The year 2012 was a mixed bag. Economy continued its modest recovery with the stock market hitting new records but it was marred by rising civilian casualties and the worsening energy crisis. The coalition government led by the Pakistan Peoples' Party is nearing its full term with a new prime minister and the political parties have begun campaigning for general elections in the first half of 2013.
1. GDP growth rate doubled from the low of 1.71% in 2009 to 3.67% in 2012. Consumer price index hit a low of 7.9% in December, the lowest in South Asia region.
2. Terrorism related fatalities declined from the peak of 11,700 in 2009 to 6,211 in 2012, and slightly decreased from 6,303 in 2011, according to SATP. Sectarian deaths accounted for 507 of the 6,2011 victims of terrorism in 2012.
3. Karachi's KSE-100 index surged nearly 50% (37% in US $ terms) in 2012 to top all Asian and BRIC market indices.
4. Elected coalition government led by the Pakistan Peoples' Party is close to completing its term with a new prime minister.
5. Retired Justice Fakhruddin G. Ibrahim was appointed by consensus of all political parties as an independent Chief Election Commissioner with broad powers under the 18th amendment.
6. Fair Trials Bill (aka Patriot Act) passed the House. This anti-terror legislation is now pending approval by the Senate. Witness protection program is being planned for terrorism cases.
7. The latest Pak Army doctrine named internal terrorism as the #1 threat.
8. Relations with US improved after the American apology over the Salala incident. The US aid and CSF funds flow resumed.
9. Despite the backlash from the CIA-sponsored bogus vaccination campaign and more recent polio worker shootings, the polio cases significantly declined from 198 in 2011 to 57 in 2012.
10. Domestic cement consumption, an important barometer of national economic activity, was up 8% in 2012, according to a research report compiled by a Credit Suisse analyst.
11. Al-Twariqi Steel Mill in Karachi to produce 1.28 million tons of steel
per year and Byco refinery to refine 120,000 barrels of crude per day in
Balochistan were completed in 2012 for full production planned in early 2013.
12. FFC and Zorlu Energy wind farms with combined 106 MW capacity were inaugurated in Jhimpir near Karachi in December 2012.
13. Sharmeen Obaid-Chinoy, journalist and documentary filmmaker, won
Pakistan’s first Oscar for her documentary ‘Saving Face’ documenting the stories of resilience and courage of Pakistan’s acid attack survivors. Sharmeen was also featured on TIME’s 100 Most Influential Peoples list for 2012.
14. Pakistan’s Muhammad Asif won
the World Amateur Snooker Championship in Sofia, Bulgaria.
15. Pakistanis set several records for the Guinness Book of World Records. Amongst them, 44,200 Pakistanis sang the national anthem together at the National Hockey Stadium to set a new world record
breaking India’s record of 15,243 people. Also, more
than 24,000 Pakistanis formed the world’s largest ‘human national flag’,
smashing a previous record set in Hong Kong.
1. There was lack of clear political consensus on military action against the Taliban even as they tried to assassinate innocent civilians like Swat schoolgirl Malala Yousufzai. She was shot in the head with the TTP claiming responsibility for the attack.
2. Energy crisis, particularly gas shortages, became more acute.
3. Civilian casualties in incidents of terrorism jumped from 2,738 in 2011 to 3,007 in 2012 as the Taliban went after soft targets, including minorities, school girls and aid workers.
Karachi saw a dramatic increase in ethnic and sectarian violence claiming over 2000 lives. Bank robberies, extortion and kidnapping increased as the Taliban sought to fund their insurgency.
5. Public finances remained weak with no real progress in improving tax collection and enhancing tax-to-gdp ratio.
6. Pakistani currency continued to decline nearing Rs. 100 to a US dollar exchange rate. The rupee slid 7 percent versus US dollar in the past
year, with reserves down about 19 percent to $13.8 billion raising fears of another balance of payments crisis.
7. Worsening energy crisis across the nation and increasing violence in Karachi, the economic hub of the country, present a very serious threat to Pakistan's fragile economy and democracy.
Here's a video discussion on year 2012 in Pakistan:
Pakistan's GDP Grossly Underestimated, Shares Highly Undervalued
Investment Analysts Bullish on Pakistan
Precise Estimates of Pakistan's Informal Economy
Comparing Pakistan and Bangladesh in 2012
Pak Consumer Boom Fuels Underground Economy
Rural Consumption Boom in Pakistan
Pakistan's Tax Evasion Fosters Aid Dependence
Poll Finds Pakistanis Happier Than Neighbors
Pakistan's Rural Economy Booming
Pakistan Car Sales Up 61%
Resilient Pakistan Defies Doomsayers
Land For Landless Women in Pakistan
Pakistan's Circular Debt and Load-shedding
Thanks for sharing the information
Here's a Wired magazine story on CIA drone strikes in FATA, Pakistan:
The sixth U.S. drone strike in Pakistan in 2013 has killed at least eight people, as if to announce the impending arrival at the CIA of the drone campaign’s chief advocate.
About 19 miles east of Mirin Shah, the main city in the tribal province of North Waziristan, at least one missile fired by a U.S. Predator or Reaper hit a compound Monday night, killing an alleged, unnamed “foreign tactical trainer” for al-Qaida, according to Pakistani intelligence sources talking to Reuters. Another strike hit the nearby village of Eissu Khel, the Long War Journal reports. In addition to the alleged al-Qaida member, at least seven others were killed and three more were injured.
While the statistical sample is small, it’s starting to sound like the drone campaign over Pakistan is ticking back up after a recent decline. A trio of drone-fired missile strikes between Wednesday and Thursday killed a Pakistani Taliban commander and at least 19 others. Another on Sunday reportedly killed another 17 people, bringing the estimated death toll in this young year to 35.
The U.S. launched 43 drone strikes in Pakistan in 2012, according to the tally kept by the New America Foundation, reflecting a two-year downward trend from 2010′s high of 122 strikes. The average time in between strikes last year was 7.7 days. But eight days into 2013, there have already been six deadly drone strikes, for reasons that remain unclear. It’s worth noting that senior Obama administration officials recently reversed their earlier rhetoric that the U.S. was on the verge of defeating al-Qaida and have returned to describing a protracted shadow campaign.
The drone strikes are likely to play a central role in the Senate confirmation hearing of John Brennan, the White House counterterrorism official whom President Obama nominated Monday to lead the CIA. Brennan, a CIA veteran, has been at the center of the drone campaign in Obama’s first term, even providing Obama with the names of suspected militants marked for a robotic death.
But even if the White House doesn’t know a target’s name, he can still be marked for death. Obama has provided the CIA with authority to kill not only suspected militants, but unknown individuals it believes follow a pattern of militant activity, in what it terms “signature strikes.” The drone program has killed an undisclosed number of civilians. A recent study conducted by Center for Civilians in Conflict and Columbia Law School’s human-rights branch explored how they’ve torn the broader social fabric in tribal Pakistan, creating paranoia that neighbors are informing on each other and traumatizing those who live under the buzz of Predator and Reaper engines. Those traumas are raising alarm bells from some of the U.S.’ most experienced counterterrorists.
Retired Gen. Stanley McChrystal, the former chief of the Joint Special Operations Command and the NATO war in Afghanistan, has been publicly ambivalent on the drones for months. In July, he told an elite audience at the Aspen Ideas Festival about how a drone spotted an Afghan man “digging in the ground” at night, leading his forces to order a deadly helicopter attack on the presumption the man was burying a bomb. McChrystal later learned that tilling soil at night is a tradition among Afghan farmers, and the dead man posed no threat.
The retired general went further in a Monday interview with Reuters’ David Alexander. “The resentment created by American use of unmanned strikes … is much greater than the average American appreciates,” McChrystal said. “They are hated on a visceral level, even by people who’ve never seen one or seen the effects of one.”
Brennan’s nomination is renewing the national discussion about drone strikes. ....
Can you draw up a concise plan on how Karachi can be turned-around? Should the Army do another Operation Clean-Up? Should the active civil society work on transformation? Can our vibrant free press do the job? Or should there be some sort of "multi-pronged" approach?
This article by a former Ambassador is a MUST READ:
Half the things are EXACTLY what I have been saying (economic warfare, doing a "reagan" on us etc).
And the other half are exactly what YOU have been saying (Liberals saying pakistan was a mistake, Sacher report, untouchables etc).
This article was written by someone who seems to be an intellectual MIX of the two of us.
What are your comments on the article?
PS: There is a POLL on the right side asking about "What is Pakistan's identity?". You have to vote to be able to see the results. Try it. You may be surprised at the poll results.....
The low point ought to include that the number of shias target-killed in Pakistan increased to nearly 1,000 in 2012, and according to Human Rights Watch, not one person has been convicted of target-killing Shias, and not one political leader has raised it as a major issue deserving of more than just a statement of condemnation. Nearly 99% of the Shia killings have occured in Karachi, while all anti-Shia parties are from Punjab and Khyber-Pakhana.
Thanks for a great year end update.
^^Shams said: "...Nearly 99% of the Shia killings have occured in Karachi"
This is not completely correct.
Yes, the number of INCIDENTS in Karachi was the largest, but the death-toll per incident was always low in these Karachi attacks. The "bulk" killing (i.e. huge casualities in single incident) of Shia was in Quetta, FATA, KP and Northern Areas.
Here are the detailed data:
Dr. Haq: Do you have any novel ideas as to how we can settle these sectaran issues so as to end the violence once and for all? Do you advocate massive State Force by Police/Army? Or better education and media? Or a clamp down on all Mullahs/Imams? Or some combination of these? Or something else altogether? This is a key problem our country faces today and your insight would be helpful.
HWJ: "This is not completely correct."
Shams's claims that 1000 Shia were killed and 99% of shia killings happened in Karachi are not correct.
The total number of sectarian deaths in the entire country was 507, according to South Asia Terrorism Portal.
The number of incidents in Karachi was the largest, but the death-toll per incident was not as high in Karachi attacks as in other parts of the country. The mass casualty attacks of Shia were in Quetta, FATA, KP and Northern Areas.
Please view the video included in the post in which I talk about the close link between the Taliban militancy and the increased death toll in sectarian attacks. I believe that effectively tackling the Taliban insurgency will reduce the level of violence against the minorities the resulting casulaties.
I see that you seem quite comfortable that only 507 Shias died and not 1000.
Shams: "I see that you seem quite comfortable that only 507 Shias died and not 1000."
What makes you think I am "comfortable that only 507 Shias died and not 1000"?
While your bigotry only permits you to mourn for your fellow shia and muhajir, my heart goes out to the loved ones of all 6,211 victims of violence in Pakistan last year. I also mourn for over 45,000 Pakistanis who have lost their lives since 2001.
Here's Pakistan Mercantile Exchange Commodity Review report:
Despite a disappointing 2011, many commodities rebounded in a year that was tough for all asset classes. Among agricultural products, wheat and soybeans yielded the highest gains and coffee the biggest loss while in metals, gold's rally stretched to a 12th year whereas oil posted its first annual loss since 2008 as commodities ended 2012 focused on the U.S. fiscal crisis after riding through a blistering drought and Europe's debt debacle.
Stocks showed best performance in three years after posting the worst returns in 2011, beating bonds, commodities and the dollar. The major force behind stocks is central banks. The MSCI All-Country World Index of equities increased 16.9 percent in 2012. The Standard & Poor’s GSCI Total Return Index of 24 commodities rose 0.1 percent, while the U.S. Dollar Index (DXY) lost 0.5 percent. Bonds of all types returned 5.73 percent, on average, according to Bank of America Merrill Lynch’s Global Broad Market Index.
Despite a mixed price trend over the year, the FAO Food Price Index (FFPI) averaged 212 points in 2012, 7 percent (17 points) less than in 2011.
PMEX commodity index increased by 9.60 % during the year 2012 which is based on seven commodities Gold, Silver, Crude Oil, Rice, Sugar, wheat and Palm Olein.
There is such a RAGING debate on the MFN-to-India issue that GOP has delayed the grant of MFN status which was supposed to trigger on 01/01/2013.
Please write an article on this KEY ISSUE. What are your views? Should MFN be granted? Should it be granted only in Phases? Or should it not be granted? Should we demand a quid pro quo?
Please explain the issues and your insights on our options in a new article.
Today Pakistan reached entered a new phase in its failure to curb terrorism. More than 100 killed in a day is the headlines in newspapers all over the world. This is very bad for economy which is already not doing well. Foreign investments will be very difficult to come by with this sort of news.
Our intelligence is failing the nation time and again.
I wonder what will take the army to once and for all take on these beasts for all hell bent on dividing the nation based on sects.
Anon: "More than 100 killed in a day is the headlines in newspapers all over the world....I wonder what will take the army to once and for all take on these beasts for all hell bent on dividing the nation based on sects"
This is awful news at the start of 2013 in Pakistan. Let's hope this year is not as bad as last year when sectarian deaths accounted for 507 of the 6,2011 victims of terrorism as reported by South Asian Terrorism Portal.
I think we have reached the Swat moment in 2009 that led to successful Pak military action against militants.
Improving the situation now will require political consensus to act quickly and decisively against the TTP and their sectarian allies in LeJ and SSP.
Violence and economic growth are inversely related. When there is violence it is natural for people to think about survival and not about starting a business venture. Destruction and property loss can wipe out futures in one swoop.
I thought we had very strong gun control laws in Pakistan. Shouldn't the government enforce those laws? And where are the other weapons RPG, bomb making paraphernalia etc coming from? If the military blocks them from coming into the country violence will come down.
^^Shams: "The low point ought to include that the number of shias target-killed in Pakistan increased to nearly 1,000 in 2012, and according to Human Rights Watch.."
Here is Human Rights Watch:
Kadeer: "Violence and economic growth are inversely related."
Mexico has lost 50,000 people (more than Pakistan's 45,000 since 911) in drug wars in the last 5 years, and yet it's economy has continued to grow.
Gross domestic product expanded 4.6 percent from the year- earlier period, up from a revised 3.9 percent in the previous three months and the most since the third quarter of 2010.
Mexico is now the fastest growing economy in Latin America, not Brazil.
I am not saying there will be no economic growth but, it will be adversely affected.
What be the potential growth if there was no violence?
The CIA has opened the 2013 year with a flurry of drone strikes in Pakistan....
...which responds by doing nothing.
Retaliation for these new escalation of drone strikes is expected to come from the TTP all over Pakistan.
Here's a ET report on new company registrations in Pakistan in December 2012:
The Securities and Exchange Commission of Pakistan (SECP) registered 332 companies in December 2012, a growth of 22% over the corresponding month of previous year.
Authorised and paid-up capital of these companies amounted to Rs1.7 billion and Rs745 million respectively.
The new incorporations included 302 private companies, 17 single-member companies, seven non-profit associations, four public unlisted companies and two foreign companies – one each from Turkey and Germany.
Nationals of Cyprus, Panama, China, Belgium and the Netherlands also made investment in five new local companies. These companies were associated with the areas of software development, construction and services.
The trading sector has the largest share in new incorporations with 44 companies, followed by services with 39 companies, tourism 37, information technology 19, food and beverages 15, broadcasting and telecasting 14, pharmaceutical, textile and construction 13 companies each, communications and corporate agricultural farming 12 companies each.
The Company Registration Office (CRO), Lahore registered the largest number of companies in December, at 108. It was followed by CROs of Islamabad and Karachi where 98 and 81 companies were registered respectively.
Here's ET on hydrocarbon potential in FATA and KP:
The Federally Administered Tribal Areas (Fata) and Frontier Regions (FR) have enormous reserves of minerals, oil and natural gas that can augment economic activity in the war-torn areas, a research project concluded.
Talking to The Express Tribune ‘Source Rock Mapping and Investigation of Hydrocarbon Potential (SRMIHP)’ Project Coordinator Dr Fazal Rabi Khan said that exploration and excavation of oil and gas will introduce a new era of development and prosperity in the tribal areas.
“There can be many job opportunities created for people in the tribal belt if mineral exploration and extraction is pursued properly,” said Khan, who is also the chairman of the Geology Department in Abdul Wali Khan University Mardan (Palosa Campus).
The project was launched in 2008 under an agreement between the Fata Development Authority and National Centre of Excellence in Geology University of Peshawar. The project, which was completed at an estimated cost Rs40 million, was completed in June 2012.
Khan said that their objectives include identifying hydrocarbon generating rocks and its distribution in the region, preparing a geo-database regarding hydrocarbon potential and generating a systematic data to attract oil and gas companies for exploration.
The project has successfully collected, processed and digitised the data as a result of which, 80% of the project area has been mapped digitally. “This mapping has led to the discovery of seven new oil and gas seepages.”
He added that 11 oil and gas exploration companies have reserved 16 blocks in Fata, which go across from FR Peshawar and Kohat to Khyber, Orakzai, Bannu, Tank and up to North and South Waziristan.
He said that recently 17 oil and gas exploration companies initiated their operations in Khyber, Orakzai, North and South Waziristan agencies as well as in FR Peshawar, Kohat, Bannu, Tank and DI Khan.
Khan said that Mari Gas Company, HYCARBEX Inc, Oil and Gas Development Company, Tullow, Saif Energy, MOL Pakistan Oil and Gas, Orient Petroleum International, Pakistan Petroleum, ZHEN, ZAVER and others are currently working in Fata.
Oil and Gas Development Company (OGDC) will start drilling in these areas for the exploration of oil and gas reservoirs. The chairman said that the foreign oil company, Tullow, has obtained a licence for the exploration of oil and gas in North Waziristan Agency and Bannu, while MOL has shown interest in Khyber Agency, Kohat and Peshawar.
“Although law and order problems can become a hindrance, the project can be managed considering its importance,” he added.
Khan elaborated that the process in Fata would not only help overcome the energy crisis but will also give a big boost to efforts for the socio-economic development of the region. Khyber-Pakhtunkhwa is teeming with minerals and Fata is a new oil estate, he said. “In the next five years, this province will produce more oil than Dubai and as far as shortage of gas is concerned, the hills of FR Tank are full of it.”
He said Governor Masood Kausar has also taken keen interest in the project. “The best news for the tribal areas is that there are large reserves of natural resources and foreign and local companies interested in its extraction can exploit the resources,” said Kausar.
Do you also think/feel like this?
Quote: "Bomb attacks are the background music to life in Pakistan. A blast somewhere in the country is reported nearly every day, and it is easy to become inured to it. After several months living there, I found myself thinking, as many others do: "Only three people died, it wasn't a bad one."
ALERT! The Indians have STOLEN our Kinnow seeds and are taking away our export market!
The fruits-exporters alleged that India after stealing Pakistan’s citrus is not only started growing Pakistan’s kinnow but earning precious foreign exchange through its exports...
Also see: http://alturl.com/fvie5
HWJ quotes: "Only three people died, it wasn't a bad one."
The average terror casualties per day in 2009 were about 33 in 2009 and dropped to about 17 in 2012. So three casualties is a good day not only for Pakistan but for any country including the US where 82 people die from gun violence every day.
Here's a Nation story of a Gallup poll on rising hopes for better economy in 2013 in Pakistan:
A global poll released on the eve of New Year conveys a hopeful message that economic gloom is subsiding world-wide and hopes about the economy have risen from -2pc to 7pc, a rise of 9pc points from a year ago.
The gloomy trend in West Europe appears to have been arrested while North America is slightly less gloomy than it was. There is a notable upsurge of economic hope in China and India. The global survey was carried out by the world’s largest independent network of opinion pollsters, WIN-Gallup International in 54 countries, among more than 55,817 men and women, covering vast majority of world population. The network has conducted this annual poll for 35 years since 1977.
A key question in the global survey asked: Compared to this year, in your opinion, will next year be a year of economic prosperity, economic difficulty or remain the same? According to the WIN-Gallup International global barometer of hope and happiness, 35pc of the world is hopeful about economic prospects in 2013, while 28pc expect it to be worse than the year which is just ending; 29pc expect no change from previous year while 8pc were unable to give an answer.
According to the poll, Pakistanis are rising on the global ladder of hope. Compared to a year ago, net hope rises by 17 percentage points from last year. Among those interviewed here, 32pc of Pakistanis are hopeful about economy, 27% believe it will be of economic difficulty while 30pc believe this year will be the same as last year. However, 12pc did not give a view.
Here's Daily Times on Twariqi Steel Mill plant inauguration in Karachi:
KARACHI: Tuwairqi Steel Mills Limited (TSML) Pakistan’s first private sector integrated environment-friendly steel manufacturing complex of Al-Tuwairqi Holding (ATH)/ISPC of the Kingdom of Saudi Arabia inaugurated by Prime Minister Raja Pervez Ashraf at Port Qasim Karachi on Saturday.
The plant in its first phase has the capacity to produce up to 1.28 million tonnes of high quality Direct Reduced Iron (DRI), which is evidently steel’s most versatile metallic and a preferred raw material for quality steel making worldwide.
Raja Pervez Ashraf congratulated the entire team of TSML on the successful completion of the first phase and committed to extend all possible support from the government for the expansion plans of ATH and POSCO in Pakistan. He said, “It is a matter of great pride for us Pakistan has now started producing DRI, with the completion of the first phase of TSML. We are committed to transform our country into an industrial hub and for that we seek more projects-especially in the steel sector, since steel is the backbone of the industrial growth. TSML in poised to serve as a catalyst for the industrial growth of Pakistan.”
He was of the view currently Pakistan was among the countries that rely mostly on imports when it comes to heavy mechanical structures and engineering goods. By producing high quality steel within Pakistan we can manufacture such equipment locally by value addition with the help of downstream industries, he concluded.
He distributed shields among outstanding employees of TSML as a token of appreciation of their hard work and dedication to successfully complete the first phase.
The first phase has been completed with an investment of over $350 million. The plant spreads over an area of 220 acres at Bin Qasim Karachi and employs the world’s most advanced DRI technology of the MIDREX process owned by Kobe Steel of Japan. ATH/ISPC and POSCO have signed a memorandum of understanding (MoU) with the government of Pakistan for the backward and forward integration with an estimated investment 3 times higher than of the DRI plant. Forward integration would be a further value addition through a Melt Shop, producing world standard steel grades, while backward integration would be to the extent of exploring iron ore locally in Balochistan, its beneficiation and pelletisation as well.
Dr Hilal Hussain Al-Tuwairqi, Chairman Al-Tuwairqi Holding appreciated the efforts of TSML employees. He said Al-Tuwairqi’s vision was to participate in the development of national economy in order to have a long sustaining growth of Pakistan.
“We are looking forward to create for our younger generations, ample job opportunities to build a strong and prosperous nation on the face of this plant. Al-Tuwairqi sees Pakistan as a land of opportunities and we are very clear in our perception that Pakistan as a country has to grow and we are determined to play an instrumental role in its development, he remarked.
Joon Yang Chung Chairman and CEO POSCO of South Korea congratulated the entire team of TSML. He said it was heartening to learn that TSML has increased the production capacity of Pakistan by 1.28 million tonnes per annum, which would help meet the ever growing demands of steel in Pakistan.
Zaigham Adil Rizvi Director (Projects) TSML said TSML has massive expansion and modernisation plans not only to enhance production capacity at an exponential rate but also to improve productivity and efficiency, matching the highest global standards. Pakistan’s current per capita steel consumption is only 40 kilogramme, which is exuberantly low, when compared with the global average of 215 kilogramme. This establishes a dire need increased emphasis on achieving international benchmarks to become a modern and an efficient economy.
Here's Daily Times on fiscal deficit in 1H of 2012-13:
The country’s budget deficit for the first half (July to December) period of the ongoing fiscal year 2012-13 has been estimated provisionally on the lower side at 2.4 percent of the gross domestic product (GDP), mainly because of Coalition Support Fund (CSF) arrears released by the United States otherwise it would have been at 3.0 or 3.1 percent of the GDP, a senior official informed
The revenue shortfall owing to political uncertainties, power subsidies over and above budgetary allocation and gas and power shortages in the country with increased election-related expenditure are likely to take the budget deficit to around 6.3 percent of the GDP by the end of the ongoing fiscal year, in case the Public Sector Development Programme was not slashed to adjust the extra expenditures, experts believe.
However, uncertainties on federal tax collection and power subsidies are the main areas of concern for the economic managers of the country as the federal tax collection is witnessing a shortfall and annual budgetary allocation for power subsides have been consumed in just six months of ongoing fiscal year.
The authorities have estimated that budget deficit for the entire fiscal year would increase by 0.6 percent of the GDP in case the federal tax collection falls short of the annual tax collection target. Similarly, the budgetary allocation of power subsidies which was Rs 170 billion have already been consumed in just six months and subsidies to be required to finance the tariff differential of the second half (January to June) period of the ongoing fiscal year 2013 would increase the budget deficit by around 1.0 percent of the GDP, economic experts in the private sector believe.
The Ministry of Finance has paid Rs 117 billion to Water and Power Development Authority (WAPDA) and Rs 22 billion to Karachi Electric Supply Company (KESC) to subsidise their tariffs for the consumers during July to November period and Rs 23 billion has also been paid to power sector as subsidy during the month of December. This subsidy is mainly financing the gap between generation cost and power tariff charged by the power companies from the consumers. At present the difference between power tariff is determined by the regulator and power tariff charged by the power companies.
According to the estimates, tax collection of the federal government, which has been set at Rs 2.381 trillion is also going to be missed and collection to end up at around Rs 2.1 trillion, as per the International Monetary Fund (IMF) estimates under the prevailing political, geo-strategic and energy crisis situation.
However, the sources informed that Ministry of Finance has its own view on tax collection and it strongly feels that tax collection would be around Rs 2.231 trillion against the annual tax collection projection of Rs 2.381 trillion, and expected shortfall of Rs 150 billion in this fiscal. The sources further informed that efforts are there to take tax collection near to its budgetary target with enforcement of tax amnesty scheme for whitening undisclosed and undeclared assets and money.
The official at Ministry of Finance informed that the ministry has not slashed its annual tax collection target downwards as this would relax the tax authorities in putting up of their maximum efforts for increasing tax collection. The ministry has no authority to slash the annual tax collection target downwards as it is approved the federal cabinet and is only authorised to do so. The ministry has sent no summary to the cabinet for revision in tax collection target so far, added the official.
The plant in its first phase has the capacity to produce up to 1.28 million tonnes......
.....The first phase has been completed with an investment of over $350 million
As a thumb rule, 1 MTPA = 1 Billion$.
In other words, it takes an investment of 1 billion USD to build a plant capable of producing 1 million tons per annum (MTPA).
Check it yourself. And don't believe everything GOP & its crony corporations tell you.
HWJ: "As a thumb rule, 1 MTPA = 1 Billion$."
Twariqi plant in Karachi is a natural gas fired direction reduction of iron (DRI) process.
Capex for a DRI steel plant ranges from $200 to $300 per ton...$256 million to $384 million for 1.28 million tons.
Here's an ET report on cement sales in July-Dec 2012 period in Pakistan:
Cement consumption in the country increased 11% to 2.24 million tons in December 2012, the highest-ever sales for the month, industry people say.
However, a slump in exports persisted with overseas shipments declining by 10.55% to 580,000 tons in December.
The numbers were released by the All Pakistan Cement Manufacturers Association here on Friday.
In a statement, a spokesman for the association said cement sales in the domestic market rose 7.61% to stand at 11.728 million tons in the first six months (July-December) of financial year 2012-13. Exports remained under pressure, dropping by 5.28% to 4.22 million tons.
In southern parts of the country, sales of cement units in the first half registered a growth of 7.98% in the domestic market, but exports fell by 16.34%.
In the north, where most of the cement is produced, the industry posted a growth of 7.52% in domestic sales while exports edged down 1.31%.
The spokesman was the view that despite much hype, trade with India had not significantly benefitted the cement industry as sales to the neighbour stood at only 209,000 tons in the past six months, down a whopping 40.41%. “This is well below expectations of the cement sector,” he commented.
In fact, he said, exports to India had been on a constant decline ever since the two countries opened their borders for liberal trade. “The decline is not due to lack of demand, but because of very stringent non-tariff barriers imposed by our neighbour,” he said and pointed out that Pakistan’s cement was preferred by the Indians because of better quality.
Stressing that cement exporters have a potential to export a big quantity to the Indian market, he said they were facing strict resistance with barriers still in place even after discussions on the matter in different rounds of official and unofficial talks between the two countries.
Setting aside India, Afghanistan’s market has proved to be quite lucrative for the cement industry. In the past six months, the industry exported 2.41 million tons to the neighbour, where demand stood high in the wake of reconstruction work.
Exports to other destinations through sea also remained stable in the period under review.
Here's a SteelFirst report on steel imports in Pakistan:
Pakistan's imports of iron and steel products were 13% higher year-on-year in November, as troubles at state-owned Pakistan Steel continued to encourage purchasing from outside the country.
Imports reached 155,517 tonnes in November, up from 137,548 tonnes a year earlier and a little down from 156,427 tonnes in October this year.
The struggling Pakistan Steel, the country's main producer with 1.1 million tpy of capacity, has been operating at an average utilisation of 20% during 2012 because of financial troubles. Steelmakers in Pakistan also faces higher costs and problems with intermittent power supply.
Both these factors have kept output restrained, encouraging more imports of finished products to fill the gap.
At the same time, the production problems have led to much lower scrap import volumes.
Inbound shipments of ferrous scrap in November dropped to 100,673 tonnes, down 48% on the month and 25% year-on-year.
Here's a Dawn story on Pakistan's rising imports as PSM sputters:
KARACHI, March 20: Pakistan imported 3.2 million tons of iron and steel in FY11 amounting about $2 billion, which was 5 per cent of the annual import bill.
This was disclosed in the SBP’s 2nd quarterly report for 2011-12 which discussed in detail the pathetic condition of Pakistan Steel and demand of iron and steel in the country.
The finished steel imports are price competitive despite high import duties (from 10 to 35 per cent), 16 per cent sales tax, and 3 per cent withholding tax, the report said.
“This is distressing given Pakistan’s 1.4 billion tons unexploited proven iron ore reserves as well as sufficient domestic capacity (roughly 4.5 million tons). With full capacity utilisation, imports of finished goods can drop to as low as 0.1 million tons a year,” the report said.
In dollar terms, the net saving could exceed $1 billion per year. A number of factors are responsible for the present state of affairs including the ailing Pakistan Steel Mills, insufficient investment and loopholes in the tax system, the report noted.
Over 96 per cent of growth in world steel production during the last decade was contributed by Asia, with China and India virtually explaining the entire expansion.
In sharp contrast, Pakistan’s crude steel production declined from 1.1 million tons in FY01 to 0.4 million tons in FY11.
As domestic consumption continues to grow, the demand supply gap is widening. A conservative estimate puts demand for finished iron and steel products as over 6 million tons/annum.
Pakistan Steel Mills is the sole processor of iron ore in Pakistan and constitutes a little less than 20 per cent of the country’s capacity for finished steel.
In better times, the mills supplied raw material (billets and HR sheets) to the private sector as well.
“Since FY09 (when PSM reported a huge loss), crude steel production has been going downhill, dropping from 80 per cent of installed capacity in FY08 to only 23.8 per cent in Jul-Nov FY12,” said the report.
PSM has since been strapped for liquidity, unable to consistently fund raw material imports. Low crude production has affected production of finished steel by the PSM and the numerous downstream private mills relying on PSM, which now have to import raw material.
“To date, PSM has been unable to emerge out of the low funds-low capacity cycle,” the report noted.
But more importantly, the current local iron ore supply is sufficient to produce only 0.2 million tons steel a year. This means that at full capacity, PSM must import at least 1.5 million tons of iron ore, which amounts to import burden of approximately $0.2 billion annually (at FY11 price).
The PSM also imports coal for coking. Coking needs superior quality coal and is therefore this component is not substitutable locally. At full capacity, the PSM requires 0.85 million tons of coal per year ($ 0.1 billion at FY11 prices).
“In short, in order to break even, PSM must have sufficient funds to be able to run at efficient capacity. Otherwise, producing at low capacity will only lead to snowballing losses,” said the report.
Here's PakistanToday on expansion of re4fining capacity to 18 million tons:
Karachi - country’s largest oil refinery at Mouza Kund, District Lasbella, Balochistan. At present the refinery is in a state of pre-commissioning and preparatory activities wherein different plants, equipment and instrumentation are being put to confirmatory checks and tests.
The cold circulation of crude oil has already been established and sustained. Also furnaces of different process units have been test fired. The refinery is ready for hot commissioning and start up.
This newly-commissioned petroleum refinery would have an installed refining capacity of 120, 000 barrels per day.
Combined with existing and fully operative smaller refinery, the cumulative capacity shall be over 155,000 barrels per day which is 55% higher than the existing largest refinery in Pakistan.
Thus it would enhance overall crude oil refining capacity in the country from existing 12.25 to 18 million tons per year and would significantly contribute in reducing import of deficit refined petroleum products in the country.
This refinery can be further expanded up to 180,000 bpd.
“This milestone, for sure, has been made possible with sheer hard work of our Employees and support & cooperation of all our valued contractors. Upon commissioning this Refinery, with the blessings of the Almighty, will become the single largest in the country,” said Qaiser Jamal CEO Byco Oil Pakistan while declaring the completion.
Along with this new Refinery, the Country’s first isomerisation plant is being commissioned, he said.
The introduction of isomerisation technology in Pakistan would not only enable this refinery to produce higher volumes of motor gasoline to meet the country’s demand but this will be the first environment friendly motor gasoline, with almost nil content of Benzene.
The first parcel of crude oil for this refinery will be brought to the country’s first single point mooring installed 10km into the Arabian Sea for direct discharge to the Refinery storage tanks. This facility can discharge tankers carrying over 100,000 metric tons of crude oil.
With an investment of significantly over $600 million and rising, Byco also operates as a fast growing petroleum marketing business network comprising of 222 retail outlets.
Amir Abbassciy, CEO of Byco Industries Incorporated, parent company of Byco’s operating companies in the country said: “These are the first significant steps toward achieving our aim to be in integrated oil to chemicals and related infrastructure businesses.”
Here's Dawn on Pakistan's narrowing trade deficit:
KARACHI: Pakistan’s trade deficit narrowed by 14 per cent for the first six months of the fiscal year 2012/13, to $9.871 billion, compared to the same period last year, the Pakistan Bureau of Statistics said.
Exports rose 7.58 per cent to $12.051 billion during the July-Dec period compared to the same period last year,and imports eased to $21.922 billion from $22.678 billion.
On a monthly basis, the trade deficit fell to $1.703 billion in December from $1.711 billion the previous month.
Exports totaled $1.969 billion in December and imports were $3.672 billion.
Maybe our provincial (and federal) governments can learn something from evildoer-Modi's Gujarat about how to attract the foreign investment we so DESPERATELY need today.....
As the article indicates, Gujarat with a population of 60 million received 8 Billion$ FDI in FY 11. Whereas our country with a population of 180 million received only 0.8 Billion$ in FY 12. This means Modi's Gujarat managed to attract THIRTY TIMES the per capita FDI of our country.
There must be something we are doing wrong. Question is: Are we willing to learn, even if from our arch-enemies?
What are your views? What are we doing wrong and what is Modi doing right?
Modi is a great leader. That is first and foremost the reason why educated indians want him as next PM. No Paki leader is even 1/10 of him in vision.
No one gives a damn to what he did to teach muslims a lesson eons ago when muslims were the one to first start it.
Pak will beg to get a leader like Modi.
I'm personally a congress party voter but I do admire Modi's anti-corruption, pro business methods. Karnataka and Tamil Nadu of recent are following similar methods.
Here's a Nation newspaper report on power projects under way in Pakistan:
ISLAMABAD - Ministry of Water and Power is managing portfolio of 37 Independent Power Producers (IPPs) through Private Power and Infrastructure Board (PPIB) with a cumulative capacity of 11,771MW for solution of energy shortage problem in the country.
These projects, being managed on the basis of water, coal, gas and oil resources, are at various stages of implementation and will be commissioned this year through 2019. An official source on Monday said in addition to this there are numerous Hydro Power Producers (HPP) projects under construction for a cumulative capacity of 6054 MW which are also due to be commissioned from 2016-19.
He said the Ministry of Water and Power has been working on war footing to overcome the energy crises and was undertaking different projects under its two pronged strategy both in public and private sectors to meet the demand. It is pertinent to mention here that six IPPs, having cumulative capacity of 2530 MW have been commissioned through private sector since 2008.
Moreover, he said, the Ministry is determined to enhance production of existing power plants through GENCO rehabilitation projects and addition of new power plants like 747 MW combined cycle power plant at Guddu is underway for addition in the system. Under conservation measures, the official said in pursuance of Cabinet Decision two holidays were announced per week for all government offices which have resulted in conservation of approximately 250 MW.
Steps have been taken to minimize the load of unnecessary lights and hoardings while concerned departments have been requested to replace the street lighting with LEDs and use of solar energization to reduce load. He said a replacement of agricultural tubewell motors with efficient motors in MEPCO and IESCO are in progress which will also result in conservation of up to 60 MW electricity. A project of distributing 30 million CFLs to domestic consumers has been initiated which will ultimately result in conservation of 1000MW, recently a bill has been placed before National Assembly for introducing penalties to individuals involved in electricity theft which will result in reducing theft and increasing receivables in circular debt and line losses of the system.
He said an improvements in the system are underway by introduction of Advance Metering System (AMR) which will also help to reduce line losses and ultimate reduction in load while rehabilitation of transmission lines in collaboration with international funding agencies is also being implemented to improve the efficiency of the system.
Here's PakistanToday on record remittances from Pak diaspora:
KARACHI - Economic observers expect the inflow of ever-increasing worker remittances to the country rise to a historic $ 16 billion by the end of this financial year.
“Home remittances continue to remain upbeat reaching the level of USD 7.1 billion during the first six months of FY13,” said analysts at InvestCap Research.
Terming it as one of the major supporting tools for the current deficit, the remittances from expatriates, they said, continued its upward trajectory.
During the first half of FY13, remittances posted a colossal growth of 12.5% YoY to USD 7.12 billion, in absolute terms increasing by USD 791 million.
However, on a monthly basis, the head registered a growth of 11% reaching USD 1.13billion in December 2012.
Such increase was however misleading, emanating from a low base effect of November, 2012, rather than depicting an actual increasing trend.
“The country witnessed a huge influx of remittances, touching USD 1.37 b, in October, 2012, due to the Eid factor,” viewed Abdul Azeem at the InvestCap Research.
Following this, the analyst said, remittances in November, 2012, remained extraordinarily depressed at the level of USD 1.02 billion thus leading to a low base effect in December, 2012.
The huge chunk of remittances received from the Middle East continued to play a significant role in the overall inflows into the country.
Within this region, the major oil economy, Saudi Arabia remained the key contributor with 28% weight in total remittances; remittances from Saudi Arabia posted a growth of 18% YoY to USD 1.96 billion during the first half of FY13. One of the strongest economies of the world, Saudi Arabia continued to import employees from Pakistan, therefore, a positive impact was observed in remittances from this country.
Another region of the Middle East, United Arab Emirates also remained a key source of remittances as it maintained 21% weight in total remittances from where the over all remittances increased by 3% YoY to USD 1.46 billion in the first half of FY13.
Amongst the Western countries, USA was the most important contributor, accounting for 16% share in the total home remittances although the growth was flat (0.5% YoY) but inflow of USD 1.16 billion was witnessed during the first six months of FY13. Furthermore, remittances coming in from the UK experienced massive growth of 38% YoY during the same period. UK ranked second amongst the major contributors to increase in remittances in the first six months of FY 13.
“We expect the consistent upward trend in remittances to provide support to the current account (C/A) during the remaining period of FY13,” Azeem said.
However, he warned, IMF payments were likely to exert pressure on the current account deficit, as the country has to pay USD 1.7billion during the second half of FY13.
Although, lower imports and rising exports continue supporting the trade deficit, in the latter half of FY13, we expect a significant draw back to be evident in the form of shortage of gas, absorbing any such positives. We foresee such shortage to injure exports of the country, mainly the textile sector, being a major contributor to the country’s exports.
Here's NY Times on a huge protest march in Islamabad:
An enigmatic preacher is camped before the gates of Parliament with thousands of followers, demanding the government’s immediate ouster. The top court on Tuesday suddenly ordered the arrest of the prime minister. Violence is surging, with militants stepping up deadly attacks against both government forces and religious minorities. And relations with India have dipped, after ill-tempered border skirmishes in which soldiers on both sides were killed.
As it is all unfolding, the country’s powerful military command, long at odds with the government of President Asif Ali Zardari, is in sphinx mode. The army chief, Gen. Ashfaq Parvez Kayani, and his commanders have maintained a cool distance from the unfolding political chaos, their silence stoking speculation about whether the military’s days of political intervention are really, as it claims, over.
“It’s the silence of the legions that is unnerving,” said Ayaz Amir, an opposition member of Parliament.
“There’s a sense that things are snowballing — hard to predict in any way,” said Cyril Almeida, a senior writer at Dawn newspaper.
A giant rally in Lahore last month signaled the start of Mr. Qadri’s assault on Pakistan’s political classes, which he derides as incompetent and irredeemably corrupt — a resonant message in a country of high unemployment and crippling electricity shortages. He drove home his message with an intensive television advertising campaign, paid for with generous amounts of money, the origins of which he has not fully explained.
On Monday evening, he stepped up the attack, leading tens of thousands of followers into the heart of Islamabad, where he renewed demands that Mr. Zardari resign immediately. The crowd fell short of the promised “million-man march,” but was enough to spook the government: by Tuesday morning, he had pushed forward to a square in front of the Parliament.
“There is no Parliament; there is a group of looters, thieves and dacoits” — bandits — he said in a thundering voice, pointing to the building behind him. “Our lawmakers are the lawbreakers.”
The dramatic climax of that speech, however, came not from the preacher himself, but from the marble-walled Supreme Court about 200 yards up the street.
As Mr. Qadri spoke, news broke that Chief Justice Iftikhar Muhammad Chaudhry had issued an order for the arrest of the prime minister, Raja Pervez Ashraf. The report visibly thrilled the crowd, prompting loud cheers and a sense that the promised “revolution” was going their way.
The difference with Egypt, of course, is that Pakistan has no dictator to overthrow. And while Mr. Zardari’s government has faced criticism as having governed poorly in many respects, it has made considerable strides in anchoring the country’s democratic structures.
Through a series of constitutional amendments, all of them approved by the opposition, Mr. Zardari has gradually devolved power to the provinces, reduced his presidential powers and made the electoral process more transparent. Now, advisers say, he is intent on completing the government’s term in March — the first time in Pakistan’s history that a civilian government would have seen out its five-year term.
But first that government must make it through the coming days.
Having shut down the center of Islamabad, and dominated the news cycle, Mr. Qadri is unlikely to surrender the limelight easily. His well-organized supporters insist they will not budge until their demands are met, and are encouraging other Pakistanis to join them.
If that happens, the government may have little option but to break up the protest by force. And it would be at that point that the army, sitting quietly on the fence, would be most likely to step in.
Here's Bloomberg on Pak stock market outlook:
Muddassar Malik, chief executive officer of BMA Funds, who oversees the equivalent of $120 million in stocks and bonds, comments on his outlook for Pakistan’s stock market after the benchmark Karachi Stock Exchange 100 index sank 3.2 percent to 16,107.89 yesterday, its steepest drop since Aug. 9, 2011.
Stocks fell after the country’s Supreme Court ordered the arrest of Prime Minister Raja Pervez Ashraf in a corruption case involving rental power projects. Prior to that announcement, Tahir-ul-Qadri, a popular cleric, rallied thousands of protesters in the capital Islamabad, calling for the government to be dismissed. Malik spoke in a phone interview from London late yesterday.
On the impact of the court order:
“The events are very significant, disruptive events for Pakistan’s political landscape. But I feel this is not the end, perhaps it’s the beginning. I believe the likelihood is that these events will be driving the position into positive territory.
“The structural and the fundamental story in Pakistan remains unimpaired; high population, a country with significant demand driven by domestic consumers and located in one of the fastest growing regions in the world. What is missing is a set of economic and political policies which create the right environment for investment and I think the disruption can bring about that change in confidence. There is a certain degree of optimism that we have to look forward to.”
On investors’ fears:
“There are concerns about the future direction post- elections. Investors are looking for clarity. In the last four or five years, Pakistan has been through a very difficult and challenging period in terms of politics and economics as well as the war on terror. So investors see a landscape that is starving of investment, and I think people are hungry to get back into the game.”
On market sentiment:
“The unexpected announcement was obviously a jolt for the market and it caught the market unaware and wrong-footed in the context of the political demonstrations taking place in Islamabad. Market sentiment is 100 percent driven by politics at the moment and I think it’s unrealistic to assume that sentiment will change very quickly for the next week to fortnight.”
On BMA Fund’s index target for 2013:
“Our index target for the calendar year 2013 is 20,000, and we don’t feel that the current set of events will derail that target for the time being. With the market showing the declines it has done and also the declines it could do in the coming days, it will certainly set up some of the good high- quality stocks to give healthy returns in excess to 20 percent to 30 percent.”
Here's a Nation report on oil and gas production in Pakistan:
Country’s average oil production has increased by a decent 10 per cent to 71.6k barrels a day in 2012 from 64.9k in 2011 while gas production, which contributes approximately 50 per cent to energy mix, grew by 4 per cent to an average of 4.2bcfd from 2011 average gas production of 4.1bcfd, latest data revealed.
Industry experts said that five years back in 2007 average gas production was 3.9bcfd. “This increase is well below the organic growth in its consumption thereby creating huge deficit affecting the overall economic growth,” said Nauman Khan, an energy expert. He said that major news of the year was commissioning of KPD-TAY that added an average 104mmcfd to the system. However, other gas fields like Qadirpur, Zamazama, Mari led their due hands. However, natural decline in major fields namely Sui and Sawan coupled with reduce production from Tal block diluted its impact.
According to experts, oil production was 70.4k in 2007. Improvement in 2012 was largely attributed to Nashpa field. During 2012, Nashpa field of Naspha block located in KPK region of the Pakistan was the star performer for the sector. Thanks to favorable results of its appraisal wells, fields production increased by a mammoth 109 per cent to above 11k bpd as against 5.5k bpd last year. Other notable increase also came from Adhi fields as its production rose by a decent 16 per cent. The much talked abou, Tal block production increased by a mere 3 per cent, despite commissioning of Makori East towards the end of the year. Though, experts continue to have conviction in the block’s potential but commissioning of Makori CPF (Central Processing Facility) holds its key.
A Top line security report suggests that near-term trigger is expected to come from materialization production from Sinjhoro fields, Mamikhel-2 and Maramzai-2, while improved production from Naspha, Adhi and Mela fields are also events to keep a track.
Amongst the listed companies, OGDC’s average gas production increased by a decent 14 per cent in 2012, largely attributed to KPD-TAY effect, while its oil production grew by 7 per cent. PPL performed well in the oil, depicting a growth of 12 per cent however, its gas production declined by 4 per cent due to subdued performance of Sui and Sawan. 2012 was a disappointing year for POL whose oil production declined by 18 per cent mainly on account capped production from Tal and decline in production from its own operating fields. Analysts are of the view that with security concerns and circular debt restricting Pakistan oil & gas exploration companies to tap in new reservoir, the sector continues to rely on maximizing the yield of existing reservoirs, industry experts said.
As a result, the increase in oil and gas production in 2012 failed to fill the mounting demand thereby affecting the overall industrial growth besides affecting the transport and other segments
^^RH: "Here's PakistanToday on record remittances from Pak diaspora..."
You have been incessantly beating this remittance dhol for a long time now. Here is a different view by Dr. Kamal Monnoo (Jan 16, 2013):
Yes? Is Dr. Monnoo wrong? If so, how is he wrong?
HWJ: "Is Dr. Monnoo wrong? If so, how is he wrong? "
Monnoo is focusing too much on the cyclical economic factors and not enough on the longer term demographic trends.
Western nations are going to need more, not fewer, workers from developing nations like Pakistan because the populations in the OECD nations are aging and shrinking.
Kerala example is not relevant because Kerala itself has sub-replacement TFR of just 1.7 which is worse than some of the European nations.
Pakistan, with its total fertility rate of 3.5, has the world’s sixth largest population, seventh largest diaspora and the ninth largest labor force. With rapidly declining fertility and aging populations in the industrialized world, Pakistan's growing talent pool is likely to play a much bigger role to satisfy global demand for workers in the 21st century and contribute to the well-being of Pakistan as well as other parts of the world.
I have used your "selective data" approach to show that the PPP government has done a WONDERFUL job in their first 5-year term.
In the Early Days (GFC) of the PPP term in office-
1) GDP: 162 Billion$
2) Per capita GDP: 990$
3) Inflation: 25%
4) Forex Reserves: 7 Billion$
5) Remittances: 7 Billion$
At the end (Spring 2013) of the PPP term in office-
1) GDP: 248 Billion$
2) Per capita GDP: 1,450$
3) Inflation: 8%
4) Forex Reserves: 13 Billion$
5) Remittances: 16 Billion$
SUMMARY: In the five years of PPP-rule, GDP & GDP per capita increased by about 50%, while remittances and forex reserves doubled, even as inflation was brought down by 2/3.
I think this makes an EXCELLENT case for re-electing the PPP to do 5 more years of the SAME.
What do you think?
Here's an ET blog post taking media to task:
A recent article in Wired, Danger Room highlighted the resurgence of the US drone campaign in Pakistan. While it focuses on the war, a lot was left untold about the nation’s story that is as heartening as it is heartrending, and as inspiring as it is seemingly dismaying.
The story of four of these start-ups, that launched in 2012 speak volumes about the resilience, commitment and resourcefulness of its founders.
The first is Vital Agri Nutrients, a young, agricultural Research and Development focused company that is working on developing innovative products for farmers. It has had some recent breakthroughs with their micro-nutrients and soil amendments which are currently in field trials. Given the expected shortage of water and growing prices of fertilisers world-wide, the company and its products present a promising opportunity for small and large farmers to improve the crop yield and lower their input cost per acre by employing soil amendments that help with more efficient use of fertilisers and water in plants.
Next, four young entrepreneurs at Eyedeus, aided by decades of joint research in computer vision, have developed technology that enables mobile devices to have eyes and intelligently process real-world imagery using an increasingly powerful mobile processors. Unlike the cameras on mobile devices that just allow ‘dumb’ recording of images or videos, Eyedeus technology allows developers to augment the reality around users. The company’s first product, called ‘Groopic’ (beta available on the AppStore) is already getting rave reviews. Groopic allows group pictures to be taken in a way never before possible. The person taking the picture can now be part of the group picture, go figure!
Eyedeus, by the way, is part of a full-service technology incubator called Plan 9, that’s a visionary initiative of the government of Punjab, and it hosts at least a dozen other start-ups alongside Eyedeus, working on equally innovative products and services.
Similarly, Invest2Innovate is another accelerator that is supporting at least five entrepreneurial ventures focused on businesses with a large social impact.
Third is a new age production house called JugnooMedia, developing interactive, digital musical toys for mobile devices with an aim of providing toddlers and young children new avenues of learning that are more fun and effective than the traditional, classroom teaching. The demos of their first title are very impressive and the company has announced that it will be released on the Apple AppStore and Android Marketplace soon.
And finally, there is BLISS – a social venture that is aimed at improving the livelihood of women in Pakistan alongside educating them. BLISS has already done a pilot program in a small village of Pakistan where women were taught embroidery skills alongside formal school education in the first phase. In the second phase, BLISS provided the same women an opportunity to co-op with the company and develop handbags designed by professional designers which were then marketed by BLISS through its online store as well as an impressive list of global brand ambassadors. The women who made the bags got the lion’s share of the revenue from those sales and the rest of the money is being used to sustain the operations of the organisation and scale the program.
The next time a story is told about the problems Pakistan is having with the political instability, corruption, energy shortage and terrorism the world must know, that to the same land belong some of the best, battle-tested and inventive entrepreneurs working on shaping the future of the world!
anyone wants to do the same in Pakistan????????
Sanjay: "anyone wants to do the same in Pakistan????????"
Pakistan has plenty of big retailers..both local and multi-national.
Consumer spending in Pakistan has increased at a 26 percent average pace the past three years, compared with 7.7 percent for Asia, according to data compiled by Euromonitor International, a consumer research firm.
...Pakistan’s middle class has doubled to 70 million people in the past decade as booms in agriculture and residential property, as well as jobs in telecom and media have helped people prosper, according to Sakib Sherani, chief executive officer at Macroeconomic Insights in Islamabad.
Here's Bloomberg on informal savings and investment in Pakistan:
Ali has been selling wall clocks and wristwatches in a crowded Karachi market for 15 years. He’s been participating in savings circles with fellow shopkeepers for just as long, and has used the proceeds to buy a car and acquire a new store.
Now he’s a few months away from getting 400,000 rupees ($4,100) from a savings group of 16 shopkeepers into which he’s been paying 1,000 rupees a day for almost a year. He plans to put a down payment on an apartment. “This system is flawless,” says Ali, 35, who goes by one name. “You can never save this way without this binding commitment of making payments every day or every month. At banks there are hassles and procedures that waste time. This is simple. The organizer comes to collect the money himself, and because of the trust element, it’s a given that we’ll get the money.”
Millions of Pakistanis save billions of rupees in informal, interest-free savings circles called ballot committees—popularly known as BCs—run by housewives, students, office workers, shopkeepers, even high-society ladies. Each member of a group of trusted friends or relatives contributes the same sum daily or monthly to a pool for a predetermined length of time, usually one year. Through a ballot, each participant is allotted a number indicating his or her turn. Every month, one participant gets the pool total. Everyone on the committee keeps contributing until each member gets a pot of cash.
No one knows the origins of savings circles, but they’re found in Africa and Latin America as well as Asia. “This system has existed in South Asia as long as I’ve known, and it was started by low-income women who were financially insecure,” says Ashfaque Hasan Khan, dean at the business school of the National University of Sciences & Technology in Islamabad. “The purpose was to hedge against a problem or to pay for a son or daughter’s wedding.” In India a similar savings plan, called a chit fund, flourishes. The big difference is that India’s savings circles, after years of operating on their own, are now regulated by the government.
No estimates exist of the total amount of the funds collected by the committees. In Karachi alone, the All Karachi Traders Alliance Association estimates 10 million rupees pour into ballot committees on a daily basis. “The size and volume of the circles is on the rise because inflationary pressures mean people need more cash now to do the same things,” says Dean Khan of National University. Inflation in Pakistan is close to 8 percent. While the official savings rate is 10.7 percent of gross domestic product, it is probably higher thanks to the committees.
Another reason the ballot committees are flourishing is the low level of financial literacy in Pakistan and the reluctance of ordinary Pakistanis to take part in cumbersome banking procedures. “Coverage by bank branches is fairly limited, especially in rural areas,” says Sakib Sherani, chief executive officer at Macro Economic Insights, a research firm in Islamabad. “The ballot committees offer greater flexibility and avoid the hassle of traveling to a bank, keeping documentation, and paying service charges.”
Only 14 percent of Pakistanis use a financial product from a formal financial institution, according to a 2009 World Bank report. That compares with 48 percent for India. But when informal financial networks such as the BCs are taken into account, 50.5 percent of Pakistanis have access to finance, according to the report. ....
Polio workers back to work in Peshawar, reports Aljazeera:
Health workers are back on the streets of Peshawar in Pakistan, defying death threats so they can vaccinate children against polio.
Nine of their colleagues were killed last month, and now they have been given extra security.
Despite the risks, many health workers say they must carry out this important task. Last year, 58 cases of polio were reported in Pakistan last year.
Here's PakistanToday on vehicle sales data in Pakistan:
ISLAMABAD - Tractors and trucks production during last five months of current financial year registered growth of 83.50 percent and 15.47 percent respectively.
About 21,550 tractors were produced during first five months of current financial year as compared to 11,744 tractors during same period last year.
According to the data of Pakistan Bureau of Statistics about 732 trucks were produced in first five months of current financial year as compared to the 866 trucks production of same period last year.
Meanwhile, 257 buses and 45376 jeeps produced during the period from July- November 2012-13 as compared to the same period of last year.
The data revealed that 6165 numbers of light commercial vehicles were produced in first five months of current financial year as compared to the same period of last year.
About 688492 numbers of motorcycles were produced during the period under review as compared to the 691818 numbers production of same period last year.
During the month of November 2012, about 4777 numbers of tractors
Were produced as compared to 4017 numbers of tractors production in November 2011 where as 108 numbers trucks were produced as compared to 134 numbers production same month of last year.
About 35 buses produced in month of November 2012 as compared to the production of 48 buses of same month of last year.
Jeeps and car production was recorded at 8009 during the months of November 2012 as compared to the 10030 cars and jeeps produced in November 2011.
Motorcycles production during the month of November 2012 was recorded at 142497 as against the production of 137825 motor cycles produced in the month of November 2011.
Here's BR on renewable energy projects in Sindh:
KARACHI: Sindh government is working on 40 different power projects in its wind corridor, with a total generation capacity of 2000 MW in next two years, said Mir Hussain Ali, provincial Secretary for Environment and Alternate Energy Department.
This will also allow the electrification of about 120 schools in rural Sindh, he said addressing a session on the Renewable Energy organized by IUCN - Pakistan on Sunday.
Talking about the opportunities in the wind corridor, he said, that the government is working on about 40 projects with various investors with total generation capacity of 2000 MW in the next two years.
"This is despite the fact that Renewable Energy projects often do not get a green light in public sector because of the initial costs," he said.
The Sindh secretary for environment and alternative energy said the government is also supplying solar stoves and working on a biogas project worth Rs. 200 million rupees.
The secretary for environment and alternative energy mentioned that in Mirpurkhas, Solar Water Pumping Stations have been installed to meet the electricity crunch.
Mir Hussain Ali also talked about having immense potential of biogas at the Cattle Colony in Karachi and prospects in coastal areas of Pakistan in lieu of wind related projects.
On the occasion Carl Pope, a renowned expert on renewable energy in his presentation,"Renewable Energy Cheaper in the Long Run," said that presently over 1.3 billion people in the world are estimated to be living without electricity.
One billion of these people, including 700 million residents of South Asia will remain without electricity until 2030 if the switch to alternatives does not happen, he warned.
Here is an article entitled
"You think 2012 was bad?"
Here's an APP report about Pakistan's top ranking in snooker:
Asif's title victory helped Pakistan to get 120 points and accumulated total 172 points to attain top position in the Men Snooker Ranking for the year 2012. Pakistan had 52 points after previous year's championship and was at No.8.
The ranking is based on points accumulated for their performance in current year and immediate previous championships,said a spokesman of Pakistan Billiard and Snooker Federation here on Monday.
Both the players from England reached in Quarter finals and one moved to final helped the country to gain 100 points and placed England at position 3 with total 142 points. Last year England was at Position 10. Poland and Switzerland also performed well to better their positions as 16 and 17 from previous bests of 28 and 32 respectively. Countries that have dropped down noticeably in the ranking list includes Thailand (down to Rank 4 from top position), India (from 2 to 6), Ireland (from 3 to 8) and Afghanistan (from 9 to 23).
Here's Indian journalist Ajay Shukla in Business Standard on his recent trip to Pakistan:
During my travels in Pakistan last week, I could hardly miss the stark difference between Indian and Pakistani reactions to the killing and mutilation of two Indian soldiers on the Line of Control (LoC) in J&K. Oblivious to Indian jingoism, the Pakistani press covered, minute-by-minute, the Anna Hazare-style reality show that was Canada-based cleric Tahir ul-Qadri’s challenge to that country's political establishment. This is a metaphor for a changing Indo-Pak dynamic. For decades, India looked inward while Islamabad tom-tommed the looming India threat. Today as Pakistan, while lurching toward a form of democracy, focuses mainly on its burgeoning internal challenges, India increasingly obsesses about the terrorist threat from across the border. This, even as the tide of Pakistan-fomented violence recedes and Indian police and intelligence officials shift focus to disaffection within the country.
But the fortuitous outcome of Pakistan’s single-minded focus on Tahir ul-Qadri’s so-called Long March was that New Delhi's tough response to brutality on the LoC went almost unnoticed in Pakistan, allowing Islamabad (which has little appetite for roiling the waters) to settle for a pro-forma response. This avoided an acid exchange of tit-for-tat statements that would have united Pakistan’s divided anti-India constituency.
But that was luck, not design. New Delhi, which views Pakistan in the context of an outdated and intellectually lazy narrative of implacable hostility, needs a clearer understanding of a rapidly changing Pakistani playfield. The most important transformation relates to Pakistan’s most powerful organisation, the army; and the evolving relationship between Pakistan’s five key institutions, viz. the army, the polity, the judiciary, civil society and the media.
Interestingly, even as Pakistan’s military dims its public profile, New Delhi has taken to citing the Indian Army as the basis for its policy positions. In choosing not to sign a Siachen Agreement (wisely, but that is another debate!), New Delhi holds up the army’s objections as a fig leaf. In hardening its condemnation of Pakistan after initially soft-pedalling the recent LoC incident, the government took its cue from the army. A disempowered Indian military probably basks in this show of concern, but it would do well to remember that in the aspects that really matter — e.g., long-term strategic planning; equipment modernisation; and soldiers’ welfare — the military remains out in the cold.
Here's Bloomberg on KSE-100 rebounding on earnings expectations:
Pakistan’s (KSE100) stocks rose to a three- week high, led by Fauji Fertilizer Co., the biggest maker of the farming material, which reports earnings tomorrow.
The Karachi Stock Exchange 100 Index gained 1.5 percent to 16,894.09, the highest close since Dec. 31. Fauji Fertilizer rose 1.5 percent to 120.36 rupees, the biggest contributor to the benchmark index’s advance. Lucky Cement Ltd. (LUCK), due to report profit on Jan. 28, rose 1.6 percent to 153.46 rupees.
“Investors are confident that the earning season will be pretty good this quarter,” Khurram Schehzad, head of research at Arif Habib Ltd., said by phone.
Arif Habib, a Karachi-based brokerage, forecasts overall earnings to rise as much as 15 percent in the three months to Dec. 31 from a year earlier, he said. The KSE 100 trades for 6.9 times estimates for this year’s profit, the lowest among 15 Asia-Pacific benchmark indexes tracked by Bloomberg.
The KSE 100 tumbled 3.2 percent on Jan. 15, the biggest drop since August 2011, after the nation’s Supreme Court ordered the arrest of Prime Minister Raja Pervez Ashraf. The gauge has climbed 4.9 percent since then, after the chairman of the anti- corruption agency told the chief justice Jan. 17 there isn’t enough evidence to arrest the prime minister and others accused of graft in awarding power contracts.
New shopping mall to open in Islamabad, reports The Nation:
ISLAMABAD (PR) - The Centaurus Mall, Pakistan’s mega shopping and entertainment destination, is all-set to open its doors by the middle of next month, says a press release.
“We are all set to make a soft launch. Quite a few brands have confirmed their readiness by the date we have communicated to them, and others are working day in and day out to make sure they don’t miss out on this opportunity,” the release stated.
The Centaurus Mall, located at the heart of federal capital, is a multi-facility complex featuring a deluxe mega shopping mall (covering 400,000 sq. ft), 5-screen Cineplex, a state-of-the-art kids entertainment area, and food court offering a variety of cuisines.
“The word is out now, and we are mulling the date of 17th February to make this luxurious dream become a reality. Dozens of top-of-the-line brands are going to be there and the rest of the mall features like Cineplex, and kids play area, health club etc will be up and ready within 20 days of the launch, ShahbazRana, Head Business Development of The Centaurus confirmed.
The multi-billion project is a joint venture of Al-Tamimi Group of Saudi Arabia and Sardar Builders of Pakistan.
^^RH: Here's a Nation report on GoP MOU with Twariqi and Posco...
So you now admit that I was right when I said:
^^HWJ: "As a thumb rule, 1 MTPA = 1 Billion$."
Here's a ET overview of plans for Karachi:
Karachi has perpetually evolved ever since Sir Charles Napier first set foot on the once sleepy backwater in 1843 and discovered its potential. Around 170 years later, the growth shows no signs of stopping. From flyovers and exotic animals to the country’s tallest building – there will be lots of new additions to look forward to in 2013. There may be a lot of pessimism, but as architect Shahid Abdulla says, “We have already been battered and now it’s time to bounce back just like [Pakistan’s performance in] hockey and cricket!” Here is what some of prominent personalities had to say about what’s lined up for over 18 million people who call Karachi their home:
Director of the Karachi Zoological Gardens, Bashir Sadozai:
“This year we will import a pair of white tigers and bigger enclosures will be constructed for all the big cats. This year will also see a veterinary hospital within the zoo. We are also trying to ensure that animals breed and their offspring survive – a miniature horse is pregnant.”
Architect Shahid Abdulla:
“A lot of people will be interested in the completion of the remaining part of the Dolmen City Mall in Clifton. Around 60 per cent of it has been opened to the public. The Ocean Towers [near Do Talwar] will also stand out. It will have the finest movie theatre and the building is beautiful.”
Town planner Arif Hasan:
“It’s a myth that more flyovers can help improve traffic congestion. We need a mass transit system, which includes Karachi Circular Railway. But how long it will take for to actually start working is anyone’s guess. Our vision should be to make the roads pedestrian-friendly.”
DIG Traffic Police Khurram Gulzar
“People need to change their mindset. Please be patient. Everyone seems to be in a hurry. We have around 3,200 police constables deputed every day to manage traffic. Even then, it’s very difficult to convince people to follow traffic rules.
We must move bus and truck stands to the outskirts. The infrastructure cannot sustain them anymore. But the completion of the other track of the Lyari Expressway will help a lot in easing traffic woes.”
Karachi Metropolitan Corporation’s director-general of technical services, Altaf Memon:
“Five flyovers will be constructed this year. Four of them are being built on Shahrae Pakistan and one on Sharae Faisal near the Jinnah International Airport. We also plan to start work this month on two more overheard bridges at Shaheen Complex intersection and Golimar.
Another important project is the improvement of Banaras Chowk. The place underneath the Banaras Flyover is in shambles. We couldn’t construct the roads before because of multiple reasons.”
Director-general of parks and horticulture, Niaz Soomro:
“The renovated Hill Park will be ready by February. It will have a series of water fountains and a safer view point on the hill. [The previous spot] was closed for public after it was declared dangerous.
I am also sure people will love to visit Aziz Bhatti Park once we are done reconstructing the pond there. A wooden skating platform for children has also been planned. Hopefully, work on Clifton Aquarium will also start this year.”
^^RH Quotes Town-Planner Arif Hassan: “It’s a myth that more flyovers can help improve traffic congestion. We need a mass transit system, which includes Karachi Circular Railway. But how long it will take for to actually start working is anyone’s guess. Our vision should be to make the roads pedestrian-friendly.”
Yes, this is true. A city the size of Karachi ABSOLUTELY needs a mixed bus-rail mass transit system.
But it currently has NONE. Building a brand-new mass transit system will take 10 billion$ at least.
But our total domestic capital generation in the WHOLE of Pakistan is merely 20 Billion$.
So there is no way we can afford to do this with our own internal resources.
This means that foreign investors (Countries, IFIs, Corporations) will need to form some sort of consortium to come up with this 10 Billion$ and then come and build our mass transit system.
This again leads to my constant question to you-- WHO will want to invest such a large sum in a city that is being described in the EDITORIALS of leading LOCAL newspapers as follows:
Do you really think your silicon-valley-based "rosy" blog is enough to counterbalance the views expressed in the editorial columns of leading newspapers by experienced journalists who ACTUALLY live there in Karachi?
Are you really that naive that you think you can "fix" Karachi's "image" by typing on your computer in your bay-area home? When will the sheer futility and irrelevance of your "image make-over" efforts finally sink in?
HWJ: "This again leads to my constant question to you-- WHO will want to invest..."
Here's a APP report on the revival of KCR at a cost of over $2.5 billion:
The Economic Coordination Committee (ECC) of the Cabinet here on Tuesday approved the waiver of on- lending charges to Karachi Urban Transport Corporation for the project "Revival of Karachi Circular Railways (KCR) as modern commuter system".
The Ministry of Railways moved the summary in this regard seeking the approval of the ECC for waiver of on-lending charges to Karachi Urban Transport Corporation for the project Revival of Karachi Circular Railways.
The ECC which met here under the chairmanship of Minister for Finance and Economic Affairs Dr. Abdul Hafeez Shaikh was informed that Japan International Cooperation Agency (JICA) has already agreed to provide 93.5pc ($2.4 billion) of the estimated cost through soft loan at a markup of 0.2pc payable in 40 years including 10 years grace period. The remaining 6.5pc ($169.6 million) will be borne by the Ministry of Railway (60pc equity), Government of Sindh (25pc equity) and the City District Government Karachi (15pc equity); the stakeholders of KUTC as per their share.
Japan International Cooperation Agency (JICA) has already agreed to provide 93.5pc (US$2.4 billion) of the estimated cost through soft loan at a markup of 0.2pc payable in 40 years including 10 years grace period.
The remaining 6.5pc (US$169.6 million) will be borne by the Ministry of Railway (60pc equity), Government of Sindh (25pc equity) and the City District Government Karachi (15pc equity); the stakeholders of KUTC as per their share.
^^RH: "Here's a APP report on the revival of KCR at a cost of over $2.5 billion.."
Hope Springs Eternal.
"It ain't over til the fat lady sings".
All of this is very well, but this "revival" has happened again and again for the last 30 years. Has anything happened in all that time? If not, why should this time be different? Why should we now believe in this round of the "revival" of the old plans?
The GOP cannot even resolve the Circular Debt crisis that is DESTROYING our economy because they do not have any money to spare. Under these circumstances, where will they get the money for "KCR"?
Unless we signifacntly boost our pathetic 9% savings rate, the only was ANYTHING large (comprehensive mass transit, large port, big dams, i.e > 1 Billion$) will ever get built in Pakistan is with FOREIGN money.
We are now completely and utterly dependent on foreigners.
And so I repeat my question.....
Pak textile exports rose 8.55% in July-Dec 2012 period, reports Fiber2Fashion:
With a year-on-year rise of 8.55 percent, Pakistan’s textile and garment exports for first half of the current fiscal increased to US$ 6.458 billion from US$ 5.590 billion worth of exports made during the corresponding period of last year.
According to Pakistan Bureau of Statistics (PBS), exports for December 2012 grew to US$ 1.058 billion, compared to exports of US$ 1.009 billion in December 2011.
Product-wise, cotton yarn exports grew by 38 percent year-on-year during July-December 2012, while that of cotton cloth by 12.31 percent, yarn by 53.94 percent, towels by 10.98 percent, tents by 25.39 percent, readymade garments by 13.29 percent and other textile materials by 62.95 percent.
On the other hand, raw material exports plummeted by 51.46 percent year-on-year, cotton carded by 85.15 percent, knitwear by 2.02 percent, bed wear by 9.61 percent, art silk and synthetic textiles by 19.69 percent and made-up articles by 6.89 percent, the PBS data showed.
Karachi Bourse closes over 17,000 points first time ever, reports Dawn:
KARACHI: Stocks roared ahead at the Karachi Stock Exchange with the KSE-100 index quite easily breaking the psychological barrier of 17,000 on Thursday.
The benchmark settled at 17,056.36 points, representing gain of 147.69 points.
The market capitalisation-based KSE-30 index jumped 125.28 points to 13,931.66 points.
Figures released by the National Clearing Company of Pakistan showed that mutual funds were major buyers with net purchases worth $6.03 million. Foreign investors sold equity in the net sum of $0.76 million.
Turnover galloped to 271 million shares on Thursday, against 218 million shares traded the earlier day with the trading value increasing to Rs6.9 billion, from Rs5.5 billion.
Market capitalisation was up to Rs4.263 trillion, from Rs4.223 trillion.
In all, 353 stocks came up for trading with 205 gainers; 123 losers and 25 ending at the previous values.
Equity dealer, Samar Iqbal at Topline Securities observed that the Karachi bourse managed to close above psychological mark of 17,000.
Institutional buying and good corporate results helped equity prices to improve by approximately one per cent.
More than expected earnings announcement by Engro Foods helped the market sentiment.
Mid cap cement stocks performed well as investors expecting healthy profits for the quarter ending December.
Ahsan Mehanti at Arif Habib Corp stated that the stocks had closed at record high amid rising trades in the earnings announcements session at KSE after SBP slashed yield on T-bills.
Other reasons listed for the bullish trend at the market were investor hopes for policy rate cut in monetary announcement due next month, rising local cement prices, easing political uncertainty and renewed foreign interest in Pakistani equities.
Hasnain Asghar Ali at Escorts Capital commented that fresh inflows in E&P stocks took along the benchmark for yet another historic session.
The heavy weight E&P stocks led the bullish run and were well supported by the cement and textiles. Also better than expected earnings of EFood invited renewed buying interest as the company reported record growth in earnings.
The news flows regarding Secondary Public Offering of PPL, settlement of property dispute with Etisalaat and issuance of 3G license stayed the driving factor for the local equities.
Judicial hearings, law and order concerns and volatility on political front continued to suggest caution.
On Thursday’s trading, Unilever Food posted the highest gain for the day, in the sum of Rs105 to Rs3905 and was followed by Bata (Pak) which rose by Rs41.05 to Rs1355.
On the other side, UniLever Pak posted the heaviest loss of Rs35.16 to Rs9914.83 and Sanofi-Aventis Pak declined by Rs9 to Rs316.
The 10-top active list was again dominated by the sideboard items. Fauji Cement rose by 32 paisa to Rs7.80 on a huge volume of 60m shares.
It was followed by Maple Leaf Cement, which hit the ‘upper circuit’ with a gain of Re1 to end at Rs17.86 on 23m shares.
Byco Petroleum added 45 paisa to close at Rs14.37 on 20m shares; Jah.Sidd.Co was up by19 paisa to s16.53 on 14m shares; Fatima Fertilizer Company edged higher by 8 paisa to Rs25.88 on13m shares; PTCL was up by 46 paisa to Rs17.82 on12m shares; Lafarge Pakistan was firm by 16 paisa to Rs5.46 on 8m shares; Engro Foods, which declared financial figures on Thursday, was greeted warmly by investors with the price of stock jumping by Rs3.83 to Rs100.82.
TRG was the only scrip among the volume leaders which shed 7 paisa to s7.01 on 6m shares and KESC added 19 paisa to its overnight value and closed at Rs5.84 on 6m shares.
^^RH: "Here's a summary of BMI report on Pak power sector..."
Let us summarize the summary:
START: Pakistan has a plethora of potentially varied and rich power options from which to choose.
(Exactly in the same order as they appear in the text)
1)Planned investments may not materialise
2)Deals with Iran could trigger sanctions and loss of aid
3)Circular debt has led to closure of existing plants
4)Existing plants are aging and underproducing.
5)Lack of investment in aging grid is bottleneck
6)Government is creaking under subsidy burden
7)Private investors are pulling out
8)Funding for large dams & Thar coal is difficult to get due to environmental concerns
9)Intra-provincial ethnic suspicions have stalled many smaller dams.
10)India may be able to deliver refined fuels and ready power, but political future is uncertain.
Well? Would you like to put some sort of "happy, happy, happy" interpretation on this?
Here's PakistanToday on politics driving economy and stocks in Pakistan:
KARACHI - Among other factors, the political activity near the looming general elections in the country is calling the shots when it comes to Karachi Stock Exchange (KSE).
Last Thursday witnessed the KSE climbing to a new high with the benchmark KSE-100 share index peaking beyond 17,000 points level.
The market observers attributed the historic positive to the politico-economic factors developing on the country’s internal and external fronts. The KSE 100-share index gained 148 points to close at 17,056.36 points compared to Wednesday’s 16,908.67 points. The intraday high and low the index hit on the day were recorded at 17,067.58 and 16,908.67 respectively, the closing point of the previous day.
Of the total 353 scrips traded, 205 gained, 123 lost and 25 saw no change in their price. The trading volumes were higher to climb to 271 million shares as against 218 million of the previous session. The trading value also rose to Rs 6.90 billion from Rs 5.49 billion on Wednesday. The market capital grew beyond Rs 4.263 trillion compared to Rs 4.22 trillion a day earlier.
The free float KSE-30 index also set in the green zone and gained 125 points to last at 13,931.66 points against 13,806.38 points of the previous trading session.
The day marked mostly the second and third tier stocks leading the volumes with Fauji Cement, the volume leader, counting its traded shares as 60.334 million, gaining Re 32 paisas on each of its stakes that were priced at Rs 7.48 in the opening and Rs 7.80 at closing.
Turnover on the future market also headed northward to stand at 22.983 million shares compared to Wednesday’s 22.172 million.
According to stocks analysts, the result announcement session had led other positives to help the index peak to the historic high.
Muhammad Sohail, a broker and senior analyst at the KSE, said the announcement of “good” corporate results was the leading attributable factor for Thursday’s stocks market boost.
“Good corporate results, foreign buying and a relative calm on local political front helped the equities to cross the 17000 mark,” Sohail, the Chief Executive Officer of Topline Securities, told Pakistan Today.
Another equity analyst Ashen Mehanti, a director at Arif Habib Securities, said the rate-cut by the central bank in its Wednesday’s T-bill auction had coupled with the favorable announcement factor.
“Stocks closed at record high amid rising trades in the earnings announcements session at KSE after the SBP slashes yield on T-bills,” the analyst said.
Other catalysts Mehanti cited were the investors’ hope for a possible cut in the SBP discount rate to be announced next month, rising local cement prices, easing political uncertainty and renewed foreign interest. The abovementioned factors, the analyst said “played a catalyst role in bullish close in stocks across the board at KSE ahead of major earning announcements due next week”.
Here's a Dawn story on polio eradication in Pakistan:
LAHORE, Jan 26: A World Health Organization (WHO) official says this is for the first time in the public health history of Pakistan that the country is on the track to get rid of poliovirus type 3 (P3), one of the two globally continuing strains of the wild poliovirus, in April.
Last time, a P3 case was reported on April 14, 2012 and it would be a great breakthrough in the fight against polio if the virus is not found in any part of the country till April 14 this year.
India is gearing up to be declared polio free by 2014. The WHO has already removed India from the list of polio endemic countries.
“We believe that Pakistan is on the right track to become free of poliovirus type P3, as the last P3 case was reported in the Bara Tehsil in Khyber Agency in the second week of April 2012, whereas all recent sewage samples show no active transmission of the P3 strain across the country,” Dr Elias Durry, head of the Polio Eradication Initiative at WHO Pakistan, told Dawn.
According to the WHO, type 2 strain of the poliovirus (P2) has been eradicated globally since 1999.
About eradication of the P3 strain throughout the world, Dr Durry says Nigeria reported 19 cases of the P3 strain and the most recent case was reported in November. He says that recent security-related incidents disrupted national polio campaigns. “Though there is more than 70 per cent decrease in polio cases in Pakistan, no corner of the country can be considered polio free until the poliovirus is eradicated throughout the country,” says the WHO official.
“Pakistan successfully brought down the number of cases by 71 per cent in 2012 compared to 2011. All provinces except Khyber Pakhtunkhwa have brought down the number of cases from 66 per cent to 95 per cent,” says the official.
Dr Durry says last year Balochistan brought down the number of polio cases by 95 per cent, Sindh by 88 per cent, Punjab by 78 per cent and the Federally Administered Tribal Areas (Fata) by 66 per cent. “The most promising sign for Pakistan during the last year was a massive decrease in the number of polio cases during the high transmission season,” he said.
He said the last polio case of 2012 was reported on Nov 30 and a small number of samples from last year was still pending with the polio virology lab for evaluation. “Most likely, Pakistan is going to close its tally of 2012 polio cases at 58,” Dr Durry said.
The official says that all sewage samples collected from cities of Punjab in recent weeks were found negative. He says: “Most samples collected from Peshawar, Gadap Town in Karachi and Hyderabad produced positive results in the past, but they showed negative results now.”
Here's an ET Op Ed on IT developments anticipated in 2012:
2013 will see the adoption of Cloud services continue to grow in Pakistan. Increasingly, customers – both individuals and companies – will seek to store their data ‘in the Cloud’ as opposed to physical data servers, as well as avail of software services on a ‘rental’ basis. Large MNCs, banks and other financial services companies have already moved into this domain some time ago. Looking forward, educational institutions are likely to take the next step, as digitisation of educational content takes place. Some progressive institutions have already adopted softwares such as Moodle and Learning Management Systems and incorporated their curriculum on them, thereby preparing their scholars for a digital future.
Pakistan has over 100 million cellular subscribers; reportedly, around 10% of these use smart phones. Data usage has grown substantially, and there are an estimated 10 million mobile data users in Pakistan. However, it is important to note that 3G has been overhyped and may actually fall short of expectations, as it has in India.
Almost a year into its launch in India, only 2% of subscribers have opted for 3G services. 3G will require ubiquitous coverage for consumers to be satisfied with the services. WiMAX can play an important role here by offering a solution for data backhauling for telecom operators. Wateen has already deployed around 250 WiFi hotspots in Karachi, Lahore and Islamabad, and is ideally positioned to fulfill the data needs for mobile operators.
Branchless banking and m-commerce services will be the biggest innovations for the year. New entrants (Zong and Askari Bank, and Mobilink and Waseela) have recently launched their offerings and promise to improve the take-up of this service. New payment solutions will also be a first in the country, as smart phones enable swipe magnetic card readers and pioneering companies such as Inov8 Ltd begin to deliver on their potential for the consumer market. Smart phone apps will also be big.
In Pakistan, some companies have already started bringing Android-based devices for as low as Rs5,000. Indians have recently announced that they will be developing the world’s cheapest tablet for $35. These devices will play an exceptional role in transforming societies. The consumerisation of IT has already started taking place in Pakistan. Companies like QMobile will play an important role in the proliferation of low-cost handheld devices. This, in turn, will impact the use of mobile internet and broadband, open WiFi and WiMAX, as well as Cloud services, as consumers look to access data and media on their handheld devices.
^^RH: "Here's an ET Op Ed on IT developments anticipated in 2012.."
Typographical error. Anticipated in 2013. Please correct it.
Any data on the following?
1) What is the CURRENT size of our IT & related Industry?
2) What is the current size of our of IT & related EXPORTS?
Here is a counter-point from the Pew Research Center to your commentary on the rising stock market....
Do you disagree with this analysis? If so, why? Specifically where do you think the researchers have gone amiss?
Here's an excerpt from The Nation on SBP assessment of FY12:
Pakistan’s economy witnessed a modest improvement in FY12 – real GDP grew by 3.7 percent during the year, compared with 3.0 percent in FY11, says the State Bank’s Annual Report on the State of the Economy for the year 2011-12 released Wednesday.
It said the growth was more broad-based compared to FY11, as it was evenly distributed across agriculture, industry and the services sector.
The demand side was more insightful, as the growth in FY12 was primarily driven by private consumption, it said, adding that strong worker remittances, a vibrant informal economy and higher fiscal spending, supported consumption growth during the year.
SBP Report said that food prices have remained relatively stable during FY12, which helped bring down overall inflation to 11.1 percent – better than the 12.0 percent projected earlier. ‘It was this easing that allowed the central bank to reduce the policy rate by 200 bps during the year; this was done to partially revive private sector borrowing, and encourage banks to improve their intermediation between private savers and borrowers,’ the report added.
According to the Report, the external front was positive as remittances posted yet another year of strong growth, which not only helped narrow the current account deficit, but also contributed to economic activity. ‘In overall terms, the external sector has been less worrying than anticipated at the beginning of the year; however, as financial inflows dried up, the burden of financing the current account deficit and external debt, has fallen on the country’s FX reserves,’ the report added.
While services continued to support the economy, commodity producing sectors (agriculture and industry) posted an improvement over FY11, the Report said, adding that the growth in agriculture came from livestock and kharif crops, but minor crops witnessed a decline due to the floods in Q1-FY12.
It said the positive spillovers from agriculture, coupled with strong remittances and income support schemes, boosted construction activities and household consumption – both of which helped the manufacturing sector. ‘In terms of services, there was a sharp improvement in financial sector earnings, driven primarily by the volume of commercial bank financing of the fiscal deficit, and deceleration in fresh non-performing loans (NPLs),’ the report added.
Among other factors, SBP’s decision to cut its policy rate by a cumulative 200 bps in H1-FY12 was partially motivated by its concern over commercial banks’ reluctance to extend credit to the private sector. However, in the presence of a risk-free dominant borrower, average bank lending rates fell by only 112 bps, which suggest that banks remain apprehensive about (or uninterested in lending to) the private sector, and were willing to accept lower earnings on government securities, according to the report.
It said the actual outcome in the external sector in FY12 was better: a current account deficit of US$ 4.6 billion, and an overall gap of US$ 3.3 billion, meant that Pakistan’s FX reserves fell by US$ 4.0 billion, against an initial projection of US$ 4.4 billion. ‘Nevertheless, this contributed to a 9.1 percent depreciation of the Rupee during the course of the year. The Rupee depreciated from November to late December 2011, and sharply so in the last week of May 2012. The first event may have been triggered by the closure of NATO supply routes to Afghanistan, and sustained by rising oil prices; the second adjustment was a brief market panic in response to international developments. In effect, the Rupee was impacted more by one-off events than the underlying economic fundamentals,’ the report added....
^^RH: "Here's an ET Op Ed on IT developments anticipated in 2012.."
^^HWJ: Any data on the following?
1) What is the CURRENT size of our IT & related Industry?
2) What is the current size of our of IT & related EXPORTS?
OMG! India's IT Exports (76 Billion$)...
..are now MORE than their Remittances (70 Billion$).
Do you have the current figures for our country?
^^RH: "Here's an excerpt from The Nation on SBP assessment of FY12.."
All this is old information. It was been released long ago by the finance ministry..
^^RH: "(SBP) said the growth was more broad-based compared to FY11, as it was evenly distributed across agriculture, industry and the services sector. The demand side was more insightful, as the growth in FY12 was primarily driven by private consumption.."
Yes it was driven by private consumption. But, as I have said before, that boom in private consumption was accompanied by a TOTAL COLLAPSE IN INVESTMENTS and a dramatic rise in CONSUMPTIVE net-imports. You can see for yourself in the "Composition of GDP Growth" Data shown in Table 1.4 on Page 9 of the GOP report:
Finally someone with common sense, although the numbers are not quite accurate.
Quote January 29, 2013: "The present rate of savings to GDP is around 14 per cent, which is lower if compared with the developing countries and emerging economies of the world. To give a boost to the economy, investment ratio of savings to GDP should be at least 20 per cent, especially when foreign investment is not forthcoming."
HWJ: "Quote January 29, 2013: "The present rate of savings to GDP is around 14 per cent, which is lower if compared with the developing countries and emerging economies of the world. To give a boost to the economy, investment ratio of savings to GDP should be at least 20 per cent, especially when foreign investment is not forthcoming."
Does this author how few Pakistanis save with govt regulated financial institutions?
Does this he know how much Pakistanis are saving and investing outside the banking system?
HWJ: Any data on the following?
1) What is the CURRENT size of our IT & related Industry?
2) What is the current size of our of IT & related EXPORTS?"
Pakistan's State Bank and Economic Survey use BPM5 method which significantly understates IT industry data compared with BPM6 used by Indians. BPM 6 includes sales to multinationals, earning of overseas offices & salaries of non-immigrant overseas workers (aka code coolies) to export revenue.
^^RH: What makes you think I am "comfortable that only 507 Shias died and not 1000"?
While your bigotry only permits you to mourn for your fellow shia and muhajir, my heart goes out to the loved ones of all 6,211 victims of violence in Pakistan last year. I also mourn for over 45,000 Pakistanis who have lost their lives since 2001.
Have you heard anything from Shams on this issue of the recent killing of the head of Banori Darul-Uloom (Deobandi)?
I was wondering about the reaction of Shams towards what is clearly a retaliatory killing of a Sunni-Punjabi Cleric by Shia-Muhajir militants.
Let us know if you hear anything from Shams about this latest killing.
Here's a PakistanToday report on PEW, an economic think tank often critical of PPP-led coalition, welcoming govt steps to revive economy:
ISLAMABAD - The Pakistan Economy Watch (PEW) on Thursday said recent steps taken by the government, including the ratification of the Iran pipeline agreement and handing over the Gawadar Port to a Chinese firm seemed highly promising.
These steps will go a long way in reviving the economy which is in tailspin, said PEW President Dr Murtaza Mughal.
He said that Chinese cooperation in the pipeline project would turn it into a reality in less than the expected time, which would be a great service to the country and the people who have been reeling under the energy crisis. Mughal lauded Tehran’s patience as the project had been delayed for a long time due to US pressure.
Allowing the transfer of concession agreement for Gawadar Port from the Port of Singapore Authority to the China Overseas Port Holding will attract investment, provide opportunities to the people of Balochistan and bring Islamabad and Beijing closer, he said.
He said the announcement of the three-year Strategic Trade Policy Framework, in which an export target of $95 billion had been set, and backed by steps to support the plan, would help improve confidence in the business community. The government should ensure that this trade policy does not meet the fate of the trade policy framework for 2009-12, which had failed due to want of funds, he added.
The ministry of water and power’s plan to generate 3,000MW electricity from sugarcane bagasse on a fast track basis is equally encouraging, he observed. He said all necessary amendments in existing policies should be ensured to attract investment to make this possible.
Lauding US assistance for water and power projects and optimum use of hydropower resources, Mughal said the US should stop opposing the Iran gas pipeline project otherwise an anti-US feeling will run high among the masses.
^^RH: "Here's an excerpt from The Nation on SBP assessment of FY11..
Interesting take on the matter by "The Nation".
But here is the >>SAME<< SBP assessment as covered by Dawn, entitled "SBP Warns of Debt Trap":
1) "The State Bank of Pakistan has warned that the fiscal deficit of 8.5 per cent last year (FY-12) is >>UNSUSTAINABLE<< and could push the country towards a debt trap as the public debt-to-GDP ratio has reached 62.6 per cent"
2)The SBP cautioned against HIGHER CONSUMPTION during FY-12. “It is important to realise that over-dependence on consumption makes growth >>UNSUSTAINABLE<<, especially when the country’s investment rate has been falling.” During FY-12, the investment-to-GDP ratio reached a low of 12.5 per cent..
Here's a CSM story on Opposition using energy crisis as an election issue:
Right now the opposition is slamming the government on this point, claiming there's an easy solution: Pakistan is sitting on the world’s sixth-largest coal deposit, the Thar Coalfields in Sindh Province, but since the reserves were discovered 22 years ago, little has been done to develop them.
But negotiating the complex political web that has kept Pakistan in the energy dark ages is not as simple as opposition leaders suggest, say analysts. What should be a mere technical challenge has escalated as the government has become paralyzed.
RECOMMENDED: How much do you know about Pakistan? Take this quiz.
“It is not a lack of political will to address the energy crisis,” says Adil Najam, vice chancellor of the Lahore University of Management Sciences and a leading Pakistani expert on environment and development policy. “It is a lack of political ability.”
For the past 22 years, plans to develop the Thar Coalfield have been stuck in limbo because of disagreements between the provincial and federal governments. The federal government wants a majority stake in any mining ventures, and has suggested a 80/20 split with the province. Though it has accepted investment from the federal government, the Sindh provincial government wants absolute control over the coalfields and has been adamant in insisting that Sindh alone should benefit from its natural resources.
So the two are in a bind: The ruling Pakistan People’s Party (PPP) government is unwilling to force development plans for fear of splitting what has traditionally been its strongest support base. Fear of creating a surge of Sindhi nationalism in the country’s second-most populous province tempered even former President Pervez Musharraf's attempt to develop the coalfields during Pakistan’s nine-year military rule.
For any candidate to campaign on the promise of quick fixes is to ignore the reality of Pakistan’s political system, says Hasan Askari Rizvi, an independent political analyst in Pakistan. “It is an attractive slogan,” says Mr. Rizvi, “But it is overly ambitious and unrealistic.”
Get our FREE 2013 Global Security Forecast now
The next Pakistan government will be a coalition made up of diverse forces and their first priority will be figuring out how to pull together and move in one direction, Rizvi says.
Pakistan generates 38 percent of its electricity using imported oil, according to the International Energy Agency. Gas and hydro make up another third, a figure that would be higher if investment in both areas wasn’t marred by political brinkmanship. Energy from coal makes up a tiny 0.1 percent of the country’s energy mix.
Despite a history of gridlock, cricketer-turned-candidate for prime minister Imran Khan has made developing the coalfields the central piece of his energy policy in his campaign manifesto. He has claimed that his party, Pakistan Tehreek-e-Insaf (PTI, Pakistan Movement for Justice), can transform Pakistan from an energy importer to an energy exporter by 2016.
The main opposition party, the Pakistan Muslim League Narwaz (PML-N) has similarly made vague promises to “provide the full energy needs of an expanding industrial sector through maximum exploitation of domestic sources of energy, namely coal.”
A web of more than 20 different provincial and federal entities are involved in powering Pakistan. This has created an energy sector devoid of any long-term integrated planning, headed up by a government that is caught in a debt trap by its own unsustainable subsidies....
^^RH: "He has claimed that his party, Pakistan Tehreek-e-Insaf (PTI, Pakistan Movement for Justice), can transform Pakistan from an energy importer to an energy exporter by 2016"
Yes, but that is predicated on his ability to first "end all corruption in Pakistan in 90 days".
Im The Dim, as his playboy buddies call him in London, also promises to put a Pakistani on the moon by 2020.
Here's an excerpt of an ET Op Ed on education in Pakistan:
.. Thomas L Friedman wrote in an article recently, “nothing has more potential to lift more people out of poverty — by providing them an affordable education to get a job or improve in the job they have. And nothing has more potential to enable us to reimage higher education than the massive open online course, MOOC, platforms that are being developed by the likes of Stanford and the Massachusetts Institute of Technology and companies like Coursera and Udacity.” Within one year, the coverage provided by Coursera has increased from 300,000 students taking 38 courses taught by Stanford professors and a few other elite universities to 2.4 million taking 214 courses from 33 universities, including eight international ones.
There were reports that Pakistan was already one of the beneficiaries of the exponential development of the MOOC. A story on the 2013 Davos World Economic Forum singled out for special mention the presentation given by Khadija Niazi, a 12-year girl from Lahore, who may not have been the youngest speaker ever at the forum but was certainly captivating. According to this account, “hundreds of the conference’s well-healed attendees listened intently as Ms Niazi described her experience with massive online courses known as MOOC that are spreading around the globe … Her latest enthusiasm is for astrobiology because she is fascinated by UFOs and wants to become a physicist.”
According to another assessment, “enterprising academic institutions have taken the lead in online learning. Harvard and MIT, for instance, worked together to introduce EdX, which offers free online courses from each university. About 753,000 students have enrolled, with India, Brazil, Pakistan and Russia among the top 10 countries from which people are benefitting.” What seems to be happening is that while the government continues to neglect education, a variety of private initiatives are helping to fill some of the gaps that have been left.
Here's Pakistani response to Joel Brinkley Op Ed published in Chicago Tribune:
Proving its doomsayers wrong is among Pakistan's many overlooked strengths. Mr. Joel Brinkley, a Pulitzer Prize winning journalist, with his article, “Pakistan coming apart at the seams,” (Jan. 22, ChicagoTribune.com) joins the list of the misinformed and the plain wrong about Pakistan. This is unfortunate. It is even more unfortunate that he mistakes the coming of age of Pakistan's democracy, with its promise of political and economic stability, as a sign of failure. He cites numerous examples of the apparent dysfunction in Islamabad, as if Islamabad is only capital city in the world suffering from that disease.
This is not to deny that Pakistan faces numerous, and in some cases, unique, challenges. Mr. Brinkley attempts to list some of these also. What eludes him is the fact that Pakistan is meeting these challenges head on while constructing the edifice of a modern democratic state.
The Parliament, the most active in Pakistan’s history, is about to conclude its five-year term, paving the way for the first peaceful transfer of power in the country’s history. It cleansed Pakistan’s constitution of the debris of past non-representative regimes while also addressing longstanding constitutional and political issues threatening the federation. This Parliament has passed more legislation on human rights and women’s rights than all of Pakistan’s previous parliaments combined.
The economy continues to grow despite the burden of a full scale war against terrorism, the effects of some of the biggest natural disasters ever to hit Pakistan and the global economic slowdown. Pakistan expects a growth rate of around 4 percent in 2013 despite these challenges. The Pakistani stock market is among the most productive and profitable in the world. On most indicators of economic vigor, resilience and strength, Pakistan continues to perform well. Pakistan’s teledensity is one of the highest in the region. Users of broadband Internet and social media continue to grow exponentially, not only providing the masses entertainment, but empowerment.
Consumer spending remains robust. Many American companies have invested in Pakistan and are generating impressive profits.
The judiciary, long a rubber stamp of dictators, stands proud and independent, hauling the very intelligence agency Mr. Brinkley calls “mendacious” before it. And despite its perceived ‘mendacity’, the agency submitted itself to the court. This had never happened in Pakistan’s history before. Similarly, when a disagreement arose between the court and the government, the latter, in the true spirit of democracy and accommodation, accepted the court’s verdict. This speaks of a political maturity hitherto absent from Pakistan’s political discourse.
The social scene is no less impressive. Pakistan’s pop music industry is bigger than that of India. Pakistani students top international examinations. Pakistani sports teams, for both men and women, continue to record wins. In short, Pakistan is a vigorous, resilient nation, working hard to put a turbulent past behind and become a modern, democratic, and economically prospering country.
I challenge Mr. Brinkley to name one country with which he has bracketed Pakistan as a failed state that has these attributes. It is one thing to see a half-full glass as half-empty. It is quite another to see nothing in it. Sometimes, it seems, the real challenge Pakistan faces is not defeating terrorism, strengthening democracy, and generating economic growth, but convincing reporters to report impartially about it rather than seeking to regale public opinion with preconceived notions and worn out stereotypes.
Here's the latest cement report on Pakistan:
The All Pakistan Cement Manufacturers Association reported a 10.10% increase in domestic cement consumption in January. The country, which has almost 45 million t of cement capacity, has seen exports fall in recent years as expansion programmes increase capacity in Pakistan’s traditional export markets and new exporters have joined the competition. However, domestic demand is on the rise, hitting an all-time high of almost 24 million t in FY11/12.
January saw domestic sales reach 2.135 million t, comprised of 1.706 million t from the north and 429 000 t from the south of the country. Demand has been pushed by private construction as well as government infrastructure projects, a trend set to continue as the per capita cement demand in the country is well below average at 152 kg.
Energy shortage threatens production
However, a new threat is energy shortages, which the APCMA says hampered production in northern areas last month. The Islamabad High Court recently removed the Rs.50/mmbty Gas Development Infrastructure Cess (GIDC), declaring it illegal. Though this will bring down input costs for cement producers in the south, it is reported that it will have no benefit for the more numerous northern producers, who ‘have now been given least priority for gas supply’ (The Nation, 3 February). Some plants are looking into alternative energy supplies – DG Khan Cement, for example, is set to be one of the first applications for Kalina cycle technology in the cement industry.
Lucky Cement prospers
Meanwhile, Lucky Cement Limited has recorded a 42.15% y/y increase in half yearly profit for 2012/13. As of the end of December, the company reported profits of Rs.4.29 billion and improved net sales of Rs.17.511 billion, up 13.9% y/y. The company reportedly plans to upgrade its existing mills and packing machines to reduce operational costs. More information about the company can be found in the February issue of World Cement in the article ‘Pakistan: Cementing its Position’ from Lucky Cement. Subscribers can download the issue by signing in.
Lafarge appoints new country CEO
Finally, Lafarge Pakistan Cement has appointed Amr Reda as the new country CEO of Lafarge Pakistan. Reda had previously been the regional business controller of Lafarge Middle East and Pakistan and has been on the board of directors of Lafarge Pakistan since January 2007.
Here's an ET report on rising cement consumption in first 7 months of FY12-13:
A recovery in domestic cement consumption in the first seven months of the current fiscal year has saved the day for the industry, which has been constantly losing its export markets. January was another good month for local sales, with things continuing poorly on the export front.
According to a statement issued by the All Pakistan Cement Manufacturers Association, cement sales jumped by 10.10% to 2.135 million tons in the domestic market in January.
Mills working in the country’s north sold 1.706 million tons, while those in the south supplied 429,000 tons to the domestic market.
Meanwhile, exports of cement dropped 11.91% – with total exports at 522,584 tons in January. Of this quantity, mills in the north exported 330,016 tons and plants in the south shipped 192,568 tons overseas.
In seven months (July-January) of the current fiscal year, total cement sales rose 4.02% and reached 18.607 million tons – domestic consumption stood at 13.862 million tons, up 7.98% while exports were 4.746 million tons, down 6.05%.
Despite economic challenges like unemployment, unstable law and order conditions and the impact of sporadic natural disasters, domestic demand has been aided by private construction and the government’s infrastructure development programmes in the last 10 years, according to brokerage house Shajar Capital.
In the future, “rising remittances and changing socio-economic indicators like increasing urbanisation are expected to contribute to boosting housing demand in the country,” it said.
Discussing the patterns of consumption, Shajar said Pakistan consumed only 152 kilogrammes per capita of cement, lower than both world and regional averages, leaving room for expansion of demand.
A spokesman for the cement manufacturers association spoke of the energy crisis prevailing in the country, saying half of the cement units in northern areas could not operate at optimum levels in January because of the energy shortage.
Industry experts point out that cement manufacturers are not fully utilising capacity, hampering their ability to service bank loans. They say exports should be increased as the markets of India and Afghanistan can be exploited with the support of the government.
They stress that cement is one of the few commodities readily accepted in India, and it alone could triple Pakistan’s exports to Delhi. The only hurdle is the Indian bureaucracy, which impedes free and fair exports.
They asked the government to settle the issue through talks with the Indian trade officials.
Gold imports in Pakistan up 23% July-Nov 2012, reports Daily Times:
KARACHI: Yellow metal imports during July to November 2012 in the country increased by 23 percent or Rs 7.12 billion as against Rs 5.78 billion in July to November 2011, precious metal importers said on Thursday.
The traders imported around 1,393 kilogrammes (kgs) of gold during this period, they added.
In November 2012, gold imports stood at 298 kgs worth Rs 1.57 billion, which was up around 357 percent as compared to November 2011.
Due to lower international prices of the yellow metal, import reamined on the higher side in November 2012 as it dipped around $128 an ounce, said a metal expert in London Saleem Ahmad.
Usually yellow metal importers make deals for the precious commodity with traders in Dubai, India and South Africa.
Major deals are made with Dubai based gold traders while due to lower gold future prices in India, the domestic traders also made deals. In India the gold prices are hovering around Rs 32,000 per 10 grammes while in Pakistan 10 grammes of gold is available at around Rs 53,200.
Rising demand in domestic markets for the wedding season also pushed gold imports up besides declining international prices also attracted the domestic importers to fortify their long position in anticipation of futures rising prices. Gold remained a haven for the hedging purpose besides it is the safest investment for hedgers as compared to stocks, where shares prices are always uncertain.
Gold prices in Pakistan bullion market are hovering at around Rs 62,200 per tola. Safest haven for investment hedging became the driving force behind buying, he added.
The yellow metal import’s rise was attributed to large buying by institutional and hedge fund that kept the momentum of the gold price to go up besides physical buying from India and China.
Hedging in gold is still on the higher side as it touched a new high around 80 percent in 11 months of 2012.
Meanwhile, the gold importers demanded of the government to announce duty cut on import of the commodity.
The government should announce around Rs 100 per tola duty cut in order to lower its prices in the domestic market besides providing relief to exporters of gold ornaments in the international market.
Currently the duty on import is around Rs 550 per tola and due to higher dollar value against the rupee, the local demand for the commodity is declining.
The government should provide duty relief on 3.0 kgs imports of gold on every 10 kgs of jewellery exports, exporters demanded.
Gold is expected to touch $1,800 an ounce in the next year or so on back of the Fed measures to boost interest in gold exchange-traded funds, among the vehicles that issue securities, backed by physical metal.
Gold imports up 29.15% in first half of FY 2012-13:
ISLAMABAD: The gold imports of Pakistan during first half of current fiscal year grew by 29.15 percent as against the same period of last year.
According to data revealed by Pakistan Bureau of Statistics (PBS), the yellow metal weighing 2054 kilogram worth of $111.185 million was imported during the period under review as compared to the import of 1594 kg valuing $86.091 million during same period of last year (2011-12).
On month on month basis the gold imports in December 2012 registered an increase of 85.56 percent and 121.96 percent when compared to the imports during the months of December 2011 and November 2012 respectively.
Gold imports in December 2012 stood at $36.373 million against the imports of $19.602 million and $16.387 million in December 2011 and November 2012 respectively. The overall imports of metal group, registered an increase of 11.03 per cent during July-December (2012-13) against the same period of last year.
The metal imports in to the country during the period under review were recorded at $1.529 billion against imports of $1.38 billion during same period of last year. Imports of iron and steel scrap registered a growth of 18.27 percent during July-December (2012-13) as compared to the imports during July-December (2011-12). Iron and steel scrap imports into the country were recorded at $336.839 million during the first six months of current fiscal year against imports of $284.803 million during July-December (2011-12).
Imports of iron and steel edged up by 5.16 percent by growing from $653.196 million to $686.899 million whereas the imports of aluminum wrought and worked decreased by 7.24 percent by going down from $60.453 million to $56.074 million. The imports of all other metal and articles were recorded at $337.84 million during the period under review against the imports of $292.393 million in last year posting a growth of 15.54 percent.
The overall imports into the country decreased by 3.33 percent during first six months of current financial year whereas exports from the country witnessed positive growth of 7.58 percent, indicating a positive trends in the overall trade volume of the country.
The imports into the country decreased from US$22.677 billion last year to US$21.922 billion during the current fiscal year, the data revealed.
Here's an AP story on fracturing of TTP:
PESHAWAR, Pakistan -- Five years after setting up an umbrella organization to unite violent militant groups in the nation's tribal regions, the Pakistani Taliban is fractured, strapped for cash and losing support of local tribesmen frustrated by a protracted war that has forced thousands from their homes, analysts and residents of the area said.
The temperamental chief of the group known as the Tehrik-e-Taliban Pakistan (TTP), Hakimullah Mehsud, recently offered to start peace talks with the government, raising the prospect of a negotiated end to Pakistan's war against insurgents in a lawless region that runs the length of the border with Afghanistan.
The group's offer of sanctuary to Afghanistan's Taliban has been one of the most divisive issues in U.S.-Pakistan relations and has confounded efforts to get the upper hand against Afghan insurgents after more than 11 years of war.
Pakistan denies providing outright military and financial help to militants fighting in Afghanistan. With 120,000 Pakistani soldiers deployed in the tribal regions, Pakistan has waged its own bloody battle against insurgents that has left more than 4,000 soldiers dead.
In interviews with analysts, residents and militant experts, Mehsud's network has emerged as a narrow collection of insurgents - often with links to criminal gangs - that has only limited influence in a vast tribal region overrun by scores of insurgent groups led by commanders with disparate agendas and varying loyalties.
Rather than a precursor to peace, Mehsud's offer to talk peace is an attempt to regain stature, silence critics and gain concessions from a weak government heading into nationwide elections, according to those familiar with the militant organization.
Taliban spokesman Ehsanullah Ehsan has repeatedly denied reports of divisions within the TTP, including reported challenges to Mehsud's leadership.
But Amir Rana, director of the Pakistan Institute of Peace Studies, said Mehsud's offer to talk was an attempt to divert attention from internal rifts that are ripping the organization apart and diminishing its influence. Meshud speaks for fighters restricted to his own tribe, based in North and South Waziristan, he said.
"They are weak, there is infighting," said Mansour Mehsud, director of research at the FATA Research Center named for the Federally Administered Tribal Areas.
Pakistan's tribal regions have a special status under Pakistani law that allows tribal traditions and customs to rule. Many of the laws and rules applying to the tribal area date back to the early 20th century when the British ruled the subcontinent. Unable to control the tribesmen, the British made agreements that allowed them safe passage through tribal territory.
"They used to have the support of most people but not anymore," said Mehsud, who has no relation to the TTP leader although he shares the same tribal links. "People used to think that they would bring justice based on the Quran but instead fighting has displaced hundreds of thousands of people."
Mehsud said the Pakistani Taliban also were running out of money and that extortion and kidnappings had become one of their biggest sources of income.
A wealthy trader living on the edge of the tribal area, who was afraid to give his name because he feared retribution, said the Taliban swindled thousands of dollars from him. He said he was threatened, his family was terrorized and then a bomb exploded at his home, seriously wounding his niece.
He said other businessmen told him that they too had paid large sums of money to the Taliban. In his tribal culture, he said it is shameful to admit to being robbed because it is seen as a sign of weakness, so no one has said anything.
Here's Gulf News on various sectors of the economy in Pakistan:
Naveed Vakil, director, research and business development, AKD Securities:
Oil and Gas Development Company Limited (OGDCL): Dollar-based returns and a firm oil price outlook should keep returns high, especially as key development projects come online and the monetisation of recent finds is fast-tracked.
Pakistan Oil Fields (POL): [Its performance is closely linked] to international oil prices that are likely to remain firm in the near term as demand growth recovers, especially from China. POL also offers exposure to Pakistan’s Kohat Basin which is where there has recently been a string of discoveries have been high impact.
Pakistan Telecommunication Company Limited (PTCL): PTCL should post strong earnings growth this year, due to higher margins following the implementation of higher international incoming call rates. Infrastructure is being installed to curtail grey incoming international traffic, which should support legitimate volume as well.
Lucky Cement: Pakistan’s largest cement company should continue benefitting from a rise in domestic consumption led by development spending ahead of the elections. It should benefit from high margins as domestic cement prices remain firm while coal costs remain low.
Furqan Punjani, deputy head of equity research at BMA Capital Management Limited:
Oil and gas
Robust oil prices coupled with [increasing production volumes should] keep the oil and gas exploration and production sector in the limelight in next few years. Revenue streams linked to the dollar and local currency depreciation would also help augment bottom-lines in the sector. We prefer Pakistan Oilfields and Pakistan Petroleum because of their better dividend yields.
Based on better exports prospects and higher profit margins (on low cost cotton) as well as a promotion in the gas allocation list by the government, the textile sector has made it onto our list of top investment ideas for 2013. Nishat Mills is the biggest integrated textile unit in Pakistan and will continue to benefit from its well-diversified core operations and the good potential of its portfolio holdings.
We believe the fertilizer sector presents an ideal mix of defensive and high-growth plays for 2013. Our top pick in the sector is ENGRO.
Cement prices are currently at an all-time high of Rs440(Dh16.27) a bag. We like companies that can magnify top line growth into the bottom-line, thanks to the deleveraging of their balance sheet. This makes DGKC.PA our top pick in the sector.
Pakistan is an energy deficit country and the entire production of independent power producers (IPPs) is consumed on any given day. Moreover, with higher and regular subsidies from the government translating into better cash inflows, the sector has once again come into limelight. Furthermore, as revenues and profits are linked to the dollar, the depreciating Pakistani rupee will also benefit this sector. We prefer Hub Power Company, the largest private sector power producer of Pakistan, because of its higher dividend yields and stable bottom-line.
The Central bank of Pakistan has reduced the base [interest] rate by 450 basis points in the last 24 months. This has reduced the net interest margins of the entire banking sector, barring a few large banks that have the ability to reduce the rates provided to their depositors and keep attracting fresh deposits at lower rates. United Bank Limited is one of them. We prefer UBL [because] of their ability to grow their deposits by double digits at lower cost, coupled with their greater exposure to high yielding long term government bonds. Furthermore their quarterly payout will continue to lure value investors to the bank. ....
Here's an ET report on Elixir Securities CEO's projections for Pak equities:
KARACHI: The sales pitch employed by Elixir Securities CEO Junaid Iqbal to global fund managers at the Pakistan Capital Markets Day in New York last month was simple: even if the incumbent government returns to power after the upcoming elections, the Karachi Stock Exchange (KSE)-100 Index is still likely to post returns of over 21% in 2013.
In case a more pro-business government – supposedly led by the PML-N – comes into power, the stock market will rerate from the current multiple of 6.9 to 7.9, if the projections of the Elixir Securities research team are to be believed. That would push the index to 23,200 points by the end of 2013, which translates into an annual return of 38%.
In the best-case scenario, wherein the new political leadership tries to fix the taxation system in its first months in power, Elixir Securities estimates the KSE-100 Index will likely touch 26,000 points by December 2013, which means a staggering 54.8% annual return.
“The market is operating at an average multiple. In the absence of any leverage, there are no associated risks. It is being driven purely by earnings growth right now,” Iqbal told The Express Tribune in an interview.
Initially planned as a one-day event (hence named the Pakistan Capital Markets Day), Elixir Securities’ two-day road show in the global financial centre was attended by 35 fund managers, partners and principals from 25 major international asset management companies and hedge funds. Elixir Securities also took along representatives from Engro Corporation, Engro Foods, Lucky Cement and United Bank Limited. Iqbal was accompanied by the heads of his research and sales departments.
“All of them wondered how Pakistan’s capital markets could perform so well amidst bombings and violence,” he said, while noting that the KSE remained the third best-performing stock exchange of the world in 2012 by posting 37% returns in dollar terms, despite political instability and frequent terrorist attacks.
“I told them, honestly, that we cannot defend Pakistan on its human rights record: but the fact remains that the annualised growth in profits of the corporate sector for the last four years has been 17%,” he said.
“They understand that a political metamorphosis is taking place in Pakistan. At the same time, they are supremely impressed by the quality of management in our corporate sector,” he added.
Without naming the funds or giving their exact number, Iqbal said many of the companies he interacted with in New York have already consented to visit Pakistan in the near future. He said that it is not possible to state the exact amount of foreign institutional portfolio investment that is likely to come in as a result of his road show, but added that he was confident that investment will soon be coming into Pakistan’s capital markets.
He cited two reasons: firstly, all of the participants, which included some of the largest global funds, had sent their senior team members – something that shows how seriously they viewed Pakistan’s financial sector. Secondly, he noted, they were all ‘knowledgeable investors’ who had already developed deep understanding of issues ranging from the suspension of gas to Engro’s $1.1 billion fertiliser plant, to turf wars in Karachi involving the People’s Aman Committee.
“Pakistan is already on their radar. Our market will skyrocket once the law and order situation improves,” he said.
Here's an interesting Op Ed by Mazur Ejaz in Friday Times:
The condition of an economy is often confused with the financial health of its government. Pakistan's economy is perceived to be in a deep hole because of its near-bankrupt fiscal conditions. Similarly, America's inability to settle on a national budget is taken to be an indicator of the collapse of the US Empire.
In some ways, the condition of the economy and the financial health of the government are separate matters. Major stock market indexes at Karachi Stock Exchange and the Wall Street are at their highest level, but both governments are facing serious financial problems. Most of the countries around the world are facing similar dichotomous situations. So how does one solve the riddle of the corporate sector making record profits while governments around the world are in serious financial jeopardy?
The phenomenon needs to be analyzed at grass-roots level. A shopkeeper from my village comes to mind. He told me that he sells PTCL internet cards grossing about Rs 9,000 every day. There are several other such shops in the village. That means that just in one village, the total sale of PTCL internet cards is up to 50,000 rupees. This consumer item was not present five years ago, which means hundreds of computers have been bought in the village recently. Furthermore, if such luxury products are making such huge profits for village shops, traders throughout the country must be making much larger profits selling essentials every day. One of the indicators of booming business in our village is that the United Bank branch in the village is doing very well, according to its manager.
There are thousands of such villages in the country, and that gives one an idea of the mammoth growth of rural markets. Such an undocumented economy is not even factored in estimating the economic growth of the country. From these supposedly marginal markets, one can extrapolate the profits of the corporate sector in towns and cities.
It may be astounding for some that Pakistan's banking sector is considered fourth in profitability in the entire world. Producers of other major industrial and agricultural products are also making huge profits. Cement, fertilizer, automobile, construction and telecommunication industries are doing extremely well. Other than the textile industry, which has been hit by power shortages, there is hardly any manufacturer or importer/exporter of any kind of goods who is not making money. The stock markets look at the profits of these industries and price them accordingly. Therefore the claims of Pakistan's economic growth are not a fairy tale. The evidence is out there in the market.
The government is also like a large corporation whose income depends mainly on tax revenue. Most of the goods and services (such as roads, defense, education and health) provided by the government are public goods which are not priced directly. The government has to price its public goods through direct taxes on income and sales, or indirectly. Following a certain brand of capitalism, countries like Pakistan and the US are not collecting enough taxes to cover the cost of public goods. They have failed mainly in collecting direct taxes on income. While Pakistan cannot implement an appropriate tax collection mechanism because of corruption, the US has leaned towards favoring high income groups and ended up in a jam. The net result is the same: the rich are getting richer, appropriating most of the new wealth generated....
Here's a Daily Times on Al-Tuwariqi steel reaching full production:
* Plant runs at 100 percent of its rated capacity within 4 months of its launch
KARACHI: Tuwairqi Steel Mills Limited (TSML), Pakistan’s first private sector integrated environment-friendly steel manufacturing complex and a joint venture of Al-Tuwairqi Holding (ATH)/ISPC of the Kingdom of Saudi Arabia and the world’s third largest steel maker POSCO has recorded the ever highest production of an iron making plant in Pakistan during the Plant Demonstration Test (PDT) conducted in the expert supervision of MIDREX, USA.
During the PDT, the plant ran at 100 percent of its rated capacity i.e producing 160 tonnes of high quality Direct Reduced Iron (DRI) per hour for 72 hours achieving all of its operational targets. This development comes at a crucial juncture when Pakistan’s current per capita steel consumption is only 40 kilogram, which is exuberantly low, when compared with the global average of 215 kilogram. This establishes a dire need and increased emphasis on achieving international benchmarks to become a modern and an efficient economy.
Dr Asif Brohi President National Bank of Pakistan congratulated the entire team of Tuwairqi Steel Mills on achieving this milestone and appreciated their enthusiasm and technical expertise.
It is heartening to observe TSML has already increased the production capacity of Pakistan by 1.28 million tonnes per annum, which would help meet the ever growing demands of steel in Pakistan and with its massive expansion and modernization plans, Al-Tuwairqi is poised to transform the country into an industrial hub, he added.
Zaigham Adil Rizvi Director (Projects) TSML said, “We are committed to our vision to participate in the development of national economy in order to have a long sustaining growth of Pakistan.”
During the PDT, Chang Hee Lee Council General of South Korea, Rahat Kamal DMD SSGC, Major General Javed (r) Chairman Pakistan Steel Mills; Zubair Motiwalla Chairman Sindh Board of Investment, Waqar Ahmed Hashmi DMD KW&SB and Ghulam Rasool Shiekh from EPZA were also present.
Al-Tuwairqi kicked off the commercial production of TSML’s 1st phase in January this year-a Direct Reduction of Iron (DRI) making plant with the capacity to produce up to 1.28 million tonnes per annum of high quality DRI, which is evidently steel’s most versatile metallic and a preferred raw material for quality steel making worldwide.
Here's Daily Times on a TRL refinery planned for Pakistan:
KARACHI: Trans-Asia Refinery Ltd (TRL) has made a major announcement expressing its ‘total commitment’ to building the most complex refinery in Pakistan, producing more than 100,000 barrels a day and 4.0 million tonnes of petroleum products every year. The refinery will be located at Port Qasim, Karachi.
In a major boost to the country’s economy, TRL signalled the end of previous delays with an undertaking that ‘the investors have decided to push the project forward in the interests of all parties and the people of Pakistan’.
TRL’s determination to see the project through to completion is demonstrated by two important initiatives announced yesterday. First is the appointment of Descon to undertake a complete ‘health check’ inspection of the TRL refining equipment. The second is a newly-completed restructuring of TRL management to ensure the project proceeds with all possible haste.
TRL CEO Sultan Al Ghurair said he was delighted to have Descon on board in order to develop the project further. Descon is the leading engineering and construction company of Pakistan. The company said that, since the refinery had been delayed for some time, they will perform a health check of critical equipment before the EPC contractor is finalised.
The TRL project is a direct investment of Al-Ghurair Investment LLC, a UAE-based family conglomerate and one of the most diverse industrial groups in the Middle East. As the majority shareholder, Al Ghurair will play an important role in the future supply of fuel to the nation of Pakistan.
When completed, the TRL Refinery will annually produce 80,000 tonnes of LPG, 455,000 tonnes of Naphtha, 410,000 tonnes of motor gasoline, 422,000 tonnes of jet fuel, 1,000,000 tonnes of gas oil – from which 630,000 tonnes will be treated diesel – 1,050,000 tonnes of fuel oil and 200,000 tonnes of bitumen. All the products of the refinery are in high demand in Pakistan.
The TRL refinery will create at least 350 direct jobs and several thousand indirect job opportunities for Pakistani workers. Ghurair said: “Our parent company and major shareholder, Al Ghurair Investment LLC, has always been about creating long-lasting relationships - and TRL is committed to carrying on that tradition. Al Ghurair looks forward to playing a part in the future prosperity of Pakistan and its people - and the TRL refinery is proof of that commitment.”
Here's Washington Post on Pakistan's new anti-terrorism law:
After a decade of terrorist attacks, Pakistan is implementing a new legal framework to deal with its growing militant threat — what some are calling a local version of the USA Patriot Act.
The government says the measure will improve an anti-terrorism effort plagued by inefficiency and abuses. At times, security forces have swept up thousands of suspected Islamist militants without charge, outraging human rights activists. When terrorism suspects do go before a judge, however, they are often freed, dismaying Western officials.
“This law is war, declared war, against those who challenge the state,” said Khawaja Zaheer, the senior justice adviser to Prime Minister Nawaz Sharif. “This law is intended to do what should have been done in 2001 or 2002,” in the aftermath of the attacks on the World Trade Center and the Pentagon.
But in a debate that mirrors the controversy over the USA Patriot Act, activists argue that the new measure will lead to widespread abuses.
“People are already being detained, people are already being kept in internment camps, people are already involuntarily disappeared,” said I.A. Rehman, secretary general of Pakistan’s Human Rights Commission, an independent Lahore-based body. “The only thing they want to do with this is give even more special powers to security forces to detain.”
For years, Pakistan’s leaders have lurched between tough talk on terrorism and sympathetic outreach to some militant groups. This week Sharif condemned a U.S. drone strike that killed the leader of the Pakistani Taliban, Hakimullah Mehsud, days before planned talks between the group and the Pakistani government.
Still, with Sharif facing pressure from Western governments to act, he has been quietly building a legal framework that could underpin a potential military offensive against the Taliban should talks fail.
The new ordinance — handed down in mid-October and effective immediately pending a review by Parliament — may first be put to the test in the economic hub of Karachi, where an offensive against criminal gangs and militant groups has netted about 5,000 arrests in the past three months.
The ordinance formally defines an enemy combatant, clarifies the powers of the army to intervene in internal security, establishes new federal courts, offers additional protections to judges, and codifies the use of extended detention.
The measure draws on previous laws, but government officials say it is broader, legalizing detention tactics and other practices that military and intelligence officials have been suspected of using for years. By doing so, Sharif’s government hopes to avoid clashes with a increasingly independent court system.
“The organized mafia is roaming free due to [a] legal vacuum,” Sharif wrote in a letter asking lawmakers to support the plan....
One 30-year-old man, who asked that he be identified only by his last name of Khan, a common Pakistani surname, said in an interview that he was picked up by officers in plainclothes while riding his motorbike in northwest Pakistan in June. He said he was blindfolded and detained for 25 days without being told why.
“They did not torture me, just kept me alone,” he said.
The measure also states that enemy aliens “may be detained by the government for such period as may be determined by it from time to time.”
The 1.5 million to 3 million Afghan refugees in Pakistan could be especially vulnerable to that provision, activists say, noting that many do not have proper documentation and that the ordinance considers “crossing national boundaries” as “waging war against Pakistan.”
Here's a news story about Byco investment in refining and petrochemical sector in Pakistan:
KARACHI: Byco has invested over $800 million on the various projects in the province of Balochistan in recent years out of which more than 50% is foreign investment, said Aatiqa Lateef, Chief of Staff, Byco Industries Incorporated.
“We have commissioned Pakistan’s largest refinery and are soon to start work on the chemical complex. Our single point mooring has ensured that we get an uninterrupted supply of crude and we will soon be implementing its capacity as a point of export as well.
Our retail network is now 242 stations and we are on the verge of launching our own lubricants line. In short Byco is fuelling a nation” said
“We continue to aggressively shun the negativity surrounding investment in Pakistan. In the current economic environment where foreign investors shy away from investments in the country.
These and other measures will make the country Pakistan more self-sufficient in meeting its petroleum requirements, greatly reducing the import burden on the government and easing the energy crisis.
Pakistan is in the grip of crippling energy crises while the government works tirelessly to ease it by enabling domestic solutions. Byco with its oil refining complex and the country’s first SPM, located in the province of Balochistan, is bringing a revolution to the domestic refining capacity, increasing it from approximately 12.5 million metric tons per annum to almost 18.5 million metric tons per annum. Full throughput is expected to produce about 1.6 million tons HSFO, 2.4 million tons HSD, 1.1 million tons of MS and 0.8 million tons of LPG on an annual basis, figures much needed for Pakistan’s consistently rising energy needs. These and other measures will make the country Pakistan more self-sufficient in meeting its petroleum requirements, greatly reducing the import burden on the government and easing the energy crisis.
#Kuwait wins approval for setting up #oil refinery in #Balochistan #Pakistan #FDI
Economic managers of Pakistan have given the go-ahead to Kuwait Petroleum Corporation for setting up an oil refinery in the coastal area of Balochistan – a welcome investment initiative for the largely under-developed province, which will reduce the need for import of refined petroleum products in the country.
The Economic Coordination Committee (ECC), the highest economic decision-making body, took the decision in a meeting held on September 7 in response to Kuwait Petroleum’s interest in pouring capital into setting up a refinery in Balochistan, said an official aware of developments.
Chinese company keen to set up oil refinery
The ECC also decided to seek an extension in the timeframe for oil import credit facility from three to four months in an effort to ease pressure on the country’s foreign currency reserves. It directed Pakistan State Oil (PSO), the state oil marketing giant, to try and persuade Kuwait Petroleum to extend the existing credit facility from 90 to 120 days or even more.
In another decision, the ECC permitted import of furnace oil and jet fuel from Kuwait without resorting to competitive bidding. At present, PSO imports diesel from the Gulf Arab state on 90-day deferred payment.
A representative of the Ministry of Petroleum and Natural Resources, who was present in the ECC huddle, said before the year 2000, Pakistan purchased diesel from Kuwait under a long-term contract with the Gulf state’s government.
However, in the wake of market deregulation, Pakistan government in 2001-02 asked PSO to enter into a fuel supply contract with Kuwait Petroleum. Immediately after that, the two sides inked an agreement for the sale and purchase of high-speed diesel only with payment guarantees from the government of Pakistan. Now, this agreement has been in place for the last around 15 years.
Earlier, Kuwait Petroleum had expressed interest in exporting furnace oil and jet fuel as part of the existing arrangement and was looking to install an oil refinery in the coastal area of Balochistan with storage facilities.
‘Pakistan has received Rs1.6tr as investment in oil and gas sector’
“Pakistan and Kuwait have an old bilateral relationship in terms of oil trade and Kuwait Petroleum is a time-tested supplier, well-reputed for the most economical supplies, product quality and supply security,” an official told the ECC meeting.
The Ministry of Petroleum and PSO suggested that furnace oil and jet fuel could be included in the existing sale and purchase contract by making an addition to it.
This could be done by invoking rule-5 of the Public Procurement Regulatory Authority (PPRA) Rules 2004, which provides for waiving mandatory public procurement procedures in case of an international or inter-governmental commitment of the federal government.
The ministry took up the matter with the PPRA and Law and Justice Division for legal advice.
Later, the PPRA endorsed the proposal. The Law Division, on its part, pointed out that the contract was linked with the agreement between Pakistan government and Kuwait Petroleum and new products could be added. Therefore, it would be treated and read as an integral part of the existing contract.
After examining the proposal from legal point of view, the Law Division cleared it subject to meeting all formalities.
Byco oil refining capacity goes up to 155,000 barrels per day
Byco is now ahead of all refineries in Pakistan following the completion of its second unit, as its crude oil refining capacity has gone up to 155,000 barrels per day from 35,000 barrels per day.
Asad Siddiqui, Byco Chief Financial Officer (CFO) of the complex, talking to a select group of journalists here on Monday said the second unit of the refinery has completed, enhancing its refining capacity by 120,000 barrels per day, making it the country's largest refinery. He said that Byco has crossed Pak Arab Refining Company (PARCO) which has the refining capacity of 90,000 barrels per day, followed by 68,000 barrels of National Refinery, 48,000 barrels of Pakistan Refinery Limited and 45,000 barrels of Attock Refinery.
Replying to a question regarding expected removal of international sanctions against Iran, he said that if the sanctions are lifted Byco Refinery is all set to take the advantage of expected crude oil imports from Iran at discounted rates.
Byco CFO said that his company was well placed to benefit from removal of international sanctions against Tehran unlike the country's other refineries which had long term crude supply contracts.
"It is comparatively difficult for other refineries to switch over because of their long term agreements" but Byco has the potential to quickly take advantage of the emerging opportunity.
He said perhaps Iran would also offer discount on crude oil to open up its market and it would be a good omen for Pakistan.
He said Byco had completed one of the two new projects for isomerization and desulphurization and it had relatively short term crude supply agreements that provide flexibility for Iranian crude.
He said the Byco also had past experience of refining Iranian crude before its supply had suspended due to international sanctions.
He said because of consolidated business model, the company would be declaring profit for the first time for the quarter ending June 30, 2015 that would set the direction for its improved financial position in future.
He said the Byco management had decided to consolidate its refining business before going into expansion of retail outlets, adding that so far Byco was operating 250 petrol pumps across the country.
"The focus of our marketing has been on furnace oil sales and we have been able to secure furnace oil business from Nishat Chunia, K-Electric, Tapal, Liberty and Hub Power Company", he maintained.
He said Byco was facing problems because of the issue of turn over tax, but the authorities had not only understood the tax anomaly but was committed to issue an enabling clarification. He explained that refinery was set up under tax-holiday for seven years when there was no turn over tax which was imposed subsequently and the government had agreed to do away with it. He said about 95 per cent of the oil pricing was based on crude price which meant that turn over tax could simply eat away the entire profit.
He said that due to the completion of isomerization and desulphurization of within plants into a couple of months it would convert its entire Naphtha production into motor spirit that would almost double its production from 12,500 barrels per day to cut costs.
He said the government had appreciated the co-operation extended by the Byco in controlling petrol crisis early this year and now looked forward to take benefit of its location and infrastructure.
He said the company could directly provide furnace oil to Hubco next door while Pakistan State Oil was also taking full advantage of Byco's strength of its own port facility in the shape of single point mooring.
Siddiqui said all major oil marketing companies including PSO, Hescol, Caltex and Shell in that order and other smaller companies were lifting products from Byco refinery.
#Pakistan to build country’s first Naphtha Cracker Complex. #petrochemicals #manufacturing #materials #CPEC
In an unprecedented development to boost the economy, Pakistan is set to build the country’s first ever Naphtha Cracker Complex (NCC), a state-of-the-art “grand infrastructure” to change petrochemical raw substances into value-added products ranging from construction, home décor, appliances, furniture, medical care, paints, cleaning stuff and top of the line military gadgets.
The absence of a naphtha cracker complex means Pakistan has to buy all petrochemical feedstock from international market that take heavy toll on import bill and prices of long range of items.
India has nine naphtha cracker complexes providing it tremendous mileage in industrial and economic progress.
The creation of this complex will revolutionise the industrial landscape.
The game-changing development came after an 18-member delegation of Pakistan Chemical Manufacturing Association (PCMA) met recently with Federal Minister for Planning, Development and Reforms in his office, Islamabad where NCC was announced to be built to catalyse the economic progress.
Acknowledging NCC as a strategic need, Minister suggested PCMA to prepare feasibility report and viable business plan in consultation with market experts and technologists to help ministry to make it a reality.
NCC will have an impactful role in all industrial zones to be placed along the route of China-Pakistan Economic Corridor (CPEC), it was said at the meeting.
Post a Comment