Among the many legacies left by the British in India was a vast tapestry of corporations that had set up shop in the subcontinent. In Pakistan, no single company represented the heights of colonial corporate ambitions more than Imperial Chemical Industries (ICI).
For more than half a century after the partition of 1947, the ICI name dominated corporate circles in Pakistan. ICI attracted the best talent, set standards across industries, and their products from paints to plastics were highly sought after. But the past 20 years have seen the company go from one of the largest multinational conglomerates in the country to a bevy of smaller companies that have been bought and sold twice over. The brand name ICI has also all but finished, existing only as a small watermark on Dulux paint boxes.
Lotte Chemicals was once a small part of the Gargantua that was ICI. It was such a small part that it was only one division of ICI’s presence in Pakistan, which in itself was a small slice of the company’s global business empire. Over the past week, official confirmation came through that Lotte’s South Korean sponsors had sold a 75% stake in the company to a Dubai based joint venture between Montage Oil and AsiaPak Investments. Montage is a long-time oil broker in the UAE of Pakistani origin with liquid storage facilities in Sharjah, Karachi, Lahore, Ho Chi Minh City, and Qingdao. They also have dry storages in Vietnam and the UAE. While Montage has generally kept a low profile, AsiaPak is headed by Shaheryar Chishty, a former banker who has made a habit of pursuing orphan investments and has turned AsiPak into an investment vehicle with stakes in Thar Coal and the majority shares in K-Electric. He is also the owner of Daewoo Bus Service in Pakistan.
The deal went through for $69 million, or around Rs 17 per share of the publicly listed company. Lotte’s share price the day the deal was announced was Rs 27.75, which would indicate that the South Koreans are selling it at a discount. The negotiations for the deal have been going on since February, and the lowest share price for Lotte in the past year has been Rs 16.71 in May 2025. This is starkly different from the sale of a different limb of ICI in 2012, when the Lucky Group bought a 75% stake in ICI Pakistan’s chemical business for $152 million at a premium of 29.7%. What makes this deal even more interesting is the fact that the Lucky Group had actually signed a share purchase agreement with Lotte back in 2023 to buy this same 75% stake in the plastics company for a significantly higher Rs 31.29 per share.
This indicates that Lotte South Korea wanted a quick exit from their plastics business in Pakistan. Given how the company had to shut its plant down twice in 2023 and the continuing difficulty of doing business in Pakistan for global players, the rush makes sense. What makes this ‘exit’ a little different, however, is that it is not a complete divestment. Lotte has dropped out of their main business but have kept some of the other businesses they had acquired in Pakistan in the past decade including a bottling company and Kolson Foods.
The only question that remains is what is left of ICI, and how do these separate entities plan on doing business in a country where it is becoming increasingly difficult for both domestic and international players.
The ICI story
The story of ICI is one of grand ambitions. Formed in 1926 as a result of the merger of four of Britain’s leading chemical companies, ICI launched in what is now Pakistan in 1944. It began by the name of the Khewra Soda Ash Company, which was a subsidiary of ICI in England.
Soda Ash was the precursor to several industrial chemicals. After 1947, ICI incorporated its Pakistan assets under Khewra Soda Ash Company Ltd, which was set up in 1952, and in 1966 the company was renamed ICI Pakistan. At least one ICI subsidiary has been listed on the Karachi Stock Exchange since July 1957.
The post-Nationalisation era under Bhutto was fraught with fears. Many Pakistani businesses shifted focus to trading as investors lost confidence to set up manufacturing facilities in the country. However, ICI continued to thrive with the backing of its international parent. Also, for those who grew up in the 80 and 90s especially, it will be remembered that ICI was the main source of human capital development. Alongside CitiBank, ICI was the employer of choice for educated Pakistanis. Asif Jooma, CEO of ICI, while addressing the Leaders at LUMS conference in 2018 stated, “ICI was a significant leader feeder for the economy and it continues to be. If you do a quick scan of the corporate landscape of Pakistan, you would invariably find people that have in some shape or form been associated with ICI during their careers.”
The company did so well during those years that back in 1995, its international parent, ICI PLC, made its largest ever overseas investment in Pakistan, to set up a manufacturing facility of Pure Terephthalic Acid (PTA) at Port Qasim.
This PTA plant at Port Qasim is where our story begins. By setting it up, ICI had entered three distinct but related segments in Pakistan. There was the original business of soda ash and chemicals, there was their paints business with ICI paints being the go to brand for Pakistanis, and finally there was now the PTA business at Port Qasim. PTA is one of the primary raw materials used in the production of polyethylene terephthalate, or PET resin. This resin is used in two ways: first, to make PET bottles, which are plastic bottles used for packaging various liquids such as water, carbonated drinks, juices, sauces and oils. Second, it is used to manufacture polyester fibres, which can be further processed to create polyester staple fibre, or PSF. PSF is used in textiles, cushioning material, carpets, and non-woven fabrics.
With these three verticals aligned, ICI continued to dominate Pakistan’s corporate sector.
Then international winds of change turned the entire company around in Pakistan. In 2008, Dutch paints and chemicals giant AkzoNobel bought out the global parent company of ICI, and ICI Pakistan became part of the global AkzoNobel umbrella. When AkzoNobel came to Pakistan, they decided as part of a broader global strategy to focus on paints more than on the chemicals business. Akzo decided to split up the business.
In 2009, they sold the PTA business to Lotte Chemicals of South Korea. Lotte was a major player in plastic resin in South Korea and had made a name for itself in the industry after originally starting as a confectionary company in 1967. Over the next two years, Lotte invested $800 million into Pakistan as Foreign Direct Investment (FDI) and also installed a 40MW captive power plant for their facility.
In 2010, Akzo pursued a demerger, splitting ICI into two new companies. The paints division became AkzoNobel Pakistan and the remaining chemicals business became ICI Pakistan.
This new entity by the name of ICI Pakistan immediately went on the market for sale and was bought by the Yunus Brother Groups, the group run by the Tabba family that owns Lucky Cement. The Lucky Group bought a 75% share in ICI Pakistan for $152 million at a premium of nearly 30%, showing how coveted the business was.
In this way, by 2012, ICI’s holdings in Pakistan had been split between three players. AkzoNobel retained the paint business. Lotte Chemicals was running the PTA business out of Port Qasim. The Tabbas were running ICI Pakistan’s chemicals business. The British conglomerate was now owned by a Dutch entity, a South Korean entity, and a domestic player.
In the past month, however, both the Dutch and the South Korean shareholders of what was once ICI have left and are being replaced by large, seasoned, domestic buyers. But that is exactly what they are — domestic players.
What happened to Lotte chemicals?
A few weeks ago, Profit covered the rise and fall of AkzoNobel in Pakistan, and gave some piece of advice to Syed Babar Ali: do not buy AkzoNovel paints. The company did not fare well in Pakistan, and over time a darker side of the paints business emerged that a multinational company found it difficult to operate in.
Read more: Why Syed Babar Ali should not buy AkzoNobel
For Lotte Chemicals, the story is a little different. Unlike AkzoNobel, which was operating in a field of many local competitors, Lotte was the sole domestic producer of PTA in Pakistan. The plant at Port Qasim has the capacity to produce 520,000 tonnes of PTA annually. Which is just as well, as Pakistan’s total demand for PTA stands at roughly 700,000 tons annually. The remaining 200,000 tons of PTA is imported. That means Lotte Chemical’s market share domestically is 100%, while its overall market share stands at around 70%.
As expected of a sole producer, Lotte Chemicals’s revenues have generally increased. The only times revenue declined were during the period 2014-2015 and in 2020, due to Covid-19.
In 2014, a 16% drop in revenues occurred, mainly due to lower PTA prices. The reduced PTA margin against PX, higher energy costs, coupled with inventory losses due a drop in price of PTA at year-end, led to a decreased overall profit margin. Moreover, the company had to bore outward freight charges as export sales increased, resulting in increased distribution and selling expenses. Consequently, the company’s net loss doubled to Rs 1,100 million as compared to Rs 498 million in the previous year.
The year 2015 again brought challenging conditions for the local polyester industry due to increased taxation, higher energy costs, and reduced textile exports. This strained PSF producers who were facing tough price competition from inexpensive imports, particularly from China. Moreover, the PET industry saw reduced demand due to bottle industries adopting cost-cutting measures with lighter bottles. All of this culminated into a 3% decrease in sales volume for Lotte Chemicals, as compared to 2014.
However, at the end of 2015, the domestic PSF industry successfully levied duties on Chinese PSF producers, which contributed to Lotte Chemicals’ turnaround in 2016. That year, the anti-dumping duties and better boosted Pakistan’s domestic polyester industry. Consequently, there was a notable 15% surge in PTA demand, leading Lotte Chemicals to attain an unprecedented domestic sales record of 492,192 tonnes.
Over the next few years, Lotte Chemicals witnessed a steady rise in revenue, barring a substantial 36% decline in 2020 attributed to global lockdowns that affected PTA demand. Consequently, the company underwent a 54-day plant shutdown, causing a 14% reduction in production and a 12% decrease in sales volumes. The gross profit margin tumbled to 6.8%, while the net profit margin plummeted to around 5% in 2020.
However, the gloom was fleeting as 2021 heralded resurgence for Lotte Chemicals, fueled by heightened demand and improved prices. That resulted in a remarkable 72% surge in revenue, and an impressive 11% gross profit margin in 2021.
Despite the improvement in revenues and margins noted in the 2022 annual report for Lotte Chemicals, heightened inflation significantly impacted consumer behavior. This resulted in a decrease in consumer spending, with individuals prioritizing essential goods over luxury items such as textiles. Consequently, domestic demand for PTA in 2022 declined by 6% compared to the previous year.
And then 2023 happened. The textile industry was hit by the double setbacks of dwindling exports and operational setbacks. The initial nine months of the year witnessed a stark decline in textile exports compared to the previous year. This downturn forced several companies to either temporarily shut down or scale back their operations. Notably, textile industry entities like Shahzad Textile Mills Limited and Elahi Cotton Mills Limited announced temporary closures in October alone, mirroring the industry’s distress.
Lotte Chemicals had to suspend plant operations for the second time in nearly seven months, due to declining demand in the downstream industry.
Just like the textile industry, demand within the PET industry has also declined. According to a PACRA rating report of Pakistan Synthetics Limited (a player in the PET industry), the tough economic environment has reduced the purchasing power of the consumer and had a negative impact on the food and beverage segment.
This was not a Lotte specific problem. The economic conditions of the time meant the chemicals industry as a whole was struggling. Other chemical companies were also grappling with plant shutdowns in 2023. Take for example Sitara Peroxide Limited (Sitara Peroxide), which also suspended plant operations twice in 2023. Lotte was sitting in the same boat as all these other companies, the economic storm was threatening to envelop all of them.
The dream of ICI as it once was?
Lotte wanted out. There was a lot going on at the time for the company globally as well. According to one industry insider at Lotte, the South Korean company was facing a massive challenge from China, which had invested heavily in the PTA industry and was crushing the South Koreans by cutting costs.
At the time, Lotte decided it was going to divest from its PTA business in Pakistan. This was not to be a complete exit. According to one industry source, Lotte only wanted to get out of the plastics business and retain its bottling business which they bought around 2017 called Riaz Bottlers. They were also not going to sell Kollson Foods which they had purchased around the same time.
Almost immediately, interest was shown by three different players to buy Lotte Chemicals. The first company was Gatson Novatex. It made sense for Gatson to buy it because they have been Lotte’s biggest customers. Novtex buys nearly a third of Lotte’s resin and turns it into plastic products. On top of this, Lotte already had a 9% stake in Novatex. The second contender was a joint venture between Montage Commodities and AsiaPak. This JV has now struck a deal with them, but there was another contender: the Tabba Group.
“There was a sense of nostalgia around this sale,” says one person close to the original deal. “The Lucky Group had bought ICI Pakistan, the chemicals business, from AkzoNobel in 2012 at a premium. Back then as well the Tabba family had this feeling that owning the ICI was a big achievement and that is why they paid so much for it. Now, if they were able to acquire the PTA business as well, they would be consolidating and rejoining two broken parts of what was once the mighty ICI” they explain.
The Lucky Group made an offer at an estimated price of Rs31.29 per share, translating into a total transaction volume of Rs35.5 billion. This was going to be a very good deal and once again Lucky would be paying a premium. The deal was approved happily by the South Koreans and work began on finalising the agreement between the two entities.
But then came a snag. This agreement was made in January 2022. At the time, Lotte Chemicals had not been struggling particularly, but because of international pressures from China they were looking to divest from Pakistan and shore up their cash reserves as well as avoid any liabilities in a market that isn’t always stable. But during 2023 came both plant shut downs and the downturn that we mentioned earlier. Not only this, but costs were rising as well. An increase of gas prices by Sui Southern further hurt the abilities of Lotte to be profitable. Lucky wanted to negotiate the price down. At the time, according to sources, Lotte was willing to play ball but it seemed the price being quoted was too low. Lotte also backed down and the deal fell through.
Enter the JV
One can only imagine what would have happened if the sale had gone through and Lucky had bought Lotte by the start of 2024. The deal, as Profit has been told, finally fell through in January 2024 a year after it had been made. Earlier this year, AkzoNobel announced it was selling and the Packages Group had expressed interest in acquiring it. Had the Lucky Group managed to buy Lotte, one imagines they would have been top bidders for AkzoNobel paints as well, an acquisition that would have reunified the old ICI.
But it did not take long for the deal to fall through before the joint venture between Montage and AsiaPak stepped up to the plate. In November 2024, they began negotiations to acquire Lotte Chemicals. In the past couple of years, Lotte Chemicals has seen a bit of a reversal in their financial fortunes. The company has remained financially profitable, and the difficult period of 2022-23 also saw a small revival in 2024, as indicated in the graphs that are in this story.
By February 2025, the negotiations were almost finalised. By July 2025, Montage and AsiaPak joined hands to create PTA Global Holdings Limited — a Dubai based company that would buy Lotte Chemical’s stake. The price quoted for the 75% acquisition was $69 million, which equates to a share price of around Rs 17. The deal is a steal for PTA Global which now owns what is the only PTA manufacturer in Pakistan. But what do they plan on doing with this company?
In conversation with Profit, Shaheryar Chishty said the sale came because of typical Pakistani problems. “In the 2022-23 economic crisis, everyone was having problems with working capital and with LCs. This put a dent in cash flows and the international situation was such that the opportunity presented itself to us.”
“Lotte Chemicals actually used to be a client of mine when I was a banker. I approached them again and we began negotiations,” he explains. Chishty has experience working in South Korea in the past as well, and also bought Daewoo Bus Service from South Koreans who used to be his clients. Over the years, he has made a habit of acquiring what he calls orphans assets and turning them around. “What we need to keep in mind is that this is not an ‘exit’ from Pakistan like we’ve seen with other multinationals. Lotte had other business interests in Pakistan including bottling and foods which they have not sold.”
Chishty, of course, would know a thing or two about how difficult it is to do business in Pakistan. Back in 2022, he used AsiaPak Investments to buy a majority share in K-Electric. Despite what is a clear majority, resistance from different quarters and languishing legal battles have meant his company has not been given control of KE, a frustrating situation for all involved, including the people of Karachi who continue to suffer the from the board room battles because of the lack of direction and initiative in the company’s existing management.
Read more: Who is Shaheryar Chishty?
In Lotte Chemicals they have found a company that is publicly owned, has a massive market advantage in that they are the only player, and there are avenues for profitability. For Chishty, the goal is once again the synergies he can find with his other investments. When he bought KE the idea was to synergise it with Thar Coal, where he has investments. With Lotte as well, he wants to eventually go in a direction that brings Thar Coal into the picture. “I do believe Thar Coal has the answers for so many of Pakistan’s problems, and I want to explore the potential of coal to chemicals now that we are involved in this business as well.”
The sale of Lotte Chemicals marks a bittersweet moment for Pakistan. On the one hand, it means that what was once ICI, a grand old imperial company, is now entirely in the hands of Pakistanis. But not only has it taken time to get here, it has involved exits and divisions.
There are two words in Urdu that can be used to describe the act of division. The first is taqseem. Of Arabic origin, it is a politer word that indicates a fair distribution of some sort. The other word is of Hindi origin: Batwara. It denotes something far more visceral. It is a violent sundering of something whole, a selfish decimation.
It is perhaps why Pakistani histories of the partition refer to the events as Taqseem-e-Hind, and the language used by the Indian National Congress at the time of partition referred to Jinnah’s plan as Hindustan ka Batwara. It is also why the word batwara continues to be used in a negative connotation in discussions of inheritance.
The sale of Lotte Chemicals raises a similar question: was this taqseem or the dreaded batwara?
