Construction and Manufacturing Driving Double-Digit Growth in Pakistan Cement and Steel Production

Pakistan steel production grew by 13.3% in 2020,  the second fastest among the top 40 steel producing countries, according to data published by the World Steel Association. At the same time, Pakistan Bureau of Statistics revealed that the nation's steel imports rose by 18% year-over-year. The demand for steel was driven by construction and manufacturing sectors which are leading Pakistan's economic recovery. 

World Steel Production. Source: World Steel Association

Pakistan steel-makers produced 3.7 million tons of steel in 2020, up 13.2% from 3.2 million tons in 2019. Neighboring India saw 10.6% decline in steel production in the same period. Global steel production declined 0.9% in 2020. Pakistan also imported $2.1 billion worth of iron, steel and scrap in the first 7 months (July 2020- January 2021) of the current fiscal year.  It's a jump of 18% from the same period in prior fiscal year.  Pakistan steel industry reached peak production of 5 million tons in 2017 before declining to 4.7 million tons in 2018 and 3.3 million tons in 2019. 

Construction boom helped Pakistan grow its domestic cement consumption by 17% in the first 7 months (July 2020-January 2021) of the current fiscal year. Domestic cement sales rose to 27.65 million tons in this period, while exports grew by 10.23% to 5.71million tons from 5.186 million tons in the same period last year.  The total cement sales (local and exports) were 33.36 million tons,  up 15.77% over the corresponding period of the last fiscal year.  

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Riaz Haq said…
Economic indicators, social spending on upward trajectory

The Pakistan Tehreek-i-Insaaf (PTI) government has started yielding results in the form of improved economic indicators which was providing necessary cushion to further strengthen the social safety nets.

The government managed to put the economy back on track by introducing financial discipline and taking politically tough and unpopular decisions. “Putting the economic indicators back on the positive trajectory was a herculean task for the present government as it inherited an economy with a major balance of payment crisis which led to high inflation and low growth,” said a press release issued on Monday.

The Large Scale Manufacturing (LSM) has shown significant growth so far in the current fiscal year. The LSM grew by 7.4 percent in October and 14.5 percent in November which was the highest monthly growth in twelve years. The manufacturing recovery was also becoming broader with 12 out of 15 sub sectors registering positive growth leading to employment generation, officials say.

The incentives given to the industries including the construction sector have triggered an economic activity in the country, it said. It further said that with the industries operating at its full capacity, there has been a significant increase in the exports and the exports reached to $2.3 billion in December 2020, highest in seven years.

The exports of textile industry, it added went up by US $1.4 billion in December 2020, thus achieving the highest ever growth for any month and cement sale witnessed highest ever sale in October 2020.

Regardless of debt servicing of about US $10 billion annually, the foreign exchange reserves have reached about US $ 20 billion, highest since January 2018.

It further said that commercial bank deposits have witnessed highest growth in eighteen years. The current account has shown a surplus of US $1.6 billion during first five months of current financial year against a deficit of $1.7 billion in the corresponding period last year.

There has also been the lowest rise in the external debt in the financial year 2020 and that the loans taken by the present government were used to retire the ones taken by the previous governments.

“Pakistan’s improved ranking in the Ease of Doing Business index and the steps taken to facilitate the investors will also attract both foreign and domestic investments,” it said adding that apart from bringing improvement in economy, the government was also focusing to provide relief to the disadvantaged segments of the society.”

The budget of Ehsaas program has been doubled if compared with that of the year 2018. The cash assistance provided to millions of deserving families in most transparent manner in the wake of Covid-19 outbreak helped to protect and mitigate the sufferings of vulnerable segments of society.

Similarly, the Sehat Sahulat Cards scheme was being implemented on fast track basis both in Punjab and Khyber Pakhtunkhwa provinces which will bring a visible change in the lives of the people.
IndusPak said…
beyond the obviously good news is a depressing fact. Iran and Turkey produce 10/12 times more steel. And India produces 30 times more. Thirty times .....
Majumdar said…
Actually the size of the domestic steel industry is of little importance to Pak economy. It doesnt have large domestic iron ore or coking coal reserves and for that reason it will never be a large producer of steel; nor does it even need to. As long as it can run downstream industries (which use steel and steel products as raw materials) efficiently.
Riaz Haq said…
IndusPak: "beyond the obviously good news is a depressing fact. Iran and Turkey produce 10/12 times more steel. And India produces 30 times more. Thirty times ...."

Yes, agreed!

But let's also talk about China producing 10 times more steel than India when both have about the same population!

Iran has about 37 billion tonnes of proven mineral reserves and 57 billion tonnes of potential reserves, worth $800 billion according to 2014 data from an article posted on state-owned mines and metal holding company IMIDRO’s website.

India – 5.5 billion tons of iron ore reserves.

While comparatively low on the list of countries with the largest iron ore reserves, totalling 5.5 billion tonnes, India punches above its weight in terms of production.

It is the world’s fourth-biggest producer of the metal after Australia, Brazil and China, and far ahead of fifth-placed Russia.

State-backed National Mineral Development Corporation (NMDC) ranks among the world’s top iron ore mining companies, producing more than 30 million tonnes in 2019.


Iran has about 37 billion tonnes of proven mineral reserves and 57 billion tonnes of potential reserves, worth $800 billion according to 2014 data from an article posted on state-owned mines and metal holding company IMIDRO’s website.


IRON ore is among the top five minerals found in Pakistan and the country has an estimated 1.427bn tonnes of reserves of various grades.

The Kalabagh iron deposit is one of the largest in the country, having measured reserves of 350m tonnes. Meanwhile, 500m tonnes of iron ore deposits were discovered in Chiniot earlier this year; approximately 60-65pc of these are reportedly of high grade.

Riaz Haq said…
#Asian Dev Bank says #Pakistan holds potential for rapid #economic growth. ADB will support #infrastructure, #agribusiness, and #finance sector #investments to boost competitiveness and private sector development, create jobs and drive #market innovation.

“Under vision 2025, the country aims to achieve upper middle-income status and provide quality jobs to its growing labor force. But Pakistan has struggled with boom-and-bust cycles in previous years due to low export capacity, weak domestic revenue, and other systemic challenges,” ADB Country Director for Pakistan Xiaohong Yang said. “This has been exacerbated by the coronavirus disease (COVID-19) pandemic, which caused a sharp downturn in 2020 and is likely to push more people into poverty,” she said in an interview. “Pakistan has the potential to become a regional hub for trade and economic activity, but greater cooperation is impeded by weak connectivity and trade links.”

In response to the pandemic, ADB is taking major steps in providing critical finance for the government to implement its pro-poor fiscal and monetary policy, introducing best practice, building capacity, and sharing knowledge through close partnerships with all stakeholders. Manila-based lender financed and co-financed $2 billion loans to help Pakistan overcome the pandemic challenges. The ADB already endorsed a new country partnership strategy for 2021–2025, designed to help restore economic stability and growth.

Yang said ADB will deploy its sovereign and nonsovereign operations to support infrastructure, agribusiness, and finance sector investments. It will target reforms that boost competitiveness and private sector development, create jobs and drive market innovation. Recently issued local currency linked bonds will allow ADB non-sovereign operations to engage sectors like education, health and manufacturing. Yang said flagship projects such as the Turkmenistan–Afghanistan–Pakistan–India pipeline project and the Turkmenistan–Uzbekistan–Tajikistan–Afghanistan–Pakistan electricity project will contribute to Pakistan’s energy security. Sanitary and phytosanitary measures to promote agricultural trade will be improved and aligned with international standards. The country will also benefit from the development of regional and national tourism, as well as regional approaches to fighting pandemics.

ADB will seek to enhance productivity and well-being by improving education, nurtrition, health systems, clean water and sanitation, affordable housing, and social protection. ADB will promote system-wide reforms on skills development, and investments in secondary education with a special emphasis on increasing girls’ enrollment. The challenge of out-of-school children will also be addressed through support for Ehsaas Kafalat conditional cash transfers for primary education, targeting children, particularly girls, from poor and vulnerable households. ADB will also continue to support disaster risk reduction and management, including investments in irrigation infrastructure which will make Pakistan more resilient to water shortages, future flooding, and food security, said its country’s representative.
Riaz Haq said…
#Construction Boom in #Pakistan: #Cement sales soar 14% to 37.95 million tons in first 8 months of current fiscal year, up from from 33.31m tons in the same period last fiscal year. #Exports also grew 6.62% to 6.33m tons from 5.94m tons in 8MFY20. #COVID19

Overall cement sales posted a growth of 14 per cent to 37.95 million tonnes in 8MFY21 from 33.31m tonnes in the same period last fiscal year.

Local dispatches increased by 15.51pc to 31.62m tonnes in 8MFY21 from 27.37m tonnes in the same period last year. Exports also grew 6.62pc to 6.33m tonnes from 5.94m tonnes in 8MFY20.

As per data of the All Pakistan Cement Manufacturers Association (APCMA) released on Tuesday, North-based mills dispatched 26.82m tonnes for domestic consumption during 8MFY21, a jump of 15.29pc compared to the same period last year which was 23.26m tonnes. Exports from North were 1.63m tonnes, down by 9.83pc from 1.81m tonnes during the same period of last year.

South-based mills dispatched 4.79m tonnes in the domestic market during 8MFY21 which was 16.73pc higher than 4.11m tonnes dispatched during the corresponding period of last year. Exports from South were 4.70m tonnes, depicting a rise of 14pc over exports of 4.13m tonnes during the same period last year.

Rising cost of electricity and coal have led to increase in the cost of cement production, which is becoming difficult for the cement industry to absorb, a spokesperson for the APCMA said.

In February, cement sector showed 2pc growth to 4.577m tonnes as compared to 4.489m tonnes during Feb 2020.

Local cement dispatches in February witnessed a 6pc hike to 3.961m tonnes as compared to 3.735m tonnes in the same month of 2020. Exports continued a declining trend as seen during the last three months. Total exports dropped by 18.24pc from 753,444 tonnes in Feb 2020 to 616,030 tonnes in February.

During February, the North-based factories sold 3.28m tonnes locally, up by three per cent from 3.17m tonnes in Feb 2020, while sale of South-based mills stood at 683,384 tonnes for local consumption which was 21.49pc higher than 562,501 tonnes in Feb 2020.

Exports from North-based mills decreased by 7.71pc to 186,595 tonnes in February from 202,181 tonnes in Feb 2020 whereas the exports from South decreased by 22pc to 429,435 tonnes in February from 551,263 tonnes during the same month last year.

According to Topline Securities, cement prices averaged at Rs601 per 50kg bag in the Northern region while prices remained unchanged at Rs610-615 in the Southern region.
Riaz Haq said…
#Pakistani rupee enjoying smart recovery as #economy recovers. From a high of 168 against the #US dollar seen during the last year when pandemic started, the rupee has appreciated by 6.5% and is currently trading near 158 levels. #exports #remittances

Pakistan's rupee has staged a smart recovery against the US dollar on positive economic indicators, and experts believe it will continue its upward trend despite some challenges ahead.

Analysts and market experts said the currency will be a major beneficiary of higher GDP growth, rising foreign exchange reserves and consistent remittances inflows of over $2 billion during the first eight months of the current 2020-21 financial year.

The rupee has so far appreciated 1.7 per cent against the dollar this year and closed at 157.12 on the interbank market on Friday. Against the UAE dirham, it ended slightly up at 42.77 against 43.6 on January 8, reflecting an appreciation of 1.9 per cent.

“The Pakistani rupee has returned to stability chiefly due to higher remittances, debt relief on account of Covid-19 payment relief plan and economic rebound in the country,” experts said.

Latest central bank data indicates that Pakistan’s economy is expected to post 2.5 per cent GDP growth in the current fiscal year ending June 2021 after contracting 0.4 per cent last year as the government’s policy measures start yielding positive results.

The country registered a 24 per cent year-on-year increase in workers’ remittances to $16.5 billion during the July 2020-January 2021 period, while foreign exchange reserves rose to $20.13 billion during the week ended February 26 from $20.04 billion a week ago, according to the State Bank of Pakistan (SBP).

“The forex reserves held by the central bank increased $70 million to $12.978 billion due to the government’s official inflows. The foreign exchange reserves of commercial banks also increased to $7.155 billion from $7.132 billion,” the SBP said.

The central bank data also showed that Pakistan’s current account deficit shrank by 55 per cent on a year-on-year basis to $229 million in January from $512 million in the same month last year due to rising exports and higher remittances.

Devesh Mamtani, chief market strategist at Century Financial, said the rupee sustained an upward trend on account of positive economic indicators, but some challenges will keep the currency under pressure in 2021.

“From a high of 168 against the US dollar seen during the last year when pandemic started, the rupee has appreciated by 6.5 per cent and is currently trading near 158 levels. A wave of positive factors have helped the rupee to gain strength over the past year. This includes factors like resumption of the IMF’s [International Monetary Fund’s] $6 billion lending facility, narrowing of current account deficit and G20 lenders’ agreement for a second debt relief for Pakistani economy. The resumption of the IMF bailout programme is especially a huge win for the economy as had it been stalled last year owing to the pandemic,” Mamtani said.
Riaz Haq said…
Plastic exports increase 11.40% in 7 months

The exports of plastic materials witnessed an increase of 11.40 percent during the seven months of current financial year (2020-21) as compared to the corresponding period of last year. Pakistan exported plastic worth $185.918 million during July-January (2020-21) as compared to the exports of $166.885 million during July-January (2019-20), showing a growth of 11.40 percent, according to the Pakistan Bureau of Statistics (PBS) data.

In terms of quantity, the exports of plastic also rose by 26.09 percent as the country exported 195,134 metric ton of plastic during the period under review as compared to the exports of 154,758 metric ton during last fiscal year. Meanwhile, on year-to-year basis, the exports of plastic material witnessed increase of 48.90 percent during the month of January 2021 as compared to the same month of last year. The exports of plastic from the country during January 2021 were recorded at $21.486 million against the exports of $14.430 million in January 2020. On month-on-month basis, the plastic exports during January 2021 rose by 18.94 percent as compared to the exports of $18.064 million in December 2020, the data revealed.
Riaz Haq said…
Houses, flats for 1,500 Pakistani labourers under Naya Pakistan Housing project

It is very difficult for the salaried class, workers and laborers to construct or purchase a house in the cities due to soaring prices of land, Prime Minister Imran Khan said Thursday.

He was addressing a ceremony in Islamabad in connection with allotment of 1,500 houses and flats to the working class under the Naya Pakistan Housing programme.

The premier said the government has started the Naya Pakistan Housing project with a new mindset to provide support to these segments of society to own a house.

The ceremony started with a short speech by the PM's aide on Overseas Pakistanis Zulfi Bukhari, who said that in the first phase of this project completed by Workers Welfare Fund, 1008 flats and 500 houses have been constructed.

For the first time, workers and labourers are being provided with their own roof on mortgage basis, Minister for Communications and Postal Services Murad Saeed had said.

Under this scheme, houses will be distributed among widows and disabled, besides labourers on ownership rights to those who are earning less than Rs 0.5 million.

The premier said the government has introduced a legislation under which banks will provide loans on 5% interest rate for the construction of houses.

He said banks have promised to set aside Rs380 billion for this purpose.

Imran Khan said there is a boom in the construction industry due to the incentives given by the present government. He said this will not only lead to wealth creation but also provide job opportunities to the youth.
Riaz Haq said…
#Pakistan's current account #deficit falls 76% to $50m in Feb, from a deficit of $197m in Feb 2020, the 3rd consecutive month the current account has seen a deficit, after a surplus for 5 months in a row. #Exports rise 8% & #remittances jump 24%. #economy

The current account showed a surplus of $881 million during the first eight months of FY2021.

Pakistan’s current account deficit (CAD) for February declined 75 per cent year-on-year (YoY) and 76pc month-on-month (MoM) to $50 million, compared to a deficit of $197m in Feb 2020 and $210m last month.

This marks the third consecutive month the current account has recorded a deficit, after registering a surplus for five months in a row.

Overall, during the first eight months of FY21, the current account shows a surplus of $881m compared to a deficit of $2.74 billion in the corresponding period last year.

The narrowing of the deficit in February is largely attributable to continued strong growth in workers’ remittances and a sustained recovery in exports since November 2020, which more than offset the increase in imports due to domestic food shortages and recovering economic activity.

In February, the MoM improvement was due to a 45pc decline in primary income deficit, whereas the YoY improvement was attributable to 8pc and 24pc rise in total exports and remittances, respectively.

Total exports (goods and services) during the month jumped 3pc to $2.65bn compared to the $2.58bn logged in the previous month. Similarly, on a yearly basis, total exports witnessed an increase of 8pc in Feb 2021 against $2.46bn in Feb 2020.

In contrast, the combined imports of goods and services during the month under review grew 2pc to $5.184bn as opposed to $5.07bn recorded in January. On a yearly basis, overall imports of goods and services soared 17pc from $4.437bn in February last year.

This resulted in a trade deficit of $2.535bn in Feb 2021, up 1pc MoM and 28pc YoY.

Cumulatively, during 8MFY21, total exports stood at $19.87bn, shrinking 2pc YoY, whereas total imports grew 4pc YoY to $37.296bn, resulting in a trade deficit of $17.42bn, up 13pc YoY.

Workers' remittances by overseas Pakistanis registered a growth of 24pc YoY to $2.26bn during Feb 2021, while on a monthly basis they remained flat.

During the first eight months of FY 21, the continued healthy growth in inflows took the cumulative figure to a record level of $18.74bn, up 24pc YoY.
Riaz Haq said…
#Pakistan #Cement sales jump 44.4% in March to 5.773 million tons from 3.722 million tons in the same period last year with huge increase in domestic consumption and exports. Total cement sales in July20-March21 were 43.325m tons, up 17% from last year.

The cement sector posted the highest-ever monthly growth of 44.39 per cent in March at 5.773 million tonnes from 3.722m tonnes in the corresponding period last year due to a massive increase in domestic consumption and exports.

According to a local media report that compiled data released by the All Pakistan Cement Manufacturers Association (APCMA), local cement dispatches in March 2021 stood at 4.563m tonnes, up by 42pc compared to 3.214m tonnes in the same period last year whereas, exports surged by 60pc from 507,480 tonnes in March 2020 to 810,962 tonnes in March 2021.

During the month under review, cement mills in the North dispatched 3.809m tonnes to local markets against 2.749m tonnes in March 2020, up by 38.52pc. In March 2021, south-based mills dispatched 753,704 tonnes in domestic markets, which was 62.28pc higher than 464,440 tonnes in the same period last year.

Exports from North-based mills registered an enormous increase of 162.58pc as the volumes increased from 106,759 tonnes in March 2020 to 280,330 tonnes in March 2021.

Exports from the South rose by 32.42pc to 530,632 tonnes in March 2021 from 400,721 tonnes during the same month last year.

During the first nine months of the current fiscal year (9MFY21), total cement dispatches (domestic and exports) were 43.325m tonnes that was 17pc higher than 37.035m tonnes during the corresponding period of last fiscal year.

Riaz Haq said…
Pakistan is striving to improve its ranking as the slowest for infrastructure expansion in the region, according to the World Bank, through a $2.4 billion government investment for highways, power and transportation this year.

The investment is in addition to billions of projects being funded by the World Bank, Asian Development Bank (ADB), Gulf Council Countries, JICA and the $56 billion China–Pakistan Economic Corridor (CPEC), which has been criticized for the high debt burden it will place on Pakistan.

Three metro projects are planned while several motorways and a revival of the circular rail in the port city of Karachi are also in the works. The Asian Infrastructure Investment Bank (AIIB) and the ADB have approved a $500 million loan to Pakistan for construction activity. Prime Minister Imran Khan’s has also announced a $30 billion plan to rehabilitate and develop the dying River Ravi into a perennial freshwater body. That project is being managed by Singapore’s Meinhardt Group.

But fundamental issues, such as safety, quality and contracting in the country, threaten to derail any progress, Said Mneimne senior vice president and managing director of Asia-Pacific for Hill International told ENR from Islamabad.

U.S. based Hill entered Pakistan’s real estate sector in 2017 as a project coordinator when it was awarded the $2.4 billion Crescent Bay 108-acre mixed-use development on reclaimed land at a seafront site about 12 miles from Karachi. Last year, the company was selected to provide construction consultancy services for the 2 million sq. m mixed-use development project called Elite Reverie, also known as Eighteen. The company is also pursuing opportunities in funded power and mass transit programs such as the Bus Rapid Transit in Karachi, Mneimne says.

“The consultant-contractor relationship in Pakistan, for example, is a tough one. Contractors treat themselves as labor demanding money every week instead of that laid out in the contract, or else threaten,” to leave, he said. “The concept of project management is not used here as the environment doesn’t justify it.”

Additionally, construction technology is from the 1960s, cranes are old and excavations must be done manually. However, he said, some clients are beginning to understand the need for improvements.

The Asian Development Bank is encouraging improvements and providing funding for things such as smart technologies and innovative development approach. The Pakistan government has frozen or reduced some taxes for construction projects and has granted amnesty to those with undeclared money if they invest in construction. This will be “to offset the negative impact of the Covid-19 pandemic on the national economy,” Prime Minister Imran Khan announced in January.

The government of Pakistan is also starting to focus on public-private partnerships. “Pakistan represents an opportunity for significant growth,” Mneimne explained. “The government’s attention to the construction sector, combined with the demographic realities of the population, means that urban development simply must occur.”

Riaz Haq said…
#Pakistan’s LSM (#manufacturing) sector grows 7.45% in first 8 months (July20-Feb21) of current fiscal year. Robust growth #automobile & #cement sectors in March 21 & and robust inflows of workers’ remittances, export earnings & revenue collection on taxes

The large-scale manufacturing (LSM) sector has grown 7.45% in the first eight-month (Jul-Feb) of current fiscal year 2021 amid third wave of the Covid-19 pandemic in Pakistan, according to the Pakistan Bureau of Statistics (PBS).

The LSM growth would largely offset impact of poor cotton production in agriculture sector and extend the much-needed support to the overall economic growth in the year.

Out of total 15 sectors in LSM, eight have posted growth. These include textile, automobiles, fertilisers, pharmaceuticals, food, beverages and tobacco, coke and petroleum products, chemicals and non-metallic mineral products.

However, output of seven sub-sectors contracted, which were including iron and steel products, electronics, leather products, paper and board, engineering products, rubber products and wood products.

“The LSM Index output increased by 4.85% for (the single month of) February 2021 compared to February 2020,” PBS reported. “The LSMI decreased by 4.15 % compared to January 2021.”

Pak-Kuwait Investment Company (PKIC) Head of Research Samiullah Tariq said the LSM output declined in February compared to January due to imposition of partial lockdown in some areas nationwide amid third wave of the pandemic in the country and lesser number of days in February.

“The robust latest production numbers reported by automobile and cement sectors for March…and robust inflows of workers’ remittances, export earnings and revenue collection on taxes in the month suggest that slowdown in LSM in February is a temporary phenomenon and it would revert in March,” he added.

The government fully supports housing and construction sector with the aim of reviving industrial production amid Covid-19 pandemic. It provided different tax incentives and awarded subsidiary on housing and construction loans, as it is of the view that the strategy would enable construction and allied industries to grow and extend much-needed support to gross domestic product (GDP).

The government has targeted to achieve GDP growth of 2.1% in the ongoing fiscal year 2021. The central bank remains confident the country would achieve an economic growth of 3% despite the third wave of the pandemic in the country. The Ministry of Finance anticipated the growth at 2.6% to 2.8%.

However, the International Monetary Fund (IMF) forecasted economic growth at 1.5% recently, which is half of what the State Bank of Pakistan (SBP) has projected. The World Bank’s outlook stands at 1.3% in FY21. The central bank said the economic indicators stood strong even as the number of coronavirus infections in the country soared.

The government has decided to impose smart lockdown in areas where the rate of infection is at 15%. Special Assistant to the Prime Minister (SAPM) on Health Dr Faisal Sultan said the other day that the coronavirus disease has severely affected the country’s healthcare system and “the situation is worse than that in June last year”.

A worsening situation is ringing an alarming bell, as it carries the potential to partially impact industrial out as well. The PBS reported that the textile sector grew 2.69% in the July-February period of the ongoing fiscal year compared to 0.33% in the same period of last year. Automobile sector surged 14.66% in the period compared to contraction of 35.93% in the corresponding period of last year. Food, beverage and tobacco sector increased 15.75% compared to contraction of 1.87%. Non-metallic mineral products surged 20.77% compared to 4.35%. Fertiliser sector jumped 5.66% in July-February period of FY21 compared to 5.99% in the same period of last year.

Riaz Haq said…
#Pakistan #car sales record triple-digit growth in March 2021. #Automobile sales in the first nine months (Jul-Mar) of the ongoing fiscal year jumped 37%. #lsm #manufacturing #economy #covid19 #pandemic

Automobile sales in Pakistan recorded a steep growth of 198% in March 2021 compared to the same period of last year primarily due to a lockdown in March 2020.

In addition, the dispatches of vehicles having engine capacity of 1,000cc and below skyrocketed 437% on a year-on-year basis.

According to data released by the Pakistan Automotive Manufacturers Association (PAMA) on Tuesday, car companies sold 20,801 units in March 2021 against 6,986 units dispatched in March 2020.

“The triple-digit growth in sales volume can be attributable to a low base effect amid a countrywide lockdown imposed by the government in March last year, which restricted economic activity,” said Arif Habib Limited analyst Arsalan Hanif in a report.

“Moreover, rebound in the economy after the easing of lockdown and a drop in the policy rate aided the rise in car sales.”

On a month-on-month basis, auto sales surged 27% due to extra working days in March compared to February.

He added that sales of cars of 1,000cc and below engine capacity soared on the back of a massive surge in demand for Suzuki Alto.

A report of Topline Securities added that the month-on-month growth in vehicle sales would be 20% if Lucky Motor Corporation (KIA, non-member of PAMA) was included.

It said that Indus Motor Company recorded the highest increase of 53% in monthly sales in March at 6,695 because the company had witnessed supply issues in February.

“Sales growth of Indus Motor Company was primarily driven by Hilux sales, which were up 103% month-on-month,” the report said.

It was followed by Honda Atlas Cars with a 30% expansion in sales to 3,153 units in March 2021.

Pak Suzuki Motor Company recorded a month-on-month growth of 14% last month as its sales stood at 10,161 units.

“Among new entrants in the industry, Hyundai Nishat sold 723 units in March 2021 with the inclusion of Hyundai Elantra, while Lucky Motor Corporation sold 2,000 units as per our channel checks,” it stated.

Read more: Car sales rise 15% in December

Nine-month figures

Car sales in the first nine months (Jul-Mar) of the ongoing fiscal year registered a rise of 37%. Automobile sales during the nine-month period came in at 134,522 units against 98,425 units in the corresponding period of last year.

Indus Motor Company managed to outperform during the Jul-Mar period of fiscal year 2020-21 with a 69% growth in sales. The company sold 42,670 units in the nine-month period compared to 25,300 units in the same period of last year.

It was followed by Honda Atlas Cars with a 54% growth at 21,698 units.

Pak Suzuki Motor Company’s sales expanded 13% during the nine-month period as the company sold 66,013 cars compared to 58,303 units in the same period of last year.
Riaz Haq said…
Pakistan’s growth miracle

Some people have raised questions about the credibility of the data, but those claims do not seem to hold ground. These growth estimates reflect the performance of the previous finance minister. If anything, Shaukat Tarin would have benefitted from lower growth, which could have made next year’s numbers healthier. The out-of-whack projections, however, underscore the need for having regular quarterly estimates of GDP, which can prevent such miscalculations.
Moreover, these numbers are not counter-intuitive. For instance, the growth in LSM is in line with long queues of booked orders for new SUVs and vehicles. Anecdotal evidence from textile industry also confirms that the factories are running at near-full capacity.
But is this growth sustainable?
Considering that the third wave of pandemic is subsiding, the recovery is likely to continue unabated. The indication that government will be holding off on tough IMF conditions and will instead be giving a pro-growth budget would also help. The government may be better off focusing on sectors that have performed poorly such as cotton, mining, and transportation & communication, which with some effort can yield greater dividends.
But further growth without investment will increase inflationary pressure and will also boost imports. The inflation is already on the rise, confirming that we may not have much more excess capacity. The trade deficit is also touching $24 billion. For now, we are being compensated through high remittance inflows but if continued, this can lead to another current account crisis in the next three years. The government therefore needs to keep inflation under check, diversify exports and increase investment. All of this however is easier said than done and needs structural reforms.
In short, while this growth cannot be sustained without structural reforms, the next two to three years look good and more promising. It is therefore time to celebrate!
Riaz Haq said…
According to the figures of Pakistan Bureau of Statistics (PSB), total iron and steel scrap imports in 11MFY21 rose 4.429m tonnes, valuing $1.7bn versus 3.6m tonnes at a cost of $1.4bn in the same period in FY20.

Steel bar makers on Thursday gave the first post-budget shock to consumers by raising prices by Rs5,000 per tonne to Rs150,500-151,500 per tonne citing unexpected surge in international scrap prices.

Before the Budget 2021-22, manufacturers had increased the prices by Rs3,000 to Rs146,500 per tonne. Steel bar makers had informed the construction sector that rising steel scrap prices in world market had affected their cost of production.

Keeping in view steel bar price of Rs110,000-113,000 per tonne prevailing in Nove­mber 2020, the total price jump to date is Rs38,000-40,000 per tonne.

However, the average per tonne import price of iron and steel scrap has dropped to $386 per tonne in 11MFY21 from $389 per tonne in the same period in FY20.

According to the figures of Pakistan Bureau of Statistics (PSB), total iron and steel scrap imports in 11MFY21 rose 4.429m tonnes, valuing $1.7bn versus 3.6m tonnes at a cost of $1.4bn in the same period in FY20.

Former chairman Association of Builders and Developers of Pakistan (ABAD) Hassan Bakhshi feared that the Prime Minister Imran Khan’s dream of providing low-cost housing to the masses under the Naya Pakistan Housing Scheme is unlikely to materialise in view of persistent and unchecked increase in prices of steel bars and cement. He urged the government to allow import of steel bars at reduced duties and taxes to break the cartel of steel bar manufacturers.

Mr Bakshi said the cost of construction on a high-rise project has increased by 10-15 per cent keeping in view a jump of 50pc in steel bar prices in the last one-and-a-half years when steel bar price was Rs100,000 per tonne. Steel bars hold 40-45pc share in total construction cost of a high-rise project.
Riaz Haq said…
Installed power capacity grows 3.6pc
Mushtaq Ghumman 11 Jun 2021

The country’s installed capacity of electricity has posted a growth 3.6 percent to 37,261 MW till April 2021, as compared to 35, 972 MW during the same period in 2019-20, but no significant change is witnessed in its consumption pattern.

According to the Economic Survey 2020-21, Pakistan is dependent on energy imports because there is a lack of investment in indigenous resources of hydro, natural gas and lignite. The government has decided to stop building new coal-fired power plants because of environmental issues. Due to significant increase in electricity demand, both state-owned companies and IPPs are actively engaged in producing electricity. However, fiscal sustainability has become a challenge due to increase in energy payments. This energy deficiency began from a fuel mix transformation which was initiated two decades ago, when power generation used to rely more on imported furnace oil than hydropower.

Till April, FY2021, installed capacity of electricity reached 37,261 MW, as compared to 35, 972 MW during the same period of 2019-20, posting a growth of 3.6 percent. The hydro share in total electricity generation has declined in FY2021 as compared to its share in FY2020. Currently, thermal has the largest share in electricity generation. Moreover, its percentage share in FY2021 has increased as compared to FY2020. Significant growth of RLNG usage in energy mix has helped improve supply to various power plants. RLNG is also supplied to fertilizer plants.

There is little change in the consumption pattern of electricity. During July- April FY2021, the share of agriculture in electricity consumption remained constant. However, the share of industry in electricity consumption has increased which shows revival of economic activities.

Commenting on history of energy crisis, the Economic Survey says that current energy crisis began to manifest itself by late 2007. The problem has evolved over the years from one of chronic power supply deficit to one where there is excess installed capacity but not enough cash flow in the system to run it. The latter created ‘circular debt’ issue. Specifically, the ‘circular debt’ in Pakistan’s energy supply chain refers to the cash flow shortfall incurred in the power sector from the delayed/non-payment of obligations by consumers, Discos and the government. It has continued to grow in size over the years, rising from 1.6 percent of GDP (Rs161billion) in 2008, to 5.2 percent of GDP (Rs 2,150 billion) in June 2020. The present government has given prime importance to resolve this issue and is working on various options to reduce circular debt.

In terms of energy-mix, Pakistan’s reliance on thermal which includes imported coal, local coal, RLNG and natural gas has been decreasing over the last few years. Pakistan’s dependence on natural gas in the overall energy mix is on the decline and the reduction of its share in the energy mix is due to declining natural gas reserves and introduction of LNG. The share of renewable energy has steadily increased over the years. The government is also taking measures to increase the shares of hydel and nuclear in energy-mix.

In Pakistan, special measures have been taken to use these innovations for domestic usage of energy, such as Electrical Vehicle Policy 2020-25.

The hydro share in total electricity generation has declined in FY2021 as compared to its share in FY2020. Currently, thermal has the largest share in electricity generation. Moreover, its percentage share in FY2021 has increased as compared to FY2020. Significant growth of RLNG usage in energy mix has helped improve supply to various power plants. RLNG is also supplied to fertilizer plants, industrial and transport sectors.

Riaz Haq said…
Rebar prices in Pakistan lower compared to China, Turkey

The steel manufacturers of Pakistan are selling rebars at a lower price as compared to international market prices by absorbing the constantly increasing cost of inputs.

In the recent past, the prices of scrap have skyrocketed. The average monthly price of steel scrap as per London Metal Exchange (LME) in June was $260 and now the latest price in the month of July 2021 has crossed $540 per ton.

Similarly, prices of steel rebar in international markets as per LME last year July was $420 in 2020 and in July 2021 the average rebar prices – assuming zero duty – are $831 in Turkey and $845 in China whereas, in Pakistan the rebar prices without duty and landing charges on scrap is $794.

“If we compare the prevailing international prices with our local markets, the prices in Pakistan are still at approximately 6 to 4 percent cheaper than China and Turkey respectively, which are among the largest steel producing countries,” PALSP said in a statement.

“All of this current market situation is beyond the control of manufacturers for the reason that the domestic steel industry is largely dependent on imported raw material and prices of steel are directly related to international prices of scrap/raw material.

Pakistan’s steel industry is selling bars at less price by constantly reducing their margins which is evident from the fact that their gross margins which were 19% plus in the period from 2015 to 2018 to 12 percent currently.”

The association said the government dropped a bomb shell on the long steel sector by giving FED exemption to erstwhile FATA/PATA hence giving competitive advantage to the steel industry of that area of Rs 25,000 per ton which is likely to throw the documented
Riaz Haq said…
Indus Motors CEO on #Manufacturing Boom in #Pakistan:"As (car production) volumes (in Pakistan) grow from 250,000 to 500,000 units, at least one million new jobs will be created by the auto industry alone which augurs well for the present (#PTI) government"

The government has showered auto assemblers with a number of incentives like a cut in the Federal Excise Duty (FED) by 2.5 per cent, additional customs duty (ACD) from 7pc to 2pc and general sales tax (GST) to 12.5pc from 17pc on cars up to 1,000cc. Consumers have recently witnessed price cuts of Rs11,000-400,000 on different engine power vehicles.

Industry people believe that the cut in duties and taxes in Budget 2021-22 is an integral part of the new Auto Development Policy 2021-2026 and some more relief measures are on the cards when the new auto policy will be unveiled.

Chairman Pakistan Automotive Manufacturers Association (Pama), Ali Asghar Jamali said the industry is extremely grateful to the government for duty and tax rationalisation that will certainly help grow industry volumes and in the process create more jobs — as the auto industry has the highest job multiplier effect.

“We are optimistic that through increased volumes the industry will generate more revenue for the government, create more jobs and increase economic activity in the country,” he said.

He said car and sports utility vehicle (SUV) sales would increase in 2021-22 after cuts in duties and taxes as almost all players have reflected the decrease in their prices. “Together with lower interest rates, growing remittances and a stable exchange rate and economy, demand should remain healthy for vehicles,” Mr Jamali said.
Riaz Haq said…
#Pakistan Commerce Chief says country aims to unlock #manufacturing & export potential. #Export-led growth & Make in Pakistan are our priorities. Exports reached a record $31.3b (goods $25.3b) & (services $6b) in fiscal 2020-21 despite #pandemic challenges

* The large-scale manufacturing sector recorded nine per cent growth during July-March 2020-21 – indicating a strong post-pandemic recovery.
* To bolster exports, the government has removed three barriers: Shift from fixed parity that artificially overvalued rupee, giving refunds to exporters and industrialists on time and exemptions on customs duties mainly on raw materials.
* The Ministry of Commerce has set its eyes on the export target of $35 billion in the next fiscal year.
As the country plans to move beyond simple manufacturing, the five key areas of focus will be: pharmaceutical, engineering, food processing, fisheries, fruits and vegetables.
* To identify new markets and boost trade ties and investments, Pakistan is eyeing massive participation at Expo 2020 Dubai.
“Make in Pakistan is our top priority now” Dawood asserted. Pakistan’s policy in the past has been to support trading rather than manufacturing which is now changing under Khan’s administration. “Manufacturing is wealth creation. It helps build industries, create more jobs” which Pakistan, a country of 220 million people, desperately needs. The large-scale manufacturing sector recorded nine per cent growth during July-March 2020-21 – indicating a strong post-pandemic recovery. Industrial support packages, incentives such as gas and electricity at regionally competitive rates for export-oriented businesses, tax exemptions for high-performing sector manufacturers helped achieve this growth.
Riaz Haq said…
#Pakistan's domestic #oil consumption in FY2021 (July 2020-June 2021) totaled 19.45 million tons, up 19% from the 16.36 million tons in the previous year as #economic activity picked up and the country's imports moved to Euro 5. #energy #economy #COVID

Pakistan plans to secure adequate supply of middle distillates to supplement its improving economy but expectations of tight Chinese motor fuel exports for the second half of 2021 may prompt the South Asian nation to raise imports from other main supply sources in the Middle East, according to oil product trading sources and market analysts based in Karachi.

Pakistan's domestic oil consumption in fiscal year 2021 (July 2020-June 2021) totaled 19.45 million mt, an increase of 19% from the 16.36 million mt consumed over the same period the previous year as an improvement in domestic economic activity led to a strong uptick in gasoil and gasoline demand, data by the country's Oil Companies Advisory Council showed.
The uptick in gasoil demand was evidenced by the 18% year-on-year jump in diesel sales over FY 2021 to 7.699 million mt, in contrast with 6.546 million mt consumed in FY 2020, the data showed.

Easing COVID-19 restrictions during the last fiscal year increased industrial activity, boosting overall demand for petroleum products, which helped the economy to grow 3.94% after two years, Shahrukh Saleem, research analyst at Karachi-based ALD Securities, said.

Moreover, diesel sales also increased on the back of a stimulus package in the farming sector, with subsidies given to the sector to aid in the increase in agricultural output, another industry source said.

In addition to gasoil demand, Pakistan also recorded a sharp year-on-year growth in gasoline consumption -- the result of a recovering automobile sector.

According to data from the OCAC, Pakistan's petrol sales recorded an increase of 13% to 8.237 million mt in FY 2020.

"Lower interest rates enticed consumers to borrow funds to buy cars on installments," Tahir Abbas, head of research at Arif Habib Securities, said.

In FY 2021, domestic car sales rose to 181,397 units, from 111,632 units a year earlier, data from Pakistan's Automotive Assemblers Association showed.

Middle distillate supply sources
The improvement in Pakistan's gasoil and gasoline demand helped to absorb barrels from the regional market, with traders saying that this may have a knock-on effect of shoring up prices should this upward trend be sustained.

Pakistan imported around 800,000 mt of gasoline from China in H1 2021, almost double the 437,000 mt received in H2 2020, latest data from China's General Administration of Customs showed.

This is especially so given that regional supply balances are tightening, with several sources noting that deep cuts to oil product export volumes from North Asian producers, in particular China, have resulted in a tight outlook for the rest of 2021.

China's middle distillate exports are expected to fall over the coming months as Beijing looks to limit oil product export permits in an effort to cut emissions to meet the country's carbon zero target, while reserving enough barrels for domestic consumers.

Beijing is likely to allocate about 7.5 million-9.5 million mt of quotas for exporting gasoline, gasoil and jet fuel in the final round of allocation for this year, S&P Global Platts reported earlier. If the allocation hits 9.5 million mt, the total allocation would work out to 39 million mt for 2021, about 14.7% lower from the actual export level of 45.75 million mt in 2020, Platts calculations showed.

Reflecting the tight supply outlook, the physical FOB Singapore 10 ppm sulfur gasoil crack spread against front-month cash Dubai averaged $6.96/b over July, sharply higher than the $5.17/b average in January.

Riaz Haq said…
#Pakistan's TPL Plans to Raise $500 Million REIT to Gain From #NayaPakistan #Construction Push. It is seeking to raise 60% of the targeted funds from foreign investors, 30% from domestic investors & the rest from its parent TPL #Properties Ltd. #Karachi

A unit of Pakistan’s TPL Corp. plans to raise as much as $500 million through a private real estate investment trust, marking one of the largest such fundraisings in the nation’s history.

TPL REIT Management Co. is seeking to raise 60% of the targeted funds from foreign investors, 30% from domestic investors and the rest from its parent TPL Properties Ltd., according to Ali Jameel, CEO of TPL Corp. The hybrid real estate investment trust plans to close the deal by June, and will offer an internal rate of return of more than 30% in local currency, he said.
Riaz Haq said…
Saudi company signs MOU to invest in $12 billion real estate project in Pakistan

Sarh Attqnia Company will partner with Javedan Corporation for an urban development project on banks of Lahore’s Ravi river
‘Join us,’ Riyadh-based investor tells other Saudi companies to invest in Pakistan

KARACHI: A Riyadh-based engineering and construction firm has signed an investment agreement in a $12 billion real estate project in the eastern city of Lahore with a Pakistani business consortium, officials said on Monday.
An MOU between Sarh Attqnia Company (SAC) and the Pakistani party, Javedan Corporation, was signed in Karachi on Sunday for the construction and development of the first phase of upcoming ‘Ravi City’ project to be built on 2,000 acres of land along the banks of the historic river Ravi.
The agreement comes hot on the heels of the recently held Riyadh investment conference during the three-day visit of Pakistani Prime Minister Imran Khan to Saudi Arabia last month.
“Investment conference was held in Riyadh where large Saudi companies participated... Fortunately, we got in touch with one of the big developers’ company- Sarh Attqnia- which was looking for some opportunities for development here (in Pakistan) as a partner,” Arif Habib, Chairman of Arif Habib Group of which the Javedan Corporation is a subsidiary, said at the signing ceremony of the agreement.
Habib said the Saudi company would contribute “financially and technically as well.”

Riaz Haq said…
#Pakistan providing subsidies, incentivizing #construction industry. #imrankhanPTI: Rs 35 billion allocated for low income buyers. Rs. 300,000 subsidy on every house for the first 100,000 homes. #NayaPakistan #economy via @ePakistanToday

While visiting Naya Pakistan Housing Authority’s project Farash Town Apartments in Islamabad on Friday, Prime Minister Imran Khan expressed the government is providing subsidy and incentivising construction industry to help low income people to have their own houses.

The prime minister said thirty-five billion rupees have been allocated for subsidy on construction of houses by the low income people. He said the government will provide three hundred thousand rupees subsidy on every house for the first one hundred thousand units.

He said while one hundred thousand apartments are under construction, the process will now speedily move forward as the structure of the system has been finalised.

He said the construction industry has been incentivised in different ways including tax relief. He said One Window Operation has also been started to facilitate the construction sector.

Regarding Farash Town, the prime minister said of the total 4400 apartments, 2000 each have been allocated for low income people and middle income people and four hundred apartments will be provided to slum dwellers.

The premier, while chairing a separate meeting, said Ravi Urban Development Authority and Central Business District projects will promote modern, self-sustained, clean and green residential and business facilities in the country.

The PM said these projects are very crucial for attracting foreign direct investment in housing and construction sectors in the country. The prime minister directed the authorities to win over maximum investment for both the projects.

Earlier, the prime minister was informed that work on the development of basic infrastructure including roads, sewerage and drainage in the Central Business District is in full swing and is likely to be completed ahead of schedule. The construction work on Bab-e-Pakistan Project will also start soon.

The prime minister was apprised that the Ravi Urban project is all set to develop its Saphire Bay Project. A state of the art industrial estate, powered by renewable energy, is also ready to be launched very soon.
Riaz Haq said…
Iron, steel output swells to 4.7m tonnes

KARACHI: The production of iron and steel, with billets/ingots mainly used in the construction industry, in the last 10 years swelled by 196 per cent to 4.777 million tonnes in FY21 from 1.616m tonnes in FY12.

H/CR sheets/strips, coils/plates, also known as flat steel products for production of electronics, surged to 3.296m tonnes in FY21 from 1.850m tonnes in FY12, Pakistan Bureau of Statistics (PBS) data of Large-Scale Manufacturing (LSM) showed.

Rising production of steel related products has led to higher imports of raw materials. For making steel bars, the country’s iron and steel scrap imports in FY21 rose to 4.719m tonnes costing $1.86bn from 1.568m tonnes valuing $538m in 2011-12, the PBS figures showed.

Besides, iron and steel imports swelled to 2.992m tonnes amounting to $1.959bn in FY21 from 1.755m tonnes ($1.4bn) in 2011-12.

Commenting on rising demand for steel bars, Pakistan Association of Large Steel Producers Secretary General Syed Wajid Bukhari said steel bar production till 2011-12 was about three to 3.5m tonnes while the current demand now hovers between 6.5m tonnes to 7m tonnes.

He attributed increase in steel bar prices to soaring scrap prices in the world market to $550 per tonne from $300 per tonne while one dollar is now equal to 168 as compared to Rs85 in 2011-12.

He said gas price increased to Rs97 per unit from Rs15 per unit in the last 10 years followed by power tariff to Rs21 per unit from Rs6 per unit. Freight charges are 100 per high now.

Mr Bukhari was of the view that steel bar demand would soar to nine to 10 million tonnes by 2023-24 in view of rising construction activities.

Private sector consumes 80pc of total steel bar production as compared to 20pc by the public sector, he added.

Hassan Bakhshi, former chairman Association of Builders and Developers (ABAD), said a multi-storey high project to be built on 1,000 yards plot with three floors for car parking requires around 1,100 tonnes of steel bars.

He claimed that steel bar demand has been on the rise due to 80pc construction work on highrise projects in Punjab while the Sindh Building Control Authority (SBCA) has been creating problems in clearing new projects.

“Only 91 projects have been cleared by the SBCA in the last two years in Karachi as compared to 500-7,000 projects a year some 10 years back,” he said.

The projects being promoted on the social, print and electronic media belong to Punjab while in Karachi, advertisement campaigns have been running for old projects which had been approved very late.

Pakistan Association of Parts and Accessories Manufacturers Association chairman Abdul Rehman Aizaz was of the view that auto assemblers and their vendors consume 15,000-20,000 tonnes per month of iron and steel in different forms which are used in making different parts by the vendors and the assemblers.

Bike production swelled to 2.475m units from 1.645m units in FY12, while jeeps/cars production rose to 163,122 units from 154,706 units in FY12.

Trucks and buses production in FY21 jumped to 3,808 and 570 units from 2,597 and 568 units FY12.

Domestic appliances and electronic products have shown phenomenal growth in the last 10 years. For example, production of refrigerators, deep freezers and air conditioners has swelled to 1.337m units, 109,029 units and 505,493 units from 1.062m units, 56,313 units and 240,338 units in FY12. Electric fans production rose to 2.498m units from 1.908m units.

Riaz Haq said…
Engro Corporation
Dec 10
With the addition of new 100,000 tons PVC III Plant, inaugurated by PM
, Engro Polymer & Chemicals will now contribute around $240 million towards import substitution per annum, and fulfill export orders as well.


Prime Minister Imran Khan inaugurated on Friday a 100,000-tonne PVC III plant of Engro Polymer and Chemicals (EPCL), which will enable import substitution of polyvinyl chloride (PVC) and boost exports, a press release said.

Addressing the ceremony, Prime Minister Khan said the government supports the expansion of local businesses in order to ensure import substitution and achieve higher exports. He urged the business community to focus on import substitution and diversification of the export base to support sustainable economic growth.

A subsidiary of Engro Corporation, EPCL is the only fully integrated chlorvinyl chemical complex and producer of PVC in Pakistan.

The plant expansion took place with up to $50 million financing support from the International Finance Corporation (IFC) and leveraged global expertise in project execution with a Japanese licenser and Chinese construction team.

EPCL can now produce 295,000 tonnes of PVC per annum. The press release said EPCL will now be contributing around $240m towards import substitution.

The company also exported PVC resin worth $25m to Turkey and the Middle Eastern markets in 2021. Demand for PVC has grown at six per cent a year, with around 70pc of the consumption originating from the construction sector.

Riaz Haq said…
#Pakistan’s Ijara Starts 5 Billion PKR ($29 million) Private Equity Fund to Support #Construction, #RealEstate. It claims to offer an internal rate of return between 25% and 30%. PM Imran Khan #PMIK encourages a construction boom. #PTI #jobs #economy

Pakistan’s Ijara Capital Partners Ltd. has launched a private equity fund to raise five billion rupees ($29 million) to invest in real estate projects as Prime Minister Imran Khan encourages a construction boom.

The fund will be raised and deployed in multiple projects within six months, Farrukh Ansari, chief executive officer at Ijara Capital, said in an interview. It will offer an internal rate of return between 25% and 30%, he said.
Riaz Haq said…
Pakistan has exported its first vehicle – made by Master Changan Motors – under the new Auto Industry Development and Export Policy (AIDEP 2021-26), according to a press release issued by the company on Thursday.

The press release stated that under the new auto policy, all OEMs would require to initiate vehicle exports to help develop the local industry and expand the export capability of the country. The Changan Oshan X7, which is the country’s first export unit under the new policy, is the first vehicle to be launched through a global RHD premiere earlier in March 2022.

Pakistan is the only country outside of China to produce the latest model of Changan Oshan X7.

The press release quoted the company's CEO Danial Malik in a ceremony in Karachi, “We are delighted and proud to lead Pakistan into a new chapter for the auto industry and make its mark on a global level”.

“The Changan Oshan X7 is the first of many more vehicles to be exported under our vision to stay Future Forward, Forever and the Auto Industry Development and Export Policy (AIDEP 2021-26)”, he added.

The company further added that Pakistan is Changan’s first and only RHD manufacturing base and is helping the brand expand globally.

It added that the state-of-the-art plant was completed in a record time of just 13 months and now has the capacity to produce 50,000 vehicles annually.

“Master Changan is our first RHD production base and we are very happy to export our RHD Oshan X7 SUV from Pakistan”, Steven Zhao – Vice CEO Master Changan Motors Limited stated.

Riaz Haq said…
#Pakistan’s #Manufacturing (LSMI) grew by 26.6% YoY during March 2022 and 10.4% YoY during July-March FY22 as compared to the same period of the previous fiscal year. #PTI #imrankhanPTI #economy @PTIofficial @ImranKhanPTI

May 13, 2022 (MLN): Pakistan’s Large Scale Manufacturing Industries (LSMI) production grew by 26.6% YoY during March 2022 which was the highest YoY increase after May’21, Pakistan Bureau of Statistics (PBS) reported on Thursday.

On a month-on-month basis, the LSMI growth witnessed an increase of 8.2% in the month against the previous month, whereas on average, the LSM grew by 10.4% YoY during July-March FY22 as compared to the same period of the previous fiscal year.

The growth during the month of March’22 was led by the Furniture, Food, and Apparel sectors as they posted growth of 186.5% YoY, 85% YoY, and 78.6% YoY respectively followed by Other Manufacturing (Football) (64.1% YoY), Wood Products (32.6% YoY), Automobiles (26% YoY), Chemical products (17.1% YoY), Fertilizer (16.9% YoY), Pharmaceuticals (12.6% YoY), Paper & Board (11.6% YoY), Iron & Steel Products (11.2% YoY), Petroleum Products (8.1% YoY), Computer, electronics and Optical Products (6% YoY), Textile (5.1% YoY), Non-Metallic Mineral Products (4.2% YoY), and Rubber Products (0.2% YoY).

While the industries that contracted during the month were Beverages (-6% YoY), Tobacco (-1.4% YoY), Leather Products (-7.6% YoY), Machinery and Equipment (-10.9% YoY), Fabricated Metal (-6.1% YoY), Electrical Equipment (-1.5% YoY), and Other Transport Equipment (-11.7% YoY).

On a cumulative basis, during 9MFY22 out of 22 major industries, 17 posted positive growth while the rest of the 5 industries' witnessed a decline.

The sector-wise performance revealed that the production in Food, Beverages, Tobacco, Textile, Chemicals, Automobiles, Iron & Steel Products, Leather Products and Paper & Paperboard sectors have surged by 11.7% YoY, 0.7% YoY, 16.7% YoY, 10.61% YoY, 3.2% YoY, 7.8% YoY, 54.1% YoY, 16.5% YoY, 1.5% YoY, and 8.5% YoY respectively during Jul-March FY22, compared to the performance in Jul-March FY21.

On the other hand, the dismal numbers were witnessed in Pharmaceuticals, Rubber Products, Fabricated Metal, Electrical Equipment, and Other Transport Equipment industries as their production dropped by 0.4% YoY, 20.6% YoY, 7.2% YoY, 1.1% YoY, and 10.2% YoY respectively during 9MFY22.

Riaz Haq said…
Economic Survey of Pakistan 2021-22 (Manufacturing & Mining Chapter)

During July-March FY2022, LSM staged
the growth of 10.4 percent against 4.24
percent growth in the corresponding
period last year. Production of 11 items
under the Oil Companies Advisory
Committee increased by 2.0 percent, 36
items under the Ministry of Industries and
Production surged by 10.3 percent, while 76 items reported by the Provincial Bureaus
of Statistics increased by 12.1 percent. The expansion of LSM is also appeared to be
broad based, with 17 out of 22 sectors of LSM witnessed a positive growth. Furniture,
Wood Products, Automobile, Footballs, Tobacco, Iron & Steel Products, Machinery and
Equipment, and Chemical Products remained the top performing sectors of LSM.

Automobile sector marked a vigorous growth of 54.1 percent during July-March FY2022
against 21.6 percent growth last year. New Auto Policy, to promote new technologies
including Electric Vehicles (EVs) and Hybrid, and accommodative monetary policy to
promote auto financing paved the way to grew automobiles production. Besides, tax
incentives to promote locally manufactured cars also pent-up the demand as well as the
production of the given sector such as locally manufactured hybrid sales tax reduced
from 12.5 percent to 8 percent and FED reduced by 2.5 percent upto 1300cc for locally
manufactured cars. Moreover, during July-March FY2022 car production and sale
increased by 56.7 and 53.8 percent, respectively. Trucks & Buses production and sale
increased by 66.0 and 54.0 percent and tractor production and sale increased by 13.5
and 12.1 percent, respectively. Though the relief measures in form of waiving of taxes
pushed up the sector, in the meanwhile reduced the revenues of national exchequer and
built the pressure on imports besides creating uncertainty in market sentiments.


In case of passenger cars, the production and sales are up by 57 percent and 54 percent
with 166,768 and 172,612 units, respectively. In this regard, higher growth has been
observed in up to 800cc and up to 1000cc segments registering 77 percent and 65
percent growth, respectively. Growth in exceeding 1000cc segment was 35 percent. For
similar reasons, the production and the sales of light commercial vehicles (LCV) and
SUVs registered increase by 44 percent and 46 percent, respectively. In the SUV and SUV
crossover segment two new products appear from Beijing Automotive Industry, BAIC
BJ40L and BAIC X25 with modest numbers which are expected to grow in time.
Farm tractor sector has shown growth with production and the sales up by 13.5 percent
and 12 percent respectively. This pleasant upward surge was due to overall growth in
agriculture sector ensuing better crop prices and consequent more buying power of the
farmers. However, these numbers are not even close to the highest numbers this
industry had achieved in the past.
The two/three wheelers sector showed modest fall in production and the sales by 3.5
percent and 4.1 percent respectively. This fall is due intra-industry production losses by
some units, while other units have shown their natural growth. Two/three wheelers
offers most economical public transport alternate for the lower income group, however,
at same time, it is extremely price sensitive. Massive exchange rate losses kicked off
inflationary conditions resulting inevitable price increase. Still, this sector offers most
preferred means of transport and best alternative in the absence of Public Transport in
the cities and thus holds a dependable and continued potential for growth in the coming

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