Process Industry in Pakistan PDF

2/10/2019 Process Industry in Pakistan
SlideShare Explore Search You
Upload
Login
Signup
Search Submit Search
Home
Explore
Presentation Courses
PowerPoint Courses
by LinkedIn Learning
Search
Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
https://www.slideshare.net/asharahmed/process-industry-in-pakistan 1/22
Upcoming SlideShare
Loading in …5
×
2 of 14
Process Industry in Pakistan

7,623 views
Share
Like
...
Ashar Ahmed, Student

Follow
Published on Sep 24, 2009
Hi everyone,
You can now download
...
Published in: Business, Travel
3 Comments
7 Likes
Statistics
Notes
Full Name
Comment goes here.
12 hours ago Delete Reply Block
Are you sure you want to Yes No
Your message goes here
Share your thoughts…

Post
Ashar Ahmed , Student

Hi everyone,
You can now download full editable version of this file at following link, enjoy!
http://www.scribd.com/doc/22402228/Process-Industry-in-Pakistan
4 years ago Reply
Kanza Haider
great researched material !
5 years ago Reply
Iqra Akram
good job
5 years ago Reply
AhmadWaheed15
1 week ago
sujal rana , Student at sardar vallabhbhai national institute of tech. at Student

2 years ago
Adina94
3 years ago
Gulzar Ahmad at yes

4 years ago
Abdull Samad , Banker at University of Central Punjab

5 years ago
Show More
No Downloads
Views
Total views
7,623
On SlideShare
0
From Embeds
0
Number of Embeds
4
Actions
Shares
0
Downloads
0
Comments
3
Likes
7
Embeds 0
No embeds
No notes for slide

1. 1. Analysis of The Process Industry of Pakistan 1.INTRODUCTION TO PROCESS INDUSTRY.........................................................................................2
2.EVOLUTIONARY PROCESS:...................................................................................................................3 2.1.Long Run Changes in
Growth.................................................................................................................3 2.2.Reduction in
Uncertainty.........................................................................................................................3 2.3.Diffusion of Proprietary
Knowledge.......................................................................................................4 2.4.Accumulation of
Experience....................................................................................................................4
3.EXPANSION..................................................................................................................................................4 4.MARKET
CONDITIONS............................................................................................................................6 5.LIFE
CYCLE.................................................................................................................................................6 6.industry
analysis............................................................................................................................................7
6.1.Survival....................................................................................................................................................7
6.2.Strategies.................................................................................................................................................7 7.buyer’s
power.................................................................................................................................................8 8.supplier’s
power.............................................................................................................................................9 9.threat of new
entrants...................................................................................................................................9 10.degree of
rivalry...........................................................................................................................................9 11.new competitors
entry...............................................................................................................................10 12.competitive advantage of
industry...........................................................................................................10 13.corporate governance, vision, mission, targets and
policies..................................................................11 14.assessment...................................................................................................................................................11
14.1. Safety & Health..................................................................................................................................11 14.2. Accounting
Standards.........................................................................................................................11 14.3. Trade
Standards.................................................................................................................................13 14.4. Contract Management System / Labour Union /
CBA.......................................................................14 15.Conclusion..................................................................................................................................................14
Page 1 of 14
2. 2. Analysis of The Process Industry of Pakistan 1. INTRODUCTION TO PROCESS INDUSTRY Industrial processes are procedures involving chemical or
mechanical steps to aid in the manufacture of an item or items, usually carried out on a very large scale. Most processes make the production of an otherwise rare
material vastly cheaper, thus changing it into a commodity; i.e. the process makes it economically feasible for society to use the material. Production of a specific
material may involve more than one type of process. Most industrial processes result in both a desired product(s) and by-products, many of which are toxic,
hazardous, or hard to deal with. Some major sectors associated with the process industry include: • Chemicals • Metal and Steel production • Petroleum refining •
Fertilizer • Medicines & basic drugs • Beverage • Pharmaceutical • Food Processing etc. Some major companies doing business in process industry in Pakistan are
mentioned below: • National Refinery • Pakistan Refinery • Pak-Arab Refinery • Pakistan Steel Mills • Engro Chemicals • Fauji Fertilizer • ICI • Nestle Page 2 of
14
3. 3. Analysis of The Process Industry of Pakistan • Pepsi Co. • GlaxoSmithKline • Abbott 2. EVOLUTIONARY PROCESS: 2.1.Long Run Changes in Growth In
1947 only some 5 percent of the large-scale industrial facilities in British India were located in what became Pakistan. The country started with virtually no
industrial base and no institutional, financial, or energy resources. Three small hydroelectric power stations provided limited electricity to a few urban areas.
Further, there was a shortage of management personnel and skilled labor. Processing industry base in Pakistan is very low. The industrial base is low because of
basic structural weaknesses not rectified over the years. The processing industry has not developed like other developing countries. This sector contributes almost
25 per cent to the GDP in developing countries but in Pakistan we have not developed like others. 2.2.Reduction in Uncertainty Under the current situation and past
history, the processing industry should continue growth and government should play the role of promoter and facilitator. Foreign investment would also be
encouraged. Under the present depressed economic conditions, the government through authorities should play a catalytic role in order to provide boost to industrial
activities in the country. Page 3 of 14
4. 4. Analysis of The Process Industry of Pakistan 2.3.Diffusion of Proprietary Knowledge There is a lack of diffusion of proprietary knowledge in the processing
industry which is hindering the evolution of this industry in Pakistan. The share of knowledge and technology intensive Engineering, electronics, pharmaceutical,
chemical and non-metallic mineral products, should be strengthened and enabled through fiscal and tariff means as well as building of alliances with international
partners and technical institutions. 2.4.Accumulation of Experience The processing industry lacks highly experienced professionals. This can be related to the
literacy rate in Pakistan which is still low. Although the number of universities has increased from four to 25 and there are an equal number of private universities,
including specialized management, engineering, and medical universities. There is a very small number of professionals in this field that can excel by international
standards. Most of the expertise in this industry is outsourced from foreign developed countries. However, efficient use is the key and this is an area where things
can be improved by developing managerial and labour skills and technology upgradation. 3. EXPANSION The pace of growth in processing industry since
independence has not been up to the requirements. It has fluctuated in response to changes in government policy and to world economic conditions. That’s why
there are tremendous chances of expansion in this industry owing to ever growing demand. There are only a few industrial units of processing in the country which
cannot even fulfill the demand of the domestic market and ultimately the Page 4 of 14
5. 5. Analysis of The Process Industry of Pakistan requirements are fulfilled by importing. The expansion and growth chances for particular sectors of process industry
are discussed below: • Petroleum refining, is one of the industries where in the medium to long term, excess demand situation appears prevailing in the economy. •
Cement is another sector where the demand is expected to remain strong. The country at present has 29 cement plants with an installed capacity of producing
around 37 million tones of cement. Development Programs, an increasing number of real-estate development projects for commercial and residential use, demand in
the external markets like Afghanistan, Iran, Bangladesh and Middle East are all indicators of possible expansion opportunities in this sector. • In fertilizer sector the
level of consumption in Pakistan is one of the lowest among agrarian economies. This sector is still facing a urea supply shortfall problem, though its severity has
declined. Over the last 5 years, the average fertilizer off take growth was 2.1 percent. Fertilizer manufacturers are running at 100 percent plus capacity utilization
levels and many are also in the process to expansion. This excess demand coupled with the government efforts to encourage farmers to raise the fertilizer off-take; it
will not be unrealistic to foresee an increasing demand for fertilizer going ahead, which would force the expansion of this sector and ultimately the process industry.
• Pharmaceutical is another sector where if appropriate measures are taken, domestic consumption can see substantial growth going forward. At present a large
segment (almost 50 percent) of population in the country lacks access to medicare. • Steel and metal processing is also a sector which is undergoing immense
expansion and the gap in demand and supply is ever increasing due to large scale development projects. The steel sector is Page 5 of 14
6. 6. Analysis of The Process Industry of Pakistan not able to fulfill the demand of the domestic market and occasionally steel items are imported to balance the
demand supply situation. Pakistan’s process industry has expanded very slowly and does not fulfill the demand situation of even the domestic market. But in the last
decade this expansion process has intensified but the demand of the products of processing industry has risen exponentially, which invites more expansion
opportunities. 4. MARKET CONDITIONS The market of the processing industry products is highly open and buyer’s are actually waiting for the output of the
industry. The recent boost in industrialization and urbanization, the need for the products like chemicals, steel and other processed products has increased in
Pakistan. Although the economy of Pakistan has suffered in the past from decades of internal political disputes, a fast growing population, mixed levels of foreign
investment, and a costly, ongoing confrontation with India and Terrorists. The market is partially independent of the above mentioned conditions as their products
are essential part of the economy and life in Pakistan. So the market condition is still favourable to the new entrants. 5. LIFE CYCLE The life cycle of the process
industry is depicted in the following curve. The industry is in growth stages as there is a lot of growth and expansion opportunities. The production of the industry is
not able to meet the domestic demand and h wt hence not in o the maturity Gr region. y tr us d In Page 6 of 14 Introduction Growth Maturity Decline Time
7. 7. Analysis of The Process Industry of Pakistan 6. INDUSTRY ANALYSIS 6.1.Survival The survival of the process industry in Pakistan is due to the following
reasons: • Excessive demand of process industry products • Pressure on Government of Pakistan for imports to fill the demand supply gap. • Growth opportunities
for investors. • Global competition due to imposition of WTO The factors limiting the survival of process industry are as follows: • Lack of technical expertise and
experience for setting up the processing plants. • Growing power shortages • Heavy and long term investment involved in setting up processing plants. • Heightened
political tension • Deteriorating law and order situation • Cumulative impact of monetary tightening and rising cost of doing business 6.2.Strategies The process
industry must put greater emphasis upon strengthening the basic competitive position of the industries through modernization, quality Page 7 of 14
8. 8. Analysis of The Process Industry of Pakistan control and standardization rather than seeking excessive protection to survive with their own weaknesses and
inefficiencies. Vertical integration & supply chains may prove to be an attractive strategy for the industrial units. For example in sugar sector vertical integration can
deliver results and can produce products such as ethanol, Bio ethanol, a direct by-product of sugar production. Chemical industries can also benefit from vertical
integration. Production of naphtha is a case in point. Produced in oil refineries, naphtha can be further processed to create a large number of chemicals and
pharmaceuticals. To achieve this, naphtha cracking plants need to be set up in the country. Domestic production of chemicals generated from naphtha will not only
help meet local needs but will be exported to a growing international market.10 Today, India is the only south Asian country to have Naphtha cracking facilities.
Given the size of Pakistan’s own domestic market, the future lies not only in terms of an inward-looking domestic market approach, but also in boldly facing the
competition and aggressively seeking higher share of the world market. This will require that we improve our skills, modernize the industries technologically,
ensure availability of raw material at competitive rates and undertake an aggressive marketing initiative to get a better market share internationally. 7. BUYER’S
POWER Traditionally buyer’s of the products of processing industry have no option but to buy from them because of few or no competitors. For example ICI is the
only plant manufacturing a chemical PTA. So, all buyer’s of PTA have no choice but to buy from ICI. Similarly the competition in Fertilizer, Steel, Oil and
chemicals is also limited and the buyer’s do not possess a bargaining position. Page 8 of 14
9. 9. Analysis of The Process Industry of Pakistan Recently due to the ease of import procedures and growing demand of the products, buyer’s are able to import the
products from international market. This import trend has given some bargaining power to the buyers. 8. SUPPLIER’S POWER The suppliers are very powerful in
the processing industry as majority of the processing plants in Pakistan are designed for a specific type of raw material. The raw material suppliers trade in the
international market and the industry has to follow their dictating terms. An example is of oil refineries for which the raw material is crude oil. All refineries in
Pakistan are designed for the crude oil of Middle East. So they have to import the crude oil from these countries. Due to this the recent up-surge in the crude oil
prices has to born by the refineries and they had to purchase the crude oil at sky scraper prices. 9. THREAT OF NEW ENTRANTS The economies of scale in
industry particularly in China and India pose a threat to Pakistan’s processing industry. The Planning Commission official warned that the industrialized nations
including Japan and America were making India the hub of major trade and industrial activities and it should be noticed by the policy makers. 10.DEGREE OF
RIVALRY Since the processing industry is in growth phase of it’s life cycle that’s why the competition among the different sectors of the industry is negligible.
Hence the degree of rivalry is almost nil. For example in oil refining sector there are only five refineries in the country and their production quotas are fixed by the
government. Hence the competition and rivalry is not present. The only situation of rivalry and Page 9 of 14
10. 10. Analysis of The Process Industry of Pakistan competition exist in low cost operation better customer services. The companies in processing sector are now
focusing towards better customer services. 11.NEW COMPETITORS ENTRY New players are entering in the process industry which is increasing the competition
in the industry. But this introduction of new entrants among the small number of industrial units in the processing industry will not create much competition. The
demand of the products of this industry is immense and all new entrants will have the buyers lined up to consume their products. However in the long run as the
process industry will move towards its maturity stage of life cycle, the competition will increase. 12.COMPETITIVE ADVANTAGE OF INDUSTRY The
processing in Pakistan has many competitive advantages which are discussed below: • After comparing a number of countries it can be concluded that utility costs
are not high and cost of doing business in processing industry is much less. • Government has recently imposed a zero import duty on the raw material for many
sectors of processing industry. • Demand for processed products is increasing day by day and it can be safely predicted that the demand will continue to grow in the
future. • The processing plants requires heavy initial investment but gives continued profits in long run. For example Pakistan Steel Mills has paid an amount of
Rs.76.7 billion towards duties and taxes to the Government since 1984-85 to February, 2008. The project has thus repaid more than Rs.24.70 billion which was
spent on creating it. Page 10 of 14
11. 11. Analysis of The Process Industry of Pakistan 13.CORPORATE GOVERNANCE, VISION, MISSION, TARGETS AND POLICIES Pakistan government
targets industrial production to increase to 25 per cent of the gross domestic product (GDP) by 2015 from the current 19 per cent, to be supported by increased
output from five ‘priority sectors’ like engineering, chemicals and fertilizers. Government is also pursuing the Privatization Program through which it aims to
achieve enhanced quantity and quality of goods and services, strengthen public finances, broaden and deepen capital markets, reduce opportunities for corruption as
well as to avoid mismanagement. 14.ASSESSMENT 14.1. Safety & Health Safety and health were not given much importance in the Pakistani processing industry
but now in the rise of globalization and increasing international pressure many companies in Pakistan are seriously pursuing the Health and safety standards. The
trend of appointing a full time Health Safety and Environment (HSE) Manager is now increasing and companies are investing on trainings and equipment for health
and safety of employees as well as the equipment. 14.2. Accounting Standards The ICAP has adopted all (International Accounting Standards) IASs without
modification except IAS 29 (hyperinflation). State bank of Pakistan and Securities and Exchange Commission of Pakistan (SECP) are responsible of enforcing
these standards. Usually the companies listed in Stock Exchange are enforced to present their account status and balance sheets according to these standards. These
standards include: • IAS 1 Presentation of Financial Statements (Revised 1997) Page 11 of 14
12. 12. Analysis of The Process Industry of Pakistan • IAS 2 Inventories (Revised 1993) • IAS 4 Depreciation Accounting (Reformatted 1994) • IAS 7 Cash Flow
Statements (Revised 1992) • IAS 8 Net Profit or Loss for the Period, Fundamental Errors and Changes in Accounting Policies (Revised 1993) • IAS 10 Events After
the Balance Sheet Date (Revised 1999) • IAS 11 Construction Contracts (Revised 1993) • IAS 12 Income Taxes (Revised 1996)* • IAS 14 Segment Reporting
(Revised 1997) • IAS 16 Property, Plant and Equipment (Revised 1998) • IAS 17 Leases (Revised 1997) • IAS 18 Revenue (Revised 1993) • IAS 19 Employee
Benefits (Revised 1998) • IAS 20 Accounting for Government Grants and Disclosure of Government Assistance (Reformatted 1994) IAS 21, The Effects of
Changes in Foreign Exchange Rates (Revised 1993) • IAS 23 Borrowing Costs (Revised 1993) • IAS 24 Related Party Disclosures (Reformatted 1994) • IAS 25
Accounting for Investments (Reformatted 1994) • IAS 26 Accounting and Reporting by Retirement Benefit Plans (Reformatted 1994) • IAS 27 Consolidated
financial Statements and Accounting for Investments in Subsidiaries (Reformatted 1994) • IAS 28 Accounting for Investments in Associates (Revised 1998) • IAS
30 Disclosures in the Financial Statements of Banks and Similar Financial Institutions (Reformatted 1994) • IAS 31 Financial Reporting of Interests in Joint
Ventures (Revised 1998) • IAS 32 Financial Instruments: Disclosure and Presentation (Revised 1998) • IAS 33 Earnings Per Share (1997) • IAS 34 Interim
Reporting (1998) Further SECP is considering the implementation of latest accounting standards i.e International Financial Reporting Standards (IFRS), some of
which are: Page 12 of 14
13. 13. Analysis of The Process Industry of Pakistan • IFRS 1 First-time Adoption of International Financial Reporting Standards • IFRS 2 Share-based Payment • IFRS
3 Business Combinations • IFRS 4 Insurance Contracts • IFRS 5 Non-current Assets Held for Sale and Discontinued Operations • IFRS 6 Exploration for and
Evaluation of Mineral Assets • IFRS 7 Financial Instruments: Disclosures • IFRS 8 Operating Segments 14.3. Trade Standards The trade standards in processing
industry is regulated by Pakistan Standard Trade Classification (PSTC) which were introduced for categorization of exported commodities and the previous group
classification, i.e. primary products, semi-manufactured commodities and manufactured goods was replaced by the 10 sections of PSTC as under:- From July, 1984,
the commodity list was further expanded by adoption of 4-digit commodity codes in accordance with the Standard International Trade Classification (SITC) Volume
II Revision 2 (1981). Currently Harmonized System is used as a commodity classification system in which articles are grouped largely according to the nature of the
materials of which they are made. HS Coding System was developed under the auspices of the Customs Cooperation Council (CCC) now known as the World
Customs Organization (WCO). Few Trade organizations and treaties which apply on the processing industry are: • ECO (Economic Corporation Organization) •
SAFTA (South Asian Free Trade Agreement) Page 13 of 14
14. 14. Analysis of The Process Industry of Pakistan • ASEAN (Association of Southeast Asian Nations) • WTO (World Trade Organization) 14.4. Contract
Management System / Labour Union / CBA The process industry of Pakistan employs a large base of skilled and non- skilled labour. These industries are bound by
the Labour Laws stated in the constitution of Pakistan and guidelines issued by the International Labour Organization (ILO). The Constitution of Pakistan contains a
range of provisions with regards to labour rights found in Part II: Fundamental Rights and Principles of Policy. Every employer in an industrial or commercial
establishment is required to issue a formal appointment letter at the time of employment of each worker. The obligatory contents of each labour contract, if written,
are confined to the main terms and conditions of employment, namely nature and tenure of appointment, pay allowances and other fringe benefits admissible, terms
and conditions of appointment. 15.CONCLUSION The provision of facilities for testing laboratories, R&D, vocational and technical training, infrastructure and
communications, are all necessary inputs which are regarded as being imperative for the processing industry. Value additions in products and processes also have to
be strengthened through backward and forward linkages. The process industry is no doubt a gold mine for investors and there are tremendous growth opportunities
in it’s product market. Page 14 of 14
Recommended
Teaching Complex Topics

Online Course - LinkedIn Learning
PowerPoint: Using Photos and Video Effectively for Great Presentations

Gamification of Learning
Pakistan industries and health hazards

Usman Dawood Barry
The food industry of pakistan[bba.4 b] by naeem

Naeem Shaukat
Industry life cycle

Pfizer
Introduction of food industry in pakistan & the present status of nestle paki...
Muhammad Usman Waheed
9. life cycle strategies

Jigar Lakhani
Industrialization in pakistan
Hassan Obaid
Industrial sector of Pakistan

farazishaque
English
Español
Português
Français
Deutsch
About
Dev & API
Blog
Terms
Privacy
Copyright
Support
LinkedIn Corporation © 2019
Share Clipboard
Facebook
Twitter
LinkedIn
Link
Public clipboards featuring this slide
No public clipboards found for this slide
Select another clipboard
Looks like you’ve clipped this slide to already.
Search for a clipboard
Create a clipboard
You just clipped your first slide!
Clipping is a handy way to collect important slides you want to go back to later. Now customize the name of a clipboard to store your clips.
Name* Best of Slides

Description dd a brief description so oth
Visibility
Others can see my Clipboard
Cancel Save
Save this document

Process Industry in Pakistan PDF

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Process Industry in Pakistan PDF

Uploaded by

Copyright:

Available Formats

2/10/2019 Process Industry in Pakistan

SlideShare Explore Search You

Search Submit Search

Process Industry in Pakistan

Ashar Ahmed, Student

Process Industry in Pakistan

Share your thoughts…

Ashar Ahmed , Student

sujal rana , Student at sardar vallabhbhai national institute of tech. at Student

Gulzar Ahmad at yes

Abdull Samad , Banker at University of Central Punjab

Process Industry in Pakistan

Teaching Complex Topics

PowerPoint: Using Photos and Video Effectively for Great Presentations

Pakistan industries and health hazards

The food industry of pakistan[bba.4 b] by naeem

Industry life cycle

9. life cycle strategies

Industrial sector of Pakistan

LinkedIn Corporation © 2019

Public clipboards featuring this slide

No public clipboards found for this slide

Select another clipboard

Looks like you’ve clipped this slide to already.

Search for a clipboard

You just clipped your first slide!

Name* Best of Slides

You might also like