Friday, September 24, 2010

Lotte Pakistan Plans to Spend $500 Million to Increase Chemical Production

Lotte is aconglomerate and one of the largest food and shopping groups in Japan and South Korea. This $500 million investment come in right after China's announced that its exporting Pakistan a 1000 MW Nuclear Plant !

Lotte Pakistan PTA Ltd., the nation’s only producer of pure terephthalic acid, plans to spend $500 million to increase output as demand rises for the chemical used in making polyester.

“The investment may be in another plant producing the same product in Pakistan,” Asif Saad, chief executive officer of the company, said in an interview in Karachi yesterday, without giving details. Lotte Pakistan is yet to decide a timeframe for the investment, Zain Talpur, a company spokesman, said today.

Demand for pure terephthalic acid may increase as textile makers use more polyester after the nation’s worst-ever floods destroyed cotton standing in fields, according to Syed Abid Ali, a research analyst at Arif Habib Securities Ltd. in Karachi. A jump in cotton prices to a 15-year high this month may also boost polyester demand.

Pakistan, the world’s third-largest cotton user, may import as much as 50 percent more of the fiber this year after floods damaged crops, Muhammad Arshad, a vice president at the Pakistan Central Cotton committee, said this month. The South Asian nation is the world’s fourth-largest cotton producer and textiles account for two-thirds of its overseas shipments.

Flooding since July 22 caused $7 billion of damage across the nation and 20 million people were displaced, according to Prime Minister Yousuf Raza Gilani.

Lotte Pakistan’s shares, which have climbed 7.9 percent this year, rose 0.6 percent to 8.45 rupees at 9:21 a.m. on the Karachi Stock Exchange. The company doubled its profit in the quarter ended June 30 to 1.26 billion rupees ($14.6 million).

The company is 75 percent owned by South Korea’s Lotte Group which bought a majority stake in Pakistan PTA Ltd. in September 2009, according to the company’s website.

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