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Pakistan Industries Updates

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Pakistan Industries updates


National Foods Ltd is setting up its fifth plant in the M4 Industrial City of Faisalabad, said a company official on Tuesday.

Briefing a group of journalists at the Port Qasim factory of the manufacturer of convenience-based food products, the official said the 30-acre Faisalabad plant will be the company’s biggest production facility upon its completion by the end of 2022.

Currently, the company operates three plants in Karachi’s Port Qasim, SITE and Nooriabad industrial estates and one plant in Gujranwala. He didn’t share the size of the investment.

The company posted an unconsolidated profit of Rs725 million for January-March, up 39.3 per cent from a year ago. Its quarterly sales grew 23.4pc to Rs8.4 billion.

Even though the company is one of the major Pakistani exporters of recipe mixes, a sharp devaluation of the local currency against the dollar in recent quarters has left a negative impact on the earnings growth, the official said
 

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The government on Friday decided to sell state-owned enterprises to foreign countries through negotiated deals instead of conducting transparent bidding and also ruled out the possibility of handing over management control of power distribution companies to the private sector.

The decisions taken by the Cabinet Committee on Privatisation (CCOP) mark a departure from the privatisation path laid in an Act of parliament, which was aimed at ensuring maximum gains for the state and avoiding discretion in such sensitive matters.

Finance Minister Miftah Ismail chaired the first meeting of the CCOP that was attended by the key cabinet ministers.

An official statement issued by the finance ministry stated that the CCOP deliberated the modalities for the negotiated government-to-government (G2G) commercial transactions and decided that it was not the domain of the Privatisation Commission.

The CCOP directed the Ministry of Finance to formulate the proposal for structured transactions in coordination with the relevant ministries for the consideration of the cabinet, according to the finance ministry.

Miftah Ismail had directed the Privatisation Commission to initiate the process for a new legal framework for the negotiated government-to-government transactions.

It was decided that the finance ministry would prepare a new legal framework for the approval of the federal cabinet that would then decide and allow for either the strategic sale or giving the stake of government companies listed at the stock market to the foreign government under a negotiated deal.
The route has been adopted for fast-track sale of the government entities. But during the PTI regime, Saudi Arabia had offered to buy two multibillion-dollar LNG power plants under a government-to-government deal. The previous government turned down the offer, terming it against the Privatisation Ordinance of 2000.

Similarly, the PTI government had also refused to sell the Pakistan Steel Mills to China under the China-Pakistan Economic Corridor Framework agreement because of the same reason.

The CCOP meeting was informed that the government of the United Arab Emirates has showed interest in acquiring stakes in the state-owned enterprises under a negotiated deal.

The Privatisation Commission had proposed the CCOP that a competitive route should be adopted for the sale of the listed government entities to the institutional investors and the foreign governments as per the prevailing laws and regulations.

The CCOP also blocked an ongoing process to handover the management control of the power distribution companies to the private sector to bring efficiency.

“The CCoP agreed that this is a critical area of focus and directed Privatisation Commission to take one DISCO at a time to pursue a concessional arrangement focused on enhancing their financial viability and service quality. Additionally, transfer of DISCOs to provinces was also deliberated, it added.

The decision to offer the distribution companies to the provinces lay bare the government’s intention to keep these entities in the public sector. The provinces in past have already refused to take over the distribution companies.

The sources said that the CCOP wanted to handover the Faisalabad Electric Supply Company (FESCO) to the private sector but then dropped the idea due to opposition by some CCOP members.
 

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SLM Tyres reaching first-phase production​


ISLAMABAD, Jul. 27 (Gwadar Pro)-Servis Long March (SLM) Tyres has reached a milestone of manufacturing more than 2,000 tyres per day at its Nooriabad plant in Sindh Industrial and Trade Estate (SITE), Karachi.

It marks the completion of the first-phase production capacity of 740,000 tyres per annum, Gwadar Pro learned recently.

SLM Tyres is a $300 million joint venture between Pakistan’s Servis Group and China’s Chaoyang Long March Co. Ltd. It’s the first All-Steel Radial Truck and Bus Tyres manufacturing facility in Pakistan with complete transfer of technology right from the commencement of commercial production, according to the Servis Group. The JV started commercial production in March 2022.

Servis Group owns 51% shares in the JV while Chaoyang Long March Co. Ltd. owns a 44% stake.

The targeted production capacity of SLM Tyres is 2.4 million tyres per annum in three phases. Annual tyre production is expected to rise from 0.74 million in the first phase to 1.2 million in the second phase and 2.4 million in the third phase.

According to the Servis Group, the project will contribute Rs. 23 billion to the national exchequer by way of customs duty, sales tax and income tax during its initial 10 years of commercial operations.

SLM tyres are being exported to the US, with the next areas of focus being the European Union and Brazil. Yearly exports are expected around $70 million in the first year of commercial operations, which will gradually increase to $300 million, Servis said.
 

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Fauji Fertilizer Company Limited (FFC) has announced its half-yearly financial results for the period ended June 30, 2022, in its Board of Directors’ meeting held on July 28, 2022.

FFC attained Urea production of 1,276 thousand tones, 4% higher than last year mainly because of the deferment of plant turnaround to H2. The company also achieved a benchmark sona urea offtake of 1,275 thousand tones for the period. Increased urea sales combined with higher prices of imported fertilizers also led to the highest ever all-product revenue of Rs54.71 billion during the period.
 

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