Pakistan's Engro to set up rice processing plant

KARACHI, Oct 29 (Reuters) - Engro Chemicals (Engro), (EGCH.KA) Pakistan's second largest urea manufacturer, said on Thursday in a letter to the Karachi Stock Exchange (KSE) that it planned to enter the rice processing and export business.

It proposed setting up a rice processing plant in the province of Punjab which was expected to come online by the fourth quarter of 2010.

"The plant is expected to cost 3.2 billion rupees with an equity injection required of 1.6 billion rupees," Engro said.

Engro plans to export its rice primarily to the Middle East and European Union.

Engro on Wednesday reported a decline of 23 percent in its earnings for nine months ended Sept. 30 at 2.6 billion rupees, compared with 3.4 billion rupees in the same period last year, which analysts said was due to higher input costs.

The company was trading 0.69 percent lower at 165.99 rupees by 10:40 a.m. (0440 GMT) in a broader market which was down 0.58 percent at 9,198.20 points. (Reporting by Sahar Ahmed; Editing by David Fox) (For more Reuters coverage of Afghanistan and Pakistan, see: here)