Pakistan manufacturing Updates

[ghazi52]

Foreign investors from China, Russia and Korea are taking interest in the revival of Pakistan Steel Mills (PSM), which has been closed since 2015.

The government had already announced to run PSM through Public-Private Partnership to revive the Mill. A high-level meeting was informed yesterday that meetings are being held with potential investors regarding the revival of Pakistan Steel Mills (PSM).

These investors/parties are from China, Russia and Korea and the meetings are being held almost on a daily basis.


Federal Minister for Privatisation, Mohammed Mian Soomro chaired a meeting regarding transaction updates, legal matters and e-office in the Ministry.

 

[ghazi52]

In another major development for Pakistan's manufacturing sector, South Korean electronics giant Samsung is in the process of establishing a television line-up plant in Karachi, announced Advisor to Prime Minister on Trade and Investment Abdul Razak Dawood on Tuesday.

“I have been informed that Samsung Electronics is in the process of establishing their TV line-up plant in collaboration with the R&R Industries at Karachi,” said Dawood in a tweet.

The advisor added that the said plant would become functional in the fourth quarter of 2021 and is expected to produce 50,000 units annually.

“This is a vindication of MOC’s "Make-in-Pakistan" policy for industrialization via rationalization of input costs and other incentives,” added Dawood.

As per the financial results for the second quarter ended June 30, 2021, Samsung Electronics posted consolidated revenue of Korean Won (KRW) 63.67 trillion, a 20% increase from the previous year and a record for the second quarter. Operating profit increased 34% from the previous quarter to KRW 12.57 trillion as market conditions improved in the memory market.

The development also comes as a major boost to Pakistan that has been promoting local assembly/manufacturing in a bid to reduce reliance on imports.

Back in July, Lucky Motor Corporation (LMC), a subsidiary of Lucky Cement Limited, announced in a notice to the Pakistan Stock Exchange that it has entered into an agreement with Samsung Gulf Electronics Co., FZE (Samsung) for the production of Samsung-branded mobile devices in Pakistan.

The notice added the production facility for producing Samsung mobile devices will be located at LMC’s existing plant facility producing vehicles at Bin Qasim Industrial Park, Special Economic Zone, Port Qasim, Karachi.

The production facility is expected to be completed by end of December 2021.

Last month, the Pakistan Communication Authority (PTA) issued the Mobile Device Manufacturing (MDM) authorisation to LMC to manufacture Samsung-branded phones in the country.

The authority said this is a landmark achievement and “will further revolutionise the vibrant mobile manufacturing ecosystem in the country by ensuring the presence of major local and foreign players in the market".

 

[Ali_Baba]

While these are all assembly deals - what they do is reduce the cost of imports and you are not paying for the value add of a manufactured product versus manufactured parts needing assembly and the advantage of doing it inside Pakistan means the product is cheaper for local consumers to buy.

This should be openly recommended and not something people should turn their noses up at if it doesnot involve manufacturing of key components(that can come later).

 

[_NOBODY_]

While these are all assembly deals - what they do is reduce the cost of imports and you are not paying for the value add of a manufactured product versus manufactured parts needing assembly and the advantage of doing it inside Pakistan means the product is cheaper for local consumers to buy.

This should be openly recommended and not something people should turn their noses up at if it doesnot involve manufacturing of key components(that can come later).

You don't immediately go from nothing to full fledge manufacturing so be patient.

 

[ghazi52]

ISLAMABAD: The federal government is likely to frame a petrochemical policy aimed at attracting an investment of $3 billion in this sector on the same lines as in India and other countries.

The Overseas Investors Chamber of Commerce and Industry (OICCI) has written a letter to Prime Minister's Advisor on Commerce and Investment, Abdul Razak Dawood, in which foreign companies have proposed incentives to support the petrochemical industry locally.

A delegation of OICCI has also held a meeting in Islamabad to seek support from the authorities for the petrochemical policy.

There is a need for development of comprehensive petrochemical policy for Pakistan in the following four dimensions:

(i) cost competitiveness (duty free imports of equipment, extended tax exemptions for up to 20 years, low cost financing like TERF, low BTU gas at wellhead prices etc);

(ii) market volume/access to demand (11 per cent duty on mainstream final petrochemical products currently not produced in Pakistan and maintain duties at January 2021 levels for midstream final petrochemical products currently produced in Pakistan, protection for local industry in FTAs, etc.); and

(iii) ease of doing business (simplification and streamlining of processes in the form of one window operations).

The requested support is broadly in line with incentives provided to petrochemicals in other countries such as India, South Korea, Egypt, Brazil, etc. According to the OICCI's member companies' estimate, by providing comprehensive policy support, Pakistan can attract investment up to $ 3 billion in the short term, which will improve investment to GDP ratio by 100 bps.

In the medium term, these investments will enable the country to achieve import substitution up to $ 800 million per annum, generate employment of 50,000 people and generate additional tax collection amounting to Rs 50 billion per annum.

In the long run, the success of these investments will lay the foundation for large-scale petrochemical investments which will have significant positive impact for the country.

Official sources told Business Recorder that petrochemical industry is categorised in the following segments:

(i) upstream products such as Ethane, Propane, Ethylene, Propylene, Styrene, Xylene, etc, which are basic feedstock of engineering plastics are not being manufactured locally due to unavailability of Naphtha cracker in Pakistan and local demand is being met through imports;

(ii) Midstream products not manufactured locally:
(a) Polyethylene (PE), Acrylonitrile Butadiene Styrene (ABS), etc. Polypropylene (PP) is presently not being manufactured locally but two projects are in pipeline:

(b) manufactured locally, Polyvinylchloride (PVC), Polystyrene (PS), Polyethylene Terephthalate (PET), Phthyalic Anhydride (PA), Purified Terephthalic Acid (PTA), Linear Alkyl Benzene Sulfonic Acid (LABSA), Sodium Laurel Ether Sulfate (SLES) and Methanol, etc.

The processes of this are injection molding, extrusion etc. Iii Downstream products:

Major applications are in construction sector (pipes, doors, windows, etc); auto parts; home appliances; electrical & electronics items; household items; furniture; apparel; packaging; scientific and medical equipment; paint & varnishes and artificial leather etc.

Copyright Business Recorder, 2021

 

[ghazi52]

 

[ghazi52]

The Large-Scale Manufacturing (LSM) growth is back to the merry ways – registering 12.7 percent year-on-year growth for August. The cumulative Jul-Aug growth clocked in at 7.26 percent, but one has to be mindful that this comes off a low-ish base, as the second Covid wave had hit the country around the same period last year, leading to some disruption.

The August index is clearly the highest ever, keeping in line with a trend that started in September 2020. That said, the August value is not a runaway winner – as it is only better by a few decimals from the highest August index achieved in 2017. Last year August LSM index was at a multiyear low primarily due to Covid – and the 12.7 percent year-on-year must be viewed in that light.




In terms of sectoral contribution, automobile continues to lead the way with more than two-third of the cumulative growth, with less than 5 percent weight in LSM composition. The August growth is by and large built on low base as automobile production that had completely halted last year had only started to recover around August 2020. The August 2021 car production numbers are still some way off the peaks witnessed in FY18.

September car production numbers are encouraging – at multi-month high – registering highest production since January 2019. The Q1FY22 production will be nearly double than same period last year, but not all of it makes it way to the LSM numbers for various reasons. Whether or not the automobile demand takes a serious hit, like the one witnessed for much of 2019, as inflation concerns rise and chances of rate hikes increase with every passing day, will be known in due course. But for another two to three months, automobile will continue to lead LSM growth contribution, until the high base kicks in.

The two key construction industries – steel and cement remain on the upward trend, and that comes off a firm base, unlike some other sectors. As people finding it difficult to make ends meet, it will be an intriguing watch if low-cost housing continues with same fervor it started. Should there be a change of heart in Islamabad as regards PSDP spending, the demand could take a hit in the quarters that follow.

The three big sectors in terms of weight food, textile and petroleum have yielded low single-digit growth numbers, and not essentially from a high base. A significant number of industries are still producing way off the peaks seen in FY18. The same also gets cross verified by the use of HSD, which by and large indicates transportation of goods – as the volume remains lower than the high seen during FY16-FY18. There appear no signs yet of the industrial activity reaching the optimal. Not at least the large-scale.

 

[ghazi52]

Large industry grows 3.56 percent in four months

Web Desk
December 17, 2021


Large Scale Manufacturing Industries (LSMI) production grew by 3.56 percent during the first four months of the current fiscal year compared to the corresponding period of last year, Pakistan Bureau of Statistics (PBS) reported Thursday.

The LSMI Quantum Index Number (QIM) was recorded at 140.50 points during July-October (2021-22) against 135.66 points during July-October (2020-21), showing growth of 3.56 percent, according to latest PBS data.

The highest increase of 2.26 percent during July-October (2021-22) was witnessed in the indices monitored by the Ministry of Industries, followed by 0.88 percent increase in indices monitored by the Provincial Board of Statistics (BOS) and 0.43 percent increase in the products monitored by the Oil Companies Advisory Committee (OCAC).

On year on year basis (YoY), the industry declined by 1.19 percent during the month of October 2021 compared to the growth of October 2020, according to PBS latest data.

The major sectors that showed positive growth during July-October (2021-22) included textile (0.91%), food, beverages and tobacco (5.15%), coke and petroleum products (7.33%), pharmaceuticals (6.55%), chemicals (3.14%), automobiles (37.91%), iron and steel products (11.62%), leather products (10.49%), paper and board (9.39%), engineering products (0.81%) and wood products (6.56%).

The commodities that witnessed negative growth included non-metallic mineral products (2.66%), fertilizers (7.23%), electronics (10.92%) and rubber products (32.23%).

It is pertinent to mention here that the provisional QIM is being computed on the basis of the latest production data received from sources, including Oil Companies Advisory Committee (OCAC), Ministry of Industries and Production (MoIP) and Provincial Bureaus of Statistics (PBoS).

 

[ghazi52]

According to the Pakistan Bureau of Statistics (PBS) Pakistan’s Large Scale Manufacturing Industries (LSMI) production increased by 3.26 percent during the first five months of the current fiscal year (FY22) compared to the corresponding period of last year.

According to details, the highest increase of 4.72 percent during July-November FY22 was witnessed in indices monitored by the Oil Companies Advisory Committee (OCAC) followed by a 4.15 percent increase in indices monitored by the Ministry of Industries, and a 0.97 percent increase was witnessed in the products monitored by the Provincial Board of Statistics (PBS).

On year on year basis (YoY), the industry grew by 0.30 percent during the month of November 2021 compared to the growth of November 2020, according to PBS data

 

[ghazi52]

LSM growth speeds up in December​

The LSM sector grew by 6.4 percent in December 2021 over corresponding month of last year​

Correspondent
February 18, 2022


Fiscal year 2015/16 is the base year for the latest numbers of LSM growth. -


ISLAMABAD: Large-scale manufacturing (LSM) sector grew faster than expected in December, supported by stronger auto and textile productions but high price inflation could weigh on factories output in months ahead.

The LSM sector grew by 6.4 percent in December 2021 over corresponding month of last year and 10.5 percent over previous month, showing a healthy performance almost in all categories, Pakistan Bureau of Statistic (PBS) reported on Thursday.
Fiscal year 2015/16 is the base year for the latest numbers of LSM growth.

Analysts said subsidized energy, easy raw material imports and comparatively low cost of borrowing helped boost the industrial activities. LSM accounts for 80 percent of manufacturing sector.

During the first half (July-Dec) of the current financial year, the LSM sector growth arrived at 7.4 percent over same period of the last fiscal.

Food, beverages, tobacco, textile, wearing apparel, leather products, paper & board, coke & petroleum products, chemicals, iron & steel products, fabricated metal, machinery and equipment, automobiles and furniture showed strong production growth during the period.

However, production of fertilizer, pharmaceuticals, rubber products and electronics declined during the first six months of fiscal 2021/22.

The LSM sector growth arrived at 3.8 percent in December 2021 over corresponding month of last year and 16.7 percent over previous month according to the previous base year of fiscal 2005/06

Whereas, July-Dec 2021/22 average LSM growth recoded at 3.4 percent over same period of the last fiscal.

Oil Companies Advisory Council, logging outputs of 11 oil and petroleum products, measured growth of 0.10 percent year-over-year in outputs in July-Dec FY22. In December 2021, it however declined by 1.6 percent over same month of last year and negative 0.5 percent over previous month.

Ministry of industries, measuring output trend of 36 items, recorded a 3.2 percent growth in production in first-half of FY22. In December 2021, it grew by 5.0 percent over corresponding month and 10.7 percent over November 2021.

Provincial bureau of statistics, counting production of 65 products, recorded 4.1 percent growth in July-Dec 2021/22 over corresponding period of FY21. In December, its output increased 3.1 percent over corresponding month 0.3 percent over previous month.

During July-December FY22, food sector grew 1.3 percent, beverages 4.3 percent, tobacco 50.8 percent, textiles 2.8 percent, wearing apparels 20.5 percent, leather products 6.8 percent, wood products 292 percent, paper & board 8.3 percent, coke and petroleum products 0.7 percent, chemical products 14.1 nonmetallic products 1.8 percent, iron & steel products 18.4 percent, machinery & equipment 15.3 percent, automobiles 69.4 percent, furniture 594 percent and other manufacturing (football) 19.1 percent over last year.

However, production of fertilizer declined 3.8 percent, fabricated metal minus 4.3 percent and computer, electronics and Optical products reduced by 3.3 percent. Besides, pharmaceuticals output also reduced by 4.9 percent, rubber products 28.3 percent and electronics production down by 1.3 percent during first half.

On year-on-year basis, food sector grew 3.3 percent, beverages minus 0.3 percent, tobacco 50.8 percent, textiles minus 0.9 percent, wearing apparels 17.3 percent, leather products 5.4 percent, wood products 478.4 percent, paper & board 7.7 percent, coke and petroleum products minus 21.6 percent, chemical products 2.5 percent, fertilizer up 6.3 percent, nonmetallic products 6 percent, iron & steel products 13.4 percent, fabricate metals minus 6.1 percent, computer, electronics and optical products reduced by 24.1 percent, machinery & equipment 16.4 percent, automobiles 83.1 percent, furniture 181.3 percent and other manufacturing (football) 31.1 percent.

Pharmaceuticals output reduced by 13.6 percent, rubber products 5.8 percent while electronics production up by 56.1 percent over same month of last year.

 

[ghazi52]

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[ghazi52]

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Heavy Vehicle production in Pakistan surges according to Pakistan Automobile Manufacturing Association (PAMA) revealed.

- Trucks production: 5,247 Units increase of 63.20 percent

- Buses production: 591 Units increase of 15.88 percent

- Pickups and Light Commercial vehicles: 39,611 units increase of 40.46 percent

- Passenger Cars: 204,043 Units increase of 52.66 percent

- Motorcycles and 3 wheelers: 1,680,776 units decrease of 3.69 percent

 

[ghazi52]

,.,.,.
The Large Scale Manufacturing Industries (LSMI) output increased by 15.4 percent for April 2022 when compared with April 2021 (year-on-year), according to the Pakistan Bureau of Statistics (PBS).

The LSMI for April 2022 decreased by 13.3 percent on a month-on-month basis when compared with March 2022 with the base year 2015-16.

The Provisional Quantum Index Numbers of Large Scale Manufacturing Industries (QIM) revealed that the LSMI output registered a growth of 10.7 percent during July-April 2021-22 when compared with the same period in 2020-21.