|INVESTMENT IN BIN QASIM INDUSTRIAL ZONE
| LONG-TERM AUTO-INDUSTRY POLICY SOON : SAYS PM
Addressing a gathering after inaugurating an automobile assembly plant of Al-Haj FAW Motors Company at National Highway in the vicinity of Port Bin Qasim, the premier said that the government was ready to support experimental and innovative vehicles to make these affordable for the common man. The real success of this industry would be when the prices of vehicles would come down to the affordability of a common man, he added.
He expressed the hope that local auto-industry would come up with such a programme that would be based on price and fuel efficiency Talking to journalists after inaugurating the assembling plant, Prime Minister Raja Pervez Ashraf said the country had great potential for economic growth and added that the government keenly desired to facilitate private sector because the country could not prosper until the businessmen made progress.
Welcoming the assembling plant at the time when the automobile industry was passing through difficult time, the prime minister suggested the need to manufacture locally which would not only help in improving the economy and reduce the prices but also help the country compete in international market and increase its exports. Earlier speaking at the ceremony, Al-Haj FAW Group chairman Haji Shah Gulji Afridi said 3,000 workers were employed in the plant which had the capacity of producing 25,000 vehicles every year.
He highlighted the need for checking import of reconditioned vehicles to give boost to local automobile industry which could earn foreign exchange by exporting vehicles. Auto analysts believed that in a market dominated by Japanese auto assemblers amid tough challenges, the Chinese company will have to mainly focus on changing people’s mindset about Chinese automobile in Pakistani market by providing quality, durability, after sales support etc. Under this new joint venture project, Chinese automobile technologies will also be transferred into Pakistan in the next two years.
Analysts recalled that a number of Chinese companies had entered Pakistan but they failed due to poor product selection, product quality, back up support to parts and no proper support from the principal. Analysts said hopefully the Chinese company and their local partners will focus to avoid all these mistakes.
RS40BN KESC PLAN ON POWER GENERATION
The Karachi Electric Supply Company (KESC) on Wednesday announced plan to invest Rs40 billion ($400 million) during next two to three years in enhancing its generation capacity, improving generation fleet efficiency to meet growing power demand across its service territory.
A spokesman from the power utility said on Wednesday that KESC would arrange these funds from local and foreign institutions in the shape of both debt and equity.
The KESC has already invested around $1 billion over the last four years in various large scale projects in generation, transmission and distribution. The new Rs40bn investment plan, he said, is aimed at enhancing KESC`s power generation capacity.
These funds will also be utilised in reducing power generation cost and building requisite transmission capacity to meet ever-rising demand of electricity in Karachi, he added.
Under the new investment plan, KESC is undertaking combined cycle projects at its three power plants in Korangi and SITE area where it would enhance efficiency of the plants and add additional 47MW of generation capacity.
A specially-designed `transmission package` will see installation of new transformer bays, in addition of three new grid stations at strategic locations and extension of six existing grid stations.
The spokesman further said that in line with strategic intent to bring down the cost of generation, the new investment plan would allow KESC to convert two of its oil-fired units of 210MW each at its Bin Qasim-I to coal.
In addition, KESC pledges to develop a bio-waste energy project which would convert cattle manure from Landhi Cattle Colony and organic food waste to produce 22MW of electricity.
YAMAHA PLANNED $150 MILLION INVESTMENT IN BIN QASIM ZONE
Japanese auto maker Yamaha, which is setting up a motorcycle manufacturing plant at Bin Qasim near Karachi at a cost of $150 million, has sought an exemption of five years on the import of material and components.
A three-member delegation of Yamaha led by its Executive Officer Sumioka Ryouichi held a meeting with Chairman of Board of Investment Saleem H. Mandviwalla here on Tuesday to review progress for setting up the plant for which Yamaha has acquired 50 acres of land in the National Industrial Park of Bin Qasim.
In support of its demand for five-year exemption, the Yamaha delegation explained that the existing assemblers and manufacturers of vehicles in Pakistan had over the years developed auto parts and components locally and that the auto industry was yet heavily import dependent for various materials and components, with marginal exports.
The exemption would help support Yamaha to increase company`s marginal profits to some extent till year 2020, explained Sumioka Ryouichi.
He further said that the Yamaha investment in Pakistan would create 45,000 jobs for locals and with the transfer of technology in manufacturing of motorcycle, vendor skill capability and capacity would also be developed with exclusive training institutes being run by the company. The BoI chairman speaking to newsmen after the meeting said that the board being facilitator of investments in the country.
TOYOTA TO INVEST $1.3BN IN INDONESIA
Japan`s Toyota group said on Saturday it will invest about 13 trillion rupiah ($1.3 billion) over the next five years in expanding its vehicle production in Indonesia.
Toyota Motor and its five affiliated firms are making the move `considering the remarkable growth of the (Indonesian) market in recent years`, a statement from the group said.
The investment will create 9,000 new jobs, raising the group`s total workforce in Indonesia to around 41,000, according to Japanese media. Toyota Motor`s Indonesian unit, Toyota Motor Manufacturing Indonesia (TMMIN), will buy 150 hectares (370 acres) of land near its two plants in Karawang outside Jakarta to build a new engine plant, the statement said.
TMMIN will increase annual production at one of the Karawang plants from 110,000 vehicles to 130,000 by September 2013 to reinforce supply of pickup trucks, minivans and sports utility vehicles. The five Toyota group firms are Daihatsu Motor, Toyota Auto Body, Aisin Seiki, Denso and Toyota Tsusho. In the expansion project, Toyota Auto Body will begin vehicle production in December, the statement said.
Daihatsu Motor will also begin construction of its second test track and design centre outside Japan at one of its Karawang plants -by the end of this year.
The six group firms have already invested about 27 trillion rupiah over four decades with Toyota Motor accounting for 9.5 trillion rupiah, the statement said. Strong investment and domestic spending have seen Indonesia remain one of the best performers in Asia.
Southeast Asia`s biggest economy on Monday announced growth of 6.2 percent in the third quarter from a year earlier.
3 LNG Floating Terminals to be established in 2012-14
With an investment of $600 million by three investors, three Liquefied Natural Gas (LNG) Floating Terminals with a total capacity of 1500 mmc would be established in Pakistan during 2012-14.
Energy crisis in the country has necessitated the private sector to come forward and share the investment burden with the government for establishing energy related infrastructure in the country. The private sector has been issued licences to establish three LNG Floating Terminals at Port Qasim with capacity of 500 mmc each. These three floating terminals will be established on Build Operate and Transfer (BOT) basis by the private sector.
The experts in the private sector have termed it as a positive outcome of the energy crisis in the country, which has attracted the private sector to make investment in liquefied natural gas infrastructure where the country badly lacks behind despite facing crisis like situation since a decade. Each LNG Floating Terminal will cost $200 million and till date Port Qasim authority has committed $600 million investment for three separate LNG Floating Terminals.
Global Energy Infrastructure Pakistan will complete establishment of first LNG Floating Terminal by October 2012, Energy Corporation EVTL by December 2012 and Pakistan Gas-Port by 2014. Some 250 industrial units are functioning at Port Qasim Industrial Area and 200 new industrial units are being set up within different sectors of the economy. And with establishment of three LNG Floating Terminals within the jurisdiction of Port Qasim Industrial Area, it would help attract further investment in this industrial area.
The government has already committed with the local textile industry that it would ensure 500 mmc LNG before winter season to meet the gas shortfall in the country and save the export-oriented textile sector. The official informed that the government is trying to bridge the gap between demand and supply especially of gas through short-term measures like 500 mmc LNG import during the upcoming winter as this year gas shortfall will be much higher than last year.
The official said that recommendations of the three-member committee constituted by the prime minister for ensuring gas availability in winter season including a senior member from All Pakistan Textile Mills Association (APTMA) are to be made part of the LNG policy being finalised. The volume of 500 mmc would be enough to bridge the demand and supply gap for the textile sector as well as priority sectors in the upcoming winter season, added the official.
At present some 4 billion cubic feet (BCF) gas is available and additional 4 BCF demand is available in the country The country is faced with 2 BCF gas constraint, explained the official.
FAJUI AKBER PORTIA MARINE TERMINAL
The Sindh Food Department and Fauji Akber Portia Marine Terminals will establish strategic storage facilities for wheat and grain with a combined capacity of 150,000 tons at the Port Qasim South Western Industrial Zone.
According to a Memorandum of Understanding (MoU) signed on Monday, the project company will make an investment of up to $100 million, including a potential Foreign Direct Investment (FDI) component, possibly from Chinese investors, for establishment of the storage facilities.
The MoU was signed by Food Department Secretary Aftab Ahmed Memon and Fauji Akber Portia Marine Terminals CEO Ahmed K Rana.
Speaking on the occasion, provincial Finance Minister Syed Murad Ali Shah said that the Government of Sindh has already initiated establishment of modern grain storage facilities: an initiative that will cater to fluctuating grain demand. At present, Sindh alone faces a storage shortage of a minimum of four million metric tons. The facility will immediately enhance grain storage capacity through modern methods.
Rana said that his company has already established an exclusive dry cargo terminal at Port Qasim at a cost of $135 million, which has a maximum design capacity of 2.5 million tons and storage capacity of 125,000 tons of grain. The facility has been fully operational since December 2010.
Mr Gilani appreciated the role of the private sector and said that this state-of the-art terminal would help in reducing costs, increasing speed of loading/unloading and preventing wastage. It would also ensure that agriculture commodities are handled according to the best international standards. “Ports are vital to the economic development of Pakistan. Efficient ports and terminals lower the cost of imports, bring revenue through exports, increase foreign exchange reserves and enhance tax collection, said Gilani.
These measures, he said, will help reducing food inflation, a phenomenon that is hurting the most to the poor people. Being one of the busiest ports in the country, Port Qasim`s current contribution to the economic activities is quite significant. The world-class facilities at the terminal will further contribute to GDP and help the country achieve its goals in becoming a strategic hub for regional trade, he emphasised. Until now Port Qasim could only accommodate dry bulk vessels of 50,000 tons capacity due to the outdated terminals and depth of the channel.
The new terminal, which was created by reclaiming 22 acres of water at a cost $135 million, has a 300 meter long Jetty with a depth of 14.5 meters.
The prime minister said the government was always seeking new avenues to facilitate and encourage foreign investment into the country through provision of incentives and business-friendly policies.
The nation has passed through a very turbulent period during and after the floods, he said, adding that these unprecedented floods in country`s history have left the government with a huge challenge ahead in terms of rehabilitation and reconstruction.
“On account of inadequate storage facilities, we have experienced shortage in some commodities,” Mr Gilani added. “We can prevent these shortages and wastages as the strategic storage for precious commodities like wheat will now be possible because of FAP silos,” he said. The Fauji Akbar Portia stands to gain by learning from the various best global practices and replicating them here for maximisation of output. Such terminals are the need of the hour to enable Pakistan to progress, said Gilani. The government will continue to assist such long-term investments by providing incentives and reducing financing cost for port projects.
NEW INVESTMENT INITIATIVE LAUNCHES UPTO $80 MILLION OF US FUNDING.
The United States announced today the multi-year Pakistan Private Investment Initiative. Drawing on public-private partnerships, this initiative will spur job growth and economic development by expanding access to capital for Pakistan’s small to medium sized companies.
“Pakistan has a wealth of talented entrepreneurs that desperately need capital to fully realize their potential. This initiative is an example of how the United States can move beyond traditional foreign assistance by playing a constructive role to help these entrepreneurs expand their businesses, provide new jobs to Pakistan’s fast-growing population, and improve lives.” said U.S. Chargé d’affaires in Pakistan Richard E. Hoagland.
Market-oriented, commercial solutions have been a priority for the United States in support of Pakistan’s economic development. The Pakistan Private Investment Initiative will generate investment funds catalyzed by U.S. assistance. This initiative seeks private or other qualified sources of capital for matching investments and fund management services. The investment funds will make equity investments in promising Pakistani companies under-served by existing sources of capital.
The Pakistan Private Partnership Initiative welcomes proposals from qualified Pakistani, regional, and international fund managers keen on investments in Pakistan by October 12, 2012.
WIRELESS CONNECTON CROSSES 3-MILLION MARK
Wireless telephone connections crossed the benchmark of three million despite slow growth and immense competition among the operators. According to statistics of Pakistan Telecommunication Authority (PTA) updated recently, the number of wireless phone subscription has increased to 3.1 million by May 2012 with tele-density stable at 1.8. The wireless services providers have been facing immense competition among each other besides the cellular phone services have stifled its growth in targeted market, analysts said.
The Wireless Local Loop (WLL) operators have established their networks throughout the country including Gilgit Baltistan and Azad Kashmir but its subscription concentrated in mainly in few commercial cities and northern areas. Besides the wireless services are being utilised in offices and industries due to package of daily services charges against unlimited usage. The majority of WLL operators have waived off line rate and on-net call charges to attract customers. On the other hand, free minutes and low connection rates are still lucrative for small enterprises and industrial workers. Except few operators such as Pakistan Telecommunication Company Ltd, Telecard and WorldCall, majority of the operators are struggling to retain their subscribers numbers and revenues through utility.
They offered multiple services bundle packages and cheap international calls to the subscribers. staff report
TERADATA EXTENDS ITS OPERATION IN PAKISTAN
Teradata inaugurated Lahore office, Chief Minister Punjab Mian Muhammad Shahbaz Sharif officiated at the inauguration ceremony and appreciated Teradata’s efforts in encouraging economic growth of the IT sector in Pakistan. He extended government of Punjab’s support to Teradata in extending their operations in Punjab.
Hermann Wimmer, Teradata President for Europe, Middle East and Africa (EMEA) said, “Teradata remains committed towards growth in Pakistan market, extending the Lahore office by setting up an office with the capacity of 200 plus highly skilled IT professionals, is a testimony to how Teradata envisions the economic potential of Pakistan”.
Teradata Corporation (NYSE:TDC) focused on integrated data warehousing, big data analytics and business applications.
Teradata’s innovative products and services deliver data integration and business insight to empower organizations to make the best decisions possible for competitive advantage.
Khuram Rahat, Teradata Managing Director for Pakistan, Afghanistan and Bangladesh said we have come a long way since our office at Lahore was established in Lahore in 1997 with only 5 persons and has now extended to a 200 plus seat office and with plans of growth in the near future.
Burhan Khan, Manager Teradata Global Consulting Centre Pakistan said extending operations from Islamabad to Lahore would contribute to the knowledge economy of Punjab and would help Teradata tap into exceptionally skilled IT professionals.
Dr Umar Saif, Chairman Punjab IT Board (PITB) introduced the Teradata University Programme and announced 15 universities of Punjab which would be participating in this knowledge transfer programme during 2012-13. US potential market for Pakistan to import quality food products
United States is potential market for Pakistan to import high quality food products meeting its local requirements through enhanced bilateral trade ties and coordination among businessmen.
Speaking to businessmen, David L Wolf, senior Agricultural Attache, United States Department of Agriculture (USDA) said US could fulfill Pakistan’s demand of packaged food items and beverage with its several brands and variety of products.
He said US food products were prepared in accordance with the demand of global markets therefore it would be suitable for all segment of society and different age groups.
Richard T Drennen, Agricultural Counselor USDA highlighted the current scenario of imports from USA in food sector, saying the US was one of the biggest supplies of food products and beverages to scores of countries.
He delivered presentations regarding potentials and issues in imports of food and beverage in restaurant industry, distribution in retail and wholesale business, import of food and beverages in modern retailing and import of pulses in Pakistan.
Razi Ahsan, General Secretary represented Pakistan Food Association said the meet-up was the part of ongoing efforts to disseminate knowledge and seek opportunities in bilateral trade in food sector between the two countries and to optimise the facilitation in imports.
The businessmen deliberated on the prevailing issues of the trade between the two countries including absence of any treaty between the countries resulting in higher duty.
The businessmen discussed trade between two countries was not viable in food sector as the orders were too limited to benefit them hence the quantity should be enhanced for bilateral interests.
The imports of food items are not possible directly to Pakistan as there are issues of repacking and sourcing from UAE. Besides the proper warehouses are needed in Pakistan to keep food items at required temperature, they observed.
Local tycoons of macro retail shops, prepared and fast food brands’ owners mainly representing McDonald, IBL, Naheed Super Market and Bombi’s Group attended the meeting.
PRSEIDENT ZARDARI seeks Japanese investment in Pakistan
President Asif Ali Zardari Tuesday urged foreign investors and entrepreneurs to take full advantage of enormous potential and opportunities for investment available in Pakistan due to availability of intelligent, trained and hardworking people coupled with vast reservoir of natural resources and liberal incentive packages.
Addressing Japanese business community here at Aiwan-e-Sadr, the President said due to its location at cross roads of Central and South Asia, Pakistan offers a huge market for its products and services. The President said that Pakistan’s investment polices are investor friendly and investment in Pakistan will fetch rich dividends. He said last month Pakistan has enacted a law that guarantees continuity of incentives to entrepreneurs.
He said that under the recently enacted, Special Economic Zone Bill, 2012, all capital goods, machinery and equipment will be given one time exemption from customs duties and the entrepreneurs will also be exempted from Income Tax for ten years, the President said and added that the incentives granted to investors will be protected by law. He said Pakistan can serve a market of over 3 billion in its neighborhood and called upon the Japanese friends to benefit from these advantages.
Highlighting some of the facilities available to the foreign investors, the
President said foreign investors can invest without any restrictions, they can hold complete ownership of the businesses, can get equal treatment to local and foreign investors and there is free repatriation of profits and capitals. The President said generous tax and customs incentives for bringing raw materials; plant and machinery into Pakistan are available.
He said despite the challenges of terrorism and natural disasters economy has shown great resilience and steadily the economy is recovering. He said the interest rates have come down twice in the past two months and large-scale manufacturing has increased this year as compared with last year. He said the services sector has also grown.
President Zardari said Pakistan is the 6th most populous country in the world and offers a large consumer market. President Zardari said Japan is Pakistan’s strong development partner and a world leader in innovation and technology. He said people of Japan are known for their hard work and high ethical standards. In entrepreneurial skills, he said, they are second to none.
Appreciating Japanese goods, he said these enjoy consumer’s confidence all over the world.
Recalling his previous two visits to Japan during the past four years, the President said that he has fond memories of those visits and termed it highly productive. President said the year 2012 is a special year for Pakistan-Japan relations as it marks the 60th anniversary of diplomatic relations of the two countries.
He said on this occasion, “Let us also pledge to take our relations to new heights”. “We can do much more particularly in business, trade and investment” adding that the current bilateral trade is far below the potential and there is need to increase it. The President said the region is faced with extremism and militancy and the best way to fight extremism is to generate economic activity in the region.
He said poverty and economic deprivation breeds extremism therefore, economic security is the most effective weapon to fight extremism. Referring to regional situation, the President said to ensure peace in the region Pakistan is working with India. He said, “We have liberalised visa regime. We have improved trade relations. These developments will contribute to stability in the region.” The President said the government has launched a major drive against poverty and introduced ‘Benazir Income Support Programme’ for the poorest that is supporting millions of poor families across the country.
Referring to energy challenge, the President said the government is making sincere efforts to resolve this issue and expressed the hope that it will be resolved. He said, “We are not deficient in energy resources but these resources need to be exploited.” The President said solar and wind energy have great potential in meeting the energy crisis adding that Pakistan has abundant sunshine that can be used for power generation.
He said, “Our coal reserves of 186 billion tonnes are ready to be converted into electricity and diesel.” He said Pakistan looks towards Japan and Japanese technologies to assist it in meeting the energy challenge adding that it will be a mutually profitable venture. Referring to the progress of automobile sector of Japan the President said Japan’s share in car and truck market is almost 100pc, and it has almost 50pc share in the motorcycle market.
The President said there in need to increase the share of local contents as Pakistan still imports almost 50pc of the automotive parts. He said there is an opportunity for Japanese investors to fill the remaining half, which he said will cut manufacturing costs and enhance profitability.
The President said there is also need to expand the cooperation in the field of textile industry as Japanese investors can benefit by using their textile technology in Pakistan. The President said that mineral resources in Pakistan are untapped as Pakistan is blessed with all kinds of precious minerals. Pakistan is exporting almost $170 million of Naphtha to Japan, he added. He asked the Japanese investors to set up a processing unit in Pakistan that will be a win-win situation for both.
He also urged the Japanese companies to invest in agriculture sector by bringing in new technologies in water conservation, increasing yield per acre of major crops, introducing new varieties, and converting waste products into value added items. President Zardari said Pakistan recently concluded Free Trade Agreements with China, Sri Lanka and Malaysia and has Preferential Trade Agreements with Iran, Mauritius and Indonesia. He said Pakistan has also extended its trade relations to the ECO countries and Central Asian Republics.
The President said Pakistan-Japan Business Forum need to strengthen its bilateral economic ties. He said work for Free Trade Agreement between the two countries should be expedited. He expressed the hope that holding of this meeting in the Presidency is a demonstration of Pakistan-Japan close relations. “It is also a measure of the importance we attach to the Japanese investment in Pakistan,”
A REHMAN ISMAIL