Will Pakistani project in US be derailed?
KARACHI: The Fatima Group of Pakistan plans to open a fertiliser plant in America with production expected to come online by end 2016. However, opposition from certain quarters in US has created anxiety in corporate circles in the country.
But even more surprising is that a Pakistani company wishing to invest in US is jeered by a Congressman for an ingredient used in fertiliser production, which local company sources say is unfair.
The Washington Post in its story on Monday quoted Rep Duncan Hunter, the California Republican, who argued against allowing Fatima Fertiliser to set up a plant in US on the grounds that “it is the sole producer of calcium ammonium nitrate (CAN) that is used by the Taliban in homemade bombs that kills and maim US troops in Afghanistan”.
Fatima Fertiliser plans to open its plant in Posey County in Indiana and the Indiana Finance Authority issued over $1.25 billion in tax-exempt bonds, which were made possible because of a federal disaster relief programme.
According to “The Posey County News,” Posey County was made eligible to be declared a Midwestern Disaster Area under the Heartland Disaster Tax Relief Act of 2008.
Mr McGoff, who serves as the Indiana Finance Authority’s General Council, said that Indiana was given $3.1 billion in Midwestern Disaster Area Bonds. Of that $3.1 billion, Indiana was able to use about $2.2 billion, including the bond issue for the Posey County project.
The purpose of the bond programme was to spur economic development.
The tax-exempt bonds are for Midwest Fertiliser Corp which is a new startup company of the Fatima Group.
The plant is expected to create 309 full-time, permanent positions with an average annual wage of $58,000 plus benefits and these jobs would be in place by 2015, according to reports.
The company officials in Karachi dismissed the allegations as baseless and damaging. According to the chief executive officer of Fatima Fertiliser Company Limited, Fawad Ahmed Mukhtar the “Pak Arab and Fatima together produce no more than 0.1 per cent of the global production (of CAN).”
The Washington Times article also quoted the congressman Rep. Duncan Hunter, saying “its crazy” that a Pakistani fertiliser company is being allowed to build a plant in the US. while it rejects Pentagon pleas to control its products that end up in homemade bombs that kill American troops.
But according to Mukhtar, the company has mitigated most cited risks. “There are six protocols or demands by the United States, which include changing of bag colour, putting a code on the bag, transport tracking and distribution tracking, which have been fulfilled”.
However, he stated that one demand still remains to be settled; it pertains to the dyeing of the product.
“The government of Pakistan did not agree to that and therefore it is beyond our control,” CEO Fatima, Mukhtar explained.
At the Karachi Stock Exchange, the Board of directors of Fatima Fertiliser announced the company’s full year result for 2012 on Wednesday, reporting profit after tax of Rs6.11 billion, with an earning per share of Rs2.86, up 48 per cent over the previous year. The company also recommended a final cash dividend of Rs2 per share.