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Alhamdulillah, Sitara Chemical is going to sign privately placed Sukuk of Rs 1500 Million for our PVC project. This project will add to the manufacturing strength of quality PVC in the country besides employment generation. We have already privately placed SUKUK for financing of Caustic Soda Plant and power generation.
This has resultantly helped us to enhance production of our existing facilities to 180,000 MT Caustic Soda per annum as well as enabling us to meet substantial portion of demand in the country. Sitara Group of Industries is engaged in diversified business of Textiles, Energy, Chemicals, Real Estate etc under the seasoned Chairmanship of Haji Bashir Ahmad, Sitara-i-Imtiaz. We are heading towards vertical and horizontal growth of our ongoing manufacturing and for upcoming projects.
We are stick to our mission of continual growth and diversification. I am pleased to express that we are finding enough potential for further development and diversification with the help of kind support of our financial partners and my dedicated team in the coming future. InshaAllah, Sitara Chemical Industries Limited shall continue to lead the way and I am confident that the pace of growth which has been evidenced in past shall remain unharmed with the benevolence of Almighty Allah coupled with committed team work.
SITARA GROUP OF INDUSTRIES:
Sitara Group of Industries is a renowned industrial group which started its journey it the 1950's. Now this group has become the back bone of Pakistan's economy and has established a good reputation in the circles of trade and industry for its excellence. Currently Sitara Group runs projects related to industry, trade and social work.
-- Sitara Chemical Industries Ltd.
-- Sitara Chemicals - Textile division.
-- Sitara Energy Limited
-- Sitara Peroxide.
-- Sitara Textile Limited.
-- Sitara Spinning Mills Ltd.
-- Sitara Agri Model Farms.
-- Sitara Developers Pvt Ltd.
-- Sitara Hamza Pvt Ltd.
-- Sitara Fabrics.
-- Sitara Enterprises.
SITARA GROUP CHARITIES:
-- Aziz Fatimah Trust Hospital.
-- Ghafoor Bashir Children Hospital.
-- Aziz Fatimah Educational Complex.
PVC PLANT WITH THE COLLABORATION OF PEOPLES REPUBLIC OF CHINA: The project will be based on 100% indigence raw materials. Most of the technology will be imported from Republic of China. The project is to generate direct employment for about 1400.
Thousands of people would be able to have economic surge due to in-direct involvement for provision of raw material & other supplies, transportation and other services. Basic design and facilities of this PVC project is considered for 60,000 MT/Annum. However, initially production capacity of 30,000 MT/Annm will be installed that is extendable to 60,000 MT/Annum. Total project cost is estimated to be around Pak Rupees 4.5 Billion.
The project will contribute to a greater extent to national exchequer in terms of taxes, both directly and indirectly. PVC project will help in making the environment even more better due to utilisation of chlorine. The project will boost national economy particularly plastic industry with the PVC resins relatively at lower cost and easy availability.
The project will open the doors for other petro-chemical products like PVA, Acetic Acid etc based on Acetylene route. The project will help in saving foreign exchange to the tune of US $70 million per annum.
PRODUCT AND TRANSACTION STRUCTURE: This product is based at the co-ownership of assets "Shirkat-ul-Milk". Sitara Chemical and investors are joint owners of the assets financed through this SUKUK issue. This may be called as Musharika part of transaction. Investors will rent out their shares of in project assets to SCIL and will be compensated by rental payments. The investors will share the rentals based on the their share/outstanding investment in project assets. The rentals are based on a benchmark.
Investors are consortium of banks and mutual funds comprising Standard Chartered Bank, United Bank Ltd, Bank Alfalah, Dawood Islamic Bank Ltd, AMZ Asset Management Ltd, and CDC Trustee AMZ Income Fund. After a graceful period of two and half years, SCIL has undertaken to start purchase of SUKUK units, belonging to the investors in instalments, scheduled over a period of three and half years.
Once all SUKUK belonging to the investors has been acquired by SCIL, the transaction will come to an end. For the purpose of this transaction and to protect the rights of investors, First Dawood Investment Bank Ltd has been appointed as Trustee. Rental comprises 3 month KIBOR plus 0.70% per annum.

Copyright Business Recorder, 2008

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