LOTTE Chemical warns closure of Plant in Pakistan

Aftab Ahmed

Islamabad: M/S LOTTE Chemical has warned to shut down plant due to non-availability of raw material.

Earlier, the government had refused to allow Lotte Chemical to import raw material from India. The South Korean firm has explored avenues other than India to import raw materials. But no country had surplus raw material.

M/s. LOTTE Chemical has informed the Commerce Ministry that they are fully committed under their 2019-20 contracts with other customers. The non-availability of Paraxylene has led to operational problems and the plant has been shut down several times.

M/s. LOTTE Chemical, which contributes to 60% of the domestic market of PTA, has informed that in case the domestic PTA Industry is not able to operate due to non-availability of Paraxylene, the downstream industries like Polyester Filament Yarn (PFY), Polyester Staple Fiber (PSF) and PET bottle will be forced to import PTA, which will result in the following losses to Pakistan.

In the absence of imported Paraxylene, the only PTA plant will shut down causing un-employment and huge loss to the investment made in PTA production, Lotte Chemical informed.

Without indigenous PTA, the downstream industry will be forced to pay higher prices to foreign suppliers as they will take advantage of the situation and charge premiums. This may make downstream industries, especially Textiles, uncompetitive in the export market.

Pakistan’s ability to attract investment for Naphtha Cracker shall diminish due to plant Closure; Naphtha Cracker requires a significant quantity of Paraxylene. Pakistan will lose foreign exchange through foreign imports of over $100 million which is currently being provided by the domestic PTA Industry through import substitution.

In order to avoid a shutdown of downstream industry of PTA, M/s. LOTTE Chemical Pakistan Ltd. had requested for grant of one-time permission to import 40,000 MT Paraxylene from India.