per capita consumption rates compared to the South East Asian region as well as the world; increasingly higher cost of cotton and improving textile blend economics; expanding export demand for higher value added textiles; a large spinning industry comprising of over 8.23 million spindles; and Government incentives for blended textiles.
Soda Ash The Soda Ash Plant is located in the northern part of Punjab at Khewra, District Jhelum. The initial work of setting up a soda ash plant at Khewra site dates back to 1929, however, commercial production began in 1944. The original capacity of the plant was 18,000 tonnes per annum that has increased to 200,000 tonnes per annum through a number of expansion projects. The plant is currently meeting about 80% of the Country's requirement for Soda Ash, and by using locally made equipment and raw materials, provides savings to the Nation's foreign exchange reserves. Most recently, the Soda Ash Business has further increased its production capacity to 225,000 tpa through Automation, Power Co Generation and Debottlenecking projects completed in 2002 at a cost of Rs 555 million. Soda Ash is an industrial raw material used in the manufacturing of Glass, Detergents, Caustic Soda, Soap, Paper, Textile, Water Softener, Petroleum, Washing and Laundry Soaps. The major raw materials used in the manufacturing of Soda Ash are salt, limestone and coke. Salt and limestone are locally available at Khewra, in abundance, whereas coke is procured from the Pakistan Steel Mills, Karachi. Other essential requirements are natural gas, Furnace oil, Ammonia and Water. The product range was diversified in 1995 with the commissioning of a 10,000 MT Refined Sodium Bicarbonate Plant. The basic raw materials for its manufacture are soda ash and carbon dioxide, both of which are available at the Khewra Works. The Soda Ash Business employs 550 permanent Staff and has 2500 people who work as Contractors and Suppliers. Most of the permanent employees are provided housing facilities on the Company's well-developed residential estates. Other facilities like the Winnington School, Alkali Sports Club, Winnington Club, hockey & football grounds, squash courts, 20 bed Winnington Hospital, with a full time Medical Superintendent and a Lady Medical Officer supported by visiting specialists and a well trained paramedical staff, are also availed by the employees.
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Paints ICI plc, ICI Pakistan's parent company, is one of the world's largest manufacturers of paints. With acquisitions in the Americas and Europe it produces and sells over a billion litres of paint annually. In 1965, ICI UK acquired a 50% interest in a paints company situated at Ferozepur Road, Lahore Pakistan and changed its name to Paintex Limited. In 1973 the new Company was converted into a Public Limited Company. The paints manufacturing capacity of the plant was upgraded and enhanced in 1981 and since then the Business has proceeded progressively to consolidate market share in the major segments of the decorative, automotive, industrial and refinish paints market. It has now become the undisputed leader in all the three segments. The Paints Business accounts for nearly 20% of ICI Pakistan's annual turnover and contributes nearly 24% of the Company's profit. The impressive growth recorded by the Paints Business through aggressive marketing and refined brand management is a success story where the vital ingredient has been consistently superior quality and focus on customer satisfaction. By offering technical and free colour advisory service, ICI has set a high value on being able to advise and assist the customer about his needs for specialised applications, and resolving problems of technical specifications for the use of paints under varying conditions. ICI Autocolor Business, a part of ICI Pakistan Paints, is a market leader in the manufacture of paints for cars and vehicles for their repair and refurbishment. Recently, the Company established a state-of-the-art Technical Training Centre for refinishes training, the first of its kind from a commercial enterprise in Pakistan. In 1998 the Paints business was awarded MRP (Manufacturing Resource Planning) II Class A for excellence in overall business operation. ICI Paints is the first in Pakistan and 23rd in the world to be awarded MRP II Class A. ICI Paints is also the first paint's business in Pakistan to receive ISO 9001 certification in all it's disciplines. The achievement of MRP II Class A accreditation and ISO 9001 certification is not only a reflection of commitment to excellence in service standards and customer satisfaction but also in the pursuit of being the world's best. Chemicals The ICI Pakistan Chemicals Business comprises of a unique and diversified portfolio encompassing Uniqema, Polyurethanes, and a Trading business that includes representation of ICI plc (UK) Businesses, such as Synetix as well as former ICI plc (UK) businesses such as Chlor Chemicals, Acrylics and Tioxide, supplemented by imports of complementary product lines from non-ICI companies in the USA, Europe and Far East.
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Uniqema The Uniqema Business at ICI Pakistan includes the manufacture and marketing of textile auxiliaries, adhesives and paint lattices, and the trading of personal care products to a wide range of industries. The Uniqema plant set up in Karachi in 1964 was primarily designed to manufacture a range of textile auxiliaries. Today, with a capacity of 6,500 tonnes it manufactures and formulates a range of over 40 products used in industrial processing that call for Specialty Chemical applications. Polyurethanes ICI Pakistan has its own Polyurethanes (PU) blending unit with an installed capacity of over 730 MT/annum. It produces rigid Polyol, which is one of the two components used in thermal insulation of appliances and panels for cold storages. The various industries that the Polyurethanes Business caters to are appliances, construction, footwear, transport and furniture. PU chemicals are also used in chemical plants and animal houses such as poultry sheds, etc. Apart from local blending, PU chemicals are also sold on direct indent and ex-stock basis for different applications. ICI Pakistan is the market leader in PU, with an overall share of about 70%. Trading The Business markets, through indent and ex stock sales, a diversified product range from specialized chemicals used for water treatment to basic commodity chemicals used in a variety of industries including fertilizer, cement, polyester, oil and gas, plastics and paints. These products originate from ICI plc (UK) Principals, subsidiaries and associated companies worldwide. Agrochemicals & Seeds Seeds The Seeds Business was initiated in 1991 and since then has attained a dominant position in the hybrid sunflower and fodder seed segments. The maize sector acceptance has been most encouraging and the Company has introduced a hybrid canola seed to further support the indigenisation of cooking oil supplies. Seeds are primarily being imported from Thailand and Australia, although the Business has also imported from New Zealand and the Netherlands in the past. The Business is also actively evaluating hybrid vegetable seeds in order to expand its product portfolio.
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Agrochemicals In 1991, ICI Pakistan set up a formulation plant at an approximate cost of Rs 40 million for blending and formulating agrochemical products. The main products from this plant were pesticides, weedicides and herbicides. After operating this plant for ten years, the Business took a strategic decision and in 2001, and the Agrochemicals Business was restructured in light of changed market conditions favouring generic products. Consequently, the main focus of the Business has shifted to the import and marketing of seeds. The Agrochemicals Business will continue its operations, albeit on a lower scale. The Business will now selectively identify market opportunities to continue selling in this market. Pharmaceuticals & Animal Health Pharmaceuticals ICI Pakistan's Pharmaceuticals Business markets prescription drugs with a strong portfolio of innovative products from Astra Zeneca Pharmaceuticals UK, Schering Plough Medical USA and In-Situ Technologies USA. A focused portfolio of products is at present maintained, with strong representation in the cardiovascular, oncology and anaesthetic segments. ICI Pharmaceuticals' strength is in cardiovascular drugs with Tenormin, a product used for controlling hypertension and the market leader in its therapeutic segment. In addition, Inderal, Zestril and Etizem complete a comprehensive portfolio of cardiovascular drugs ICI Pharmaceuticals also specialises in drugs for the treatment of cancer. Presently, the product portfolio includes Nolvadex, used for the treatment of breast cancer, and Zoladex, an advanced technology drug used in the treatment of prostrate cancer. Future expansion of this range will result in new therapies being introduced to further broaden the availability of cancer treatments in Pakistan. The Business has recently introduced cardiac stents and catheters, a breakthrough aid in cardiovascular surgery. ICI Pakistan Pharmaceuticals imports finished products and also arranges its products to be manufactured under toll-manufacturing agreements. Animal Health The Animal Health Business of ICI Pakistan is involved in the marketing of veterinary medicine for use on livestock. The portfolio consists of products from ScheringPlough Animal Health Corporation and Norbrook USA. Investment ICI Pakistan has an exceptional record of investment in Pakistan, through continuous evaluation of new business opportunities with appropriate technologies
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for transfer to Pakistan. Over the years, ICI Pakistan has invested in excess of Rs 33 billion in capital projects since its inception at Khewra, over fifty years ago. The most significant investments have been Rs 24 billion in the PTA plant in 1998 and Rs 2.9 billion for the Polyester expansion project in 1997. From 1996 to date, the Company made the following investments: Year 1996 1997 1998* 1999 2000 2001 2002
Project Amount Million Polyester Expansion Project 2,953.5 PTA Plant Commissioning 23,747.6 Soda Ash Automation, Debottlenecking 555.0 & Power Cogeneration As explained earlier, the PTA Business was demerged into a separate publically listed company, Pakistan PTA Limited The above represents investment in major projects. In addition, the Company spends around Rs 500 million annually in sustenance capital expenditure to ensure integrity and efficiency of its existing asset base. As a result of these investments, the production capacity of various ICI Pakistan plants has increased considerably over the years. At the end of 2001, the nameplate capacities of its various production facilities was as follows: Business Polyester Soda Ash Paints Agrochemicals Chemicals Sodium Bicarbonate
Annual Nameplate Capacity 55,533 185,000 -
Production 72,911 219,450 14,443 493 6,283 11,543
In metric tones except Paints & Agrochemicals, which are 000's of litres The capacity of the Paints, Agrochemicals & Chemicals plants are indeterminable because these are multiproduct plants involving varying processes of manufacture
Safety, Health and Environment Good Safety, Health and Environmental (SHE) performance is essential to the continued success of ICI. The SHE management system is integrated into the company's overall structure and ensures that goals are established, resources allocated, performance monitored and corrective action taken as required. A new 250
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set of tough SHE targets for the next five years have been established to take ICI into the new millennium. The Principles by which the Company operates, within the limits of current knowledge, are: • • • •
All work related injuries and illnesses are preventable. The goal is zero harm. All escapes of hazardous materials can be prevented and emission in the course of operation will progressively be reduced towards zero. Adherence to the highest standards for the safe disposal of waste materials. Efficient utilisation of energy, water and other resources, both natural and man-made.
ICI Pakistan's achievement in the area of Safety, Health and Environment has been recognized by its principal shareholder, ICI plc (UK), and over the years, the Company received numerous awards for exemplary performance in this area in competition with all other ICI companies around the world. Details of ICI plc Chief Executive's SSHE Awards received by the Company, in recognition of its exemplary performance in SHE are provided below: Year 2001 2000 1999 1998 1997 1996 1995
Award Winner - Product Stewardship Award Winner Sustained SHE Excellence Award ICI Group SHE Excellence Leadership Award Special Commendations Joint Winner (with Quest) Highly Commended Highly Commended Runner Up Highly Commended
Human Resources ICI Pakistan believes that its people are its most valuable asset. The Company currently employs 1,700 individuals of which 500 and 1,200 and in management and non-management cadres, respectively. The Human Resource Department provides professional support to the entire organization to ensure that business goals are realized through people whose own personal aspirations are also met.
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Training and Development of staff is considered to be a core value at ICI Pakistan. This is an essential responsibility of every Manager and is a part of his `Key Result Area'. The Company has a very proactive Corporate Training Department, which apart from facilitating most of individual training needs, also provides extensive in-house training. Social Responsibility Social initiative and involvement at ICI Pakistan takes the form of active support to organizations, providing essential services to community members, particularly in the field of education and medical assistance. ICI Pakistan provides financial assistance to charitable projects, non-profit organizations and developmental initiatives. Over the years a host of worthy causes have received financial support and assistance, through sponsorship, for uplift initiatives and community development projects. Some of the projects supported by ICI Pakistan include the following: • • • •
Construction of a fountain at a major roundabout in Karachi. Sole sponsorship of a Rs 10 million Management Centre in cooperation with the British Council, Karachi Financial support of over Rs 5 million to charitable and developmental projects in the Sindh and Punjab Donation of Rs 1 million to the Al-Shifa Trust Eye Hospital
In addition to the above, the Company also set up the ICI Pakistan Foundation in 1991, to serve as a platform through which the Company's philanthropic and social aid initiatives are channelled. As part of its community development initiatives, the ICI Pakistan Foundation has contributed to a series of building and construction projects, in and around the Khewra community, where the Company's Soda Ash plant is located. In addition, it has also provided in excess of Rs 24 million in the last five years to worthy causes, including: • • • • • • •
The Agha Khan Foundation Lahore University of Management Sciences Institute of Behavioural Sciences Layton Rehmatullah Benevolent Trust Anjuman Behbood-e-Samat-e-Atfal Lady Dufferin Hospital Foundation Mary Adelaide Leprosy Centre
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Industrial Chemicals (Pvt.) Limited
2nd Floor Eveready Chambers, I.I Chundrigar Road, Karachi-74200 Tel: - (92-021) 2627390, 2627405 Fax:-(92-021) 2632730 Factory: 29-Site, Manghopir Road, Karachi- 75700, Tel: - (92-021) 2570203, 2570205, 2572957, Cable: bichromate, Fax: - (92-021) 2562576, e-mail :
[email protected] Industrial Chemicals (Pvt.) Ltd is a company engaged in the manufacture of Chromium Chemicals. It operates two factories and its major product is basic chromium sulphate, a chemical used in the production of wet blue leather. Production Capacity : 1) 2) 3)
Sodium Bichromate/Dichromate Hydrous : Basic Chromium Sulphate : Sodium Sulphate :
3,000 metric tons/annum. 12,000 “ “ “ 1,200 “ “ “
The major raw material used in producing these chemicals are: • • • • • • •
Soda ash (light) Chrome ore Sulphuric acid Dolomite Industrial glucose Ferrous sulphate Sodium bi sulphide
Plant Description
:
The plant comprises of seven areas: 1. 2. 3. 4. 5. 6. 7.
Kiln Feed Preparation Roasting & Energy Recovery Leaching/Residue Treatment Chrome Conversion & Evaporation/Sodium Sulphate Purification BCS Conversion/Drying & Bagging Tank Farm Utilities.
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Kohinoor Soap & Detergents (Pvt.) Ltd. Tibet Centre, M.A Jinnah Road, Karachi-74400 Tel:- (92-021)7725648-49, Fax:- (92-021)7720978 - 7723398
Kohinoor Soap & Detergents (Pvt). & Its allied industry is the oldest Group Involved in the manufacture of cosmetics, soaps/detergents and toiletries in the country right since independence, in 1947. The Group also manufactures the all time famed make up cream namely, “Tibet Snow, which is the company’s most demanded product. Products • • • •
Soap Detergents Cosmetics Toiletries
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LEINER PAK GELATINE LIMITED 17-G, Gulberge -2, Lahore -54660, Tel:- (92-042) 5756953-4, Fax (92-042) 5710604 e-mail:
[email protected] Status of the Company
:
Year of Registration
: 1983
Activities/Products of the Company:
Brand/Trade Name
Public Limited Company
Manufacturer & Exporter Of: A. “Halal” Gelatine I) Pharmaceutical Grade II) Edible (Food) Grade B. Di-Calcium Phosphate (Feed Grade)
: Leiner
International Recognized Certifications
:
ISO 9002, ISO 14000 and also registered in Dun & Bradstreet World Database
Number of Employees
:
364
Members of (Trade Association)
:
Lahore Chamber of Commerce & Industry, 11, Shahra-e-Aiwan-e-Tijarat, Lahore
Basic Raw Materials: a) b) c) d) e) f)
Raw Bone Crushed Bone Hydrochloric Acid Caustic Soda Liquid Lime Chemicals
Products and Plant Capacity: Estimated Capacity (M.Tons)
Actual Production (M.Tons) 2000-2001
Gelatine
3,000
1,071.896
Di-Calcium Phosphate
15,000
4,738.450
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Master Paint Industries (Pvt.) Ltd. First Floor, LDA Plaza, Egerton Road, Lahore, Tel:-(92-042) 6307256-60, UAN:-111-333-465 Fax:-(92-042) 6307253, 7247474 website:- www.masterpaints.com.pk Master Paints Industries (Pvt) Ltd is now days considered as one of the Pakistan’s Leading Company in paint Manufacturing. It came into existence in 1975. The foremost objective of the company was to introduce modern paint technology in Pakistan. Soon after its existence, it acquired a very sound position by attaining good market share and became one of the leading decorative paint manufacturing company in Pakistan in terms of quality. Behind this marvelous progress of the company, there are highly qualified personnel who shaped the company into leading organization on the basis of their qualification and experience. Master pant’s R&D department remains in pursuit of excelling good quality and innovating the modern technology in decorative paints. Master Paints fortunately has a very dynamic team of Marketing and Production personnel who have been striving to keep the company as the leading one in Pakistan’s Paint Market. Now the consumers have admitted the Master Paint as the symbol of full satisfaction. 45136 liters of paints per month are being produced by Master Paints (Pvt) Industries Limited (0.54 million liters/year) In accordance with demand following is the list of raw materials:1 2 3 4 5 6 7 8 9 10 11 12 13 14
Long Alkeyed Resins Titanium Dioxide Lead (36%) Calcium (10%) Cobalt (12%) Granding Balls Dipentene Britty(China Clay) W.Spirit Mowilith(Poly Vinyl acetate) Natrosol (Thickening Agent) Exkin 2(Anti Skinning Agent) Xylene . Benzyl Alcohol
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Nimir Chemicals Pakistan Limited 51 N, Industrial Area, Gulberg-II, Lahore. Tel: (92-042) 5718001-9, Fax: (92-042) 5718013, e-mail:
[email protected] Factory:- 14.8 Km, Shaikhupura, Faisalabad Road, Mouzza Bhikki, Distt. Shaikhupura.
Main Raw Materials
: Ortho Xylene (OX) 2-Ethyl Hexanol (2-EH)
Products
:
Phthalic Anhydride (PA) Di-Octyl Phthalate (DOP) Maleic Anhydride (MA)
Capacity
:
PA DOP MA
Process
12,000 TPA 15,000 TPA 360 TPA
PA is produced from OX mixed with air. Apart from sales in the market, PA is also consumed in-house with 2-EH to produce DOP. MA is the by-product of PA.
NCPL – Flow Chart Maleic Anhydride (MA) Ortho Xylene (OX)
2-Ethyl Hexanol (2EH)
Unsaturated Polyester Resins
Phthalic Anhydride (PA) Di-Octyl
Phthalate
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Fiber Glass
Alkyd Resins
Enamel Paints
Flexible PVC
Shoes, Hoses / Pipes, Artificial Leather, Cables
Experts Advisory Cell
Prospects of Chemical Industry in Pakistan
National Insecticides Company (Private) Limited 28-Abdullah Haroon Road, P.O Box 7129, Karachi -74400 Tel:-(92-021) 5687171, 5689254-57, Fax:- (92-021) 5670073
Businesses Summary NICL gears up to have a more focused approach towards crop protection and to redress the worries of farmers by providing them with a wide range of premium priced (branded) as well as quality me-too products. The biggest edge, NICL has over competitors is the wide range of pesticides for every crop and for every season, round the year. Besides, these products cover the field-bed preparations to post-harvest care. With Head Office based at Karachi and local branches in all the major agricultural centers of the country, NICL is ideally networked to carry out product promotional activities according to the specific demands of the farmers. The efficient dealers network of NICL has also enabled to provide excellent logistic services to the satisfaction and convenience of its customers. NICL, through its field strength, technical competence and ethical business practices has been able to attract some of the major names in global agrochemical industry, such as Aventis Cropscience, Cheminova, Luxan, Sumitomo Chemical, Agtrol, BASF and other reputable manufacturers/suppliers from Europe and China. In the field of Application Technology NICL has marketed CF Valves (G.AT.E.S. of USA) and Matabi sprayers (Goizper of Spain). NICL Operations Unit Initially, NICL was introduced as a joint venture with Union Carbide, established in 1969, which pioneer in converting small packing from bulk packs through rotary filling machine, having filling capacity of more than 2,000 bottles per hour. It has automatic filling, labeling and printing machines imported from Europe. Consistent efforts are being made for upgrading this facility. The initiative of having advanced quality control and a laboratory with High Performance Liquid Chromatography (HPLC) facilities has placed NICL as one of the most reliable production plants in Pakistan.
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LIST OF REGISTERED PESTICIDE OF NICL'S PRODUCTS Sr.No. Brand name
Common name
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 20 30 31 32 33 34 35 36
ACETACHLOR BUTACHLOR BIFENTHRIN BUPROFEZIN COPPER HYDROXIDE METHAMIDOPHOS CHLORPYRIFOS ABAMECTIN PROFURITE AMINIUM CYPERMETHRIN CHLORPYRIFOS DIAFENTHIURON DIAFENTHRIURON FENPROPATHRIN FENVALERATE PROFENOFOS ACETAMIPRID IMIDACLOPRID ISOPROTURON METHAMIDOPHOS LABDA-CYHALOTHRIN MANCOZEB MONOCROTOPHOS MONOMEHYPO CHLORPYRIFOS BROMOXYNIL+MCPA PYRIDABEN ACETAMIPRID ALPHA-CYPERMETHRIN PENDIMETHALIN CHLOROTOLURON+MCPA ISOPROTURON BUTRALIN ENDOSULFAN ACETAMIPRID FENPROPATHIN
ACETOR 50%( w/w) EC BANDOX 60%( w/v) EC BIFENTHRIN 10% (w/v) EC BUPROFEZIN 25% (w/w) WP CHAMPION 77% (w/w) WP CHASER 60% (w/w) SL CHLORPYRIFOS 40% (w/v) EC CHONG MAN GUANG ! 8% (w/w) EC CHONG SHA 50% (w/w) SP CYPERMETHRIN 10% (w/w) EC CYREN 4E (w/v) DEFENSE 50% (w/v) SC DIAFENTHIURON 50% (w/w) FENTHRIN 20% (w/w) EC FENVALERATE 20%(W/W) EC FRENO 50%(W/W) SP GETRID_ 20% (w/w) SP IMIDACLOPRID 25%(w/w) WP & ISOPROTURON 500 (w/v) FL JIANGMEN 60% w/v) SL LABDATHRIN 2.5% (w/v) EC MANCOZEB 80% WP MONOFOS 40% WSC (W/v MONOMEHYPO 5%G (w/w) PYRIFOS 40% (w/v) EC QUATTRO 200/200 (w/v) EC SHAMANTE 20% (w/w) WP SIGURO 20% SL SKOLIX 5%EC STOMP 330 (w/v) STRIKE MA 60 (w/w) WP SWAT 75% (w/w) WP . TAMEX 360 (w/v) EC THIOLUXAN 35% (w/v) EC TITONIC 20% (w/w) SP TOTTI 20% (w/w) EC
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National Petrocarbon (Pvt.) Limited 12th floor, Uni-Centre I.I Chundrigar Road, P.O Box 6782, Karachi-74000 Tel:- (92-021) 2417823-24 Fax:- (92-021) 2413480 e-mail:-
[email protected] website:- www.alhamzagroup.com
Date of Establishment:
:
1980
Product
:
Carbon Black
Installed Capacity
:
10,000-M. Tons per Year
Revised Capacity (July2002) :
20,000-M. Tons Per year
Raw Material
Carbon Oil
:
The Plant of the company is situated at Bin-Qasim, Pipre, Karachi.
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OLYMPIA CHEMICALS LIMITED 23-Davis Road, Lahore, - 5400 Ph:(92-o42) 6302864, 6301979-81, Fax::(92-o42) 6363920, 6371142 Telex: 47385 FEEDS PK. GRAMS: KHUDADOST, e-mail:-
[email protected]
Olympia Chemicals Limited (OCL) is a Soda Ash plant of Olympia Group, which is successfully involved in conglomeration of industries like, synthetic, textile, power, poultry feed and hatchery. OCL is located in the remote corner of northern Punjab at Warcha, Dist Khushab, spread over an area of 190 acres. The present rated capacity of the plant is 120 metric tons per day, which is likely to be doubled by January 2003. The plant is based on Chinese technology and locally available raw material like Sodium Chloride (Salt), Calcium Carbonate (Lime Stone) and Coal. The quality of the product is guaranteed by a reputed Chinese design company (one of the largest design companies in the world) namely Chengdu Chemicals Engineering Corporation of China (CCECC), which also trained OCL manpower for smooth running of the plant. Soda ash user industries are glass, paper, paint, silicate and detergents. OCL was conceived in 1995 aimed at meeting growing domestic demand resulting in considerable foreign exchange savings for Pakistan besides improving supply situation of Soda Ash. It is thus contributing toward economy by import substitution, taxation, development of natural resources and employment. The plant went into full production in a record time of two years i.e in May 2000, with a financial out-lay of Rs.600 million. OCL employs solvay process, which is also being employed by the leading Soda Ash manufacturers, the world over. One of the striking features of OCL is that it pioneered use of local coal for power generation, which makes it cost effective and compete with a multinational giant like ICI. OCL presently has about four hundred personnel on it's rolls (besides contractors) and almost 60% manpower belongs to Khushab District. The company has planned residential accommodation for its entire work force. As welfare measure development of a hospital and school (upto matric) are on the drawing board, beside provision of telephone, postal and bank facilities. Lower ladder employees can also expect a gratis residential plot near Qaidabad, on retirement.
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OXYPLAST PAKISTAN (PVT.) LTD. Silver House -11-E, Block 6, P.E.C.H.S., Karachi-75400 Tel: - (92-021) 4312901-5 Fax:-(92-021) 4312906 e-mail:
[email protected] web site:- http//www.oxyplast.com.pk OXYPLAST PAKISTAN (PVT) LTD was established on 19-12-1991 and started commercial production of Thermosetting Powder coating in 1993. It is the pioneer in manufacturing thermosetting powder coating in Pakistan under license and Technical collaboration of OXYPLAST BELGIUM N.V/S.A. The st Company has the distinction to be the 1 ISO 9002 certified Powder Coating manufacturer in Pakistan. OXYPLAST PAKISTAN offers its customers a wide range of all types of Powder coating of standard colours from ready stock or on short notice. Also, powder coatings is tailore made to match the customer’s individual requirements. Following are 3 basic types of powder coating, which are being produced: 1. EPOXY POWDER COATINGS (Included Fusion Bonded Epoxy). 2. EPOXY POLYESTER POWDER COATINGS. 3. POLYESTER POWDER COATINGS. Production Capacity 1600 M. Tons/Annum. (8 hours single shift basis). Manufacturing Process Of Powder Coating:A. B. C. D. E. F.
WEIGHING OF RAW MATERIALS DRY MIXING KNEADING AND CRUSHING GRINDING (MICRONIZING) DRY MIXING (WHEN REQUIRED) PACKING
Generic Name And Brussels Nomenclature:Generic Name: THERMOSETTING POWDER COATING. Brussels Nomenclature :- POLYESTER : EPOXY :
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39.07.9990 30.07.3000
Experts Advisory Cell
Prospects of Chemical Industry in Pakistan
Pak Petrochemical Industries (Pvt.) Ltd. Polymer House, 136, Main National Highway, Karachi-75030. Tel: - (92-021) 5019701-4 Fax:-(92-021) 5018552-3 e-mail:
[email protected] web site:- http// www.polystryrene.com.pk
The Company, with 35 % Foreign Direct Investment is the only manufacturer in Pakistan of whole range of Polystyrenes, which serve as primary raw materials for several dozen plastic products. The Commercial Production started in 2nd half of the year 2000. Apart from serving the needs of Pakistani Plastic Industries, the Company , also exports its products to the following countries: 1. 2. 3. 4. 5. 6.
Turkey Egypt India Mozambique Taiwan China
Products & Capacities: Product General Purpose Polystyrene High Impact Polystyrene Expandable Polystyrene
PCT Heading 3903-1900 3903-1900 3903-1100
Annual Production Capacity 20 M. Ton / Day 80 M. Ton / Day on Alternate basis.
LIST OF RAW MATERIALS & ADDITIVES ETC. Description
PCT Heading
Chemical Classification
Styrene Monomer
2902-5000
Cyclic Hydro Corbon
Colorless Liquid
Ethyl Benzene
2902-6000
Cyclic Hydro Corbon
Colorless Liquid
Mineral Oil
2710-0091
Colorless Liquid
Stearic Acid
3823-1100
Petroleum Oils Other Crude Industrial Monocirboxyhc 263
Form
White Powder Experts Advisory Cell
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Calcium Stearate
2915-7090
Zinc Stearate
2915-7090
Irganox
3812-3000
Betylated Hydroxy (BHT)
3812-3000
Stabilizer G-126
3812-3000
Ethyl BISStearamide (EBA)
Fatty _Acid Derivative of Acyclic Stearic Acid Derivative of Acyclic Stearic Acid
White Powder White Powder White Powder
3404-9091
Antioxidant preparation & compound stabilizers for other rubber or Plastics. Antioxidant preparation other compound stabilizers for rubber or Plastics. Antioxidant preparation & other compound stabilizers for rubber or Plastics. Artificial Waxes
Butadiene Rubber (B.R)
4002-2000
Synthetic Rubbers
Lubricants
2915-7090
Benzyle Per Oxide (BPO) Tertiary Butyl Per Oxy Benzoate (TBPB) Poly Wax
2916-3200
Carboxylic Acids and Anhydrides etc Peroxides
Colorless Semi "Transparent Blocks White Powder
2916-3990
Peroxides
Yellowish Liquid
3404-9090
Artificial Waxes
Soft White Beads
Pentane
2901-1010
Hydrocarbon
Colorless Liquid
Tri Calcium Phosphate (TCP) Calcium Carbonate
2835-2600
Phosphates
White Powder
2836-5000
Carbonates
White Powder
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Colorless Liquid
Colorless Liquid
White Powder
White Crystals
Experts Advisory Cell
Prospects of Chemical Industry in Pakistan
Prime Chemicals (Pvt.) Limited 257-Main Market, Riwaz Garden, Lahore, 54000 Tel:-(92-042) 7229898, 7312829 Fax:- (92-042) 7233023 / 7237106 e-mail:-
[email protected] Factory:- 10th KM Faisalabad Road, Sheikhupura, Tel & Fax:- (04931)882228, Mobile:- 0300-8447580 Introduction & History Prime Chemiclas (Pvt) Ltd. a various chemicals manufacturing project was established in 1985 and commercial production started in 1987 with Sulphuric Acid as basic product. In 1989 Alum Sulphate manufacturing facility was added. Similarly in 1990 Sodium Sulphite, Sulphur Rolls, Sulphur Powder, Chromium Sulphate and micro nutrients for specific use were developed and their production started. Project was up graded & capacities further increased in 2002. New project is capable of producing the following chemicals:The Products: 1) 2) 3) 4) 5) 6) 7) 8) 9)
Sulphuric Acid (Industrial grade) Sulphuric Acid (Electrolyte grade Alum Sulphate (Industrial grade) Alum Sulphate (pharmaceutical grade) Alum Sulphate (Water Treatment grade) Aluminium Ammonium Sulphate Sodium Sulphite Sulphur Rolls & Powder Chromium Sulphate (temporary closed)
The Management: Project is handled by qualified chemical Engineers; Economist & Chartered Accountants Mr. M. Nazir Chaudhry, a Chemical Engineer with over 35 years experience is the Chief Executive of the project while Mr. Badar Munir Chaudhry, a known economist is the project Director. Service to the Nation: Prime Chemical (Pvt) Ltd have the honour in serving the 90% Industrial Sector including strategic sector of the country. Company Moto :- Service with high quality products.
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Pakistan National Chemical Industries (Pvt.) Ltd. 107, Defence Housing Authority, Phase I, Main Korangi Road, Karachi-75500 Tel:- (92-021) 5880064, 5887035, 5880051-54 Fax:-(92-021) 5890603 e-mail :
[email protected] Factory : Plot No 226-231, Hub Industrial Trading Estate, Hub, Balochistan Tel: (92-202) 32975, 33749, Fax (92-202) 33095 Pakistan National Chemical Industries (Pvt.) Ltd was formed in the year 1986-1987 and commenced production operations in the year 1991. The company is based in Karachi and owns two manufacturing units. One is in Hub Industrial Estate Lasbella, 30-KM from Karachi and the other is at SKP near Lahore. The total production capacity of both the units is 6,000-00 M/Ton per year. The main objective of the company is to manufacture highly activated Bleaching Earth suitable for bleaching, refining, decolorizing of animal and vegetable oil, fats, industrial and mineral oil and lubricants from indigenous raw material. The company lays a significant stress on Research & Development as well as qualitative testing of products at various stages during manufacturing and maintains a very well equipped laboratory. It is the only Pakistani Bleaching/Fuller's Earth which is being exported to several South Asian countries and to Middle East. Raw Material The raw material for activated bleaching earth is Montmorillonite clay derived from degeneration of volcanic ashes. This is chemically an aluminum hydro silicate in which the silicic acid to aluminum is 4:1 Our country is blessed with rich deposit of Montmorillonite in the province of Punjab, NWFP & Azad Kashmir. National Chemicals (Pvt.) Ltd owns mines in Garhi Chandan and Aza Kheil, Area Peshawar Division, which has extensive deposits of Mines capable of producing highly Activated Bleaching Earth.
Process •
The clay is passed through the Ball Mill along with water, which blends the clay with water called Slurry in technical term.
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•
The Slurry is then shifted to storage tank and after settling, it is shifted to another tank where it is activated by using Hydrochloric Acid. During this process, the samples are checked in the laboratory to ensure adherence to quality parameters. Once the desired parameters are achieved the Activated Slurry is shifted to another storage tank for removing the Hydrochloric Acid by washing in fresh water in order to achieve the desired pH value.
•
The Activated Slurry is then transferred to filtration process where the water is removed and the clay in the shape of Cake is collected for further process.
•
Cake is fed to rotary dryer which is heated to ensure removal of moisture from the Cake and the final product is passed on the Pulverizer where the granule are ground to achieve desired particle size as per specified parameters.
•
After the Pulverizer the material is packed in the bags and is kept in the warehouse for delivery to consumer.
Capacities SUPERMONT
:
3,000-00 M/TON
GOODEARTH
:
3,000-00 M/TON
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Procter & Gamble Pakistan (Pvt.) Ltd.
Bahria Complex 1, 6 th floor, M.T. Khan Road, Karachi-74000 Tel:-(92-021) 111-000-764, Fax:- (92-021) 5610801 website www.pg.com.pk
Established in 1837 in Cincinnati, Ohio, USA, Procter & Gamble serves over 5 billion consumers in 160 countries worldwide. P&G markets nearly 300 brands and its worldwide sales achieved US$ 40 billions. The P&G community consists of nearly 102,000 employees working in almost 80 countries worldwide. P&G has been dedicated to research and break-through innovation for as long as it has been in business, which helped the Company to develop products that make every day life better for all the people. Tide, for example was the world's first heavy-duty synthetic detergent. Pampers created disposable diapers business. Pert Plus was the first two-in-one shampoo and conditioner. P&G invests more yearly than US$ 1.7 billion in research and development, which helps to create products of superior quality the world over. Thus far P&G has filed more than 27,000 patents, making it one of the most innovative companies in the world. Procter & Gamble started its operations in Pakistan in 1991. Today, P&G sells 13 high quality brands to Pakistani consumers (shampoos, detergents, soaps, baby care and feminine protection products, Vicks products and snacks). Locally, P&G produces bar soaps and repacks bulk Pampers into smaller Pampers packs. It also produces Vaporub at a contract manufacturer location. P&G Pakistan has achieved leadership in various important brand categories; for instance, shampoos including Pantene and Head & Shoulders have a share of more than 50% in the market. Ariel and Pampers are market leaders. P&G's goal is to be the finest Global Local Consumer Goods Company operating in Pakistan. Due to the high quality and competitive costs available here, P&G exports into neighboring countries like Saudi Arabia, Yemen, Syria and Afghanistan. P&G is currently the only toilet soap manufacturer exporting premium bar soaps. In Pakistan, P&G is totally committed to the development of the country and its people. Various social and development programs have been initiated by P&G in Pakistan which, are improving the lives of millions of Pakistani consumers, especially children and are leading to reduction of common diseases via heightening awareness of good hygiene habits. P&G is an active member of ABC, OICCI, MAP and the Pakistan Advertisers Society. Furthermore, the company is dedicated towards fulfilling its responsibility of a good corporate citizen by providing better life opportunities to the people of 268
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Pakistan. Campaigns like Ariel - Help the Needy, Safeguard - Health & Hygiene Awareness Program for children, Pampers - Young Mothers Educational Program and Ariel - Maa, have really done wonders for the image of the company. Procter & Gamble owns a key place in the Pakistani market and continues to strive hard towards growing its business at a higher pace, and is indeed equipped enough to carry this off successfully by optimally utilizing its skilled and trained professionals as well as the strength of its brands in the Pakistani market.
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PAK CHEMICALS LIMITED Hakimsons Building, 19, West Wharf Road, P.O. Box 4739, Karachi- 74000 Tel: - (92-021) 2313508-14 Fax: - (92-021) 2314260 e-mail : -
[email protected]
Nature of Concern Unit
:
Manufacturing of Heavy Chemicals.
Year of The Installation
:
1949
Installed Capacity:
Sulphuric Acid Plant 23,500-24,000 M/Tons Alumunium Sulphate Plant 4,500-4,600 “ “ Alumina Alum Plant 1,200 “ “
No. of Employees
:
69
Description of Raw Material
:
i)
Sulphur
ii)
Grinded Bauxite
iii)
Ammonium Sulphate
Description of Goods Manufactured
:
•
Sulphuric Acid (Comm.)
•
Sulphuric Acid (Elec.Dilute)
•
Sulphuric Acid (Elec.Conc.)
•
Aluminium Sulphate
•
Alum Red
•
Alum White
Refined Grade Acids. •
Sulphuric Acid Ex-Pure
•
Sulphuric Acid A.R.Grade
•
Hydrochloric Acid Ex.Pure
•
Hydrochloric Acid A.R.Grade
•
Nitric Acid Ex-Pure
•
Nitric Acid A.R.Grade
•
Sulphuric Acid (For Gerber Test)
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Penta Industries (Pvt.) Ltd. LA-7/1-1, Block No. 22, Federal B Industrial Area Karachi-75950 Tel Off: - 92-021-6683904-5, Fax: - 92-021-6686756 Tel (factory): - 92-021-6364180, 6361344, 6366509 Fax: - 92-021-6360029 Cable:- “PENTAFIX” Brief History: M/s Penta industries (Pvt) Ltd., was founded, in 1983 by Dr. Suleman Vohra. Dr. S. Vohra after doing his PhD in 1967 from the university of Glasgow, UK. in Petro-chemical joined Valika Chemicals and founded M/s. Universal Chemical industries a l o n g with partners. In 1983 partners separated and Sr. S. Vohra founded Penta Chemical industries at LA-7/1-1, Federal B. Industrial area, Block 22, Karachi and took a modest start with measure facilities. Capacity: Presently the factory has the facility of locally fabricated stainless steel vessels of one ton and 2 tons capacity. It is producing the following t ext i l e auxiliaries: • • • • • • •
Poly (Vinyl acetate) for textile Acrylic Binder for textile Printing Acrylic Sizing Agent Amino resins for textile Tallow based softening agents. Cationic softener Wa x emulsions etc.
The above chemicals along with other minor chemicals are produced as per demand and requirement of the textile industry from season to season. Raw Material: Basic Raw materials for the products are currently imported which, includes: -
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Monomers • • • • • • • • •
Vinyl Acetate rnonomers 1-Butyl acrylate Acrylic Acid 2-Ethyl hexyl Acrylate Styrene Methacrylic Acid Methyl Methacrylate Acrylointrile. Acrylamice.
Emulisifier & Protective Colliods:(a) A. number of cationic, Nonionic and Anionic emulsifiers as per requirement. (b) Poy (Vinyl alcohol) fully and partially hydrolysed from Gohsenol (Japan), POVAL (Taiwan) etc. Locally Produced Chemicals: • • • •
Formulin Urea Caustic Soda Acids (Sulphuric ,Formic, etc.)
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Syngenta Pakistan Limited [Formerly Novartis (Pakistan) Limited] S-50, S.I.T.E., Hawksbay Road, Karachi 75730 Tele: (92-021) 2565172-77, Fax: (92-021) 2565181,2565191
Firm
: Public Limited
National Tax Number Sales Tax Registration Number Annual Turn Over
: : :
1,820 millions (Year 2001)
Type of Business
:
Pesticides
28-02-3308055 11-00-3808-001-19
List of Raw Materials : Cypermethrin Technical Diafenthiuron Technical Diazinon Technical Emulsogen EL Isophorone Kelzan Biopolymer AG Profenofos Technical Propylene Glycol Reoplast 39 Sermul EA 27 Shellsol A150 Soprophor FL
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Products Actara 25 WG Agrimec 018 EC Basudin 60 EC Curacron 500 EC Deltanet 400 EC Karate 025 EC Match 050 EC Plenum 25 WP Polo 500 SC Polytrin C 220 ULV Polytrin C 440 EC Proclaim 019 EC Supracide 40 EC Trigard 75 WP Actara ST 70 WS Deltanet ST 400 CS Aatrex 90 WG Callisto 100 SC Dual Gold 960 EC Enfield 75 WG Gesapax Combi 80 WP Gramoxone 200 SL Krismat 75 WG Logran Extra 64 WG NOA 407-855 Primextra 500 FW Primextra Gold 720 SC Rifit 500EC Topik 15 WP Topogard 500 FW Ridomil Gold MZ 68 WP Ridomil MZ 72 WP Score 250 EC Thiovit 80 WP Topas 100 EC Trimiltox Forte
Syngenta Products Lead Al Insecticides. Thiamethoxam 25% Abamectin 1.8% Diazinon 60% Profenofos 50% Furathtiocarb 40% Lambda Cyhalothrin 2.5% Lufenuron 5% Pymetrozine 25% Diafenthiuron 50% Profenofos 20% Profenofos 40% Emamectin Benzoate 1.9% Methidathion 40% Cyromazine 75% Seed Treatment Thiamethoxam 70% Furathiocarb 40% Herbicides Atrazine 90% Mesotrione 10% S-Metolachlor 96% Trifloxysulfuron 75% Ametryn 40% Paraquat 20% Trifloxysulfuron 1.85% Triasulfuron 4% NOA 407-855 10% Metolachlor 30% S-Metalachlor 40% Pretilachlor 50% Clodinafop-Propargyl 15% Terbutryn 35% Fungicides Metalaxyl-M 4% Metalaxyl 8% Difenoconazole Sulphur 80% Penconazole 10% Copper 21%
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Other Al
Cypermethrin 2% Cypermethrin 4%
Atrazine 40% Ametryn 73.15% Terbutryn 60% CGA 185-072 2.5% Atrazine 20% Atrazine 32%
Terbuthylazine 15% Mancozeb 64% Mancozeb 64% 25%
Mancozeb 20%
Experts Advisory Cell
Prospects of Chemical Industry in Pakistan
Sardar Chemical Industries Limited Suite #9, 2nd floor, Hafeez Centre, Mian Boulevard Gulberg-III, Lahore Tel :(92-42) 571154, 5710148, 5753402 Fax::(92-42)
Sardar Chemical Industries Limited is the second largest dyestuffs manufacturing Company in Pakistan. Quality of its dyestuffs strictly conforms to the International Standards and these are being successfully used in the native Industry. These dyes are also being exported and have met the entire approval of buyers both in Pakistan and abroad. All the dyestuffs produced are free from AZO dyes, prohibited under the German Consumer Goods Act and certification to this effect has duly been obtained from the accredited Laboratories of U.K. & Germany. Therefore, big & small tanneries and textile units in the country, which are engaged in the export of materials, are consistently using these dyestuffs to the entire satisfaction of their local & foreign customers. The Company was established in 1989 as a Private Company and went into production on Ist January, 1993. It was floated on the Stock Exchanges in Pakistan in October, 1994. Sardar Chemical Industries Limited is involved in the manufacture of various classes of dyestuffs producing Direct dyes,- and Reactive dyes along with Optical Brightener for the Textile Industry and Acid dyes for Leather Industry. Having installed capacity of 600 tons of dyestuff, the imports for all kinds of dyestuffs and chemicals in Pakistan range to approximately 6 to 8 Billion Rupees i.e. US$ 135 (M), leaving the huge gap for the local industry to fill. The leading multinational in Pakistan, Clariant has a turn over of almost 3 Billion Rupees which comprises of mainly locally produced goods and a portion of it through imported products. Products: • • • • •
Leather Dyes Direct Dyes Optical Brighteners Reactive Dyes for printing Reactive Dyes for Dyeing
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Raw Materials: The Company is regularly importing raw materials required in the manufacturing of above-mentioned dyestuffs. These raw materials are imported f r o m various countries in bulk quantities. The details are given as below: S.No. Raw Material I. 2. 3. 4. 5. 6. 7. 8 9. 10. 11. 12: 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 24. 25.
Import Qty for 2 months (Kgs) H.Acid 85% (On 100% Basis) 5100 Para Nitro Aniline 99% 2000 Para Cresidine 98% 600 J, Acid 90% (on 100% Basis) 1000 Dehydro Thio Para Touldine Mono Sulfonic Acid 100% 1000 2-Amino Naphthalene 4,8 Disulphonic Acid (On 100% Basis) 500 3-Amino Acetanil D Hydrochloride 100% ° 500 Carbonyl J Acid 70% (on 100% Basis) 1200 4-Amino 1,1 AZO Benzol 3,4 Disulphonic Acid (On 100% Basis) 600 Naphthalene-2-Sodium Sulphonate 82% 1000 M Xylidine-O-Sulphonic Acid 800 Anthranilic Acid 97% 1000 Derma Bordeaux V 120% (Acid Red 119) 1000 Direct, Turquoise Bloue F-BL 400% 1000 Nylosan Rubine N-5BL (Acid Red 299) 600 Meta Amino Phenol 98% 1000 0-Toludine5-Sulfonic Acid 100% 800 Resorcine 1000 Sulphanilic Acid 2000 2-Amino-4-Chloro-1-Hydroxy Benzene (On 100% basis) 500 3-Methyl 1(4-Sulphophenyle-5 Parazolone 100%) 500 4,4 Diamino Sulfanilide 100% 5100 4-Amino-4-Nitro Amino Diphenyl 2-Sulphonic Acid (On 100% Basis) 1000 2-Amino-4-Nitro-l-Hydroxy Benzene 98% 800 Aceto Acetic 0 Anisidine 99% ° 500
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Sandal Dyestuff Industries (Pvt.) Ltd.
Head Office: - Room # 305-308, 2nd floor, The Business Centre, 8/8 New Civil Lines, P.O. Box No. 166, Faisalabad-38000 Tel PABX: - (92-041) 633071-74 Fax: - (92-041) 617940 e-mail:-
[email protected], website:- http:// www.jamal.com/sandal
The Sandal Group established Sandal Dyestuff Industries (SDI) in 1995 to offset reliance of local textile industry on international brands for dyestuff needs. Today SDI is the largest dyestuff manufacturer of its kind in the country producing a wide range of products at par in quality with the best in the world. SDI is now Pakistan’s largest Dyestuff & Pigment producer and the only producer of Powder Pigments, Copper Pthalocyanines and Bifunctional Reactive Dyes. Sandal’s Dyestuffs are in great demand in quality driven markets like Australia, Turkey, Italy, Spain and Egypt. Since exports of pigment emulsions to Bangladesh in 1996, the list of export items has expanded to Acrylic Binders, Pigment Powders and Reactive Dyes. Plant Capacity: The plant has the capacity to produce various dyestuffs in the following quantities: Plant Capacity Reactive Dyes 1500 M.T./year Pigment Emulsion colors 2000 M.T./year Direct Dyes 500 M.T./year Acid Dyes 500 M.T./year Pigment Powders 500 M.T./year Acrylic Binders 3000 M.T./year Copper Pthalocyanines 500 M.T./year Domestic Market Share An increasing domestic market share i.e. Pigment Emulsion Colors 25%, Acrylic Binders 9% and Reactive Dyes 15% speaks volumes of the customer confidence Sandal’s high quality products have generated. Since 1995, the company has significantly upsized it’s manufacturing and customer support operations to accommodate the expanding customer base.
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Prospects of Chemical Industry in Pakistan
Production Facility Sandal Dyestuff’s production facility came about after years of careful planning and research. The objective was to make the best use of Sandal’s vast experience of over three decades in both commercial and quality aspects of dyestuffs. To do this well, a continuous transfer of technology took place between Sandal and its multinational partners. Leading consultants in dyestuffs industry from around the world took part in various aspects of the plant’s design and set up. The result has been a state of the art facility doing justice to the vast expertise at hand for its operation. Sandal Dyestuff’s most modern Spray Drying facility has the largest capacity among others in its class in the country, providing both Powder & Non-dusting granulates for all types of Dyes. Sandal Dyestuff’s state of the art facility includes: •
Latest P.L.C. based Reverse Osmosis Plant for Dye Purification to achieve highly pure, salt-free dyes in powder form and in liquid form.
•
Knauta Mixers (conical screw blenders) for Powder to Powder blending.
•
A modern inert gas Polymerization Unit, capable of handling Acrylic Copolymers of any type.
•
The only Copper Pthalocyanine Manufacturing unit in the country.
•
A comprehensive Dispersion Department having horizontal & vertical Sandmills for achieving a uniform & very fine particle size of upto 0.5 micron level for liquid Pigment Dispersions.
Quality Control Behind Sandal’s phenomenal success over the years is its firm commitment to quality control measures. All production processes with a possible influence on the final product must go through independent quality checks at Sandal’s five fully equipped labs. The extensive quality control set up is run by a team of 45 highly qualified professionals. The Main Quality Control lab works in tandem with four other labs at Sandal Dyestuff. On its own, the QC lab is capable of simulating application processes of dyes, pigments and binders on fabrics and leather on lab scale. Research & Development The Research and Development program at Sandal aims to provide tailor made solutions to its valued customers based on feedback from the marketing and 6/4/04Experts Advisory Cell
Prospects of Chemical Industry in Pakistan
after sales teams. The effort includes staying abreast of the latest developments in the international dyestuff industry. Human Resource Development Understanding that dyestuff manufacturing is a precision crafting business that requires high skill and deep knowledge of the processes involved, Sandal Dyestuff has devoted vast resources towards its human resource development effort. From acquisition of technology to staff training, the multi tier human resource development program is aimed at improving all levels of the organization’s hierarchy. Success of this program is already visible in the company’s outstanding performance in recent years.
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Prospects of Chemical Industry in Pakistan
Shaffi Chemicals Industries Limited Malik Bagh, Baradari Road, Shahdara, Lahore Tel : - (92-042) 7932001-7 Fax: - (92-042) 7925299
Shaffi Chemicals Industries Limited was incorporated under the Companies Ordinance 1984 as a public limited company in 1994. Its shares are quoted at Karachi & Lahore Stock Exchanges. The main activity of the company is to manufacture and process Di-Octyle-Ortho Phthalates (DOP) Chemicals.
Product:
DOP (Di-Octyle-Ortho Phthalates)
Capacity:
17,500 Tons/year
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Prospects of Chemical Industry in Pakistan
SITARA CHEMICAL INDUSTRIES LIMITED P.O Box 442, Faisalabad Tel : (92-041) 689141-5, Fax (92-041) 689147, 689148 e-mail:
[email protected] web site:- www.sitara.com.pk
Sitara Chemical Industries Ltd. is one of the major entities of Sitara Group of Companies. It is a public limited company which was incorporated in 1981. Its first Chlor Alkali plant started commercial production in 1985. The manufacturing plant was set up with the technical collaboration of a reputed Italian equipments company. Its factory is located at 32 KM Faisalabad-Sheikhupura Road. The company has four caustic chlorine plants and also owns/operates two textile spinning units located near its Chemical Complex. Products
Capacity, tpy
Hydrochloric Acid Caustic Liquid, Solid & Flakes Chlorine Gas Sodium Hypochlorite Chlorine Gas (Liquefied) Bleaching Powder Ammonium Chloride Magnesium Chloride Calcium Chloride Ferric Chloride Hydrated Lime Nickle Chloride Phosphoric Acid Phospho Gypsum
• • • • • • • • • • • • • •
240,000 130,000 117,000 33,000 10,000 5,000 3,300 As per order -do-do-do-do-do-do-
Raw Materials • • • • • •
Rock Salt Soda Ash Barium Carbonate Lime Stone Sulphuric Acid Lime Burnt
• • • • •
Megnasite Ore Calcium Carbonate Anhydrous Ammonia Iron Turning Rock Phosphate
6/4/04Experts Advisory Cell
Prospects of Chemical Industry in Pakistan
TUFAIL CHEMICAL INDUSTRIES LTD., Head Office:-604, Progressive Centre, 30-A, Block-6, P.E.C.H.S, Main Shahra-e-Faisal, Karachi-754000, Tel:-(92-021) 4388204-8, Fax:- (92-021) 4546688 e-mail:-
[email protected] Lahore Office: 2nd floor, Rear Block No. 2, Awami Complex, 1-4 Usman Block New Garden Town, Lahore, Tel:-(92-042) 5864963-5835547, Fax :-(92-042) 5835956 e-mail :
[email protected] Factory: 7 KM, Raiwind Manga Road, Distt. Kasur (Near Lahore)
Tufail Chemical industries Limited is a private company which manufactures Formic acid from sodium formate. The latter is imported from aboard to meet the domestic requirement of Formic acid Products: • Formic acid • Sodium Sulphate
Capacity : :
5,000 Tons/annum 7,500 Tons/annum
Raw Materials: • Sulphuric Acid • Sodium Formate
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Prospects of Chemical Industry in Pakistan
TRI-PACK Films Limited
1st floor, G.D. Arcade, Fazal-ul-Haq Road, 73-E, Blue Area, Islamabad Tel: (92-051) 2273135, 2273907-8, Fax:- (92-051) 2273136
Tri-Pack Films Limited - a joint venture between Mitsubishi Corporation of Japan and Packages Limited of Pakistan, was incorporated as a Public Limited Company on April 29, 1993. The installation of plant and machinery was completed in March 1995, trial production commenced in April, 1995 and commercial production began from June 1995. The plant has the capacity to produce 12,000 tonnes of Biaxially Oriented Polypropylene Film (BOPP) per annum. PRODUCT FEATURES Physical Appearance BOPP is a pre-stretched plastic film, which can be clear & transparent like glass, with a glossy or matt surface, colored or opaque. It could also be produced in pearled shades or further vacuum coated with metal to provide a silver metalized surface. It is most commonly used for the wrapping and packing of consumer goods like biscuits, processed food, confectionery textile, hosiery & garments and cigarettes in transparent or printed form. Chemical Composition The film is made mainly from the resin of Polypropylene, which itself is a derivative from the downstream processing of crude oil. Protective and Barrier properties In addition to enhancing the presentation of products wrapped in it, BOPP also improves the shelf life of food and other products by offering a reasonable barrier to the permeation of dust, moisture, gas and aroma. Heat Sealability It heat- seals at a relatively low temperature thus saving users/manufacturers energy costs while facilitating higher production speeds.
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BOPP HISTORY AND BACKGROUND BOPP was introduced to the world sometimes in mid sixties as a transparent film, which could be mass-produced at a relatively low cost. The versatility it offered in Protective and Barrier properties attracted keen interest among user groups. Rapid growth of this interest among a variety of users for the product resulted in fast growth of technologies to develop newer uses of this film. At the same time technological advances in the ensuing period also contributed to the progressive reduction in costs. This allowed the product to quickly become a much cheaper alternate to `Cellophane' which has since been replaced by BOPP worldwide in most of its age old applications, such as over wrap for printed packages, lamination and flexible pouches. Raw Material (H.S. CODE 3902.1000 & 3902.3000) Raw material for BOPP film are polypropylene resin of homopolymers, coPolymers and additives of different grades and are 100 % imported from various countries of Far Eastern, Europe, Middle East and Australia. IMPORT TARIFF HOMOPOLYMER CO-POLYMERS 1. 2.
(H.S. CODE 3902. 1000) (H.S. CODE 3902.3000)
Custom Duty Sales Tax
20% of Import Value 20% of Duty Paid Value
BOPP FILM (H.S. CODE 3920.2010) 1. 2.
Custom Duty Sales Tax
30% of import value 20% of Duty Paid Value
CORPORATE SET-UP Tri Pack Films Limited, a Public Limited Company is a joint venture between Mitsubishi Corporation of Japan and Packages Limited. It is listed on all the stock exchanges of Pakistan. The registered office of the company is in Karachi. Factory is located in Hattar Industrial estate. A team of professionals to manage the technical, marketing, commercial and financial functions runs the company.
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Prospects of Chemical Industry in Pakistan
CAPITAL STRUCTURE The authorized capital of the company is Rs 300 million divided into 30 million ordinary shares of Rs. 10 each. In this, Packages Limited has 33%, Mitsubishi Corporation has 25%, and general public has 42%. THE SPONSORS PACKAGES GROUP The Packages Group is among Pakistan's larger industrial groups. Its business interests include Packages Limited, International General Insurance Company of Pakistan Limited, Tetra Pak Pakistan Limited (a joint venture with Tetra Pak International), Milkpak Limited (a joint venture with Nestle S.A.), and First International Investment Bank Limited (a joint venture with International Finance Corporation and American Express Bank Limited). MITSUBISHI CORPORATION (MTCL)." After World War II, MTCL was dissolved on the order of General Headquarters of the Allied Powers in 1947, splitting into many independent companies. In 1950, in the process of liquidation, MTCL established a second company named' Kowa Jitsagyo Co., which was renamed "Mitsubishi Corporation" in 1950. OPERATIONS • • •
Mitsubishi Corporation is one of Japan's leading general trading companies and pursues a diverse range of activities worldwide through its global network of offices and subsidiaries. Mitsubishi Corporation is a public limited company in Japan, having it's registered office at 6-3, Marunouchi 2-chome, Chiyodaku, Tokyo, Japan Mitsubishi Corporation has the following major business groups, each handling millions of transactions, worldwide: a) b) c) d) e) f) g)
Information Systems & Services Fuels Metals Machinery Chemicals Foods Textiles
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Textile Chemical Industries I - 45, S.I.T.E. Karachi 75700 Tel:- (92-21) 2562242 Fax:- (92-21) 2561573
Textile Chemical Industries (TCI), an ISO 9001:2000 certified firm, with an annual turnover of approximately Rupees 100 Million was established in 1961. The main objective of its establishment was to cater to the textile industry with locally manufactured chemicals in order to save the foreign exchange and also to earn foreign exchange for the country through export. Its products are being exported to Sri Lanka, United Arab Emirates and Bangladesh. Textile Chemical Industries has the unique distinction of having a complete technology development and its own Research & Development facilities under one roof. This advantage is clearly demonstrated by its leadership in the field of manufacturing auxiliaries specially for Pigment Printing, where based on this technology it has succeeded in developing and marketing Formaldehyde-Free Binder used in pigment Printing in textile industry. Textile Chemical Industries intends to build on this technological advantage in the coming years to further strengthen its leading role in the market. The company is also aware of its environmental obligations and is fully complying with the Effluent Standards of the EPA by consistent in-house testing and monitoring of its effluents. Textile Chemical Industries won the selection of Dutch Government's approval as the role model for environmental Friendly Manufacturing Procedures. The Company is under process of getting.1SO 14000 certified. Raw Materials: • Acrylic Monomers • Vinyl Acetate Monomers • Styrene Monomers • Emulsifiers • Buffers • Humectants Products: • Bleaching Auxiliaries • Dyeing Auxiliaries • Printing Auxiliaries • Finishing Auxiliaries • Textile Pretreatment Auxiliaries Capacity:200 to 250 tons per month. 6/4/04Experts Advisory Cell
Prospects of Chemical Industry in Pakistan
Zahabiya Chemical Industries Plot 14, Sector B-VIII Export Processing Zone, Karachi-75150 Tel:-(92-021) 5082323-4 Fax:-(92-021) 5082325, 4960462 e-mail:- firo
[email protected] &
[email protected] web site:- www.zahabiya.com
Zahabiya Chemical Industries is a sole proprietary concern, situated in the Karachi Export Processing Zone, located at the sea coast of Karachi. Zahabiya is acknowledged and honoured as the renowned manufacturers of Adhesives, Sealants, Construction Chemicals, Water Proofing and Other Compounds fulfilling International Standards of 21st Century's requirements of Non Toxic and Non Hazardous "HUMAN FRIENDLY" products instead of traditional Toxic Environment polluting products. The products offered are backed with our 30 years' of manufacturing experience and expertise in our specialised field. Zahabiya products are manufactured, keeping in view the general climatic conditions and especially for tropical climatic zones. Zahabiya's Field of Activity 1. 2. 3. 4. 5. 6. 7. 8. 9.
Wide range of Civil Construction related cement admixtures and protective products starting from plinth level up to the finishing stage, especially exterior surface coatings for abnormal climatic zones. Engineering related Adhesives, Sealants, Water Proofing Compounds, Rust Protective coatings and other products. Products meant for Air Conditioning & Refrigeration including HVACR, Deep Freezing and Central A/C Ducting manufacturing and assembling. Tin, Metal Can, Drum/Barrel, Metallic Collapsible Tubes Lining & Sealing Compounds. Automobile manufacturing/assembling related Adhesives, Sealants Rust Proofing and other compounds especially Sound Deading compound and cavity sealers. Adhesives, Sealants and Compounds for all types of Automotive & Industrial Filters. Adhesives, Glues & Lacquers for all type of Paper/Board Packaging/Manufacturing including Heat-seal coatings for blister packaging & lamination and for Wood Working/Furniture making Industries. Wall Paper adhesives, Tile Fixing compounds and Carpet Backing compounds. Fire Resistive, Fire Retardant coatings and compounds. 6/4/04Experts Advisory Cell
Prospects of Chemical Industry in Pakistan
10. Other Tailor Made products on request, concerned to our classified field of manufacturing. The above details www.zahabiya.com
can
also
be
procured
from
the
web
site:
Besides manufacturing specialty products, the company has got the facilities of applications of products, under its guidance for the perfection of all jobs executed. Its authorised teams are available to execute all jobs with the entire perfection and guarantee for satisfaction of all clients with economy as well. Interestingly, all the products have been indigenously developed keeping in view the traditional climatic condition and especially for tropical atmospheric conditions of our region choosing best raw materials from throughout the world. Zahabiya”s products have been successfully and economically used in numerous Houses, Commercial, Industrial Institutional complexes/projects throughout Pakistan from Karachi to Hunza, including Defense Departments. The products are also being exported to Sri Lanka, Bangladesh and Middle East. From the experience, it can fervently be said that all the products do perform the functions they are meant for, even perform better when compared to many other similar products including multinational brands, due to their designing based on the company’s vast practical experience. It may be informed that Zahabiya Chemical Industries is purely Pakistani in origin, all associated with it feel proud not to be assisted by any foreign collaborator and are pleased to mention here that it is the First Pakistani industry to get ISO 9002 certification "as the
manufacturers and exporters of industrial adhesives, sealants & construction chemicals (water proofing compounds)".The Company is registered with Engineer-in-Chief”s Branch, Military Engineering Services, Pakistan.
The company is procuring various raw materials including many kinds of Resins, Elastomers, Copolymers, Solvents, Pigments, Additives, Preservatives and essential chemicals from best sources throughout the world. The fillers and extenders, which are of Pakistan origin, are being brought in Karachi Export Processing Zone from local market. Presently, Zahabiya is having the manufacturing capacity of 50 Metric Tons per month on single shift basis on mixed consignment manufacturing. The capacity of course varies if the same type of product is manufactured continuously being at higher side.
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Prospects of Chemical Industry in Pakistan
Annexure-IX GOVERNMENT OF PAKISTAN MINISTRY OF INDUSTRIES & PRODUCTION
FERTILIZER POLICY 2001 (Revised on 29-8-2001) Whereas the Fertilizer Policy announced by the Government of Pakistan in 1989 was successful, assuring reasonable prices of fertilizer to farmers below import price and in bringing substantive investment to enhance domestic production and has completed its stipulated time frame, and whereas it is felt that further investment in fertilizer production is required keeping in view the importance of fertilizers in increasing the country's agricultural output, a need is felt to review and update the policy to encourage new and existing investors to come forward to invest. Accordingly, the following policy is adopted, after due authorization by the Cabinet, with effect from 1st July, 2001: 1. EXISTING PLANTS: 1.1 a) To enable local fertilizer price to stay below imported fertilizer prices, the escalation of existing feed gas prices will be as follows: DATE 1-7-2001 1-7-2002 1-7-2003 1-7-2004 1-7-2005 1-7-2006
ANNUAL INCREASE% Nil 5.0 7.5 10.0 12.5 15.0
b) Thereafter, the price is to be $ 1.10/MMBTU or prevailing Middle East price determined in accordance with 2.1.2 whichever is higher, only for those existing investors who bring in new plant (minimum Capacity 0.5 MT/year) under clause 2. c) Fuel gas price will be the same as for other industrial consumers in the country. Fuel gas will continue to be defined as gas which is used for generation of electricity and steam and for usage in housing colonies. d) Concessional feed gas allowed under the 1989 Fertilizer Policy to companies that undertook expansion will be continued until their 10 year period is exhausted. Thereafter the feed gas price will be same as in 1.1(a) and (b). 6/4/04Experts Advisory Cell
Prospects of Chemical Industry in Pakistan
2. NEW INVESTMENT: 2.1 NATURAL GAS 2.1.1 It is the intent of this policy to provide investors in new fertilizer plants in Pakistan a gas price that enables them to compete in the domestic market with fertilizer exporters of the Middle East so that indigenous production is able to support the agricultural sector's requirement by fulfilling fertilizer demand. 2.1.2 The price of feed gas will be the Middle Eastern Price prevailing on the date of signing of the GSA or $ 0.77/MMBTU which ever is higher (less the discount of 10% mentioned in 2.1.3 ) and shall remain fixed at such price till the expiry of 10 years from the date of commissioning. This price will be determined by the Gas Regulatory Authority of Pakistan, from the published international data, in dollar terms, on the principle of general parity with the price prevailing in Middle East. 2.1.3 A discount of 10% will be allowed on such determined price as at 2.1.2 to facilitate new investment. The discount price i.e. the price fixed as per 2.1.2 and 2.1.3 will remain fixed, for a period of 10 years from the date of commissioning, in dollar terms. The rupee parity will be determined as defined in para 2.1.6. This price will be inclusive of all taxes, duties, levies, fees and charges whatsoever, whether local, federal or provincial. However, GST or similar duty may be imposed on such determined price provided it is adjusted against GST, payable on the fertilizer produced. 2.1.4
The investor may avail this opportunity to sign GSA (Gas Sales Agreement) as detailed in 2.1.2 & 2.1.3 by 30th June, 2005.
2.1.5 Fuel gas prices shall continue to be treated as at par with other Industrial consumers. 2.1.6
For billing purposes, the price fixed in dollars will be calculated in Pak Rupees, at the average interbank rate. The average interbank rate shall be fixed twice in a year i.e. on 1st January, and 1st July, based on the average of the previous six months daily interbank rate.
2.1.7
Gas Companies will build adequate safeguards in the GSA to ensure that the investor proceeds without delay in installing the plant after signing of the GSA, so as not to pre-empt the use of available gas to another investor. The Government will ensure that Gas Companies do not cause undue delays in signing of GSA.
2.1.8 Gas will be allocated to new fertilizer, plants on the principle of first come, first served. Recognizing the expected growth in fertilizer demand, the importance of steady supply and the suitability of Mari Gas production, the government has decided to dedicate the shallow 6/4/04Experts Advisory Cell
Prospects of Chemical Industry in Pakistan
reservoir of Mari gas field to the Fertilizer Industry while the new deep reservoir is to be developed for power sector as it is suitable for power generation. 2.2 IMPORT AND LOCAL MANUFACTURE OF PLANT: 2.2.1 The Government of Pakistan encourages investment and a number of concessions are available as per the Investment Policy and applicable Tariff Structure. Investors may avail these concessions with reference to import and local manufacture of plant, equipment and machinery, including deferred duty payable through customs debentures. 2.3 IMPORT OF SECOND HAND PLANT: 2.3.1 Investors will be allowed to relocate second hand plant, equipment and machinery, with the same concession/exemption as applicable to new plants. 2.4 EXPANSION / BMR / DE-BOTTLENECKING: 2.4.1
If an investor undertakes an expansion, major BMR or de-bottlenecking of an existing plant, which results in increase in the production capacity of the plant, such additional feed gas shall be treated at par with a new plant for 5 years for purposes of concessions /exemptions outlined in 2.1.2,2.1.3,2.1.4,2.1.5 and 2.2.1,2.2.2 and2.3.
2.5 EQUAL TREATMENT All the fertilizer producers, domestic and foreign, public and private will be treated equally in commercial, fiscal, corporate and contractual matters. 3.
PHOSPHATIC FERTILIZER: 3.1
Considering the importance of Phosphatic Fertilizer, the Government plans to continue to encourage its local production. For the said purpose, the following measures shall be taken: 3.1.1 Rock phosphate and phosphoric acid importable by manufacturers of fertilizer shall remain importable free of duty and sales tax.
4.
N.P.K. 4.1.1 All raw materials required for NPK production i.e Di-Ammonia Phosphate (DAP), Mono-Ammonia Phosphate (MAP), Tripple Super Phosphate (TSP), MOP, SOP and micro nutrients are allowed to be imported free of duties & taxes. 6/4/04Experts Advisory Cell
Prospects of Chemical Industry in Pakistan
5.
4.1.2 Import and local manufacture of plant, equipment and machinery shall be treated as per Section 2.2.1 for concessions and exemptions. GENERAL: 5.1
Selling price of fertilizer shall remain deregulated on the understanding that while manufacturers will allow free market forces to prevail they will pass the benefits in the form of lower price of fertilizer to the farmers. In order to ensure this objective is achieved a Committee will be set up and shall meet as and when required, but at least on a regular quarterly basis and take appropriate steps as necessary. The Committee will be headed by the Minister for Industries &. Production and will include Minister for Food, Agriculture, Livestock as well as a senior representative from the Ministry of Finance.
5.2
Withholding tax collected at the time of import of fertilizer, shall be adjusted against assessed income tax of the year during which such import takes place, in case the fertilizer is imported by a manufacturer of fertilizer.
6/4/04Experts Advisory Cell
APPENDIX – I
SCOPE OF CHEMICAL SECTOR DEVELOPMENT IN PAKISTAN WITH SPECIAL REFERENCE TO PETROCHEMICALS
Dr. FARRUKH S.M. AKHTAR Vice President Projects Yanbu Investment Company Yanbu, Saudi Arabia
April 5, 2002
Industrialization is the only economic option of Pakistan. Industrialization has not been pursued as organized sector. Sporadic emergence of industry in Pakistan has been primarily based on convenience (fertilizer, cement, textile, vegetable oil are typical examples). Support industry has mushroom growth. Although very valuable resource but has lacked once again organized structure. Introduction of quality function was never conceived. This along with the lack of other ingredients industrial sector never took off. There is a strong need to take up this option gainfully. Among others chemical sector is the most important. I am privileged to share with you the scope of strategic development of chemicals with special reference to petrochemicals. In essence it deals with the major task facing all economies (including Pakistan) in their pursuit of further growth and development. Moving downstream aims at the further development of the economy as higher added value products and or services will be produced which will enhance the gross domestic product of Pakistan or region with subsequent impact on the standard of living. However, before we examine opportunities mainly in the petrochemical industry in our region of the world; let us spare few moments to look at the oil-petrochemical industry background, locate petrochemicals within the chemical industry, and examine some of the main features of the petrochemical industry.
Oil – petrochemical industry background Petroleum and gas have traditionally been used primarily for energy and this situation is not likely to change in the near or medium term. Therefore, it is to be expected that hydrocarbon resource prices will reflect primarily energy market developments. Between 90-93% of oil and gas are consumed for energy purposes. Petrochemicals manufacturing absorb the balance of the world’s oil and gas supplies. Although it is small percent share, however, it is a very important source of demand for hydrocarbon resources due to its major impact on the economy as a whole. Oil and gas supplies are known to be finite and non-renewable. At present rates of utilization world is not likely to face any major crises in near future as is evident from the production and consumption statistics on oil and natural gas presented below:
Oil
1988
(million barrels)
2003
2008
Production Consumption
24391 24689
27701 27701
30624 30624
Gas (billion cubic meter)
Production Consumption
1988
2003
2008
2439 2419
2842 2842
3198 3198
Out of 24391 million barrels, globally produced, Pakistan share was 21 million barrels of oil in 1998. Pakistan’s share of oil & gas in 1998 is given below: Crude Oil (million barrels) Production Consumption Imported
1998 21 52 31
Natural Gas (million CFt) Production Consumption
699,709 607,891
Traditionally, the petrochemical industry adapted on the one hand to the situation created by the oil refining and gas processing and on the other hand to the market. Oil fields were generally far away from the main consumption areas. It was considered simpler and cheaper to ship the crude to the main consuming markets and built the refineries in the consumer areas. Basic petrochemical plants with the exception of USA were usually situated near the refineries. End product manufacturing plants, depending upon the local circumstances, are placed somewhere between the basic petrochemical plants and the markets. The result of this approach was that the majority of the hydrocarbons produced in the developing countries was shipped to the developed countries without major processing. The situation prevailed prior to 1973 as exploration, production and utilization of oil & gas was determined by multinationals based in the industrialized countries. The price of oil was low and the pattern of ownership was such that little capital was generated to affect industrial restructuring & further processing of these hydrocarbon resources at producing countries.
In line with that, United States, Japan and Western Europe were the major producers and consumers of petrochemicals. After the oil price corrections of the seventies the oil based economies emerged in a privileged position to produce petrochemicals as associated gas resources which were largely flared and wasted in the past were recovered, gathered and put to use. The accumulation of large financial surpluses facilitated the establishment of the industry and the substantial infrastructure needed for it. These developments were part of the strategy adopted by the oil producers as they became aware of the risks of accumulating fixed-income-yielding assets in an inflationary atmosphere. Therefore, they were no longer satisfied with a role as residual suppliers of the world oil requirements without playing an effective role in the downstream industry. Concurrently with realization of these developments other regions than the three main industrial regions of the world, started to become important players in the petrochemical industry. The Far East, Latin America, Indian subcontinent, CIS countries as well as the Middle East entered the arena and decreased the share dominance of main industrial regions. It is expected that this trend is to continue in the future and the share of main industrial regions will become substantially lower.
Petrochemicals within the chemical industry All petrochemicals have a common base as they are derived from the processing of crude oil and/or natural gas completely or partially. Other chemicals, which are not of petrochemical origin, also play major role in the petrochemical industry the most notable of them is chlorine, its production is highly energy intensive and can be produced competitively based on energy from natural gas. The location of the petrochemical industry in the whole chemical industry can be defined in many different ways. There is no universal understanding either of the exact meaning of the petrochemistry, or of the method of the classification to be adopted. However, the chemical industry can be classified broadly into:-
Heavy or commodity chemicals Specialty & fine chemicals
The heavy or commodity chemicals can further be classified into: -
Organic
-
Inorganic
Specialty and fine chemicals are produced usually in small quantities, however, fine chemicals are sold based on specifications related to their chemical composition while specialty chemicals are sold based on performance. The petrochemical industry can be identified mainly with the heavy organic group. Substantial part of this group is certainly petrochemistry today. The boundaries between commodity chemicals and specialty & fine chemicals are somewhat blurred. Depending on the stage of evolution the specific chemicals as they move in many cases from one category to another during their development. A separate scope paper would be needed on inorganic chemicals. At times the boundaries between organic and inorganic chemicals can be blurred also. A clear example of that is ammonia, which is an inorganic chemical. However, by its connection to the fertilizer production, ammonia manufacturing can be classified within the organic chemical industry and because of its process technology and feedstock it is often included in the petrochemical field. Some organic compounds like plasticizers, surface-active agents and more complex intermediates for the manufacture of the pharmaceutical and plant protection products, although they are specialty & fine chemicals are often grouped with the petrochemicals. The main features of the petrochemical industry The petrochemical industry is characterized with a number of main features as outlined below:• • • • • •
Technology intensive Capital intensive Energy intensive Scale intensive Migratory Dominated by multinational
It should be noted that the larger the use of domestic resources in processing activity, the higher the value added contribution to hydrocarbon resources. Petrochemical products through their life of development follow in general the product cycle theory. Typically the product demand:-
• •
Increases after initial introductory period Then slows down during product maturity
Concurrently:• •
Number of producers increases rapidly (subject to the entry barrier restrictions) Then slows down
In turn prices:• •
Decline at first At mature stage tend to level off
The price decline is combined effect of:• • • •
Decreased costs Economies of scale Learning curve-operating experience Increased competition
During early stages of product life cycle generally one country and or one company is the only producer and hence meets domestic and export demand. Such situation is often due to technology position of that specific company. The trend toward migration of petrochemical industry near hydrocarbon resources is the result of interaction of a rise in feed stock prices and decline in unit capital costs of mature petrochemical products. This factor is very important to identifying investment opportunities in downstream industries in the Gulf region. Other wise there is a substantial regional demand for downstream products. Such industries can become viable even though they may have lower competitive edge over producers in other regions. One of the main features of the petrochemical industry is its technology dependence. Accordingly it requires substantial resources committed to research, product development and technical services. This need is less emphasized in the case of well established commodity products as there has been no radical change in basic technologies/processes, like steam cracking catalytic reforming etc although substantial improvements were achieved. However, by moving more downstream in areas of commodity performance products (e.g. plastics) and in specialty and fine
chemicals technologies are highly guarded and continuously improved upon. Therefore, having R&D capability or access to technical advances is a key prerequisite to moving downstream in these fields. A good regional example of that is SABIC (Saudi Basic Industries Corporation) which is investing in this important area and hopefully other regional players will follow suit. The following indicative table shows the added value for moving downstream. As it can be seen that the hydrocarbon resources in a barrel of oil can increase in value in a dramatic way through further processing downstream. However, the level of effort in terms of capital expenditure, technology acquisition and commitment of resources for further development needed to generate adequate returns should not be under estimated. Comparative added value $ per tonne Crude Oil
100-140
Liquefied and Compressed natural gas
25-60
Commodity chemicals
150-1500
Specialty & fine chemicals
1000-20000
The issues related to the availability of market and its location for such down stream products has to be considered also.
Petrochemicals and opportunities downstream Now having set the stage for why go downstream in petrochemicals, it is reasonable to examine the basic building blocks. Before we do that let us have a quick view of consumption pattern of petrochemicals also world consumed around 447 million tons of petrochemicals during 1998 (out of which 261 thousand tons were consumed in Pakistan).
The consumption of major petrochemicals in the world is
Million tones actual Aromatics Olefins Plastics Elastomers Fibres Formaldehyde resins Key intermediates Total
1998 56 159 115 6 22 9 80
2000 59 164 127 6 23 10 85
447
475
Forecast 2003 2008 65 76 173 190 147 181 7 9 24 26 11 12 92 110 519
604
80% of all organic chemicals production is attributed to 5 basic building blocks of petrochemical industry and those are:Ethylene Propylene Butadiene Aromatics (benzene, toluene & xylene) Methanol The opportunities offered by each “building block” are presented hereafter.
Ethylene 1988 (000 tonnes) World Capacity
Production
Consumption
91,802
79,070
79,014
Opportunity
Ethylene consumed %
End use
Ldpe and Lldpe
30
Film and Products
moulding
Hdpe
22
Film and products
molding
EDC
15
Vinyl chloride
Ethylene oxide
12
Ethylene glycol & Nonionic surface active agents
Ethylbenzene
7
Styrene
Alpha olefins
3
Co-polymers, detergents
Vinyl acetate
2
Polyvinyl emulsion & resins polyvinyl alcohol
Acetaldehyde
2
Acetic acid anhydride
&
acetic
Propylene 1988 (000 tonnes) World Capacity
Production
55,834
Opportunity
Consumption
47,389
Propylene consumed %
47,475
End use
Polypropylene
52
Fibres & filaments, film & molding products
Acrylonitrile
12
Acrylic fibres, abs & san
Oxo chemicals
9
Various alcohols
Propylene oxide
8
Polyurethane polyols, propylene glycol
Cumene
6
Phenol/acetone
Oligomers
4
Dodecyl benzene/ phenol, isodecyl alcohol
Acrylic acid
3
Ethyl, methyl, butyl & other acrylates
Isopropanol
3
Solvent, fuel, acetone
Allyl chloride
1
Epichlorohydrin & allyl alcohol
aldehydes
&
Butadiene 1988 (000 tonnes) World Capacity 9,023
Opportunity
Production
Consumption
8,044
8,044
Butadiene consumed %
End use
SBR & latex
37
Tires, hosing
Polybutadiene
24
Rubber and plastics
SB copolymer latex
10
Plastics and rubber
ABS resin
9
Plastics
Adiponitrile/hmda
5
Nylon 66
Nitrile rubber
3
elastomers
Benzene 1988 (000 tonnes) World Capacity
Production
38,302
Consumption
28,388
28,388
A- 83% of benzene is consumed by:Ethylbenzene
Styrene
Cumene
Phenol & acetone
Cyclohexane
Nylon fibres & plastics
B - Rest of benzene is consumed by:-
Opportunity
Benzene consumed %
End use
Nitrobezene
5
Aniline, benzidine, dyes, quinoline, azobenzene
Alkylbenzene
3
Detergents
Chlorobenzene
3
Orth & para Chloronitrobenzene
Maleic anhydride
3
Unsaturated polyester resin
Toluene 1988 (000 tonnes) World Capacity 21,005
Opportunity
Production
Consumption
14,279
Toluene consumed %
14,280
End use
Benzene
50
Para - xylene
21
Solvent
13
Thiodiphenol
9
Flame retardant, antioxidant
Toluene diisocynate
6
Polyurethane foams & coatings
Benzoic acid
1
Preservative Plasticizer
PTA and DMT
Xylenes
a- para xylene 1988 (000 tonnes) World Capacity
Production
17,151
Opportunity
Consumption
13,191
Para xylene consumed %
PTA
79
DMT
20
13,191
End use Both are used to manufacture polyester fibre, films and engineering resins
b – Ortho xylene
1988 (000 tonnes) World Capacity
Production
3,604
Opportunity Phthalic anhydride
Consumption
2,995
Ortho xylene consumed % 96
2,995
End use Plasticizers, alkyd resins
USP
Methanol 1988 (000 tonnes) World Capacity
Production
35,342
Opportunity
Consumption
25,674
Methanol consumed %
25,674
End use
Formaldehyde
33
Urea & resins
phenolic
MTBE
27
Octane booster
Acetic acid
7
Vinyl acetate, cellulose acetate
DMT
4
PET
Chloromethane
4
Silicones, refrigerant, catalyst carrier, etc
Methylamine
3
Dyes, pesticides, surface activeagent
Methylmethacrylate
3
Acrylic sheets, surface coatings
Methylchloride
2
Silicones
The above scope analysis just highlights the main building blocks of the petrochemical industry and the main opportunities downstream. From those, there are hundreds and even thousands of alternatives for moving downstream.
Pakistan has to construct a serious road map for the development of chemical sector and has to develop a long-range plan at least spanned over 50 to 75 years. This would need stratification to medium term spans of 7 to 10 years. GOP has to lay the foundation of organized chemical sector development. Each product or project has to be vertically or horizontally integrated as a brick or like organ gram. GOP must based on national parameters (provinces are sub sets of nation) enlist all possible downstream opportunities. This can be performed by gainfully employing Appendix-1 and other tools as structured Brainstorming, scripted flowcharts, FMEA and so on. GOP should be instrumental in chalking out the road maps for selection parameters and typical data base s required as listed in Appendix-1. However, the identification of viable downstream investment opportunity is just the beginning rather the end for moving down stream as it will be up to the investor to evaluate the available opportunities and the following factors has to be assessed and evaluated: The growth rates, Supply and demand analysis, Areas of growth. Targeted markets, Technology availability, Financial/economic viability If all the ingredients are satisfied then we have the right opportunities, and let GOP embark on promoting organized industrial sector. Moving downstream, although is a main strategic objective for emerging economies, must be done in an economically feasible way, which will generate adequate returns on investment that can be recycled in the economy to generate further growth.
ATTACHMENT – I PROJECT IDENTIFICATION
Scope: The scope of project identification process begins with the preparation of the “Shopping list” of ideas (project/product) and ends at a project profile (sometimes depending on the details is called pre-investment pre-feasibility study). As a policy the ‘ideas shopping list’ is tested against selection parameters. This list of selection parameters could vary from situation to situation. Some of the parameters are listed below. Selection Parameters i) Availability of basic raw materials petrochemicals, minerals, etc.)
(mainly
crude
oil,
primary
ii)
Assessment will be made, based on Pakistan and world-wide usage and trends, of selected products which are manufactured in relatively large volumes, and which are expected to enjoy long-term high growth patterns.
iii)
These products should be suitable for production in relatively large world-scale plants ($50MM or more in investment) that are capital and/or energy-intensive, rather than labor-intensive.
iv)
In most cases, the products will be made utilizing the most modern technology so as to remain competitive for the long-term, i.e. no obsolete chemistry or inefficient production methods.
v)
The products selected should have good export potential, particularly in early years of operation.
vi)
Or the products selected are import substitution oriented.
vii)
Total output should not unduly disrupt the world market place or overall patterns of international trade in order to maintain world price stability, while at the same time satisfying Pakistan requirements partially or totally.
This parameter list is not exhaustive and may be adjusted as required.
Preparation of shopping List: Any project or investment opportunity starts from an idea regarding producing a product. The idea could be naïve but it should not be disregarded at an earlier stage of its conception. A seemingly “naïve idea” could result in a sound investment opportunity. This stage of identifying of an idea or naming a product is the most time consuming and demands rational thinking process. Despite the fact that there could be a creative and innovative process involved in identifying the idea but the conventional method proved its worth time and again. The basic idea may originate during discussions with company management as a result of long range planning, government, consultants, machinery manufacturers and suppliers, process know-how developers and suppliers or from any number of primary and secondary sources like newspapers, technical journals, conferences, seminars, etc. This method yields sporadic results and by no mean is inferior to other methods. In other method, one could adopt “The Bird Approach” or The Squirrel Approach. This analogy is very opposite to those charts which list feedstock’s, primary products, intermediates specialty and performance products and vice versa. Both Bird and Squirrel approaches are described below. The Bird Approach Start with the entire world – scan it for opportunities to seize upon, trying to make the best of what you find. You will resemble a bird searching for a branch to land on a large tree. You will see more opportunities that you can think of. You will have an almost unlimited choice. But your decision, because you cannot stay up in the air forever, is likely to be arbitrary, and because arbitrary, it will be risky forever, is likely to be arbitrary, and because arbitrary, it will be risky. The Squirrel Approach Start with yourself and your organization – where you are with the skills, knowledge, expertise you have – and what you can do best. In this approach you will resemble a squirrel climbing that same large tree. But this time you are starting from the trunk, from familiar territory, working your way up cautiously, tree fork by tree fork, deciding on each fork the branch that suits you best. You will only have one or two alternatives to choose from at a time – but your decision, because it is made on limited number of opportunities, is likely to be more informed and less risky. In contrast with the bird who makes single big decision, the squirrel makes many small ones. The squirrel may never become aware of some of the opportunities the bird sees, but he is more likely to know where he is going.
However, by employing any or all approaches you would be able to generate, a good shopping list. Screening Process. Once shopping list is generated then it is subjected to screening process. This process begins by establishing the necessary input data that have a great degree of credibility. This requires consultation with database. This process of data review/examination should not be short circuited because of ill-conceived deadlines. The typical data bases required are: -
World and regional producing industries, locations and their
capacities, operating rates, etc. -
World and regional implementation and under planning projects, locations, nameplate capacities.
-
Regional licences issued, owners, capacities, product states and
-
status. Feed stocks, auxiliary raw materials, prices, sources, availability, selected products grades, specification, historical prices, channels.
-
Uses and users
-
World and regional import and export data.
-
Technologies, Licensors and Technology Suppliers.
-
Capital cost estimates, sizes
-
Operating cost estimates
-
Utilities, consumption, etc.
In reaching a decision on each of these tests, the data gathered at a conceptual stage are valuable. The evaluation of the project alternative is frequently disturbed because the data necessarily projected are not always ‘accurate’. Actually only the DEGREE of accuracy is at stake for all management decisions or to a large extent based upon projections.
The evaluation of various aspects of an alternative requires the combined judgment of several cross-functional individuals. Top management, for example, is in the best position to determine whether a project is compatible with certain (e.g. the given country or the company) short term and long range developmental plans. The selection of a project for implementation unquestionably appears to be one of the most strategic and significant decision in the entire planning effort. Based on the above screening analysis, a reasonable project profile could be developed. Such a profile may briefly contain information on the following aspects: i) ii) iii) iv) v) vi) vii)
Description of products Capital cost estimate Feedstock’s, raw materials, consumption/unit Utilities, consumption/unit Technology, Technology Suppliers Market and end uses of products Some economic indicators
The screened project profiles showing positive indicators would prove to be saleable documents and is the end of project identification study.
