Pakistan Investment Guide

Message from Prime Minister Islamic Republic of Pakistan
Industrialization is a macro economic priority of this government for growthled economic development because it is the key to employment generation, import substitution, export promotion and poverty reduction. It will, therefore, be a foremost endeavor of the government to make Pakistan an attractive investment destination. Our government is especially focusing on reducing the cost of doing business, rationalizing the regulatory framework, providing necessary infrastructure and promoting an enabling business-friendly climate in the country. We are also aware of the need for continuity, consistency and connectivity as essential prerequisites of a stable policy environment. Ministry of Industries and Production is making efforts to make efforts in Pakistan productive and profitable. Its service organizations like Board of Investment (BOI), Small and Medium Enterprises Development Authority (SMEDA), National Productivity Organization (NPO), Engineering Development Board (EDB) and Experts Advisory Cell (EAC) are facilitating industrialization programme in a professional manner. BOI is concentrating on attracting investment, SMEDA is facilitating operational requirements of small and medium enterprises, EDB is focusing on technological development and promotion of engineering industry, NPO is engaged in enhancing factor productivity while EAC is disseminating economic information among the stakeholders which is tremendously beneficial in a knowledge based economy. I would like to see these organizations putting in greater efforts for promotion of investment and economic development in the country. Pakistan Investment Guide" is a very useful document prepared by the Experts Advisory Cell (EAC) of Ministry of Industries and Production, which highlights investment potential of Pakistan. Pakistan has excellent skilled manpower available at comparatively low cost, rapidly growing domestic market and emerging regional market for exports. Despite these positive factors the level of investment and exports have remained low, leaving considerable room for improvement. I am confident that this guide will immensely help potential investors towards identifying the industrial sectors for profitable investment. I have also directed to provide effective one-desk facilitation service to the investors for their convenience. I congratulate the Federal Minister, Mr. Liaquat Ali Jatoi and his team in the Ministry of Industries and Production for compiling "Pakistan Investment Guide" for investment promotion and industrial development of Pakistan. ____________
Experts Advisory Cell
Message from Minister for Industries & Production
MESSAGE FROM MINISTER FOR INDUSTRIES & PRODUCTION

The Ministry of Industries and Production is determined to facilitate economic propagating environment industrial development information that will by and
analytical insight to create enabling promote enhance development,
value addition and increase exports at competitive cost in a globalized economy. The main objective of the Ministry integrated approach. been is to and The facilitate through the an feels In order to create an enabling environment for investment, the Ministry has revitalized the support and service organizations under its administrative control to guide the potential investors. The role of Board of Investment is to review investment policies, attract investment, provide one desk operation and maintain The investors, Ministry so that, To shall extend of be this database for investment projects. Engineering Development Board is there to guide the entrepreneur interested in engineering projects. Small and Medium Authority Enterprise acts as Development preferential treatment to potential pace industrialization accelerated. could achieve prospective investors
coordinated Ministry in
confident that the Government has successful providing conducive climate for investment through various policy incentives.
objective, the Ministry has set up one Desk Facilitation Service for overseas investors at four major cities of the country i.e. Islamabad, Lahore, Karachi and Peshawar. In addition, Ministry and its support organizations are fully available to provide any assistance to the investors.
resource base and facilitator for Small and Medium Enterprises in the country. Experts Advisory Cell is the techno-economic arm of the Ministry, which assists in developing sectoral policies. Experts Advisory Cell has developed expertise in
Message from Minister for Industries & Production
sectoral
studies
and
has
encompass the prevailing incentive regime, macro regulatory and and framework, infrastructure microeconomic
comprehensive database of public as well as private sector industries. You are welcomed to contact any of the supporting organization of Ministry for necessary assistance. The Investment guide is an attempt by the Ministry of Industries and Production to facilitate potential investors through and provision of
environment
services being offered by Pakistan. Main feature of the document is the coverage of major industrial sectors of the economy where investment opportunities exist. It is hoped that the users will find this document informative and useful. Any suggestion for improving this publication shall be greatly appreciated.
comprehensive and
consolidated in Pakistan.
information on investment climate opportunities Extensive efforts have been made to
Liaquat Ali Khan Jatoi Minister for Industries & Production
Message from Secretary, Industries & Production
MESSAGE FROM SECRETARY INDUSTRIES & PRODUCTION

I am pleased to see that Experts Advisory Cell has taken the initiative of updating Pakistan Investment Guide 2004 in the wake of latest policy initiatives and economic priorities of the Government of Pakistan. The Guide has been updated with the objective of fulfilling the need of overseas for Pakistani a business community, the local and foreign investors self-contained document containing wholesome information on the manufacturing industries and potential areas for investment. This document provides a useful and authentic source of information. government further It contains major To national policies and important notifications. the facilitate investors, EAC is in the process of updating Industrial Digest of Pakistan, which will provide detailed review of twenty-five major industrial sectors of Pakistan. I am confident that this Guide will be useful to the potential investors in making up their mind on the choice of investment in highly rewarding industrial projects in a friendly business environment in Pakistan.
Muhammad Javed Ashraf Hussain Secretary Industries and Production
Table of Contents
TABLE O`F CONTENTS

Preamble ...................................................................................................... i
Pakistan Basic Facts (2002-03) .................................................................................. 1 Pakistan An Overview .............................................................................................. 5 International View ...................................................................................................... 7 Pakistans Economy ................................................................................................. 12
CHAPTER I
Potential Sectors for Investment Engineering Sector ............................................................................................. 16 Electrical Capital Goods...................................................................................... 24 Automobile Sector .............................................................................................. 27 Consumer Durable Industry ............................................................................... 34 Textile Related Engineering................................................................................. 35 Textile Sector...................................................................................................... 40 Synthetic Fibre Sector ........................................................................................ 47 Energy Sector ..................................................................................................... 50 Fertilizer Sector .................................................................................................. 53 Petrochemicals & Chemical Sector...................................................................... 57 Pharmaceutical Sector ........................................................................................ 68 Dairy Sector ....................................................................................................... 70 Mining & Mineral Sector ..................................................................................... 71 Marble & Granite Sector ..................................................................................... 77 Edible Oil-seeds Sector ....................................................................................... 84 Paper & Paper Board .......................................................................................... 86 Leather Sector .................................................................................................... 89 Surgical Sector ................................................................................................... 93 Sports Goods Sector ........................................................................................... 96 Poultry Sector..................................................................................................... 98 Fisheries Sector ................................................................................................ 100 Processed Food & Beverages ............................................................................. 105 Tea Cultivation and Processing ......................................................................... 112 Information Technology .................................................................................... 115 Tourism Sector ................................................................................................ 119 Environmental Protection ................................................................................ 122
CHAPTER II
Enabling Environment Physical Infrastructure ..................................................................................... 123 Technological Infrastructure ............................................................................. 137 Financial Infrastructure.................................................................................... 138 Intellectual Infrastructure................................................................................. 139 Legal & Regulatory Framework ......................................................................... 140
CHAPTER III
Initiating Business in Pakistan Incorporating Companies in Pakistan ............................................................... 143 Registration of a Company................................................................................ 145 Documents for Registration of Companies ........................................................ 146 Procedure to Establish Business in Pakistan .................................................... 149 Company Registration Offices (CROs) ............................................................... 150
Table of Contents
CHAPTER IV
Immigration Procedures Existing Business Visa Policy .......................................................................... 152
ANNEXURES
Annex-I Annex-II Annex-III Annex-IV Annex-V Annex-VI Annex-VII Annex-VIII Annex-IX Annex-X Annex-XI Annex-XII Annex-XIII Annex-XIV Annex-XV Annex-XVI Annex-XVI(a) Annex-XVII Natural Gas Tariff ............................................................................ 155 Electricity Tariff ............................................................................... 156 Industrial Policy .............................................................................. 158 Investment Policy of Pakistan .......................................................... 159 Trade Policy 2003-04 ....................................................................... 170 Foreign Private Investment (Promotion & Protection) Act, 1976........ 175 Engineering Vision 2010.................................................................. 178 Emerging Electronic Products Assembly Scheme (EEPAS)................ 180 Textile Vision 2005 .......................................................................... 181 Policy of Power Generation Projects 2002......................................... 183 Petroleum Exploration & Production Policy -2001............................ 185 Fertilizer Policy 2001 ....................................................................... 187 National Mineral Policy 2001 ........................................................... 190 Information Technology Policy 2002................................................. 191 Tourism Policy 2001 ........................................................................ 193 National Environment Policy............................................................ 194 National Environment Action Plan ................................................... 196 Pakistan Merchant Marine Policy 2001 ............................................ 197
NOTIFICATIONS
SRO 358 (1) 2002........................................................................................ 198 SRO 515 Amendment in SRO 358(1)2001 ................................................... 213 SRO 484(1)2003 Amendment in SRO 358(1)2001........................................ 220 SRO 905(1)2003 Amendment in SRO 358(1)2001........................................ 222 SRO 987(1)/99............................................................................................ 228 SRO 839(1)/2000 Amendment in SRO 987(1)/99........................................ 234 SRO 503(1)/2003 Amendment in SRO 987(1)/99........................................ 235 Circular for Restoration of the Status of Tourism as Industry...................... 236 Declaration of Housing as an Industry ........................................................ 237 List of Deregulated Services in the Telecom Sector ...................................... 238 Category (A) : Value added industries.......................................................... 239 Category (B) : Hi-Tech Industries ................................................................ 241 Category (C&D): Priority and Agro-based Industries .................................... 242 SRO 439(1)/2001........................................................................................ 243 SRO (1)/2002 ............................................................................................ 248 SRO 359(1)/2002 ...................................................................................... 249 The Protection of Rights in Industrial Property Order 1979 ......................... 250 Duty Free Import of Food Stuff by Foreign Investors ................................... 251
IMPORTANT ADDRESSES ........................................................................252
II
Preamble
Preamble
Pakistan Investment Guide provides highly focused information on doing industrial business in Pakistan. It presents an overview of the economic milieu, industrial culture, investment environment and potential opportunities in the range of high-return sector and projects. The World Bank and major credit rating agencies are appreciating Pakistans robust economic performance. Pakistan is fast becoming a favorite heaven for foreign direct investment by major corporate entities. The Guide is set out in four chapters. Chapter -I provides an overview of specific sectors, which are of the interest of potential investors. The chapter focused on those areas, which have a scope for investment as well as potential for future growth. Chapter -II of the guide gives details of the enabling environment covering Physical, technological, financial, intellectual and legal/regulatory infrastructure available in the country for establishing business in Pakistan. Chapter -III provides, information about initiating business in Pakistan. This chapter includes write up on Incorporating Companies, Registration, documentation and procedure to establish business in the country. Chapter -IV gives the immigration procedures including existing vise policy. Investment guide also contain information available about contact numbers of the Federal Ministries, Pakistan trade office abroad, important government web sites, foreign airlines and list of the major hotel in the country. Important contact points for doing business in Pakistan are also listed at the end of the Guide. The Guide provides an overall guidance to the potential investor. While every efforts has been made to present reliable and up-to-date information, the EAC does not assume any legal responsibility for accuracy of the material that may be used as benchmark for making investment decisions. Ministry of industries and production has established Business Support Centers in Karachi, Lahore and Islamabad. The centers provide full-length facilitating information on doing business in Pakistan. The Board of Investment is also major contact-point.
Pakistan Basic Facts (2002-03)
PAKISTAN BASIC FACTS (2002-2003)

Geographical Location Boundary Between 23 and 37 North latitude, 61 and 76 East longitude. North North-West East South : : : : China (Sinkiang) Afghanistan and Iran India Arabian Sea
Area
796,095 Square Kilometers Cultivated Area :22.13 million hectares Forest Area :3.81 million hectares 149 million 185 persons per Square Kilometer 2.1% 43.18 million Urdu English / Urdu Pak-Rupee (Rs.) Islamabad Karachi, Mohammad Bin Qasim, Gwadar and Pasni Faisalabad, Hyderabad, Lahore, Multan, Rawalpindi, Sialkot, Peshawar, Quetta and Larkana Karachi, Lahore, Islamabad, Peshawar, Quetta US$ 67.07 billion US$ 63.95 billion
Population Density Population Growth Rate Labour Force National Language Official Language Currency Capital Sea Ports Dry Ports
International Airports Gross National Product (GNP) Gross Domestic Product (GDP)
Per Capita Income GDP Growth Rate Total Exports Major Commodities
US$ 492 5.1% US$ 11.03 billion Cotton, Textile Goods, Rice, Leather items, Sports goods, Carpets, Fruits, Handicrafts and Sea-food etc US$ 12.18 billion Industrial equipment, Vehicles, Petroleum, Edible Oil, etc. Iron Ore,
Total Imports Major Commodities
Major Crops Major Industries
Wheat, Rice, Sugar-cane, Grams, Cotton and Tobacco Textiles, Cement, Fertilizer, Leather, Garments, Chemicals, Agro-based, Engineering, Electrical & Electronics and Automobile etc.
Banks & Financial Institutions Nationalized Scheduled Banks
National Bank of Pakistan United Bank Ltd. First Women Bank Ltd. Allied Bank of Pakistan Limited Muslim Commercial Bank Limited Habib Bank Ltd. Zarai Taraqiati Bank Limited (ZTBL) Industrial Development Bank of Pakistan Punjab Provincial Cooperative Bank Federal Bank for Cooperatives Askari Commercial Bank Ltd. Bank Al-Habib Ltd. Bolan Bank Ltd. Faysal Bank Ltd. Bank Al-Falah Ltd. Metropolitan Bank Ltd. Platinum Commercial Bank Ltd. Prime Commercial Bank Ltd.
De-nationalized Scheduled Banks
Specialized Banks
Private Scheduled Banks
Foreign Banks i. Development Financial Institutions ii. Investment Banks 1. 2. 3. 4. 5.
PICIC Commercial Bank Ltd. Saudi-Pak Commercial Bank Ltd. Soneri Bank Ltd. Union Bank Ltd. The Bank of Khyber The Bank of Punjab ABN-AMRO Bank N.V Albaraka Islamic Bank BSC (EC) American Express Bank Ltd. Standard Chartered Grindlays Bank Ltd. Bank of Tokyo Mitsubishi Ltd. Bank of Ceylon Credit Agricole Indosuez Citibank N.A. Deutsche Bank A.G. Emirates Bank International Ltd P.J.S.C. Habib Bank A.G. Zurich International Finance Investment & Commerce Bank Ltd. Mashreq Bank PSC Oman International Bank S.O.A.G. Rupali Bank Ltd. Societe Generale. The French Int. Bank Ltd. Standard Chartered Bank Investment Corporation of Pakistan Pakistan Industrial Credit & Investment Corporation Pak Kuwait Investment Company (Pvt) Ltd. Pak Libya Holding Company (Pvt) Ltd. Saudi Pak Industrial & Agricultural Investment Company (Pvt) Ltd. SME Bank Limited National Investment Trust Pak Oman Investment Co. (Pvt) Ltd. Crescent Investment Bank Ltd. First International Investment Bank Ltd. Atlas Investment Bank Ltd. Security Investment Bank Ltd. Fidelity Investment Bank Ltd. 3
6. 7. 8. 9. 10. 11. 12. 13. 14. o Discount & Venture Capital Houses
Prudential Investment Bank Ltd. Islamic Investment Bank Ltd. Asset Investment Bank Ltd. Al-Towfeek Investment Bank Ltd. Jhangir Siddiqui Investment Bank Ltd. Franklin Investment Bank Ltd. Oryx Investment Bank (Pak) Ltd. Trust Investment Bank Ltd. Escorts Investment Bank Ltd.
15. First Credit & Discount Corp. (Pvt) Ltd. 16. Prudential Discount & Guarantee House Ltd. 17. National Discounting Services Ltd. 18. Speedway Fondmetall (Pak) Ltd. 19. Pakistan Venture Capital Ltd. 20. Pak Emergency Venture Ltd. 21. 22. 23. 24. Citibank Housing Finance Co. Ltd. House Building Finance Corporation LTV Housing Finance Ltd. International Housing Finance Ltd.
o Housing Finance Companies
o Micro Finance Banks
25. Khushali Bank 26. The First Microfinance Bank Ltd.
PAKISTAN AN OVERVIEW
Geography Pakistan has a strategic location, spread over a landmass of 796,096 square kilometers. Pakistan borders Iran and Afghanistan in the North West, China in the North and India in the East. Pakistan exhibits a wide range of different landscapes including coastal beaches, lagoons and mangrove swamps in the South, deserts and fertile plains in the centre and high mountains in the North. Three major geographical areas can be identified: the northern High Mountain Region, the Indus River Plains, and the Balochistan Plateau. The High Mountain Region stretches in the North from east to west including parts of the Himalayas, Karakorum, and Hindukush mountains. In this area there are 40 of the worlds 50 highest mountains including the K-2 (second highest with 8,611 meters) and the Nanga Parbat (eighth position with 8,126 meters). In the east of the country lie the flat, fertile plains of the Indus River and its tributaries. The Indus is the main river of Pakistan and the nations lifeline. It runs the length of the country from Tibet on its course to the Arabian Sea, a total of almost 2,500 km. Climate Pakistans general climate can be divided into four seasons: cold, hot, monsoon, and post-monsoon. The cold season (winter) lasts from November to March being cool and dry. The hot season from April to June is usually hot and dry. Temperatures often exceed 40C.The monsoon season with somewhat lower temperatures and extensive rainfalls starts at the beginning of July. The post-monsoon season from October to November is a transitory period with hot days and cold nights; these two months are the driest months. Languages There are more than twenty different languages spoken in Pakistan. The national language of the country is Urdu. Other most common languages include:
Punjabi, Sindhi, Balochi and Pushto. Besides Urdu, English is the second official language predominating in courts, administration and business Nationalities The ethnic composition of Pakistan corresponds to the linguistic distribution of the population, at least among the largest groups: 59.1% of Pakistanis are Punjabis, 13.8% as Pashtuns, 12.1% as Sindhis, 12%, 4.3% as Baloch, and 3% as members of other ethnic groups. Religion Islam is the state religion. About 97% of Pakistanis are Muslim and other 3% are Hindus and Christians.
INTERNATIONAL VIEW
The Pakistan economy had to withstand several external problems during financial year 2001 and 2002, namely the shocks generated by the events of 11 September 2001, tension on the border with India, slow growth in the global economy, and a severe drought affecting the agricultural sector. However, due to Pakistan's recent economic reforms and support from the major creditors, macroeconomic fundamentals have recovered significantly. The salient features are as under: The macro economic situation of Pakistan has made a turnaround. Positive developments include improvements in the political process and the security situation, foreign debt renegotiations, the quasi disappearance of foreign exchange regulations, a significant increase in exports to more than USD 11 billion, a positive current account balance (overseas Pakistanis remittances), the opening of most sectors to foreign investment, increased Foreign Direct Investment of USD 800 million, and an increase in foreign exchange reserves to more than USD 11 billion. As a consequence, the financial markets are very liquid, providing cheap financing to entrepreneurs (ST interest rates for Government bonds of around 2% p.a.) and fuelling a consumption boom by the emerging middle class. Meanwhile, inflation remains subdued, further to the proper management of the incoming funds by the State Bank of Pakistan.
Source: Asia Invest-Europe Aid Opportunities in Pakistan). Co-operation Office (New Business
The World Bank in its Country Update on Pakistan (May 2003) has also endorsed the turn around that Pakistans economy has achieved through macro economic stability. The World Bank, in its report, has highlighted the following points: Pakistan has turned around a deteriorating macro Situation of a few years ago to a rapidly improving one. The budget deficit has fallen (and a surplus before paying interest). Inflation has remained below 5%. The current account deficit in the balance of payments has turned into a surplus (and before interest expense, a large surplus). Exports have begun to grow again, after years of stagnation. Remittances from abroad jumped to 7
triple. The foreign exchange market strengthened and the rupee appreciated against the currencies of its main trading partners, most rapidly against the dollar. Pakistans Debt Reduction Strategy is ahead of schedule, with falls in both external and domestic public debt as a percent of GDP. Combining the increased exports with the increased workers remittances, the increased aid disbursements and the substantial debt reduction received post-September 11, Pakistans external credit worthiness standing has improved sharply. Domestic public debt service has also begun to improve, due to the reduced need for budget borrowing and the fall in interest rates on government debt. Public expenditure on development has begun to rise as percentage of GDP while spending on interest and defense has fallen.
Source: World Bank Country Update May, 2003.
Country Risk Assessment Several international agencies like Moodys Investor Service, Standard & Poors, Export Credit Agencies and IMF have conducted independent assessments about Pakistan and improved country rating. Moodys Investor Service (http://www.moodys.com/cust/default.asp) Moody's Investor Service raised Pakistan's rating for external debt and bank deposits from Caa1 to B3 in February 2002 as a consequence of the country's agreement with the Paris Club of intergovernmental lenders. A further increase from B3 to B2 intervened in October 2003 to reflect the narrowing fiscal deficit, the rapid decline in debt ratios, and the ongoing strength of the external position. The outlook is stable across the rating. The upgrade reflects the improved macro economic position and is additionally backed by the Government's reform policy as well as the IMF assistance.
Standard & Poors (http://www.standardandpoors.com) Standard & Poor's currently assigned Pakistan's external debt in local currency a stable but speculative rating of BB- and in foreign currency a speculative rating of B, with a stable outlook until very recently. However, Standard & Poors Ratings Services on December 2nd 2003, revised the outlook
on its long-term sovereign credit ratings on Pakistan to positive from stable. The B/B foreign currency and BB-/B local currency sovereign ratings on Pakistan were affirmed. The outlook revision reflects improved fiscal and macroeconomic performance, growing external liquidity and continued structural reforms under Political Government.
Export Credit Agencies

http://www.cofacerating.com/ http://www.ecgd.gov.uk/home/cir_cc.htm?frmchk=y&cID=153 www.hermes-kredit.com/
The main export credit agencies of Europe such as the Export Credit Guarantee Department (ECGD) UK, the Compagnie Franaise dAssurance du Commerce Extrieur (COFACE) France or the Istituto per i Servizi Assicurativi del credito allEsportazione (SACE) Italy will consider the Pakistani risk on a case by case basis. COFACEs opinion on Pakistan as of October 2003. are: Assets: International aid received after Pakistan joined the antiterrorist alliance has consolidated the country's financial situation. o The country's nuclear-power status and the risk of it switching to an anti-Western camp have given it a central position among American strategic priorities. o Several structural reforms, like banking sector consolidation, have been progressing under IMF auspices.
o
Private remittances by expatriate workers have been underpinning the country's foreign currency position.
Risk assessment: Pursuing its policy of cooperation with the United States in combating terrorism, Pakistan has been benefiting from international financial assistance that bolsters the economy. The September 2001 Paris Club agreement and continued IMF support have been contributing to improvement of Government solvency. Furthermore, an export increase has
reduced the external financing need and improved the currency liquidity situation. Finally, the growth and inflation rates reflect the country's relative dynamism.
Pakistan no more on list of high-risk economies The IMF has removed Pakistan from the list of high-risk economies but is expected to negotiate for another programme for fiscal reforms. Removal of Pakistan from the list would mean an end to the practice of quarterly scrutiny of the countrys fiscal performance, and now there would be only half-yearly appraisal. However, there could be a mid term communication for pointing out major drifts from the planned course in reform implementation as well as exchange of new ideas on how to run fiscal administration more prudently. During such overtures, the IMF is also expected to launch negotiations for an altogether new programme of reform assistance, the removal of Pakistan from the list of countries at highest-risk has been taken on the basis of plugging of slippage in resources and spending; improvement in the situation in bank borrowing for meeting budgetary requirements; reduction in fiscal deficit and stability in inflowspending scenario on account of batter revenue collection during the past five months. Revenue situation has been a major irritant in the past while dealing with the IMF on performance review.
SETTING UP A BUSINESS IN PAKISTAN

In recent years, the Government of Pakistan has substantially simplified the regulatory environment for the setting up of a business operation. Delays in the provision of fixed line telecommunication, power and water supply depend on the location, but have been improving substantially over the years. Mobile communication and Internet access is efficient. In order to facilitate the potential investors, Government of Pakistan has already established First Business Support Centre in Karachi whereas two more are in advance stages of completion and will start operation shortly. These centres will provide assistance 10
to potential investors in starting a business in Pakistan. During past couple of years Government has made a remarkable efforts to improve the situation, which is also evident from the table I. Starting a business in Pakistan A Comparative Profile with other countries, 2002 TABLE I
Country Pakistan (2002) Pakistan (2003) India Bangladesh Sri Lanka Nepal China Thailand Malaysia United Kingdom Australia Minimum capital (% Per capita income 10 53 70 0 10 27 47 0 10 88 55 458 7 29 75 0 8 73 15 323 8 25 189 0 12 55 13 4330 8 45 7 0 7 56 27 0 5 4 1 0 2 6 2 0 Source: Asia Invest-Europe Aid Co-operation Office (New Business Opportunities in Pakistan). Number of Procedures Time (No of Days) Cost -% per capita Income
The Prevailing Natural Gas Tariff for Various Sectors is given at Annexure I and Electricity Tariffs is given at Annexure II.
11
PAKISTANS ECONOMY
GDP grew at an average rate of 5.10% during 2002-03 against growth rate of 3.6% in 2001-02 and 2.60% during 2000-01. of 5.3%. Pakistans Economy is almost evenly distributed between the Commodity Sector (49.3% of GDP) and the Service Sector (50.7% of GDP). Sectoral shares during 2002-03 are presented in Table II. TABLE -II
Commodity Sector (49.3%) Services Sector (50.7%)
During 2003-04, it is
expected that GDP growth rate will reach a range of 5.8% to 6% against a target
Agriculture Manufacturing Construction Electricity & Gas Mining and Quarrying
23.7% 18.4% 3.3% 3.4% 0.5%
Wholesale & Retail Trade Transport, Storage & Communication Public Administration & Defence Ownership of Dwellings Finance & Insurance Other Services
15.5% 9.9% 6.6% 6.2% 2.4% 10.1%
Source: Economic Survey Statistical Supplement 2002-03
CURRENT STATUS OF INDUSTRIAL INVESTMENT

Table-III indicates the local investment in large and small scale manufacturing both in the private and public sector. Industrial Policy is attached at Annexure III. TABLE - III
1999-2000 2000-01 2001-02 (Rs in Million) 2002-03
Manufacturing a. Public Sector b. Private Sector Large Scale c. Public Sector d. Private Sector Small Scale e. Public Sector f. Private Sector
102,727 24,998 77,729 84,688 24,998 59,690 18,039 18,039
100,668 13,775 86,893 80,872 13,775 67,097 19,796 19,796
115,764 1,365 114,399 94,322 1,365 92,957 21,442 21,442
131,107 1,560 129,547 107,852 1,560 106,292 23,255 23,255
Source: Economic Survey of Pakistan 2002-03
12
Foreign Direct Investment Foreign Direct Investment (FDI) is considered to be an important source of capital in the developing countries. In addition, FDI input is vital for proliferating technological change, improving the ability and competitiveness of firms and providing access to the latest technological skills and global marketing expertise. World total FDI flows have experienced massive contraction globally since 2000, declining from almost USD 1.3 trillion to about USD 651 billion in 2002. Both developed and developing countries have been affected by the reduction in FDI flows with the exception of China and Central/Eastern European countries where they have continued to rise. In such a difficult external environment Pakistan succeeded to attract USD 798 million in FDI during the 2002-03 fiscal year as against USD 485 million in the previous year. Oil and gas, financial sector (include the privatization proceeds of the UBL), chemicals and transport together account for nearly three-fourth of FDI. Almost 30% of FDI have come from the UK followed by the US (25.0%), and the UAE (16.3%). Country wise breakup of FDI is given in the table IV. TABLE -IV
Dire ct 20000-01 Portfolio Total Direct 2001-02 Portfolio Total Direct 2002-03 Portfolio Total
(US$ Million)
2003-04 (Jul-March) Direct Portfolio Total
USA UK UAE Germany France Hong Kong Italy Japan Saudi Arabia Canada Netherlands Korea Other Total
92.7 90.5 5.2 15.5 0.7 3.6 1.3 9.1 56.6 0.1 4.8 3.7 38.6 322.4
-37.8 -33.8 -10.9 0.0 0.0 -16.3 0.0 0.0 -1.7 0.5 -1.3 0.0 -39.1 -140.4
54.9 56.7 -5.7 15.5 0.7 -12.7 1.3 9.1 54.9 0.8 3.5 3.7 -0.5 182.0
326.4 30.3 21.5 11.2 -6.9 2.8 0.1 6.4 1.3 3.5 -5.1 0.4 92.8 484.7
-1.7 -32.4 -4.2 0.0 0.3 20.6 0.0 0.2 0.1 2.7 -0.8 0.0 5.1 -10.1
324.7 -2.1 17.3 11.2 -6.6 23.4 0.1 5.6 1.4 6.2 -5.9 0.4 97.9 474.6
211.5 219.4 119.7 3.7 2.6 5.6 0.2 14.1 43.5 0.5 3.0 0.2 174.0 798.0
15.1 -34.6 0.7 0.1 0.0 -0.4 0.2 0.0 0.1 0.0 0.0 -6.8 47.7 22.1
226.6 184.8 120.4 3.8 2.6 5.2 0.4 14.1 43.6 0.5 3.0 -6.6 221.7 820.1
172.3 75.7 54.1 4.0 1.8 4.4 0.2 10.9 3.2 0.3 10.2 0.7 294.5 632.3
16.4 -13.8 9.3 -2.9 0 -4.8 -1.9 -3.2 -1.9 0 -2.0 -9.4 -13.3 -45.5
188.7 61.9 63.4 1.1 1.8 -0.4 -1.7 7.7 1.3 0.3 8.2 -8.7 263.2 586.8
Source: BOI
Table indicates that during July to March 2003-04, the foreign direct investment remained at US$ 632.3 million. Major investments came from USA, The UK, Switzerland and The UAE. Tables V & VI provide details of investment inflow during July-March 2003-04: 13
TABLE -V Top investing countries Country US$ Million Switzerland 201.7 U.S.A 172.3 U.K. 75.7 U.A.E 54.1 Japan 10.9 Netherlands 10.2 China 11.1 Others 96.3 Total 632.3 TABLE -VI Sector wise Investment Sector Financial Business Oil & Gas Petroleum Refining Textiles Trade Construction Others Total Projection
% age 31.9 27.2 12.0 8.6 1.7 1.6 1.8 15.2 100.00
Source: BOI
US$ Million 243.9 151.3 54.2 26.5 22.4 20.7 113.3 632.3
% age 38.6 23.9 8.6 4.2 3.5 3.3 17.9 100.0
Source: State Bank of Pakistan
Pakistan has one of the most attractive foreign investment regimes in South Asia. Foreign companies can invest in all three key sectors of the economy namely Agriculture, Industry and Services. The industry sector where foreign equity investment up to 100% is permitted in most cases is the most open. Pakistans aim is to attract USD 1.0 billion in net FDI in 2004 in a bid to lift its low investment to GDP ratio. Investment Policy of Pakistan is attached at Annexure IV. Rate of return on FDI The rate of return is on FDI in various countries shows that Pakistan as an attractive destination with a yearly return of 7.0% in 2001 (Table VII)
14
Rate of return on FDI (in%) TABLE -VII World average Developing countries average Pakistan China Indonesia Korea Foreign Trade Year 2003 has witnessed a further strengthening of the country's external balance of payments despite the fact that the world economic environment remained difficult. Both exports and imports registered impressive growth; The Government removed most of the trade restrictions and anomalies by lowering and consolidating tariff. In 2002-03 the Government brought down the maximum tariff rate to 25%. Pakistans exports have managed to cross the USD 9 billion mark in 2000-01 and 2001-02 and a record breaking USD 11 billion in 2002-03. The import trend over the years also reflects industrialization. Petroleum and derivative products constitute the single largest category of imports in Pakistan while Import of machinery constitutes the second largest category with a share of more than 16% of total imports of Pakistan. National Trade Policy is attached at Annexure -V. Protection to Investment The economic policies and the existing legal cover for foreign and Pakistani investment will be extended to new areas and sectors. The benefits and incentives for investment provided by the Government shall continue enforce and will not be reduced or altered to the dis-advantage of investors. The Foreign Private Investment (Promotion and Protection) Act, 1976 and the Furtherance and Protection of Economic Reforms Act, 1992 (Annexure VI). 1999 7.1 4.6 3.4 5.6 5.5 3.0 2000 6.8 4.3 6.1 6.2 5.7 3.1 2001 5.5 4.2 7.0 5.8 5.4 3.3
Source: UNCTAD, World Investment Report, 2003
15
Potential Sectors for Investment
ENGINEERING SECTOR
The Engineering Sector in Pakistan is engaged in producing cement and sugar plants, industrial boilers, chemical / petrochemical plant & equipment, construction equipment and Power transmission towers, Textile related engineering, Automotive etc. Companies in the public sector mainly dominate this sector. The Light Engineering industry encompasses a wide range of product categories ranging from surgical instruments to bicycles. (Write-up is available under separate heading). HEAVY ENGINEERING Engineering goods are of great significance amongst non-traditional items and offer promising prospects for exports. Pakistan has developed a fairly wide base for production of engineering goods and capital machinery. The usage of capital goods in major industrial sub-sectors is given in table -1: Table 1
A. PRODUCT GROUP Metal Working Machinery (Machine Tools Industry) PRODUCTS Centre lathes, shaping machines, milling machines, drilling machines, planning machines, power presses, hydraulic presses, hacksaws and circular saws. Power looms (automatic, semi-automatic, manual), ring spinning frames, cone winding machines, dyeing and finishing machines. Food processing machinery, paper industry machinery, chemical and oil refinery machinery, cement/ sugar manufacturing machinery, construction machinery. Membrane wall segments, Rotary air heater, Heat exchangers, Condensers, Cooling water pumps, Super heater coils, other steel plate fabricated equipment/ components. Agricultural machinery, pumps and compressors.
B.
Textile Machinery
C.
Other Industrial Machinery
D.
Power Generation Plant & Equipment
E.
Machinery Not Elsewhere Specified
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INDUSTRY STRUCTURE There are about 2000 registered units with large number in the unorganized sector involving capital investment of over Rs. 100 billion. The Heavy Engineering Industry is concentrated both in the public and private sectors namely: Public Sector Heavy Mechanical Complex Heavy Electrical Complex Heavy Industries Taxila Pakistan Aeronautical Complex Pakistan Engineering Company Private Sector SIEMENS Pakistan Engineering Co. Ltd. DESCON Engineering Ltd. Gresham Eastern (Pvt) Ltd. Qadbros Engineering (Pvt) Ltd. DDFC (Pvt) Ltd Karachi Shipyard & Engg. Works Pakistan Machine Tool Factory Pakistan Ordnance Factories Pakistan Steel Mills
KSB Pumps Co. Ltd. Haseeb Waqas Engineering Ltd. Metal Forming (Pvt) Ltd. Brothers Engineering (Pvt) Ltd.
The table 2 depicts capacities and major products being manufactured by the public and private sector companies: Table -2
MANUFACTURERS Heavy Mechanical Complex (HMC) INSTALLED CAPACITY Mechanical Works: 16,750 tons equipment/ year Foundry & Forge Works: 60,000 tons/ year (Steel Melting capacity) Pakistan Machine Tool Factory (PMTF) Die Casting 400 tons/ year. Machine Tools 80 units/year. Steel Fabrication 20,000 tons/year Steel Ingots: 40,000 tons/year Rolled material: 80,000 tons/year. MAJOR PRODUCTS Cement/ sugar plants/ equipment, boilers, construction machinery, chemical/ petrochemical plant equipment, power plant equipment, steel castings, iron & non-ferrous castings & forgings.
Lathe Machines, milling machines, drilling/ boring/ milling machines, engraving machines, turret milling machines, arbor presses. Machine tools (680 units/ year), concrete mixers (350 Nos./year) Pumps/turbines (3,400 Nos./year), HSD engines (3,600 Nos./year) Transmission Towers.
Pakistan Engg. Company (PECO)
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Contd. Table -2
MANUFACTURERS Karachi Shipyard & Engineering Works (KSEW) INSTALLED CAPACITY 12,000 tons equipment/ year MAJOR PRODUCTS Transmission towers, industrial boilers, pressure vessels, storage tanks, electric overhead cranes, sugar plants/ equipment, water treatment plants, components for oil, gas & petrochemical industries. Sugar Plants/ equipment, cement plants/ equipment, chemical/ oil refineries equipment, boilers/ pressure vessels, heat exchangers, cranes, waste water treatment plants. Cement plants, boilers, sugar processing equipment, cranes, LPG tanks. Sugar processing equipment, cement processing equipment, chemical/ petroleum processing equipment, power plant equipment, steel rolling plant equipment. Boilers, heat recovery steam generators, heat exchangers, pressure vessels, LPG/ oil road tankers, water treatment plants, storage tanks and steel structures. Boilers, water treatment plants, LPG/ chemical road tankers, pressure vessels. Overhead cranes, conveyors, heat exchangers, storage tanks, steel structures, steam generators. Boilers, water treatment plants. Fabrication of parts for food, chemical, paper & board, power sectors. Submersible, centrifugal and turbine pumps.
Haseeb Waqas Engg. Limited.
5,000 tons/year
Brothers Engineering (Pvt) Limited Qadbros Engg (Pvt) Limited
7,000 tons/year
4,300 tons/year
DESCON Engg. Works Limited
5,000 tons/year
DDFC (Pvt) Limited
450 tons/year
Fabricon (Pvt) Limited
500 tons/year
Gresham Eastern (Pvt) Limited Metal Forming (Pvt) Limited KSB Pumps (Pvt) Limited
600 tons/year 500 tons/year 5,000 Nos./ year
Engineering goods have already made a breakthrough in the export market. In addition to exports of conventional surgical instruments, cutlery goods and light engineering products, capital goods such as cement plants, sugar plants and ships have been manufactured and exported. However, Pakistan is still far behind in export of engineering goods as compared to Newly
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Industrialized Counties i.e. Korea and Malaysia and thus offers huge potential for manufacture of engineering products. Table -3 depicts the export trend of engineering good industry. Export of Engineering Goods Table 3
Year 1999-2000 2000-2001 2001-2002 2002-2003 Total Exports Billion US $ 8.6 9.2 9.1 11.2 Engg. Exports Million US $ 188 223 221 324 % Share of Engg. Goods 2.2 2.4 2.4 2.9
Potential Investment The share of engineering goods is 31.2% of total Pakistans imports. The performance of engineering goods manufacturing sector shows that there is a need to enhance the engineering manufacturing capabilities of the country, which should cater the requirements of large domestic market and increase exports to the potential markets. In order to develop the existing engineering base, Government of Pakistan has announced the growth strategy of Engineering Pakistan Sector/Engineering Vision (Annexure -VII). As per growth strategy
announced by the Government for the engineering industry.
requires US$ 10 to US$ 12 billion investment, which will create 2 million additional employment opportunities. Engineering exports can attain 10 to 12% share in total exports from existing 3% over a period of 10 years. In low road, investment of $ 2 billion would be required and in high road US $ 5 billion investment is needed over the period of ten years. This sector has the largest and strongest cross sectional linkages, capable of driving the industrial growth in the country. Potential of Engineering Goods Industry in terms of contribution to GDP, Export and Investment is presents in table -4. 19
Table 4 Low Road Potential

On an Annual Basis Sector Television Surgical Instr. Electric Fans Home App. Ceramics Molds & Dies Elect. Capital Auto & Parts Heavy Engg. Sub Total Others Steel Grand Total GDP Contribution US$ Million Exist. 2012 40 367 62 256 25 91 100 300 46 74 7 53 70 177 300 1,184 5 600 655 3,102 1,229 4,972 221 455 2,105 8,529 Over 10 years Exports Employment Investments US$ Million (000 Nos.) US$ Million Exist. 2012 Exist. 2012 Exist. 2012 8 28 33 128 124 500 50 82 200 590 6 124 25 50 58 92 40 10 25 80 150 6 32 17 25 123 147 2 68 15 24 26 128 7 170 11 27 166 217 25 200 100 225 725 1,144 200 14 500 100 400 170 1,334 250 985 1,511 2,996 101 797 334 721 1,500 3,891 40 78 1,500 4,400 270 2,131 624 1,784 4,511 11,287 Source: Engineering Development Board
Growth Strategy for Engineering Sector and Incentives The Government has already created a level playing field for the engineering sector by rationalizing the tariff structure reducing duties to 5% on various raw materials, sub components 10% and components 20%, CKD kits for cars 35%, Motorcycles 30%, Tractors 0% and Buses/Trucks 20-30%. Under the new strategy the establishment of an EXIM Bank is being considered to support engineering sector. The Bank will offer credit facilities to the buyers of Pakistani engineering products and machinery, as being practiced worldwide. Duty on Plant and Machinery has been reduced and now ranges between 5% - 10%. Achievements Due to growth strategy of Engineering Sector, Automobile Industrys has made a significant Contribution in Economy (2002-03). Some details are depicted at table -5.
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Table 5
Unit Investment Billion Rs Contribution to GDP Billion Rs Revenue to GOP Billion Rs Import Substitution Million US $ Foreign Exchange Million US $ Savings Employment 000 Numbers Assemblers 19.3 85.6 27.9 1,396 758 7.6 Vendors 48.0 16.5 5.3 247 130 150 Total 67.3 102.1 33.2 1,643 888 157.6 Projected till June 2004 98.2 153.9 51.5 2,400 1,252 171
Source: Engineering Development Board
Tariff Reduction on Major Items The Government of Pakistan took an initiative during last three years to improve Pakistans competitive position by reducing cost of doing business and investment in Pakistan. Accordingly import duties on industrial raw materials were reduced in consultation with stakeholders of various industrial sectors of the economy and duties on a large number of industrial raw materials were reduced to 5% or 10%. Product wise details are given in table 6. Table 6 Stainless Steels Alloy Steels Submersible Motors Stainless Steel Tubes for Disposable Syringe needles Glass Fiber mats Carbon Fiber Aluminum Foil Feedstock Machinery items (Ch. 84) Machinery items (Ch. 84) Electrical items (Ch. 85) CFC Compressors Non-CFC Compressors CFC Filter dryer Non-CFC Filter Dryer 2001-02 10% 10% 30% 20% 20% 10% 20% 10% 20% 20% 20% New PCT 20% New PCT 2002-03 5% 5% 10% 10% 10% 5% 5% 5% 10% 10% 10% 5% 10% 5% 2003-04 5% 5% 10% 10% 10% 5% 5% 5% 10% 10% 10% 5% 10% 5%
Government has also announced Emerging Electronic Products Assembly Scheme (EEPAS) for the growth of electronic sector by providing incentives to import parts and component at concessionary rate of 5% (Annexure -VIII).
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Tariff rationalization of engineering items for the budget 2004-05 is under process with the consultation of stakeholders. Tariff Reforms during last 8 years are presents in table -7. Table 7 Period 1994-95 1995-96 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 Automobile Sector Tariff at Auto sector has also reduced as shown in table -8. Table 8 Engine Capacity Up to 1000 cc Up to 1300/1500 cc Up to 1800 cc Above 1800 cc Motorcycle Growth Potential/Target Target for Engineering Sector is to build an existing base and progressively increase the share of industrial sector to 25% and share of engineering goods to 30% of manufacturing in 10 years. Financial Ratios Major financial ratios of listed Engineering companies of the country are as under: 2001-02 100% 120-150% 150% 250% 105% 2002-03 75% 100% 125% 200% 90% 2003-04 75% 100% 125% 150% 90%
Max. Rate 70% 65% 45% 35% 35% 35% 30% 25% 25%
No. of Slabs 13 13 05 05 05 05 04 04 04
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Engineering (2003) Current Ratio Gross Profit Margin (%) Net Profit Margin (%) Earnings Per Share (Rs) Dividend/ Net Profit (%) Dividends Per Share (Rs) Return on Investment (%) Return on Equity (%) Average 1.63 16.94 8.89 13.23 25.25 2.42 9.33 24.41 Maximum 3.71 21.94 17.14 37.94 63.64 8.50 19.45 43.05 Minimum 0.68 8.49 0.28 0.19 0.37
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List of major local companies along with Important Addresses

Heavy Mechanical Complex (Pvt) Limited Taxila, Rawalpindi Ph: 051- 9270562-67 Fax: 051- 9270560 E-mail: hmcengg@isb.paknet.com.pk Heavy Electrical Complex, Hattar Industrial Estate, Kot Najibullah, Hattar, Haripur, NWFP Fax: 0595-617305 Pakistan Engineering Company, 6/7, Ganga Ram Trust Building, Shahrah-e-Quaid-e-Azam, Factory : Kot Lakhpat Lahore Ph: 042-7320225-7, 7325073-7243867 Fax: 042-7323108 E-mail: peco@paknet4.ptc.pk Pakistan Engineering Company, Kot Lakhpat Works, Lahore Ph: 042-5880071-74 Fax: 042-5861084 Spinning Machinery Company of Pakistan (Pvt) Limited, Near New Race Club, P.O. Islam Nagar, Kot Lakhpat, Lahore Ph: 042-5120548-9, 5120545 Fax: 042-5120546 E-mail: smc@nexlinx.net.pk Pakistan Machine Tool Factory PMTF Road, Off: National Highway Karachi Ph: 021-5082451-54 Fax: 021-5082450 E-mail: pmtf@cyberaccess.com.pk pmtf@khi.paknet.com.pk URL: http://www.pmtf.com.pk DESCON Engineering Limited, Akhavan House, 38 Sir Agha Khan Road, P.O. Box 1201, Lahore Ph: 9242-6365134 Fax: 9242-6364049 Website: www.cescon.com.pk DDFC (Pvt) Limited, 73-G/11, Model Towan, Lahore 54700 UAN: 111-355-355 E-mail: ddfcho@brain.net.pk Qadbros Engineering (Pvt) Limited, 9-A, Link Ravi Raod, Badami Bagh, Lahore 54000 Website: www.qadbros.com Engineering Components & Machinery Manufacturing Association of Pakistan 10 Nargis Block, Iqbal Town, Lahore Ph: 042-7841200, 6364065 Fax: 042-7832456, 7632456 E-mail: grand@icci.org.pk
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ELECTRICAL CAPITAL GOODS

The Electrical Capital Goods industry is producing capital equipment and machinery for Power Generation, transmission and distribution to meet the energy requirements of the country. Salient features of the sector are as under: Yearly market volume averages Rs. 8,250 million. Direct/Indirect Employment in this sector is about 6000 persons Total investment in the sector is about Rs. 10.3 billion. Main Products and Manufacturers in the Market Table -1 shows the strong presence of large European groups in the industry, notably Siemens. However, the less sophisticated a product is (e.g. cables or electrical engines) the more local groups are present in the sector. Often these groups have technical agreements with Western suppliers. Table 1
Products Transformers Distribution Power Switchgears Key Players Siemens Pel Siemens HEC 100% Siemens Alstom PEL Siemens PECO Chinese (Imported) Siemens Pakistan Cables HM Cables Pioneer Cables Age Cables Newage Cable Atlas & Others Energy Meters PEL Escorts Syed Bhais Key Players Market Share 75% 100% 75%
Motors
45%
D.G. Sets Cables/Conductors
14% 45%
Energy Meters
90%
Source: Market Estimates/Asia Interest (Europe Aid Cooperation Office)
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Investment Opportunities Table -2 shows the projected short term and mid term export and investment opportunities in the sector: Table 2
Description Export (Value/Volume) Domestic production capacity (80% of utilisation) Investment 2001/02 USD 7.0 M Rs.15, 650 M Short Term 2006/07 USD 80.0 M Rs. 20,000 M Rs.1, 000 M Mid Term 2011/12 USD 170.0 M Rs. 35,000 M Rs.1, 500 M
Source: Industry Estimates.
List of major local companies along with Important Addresses:

PEL Pak Elecktron Ltd. 507 & 508 Fortune Centre 45-A/6. PECHS, Sharae Faisal Karachi 754000 Web Site: http://www.pel.com.pk/ Tel: 4548728, 4548725 Fax: 4529553 New Business Opportunities in Pakistan Newage Cables (Pvt) Ltd Newage Mansio, Macload Road Lahore Tel: 6312153, 6312150 Fax: 6363081 Listing of major foreign companies Siemens Pakistan Engineering Co. Ltd B/72, Estate Avenue, S.I.T.E P.O. Box 7158 Tel: 2574919, 2574910 Mob: 0300-8224987 Fax: 2577790 Email: ccs@siemens.com.pk Main associations Pakistan Electrical & Electonics Merchants Association (peema) 3/10, Arkay square Shahrah-e-Liaquat Karachi Tel: 021-2425933 Fax: 021-2427496 E.mail : muhh@cyber.net.pk Engineering Components & Machinery Manufacturing Association of Pak. 10 Nargis block, Iqbal town Lahore Tel: 042-7841300/6364065 Fax: 042-7832456/7632456 E.mail: grand@lcci.org.pk Pakistan Electrical Manufacturers Assn. 84-Shadman colony Lahore Tel : 042-7569201/7569202 Pakistan Cables Ltd B/21, SITE PO Box 5050 Karachi 75700 Tel : 2561175, 2561170 Fax : 2564614 Email : pakcables@cyber.net.pk
Alstom Pakistan Ltd. D163, SITE, Karachi 75700 Tel: 2576005-9 UAN : 111777888 Fax: 2560449 Email: apkho@cyber.net.pk Pakistan Electric Fan Manufacturers Association Pefma house (gorali), p.o. Box 53 G. T. Road Gujrat Tel: 04331-521429/520301-3 Fax: 04331-521427 E.mail: khalid03@gjr.paknet.com.pk Pakistan Electronic Manufacturers Association 1st floor, Rizvi chambers Akbar road Karachi Tel: 021-7766912 Fax: 021-5874546 All Pakistan Cables & Conductors Manufacturers Association 103, Uni centre I. I. Chundrigar road Karachi Tel: 021-2414065-66/2417052/2419275 Fax: 021-2412014
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Financial Ratios Major financial ratios of listed Cables & Electrical Goods companies of the country are presents at table 3: Table 3 Cables & Electrical Goods (2002) Average Current Ratio 1.36 Gross Profit Margin (%) 21.81 Net Profit Margin (%) 6.95 Earnings Per Share (Rs) 39.01 Dividend/ Net Profit (%) 52.06 Dividends Per Share (Rs) 3.75 Return on Investment (%) 8.86 Return on Equity (%) 40.45
Maximum 1.60 31.38 18.71 108.78 101.00 13.00 27.14 96.76
Minimum 1.07 12.26 1.43 5.35 1.27 4.41
Source: Vital Information Services (Pvt) Limited www.newsvis.com.pk
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AUTOMOBILE SECTOR
Salient features of the sector are given in table 1. Table 1
TOTAL TURNOVER Automobile Sector Assemblers Rs. 59 billion (Exports USD6.5 million) Auto Vendors- Rs.10.9 billion (Exports USD 31 million) Assemblers 32 Auto VendorsOrganized and Tier one 780 Tier Two 380 Unorganized and after market suppliers 840 TOTAL 2,000 Assemblers- 5,600 Auto Vendors- 140,000 ASSEMBLY (no. of Units) Cars - 62,893 LCVs 12,548 Buses 1,346 Trucks 1,954 Tractors 26,501 Motorcycles 176,591 AUTOPARTS Individually N.A USD 1.5 billion (Assembly & Auto Parts) Auto Parts Rs. 50 billion
NO. OF COMPANIES
NO. OF EMPLOYEES TOTAL TURNOVER (Volume)
TOTAL INVESTMENT
There are 32 automobiles manufacturing units with a capital investment of US$ 1.5 billion (Assembly & Auto Parts) and employs 5,600 workforce. Auto parts vendor industry consists of 2,000 units in organized and un-organized sector and employs 140,000 workforces. Automobile Sector of Pakistan can be broadly categorized into following segments: A. B. C. D. E. Cars & Light Commercial Vehicles (LCVs) industry Two / Three wheelers industry Tractor Industry Truck & Bus Industry Vendor Industry
Pakistan Auto Manufacturing Installed Capacity & Production is given in the table 2: 27
Pakistan Auto Manufacturing Installed Capacity & Production Table 2

Auto mobile Installed Capacity Cars 100,000 LCVs 23,000 Buses 1,900 Trucks 12,500 Tractor 40,000 Motor Cycle 340,000 1999-00 32,461 5,502 1,460 913 34,559 86,959 2000-01 2001-02 2002-03 39,573 40,601 62,893 6,924 9,055 12,548 1,296 1,086 1,346 512 1,134 1,954 31,635 23,801 26,501 108,850 120,627 176,591 Source: Board of Investment
Pakistan Auto Manufacturing Forecasts Installed capacities, production and manufacturing forecasts up to year 2004-05 are given at table 3: Table -3
Auto mobile Cars LCVs Buses Trucks Tractor Motor Cycle Installed Capacity 2003-04 113,600 92,149 28,000 17,779 1,900 2,640 12,500 1,473 33,000 28,864 375,000 277,905 2004-05 115,186 21,335 3,168 2,210 30,307 416,857
Source: Pakistan Automobile Manufacturers Association (PAPM) and MIS (MOIP)
Pakistan Auto parts cost break down is given in the table 4. Pakistan Auto Parts Cost Break Down Table 4 Cost Factor Raw Material and Parts Overheads Labor Utilities Sales & Marketing Advertising Research and Development Financial Cost Profit Government Levies Cars (%) 53 15 5 2 1.5 0.5 2 4 17 CVs (%) 60 19 3.5 0.5 1.5 0 2 2 12 Tractor (%) 57 14 10 3.5 1 0.5 1 8 5 Motor Cycle (%) 49 13 9.5 3.5 2.5 0.5 2 4 15
Source: Engineering Development Board, Ministry of Industry
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Investment Opportunities The investment foreseen by year 2010 in this sector is given in table 5: Table -5
Automobile Market Size Investment (Rs in Billion) Capacity Utilization Cars/LCVs Existing 2010 46,000 30 40% 200,000 70 Enhanced Trucks/ Buses Existing 2010 2,000 2.5 30% 7,000 7 90%
Source: Engineering Vision 2010
The vendor industry is engaged in developing indigenous auto parts for cars, motorcycles, trucks buses, 2/3 wheelers and LCVs. The indigenization status is given in table 6: Table -6 Automobiles
Cars
Motorcycles
Tractors
Trucks
Buses
* %age deletion 56-70 level achieved Target 2003-04 59-71
82-86 83-88
50-85 54-85
42-67 42-69
43-47 45-48
* The %age deletion level is given in range for different categories of Automobile Sector Source: Engineering Development Board
Besides local consumption of automobiles and auto parts, the auto parts manufactures exported auto parts worth US$ 32 million in 2002-03. This shows that there is enough potential in developing auto parts for local industry as well as exports. Financial Ratios Major financial ratios of listed Auto & Allied Engg. (2002) Companies of the country are depicts in table 7.
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Table -7 Current Ratio Gross Profit Margin (%) Net Profit Margin (%) Earnings Per Share (Rs) Dividend/ Net Profit (%) Dividends Per Share (Rs) Return on Investment (%) Return on Equity (%) Average 1.73 16.58 6.81 20.29 44.80 3.32 10.38 25.02 Maximum 4.39 30.45 19.91 67.18 97.49 13.00 24.56 105.63 Minimum 0.89 8.77 0.28 2.21 0.34 1.53
Source: Vital Information Services (Pvt) Limited
List of major companies along with Important Addresses:

Suzuki Motorcycles Pakistan Limited F-14, SITE, Mauripur Link Road, Karachi-75730 Fax: 021-2563895 Sind Engineering (Pvt) Limited, 16-Dockyard road,West Wharf, P.O. Box # 5262, Karachi 74000 Ph: 021- 202721-25 Fax: 021- 203082 (Dong Feng Trucks) Millat Tractors Limited, Sheikupura Road, Shahdara, Lahore Ph: 042-7924166 Al-Ghazi Tractors Limited, th 11 Floor, NIC Building, Abbasi Shaheed Road, Karachi 74400 Fax: 021-5689387 G.M. Tractor (Pvt) Limited, 172-G, Block 2, PECHS, Main Tariq Road, Karachi Ph: 021-4534361-2 Fax: 021-4537488 E-mail: wahab@cyber.net.pk Atlas Honda Limited, 1-McLeod Road, Lahore Ph: 042-7225015-17 Fax: 042-7233518 Pak Suzuki Motor Company Limited, Plot No. DSU 13, Pak Steel Industrial Estate, Bin Qasim, Karachi 75000 Ph: 021-4750788-95 Fax: 021-4750056 Indus Motor Company Limited, Plot No. N.W.Z/1/P-1, Port Qasim Authority, Karachi 75000 Ph: 021-4750041-48 Fax: 021-4750056 Honda Atlas Cars (Pakistan) Limited, 43 Km, Multan Road, Manga Mandi, Lahore Ph: 042-5871100-09 Fax: 042-5877711-12 (Honda Civic) Dewan Farooque Motors Limited, Dewan Center, 3-A, Lalazar, Beach Hotel Road, Karachi 74000 Ph: 021-111-313-786 Fax: 021-5610340 (Hyundai & KIA) Raja Motor Company (Pvt) Limited, 192-A, Raja Square, SMCH Society, Shahrah-e-Faisal, Karachi Ph: 021-4550176, 4550035-6 Fax:021-4553027 E-mail: raja@paknet3.ptc.pk (Fiat Cars) Hinopak Motors Limited, D-2, S.I.T.E., Manghopir Road, Karachi Ph: 021-2563510-8 UAN: 111-25-25-25 Fax: 021-2563028 E-mail: marketing@hinopak.com Website:www.hinopak.com(Hino Trucks & Buses)
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Ghandhara Nissan Diesel Limited Ghandhara House, 109/2, Clifton, P.O. Box # 3812, Karachi-75600 Ph: 021-5830251-57 UAN: 111-190-190 Fax: 021-5830258 (Nissan Trucks & Buses)
Dawood Yamaha Limited, 40-C, Block VI, PECHS, Karachi 75400 Fax: 021-454777
Auto-Part Pakistan after Sales Market The market represents a total of Rs. 36 billion, as estimated by the Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM). Total Documented Imports represented Rs. 10 billion as per the Federal Bureau of Statistics (FBS) in 2002 and the locally manufactured portion around Rs.4 billion, while the balance according to the industry would be misdeclared/ smuggled imports. Competition in Export Markets As the Pakistani auto parts exporters are up against exporters from developed countries, which have far more advanced technological resources and established market network, they are only able to compete in basic and low-end parts. The local vendors desperately need technological know-how to improve upon their quality and hence penetrate into higher-end markets. Competition in the Domestic Market As the auto parts sector is not well organized, the technological know-how and expertise is only available to a few large exporting vendors. This sector offers a huge potential for new entrants with technological know-how and modern production facilities. Vendor Industry -Technical Collaborations List of technical agreements in the Vendor Industry is as under:
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Listing of Major Local Companies

Agriauto Industries Ltd 5th floor, Siddique sons tower, 3 j.c.h. Society, block 7/8, Karachi Tel: 92-21-4541540-43 E.mail: agrato@digicom.net.pk Manufacturers of: shock absorber & struts (all vehicles) sleeves (hard chrome plated), camshafts, gaskets, steering box. Balochistan Wheels Limited 1st floor, State life building, #3 Dr. Ziauddin Ahmed Road, Karachi-75530 Tel: 92-21-5682528 Manufacturers of: automotive steel wheels for all type of vehicles. Bolan Casting Ltd. F-1 SITE, Hub River Road Karachi-75730. Tel: 92-21-2579891 E.mail: bolha@cyber.net.pk Manufacturers of: cylinder block, center hosing, axle casing, axle support, and brake drums. Synthetic Products Enterprises 127-S, SIE Township, Kot Lakhpat, Lahore. Tel: 92-42-5115506-7 E.mail: almas@spel.lcci.org.pk Manufacturers of: steering wheels, door handles, radiator grills & wheel trims etc. Rastgar Engineering Company Pvt Ltd. 307 street no. 3, sector I-9/3, Industrial Area Islamabad Tel: 92-51-4-433544-5 E.mail: iar@rastgar.com Manufacturers of: Wheels, hubs, brake disks and tractor components. Millat Tractor Ltd (Massey Ferguson) Sheikhupura Road P.O Box 12023 Shahdara. Lahore Tel: (042)7925383-7911021-5 Fax: (042)7924166, 7925835 E-mail: sml@discovery.isb.sdnpk.org Alsons Industires (Pvt) Ltd. S/18, s.i.t.e. Karachi-75730 Tel: 92-21-2562060 E.mail: alsonsind@nettlink.net.pk Manufacturers of: speedometer, assembly for two wheelers as well as four wheelers, fuel, temp battery gauges, instrument clusters for four wheelers and tractors, brake assembly for automobile Allwin Engineering Industries Ltd. National highway landhi Karachi-75120 Tel: 92-21-5015527 Emali: aeil@atlasgroup.pk.com Manufacturers of: pistons, pistons pins, cylinder liner sleeves, radiator cores, radiator assemblies and cast iron, fully machined parts Manan Shahid Forgings Private Limited Mominpura Road, DaroghaWala off GT Road Lahore54920 Tel: 92-42-6550330 E.mail: forging@nexlinx.net.pk Manufacturers of: connecting rods, axles, hubs, gear, hydraulic lift arms, lock bars. Thermosole Industries Pvt Ltd. Thal Engineering Plot 1-2, sector 22, Korangi, Karachi. Tel: 92-21-5885696-8 E.mail: thalengg@fascom.com Manufacturers of: Denso Car A/c, wire harness.
Exide Pakistan Ltd 40-K. Block-6. P.E.C.H.S Dr Mahmood Hussain Road. Karachi-75400 Tel: (021) 4536750-52. 4536759 Fax: (021) 4538948
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M/S Adam Motors Ltd. (Chrysler Jeep) DSU-10, Pakistan Steel Downstream Industrial Estate, Bin Qasim, Karachi. Tel: 0201-4750777 Pakistan Agricultural Machinery and Implements Manf. Association 6/21-26, Nazar bagh G. T. Road Peshawar Tel: 091-211835 Fax: 091-216723 Pakistan Automotive Manufacturers Association 11, Ilaco house Abdullah Haroon road Karachi Tel: 021-5662493/5672349 Fax : 021-5687247 E.mail: pamauto@cyber.net.pk Pakistan Association of Automotive The Pakistan Automobile Spare Parts Importers & Dealers Association 4/18, Rimpa plaza, plaza square M. A. Jinnah road Karachi Tel: 021-7721883/7728774 Fax : 021-7761938 E.mail: paspida@super.net.pk All Pakistan Two/tri Wheelers Assemblers Cum-progressive Manufacturers Assn. 129/130, Murree road Rawalpindi Tel: 051-5532301 Fax : 051-5556804 Listing of European and other foreign companies present in the sector Vendor industry -Technical Collaborations Al-Ghazi Tractor Ltd. (Fiat Tractors) Manufactruing Plant at Dera Ghazi Khan. Fiat Tractors Model 480 (48HP) Fiat Tractors Model 640 (65 HP) 11TH Floor, NIC building Abbasi Shaheed Road Tel: 021-5660881-5 Fax: 021-5689387 M/S Sigma Motors (Pvt.) Ltd. (Land Rover, Discovery) 1-B, Street 55, F/8-4, Islamabad. Tel: 2264243, All Pakistan Tyres Importers and Dealers Association 7/12, Rimpa plaza M. A. Jinnah road Karachi Tel: 021-7729129/7722366 Fax: 021-7722815 Parts & Accessories Manufacturers 894-circular road near Nigar cinema Lahore Tel: 042-7312452 Fax: 042-7237613 E.mail: secypaapam@hotmail.com
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CONSUMER DURABLE INDUSTRY

The sector covers refrigerators, deep freezers, air conditioners, washing machines, microwave ovens, electric iron and air coolers. According to industrial resources the existing total market of consumer durable is Rs. 30.00 billion which includes the major share of refrigerators Rs. 7.0 billion deep freezers Rs. 3.0 billion and air conditioners Rs. 5.0 billion. Industry overview of consumer durable products is given in table 1. Table -1
Refrigerators Status No. of Units Total Employment Installed Capacity (No. of Units) Current Production (No. of Units) Capacity Utilization World Exports (US$ Million) World Imports (US$ Million) Pakistan Exports (US$ Million) Pakistan Imports (US$ Million) Organized 3 3,000 600,000 375,000 62% 5,052 4,219 11 Deep Freezers Organized 3 2,000 250,000 145,000 58% 2,067 1,455 2 Air Conditioner Organized 6 1,000 200,000 55,000 28% 2,067 1,382 11
Source: SMEDA
The market size of refrigerators, air conditioners and deep freezers is estimated to grow annually by 15 20%. On this basis the projected demand in Pakistan is depicts in table -2: Table -2 Year Refrigerator (000 Unit) Air Conditioners (000 Unit) Deep Freezers (000 Unit) Total 2005 450 123 175 748 2010 567 181 164 912 2015 813 269 194 1,276
Source: SMEDA
The demand for consumable durables will increase with the increase in the population, improved economic conditions and changing life style. There is potential for investment in this sector.
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TEXTILE RELATED ENGINEERING

The Pakistans textile engineering sector is underdeveloped and under utilized. The major engineering developments in the past years have been concentrated into: Spinning Frames Conventional Weaving Looms Conventional Wet Processing Machines. The sector currently caters for spares, components for modernization and parts for machines used in cottage or small-scale enterprises. Brief General description of the sector is given in table 1: Table -1
TOTAL TURNOVER NO. OF COMPANIES Rs. 55-60 billion 500 Companies 80% Small workshops 15% Medium engineering units 5% Large units The large units are mainly in the public sector. 50,000 Rs. 18-20 billion
NO. OF EMPLOYEES TOTAL INVESTMENT
The rate of investment in the textile industry is the highest for Pakistan (in Asia) mainly in the spinning and weaving sectors. Most of the new investments went into replacement of old machinery rather than enhancing capacity where as most of the modern mills in Pakistan are equipped predominantly with textile machinery imported from Japan, Western Europe or North America. The machinery and equipment is imported from the USA, Germany, Belgium, France, Korea, Japan, China, and Thailand. Many machines such as injection molding and lathe machines etc. are being manufactured locally. Detail of Textile machinery parts/components manufactured in Pakistan is given in table -2.
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Table 2
Blow room
Spinning
Details of locally manufactured components 1. Conveyors 2. Transportation pipes (raw mat) 3. Fans 4. Dust extraction 5. Humidification 6. Gears 7. Shafts 8. Motors (not specialised) 1. Card wire (tops only) 2. Dust extraction & waste collection 3. Web belts 4. Card coilers 5. Under casings 6. Stationary flats, c.r.c. Rollers 7. Crush rollers 8. Gears 9. Shafts 10. Stop motions 11. Motors (not specialised) 12. Chains 1. Creels 2. Rubber cots 3. Gears 4. Chains Rubber cots Spinning machinery corporation. 1. Head stock parts - 350 2. Tail stock parts - 41 3. Section assembly - 113 4. Drafting system - 11 5. Creel assembly - 20 535 Additionally - pmtf 105 Accessories like costs, aprons, bobbin, etc. are also available locally Manual cone winders Bobbing conveyors + drums+ other accessories % In value (Imported) 70% % in value (Local) 30%
Name of machine
Carding
60%
40%
Draw frames
90%
10%
Combers Ring frames
98% 60%
2% 60%
Winding: manual automatic Humidification plant+ chilling
80%
100% 20%
All parts manufactured locally except controls 20% 80% which are imported Source: Asia Invest-Europe Aid Cooperation Office (New Business Opportunities in Pakistan).
% In value (Imported) 40% % in value (Local) 60%
Weaving
Name of machine Warping machine Details of locally manufactured components All guide rollers Gears ,pumps,frame,comb (expanding) +accessories including: tie rods-(comb holders oscillating fans chains tension device, cutters. Motors (not specialised) Specialised design-full machine. Parts almost as above and accessories 1. Creel 2. Size boxes 3. Squeezing rollers 4. Guide rollers 5. Drying cylinders 6. Frame work 7. Rubber rollers 8. Exhaust fan 9. Pneumatic control parts 1. Automatic cop change mechanism & cutter 2. Temple cutter 3. Feeler motion 4. Take up motion 5. Positive warp let-off motion
Sectional warping machines Multiple cylinder sizing machine
20% 30%
80% 70%
Semi & automatic cop change looms 76" - 126" reed width
100%
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Semi automatic terry towel looms 76"-116" reed width Shuttleless looms type Rapier Cloth inspection.
6. Back rest sensitivity control 7. Drive & brake arrangement 8. Weft stop motion 9. Warp stop motion 10. Reeds + healds 11. Picking system 12. Beams 13. Shuttles 14. Electric motors All above parts/components + terry motion and pile beating system 170-180 rpm, reed space 76 (26 inches) total assemblies locally manufactured except rapiers, stop motions, specialised motors, panels Full machine-rollers, guiding rollers, light box, plaiter, welding cutting, cloth inspection machines-cloth rolling machines - except inverters, cloth guiders, meter counter gear boxes, roller felt/rubber coverings, ultra-violet lighting systems All components manufactured locally except - selvedge guide, inverters, panels, specialised electrical equipment All components are manufactured locally All components except controls manufactured locally 30% 30%
- 100%
70% 70%
Cloth folding & palleting Cloth rolling Humidification plant. 20% 80%
30% 20%
70% 100% 80%
Source: Asia Invest-Europe Aid Cooperation Office (New Business Opportunities in Pakistan).
Textile Wet Processing (Conventional) Pre treatment

Name of machine Singeing machine (cloth) High pressure kiers Details of locally manufactured components Complete singeing machine with brushing units except control & panels 1. Pressure vessel 2. Circulation system 3. Spreading guides 4. Pumps 5. Motors, except control panel & valves 1. Squeezing mangles 2. Washing chambers 3. Guiding rollers 4. Pumps 5. Motors (except control) 1. Washing chamver 2. Entry system squeezing mangle 3. Guiding 4. Batch forming system 5. Roles 6. Pumps 7. Motor except sel vedge guides, control panels, expanders 1. Entry frame 2. Expander unit 3. Mercerising com 4.bottom rollers 5. Top rollers 6.squeezing unit with rubber rules 7.sted rollers 8.drainage pipe 9. Stabilising composcaling separator 10.caustic soda dissolving device 11.oscilsating separator except, compressor, liquor filter, valves cooling Except controls, special motors % In value (Imported) 30% 30% % in value (Local) 70% 70%
Rope washing Machine
20%
80%
Open winding washing & soaping machine
30%
70%
Chainless mercerising machine
40%
60%
Desizing machine (rope type)
10%
90%
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Dyeing
Name of machine Jt-10type jigger machines Except control panel, special motors 10% 90% Jumbo dyeing jigger machine Open jigger Close jigger machine Dyeing paders Jet dyeing machine (double tube) Jet dyeing venture a type Details of locally manufactured components Except control panel, special motors % In value (Imported) 10% % in value (Local) 90%
Except control panel, special motors Except control panel, special motors Except control panel, special motors Except control panel, special motors Except control panel, valve, control panel, jets Except control valve, control panel, jets
10% 10% 10% 20% 30% 10%
90% 90% 90% 80% 70% 90%
High tech machines

Name of machine Shearing/ cropping machine Details of locally manufactured components Sophisticated machine in order to remove bars from cloth before going in for wet finishing process. It requires burners, cloth guiding rollers, temperature control, etc. This process lays the foundation for smooth & quality processing. Only few quality manufacturers all over the world. Entry frame, beating & suction can be made locally. Also impregnation tanks, batcher and plaited is possible. Brushing unit, complete singeing unit dry fire extinguisher, panels and controls are imported. Pressure vessel stainless steel with jacket - circulation system, spreading - guide rollers, pumps, motors locally manufactured except controls, panels, valves. Squeezing mangles, washing chambers, guiding rollers, pumps, motors, locally made. Except controls and panel which are imported. Various roller widths required entry frame - take up rollers, washing chambers- padding mangles, squeezing mangles etc. Batch formation pumps - motors, all mechanical parts can be locally made except squeezing rollers, guiding rollers, selvedge guiders, expanders, tension controls, panels, controls. % In value (Imported) 80% % in value (Local) 20%
Cloth singeing machine & desizing
60%
40%
High pressure kier
30%
70%
Rope washing machine Open width washing and soaping machine
20%
80%
75%
25%
Dyeing jiggers Through
Vinches for dyeing
- Guide rollers - heating system 50% 50% mechanical parts - general motors, locally manufactured. Except controls - guiding system - digital drive - plc controls & panels. All parts local - raw material stainless 25% 75% steel except special drives and Controls. Source: Asia Invest-Europe Aid Cooperation Office (New Business Opportunities in Pakistan).
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Important Addresses
Machinery Manufacturers Pakistan Machine Tool factory PMTF Rd., off National Highway, Karachi 75030 Tel: 92-21-508 24 51/4 Siddiq Brothers Engineering Works Bea WAODA Steam Power Station Sheikhupura Road Faisalabad, Pakistan Contact: Abdul Waheed, Chief Executive Tel: 92-41-750594; 754668 Fax: 92-41-754921; 754669 Bashir Engineering Works Jinnah Road Gujranwala, Pakistan Contact: Muhammad Bashir, Managing Director Tel: 92-431-214758; 216196 Fax: 92-431-222893 All Pakistan Cotton Power Looms Assn. P-107, st. No. 5, first floor Montgomery bazar Faisalabad Tel: 041-612929/639383 Fax: 041-613636 E.mail: apcpa@phone.net All Pakistan Solvent Extractor's Assn. C-38, Estate avenue, s.i.t.e. Karachi Tel: 021-2561724 Fax: 021-2564536 Pakistan Engineering Co. Ltd. (temporally closed) Shahrah-e-Quaid-e-Azam Lahore, Pakistan Contact: Javaid Sahibzada, Managing Director Tel: 92-42-7356292; 7324338; 7320225-6 Fax: 92-42-7323108 Mumtaz Foundry and Engineering Works (Pvt.) Ltd. Nishatabad, Sheikhupura Road Faisalabad, Pakistan Contact: Maqsood Ahmed, Managing Director Tel: 92-41-754141; 751111 Fax: 92-41-751119 Pakistan Small Units Powerlooms Assn. 2nd floor, Waqar plaza New Business Opportunities in Pakistan Aminpura bazar, p.o. box 8647 Faisalabad Tel: 041-714371 Fax: 041-33567 E.mail: psupla@hotmail.com All Pakistan Textile Processing Mills Association 213-main Soosan road, 1st floor Ibrahim motor plaza, Madina town Faisalabad Tel: 041-721013-14 Fax : 041-718982 E.mail : pktexpro@fsd.paknet.com.pk
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TEXTILE SECTOR
Overview Textile industry is the most important industrial sector in Pakistan, which is based on locally available raw cotton. It provides largest employment to the industrial labour force and also earns largest foreign exchange for the country. Textile production comprises of cotton, cotton yarn, cotton fabric, fabric processing (Grey-dyed-printed), home textiles, towels, hosiery & knitwear and ready-made garments. Structure of Textile Industry Presently, the industry consists of large scale organized sector and a highly fragmented cottage/small scale sector. The organized sector comprises of integrated textile mills i.e. spinning units with shuttleless looms. The down stream industry (Weaving Finishing Garment Towels & Hosiery), with great export potential, is mostly in the unorganized sector. The table 1 depicts the magnitude of the textile industry. A) Large Scale Mill Sector Table -1
Sub-Sector 1. Spinning 2. Composite Units Total 3. Independent Weaving Units 4. Finishing Units 5. Garment Units No. of Units 392 50 442 124 10 50 23,600 shuttleless Looms 5,000 Sewing Machines Size 9.2 million spindles. 147,852 Rotors 9,876 Looms Production 1550 M. Kgs. 384 M. Sq. meter
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B)
Cottage / Small - Scale Sector

No. of Units 453 20600 625 Size 50,000 Looms 175200 Looms 225,200 Cotton Synthetic 7602 Looms 30,0000 Sewing Machines 12000 Knitting Machines 2700 M. Sq. meter 760 M. Sq. meter 3460 M. Sq. meter 53 M. Kgs. 650 M. Pcs. 400 M. PCs. Production 3600 M. Sq. meter 384 M. Sq. meter
Sub-Sector 1. Independent Weaving Units 2. Power Looms Total 3. Finishing
4. Terry Towels 5. Garments 6. Knitwear
400 2500 600
Textile Industry at a Glance Major economic contribution by the textile sector during 2002-03 is given below: Exports Manufacturing Employment GDP Investment Taxes Interest Salaries & Wages Contribution To R&D Banks financing Investment in last 4 years Cotton Cotton accounts for 11.7 percent of value addition in agriculture and about 2.9 percent of GDP. Cotton production in Pakistan has already crossed 10 million bales during 2002-03, which will expand further in the current year, as the area under cultivation will increase from 2.79 million hectare to 2.86 million hectare. Supply and distribution of cotton (bales) is depicted in the table 2: 68 % of total exports (US $ 7.4 billion) 46 % of total manufacturing 38 % of total industrial workers 10.5 % of total GDP 31 % of total investment Rs. 101 billion per annum Rs. 44 billion per annum Rs. 4.5 billions per annum Rs. 148 billion per annum US$ 1 billion during 2002 & 2003 US$ 4 billion
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Table -2
Years Carry over Stock Production Imports Total Mills & Non-Mill Consumption Export
(000 bales)
End Season Stock Total
1997-98 1998-99 1999-00 2000-01 2001-02 2002-03
1,225 803 1,565 2,595 1,934 1,735
9,184 8,790 11,240 10,732 10,612 10,425
301 1,313 421 670
10,710 10,906 13,226 13,997
9,398 9,332 9,943 10,381 11,029 11,100
509 9 586 709 268 320
803 1,565 2,697 2,907
10,710 10,906 13,226 13,997
1,080 13,626 1,109 13,269
2,329 13,626 2,200 13,620
1 Bale = 375 Ibs. or 170kgs
Source: APTMA/Textile Commissioners Office
Production of Yarn Pakistan has the third largest spinning capacity in Asia. The spinning sector forms the heart of the textile industry. This sector produces yarn for downstream sectors, namely weaving, processing and knitting. At present, this sector comprises 453 textile mills, 50 are composite units and 403 spinning units. The table 3 shows installed and operational capacities for spinning sector in Pakistan. Table -3
Year 1998-99 1999-00 2000-01 2001-02 2002-03 2002-03 (Jul-Dec) Units 442 443 444 445 453 453 Installed Capacity (in 000) Spindles Rotors* 8,392 166 8,477 150 8,601 146 8,819 141 9,217 147 9,263 146 Operation Capacity (in 000) Spindles Rotors * 6,671 66 6,825 66 6,913 70 7,189 65 7,623 72 % Capacity Utilization Spindles 79 81 80 81 83 Rotors * 40 44 48 46 49
7,858 69 85 47 Source: APTMA/ Textile Commissioners Office
Production and Export of Cotton Yarn The table -4 depicts production & export of cotton yarn for the last five years:
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Table -4
Year 1998-99 1999-00 2000-01 2001-02 2002-03 Production* (Kgs) 1,153 1,276 1,336 1,385 1,346 Exports Qty Kgs 421 513 545 540 523 US$ 945 1071 1077 930 930 Values Rs US$/Kg. 47420 2.24 55485 2.09 62914 1.97 57898 1.73 54335 1.77
(Million)
Rs./Kg 112.51 108.16 115.41 106.39 103.89
* Excluding P/V and P/C
Source: Export Promotion Bureau /Textile Commissioners Office
The above Table shows that 35% of yarn is exported; the balance is locally consumed by other sectors of textiles. This indicates that 65% of local consumption is converted into higher value added products for exports and local consumption. EXPORT PERFORMANCE The table -5 shows the export performance of textile sector: Table -5
Products Raw Cotton Qty (Mln. Kg) Value (Mln.$) Cotton Yarn Qty (Mln. Kg) Value (Mln.$) Cotton Cloth Qty (Mln. Sq Mtrs) Value (Mln.$) Hosiery & Knitwear Qty (Mln. Sq Meters) Value (Mln.$) Bedwear Qty (Mln. Doz) Value (Mln.$) Towel Qty (Mln. Kg) Value (Mln.$) Tents/ Canvas Qty (Mln. Kg) Value (Mln.$) Ready Made Garments Qty (Mln. Doz) Value (Mln.$) Synthetic Fabrics Qty (Th Sq Mtrs) Value (Mln.$) Other Made Ups Value (Mln.$) Carpet & Carpeting Qty (Th Sq Mtrs) Value (Mln.$) 134.94 139.12 547.21 1,073.17 1,736.00 1,032.53 38.84 898.95 147.93 734.92 47.14 241.02 19.76 44.55 36.06 825.53 840.00 536.52 328.26 6.03 276.25 34.93 24.58 544.22 942.38 1,957.36 1,132.73 38.00 841.55 181.83 918.51 79.53 269.82 21.47 47.48 42.35 862.04 667.37 409.51 331.38 4.78 233.15 54.58 48.71 522.62 930.14 2005.38 1330.98 51.69 1136.25 241.08 1320.80 101.39 373.58 30.50 69.52 36.89 1094.47 767.51 561.72 356.82 4.04 208.57 25.12 31.17 353.79 748.04 1480.21 1053.26 40.26 912.80 156.72 884.36 61.72 239.67 19.05 41.60 18.03 647.74 480.83 344.93 269.79 2.69 143.18 2000-01 2001-02 2002-03 2003-04 (Jul-Feb)
Source: Textile Commissioner Organization
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POTENTIAL AREAS FOR INVESTMENT Investment foreseen In Textile Vision 2005 (Annexure -IX) is given in table-6. Table -6 Total Pak Rs Billion US$ Billion
Low Road 138 2.7
Do-Able 233 4.5
High Road 333 6.4
There is a large scope in textile sector for high value added products. Value addition in textile is given here under: Value Addition in Textile One Bale of 170 Kgs of Cotton is worth* Products Raw Cotton Cotton Yarn Towels Cotton Fabric (Grey) Finished Fabric Bed Wear Knit Wear Woven Garments
* Based on Actual Unit values of 2001-2002
US$ 119 253 434 579 603 618 1,401 1,561
The following are the potential investment in textile sector: 70 % of total yarn production is based on coarse and medium count yarn. Spinning industry need to diversify its product mix and increase the share of high value added finer count yarn. Increased demand of blended fabric world over, calls for investment in this sector. The knitwear industry being high value added, has the potential to grow at rapid pace, therefore requires further investment.
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INCENTIVES The following incentives are available to textile industry: Repayment of export rebates under SRO 417/611. Duty concessions on import of Plant, Machinery and Equipment. Tariffs have been reduced on import of raw materials to 5% and 10%. Compensatory rebates on textile allowed. Bank financing for textile sectors available. Enhanced Market access in Europe and USA. Financial Ratios Major overall financial ratios of listed Textile companies of the country is given in table -7: Textile Spinning (2003) Current Ratio Gross Profit Margin (%) Net Profit Margin (%) Earnings Per Share (Rs) Dividend/ Net Profit (%) Dividends Per Share (Rs) Return on Investment (%) Return on Equity (%) Textile Weaving (2003) Current Ratio Gross Profit Margin (%) Net Profit Margin (%) Earnings Per Share (Rs) Dividend/ Net Profit (%) Dividends Per Share (Rs) Return on Investment (%) Return on Equity (%) Average 0.97 12.60 3.65 10.29 22.67 1.14 4.25 12.77 Maximum 1.24 19.35 12.72 17.62 59.18 4.00 15.22 28.81 Minimum 0.65 8.66 0.30 4.75 0.25 1.45 Average 1.11 10.70 4.11 25.61 31.27 1.12 4.76 31.09 Maximum 2.39 19.69 44.75 245.11 231.23 10.00 62.78 429.73 Minimum 0.76 1.16 0.07 0.07 0.23
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Woolen (2003) Current Ratio Gross Profit Margin (%) Net Profit Margin (%) Earnings Per Share (Rs) Dividend/ Net Profit (%) Dividends Per Share (Rs) Return on Investment (%) Return on Equity (%) Average 2.31 21.85 9.79 10.59 52.44 2.35 5.52 44.97 Maximum 3.36 25.85 17.15 16.92 81.15 3.96 9.84 108.43 Minimum 1.37 14.89 3.55 4.19 2.71 0.11 3.10 12.08
Important Addresses:
All Pakistan Textile Mills Association House No. 44-A Lalazar Maulvi Tamizuddin Khan Road Karachi Fax 021-611305, 4546263 Ph: 111-700-000 Pakistan Bed wear Exporters Association 11, Timber Pond, Keamari Road Karachi Fax 021-2851429 All Pakistan Cloth Exporters Association 30/7 Civil Lines, Near State Bank, Faisalabad Fax. 041-617988
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SYNTHETIC FIBRE SECTOR

OVERVIEW The polyester staple fiber industry in Pakistan gradually developed during the last decade in response to growing demand for man-made fiber for the production of blended yarn and fabrics. Table I below shows installed capacities of Synthetic Fibre manufacturers: Table -1:
A. 1. 2. 3. 4. 5. B. 1. C. 1.
Installed Capacities Synthetic Fibre

Manufacturers Polyester Staple Fibre Dewan Salman Fibre Ibrahim Fibres Limited ICI Pakistan Limited Rupali Polyester Limited Pakistan Synthetics Limited TOTAL Acrylic Staple Fibre Dewan Salman Fibre Viscose Staple Fibre Chemi Viscose Fibre Limited Grand Total Installed Capacity (Metric Tons) 265,000 209,000 115,000 23,000 27,000 639,000 25,000 10,000 674,000 Source: PSF Manufacturers 2000 375,560 193,743 66,208 21,143 24,976 69,490 372,761 9,800 382,561 0.40% 2001 414,780 225,302 72,911 23,459 22,679 70,429 406,465 15,554 422,019 10% 2002 452,212 240,643 95,023 23,791 22,524 70,231 455,000 9,568 464,568 10% 2003 527,402 218,961 108,976 22,841 24,974 151,650 522,000 10,000 532,000 14%
Table II: Production & Demand-Supply Data

Description PRODUCTION Dewan Salman ICI Pakistan Rupali Polyester Pak Synthetics Ltd Ibrahim Fibre SALES IMPORTS DEMAND/CONSUMPTION Growth Rate* 1999 364,888 192,989 63,169 22,776 18,745 67,209 371,440 9,500 380,940 9%
Surplus Capacity of PSF Looking at the consumption pattern of PSF in Pakistan, a demand-supply gap will be seen due to surplus capacity of more than 100,000 tons. This surplus capacity can be absorbed through development, modernization and consolidation of downstream Art Silk and Polyester Filament Yarn sectors and export of PSF to countries like Turkey, Syria, and UE etc. Dewan Salman and ICI have recently started exporting PSF to Middle East and Europe. A sector faced with reduced
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margins, can avail some of the export opportunities available in terms of demand from other Asian nations. The export of current semi-dull and bright varieties of PSF by ICI and Dewan is an encouraging sign. But these varieties are in less demand and fetch low premium. Dewan is also venturing into Specialty Fibre business and its Specialty Fibre Project, which has the to switch production efficiently from one variety to another, has already started trial production. This unit will enable the company to introduce new value added PSF products for local as well as international markets. INVESTMENT OUTLOOK The PSF sector has been growing on average at a robust rate of 10% per annum during the last five years. In addition, the increasing trend of shifting from 100 percent cotton yarn to blended yarn in the spinning sector augurs well for the PSF sector. The increased usage of PSF in the textile made ups and improved PSF blending ratio could give further boost to the already growing PSF sector. There is also a need to develop the room-furnishing segment i.e. curtains, bed sheets, carpets etc. which consumes major portion of polyester and acrylic staple fibers produced globally. Capacity expansion by ICI, Ibrahim Fibers and Dewan Salman during 2002 and 2003 clearly highlights growth potential of this vital synthetic textile sector. However, expected second expansion of 208k tons by Ibrahim during 2006 would again create a surplus capacity of around 100k tons from 2006 onward. Keeping these expansions in view and considering a CAGR of 8% in PSF demand due to factors outlined earlier in the report, demand supply equilibrium will be reached in the year 2009. Going onward, demand may again outstrip supply in 2010 by 70k to 75k tons. It is quite obvious that setting up another PSF plant at this stage would not be viable due to expansions already carried out by major players in the sector and expansion planned by Ibrahim in 2006. Any possibility of investment in PSF business would probably resurface after 2009. However, increase in demand of PSF, which would reach above 800k tons by the year 2009, would make establishment of a 400k tons PTA plant viable.
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Ibrahim Fibres Ltd., 1-A, Ahmad Block, New Garden Town, Lahore Tel: 042-5869151F Fax: 042-5864915 Dewan Salman Fibers, House No. 46, Nazimuddin Road, F-7/4, Islamabad Tel: 051-111-313-786 Ph: 051-2276535 Pakistan PTA Limited Bahria Complex II, 3rd Floor, M.T. Khan Road, P.O. Box 723 Karachi Ph: 021-5610596 Fax:021-5610506 Polyester Fibre Business ICI Pakistan Limited ICI House, 63-Mozang Road, Lahore Tel: 042-6369383 Fax: 042-6302685
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ENERGY SECTOR
The Government attaches high priority to the energy sector. During 2003, the demand for energy in Pakistan was 47 million tons of oil equivalent and the main sources were Oil 38.3%, Natural Gas 44%, Hydroelectric 11.3%, Coal 5.4% and Nuclear 1%. Annexure X. An attractive policy package for petroleum and power was announced to eliminate the load shedding, mobilization of the existing resources, promotion of private sector investment (domestic & foreign) and enhancing indigenous oil and gas production. (Annexure -XI) Pakistan has about 17,794 MW installed capacity of electricity generation in 2003, out of which share of thermal capacity is 69% followed by Hydro electric 28% and Nuclear 2.6%. The following table shows the installed capacity of electricity generation through various sources: Installed Capacity Generation (2002) Thermal Thermal Thermal Nuclear (Kanup & (WAPDA) (KESE) (IPPs) Chasma) 4,735 1,756 5,795 462
Unit: MW
Policy of Power Generation Projects 2002 is attached as
Hydel (WAPDA) 5,046
Total 17,794
Source: Energy Book 2003
Electricity Consumption by Sector Sector Domestic 23,624 Commercial 3,218 Industrial 16,181 Agriculture 6,016 Street Light 244
Unit: MW Traction 10 Bulk Supplies 3,318 Other Govt. 45 Total 52,656
Source: Energy Book 2003
Annual growth rate
4.02%
Demand for electricity is increasing day by day as Pakistan is on road track of development and WAPDA's Customer base is expanding rapidly.
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WAPDA's "Vision 2025" programme is aimed at constructing 27,000 megawatts (MW) of hydro, coal and gas-based power stations in the country over the next quarter-century, thus creating large opportunities for investment in the energy sector. Potential Investment Projects Planned Capacities (M.W.)
Hydel Short Term Plan (5 years) Medium Term Plan (15 years) Long Term Plan (5 years) 792 6,130 156,633 Coal 750 3,600 Gas 2,620 2,060 Nuclear 600 1,200 Renewable (Misc.) 10,600 34,885
Source: Private Power & Infrastructure Board (Power Policy) {Policy for Power Generation Projects 2002}
Incentives The new power policy is under consideration by the Government with the following proposed incentives: Financial Regime a) Permission for power generation companies to issue corporate registered bonds. b) Permission to issue shares at discounted prices to enable venture capitalists to realized higher rates of return proportionate to the risk. c) Permission for foreign banks to underwrite the issue of shares and bonds by the private power companies to the extent allowed under the laws of Pakistan. d) Non-residents are allowed to purchase securities issued by Pakistani companies without the State Bank of Pakistans permission and subject to the prescribed rules and regulations. e) Abolition of 5% limit on investment of equity in associated undertakings. f) Independent rating agencies are operating in Pakistan to facilitate investors in making informed decisions about the risk and profitability of the project companys Bond/TFCs.
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Fiscal Regime a) Customs duty at the rate of 5% on the import of plant and equipment not manufactured locally. b) No levy of sales tax on such plant, machinery and equipment, as the same will be used in production of taxable electricity. c) Exemption is already available from income tax including turnover rate tax and withholding tax on imports; provided that no exemption of income tax on oil-fired power plants. d) Repatriation of equity along with dividends is freely allowed, subject to the prescribed rules and regulations. e) Parties may raise local and foreign finance in accordance with regulations applicable to industry in general. GOP approval may be required in accordance with such regulations. f) Maximum indigenization shall be promoted in accordance with GOP policy. g) Non-Muslims and Non-residents shall be exempted from payment of Zakat on dividends paid by the company. The above incentives will be equally applicable to private, public-private and public sector projects.
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FERTILIZER SECTOR
There are 10 fertilizer units operating in the country, with an installed capacity of 5.7 Million Tons of fertilizers. During the last decade an investment of US$ 1.2 billion has been made in this sector. Number of units Public Sector Private Sector Capacities (000 M. Tons) Public Sector Private Sector Average Annual Growth Rate Share in GDP Total sector-wise investment (Rs in Billion) Installed Capacities Installed capacities of different types of fertilizers are given in the table 1: Table -1
Units Dawood Hercules Chemicals Ltd. ENGRO Chemical Pakistan Ltd. Pak Arab Fertilizers Ltd. (NFC) Pak American Fertilizers Ltd. (NFC) Pak China Fertilizers Ltd. (SCHON) * Fauji Fertilizer Company Ltd. + Fauji Jordon Fertilizers Co. Pak Saudi Fertilizers Ltd. Total Pak Arab Fertilizers Ltd. (NFC) Pak Arab Fertilizers Ltd. (NFC) Fauji Jordan Fertilizer Company Ltd. Lyallpur Chemicals & Fertilizers Ltd. (NFC) Hazara Phosphate Fertilizers Ltd. (NFC) Total ENGRO Chemical Pakistan Ltd. Grand Total : Products Urea Urea Urea Urea Urea Urea Urea Urea CAN NP DAP SONA SSP SSP SSP NPK 10:23:10 All products Capacities (000 Tons) 445 850 92 346 102 1880 557 4,272 450 305 446 90 90 180 100 5,753
10 4 6 5,753 1,373 4,384 7% 0.4% 87
* Presently not in operation. Source: National Fertilizer Development Centre (NFDC)
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Supply - Demand Projection The supply/ demand position of the fertilizer products, namely Urea, DAP and SOP/MOP for the next 9 years has been calculated and given in table -2. Table -2
Year 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 Supply 4,170** 4,170 4,170 4,170 4,170 4,170 4,170 4,170 4,170 Urea *** Demand 4,390 4,499 4,612 4,727 4,845 4,966 5,090 5,218 5,348 DAP Deficit/ Surplus -220 -329 -442 -557 -675 -796 -920 -1,048 -1,178 * Supply 292 450 450 450 450 450 450 450 450 # Demand 1,069 1,123 1,179 1,238 1,300 1,365 1,433 1,505 1,580 Deficit/ Surplus -777 -673 -729 -788 -850 -915 -983 -1,055 -1,130 SOP/MOP Demand 48 53 59 64 71 78 86 94 104
Source: NFDC
** Supply projections for next nine years based on installed capacity of operational units. *** Demand projections of urea are based on annual growth rate of 2.5% in line with present population growth rate. # Demand projections @ 5% per annum.
(000 Tons)
Urea Supply / Demand Position

(000 Tons)
Present Supply (2002-03) Present Demand Present (Shortfall)/ Surplus Shortfall in 2006-2007 Shortfall in 2011-2012 Value of imports 2006-07 Value of imports 2011-12 Cumulative import value 2004-12
4,407 4,282 125 (557) (1,178) US$ 77 million US$ 163 million US$ 851 million
At present Pakistan is self sufficient in the production of urea. The phosphatic fertilizers produced in the country are Nitro Phosphate and Single Super Phosphate. The demand of urea in the country by year 2011-12 is likely to increase by 1.2 million M tons necessitating setting up of two large-scale fertilizer plants. The only plant of DAP with a capacity of 450,000 tons per annum is meeting 40% of the current local demand the remaining is met through imports. Hence, two world scale plants to produce DAP shall be required. Therefore, there is a potential of investment of US$ 1.2 billion in these four plants.
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Incentives To encourage the investments in fertilizer sector, Government announced the Fertilizer Policy 2001. The policy provides the incentive for the investors to invest in new fertilizer plants in Pakistan. However this policy is being under review to make it more effective. Salient Features of Fertilizer Policy 2001 The salient features of Fertilizer Policy 2001 (Annexure -XII) are as under: In next 10 years, Pakistan will need additional 2 million M tons of fertilizers. Urea production is 4.2 million tons while consumption is 4.4 million tons with estimated 6.3 million tons in next 10 years. The policy has three parts dealing with existing fertilizer plants, new fertilizer plants and BMR. Gas subsidy on Fertilizer will end in next five years. Pakistan offers gas to the new Plants at 70 cents as compared with 77 cents in many countries. For expansion in the existing plants, the gas prices will be the same for feedstock for five years. Duty free import of rock phosphate to phosphatic fertilizer manufacture and duty-free import of raw material to NPK fertilizer producer. Tax holiday for 3-8 years for investors in this category. Financial Ratios Fauji Fertilizer Company Limited Profit Before Tax Profit After Tax Return on Equity Earnings per share ENGRO Chemicals Profit before Tax Profit after Tax Dividend Per Share Return on Equity Million Rs Million Rs Rs % 2001 1,191 1,064 7.5 20.31 2002 1,836 1,133 7.5 21.26 Million Rs Million Rs % Rs 2002 4,839 3,073 28.55 18.87 2003 4,931 3,145 27.29 19.22
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Dawood Hercules Profit Before Tax Profit After Tax Return on Equity Pak Arab Fertilizer Profit Before Tax Profit After Tax Return on Equity Important Addresses:
National Fertilizer Corporation of Pakistan (Pvt) Limited st 1 Floor, Alfalah Building (Tail Wing), Whahrah-e-Quaid-e-Azam, Lahore Ph: 6302904, 6302905 Dawood Hercules Chemicals Limited, Shalimar House, 35-A, Shahrah-e-Abdul Hameed Bin Badees, Lahore Ph: (042) 6301601-7 Fax: (042) 6360343, 6364316 ENGRO Chemicals Pakistan Ltd., PNSC Building, M.T. Khan Road, Karachi Ph: 5611060-69, 111-211-211 Fax: (021) 5610688 Fauji Fertilizer Company Ltd., 93- Harley Street, Rawalpindi Ph: 9272305-09 - Fax: 9272303 Fauji Fertilizer Bin Qasim Limited, 93 Harley Street, Rawalpindi Ph: 9272196-97 - Fax: 9272198-99
Million Rs Million Rs %
2001 823 595 13.29 2002 1,077 478 53
2002 659 472 17.43 2003 1,116 519 37
Million Rs Million Rs %
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PETROCHEMICALS & CHEMICAL SECTOR

Chemicals Chemicals are the main constituents of all production processes, ranging from Food and Food Products to High-Tech industries like Information Technology. Chemical Industry of a country is considered backbone of the industry. Chemical Imports Petrochemical & Chemical products constitute approximately 40% (US$ 4 billion) of total imports of the country (US$ 11.4 billion). Imports of Chemical, Petroleum and Petroleum products for the years 2001-02 & 2002-03 are given at table -1 . Table -1 Chemical Group Petroleum & Petroleum Products Dyes & Colors Pharmaceuticals Fertilizers Other Chemicals Total: Imports 2001-02 172,578 7,775 13,988 10,904 82,263 287,508 2002-03 179,317 8,419 12,964 14,068 90,954 305,722 (Rs Million)
Source: Economic Survey 2001-02 & State Bank of Pakistan Annual Report 2002-03
High import bill calls for special attention to the development of petrochemicals and chemical sectors in order to save foreign exchange. Petrochemical products are broadly classified into two groups, i.e. basic and end products. The basic product group includes Olefins (Ethylene, Propylene, and Butadiene) and Aromatics, while the end products group includes long chains of chemicals like Xylenes, Dimethyl Terepthalate (DMT), Ethylene Dichloride, Polypropylene, Ethylene Dioxide, Alkyl Benzene, Acrylics etc. that are used as raw materials for Pesticides, Plastics, Synthetic Fibers and Elastomers
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Industries. There is substantial scope of development in Chemical as well as petrochemical industry in Pakistan. At present the petrochemical industry of Pakistan is limited to production of Poly Vinyl Chloride (PVC) based on imported Vinyl Chloride Monomer (VCM), Synthetic Fibers, Aromatics - Benzene, Toluene and Xylene (BTX), Purified Terephthalic Acid (PTA) and Carbon Black, Pthalic Anhydride, Maleic Anhydride, Dioctyl Phthalate (DOP), Formic Acid, Acetic Acid, Polyviyl Chloride. During the last three decades repeated efforts have been made to develop projects of petrochemicals products. In this connection numerous studies have been carried out for production of basic petrochemicals i.e. Ethylene, Propylene etc. utilizing alternate feed stocks, i.e. a) b) c) d) e) Naphtha Natural Gas Associated Gases Molasses Coal
No significant development has taken place so far in the above subsectors. Pakistan has no facility to produce basic petrochemicals like Ethylene, Propylene, Butadiene, etc. and they are being imported in bulk. Out of long list of chemicals, only few are being produced locally. They include pure Terephthalic Acid (PTA), BTX and Carbon Black. It is important to strive for setting up of a petrochemical complex as petrochemical products provide raw material for plastics, detergents, dyes, paints & varnishes and pesticides etc. They are also used as additives for manufacture of lubricating oils. Most of the specialty and fine chemicals belong to the petrochemical group. However, this involves high capital investment and state of the art technology. It is estimated that petrochemical complex cost can range between US$ 1.0 billion depending upon the scope of the project.
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Petrochemical Complex As stated earlier various feed stocks can be considered for setting-up of Petrochemical Complex and basic petrochemical products like Ethylene and Propylene can be produced. These are discussed here-under: (a) Naphtha An approximate quantity of 500,000 MT is available in the country. It is understood that the economic size of a Petrochemical Complex requires 650,000 MT of naphtha. The shortfall can be imported. Such a Petrochemical Complex can give rise to hundreds of SMEs and form a source of raw material for many down-stream industries. (b) Natural Gas Currently in Pakistan have recoverable reserves of 42.73 TCF (Trillion Cubic Feet). The overall status is given table 2. Table -2 NATURAL GAS; TCF Recoverable Reserves 42.73 Total Production 15.94 Balance Reserves 26.79
Source: Energy Year Book-2003
Value Addition to Natural Gas Value addition of only 16.20 % of the total consumption of Natural Gas is currently taking place in the fertilizer industry as a fertilizer feedstock. Acetylene can be obtained as value added product of Natural Gas that can further be converted to basic petrochemical products. Sitara Group of Companies had planned this project long time ago but could not implement the project due to non-availability of gas. However, a dedicated field with gas of similar quality as of Sui gas may be considered for such a project. In this way the surplus chlorine available at Sitara Group of Companies can be utilized which can replace import of Vinyl Chloride Monomer (VCM). This project is estimated to cost around US$ 500 million.
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Natural Gas Consumption (Sector Wise) 2002 - 03 Total: 872.3 Billion Cu. Ft.
2.60% 18.90% 17.60%
0.40% 4.50% 1.30%
16.20%
38.50%
Commercial
Domestic
Transport (CNG)
Power
Fertilizer (Feedstock)
Fertilizer (Fuel)
Cement
Gen. Industry
(c)
Associated Gases The table 3 depicts the availability of Associated Gases in the country. Table -3
Recoverable Reserves 1.370 Trillion Cubic Feet (TCF) Total Production Balance Reserves 0.816 0.554
Source: Energy Year Book-2003
The use of Associated Gases rich in Ethane and Propane has been considered but the gathering system poses problems, therefore, the project based on Associated Gases could not be set up. Further, the availability of Associated Gases is not of the quantum that can result in setting up of economical size Petrochemical Complex. (d) Molasses (a by-product of Sugar Industry) About 2 million tons molasses are produced and mostly exported from Pakistan at present. Presently 13 distilleries are operating in the country; 10 of which are associated with Sugar Mills while 02 units are non-operational, to produce value added alcohol, i.e. Ethanol. Sugar industry stake-holders need to be convinced and facilitated to set up local plants which can produce 400,000 MT of value added Ethanol to be converted to other petrochemical products. The ethanol can also be blended to blend with the gasoline to obtain a mixture called Gasohol, which is being practiced in the
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world especially in Brazil, USA, and lately in India. Based on 20% blend of gasohol, current gasoline demand of 1.1 million MT can be reduced by 220,000 MT. Besides Ethanol and Gasohol, molasses can be used to produce other products like Citric Acid, Pharmaceuticals, Acetic Acid, Acetone, Ethyl Acetate, Butyle, Acetate, Ethylene based chemicals for fibre and plastic production. (e) Coal There are abundant reserves of coal of useable quality at Thar area in Sind province. These reserves are large enough to set up any commercial scale plant. Coal has been successfully exploited to convert into synthetic natural gas, petrochemical and chemicals in South Africa, USA and China. Details are at table 4.
(Million Tons) Total Reserves 184,623 235 217 90 Mineable Reserves 1,915 32.7 32.4 0.9 Production (000, Tons) 1,047 502 1,709 53 Thar Lakhra Heating Value (Btu/lb) 6,244 11,045 5,503 9,158 9,472 15,801 9,637 15,499 9,386 142,171
Table -4
Province Sindh Punjab Balochistan N.W.F.P
Source: Energy Year Book 2003
Pesticides Pesticides have become essential for protection of agricultural crops to get higher yield and protect the crops from diseases. Presently, the Pesticide Industry comprises of Formulation industry based on the imports of Basis and intermediate Chemicals. The sector lacks in manufacturing because of the lack in production of base chemicals in the country. The imports exceeded Rs. 6.0 billion during 2002-03. It would not be possible as well as economical to manufacture all the required active ingredients in the country because of the absence of petrochemical base. However, few ingredients can be produced in Pakistan, especially the basic chemicals to produce pesticides to be used on cotton crop. Cotton crop consumes about 71% of the total pesticides in Pakistan. The share of plant protection for cotton crop is approximately US$ 330 Million. The data on imports, demand and local formulation of pesticides is provided in table -5.
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Table -5
Year
Pesticides Imports Local Formulation Total Demand (M. Tons) (M. Tons) (M. Tons) 1997 24,168 13,836 38,004 1998 22,765 18,811 41,576 1999 27,210 18,470 45,680 2000 19,764 41,535 61,299 2001 20,678 26,914 47,592 2002Import of various Active ingredients from various countries for formulation, given in ta 27,099 42,794 69,893 2003 24,028 54,105 78,133 Source: MINFAL
Table -6
IMPORT OF ACTIVE PESTICIDES INGREDIENTS (Nos./ Value & Origin)
Variety of Active Ingredients

63 03 02 16 01 11 04 04 02 05 03 04 03 09 02 01 09 09 14
Import Value (Million US$)

56.50 0.10 0.28 1.21 0.17 5.75 0.73 0.27 0.53 1.04 0.01 0.19 0.35 7.40 0.03 0.07 4.94 6.33 5.52 91.42
Origin
China Belgium Denmark Egypt France Germany Greece Indonesia Japan Malaysia Poland Saudi Arabia Singapore Switzerland Taiwan Turkey UAE UK USA
TOTAL:
Hydrogen Peroxide Hydrogen Peroxide is extensively used in the textile processing and about 17,000 MT is being imported annually. Both the existing plants of Hydrogen Peroxide are closed due to financial problems and local demand is being met through imports. If it is not possible to re-start the existing closed plants due to economics, another feasible plant with a capacity to meet local demand can be
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set up. cost.
The estimated cost of the project is approximately US$ 21 million.
Production of Hydrogen Peroxide within Ammonia plant may save some capital
Alkyl Benzene Sulfonates (Detergent Based) The recent demand for detergents is necessitating setting up of a manufacturing facility for the basic raw material like Dodecyl Benzene and Tridecyl Benzene Sulfonate. Presently more than Rs. 1.5 billion worth of detergent active agents are being imported. The raw material for the detergent base is benzene which can be provided from the petrochemical complex that can be converted to Alkyle Benezene and subsequently to Alky Benezene Sulfonates. Methanol Methanol can be produced from natural gas. It is being imported to the tune of 40,000 - 50,000 MTPY, which costs around Rs. 600 Million. the industry compared with Saudi Arabia/Middle Eastern countries. Aromatics (BTX) Three most important Aromatics are: Benzene, Toluene and Xylene are commonly known as BTX. In Pakistan, Benzene is used for production of insecticides. Toluene is used for production of Tri-Nitro Toluene (TNT) and solvents. Mixed Xylenes are used as solvent in paint industry and for formulation of various insecticides and as surface coating agents. Paraxylene and Orthoxylene are derived from mixed Xylene. Paraxylene is used as a raw material for production of PTA while Orthoxylene is used for production of phthalic anhydride. The production of Methanol is viable if natural gas is provided at competitive prices to
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Historically, BTX requirements of the country have been met from local production and imports. The local production originates from a small unit of The unit uses reformat as feedstock. National Refinery Limited. The unit has an annual capacity of 25,000 metric tons of Benzene, Toluene and Xylene. Throughout its existence the plant has been operating at lower capacity owing to operational, availability, production economics and market constraints. After start of ICIs PTA production facility paraxylene imports have been started. During the last two (2) years the imports of paraxylene ranged between 250,000 to 300,000 metric tons. Mono - Ethylene Glycol (MEG) Mono-Ethylene Glycol (MEG) is one of the most important synthetic organic liquids used for manufacturing of polyester fibre and as anti-freezing agent. In Pakistan MEG is primarily being consumed as input for manufacturing of polyester fibre/yarn. At present, all the requirements of MEG are being met from imports. The imports during 1998 2002 are presented in table 7 Table -7 Year 1998-99 1999-00 2000-01 2001-02 2002-03 Quantity (Liters) 166,792,092 155,943,155 156,766,366 109,211,983 203,913,709 MEG Imports Quantity (M. Tons) 186,131 174,024 174,943 121,875 227,557 Value Rs. 000 3,251,027 4,447,045 4,828,181 3,128,510 6,410,410
Source: Federal Bureau of Statistics
In 2002-03, the 227,557 metric tons of MEG was imported at a value of US$ 109 million. There is a great potential to set up the MEG manufacturing units. However, the base for this plant is petrochemical complex from where Ethylene can be obtained.
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Proposed projects based on local raw-material Table below gives the details of projects, which can be established on local raw material. Name of Minerals/Rocks
Copper
Proposed Projects
Export potential as blister copper and cathode copper, used as alloys of brass, bronze and copper nickel and copper based chemicals. Exploitation of small copper deposit, for production of copper concentrate and to use it for production of copper based chemicals. Export, stock piling, Jewellery. Recovery of gold from Indus sand and gold rocks. To mine and produce concentrates for export till economy of scale permit their local production. Zinc sulphate for rice field and lead for the manufacturing of paints. Beneficiated iron ores of Dilband; Balochistan and Sargodha; Punjab in the blast furnace of Steel Mills to substitute imports costing billion of rupees per annum. Export potential of metallurgical grade chromite. Chemical grade chromite is used for chemical industries and for the production of chromates, di-chromates & chrome pigments. Refractory grade is used as a refractory material for the production of chromemagnesite basic refractories. Thermal power generation, brick kiln, cement, sugar and other heat installation units & for the production of smokeless coal for households. Possibility of undertaking studies on coal-water, coal oil slurries for injecting as fuel in industrial & power plants. As amender for saline sodic soils, correction of low quality tube wells water, building material as gypsum plaster and gypsum plaster sand blocks. Phosphatic fertilizers, phosphoric acid, animal feed. To produce iodated table salt, mineral mixture for livestock, chemicals like soda ash, caustic soda, sodium sulphide, sodium sulphate etc. Slaked lime, cement, steel mills in blast furnaces, building and road material etc. Basic refractories Import substitution production of magnesium metal from magnesite.
Gold Lead and Zinc Ores
Iron Ores
Chromite
Coal
Gypsum
Rock Phosphate Rock-Salt
Limestone Magnesite
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Gemstones Natural Stones. China Clay (kaolin) Barite
Export potential value addition through cutting and polishing. Mainly Building Material. Ceramic plant for pottery and sanitary ware. Grounded barite is used as a weighting medium in drilling of oil and gas wells. Also used in chemicals, glass and paint industries. Cosmetics, paint, ceramic, paper and rubber industry. Beneficiation of graphite to produce pencil, crucible, reactor, electrode and foundry grade concentrates. Production of battery grade manganese dioxide from indigenous manganese ores and production of potassium permanganate.
Soapstone (Talc) Graphite Manganese Ore
Petroleum exploration &production as well as oil & gas 10-year road map for private investment is attached at annex VII
Financial Ratios Major financial ratios of listed Chemical & Pharma companies of the country is as under: Chemical & Pharma (2003) Current Ratio Gross Profit Margin (%) Net Profit Margin (%) Earnings Per Share (Rs) Dividend/ Net Profit (%) Dividends Per Share (Rs) Return on Investment (%) Return on Equity (%) Average 1.90 30.13 10.20 29.16 48.93 5.10 10.34 20.89 Maximum 6.52 49.24 46.22 203.11 101.12 25.01 27.56 43.87 Minimum 0.64 12.49 1.21 0.60 2.13 4.85

Pakistan Plastic Manufacturers Association (PPMA) Mashrique Shopping Centre, 4th Floor 410, St. 6/A, Block No. 14, Gulshan-e-Iqbal, Karachi Tel: 021- 4942336 Fax: 021-4944222 Pak China Chemicals, Ali Akbar Group 1-Km, Bhopitan Chowk, Defence Road off Raiwind Road, Lahore. Fax: 042-5321324 Tel: 042-5321461-5
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ENGRO Asahi Polymer & Chemicals Ltd., 1st Floor, Bahria Cmplex, 24, MT. Khan Road, Karachi 74000 Tel: 021-5610610, 5610617 & 111-411-411 Fax: 021-5611690 Sitara Chemicals Industries Ltd., 32-Km, Sheikhupura Road, Faisalabad. Fax: 041-689147-48 Tel: 041-689141-5 Delta Industries (Pvt.) Ltd., Akhwan House, 38-S.M.S. Agha Khan III, (Davis Road), Lahore-74400. Fax: 042-6369434 Tel: 042-6372042 BASF Pakistan Ltd., 46-A, Block-6, PE.C.H.S., Karachi-75400. Fax: 021-4524314 Tel: 021-4549171 Unilever Pakistan Ltd., Avari Plaza, Fatima Jinnah Road, Karachi-75530. Fax. 021-5680918 Tel: 021-5660062-65 Gunj Glass Works Ltd., Hasan Abdal. Fax: 05772-520822 Tel: 05772-520224-7
Sandal Dyestuff Industries (Pvt.) Ltd., Room No. 305-306, 2nd Floor, The Business Centre, 8/8 New Civil Lines, Faisalabad. Fax: 041-617940 Tel: 041-633071-74 Chemi-Dyestuffs Industries (Pvt.) Ltd., D-4, South Avenue, S.I.T.E., Karachi-75700. Fax: 021-2562613 Tel: 021-2573940 Clariant Pakistan Ltd., 1-A/1, Sector 20, Kornagi Industrial Area, Karachi-74900. Fax: 021-5046712 Tel: 021-5046710 Dynea Pakistan Ltd., 2nd Floor, AL-Hanna Centre, 55, Dar-ul - Aman Society, Shahrah-e-Faisal, Karachi-75350. Fax: 021-557167 Tel: 021-4520132-5 Wah Nobel (Pvt.) Limited, G. T. Road, Wah Cantt. Tel: 0596-545243-77 Fax: 0596-545241
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PHARMACEUTICAL SECTOR
The Pharmaceutical Industry plays an important role in the economic development of the country by ensuring better health to the people through supplying cheaper and quality drugs. The pharmaceutical industry in Pakistan comprises national and multinational companies. Industry Structure Presently, there are about 387 pharmaceutical manufacturing companies including 30 multinationals, which are meeting around 80% of the countrys requirement. Total capital investment in this sector is approximately Rs 21.12 billion divided almost evenly between national and multinational companies. Break-up of investment is given in table -1: Table -1 Description MNCs National Total Potential Investment According to policy of Ministry of Health, four types of drugs manufacturing licenses are issued depending upon the nature of activity of pharmaceutical manufacture i.e. formulation, basic and semi basic manufacturing and repacking. The Government is keen to attract investment in this sector, which is very important to cater the health needs of growing population. The pharmaceutical policy, which is to be announced shortly, aims at providing more incentives in order to enable this sector grow and provide quality products to the consumers at affordable prices. Investment Last two years 2.53 2.74 5.27
(Rs in Billion)
Total investment at present 11.14 9.98 21.12

Source: Industry estimates
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Incentives Patent Ordinance 2002 has been made TRIPS compliant to include granting of patents to pharmaceutical products, which will encourage new investments in the sector. Tariff has been rationalized and duty on import of most of the raw material has been reduced to 5%. 5% duty on import of Plant, Machinery & Equipment (not manufactured locally). 90% first year allowance on cost of Plant, Machinery & Equipment. Financial Ratios Major financial ratios of listed Chemical & Pharma companies of the country is as under: Chemical & Pharma (2003) Current Ratio Gross Profit Margin (%) Net Profit Margin (%) Earnings Per Share (Rs) Dividend/ Net Profit (%) Dividends Per Share (Rs) Return on Investment (%) Return on Equity (%) Average 1.90 30.13 10.20 29.16 48.93 5.10 10.34 20.89 Maximum 6.52 49.24 46.22 203.11 101.12 25.01 27.56 43.87 Minimum 0.64 12.49 1.21 0.60 2.13 4.85
Important Addresses
Pakistan Pharmaceutical Manufacturers Association (PPMA) 130-131, Hotel Metropole, Karachi Tel: 021-5211773/ 042-5118801-3 Fax: 021-5675608 Pharma Bureau of Information and Statistics Room No. 16 & 17, Ground Floor, Plot 23, Sector 22, Korangi Industrial Area, Karachi Tel: 021-5060221/ 5060197 Fax: 021-5060360
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DAIRY SECTOR
Dairy is one of the growing segment of Livestock sub-sector and important component of Pakistans economy. Pakistan is the fifth largest producer of milk in the world. The per capita availability of milk at present is 185 litres which is highest among the South Asian countries. Milk Production in Pakistan has seen a constant increase during the last two decades. The production has increased from 8.918 million metric tons in 1981 to 27.031 million metric tons in 2001-02. Milk production for the year 2002-03 is estimated at 27.811 million metric tons (Economic Survey of Pakistan 2002-03). Investment Prospects Pakistan is the fifth largest producer of milk in the world today. There is a large and untapped potential in the dairy industry. With a population of 149 million, a significant demand for dairy products exists in Pakistan. There is a need for establishing modern milk processing and packaging facilities based on advanced technology to convert abundantly available raw milk into high value added dairy products. In addition, with improved conditions for milk pasteurization, availability of chilled distribution facilities and consumer preference for the low cost pasteurized milk, the sector provides unique opportunity for investment in establishing pasteurized milk production plants. There is also great scope for establishing an efficient milk collection system and refrigeration & transportation facilities. The sector offers opportunity to foreign investor for establishing a joint venture for the production of dairy products, particularly dried milk and infant formula milk for which great demand exist in the neighboring countries like Iran, UAE and Saudi Arabia. Important Address
Pakistan Dairy Association 11/19-B, Link Shami Road, Lahore Cantt. Tel: 042-6650653/6680041
Fax: 042-6682042
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MINING & MINERAL SECTOR

The minerals play a vital role in economic development by providing raw material to the industry. Pakistan has great potential in mineral development. Various geological surveys conducted in the recent past have proved potential reserves of various metallic minerals. The reserves and extraction of some important minerals in the country are given in table below:
Minerals Antimony Argonite / Marble China Clay Celestite Chromite Coal Dolomite Fire Clay Fullers Earth Gypsum Anhydrite Lime Stone Magnesite Rock Salt Silica Sand Ochre Sulphur Soap Stone Baryte Bauxite / Laterite Iron Ore Crude Oil Natural Gas Reserves Unit of Measurement 000 Tons Very large deposits 4.9 million tons Not estimated Fairly large deposits 185 billion tons Very large deposits Over 100 million tons Fairly large deposits 350 million tons Very large deposits 12 million tons Over 100 million tons Very large deposits .. 0.8 million tons 0.6 million tons 30 million tons Over 74 million tons Over 430 million tons 296 million US barrels 492 billion cu. Mtr. 000 Tons 000 Tons Tons 000 Tons 000 Tons 000 Tons 000 Tons 000 Tons 000 Tons 000 Tons Tons 000 Tons 000 Tons 000 Tons 000 Tons 000 Tons 000 Tons Tons Tons Mln barrels Mln cu. Mtr. 1998-99 411 67 642 18 3,378 198.831 153 16 242 9,466 3,455 1,190 158 4.080 19.103 42 18 41,362 38,151 19.95 21,090 Year-wise Extraction 20011999-00 2000-01 02 95 37 579 620 622 63 802 26 3,164 347.583 139 19 355 9,589 4,513 1,358 167 4.793 22.812 48 26 48,237 45,980 20.40 23,170 47.574 807 21.683 3,269 352.689 163.723 12.926 399.097 10,868 4,645 1,394 154.867 4.691 17.428 46.989 28.289 35,114 24,765 21.08 24,780 53.542 382 24.185 3,609 312.886 171.056 15.521 401.740 10,805 4,637 1,423 161.737 5.064 22.580 53.573 21.451 37,182 4,942 23.19 26,160 2002-03 35* 598* 42.575 402 30.675 3,511 243.789* 116.515 14.723 424.107 11,880 2,645* 1,426 185.415 6.733 19.401 65.797 40.745 40,649 4,762 23.45 20,120
Jul-March Economic Survey 2002-03, Statistical Pocket Book 2004
Exports and Imports of Minerals The export and import statistics for the last two years is given in tables below:
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Exports
S. No Description 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Marble Granite Barite Silica & Quartz Sands Pebble / Crushed Stones Dust & Powder of precious stones Fullers earth Fire & other clays Sodium chloride & common Salt Quartz, Mica & Feldspar Steatite, Natural talc Chromite ore & concentrate (000 Rupees) Value in US $ 2001-02 2002-03 2001-02 2002-03 121,066 350,574 1,971,000 5,968,232 3,147 850 51,237 14,550 41 429 667 7,303 1,429 1,431 23,266 24,361 210 483 3,419 8,222 ----2,652 ---45,148 12,006 21,338 195,473 3,63,261 4,263 2,674 69,407 45,522 76,916 74,167 1,252,295 1,262,631 1,688 5,580 27,482 94,994 2,400 214 39,075 3,643 163,778 371,411 2,666,525 6,322,965 Source: Federal Bureau of Statistics (000 Rupees) 2001-02 2002-03 14,147 5,847 2,437 11,088 2,828 51,809 44,472 40,275 446 14,960 146,696 21,717 57,642 9,273 2,952 3,317 26,911 2,840,619 10,366 197,133 7,970 5,427 2,452 14,269 14,872 5,935 99,760 35,250 39,430 1,490 18,625 149,351 47,661 51,031 7,860 1,454 7,415 18,008 2,751,379 Value in US$ 2001-02 2002-03 230,332 99,540 39,677 1,80,527 46,043 8,43,520 7,24,063 6,55,731 7,261 2,43,568 2,388,407 3,53,581 9,38,489 1,50,976 48,062 54,005 4,38,147 46,249,000 2,42,917 2,53,183 1,01,038 1,69,833 6,00,102 6,71,263 25,366 3,17,075 2,542,577 8,11,389 8,68,760 1,33,810 24,753 1,26,234 3,06,571 46,839,000
Imports
S. No 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. Description Marble & Building stone Granite Gypsum Silica sands & Quartz and other natural sands Sulphur of all kinds Natural Abrasives Graphite Natural Dolomite cut into blocks Magnesium Oxide, Magnesia Kaoline and other Kaolinic Clays Bentonite Clays Sodium Chloride pure & Common Salt Quartz, Mica feldspar Barium Sulphate Talc Iron ore & concentrates Aluminum ore & concern Lead ore & concentrates Manganese ores & conc Titanium ores & Conc Niobium Tantanuim Chromium ores & conc.
2,886 1,68,772 49,131 112,764 3,209,589 1,919,713 19,597 1,29,762 3,33,622 1,502 88,358 25,570 821 39,921 13,976 Source: Federal Bureau of Statistics
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Potential Investment The foreign direct investment in the mining and quarrying sector was US$ 80 million in 1999-2000, which increased to US$ 275 million in 2001-02 and remained at US$ 152 million during nine months of 2002-03. Pakistan has proven reserves of metallic minerals i.e. copper, gold, silver, chromites, iron, lead and zinc, which are still untapped. Three Australian mining companies, BHP Billiton, the largest Copper mining company in the world, Tethyan Copper Company (TCC) and Mincor Resources are engaged in the exploration of copper, gold and other base metals in district Chaghi, Baluchistan with an investment of about US$ 152 million. Similarly, a Chinese company has entered into a lease agreement with the Government for the operation of Saindak Copper-Gold project in Chaghi, Baluchistan. In addition, two Chinese companies are working for the establishment of coal-fired power plants based on Thar coal reserves in Sindh. Another Chinese company has entered into a joint venture agreement for the exploration and development of lead-zinc deposits in Balochistan with an investment of about US$ 80 million. Realizing the vast potential of mineral resources, there is great opportunity for the multinational companies to invest in this sector. The response and interest of the international mining companies shows complete confidence of investors in Pakistans geology and Governments mineral development policies. Regulatory Regime The Mineral Concession rules agreed by the Federal and Provincial Governments provide four types of titles:
Application Fee (Rs) 15,000 25,000 250 750 Year 1-3 Year 4 Renewal Fee (Rs) Not Renewable Rent Rs Sq. Km -
S.No. 1. 2.
Category Reconnaissance License Exploration License
Area 100 to 10,000 sq. kms. 10% area of Reconnaissance license and not 1000 sq. kms.
Period -
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S.No.
Category - First Renewal - Second Renewal
Area
Application Fee (Rs)
Renewal Fee (Rs) 50,000 50,000
Rent Rs Sq. Km 1,000 1,250 2,000 3,500 3,000
Period Year 5 Year 6 Year 7 Year 8 Year 9
3.
Mineral Deposit Retention License
Area in Exploration license column could be retained for 2 years with 1 year extension 250 kms.
100,000
100,000 3,000 2+1
4.
Mining Lease
100,000
100,000
3,000
30+10
Royalty Determination and Payment (i) (ii) Royalty will be calculated at the first point where the minerals are sold or otherwise disposed off, without any deductions from gross value. Royalty will be assessed and paid on monthly basis.
Insurance Mining operators will be allowed to insure their assets and risks with international insurance companies. Incentives Repatriation of Capital & Profits: The Foreign Private Investment (Promotion and Protection) Act, 1976 guarantees that a foreign investor in an industrial undertaking may at any time repatriate capital and profits. This includes mining ventures. Fiscal Regime A summarized Updated Version of Fiscal Regime as Provided by Ministry of Petroleum & Natural Resources is given in the table below:
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Section 9.2 9.2.1 9.2.2 9.3 9.3.1 9.3.2 9.4 9.4.1 9.4.2 9.4.3 9.5 9.5.1 9.5.2
Taxes
Income Tax Corporate Tax Minimum Corporate Tax With-Holding Tax Dividends Non-resident Contractors Other Taxes Sales Tax Additional Profit Tax Zakat Concession on Imports Import of machinery (not manufactured locally) Locally manufactured mining machinery Customs Duty Sales Tax Royalty Coal Precious Stones Semi-precious Stones Base metal Other than above
Rate as per Mineral Policy, 1995 Upto date status

30% for local listed companies 35% for private, non resident companies 0.5% of the declared turn annually 0.75% with 0.25% increase on export of minerals from 1st July 2000 7.5% 6% of gross payment Nil on Export Negotiable Non-Muslim Exempted Nil
10% 15% As decided by provinces 10% 3% 2% 1%
10 10.1 10.2
Source: Ministry of Petroleum & Natural Resources (Mineral Wing)
National Mineral Policy is attached at Annexure XIII. NATIONAL MINERAL POLICY OF PAKISTAN Investment in small-scale mining (capital employed less than Rs. 300 million) will be confined to Pakistani nationals. Corporate merger of small-scale mine operators will be encouraged. A Geodata Centre of Pakistan (GDCP) will be established as an autonomous body of the Ministry of Petroleum and Natural Resources to collect, store, update and manage geodata of the whole country. The Federal and Provincial Governments will provide grants to the respective corporations for the promotional tasks on priority minerals or priority areas.
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The Mining Concession Rules will provide for four types of mineral titles, namely; Reconnaissance License, Exploration License, Mineral Deposit Retention License and Mining Lease. Mining and Value Added Mineral Processing are placed in Category A industries. 5% customs duty on import of plant, machinery and equipment (which is not manufactured locally). Except for royalty, there will be no other Provincial or local levies or taxes imposed on minerals or mining operations. No sales tax will be levied on minerals that are exported. Important Addresses
Mines & Minerals Balochistan Directorate General of Mines & Minerals Link Sariab Road Quetta Small & Medium Enterprise Development Authority Ground Floor, State Life Building The Mall, Peshawar Sindh Coal Authority F-158/1, Block-5, KDA Scheme No. 5 Clifton, Karachi Director General (Mines & Minerals) Govt. of N.W.F.P 5-Khyber Road Peshawar National Centre of Excellence in Geology Geology Department, University of Peshawar Peshawar Mining & Geological Engineering Department University of Engineering & Technology Lahore Director General (Mineral Wing) Ministry of Petroleum & Natural Resources 21-E, Huma Plaza, Blue Area, Islamabad Insitute of Mining Engineers of Pakistan 10/3, Sharif Complex, Main Gulberg-II, Lahore Director General Mines & Minerals Directorate General of Mines & Minerals, Govt. of Punjab Poonch House Multan Road Lahore Pakistan Mineral Development Corporation H # 13, H/9 Islamabad Dirctor General Geological Survey of Pakistan Sari-ab Road, Quetta National Gelogical Society of Pakistan Post Graduate Centre in Earth Sciences Punjab University Quaid-e-Azam Campus Lahore
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MARBLE AND GRANITE SECTOR

NATURAL STONES Pakistan has enormous wealth of decorative and building stones such as granites, onyx, marble of different shades, recrystallized limestone, fossil ferrous lime stones, serpentine, gabbros, purple and magnesium sandstones etc. These materials occur on the surface and therefore lend themselves to economic open cast mining. Pakistans Marble and Granite sector is in its nascent stage of development. A review of the current state of the industry reflects a lack of development on scientific lines; including that of technology and human resources. Processing industry relies mainly upon local manufacturers of machinery and equipment, with only a very few calibrated and high efficiency machines from reputed international suppliers Granites: Nagarparkar in the South East (Sindh) and Manshera in the North (NWFP), so far known are the main sources of workable granites in the country. However, Gilgit Region (Northern Areas) do indicate great potential of variety, quality and quantity of granites that according to geological evidences have superiority over other granites in Pakistan. The resources of granite in Pakistan have not been specifically estimated, yet vast reserves of granite (millions of tones) are generally quoted. GRANITE PRODUCTION IN PAKISTAN (Province wise 2002-03) Province Balochistan NWFP Sindh Total Production (Tons) 5000 5000 5000 15000
Source: All Pakistan Marble Industry Association
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Export of Granite S. No. 1. 2. 3. Year 2000-01 2001-02 2002-03 Value (Million Rs.) 8.301 0.85 3.147
Source:-Federal Bureau of Statistics
Granite Colors Pakistan fortunately has exceptionally good shades and colours of granite widely available in different parts of the country. Rare colours have great demand in the world market. These include, Jet black, Pearl Blue and Dark Green. The following table shows colours of granite and their availability in the country: Major Colours and Shades of Granite Available in the Country
Major Colour Categories Black Pink Grey Green Gold and Yellow White Red Name of Areas Mansehra, Gilgit, Dir, Swabi, Kohistan, Chitral Dir, Swat, Nagar Parker, Kohistan Gilgit, Dir, Mansehra, Buner, Malakand, Chaghi Chaghi, Dir, Swat, Kashmir Kohistan, Swat, Dir, Mansehra Gilgit, Baltistan, Malakand, Dir, Chitral Dir, Swat, Kohisan Colour Shades Jet black Pink Silver lining Greyish Green Green with bends Golden Yellow White grey: golden
Source: Industry and Market Research by SMEDA
Marble and Onyx Onyx occurs mainly in Baluchistan Chagai district while marbles of different classifications, fossil ferrous limestone, serpentine etc occur in other provinces mainly in NWFP and Northern Areas. Out of 160 million tones of marble reserve estimated in Pakistan, 158 million tones are in the NWFP and 2 million tones in Balochistan. Marble Colors Majority of the colors traded in the international markets are available in the country. Among all these colors, white color is universal in demand. Following exhibit indicates the colors of marble and onyx available in different parts of the country:
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Area wise Reserves & Major Colors/ Shades Available in the Country
Major color categories White Name of Areas Mohmand Agency, Chitral, Buner, Swat, Parachinar, Gilgit, Hunza, Swabi, MKD. Buner, Bajour, Mardan, Bela Swat, Swabi, Buner, Azad Kashmir and Lasbela Nowshera, Chitral, Bela Lasbela Buner, Bajour, Mardan, Swat, Mohmand Agency, Lasbela and Khuzdar Buner, Swat, Kohat, Waziristan, Khuzdar and Lasbela Buner, Kohat, Lesbela, Khuzdar Color Shades Pure White: White with pink, brown and green shades: White to light gray: White to light gray with yellowish brown patches: Creamy white Dark Black: Blacks with patches of white: Black with white and golden streaks Dark Green, Green with streak & patches of white, gray and black, Greenish white. Greenish gray Pink with streak and patches of white: Pink with patches of white, gray, red and brown: Pink with fossils Gray with white bands: Gray with pink, brown and green patches Approx. Area-wise Production (Tons)
418,000
Black Green Pink
226,116 51,000
153,000
Gray
317,196
Brown Yellow Onyx Green Onyx White, Brown blended Total
Dark Brown with white lines, Brown with yellow patches, Light brown with fossils Yellow with Golden batches: Yellowish golden fossils. Dark green with layers of light green: Green with streaks of white and yellow White with layers of light gray
65,000 136,000 20,000 6,000
1,392,312 Source: Industry and Market Research by SMEDA
Production of Marble and Onyx (2002-03)

MARBLE PRODUCTION IN PAKISTAN (Province wise 2002-03)
Province Balochistan NWFP Sindh Total
Production (Tons) 1,000,000 2,000,000 60,000 3,060,000

Source:-All Pakistan Marble Industry Association
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MARBLE AND ONYX EXPORTS (2002-03)

QUANTITY (TONNES) MARBLE CHINA USA ITALY BANGLADESH HONG KONG OTHERS TOTAL ONYX MANUFACTURED 4,840 1,706 4,599 2,369 2,532 25,304 41,350 6,645 VALUE ( 000 US $) 1,349 1,020 918 924 740 1,726 6,677 11,722
TOTAL MARBLE & ONYX
47,995 IMPORTS
18,399
Source:-All Pakistan Marble Industry Association
S No
Description Marble, Onyx block uncut/unpolished Marble Onyx slabs Total:
Value in 000 Rs 2001-02 3,116 3,378 6,494 2002-03 2,173 3,674
Value in 000 USD 2001-02 50,732 54,998 2002-03 36,993 62,546
1. 2.
5,847 105,730 99,539 Source: Federal Bureau of Statistics
Marble and Granite Processing Industry in Pakistan

Name of City Total No. of Units 180 6 3 35 28 6 93 11 6 6 112 51 148 685 Gang Saw Import Karachi Hyderabad Quetta Multan Faisalabad Sargodha Lahore Gujranwala Sialkot Gujrat Rawalpindi Islamabad NWFP & FATA Total 14 Gang Saw Local 16 1 2 2 1 2 3 1 1 3 21 9 45 1 10 5 70 92 Gang Saw Mini 1 Cutters H.V 20 Cutters 48 Cutters 12 to 36 630 10 9 49 53 10 200 20 8 11 165 200 850 2,215 Auto Polishers Manu al Polis hers 300 2 5 2 19 2 4 18 7 12 33 385 2 1 Chip Tiles
36
2 3 22
15 23 46 103
4 4
4 2 45
Source: Industry and Market Research by SMEDA
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Potential Investment Pakistans Marble and Granite Sector reflects a lack of development on scientific lines. Processing industry mainly relies on locally manufactured machinery and equipment. Therefore, to cater for the export market, the processing units should add essential equipment required for quality production. Strategy for Development A detailed marketing package based on identification of buyer in the target market, and effective distribution system for entering in to this market. Technology up-gradation and human resource development, Machinery up-gradation is the mainstay of technology improvement. A comprehensive package is being developed to make this sector technology efficient. Mineral specific financial packages including mine collateralization are planned to support investment activities at mines. Investor friendly Regulatory Framework and export oriented fiscal regime has been developed for promoting investments at mine sites. Infrastructure facilities including link roads and feeder roads at Marble and Granite bearing areas have been worked out for the country. To support investment facilities at mines, Government is considering mineral specific financial packages. Important Addresses
All Pakistan Marble Industries Assn. Flat # 6, Block 16/A I/9 Markaz Islamabad Tel: 051-430519/433508 Fax: 051-435002 E-mail: apmia@hotmail.com Pakistan Mine Owners Association Barnas Road Quetta Tel: 081-64792/75171/821792 Fax : 081-821802
Gems and Jewellery Pakistan has a considerable quantity of naturally available gems including an unmatched quality of Emerald, Ruby, Pink Topaz, Lapis Lazuli, Roze Quartz, Tourmaline, Moonstone, Zircon, Aquamarine, Garnet, Kunzite and Peredot. Most of the precious stone mines in Pakistan are located in Northern areas. Jade is found in Gilgit, Florite in Chitral and Kohat, with most expensive Ruby deposits in 81
Hunza producing Blood Red Ruby. The Mingora Emerald is transparent sea green making it the most precious gem of Pakistan. Topaz and Pink Topaz as well as the other previous stones are found in various northern regions. Gemstone Productive Areas
Emerald Ruby Pink Topaz Light Pink Topaz Peridot Spinel Aquamarine Tourmaline Feldspar Quartz Topaz Zircon Agate Garnet Turquoise Swat, Gilgit, Mohmand & Bajour Agency Hunza, Neelam Valley(Azad Kashmir) and Upper Hunza Mardan Mardan Kohistan Hunza Valley Eastern Part of Gilgit, Chitral Neelum valley-Azad Kashmir, Chitral, Bulechi Nortern Tribal areas Skardu, Gilgit, Chitral Skardu, Lasbela, Nagarparkar, Azad Kashmir, Gilgit, Chitral Shingus and Bulechi in Gilgit District Dusso in Skardu District Chilas, Gilgit Nagarparkar - Sind, Dir Kohistan Swat, Malakand Agency, Targhao - Bajaur Agency, Skardu Chagai Hills - Baluchistan
Actual export statistics for gems show a total value of around USD 2 million. It is estimated that the export market for gems if properly exploited can be very significant. Gem exports can be categorized into two categories i.e. precious stones worked and un-worked. In the period 1998-2002 the export share of unworked gems was 90%. Some of the leading importers from Pakistan include Hong Kong (40% of Pakistans gem exports in 2001) the USA (20%) and Germany . In Pakistan most of the jewellery is produced manually using expertise of skilled workers and mostly relying on the lost wax casting procedure as opposed to more modern techniques. This causes substantial waste levels. Likewise, processing of gems is based on outdated procedures.
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Various capacity building initiatives have been launched including cluster development under a project being executed with the help of UNIDO. Also the Export Promotion Bureau has taken initiatives to organize training in this sector. It has established three training institutes in Karachi, Lahore and Peshawar. Currently the Export Promotion Bureau is working on the idea of establishing a Dazzle Park in Karachi where all modern facilities will be provided to the jewellers.
SWOT Analysis of the Gem and Jewellery Sector Strengths/Opportunities Abundance of raw materials specially gems and semi precious stones. Skilled labour Comparative advantage in the studded Jewellery. States liberalized policies i.e. Zero percent duty on Import of Gold, and export facilitation. Availability of Finance, which can be utilized by SMEs. Availability of Technical Skill through training Institutes. Large number of Entrepreneurs. Wide local market for consumption. Use of Information Technology in the industry. Easy Access to International markets. Recognition in the Global market. Threats/Weaknesses Cut throat regional competition. Rudimentary Methods. Modern techniques not being implemented Labour is skilled but relatively costly. High Entry barriers Traditional Designs and no innovations Export is nominal as compared to the potential Absence of any affiliation with International Gold Organization. Smuggling Under invoicing
Important Addresses
All Pak Commercial Exporters Association of Rough & Un-polished Precious & Semi-Precious Stones 2, al-Jalil market, Nimak Mandi Peshawar Tel: 091-213396/2568801 Fax: 091-213520 E.mail: apceap@psh.brain.net.pk All Pak Gem Merchants & Jewellers Assn. Gems & jewellery trade centre 1st floor, Blenkin street off Zaibunnisa street, Saddar Karachi Tel : 021-5210400/5657777/5678888 Fax : 021-5682970
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EDIBLE OIL SEEDS SECTOR

The Edible Oil Industry of Pakistan is engaged in the processing of vegetable ghee/ cooking oil. Total installed capacity (Million M. Tons) Number of units Total investment (Rs in Billion) Growth rate Value addition Total Manpower (Nos) Production Trends in edible oil consumption alongwith domestic production and imports are presented in the following table:
Local Production
(000 M.Tons)
2.7 155 7.20 12% 25% 37,700
Year 1999-00 2000-01 2001-02 2002-03*
Consumption
(000 M. Tons)
Imports 1,050 1,144 1,197 1,304
Import Bill
(Rs in Million)
(000 M.Tons)
1,661 1,706 1,779 1,938
611 562 582 634
21,402 19,045 24,034 34,407
* Estimated @ Edible Oils
Source: Economic Survey of Pakistan
The country today is importing well over 1.18 million M tons of edible oil against an annual import bill of Rs. 34.40 billion. In order to reduce imports of edible oil and to enhance indigenous oilseed production in the country, Pakistans Oil Seed Development Board was established in 1994. There is a specific duty structure on the import of oils and seeds. The customs duty is almost 65-70% of the C&F value. This higher tariff structure on imported oils is to provide protection to the locally available oil seed.
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Potential Investment The edible oil processing sector has already reached the saturation stage. However, great potential exists in production of oilseeds for extraction of oils to substitute imports of edible oil and seeds. Data of cultivated area, production, availability of indigenous & imported oils and forex expenditure on import of edible oil & oil seeds are given in the tables below:
Cotton Seeds Year
1999-00 2000-01 2001-02(P) 2002-03 Area (Acres) 7716 7267 7772 6669 Production (000 Tons) Oilseed Edible Oil 3640 437 3606 433 3612 433 3451 414
Rape & Mustard

Area (Acres) 698 645 531 649 Production (000 Tons) Oilseed Edible Oil 209 67 220 70 185 59 217 69 Area
Sun-Flower
(Acres) 290 178 262 398 Production (000 Tons) Oilseed Edible Oil 210 77 124 44 184 64 278 106 Area (Acres) 164 83 118 223
Canola
Production (000 Tons) Oilseed Edible Oil 82 31 42 15 59 21 136 52
Source: Agriculture Statistics of Pakistan, MINFAL and Pakistan Oilseed Development Board
Forex Spending On Edible Oil/ Oilseed Imports Year 1999-00 2000-01 2001-02 2002-03 Edible Oil Quantity Value (Rs (Million Million) Tons) 1.050 21,402 1.144 19,045 1.197 24,084 1.304 34,407 Imported Oilseed Quantity Value (Rs (000 Tons) Million) 450 500 600 658 95 106 184 11,062 Total Forex Spending (US$ Million) 532 401 605 191
Note: Value of imports based on the prevailing prices of the international market
Pakistan Vanaspati Manufacturer's Association, House No. 5-B, Sector F-7/3, College Road, Islamabad Ph: 051-2274358 Ph: 051-2272529 Pakistan Oilseed Development Board (PODB), 79-East, Al-Rehman Chamber, Blue Area Islamabad Ph: 051-9221814 Fax: 051-9221813 Kissan Board Punjab, 10 G, Johar Town, Lahore Ph: 042-5302654 Fax: 042-5302658 All Pakistan Solvent Extractors Association, Room No. 418, Clifton Centre, KDA - Scheme -V, Khakheshan, Clifton, Karachi Ph: 021-5866757, 5866535 Fax: 021-5871108
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PAPER & PAPER BOARD SECTOR

The Pakistan Paper & Paper Board Industry is in nascent stage. This sector could not develop to the desired level due to non-availability of local wood pulp and inadequate technological base. Industry Structure There are about 100 units in the organized and un-organized sector producing paper & paper board. Cumulative installed capacity of these units is 650,000 M. Tons. The organized sector comprises 26 units with an installed capacity of around 425,000 tons whereas, the demand during 2002-03 was about 550,000 tons of all grades of paper & paper board. Production The break-up of production of various types of paper & paper products is depicted in table below:
Production of Paper & Paper Board 1999-00 Writing & Printing Paper Wrapping & Packing Paper White Duplex Board/ Paper Board Chip/ Other Board Fluting paper Other all kind of Paper Total: Installed Capacity Capacity Utilization % 90,725 20,696 107,831 26,363 53,788 6,544 305,947 341,000 90 2000-01 101,565 4,612 149,105 33,476 39,702 8,733 337,193 393,500 86 2001-02 113,321 9,323 147,425 35,976 30,714 8,966 345,727 393,500 88
(Tons)
2002-03 104,993 17,654 152,498 37,425 25,762 16,520 354,852 411,500 86
Source: Pakistan Pulp Paper & Board Mills Association
Imports The short fall in demand is met through imports from various countries. The supply demand position of the last three years is given hereunder:
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Supply-Demand Position of Paper & Paper Board 1999-00 2000-01 Demand (all grade) Local Production Imports 466,317 305,947 160,370 481,196 337,193 144,003
(Tons)
2001-02 524,057 345,727 178,330
2002-03 549,461 354,852 194,609
Paper and paper board products are imported from Finland, Canada, USA and China. Newsprint is the major imported finished product followed by white duplex/coated board. Break-up of various types of paper & paperboards imported during the last three years is shown in table below:
(Tons)
1999-00 Writing & Printing Paper Wrapping & Packing Paper White Duplex Board/ Paper Board Coated Paper/ Chip/ Other Board Paper of all kind Sub Total: Newsprint Total 7,086 18,578 41,197 10,321 6,021 83,203 77,167 160,370
2000-01 6,675 18,400 41,543 10,502 7,199 84,319 59,684 144,003
2001-02 10,838 21,282 56,105 11,215 8,097 107,537 70,793 178,330
2002-03 11,886 28,548 55,870 12,519 9,452 118,275 76,334 194,609
Potential Investment Baggasse is a by-product of sugar industry. Traditionally it has been used by the sugar mills as fuel for the boilers. A project to manufacture paper from baggasse was initiated in 1980s but since replacement fuel for the boilers was not available, it could not be implemented. With the availability of cheaper coal as fuel, the boilers can be converted on coal and consequently baggasse can be made available for paper manufacturing which is a better value added product. Wheat straw and river grass are already being used for paper manufacturing but more mills can be planned based on these raw materials.
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The existing demand of the country is being met by local production and imports. However, investment required for the revival of idle capacity through upgradation of technology and availability of raw material at competitive rates. Financial Ratios Major financial ratios of listed Paper & Board companies of the country is as under: Paper & Board (2003) Current Ratio Gross Profit Margin (%) Net Profit Margin (%) Earnings Per Share (Rs) Dividend/ Net Profit (%) Dividends Per Share (Rs) Return on Investment (%) Return on Equity (%) Average 1.196 27.47 17.95 22.84 48.52 5.71 16.68 27.56 Maximum 3.17 62.46 58.35 38.34 6090 11.00 22.01 32.97 Minimum 1.14 15.97 6.22 9.98 30.69 2.50 13.22 20.29
Pakistan Pulp Paper & Board Mills Association, 402, Burhani Chambers, Abdullah Haroon Road, Karachi Century Paper & Board Mills Ltd., Lakson Square Building No. 2, Sarwar Shaheed Road, Karachi-72400. Fax: 021-5681163 Tel: 021-5682425
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LEATHER SECTOR
Overview Leather and leather products manufacturing in Pakistan have a sizeable market both for domestic consumption and exports. The leather and leather product industry is labour intensive employing around 250,000 workers. The recent growth of the industry is mainly due to export of value added finished leather and leather manufactures such as leather garments, gloves, footwear and sports goods. The local market of leather is limited and around 80% of production is exported. During 2002-03, the total exports of leather and leather manufactures stood at US$ 694 million, which is around 7% of total exports. Industry Structure The types of leather manufactures is depicted in table below: Commodities Tanneries Leather Garments/ Apparel Footwear Leather Gloves No. of Industrial units 725 Nos. 461 Nos. 524 Nos. 348 Nos. Total capacities 90 Mln. Sq Mtrs 7 Mln. Pcs 10 Mln. Prs 200 Mln. Prs
Source: MINFAL
More than 80 percent of the units are located at Karachi and Lahore. There are numerous tannery units in the unorganized sector producing leather on cottage basis, with negligible use of machinery. The main reason for heavy concentration of tanneries in Karachi and Lahore is the availability of skilled and semi-skilled labour and technicians and a well developed market for hides and skins. Other towns, where this industry is flourishing are Hyderabad, Multan, Shahiwal, Kasur, Sheikhupura, Gujranwala, Sialkot and Peshawar. The growing capacity for tanning in the country has given a fillip to the development of footwear and leather goods manufacturing industries, which produce gloves, garments, bags and other products.
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Major Product & Export Potential / Growth The major leather products manufactured by the sector include footwear, leather garments, leather gloves, handbags, purses, key chains, wallets etc. Comparative position of value addition in leather and leather made-ups is given in the table.
VALUE ADDITION Value US$ Conversion Million Rates 177 10.76 295 45 sq.ft/pc 35 sq.ft/pc 30 sq.ft/pc 25 sq.ft/pc 1.0 sq.ft/pcs 1.5 sq.ft/pcs. 2.0 sq.ft/pcs. 1.5 sq.ft/pair 2.0 sq.ft/pair 2.5 sq.ft/pair
Items Finished Leather Leather Garments
Quantity 12.61 m sq.m 7.16 m pcs.
QTY in $/sq.ft. Of Million Sq.Ft. Leather 135.58 1.31 322.2 250.6 214.8 179 19.38 29.07 38.76 4.13 5.5 6.88 0.92 1.18 1.37 1.65 1.34 0.89 0.67 5.57 4.18 3.34
Leather Gloves Leather Footwear
19.38 m pcs. 2.75 m prs.
26
23
Export Potential & Growth The leather sector is basically an export-oriented sector. Major buyers of Pakistani leather and leather products are Italy, Spain, Portugal, South Korea, Germany, France, UK, USA and Dubai, etc. The table given below shows a changing trend in export of leather goods from raw and semi-processed leather to higher value added items. Exports
No. 1 2 3 4 5 COMMODITIES Leather Tanned Apparel & Clothing of Leather Leather Gloves Leather Footwear Leather Manufacturers TOTAL 2000-2001 2001-2002 2002-2003 2003-2004 Jul-Mar 168,056 241,824 56,233 47,093 16,911 530,117 Value in 000' US $ 239,933 234,774 321,290 232,316 49,644 73,397 51,325 56,970 10,530 97,261 672,722 694,718
232,920 375,597 36,878 36,332 12,587 694,314
Source: PLGMEA
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Export Projections
COMMODITIES Leather Tanned Apparel, Clothing, Gloves etc. Leather Footwear Total 1998-99 (Base year) 177 325 23 525 2002-03 205 440 47 692 2003-04
(Million US$) 2004-05
215 226 506 582 65 91 786 899 Source: Leather Outlook 2010
Pakistan for the last fiscal year has slightly surpassed the projected leather export target and there are healthy economic indicators that such trend would continue. Therefore for the investors it would be high time to enter into leather industry particularly footwear with the maximum value addition and the highest growth during the last year. Product-wise share of Pakistani leather & leather made ups is presented in the table:
COMMODITIES Leather (Finished) Leather Gloves Leather Garments Leather Footwear World Imports US Pakistan Exports Million $ US Million $ 11,558 1,530 3,397 25,830 240 51 321 49 Market Share % 2.1 3.3 9.4 0.18
Source:: Leather Outlook 2010
Financial Ratios Major financial ratios of listed Leather & Tanneries companies of the country is as under: Leather & Tanneries (2003) Current Ratio Gross Profit Margin (%) Net Profit Margin (%) Earnings Per Share (Rs) Dividend/ Net Profit (%) Dividends Per Share (Rs) Return on Investment (%) Return on Equity (%) Average 1.23 23.39 2.16 23.41 85.20 2.50 3.66 10.80 Maximum 1.30 34.49 3.98 31.53 136.24 4.00 6.84 19.82 Minimum 1.17 12.29 0.34 15.29 34.17 1.00 0.45 1.7
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Pakistan Tanners Association st 46-C, 21 Commerciial Street, Phase Ii, Extn. Defence Housing Authority, Karachi-75500 Phone: (021), 5880180, 5880184 Fax: (021) 5880093 Secretary: Mr. Moin Qureshi Pakistan Leather Garments Manufacturers & Exporters Association Plot No. 92 C, Ist Floor, Khayaban-E-Ittehad, Phase II, Defence Housing Authority, Karachi Phone: (021) 5387365, 5387366 Fax: (021) 5388799 Chairman: Mr. Fawad Ijaz Khan Email: Info@Plgmea.Org, Plgmea@Cybet.Net.Pk Pakistan Footwear Manufacturers Association 6-F, Rehman Business Centre, 32-B-III, Gulberg III, Lahore 54660 Phone (042) 5750051 Fax: (042) 5750052 Secretary: Col Arshad Ayyaz Email: Pfma@Pfma.Lcci.Org.Pk
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SURGICAL SECTOR
The surgical instruments manufacturing units in Pakistan are mostly export oriented. The surgical instrument manufacturing cluster is located in the city of Sialkot and its adjoining areas. Industry Structure There are around 2,500 surgical instrument manufacturing units in the country. Among these, around 1,540 units are registered and the remaining are in unorganized sector i.e. cottage and vendor industry. Estimated investment in this sector is around Rs. 12 billion and employs about 60,000 work force. Investment break up is given below:
(Rs in Million)
Segment Large Scale Medium Scale Small Scale Vendor Traders
No. of Firms 20 370 1,150 2,000 800-1,000
Annual Revenue 60-100 10-60 1-10 1-1.5
Investment 50-100 10-25 1-5 Source: SMEDA
Dont have their own production facility
Production The skill in the industry has reached a stage where it has the capability to manufacture nearly 10,000 different types, which constitutes 60% disposable and 40% reusable instruments. The production remained around 110 million instruments of various types in 2002-03. The growth rate was 6% during past decade. Exports There are two major types of surgical instruments i.e. surgical and dental. These also include Veterinary instruments, Pedicure and Manicure items and Beauty saloon instruments. The world export of these two categories is over
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US$ 30 billion. Pakistans exports of surgical instruments during year 2002-03 were US$ 150 million, which contributes 1.3% of the total export earnings of the country. Considering the size of the export market and share of other countries, Pakistan has a meager share of less than 1% of the world exports of medical and dental instruments. This indicates that there is enough potential for new investments to enhance its exports to USA, UK, Germany and France on the basis of the following facts The average export price of local instrument is US$ 1.24 each, which is the lowest in the world, whereas, the average price of a German instrument is US$ 18. Approx 81% of the instruments are sold to USA, Germany, UK, Italy, France and Japan. These are the expanding markets having great potential. The mission of Surgical Vision is to make Surgical a Billion Industry within five years. SWOT analysis of surgical instrument manufacturing in Pakistan
STRENGTHS Geographical Concentration in Sialkot Economies of Scale Availability of Inputs locally Skilled Labour Force- cheaply available Technical Expertise Concentration on Core Competencies Wide Product Range catering the lower end market WEAKNESSES Minimal Involvement of Brand Names Branding Marketing and Distribution Management Lack of proper training facilities. OPPORTUNITIES Diversification of Product range Manufacturing Flexibility Unexplored Markets Joint Ventures Use of modern manufacturing techniques
THREATS Stiff regional competition Increasing quality awareness amongst major Buyers
Potential Investment Technological innovation and surgical procedure development has become very common nowadays. The Pakistani surgical instrument industry has maintained its focus only on the conventional surgical gadgets. The field of developing high value surgical and orthopedic implants and electro94
medical instruments such as optical fibre and optical aid for surgery need to be developed. The global market (value) of such instruments is greater than that of conventional surgical instruments. It is an excellent opportunity for the local industry to gear itself to take up development and production of instruments through latest materials such as plastics and other synthetics and also to explore the areas of electro-medical and diagnostic instruments. Upgradation of technology in this sector can be achieved to the maximum extent aided by the collaboration of foreign companies. Key Player
The Surgical Instrument Manufacturers Association of Pakistan Kutchery Road, Sialkot Tel: 0432-263016/266240 Fax : 0432-265978/554217 E.mail : sima@brain.net.pk
Incentives This sector falls in the category of value added industry. The Plant, Machinery and Equipment (PME) if not manufactured locally is importable at 5% custom duty ad valoram. SRO 439(1)/2001 18.6.2001. The customs duty on import of stainless steel sheets has been reduced to 5%. Modern common metallurgical testing facilities have been established in Sialkot viz, Sialkot Material Testing Laboratory and Metal Industry Development Centre (MIDC).
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SPORTS GOODS SECTOR

Pakistan's sports goods industry has progressed with prominence and achieved recognition at the global level. Presently, approximately 250 sports items are manufactured and exported to more than 130 countries of the world. Sialkot being the nucleus of this industry, has achieved an excellent craftsmanship. This is reflected in its sports items with recognition all over the world inspite of having inadequate technology and supply of raw material. Thousands of skilled craftsmen are working in hundreds of big and small factories in the city of Sialkot as well as in the suburban villages of this city. An employment of about 300,000 people directly or indirectly is associated with this sector. Some of the large producers have established joint ventures/subcontracting agreements with the companies of international repute. With this collaboration, the management techniques and manpower skills have considerably improved. The exchange of technological know-how and expertise have made the industry capable of accepting sub-contracts from the manufacturers of different countries to produce quality products. Production This industry has a great potential provided that some technological advancements are made. Statistics showing production value of last 3 years is depicted in table below:
(Rs. in Billion)
Year 1999-00 2000-01 2001-02 2002-03 Share in Exports
Production 14.75 16.42 19.00 19.97
The share of Sports Goods in total exports of the country has remained around 3 per cent for the last three years.
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Year 1999-00 2000-01 2001-02 2002-03
Exports of Sports Goods Rs in Billion US$ in Million 14.46 279.2 15.92 270.2 18.62 304.5 19.58 335.2
% Share in total export 3.26 2.95 3.32 3.00
The total value of exports of sports goods at the international level is approximately US$ 25 billion, which comprises more than 10,000 sports items. Whereas, Pakistan produces around 250 items, which indicates a potential to increase the range of exports items. Product-wise Exports of Sports Goods Total exports of sports goods including sports gloves (leather) from Pakistan were valued at Rs 19,579 million during 2002-03. Break-up of export of major items in terms of rupees during the last three years is depicted in table below:
(Rs in Million)
Year Cricket Bats Foot Balls Gloves Hockey Sticks Cricket Balls Others Total
Key Players:
1999-00 22.20 4,366.56 3,682.34 279.57 35.56 6,071.20 14,457.43
2000-01 26.08 4,133.33 3,837.53 300.14 45.59 7,576.18 15,918.85
2001-02 9.00 4,886.93 4,085.52 346.36 54.18 9,241.06 18,623.05
2002-03 66.71 4897.04 3980.36 246.97 31.79 10,356.16 19,579.03
Pakistan Sports Good Manufacturers & Exporters Association, Paris Road, Sialkot Ph: 0432-265080, 267962 Fax: 0432-261174
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POULTRY SECTOR
Poultry farming is an agro-based industry. Poultry sheds are available on rental basis with complete set of equipment. The rent varies between Rs. 0.50 to Rs. 1 per square feet depending upon the location and facilities at the farm. Broiler farming is a quick return on investment. The demand for white meat is increasing with the change in eating habits, whereas, the livestock population is decreasing and the gap between the demand and supply of the meat is expected to be met through poultry meat. Current Status Poultry Statistics Poultry Farms No of layer farms (nos) Broiler farms (nos) Breeder farms Total farms Birds Produced/Maintained Birds Layer Broiler Breeder stock Poultry Products Farm Eggs Desi Eggs Total Eggs Poultry Meat Culled birds (layer & breeders) Broiler Desi Total Meat produced 4,500 15,000 500 20,000 Millions 25.00 369.00 4.50 Millions 4,400 1,890 6,290 M.T 13,604 169,535 139,796 322,935
Source: SMEDA
The sector has substantially developed and today the total investment in this sector is approximately Rs 60 billion with a growth rate of 10-15% per annum.
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Industry Structure The investment in poultry sector is about Rs 60 billion; it includes poultry feed mills, hatcheries, layer, breeder and broiler farms and related infrastructure. Poultry Statistics
Investment size (Rs in Billion) No. of Hatcheries (Nos) Capacity to produce day old Chicks (Mln) Day old Chicks (Mln) No. of Feed mills Installed Capacity of feed mills (Mln Tons) Poultry feed produced (Mln Tons) 60 180 337 222 131 2.52 1.37
Source: SMEDA
Incentives For promotion of livestock and poultry, the Government has provided the following incentives in the agriculture package. Imported plant and equipment not manufactured locally shall be subject to custom duty of 10% with complete exemption from sales tax. Capital structure of projects in agro-food industry will be entitled to debt-equity ratio of 70:30. Projects will be entitled to financing from all banks and development financial institutions. Expatriate personnel of the units will be allowed to import food items and other consumables without any duty/ taxes, subject to maximum limit of $ 2,000 per person per year. Import of breeding stock will be allowed subject to the import duty of 10%. Important Addresses:
Pakistan Poultry Association, 219-Mashriq Centre, Sir Shah Muhammad Suleman Road, Block 14, Gulshan-e-Iqbal, Karachi Ph: 021-4940362, 7763495 0333-2111782 -Fax: 021-4940364 Islamabad Poultry, D- 98, Satellite Town Rawalpindi Ph: 021- 4427139 4845645, 4845647 Fax: 021- 4421203
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FISHERIES SECTOR
Fisheries and aquaculture are an important source of food, employment and revenue generation in many countries, especially developing countries. Pakistan has a total coastline of 1,050 km and a total area of approximately 300,270 sq. km. Pakistans consumption of fish is lowest in the world i.e. 0.6 Kg per person per year, and thus most of the produce is exported. However, there is a great dependence on a few species for exports, with very little value addition. Most of the fish catch is marine which comprises 71% of total fish exports. Pakistan exports mainly to Europe, US, Japan and Middle-Eastern countries.
Industry Structure This sector offers employment to over one million people, most of which work as fishermen. There are 38 processing units out of which 27 are used for refrigeration. Their total capacity is about 450 tonnes per day. Areas where marine fishing is carried out are Karachi, Gwadar and Pasni. The Karachi harbour is the biggest and most important harbour for fishing in Pakistan. Infrastructure facilities available include 10 floating piers with a berthing capacity of 32 vessels on both sides. There is also an ice/ oil supply bunker available for future accommodation of 300 tons/ day flake ice plant and an oil dispensing station. This harbour is handling over 2000 vessels. The Korangi fish harbour was constructed to promote deep-sea fishing. It has a 709-meter long jetty. The Gwadar fish harbour is the third important harbour in Pakistan and has a 416-meter long and 65-meter wide jetty. Major Products There are more than 30 species of shrimp, 10 species of crab, 5 species of lobster and about 70 commercial species of fish which includes Sardine, Hilsa, Salmon, Macheral, Butter fish, Pomfret, Sole, Tuna, Sea Bream and Shrimp.
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Types of Fish catch in Pakistan Type of fish available in the country is given in the table below:
F.A.O Group Herrings, Sardines, Anchovies Red fish, Bass, Congers Tuna, Bonito, Bill fish Jack mullet, Sauries Shark, Ray, Cimaeras Shrimp, Prawns Squid, Cuttle fish, Octopii Mackerel, Snoek, Cutlass fish Flounders, Halibuts, Sole Shads Lobsters, Spiny, rock Lobsters Sea Spiders, Crabs Diadromous Miscellaneous marine fish Percentage 33.3 17.5 12 11.4 6.3 7 1.2 0.8 0.4 0.2 0.1 0.1 0.1 9.6
Source: FAO
Main Machinery The following type of vessels are currently operating in the fishing sector: Trawlers Gill netters Long liners Howra for fresh trash fish Mechanical sail boats Row boats
Most of the trawlers are equipped with modern electronic instruments like GPS, sonar and satellite telephones. The sanitary conditions have been improved further to a European Union mission, and the conditions are deemed satisfactory by the EU. The Karachi Fishing port has been given the A grade by the EU, whereby, India has only a grade B rating.
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Export Potential The following table shows Pakistans export of fish & fish preparations.
Pakistans Exports Qty.000tonnes US$ Million Rs Million 1999 79.1 2000 89.9 2001 82.0 2002 84.4 2003 94.6
131.97 138.90 136.80 126.10 133.90 6174.9 7190.7 7994.5 7745.8 7868.5
Source: Agricultural Statistics of Pakistan 2002-03
Shrimps Shrimp export has a major share of the total seafood export of Pakistan. In order to increase the shrimp export, there is a need to develop shrimp farms. Shrimp farming is non-existent in Pakistan, whereas, India, Bangladesh, Thailand and Iran are active in this area. Farm shrimps have a major share in the sea food of these countries. For example, farm shrimp contributes more than US$ 1,100 Million in the exports of Thailand. The following table depicts the share of shrimp in fisheries export.
Types of Shrimp Pakistan in World Standing Total global Production of Shrimp Shrimp Total export of Shrimp from Pakistan Total export of Shrimp from Thailand Total global Production of Cultured Shrimp Cultured Shrimp Total export of Cultured Shrimp from Pakistan Total export of Cultured Shrimp from Thailand Million Metric Tons 1.3 0.021 0.279 0.721 0 0.16
Source: SMEDA
The shrimp consumption has increased throughout the world, so a lot of potential exists in shrimp production. Potential Investment The potential areas for investment is given below: Development of Shrimp farms for the production and exports of cultured shrimps along the coastal line.
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Sea zones are divided in two categories i.e. Zone 1 (12-35 nautical miles) and Zone 2 (35-200 nautical miles). Zone 1 is reserved for local fishermen, which remains under utilized due to lack of boats equipped with necessary modern gadgets for catch and preservations. Whereas, in Zone 2 local as well as foreign vessels can operate under license from the Government. The catch from this zone is very nominal and requires investment for its exploitation. Fish processing sector is not well equipped and latest technology is required for preservation, curing and packing. The market trend clearly suggests that there is excessive demand for ready to eat fish products, which fetch a premium price in a guaranteed market. Incentives Plant, Machinery and Equipment not manufactured locally is importable at 5% custom duty under SRO 439(1)/2001 dated 18.06.2001. The following measures have also been taken for fisheries sector: Fishing/ catching stage operators are being given the status of indirect exporters to facilitate duty-free import of machinery and equipment like navigational equipment, fish finders, storage and handling of equipment. To promote aquaculture, suitable lands next to sea is to be made available. Duty-free import of shrimps meal and baby shrimps will be allowed. List of Major Local Companies
Fauji Fish Farms Near Khoski Sugar Mills,Khoski Badin Tel: 261694, 263663 Kanpa International Sales D-3,Fish Harbour West Wharf Road,P.O.Box: 6026 Karachi Tel: 92-021-2312879, 2312290 Tel: 2310044 E.mail: kanpa@cyber.net.pk Marcon international (pvt) ltd. B-1,Fish Harbour,West Wharf Karachi Tel: 92-021-2200200, 2200200 Fax: 2312476 Seavita Fisheries B-1,Fish Harbour,West Wharf Karachi Tel: 92-051-2202802 Fax: 2316206 E.mail: seavit@cyber.net.pk A.g. Fisheries (pvt) ltd. B/5,Fish Harbour,West Wharf Karachi 74000 Tel: 92-021-2312605-6 Fax: 2310318 E.mail: agfish77@hotmail.com M.A. Mohamedi & co. 15-/A,Pak Chambers 7,West Wharf Road Karachi 74000 Tel: 92-021-2201668 Fax: 2310962 Seagreen enterprises (pvt) ltd. A/2,Fish Harbour West Wharf Karachi Tel: 92-021-2201866, 2310324 Mob: 0300-8232541 Fax: 2310939 E.mail: emiles@fascom.com
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Spectrum Fisheries ltd. E-1, Fish Harbour, West Wharf P.O.Box: 6111 Karachi 74000 Tel: 92-021-2313335, 31, 32 Fax: 2314444 E.mail: spec@super.net.pk Web: www.jamals.com/spfish Pakistan Seafood Industries Association A-2, Fish Harbour, West Wharf Karachi Tel: 021-2311117 Fax: 021-2310939 E.mail: psiapk@hotmail.com
Deep Sea Fishing Trawlers Operators Association Manchester House Hotel Asia building, Zaibunnisa St. Karachi Tel: 021-5214567/5211931 Fax: 021-2310601
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PROCESSED FOOD & BEVERAGES SECTOR

The processed food and beverages industry is considered to be one of the largest industrial sectors in Pakistan. It accounts for approx. 27% of total production and 16% of total employment in the manufacturing sector. The total value of production is over Rs. 46 billion. The industry status is given as below:
i) Fruit & Vegetable Processing Capacity ii) Confectionery Capacity iii) Cereals Capacity Production iv) Beverages Capacity Production v) Fruit Juice/Pulp Capacity vi) Biscuit and Bread Capacity Production 80% 25 Units 30,000 M. tons 23 Units 30,300 M. tons 1 Unit 350 M. tons Corn Flakes 325 M. tons Rice Cereals 100% of capacity 100 Units 600 million litres 540 million litres 25 Units 400,000 M. tons 42 Units 46,830 M. tons 37,464 M. tons
Fruits & Vegetables Pakistan produces a wide variety of fruits and vegetables, with total annual production estimated at 10.8 million metric tons. Production estimates for various fruits are; over 1.83 million metric tons citrus; 1,037,100 metric tons mangoes; 367,100 metric tons apples; 538,500 metric tons guavas; 124,700 metric tons of apricots and 2 million tons other fruits such as, bananas, grapes, pomegranates, pears and dates. Although improvements have been made through mechanized grading and packaging, nearly 45 percent of total fruit and vegetable production is lost during harvesting, transportation, preservation and storage. Exports of fruits stood at 4 to 5 percent of total production amounting to US$ 82.80 million during 2002-03. Total annual production and exports of fruits in the last three years is as under:
Fruits Year 1999-00 2000-01 2001-02 2002-03 Production (000 Tons) 5846.3 5859.5 5900.5 5741.7 Exports (US$ in million) 79.76 78.29 82.75 82.80
Sources : Agricultural Statistics of Pakistan 2002-03
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There is a tremendous potential to increase the exports of fruit & vegetable and to earn more foreign exchange by value addition products like jams, jellies, juices, caned products etc. Total vegetable production during 2002-03 was over 2.88 million metric tons. Vegetable exports largely include potatoes, onions and mushrooms, amounting to US$ 26.25 million during 2002-03. The main importers of Pakistani fruits and vegetables are the Middle East, Singapore, and Malaysia. Production and exports of vegetables excluding potatoes, tomatoes and sugar beets is given below:
Vegetables* Year 1999-00 2000-01 2001-02 2002-03 Production (000 Tons) 2863.1 2860 2873.8 2880.5 Exports (US$ in million) 38.65 23.07 19.60 26.25
*Excluding Potatoes, Tomatoes and Sugar beets. Source: Agricultural Statistics of Pakistan 2002-03
Fruits and Vegetables Processing The existing fruits and vegetables processing industry is concentrated around Karachi, Lahore and Peshawar. Approximately 25 firms are engaged in canning, preservation and bottling of fruit juices. There is no regular fruit and vegetable canning industry in Pakistan. Pakistan currently has 24 fruit juices and pulp processing plants in the organized sector and a number of small units in the un-organized sector, with an installed capacity of around 400,000 metric tons per annum. The dried vegetable industry is highly underdeveloped. The major institution engaged in dehydrating vegetables is the Pakistan Council for Scientific and Industrial Research (PCSIR), having a capacity to dehydrate 1.5 M. tons per day. National Food and Icepak Limited, Lahore are other significant processors of vegetables. The units claim to export 40 percent of their total production. Pakistan produced over 306,300 metric tons of tomatoes during 2002-03. Market size is expected to grow by 11 percent per annum over the next 2-3 years.
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POTENTIAL INVESTMENT Mangoes Pakistani mangoes are undoubtedly the best in the world. Total produce of the country is around 500,000 - 700,000 M. tons of mangoes annually. Export of fresh mangoes have been around 50,000 M. tons in current year. Around 40% of mangoes never reach markets due to spoilage and poor handling. Further due to lack of a cold chain from the farm to the market place, the fruits sold in the market have shorter shelf life and do not yield the best prices. Therefore, there is a potential to invest in this field to establish refrigeration, grading, packaging and better transportation facilities in the mango growing areas of the country. Production of mango is shown in the following table: S. No. 1. 2. 3. 4. Year 1999-00 2000-01 2001-02 2002-03 Measuring Unit (000 Tons) 937.7 989.8 1037.1 1036
Sources: Agricultural Statistics of Pakistan 2002-03
Citrus Among the fruits, Citrus is one of the most important fruit of Pakistan in term of area and production. It is very popular within the country and outside, and use in industries comprising beverages and food processing. Among these, beverages is the largest consumer of citrus. Pakistan is producing a variety of citrus fruit comprising of Kinnow, sweet orange, grape fruit, lemon and lime. Amongst these Pakistani Kinnow are very popular in the international markets. Production of citrus during the last four years is given : S. No. 1. 2. 3. 4. Year 1999-00 2000-01 2001-02 2002-03 (000 Tons) Production 1943.2 1897.7 1830.3 1702.3
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There is a potential to invest in the Kinnow processing plant i.e. washing, waxing, grading and packing for exports. There are 28 Kinnow processing plants with a processing capacity of 5 to 10 M. tons per hour located in Sargodha and Karachi. The Punjab government has launched a multipurpose agriculture project to produce high yielding and disease resistant citrus fruit in the province. A major component of this project is to produce seedless Kinnow. The seedless Kinnow can not only help growers to earn more profit but will also fetch better price for their produce from the international markets. Apples and other Fruits A project is planned for a post harvest apple treatment in Quetta, Baluchistan in collaboration with the private sector. The project envisages a production capacity of 10,000 metric tons per year, as well as facilities for storage, grading, waxing and packing of apples and other fruits, most of which are to be exported. Production data of apples is given: S. No. 1. 2. 3. 4. Year 1999-00 2000-01 2001-02 2002-03 (000 Tons) Production 377.3 438.9 367.1 315.4
Confectionery There are about 23 units in the organized sector, which together have a capacity of 30,300 metric tons of sweets, 12,000 metric tons of toffees, 7,800 metric tons of bubble gum, and 4,200 metric tons of chocolates, a combined capacity of 54,300 metric tons. Actual production is estimated at over 32,000 metric tons per year. In addition, a number of small units in the informal sector, which collectively have an estimated capacity of 12,000 metric tons, produce approximately 5,000 metric tons of confectionery per annum.
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Cereals The Pakistani market for cereals is estimated at US$ 2.5 million annually. Domestic supply relies on a single Pakistan Army owned and operated unit which produces 350 metric tons of corn flakes and 325 metric tons of rice cereal and porridge annually. Nestle Milkpak Limited, a joint venture between Nestle, Switzerland and a Pakistani company, commenced manufacturing infant cereals in Pakistan in 1990. There is no significant upcoming project for cereals. However the sector offers good investment prospects. Beverages Beverage processing includes Carbonated Soft Drinks (CSD), fruit juices, syrups and juice flavoured drinks. The per capita consumption of carbonated drinks is 16 bottles of 8 ounce each per annum. The total demand for CSD is over 90 million cases, which contains 24 bottles each of 8 ounces. Pakistan has the lowest per capita consumption of CSD in the world. The market is expected to grow by 20-25% annually over the next three years. Potential exports markets for Pakistan are Afghanistan, Central Asian States & European countries. Joint Ventures Several foreign firms have entered the Pakistani market and have established either their own presence as manufacturers or have formed Joint ventures with local firms such as ARTAL, Belgium involved in integrated poultry project. NESTLE, Switzerland joint venture with Milkpak Limited, Lahore, involved in dairy products. BEST FOODS OF U.S.A. (Rafhan Food), joint venture produces processed food like soups and noodles, mayonnaise, canola and sunflower oils, custard, jellies, corn flour and dextrose based energy drinks. UNILEVER PAKISTAN LIMITED, a subsidiary of Unilever, produces Ice cream, processed dates, blended tea and cooking oils. Continental Biscuits and Dane Foods Limited have joint ventures with European firm producing biscuits.
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Listing of Major Local Companies

Mitchell's Fuit Farms Ltd. Block No.1-A,Sector G-7/4 Street No.40 Islamabad Ph: 92-051-8122669 E.mail: rson@mitchells.com.pm Hamdard Laboratories (Waqf) Pakistan III-E 5/8,Al-Majeed Hamdard Centre,Nazimabad-III Karachi 74600 Ph : 92-021-6620945, 6616001 Fax : 661755 E.mail : hlpak@paknet3.ptc.pk Shezan Iternational Ltd. L-9/22,F.B Industrial Area Karachi 75950 Ph: 92-021-6349222-3 Fax: 6313790 E.mail: shezan@cyber.net.pk Cdl Foods Limited 135,Ferozepur Road Lahore 54600 Ph: 92-042-7581556-8 Fax: 7590376 E.mail: info@cdl.com.pk A.M.K. International 12,Sami Chambers,2nd Floor Corner Aram Bagh M.A. Jinnah Road Karachi Ph: 92-021-2621623 Fax: 2628290 Shelta International 130-E-1,Main Boulevard Gulberg-III Lahore Ph: 92-041-5759831 Fax: 5752903 E.mail: www.jamals.com/shelta United Freshways New Business Opportunities in Pakistan #2,Sheikh Inayatullah Building 1st Floor,Liberty Market Gulberg Lahore Ph: 042-5750446 Fax: 5750518 E.mail: uniways@brain.net.pk King Citrus Trade 1 K-14,Nazimabad Karachi 74600 Ph: 92-021-4313494 Fax: 4529740 E.mail: king@cyber.net.pk Icepak Ltd. 720 Landmark Plaza, Jail Road, Lahore, Pakistan Mansoor ARIFEEN Chief Executive Tel: + 92 42 571 46 90 Fax: + 92 42 571 22 31 icepak@wol.net.pk Ahmed Fod Idustries (Pvt) Ltd. D-112,Naurus Road,S.I.T.E. Karachi 75700 Ph: 92-021-2563524, 2563520 E.mail: sfipkltd@cyber.net.pk Bambino Food Industries (Pvt) Ltd. 75-K,Block-6,PECHS Karachi 74400 Ph: 92-021-4543266 Fax: 92-021-4545232 Popular Juice Industries 311-313,Chapal Plaza Hasrat Mohani Road Karachi 74000 Ph: 92-021-2420222-3 Fax: 2426518 E.mail: popular@cyber.net.pk Benz Industries Limited 10-K.M.Multan Road Lahore Ph: 92-021-5412413 Fax: 7226901 Tops Food & Beverages Ltd. 3-National Park Road Rawalpindi Ph: 92-051-5567047 Fax: 5565461, 5584420 E.mail: murbr@isb.compol.com Al-Hamd Establishment C-746,1st Floor,Block-2,PECHS Tariq Road Karachi Ph: 021-92-4939747 Fax: 4939747 Scintilla International SD-160,Askari Housing Complex Gulberg-III Lahore 54660 Ph: 92-051-5867014 Fax: 5867057 E.mail: sintila@brain.net.pk Subhani Trading Co. Ground Floor,Umer Plaza 1-Mozang Road Lahore Ph: 92-042-7122009 Fax: 7122010 E.mail: justme@brain.net.pk M.A. Links 2583-E,Nishter Road Zakaria Medical Centre Bldg. Multan Ph: 543524 Fax: 543524 E.mail: mhhrehman@paknet4.ptc.pk Pak Exports Traders Flat No.208,2nd Floor Data Appt.137 Garden West Karachi 74550
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Listing of European and other Key Players Nestle Milkpak Ltd. 1st Floor, Yasin Plaza 74-W, Blue Area, Islamabad Ph: 92-051-2271875, 2271874 Fax: 92-051-2821899 Other key players Pakistan Agricultural Machinery and Implements Manf. Association 6/21-26, Nazar bagh g. T. Road Peshawar Tel: 091-211835 Fax: 091-216723 Croplife Pakistan 909-910, Park avenue,block 6, p.e.c.h.s. Shahrah-e-Faisal Karachi tel: 021-4541562 Fax: 021-4546131 E.mail : croplife-pak@cyber.net.pk All Pakistan Fruit & Vegetable Exporters Importers & Merchants Association 8/2 new onion & potatoes market University road Karachi Tel: 021-4937132/4937125 Fax: 021-4937126 Pakistan Agricultural Pesticides Assn. 909-910, Park avenue, p.e.c.h.s. Block 6, Shahrah-e-Faisal Karachi Tel: 021-4541562 Fax: 021-4546131 Pakistan Beverage Manufacturers' Assn. M-318, Model town extension Lahore Tel: 042-5167316/021-2569801-5 Fax: 042-5167306/021-2563119 Pakistan Metal Containers Manufacturers Association d-114, Hill street Manghopir road s.i.t.e., industrial area Karachi Tel: 021-2571951
Financial Ratios Major financial ratios of listed Food & Allied Ind. companies of the country is as under: Food & Allied Ind. (2003) Current Ratio Gross Profit Margin (%) Net Profit Margin (%) Earnings Per Share (Rs) Dividend/ Net Profit (%) Dividends Per Share (Rs) Return on Investment (%) Return on Equity (%) Average 1.07 30.23 5.46 9.25 32.42 3.00 6.42 24.21 Maximum 1.1 27.94 3.69 2.57 1.96 8.14 Minimum 0.96 27.31 1.76 4.71 36.69 3.00 4.27 16.26
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TEA CULTIVATION AND PROCESSING

Tea is used as common beverage in almost all over the world. Pakistan has a long tradition in tea consumption, which has become a favourite source of entertainment in the society. The per capita consumption is about one kilogram. Pakistan imports all its tea requirements from abroad and thus the total annual import of tea was 108,110 M. Tons in 2002-03 costing US$ 172.7 to the national exchequer. Presently, Pakistan is the second largest importer of tea after United Kingdom. Demand for tea is growing day by day and in the wake of high growth rate of population (2.1% annually), Pakistan is likely to become the worlds largest importer of tea by the year 2010. Pilot Project The Government has prepared a plan to start the local tea production by involving private sector. Mansehra district in NWFP has been identified by Chinese experts for tea plantation. A pilot project for the development of tea production was initiated in 1986 by establishing national tea research institute in Shinkari, district Mansehra. The institute was established on 50 acres of land which developed a tea garden on 30 acres with the collaboration of private sector and Chinese experts. In addition an adequately equipped soil testing laboratory and a conventional mini tea processing units was established. MAIN ACHIEVEMENTS Screened 5 Chinese tea varieties suitable for tea plantation in the area and established tea gardens at Shinkairi, Daively and on farmers field at different locations in districts Mansehra, Battagram and Swat. Tea research and development institute identified 150,000 acres of land suitable for tea plantation in Hazara and Swat, 85% of which lies in district Mansehra. The institute obtained a maximum yield of 9 tons of fresh leaves (2 tons made tea) per hectare from tea bushes of 7 years of age. Evaluated tea quality, which ranked second best in grade at the international tea market.
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FUTURE PLAN
Evaluation of the production package on the farmers field under different ecological conditions. Popularization of tea cultivation through field demonstration and audio visuals. Training of rural population on leaf plucking and green tea processing as cottage industry. Processing, qualitative assessment and marketing of black tea. Requirements for Tea Cultivation Following factors are necessary for plantation of tea: i) ii) iii) Climate: Soil: Labour Annual rainfall above 1000mm Air temperature: 2 - 30C pH value ranging from 4.5 to 6.5 Cheap and adequate.
Imports of Tea The following table depicts the import of tea during last three years: Year 1999-00 2000-01 2001-02 2002-03 Qty (000 Kg) 108,644 111,867 99,396 108,110 Value (US$ Million) 210.422 205.863 156.459 172.7
Source: Economic Survey of Pakistan Annual report of state bank of Pakistan
Potential for Investment The successful plantation and processing at the pilot level has demonstrated encouraging results, yield and quality wise making the project economically viable for further development. Now it is time for the local/ foreign investors to invest in this sector, as maximum Government support is available.
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Incentives Availability of land on long lease basis in Pakistan on corporate farming concept developed by the Government. Government will consider special production package for different fields under different ecological conditions. Training of rural population and tea processing to be treated as a cottage industry. 5% import duty on Plant, Machinery and Equipment (PME) not manufactured locally under SRO 439(1)/2001 dated 18.01.2001. Important Address
Pakistan Agricultural Research Council (PARC) Plot No. 20, G-5/2, Islamabad Ph: 051-9203070
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INFORMATION TECHNOLOGY
INTRODUCTION Pakistan is a country with meager capital resources but rich in human resources, which constitutes the foundation for any major IT initiative. Its population of 149 million includes highly talented people, who have made their mark in various fields, including Information Technology. Software Industry in Pakistan has developed a lot during last ten years. Due to liberalize IT policy, a mushroom growth of Software houses have been registered in IT Sector. (IT Policy is attached at Annexure -XIV). Government of Pakistan is taking very significant steps to develop IT culture in Pakistan and lot of incentives have been given to software houses to start software business. INFRASTRUCTURE Infrastructure of information technology sector in Pakistan consists of following segments: Software Technology Parks (STPs) Government of Pakistan has established Software Technology Parks, (STPs) along with private sector, with the objective of encouraging, promoting and boosting the Software Export from Pakistan. The Software Technology Parks (STPs) in Islamabad, Karachi, Lahore and Peshawar have been established as one-stop shop for all software houses which seek working conditions conducive to creativity, inexhaustible bandwidth and power supply, minimum regulatory overheads, maximum flexibility in the choice and use of space at minimal costs. Call Centers Government of Pakistan has announced policy for the establishment of Call Centers in Pakistan to provide service to offshore companies. One of the key 115
policy measures undertaken by the Government to facilitate call centers is the subsidized rates for international connectivity and provision of redundancy through satellites to international call centers which gives a high level of comfort to operators in mission critical services being provided through these call centers. Telecommunication Telecommunication Infrastructure and services across the country are fairly well established and Pakistan has state-of-the-art telecom network comprising of digital switching, transmission, radio and fiber optic cable systems and other modern technologies. The Telecom infrastructure of Pakistan is robust, reliable and has a sound foundation for major roll-out to cater for increasing traffic needs, which may be encountered with sector opening up and deregulation of Telecom market. Human Resource Pakistan is rich in human resource. Its 140 million population has enormous potential to be trained in any specialized field including information technology. It is a matter of great pride that some Pakistani professionals working abroad have earned good name for the country in the various fields of expertise. INCENTIVES FOR SOFTWARE EXPORTS The Government of Pakistan has extended very liberal fiscal and monetary incentives for software exports. The incentive package consists of two major categories i.e., Fiscal Incentives and Corporate Incentives as follows: A. Fiscal Incentives All computers and related hardware, peripherals including communications hardware and software, telemetric infrastructure and software development tools to be used exclusively for software exports are exempted all duties, taxes, surcharges and livable Octroi, etc. Software Houses / Software Companies are exempted from corporate income tax on export earnings from Software and Related Services till June 30, 2016.
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Financial assistance will be provided to the Software House / Software Company by extending the facility of Export Financing Scheme Refinance for Export of Computer Software by the Software Houses/Companies and in the shape of loans to software houses/companies by the nationalized/commercial banks. The PTCL shall provide international high speed data circuits to Software Houses/ Software Companies at rates which are highly competitive as compared to rates offered by other telecom companies in the region. Subsidised rentals for office facilities/office space in Software Technology Parks (STP) shall be charged, first such park has since been established at Islamabad. Software Houses/Software Companies are allowed to re-export capital goods without any levies. B. Corporate Incentives Foreign investors will be allowed up to 1005 ownership of equity in Software Houses / Software Companies. Software that is developed in Pakistan or part of which is developed in Pakistan will be protected by law from piracy and companies can be lodged with Pakistan Software Export Board (PSEB). Software Houses / Software Companies could be located either within STP or anywhere else in Pakistan. Software Houses / Software Companies located in STPs shall be allowed to carry out ONLY Software and Related Services business within the STP bounds and NO OTHER BUSINESS. OPPORTUNITIES IN I.T. SECTOR OF PAKISTAN The following opportunities are present in IT Sector of Pakistan: Development of packaged software. Quality training and development of specialized human resources. Re-engineering and computerization of government/public sector and private sector organizations. Installation of network (LANS, WANS, etc). Development of call centers. Reorganization and growth of communications infrastructure. Utilization of available educated human resources pool.
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Unlimited E-Commerce potential. Global and domestic Internet Explosion. Worldwide growth of distance learning and education. Entertainment potential of IT and the Internet. Consumer Awareness and Empowerment through IT and the Internet. Establishment of Call centers Bulk Data entry Cable internet CAD/ CAM Projects Direct cross border connectivity Medical and legal software development
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TOURISM SECTOR
Pakistan Tourism Development Corporation (PTDC) is involved in the promotion of tourism culture, catering for both type of tourists i.e. foreigners as well as domestic and to provide the housing, resting and recreational facilities extending from snow bound peaks in the north to the shining beaches and golden deserts in the south. PTDC has already completed numerous projects for the development of tourism in Pakistan. In order to attract more foreign tourists and to further develop this important source of foreign exchange inflows in the country, the Government announced Tourism Policy on May 30, 2001. According to this policy, an annual growth of 5% in tourist arrivals has been estimated. The foreign exchange earnings would reach the level of US$ 800 million by the year 2005 as compared to existing estimated level of US$ 200 million. Investment in Tourism Sector is welcome in both on-going projects as well as new proposed projects. National Tourism Policy 2001 is attached at Annexure XV. The requirement of investment in on-going and new proposed projects are as under:ON-GOING PROJECTS Funds Required (Rs in Million) 22.000 29.000 11.000 9.000 5.000 76.000
S.No 1. 2. 3. 4. 5.
Name of the Projects PTDC Motel Barankalay PTDC Motel Hawksbay PTDC Motel Bunni PTDC Motel Astak PTDC Motel Chaman Total
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NEW PROPOSED PROJECTS

S.No 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Name of Projects 20 Room Motel at Quetta (Baluchistan) 10 Room Motel at Jiwani Fort.(Baluchistan) 20 Room Motel at Gawadar (Baluchistan) 10 Room Motel at Takht-e-Suleman (Baluchistan) 20 Room Motel at Multan (Punjab) 20 Room Motel at Faisalabad (Punjab) 20 Room Motel at Gujrat (Punjab) 10 Room Motel at Sadiqabad (Punjab) 10 Room Motel at Nankana Sahib (Punjab) 20 Room Motel at Gorakh Hill, Dadu (Sind) 20 Room Motel at Muzaffarabad (AJK) Construction of Aiwan-e-Seyahat, Phase I Islamabad 20 Room Motel/Recreational Facilities at Islamabad Total Estimated Cost (Rs in Mill.) 39.867 29.691 39.867 29.691 38.789 39.075 36.109 25.934 25.497 39.867 39.867 39.500 39.500 463.254
Incentives For promotion of this industry, the following incentives has been allowed: Tourism is categorized as Industry according to the Investment Policy in vogue. Permission is not required for setting up of tourism project in the Private sector. Telephone, Telex, Fax facilities are provided to travel Trade on priority basis. Plant, Machinery & Equipment (PME) not manufactured locally can be imported @ 10% custom duty. Tax relief/ First Year Allowance (FYA) @ 75% of the PME is also available. Special equipment for adventure tourism activities like water sports, hang-gliding trekking, mountaineering angling, golf, indoor sports equipment, power boats; water rafts, canoes, water and snow skiing equipment provided by the travel trade as a service to the tourists is allowed to be imported on 10% customs duty. The central air-conditioning equipment and apparatus of general utility in hotels are charged industrial tariff for electricity. Tourists will be allowed use of rest houses and inspection bungalows of the government and semi-autonomous bodies by the tourist. 120
Permission to use hostels of government educational institutions for tourism. Public utilities, washrooms etc will be developed at all petrol pumps. Roadside eateries to be set up, and at least one toilet each, and keep it open for tourists. Home coming tours to be promoted among immigrant Pakistanis. New Visa Policy will be displayed at entry and exit points and at Pakistani missions abroad. Consistency in Policy for the grant of Visa. Cultural Programmes may be allowed to be organized in 4 and 5-star hotels and other public areas without additional taxation and permissions by government authorities. Calendar of events with fixed dates to be produced by provinces to facilitate the tour operators to sell those events in the international markets. The Government is also considering to remove restrictions on
photography except defense oriented installations. Further, the restrictions on movement of foreign tourists will also be removed except the areas marked by provincial governments.
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ENVIRONMENTAL PROTECTION
New environmental rules are expected to generate important investments in various industries to improve their treatment of gas and water residues. The textile sector, due to its size, should be one of New Business Opportunities in Pakistan. The sectors targeted by foreign suppliers of environmental technology, especially for the treatment of wastewater. Soda ash and various chemicaldyeing products are the main effluents needing treatment. In order to prescribe the use and check the abuse of environmental resources, the Government has laid down National Environmental Quality Standards (NEQS) for municipal and industrial liquid effluent and industrial gaseous emissions, motor vehicle exhaust and noise. The NEQS in respect of municipal waste, industrial units and vehicular emissions were notified on and enforced from 24th August 1993. With regard to new industrial units, the NEQS have been enforced from 1st July 1996. The Pakistan Environmental Protection Act 1997 and other regulatory rules and regulations clearly demonstrate the progress that has been made in the environmental arena. National Environmental Policy and National Environmental Action Plan are attached at Annexure -XVI and XVI (a).
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Enabling Environment
PHYSICAL INFRASTRUCTURE
Roads The total length of roads in the country is in excess of 250,000 km, including nine National Highways and one Motorway (M-2). The construction work on Islamabad-Peshawar Motorway started in 1998 is in progress. The total length of motorways planned in the country is 2169 Km. 367 Km LahoreIslamabad section is completed and 208 Km Islamabad Peshawar Motorway (M1) is under construction. Karachi Northern Bypass and Makran Coastal Highway are under construction. Total length of Makran Coastal Highway is 248 Km. The construction of Pakistan Motorway connecting the Northern and Southern parts of the country with a link of Gawadar has been initiated. Two additional Motorway projects, Pindi Bhattian Faisalabad (M-3) 52 Km and Karachi Hyderabad (M-9) have been awarded on Built Operate Transfer (BOT) basis. The main Karakuram Highway (N-35) 735Km long is being improved. Railways Pakistan Railways is connected from North to South and East to West catering the large scale movement of freight as well as passenger traffic. Pakistan Railways network comprises 11,515 Km of track consisting of 10,960 Km of broad gauge and 555 Km of meter gauge. Double line track consists of 1,043 Km and electrified track consists of 554 Km. Major assets of Pakistan Railways include, 577 locomotives, 2,040 passenger coaches and 23,939 freight wagons and Pak Railways carries almost 65 million passengers annually. Private sector is being encouraged to participate in Railway sector to operate freight and passenger trains by paying track access charges. Pakistan Railways offers 50% concession in freight charges for consignment meant for exports. well as Iran via Quetta/ Taftan. This concession is for all commercial assignments booked from all parts of the country for Karachi Port, Port Qasim as
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Air Transport Pakistan is linked to almost all countries of the world though 42 Airports out of which five are international airports i.e. Karachi, Lahore, Islamabad, Peshawar and Quetta. The Government has provided for the construction of new airports in the country on BOT basis under new aviation policy. To meet the requirement of domestic and air transport, a number of private airlines have been allowed to operate along side the national carrier. The policy also provides for selective open skies through reciprocity and bilateralism with the maximum number of countries. The national airline now covers 31 international destinations across the 4 continents and serves over 22 cities within Pakistan. Presently, 2 private airlines i.e. Aero Asia and Shaheen Air International are operating on domestic and international routes. 35 international airlines operate to Pakistan and there has been tremendous growth on cargo side. aircrafts of various types. Karachi's Quaid-e-Azam International Airport, whose Jinnah Terminal opened in August 1992. is the principal international gateway to Pakistan, although Islamabad, Lahore, Peshawar, Faisalabad and Quetta also have a number of international flights. Sea Ports 1. Karachi Port Pakistan Airline has a fleet of 44
Karachi Port handles about 75% of the entire national trade. It has 12 Km long, 12.5 M deep approach channel, 30 dry berths including 2 container terminals and 3 liquid cargo handling berths. It is capable to handle modern container vessels and tankers upto 75,000 DWT. KPT has two dedicated container terminals, KICT & PICT. KICT has 28 30 berths with a handling capacity of 300,000 TEUs per annum. This will be enhanced to 400,000 TEUs per annum. It handles container ships upto 11.0 meter draught. PICT has been
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set up at berths 6-9 with handling capacity of 350,000 TEUs per annum. It has a draught of 11.5 meter whereas it is designed for 13.5 meter depths. Bulk handling terminals at the port is 3 million tons. KPT has about 100 acres of land available for development of Cargo Village at Western Backwaters. This will serve as a satellite to the port integrating container, bulk and general cargo handing as well as providing processing plants for perishable exports liquid handling capacity of Karachi Port 519 million tons per annum (mta) for POL and Non-POL products. It has three oil piers with 3 million tons capacity and structural suitability to handle 35,000 DWT tankers. The port handles 13 million tons of dry cargo and 15 million tons of liquid cargo. Pakistan Merchant Marine Policy 2001 is attached at Annexure XVII. 2. Port Qasim Port Qasim is located around 50 Km south-east of Karachi. The facilities include: Multi purpose Terminal Berths Berths 1-4 can accommodate Berths 5-7 can accommodate 1,400 M 7 (200 M. each) 25,000 DWT vessels 35,000 DWT vessels
Besides, Port Qasim has a dedicated berth to handle iron ore and coal for Pakistans Steel through 4.5 M elevated conveyor. It caters for 75,000 DWT class vessels. The Port handles 7.2 million tons of cargo (3 Millions Tons liquid). A specialized oil terminal which offers state of the art facilities to tankers up to 750,000 DWT class vessels is also available. A dedicated two berths container terminal catering for berthing facilities to 50,000 DWT class container vessels subject to permissible dimensions, four multi purpose berths in a linear length of 800 meter extending port facilities up to 45,000 DWT class.
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3.
Gwadar Deep Sea Port Gwadar deep sea port is a strategically located port and will be completed
in two phases after which Pakistan will become maritime hub for the region linking the Europe . Phase I involves construction of : 3 Multipurpose Berths Length of Berths 602 m 4.5 Km long Approach Channel Dredged to 11.5 m 12.5m. Turning Basin 450 m dia. One 100 m Service Berth. Related port infrastructure and port handling equipment & Pilot boat, Tugs, Survey Vessel etc. It is likely to be completed by end March 2005. Phase II of the project involves construction of: 4 Container Berths 1 Bulk Cargo Terminal (to handle 100,000 DWT ships). 1 Grain Terminal. 1 Ro-Ro Terminal. 2 Oil Terminals to handle 200,000 DWT ships. 4. Dry Ports Dry Ports facilities are available in the following cities: Lahore Rawalpindi Sialkot Hyderabad Larkana Faisalabad Peshawar Quetta Multan Gilgit (under construction)
Dry port facilities are immediately required in the potential cities / regions for the following purposes: To provide customs and port facilities at the door-steps of businessmen with a view to making import and export easy and economical and also for broadening the countrys international trade base; To disperse industrial and commercial activities including clearing agencies; indenting agencies and freight forwarding agencies for achieving a balanced regional growth in the country;
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To reduce congestion and over-concentration in a few mega cities like Lahore and Karachi; To generate trade and employment opportunities in the less developed regions of the country; To liquidate congestion at the sea ports of Karachi by spreading customs and port clearance cargo to up-country dry ports; To improve efficiency and effectiveness of Custom House Karachi by a fair distribution of customs work between Custom House Karachi and up-country dry ports; To bring about container revolution in the country; and To make the operation of EPZs, Foreign Post Offices, International Airports and Haj flights possible in the dry port cities; Telecommunication Pakistan is now connected with most of the globe through international gateway exchanges. Value added services such as Internet, E-mail, cellular mobile telephone, optical fiber systems, pay card phones, paging services etc. are widely available in the country. The total number of Internet users in Pakistan is more than 1.3 million. There are more than 4.851 million telephone lines including 15,968 PCOs, and 127,910 Pay Card Phones and around 326telegraph offices operating in the country. The total number of exchanges are 2,751 with working connections (ALIS) of 3,899,648. There are 202 ISPs in Karachi, Lahore & Rawalpindi. Export Processing Zones Government of Pakistan has adopted a policy package for development of Export Processing Zones that could effectively energize the process of efficient industrialization and development with adequate attraction for local and foreign investment for export oriented business ventures. Export Processing Zones Authority (EPZA) Pakistan offers attractive incentives/ facilities for investment in the existing Export Processing Zones (EPZs). There are presently six notified EPZs. There are presently six notified EPZs: 1) 2) Karachi Export Processing Zone (1980) Sialkot Export Processing Zone (2002)
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3) 4) 5) 6)
Rawalpindi Export Processing Zone (under construction) Saindak Processing Zone (2001) Reko Dek Export Processing Zone (2001) Risalpur Export Processing Zone (2003)
These zones have helped boost the economic activities through: 1. 2. 3. 4. Creating job opportunities and raising the standard of living. Transferring new skills and expertise to local human resource. Promoting non-traditional exports. Creating backward and forward linkages to increase the output and raise the standard of local enterprises that supply goods and services to the zone investors. Transfer of new technology. Developing backward regions by attracting industrial activities. Stimulating strategically important sectors of the economy.
5. 6. 7.
Incentives available for investments in EPZs: 1. 2. 3. 4. 5. 6. 7. 8. 9. 100% ownership rights. 100% repatriation of capital and profits. No minimum or maximum limit for investment. Duty and tax free imports of machinery, equipment and material. No sales tax on input goods including electricity and gas bills. No excise duty, no customs duty on cement, steel and any other material used in construction of buildings. Free from National Import restrictions. Foreign Exchange control regulations of Pakistan not applicable. Duty free vehicles allowed under certain conditions. After 5 years of use, vehicles can be disposed off in domestic market on payment of duty. Old machinery can be sold in Pakistan after three years of its import. Units operating in EPZs can undertake sub-contracting for units of tariff area subject to payment of duty and taxes on value addition only. Partial processing in Pakistan allowed under sub-contracting arrangements. EPZ units allowed to supply goods to customs manufacturing bonds. EPZ manufacturers are treated at par with bonded manufacturers in tariff area for export incentives. Relief from double taxation subject to bilateral agreement. 128
10. 11.
12. 13. 14. 15.
Karachi Export Processing Zone Karachi Export Processing Zone is located adjacent to the Landhi Industrial Area (Extension) within a distance of 18 kilometers from the modern Quaid-e-Azam International Airport, 20 kilometers from Port Qasim and 35 kilometers from the highly modernized and developed Karachi Seaport. The Zone is linked to the National Highway network. It offers effective and convenient approach to the markets of the Middle East, Far East, Africa, Europe, and America and to the new markets of Central Asian Republics. KEPZ was planned on 500 acres of land. So far 211 acress have been developed under Phace I locating the present Zone. An additional 100 acres is proposed to be developed under Phase II programme. The present KEPZ has been developed for industrial, ware-housing and financial sectors requirements providing all requisite information facilities such as electricity, water, gas, telephone etc. The developed land has been demarcated as under:Industrial Sector Commercial Trading) Sector (Ware-housing/ Insurance 330 plots 70 plots 33 plots
Financial Sector Companies)
(Bank,
The size of plots are 1,000 sq. meter each for Industrial and Commercial Sectors and 96-216 sq. meter for the Financial Sector. All investments in the Zone are made in convertible foreign currency. A foreign investor and a non-resident Pakistani can invest upto 100% of the equity. A joint venture between foreigner or foreign company and a non-resident or resident Pakistani is possible in any proportion. As on March 31, 2004, EPZA has sanctioned 204 industrial units with an envisaged investment of US$ 201.630 million, details of which are as under:
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i)
Industrial Sector (1) Units in operation (2) Competed, under construction/paid for land (3) Suspended operation/construction (4) Recently sanctioned Total
114 38 39 13
204 (382 plots allotted)
ii.
Warehousing Trading Units (1) (2) (3) (4) Units in operation Completed , under construction/paid for land Suspended units Recently sanctioned Total units 17 05 12 06
40 (37 plots allotted) 6964 workers(50% female) US$ 1121.588 million US$ 828.930 million US$ 79.604 million
iii. iv. v. vi.
Total employment generation Cumulative exports Total Imports of raw material Capital investment
New Zones in Operation EPZA is implementing an industrial policy for development of more Export Processing Zones in the country in collaboration with the private sector. The new Zones are being set up as public cum private joint ventures. Risalpur EPZ is a joint venture of EPZA with Sarhad Development Authority established on 92 acres of land. Already 41 project proposals worth US$ 30 million stand approved. The Zone provides excellent opportunity for export of goods to Afghanistan, Central Asian Republics and Iran. Production activities in the Zone have taken place during the year 2003 with the export of consumable items to Afghanistan. Saindak EPZ is a milestone achieved by EPZA during 2003 making Pakistans entry into world market in metals. Saindak gold and copper EPZ located over an area of 1284 acres in district Chagai of Balochistan province has started production on August 6, 2003 after being notified on October 12, 2001. The Zone would produce 20,000 tons of blister copper per year containing about 1.5 tons of gold from indigenous ores generating foreign exchange revenue of US$ 40-45 million per year.
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Sialkot EPZ is a joint venture between EPZA and Punjab Small Industrial Corporation in collaboration with Sialkot Chamber of Commerce & Industry. The infrastructure is fully developed on 238 acres of land. Over 170 projects already stand approved with projected exports of over US$ 400 million. When fully commissioned, Sialkot EPZ would help Sialkot export over a Billion Dollars. Sialkot is known for quality exports in sports goods, surgical items and allied industries. Duddar EPZ Duddar lead zinc project on about 20 sq. km in district Lasbela, Balochistan would also be operated by the Chinese investors of Saindak EPZ; Messrs MRDL which is a subsidiary fully owned by China Metallurgical Construction Corporation (MCC). Gujranwala EPZ located at industrial estate 3 on Lahore-Gujranwala GT Road is a joint venture between EPZA and Punjab Small Industrial Corporation. UPCOMING ZONES
Name of Project Punjab Faisalabad EPZ Multan EPZ Lahore EPZ Rahimyar Khan EPZ Gujrat EPZ Sargodha EPZ Balochistan Quetta EPZ Gadani EPZ Hub EPZ Gwadar EPZ Pasni EPZ Sindh Sukkur EPZ Nooriabad EPZ Hyderabad EPZ NWFP D I Khan EPZ Northern Areas Gilgit EPZ Azad Kashmir Mirpur EPZ Up to date Status Joint Venture with Faisalabad Chamber Joint Venture with Industries Dept Joint venture with Lahore Chamber Joint venture with PSIC and the Bahawalpur Chamber Proposed joint venture with respective Chamber Proposed joint venture with respective Chamber Joint Venture with Industries Dept Joint venture with LIEDA Joint venture with LIEDA Sponsored by Ministry of Communications Joint venture with Pasni Fish Harbour Authority Joint venture with SITE Joint venture with SITE Joint venture with Hyderabad Chamber Joint venture with Northern Areas Chamber Joint venture with Northern Areas Chamber Joint venture with industries Dept Total Area 101 Acres 200 Acres 150 Acres Yet to be determined Yet to be determined Yet to be determined 200 Acres 200 Acres 50 Acres 200 Acres 200 Acres 200 Acres 200 Acres Yet to be determined 100 Acres 100 Acres 200 Acres
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Land Initial lease for a period of 30 years (renewable by mutual agreement). Developed land is available in plot size of 758 sq. mtr. 2022 sq. mtr. And 15573 sq. mtr. In the Industrial and Warehousing/ Trading Sectors. Annual Ground Rent (AGR) Annual Ground Rent (AGR) is very competitive to other Zones in the region and is US$ 1.50 per square meter for industrial plots and US$ 2.50 per square meter for warehousing trading and financial/ commercial plots. Registration fee payable only at the time of registration is US$ 1,000/-. Development Surcharge is levied @ 0.5% of FOB value of exports. Presumptive Tax EPZA collects income tax on behalf of Income Tax Department at the following rates specified in the eight schedule in Part-I of the first schedule of Income Tax Ordinance. Part I Part II Part III Utility Charges Gas Charges Karachi Export Processing Zone has adequate facility for gas supply to users at nominal rate of US$ 43.44 per MMBTU for the commercial users while for the industries the rates are US$ 43.00 per MMBTU. Electricity Charges Electricity charges are approx 10 cents per unit of connected load of 100 KW (low tension industrial B) the unit rate would be different in case of high tension and low tension connected load and also would depend on consumption. Water Charges Water is adequately available. There are two underground reserves of 0.65 million imperial gallons each, a water tower of 30 meters high with an underground water pumping station are in operation in the Zone. The water charges are Rs 73/1000 gallons (rate would be payable as per prevailing Rs =$ conversion rate). 0.75% of Exports 1.00% of Exports 1.25% of Exports
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Telecommunication International telephone services are available through 4,000-line digital electronic exchange linked with all parts of the world by satellite communication. Internet connection provided by local ISPS is very cheap and competitive to other countries. Labor Cost Labor cost is very low as compared to the labor costs in other free zones of the region. Labourers are divided into three categories and are easily available at very reasonable rates as given hereunder: Un-skilled Skilled Managerial Eligibility for Investment in EPZs The following categories of persons shall be eligible to establish industrial undertaking in a zone: A foreign investor. A foreign investor in collaboration with a resident citizen of Pakistan or a company incorporated in Pakistan. A resident citizen of Pakistan or a company incorporated in Pakistan, being allowed to invest to the extent of hundred percent or sixty percent out of his or, its own foreign exchange resources without constraining the foreign exchange reserves of Pakistan. Incentives No Custom duties All imports of machinery, equipment & materials are duty free. All inputs required for construction of buildings, including Cement and Steel are duty-free. Duty free import of three vehicles i.e. one executive car, one vehicle for transportation of workers and one vehicle for transport of goods under certain conditions EPZ units can supply goods to Customs Manufacturing bonds. Complete freedom from restrictions of National Import Policy. US$ 75 per month US$ 100 per month US$ 200-500 per month
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No Sales Tax EPZs have been classified as zero rating area in Sales Tax act of Pakistan. Therefore all in puts whether local or imported are exempted from Payment of Sales Tax on their utility bills i.e. Gas & electricity. Availability of Domestic Market For goods produced in the Zone, Domestic Market is available on same conditions as for imports from any other country on payment of applicable duties. The value of goods exported shall be deemed to be the total income for the purpose of taxation. EPZ Authority has reduced the rate of EPZ surcharge of 1 % on the f.o.b. value of exports to 0.5% to off set the impact of presumptive tax. One-Window Facilities Processing of Investment applications and sanctions under one-window operation. All infrastructure facilities like water, electricity, gas telex and telephone are available within Zones under one-window concept. Import Certificate & export NOCs are authorized by authority within 24 hours. Under one-window concept, the investors are not required to come in contact with Income Tax Agency. EPZA itself collects the Tax on f.o.b. value of exports and deposit with Income Tax authorities. Inter-unit transfer of finished goods among EPZ units is allowed. Production Oriented labor laws to be solely regulated by the Authority. Other Incentives & Facilities The garment manufacturing units, located in Export Processing Zones are eligible to participate in auction of quotas. Skilled & unskilled labor available in abundance. Peaceful, secure and environmentally protected pollution free work area. Investors are free to make investment in any sector except in prohibited items such as narcotics, alcoholic drinks, armaments, or those causing serious environmental pollution.
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In view of the success of Karachi Export Processing Zone, the EPZA has established / plans to establish more such zones in the country. Export Processing Zones developed or being developed under public-private partnership are mentioned below: Saindak Export Processing Zone (Copper mining) 2001 Riko Deq Export Processing Zone (Copper mining) 2001 Sialkot Export Processing Zone (Development completed) 2002 Riasalpur Export Processing Zone (Development completed) 2002 Gujranwala Export Processing Zone (Announced) 2002 Faisalabad Export Processing Zone (Announced) 2002 Lahore Export Processing Zone (To be announced shortly) 2003 Industrial Estates The objective to develop industrial estates was to establish planned industrial areas, where prospective industrialists could obtain all the facilities, such as land, roads, railway, water supply, electricity gas, telephone, godowns, sanitation, drainages, labour colonies and other necessary public facilities. The following table shows province wise industrial estates: Punjab
Industrial Estate Kasur Road, Lahore Multan Kot Lakhpat, Lahore Medium Industrial Estate Chakwal Small Industrial Estates Gujranwala Faisalabad Lahore Sargodha Sahiwal Thal Mandi Town, Bhakkar Jauhrabad Mianwali
Gujar Khan Gujrat Bahawlpur Jhelum Daska Sialkot Gujar Khan Mian Chunnu Khanewal Raiwind Lahore Burewala Shor Kot Taxila
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Sind
Sind Industrial Trading Estate Ltd Karachi North Karachi Nooriabad Small Industrial Estate Khairpur Gambat Hyderabad Dadu Mirpurkhas Industrial Park Mirpurkhas Hyderabad Tando Adam Kotri Sukkur Nawabashah
Sanghar Sukkur Rohri Badin Thatta Sehwan
Shikarpur Larkana Kandhkot
Other Industrial Estates operating in Karachi are Federal B Industrial Area, Korangi Industrial Area, Landhi Industrial Area and Bin Qasim Industrial Area.
Balochistan
Industrial Estate Hub Chowki Uthal Mini Industrial Estate Loralai Khuzdar Winder Dera Murad Jamali Turbat Pasni Quetta Gadani
NWFP
Industrial Estate Peshawar Hattar Gadoon Amazi Small Industrial Estate Peshawar Mardan-1 Mardan-II Ghazi Mattani D.I. Khan Abbottabad Kalabat Mansehra Nowshera
D.I. Khan Bannu Kohat
Small Industries Corporations There are three provincial autonomous small industrial corporations in the province of Punjab, Sind and NWFP, whereas the Directorate of Industries in Balochistan manages Industrial Estates in Balochistan.
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TECHNOLOGICAL INFRASTRUCTURE
In order to ensure rapid growth in the industrial sector and to effectively participate in the Technological changes internationally, more balanced fiscal incentives and support is being given for Technology upgradation. The Government has initiated various steps to facilitate industrial sectors for upgradation of Technology through: (a) Bilateral arrangements with Japan to upgrade the capabilities of support organizations in the sectors of Leather, Plastic Technology, Synthetic Fibre and Auto parts manufacturing. Technical assistance from international agencies i.e. Asian Development Bank and World Bank have been sought for the development of Small and Medium Enterprises sector. Pre-feasibility studies have been prepared for the prospective investors in the areas of SMEs, value added textiles and leather products, engineering, electrical and electronic, sports and surgical goods, furniture, gem stones, jewellery, chemicals, agri-business, livestock, dairy farming & fisheries, mining, information technology and telecommunications sectors. 26 Technology Supports Centres are to be established at different cities of the country with the technical and financial assistance of JICA. Government has planned to establish Engineering Parks one each at Karachi and Faisalabad with all infrastructure and state of the art machinery specially for Textile Sector.
(b)
(c.)
(d)
(e)
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FINANCIAL INFRASTRUCTURE
In order to encourage local and foreign investment the Government especially the MoI&P has pursued and supported various types of Industrial loans at concessional rates which includes project loans, working capital loans, debenture loans, loan against local machinery manufacturing. Investment rates for the project loans, debenture loans, working capital loans and loans against LMM have been reduced to single digit. In addition to above, special financial support institutions have been mobilized for the development of SMEs sector. a) SME Bank has been established to finance small and medium size industrial units which face financial difficulties in acquiring loan from commercial banks and other large size financial institutions. Khushali Bank has been established to provide loans to micro sector and individual business enterprises. Bank borrowing and lending charges have been reduced to encourage investment in the country. Commercial Banks have been allowed lease financing for durable consumer goods like cars, motorcycles, television, air conditioners, washing machines, refrigerators, etc. which is helping the industrial sector to increase their production and thus achieving the economy of scale.
b) c) d)
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INTELLECTUAL INFRASTRUCTURE
Industrial support institutions play a key role to facilitate investment and increase industrial activity in the country. In Pakistan a number of such institutions in different areas have been established such as: Development financial institutions. Provincial small industries corporations for the development of industrial estates and financing of SME projects. Small and Medium Enterprises Development Authority (SMEDA) for development of SMEs. Engineering Development Board (EDB) supervising and providing assistance for indigenization and developing local manufacturing capabilities. National Productivity Organization (NPO) is working for improving the productivity of various sectors of economy. Patent and Design Office (PDO) is activity working to safeguard intellectual property rights in Industry and Technology sector Experts Advisory Cell (EAC) is assisting the Government and the stakeholders by providing techno-economic analysis for policy formulation. Textile Commissioner Organization (TCO) is providing Technology foresights and marketing support to the textile sector Cluster Development in the sub-sectors of fisheries, fruits and vegetables have been planned in Karachi and Multan respectively in collaboration with UNIDO Technical Assistance Program to promote joint industrial activities by SMEs. To enhance efficiency and productivity, offices in the Ministry of Industries and Production have been completely automated/computerized and following websites have been launched: www.moip.gov.pk (Ministry of Industries and Production) www.engineeringindustry.info(Engineering Development Board) www.eac.gov.pk (Experts Advisory Cell) www.smeda.org (Small and Medium Enterprises Development Authority) www.npo.gov.pk (National Productivity Organization)
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LEGAL & REGULATORY FRAMEWORK

Strategies for productivity improvement and Industrial growth require comprehensive and coherent policies at the macro level as against adhocism. To achieve this objective, Government has developed sectoral policies and visions in consultation with the stakeholders. a) Prior permission and control in establishment of industries have been done away with except for four industries (Arms and Ammunition, High Explosive, Radioactive Substances; Security Printing and Currency and Mint). Long term policy framework has been formulated relating to following sub-sectors: (i) (ii) A Textile Vision was prepared to shift the focus of export to value added products to US$ 13.8 billion by 2005. An Engineering Vision 2010 has been put in place to promote engineering industry in the country through adopting modern technologies, technical and managerial know how and a vigorous international marketing strategy. The Fertilizer Policy-2001 has been finalized to attract new investment in this sector. A Leather Outlook 2010 has been prepared to focus on value added production and export. Industrial Policy for pharmaceutical sector is under preparation to promote investment in this sector.
b)
(iii) (iv) (v) c)
Advisory Council for the Ministry of Industries and Production has been set up to seek guidance of all important chambers and private sector stakeholders on industrial policy and implementation matters. It has given a sense of participation to private sector and is helping the ministry to formulate policies on tariffs rationalization and budget etc. Business Support Centre at PIDC House, Karachi has been established to stimulate growth of the countrys industrial sector. The Centre supports foreign investors as well as overseas Pakistanis in starting industrial operations in the country. It also facilitates investors towards provision of connections of electricity, gas, water and acquisition of land etc. on priority through investment officers. Two other BSC, one each in Islamabad and Lahore are in the advance stage. A World Bank funded project is being conducted for providing support for Reforms in Regulatory, Legal & Policy Environment for Private
d)
140
Sector growth to improve the Investment Climate in Pakistan. This would facilitate the de-regulation process in the country. e) f) Tariff rationalization through adoption of participatory approach has been under taken. consultative and
Realistic tariff measures were taken by removing tariff anomalies including reduction of duties on raw material vis--vis finished goods. For example, in case of alloy steel/stainless steel, the tariff has been reduced from 50% to 5% in three year's time. Similarly for engineering plastics, duties have been reduced from 35% to 10%. Legal framework has been provided through new laws to protect the rights of investors, such as Patent Ordinance, Design Ordinance and Integrated Circuit Ordinance etc. Small and Medium Enterprises Development Authority (SMEDA) in cooperation with Asian Development Bank is undertaking a study on simplification of procedure for the industrialists i.e. labour laws, corporate laws, banking procedure for loaning, etc.
g)
h)
Antidumping Ordinance 2000 Government of Pakistans has enforced Antidumping Ordinance 2000 under which any significant injury to domestic industry caused by dumped imports (export price of underlying product is less than its normal value) can be dealt. National Tariff Commission (NTC) is the investigating authority on this matter. Subsidies & Countervailing Ordinance 2001 Subsidies and Countervailing Ordinance 2001 has been put in place which provides protection against injury caused to domestic industry by subsidized dumped imports (the export price of underlying product is less than its like product in domestic market due to subsidies granted in home country). In such cases, NTC initiates investigation against the exporting country on the basis of data provided by domestic industry and validity of the case. If injury is confirmed, subsidies and countervailing duty is imposed for a period of five years.
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Safeguard Ordinance 2002 Safeguard Ordinance 2002 has been promulgated to deal with any significant injury or threat of injury to the domestic industry caused by sudden increase in the volume of imports. A safeguard measure is supposed to be of a temporary nature and taken primarily to afford opportunity to the domestic industry to adjust itself to the competition from imports. NTC is the relevant authority in this matter.
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Initiating Business in Pakistan
INCORPORATING COMPANIES IN PAKISTAN

The Government is open to foreign investment and provides incentives to attract investment. The national investment policy provides equal opportunities for local and foreign investment. The Government has taken major steps to accelerate pace of industrial development and has initiated programmes to address investors concerns. In addition to various development measures, the Government has simplified procedures for new entrepreneurs to start their business in the country. Potential investors can start business by establishing a sole
proprietorship, partnership firm or a private/public limited company. The brief descriptions of various methods of conducting business in the country are as follows: Sole Proprietorship: In sole proprietorship, an individual to start a business independently on his/her account carries out the business or profession. No formal procedure or formality is required for setting up a sole proprietary concern. However, now a single person can also form a private company. Partnership: In this type of concern, a partnership deed is signed between two or more persons for carrying out a business. The capital, debt, profit and loss of the firm are shared according to the specified terms of agreement. For taxation purposes partnership firms are classified as registered and unregistered firms. The registered firms are liable to super tax before disbursement of profits to the partners and the income of the partners is also taxable. In case of unregistered
143
firms income tax is levied on the income of firms and the partners are not liable to pay tax on the shares of profit received. Company: A company is legal entity formed under the Companies Ordinance, 1984. It can have share capital or can be formed without share capital. There are various type of companies i.e. Company Limited by Shares, Company Limited by Guarantee and unlimited company. Company limited by shares: There are two types of companies, which can be formed i.e. Public Limited Company, or Private Limited Company. Public Limited Company can be formed by atleast three persons, whereas, Private Limited Company requires atleast one person to subscribe his name in Memorandum and Articles of Association of the company. - Restricts the right to transfer its share; - Limits the number of its members to fifty; and - Prohibits any invitation to the public to subscribe for shares or debentures of the company. A private limited company is required to use the words (Private) Limited as the last words of its name. A single Member Company shall write (SMC Private) Limited as the last words of its name. Company Limited by Guarantee: It means a company having the liability of its members limited by memorandum to such amounts as the members may respectively undertake to contribute to the capital of the company in the event of its winding up for the payment of liabilities. A company limited by guarantee is usually formed on applying its profit or income in promoting its objects and to prohibit the payment of dividend to its members. Companies limited by guarantee use the words (Guarantee) Limited as the last words of their names. Unlimited Company: It means a company having unlimited liability of its members.
144
REGISTRATION OF A COMPANY
The following are the requirements under the Companies Ordinance 1984 for registration of a company: Availability of Name For incorporation of a company the first step is to confirm the availability of the name from the concerned registrar on payment of a fee of Rs 200. The company may propose one or more names according to their priority for incorporation of a new company. The name should not be inappropriate, deceptive or designed to exploit or offend any religion. It should neither be identical nor have any close resemblance with the name of any existing companies. Formation of a company Any three or more persons associated for any lawful purpose may, by subscribing their names to a Memorandum of Association, create a public company. Any two or more persons associated in a similar manner form a private company and one person may form a Single Member Company (SMC). Before incorporation of companies, the approval of concerned ministries is required as given below:
a) b) i) ii) iii) iv) v) vi) vii) c) d) Banking Company Non Banking Finance Companies Investment Finance Services Leasing Company Venture Capital Investment Discounting Services Investment Advisory Asset Management Services; and Housing Finance Services A Security Company Arms, Ammunition, Printing, Currency and Mint, High Explosives, Radio Active substances i) ii) Ministry of Finance State Bank of Pakistan
Securities & Exchange Commission of Pakistan
Interior Division through SEC. Ministry of Industries & Production/ Board of Investment
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DOCUMENTS FOR REGISTRATION OF COMPANIES

I. Copy of National Identity Card of each Subscriber/ Promoter. II. Memorandum and Articles of Association Four printed copies of Memorandum and Articles of Association duly signed by each subscriber in the presence of one witness. One copy should be affixed with special adhesive stamps at the rates prescribed under the Stamp Act, 1899. III. Form 1 Declaration of compliance with the requirements of the Companies Ordinance, 1984. IV. Registration/ Filing Fee A copy of the original paid Challan in the authorized branches of Habib Bank Limited or a Bank Draft drawn in favour of the Securities and Exchange Commission of Pakistan of the prescribed amount. V. Authorization by Sponsors The authorization of sponsors to make good the deficiencies in memorandum of association pointed by the registrar concerned and to collect the certificate of incorporation. DOCUMENTS FOR REGISTRATION OF AN ASSOCIATION NOT FOR PROFIT All the documents meant for registration of a limited company alongwith a licence issued from the Securities and Exchange Commission of Pakistan, Islamabad or/and for trade body, a licence issued by Ministry of Commerce. (The application for obtaining the requisite licence from the Commission should be accompanied by draft Memorandum and Articles of Association, list of promoters, declaration, names of associated companies in which the promoters of the proposed association held any office and estimates of annual income and expenditure). REQUIREMENT AFTER ESTABLISHMENT OF PLACE OF BUSINESS BY FOREIGN COMPANIES A Foreign Company incorporated outside Pakistan, is required to file the following documents to the registrar concerned within 30 days from the establishment of its place of business in Pakistan:
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i)
ii) iii) iv) v) vi)
A certified copy of the character, statute or Memorandum and Articles of Association of the company in the English language accompanied by Form 38; Registered office address or principal office of the company, on Form 39; A list of Directors, Chief Executive and Secretaries (if any) of the company, on Form 40; Particulars of principal officer of the company in Pakistan, on Form 41; Particulars of person(s) resident in Pakistan authorized to accept service on behalf of the foreign company, on Form 42; and Address of principal place of business in Pakistan of the foreign company, on Form 43;
Any change or alteration in particulars stated above are required to be filled on Form 44 with the registrar concerned within 30 days of such change or alteration. It is required to file annually with the registrar concerned annual accounts in respect of its operations within Pakistan as well as its global accounts together with the list of Pakistani members and debenture holders and of places of business of the company in Pakistan within the prescribed. It is required to give notice on Form 46 to the registrar concerned at least 30 days before it intends to cease to have any place of business in Pakistan and to publish a notice of o Opening of Project/ Branch/ Liaison Offices by Foreign Firms - Foreign companies that intend to undertake export activities in Pakistan will be registered without any formality. - Permission to companies engaged in contractual obligations of contracts with public sector, entities will be granted on production of valid documents without circulating to government departments. - Permission for opening a liaison office by a foreign company to promote the product and services will be granted by the BOI in consultation with the concerned agencies. - For companies that wish to open their branch/liaison or representative offices in Pakistan may apply to BOI for Permission 147
on prescribed form. The BOI will process and decide such cases within a period of 6 to 8 weeks. - Details on the required documentation, etc. are available at all offices of the BOI. A specimen of the application for permission to establish branch/liaison office by foreign companies. - Permission for opening of branch/ liaison offices may be granted by the BOI for a period of 3 to 5 years. Further extensions will be granted by the BOI after reviewing and examining the past performance of the foreign companies. Request for renewal of extension will be processed by the BOI within two weeks provided the requests are supported with complete documentation.
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PROCEDURE TO ESTABLISH BUSINESS IN PAKISTAN

Registration of Private/Public Company Any one or more person associated form Private Co. One person to form a Single Member Company (SMC). Three or more person associated form Public Co. Application for Selection of a Name Seeking the availability of name with the Company Registrar Fee Rs. 200/Documents required for Registration
Copy of National Identity Card of each Subscriber/ Promoter. Four Printed Copies of Memorandum & Articles of Association. Signed by each member in presence of a witness. Special stamp pasted. Declaration of compliance with the requirement of the Companies Ordinance, 1984 on Form 1. Registration/ Filling Fee. Authorization by Sponsors.
Incorporation Commencement of Business Note: Private Companies can commence business just after incorporation. Public Companies have to obtain certificate for commencement of business. Commencement of business is allowed on obtaining licence, if required. Permission prior to incorporation is sought in case of specialized companies.
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Details of the Addresses, Telephone Nos of the Company Law Division of the Commission and its Company Registration Offices is given below:SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN N.I.C. BUILDING, JINNAH AVENUE, ISLAMABAD PAKISTAN Ph: 051-9207091-4, Fax: 051-9204915 Website: www.secp.goq.pk E-mail: secphq@isb.paknet.com.pk Chairman, SEC Commissioner (Company Law) Executive Director (Company Law) Registrar of Companies Additional Registrar of Companies I Additional Registrar of Companies II 1. 051-9205310 051-9206513 051-9207637 051-9206514 051-9206306 051-9212070
COMPANY REGISTRATION OFFICES (CROs) CRO Islamabad State Life Building, 7-Blue Area, Islamabad Phone: 051-9208740, Fax: 051-9208740 E-mail: crois@isb.paknet.com.pk CRO Karachi 4th Floor, SLIC Building No. 2, Karachi Phone: 021-2415855, 2416778, Fax: 021-2416778 E-mail: crokhi@khi.paknet.com.pk CRO Lahore 3rd & 4th Floor, Associated House, 7 Egerton Road, Lahore Phone: 042-9200274, Fax: 042-9202044 E-mail: crolhr@lhr.paknet.com.pk CRO Multan, 63-A, Nawa-I-Waqt Building, Abdali Road, Multan Ph: 061-9200920, Fax: 061-9200920 E-mail: cromul@mul.paknet.com.pk
2.
3.
4.
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5.
CRO Faisalabad 356-A, Al-Jamil Plaza, 1st Floor, Peoples Colony, Small D Ground, Faisalabad Ph: 041-9220284, Fax: 041-9220284 E-mail: crofsb@fsd.paknet.com.pk CRO Peshawar 1st Floor, State Life Building, The Mall, Peshawar Cantt Ph: 091-9213178, Fax: 091-9213178 E-mail: cropsh@psh.paknet.com.pk CRO Quetta 382/3, (IDBP House), Shahrah-e-Hali, Quetta Cantt Ph: 081-844136 E-mail: croqta@qta.paknet.com.pk CRO Sukkur House # 28, Humdard Housing Society, Airport Road, Sukkur Ph: 071-30517
6.
7.
8.
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Immigration Procedures
EXISTING BUSINESS VISA POLICY

To facilitate travel to and staying in Pakistan for foreign business persons and investors, business visa policies have considerably been relaxed. Pakistan Missions abroad are authorized to issue Business Visas to the bonafide investors/ businessmen upto the duration of three years of 45 countries listed below:
1. 2. 3. 4. 5 6. 7. 8. 9. 10. 11. 12 13 14. 15. Australia Austria Bahrain Belgium Brunei Canada China Czech Republic Denmark Finland France Germany Greece Hong Kong Hungary 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. Indonesia Iceland Iran Ireland Italy Japan Kuwait Luxembourg Malaysia Netherlands New Zealand Norway Oman Poland Portugal 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45. Qatar Russian Federation Saudi Arabia Singapore Slovakia South Africa South Korea Spain Sweden Switzerland Thailand Turkey U. A. E. United Kingdom United States of America
Pakistani industrialists and business persons interested to invite foreign entrepreneurs, for promotion of trade and industrial co-operation, are allowed to sponsor, on their own guarantee, the granting of a visa for one month through the Chambers of Commerce and Industry at Lahore, Karachi, Peshawar, Quetta, Islamabad and Federation of Pakistan Chambers of Commerce and Industry FURTHER CONCESSIONS IN THE NEW BUSINESS VISA POLICY Work Visa Procedures i) A uniform facility has been extended to exempt technical and managerial personnel from the work permit for the newly opened sectors of the economy, including Agriculture, Services and Social Sectors, in addition to exemption already enjoyed by such personnel for working in the manufacturing/ industrial and infrastructure sectors. They are now only required to obtain work Visas. Work visas will be granted to foreign technical and managerial personnel for the purpose of transferring skills and know-how. These visas will be granted subject to a constructive plan to train Pakistani personnel to take over the technical and managerial responsibilities over a reasonable period of time. A Committee under the Chairmanship of the Secretary of BOI periodically considers and decides the cases of granting or 152
ii)
iii)
extending work visas to foreign personnel and companies requiring employment of foreign nationals or extension in their visa should submit the request on the prescribed application form to the Board of Investment (FTP Wing) Islamabad. The prescribed form can be obtained from the offices of the Board of Investment Islamabad, Karachi and also from the web-site of BOI (www.pakboi.gov.pk). Work visas will be authorized and issued by the Ministry of Interior on the basis of the decision of the Committee. The work visa will be issued for a period up to 5 years or for the life of the applicant's passport. iv) The Work Visa may be issued for a period of 5 years or for the validity of the applicants Passport. The concerned Pakistani Mission abroad will grant Work Visa to the applicants. Whereas extension in Work Visa will be endorsed by the Regional Passport Office of the city where the expatriate is working upon authorization by the Ministry of Interior. In case of multiple entry visas the number of entries will not be restricted.
v)
Business Visa Conversion into Work Visa For the purpose of changing the category of visa of foreign national employees and investors from business visa to work visa, the condition to go out of Pakistan to any third country and get it converted from the Pakistani Mission in that country has been withdrawn. The Ministry of Interior will process such requests simply upon receiving verification from the BOI. Multiple entry resident visas for up to 3 years will be issued to business persons of all countries, except those not recognized by Pakistan, who bring in an amount of US$ 200,000 or more. Registration of Foreigners with the Police It has been decided to exempt all foreigners from registration with the police, except for nationals of countries on the negative list. Even in the case of countries on the negative list (except for Indians and foreigners of Indian origin), foreign nationals in the managerial category who are issued work permits/visas will also be exempted from police registration.
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Grant of Pakistan Citizenship to Foreign Nationals (Investors) Any person of a country recognized by Pakistan may obtain Pakistani Citizenship by investing a minimum of US$ 0.75 million in tangible assets and $ 0.25 million (or equivalent in major foreign currency) in cash on a non-repatriable basis and by fulfilling the conditions of the Pakistan Citizenship Law. Investment on a non-repatriable basis means that the amount is brought to Pakistan through normal banking channels converted into Rupees never repatriated.
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Annexures
Annex - I
NATURAL GAS TARIFFS *

The prevailing natural gas tariff for various sectors is given below:
(Rs/ million BTU)
Category
1.7.2003 69.31 104.42 167.06 217.32 193.82 172.26 209.78 172.26
Domestic Slab
i) ii) iii) iv) iv) Upto 3.55 M.cu.ft/month 3.55 to 7.10 M.cu.ft/month 7.10 to 10.64 M.cu.ft/month 10.64 to 14.2 M.cu.ft/month ** Above 14.2 M.cu.ft/month **
Commercial
General Industry Cement CNG Stations
Fertilizer
On SNGPL & SSGCL Systems As Feed Stock Pak American Fertilizer FFC Jorden Dawood / Pak Arab Pak-China / Hazara As Fuel (Dawood/Pak Arab) (others) Raw Gas from Mari Gasfield As Feed Stock FFC/Engro Chemical (New) FFC/Engro Chemical (Old) Pak Saudi As Fuel 36.77 36.77 67.26 71.38 172.26 172.26 13.09 66.31 66.31 172.26 172.26 235.77 166.41 161.85 161.85
Power
SNGPL/SSGCL Systems Liberty / Power Limited Raw Gas for WAPDA from Sui Gasfield (917 Btu) Kandhot Gasfield (866 Btu) Mari Gasfield (754 Btu) Sara/Suri Gasfields
Units: Prices are on Rs/ million Btu basis since 1st March 2002. Before this, these were on Rs/ Mcf basis. * Without GST (General Sales Tax) ** Since 25-10-2002, 5th slab has been removed and the 4th slab applied to all above 10.64 MCU ft. per month.
Source: Energy Year Book 2003*
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Annex - II
ELECTRICITY TARIFFS
FIXED CHARGE (Rs/KW) EQUIVALENT RATE RS/KWH ENERGY CHARGE (Rs/KW) ADDITIONAL SURCHARGE (Rs/KW)
TARIFF CATEGORY
FAS (Rs/KW)
GENERAL SUPPLY TARRIF (A-2) FOR FIRST 100 UNITS ABOVE 100 UNITS
0 0 MINIMUM CHARGE
2.77 3.01
3.82 3.92
GENERAL SUPPLY TARIFF (A-1) UPTO 50 UNITS FOR FIRST 100 UNITS(1-100) FOR NEXT 200 UNITS(101-300) FOR NEXT 700 UNITS(301-1000) FOR NEXT 3000 UNITS(1001-4000)
For Single Phase Connection Rs 150/For Three Phase Connection Rs 300/0 0 0 0 0 0.61 0.41 0.58 1.51 1.88 0.37 0.37 0.37 0.25 0.73 1.58 2.29 3.55 4.42
MINIMUM: For Single Phase Rs.45 CHARGE : | For Three Phase Rs.100/-
INDUSTRIAL SUPPLY TARIFFS B1-(UPTO 40 KW) B2-(41-500 KW) B2-(Peak) B2-(OFF PEAK) B3-UPTO 5000 KW(NORMAL) B3-(PEAK) B3-(OFF PEAK) RAWAT H.V. TESTING LAB B4- ALL LOADS(NORMAL) B4-( PEAK) B4-(OFF PEAK) BULK SUPPLY TARIFF C-1(a) 400 VOLTS upto 20 KW C-1(b) 400 VOLTS above 20 KW upto 500 KW C-2(a) 11/33 KV upto 5000 Kw C-2(C) AJ&K C3 66/132 KV 0 220 216 214 0 0.46 0.53 0.49 1.24 1.09 1.06 1.10 1.04 0.32 0.32 0.32 0.33 0.32 3.42 3.21 2.96 2.53 2.90 0 300 300 300 290 290 290 0 280 280 280 1.0 1.08 1.33 0.93 0.72 0.55 0.55 0 0.83 0.61 0.58 1.81 1.3 1.98 1.2 1.29 1.97 1.15 1.88 1.24 1.87 1.11 0.11 0.11 0.11 0.11 0.11 0.11 0.11 0.16 0.11 0.11 0.11 3.07 2.09 2.78 2.07 2.01 2.26 1.60 2.11 1.86 2.20 1.49
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TARIFF CATEGORY
FIXED CHARGE (Rs/KW)
EQUIVALENT RATE RS/KWH
ENERGY CHARGE (Rs/KW)
FAS (Rs/KW)
ADDITIONAL SURCHARGE (Rs/KW)
AGRICULTURAL TUBE-WELL TARIFF-D 1-SCARP 2-(I) PUNJAB & SINDH 2-(II) NWFP & BALUCHISTAN, distt. MIANWALI BAHAWALPUR in PUNJAB & THARPARKAR in SINDH TEMPORARY SUPPLY TARIFFS E-I(i) DOMESTIC E-1(ii) COMMERCIAL E-2(I) INSUSTRIAL E-2(ii-a) BULK (LICENSEE+NONLINCESEE 400 V) E-2(ii-b) BULK (LICENSEE+NONLICENSEE 11 KV) E-2(iii) BULK SUPPLY TO OTHERS CONSUMERS F-SEASONAL SUPPLY (125% ADL/SCH OF REGULAR) G-1(1) PUBLIC LIGHTING SUPPLY G-1(2) OTHER THAN ABOVE IN G1(1) H(1) RESIDENTIAL COLONIES (WITH OWN TRANSFORMER) H(2) RESIDENTIAL COLONIES (OTHERS) I-RAILWAY TRACTION J-1CO-GENERATION (SALE OF WAPDA) J-2(a) Purchase by wapda (DEC-JUL) J-2(b) Purchase by wapda (AUG-NOV)
82 72 0
0.3 0.18 0
1.26 0.9 0.75 0
0.37 0.37 0.37 0
3.13 1.59 1.38 0
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
2.11 3.79 2.36 1.76 1.64 1.85 0 0 1.93 1.45 1.46 1.02 1.74 1.03 0.78
0.37 0.11 0.32 0.32 0.32 0 0 0.23 0.37 0. 37 0. 33 0. 37 0 0
3.68 4.74 3.51 3.85 3.62 3.67 0 0 4.57 4.02 4.04 3.50 3.36 0 0
Source: Economic Survey of Pakistan 2002-03
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Annexures
Annex - III
INDUSTRIAL POLICY
The existing Industrial Policy aims at attaining the following objectives: Self-reliance High value-added exports Development of skills which help in improving efficiency, productivity and quality Encouragement of labor intensive industries Development of infrastructure facilities with active cooperation of private sector. Principles of Industrial Policy The Industrial Policy is inter alia, based on following principles: Full safeguard to be provided to protect lawful investment of foreign and local capital. No restriction on private investment in any sector except in some defense oriented and sensitive areas. The government's role will be act as a facilitator. Encourage development of small and medium enterprises. Special financing to be made through recently established SME Bank on easy terms and conditions. Multinational joint ventures will be encouraged to improve foreign investment. Encourage investment of value added export oriented industry. Appropriate measures against dumping and smuggling. Encourage establishment of industries in under developed areas by providing necessary infrastructure such as communication, gas, electricity, water, etc.
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Annexures
Annex - IV
INVESTMENT POLICY OF PAKISTAN

Pakistans Investment Policy has been formulated to create an investorfriendly environment, with a focus on further opening up the economy and marketing the potential for direct foreign investment. The essence of the policy is to strengthen Pakistans competitiveness by improving the policy regime, offering fiscal and tariff relief and providing comprehensive facilitation services. Policies Previously only the manufacturing sector was open to foreign investment. Now, the Policy Regime is much more liberal with most other economic sectors open for foreign involvement and with significant efforts at mobilizing domestic financial resources towards long term investment. i. Manufacturing/ Industrial Sector Foreign Investors are permitted to hold 100% of the equity of industrial projects without any permission of the Government. No Government sanction is required for setting up any industry, in terms of field of activity, location and size, except for the following: Arms and Ammunitions High Explosives Radioactive Substances Security Printing, Currency and Mint No new unit for the manufacture of alcoholic beverages or liquors will be allowed. There is no requirement for obtaining No Objection Certificate (NOC) from the provincial governments for locating the project anywhere in the country except in areas that are notified as negative areas.
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ii.
Non-Manufacturing Sectors Foreign investment on a repatriable basis is allowed in the Service, Infrastructure, Social and Agriculture Sectors subject to the conditions indicated against each. There will have to simply register their company with Security & Exchange Commission of Pakistan (SECP) under the Companies Ordinance, 1984 and to inform the State Bank of Pakistan, provided the relevant conditionalities are fulfilled. (a) Service Sector Activities FDI in Service Sector is allowed in any activity subject to condition that services which require prior permission/ NOC or license from the concerned agencies will continue to get the same treatment until and unless de-regulated by such agencies and will be subject to provisions of respective sectoral policies. Conditions The amount of foreign equity investment in the company/ project shall be at least US$ 0.3 Million. Foreign investors are allowed to hold 100% of the equity subject to the condition that the repatriation of profits will be restricted to a maximum 60% of total equity or profits and the condition that a minimum of 40% of the equity is held by Pakistani investors (including sale of shares in stock exchange) within five years. (b) Infrastructure Sector Activities Infrastructure Projects, including the development of Industrial Zones. Conditions o o The amount of foreign equity investment in the company/ project shall be at least US$ 0.3 Million. Foreign equity is allowed on a repatriable basis.
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(c)
Social Sector Activities Education, Technical/ Vocational Training, Human Resource Development (HRD), Hospitals, Medical and Diagnostic Services. Conditions o o The amount of foreign investment in the company/ project shall be at least US$ 0.3 Million. 100% foreign equity is allowed.
(d)
Agriculture Sector Activities Land Development/ Reclamation of Barren Land, Desert and Hilly Areas for Agriculture Purposes and Crop Farming, Reclamation of Water Front Areas/ Creeks, Crops, Fruits, Vegetables, Flowers, Farming/ Integrated Agriculture (Cultivation and Processing of Crops), Modernisation and Development of Irrigation Facilities and Water Management, Plantation/ Forestry, Horticulture, Dairy, Small Ruminants (sheep and goats) and all Other Livestock Farming and Breeding. Conditions CAF Policy Package has been considered by the Cabinet in its meeting held on 19th June, 2002. The policy in this regard will be conveyed soon.
iii.
Other Sectors Tourism Tourism has been given the status of Industry in accordance with Ministry of Industries and Production Circular No. 1129/99-INV-IV dated 2nd August, 1999. Housing and Construction The Housing and Construction sector has also been declared as Industry (see Finance Division Notifications No. 10(10)/IF-II/98 dated 7-4-1999 and 4-6-1999.
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Local and Foreign Companies involved in real estate projects will not market these projects unless the title of the property is transferred in the name of a locally incorporated company and the Commencement of Business certificate is issued by the Security Exchange Commission of Pakistan (SECP) to the firm. Information Technology o In accordance with Government notification No. 3 (2)/97-INV-IV date 05/03/1997. Computer Software and Information Technology (IT) have been declared as industry. More details on the Governments IT Policy can be obtained at the following web site: www.itcomm.gov.pk Custom duty exemption is available on import of machinery & equipment used in the field of IT (Chapter 99 PCT) Computer software and other items related to IT can also be imported at zero rate of import duty (Chapter 99 PCT).
o o
Fiscal Incentives Zero percent Custom duty on import of agriculture machinery, equipment and implements (not manufactured locally) New or used (SRO No. 358 ()/02 dated 15.06.02. SRO Culture Being Reduced SROs No. 28(1) dated 17.01.1998 and SRO No. 437 (1) dated 18.06.2001 have been merged in new SRO No. 358(1)/2002 dated 15.06.2002. SRO No. 439(1)/2001, dated 18.06.2001 which governed the import of machinery for industries has been rescinded but again revived by SRO 41/2002 dated 10-82002. Now Tariff on Import for Industrial Sector Machinery has been reflected in Pakistan Custom Tariff, 2002 (CBR web-site: www.cbr.gov.pk). Most of the machinery items not being manufactured locally attract 5-10% Custom Duty, while others which are also manufactured locally are importable at custom duty rate of 20-25%.
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Tariff Manufacturing/ Industrial Sector Custom Duty
Custom duty on imported raw material used in Zero Rated producing for exports Customs duty leviable on imports of plant, 5-10% machinery and equipment Respective HS Code in Pakistan Customs Tariff 20-25% Other Sectors (Non-manufacturing) Imported plant, machinery and equipment (not 10% manufactured locally) SRO No. 358(1)/02, dated 15.06.2002 The import tariff on agriculture machinery (not Zero% manufactured locally) as per list of specific machinery and equipment for this purpose has been notified vide SRO No. 358(1)/02 dated 15/06/2002 General Sales Tax (GST) exemption on domestically produced and imported plant and machinery is governed under SRO 987(1)/99 dated 30/08/1999. (CBR web-site: www.cbr.gov.pk) Fiscal (Tax Relief) Incentives To keep Pakistan competitive in international markets and support the viability of investments in the country, the following incentives are available to both foreign and local investors: A. Initial Depreciation Allowance (IDA) Under the provisions of sub-section (5) of Section 23 of the New Ordinance, Initial Depreciation Allowance at the rate of 50 % is permissible on an eligible depreciable asset placed into service in Pakistan for the first time in a tax year. For the purpose of such allowance, eligible depreciable asset means plant and machinery excluding the following; (a) any road transport vehicle unless the vehicle is plying for hire; (b) any furniture, including fittings;
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(c) any plant or machinery that is acquired second hand; or (d) any plant or machinery in relation to which the deduction has been allowed under another section of this Ordinance for the entire cost of the asset in the tax year in which the asset is acquired. It should be noted that the classes of allowances by way of First Year Allowance (FYA), Reinvestment Allowance (RA) and Industrial Building Allowance (IBA) as were introduced through the Finance Act, 1998, at varying rates ranging from 20 % to 80 % have now been withdrawn under the New Ordinance. B. Amortization (i) (ii) Amortization of pre-commencement expenses allowed at the rate of 20 % annually. Amortization of intangible assets allowed over a period of ten years. (I) Normal Tax Rates (Assessment Year 2003-04) 35% including surcharge 41% including surcharge 44% including surcharge
Corporate Tax Rates Public Companies Other Companies Banking Companies (II)
S.No. 1. 2. 3. 4. 5. 6.
Personal Income Tax Rates

(Applicable to Assessment Year 2003-4) ( in Rupees)
Income Range Upto Rs. 80,000 Rs. 80,001-Rs.150,000 Rs. 150,001-Rs 300,000 Rs. 300,001-400,000 Rs. 400,001-700,000 Over Rs. 700,000 Tax Rate No tax 7.5% of income exceeding Rs 80,001 Rs. 5,250+12.5% of excess over Rs. 150,000 Rs.24,000 + 20% of excess over Rs. 300,000 Rs. 44,000+ 25% of excess over Rs. 400,000 Rs. 119,000+35% of excess over Rs. 700,000
FACILITATION
Exchange Control a) Full repatriation of capital, capital gains, dividends and allowed. profits, is
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b)
The facility for contracting foreign private loans (which does not involve any Guarantee by the Government of Pakistan) is available to all those foreign investors, who make investment in sectors open to foreign investment, for financing the cost of imported plant and machinery required for setting up the project. However, loan agreements should be registered/ cleared by the State Bank of Pakistan. Foreign controlled manufacturing concerns will be allowed unlimited domestic borrowing according to their requirements for working capital. Authorized dealers are authorized to grant rupee loans and credits to foreign controlled companies for meeting their working capital requirements subject to observance of Prudential Regulations prescribed under the Banking Companies.
c) d)
Transfer of Technology (a) There is no restriction of payment of royalty and/or technical service fees for the manufacturing sector. However, such agreements shall be registered with the State Bank of Pakistan. The payments of royalties and technical service fees to foreign companies will be taxed at 15 %. However, reduced rates under the treaties with different countries remain applicable. The payment of franchise, royalty or technical fee in case of nonmanufacturing sectors is allowed subject to following condition: (i) Inn case of foreign investment in non-manufacturing sectors including food sector, the initial/lump sum fee should not exceed US $ 100,000 irrespective of number of outlets under one franchise. A maximum 5 % of net sales (excluding 15 % Sales Tax) in the food sector may be allowed as franchise fee only for those items, which are core items of the franchise and are the specialties of the trade name. The payment of such fees be allowed on monthly basis. No item will be eligible for twice payment of royalty/ franchise fee e.g., soft drinks, etc.
(b)
(c)
(ii)
Percentage/amount of fees etc., for other non-manufacturing projects is allowed upto the maximum of 5% of net sales (excluding 15% Sales Tax). Initial period for which such fees may be allowed to projects in nonmanufacturing sectors should not exceed 5 years. Subsequent extension in time period may be considered provided these projects also make investment in allied upstream projects.
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The agreements conforming to above guidelines will be sent by the sponsors to State Bank of Pakistan for its information. However, any relaxation or deviation from the guidelines will require prior approval of the Cabinet Committee on Investment (CCOI). Social Facilities/Quality of Life Foreign nationals (Investors, executives, expatriate employees) having CBRs Pass Booklet are allowed duty free import of food stuffs and other consumable items equivalent to US$ 1,000 per year per person in Pakistan. However, imports exceeding the above duty free limit of US$ 1,000 will be allowed on payment of normal import duties. (See CGO No. 5/98 dated 18 Feb. 1998. Various communities of foreign investors and their employees are allowed to establish Exclusive Clubs with recreation facilities. One Airport Entry Pass for protocol purposes will be issued to foreign and local investors/ companies, provided the equity investment is at least US$ 10 million. The BOI extends a courtesy service covering reception in Pakistan, hotel bookings, accommodation, transport bookings, and assisting with the business itinerary, etc. for new foreign investors visiting Pakistan.
Unilateral Relief A person resident in Pakistan is entitled to a tax relief on any income earned abroad, if such income has already been subjected to tax outside Pakistan, proportionate relief is allowed on such income at the average rate of tax in Pakistan or abroad, which ever is lower. Agreements on Avoidance of Double Taxation The Government of Pakistan has either signed or initiated agreements on Avoidance of Double Taxation with 51 countries including almost all the developed countries of the World. The names of countries with which Pakistan has concluded Agreements for Avoidance of Double Taxation are given below:
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Countries Having Agreement with Pakistan for Avoidance of Double Taxation

1. 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17. Austria Bangladesh Belarus Belgium Canada China Denmark Finland France Germany Greece Hungary India Indonesia Iran Ireland Italy 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 Japan Jordan Kazakhstan Kenya Republic of Korea Kuwait Lebanon Libyan Arab Republic Malaysia Malta Mauritius Netherlands Nigeria Norway Oman Philippines Poland 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 Qatar Romania Saudi Arabia Singapore South Africa Sri Lanka Sweden Switzerland Syria Thailand Tunisia Turkey Turkmenistan U.A.E U.K U.S.A Uzbekistan
Investment Treaties: Pakistan has signed Bilateral Agreements on Promotion and Protection of Investment with 43 countries. agreements: The term investment includes all assets of the individual investors and companies for the purpose of business investment in particular, although not inclusively. This includes: shares, moveable and immovable assets, intellectual property rights, licensing and know-how agreements, goodwill, and concessions to cultivate, extract, or exploit natural resources. The contracting Parties shall encourage investments in their respective territories by investors of the other Contracting Parties. Non-discrimination vis--vis local investors and foreign investors of third countries. Nationalization shall be applied exclusively for the reasons of public interest, pursuant to the law, and shall in no case be discriminatory. Countries adopting such measures shall pay to investors an adequate indemnity without undue delay according to the market value of the investment nationalized. Following are the general features of these
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Equal/non-discriminatory treatment in case of compensation for losses owing to war, other armed conflicts, a state of national emergency, requisitioning measures, etc. The free transfer of investments, and income deriving there from including particularly but not exclusively, profits, dividends, interest income, proceeds of sales or liquidation, repayments of loans, salaries, wages and other compensation received by foreigners employed on the investment. A dispute settlement mechanism to settle any dispute between the countries with respect to the interpretation of the respective agreement. A dispute settlement procedure to settle any dispute between a host country and an investor of the other country. If the dispute is not settled through mutual consultation, the investor concerned can take his case to the competent court of the respective country or ad hoc court of arbitration established under the rules of the UN Commission on International Trade Law or the International Centre for Settlement of Investment Disputes (ICSID) or the Court of Arbitration of the International Chamber of Commerce. List of Countries with which Pakistan has Bilateral Investment Treaties
Signing S.No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. Name of Country Germany Sweden Kuwait France South Korea Netherlands China Uzbekistan Tajikistan Spain Turkmenistan United Kingdom Singapore Turkey Portugal Malaysia Romania Switzerland Kyrgyz Republic Azerbaijan Bangladesh Date 25-11-1959 12-03-1981 17-03-1983 01-06-1983 25-05-1988 04-10-1988 12-02-1989 13-08-1992 31-03-1994 15-09-1994 26-10-1994 30-11-1994 09-03-1995 15-03-1995 17-04-1995 07-07-1995 10-07-1995 11-07-1995 23-08-1995 09-10-1995 24-10-1995 S.No. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. Name of Country U.A.E Iran Czech Republic Indonesia Tunisia Syria Denmark Belarus Mauritius Italy Oman Sri Lanka Australia Japan Belgium Thailand Qatar Philippines Egypt OPEC Fund Lebanon Morocco Signing Date 05-11-1995 08-11-1995 17-12-1995 08-03-1996 18-04-1996 25-04-1996 18-07-1996 22-01-1997 03-04-1997 19-07-1997 09-11-1997 20-12-1997 07-02-1998 10-03-1998 23-04-1998 18-03-1999 06-04-1999 11-05-1999 16-04-2000 24-10-2000 09-10-2001 16-04-2001
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Protection to Domestic Manufacturing The objective of keeping domestic manufacturing competitive will continue to be actively pursued through suitable adjustments in the tariff structure. Imported finished products will attract higher rates than imported raw materials/ inputs. The incidence of duties and taxes on locally produced goods will be less than the incidence of duties and taxes on finished imported goods. Reasonable tariff protection will be available to domestic manufacturing depending upon value addition. Protection to Investment The economic policies and the existing legal cover for foreign and Pakistani investment will be extended to new areas and sectors. The benefits and incentives for investment provided by the Government shall continue enforce and will not be reduced or altered to the disadvantage of investors. The foreign Private Investment (Promotion and Protection) Act, 1976 and the Furtherance and Protection of Economic Reforms Act, 1992.
Source: BOI
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Annex - V
TRADE POLICY 2003-04

SALIENT FEATURE OF TRADE POLICY FOR 2003-04
Following consideration has been made while formulating the Trade Policy 200304: High Export Performance during 2002-03. Compliance with WTO. Pakistans Economic Condition.
Achievements 2002-03
Export Export in 2002-03 reached level of $ 11 billion. Trade deficit reduced by 4% to $ 1.15 billion. Major increase in exports witness in Rice (22%), Leather (48%), Wheat (81%) and Cement (180%). The Textile sector fetched $ 7.17 billion or 67% of our total exports. Export covers 91% of imports against 88% last year. In terms of direction of trade, exports to American region increased (15.5%), to EU (27%), Middle East (36%) and Asia (14%). The increase in export has been possible largely due to greater market access allowed by European Union, Investment in textile sector, consistent economic policies, reduced tariff, product and market diversification. Import Imports were $ 12.2 billion, which is 17.8% higher than proceeding year. Major increase in imports are: Machinery Group (75%), mainly in import of textile machinery, electrical machinery and agriculture machinery and Chemicals Group imports (15%), mainly fertilizer (32%), plastic material (17%) and other chemicals (19.7%) Projections for 2003-04 Export US$ 12.1 billion. Import - US$ 12.8 billion.
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Elements of Export Strategy 2003-04
Reducing the cost of doing business. Increasing market access. Technology and skill upgradation. Encouraging export oriented foreign investment. Region specific strategy. Capacity Building of Exporters. Incentivization of Exporters. Value Addition.
Proposals for Trade Policy 2003-04
Upgradation Fund: An upgradation fund to the tune of Rs 3.74 billion will be managed under public private partnership for infrastructural improvement. Industrial Clusters: Scheme of industrial clusters will further expand to other sector to create a competitive edge. New cluster would be (Sports-Sialkot, Surgical Sialkot, Auto Parts Karachi, Electronic Appliances Karachi and Knitwear Karachi & Lahore. Contamination Free Cotton: Establishment of Training Institute for Training of Growers and Ginners. Warehousing Products Abroad: A scheme is being offered under which EPB will hire through professional companies, specialized in the business of warehousing and marketing in selected foreign countries and offer such space to exporters free of cost for the first year extendable for the second year. Promoting Pakistan Product To promote export products, EPB will hire space through professional companies on 50 : 50 share basis in high traffic shopping malls in major capital cities of the world. Expo Pakistan: An annual mega event will be held in Karachi Expo Centre and Lahore Expo Centre to display and widely publicize the Pakistans products. Promotional Expenses: For marketing and promotion of exports, State Bank of Pakistan has enhanced retention by the exporters from 5% to 10% Inter-ministerial Committee: An export facilitation inter-ministerial committee would be established, comprising with different ministries and State Bank of Pakistan.
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Skill Development Council: Skill Development Council in EPB will be established to improve technical and managerial skills. Reorganization of EPB: EPB will be re-organized to increase its efficiencies in marketing. It has also been proposed to set up EPB office at Gawader. Quality Management: Financial assistance for acquiring ISO Certification will be continued. Cost of Utilities: To reduce the cost of electricity for industrial sectors, WAPDA/ KESC will allow off Peak Hour Rate and Bulk Rate for industrial consumers. Land Route Trade: Additional land routs may be introduced in consultation with Government of NWFP and Balochistan Waste Water Treatment: Such plants will be set up on a collective and cooperative basis in cluster cities, financed by upgradation fund for leather and textile sector. WTO Awareness: It has been decided a) To establish WTO Directorate in EPB. b) To enhance the capability in the National Tariff Commission (NTC) in the spheres of antidumping, countervailing duties and safeguard measures. Civil Awards: To recognize and reward exporters who achieve high performance in export, a package of incentives will be provided i.e. grants of civil awards on Pakistan Day, Independence Day and Prime Ministers Gold Medals. Freight Subsidy: Government has allowed 25% freight subsidy on products whose total exports were not more than $ 5 million. This scheme has been instrumental in product diversification and geographic expansion of export. Agri-products & Fisheries: To improve the exports of agri products and fisheries, it has been decided to establish the following: o o o o o Agriculture Export Processing Zone Apple Treatment Plant at Quetta. Dates processing Plant at Turbat. Shrimp Farming Facility in Balochistan. Fish Processing, Hatcheries and Canning Plants at Karachi, Gawader and Pasni. o Collection points and cold storage facilities for fruits & vegetables. o Organic foods promotion mapping and certification. 172
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Special Export Zones: Two special export zones will be established one at Karachi and other, one of industrial cities of Punjab. These zones will be focusing on textile sector particularly in dyeing, processing and finishing sectors. Garment Cities: To meet the challenges of WTO, there is an urgent need to enter into joint venture with reputed foreign companies especially in the Garments Sector. Three Garment cities in Karachi, Lahore and Faisalabad will be established. Import Trade Regime: The import trade regime of Pakistan aims at: o Uninterrupted supply of adequate raw material to industry. o Facilitating liberal development. import of machinery for industrial
o Availability of essential commodities for general consumer. o Providing a measure of competition to the informal channel. o Facilitating inflow of latest technology in the country. o Increasing efficiency of the domestic industry. Import of Goods for demonstration purposes: It has been decided to import goods for demonstration purposes on import cum export basis for limited time period. Introduction of Import Management Services in EPB: Presently there is no organization, which provides guidelines/ services to the importers to effect cost effectiveness imports. It has been decided to introduce import management services in EPB for guiding importers. Liberalization: The import of second hand electro-medical equipments, second hand trucks, boilers and Used Agricultural Spraying Machinery, Spraying Lorries/Sprinklers will be allowed for development. Packaged Rice: At present concessional rate of income tax at 0.75% is applicable to export of branded rice in packs of 5 kg only. This facility will be extended to all branded packs of rice up to 50 Kg. Exports of Vegetable Ghee: Vegetable Ghee in tins to 5 Kg is allowed to be exported under claim for duty drawback. Exports of ghee in 16 Kg packs will be allowed. In order to boost exports of the country, the government in current trade policy has introduced following facilities:
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The exporters with at least 10% growth over last years exports would be allowed to retain 50% of export proceeds (additional exports) in their local foreign currency accounts to use it for the purchase of machinery equipment, raw-material and payment of commission and promotional expenses. Export development surcharge will be waived off on the additional exports. Export performance link reward system has been introduced. Export Promotion Bureau shall sponsor special delegations abroad of the selected Small and Medium Enterprises (SMEs) to explore market prospects. A US$ 150 million Foreign Currency Export Finance Facility (FCEF) for exporters to meet their import requirement by borrowing at Libor 2% (plus or minus) to be repaid from export proceeds. For the export of services, following facilities has been announced: Retention of 35% of export proceeds for commission Permission to export equipment without bank guarantee Facilities from banks for bonds, performance guarantees and advance payment
Government is considering to establish export warehouses abroad especially in non-traditional markets to facilitate exporters/ manufacturers. Monetary limit on export of samples has been increased to $ 10,000. Petroleum products have been made freely exportable by private and public sector. The current restriction of minimum export price for Rice has been done away with. However, pre-shipment quality check for Basmati Rice shall continue in order to safeguard its image in international markets. Licensing requirement for bulk imports of Gold/ Silver has been removed, provided an importer manages his own foreign exchange. Import of essential spares, when airlifted/ couriered by industrial users against foreign currency demand draft, has a limit of $ 15,000 per annum. This limit is being increased to $ 30,000. Exporters may import spares etc. beyond this limit subject to a cap of 5% of their last years exports.
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Annex - VI
FOREIGN PRIVATE INVESTMENT (PROMOTION AND PROTECTION) ACT, 1976.

An act to provide for the promotion and protection of foreign private investment in Pakistan. Whereas, it is expedient to provide for the promotion and protection of foreign private investment in Pakistan, and for matters ancillary thereto. It is hereby enacted as follows: 1. Short Title Application Commencement and foreign private investment means an industry, undertaking or establishment engaged in the production, distribution or processing of any goods, the providing of services specified in this behalf by the Federal Government or the development and extraction of such mineral resources and products as may be specified in this behalf by the Federal Government. Words and expressions used but not defined in this Act shall have the same meanings as in the Companies Act, 1913 (VI of 1913).
1. This Act may be called the foreign Private Investment (Promotion and Protection) Act, 1976. 2. It shall come into force at once. 3. It shall apply to all industrial undertakings in Pakistan having foreign private investment established with the approval of the Federal Government after the first day of September, 1954. 4. Provided that nothing in this Act shall be in derogation of any facilities or protection specially sanctioned by the Federal Government to foreign private investment in the case of particular industrial undertaking or a class of industrial undertakings or such facilities or protection as may be available to foreign private investment under a bilateral investment treaty:2. Definitions: In this Act, unless there is anything repugnant in the subject or context, Foreign capital means investment made by a foreigner in an industrial undertaking in Pakistan; in the form of foreign exchange, imported machinery and equipment; or in any other form which the Federal Government may approve for the purpose.
3. Fields For Foreign Private Investment The Federal Government may, consistent with the national interest, for the promotion of foreign private investment, authorize such investment in any industrial undertaking; Which does not exist in Pakistan and the establishment whereof, in the opinion of the Federal Government, is desirable; or Which is not being carried on in Pakistan on a scale adequate to the economic and social needs of the country; or Which will contribute to; Resources of Pakistan; The discovery, mobilization or better utilization of the national resources; The strengthening of the balance of payments of Pakistan; The economic development of the country in any other manner.
4. Approval of Foreign Private Investment Where the Federal Government sanctions an industrial undertaking having foreign private investment, it may do so subject to such conditions as it may specify in this behalf.
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5. Protection of Agreements Where the Federal Government considers it necessary in the public interest to take over the management of an industrial undertaking having foreign private investment or to acquire the ownership of the shares of citizen of Pakistan in the capital of such industrial undertaking, any agreement approved by the Federal Government relating to such undertakings entered into between a foreign investor or creditor and any person in Pakistan shall not be affected by such taking over or acquisition. Foreign capital or foreign private investment in an industrial undertaking shall not be acquired except under the due process of law which provides for adequate compensation therefore to be settled in the currency of the country of origin of the capital or investment and specifies the principles on and the manner in which compensation is to be determined and given.
4. Any additional amount resulting from the reinvested profits or appreciation of capital investment; and 5. A creditor of an industrial undertaking referred to in clause (a) may repatriate foreign currency loans approved by the Federal Government and interest thereon in accordance with the terms and conditions of the said loan; and 6. Provided that nothing in this section shall affect the terms of the permission to make such investment granted to a Foreign investor granted to a foreign investor before the commencement of this Act. 7. Remittances By Foreign Employees Foreign nationals employed with the approval of the Federal Government in any industrial undertaking having foreign private investment may make remittances for the maintenance of their dependents in accordance with the rules, regulations or orders issued by the Federal Government or the State Bank of Pakistan. 8. Tax Concessions & Avoidance of Double Taxation The Federal Government may allow such concessions to industrial undertaking having foreign private investment as may be admissible under any law for the time being in force. Foreign private investment shall not be subject to other or more burdensome taxes on income than those applicable to investments made in similar circumstances by the citizens of Pakistan.
6. Repatriation Facilities 1. A foreign investor in an industrial undertaking established after the 1st day of September; 1954, and approved by the Federal Government may at any time repatriate in the country from which the investment was originated; 2. Foreign private investment to the extent of original investment; 3. Profits earned on such investment; and
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Foreign private investment shall be allowed, all the tax concessions admissible on the basis of any agreement for avoidance of double taxation which the Government of Pakistan may have entered into with the Government of the country of origin of such investment
10. Removal of Difficulties If any difficulty arises in giving effect to any provision of this Act, the Federal Government may make such order, not inconsistent with provisions of this Act, as it may appear to be necessary for the purpose of removing the difficulty. Provided that no such power shall be exercised after the expiry of one year from the commencement of this Act. 11. Power to Make Rules
9. Equal Treatment Industrial undertakings having foreign private investment shall be accorded the same treatement as accorded to similar industrial undertakings, having no such investment in the application of laws, rules and regulation, relating to importation and exportation of goods.
The Federal Government may be notified in the Official Gazette, make rules for carrying out the purposes of this Act, and such rules may, among other matters provide for the employment of Pakistani and foreign nationals in industrial undertakings, having foreign private investment.
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Annex - VII
ENGINEERING VISION - 2010

The Government has formulated a ten-year Engineering Vision 2010 to build an economically strong Pakistan through an invigorated and integrated engineering industry. In the light of Engineering Vision, the Government has developed a growth strategy for the engineering industry for rapid industrialization. The targets to be achieved during next 10 years are: Increase the share of manufacturing sector from existing level (i.e. 17.7% of GDP) to 25% and the share of engineering goods to 30%. A growth led strategy of value added quality production to be adopted for exports and local consumption. The Government is aiming at the following measures to accomplish the above targets: Investment needed: US$ 10 to 12 billion. Engineering goods exports to be increased from 3% to 12% of total exports. Exports of engineering goods will increase from existing US$ 270 million to US$ 2.13 billion in low road and to US$ 5 billion by the year 2012. Policy Thrust Government to build Pakistans image as a professional producer of quality products as per international standards. Government policies to be driven by national interest supporting local industry without seriously infringing on WTO and other international commitments. Government to avoid fragmented decision making and follow an integrated approach with various policies complimenting and not contradicting each other.
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Full participation of private sector stakeholders in policy formulation, implementation and monitoring. Productivity and quality enhancement to substantially save current losses of about 10% of GDP. Human Resource Development Allocate at least 1% of the total annual outlay to technical education and skill development for the next 5 years. Maximize Participation of Local Engineering Industry All tenders to require local component of PME to be at least 30% especially for Energy Sector Projects. Earmark 2000 MW of power generation with progressive indigenization for local engineering industry. Encourage Rapid Growth Through Market Enhancement Expedite establishment of EXIM Bank. Offer State Credit for exports of capital goods. As a matter of Government Policy, Stakeholders to renegotiate existing agreements with foreign partners to permit exports (tractors, cars etc) from Pakistan.
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Annex VIII
EMERGING ELECTRONIC PRODUCTS ASSEMBLY SCHEME (EEPAS)

For items covered under this scheme indigenization will not be necessary for next 5 years to facilitate investors. CKD kits @ 5% Customs Duty are allowed. Accordingly for the following items specified in SRO: 444(1)2001, dated 18th June, 2001 at S. No. 18 and 19 the determination of locally manufacturing status shall not be necessary & CKD kits are allowed @ 5%.
Television Sets Cellular Mobile Phones Laser Video disc players DVD Players Electronic calculators Compact disc players Stereo car cassettes player Hi-tech systems Pocket size cassette player Pocket size CD player Radio Electronic calculator Microwave ovens Caller Line Identification (CLI) apparatus
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Annex - IX
TEXTILE VISION 2005

Textile industry of Pakistan consists of a small, medium and large scale units with a broad product range and a variety of production technology. The textile sector remained the back bone of the economy and contributes around 60% of export earnings and is a major employer of industrial labour force. In order to meet the future challenges in the textile sector and make Pakistans product competitive globally, it was pertinent to update technology and enhance production capabilities. The Government developed Textile Vision 2005 in the year 2000 which will enable Pakistan to be amongst the top five textile exporting countries in Asia. Vision Statement 2005 An Open, Market Driven, Innovative and Dynamic Textile Sector, which is: Internationally Integrated Globally Competitive Fully Equipped to Exploit the Opportunities Created by MFA Phase Out To achieve the objective, three different scenarios have been suggested: Low Road Exports will maintain the historic growth rates. There will be no change in the product or the market mix. Investment required: Rs 151 billion. Do-Able Exports growth rate will match each importing countrys growth rate of unit imports.
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Unit exports of garments to Middle East market will grow at 3 percent annually. Pakistan will capture 0.5 percent share in the Japan and Hong Kong markets. Unit price of cotton yarn will grow at 3 percent and that of fabrics will grow at 4 percent annually. Share of 100 percent synthetic garments in the garments exports will increase from current 3 percent to 30 percent, in line with the world trend. 13 million bales of cotton will be consumed. Investment required: Rs 280 billion. High Road Value added products (garments and made-ups) would be the engine of export growth (20% annually). Export product mix will be balanced by giving extra push in the woven garments. Fabrics exported will contain 55 per cent processed fabrics. Total cotton production will be 16 million bales of which 13 million will be consumed. Investment required: Rs 333 billion. Fiscal & Finance Policy Repayments of rebates under SRO 417/611 made on faster track. Duty concessions on textile machinery under SRO 369 resolved. Tariff on textile products being rationalized. Duty on synthetic fibers not produced locally reduced. Compensatory Rebates on synthetic textiles allowed with effect from March 1, 2002. Export Refinance markup rate reduced to 8.5%. Bank Financing for Textile Sectors available as per annual targets fixed under Textile Vision 2005.
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Annex - X
POLICY FOR POWER GENERATION PROJECTS - 2002

Objectives of the Power Policy The main objectives of the Policy are:To provide sufficient capacity for power generation at the least cost, and to avoid capacity shortfalls; To encourage and ensure exploitation of indigenous resources, which include renewable energy resources, human resources, participation of local engineering and manufacturing capabilities; To ensure that all stakeholders are looked after in the process, i.e. a win-win situation for all; and To be attuned to safeguarding the environment. Scope of the Power Policy The scope of the Power Policy covers; Private sector projects; Public sector projects; Public-private partnership projects; and Projects developed by the public sector and then divested. Financial Regime This policy offers the following set of financial incentives: (a) (b) Permission for power generation companies to issue corporate registered bonds. Permission to issue shares at discounted price to enable venture capitalists to be provided higher rates of return proportionate to the risk.
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(c)
Permission for foreign banks to underwrite the issue of shares and bonds by the private power companies to the extent allowed under the laws of Pakistan. Non-resident are allowed to purchase securities issued by Pakistani companies without the State Bank of Pakistan's permissions and subject to the prescribed rules and regulations. Abolition of 5% limit on investment of equity in associated undertakings. Independent rating agencies are operating in Pakistan to facilities investors in making informed decisions about the risk and profitability of the project company's Bonds/TFCs.
(d)
(e) (f)
Fiscal Regime This policy offers the following set of fiscal incentives: (a) (b) (c) Customs duty at the rate of 5% on the import of plant and equipment not manufactured locally. No levy of sales tax on such plant, machinery and equipment, as the same will be used in production of taxable electricity. Exemption is already available from income tax including turnover rate tax and withholding tax on imports; provided that no exemption of income tax on oil-fired power plants. Repatriation of equity along with dividends is freely allowed, subject to the prescribed rules and regulations. Parties may raise local and foreign finance in accordance with regulations applicable to industry in general. GOP approval may be required in accordance with such regulations. Maximum indigenization shall be promoted in accordance with GOP policy. Non-Muslims and Non Residents shall be exempted from payment of zakat on dividends paid by the company.
(d) (e)
(f) (g)
The above incentives will be equally applicable to private, public-private and public sector projects.
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Annex -XI
PETROLEUM EXPLORATION & PRODUCTION POLICY - 2001

The highlights of the Petroleum Policy are outlined below: Zone Map will be redefined in view of past experience and prospectivity. Gas producers will be allowed to enter into gas sales agreements for supplies directly to gas distribution companies, power plants, industrial consumers or third parties other than residential or commercial consumer. Gas producers will have an option to export their gas if in excess of internal demand. In order to promote third party gas sales, Government will allow foreign exchange remittance of gas sales proceeds keeping in view the Rs. Requirements in different Zones. At the request of E&P companies, the Government can also purchase gas through a nominated buyer at the policy price. For pipeline infrastructure development, open access regime will be followed and for tie-in pipeline constructed by producer, buyer or a third party separate transmission tariff will be allowed by the regulator. The income tax rate will be reduced to a uniform rate of 40% from the current rate of 50% to 55%. Royalty will be allowed to be expensed. Government Holdings carry at exploration stage will be abolished. Local companies will be promoted to take 15%-25% interest in the foreign joint ventures on full participation basis. Initial term of the licenses will be increased to 5 years with two renewals of 2 years each. 5 years will be allowed for retention of significant gas discoveries. In order to make marginal discoveries attractive for development, first production bonus of US$ 0.5 million will not be payable. Expatriates security clearances has been streamlined. The Government will prepare and update annually an integrated Energy Plan for the country. New terms will be available to new licenses and those licenses in which no discovery has been made.
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Oil & Gas 10-Year Road Map for Private Investment Deregulate oil and gas sector completely. Government to be responsible only for policy formulation. Increase number of exploratory wells per year from current 15 to 100. Increase oil production from current 56,000 to 100,000 barrels per day. Increase gas production from current 2.4 to 5.0 billion cubic feet per day. Reduce import of refined products to 90% of total consumption. This will require additional refining capacity of above 6 million tons per year. Eliminate imports of fuel oil. Construct cross-country oil pipelines to introduce efficiency and reduce burden on roads. Increase oil storage capacity from current 19 days cover to 45 days. Strengthen R&D support to the Government. Eliminate lead in gasoline. Reduce sulphur in diesel oil from current 1% to 0.05%. Promote CNG for diesel oil substitution. Encourage trans-boundary trade of clean energy (natural gas) and promote regional energy cooperation in South Asia.
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Annex XII
FERTILIZER POLICY - 2001

The new fertilizer policy announced on August 30, 2001 has unveiled a number of incentives for investors in fertilizer sector. The basic objectives of the new 10-year fertilizer policy are as follows: Provide fertilizer to farmer at reasonable prices below import prices. To meet entire domestic demand in order to avoid estimated expenditure of 1.7 billion dollars on import of two million tons after 10 years. Attract foreign investment, and Offer a reasonable return on equity. To achieve these objectives, the government provides following incentives to this sector: Existing Plants a) To enable local fertilizer price to stay below imported fertilizer prices, the escalation of existing feed gas prices will be as follows: Date 1.7.01 1.7.02 1.7.03 1.7.04 1.7.05 1.7.06 Annual Increase % Nil 5.0 7.5 10.0 12.5 15.0
b) Thereafter, the price is to be $ 1.10/MMBTU or prevailing Middle East price whichever is higher, only for those existing investors who bring in new plant (minimum Capacity 0.5 MT/ year). c) Fuel gas price will be the same as for other industrial consumers in the country. Fuel gas will continue to be defined as gas, which is used for generation of electricity and steam and for usage in housing colonies.
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d) Concessional feed gas allowed under the 1989 Fertilizer Policy to companies that undertook expansion, will be continued until their 10year period is exhausted. New Investments Natural Gas The price of feed gas will be the Middle Eastern Price prevailing on the date of signing of the GSA or $ 0.77/MMBTU which ever is higher (less the discount of 10%) and shall remain fixed at such price till the expiry of 10 years from the date of commissioning. A discount of 10% will be allowed on such determined price to facilitate new investment. The discount price i.e. the price fixed will remain fixed for a period of 10 years from the date of commissioning, in dollar terms. This price will be inclusive of all taxes, duties, levies, fees and charges whatsoever, whether local, federal or provincial. However, GST or similar duty may be imposed on such determined price, provided it is adjusted against GST, payable on the fertilizer produced. The investor may avail this opportunity to sign GSA (Gas Sales Agreement) and fuel gas prices shall continue to be treated as at par with other Industrial consumers. The rupee parity will be determined as the price fixed in dollars will be calculated in Pak Rupee, at the average inter bank rate to be fixed twice in a year. Gas Companies will build adequate safeguards in the GSA to ensure that the investor proceeds without delay in installing the plant after signing of the GSA, so as not to pre-empt the use of available gas to another investor. The Government will ensure that Gas Companies do not cause undue delays in signing of GSA. Gas will be allocated to new fertilizer plants on the principle of first come, first served. Recognizing the expected growth in fertilizer demand, the importance of steady supply and the suitability of Mari Gas production, the government has decided to dedicate the shallow reservoir of Mari gas field to the Fertilizer Industry. Import and Local Manufacture of Plant The Government of Pakistan encourages investment and a number of concessions are available as per the Investment Policy and applicable Tariff Structure. Investors may avail these concessions with reference to import and local manufacture of plant, equipment and machinery including deferred duty payable through customs debentures.
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Import of Second Hand Plant Investors will be allowed to relocate second hand plant, equipment and machinery, with the same concession/exemption as applicable to new plants. Expansion/ BMR/ De-Bottlenecking If an investor undertakes an expansion, major BMR or de-bottlenecking of an existing plant, which results in increase in the production capacity of the plant, such additional feed gas shall be treated at par with a new plant for 5 years for purposes of concessions/ exemptions. Equal Treatment All the fertilizer producers, domestic and foreign, public and private will be treated equally in commercial, fiscal, corporate and contractual matters. Phosphatic Fertilizer Considering the importance of Phosphatic Fertilizer, the Government plans to continue to encourage its local production. For the said purpose, the following measures shall be taken: - Rock phosphate and phosphoric acid importable by manufacturers of fertilizer shall remain importable free of duty and sales tax. Nitrogenous, Phosphatic Potassium Fertilizer (N.P.K.) All raw materials required for NPK production i.e. Di-Ammonium Phosphate (DAP), Mono-Ammonium Phosphate (MAP), Triple Super Phosphate (TSP), MOP, SOP and micro nutrients are allowed to be imported free of duties and taxes.
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Annex - XIII
NATIONAL MINERAL POLICY

Policy Investment in small-scale mining (capital employed less than Rs. 300 million) will be confined to Pakistani nationals. Corporate merger of small-scale mine operators will be encouraged. A Geodata Centre of Pakistan (GDCP) will be established as an autonomous body of the Ministry of Petroleum and Natural Resources to collect, store, update and manage geodata of the whole country. The Federal and Provincial Governments will provide grants to the respective corporations for the promotional tasks on priority minerals or priority areas. The Mining Concession Rules will provide for four types of mineral titles, namely; Reconnaissance License, Exploration License, Mineral Deposit Retention License and Mining Lease. Incentives Mining and Value Added Mineral Processing are placed in Category A industries. 5% customs duty on import of plant, machinery and equipment (which is not manufactured locally). Except for royalty, there will be no other Provincial or local levies or taxes imposed on minerals or mining operations. No sales tax will be levied on minerals that are exported.
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Annex - XIV
INFORMATION TECHNOLOGY POLICY (IT POLICY) 2002

The Government of Pakistan has raised its budget allocation for the development of science and technology from Rs.125 million to Rs. 15 billion. The Government has now set a software exports target of $ 1 billion till the year 2005. Main objectives of IT Policy are as under: Make the Government a facilitator and an enabler to provide maximum opportunities to the private sector to lead the thrust in development of IT in Pakistan. Develop an extensive pool of trained IT manpower at all levels to meet local and export requirements. Provide business incentives for both local and foreign investors to ensure the development of Pakistan's IT sector (including the software, hardware, and service industries) and the use of its products. Develop an enabling legislative and regulatory framework for IT related issues. Revitalize and support the countrys dormant manufacturing and research and development (R&D) potential. Establish an efficient and cost-effective infrastructure that provides equitable access to national and international networks and markets. Set up national databases that are reliable, secure, upto date and easily accessible. These would be open databases. Promote widespread use of IT applications in government organizations and departments for efficiency improvement and transparency in functioning and service provision and to organize and facilitate access to public information. Promote extensive use of IT applications in trade, industry, homes, agriculture, education, health and other sectors with widespread use of Internet. Encourage and promote the development of quality software that can capture export markets. Develop a tradition of electronic commerce for both national and international transactions. Encourage expatriate IT professionals to return to Pakistan and establish software houses or extend assistance to the local industry in the form of assignments from abroad.
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Highlights of Incentives for Investment in IT Sector Some of the salient points of the investment package in IT Sector are: Information Technology (IT) enjoys the status of "Industry. The cost of Internet bandwidth has been drastically reduced by 65%. The result is that bandwidth rates today are cheaper than in India and other countries in the region. Free Internet connections are being extended to public sector Universities. To facilitate the private sector IT telecom industry and to enhance the investor's confidence in the government, processing period for license applications in the deregulated sector has been reduced to 7 days. In order to put in place an efficient IT infrastructure, PTCL would now provide international bandwidth and Internet connectivity to the ISPs and other corporate customers within 4 to 8 weeks. A plan to train thousands of blue collar IT workers for data entry and transcription services has been initiated and would be completed within 6 months. As a first step towards Electronic Commerce, the State Bank of Pakistan (SBP) has allowed banks to open Internet Merchant Accounts within Pakistan. Internet delivery on Cable TV has been permitted which would result in substantial increase in the Internet usage. The market is being opened up for the private sector participation in joint venture with PTCL in terms of tele-housing arrangement, voice over Internet and setting up international bandwidth gateways via satellite and cable. Universal Access to the Internet even to non-connected areas at the cost of a local using the unique 131 Universal Internet Numbers of ISP's has been extended. Call Centers, which are important potential source of foreign exchange earnings and employment creation, have been allowed to be established in the private sector. Computer networking and majority of IT equipment has been exempted from custom duties. Income tax holiday for the IT Training Institutions has been extended by another five years. i.e. upto 2005. Exemption of income tax would also be available on the profits and gains of software exporting companies till June 30, 2016.
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Annex - XV
TOURISM POLICY 2001

Policy Tourism shall continue to be treated as an industry, contributing more aggressively towards socio-economic growth. A paradigm shift from promoting seasonal tourism to year rounds tourism. A qualitative improvement/development in environment, human resources, tourist services and the tourist product. Federal & Provincial Governments to bring all legislation in consonance with demands of the tourist industry. Stimulate private sector involvement in tourism through provision of industry support constructs. Goals and Targets To increase foreign visitors arrivals from 0.42 million in year 2000 to 6.5% annually over the next five years. To increase foreign exchange earnings from US$ 385 million in year 2000 to US$ 500 million over the next three years. Incentives 10% customs duty on import of plant, machinery and equipment. Tax relief: First year allowance @ 75% of machinery cost. Tourism Projects to be allowed the status of industry. 50% income tax exemption be allowed to tour operators who bring in at least 500 inbound tourists in the form of group tours in that calendar year. Number of taxes covering the Hospitality Sector will be restricted to a maximum of six or seven taxes at the federal and provincial levels. On the recommendations of the Ministry of Tourism, land for hotels, motels, recreation parks, fun lands, athletic clubs, cultural centers etc., to be provided on non-commercial rates and on long lease basis by the development authorities at the Federal and Provincial levels.
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Annex XVI
NATIONAL ENVIRONMENTAL POLICY

Pakistan Environment Protection Act 1997 - along with rules and regulations has been promulgated which is in conformity with the global responsibility for environmental protection. National Environment Quality Standards has been issued for; i) ii) iii) iv) Municipal & Liquid industrial effluent. Industrial gaseous emissions. Motor vehicle exhaust and noise. New industrial units.
Metrology Standards, Testing & Quality Assurance Systems: Government is working on National Technology Policy and strengthening following national agencies: A) Pakistan Standards and Quality Control Authority Created in 1996 through merger of Pakistan Standard Institute and Central Testing Laboratories. It is working on ISO 9000 Certification with collaboration of AOQC Moody International. B) National Accreditation Council (NAC) Established in 1998, to operate the ISO Certification and registration system in Pakistan. 9000
Seeking registration with International accreditation forum (IAF).
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C)
National Physical Standards Laboratory (NPSL) National Body for calibration of equipment in a limited number of fields including mass, length, time etc (as per ISO 9000 requirement). NPSL is being upgraded, restructured and strengthened under the World Bank assisted Industrial Technology Development (ITD) Project.
D)
Government is granting Rs 150,000 to companies which get ISO 9000 Certification.
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Annex XVI (a)
NATIONAL ENVIRONMENTAL ACTION PLAN (NEAP)

Objectives: To initiate actions and programs for achieving the state of environment that:1. 2. 3. Safe-guard public health. Promote sustainable livelihood. Enhance quality of life for the people of Pakistan.
Strategy Frame Work: The NEAP will cover the following areas: 1. 2. 3. 4. 5. 6. Managing the focused programs. Strengthen and support the existing poverty alleviating. Capacity building Incentives for Institutions working for environment. Monitoring / evaluation. Flexibility to adjust the required changes.
The Main Areas of Concern are: 1. 2. 3. 4. 5. 6. 7. 8. 9. Clean Air. Clean Water. Management of Solid Waste. Eco-system management. Management of Fresh Water Resources. Marine Pollution. Toxic and Hazardous Substances. Energy Conservation and Management. Compliance with International Treaties and Protocols
Implementation: The program will be managed at: 1. 2. 3. 4. Federal level. Provincial level. Districts level. Grass root level.
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Annex - XVII
PAKISTAN MERCHANT MARINE POLICY 2001

Objectives Facilitate and attract private sector investment in shipping. Deregulate to provide a free environment for investment in the maritime sector. Ensure efficient operation of the country's ports and harbors through availability of harbor crafts namely tugs, pilot boats, dredgers, survey vessels and specialized crafts. Make tangible contribution to the national economy by augmenting foreign exchange earnings and reducing freight bills. Enhance utilization of trained manpower in the maritime sector by augmenting country's training facilities so as to enhance productivity and make them internationally marketable. Targets Expand and upgrade Pakistan flag merchant marine fleet to increase the present share of cargo from 5% to 40%. Increase dead weight carrying capacity of Pakistan Flag Ocean going vessels to over one million tones in order to compete in the global market. Expand maritime related training/support facilities as embodied in the updated IMO Conventions. Revive and augment national ship building/capacity to meet 20% ship construction requirements of the Pakistan merchant marine and all national requirements of support and ancillary crafts. Incentives Ships and all floating crafts including tugs, dredgers, survey vessels and other specialized crafts purchased or bareboat chartered by a Pakistani entity be exempt up to 2020 from payment of all import duties and surcharges. All port and harbor authorities in Pakistan shall allow all ships and floating crafts including tugs, dredgers, survey vessels and other specialized crafts, 10% reduced berthing rates, when the same are berthed for purposes of repair and maintenance.
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Notifications / Circulars
GOVERNMENT OF PAKISTAN MINISTRY OF FINANCE, ECONOMIC AFFAIRS, STATISTICS & REVENUE (REVENUE DIVISION) *** Islamabad, the 15th June, 2002. NOTIFICATION (CUSTOMS) S.R.O. 358 (I)/2002.- In exercise of the powers conferred by section 19 of the Customs Act,1969(IV of 1969), and in supersession of its Notification No. S.R.O. 444(I)/2001, dated the 18th June, 2001, the Federal Government is pleased to exempt (i) the raw materials and components, as are not produced locally, and specified in column (3) of the Table I below, falling under the heading or sub-heading numbers of the First Schedule to the said Act and specified in column (4) of the said table, if imported by the manufacturers of goods specified in column (2) of the said Table, from so much of customs-duty as is in excess of the rates specified in column (5) thereof, subject to the conditions specified under the caption "conditions with reference to Table I" and produced below the said Table I; and the raw materials, components and goods specified in column (2) of the Table II below and falling under the heading and sub-heading numbers of the First Schedule to the said Act specified in column(3) of the Table II, from so much of customs-duty specified in the First Schedule to the said Act, as is in excess of the rates specified in column(4) of that Table subject to the conditions specified in column(5) thereof;
(ii)
TABLE I S.No. (1) 1. Description of goods to be manufactured (2) Masterbatches. Description of raw materials and components (3) Pigments, additives, resins. Heading or sub-headings Nos. (4) Rate of duty. (5) 10% ad val.
dyes, Respective fillers, headings. 2530.9010 2803.0020 2820.1010 2827.1000
2.
Dry battery cells.
Natural manganese dioxide. Acetylene black. Electrolytic manganese dioxide. Ammonium chloride.
5% ad val. 5% ad val. 5% ad val. 5% ad val.

198
Zinc chloride. Mercuric chloride. Carbon rods. Zinc slugs. Electrolytic paper. 3. 4. Oleo-chemical/ Stearic acid. Engineering goods. Palm stearin. Non-alloy (carbon) steel sections, bars and rods not manufactured locally. PU paints. Release agents. Wax cream. Shoe adhesives.
2827.3600 2827.3990 8545.9020 7907.0010 4811.9000 1511.9010 72.14 72.15 72.16
5% ad val. 5% ad val. 5% ad val. 5% ad val. 5% ad val. 10% ad val. 20% ad val. 20% ad val. 20% ad val. 10% ad val. 10% ad val. 10% ad val. 10% ad val. 10% ad val. 10% ad val. 10% ad val 10% ad val. 10% ad val. 10% ad val. 10% ad val. 10% ad val. 10% ad val. 10% ad val.
5.
Footwear.
3208.9000 3403.1990 3405.1010 3506.9100 3506.9900 3506.9900 Hot melt materials. 3824.9099 Isocyanate. 3824.9099 Desmodur RE. 3921.9000 Toe puff material. 4411.3900 Fibre board. 4811.5990 Insole board. Combralla lining 5603.1300 5603.1400 material. 5906.1000 Shoe reinforcement 3204.1700 tapes. Rubber, master batch. 4821.1000 3923.5000 4016.9310 3902.1000 39.04 3921.9000 2707.6000 2707.9100 2707.9990
6.
7.
Disposable syringes Medical grade paper and needles. labels PVC gaskets. Rubber gaskets. Polypropylene (medical grade). PVC (medical grade) Plastic film. i. Oils and other Manufacture or products of Formulation of distillation of agricultural high pesticides temperature, by manufacturers or coal-tar and formulators duly similar products recognized and in which the approved by the weight of the Ministry of Food and aromatic Agriculture. constituents
10% ad val. 10% ad val. 10% ad val. 10% ad val. 10% ad val. 10% ad val. 5% ad val. 5% ad val. 5% ad val.
199
ii.
iii.
exceeds that of 3402.1190 3402.1200 Non-aromatic 3402.1300 constituents. 3402.1990 Surface active agents. Respective headings/subheadings Nos. of Chapter 28, 34 or 38. Active ingredients, stabilizers, emulsifiers and solvents. 3920.1000 3926.9090 3903.9000 3204.1700 32.06 32.07 32.11 34.04 3912.2000 39.02 Respective headings. Respective headings. Respective headings. 8540.1100 8540.1200 8540.9100 8529.9000 8504.3100 8529.9000 Respective headings.
5% ad val. 5% ad val. 5% ad val. 5% ad val. 5% ad val.
8.
Ribbons for Typewriter/computer printers. Printing ink.
Polyethylene film. Empty cartridges. Nylon fabrics. Organic pigments. Inorganic pigments. Driers. Waxes. Resins.
10% ad val. 10% ad val. 10% ad val. 10% ad val. 10% ad val. 10% ad val. 10% ad val. 10% ad val. 10% ad val. 5% ad val. 10% ad val.
9.
10.
Articles of stationery.
Raw materials. Parts and components. Under EEPAS Raw materials. Picture tube (colour). Picture tube (black and white). Deflection yoke. Tuner. Transformers. Front and back cover. Other subcomponents, components, modules and subassemblies. i. materials,
11.
i. Television sets.
5% ad val. 5% ad val. 5% ad val. 5% ad val. 5% ad val. 5% ad val. 5% ad val. 5% ad val.
ii. Cellular mobile phones; Laser
Raw Respective headings.
5% ad val.
200
video disc players; DVD player; VCP(Video Cassette Player); VCR(Video Cassette Recorder); Compact disc player; Stereo car cassettes players; Hi-fi system; Pocket size cassette player/ CD players; Radiocum-cassette player; Radio; Electronic calculator; Microwave ovens; Caller Line Identification (CLI) apparatus. 12. Formic acid.
components, subcomponents for the electronic apparatus. ii. SKD Respective kits for assembly of headings. microwave ovens VCP, VCR, VCD and DVD apparatus under Emerging Electronics Products Assembly Scheme (EEPAS) imported in more than seven components, SKD kits would not contain packing materials, carton boxes, brochures and the printed materials. 10% ad val.
Sodium hydro oxide 2815.1200 {caustic soda in equeous solutions (soda lye or liquid soda)} Cast coated paper. Release base paper. 4810.2200 4811.5900
20% ad val.
13. 14. 15. 16. 17.
Sticker paper. Flexible tubes. Aluminum presensitized printing plates. Acrylic sanitary ware. Toilet soap.
20% ad val. 20% ad val. 20% ad val. 10% ad val. 10% ad val. 20% ad val. 10% ad val. 10% ad val. 10% ad val. 10% ad val.
Aluminum foils P.E. 3921.9000 laminated sheets. Aluminium plates, 7606.1100 sheets and foils. 7607.1900 Sanitary grade acrylic sheets. Cresylic acid Pigments and colours. Surface active agents. Mixture 3920.5100 2707.6000 dry 3204.1900 34.02 of 3302.9000
201
odoriferous substances. Note: For Sr. No.11 in Table I, the determination of local manufacturing aspect shall not be applicable
(Conditions with reference to Table I) (i) the manufacturer has suitable in-house facilities for manufacture of goods in respect of which he claims exemption under this notification or is duly registered with the Sales Tax Department as a manufacturer of respective goods; the manufacturer shall furnish to Chief (Survey), Central Board of Revenue, or any officer authorized in this behalf, the list of such goods along with the details of raw materials, sub-components and components required and the Chief (Survey) Central Board of Revenue, or such authorized officer, will certify input/output ratio and annual requirement of the manufacturer; the manufacturer shall, at the time of import of raw materials and components make a written declaration on the bill of entry to the effect that the inputs have been imported in accordance with his entitlement in terms of condition (ii) above. The manufacturer shall also declare that the imported raw material and components, etc., shall be consumed for the purpose of manufacture and assembly of the permissible products within a period of one year; the manufacturer shall communicate to the concerned Collector of Customs in writing about the consumption of imported goods within one month of consumption. In case of non-consumption within one year, the importer shall pay the customs-duty and other taxes involved or shall give plausible reasons to the Collector of Customs and seek extension for a reasonable period; and in case the manufacturer does not provide information regarding consumption or otherwise of the imported goods within a period of one year of import or such extended period as allowed by the Collector or if otherwise deemed necessary, the Duty Suspension Audit Organization (DSAO) shall carry out audit of the manufacturing unit. If upon audit consumption of goods is not found satisfactory the Collector of Customs shall initiate proceedings for the recovery of leviable customs duty and penal action under the relevant provisions of the law in force.
(ii)
(iii)
(iv)
(v)
202
TABLE II S. No. (1) 1. Description of Goods. (2) Air craft spares, parts, chemicals, lubricants and paints. Ships and all the floating crafts including tugs, dredgers, survey vessels and other specialized crafts purchased or bareboat chartered by a Pakistani entity and flying Pakistani flag. Heading or subheadings. (3) Respective headings. Rate of Duty. (4) 5% ad val. Conditions of import. (5) If imported by domestic airlines for maintenance of their aircrafts. This exemption shall be available up to the year 2020, subject to the condition that the ships and crafts, etc., appearing in column (2) are used for the purpose for which they were procured and in case such ships and crafts are used for demolition purposes, full import duties and other charges applicable to ships purchased for demolition purposes shall be chargeable.
2.
Chapter 89 0% ad val. excluding PCT heading 89.08
3.
Paraxylene. Acetic acid.
2902.4300 2915.2100
0% ad val. 0% ad val. 10% val.
Heavy duty polypropylene 6305.3300 or polyethylene special bags and flexipacks for packing one ton or more, of PTA. 4. i. Special steel round bars 7214.9900 and rods of non- alloy steel exceeding diameters 75 mm. ii. Lubricating anti-rust 3403.9900 and anti-corrosion preparation.
If imported by M/s ICI Pakistan Limited for the manufacture of ad Pureterephthalic Acid (PTA). This concession shall remain valid up to the 30th June, 2008.
10% ad val
10% val.
If imported by a recognized seamless pipes manufacturing industry duly notified as such by the Ministry ad of Industries and in such quantities as are determined by Chief (Survey), CBR.
203
5.
Coking coal manufacture of coke. Phosphoric acid.
for 2701.1200 2701.1900 2809.2010
5% ad val.
If imported by the Pakistan Steel Mills. If imported by the Phosphatic Fertilizer Industry. i. Goods are meant for setting up of a complete plant. Any machine meant for balancing, modernization, replacement or expansion of existing plant is excluded. ii. At the time of arrival of the first partial shipment of the plant, the importer shall furnish complete details of the whole machinery, equipment and components parts required for the plant, duly supported by the contract and layout plan and drawings. Goods are meant for setting up of a complete plant. Any machine meant for balancing, modernization, replacement or expansion of existing plant is excluded. ii. At the time of arrival of the first partial shipment of the plant, the importer shall furnish complete details of the whole
6.
0% ad val.
7.
Desalination plants, Coal Respective firing system, Gas headings. processing plants and Oil & Gas field prospecting.
5% ad val.
8.
Oil refining (mineral Respective oil/hydro-cracking and headings. other value added petroleum products). Plants for petrochemical/petro-chemical down stream products (including fibers) Cool chain plants, Plants for heavy chemical industry.
10% val.
ad i.
204
machinery, equipment and components parts required for the plant, duly supported by the contract and layout plan and drawings. 9. Sugar plants, plants, thermal plants, hydro power plants upto capacity per unit. cement Respective power headings. electric 50 MW 20% val. ad i. Goods are meant for setting up of a complete plant. Any machine meant for balancing, modernization, replacement or expansion of existing plant is excluded.
ii. At the time of arrival of the first partial shipment of the plant, the importer shall furnish complete details of the whole machinery, equipment and components parts required for the plant, duly supported by the contract and layout plan and drawings. 10. Motor vehicle not Respective exceeding 1350 cc headings. cylinder capacity fitted with special gadgets to overcome disability. 10% val. ad If imported by the war disabled defence force personal or by a civil disabled personal in accordance with the conditions laid down in the General Order issued by the Central Board of Revenue. If not manufactured locally, imported for development of grain
11.
Machinery and equipment Respective for grain handling and headings. storage facilities.
5% ad val.
205
handling and storage facilities by private sector. 12. Plant, machinery, Respective equipment and articles headings imported by the importers for the sectors specified below:1. Service sector. Wholesale, distribution and retail trade, transportation, storage and communication, infrastructure projects including development of industrial zones; telecommunication i.e. Email/internet/electronic information services (EIS), data communication network services, trunk radio services, cellular mobile telephone services, audiotex services, voice mail services, card pay phone services, close user group for banking operations, international satellite operators for domestic data communications, paging service and any other telecommunication service which is deregulated in future, will become part of this list, technical testing facilities; audio-visual services; sporting and other recreation services; rental services relating to transport equipment and machinery, equipment and tools for land development and agriculture purpose; environmental services 10% val. ad If not manufactured locally and as certified through Central Board of Revenue by the Facilitation Committee of Board of Investment (BOI), Islamabad from time to time. The Board of Investment shall take such measures as it deems necessary to ensure that the concerned sectors entitled to avail exemption under this notification, import only those goods as are approved by the Committee in view of actual project requirement.
-do-
206
2.
Social sector.
Education, technical/vocational training, human resources development (HRD) as well as hospitals, medical and diagnostic
13.
Following agriculture machinery and equipment: (A) Land development, leveling and clearing machinery and equipment. i. Laser land leveling equipment. ii. Hydraulically driven land leveler/land planer; iii. Survey equipment like theodolite; iv. Stone collector wind rower, capacity 1.52.5 m; and v. Bulldozer pulled soil scrapper, capacity 20-25m3. Respective headings. 0% ad val. If not manufactured locally and imported for the purpose of land development and reclamation of barren, desert and hilly land for agriculture purpose and crops farming; reclamation of water front areas or creeks; crops, fruits, vegetables, flowers farming; integrated agriculture (cultivation and processing of crops); modernization and development of irrigation facilities and water management; plantation, forestry and horticulture; dairy; small ruminants (sheep, goat) and all other livestock farming and breeding.
(B) Tillage planting equipment. i. ii.
and
Para plow-sub-soiler (with vibratory mechanism); Rotary tiller/weedier
-do-
207
(above 90 HP); Flame weedier; Vegetable seedling transplants; and v. Paddy seeding raising equipment. iii. iv. (C) Fertilizer, plant Protection equipment. i. Slurry spreaders; ii. Manure spreader/ composite shredder; iii. Self propelled sprayers/air assisted sprayers, (excluding manual type sprayers); iv. Power knapsack/mist blower sprayers; v. Herbicides applicators (with working pressure above 40 psi); vi. Granular applicators; vii. Spray nozzles assembly; and viii. Spray pumps (gear and diaphragm type); (D) High efficiency irrigation and Drainage equipment. -do-
-do-
i.
Sprinkler including high and low pressure (center pivota) system and conventional sprinkler equipment, water reel traveling sprinkler); ii. Drip/trickle irrigation equipment/mint irrigation sprinkler system; iii. Dredger/excavator/ dragline equipment/back hoe trenchers; iv. Tile drain laying
208
equipment; v. Direct power drilling rigs; vi. Tractor rotary (excluding and
rotary
mounted ditcher tractor);
vii. Tractor mounted chain trencher (excluding tractor). (E) Harvesting threshing machinery. i. ii. iii. iv. and
Combine harvesters; Straw balers; Forage choppers; Sugarcane, potato, onion, garlic, fruit, groundnut, harvester/digger. v. Cotton picker; vi. Stock pullers cum shredder; vii. Fodder rakes; viii. Forage wagon; ix. Rotary slusher; and x. Pruner machinery; (F) Post-harvest handling processing machinery. i. and
-do-
Mobile/stationery seed processing units; -doVegetables and fruits cleaning and sorting/grading equipment; and Fodder and feed cube maker equipment;
ii.
iii.
209
(G) Dairy or livestock machinery/Miscellaneous. i. Milking machines; ii. Sheer machinery; iii. Slurry digester; iv. Solar heating equipment; v. Green houses/G.H. equipment; and vi. Veterinary equipment. (H) Seeding and planting equipment. 14. 0% ad val. Hides, skins and finished 41.01 leather. 41.02 41.03 (except 41.03) 41.04 41.05 41.06(except 4106.3100 & 4106.3200) 41.07 41.09 Seeds for sowing. Respective headings, 0% ad val. 0% ad val. Nil.
-do-
15. 16.
Nil. Nil.
Books, magazine, journals 4901.9100, and newspapers. 4901.9900, 4902.1090, 4902.9090, 49.03. Pulses. Raw cotton. Raw wool. 07.13 52.01 51.01 5105.1000, 5105.2100, 5105.2900. acid 2917.3610
17. 18. 19.
0% ad val. 0% ad val. 0% ad val.
Nil. Nil. Nil.
20.
Pure terphthalic (PTA).
15% val.
ad Nil.
210
21. 22.
Yarn spun from silk waste, 5005.0000 not put up for retail sale. Of nylon or other 5402.3100 polyamides, measuring per single yarn not more than 50 tex. Other textured yarn. 5402.3900 Of nylon or other 5402.4100 polyamides, measuring per single yarn not more than 50 tex. Of nylon or other 5402.6100 polyamides, measuring per single yarn not more than 50 tex. Viscose yarn, untwisted or 5403.3100 with a twist not exceeding 120 turns per metre Monofilament Other synthetic materials. Acrylic or modacrylic Acrylic or modacrylic 5404.1000 textile 5404.9000 5501.3000 5503.3000
15% val. 15% val. 15% val. 15% val.
ad Nil ad Nil.
23. 24.
ad Nil. ad Nil.
25.
15% val.
ad Nil.
26.
15% val. 15% val. 15% val. 15% val. 15% val. 15% val. 15% val.
ad Nil.
27. 28. 29. 30. 31. 31A
ad Nil. ad Nil. ad Nil. ad Nil. ad Nil.
Other textile products and 5911.9000 articles for technical uses. Defence Stores Respective headings Defence stores excluding Respective those of National Logistic headings Cell
31B
32.
Silver.
71.06
ad if import against the foreign exchange allocation of the defence department. 10 ad val. if imported by the Federal Government for the use of defence service provided that the goods have not been imported againt the foreign exchange allocation of the department If imported by US $ 2.00 companies specifically per KG. registered and
211
authorized for the purpose by Ministry of Commerce and the import duty is realized in foreign exchange. 33. Gold. 71.08. US $ 1.00 If imported by per 11.664 companies specifically grams. registered and authorized for the purpose by Ministry of Commerce and the import duty is realized in foreign exchange. 2% ad val. Nil. 2% ad val. 20% val. 10% val. 15% val. 30% val. 10% val. Nil.
34. 35. 36.
Diamonds. Rough Gemstone. Phthalic anhydride Gum Resin Rosin
7102.1000, 7102.3100. 7103.1000 2917.3500 3806.1000 3806.1000
37. 38. 39.
Ambulances
Respective headings.
imported by ad If recognized of ad manufacturers chemical resin and ad processed chemicals in such quantity as determined by Chief (Survey), CBR. ad Nil. ad Nil. If exemption letters have been issued or where the cases are under process with the competent authority of SMEDA provided the same are issued by the 30th June, 2002 and the imports are effected by the 31st December 2002.
Sealed Lead-acid 8507.2000 batteries of a kind used in telephone exchanges. Imports against the Respective authorization of SMEDA headings. under Table-II of defunct Section 18 of Finance Act, 1999.
As envisaged in Table-II of defunct Section 18 of the Finance Act, 1999.
[ C.No.1(2)Mach./2002 ]. (Dr. Manzoor Ahmad) Additional Secretary
212
GOVERNMENT OF PAKISTAN Ministry of Finance, Economic Affairs, Statistics and Revenue (Revenue Division)
*****
NOTIFICATION (CUSTOMS)
Islamabad, the 10th August, 2002
S.R.O 515 (1)/2002: - In exercise of the power conferred by section 19 of the Customs Act, 1969 (IV of 1969), the Federal Government is pleased to direct that the following amendment shall be made in its Notification No. S.R.O.358 (1) 2001 dated the 15th June, 2002. namely: In the aforesaid Notification,(1) (1) In table-I,(a) in S.No,7,(i) in column (3), in item (iii), for the words Active ingredients, the words ,commas and figures All active ingredients of pesticides registered by the Department of plant protection under the Agricultural Pesticides ordinance, 1971 (II of 1971), shall be substituted; and (ii) in column (4), after the figure and comma 28, the figure and comma 29, shall be inserted; and (b) after S.No.17, in column (2),(3),(3) and (5), the following new serial number and the entries relating therto shall be added, namely:18. Audio/video Magnetic tape 8523.1300 10% ad val. Cassettes. In jumbo rolls And pancake Only. High impact 39.03 10% ad val. Polystyrene. Components. Respective headings 2. (a) in Table-II,(a) against S.No. 1 in column (1), in column (2), for the existing entry the following shall be substituted, namely:10% ad val.; and
Aircraft spares, parts, tyres, navigational equipment, accessories for maintenance and operations of aircrafts, chemicals, lubricans and paints, air tickets, aircraft carpet, aircraft fabric, skydrol (brake fluid), laminated sheet, aluminum alloy sheets, aluminum alloy extrusions, aircrafts seats, tools, test equipment, life jackets spares of TGS vehicle, meals trolley, ball hand seal, standard units, exterior washing liquid, air head set electronic, air head set pneumatic and sealants.; (b) after S.No.11, inn column (1), and the entries relating thereto in column (2), (3), (4) and (5), the following new serial number and the entries relating thereto shall be added, namely:-
213
Notifications / Circulars 11A. Machinery and equipment. Respective headings 0% ad val. If not manufactured locally and imported for the purpose of wheat or grain storage and cool chain..
(c) against S. No.14 in column (1), in column (3), after the figures 41.07, the figures, commas, brackets and word 41.12, 41.13 (excepts 4113.2000), shall be added; and (d) against S. No.36, in column (1), in column (2), for the words Resin shall be Substituted; and Gum Resin the words Gum
(e) in column (1), after S.No.39, and the entries relating thereto in columns column (2), (3), (4) and (5), the following new serial number and the entries relating thereto shall be added, namely:40. 41. 42. 43. 44. 45. Black pepper Cassia. Cloves. Chardamo (big) Chardamo (small) Un-manufactured 24.01 tobacco, tobacco refuse. Eye drops. Ointment medicinal Streile surgical catgut, similar sterile suture materials. 49. PVC tape. 3919.1000 20% ad val. 3004.9050 3004.9060 3006.1000 0904.1110 0906.1000 09.07 0908.3010 0908.3020 10% ad val. 10% ad val. 10% ad val. 10% ad val. 10% ad val. 5% ad val. Nil Nil Nil Nil Nil Nil
46. 47. 48.
10% ad val. 10% ad val. 10% ad val.
Nil Nil If registered as drug under Drug Act,1976 (XXXI Of 1976). If imported by the manufacturers of first aid bandges in such quantities as determined by Chief (Survey), Central Board of Revenue.
50.
Polyester base film/polyester film un-coated.
3920.6300
10% ad val.
If imported by audio tape manufacturing units or metallic Experts Advisory Cell
214
Notifications / Circulars yarn manufacturing units in such quantities as are determined by Chief (Survey), Central board of Revenue. 51. Flat-rolled products of iron or steel, of thickness exceeding 10mm 1250 mm. Flat-rolled products of iron or steel, of Grade thickness ASTMA 516 Gr 60 & Grade 70. (i) Tubes, pipes and hollow profile of stainless steel. (ii) Tubes or pipes fitting of stainless steel. . 54. Other packing or wrapping machinery (including heat shrink wrapping machinery). AC clutch motors for industrial sewing machines. Submersible motors of stainless steel. machines. Machinery, components, raw materials, goods like locomotives passenger coaches, freight Respective headings. 5% ad val. Nil
52.
5% ad val.
Nil
53.
7304.4100 7304.4900 7306.4000 7307.2100 7307.2200 7307.2300 7307.2900 8422.4000
5% ad val.
Nil
5% ad val.
Nil
55.
85.01
5% ad val.
Nil
56.
85.01
10% ad val.
Nil
57.
10% ad val.
If imported by Pakistan Railways subject to the condition that a written declaration is Experts Advisory Cell
215
Notifications / Circulars wagons, tracks and the allied railway specific goods, as are not manufactured locally. made on each bill of entry to the effect that the goods have been imported for Direct use by the Pakistan Railways and Shall not be used Otherwise..
[C.No. 6(24)/2002-CB-Part] (Dr. Manzoor Ahmed) Additional Secretary
216
GOVERNMENT OF PAKISTAN MINISTRY OF FINANCE, ECONOMIC AFFAIRS, STATISTICS & REVENUE REVENUE DIVISION Islamabad, the 2nd September, 2002. NOTIFICATION (CUSTOMS) S.R.O (1)/2002- In exercise of the power conferred by section 19 of the Custom Act, 1969 (IV of 1969), the Federal Government is pleased to direct that the following further amendments shall be made in its Notification No. S.R.O. 358(I)2002,dated the 15th June 2002, namely:In the aforesaid Notification, in the Table-II, after S.No.57, in column (1), and the entries relating thereto in column (2), (3), (4) and (5), the following new serial numbers and the entries relating thereto shall be added; namely: 58 Yarn of coarse animal hair or of horsehair (including gimped horsehair yarn), whether or not put up for retail sale. Other. High tenacity yarn of nylon or other polyamides. 61 val Nil per single yaru more than 50 tex. 62 Yarn (other than sewing thread) of synthetic staple fibres, not put up for retail sale. Metallised yarn, weather or not gimpted, being textile yarn, or strip or the like of heading 54.04 or 54.05, combined with metal in the form of thread, strip or powder or covered with metal. 55.09 15%ad val Nil Of nylon or other polyamides, measuring 5110.0000 15%ad val Nil
59 60
5207.9000
15%ad val
Nil Nil 15%ad
5402.1000 15%ad val 5402.3200
63
5605.0000 15%ad val
Nil
2.
This Notification shall take effect from the 2nd September, 2002. (C.No. 6(24)/2002-CB-Part.)
(Dr. Manzoor Ahmad) Additional Secretary
217
GOVERNMENT OF PAKISTAN MINISTRY OF FINANCE, ECONOMIC AFFAIRS, STATISTICS & REVENUE (REVENUE DIVISION)
Islamabad, the 22nd October, 2002.
S.R.O.___ (I)/2002.In exercise of the powers conferred by section 19 of the Customs Act, 1969 (IV of 1969) the Federal Government is pleased to direct that the following further amendment shall be made in its Notification No. SRO 358(I)/2002 dated the 15th June, 2002, namely: In the aforesaid Notification, in Table II, for S. No. 10 in column (1), and the corresponding entries relating thereto in columns (2), (3), (4) and (5), the following shall be substituted, namely: 10. CKD K its and special gadgets to be fitted in the motor vehicle not exceeding 1350 CC cylinder capacity to overcome disability. Respective Headings. 10% ad val. If imported by the local assembler / local assembling of car for the war disabled defense force personnel or the civil disabled perso ns in accordance with the procedure laid down by the CBR, against purchase authorization from the Ministry of Commerce..
______________________________________________________________________________ [C.No. 1(1)Tar.II/87]
(DR. MANZOOR AHMED) Additional Secretary
218
GOVERNMENT OF PAKISTAN Ministry of Finance, Economic Affairs, Statistics and Revenue (Revenue Division) Islamabad, the 28th November 2002 NOTIFICATION (CUSTOMS) S.R.O. (I)/2002.- In exercise of the powers conferred by section 19 of the Customs Act, 1969 (IV of 1969), the Federal Government is pleased to direct that the following further amendments shall be made in its Notification No. S.R.O 358(I)/2002 dated the 15th June, 2002, namely:In the aforesaid Notification, in Table-II,(a) against S.No.32, in column (1), for the existing entry in column (5), the following shall be substituted, namely:If imported in bulk and the importer arranges his own foreign exchange for the purpose and the import duty is realized in foreign exchange. : and (b) against S.No.33, in column (1), for the existing entry in column (5), the following shall be substituted, namely:-
If imported in bulk and the importer arranges his own foreign exchange for the purpose and the import duty is realized in foreign exchange.
219
Islamabad, the 7th June, 2003.

S.R.O. 484(I)/2003. - In exercise of the powers conferred by section 19 of the Customs Act, 1969 (IV of 1969), the Federal Government is pleased to direct that the following further amendments shall be made in its Notification No. S.R.O. 358(I)/2002, dated the 15th June 2002, namely: In the aforesaid Notification, (1) in Table-I,(a) against S.No.3 in column (1), in column (3), the following new items and the entries relating thereto in columns (4) and (5) shall be added, namely: Crude soya-bean oil Crude coconut oil RBD coconut oil (b) 1507.1000 1513.1100 1513.1900 val. val. val.; 10% ad 10% ad
after S.No.18 in column (1), and the entries relating thereto in columns (2), (3), (4) and (5), the following new serial numbers and the entries relating thereto shall be added, namely:BOPP film (metalized capacitor Grade 4 to 12 micron) (i) (ii) Adhesives based on polymers or rubbers. Toilet or facial tissue stock, towel or napkin paper of a kind used for household or sanitary purpose. Non Wovens, whether or not impregnated, coated, covered or laminated of man made filaments. Looped pile fabrics of man-made fibres. Epoxide resin 3920.2030 5% ad val.
19.
Electrical capacitor Diapers
20.
3506.9190 4803.0000
10% ad val. 10% ad val.
(iii )
5603.1100
10% ad val.
(iv) 21. Thermosetting powder.
6001.2200 3907.3000
10% ad val. 10% ad val.; and
(2)
in Table-II, -
220
Notifications / Circulars (a) after S.No.15 in column (1), and the entries relating thereto in columns (2), (3), (4) and (5), the following new serial number and the entry relating thereto shall be inserted, namely:15A. Edible oil seeds 1201.0000 1204.0000 1205.1000 1205.9000 1206.0000 1207.2000 1207.3000 1207.4000 1207.5000 1207.6000 1207.9900 0% Nil.;
(b) (c) (d)
(e) (f) (i) (ii) (h)
S.No.21 in column (1) and the entries relating thereto in columns (2), (3), (4) and (5) shall be omitted; S. Nos. 27A and 27B in column (1) and the entries relating thereto in columns (2), (3), (4) and (5) shall be omitted; against S.No.33 in column (1), for the existing entry in column (4), the following shall be substituted, namely:US $ 0.50 per 11.664 grams; against S.No.34 in column (1), in column (4), for the figure 2 the figure 0 shall be substituted; against S.No.35 in column (1), in column (4), for the figure 2 the figure 0 shall be substituted; (g) against S.No.36 in column (1), in column (2), the words Gum Rosin and the entries relating thereto in columns (3) and (4) shall be omitted; and the word Rosin and the entries relating thereto in columns (3) and (4) shall be omitted; after S.No.44 in column (1) and the entries relating thereto in columns (2), (3), (4) and (5) the following new serial numbers and the entries relating thereto shall be inserted, namely:44A. Nutmeg. 0908.1000 10% ad val. Nil. 44A. 44B. Mace. 0908.2000 10% ad val. Nil
(i)
Seeds of anise or 0909.1000 10% ad val. 44C. badian. Nil.; and after S.No.63 in column (1) and the entries relating thereto in columns (2), (3), (4) and (5), the following new serial number and the entry relating thereto shall be added, namely:64. Dry and fresh fruits. Respective headings 10% ad val. If imported Afghanistan.. from
(C.No. 1(2)Mach./2003-Pt.II)
(Zafar ul Majeed) Additional Secretary
221
GOVERNMENT OF PAKISTAN MINISTRY OF FINANCE, ECONOMIC AFFAIRS, STATISTICS AND REVENUE (REVENUE DIVISION)
Islamabad the 10th September, 2003
S.R.O 905 (I)/2003In exercise of the powers conferred by section 19 of the Customs Act, 1969 (IV of 1969), the Federal Government is pleased to direct that the following further amendment shall be in its Notification No. S.R.O. 358(I)/2002, dated the 15th June, 2002, namely:In the aforesaid Notification, in TABLE II, after S. No.64 in column (1), and entries relating thereto in column (2), (3), (4) and (5), the following new serial number and entries relating thereto shall be inserted, namely:65 66 67 68 69 Sodium dichromate Cyelopentance Dichloroflluro ethane Stearic Acid Bronze Powder 2841.3000 2902.9090 2903.4900 3823.1100 7406.1000 20% 5% 5% 20% 5% Nil Nil Nil Nil Nil
[C.No.6(7)/Tar-I/2002]
(Shahid Ahmad) Additional Secretary
222
Islamabad, the 28th October, 2003 NOTIFICATION (CUSTOMS) S.R.O.____-(I)/2003- In exercise of the powers conferred by section 19 of the Customs Act 1969(IV of 1969), the federal government is pleased to direct that the following further amendments shall be made in its notification No. S.R.O 358(i)/2002 dated the 15th June ,2002 namely In the aforesaid Notification , in Table II after S.No.69 in column (1) and entries relating thereto in columns (2),(3),(4) and (5) , the following new serial number and entries relating thereto shall be inserted namely:70 Insecticides/pesticides put up in retail packing for use in agriculture. 3808.1060 3806.1090 5% Nil.
[C.No.3(23)Tar.I/86] (Muhammad Ramzan) Additional Secretary
223
Islamabad the 15th November, 2003
S.R.O (I)/2003In exercise of the powers conferred by section 19 of the Customs Act, 1969 (IV of 1969), the Federal Government is pleased that the following further amendment shall be made in its Notification No. S.R.O. 358(I)/2002, dated the 15th June, 2002, namely:In the aforesaid Notification, in TABLE II,(1) after S. No. 29 in column (1), and entries relating thereto in columns (2), (3), (4) and (5), the following new serial numbers and entries relating thereto shall be inserted namely:29A 29B of polyester not exceeding Other 5503.2010 15% 205 NIL;
5503.2090
NIL; and
(2) after S.No. 30A in column (1), and entries relating thereto in columns (20. (3), (4) and (5), the following new serial number and entries relating thereto shall be inserted, namely:30B. [C.No.6(33)/2001-CB] (MUHAMMAD RAMZAN) Additional Secretary Of polyester 5506.2000 15% NIL..
224
Islamabad the 15th December, 2003
S.R.O (I)/2003In exercise of the powers conferred by section 19 of the Customs Act, 1969 (IV of 1969), the Federal Government is pleased to direct that the following further amendment shall be made in its Notification No. S.R.O. 358(I)/2002, dated the 15th June, 2002, namely:In the aforesaid Notification, in Table II, after S.No.70, in column (1), and the entries relating thereto in column (2), (3), (4) and (5), the following new serial number and the entries thereto in column (2), (3), (4) and (5), shall be added namely:71. Wheat 10.01 0% ad val. Ministry of Food. Agriculture and livestock should monitor and check through the concerned agencies the quality and standard of the wheat imported by the private sector and for this purpose minimum specifications issued by the Ministry have to be followed.
[C.No.3(10)Tar1/91] (MUHAMMAD RAMZAN) Additional Secretary
225
GOVERNMENT OF PAKISTAN Ministry of Finance, Economic Affairs, Statistics and Revenue (Revenue Division)
*****
Islamabad the 2nd January, 2004
S.R.O. (I)/2004-: In exercise of the powers conferred by section 19 of the Customs Act 1969(IV of 1969) , the Federal Government is pleased to direct that the following further amendments shall be made in its Notification No.S.R.O.358(I)/2002, dated the 15th june,2002, namely:In the aforesaid Notification, in TABLE II, after S.No.71 in column (1), and entries relating thereto in column (2), (3), (4) and (5), the following new serial number and entries relating thereto shall be added, namely:72. Billets 7207 10% Nil.
[C.No.8(9)/Tar-Il/84.Pt]
(Muhammad Ramzan) Additional Secretary
226
GOVERNMENT OF PAKISTAN Ministry of Finance, Economic Affairs, Statistics and Revenue (REVENUE Division)
Islamabad the 3rd January, 2004

S.R.O. (I)/2004-: In exercise of the powers conferred by section 19 of the Customs Act 1969(IV of 1969) , the Federal Government is pleased to direct that the following further amendments shall be made in its Notification No.S.R.O.358(I)/2002, dated the 15th june,2002, namely:In the aforesaid Notification, in TABLE I, after S.No.17 in column (1), after the existing entries in column (3), ano corresponding entries in column (4) and (5), the following new entries shall be inserted, namely:Palm Stearin [C.No.3(14)Tar-l/86] 1511.9010 10% ad valid.
(Muhammad Ramzan) Additional Secretary
227
GOVERNMENT OF PAKISTAN REVENUE DIVISION

Islamabad, the 30th August, 1999 NOTIFICATION SALES TAX S.R.O. 987 (I)/99.- In exercise of the powers conferred by sub-section (1) of section 13 of the Sales Tax Act, 1990, read with serial No. 44 in the Sixth Schedule to the said Act, the Federal Government is pleased to notify the following plant and machinery, excluding such imported plants and machinery as are manufactured locally and also excluding generators, generating sets, wires and cables and maintenance spares, for the purposes of exemption from sales tax, namely:(a) Plant and machinery, operated by power of any description, as are imported or purchased locally by a registered person to be used for the manufacture of taxable goods by that registered person; (b) apparatus and appliances, including metering and testing apparatus and appliances specifically adapted for use in conjunction with the machinery specified in clause (a) above; (c) mechanical and electrical control and transmission gear adapted for use in conjunction with machinery specified in clause (a); and (d) component parts of machinery as specified in clauses (a), (b) and (c) identifiable for use in, or with, such machinery but excluding the maintenance spares for current use. 2. The aforesaid plant and machinery shall be exempt from sales tax subject to the following limitations, conditions and procedures, namely:(1) The importer or purchaser of the locally manufactured machinery, as the case may be, holds a valid sales tax registration issued in his favour showing his registration category as "manufacturer"; (2) the registered person declares his sales tax registration number, NTN number, common tax payers identification number and import registration Number on the bill of entry filed at the time of import; (3) the importer or purchaser of locally-manufactured machinery shall declare the description of taxable goods and its respective PCT heading numbers that he is manufacturing or intends to manufacture with such plant and machinery and shall also declare the intended site for the installation of said machinery; (4) the importer or purchaser of the locally manufactured machinery shall submit an indemnity bond set out in Annex-I or II, as the case may be, to the extent of sales tax exemption under this notification binding himself to pay the sales tax so exempted and additional sales tax in case of his failure to fulfil the condition specified in this notification, to the Collector of Customs or Collector of Sales Tax, as the case may be. This indemnity bond shall not be discharged till the submission of installationcum-production certificate issued by an officer not below the rank of Assistant Collector of Sales Tax of the respective jurisdiction in the form set out in Annex-III or IV, as the case may be;
228
Notifications / Circulars (5) the machinery imported or purchased locally shall not be removed from the premises declared under clause (3) at the time of import or purchase before the expiry of seven years of the date of bill of entry or date of sales tax invoice or before the expiry of five years from the date of commencement of commercial production of taxable goods, whichever is earlier. If he intends to shift the machinery to a place other than the place declared under clause (4) he shall obtain prior permission from the Collector of Sales Tax having jurisdiction; (6) if the importer or purchaser of locally manufactured machinery intends to sell the said machinery before expiry of the stipulated period, to an unregistered person, he shall pay the total amount of sales tax exempted and shall obtain permission for the same before giving its delivery to the buyer. In case he intends to sell it to a registered person, the purchaser/receiver of such machinery shall submit an indemnity bond for the remaining period after seeking prior permission from the Collector of Sales Tax having jurisdiction over the seller and also after giving due intimation to the Collector of Sales Tax having jurisdiction over the registered buyer. In such a case of sale to registered person, the liability to pay tax shall be deemed, in terms of sub-section (3A) of section 3 of the Sales Tax Act, 1990, to be of the person (registered buyer) receiving the goods; (7) the importer or purchaser of locally manufactured machinery shall start commercial production of the taxable goods within two years of the date of Bill of Entry or sales tax invoice, as the case may be; and (8) the breach of any condition specified in this notification or non submission of installation-cum-production certificate within the stipulated time, shall be deemed to be tax fraud and shall be punishable under relevant provisions of the Sales Tax Act, 1990. Besides the sales tax exempted under this notification and additional sales tax shall be recovered under section 202 of the Customs Act, 1969, read with or under section 48 of the Sales Tax Act, 1990, as the case may be, in addition to any other penal action under the Customs Act, 1969 and the Sales Tax Act, 1990.
229
Notifications / Circulars ANNEX-I [See para 2(4)] INDEMNITY BOND THIS DEED OF INDEMNITY is made on the _________date of _________ BETWEEN Messrs ______________having sales tax registration No.________(hereinafter called "the importers" which means and includes their successors, administrators, executors and assignees) of the one part, AND the President of Pakistan through the Collector of Customs_________(hereinafter called the "Collector of Customs" of the other part. WHEREAS the Federal Government, by its decision contained in Notification No. S.R.O._____ dated the ______ and subject tot he condition specified in the said Notification, has been pleased to direct that such machinery, as are not manufactured locally, shall be exempt from the whole of sales tax leviable thereon, in accordance with the said notification. NOW, THEREFORE, in consideration of the release of the machinery without recovery of leviable tax, the importers bind themselves to pay on demand to the Government of Pakistan the sum of Rs._____ being the sales tax leviable and additional sales tax on the machinery, if the importers fail -(i) to produce an installation-cum-production certification from Assistant Collector of Sales Tax of respective jurisdiction within two year from the date of the importation of the machinery, to the effect that the machinery has been installed and has started commercial production of the taxable goods as declared in the Bill of Entry at the time of import of machinery; and to produce such other evidence as the Collector of Customs may require to satisfy himself that the plant or machinery has been installed in accordance with the conditions of the said Notification and has started commercial production of taxable goods.
(ii)
The importers further agree and bind themselves that the amount covered by this Bond shall be recovered as arrears of customs duty under section 202 of the Customs Act, 1969 (IV of 1969). This Bond shall be cancelled and returned when the aforesaid certificate has been produced and the Collector of Customs is satisfied that the importers have fulfilled al the conditions of this Bond in the said Notification. Signed by importers on this _________________day of ____________199 ____. ----------------------------------Managing Director (Name and permanent address) Collector of Sales Tax or his authorized officer (On behalf of President) Witness _____________________________________ (Signature, name, designation and full address)
230
Notifications / Circulars ANNEX II

INDEMNITY BOND THIS DEED OF INDEMNITY is made on the ___________day of ________BETWEEN Messrs ___________having sales tax registration No.______(hereinafter called "the purchaser" which means and includes their successors, administrators, executors and assignees) of the one part. AND the President of Pakistan through the Collector of Sales Tax,_______(hereinafter called the "Collector of Sales Tax", of the other part. WHEREAS the Federal Government, by its decision contained in Notification No. S.R.O.________dated the _________ and subject to the conditions specified in the said Notification, has been pleased to direct that such machinery shall be exempt from the whole of sales tax leviable thereon, in accordance with the said notification. NOW, THEREFORE, in consideration of the supply of the machinery without recovery of leviable sales tax, the purchaser bind themselves to pay on demand to the Government of Pakistan the sum of Rs._______being the sales tax leviable on the machinery alongwith additional sales tax, if the purchaser fails (i) to produce an installation-cum-production certification from Assistant Collector of Sales Tax of respective jurisdiction within two year from the date of purchase of the machinery, to the effect that the machinery has been installed and has started commercial production of the taxable goods as declared at the time of purchase of machinery; and to produce such other evidence as the Collector of Sales Tax may require to satisfy himself that the plant or machinery has been installed in accordance with the conditions of the said Notification and has started commercial production of taxable goods.
(ii)
The purchaser further agree and bind themselves that the amount covered by this Bond shall be recovered as arrears of sales tax under section 48 of the Sales Tax Act, 1990. This Bond shall be cancelled and returned when the aforesaid certificate has been produced and the Collector of Sales Tax is satisfied that the purchaser have fulfilled all the conditions of this Bond in the said Notification. Signed by purchaser on this ________________day of ______________________199_____.
----------------------------------------------------Managing Director (Name and permanent address) Collector of Customs or his authorized officer (On behalf of President) Witness _______________________________________ (Signature, name, designation and full address) Witness _______________________________________ (Signature, name, designation and full address) Note.- The bond shall be written on appropriate non-judicial stamp paper and shall be witnessed by a Government servant in BPS-16 or above, an Oath Commissioner, a Notary Public or an officer of a Scheduled Bank.
231
Notifications / Circulars ANNEX -III [See para 2(4)]
INSTALLATION-CUM-PRODUCTION CERTIFICATE
File No._____________________
Certificate No._________________________________ Dated: _________________ (Progressive S.No. started from 1st January every year)
I, _______________________(name of Assistant Collector of Sales Tax), am satisfied that the machinery imported by Messrs ___________ having sales tax registration No._______under the provision of Notification No. S.R.O._________dated__________vide bill of Entry No._________dated________ has been installed at the unit situated at ___________and has started commercial production of taxable goods.
Assistant Collector of Sales Tax
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Notifications / Circulars ANNEX IV [See para 2(4)] INSTALLATION-CUM-PRODUCTION CERTIFICATE
File No.______________________ Certificate No.__________________________________ Dated:___________ [Progressive S.No. started from 1st January every year]
I,____________________________________(name of Assistant Collector of Sales Tax_, am satisfied that the machinery purchased locally by Messrs _________________having sales tax registration No.________________ under the provision of Notification No. S.R.O.___________dated__________ vide sales tax invoice No._________________dated________________________ issued by M/s _____________________having sales tax registration No._________________ have been installed at the unit situated at ___________________and has started commercial production of taxable goods.
Assistant Collector of Sales Tax --------------------------------------------------------------------------------------------------------------------------------[C.No.1/14-STB/99] S.M. Kazimi Additional Secretary
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GOVERNMENT OF PAKISTAN MINISTRY OF FINANCE, ECONOMIC AFFAIRS, STATISTICS & REVENUE REVENUE DIVISION
Islamabad, the 21st November, 2000. NOTIFICATION (SALES TAX)
S.R.O. 839 (I)/2000.- In exercise of the powers conferred by sub-section (1) of section 13 of the Sales Tax Act, 1990, read with serial No.44 in the Sixth Schedule to the said Act, the Federal Government is pleased to direct that the following amendment shall be made in its Notification No. S.R.O. 987(I)/99, dated the 30th August, 1999, namely:-
In the aforesaid Notification, in para 2, in sub-para (8), for the words be deemed to be tax fraud and shall be punishable the words attract legal action shall be substituted. _____________________________________________________________________________
[C.No. 3(9)STP/99]
( SARFRAZ AHMAD KHAN ) Additional Secretary
234
Islamabad, the 7th June, 2003. NOTIFICATION (SALES TAX)
S. R.O. 503(I)/2003.- In exercise of the powers conferred by sub-section (1) of section 13 of the Sales Tax Act, 1990, read with serial No. 44 in the Six Schedule to the said Act, the Federal Government is pleased to direct that the following further amendment shall be made in its Notification No. S.R.O. 987(I)99, dated the 30th August, 1999, namely:In the preamble,(a) for the words, the following plant and machinery the words, plant and machinery having the following specifications shall be substituted; and (b) after the words sets the word, figure and letters below 250 KVA shall be inserted. _____________________________________________________________________________ [C.No.1/5-STB/2003] (Zafar ul Majeed) Additional Secretary
235
Government of Pakistan Ministry of Industries & Production ********************** No. 1-129/99-INV-IV CIRCULAR Subject:RESTORATION OF THE STATUS OF TOURISM AS INDUSTRY In pursuance of the Cabinet decision in case No.129/11/90, dated 2406-1999, the Government of Pakistan declared tourism /as an `Industry' and extended it all those benefits which were available to the industry. In this connection this Ministry's circular letter No.6(146)/99-P, dated 30th July, 1990 refers. 2. Subsequently the Board Of Investment announced Investment Policy in Islamabad, the 2nd August, 99
1997, in which the status of tourism was changed to that of `Services. 3. In pursuance of recent direction of the Prime Minister of Pakistan, the
status of tourism as `Industry' is hereby restored. This will entitle the investors in Tourism projects to all such facilities/concessions which are presently available to industries in the country.
(Muhammad Anwar Khan) Chief Research Officer TEL:9202594
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TO BE PUBLISHED IN THE GAZETTE OF PAKISTAN Government Of Pakistan Finance Division (Investment Wing)
________________ NOTIFICATION Islamabad, the 7th April, 1999 The Competent Authority has been pleased to declare Housing as an Industry, entitling Housing Sector to all fiscal incentives/special treatment and other benefits, as envisaged in the Investment Policy 1997, as amended from time to time. Sd/(MOHAMMAD YOUSUF MEMON) DEPUTY SECRETARY (BKG) F.No.10(10)/IF-II/98 To The Manager, Printing Corporation of Pakistan Press Karachi ________________________________________________________________ TO BE PUBLISHED IN THE GAZETTE OF PAKISTAN GOVERNMENT OF PAKISTAN FINANCE DIVISION (INTERNAL FINANCE WING) Islamabad, the 4th June, 1999 NOTIFICATION The Competent Authority has been pleased to declare Housing as an Industry, entitling Housing Sector to all fiscal incentives/special treatment and other benefits, as envisaged in the Investment Policy 1997, as amended from time to time. Sd/ Deputy Secretary (IF) ( Abdul Rauf Khan) F.No.10(10)/IF-II/98To The Manager, Printing Corporation of Pakistan Press, Karachi
237
LIST OF DEREGULATED SERVICES IN THE TELECOMMUNICATIONS SECTOR 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. E-mail/Internet/Electronic Information Services (EIS). Data Communication Network Services. Trunk Radio Services. Cellular Mobile Telephone Services. Audiotex Services. Voice Mail Services. Card Pay Phone Services. Close User Group for Banking Operation. International Satellite Operators for Domestic Data Communication. Paging Services. Vehicle Tracking System (VTS). Burglar Alarm System (BAS). Global Mobile Personal Communication System (GMPCS). Any other telecommunication service, which is deregulated in future, will become part of this list.
Note:- Those sectors which have not been deregulated due to monopoly available to Pakistan Telecommunication Corporation Limited (PTCL) till 31st December,2002, are opened to foreign investors in collaboration with PTCL **********************
238
CATEGORY (A): VALUE ADDED INDUSTRIES

I. 1. 2. 3. Ceramic Products: Refractory goods such as refractory cements, refractory bricks, refractory blocks and refractory tiles. Ceramic ware for laboratory, chemical or other technical uses. Ceramics sinks, washbasins, washbasin pedestals, baths, bidets, water closet pans, flushing cisterns, urinals and similar sanitary fixtures. Table ware and kitchen ware. Ceramic filter elements. Electric insulators. 8. 9. 10. 11. 12. Esters of inorganic acids and their salts and their halogenated, sulphonated nitrated or nitrosated derivatives. Organo-Inorganic compounds, heterocyclic compounds, nucleic acids and their salts and sulphonamides. Provitamins, vitamins and harmones. Glycosides and vegeta Basic Manufacturing of inorganic chemicals, insecticides, rodenticides, fungicides, herbicides, anti-sprouting products and plantgrowth regulators, disinfectants. Binders for foundry moulds or cores.
4. 5. 6.
13.
II. Articles of Iron & Steel: 1. 2. 3. 4. 5. Seamless pipes. Spring and leaves for springs of steel. Radiators for central heating, non-electrical heating and parts thereof, of iron or steel. Industrial Chains for power transmission and parts thereof. Sewing needles and knitting needles
IV. Engineering and Allied (Subject to progressive deletion): 1. 2. 3. 4. Machinery and mechanical appliances. Vehicles, aircraft, vessels and associated transport equipment. Optical, photographic, cinematographic goods, measuring, checking, precision instruments; parts and accessories thereof. Musical instruments and toys, parts and accessories of such articles. semiconductors and other components (Microprocessor, Memory Devices, transistors, Diodies, Logic Gates, Microcontrollers, Integrated Circuits (ASICS), Liquid Crystal Displays (LCDs), Capacitors, Resistors, Printed Circuit boards, Fabricated Wafers, Silicon Wafers, Leadframes, Cassette mechanism, Megnetic Heads and Cathode Ray Tubes, Advanced Waferfab manufacturing, photomasking Microelectronic Circuits, Semiconductor (Materials). Consumer Electronics (Television Receivers, TV picture tubes, Video Cameras, Audio Products, Electronic Games). Electrical Appliances (Refrigerators, Airconditioners, Toasters, Vacuum Cleaners, Blenders, Food Processors, Ovens, Microwave Ovens, Shavers, Hair dryers). Gas absorption Chillers.
III. Chemical and Allied Industries: 1. Hydrocarbons and their Halogenated, sulphonated 2. Industrial Alcohols and their halogenated, sulphonated, nitrated or nitrosalted derivatives. 3. Phenols, Phenol-alcohols and their halogenated, sulphonated, nitrated or nitrosated derivatives. 4. Ethers, alcohol peroxides, ether peroxides, ketone peroxides, epoxides with a three membered ring, acetals and hemiacetals and their halogenated, sulphonated, nitrated or nitrosated derivatives. 5. Aldehyde-function compounds. 6. Ketone-function compounds and quinonefunction compounds. 7. Carboxylic acids and their anhydrides, halides, peroxides and peroxyacids and their halogenated, sulphonated, nitrated or nitrosated derivatives.
5.
6. 7.
8.
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9.
10.
11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22.
Electrical Industrial Apparatus (Switchgears, Electric motors, Transformers, Generators, Electricity Meters, Controller, Relays, Voltage Regulators, Welding and Cutting Equipment, Starters, Switchers & Fuses, Circuit Breakers, Contractors, Power transmission Equipment and Parts). Critical Components of automobile manufacturing (Components of engine, gear box, suspension, robotics for chassis and body manufacturing, electrical and mechanical accessories, Compressed Natural Gas Kits). Automotive parts/tools/dies manufacturing. Rubber components and parts. Automotive or Automobile Progressive Manufacturing. Valves and controls for fluids and gas, high pressure and / or high temperature piping and fixings. Specialized pumps including solar pumps for chemical/petroleum industry. Elevators and escalators. Ship building. Turbines (all types). Generators for power plants. Seamless high-pressure cylinders. Compressors. Locomotives/Passengers carriage/ good carriages.
13. Dying, Printing and Finishing.
VI. Pharmaceutical Products

1. All basic and integrated pharmaceutical products. manufactured
VII. Photographic or Cinematographic Goods: 1. 2. 3. 4. 5. Photographic plantes and film in the flat such as X-ray. Photographic film in rolls. Photographic paper. Cinematograph film. Chemical preparation for photographic uses.
VIII. General/ Miscellaneous 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. Complete Leather processing or Articles of Leather. Footwear goods. Surgical goods/ sports goods/ cutlery. Soft, stuffed and battery toys. Frozen concentrated citrus juices. Seafood industry (framing/catching, processing and preservation of fish, shrimp and other marine products). Mining or mineral processing. Manufacture of industrial plants, machinery. Rubber and textile chemicals/dyes/pigments. Petro-chemicals/ Petro-chemical down stream products (including fibers). Chloro-Alkali. Paper or Newsprint Manufacturing (starting from Pulp). Manufacture of bio-medical/medical diagnostic equipment/devices. Research and development/ technical testing facilities. fruits, vegetables and flowers grading, processing, packing, preservation. Production of quality/hybrid seeds. Natural or cultured pearls, precious or semiprecious stones. Precious metals, metals clad with precious metal and jewelry/ intimation jewelry. Glass or Glass Ware.
IV. Textiles: 1. 2. 3. Cotton Yarn. Silk woven and its value added products. Cotton and blended woven fabrics or their products. 4. Articles of apparel and clothing accessories, all types. 5. Man made staple fibers. 6. Woven Fabrics of Synthetic Staple Fibers. 7. Carpets and other textile floor coverings. 8. Knitted or crocheted fabric. 9. Automobile Textiles. 10. Blankets and traveling rugs. 11. Bed linen, table linen, toilet linen and kitchen linen, etc. 12. Curtain (including drapers) and interior blinds; curtain or bed valances
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CATEGORY (B): Hi-Tech Industries
o o o o o o o o
Process Control Equipment/ Systems; Power Tools/ Pneumatic Tools. Powder Metallurgical Industry and Manufacture of Alloys and Stainless Steel. Information Technology. Solar Technology / Solar Cell Industry. Aerospace. Defence Production. Hermetical Sealed (HS) Technology. Oil Refining (Mineral Oil)/ Hydrocracking and other value-added Petroleum Products
************
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CATEGORY (C&D): Priority and Agro-based Industries
o o o o o o o o o
Specialized paints or coatings. Fire-fighting foam. Fertilizers. Treatment and disposal of toxic and hazardous industrial wastes, sewerage, effluent/solid waste management, water supply. Edible Oil Extraction/ Refining. Livestock/ poultry feed. Integrated poultry, livestock complex including the facility for processing and packing. Milk processing and milk products/ dairy products. Agro-based products/ bi-products/ chemicals (e.g. cotton, sugar cane, rice, corn-based like cattle feed, cellulose and its products, industrial alcohol, glycerin, fructose, furfural, Xylose etc.) Hotels, Tourism and Tourism related projects. Housing and Construction Industry. -----
o o
242
GOVERNMENT OF PAKISTAN MINISTRY OF FINANCE AND ECONOMIC AFFAIRS, STATISTICS & REVENUE (REVENUE DIVISION) *** Islamabad, the 18th June, 2001. NOTIFICATION (CUSTOMS)
S.R.O. 439 (I)/2001.- In exercise of the powers conferred by section 19 of the Customs Act, 1969 (IV of 1969), and in supersession of its Notification No. S.R.O. 369(1)/2000, dated the 17th June 2000, the Federal Government is pleased to direct that the plant, machinery and equipment, not manufactured locally, imported by (a) the export industries shall be exempt from so much of the customs-duties leviable under the First Schedule to the said Act as are in excess of five per cent ad valorem provided the export industry annually exports minimum average fifty percent of its production in first ten years and for expansion of existing unit, they should export fifty per cent of additional capacity created under expansion; (b) hi-tech industries specified in column (2) of Table I below, shall be exempt from so much of the customs-duties eviable under the First Schedule to the said Act as are in excess of five per cent ad valorem; (c) value added industries specified in column (2) of Table II below, shall be exempt from so much of the customs duties leviable under the First Schedule to the said Act as are in excess of five per cent ad valorem; and (d) priority industries specified in column (2) of Table III below, shall be exempt from so much of the customs-duties leviable under the First Schedule to the said Act as are in excess of ten per cent ad valorem, subject to the following conditions, namely: (i) The importer shall at the time of import of plant; machinery and equipment, make a written declaration on the bill of entry specifying the category of industry and that the plant, machinery and equipment has been imported in accordance with this notification and will be used for manufacturing in the category of industry claimed on the bill of entry; importer shall furnish an indemnity bond in the form set out below to the extent of customs-duty exempted under this notification. The said bond shall not be discharged till production of an installation certificate, within one year from the date of importation of plant, machinery and equipment, from the Assistant Collector or Deputy Collector of Customs and Central Excise, in whose jurisdiction the project is located and such certificate shall clearly state that plant, machinery and equipment imported for the purposes specified in the bill of entry have been duly installed; the event of non-production of such certificate by the importer, the Collector of Customs shall enforce the indemnity bond and proceed to recover Government dues under section 202 of the Customs Act, 1969 (IV of 1969), and the rules made thereunder; and case any provision of this notification is violated, the Collector of Customs shall proceed to recover Government dues besides taking punitive action under the law.
(ii)
(iii)
(iv)
Explanations,- For the purposes of this notification, the expression, not manufactured locally" shall mean the goods, which are not included in the list of locally manufactured goods, specified in the General Order, issued by the Central Board of Revenue or certified as such by the Engineering Development Board and Central Board of Revenue; and (ii) machinery and equipment" shall mean,(a) operated by power of any description, such as is used in industrial processes; (b) and appliances, including metering and testing apparatus and appliances specially adapted for use in conjunction with machinery specified in sub-clause (a) above; (c) and electrical control and transmission gear adapted for use of goods specified in sub-clause (a) above; and (i)
243
Notifications / Circulars d) parts of machinery and equipment specified in sub-clauses (a) and (b) above, identifiable for use in of with such machinery and equipment. TABLE I Sr. No. (1) Type of industry (2) Hi-tech Industries: 1. 2. 3. 4. 5. 6. 7. 8. Process control equipment/systems; power tools/pneumatic tools. Powder metallurgical industry and manufacture of alloys and stainless steel. Information Technology. Solar technology/solar cell industry. Aerospace. Defence Production. Hermetical sealed (HS) technology. Oil refining (mineral oil)/hydrocracking and other value added petroleum products. TABLE II Sr. No. (1) Value Added Industries: CERAMIC PRODUCTS: 1. 2. 3. 4. 5. 6. Refractory goods such as refractory cements, refractory bricks, refractory blocks and refractory tiles. Ceramic ware for laboratory, chemical or other technical uses. Ceramic sinks, washbasins, washbasin pedestals, baths, bidets, water closet pans, flushing cisterns, urinals and similar sanitary fixtures. Table ware and kitchen ware. Ceramic filter elements. Electric insulators. Type of industry (2)
ARTICLES OF IRON AND STEEL: 1. 2. 3. 4. 5. Seamless pipes. Spring and leaves for springs of steel. Radiators for central heating, non-electrical heating and parts thereof, of iron or steel. Industrial chains for power transmission and parts thereof. Sewing needless and knitting needles.
CHEMICAL AND ALLIED INDUSTRIES: 1. Hydrocabons and their Halogenated, sulphonated, nitrated or nitrosated derivatives. 2. Industrial alcohols and their halogenated, sulphonated, nitrated or nitrosated derivatives. 3. Phenols, phenol-alcohols, and their halogenated, sulphonated, nitrated or nitrosated derivatives. 4. Ethers, alcohol peroxides, ether peroxides, ketone peroxides, epoxides with a three membered ring, acetals and hemiacetals and their halogenated, sulphonated, nitrated or nitrosated derivatives.
244
Notifications / Circulars 5. 6. 7. 8. 9. 10. 11. 12. 13. Aldehyde-function compounds. Ketone-function compounds and quinone-function compounds. Carboxylic acids and their anhydrides, halides, peroxides and peroxyacids and their halogenated, sulphonated, nitrated or nitrosated derivatives. Esters of inorganic acids and their salts, and their halogenated, sulphonated, nitrated or nitrosated derivatives. Organo-inorganic compounds, heterocyclic compounds, nucleic acids and their salts and sulphonamides. Provitamins, vitamins and hormones. Glycosides and vegetables alkaloids, natural or reproduced by synthesis and their salts, ethers, esters and other derivatives. Basic manufacturing of inorganic chemicals, insecticides, rodenticides, fungicides, herbicides, anti-sprouting products and plant-growth regulators, disinfectants. Binders for foundry moulds or cores.
ENGINEERING AND ALLIED (SUBJECT TO PROGRESSIVE DELETION): 1. 2. 3. 4. 5. Machinery and mechanical appliances. Vehicles, aircraft, vessels and associated transport equipment. Optical, photographic, cinematographic goods, measuring, checking, precision instruments, parts and accessories thereof. Musical instruments and toys, parts and accessories of such articles. Semiconductors and other components (Microprocessors, Memory Devices, transistors, diodes, logic gates, microcontrollers, integrated circuits (ASICS), Liquid Crystal Displays (LCDs), Capacitors, Resistors, Printed Circuit boards, Fabricated Wafers, Silicon Wafers, Lead-frames, Cassette mechanisms, Magnetic Heads and Cathodes Ray Tubes, Advanced Waferfab manufacturing, Photomasking, Microelectonic circuits, semiconductor materials). ` Consumer electronics (Television Receivers, TV picture tubes, video players, video cassette, video cameras, audio products, electronic games). Electrical Appliances (Refrigerators, air conditioners, toasters, vacuum cleaners, blenders, food processors, ovens, microwave ovens, shavers, hair dryers). Gas absorption chillers. Electrical industrial apparatus (Switchgears, electric motors, transformers, generators, electricity meters, controllers, relays, voltage regulators, welding and cutting equipment, starters, switches and fuses, circuit breakers, contactors, power transmission equipment and parts). Critical components of automobile manufacturing (components of engine, gear box, suspension, robotics for chassis and body manufacturing, electrical and mechanical accessories, compressed natural gas kits). Automotive parts tools and dies manufacturing. Rubber components and parts. Automotive 6r automobile progressive manufacturing. Valves and controls for fluids and gas, high pressure and high temperature piping and fixings. Specialized pumps including solar pumps for chemical or petroleum industry. Elevators and escalators. Ship building. Turbines (all types). Generators for power plants. Seamless high-pressure cylinders. Compressors. Locomotives/Passengers carriages/goods carriages.
6. 7. 8. 9.
10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. TEXTILES: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
Yarn made from cotton and man-made textile material. Silk woven and its value added products. Cotton and blended woven fabrics or their products. Articles of apparel and clothing accessories all types. Man made staple fibres. Woven fabrics of synthetic staple fibres. Carpets and other textile floor coverings. Knitted or crocheted fabric. Automobile textiles. Blankets and travelling rugs.
245
Notifications / Circulars 11. 12. 13. Bed linen, table linen, toilet linen and kitchen linen, etc. Curtains (including drapers) and interior blinds, curtain or bed valances. Dying, printing and finishing.
PHARMACEUTICAL PRODUCTS: All basic and integrated manufactured pharmaceutical products. PHOTOGRAPHIC OR CINEMATOGRAPHIC GOODS: 1. 2. 3. 4. 5. Photographic plates and film in the flat such as X-ray. Photographic film in rolls. Photographic paper. Cinematograph film. Chemical preparation for photographic uses.
GENERAL OR MISCELLANEOUS: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. Complete leather processing or articles of leather. Footwear goods. Surgical goods, sports goods or cutlery. Soft, stuffed and battery toys. Frozen concentrated citrus juices. Seafood industry (farming/catching, processing and preservation of fish, shrimp and other marine products). Mining or mineral processing. Manufacture of industrial plants, machinery and equipment including mining or mineral processing, agricultural and earthmoving machinery. Rubber and textile chemicals, dyes and pigments. Petro-chemicals or petro-chemical down stream products (including fibers). Chloro-alkali. Paper or newsprint manufacturing (starting from pulp). Manufacture of bio-medical medical diagnostic equipment and devices. Research and development and technical testing facilities. Fruits, vegetables and flowers -grading, processing, packing, preservation. Production of quality or hybrid seeds. Natural or cultured pearls, precious or semi-precious stones. Precious metals, metals clad with precious metal and jewelry/imitation jewelry. Glass or glass ware. TABLE III Sr. No. (1) Priority Industries: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Specialized paints or coatings. Fire-fighting foam. Fertilizers. Treatment and disposal of toxic and hazardous industrial wastes, sewerage, effluent or solid waste management, water supply. Edible oil extraction or refining. Livestock and poultry feed. Integrated poultry, livestock complex including the facility for processing and packing. Milk processing and milk products and dairy products. Agro-based products bi-products and chemicals (e.g. cotton, sugar cane, rice, corn-based like cattle feed, cellulose and its products, industrial alcohol, glycerin, fructose, furfural, Xylose etc). Tourism, Hotels and Tourism Related Projects. Housing and Construction Industry., Type of industry (2)
_________________________________________________________________
246
Notifications / Circulars FORM [See condition (2)] (On appropriately stamped non-judicial paper} INDEMNITY BOND THIS DEED OF INDEMNITY is made on the__________day of________ BETWEEN Messers______________________having registered office at __________ (hereinafter called "the importer" which expression shall include their successors, administrators, executors and assignees) of the one part, AND the Present of Pakistan through the Collector of Customs____________________ (hereinafter called "the Collector of Customs") of the other part; WHEREAS the Federal Government has, vide its Notification No. S.R.O.____________, dated the________________, and subject to the conditions given in the said Notification been pleased to direct that the plant, machinery and equipment, not manufactured locally, imported for__________________ (mention category of industry) shall be exempt from so much of the customs duty, as specified in the said Notification. AND WHEREAS M/s________________having registered office at ______________________have imported the plant, machinery and equipment as is not manufactured locally, in accordance with the conditions given in the aforesaid Notification for installation at _________________. (address of industrial unit). NOW, THEREFORE, in consideration of the release of plant, machinery and equipment without recovery of the leviable customs duty, the importers bind themselves to pay on demand to the Government of Pakistan the sum of Rs____________being the customs-duty leviable on the plant, machinery and equipment, if the importers fail to produce a certificate from the Assistant Collector of Central Excise within one year from the date of importation of plant, machinery and equipment to the effect that the machinery has been installed at the said unit. The importers further agree and bind themselves that the amount of duty covered by the Bond may be recovered as arrears of customs-duty under section 202 of the Customs Act, 1969 (IV of 1969). The Bond shall become void when the aforesaid certificate has been produced and the Collector of Customs is satisfied that the importers have fulfilled all the conditions of this Bond and the aforesaid Notification. Signed by importers on this________________day of______________. _________________ Managing Director (Name and permanent address) Witness __________________________________________ (Signature, name, designation and full address). Witness __________________________________________ (Signature, name, designation and full address). Note: This bond shall be witnessed by a Government servant in BPS-17 or above an officer of a scheduled bank. SCHEDULE OF MACHINERY IMPORTED.
247
Government of Pakistan Ministry of Finance, Economic Affairs, Statistics & Revenue (Revenue Division) ********************** Islamabad, the 10th August 2002 NOTIFICATION (CUSTOMS) S.R.O. (1)/2002 In exercise of the power conferred by section 19 of the Customs Act, 1969 (IV of 1969), the Federal Government is pleased to direct that in its Notification No. S.R.O. No. 359(1)/2002, dated 15th June 2002, the following amendment shall be made and shall be deemed to have always been so made, namely: In the aforesaid Notifcation, serial number 11 and entry relating thereto shall be omitted. ______________________________________________________________________ __ [C.No. 6(24)/2002-CB.Part]
(DR. MANZOOR AHMAD) Additional Secretary
248
Government of Pakistan Ministry of Finance, Economic Affairs, Statistics and Revenue (Revenue Division) ********************** Islamabad, the 15th June,2002 NOTIFICATION (CUSTOMS) S.R.O. 359(1)/2002 In exercise of the powers conferred by section 19 of the Custom Act, 1969 (IV of 1969), the Federal Government is pleased to rescind, with immediate effect, its following Notifications, namely:
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12.
S.R.O. 735(I)/87, dated the 9th September, 1987; S.R.O. 491(I)/88, dated the 26th June, 1988; S.R.O. 492(I)/88, dated the 26th June, 1988; S.R.O. 2(I)/96, dated the 1st January, 1996; S.R.O. 28(I)/98, dated the 17th January, 1988 S.R.O. 236(I)/98, dated the 4th April, 1998; S.R.O. 962(I)/98, dated the 8th September, 1998; S.R.O. 582(I)/2000, dated the 12th August, 2000; S.R.O. 262(I)/2001, dated the 3rd March, 2001 S.R.O. 437(I)/2001, dated the 18th June, 2001; S.R.O. 439(I)/2001, dated the 18th June, 2001; and S.R.O. 688(I)/2001, dated the 3rd October, 2001.
______________________________________________________________________ [C.No. 6(24)/2002-CB.Part] (DR. MANZOOR AHMAD) Additional Secretary
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THE PROTECTION OF RIGHTS IN INDUSTRIAL PROPERTY ORDER, 1979

(President Order No. 5 of 1979) In pursuance of the Proclamation of the fifth day of July, 1977, read with Laws (Continuance in Force) ORDER, 1977 (CMLA Order No. 1 of 1977) and in exercise of all powers enabling him in the behalf, the President is pleased to make the following Order. i. ii. iii. SHORT TITLE, EXTENT AND COMMENCEMENT The Order may be called the Protection of Rights in Industrial Property Order, 1979. It extends to the whole of Pakistan. It shall come into force at once. INTERPRETATION In this Order, "Industrial Property" means property, movable or immovable used in the production, manufacture, processing or assembling of any goods or the development and extraction of mineral resources, or both in such production manufacture, processing or assembling and in such development and extraction, and'includes any right, title or interest in such property. ORDER TO OVER-RIDE OTHER LAWS This Order shall have effect notwithstanding any thing contained in the Constitution or any other law for the time being in force. PROTECTION OF INDUSTRIAL PROPERTY RIGHTS i. ii. No person shall be deprived of his industrial property save in accordance with law. No industrial property shall be compulsorily acquired or taken possession of save for a public purpose and save by the authority of law which provides for adequate compensation being given therefore within a reasonable time specified therein either fixes the amount of compensation or specifies the principles on and the manner in which compensation is to be determined and given. Any person to whom compensation is to be given under any such law as is referred to in clause may apply to the Court of competent jurisdiction for a decision as to whether such compensation is adequate or otherwise and for the determination of adequate compensation. SAVING Nothing in this Order shall be deemed to apply to or to have effect in respect of, any industrial property_which was compulsorily acquired or taken possession of before the commencement of this order.
iii.
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GOVERNMENT OF PAKISTAN CENTRAL BOARD OF REVENUE ******
C.NO.10(15).73.CUS.EXM.
Islamabad, the 18th February, 1998.
CUSTOMS GENERAL ORDER N0.5/98
Subject:-
DUTY FREE IMPORT OF FOOD STUFF BY FOREIGN INVESTORS EXECUTIVES AND EXPATRIATES EMPLOYEES In suppression of C.G.0.4/98 dated 9th January, 1998 and in partial
modification of Customs General Order No. 15/96 dated 13th June, 1996, the Central Board of Revenue is pleased to substitute sub-para (a) thereof as follows: "food stuff worth US$1000/- per annum per person would be allowed to be imported/purchased from duty free shops and diplomatic bonded warehouses without payment of customs duty and taxes by the foreign investors, executives and expatriate employees working in Pakistan. However, this concession will not extend to any alcoholic beverages.
Sd/(H. A. SHIRAZI) CHIEF (CUSTOM PROCEDURE)
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Important Addresses
IMPORTANT ADDRESSES
Business Support Centres Islamabad: 1st Floor, SEDC Building (STP), 5-A, Constitution Islamabad PAKISTAN Tel: (92-51) 9203564, 9206137 Fax: (92-51) 9202108 2nd Floor, PIDC House, Dr.Zia-ud-Din Ahmed Road, Karachi PAKISTAN Tel: (92-21) 5685073-76 Fax: (92-21) 5685071
Karachi:
Board of Investment Islamabad: Attaturk Avenue, G-5/1, Islamabad PAKISTAN Tel: (92-51) 9206161, 9207531, 9202845 Fax: (92-51) 9217665, 9203281, 9206160 Godrej, Kandawala Building, M. A. Jinnah Road, Karachi Tel: (92-21) 9215067 Fax: (92-21) 9215078
Karachi:
252
Important Addresses
FEDERAL MINISTRIES
Name & Addresses Ministry of Interior Pak. Sectt. R Block, Islamabad Ministry of Finance & Economic Affairs, Pak Secretariat, C Block, Islamabad. Ministry of Commerce, Pak Secretariat, A Block, Islamabad. Ministry of Communications, Pak Secretariat, D Block, Islamabad. Ministry of Environment, Local Government & Rural Development, UBL Bldg., 7th-9th Floor, Jinnah Avenue, Islamabad. Ministry of Food & Agriculture Pak Secretariat, B Block, Islamabad. Ministry of Foreign Affairs, Sector G-5, Islamabad. Ministry of Health, Pak Secretariat, C Block, Islamabad. Ministry of Industries, Pak Secretariat, A Block, Islamabad. Ministry of Information & Media Development, Cabinet Block, Islamabad. Phone no. (92-51) 9202060 (92-51) 9209657 (92-51) 9210086 (92-51) 9202253 Fax No. (92-51) 926380 E-mail aurpk@hotmail.com
(92-51) 9205166
eco@paknet2.ptc.pk
(92-51) 9210277
(92-51) 9203104
minscom@moc.gov.pk
(92-51) 9201252
(92-51) 9221300
Minscom@moc.gov.pk
(92-51) 9224579
(92-51) 9202211
pakepa@isb.compol.com
(92-51) 9210351
(92-51) 9221246
faridsahib@yahoo.com
(92-51) 9210335
(92-51)9207400
pakfo@yahoo.com
(92-51) 9211622
(92-51) 9205481
sehat@apollo.net.pk
(92-51) 9211709
(92-51) 9205130
mind@isb,paknet.com.pk
(92-51) 9212009
(92-51) 9201350
informationsecretary@pak.gov.pk
Ministry of Labour & Manpower, Pak Secretariat, B Block, Islamabad. Ministry of Water & Power, Pak Secretariat, A Block, Islamabad.
(92-51) 9213686
(92-51) 9203462
(92-51) 9211852
(92-51) 9206272
mwp@isb.paknet.com.pk
253
Important Addresses
PAKISTAN TRADE OFFICES ABROAD

AUSTRALIA (Sydney) Consul General Consulate General of Pakistan Level 10, Show House,49-51, York Street, Sydney GPO Box 5256, Sydney 1044 Tel: (Off) (61-2) 2993066 Tel: (Res) 94983704 Fax: 92997319 E-mail: parepsydney@syd.comcen.com.au Web-site: www.pakistan.org.au DUBAI Consulate General of Pakistan, (Trade Division), Khild Bin Waleed Road, P.O. Box 340,Bur Dubsi. (+791-4)3972425-3970412-3972707 Ress: 3594044 Fax 3976599 E.mail: paktradedxb@arocormail.de. CHINA (Beijing) Commercial Counsellor Embassy of Pakistan, (Commercial Section) No. 1, Dong Zhi Men Wai Da Jie Beijing 100600 Tel: (Off) (86-10) 65322872-65322581 Fax: (86-10) 65322872 E-mail: pakcomm@public.bta.net.cn pakrep@public.bta.net.cn(Dip) CANADA (Montreal) Consul General Consulate General of Pakistan # 3421 Peel Street, Montreal Quebec, H3A IW7, Tel: (Off) (1-514) 8452297-98 Res: 8468804 Fax: 8451354 E-mail: parepmontreal@spring.ca Web-site: www.global.net.pakistan GERMANY (Frankfurt) Commercial Counsellor Consulate General of Pakistan (Commercial Division) Darmstadter Landstr 199, 60598 Frankfurt am Main Tel: (Off) (49-69) 697697-20 E-mail: pakistan@t-online.de AFGHANISTAN (Kabul) Embassy of Pakstan. Commercial Section Tel: 0093-20-230091 2300913 BELGIUM (Brussels) Economic Minister Pakistan Mission to the European Communities, Belgium & Luxembourg 57-Avenue Delleur 1170 Brussels Tel: (Off) (32-2) 6738007-618816-6470680 Fax: (32-2) 6753137 E-mail: econ@infoboard.be Ghani.suleman@belgacom.net Sulemanghani@hotmail.com
BANGLADESH (Dhaka) Commercial Secretary High Commission for Pakistan, (Commercial Section) House No. NE (C ) 2, Road No. 71, Gulshan Avenue, Dhaka 1212 Tel: (Off) (880-2) 871900, 885388-89 Fax: 872254 Res: 873316 E-mail: parepdka@bangla.net pakcom@bol-online.com FRANCE (Paris) Commercial Counsellor Embassy of Pakistan (Commercial Section) 116-Bis, Av. Des. Champs Elyees 75008 Paris Tel: (Off) (33-1) 45628915(Dip)45635362(Dir)Fax: 45635366 E-mail: comm.@club-internet.fr HUNGARY (Budapest) Commercial Assistant Embassy of Pakistan (Commercial Section) Adonisz U.3/a, Budapest-1125 Tel: (Off) (36-1) 3558017-3558210 222057 Cmrph Fax: (36-1) 3751402 E-mail: pakemb@mail.matav.hu
254
Important Addresses
INDONESIA (Jakarta) Commercial Secretary Embassy of Pakistan (Commercial Section) jl. Teuku Umar, 50, Monteng, Jakarta Tel: (Off) (62-21) 3144008-9 Res: 7222643 Fax: (62-21) 3103947 61739 INTRADIA
HONG KONG Consul General Consulate General of Pakistan, Room # 3706, 38th Floor, China Resources Building, 26-Harbour Road, Wanchai Te: (Off) (852-5) 28271966, 28270681 Res: 25519533 Fax(825)2827-1066-2827-1066 E-mail: pakcon@netvigator.com IRAN (Tehran) Commercial Counsellor Embassy of Pakistan Khayaban-e-Dr. Hussain Fatimi, Avenue, P.O Box 4551-11365, Tehran Tel (Off)(98-21) 6944888-90 Res: 8090166 Fax: 935154 E-mail: pakembteh@hotmail.com tehrancomm@yahoo.com JAPAN (Tokyo) Commercial Counsellor Embassy of Pakistan (Commercial Section) 2-14-9, Moto-Azabu, Minato-Ku, Tokyo 106 Tel (Off) (81-3) 345445088-34544861-4 Res: 35840520 Fax: (81-3) 34514280 E-Mail: comsec@iac.co.jp eptfail@iac.co.jp(Dip) KENYA (Nairobi) Commercial Secretary High Commission for Pakistan (Commercial Section) St. Michael Road, Off Church Road Off Waiy Akiway,Westlands,P.O. Box 30045 Nairobi Tel (Off) (254-2) 443911-12 Res: 562537 Fax: 446507 E-mail: parep@met.2000.ke.com
INDIA (New Delhi) Commercial Secretary High Commission for Pakistan (Commercial Section) Nbo.2/50-G, Shantipath, Chanakyapuri, New Delhi-110021 Tel (Off) (81-31) 6888121-6110601-467004 Res: 6149646 81-31-65270 PAREP IN Fax: (91-11) 6872339-6888353 E-mail: pakhc@unda.vsnl.net.in ITALY (Rome) Commercial Counsellor Embassy of Pakistan (Commercial Section) Via Della Camillucia 682, 00135-Rome Tel (Off) (39-6) 3296660, 3294836 Res: 30880672 620890 PAREPI Fax: (39-6) 3296660 E-mail: pareprome@linet.it KAZAKHSTAN (Almaty) Commercial Counsellor Embassy of Pakistan (Commercial Section) 25-Tulebaeva Street, Almaty Tel (Off) (7-3272) 333831-331502 332678 335962 Res: 335572 251251 EMBPK SU Fax: 506225 E-mail: parepalmaty@hotmail.com
255
Important Addresses
KOREA SOUTH (Seoul) Commercial Counsellor Embassy of Pakistan (Commercial Section) 258-13, Itaewon 2-Dong, Youngsan-gu Seoul Tel: (Off) (82-2) 7968252-53 29346 K PAREP Fax: (82-2) 7961141 E-mail: plkistn@elim.net NETHERLANDS (The Hague) Commercial Secretary Embassy of Pakistan Amalia Street 8, 2514 JC The Hague Tel: (Off) (31-70) 3648948-9 Res: 3282437 Fax: 3658474, E-mail: parepnl@wanadoo.nl SAUDI ARABIA (Jeddah) Consul Commercial Consul General of Pakistan (Commercial Section) 60-Sh. Ibrahim Al-Tassan, Street 19, Mushrifa Distt, Eneikesh 17-N, 7-E, Jeddah 21411 Tel (Off) (996-2) 6692371-6691047-6691051 Fax: 6693309 E-mail: parepjeddah@zajil.net SOUTH AFRICA (Johannesburg) Commercial Secretary Trade Commission for Pakistan 59 Oxford Road, Saxonwold 2196, Johannesburg Tel: (Off) (27-11) 6465596-6462634 Res: 4860155 E-mail: Pakistan@786.co.za SPAIN (Madrid) Commercial Counsellor Embassy of Pakistan (Commercial Section) Av.PIO XII No. 11, 28016-Madrid Tel:(Off) (34-91) 3459138-3504943 Res: 5343519 Fax: 3504946 E-mail: parepmadrid@hotmail.com comercio@embajadapakistan.org.
MALAYSIA (Kaula Lumpur) Commercial Secretary High Commission for Pakistan, (Commercial Section) 132-Jalan Ampang 50450 Kuala Lumpur Tel: (Off) (60-3) 21618877-79 Res: 45724415 Fax: (60-3) 21625843 E-mail: chmali@pc.jarring.my OMAN (Muscat) Commercial Assistant Embassy of Pakistan (Commercial Section) Bldg. # 15, Area, 16/A, Al-Khuwair, P.O. Box # 1302, Postal Code 112, Ruwi Muscat Tel: (Off) (9-68) 603439- 603343 Fax: 697462, E-mail: Pakistan@gto.net.com SINGAPORE Commercial Secretary High Commission for Pakistan (Commercial Section) Shaw Centre # 24-02/04 I Scott Road, Singapore 228208 Tel (Off) (65) 7345747, 7376988 Res: 7358805 Web-site: www.parep.org.sg RUSSIA (Moscow) Commercial Counsellor Embassy of Pakistan (Commercial Section) 17-Sadova Kudrinskaya, Mosco Tel: (Off) (7-95) 2542261 2549791, 2547201 Res: 2434822 Fax: 9569097 E-mail: pakist@paktrad.msk.ru SWEDEN (Stockholm) Commercial Counsellor Embassy of Pakistan (Commercial Section) Karlavagen 65,Itr 11449 Stockholm Tel: (Off) (46-8) 203300 Fax: 249233 E-mail: parepstockhoim@swipnet.se www.pakistanembassay.se
256
Important Addresses
SWITZERLAND (Geneva) Permanent Mission of Pakistan, Geneva. Permanent Mission to the Uited Nations, 56,Rue de Moillebeau, 1209 Geneva. Permanent Mission of Pakistan 56, Rue de Moillebeau, 1211 Geneva-19 Tel: (Off) 004122-7347760 Res: 7331082-7332910 412934 PAK CH Fax: (41-22) 7348085 E-mail: Pakistan@itu.ch Mission.Pakistan@itu.int TURKEY (Istanbul) Consul General Consulate General of Pakistan Abide-I-Hurriyet Cad. Gecit Sokat # 11,Kat 6, Hacionbasilar Is Hani Sisli,80270 Istanbul, Turkey Tel: (Off) (90-212) 2335800-2335801 Res: 2743839 (0607) 26850 PKIS TR Fax: (90-212) 2335802 E-mail: pakcon@comment.com.tr U.A.E. (Dubai) Commercial Secretary Consulate General of Pakistan (Trade Division) Khalid Bin Waleed Road, P.O. Box 340, Bur Dubai, Dubai Tel (Off) (971-4) 522425-524412-524417 Res: 594044 Fax: 552599 E-mailL parepdub@emirates.net.ae paktradedxb@hotmail.com U.S.A. (I) (Los Angeles) Commercial Counsellor Consulate General of Pakistan (Trade Division) 10850 Wilshire Blvd.Ste 510, Los Angeles,CA 90024. Tel: (Off) (310) 4746861 Res: 2745406 Fax: 474871 E-mail: pakcomm@aol.com
THAILAND (Bangkok) Commercial Counsellor Embassy of Pakistan (Commercial Section) 31, Soi Nana Nua (3), Sukhumvit Road Bangkok. 10110 Tel: (Off) (66-2) 2530288-2530289 Fax: (66-2) 2535325 E-mail: iftikhar@katsi.th.com pktrade@m-web.th.com
U.A.E (Abu Dhabi) Minister Trade Embassy of Pakistan (Commercial Division) Plot # 2, Sec. W-59, Diplomatic Enclave, P.O. Box 846, Abu Dhabi Tel: (Off) (971-2) 492081-447800 Extn. 29 Fax: (971-2) 49076, 447172 E-mail: tradedi@emirates.net.ae U.K. (London) Commercial Secretary High Commission for Pakistan (Trade Division) 36, Lowndes Square, London SWIX 9JN Tel (Off) (44-171) 6649215 Res: (44-181) 3983232 Fax: (44-171) 6649291 E-mail: ecodiv@hotmail.com U.S.A. (II) (Washington DC) Embassy of Pakistan, 3517 International Court, NW Washington DC 20008 Tel: (Off)202-243-3266 Res: 703-821-1148 Fax: 202-686-1495&202686-1589 E-mail: Web-site: compk@ren.com
257
Important Addresses
U.S.A (NEW YORK) Consulate General of Pakistan (Commercial Division) 12 East,65th Street, New York NY 10021 Tel: (Off) (212) 4726129-8795800(Ext.12) Res: (914) 7259043 Fax: (212) 4726780 E-mail: paktrade@qwest.net Web-site: Pakistan-embassy.com
UZBEKISTAN (Tashkent) Commercial Secretary Embassy of Pakistan (Commercial Division) Building No: 15-Abdurakhmonov Street, Sobir Rakhimov District,Tashkent Uzbekistan: (Off) (998-712) 481219 Res: 1394144 Fax: 1446478 E-mail: Commdiv@online.ru
258
Important Addresses
IMPORTANT WEB-SITES
Name of Government Offices/Organizations Islamic Republic of Pakistan Government of Sindh Government of Punjab Ministry of Finance Ministry of Foreign Affairs Ministry of Science & Technology (MOST) Ministry of Petroleum & Natural Resources (MPNR) Ministry of Environment Privatization Commission Pakistan Software Export Board State Bank of Pakistan (SBP) Export Promotion Bureau Export Processing Zones Authority Pakistan Small & Medium Enterprise Development Authority (SMEDA) Securities & Exchange Commission of Pakistan Central Board of Revenue Pakistan Trade Office Federation of Pakistan Chambers of Commerce & Industry Karachi Chamber of Commerce & Industry Lahore Chamber of Commerce & Industry Sialkot Chamber of Commerce & Industry Sarhad Chamber of Commerce & Industry Pakistan Industrial Credit & Investment Corporation Pakistan Computer Bureau Pakistan Housing Authority (PHA) Corporate & Industrial Restructuring Corporation Experts Advisory Cell Web-site Addresses http://www.pak.gov.pk http://www.sindh.gov.pk http://www.punjab.gov.pk http://www.finance.gov.pk http://www.forisb.org http://www.most.gov.pk http://www.mpnr.gov.pk http://www.environmentgov.pk http://www.privatisation.gov.pk http://www.psf.gov.pk http://www.sbp.org.pk http://www.epb.gov.pk http://www.epza.com.pk http://www.smeda.org http://www.secp.gov.pk http://www.cbr.gov.pk http://www.paktrade.org http://www.fpcci.gov.pk http://www.karachichamber.com http://www.lcci.org.pk http://www.scci.org.pk http://www.scci.org.pk http://www.picic.com http://www.pcb.gov.pk http://www.pha.gov.pk http://www.circ-gov.com http://www.eac.gov.pk
259
Important Addresses
FOREIGN AIRLINES
Air Lanka, Services Club, Extension Building, 2 Floor, Karachi Tel: (021) 5680382-5678286 Fax: 5675863 th Air China, 25/C, 24 Street, Block-6, P.E.C.H.S. Karachi Tel: (021) 4542559 Fax: 5682195 Malaysian Airlines, 23-Shopping Arcade, Sherton Hotel, Karachi Tel: 5682629 Fax: 5682195 Air France, Marriott Hotel, Abdullah Haroon Road, Karachi Tel: 5681071-5 Fax: 5684815 British Airways, Marriott Hotel, Abdullah Haroon Road, Karachi Tel (021) 5686076-7 Fax: 5684302 Block No. 10, Blue Area Islamabad. Tel: (051)564702, 565413 Fax: 563672 Biman Bangladesh Airlines, 7-Averi Plaza, Sharah-e-Faisal, Karachi Tel: (021) 5682008 Fax: 5662008 Egypt Air, Avari Plaza, Avari Plaza, Shahrah-e-Faisal, Karachi Tel: 5689605, 5661125 Fax: 5688790 Emirates Airlines, 265, R.A. Lines, Sarwar Shaheed Road, Karachi Tel: (021) 5684500 Fax: 5684860 Ethiopian Airlines, Hotel Metropole, Karachi Tel: (021) 5684025 Fax: 5661715 Gulf Air Kashif Centre, Shahrah-e-Faisal, Karachi Tel: 5682265, 5678270 Fax: 5683643 Iran Air, 10-Hotel Mehran, Karachi Tel: 516293, 5678274 Fax: 5684055 Indian Airlines, Shaheen Complex, M.R. Kayani Road, Karachi Tel: 2625023 Kuwait Airways, Hotel Sherton, Club Road, Karachi. Tel: 2625023 Fax: 5680478 Kenya Airways, 4-Lakson Square, Building No. 2 Sarwar Shaheed Road, Karachi Tel: 5685066 Fax: 5680056 Royal Jordanian Airlines, Hotel Metropolis, Karachi. Tel: 5660440 Fax: 5682026
nd
Swiss Air, Hotel Metropolis, Karachi Tel: 56862307, Fax: 5681510 Singapore Airlines, 2&3 Service Club, Extension Building, Sharah-e-Faisal, Karachi Tel: 5686198, Fax: 5683695 Saudi Arabian Airlines, Hotel Holiday Inn Crown Plaza, Shahrah-e-Faisal, Karachi. Tel: 5682525 Fax: 5688872 Syrian Arabian Airlines, 6 Club Road, Lotia Building, Karachi. Tel: 5660156/59 Fax: 5660684 Thai Airways International, Hotel Metropolis, Karachi Tel: 5660156/58/59 Fax: 5660684
Turkish Airlines, Sideo Avenue Centre, Starchen Road, Karachi. Tel: 5670069 Fax: 5660684 Turkmenistan Airways, Sea Breaze Plaza, Shahrah-e-Faisal, Karachi. Tel: 7784042 Uzbekistan Airways, Avari Plaza, Shahrah-e-Faisal, Karachi. Tel: 5675939 Fax: 5675943 Tajik Air, Flower Lines, Institute of Engineering Building, Shahrah-e-Faisal, Karachi. C/o TABANI CORPORATION XINJIANG Airlines of China, Shop No. 3 Sohrab Plaza Block 32 Jinnah Avenue F-6/4, Blue Area, Islamabad Tel: 051-273446, 27447 Fax: 273448 Yeminia, Yemen Airways, Hotel Metropolis, Karachi. Tel: 568008 / 5681655 Fax: 5684282 Oman Airways, C/O Jerrys International (Pvt.) Ltd., Hotel Metropolis, Karachi. Tel: 565092 Fax: 5689700 Qatar Airways, Service Club, Extension Building, Merewether Road, Karachi. Tel: 567804 Fax: 5683508 Cathy Pacific, Hotel Metropolis, Karachi. Tel: 5660391, 5660406 African Airlines, 12/C/3 Waqar Building, Block A, SMCHS Karachi. Tel: 455231, 455901 Fax: 4552702
260
Important Addresses
MAJOR HOTELS
ISLAMABAD Holiday Inn, Civic Centre, G-6/2 Tel: 2827311-19 Fax: 2273273 E-mail: holiday@osn.comsats.net.pk Marriott Agha Khan Road, Tel: 2826121-35 Fax: 2820648-2825113 E-mail: guest@isb.marriott.infolink.net.pk RAWALPINDI Pearl-Continental, The Mall, Tel: 5566011, Fax: 5563927-5566008 E-mail:hotelrp@isb.comsats.net.pk pcisb@hotel.isb.erum.com.pk BHURBAN Pearl-Continental Tel: (051) 427082, Fax: 427081 E-mail: pchotel@bhurban.isb.erum.com.pk KARACHI Marriott, Abdullah Haroon Road, Tel: 5680111, Fax: 5681610-5689510 E-mail: kmh@marriott.khi.brain.net.pk Web-site: http://www.indusweb.com/marriott Avari Towers, Fatima Jinnah Road Tel: 5660100 Fax: 5680310 E-mail: avarigst@khi.comsats.net.pk Web-site: www.avari.com Sheraton, Club Road Tel: 5681021 Fax: 5682875 E-mail: kshbel@cyber.net.pk Pearl Continental Ziauddin Ahmad Road Tel: 5685021-20, 111-505-505 Fax: 562655 E-mail: pckhi@hotel.khi.erum.com.pk Regent Plaza Hotel and Convention Centre, Regent Plaza, Shahrah-e-Faisal Tel: 5660611 Fax: 5687202 KARACHI Beach Luxury Tamizuddin Khan Road. Tel: 5611031 Fax: 5611625 E-mail: beachlux@khi.comsats.net.pk LAHORE Pearl Continental Shahrah-e-Quaid-e-Azam Tel: 6360210 Fax: 6362760-6364362 E-mail: pclhr@hotel.lhr.erum.com.pk Avari Lahore Shahrah-e-Quaid-e-Azam, Tel: 6365366, Fax: 6365367 E-mail: avarigst@khi.comsats.net.pk Flettis Egerton Road, Tel: 6363946-50 Fax: 6364819 PESHAWAR Pearl Continental Khyber Road, Tel: 276361 Fax: 271095 E-mail: pcpsw@hotel.psw.erum.com.pk QUETTA Serena Hotel, Shahrah-e-Zarghoon, Tel: 820071-79 Fax: 820074 E-mail: Qshlak@infolink.net.pk Web-site: www.serena-hotel.com SWAT Serena hotel, Saidu Sharif, Tel: 711640-41, 710518 Fax: 710402 Web-site: www.serena-hotel.com
261
Important Addresses
Ministry of Industries & Production + Support Organizations

Ministry of Industries & Production A&D Block, Pak Secretariat, Islamabad Ph: # 051-9201992/9 Fax: # 051-9205130 & 9202165 Experts Advisory Cell (EAC) SEDC Building, (STP) 5-A, Constitution Avenue, Islamabad Tel: 051-9205595-98 Website: www.eac.gov.pk Engineering Development Board (EDB) House No. 23, Street No. 87, Sector G-6/3, Islamabad Ph: 051-9203134 Fax: 051-9205324 Website: www.engineering.industries.info Small & Medium Enterprises Development (SMEDA) 1st Floor, Waheed Trade Complex, 36 - XX, Khayaban-e-Iqbal, D.H.A. Lahore Ph: 042-5899757-64, 5896618 Fax: 042-5896619, 5899756 Website: www.smeda.org Pakistan Industrial Technical Assistance Centre (PITAC) Moulana Jalal-ud-Din Roomi Road, Lahore Ph: 042-9230699, 9230702 Fax: 042-9230589 Website: www.pitac.gov.pk Textile Commissioners Organization (TCO) 2nd Floor, Godrej Kandawala Building, M.A. Jinnah Road, Karachi Ph; 021-9215075-76 Fax: 021-9215014 National Productivity Organization (NPO) House No. 42-A, Nazimuddin Road, F-7/4, Islamabad Ph: 051-9215980-3 Fax: 051-9215984-5 Website: www.npo.gov.pk Export Processing Zone Authority (EPZA) Landhi Industrial Area Extension, Mehran Highway, Karachi Ph: 021-5082001-2 Fax: 021-5082009, 5082005 Website: www.epza.com.pk E-Mail: leza@super.net.pk Pakistan Industrial Development Corporation (Pvt) Limited, 2nd Floor, PIDC House, Dr. Ziauddin Ahmed Road, Karachi Ph: 021-5685041-9 Fax: 021-9204376 E-Mail: pim@pimkhi.erum.com.pk Threadline Gallery of Pakistan Super Market, Islamabad Ph: # 051-9202130 Department of Explosives 3rd Floor, Shafi Court Building, Merewether Road, Karachi Ph: 021-9202198 Fax: 021-9202199 Department of Patent & Design 2nd Floor, Kandawala Building, Adjacent Nishat Cinema, Karachi, Ph: 021-9215488 Fax: 021-9215489
262

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Message from Prime Minister Islamic Republic of Pakistan

Experts Advisory Cell

Message from Minister for Industries & Production

MESSAGE FROM MINISTER FOR INDUSTRIES & PRODUCTION

analytical insight to create enabling promote enhance development,

Experts Advisory Cell

Message from Minister for Industries & Production

information on investment climate opportunities Extensive efforts have been made to

Liaquat Ali Khan Jatoi Minister for Industries & Production

Experts Advisory Cell

Message from Secretary, Industries & Production

MESSAGE FROM SECRETARY INDUSTRIES & PRODUCTION

Muhammad Javed Ashraf Hussain Secretary Industries and Production

Experts Advisory Cell

TABLE O`F CONTENTS

Experts Advisory Cell

Immigration Procedures Existing Business Visa Policy .......................................................................... 152

IMPORTANT ADDRESSES ........................................................................252

Experts Advisory Cell

Experts Advisory Cell

Pakistan Basic Facts (2002-03)

PAKISTAN BASIC FACTS (2002-2003)

Experts Advisory Cell

Pakistan Basic Facts (2002-03)

Total Imports Major Commodities

Major Crops Major Industries

Banks & Financial Institutions Nationalized Scheduled Banks

De-nationalized Scheduled Banks

Private Scheduled Banks

Experts Advisory Cell

Pakistan Basic Facts (2002-03)

Foreign Banks i. Development Financial Institutions ii. Investment Banks 1. 2. 3. 4. 5.

Pakistan Basic Facts (2002-03)

o Housing Finance Companies

o Micro Finance Banks

25. Khushali Bank 26. The First Microfinance Bank Ltd.

Experts Advisory Cell

Pakistan Basic Facts (2002-03)

Experts Advisory Cell

Pakistan Basic Facts (2002-03)

Experts Advisory Cell

Pakistan Basic Facts (2002-03)

Pakistan Basic Facts (2002-03)

Experts Advisory Cell

Pakistan Basic Facts (2002-03)

Export Credit Agencies

Experts Advisory Cell

Pakistan Basic Facts (2002-03)

SETTING UP A BUSINESS IN PAKISTAN

Pakistan Basic Facts (2002-03)

Experts Advisory Cell

Pakistan Basic Facts (2002-03)

Agriculture Manufacturing Construction Electricity & Gas Mining and Quarrying

23.7% 18.4% 3.3% 3.4% 0.5%

15.5% 9.9% 6.6% 6.2% 2.4% 10.1%

Source: Economic Survey Statistical Supplement 2002-03

CURRENT STATUS OF INDUSTRIAL INVESTMENT

102,727 24,998 77,729 84,688 24,998 59,690 18,039 18,039

100,668 13,775 86,893 80,872 13,775 67,097 19,796 19,796

115,764 1,365 114,399 94,322 1,365 92,957 21,442 21,442

131,107 1,560 129,547 107,852 1,560 106,292 23,255 23,255

Source: Economic Survey of Pakistan 2002-03

Experts Advisory Cell