18 May 2012 06:45 [Source: ICIS news]
By Tahir Ikram
KUALA LUMPUR (ICIS)--Lotte Pakistan PTA (Lotte PPTA) has put on hold its plan to build a $500m (€395m) world-scale purified terephthalic acid (PTA) plant after failing to secure the Pakistani government’s support in terms of higher import tariff for the product, a company executive said on Friday.
“At this time we are disengaged,” Lotte PPTA CEO Asif Saad told ICIS in an interview at the sidelines of the Asia Petrochemical Industry Conference (APIC) in ?xml:namespace>
Lotte PPTA was initially looking at building a second PTA plant that will have a capacity of between 800,000 tonnes/year and 1m tonnes/year in
The company, in which South Korean conglomerate Lotte has a majority stake, operates
“This is election year, I don’t think the government will take tough decisions,” Saad said.
The government of President Asif Ali Zardari is currently beset with an ailing economy, geopolitical tensions, war on terror, internal political strife and confrontation with the judiciary.
Due to poor infrastructure,
Meanwhile, the All Pakistan Textile Mills Association (APTMA) is posing a strong opposition to any increase in PTA import tariff to ensure its members continue to get cheaper raw material.
PTA’s main downstream application is the textile industry.
Saad, however, said that requesting a higher import tariff “is not asking favours from the government”, stating that such move is needed to ensure a balance among all the stakeholders in the product chain.
PTA, being a cyclical commodity business, needs minimal amount of government support in the shape of tariff protection, he said.
Lotte PPTA wants the import tariffs to be benchmarked with countries with similar industry structures and where PTA production and demand are growing.
In the EU, the PTA tariff 6% while in
The country’s PTA demand is estimated to grow at an annual rate of 8-12% over the next few years, in line with the country’s shift towards use of more polyester from cotton in textile production.
The cotton and textile sectors account for 11% of the country’s GDP and about 60% of its export receipts.
APIC runs from 17-18 May.
($1 = €0.79)
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