Pakistan Economy - News & Updates - Archive

[Neo]

SCCI asked to participate in Foreign Trade Bridge-II ​

ISLAMABAD (May 14 2008): A delegation of PakTurk Businessmen Association (PTBA) called on President Saarc Chamber of Commerce and Industry (SCCI) Tariq Sayeed and discussed prospects of business promotion between Saarc member countries and Turkey by increasing private sector engagements.

The delegation comprised A Cuneyt Zumrutpinar, President PTBA and Mehmet Necmettin Durmus, Managing Director of PTBA, said a SCCI press release here on Tuesday. Tariq Sayeed enlightened the top management of the PTBA about SCCI objectives and activities in the region to promote regional economic cooperation.

The delegation members invited the SCCI President to lead a delegation to the Turkey-Asia-Pacific Foreign Trade Bridge-II, which is scheduled for June 17-18 this year in Istanbul. They further elaborated that previously the Asia Pacific Summit in 2007 proved to be successful beyond expectations, resulting in some very productive work by bringing business communities of Turkey and Asia/Pacific together.

Last year, 12 ministries, 40 bureaucrats, 30 journalists and more than 250 businessmen from 14 Asia/Pacific countries came to Istanbul. These entrepreneurs met Turkish businessmen at bilateral meetings and laid foundations for a long-term trade volume of 2 billion dollars.

Zumrutpinar said that success and fruitfulness of the first event has encouraged the Confederation of Businessmen and Industrialists of Turkey to organise another such event under the co-ordination of the Prime Ministry's Under-secretariat for Foreign Trade of Republic of Turkey.

This time the event is being organised on a much bigger scale and the number of the participating countries and foreign businessmen increased from 14 to 22 and from 250 to 450 respectively, he said.

The major countries going to take part in the trade bridge include Afghanistan, Australia, Bangladesh, Cambodia, India, Indonesia, Japan, Korea, Laos, Malaysia, Maldives, Myanmar, Nepal, New Zealand, Pakistan, Papua New Guinea, Philippines Singapore, Sri Lanka, Thailand, Vietnam and Brunei.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Narrowing trade deficit ​

ARTICLE (May 14 2008): Our trade deficit for the ten months of the current fiscal has crossed $16 billion, and, it is feared, may hit $20 billion by the end of June 2008. The factors causing such undesirable state of affairs are known to all and sundry. What is lacking is a will to rectify the situation speedily.

Industrial production is hampered by the power shortages, and not likely to improve much in the near future because the power generation is not going to be enhanced any time soon. That leaves the agricultural and service sectors to fill the gap.

I. AGRICULTURAL SECTOR: From an export point of view, very little attention has been paid to the potential of Middle East markets for products (other than rice) for prime, semi-processed or fully processed farm products. Just consider a few items as an example:

A) LIVESTOCK:

i) Meat - Live animals; slaughtered and chilled; frozen; cooked and packed.

ii) Dairy products

iii) Hides & skins, leather goods, garments, footwear, sports goods, gloves, etc.

iv) Blood serum, bone meals etc.

v) Organic fertilisers

vi) Wool and woolen textiles etc.

vii) Handicrafts, like camel skin products etc.

viii) Stud farms and pedigree animal breeding (like race horses, camels, cats and dogs, and exotic animals, like deer, stags, ostriches etc).

ix) Fowls, Poultry, eggs etc.

x) Rare birds bred in captivity, like pigeons, partridges, quails, bustards, chikor, pheasants, peacocks, parrots and the like;

xi) Fodder and animal feed etc.

xii) Fish and sea food.

B) FRUITS AND VEGETABLES:

i) Fresh, frozen, dried, canned and processed

ii) Ready to use (washed, cut and chilled or frozen in small consumer packs) vegetables air-flown to super markets daily

iii) Cut and dried vegetables for off-season use (in consumer packs)

C) PLANTS AND CUT FLOWERS:

1) Ornamental and exotic tropical plants and flowers

2) Cut flowers and bouquets

3) Potted plants

4) Wrappings, packing materials, ribbons, strings, foliage, etc. These are just a few examples for potential markets.

FOLLOWING POINTS MUST BE NOTED:

1. Health, Quarantine and Phyto-Sanitary Certificates, conforming to International Standards are a MUST. Proper facilities, cold storage, warehouses and quarantine premises must be arranged at all key places and exit points as soon as possible.

2. Beef, Mutton (sheep) Veal (Lambs) and Venison are a huge import item in Iran and the Gulf countries. Cumulative estimates speak of an annual $10 billion market for meat products, and many times more for live sheep (around Hajj time mainly).

3. Goat meat is not favoured in Iran.

4. Cheese is a favourite food item in the Gulf region, but production in Pakistan and its marketing needs special attention.

5. Cut flowers have a worldwide demand if properly handled.

6. Potential exports from Pakistan, if properly organised, could yield between $8 and 10 billion annually, on above items alone, as our share of the bonanza.

II SERVICE SECTOR: With the wealth of computer science talent at our disposal, the existing opportunities for "out-sourcing" have not been fully exploited. With proper efforts, there is no reason why Pakistan should lag behind India, for instance, in this field. Goals must be set to achieve an annual target of $50 billion, in as short a time as possible. Besides earning foreign exchange, the vistas for gainful employment of talented youth are limitless.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

R&D issue to be resolved before budget: secretary textile ​

Thursday, May 15, 2008

KARACHI: Secretary Ministry of Textile Industries Abdul Rauf Chaudhry has assured textile exporters that the research and development (R&D) support issue will be resolved before budget presentation for next fiscal year in the National Assembly.

No date for the federal budget presentation for 2008-09 has been announced yet, but it is usually unveiled in the first or second week of June every year.

Chaudhry was responding to the queries made by members of Pakistan Readymade Garments Manufacturers & Exporters Association (PRGMEA) at a meeting held here on Wednesday. Textile Commissioner Muhammad Idrees Ahmed was also present in the meeting.

Secretary Textile, who took over the charge a week ago, added that the summary on R&D support, which was earlier sent to the textile ministry by industry stakeholders, was lying with him.

The summary demanded the government extend R&D support for another five years at the rate of nine per cent instead of current six per cent provided to the textile industry.

“I will hand over this summary to Secretary Finance in a meeting instead of sending it to him by mail service. I will also brief other government officials in the concerned ministries ie commerce on this issue. I will also discuss this issue with the members of Economic Coordination Committee (ECC) and federal cabinet. And I personally think that this R&D support be continued to the industry despite dismal garment exports,” he said.

The research and development support, a six per cent return of total amount of garments exports, is being provided to the textile exporters. This incentive would automatically come to an end with the end of current fiscal year on June 30.

Governor SBP Dr Shamshad Akhtar is of the view that R&D support is being misused by some industry players and should not be provided any more.

“Government had provided around Rs40 billion to the textile industry in R&D support till April 15 in the current fiscal year. Despite this massive support, the garment exports of the county declined by over three per cent to $7.765 billion in the first nine months of the current financial year against $8.017 billion exports recorded in the same period last year,” Dr Akhtar earlier briefed the ECC according to media reports.

Chaudhry said that he was surprised by the SBP Governor’s statement on R&D support. He was of the view that Dr Akhtar was not told the truth and needed briefing by some industry players.

Bilal Mulla, Chairman PRGMEA, claimed that R&D was not being misused. “If anyone from this industry is committing such crime, the Governor SBP should disclose his name and he should be penalised for that bad practice,” he demanded.

Citing official reports, Shahzad Salim, Chairman PRGMEA (South Zone), underlined that garment exports were increasing in countries where R&D support was available. Export proceeds to these countries rose to $3.2 billion in 2007 from $2.4 billion in 2005.

While exports to those countries, which were not given R&D support, declined to $0.17 billion in 2007 from $0.3 billion in 2005, he added.

Salim demanded of the government either to provide subsidies or provide level playing field in the world markets. “Our competitors i.e. India, China and Bangladesh are exempted from paying duties in major markets,” he added.

Readymade garment exporters also demanded increasing R&D support to 74 countries, as availed by fabric and home textiles players, from currently available only in 32 countries.

R&D issue to be resolved before budget: secretary textile

 

[Neo]

Corrective measures needed: economists ​

Thursday, May 15, 2008

LAHORE: The government should not expect a miracle to steer the country out of the current food crisis that is getting out of hand with every passing day as the policy-makers have not been able to come up with a viable policy to control the prices of staples.

Economists have warned that the situation could go out of control if corrective administrative measures are not immediately taken at both federal and provincial levels. They say the government should stop complaining about high international food prices. Most of the world’s hungry people do not use international food markets and most of those who use these markets are not hungry. The fact is that the international food markets, like the markets for everything else, are used primarily by the rich, not the poor.

In the world’s corn markets, the biggest importer by far is Japan, followed by the European Union. Next comes South Korea. Surely, citizens in these countries are not underfed. In the poor countries of Asia, rice is the most important staple, yet most countries of the continent import very little rice. Hunger is caused in these countries not by high international food prices, but by local conditions, especially rural poverty linked to low productivity in farming.

The planners in Pakistan must realise that the country has never been self-sufficient in food even in years when it exported wheat because 20 per cent of its under-nourished population had not the resources to buy it, which created wheat export surplus in those years. The economists say the under-nourished population is expected to double during current conditions as majority of the people could not afford to buy expensive food.

The food scarcity in Pakistan is so high that the Asian Development Bank, in its recent report, assessed that the country would need to import 1.117 million tons of food in 2008 against 1.9 million tons’ food import requirements of five times larger India.

They point out that the food basket carries a considerable weight in consumer expenditures averaging over 42 per cent of total expenses. Food inflation has been averaging over 20 per cent for the last four weeks. The economists point out that except for edible oil that has been impacted by the decline in rupee value there is no justification for increase in prices of other commodities that are produced in the country.

Targeted interventions might not work this time. There is a need to ensure stable supplies of all food items grown in Pakistan. They allege that the increase in rice prices was manipulated by local suppliers, however the government should have restricted rice exports to last year’s level when it was known that there was global food crisis. Pakistan currently accounts for 11 per cent of global rice exports, the same level as from India.

Similarly, they say, there is no rationale for increase in sugar prices that were already 50 per cent higher than world sugar rates. The government should not have promised to lift excess stocks of the sugar industry that triggered the price hike.

The economists say the increase in gram pulse rates was also irrational. The hoarders benefited from the leniency of the government to increase the prices beyond Rs50 per kg. Milk prices reached historic highs because the excessive milk available in remote villages could not be brought to cities in the absence of cold supply chains as established in India.

The Punjab government, they say, has until now succeeded in checking the hoarding and smuggling of wheat. It can now be expected that wheat produced in Pakistan would be used within the country if the present exercise continued till the end of harvesting.

The government should now strive for procuring 6.5 million tons of wheat as was done by the Punjab government. This would ensure sustained wheat supplies.

Corrective measures needed: economists

 

[Neo]

Comprehensive plan for power conservation.​

Clocks to be advanced by an hour, markets to close at 9pm from June 1​

ISLAMABAD, May 14: The federal cabinet has decided that all markets in the country will close by 9pm and clocks will be moved forward by an hour (GMT+6) from June 1 till the end of August to save energy during the peak summer season.

After the adjustment in the Pakistan Standard Time, sunrise in Islamabad will be at about 6am instead of 5am and sunset at about 8pm.

Similar moves to introduce ‘daylight saving time’ in the country have failed twice in the past.

In a special meeting on the energy crisis held here on Wednesday, the cabinet decided that international bids would be invited for generating 1,200 megawatts (MW) of electricity on a fast-track basis.

The industrial zones will observe scattered off days (on a rotation basis) and air-conditioners in all government offices will be switched off from 8am to 11am. Half of the streetlights will remain off during the three months.

The government will import 10 million energy-saving bulbs.

The country would face a shortage of 4,000MW during the summer, a far worse situation than it experienced last year, as a result of a 50 per cent (2,500MW) reduction in hydroelectric power generation because of less water in rivers and slower melting of snow, Water and Power Minister Raja Pervez Ashraf told journalists after the meeting.

He said that international bids for power generation would be offered at the current rates of the National Electric Power Regulatory Authority (Nepra) to attract investment. The offer will be closed as soon as the government achieves the target of 1,200MW.

The minister said the tendering and production process for power generation normally took at least three years but the government had decided to accomplish the task within a year and a half.

“If this energy generation and conservation plan is accomplished we will be able to get rid of loadshedding by the end of 2009,” he said.

He said a barge-based power plant would be imported to meet the need of Karachi and 1,200MW being used by the metropolis would be provided to other cities.

“We need to take tough decisions for power conservation,” Mr Ashraf said.

In reply to a question, the minister said the government would make efforts for the recovery of Rs207 billion various government departments and institutions owed to Wapda. He said an economically healthy Wapda will be able to function more efficiently.

Comprehensive plan for power conservation: Clocks to be advanced by an hour, markets to close at 9pm from June 1 -DAWN - Top Stories; May 15, 2008

 

[Neo]

Industrial output grows by 4.84pc: Annual target may not be achieved​

ISLAMABAD, May 14: Industrial production grew by a paltry 4.84 per cent in the first nine months of the current fiscal year, and it is feared that the annual industrial growth target of 10.5 per cent may not be achieved.

The slump in manufacturing production was witnessed in March 2007 when it grew by a meagre 3.23 per cent, the lowest growth recorded in any month of the past recorded history, Federal Bureau of Statistics (FBS) data revealed on Wednesday.

The figures for the past five months since November 2007 showed this downturn in the industrial growth due to the worst energy crisis, high cost of doing business, reduced working days on the back of strikes.

Analysts said this situation has dampened chances of any reversal in industrial growth in the next three months. This will also affect contribution of industrial sector in the GDP.

The growth in industrial production had been steadily on the decline for the last three years as it declined to 8.8

per cent in the year 2006-07 from 19.9 per cent in the year 2004-05 owing to capacity constraints and closure of many units as a result of high cost of doing business in the country.

Analysts said as there is no industrial policy in the country, the new government will have to consider a broader policy for encouraging industrialisation in the country. And also there is no effective policy or facilities for encouraging small industries to diversify the narrow industrial base of the country, they added.

With this slump in the industrial growth, the export of commodities, particularly textile products, has also affected to a greater extent, which recorded a marginal growth of six per cent during the period under review.

According to the figures, the production of cigarettes increased by 5.11 per cent, while cotton yarn grew by 3.32 per cent and cotton cloth production 4.89 per cent during the first nine months this year over last year.

In the food sector, the vegetable ghee production declined by 2.83 per cent. However, cooking oil production was up by 1.11 per cent, wheat 1.26 per cent, starch and its products 6.39 per cent, beverages 30.46 per cent during the period under review over last year.

Among the electrical production, refrigerators recorded a growth of 10.70 per cent, air-conditioners 0.29 per cent, TV sets production 19.29 per cent, electric fans 18.26 per cent, switch gear 30.49 per cent, bicycles 1.70 per cent, electric tubes 0.01 per cent and electric bulbs 3.21 per cent during the period under review over the last year.

However, production of deep-freezers dipped by 11.19 per cent, electric motors 15.98 per cent, electric meters 44.94 per cent and electric transformers 36.15 per cent during the period under review over last year.

The production of paper and board has also dropped by 5.59 per cent, but petroleum products were up by 6.03 per cent and cement 17.95 per cent during the first nine months of the current fiscal year over last year.

The production of glass sheet declined by 3.11 per cent, steel products 39 per cent, billets 17.12 per cent, coke 13.93 per cent and HR sheets 10.03 per cent during the period under review over last year.

However, production of pig iron was up by 2.29 per cent, soda-ash 13.51 per cent, caustic soda 1.44 per cent, nitrogen fertilisers 1.09 per cent.

However, phosphate fertiliser production came down by 23.99 per cent during the period under review.

Industrial output grows by 4.84pc: Annual target may not be achieved -DAWN - Business; May 15, 2008

 

[Neo]

Industrial production experiences sluggish growth​

KARACHI: The country’s industrial production slowed down further as they grew by a paltry 4.84 percent in first nine months (July-March) of current financial year.

The growth was even more dismal in March 2008, when it fell by 3.23 percent over the corresponding month of previous year, the latest official statistics on industrial output indicated Wednesday.

“The declining trend in the industrial output, in fact began from December last year because of a range of issues especially the political turmoil and other issues related to infrastructure and shortage of electricity and other utilities,” economist Dr Asad Sayeed said while citing the reasons for this slow down.

The falling trend in the industrial output also raised concerns about achieving the 10.5 percent growth target set for the current financial year. Analysts particularly expressed concern about the negative industrial growth in March this year because it was after many years that such a big decline was seen in the manufacturing sector.

The growth in manufacturing sector had been steadily declining for the last three years as it fell to 8.8 percent in 2006-07 from 19.9 percent in 2004-05 because of capacity constraints and shut down of many industrial units, especially in textile due to high cost of doing business.

Apart from infrastructure and capacity constraints issues, manufacturing sector would further slow down in the days to come because of fast depreciating value of rupee against dollar, which would make the imported raw materials more costly, Dr Asad Saeed opined.

Pointing out absence of industrial policy, he said, “the narrow based of the industrial sector as well as the sliding share of our textile sector abroad are the prime reasons behind this slump.”

The falling growth in the manufacturing sector will also adversely affect the country’s GDP and if the trend persisted, it would be hard to achieve they targeted GDP, which in the recent years stayed over seven percent on the back of strong performance of manufacturing sector.

According to the figures, in petroleum sector, production of jet fuel declined by 12.11 percent in July-March 2007-08, diesel oil by 2.80, lubricating oil 0.33 percent, LPG by 2.02 percent, whereas production of kerosene oil was up by 4.58 percent, motor spirits 10.79 percent, high speed diesel 12 percent furnace oil 8.84 percent.

In the food sector, the vegetable ghee production declined by 2.83 percent. However, cooking oil production was up by 1.1 percent, wheat 1.26 percent, starch and its products 6.39 percent, beverages 30.46 percent during the period under review.

In electrical goods, refrigerators recorded a growth of 10.70 percent, TV sets production 19.29 percent, electric fans 18.26 percent, switch gear 30.49 percent, bicycles 1.70 percent and electric bulbs 3.21 percent during the period under review.

However, production of deep-freezers dipped by 11.19 percent, electric motors 15.98 per cent, electric meters 44.94 percent and electric transformers 36.15 percent during the period under review.

The production of paper and board dropped by 5.59 percent. The production of glass sheet declined by 3.11 percent, steel products 39 percent, billets 17.12 percent and HR sheets 10.03 percent, coke production 13.93 percent.

Pig iron was up 2.29 percent, soda ash 13.51 percent, caustic soda 1.44 percent, nitrogen fertilisers 1.09 percent during the period under review. Cement production was up by almost 18 percent during this period.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

British firms seek investment avenues ​

ISLAMABAD: Senior Country Manager, South Asia for UK Trade and Investment (UKTI), Peter Courtney and CEO Asia House, Charlottee Pinder Wednesday said they were in Pakistan to know the potential for investment by more British companies.

According to a press release Wednesday, meeting with Islamabad Chamber of Commerce and Industry (ICCI) president, they said it was a perception that there was security problem in Pakistan, which compels them to invest here though there were great investment opportunities in Pakistan as compared to India.

They said there was some political instability in the country, which was also a matter of concern for the British companies and hoped that this situation would be settled soon that would help attract foreign companies to invest in Pakistan.

Pakistan could not have a clear strategy for the production of electricity in the country and should make plans for energy generation, which was necessary for economic development, they added.

They said the government was also not coming forward with clear policies, which also discourage the foreign companies to come in Pakistan. The delegation said that inflation was also hurting the low class segment because the salary structure was low but Pakistan had more investment opportunities than India but it was not being property projected by Pakistan abroad.

President ICCI, Muhammad Ijaz Abbasi said UK always provided assistance to Pakistan in many sectors and urged for support in promoting technical education in Pakistan.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Fiscal deficit to be cut to five percent: Senate informed ​

ISLAMABAD (May 15 2008): The government on Wednesday said it would bring down fiscal deficit to 5 percent by end of the year from existing 8.5 percent and increase wages of the government employees to provide them some compensation for the rising prices of essential commodities.

"It is the previous government which is responsible for inflation. The huge borrowing by previous government for budget has also contributed greatly to inflation by increasing money supply in the market", Ports and Shipping Minister Naveed Qamar responded to the criticism while winding up debate on price-hike in the Senate.

Shedding light on fiscal situation, he said the budget has completely been distorted and was being supported by borrowing hugely from the SBP. He said Rs 250 billion is being spent by the government on subsidies that could not be sustained for a long period.

"We are taking measures to control budget deficit and are committed to bringing down it as close to 5 percent of the GDP," Qamar said. For the purpose, he said, it was decided to cut down the expenses of all the government departments and review the development projects, not yet completed despite provision of substantial allocations.

Despite these challenges, the minister assured the house that the government is committed to addressing the problem of price-hike of essential commodities and would bring them to the reach of common man.

The minister said the present government that has come into power with a mandate to resolve the problems of the people is committed to fulfilling the promise it had made with the masses. "We will devise short, medium and long-term policies to overcome price-hike of essential commodities", he added.

Qamar said it is not the time for blame game but the difficult situation required some hard measures to focus agriculture sector. He said the government would take measures to ensure timely supply of inputs to the growers and would also announce timely support price of the commodities. This would encourage the growers to produce more.

"Stringent measures would be taken to curb hoarding and smuggling of wheat and flour", he said, adding the inter-provincial ban would be removed once the borders are secured against smuggling.

Naveed Qamar said the government has also taken notice of the rice price-hike and it has been decided to fix minimum export price of the commodity to ensure its supply in the local market at reasonable prices. He said the government employees, who are facing greater hardships due to unprecedented price-hike, would be duly compensated in the next budget by giving them substantial financial relief.

He said a special scheme would also be launched in the next budget for the poor people to give them relief so that they could meet the challenge of price-hike. The minister said that speculation along rising oil and food prices have been responsible for depreciation of Pak rupee against US dollar with assuring "the government is fully cognisant to the situation and will take measures to address the problem". Qamar sought suggestions from the members to control price-hike.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

National Highway: Sindh government to set up two new industrial zones: minister​

KARACHI (May 15 2008): The Sindh government is planing to establish two new industrial zones, to be located at National Highway, particularly for foreign investors and overseas Pakistanis, aimed at bringing foreign investment into the country, and creating new job opportunities.

Addressing the groundbreaking ceremony of the 'Induction Furnace' project of Tuwairqi Steel Mills Limited, the provincial minister for commerce, Abdul Rauf Siddiqui, said that the government is taking several measures to boost foreign investment in the country. The ground breaking ceremony was performed by a worker of Tuwairqi Steel Mills Limited, Muhammad Nadeem, who got the award of 'Best of Best Employee'.

Following this, the government has planned two different industrial zones of 5000 acre each, at Dhabijee and on the National Highway, the minister said. "We are also working on a one-window project, where from the investors would get permission for new industries within a few hours," he added.

The ministry of commerce also has decided to send recommendations to the federal government for duty-free import of power generation plants for the industries, he said. He said that a especial complaint cell was also being established to remove the hurdles faced by local as well foreign investors and industrialists.

"We have a lot of opportunities for the industrial growth in the country. However, bureaucratic behaviour is the major hurdle in the growth," Siddiqui said. Al Tuwairqi Group of Companies Vice Chairman and Chief Executive Muhammad Tariq Barlas said that presently the world steel trades stands at $1.5 trillion. However, Pakistan's share in this trade is only 0.4 percent. He said that during the last nine years Al Tuwairqi had presented tremendous growth and its steel trade size has reached $5 billion from $25 million.

He said: "This project of Al Tuwairqi would open new avenues of investment in similar plants and downstream industries and in the context of human resources development, Tuwairqi Steel will provide job opportunities to 1000 persons directly and to 3500 persons indirectly."

He said that it would come into existence as a pool of expertise in steel technology and trained manpower through specified technical training centres to be opened in Karachi and Lahore. Tuwairqi Steel will be environment-friendly as it will be having 'Midrex' process, which uses clean gas, with minimum emission of hazardous gases, he said.

Al Tuwairqi Group of Companies is one of the leading business and industrial concerns of Saudi Arabia with an annual turnover of 2.00 billion Saudi riyals, he said. AL Tuwairqi Project director Zaigham Adil Rizvi said that 'Induction Furnace' project would produce 0.3 million tons steel per annum.

He said that 'Induction Furnace' project is an intermediary phase, which includes installation of a power plant around 60 MW capacity as well for the furnace. "The intermediary phase will be completed close to completion of DRI plant at an estimated cost of $80 million, having capacity of 1.28 million tons per year. It is under completion and is targeted to be completed in the first quarter of 2009, at an estimated cost of $265 million", he added.

The Phase-II of the project consists of an 'Electric Arc Furnace' of 150 tons capacity and a continuous caster to produce 1.28 million tons high quality billets, he added. On the occasion, Abul Kalam, Vice-Chancellor NED University, Director Project Midrex Paul Max Love, and Director-General, BOI, Reaz-ul Haq also spoke.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Lucky Cement enters into MoU with Kuwait's Noor Invest ​

KARACHI (May 15 2008): The Lucky Cement Limited, the largest manufacturer and exporter of cement in Pakistan, has entered into a memorandum of understanding (MoU) with the Noor Financial Investment Company (Noor) for supply of 500,000 tonnes clinker per annum for a period of 5 years with additional option of 150,000 tonnes each year.

The Noor Financial Investment Company is a Kuwaiti investment company and the financial arm of the National Industries Group (NIG), which is one of the largest and best performing industrial conglomerate in Middle East and one of its subsidiaries the National Industries Company (NIC) specialises in manufacturing and marketing building materials and infrastructure products. NIC has the largest industrial complex for construction materials in the Middle East with the largest market share of building materials in Kuwait.

According to a notice sent to the Karachi Stock Exchange (KSE), Middle East is at present undergoing a construction boom and countries like UAE, Kuwait, Iraq and Qatar are severely facing shortfall of cement. Pakistan with its growing cement industry has an excellent opportunity for export of cement/clinker to these countries due to its close proximity to the region. The Lucky Cement is ideally placed due to location of its southern plant close to Karachi Port from where most of the exports take place.

This MoU will allow the Lucky Cement to increase its growing exports to the Middle East under a guaranteed off-take arrangement, which will further strengthen its dominant position of exports from the country. The Lucky is the only cement exporter in Pakistan with infrastructure facilities at Karachi port for the storage, handling and loading of loose cement.

Business Recorder [Pakistan's First Financial Daily]

 

[Neo]

Pakistan Foreign Currency Rating Lowered to B by S&P ​

By Khalid Qayum and Farhan Sharif

May 15 (Bloomberg) -- Pakistan's foreign currency rating was cut one level to B by Standard & Poor's, citing government spending that's growing faster than revenue collection and political instability. The outlook is negative, S&P said.

"The downgrade reflects rising pressures from the combination of expanding fiscal and external imbalances, against a volatile and uncertain political setting," according to a release from New York-based S&P today. This is the first time S&P has cut Pakistan's rating since President Pervez Musharraf seized power in a 1999 coup.

The rating cut comes two days after nine ministers including Finance Minister Ishaq Dar quit as Pakistan's six-week old coalition government split over a dispute on the reinstatement of judges sacked by Musharraf. Prime Minister Yousuf Raza Gilani hasn't appointed a new finance minister yet.

``It's negative news, and will have a negative impact on foreign investors,'' said Farhan Rizvi, an economist at JS Global Capital Ltd. in Karachi. ``Ratings by these institutions are closely watched by overseas investors.''

Overseas investment in Pakistan, which reached a record $6.5 billion in the year ended June 30, 2007, has since fallen 21 percent, according to central bank data. Foreign direct investment declined to $3.03 billion in the nine months ended March 31 from $3.85 billion a year ago.

Overseas Investors

The rating cut may further deter overseas investors who have already retreated from the South Asian nation, selling a net $53 million of Pakistani stocks in the nine months ended March 31, compared with purchases of $1.69 billion a year ago.

The benchmark Karachi Stock Exchange 100 index, which has risen 2.9 percent this year, declined 113.57 points, or 0.8 percent, at the 2:15 p.m. local-time close today.

The fiscal deficit in the first eight months of this year widened to 4.7 percent of the $146 billion gross domestic product, exceeding the full-year target of 4.5 percent.

The Pakistan Peoples party, headed by Asif Ali Zardari, and former prime minister Nawaz Sharif's Pakistan Muslim League, had formed the coalition government in March with the help of two smaller groups, ending Musharraf's eight-year military rule. The president sacked 60 judges in November before the Supreme Court was about to rule on Musharraf's re-election for a second term.

The PPP-led government is constrained by the highest inflation in 25 years and economic growth that is slowing to 6 percent of gross domestic product this fiscal year ending June 30, from 7 percent last year. Almost half the population of Pakistan, the world's seventh-most-populous nation, faces difficulty gaining access to affordable food because of the soaring cost of cereals, according to the United Nations World Food Programme.

Security Risks

Political and security risks are an additional constraint on Pakistan's rating as the split in the coalition government ``foreshadows a period of political stability,'' S&P said.

Pakistani militants accused the U.S. of carrying out a missile attack yesterday that killed as many as 20 people in the country's tribal region bordering Afghanistan, GEO television reported. Pakistan, which is fighting Taliban and al-Qaeda supporters in its tribal regions, has supported the U.S.-led campaign against terrorism since 2001.

S&P also lowered the South Asian country's local currency rating to BB- from B.

``The decision is a little late since the rupee has already been through a decline and everyone has priced it in,'' said Nasim Beg, chief executive of Arif Habib Investments Ltd. in Karachi, who manages 24 billion rupees ($350 million) in stocks and bonds. ``There will be no major impact at this stage.''

Pakistan's rupee, which has declined 13 percent this year, fell to 69.70 on May 9, the lowest level since at least 1998. The currency has weakened as the current account deficit widened to $9.86 billion in the nine months ended March 31 from $6.17 billion a year earlier.

Bloomberg.com: Asia

 

[Neo]

Pakistan's forex reserves fall to $12.207 bln​

KARACHI, May 15 - Pakistan's foreign reserves fell by $49 million to $12.207 billion in the week that ended on May 10, the central bank said on Thursday.

Reserves held by the State Bank of Pakistan fell to $9.874 billion from $9.926 billion a week earlier, while those held by commercial banks rose marginally to $2.360 billion from $2.330 billion.

Pakistan's foreign exchange reserves hit an all-time high of $16.486 billion on Oct. 31, 2007, but have fallen since then, partly because of outflows from the stock market after President Pervez Musharraf imposed emergency rule on Nov. 3.

The emergency was lifted on Dec. 15, but foreign investors remained cautious after the assassination of former prime minister Benazir Bhutto on Dec. 27.

The central bank's Governor Shamshad Akhtar last week said foreign inflows of up to $3.5 billion were expected in the short to medium term, mainly in the form of loans from multilateral lenders and friendly governments.

On Thursday, the rupee closed at 68.70/69.25 to the dollar, nearing the record closing low of 69.40/60 struck on May 9.

Pakistan's forex reserves fall to $12.207 bln - Yahoo! Malaysia News

 

[ejaz007]

Pakistan, Iran talks on pipeline on May 26

* ADB, GAIL and IGCL expected to form consortium for project

Staff Report

ISLAMABAD: Pakistan and Iran are going to hold another round of talks over $7 billion Iran-Pakistan-India (IPI) gas pipeline deal in Tehran on May 26, a senior official in Petroleum Ministry told Daily Times Thursday.

He said two sides have proposed to hold talks on IPI so that the final arrangements could be made on signing of Gas Sales Purchase Agreement (GSPA).

However, he added, signing of GSPA on gas pipeline deal could be delayed due to political uncertainty followed by the resignation of Petroleum Minister, Khawaja Asif of Pakistan Muslim League (N). He was of the view that the process of proposed agreement on IPI gas deal could be affected due to absence of the petroleum minister.

He said the Pakistan and Iran were supposed to sign the GSAP on IPI without making any other round of talks, and during the Iranian President visit to Pakistan on April 28, two sides also agreed to sign deal within 45 days. He said that these talks could be for making arrangements for signing the GSPA on IPI that would be signed by petroleum secretaries, ministers and heads of states of two countries.

He said that Pakistan and Iran have finalised the GSPA on IPI during the caretaker government’s tenure and Economic Coordination Committee (ECC) of the cabinet approved the draft of the GSPA.

He said that energy requirements in Pakistan are increasing day by day and gas demand in Pakistan is expected to be 26 Million Metric Standard Cubic Meter per day (MMSCMD) in 2011-12 and 77 MMSCMD in 2015.

He said that the energy supply mix in Pakistan stood at 48.6 percent gas and 30 percent oil in 2006-07. Power sector of Pakistan consumes the largest portion of gas at 35.5 percent.

Consortium for carrying out the project: Official said that Asian Development Bank (ADB), gas transmission and marketing company in India, GAIL, and Pakistani company Interstate Gas Company Limited (IGCL) could work in a joint venture to materialise the project.

He said that Indian Petroleum Minister, Murli Derua, during his talks on transit fee on IPI had conveyed that Indian company GAIL was interested in this project.

Official said that ECC has authorised IGCL to sign the agreement with Iran and Pakistani government and is going to convert IGCL into a corporation in this regard. He said that Asian Bank country director has also conveyed Pakistan that it is ready to finance the project.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Remittances rise to $5.31bn in 10 months ​

Friday, May 16, 2008

KARACHI: Remittances sent home by overseas Pakistanis continued to show a rising trend as $5,319.08 million were received in the first 10 months (July-April) of fiscal year 2007-08 compared to $4,450.12 million in the same period last year, showing an increase of $868.96 million or 19.53 per cent.

According to the State Bank of Pakistan (SBP), the amount of $5,319.08 million includes $2.20 million received through encashment and profit earned on Foreign Exchange Bearer Certificates (FEBCs) and Foreign Currency Bearer Certificates (FCBCs).

The monthly average of remittances for the period July-April 2007-08 comes to $531.91 million as compared to $445.01 million during the corresponding period of the last fiscal year, registering an increase of 19.53 per cent.

The inflow of remittances in the July-April 2007-08 period from USA, Saudi Arabia, UAE, GCC countries (including Bahrain, Kuwait, Qatar and Oman), UK and EU countries amounted to $1,463.73 million, $1,001.71 million, $907.52 million, $795.18 million, $379.03 million and $147.65 million, respectively as compared to $1,176.12 million, $827.60 million, $673.51 million, $609.88 million, $354.60 million and $123.08 million, respectively in the July-April 2006-07 period.

Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during the first 10 months of the current fiscal year amounted to $622.06 million as against $683.09 million in the same period last year.

During the last month (April 2008), Pakistani workers remitted an amount of $590.71 million, up $77.36 million or 15.07 per cent when compared to $513.35 million sent home in April 2007.

The inflow of remittances into Pakistan from almost all countries of the world increased last month as compared to April 2007. According to the break-up, remittances from USA, Saudi Arabia, UAE, GCC countries (including Bahrain, Kuwait, Qatar and Oman), UK and EU countries amounted to $151.39 million, $119.76 million, $113.90 million, $90.91 million, $44.18 million and $16.52 million, respectively as compared to the corresponding receipts from the respective countries during April 2007, ie $141.43 million, $94.12 million, $77.53 million, $71.59 million, $35.35 million and $12.70 million.

Remittances received from Norway, Switzerland, Australia, Canada, Japan and other countries during April 2008 amounted to $54 million as compared to $80.29 million during April 2007.

Remittances rise to $5.31bn in 10 months