Analysis on Pakistan Soft Grade PVC Market

Pakistan is one of countries which have a very low per capita PVC

consumption. This is mainly due to low development/construction activities

due to stagnant economy and un-developed PVC market.

PVC market can be divided into two main categories.

PVC Resin Market: Dominated by Engro Polymer and Chemical Pvt

Limited with 78% market Share.

PVC Compound Market: Adamjee Polymer, Pakistan Cables and AcroPlast

being major Players.

PVC RESIN MARKET:

In Pakistan Engro Polymer and Chemical Limited is the only fully integrated

Chlor Vinyl Chemical Complex. It is involved in the manufacturing and

distribution of PVC and Chlor Vinyl allied products.

EPCL78%

Imports15%

Scrap5% Smuggling

2%

PVC RESIN MARKET

EPCLImportsScrapSmuggling

EPCL started as the only PVC manufacturer in Pakistan with a capacity of

100,000 tons per annum and its operations are located at Port Qasim in

Karachi. Its plant was commissioned in November 14, 1999 and IFC

assisted in the financing of this plant. In 2009, EPCL made expansion in

the plant horizontally and vertically by installing 50,000 tons more PVC

resin facility and a facility to manufacture Ethylene di Chloride (EDC) and

Vinyl Chloride Monomer (VCM), which are the basic raw material and PVC

resin manufacturing. In order to diversify the business and lessen its

dependence on the PVC resin business, EPCL also installed Caustic Soda

plant with a capacity of 105,000 tons. Now EPCL has a capacity of

producing 178,000 tons of PVC, 127,000 tons of EDC, 204,000 tons of

VCM and 107,000 tons of Caustic Soda, annually.

EPCL Products

Being the sole manufacturer of PVC resin in the country, EPCL’s PVC resin

sold under the brand name of SABZ dominates the domestic market. SABZ

is available in 5 variations listed below,

SABZ PVC AU-58

SABZ PVC AU-60

SABZ PVC AU-67S

SABZ PVC AU-67R

SABX PVC AU-72

The above listed products differ in their molecular weight and are used

according to application. SABZ PVC AU-72 is a high molecular weight

suspension resin, therefore, it is used as a raw material in the production of

electrically insulated PVC cables. Whereas, SABS AU-60 is a medium-low

molecular weight suspension resin and is used as raw material in the rigid

PVC application.

Major Customers

The customer base of the Company comprises of all categories of PVC

application manufacturers. The largest domestic consumer is the Pipe

Sector. This sector is showing strong growth on a consistent basis. This is

because the PVC pipes are now increasingly used in housing and

construction, water supply and sewerage, telecommunications and

agriculture.

The Company’s other customers using soft grade product AU-67S include

manufacturers of artificial leather, shoes, garden hoses, cable compounds,

films, rigid sheets, etc.

Soft Grade PVC Market SizeIn order to know the proportion of Soft Grade PVC market we conducted

interviews with EPCL, Area Sales Manager for South (Sindh &Balochistan).

2010 2011 2012 2013 2014

AU-67 S Sales Volume, KTA 24 25.5 27 29 30.6

2.5

7.5

12.5

17.5

22.5

27.5

32.5

AU-67 S Sales Volume, KTA

Axis Title

He shared that Soft grade PVC is 15~20% of total PVC production and

based on annual sales of AU-67S for last five years it is estimated that Soft

Grade market is growing at an annual rate of 5%.

PVC Compound MarketBeside PVC resin, there are PVC compound producers, they purchase

PVC resin and produce PVC compound after careful mixing of plasticizers

to match the specification for different grade of PVC Compound.

PVC Compound Producers

Adamjee PolymerPakistan CablesAcroPlastImportsScrap

Major Market Players Include

Adamjee Polymer & Chemicals Private Limited (APCPL): They source PVC

resin from Thai Plastic & Chemicals Private Limited.

Pakistan Cables: They buy PVC resin from EPCL & also import from

international market to produce Soft Grade PVC Compound.

AcroPlast Pvt. Limited: They buy PVC from EPCL and produce various

grades of Soft Grade PVC compounds.

Imports from CHINA, Vietnam, Thailand, Korea, US, Germany & UK.

Scrap: Scrap available in local market.

PVC Industry Wise ConsumptionFollowing Chart shows industry wise break up of PVC demand for various

industries.

For Soft grade following are major customers for various Industries.

Cable Compound: Pakistan Cables, Million Cables, Pioneer Cables,

Universal Cables, Allied Cables & HM Cables.

Garden Hose: National Pipe, Atiq Hose, Adamjee Hose, M Ilyas Feroz.

Shrink Wrap: TMI, Al-Huda Plastics and Lahore Plastics.

Shoe Industry: Rehmat Plastics and Various other small vendors from KPK

province.

Artificial Leather: ATS Synthetic, Khalid Industries and Allied Plastics

ConclusionFrom the above analysis and data it is concluded that EPCL enjoys the

monopoly in PVC market and is the sole producer & distributor of PVC

Resin with 78% market share and remaining gap is filled by imports, scrap

and smuggling.

Further, Soft grade market accounts approximately 15~20% of total PVC

market with 35~40 KTA volume and annual growth of 5%.