Khalid S. Subhani is the President of Engro Corporation Limited since 2015. He is a Director on the Boards of Engro Corporation Limited, Engro Fertilizers Limited, Engro Eximp (Private) Limited, Engro Polymer & Chemicals Limited, The Hub Power Company Limited and Laraib Energy Limited. He is Chairman of the Board of Engro Polymer Trading (Private) Limited. He has also served as Chairman of the Board of Avanceon in the past.
Mr. Subhani began his career in the Manufacturing Division at Exxon Chemical Pakistan Limited in 1983 and has held a variety of leadership roles within the Company, including long term assignment with Esso Chemical Canada. He has served as Manager for New Projects, General Manager for Operations, Vice President for Manufacturing, Senior Vice President for Manufacturing and New Ventures and as President & Chief Executive Officer for Engro Fertilizers Limited.
BR Research sat with Mr. Subhani to dwell upon Engro Corporation's strategies and future plans. Below is an edited excerpt from the conversation.
<B>BR Research: Where do things stand with the all important Thar coal project?</B>
<B>Khalid Siraj Subhani:</B> As you know the financial close happened and since then, the contractor has started mobilizing. We already are in the construction phase on both fronts - power and mining. A lot of equipment has arrived and more is arriving every day. Based on the timelines and schedules, we are on time and are likely to complete it before the original schedule.
Both the mining and power projects will happen simultaneously - that is how the projects have been designed. There will not be any cost overruns either fortunately - in fact we can save on some major costs. We are looking at 660 MW of power in Phase-I, two each of 330 MW.
<B>BRR: How has the role of Sindh government been towards facilitating Thar coal project?</B>
<B>KSS:</B> I must acknowledge and thank both the Sindh government and federal government for facilitating the whole process. We have received exceptional support on this project from both governments, which have been instrumental in helping us move ahead. All of us are on same frequency and the project has been supported the way it should have been. We are very happy with the cooperation.
<B>BRR: How are things going on the LNG front? Has the project been a success?</B>
<B>KSS:</B> Our terminal was commissioned last year in March and since then, has been running on near full capacity. It has done wonders to the overall gas demand supply situation in the country, and a lot of people are unaware of that. I must appreciate the ministry to have made it happen - it is a real breakthrough and the economic benefits Pakistan is extracting form this LNG are huge.
Gas demand is ever growing and has to be fulfilled in one form or another. Since, we have not found any sizeable local discovery; obviously the reliance on LNG will keep increasing. And with that in mind, I believe, the government went for the second terminal. We are also studying the commercial terminal right now and that is in initial stages.
<B>BRR: After the overwhelming success of your first LNG terminal, what stopped you from bidding for the second terminal?</B>
<B>KSS:</B> When it comes to putting up a terminal and operating successfully, nobody has the kind of experience that we have. We were best suited to go for the second one also. After doing the first terminal in record time, unfortunately, instead of being praised of doing something that nobody else was ready to do, we got such bad publicity, which was very shocking to us.
We tried our level best to keep providing the realistic situation and information to people, but unfortunately it was a bitter experience and our board decided not to go for the second one.
<B>BRR: Engro is predominantly becoming an energy focused centric entity. Is it a well calculated move with a long term perspective in mind?</B>
<B>KSS:</B> Surely, we are now increasingly becoming an energy focused firm. We have defined three pillars, where Engro will be standing in the years to come. One is energy, the second one is food and agri, and the third is staples. We are working more or less on all the three areas. Yes, the focus right now is greater on energy, because that is the requirement of the country at this hour.
We also feel that for other businesses to expand and pick up speed, energy is vital. If there is no power or gas, nothing will happen. It is not about power generation only; it is the whole infrastructure that will have to be pretty good for other businesses to grow. It is an opportunity that is available today and you will not have the kind of opportunities available forever.
We also have a lot of captive strength in our company to take up such projects. We have very extensive engineering capacity and capability. It is a combination of all of these factors. We were already a sizeable player in the energy sphere - even fertilizer is a form of energy. That said we are trying to do things in other pillars as well.