KARACHI, Nov 21: Engro Chemical is set to start commercial production from the company’s new Sahiwal milk plant early next month, which would double the company’s milk processing capacity from 300,000 to 600,000 litres per day.

Sources close to the company said on Wednesday that the plant was currently undergoing trial runs. The existing milk processing plant, which is looked after by ‘Engro Foods Limited’, a wholly owned subsidiary of Engro Chemical, is operating at full capacity utilisation and the expansion would cater to the growing demand.

The company had diversified from fertiliser to the dairy segment in order to augment its earnings. It is said to have already gained substantial share in processed milk market. “The company aims to extend its distribution network to 103 towns from existing 58 towns by the end of 2007,” sources say.

In the main urea segment, the company is pursuing a huge capacity addition plan by setting up the new 1.3m tons of urea plant. Recently, the company finalised its financing arrangements for the project. Total capital expenditure for the project has been estimated at $960m, including appropriate contingencies.