Engro to build $1bn plant in Africa

[LahoreEstate]

KARACHI: Engro Chemical Pakistan Ltd, Pakistan’s second-largest urea maker, plans to build a $1 billion phosphate fertiliser plant in North Africa to feed demand in Pakistan and Western Europe, Bloomberg reported on Wednesday.

It quoted Engro Chief Executive Officer (CEO) Asad Umar as saying that Pakistan produces a lot of nitrogenous fertiliser indigenously but the country does not have the raw material for phosphatic and potassium fertilisers. ‘North Africa was the biggest hub of phosphate fertiliser in the world,’ the CEO told Bloomberg.

The proposed North African fertiliser plant will produce about one million metric tons a year, almost three times more than Fauji’s joint venture.

Engro, which has spent $1.7 billion expanding into milk and consumer goods in the past three years, will join the Fauji Group in supplying Pakistan with fertiliser from North Africa.

Engro plans to invest $5 billion in the next five years to expand in areas, including power generation and food exports, Asad Umar told Bloomberg.

Asked to comment on the development, Ruhail Mohammed, Vice President and Chief Financial Officer at Engro Chemical Pakistan, told Dawn that the company was in negotiations for setting up the phosphate plant with one of three to four countries in Africa. He said that the feasibility was to be determined and debt/equity ratio would then be finalised.

Ruhail said that the Engro Chemical Pakistan would benefit from the plant, since it could prove to be an assured supply of product and the dividend income that the company would receive from investment in the project would add to company earnings.

Half of the output from the proposed African plant would be imported into Pakistan and the other half would be sold abroad.

http://www.dawn.com/wps/wcm/connect/dawn...ca--szh-01