Lotte Chemical Allowed to Buy Engro Polymer Stake

On October 20, the Competition Commission of Pakistan (CCP) granted approval for Lotte Chemical Pakistan Limited to acquire a stake in Engro Polymer & Chemicals Limited from Engro Corporation Limited. The Phase-I assessment found the proposed deal unlikely to hinder competition or establish a dominant market position. Lotte Chemical specializes in manufacturing and supplying purified terephthalic acid (PTA), a key raw material for polyester and polyethylene terephthalate (PET) production.

Engro Polymer, on the other hand, produces PVC, caustic soda, hydrogen peroxide, and other chlor-alkali products. The CCP evaluated the transaction across three product markets: PVC, caustic soda, and hydrogen peroxide, considering Pakistan as the relevant geographic market. The assessment concluded that Lotte Chemical does not operate in any of these markets and has no purchasing connections with Engro Polymer.

While Engro Polymer holds a significant share in the PVC market, it faces competition in the caustic soda and hydrogen peroxide sectors. The commission determined that the transaction would not alter Engro Polymer's production capacity, sales, or output. The approval, under Section 31(1)(d)(i) of the Competition Act, 2010, permits the ownership change to proceed from a competition-law standpoint.