Mr. Khan present issues viz. energy scarcity, inflation, challenges in raw material procurement, low domestic consumption etc, that impact textile industry at large, are talk of the town in Pakistani industrial arena. How would you comment on the intensity of these issues and solutions that may aid to overcome?
The present scenario presents various impediments on macroeconomic level. Yet the consumer demand of finished products is large enough to justify indigenous production which is currently less and the deficit is made up from imports. The only sector that has the largest potential & development therein can work as stimulus to downstream, is production of base chemicals. The biggest advantage for the local market that our petrochemical facility will bring would be the availability of raw material for downstream industry like PTA, LAB, Plasticizers etc.
That’s good.<br></br> However, adding to macro-economic woes, downturn in strong regions like US, Europe and some Asian regions remain concern for emerging countries. For sector specific to petrochemicals, how do such happenings bode, and what consequences it brings along on the downstream sector?
The foremost important factor in determining profitable sustainability of petrochemical industry is the availability and price of naphtha which is used as feedstock of petrochemical industries. Naphtha is inherently and closely linked with oil prices and so is the sensitivity at the time of crises. When the higher oil prices become difficult to be passed on to downstream industries, such as the petrochemicals, then its first effect is seen with the falling profitability. The financial crises result into weak markets and breakdowns in the commodity prices. Consequently, it appears in the shape of the narrowing demand and oversupply in capacity, which clearly indicates the petrochemical sector will soon enter the bottom part of the market cycle. This however will be region centric and hopefully more conservative zones such as sub-continent countries will be less affected.
Now as we conclude the talk, would you like to give an account on Byco Group activities, its present operations, projects in hand and other future plans?
Byco Group is an emerging player in the energy sector of Pakistan. The Group is already operating one oil refinery, and aggressively expanding its presence in the oil marketing sector of the country. Byco Group is also spearheading investment in the energy sector of Pakistan by setting up its second oil refinery and a petrochemical complex, which is going to be the largest oil refinery and the first petrochemical plant in the country.
Byco Petroleum Pakistan Limited and Byco Oil Pakistan Limited are the two companies owned by Byco Industries Incorporated (BII) which is registered in Mauritius. BII, is jointly owned by Byco Busient Inc. (“BBI”) and Abraaj Mauritius Oil and Gas Limited (“Abraaj”) in the ratio of 60% and 40% respectively. BPPL owns and operates a 35,000 bpd oil refinery, which is located about 50 km from the center of Karachi. The refinery started off its commercial operations in 2004. This oil refinery produces full range of fuel products; LPG, Naphtha, Motor Gasoline, Jet Fuel, Diesel and Furnace Oil. Besides oil refinery, the Company also has oil marketing activities. It presently holds a network of over 215 retail stations spread all across the country for motor gasoline, diesel and lubricants sales.
For value addition and environmental upgradation, the Company is adding an Isomerization plant in its configuration, which will be the first in the country. This plant is presently under construction and its mechanical completion and commissioning is planned in the 4th quarter of 2011. Capacity of this plant is 12,500 bpd and it was designed and licensed by UOP, USA. After commissioning, it will substantially enhance the production of environment friendly Motor Gasoline of Euro 2 standard from BPPL.
Besides having an oil refinery and OMC retail network, the Company also owns a 100% subsidiary company by the name of Universal Oil Terminal Company (UTL) for undertaking projects and businesses related to infrastructure development and services. UTL owns and operates an oil terminal located at the Oil Installation Area of Karachi Port Trust (KPT), the main sea port of Karachi. UTL is also establishing the country’s first single point mooring (SPM) jetty for import of crude oil. This SPM is being located 12 km from the coast inside the deep sea and has a 15 km length of on-shore and off-shore pipeline connecting SPM and the refinery.
BOPL, the second company of Byco Group has two mega projects. First is an oil refinery project, which is under construction and is presently at an advanced stage of mechanical completion. Commissioning of the refinery is planned in 4th Quarter of 2011. The designed capacity of refinery is 120,000 bpd and it is being built up adjacent to BPPL’s operating refinery. Second is the project of petrochemical complex which is housed within the site where BPPL’s existing oil refinery and the BOPL’s refinery project are located. The Petrochemical Complex (also known as Aromatics Complex) will be the first of its kind in the country. It will convert Naphtha into more value Aromatic products which are high in demand in the country and regional markets. Full scale construction activities on petrochemical complex are planned to commence in first quarter of 2012 for completion in 18 months. The commissioning of the plant is timed to take place in mid 2013. Post commissioning of Aromatics Complex, Byco plans to expand its Paraxylene production capacity over three folds by adding a Parex Unit as Phase 2.
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