April 23, 2020 (MLN): Engro Polymer & Chemical Limited has apprised the Pakistan Stock Exchange regarding the status of PVC expansion/VCM debottlenecking project as of March 31, 2020.
According to the report issued by the company, the Engineering works, Major Civil works and Bulk equipment installation for both the PVC and New Utilities plant have been completed. Piping pre-fabrication is completed and substantial progress has been made on piping installation while electrical and instrument cable laying & termination is now in progress. Walk through audit of Piping installation by Licensor JNC has also been completed.
Overall, on PVC expansion project, mechanical completion work is approximately 90% done. Further to this, the company informed that the proceeds of PKR. 5.4 billion from the Rights Issue have been fully utilized for the PVC Expansion and VCM Debottlenecking, and there is no deviation from the purpose of the use of proceeds.
However, the company informed that unfortunately, further progress on PVC expansion project has been affected due to the CoVID-19 Pandemic. February saw delays in mobilization of overseas resources from China due to CoVID-19 enforced lock downs in China, while in March foreign travel restrictions placed in Pakistan along with CoVID-19 induced lock downs by the Federal and Provincial Government have further delayed mobilization of overseas and local resources.
On the VCM plant debottlenecking, detailed engineering works are in process. Civil foundations for most of the major equipment have been completed. Equipment installation work including Furnace and its downstream equipment installation was started along with piping pre-fabrication. On mechanical completion side, almost 60% work on the project has been completed. Again, the disruptions caused by CoVID 19 has affected procurement activities where considerable equipment was on order from China and in some cases from Italy and France. Lock downs in these countries have affected delivery dates.
Work on the project site is at a halt in compliance with the Lockdown notification issued by the Govt of Sind and will remain so till the lock down remains in effect. Considering the above, EPCL has issued Force Majeure Notices to its contractors working on PVC 3 & VCM Debottlenecking. Consequently, the company feels that there is a possibility of it being unable to meet the announced completion timelines.
Having said that, the company will be planning to resume the work on expansion projects once Government enforced lockdown is lifted and after assessing the COVID situation on ground. Once work at the Project Site resumes at a normal pace, PVC expansion is estimated be operational in around three months’ time and the VCM debottlenecking will be completed in approximately six months’ time.
Copyright Mettis Link News
34395
