Byco CEO Sees Return to Profit on New Refinery, Chemicals Plant
Byco Petroleum Pakistan Ltd. (BYCO), the Karachi-based refiner that posted three years of losses, expects to return to profit next year as new plants start.
Byco will be profitable from January in the six months ending June 30, 2013, Chief Executive Officer Amir Abbassciy said in an interview. The company plans to begin production from a new oil processing plant that will be the country’s biggest refinery by August. It will spend $250 million building its first petrochemical plant.
Pakistan’s petroleum producers are seeking to expand as economic growth boosts fuel demand. Byco’s plan would see it transformed from the nation’s smallest refiner into one of the largest producers, helping to boost earnings as it adds products including benzene, toluene and xylene, reducing imports.
“Byco is heading for the next big thing in the refinery business in Pakistan and they are now well placed to take advantage,” said Saad Khan, a fund manager at Askari Investment Management Ltd. in Karachi, which oversees 17 billion rupees ($179 million) in stocks and bonds. “The company will be able to gain market share with the biggest refinery and petroleum product facility in the country.”
Byco’s new refinery, manufactured in Britain and assembled in Pakistan, will be able to process 120,000 barrels a day and be profitable from its first year of commercial operation, Abbassciy said in Karachi yesterday. Pak-Arab Refinery Co., jointly owned by the governments of Pakistan and Abu Dhabi, is currently the country’s biggest refinery, with a production capacity of 100,000 barrels a day, according to its website.
Pakistan, South Asia’s biggest economy after India, is forecast to expand 4.3 percent in the year starting July 1, according to government projections. Byco, which started commercial production in 2004, has a 35,000-barrel-a-day refinery at Mouza Kund in the western province of Baluchistan.
The company’s net loss narrowed to 2.3 billion rupees last fiscal year from 3.2 billion rupees a year earlier. Sales fell to 38.9 billion rupees from 41.1 billion rupees. The shares have gained 31 percent this year in Karachi, compared with a 24 percent gain in the KSE index.
Abraaj Capital Ltd., a Dubai-based private equity firm, owns a 40 percent stake in Byco.
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