28 May 2012 00:00 [Source: ICB]
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 Pakistan government's support in terms of a higher import tariff for the product, CEO Asif Saad revealed.
"At this time we are disengaged," he told ICIS on the sidelines of the Asia Petrochemical Industry Conference (APIC) in Kuala Lumpur, Malaysia.
Lotte PPTA was initially looking at building a second PTA plant with a capacity of 800,000-1m tonnes/year, but the investment was contingent on raising the PTA 3% import tariff to 7.5% as protection for the domestic industry.
The company, in which South Korean conglomerate Lotte has a majority stake, operates Pakistan's sole PTA plant, which has a 500,000 tonne/year capacity, located at Port Qasim.
The Pakistan government has not agreed to an import tariff adjustment and may not reconsider the proposal this year, Saad said. "This is election year; I don't think the government will take tough decisions," he explained.
The government of President Asif Ali Zardari currently faces an ailing economy, geopolitical tensions, internal political strife and confrontation with the judiciary.
Meanwhile, the All Pakistan Textile Mills Association (APTMA) is posing a strong opposition to any increase in the PTA import tariff to ensure its members continue to get cheaper raw material.
However, Saad said a higher import tariff is needed to ensure a balance among all the stakeholders in the product chain.
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