ANALYSIS OF

PAKISTAN
INDUSTRY
Prepare By
Neelam Naseem khan, MBA In Supply Chain Semester 6th
Dadabhoy Institute of Higher Education

one
Assignment No 1

Submitted To
Professor Dr. Gobind Herani
Date: 10–August– 2k19

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Q1: What do you know about automobile industry of Pakistan? And what
do you expect future of it?
AUTOMOBILE INDUSTRY OF PAKISTAN
The automobile industry in Pakistan includes companies involved in the
production/assembling of passenger cars, light commercial vehicles, trucks, buses,
tractors and motorcycles. The Automotive Parts industry has shown a progressive
growth in the last several years and different type of automotive parts has been
developed locally.
The shortage of technology transfer in the vendor industry has not yet been achieved
due to vested interests of Vehicle Assemblers. Pakistan has the 6th largest population
while 50 percent of the total population is below 30 years in age.
There are over 90 million young potential consumers demand for cars and other
passenger vehicles is being increased day by day, but existing auto manufacturers
and assemblers are unable to match the demand. After the oil & petroleum sector,
auto industry sector in Pakistan is the second largest taxpayer in the country.
It is also noted that the overall performance of Pakistan automotive sector has not
met its genuine potential. Motorcycle segment has shown remarkable results but the
car segment with few exceptions is providing lesser technology and features as
compared to global market. Small cars segment the technology still used has been
phased out in the international market and the safety features like air bags and ABS
brakes etc. are not provided and most of the cars come with inefficient fuel
technology engines.
Car assemblers are continuously increasing prices and making huge profits by not
providing Pakistani consumer with the features essential in global markets of the
same make and model. The passenger taxi car has many issues like lack of safety and
reliability features, surplus production capacities and lack of competition in Pakistan
market. Instead of solving these issues the government relaxed the import of used
cars.
Research and development are essential for the growth of this sector. Government
should encourage R&D by giving sales tax exemptions on new products, or cost-
sharing with local firms through technology development funds. Foreign
participation and increased investments in the domestic sphere can phenomenally re-
establish the industry along worthwhile lines.

Auto industry is employing around 2.5 million direct and indirect labors and had a
lot more untapped potential which was linked to predictable and transparent policy.
The industry needs support from the government in terms of transparent and
consistent policies to regain its lost status both at the front of utilization and
production level.

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Q2: Describe in detail the process of industrialization since establishment of
Pakistan?

PROCESS OF INDUSTRIALIZATION SINCE

ESTABLISHMENT PAKISTAN

INDUSTRIZATION

“The process in which a society or country (or world) transforms itself from a
primarily agricultural society into one based on the manufacturing of goods and
services. Individual manual labor is often replaced by mechanized mass production
and craftsmen are replaced by assembly lines.

BACKGROUND OF INDUSTRIAL SECTOR

 Pakistan at the time of partition in 1947, had negligible industrial base.

 Out of 921 industrial units operating in the British India, Pakistan got only 34
industries i.e. 4%of the total industries established in the Subcontinent.

 There was no steel industry worth the are in Pakistan, whereas India had a sound
industrial base at the time of Independence.

 Since the division of the Subcontinent, the Government of Pakistan has been
utilizing all available resources domestic as well as external for rapid
development of the manufacturing sector.

 The Government of Pakistan being aware of the importance of industrialization

for rapid growth and development, called an Industrial Conference in
December,1947. The Industrial Conference recommended the establishment of
industries which use locally produced raw material like jute, cotton, hide and
skins.

 In order to expand the scale of production, the private enterprise was to be

encouraged to set up industries.

 In the period from 1947 to 1950, the private entrepreneurs invested in those
industries which showed the highest profit. The contribution of industrial sector
was 6.9% to GDP in 1950.

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 INDUSTUSTRIES OF PAKISTAN
Textile
Sport Teleco Ceme Surgic Oil &
s m nt al gas

Defens Auto
Sugar Feshion Fertilizer chemical
e Mobile

TEXTILE INDUSTRY
Historically, Pakistan’s textile industry and clothing sector has always been a major
contributor to the foreign exchange earner and still contributes

Achievements
 4th largest grower of cotton after USA, China and
India.
 3rd largest consumer of cotton.
 3rd largest exporter of cotton textiles.
 2nd largest supplier of cotton yarn with 26% share
 of the international market.

PRODUCTS

1st 2nd 3rd

•Power loom •Blanket •Textiles
products •Winter shawls products
•Wool fabrics •Hand •Handicrafts
•Scarf embroidered
shawls

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 STATISTIC

EXPORT

FERTILIZER INDUSTRY
Fertilizer is any organic or
inorganic material of
natural or synthetic origin
(other than liming
materials) that is added to
a soil to supply one or
more plant nutrients
essential to the growth of
plants.

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 FERTILIZER PRODUCTS
FERTILIZAR INDUSTRY
1. UREA UREA
2.1
2. DPA 5.7 2.9 DPA
5.5
3. NP NP
CAN
4. CAN SSP
18
5. SSP OTHERS
6. OTHERS 65.8

MAJOR FERTILIZER CO’S & GDP CONTRIBUTION

Employments
4.7 million
GDP Contribution
14%
Fauji Fertilizer Ltd
Engro Chemical Ltd
Sitara Chemicals
Ltd

CEMENT INDUSTRY
Cement industry is one of most prominent and energetic organization
having operations and interactions with cement industry.

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 ACHIEVEMENTS
Pakistan is ranked
5th in the world’s
cement exports
Pakistan exports
increased by 5th position leaving
47% in Germany behind
last fiscal year.

2008-09 Exported
(20.28 mt) $700m in past year

CEMENT COMPANIES IN PAKISTAN

 23 cement companies
 4 foreign companies
 3 controlled by the armed force
 19 companies are listed on the stock exchange

GDP: -

3.5% Contribution

Sugar industry
 At the time of independence in 1947, there
were only two sugar factories in Pakistan.
 At present there are 106 sugar mills operating
in Pakistan.
 It is the 2nd Largest industry in Pakistan after
Textile Industry.

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 SUGAR MILLS
Sugarcane Acreage In
Pakistan Ranks 15th
Total Of 106 Sugar Pakistan Is 5th
In The World For
Mills In The World And
Sugarcane
In The Country It Is Grown On Over
1 Million Hectares
Production

GDP Contribution
Per Capita
(0.7%)
Consumption
Employment
(26kg)
(1million)

SUGAR BY - PRODUCTS
Alcohol (used by pharmaceutical
industry)
Ethanol (used as a fuel)

SPORTS INDUSTRY
“Sports' are all forms of physical activity which, through casual
or organized participation, aim at expressing or improving
physical fitness and mental well-being, forming social
relationships or obtaining results in competition at all levels”

SPORTS GOODS
 Football
 Cricket bats
 Hockey sticks
 Boxing gloves
 Volley balls
 Swimming suits
 Golf balls
 Badminton rackets
 Basketballs

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 STATISTIC
The export of sports goods,
increased by 7.85% from  Companies of various sizes 2,400
US$39.180m →US$42.257m  Employments more than 200,000
last year  Exporting goods worth US$450 million
Sialkot export 70% of
total world demand for
hand-stitched inflatable
soccer balls (footballs).  Large exporters (more than 250 employees)
40 million balls annually  Medium exporters (100¡V250 employees)
worth US$210 million.  Small exporters (10¡V100 employees).
 Commercial exporters (1¡V9 employees).

TELECOM INDUSTRY
Telecommunication is the
transmission of information over
significant distances to
communicate
Main Categories
 Telephone
 Mobiles
 Internet

ACHIEVEMENTS
CONTRIBUTION
In 2008 Pakistan was the world’
s third fastest growing telecommunications
market 5% of its
Gross Domestic Product

Fixed-line subscriptions declined from a

peak of 5.2 million in 2005-06 to 3.4 million has created 220,000
in 2009-10 high-paying jobs in Pakistan

Pakistan traffic volume grew by 253 percent Pakistan is now a leader

compared to last year during the same in mobile usage in south Asia
period
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 MOBLI
TELENOR
NK

MAJOR TELECOM
WARID UFONE
COMPANIES IN
PAKISTAN ZONG PTCL

GLASS INDUSTRY
 The glass industry in Pakistan,
though developed, still has space for
improvement.
 There are about 37 glassworks in the
organized sector, with the production
capacity ranging between 10 tones and
200 tons per day.

The major ceramics industry is Karam

Ceramics, Swat Ceramics, Master Tiles,
Shabbir Tiles and EMCOR Industries.

Punjab Baluchistan GPA Sindh NWFP

73% 3% Contribution 5% 19%

IMPORT & EXPORT

Glass industry in Pakistan
comprises sixteen
manufacturers in the
organized sector which
(PAGMA)
produces over 90 per cent
Pakistan exported
of the indigenous
glass products
production within the
worth
Rs 60 million to
Rs 120 million
per annum during imports of various glass
2005-2010, from Rs 975 million to Rs 1,782
million, during last five years
83%. increase

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 LEATHER INDUSTRY
 The leather made ups and
finishing industries symbolize
an important division in
Pakistan.
 Earning approximately more
than 8 million $ as a foreign
exchange earnings to the
country.

LEATHER PRODUCTS
 Leather Garments
 Leather Goods PRODUCTION CAPACITY
 Footwear
 Leather Shoe
 Uppers Production capacity Production
 Tanning Tanned Leather 90 million ft2 60 million ft2
Leather Garments 7 million pieces 5 million pieces
 Leather Gloves Leather Gloves 10 million pairs 5 million pairs
Leather Footwear 200 million pairs 100 million pairs
LEATHER EXPORT MARKETS •The difference in production capacity and present
 Italy, Spain, Portugal, capacity is due to various reasons.
South Korea, Germany, Source: Pakistan Tanners Association
 France, UK, USA and UAE.

STATISTICS

Provide employment
More than 2300 to about 500,000
leather processing people
units

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 SURGICAL INDUSTRY
PAKISTAN SURGICAL INDUSTRIES (PVT) LIMITED
was established in 1974 and now has become
one of the leading manufacturers of Surgical.

SURGICAL PRODUCTS
 Surgical Instruments
 Dental Instruments
 Beauty Instruments

CONTRIBUTION IN ECONOMY
Indicator Value
To GDP (%) 0.42%
To Direct Employment (Numbers) 400-500,000
To Indirect Employment (Numbers) 600-,750000
To Exports (%) 1.21%

STATISTICS

Over 99% 2300 companies

production is are working in
done in this sector
Sialkot

Produces over Out of the

150m total
pieces/year production
worth Rs 22 over 95% is
billion exported
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 AUTOMOBILE INDUSTRY
The business of producing and selling
self-powered vehicles, including
passenger cars, trucks, farm equipment,
and other commercial vehicles

AUTOMOTIVE TNDUSTRY
PRODUCTS


Light Vehicles
Cars
CONTRIBUTION TO GDP
 Jeeps
 Tractors
 Trucks
 Motor
 Cycles

COUNTRY CONTRIBUTION
Automotive engineering is a driving
force of large-scale manufacturing,
contributing US$ 3.6 billion to
the national economy and engaging over
192,000 people in direct employment.

GDP Contribution of Different Sectors of

Economy
Agriculture 20.47% Industry 23.93% Services 55.60%
 Crops 9.90%  Manufacturing  Wholesale & Trade
17.25%
 Livestock 17.53%  Transport 11.80%
9.97%  Mining 2.39%  Finance & Insurance
 Construction 3.59%
 Fishing 0.33% 2.19%  Ownership & Dwelling
 Forestry 0.25%  Electricity & Gas
2.22%
 Public Administration &
1.80% Defense 5.4%
 Community & Social
Professional Services
10.22%

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Q3: Give overview of economy of Pakistan regarding GDP, workforce,
population, percentages of different sectors of economy etc.?

ECONOMY - OVERVIEW
Decades of internal political disputes and low levels of foreign investment have led
to slow growth and underdevelopment in Pakistan. Pakistan has a large English-
speaking population. Nevertheless, a challenging security environment, electricity
shortages, and a burdensome investment climate have deterred investors. Agriculture
accounts for one-fifth of output and two-fifths of employment. Textiles and apparel
account for most of Pakistan's export earnings; Pakistan's failure to diversify its
exports has left the country vulnerable to shifts in world demand. Pakistan’s GDP
growth has gradually increased since 2012. Official unemployment was 6% in 2017,
but this fails to capture the true picture, because much of the economy is informal
and underemployment remains high. Human development continues to lag most of
the region.

In 2013, Pakistan embarked on a $6.3 billion IMF Extended Fund Facility, which
focused on reducing energy shortages, stabilizing public finances, increasing
revenue collection, and improving its balance of payments position. The program
concluded in September 2016. Although Pakistan missed several structural reform
criteria, it restored macroeconomic stability, improved its credit rating, and boosted
growth. The Pakistani rupee, after heavy depreciation in 2013, remained relatively
stable against the US dollar in 2015-17. Low global oil prices in 2016 contributed to a
narrowing current account deficit and lower inflation. Remittances from overseas
workers continued to be a key revenue source, also mitigating the impact of the lack
of foreign investment and a growing trade deficit on the country’s current account.

Pakistan must continue to address several longstanding issues, including expanding

investment in education and healthcare, adapting to the effects of climate change and
natural disasters, improving the country’s business environment, reducing
dependence on foreign donors, and widening the country’s tax base. Given
demographic challenges, Pakistan’s leadership will be pressed to implement
economic reforms, promote further development of the energy sector, and attract
foreign investment to support enough economic growth necessary to employ its
growing and rapidly urbanizing population, much of which is under the age of 25.

To boost development, Pakistan and China are implementing the “China-Pakistan

Economic Corridor,” a $46 billion investment program targeted towards the energy
sector and other infrastructure projects that Islamabad and Beijing had agreed on in
early 2013.

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GDP (purchasing power $1.056 trillion (2017 est.)
parity) $1.003 trillion (2016 est.)
$960.2 billion (2015 est.)
note: data are in 2017 dollars
data are for fiscal years

GDP (official exchange rate) $278.9 billion (2015 est.)

GDP - real growth rate 5.3% (2017 est.)

4.5% (2016 est.)
4.1% (2015 est.)
note: data are for fiscal years

GDP - per capita (PPP) $5,400 (2017 est.)

$5,200 (2016 est.)
$5,100 (2015 est.)
note: data are in 2017 dollars
data are for fiscal years

Gross national saving 11.8% of GDP (2017 est.)

13.8% of GDP (2016 est.)
14.7% of GDP (2015 est.)
note: data are for fiscal years

GDP - composition, by end household consumption: 81.8%

use government consumption: 11.9%
investment in fixed capital: 14.2%
investment in inventories: 1.6%
exports of goods and services: 8.3%
imports of goods and services: -17.8% (2017 est.)

GDP - composition by sector agriculture: 24.7%

industry: 19.1%
services: 56.3% (2017 est.)

Population below poverty 29.5% (FY2013 est.)

line

Labor force 63.89 million

note: extensive export of labor, mostly to the Middle East, and
use of child labor (2017 est.)

Labor force - by occupation agriculture: 42.3%

industry: 22.6%
services: 35.1% (FY2015 est.)

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Unemployment rate 6% (2017 est.)
6% (2016 est.)
note: substantial underemployment exists

Unemployment, youth ages total: 8.6%

15-24 male: 8%
female: 10.6% (2014 est.)

Household income or lowest 10%: 4%

consumption by percentage highest 10%: 26.1% (FY2013)
share

Distribution of family income 30.7 (FY2013)

- Gini index 30.9 (FY2011)

Budget revenues: $45.64 billion

expenditures: $59.28 billion
note: data are for fiscal years (2017 est.)

Taxes and other revenues 14.9% of GDP (2016 est.)

Budget surplus (+) or deficit -4.5% of GDP (2016 est.)

(-)

Public debt 59.4% of GDP (2017 est.)

59.5% of GDP (2016 est.)

Inflation rate (consumer 4.1% (2017 est.)

prices) 2.9% (2016 est.)

Central bank discount rate 5.75% (15 November 2016)

6% (15 November 2015)

Commercial bank prime 7% (31 December 2017 est.)

lending rate 6.94% (31 December 2016 est.)

Stock of narrow money $117.2 billion (31 December 2017 est.)

$103.5 billion (31 December 2016 est.)

Stock of broad money $142 billion (31 December 2017 est.)

$126.8 billion (31 December 2016 est.)

Stock of domestic credit $165.2 billion (31 December 2017 est.)

$145.2 billion (31 December 2016 est.)

Market value of publicly $43.68 billion (31 December 2012 est.)

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traded shares $32.76 billion (31 December 2011 est.)
$38.17 billion (31 December 2010 est.)

Agriculture - products cotton, wheat, rice, sugarcane, fruits, vegetables; milk, beef,
mutton, eggs

Industries textiles and apparel, food processing, pharmaceuticals, surgical

instruments, construction materials, paper products, fertilizer,
shrimp

Industrial production growth 5% (2017 est.)

rate

Current Account Balance -$11.67 billion (2017 est.)

-$4.867 billion (2016 est.)

Exports $21.7 billion (2017 est.)

$21.71 billion (2016 est.)

Exports - commodities textiles (garments, bed linen, cotton cloth, yarn), rice, leather
goods, sporting goods, chemicals, manufactures, surgical
instruments, carpets and rugs

Exports - partners US 16.3%, China 7.6%, UK 7.4%, Afghanistan 6.5%, Germany

5.7% (2016)

Imports $48.21 billion (2017 est.)

$41.62 billion (2016 est.)

Imports - commodities petroleum, petroleum products, machinery, plastics,

transportation equipment, edible oils, paper and paperboard,
iron and steel, tea

Imports - partners China 29.1%, UAE 13.2%, Indonesia 4.4%, US 4.3%, Japan 4.2%
(2016)

Reserves of foreign exchange $20.02 billion (31 December 2017 est.)

and gold $22.05 billion (31 December 2016 est.)

Debt - external $75.66 billion (31 December 2017 est.)

$70.45 billion (31 December 2016 est.)

Stock of direct foreign $41.56 billion (31 December 2017 est.)

investment - at home $39.06 billion (31 December 2016 est.)

Stock of direct foreign $2.175 billion (31 December 2017 est.)

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investment - abroad $2.094 billion (31 December 2016 est.)

Exchange rates Pakistani rupees (PKR) per US dollar -

105.1 (2017 est.)
104.769 (2016 est.)
104.769 (2015 est.)
102.769 (FY2014 est.)
101.1 (FY2013 est.)

Fiscal year 1 July - 30 June

END

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