Sunday, April 12, 2015

Haier Pakistan to Expand Production From Home Appliances to Laptops, Smartphones

Haier-Ruba joint venture in Pakistan has announced plans to start manufacturing laptops and smartphones in Lahore this year, according to the JV chairman Shah Faisal Afridi. The Haier-Ruba group is one of the largest manufacturers of polyester yarn and home appliances in the country.



“We are not relying on importing mobile phones from China but our focus is the transfer of technology in the country so that we could manufacture our own product here. We have already started an assembly line for the laptops in Pakistan”,  Afridi said in an interview with More magazine.

Haier Pakistan is currently producing refrigerators, deep freezers, washing machines, home air conditioners, commercial air conditioners, television sets, microwave ovens and  other small appliances in a special economic zone (SEZ) on the outskirts of Lahore.

“Pakistan is one of eight countries around the world where the Chinese government plans to help its investors set up and operate SEZs, to use the country as a major base for manufacturing and exporting goods to the rest of the world. These zones have to be privately owned and operated,” said Afridi, who also heads the Haier-Ruba SEZ Company, according to Pakistan's Dawn newspaper.

Haier entered the Pakistan market in February 2001 by jointly establishing a facility with Pakistan-based Panapak Electronic Company to produce Haier air conditioners.  The Group opened Haier (Pakistan) Industrial Park in Lahore in April 2001. In 2004, Haier was the first foreign brand home appliance manufacturer in Pakistan to obtain the ISO9001:2000 Certification, according to Andrew Delios, the author of "International Business: An Asia Pacific Perspective".

After 13 years in Pakistan, Haier has become the second most popular home appliance brand in the country. Haier Pakistan has maintained the highest market share for air-conditioners and washing machines for several years while Haier  refrigerators curently enjoy the second highest market share. According to a Millward Brown survey in 2013, Haier has achieved 94% brand awareness, the second highest in the country.

Haier has 8 industrial complexes, two of which are foreign--one in the United States, and one in Pakistan,  according to  Xiaofei Li, the author of "China's Outward Foreign Investment: A Political Perspective". In these Special Economic Zones, Haier does localization to suit the needs of the consumers.  For Pakistani market, Haier especially designed a washer that can hold 15 long gowns at one time. There are many more such Special Economic Zones envisaged as part of the CPEC (China-Pakistan Economic Corridor).  It will be essentially an industrial corridor spanning almost the entire length of the country from the Arabia sea coast to the Karakorams where it enters China via the Karakoram Highway (KKH), the word's highest paved road.

Under the agreement signed by Chinese and Pakistani leaders at a Beijing summit recently, $15.5 billion worth of coalwind, solar and hydro energy projects will come online by 2017 and add 10,400 megawatts of energy to the national grid.  An additional 6,120 megawatts will be added to the national grid at a cost of $18.2 billion by 2021.

Pak-China Industrial Corridor Source: Wall Street Journal


The transport and communication infrastructure—roads, railways, cable, and oil and gas pipelines—will stretch 2,700 kilometers from Gwadar on the Arabian Sea to the Khunjerab Pass at the China-Pakistan border in the Karakorams.

Starting in 2015, the Chinese companies will invest an average of over $7 billion a year until 2021, a figure exceeding the previous record of $5.5 billion foreign direct investment in 2007 in Pakistan.

Beyond the initial phase, there are plans to establish special economic zones in the Corridor where Chinese companies will locate factories. Extensive manufacturing collaboration between the two neighbors will include a wide range of products from cheap toys and textiles to consumer electronics and supersonic fighter planes.

The basic idea of an industrial corridor is to develop a sound industrial base, served by competitive infrastructure as a prerequisite for attracting investments into export oriented industries and manufacturing. Such industries have helped a succession of countries like Indonesia, Japan, Hong Kong,  Malaysia, South Korea, Taiwan, China and now even Vietnam rise from low-cost manufacturing base to more advanced, high-end exports.  As a country's labour gets too expensive to be used to produce low-value products, some poorer country takes over and starts the climb to prosperity.

Once completed, the Pak-China industrial corridor with a sound industrial base and competitive infrastructure combined with low labor costs is expected to draw growing FDI from manufacturers in many other countries looking for a low-cost location to build products for exports to rich OECD nations.

The CPEC will not be just an economic or industrial corridor; it'll also be a strategic corridor for both China and Pakistan in countering the growing US-India alliance and Obama's Asia Pivot both of which are seen as a threat to the regional stability of South Asia.

Clearly, China-Pakistan ties have now become much more strategic than the US-Pakistan ties, particularly since 2011 because, as American Journalist Mark Mazzetti of New York Times put it, the  Obama administration's heavy handed policies "turned Pakistan against the United States". A similar view is offered by a former State Department official Vali Nasr in his book "The Dispensable Nation".

Related Links:

Haq's Musings 

3G, 4G Rollout in Pakistan

Pakistan Starts Manufacturing Tablets and Notebooks

China-Pakistan Industrial Corridor

US-Pakistan Ties and New Silk Route

Can Pakistan Say No to US Aid?

Obama's Pakistan Connections

Seeing Bin Laden's Death in Wider Perspective

China's Investment and Trade in South Asia

China Signs Power Plant Deals with Pakistan

Soaring Imports from China Worry India

China's Checkbook Diplomacy

Yuan to Replace Dollar in World Trade?

China Sees Opportunities Where Others See Risk

Chinese Do Good and Do Well in Developing World

Can Chimerica Rescue the World Economy?




38 comments:

Syed said...

Laptops are facing a quick death worldwide. Aside from that, a friend of mine exports nearly 200,000 used corporate throwaway laptops from the US to Pakistan, guaranteeing them only in a contract that he would wipe all drives and install brand new operating system before selling. He has a big sweat shop in Faisalabad

He sells the laptops for about Rs. 20,000 +/- a piece. Still, he has tough competition since there are many importers like him in Pakistan.

Riaz Haq said...

Syed: "Laptops are facing a quick death worldwide."

Pakistan is bucking the trend in declining PC sales in MENA region:


PC sales in Africa and the Middle East (AME) will decline by 2% in 2014, with sales remaining flat to slightly negative for the next five years, according to new research by International Data Corp (IDC).

This is despite a positive third quarter in 2014, when the market expanded by 2,1% in volume terms year on year to reach 4,26m units. The grow was spurred in large part by two significant education orders in Pakistan and the revival of the Egyptian market.

Growth on the third quarter was seen across both the desktop and portable PC segments, IDC said. Desktop shipments to AME increased by 3,6% year on year to 1,73 million units, while shipments of portable PCs were up by 1,1% to 2,53m units.

“The market overcame ongoing instability in certain parts of the region to maintain its state of growth in the third quarter of 2014,” said Fouad Rafiq Charakla, research manager for personal computing, systems and infrastructure solutions at IDC Middle East, Turkey and Africa. “For example, the Nigerian market was hit hard by the outbreak of Ebola, while the war-like situation in Iraq greatly inhibited shipments to the ‘rest of the Middle East’ sub-region comprising Iran, Iraq, Syria, Yemen, Palestine and Afghanistan.”

PC makers also had to contend with a general slowdown in PC demand across the region due to the growing popularity of tablets and smartphones, said Charakla. “Indeed, an overall regional decline was only averted by the delivery of 150 000 notebooks into Pakistan’s education sector and the return of relative calm to Egypt, which saw these two countries become by far the fastest growing markets during the quarter.”

The three leading PC vendors in AME remained unchanged from the previous quarter. Hewlett-Packard continued to lead in market share, posting year-on-year unit growth of 14,4% for the quarter. Second-placed Lenovo continued to benefit from strong consumer demand and was again the fastest growing major PC vendor in the region, increasing its shipments by 58,2% year on year. Third-ranked Dell recorded 23% year-on-year growth, with one of the education deals in Pakistan serving as a major driver of sales.

Despite this, IDC expects the AME PC market to shrink by 2% overall in 2014. “The market will remain close to flat over the coming five years, and may even experience some minor declines, with demand for both desktops and portable PCs continuing to slow in many parts of the region. However, a number of underpenetrated markets — including Egypt, Pakistan, Nigeria and some smaller African countries — will continue to experience growth, preventing the overall region from experiencing any significant declines.” — © 2014 NewsCentral Media

http://www.techcentral.co.za/regions-pc-market-to-slump-by-2/53387/

Paki said...

I think should be called assembling not manufacturing.

Riaz Haq said...

Paki: " think should be called assembling not manufacturing."

You have an outdated notion of manufacturing.

The days of vertically integrated manufacturing companies are long gone. Major manufacturing companies today assemble parts sourced from hundreds if not thousands of different vendors spread across the world forming a modern supply chain.

Even fast food restaurant companies like McDonald's buy hamburger buns, beef patties, lettuce, tomatoes, fries, sauces etc from lots of different vendors to "assemble" hamburgers and fries. They all buy beverages from Coke or Pepsi to complete their meals.

Anonymous said...

When will the Economic Corridor be ready? All the money is coming from China in loan to be paid back?

I am afraid of corruption and lot of money taken away from Pakistan by over invoicing.

Riaz Haq said...

Anon: " When will the Economic Corridor be ready? All the money is coming from China in loan to be paid back? I am afraid of corruption and lot of money taken away from Pakistan by over invoicing"


Read the following:

The first phase of the economic corridor is focused on $45.6 billion worth of energy and infrastructure projects. China's state-owed banks will finance Chinese companies to fund, build and operate $45.6 billion worth of energy and infrastructure projects in Pakistan over the next six years, according to Reuters. Major Chinese companies investing in Pakistan's energy sector will include China's Three Gorges Corp which built the world's biggest hydro power project, and China Power International Development Ltd.

Under the agreement signed by Chinese and Pakistani leaders at a Beijing summit recently, $15.5 billion worth of coal, wind, solar and hydro energy projects will come online by 2017 and add 10,400 megawatts of energy to the national grid. An additional 6,120 megawatts will be added to the national grid at a cost of $18.2 billion by 2021.

http://www.riazhaq.com/2014/12/pak-china-industrial-corridor-to-boost.html

The Chinese money is not a loan to Pakistan govt; it's being borrowed by Chinese companies to invest and build infrastructure. The companies will profit recoup their investment and returns by charging their customers in Pakistan. Pakistan taxpayers will not be on the hook to repay.

Majumdar said...

Good news, sir!

Regards

nayyer ali said...

I think we are seeing some overall positive trends and the Chiinese investment, if fully followed through on will add a lot to growth. Pakistan has a more equitable society, no billionaires like India but not as much abject poverty either. What is disappointing is that overall economic growth is too slow. With good policies Pakistan should be doing 7% a year for the next 20 years and reaching the level of Malaysia or Turkey. Too much internal violence also that needs to be brought to an end.
I wonder if we will see a modernized political system rather than the current patronage parties. A party like the AKP in Turkey that focuses on economic growth and reflects the new middle class.
The other major issue is population growth. While TFR has dropped it needs to be brought down to 2.2 or so ASAP. Can't imagine a Pakistan with 300 million people in 2050.

Kadeer said...

It is not known how much Pakistanis will be paying per kilowatt/hr. I am hesitant to think it will be a gravy train.

The Chinese Government is a all weather partner to Pakistan but the banks they own have free rein - they are out to make as much money as possible.

They have to be profitable because these banks have investors and many of them are Chinese shareholders who are paid dividends. This is the experience in many African countries now.

Keep in mind 45 billion is only an MOU. When Pakistanis have to pay for electricity to someone in another country, angers will surface!

Riaz Haq said...

‘If ‘One Belt, One Road’ is like a symphony involving and benefiting every country, then construction of the China-Pakistan Economic Corridor is the sweet melody of the symphony’s first movement.’
—Wang Yi, China’s foreign minister


Chinese President Xi Jinping is set to unveil a $46 billion infrastructure spending plan in Pakistan that is a centerpiece of Beijing’s ambitions to open new trade and transport routes across Asia and challenge the U.S. as the dominant regional power.

The plan, known as the China Pakistan Economic Corridor, draws on a newly expansive Chinese foreign policy and pressing economic and security concerns at home for Mr. Xi, who is expected to arrive in Pakistan on Monday. Many details had yet to be announced publicly.

“This is going to be a game-changer for Pakistan,” said Ahsan Iqbal, Pakistan’s planning minister, who said his country could link China with markets in Central Asia and South Asia.

“If we become the bridge between these three engines of growth, we will be able to carve out a large economic bloc of about 3 billion living in this part of the world…nearly half the planet.”

Beijing’s primary concern is that instability in neighboring Pakistan and Afghanistan is spilling into China’s predominantly Muslim northwest, and could grow worse with the withdrawal of U.S. troops from the region.

China sees a historic opportunity to redraw the geopolitical map by succeeding where the U.S. has largely failed, building critical infrastructure that could kick-start economic growth and open new trade routes between China and Central and South Asia. A cornerstone of the project will be to develop the Pakistani port of Gwadar, a warm-water port run by the Chinese on the doorstep of the Middle East.

If realized, the plan would be China’s biggest splurge on economic development in another country to date. It aims over 15 years to create a 2,000-mile economic corridor between Gwadar and northwest China, with roads, rail links and pipelines crossing Pakistan.

The network ultimately will link to other countries as well, potentially creating a regional trading boom, Pakistani and Chinese officials say.

The Pakistan program has been described by Chinese officials as the “flagship project” of a broader policy, “One Belt, One Road,” which seeks to physically connect China to its markets in Asia, Europe and beyond.

“If ‘One Belt, One Road’ is like a symphony involving and benefiting every country, then construction of the China Pakistan Economic Corridor is the sweet melody of the symphony’s first movement,” Wang Yi, China’s foreign minister said during a visit to Pakistan in February.

Andrew Small, author of “The China-Pakistan Axis: Asia’s New Geopolitics,” said China was reacting to the perceived failure of Western aid to make a significant difference to Pakistan. “The Chinese response is that you haven’t done it on a large enough scale,” Mr. Small said. “They’re saying that it is only by doing it on this kind of big-bang scale that you’re going to have the transformative economic effect that Pakistan needs.”

Gwadar, operated by a state-run Chinese firm, is set to begin commercial operations this year, and one of the deals to be signed by the Chinese president while in Pakistan is a final agreement on building a new international airport there, Pakistani officials said.

Mr. Small said propping up Pakistan economically furthers China’s regional competition with India. China sees Pakistan as a strategic counterweight to India. Conversely, the U.S. is backing India, which President Barack Obama visited in January, as a counterweight to China, despite Washington’s long relationship with Islamabad....


http://www.wsj.com/articles/china-to-unveil-billions-of-dollars-in-pakistan-investment-1429214705

Riaz Haq said...

Recalling the recent high-level exchanges from both sides, especially the visit of Commerce Secretary Pritzker to Islamabad in March to attend the US-Pakistan Business Opportunities Conference, the two sides expressed satisfaction over the relationship and agreed to intensify engagements in the coming months to further strengthen and deepen bilateral cooperation in all areas.

Finance Minister Dar shared with the Deputy Secretary of State the important achievements in the economic sector that led to the upgrading of Pakistan’s economic outlook in recent months.

The significant decrease in inflation, growing foreign exchange reserves, stable exchange rate and shrinking fiscal deficit, Dar underlined, were the result of sound economic policies pursued by the government of Prime Minister Muhammad Nawaz Sharif.

Noting the significant improvement in the security situation in the country, Deputy Secretary Blinken stressed the need to continue building momentum on expanded trade investment and economic cooperation between Pakistan and the United States. The two sides also agreed that energy remains the vital area with immense potential for enhanced cooperation.

In this context it was emphasized that the forthcoming meeting of the Working Group on Energy should review the entire range of collaboration to assist Pakistan in overcoming its energy deficiency.

Federal Finance Minister Mohammad Ishaq Dar also met President of OPIC Ms Elizabeth Littlefield and her team and discussed OPIC’s programme portfolio and the projects in the pipeline in Pakistan.

Dar apprised Ms Littlefield of the excellent economic recovery that was attracting investors to make new investment or expand operations in Pakistan. He said indicators like foreign exchange reserves, inflation, the discount rate and stock market index had markedly improved in the last 22 months and international agencies had acknowledged the economic recovery. He said the IMF Board has recently cleared the 6th review without any waiver and Moody’s has also upgraded Pakistan’s outlook from stable. He observed that in view of the renewed interest of investors OPIC can increase its presence in Pakistan and finance more projects especially in the energy sector.

Ms Elizabeth Littlefield congratulated the finance minister over the successful review of EFF programme and improvement in rating by Moody’s. She stated that Pakistan had staged a remarkable recovery in a very short span of time and the investors’ interest had evidently increased.

Ms Littlefield informed Finance Minister Dar to look into some of the pending issues of its wind energy projects of 50 MW each. She said that though the size of these projects was not big yet it was clean renewable energy which will improve its energy mix.

The finance minister informed Ms Littlefield that the government of Pakistan was working on the generation of 7,000 MW of electricity from hydel, coal, wind and LNG. He assured the president OPIC of all possible help in removing glitches in its projects which are in the pipeline. Dar apprised her about the import of LNG that will be used to produce electricity and asked OPIC to provide financing to US companies interested in these projects.

----------

Ishaq Dar who is currently visiting Washington to attend the World Bank and International Monetary Fund (IMF) meetings said that on the economic front far-reaching initiatives have been taken by Pakistan with neighboring countries including enhancing bilateral trade, streamlining transit trade issues, increasing investment cooperation, strengthening connectivity through road and rail links and promoting energy collaboration.

He told the participants of the Carnegie Endowment for International Peace that the government is implementing a four point agenda as per its manifesto and focusing on energy, economy, education and elimination of extremism.


http://www.thenews.com.pk/Todays-News-13-37079-Pakistan-US-agree-to-enhance-economic-cooperation

Riaz Haq said...

Shifting Allegiances – Rethinking #US-#Pakistan Relations as Pakistan grows closer to #China and #Russia http://on.cfr.org/1CYQRZw via @CFR_org

The once strong U.S.-Pakistan relationship may be set to expire. Since the Afghan-Soviet war (1979-1989), Pakistan has served as a key U.S. ally in the Middle East—providing a base for military operations, participating in the counterterrorism operations in Afghanistan and Pakistan, and mediating relations between the United States and China. This bilateral relationship expanded in 2001 under President Bush, who increased humanitarian and military aid from $187.7 million in 2001 to $2 billion the year after 9/11—totally $20 billion in the subsequent decade. However, recent Pakistani political and military decisions reveal shifting allegiances, calling into question the strength of U.S.-Pakistan relations.


In recent months, Pakistan has embarked on a number of initiatives that support U.S. regional interests. Much of Pakistan’s renewed attention to countering terrorism was spurred by the December 16, 2014, Peshawar school attack—the most violent terrorist attack in Pakistan’s history—in which Taliban militants killed 145 people, including 132 children. Subsequently, in December 2014, the Pakistani government created National Action Plan (NAP) to crack down on terrorism. In January 2015, Pakistan began a process of deepening military ties with Afghanistan to strengthen border security. Also in line with U.S. interests in the region, Pakistan is pursuing friendlier relations with India by resuming dialogues for the first time in almost one year amid tensions on the contested Jammu and Kashmir border. As a result of Pakistan’s counterterrorism efforts, the State Department’s approved Pakistan’s request for nearly $1 billion in military equipment.

---
In recent months, Pakistan’s allegiances have begun to shift as the country strengthens relations with China and Russia, two countries with which Pakistan’s interests increasingly align. Pakistan’s deepening regional ties have reached an unprecedented level, according to a study by the non-profit group, Pew Charitable Trusts, and pose a direct challenge to U.S. regional influence. Most recently, on April 16, Chinese president Xi Jinping announced plans to embark on a $46 billion infrastructure spending plan in Pakistan known as the China Pakistan Economic Corridor and, in early April, Pakistani president Nawaz Sharif approved an approximately $5 billion deal with China to purchase eight submarines with the potential to attach nuclear warheads. With a security interest in filling the vacuum left by the drawdown of U.S. troops from the region in order to stem the growing threat of terrorist attacks in West China and promises of unprecedented investment to Pakistan, Pakistan may default to a partner with which its interests more directly align—China.
---------

Pakistan’s recent actions reflect an increasingly different set of priorities. While Pakistan’s rivalry with India, quest for regional alliances, and pursuit of a strong military arsenal are not new, the country’s growing alignment of interests and unprecedented collaboration with potential U.S. rivals—China and Russia—threaten the stability of a bilateral relationship founded primarily on Pakistan’s reliance upon the United States. The United States should question whether it is clinging to an outdated perception of U.S.-Pakistani relations.


http://blogs.cfr.org/zenko/2015/04/17/guest-post-shifting-allegiances-rethinking-u-s-pakistan-relations/

Nigel Stevens said...

@Riaz

In recent months, Pakistan’s allegiances have begun to shift as the country strengthens relations with China and Russia, two countries with which Pakistan’s interests increasingly align.

It is difficult to understand Pakistan.

US, a country, that values religious freedom and where many Pakistanis (including Mr Haq) have the choice to become a citizen of, is today the most hated country in Pakistan.

China, a country, that restricts the practice of Islam (Unghur Province) and does not allow religious freedom or allow Pakistanis to migrate to or become a citizen, is today the most loved and an "all weather friend" of Pakistan.

Go figure!

Riaz Haq said...

NS: "It is difficult to understand Pakistan"

Is it more difficult understand Pakistan than to understand America?

Remember what Kissinger said?

“America has no permanent friends or enemies, only interests”

Translation: International relations are guided by interests, not love or values.

Nigel Stevens said...

Following Kissinger or Mao is simply obsolete today.

Ask some Pakistani politicos or, more importantly, any of the Military Brass and they will tell you that China is their "all weather friend". There is almost an infatuation with China monetarily driven perhaps.

If there is any country today, it is China who puts its own interest, economic interest, at the front and center. Pakistanis are under the illusion that Pakistan is more important to China than India. To China, India is and will be a much larger trading partner already there are bilateral exchanges in multiple fields on a level that Pakistan cannot even come close to.

Riaz Haq said...

NS " Pakistanis are under the illusion that Pakistan is more important to China than India. To China, India is and will be a much larger trading partner already there are bilateral exchanges in multiple fields on a level that Pakistan cannot even come close to"

It's obvious that you don't understand the strategic nature of China-Pakistan ties.

China's emphasis on "connectivity and maritime sectors" and "China-Pakistan economic corridor project" is mainly driven by their paranoia about the US intentions to "check China's rise" It is intended to establish greater maritime presence at Gwadar, located close to the strategic Strait of Hormuz, and to build land routes (motorways, rail links, pipelines) from the Persian Gulf through Pakistan to Western China. This is China's insurance to continue trade with West Asia and the Middle East in case of hostilities with the United States and its allies in Asia.

Read the following to educate yourself:

http://www.riazhaq.com/2013/05/how-strategic-are-pakistan-china-ties.html

In answer to your claim that volume of trade determines strategic interests, let me explain to you that the US today is so dependent on China that ordinary Americans' daily lives would come to grinding halt, Walmart would go out of business and US F-35 stealth fighters would be grounded without imports from China.

http://www.reuters.com/article/2007/06/28/us-books-madeinchina-idUSN2425061320070628

http://www.reuters.com/article/2014/01/03/us-lockheed-f-idUSBREA020VA20140103

So why is it that the US wants to form alliances with India against China rather than its much bigger trading partner China in the post-Cold War world?

Riaz Haq said...

The regional security in South Asia and the adjacent regions to the west and north are on the cusp of a profound transformation. Broadly, there are three vectors involved here.

One, Iran’s integration with the international community as a ‘normal country’, a process that has already begun; two, the historic entente between Russia and China which has consolidated almost immeasurably in the past one year period since the New Cold War tendencies began appearing; and, three, a largely-unnoticed but extremely significant shift in the foreign-policy priorities of Pakistan, a genuinely ‘pivotal’ state in the politics of South Asia, given its highly strategic geographic location in the South Asian region, from where it impacts regional security in Central Asia and West Asia.

The state visit by the Chinese President Xi Jinping to Pakistan on Monday in many ways brings together the three vectors. The visit is, on the face of it, a bilateral event of historic significance to the long-standing ties between the two relationship, which from all accounts can be expected to add much strategic content to the relationship and elevate it to an altogether qualitatively new level.

However, China is also playing the long game insofar as Beijing is actually beginning the implementation of its “One Belt, One Road” initiative, which is a global project in character and scope and all but prefaces China’s inexorable rise on the world stage as a superpower.

It is extraordinary that China is committing such massive investment in excess 40 billion dollars in a single country, undeterred by the perception in the western financial circles that Pakistan is a “failing state” and a revolving door of international terrorism.

In the eighties or nineties, this would have lent itself to interpretation as “India-centric” and as a diabolical move by the Chinese policymakers to strengthen Pakistan’s capacity to challenge India, a common foe. But that is no more the case today. The impulses driving the Chinese policies toward Pakistan today are to be found elsewhere.

First and foremost, Pakistan’s stability has come to be a matter of serious concern from the perspective of China’s internal security needs, which is attributable not only to the spurt in terrorist activities in Xinjiang by groups that are to be traced to the Af-Pak region, but also out of China’s emergent concerns as a stakeholder in regional stability that is an imperative need to advance its regional and global policies (politico-military, economic and cultural) more optimally.

The dramatic shift in the Chinese thinking apropos of the issues of terrorism in South Asia and Beijing’s unmistakable empathy with India’s concerns as a victim of terrorism testify to this. A leading Indian daily brought this home today reporting from Beijing an extraordinary statement attributed to the head of the Chinese foreign ministry think-tank Institute of South and Southeast Asian and Oceanic Studies, Hu Shisheng that China finds itself “awkward diplomatically” to have taken a “neutral stand” on the terrorist attack on Mumbai in November 2011.

Hu said, “India’s concerns over terrorism will be addressed in a more constructive way. China also suffered due to terrorism.” He said China has suffered from U.S. double standards on terrorism and should not behave in a similar fashion.

---
Without doubt, Pakistan (along with Central Asia and Iran) becomes a gateway for China to the world market and it is crucial for Beijing that Washington’s ability to block this gateway is “zero”. Pakistan is actually the single most critical gateway for China in the emergent paradigm. Arguably, that alone could explain the extraordinary extent to which China is making the stabilization of Pakistan a real-time dimension to its own national policies of development.



http://atimes.com/2015/04/pakistan-china-iran-and-the-remaking-of-regional-security/

Riaz Haq said...

China signed 51 agreements with Pakistan in a ceremony in Islamabad Monday that could ultimately lead to $48 billion in infrastructure projects.
For now, $28 billion in spending is planned. China President Xi Jinping made his first state visit to Pakistan to unveil the development program known as the China-Pakistan Economic Corridor; it will include railway upgrades and power plant construction. China and Pakistan share a “mutual antagonism toward India, but their economic ties had lagged behind,” The Wall Street Journal reports.

Xi and Pakistani Prime Minister Nawaz Sharif highlighted five projects, including a $1.4 billion dam that will deliver 720 megawatts of electricity, and a $1.5 billion solar power park that will add 900 megawatts of power to the grid.----------

Renaissance Capital analysts Daniel Salter, Charles Robertson, Seki Mutukwa and Omair Ansari write that Pakistan is “an undervalued reform story” and add:

“The government is delivering on privatisations with the Habib Bank stake sale, and initial shipments of LNG [liquefied natural gas] have started to arrive (an important first step in rebalancing the country’s energy mix). On the negative side, the government again delayed the anticipated gas tariff hike until July. … If there has been one theme that has worked well in EM of late it is reform. Pakistan ticks many of the boxes here, yet trades on a far lower valuation (8.4x 12-month forward P/E) than other emerging markets and frontier market reform stories such as Vietnam (13.5x), India (16.8x), Philippines (20.0x), Bangladesh (21.4x) or Sri Lanka (13.4x). We believe Pakistan should be of interest not only to frontier funds, but also to mainstream emerging market investors able to look outside of their benchmark index. We like cement, consumer and, to an extent, banks top-down. Our top picks from our bottom-up coverage are: Lucky Cement (LUCK.Pakistan), DG Khan Cement (DGKC.Pakistan) and Packages (PKGS. Pakistan).”

In February and March, the MSCI Pakistan Index fell by over 20% in dollar terms, and the 13% drop in March was the largest in five years, Renaissance Capital reports. But the MSCI Pakistan Index started to rebound this month, up roughly 9%. So far in April, the iShares MSCI Frontier 100 ETF (FM) is up 4%, the WisdomTree India Earnings Fund (EPI) is down 1.5%, and the iShares MSCI India ETF (INDA) has tumbled 2.6%.


http://blogs.barrons.com/emergingmarketsdaily/2015/04/21/how-to-play-pakistan-as-china-invests-billions/

Riaz Haq said...

Forty Years After Fall of Saigon, Entrepreneurs Return to Vietnam

Henry Nguyen was a toddler when his family fled Vietnam just before the fall of Saigon 40 years ago.

Now he’s back, part of an influx of Vietnamese-born entrepreneurs returning to the country to reap the benefits of its shift to a more market-oriented economy.

Since his return in the early 2000s, Mr. Nguyen has become one of the best-known business figures in the Vietnam. He is head of Vietnam operations for Boston-based fund manager IDG Ventures, and he recently introduced the Big Mac to the country as McDonald’s Corp.MCD +0.20%’s first franchisee here.

In another sign of the changing times, Mr. Nguyen, the son of a civil engineer who worked with the old South Vietnamese government, is married to the daughter of Vietnam’s communist prime minister. The couple and their twin daughters live in Ho Chi Minh City, the name by which Saigon is now known.

“It’s something I never planned on or anticipated,” said Mr. Nguyen, a fresh-faced 41-year-old American with thick-rimmed glasses and spiky hair. “But looking forward, this is where my life is.”

The fact that Mr. Nguyen has gotten so far highlights how much Vietnam has changed since the South capitulated to Communist forces on April 30, 1975. It also points to the important role the country’s diaspora has played in expanding the scope and scale of what could be one of the world’s next great economic success stories.

As Vietnam’s Communist Party began to loosen its hold of the economy in the early 1990s after the collapse of the Soviet Union, Viet Kieu, or overseas Vietnamese helped lead the march of foreign investment into the country.

Seattle-raised entrepreneur David Thai helped blaze the trail when he moved to Hanoi in the 1990s. He became the first overseas Vietnamese to register a private company and open a chain of coffee shops under the name Highlands Coffee. Since then, officials say other expatriate Vietnamese have invested more than $20 billion here, mostly in and around Ho Chi Minh City, still in many ways the country’s economic engine.

Intel Corp. appointed U.S. national Than Trang Phuc to launch a $2 billion chip factory in Ho Chi Minh City in the early 2000s, while other Vietnamese returned from America, France and elsewhere to set up private businesses.

The potential payoff is significant. Frederic Neumann, co-head of Asian economic research at HSBC HSBA.LN -0.25% views Vietnam as the best example of a frontier economy benefiting from rising costs in China. Thanks to multibillion-dollar investments from companies such as Samsung Electronics Co.005930.SE +1.39% and Intel INTC -0.41%, exports of smartphones and other electronics now have eclipsed old standbys such as textiles and footwear, leaving the country comfortably higher up the value ladder than cheaper locales such as Cambodia or Bangladesh.

http://blogs.wsj.com/frontiers/2015/04/29/forty-years-after-fall-of-saigon-entrepreneurs-return-to-vietnam/

Riaz Haq said...

The United States and Pakistan on Wednesday announced to facilitate and accelerate private investment in clean energy projects in Pakistan.

Under this initiative, the US government will work with Pakistan to advance reforms that will allow the US, Pakistani, and international private sector developers and investors to add at least 3,000 megawatts of clean power to Pakistan’s national grid within the next 3-5 years.

“This clean energy initiative will help address Pakistan’s energy challenges,” said US State Department’s Special Envoy for Energy Amos Hochstein during the second US-Pakistan Energy Working Group under the broader US-Pakistan Strategic Dialogue framework. “It is a partnership to help alleviate Pakistan’s energy challenges based on a set of goals shared by Pakistan, the United States, multilateral banks, donors, and the private sector.”

Special Envoy Hochstein, Deputy Chief of Mission Williams and a delegation from Washington met Shahid Khaqan Abbasi, Khawaja Asif and a range of Pakistani government officials to discuss measures to increase cooperation in the clean energy sector. Energy demand in Pakistan is expected to double by 2020. Addressing this challenge will require significant action by the government to institute reforms that create space for private sector support, as well as the support of many countries and institutions.

To advance the goals of this common initiative, the US and Pakistani officials discussed steps to: strengthen regulatory institutions and develop market-based rules to attract private investment; develop an investment strategy for expanding the role of clean energy systems; expand transmission capacity for clean energy projects; and mobilise loans, grants, technical assistance and guarantees needed to manage and reduce private sector risks and leverage private capital into clean power projects.

Helping the energy sector become more market-based is one of the best alternatives to ending the current crisis and ensuring that future demand can be met. Clean power investments in hydroelectric, wind, solar, biomass, and natural gas, combined with an expanded effort to improve the efficiency at all parts of the energy sector, will reduce Pakistan’s dependence on foreign fuel sources, help address climate change, improve Pakistan’s energy security, and promote innovation and growth.

This initiative marks a new phase of US energy sector assistance to Pakistan, which since 2010 has contributed over 1,500 megawatts of electricity to Pakistan’s national grid by refurbishing existing hydropower and thermal generation facilities, completing hydropower projects, and improving the operation and efficiency of Pakistan’s transmission and distribution systems. inp

ISLAMABAD: The United States and Pakistan on Wednesday announced to facilitate and accelerate private investment in clean energy projects in Pakistan.

Under this initiative, the US government will work with Pakistan to advance reforms that will allow the US, Pakistani, and international private sector developers and investors to add at least 3,000 megawatts of clean power to Pakistan’s national grid within the next 3-5 years.

“This clean energy initiative will help address Pakistan’s energy challenges,” said US State Department’s Special Envoy for Energy Amos Hochstein during the second US-Pakistan Energy Working Group under the broader US-Pakistan Strategic Dialogue framework. “It is a partnership to help alleviate Pakistan’s energy challenges based on a set of goals shared by Pakistan, the United States, multilateral banks, donors, and the private sector.”

http://www.dailytimes.com.pk/business/30-Apr-2015/us-to-help-pakistan-get-3-000mw

Riaz Haq said...


LAHORE: The Pakistani society is quickly adapting to technological change. Be it the spectrum auction that marked the arrival of 3G, 4G services or wireless appliances making their way into the mainstream, Pakistanis are slowly coming of age. Similarly, awareness among people of electronic appliances has also increased the demand of these products.

This trend has been taken into account by businesses as an opportunity to invest in the Pakistani market and derive high rewards.

Haier-Ruba group is a company that has shown an exponential growth rate since its inception in the country. The group deals in many businesses ranging from polyester yarn, electronic appliances, power generation, real estate and automobile business.

Recently, its primary achievement can be attributed to the successful development of the Haier-Ruba Economic Zone (HREZ) with the support of Chinese authorities.



The HREZ is located near Lahore and is spread at 300 acres, but it is looking to expand especially after the China-Pakistan Economic Corridor (CPEC) breakthrough.

Haier-Ruba President and CEO Faisal Shah Afridi said the company is looking to buy more land, increase investments and target a wider market .

“We need more land around the motorway and are willing to buy 3,000-5,000 acres of land at market price,” Afridi said.

The HREZ is a part of the CPEC and Afridi expressed hope that this will prove to be a gateway for other Chinese industrialists to venture into Pakistan.

Afridi said that Haier-Ruba also plans to establish regional zones in Pakistan.

“Currently, under HREZ, we are have undertaken 11 projects, the annual turnover of these is $800 million,” said Afridi. “We are planning to invest another $1.5 billion in the next five years for our future ventures.”

The background

Ruba Group’s partnership with Haier dates back to 2001 when a company was established through a joint venture.

After the initial success and rising demand of electronic appliances, Haier Pakistan was set up in 2006, to further diversify its product line with another investment of $0.5 million kicking in later. Currently, the company boasts of annual turnover of Rs46 billion.

http://tribune.com.pk/story/883770/joint-ventures-haier-ruba-plans-expansion-investment-of-1-5b/

Riaz Haq said...

For industrial cooperation, the two countries China and Pakistan) are planning industrial parks (along CPEC). According to local media, the Pakistani government has proposed 29 industrial parks and 21 mineral economic processing zones in all four provinces. A joint working group would decide and identify the industrial parks, said Pakistani Minister for Planning, Development and Reform Ahsan Iqbal, who hailed the CPEC as a "game changer" and a once-in-a- lifetime opportunity for Pakistan.

--------

Last month Pakistan's Chief of Army Staff Gen. Raheel Sharif inspected the under-construction road network as part of the CPEC. According to the army, 502 km out of the 870-km road network linking the Gwadar Port with the rest of the country have been completed by Frontier Works Origination (FWO). During the inspection, the army chief also vowed that the CPEC "will be built at all costs."

The Gwadar Port started its long-awaited operations on May 11 as the first private container vessel docked at the deep-sea port. Local fish was exported to the international market through containerized shipment. Speaking at the commencement ceremony, Pakistani Ports and Shipping Minister Kamran Michael said a new dimension was added to the history of the Gwadar Port.


For industrial cooperation, the two countries are planning industrial parks. According to local media, the Pakistani government has proposed 29 industrial parks and 21 mineral economic processing zones in all four provinces. A joint working group would decide and identify the industrial parks, said Pakistani Minister for Planning, Development and Reform Ahsan Iqbal, who hailed the CPEC as a "game changer" and a once-in-a- lifetime opportunity for Pakistan.

The Pakistani government has shown strong willingness to push forward the construction of the CPEC. During a high-level meeting held in Islamabad on July 27 to review the pace of work on CPEC projects, Prime Minister Sharif directed that projects under the CPEC be put on fast-track through mobilization of resources and completion of financial and technical formalities.

His endorsement for the projects is also shared by Pakistani President Mamnoon Hussain, who said in his message on the country' s 69th Independence Day on Aug. 14 that the CPEC "will lead to economic revival in Pakistan."

http://news.xinhuanet.com/english/2015-08/19/c_134534217.htm

Riaz Haq said...

#China will establish special economic zone in #Pakistan via New Europe. #CPEC #Gwadar http://neurope.eu/article/china-will-establish-special-economic-zone-in-pakistan/ …

China Overseas Port Holding, will establish a special economic zone of over 152 hectares at the deep sea port of Gwadar, Pakistan. The government of Baluchistan –Pakistan’s poorest- will later on provide the rest of the land to the Chinese corporation, which will own for more than 40 years a tax-free 923-hectare land.

The Pakistani authorities gave the permission to the Chinese state-owned company to lease the land for 43 years. According to China Daily, Gwadar is considered to be at strategic location as it stands between South and Central Asia and the oil-rich Middle East. The Chinese state company will be in full charge of the Gwadar zone.

The agreement between the two sides is part of the China-Pakistan Economic Corridor, which is a massive investment project worth $46 billion aiming to connect western China to the Arabian Sea.

The firm promised to create a trade-oriented powerhouse, including the construction of an export zone and an international airport. “China has asked us to provide land for building an export processing zone and a modern international airport in Gwadar,” Baluchistan chief minister Abdul Malik Baloch told AFP. China will also build another sea port and a road network to link the trade zone to the airport.

Wang Shida, a trade expert who works at the Chinese Institute of Contemporary Relations said that the new agreement between Pakistani authorities and China is a win-win deal. “The Pakistani economy will gain from the large number of processing firms that will move to the Gwadar port. It will also boost export from Pakistan. As for China, it will gain from cheaper oil imports from the Middle East and opportunities for Chinese companies will go global,” he told China Daily.

AFP reported that the economic zone will be guarded by a special security force of between 10,000 and 25,000 men. Moreover, the French news agency underlined that the Pakistani province has plenty of resources including oil, gas and minerals.

Some people in Baluchistan, already criticised their authorities of doing little to raise the living standards for the locals, giving way too much benefits to the Chinese firm without ensuring the local interests.

Riaz Haq said...

#China to support #Pakistan to ensure security of new economic zone, says Chinese general. #CPEC http://www.scmp.com/news/china/diplomacy-defence/article/1878647/china-support-pakistan-ensure-security-new-economic?utm_source=&utm_medium=&utm_campaign=SCMPSocialNewsfeed … via @SCMP_News

Beijing will back Pakistan to ensure the security of a new economic corridor granting access to the port of Gwadar that aims to create direct links between China and the Arabian Sea, a top general has pledged.

Central Military Commission vice-chairman Fan Changlong told Pakistan's army head Raheel Sharif on Thursday that Beijing looked forward to close cooperation "to ensure proper management and security of CPEC", according to a Pakistani military statement.

The China-Pakistan Economic Corridor is an ambitious US$46 billion project giving Beijing greater access to the Middle East, Africa and Europe through Pakistan, via a highway to Gwadar port on the Arabian Sea.

Fan's visit, the first by a Chinese general of his seniority in more than a decade, came two days after Pakistan handed hundreds of hectares of land over to China for the development of a free-trade zone in Gwadar as part of the project.

The development is part of China's ambition to expand its trade and transport footprint across Central and South Asia while countering American and Indian influence. India has expressed wariness about the project in the past, though analysts recently said concerns would arise only if there were "defence-related matters".


Fan, who headed a high-level military delegation, on Thursday met Sharif at the Pakistani army headquarters in Rawalpindi to discuss "matters of mutual interest, regional security, steps for regional stability and enhanced bilateral defence collaboration", the statement said.

Fan said China "deeply appreciates" Pakistan's efforts to eliminate militancy, particularly by the East Turkestan Islamic Movement, which Beijing says is active in the Xinjiang region, which borders Pakistan.

Xinjiang - the homeland of China's 10 million Uygurs, a mostly Muslim ethnic minority - is sporadically hit by deadly violence. Beijing has claimed that militants from the movement are hiding in Pakistan, a claim that has been supported by local security sources.

"China values the efforts of Pakistan Army in fighting ETIM," Fan said, adding that China and Pakistan were "best iron brothers, good friends and strategic partners".

Fan also met Prime Minister Nawaz Sharif in Islamabad on Thursday, with Sharif lauding Islamabad's friendship with Beijing as a "cornerstone" of its foreign policy.

The government of Baluchistan province - Pakistan's poorest - handed over about 280 hectares of a 923-hectare swathe of tax-exempt land in Gwadar on Wednesday. Beijing will develop that land under a 43-year lease.

The rest of the land would be handed over under the agreement with the public China Overseas Port Holding Company "soon", senior Pakistani government officials said.

Riaz Haq said...

#China entrepreneurs explore joint ventures in #Pakistan #CPEC http://www.pakistantoday.com.pk/?p=469870 via @ePakistanToday


A delegation of Chinese entrepreneurs visited the Islamabad Chamber of Commerce and Industry to explore business partnerships and joint ventures in Pakistan for various products including construction machinery, heavy duty vehicles, consumer electronics, hardware and glass wares.

The delegation was representing some big companies of China including FOXCONN Technology Group, China JiangSu NanTong LiuJjian Construction (CAMBODIA) Group, Wealthpower Technology Ltd, and Suzhou Super Glass Optical Technology Co Ltd. FOXCONN Technology Group has 1.2 million employees all over the world out of which 8 million were working in China.

The delegation informed that FOXCONN Technology Group was the most dependable partner for joint-design, joint-development, manufacturing, assembly and after-sales services to global computer, communication and consumer-electronics (“3C”) leaders and was looking for partners in Pakistan for manufacturing and distribution of these products. Similarly, CAMBODIA Construction Group produced big cranes, heavy duty construction machinery, trucks and were interested to start joint ventures in Pakistan.

The delegation members said that after the finalisation of China-Pakistan Economic Corridor project between the two countries, many Chinese investors were taking increased interest in Pakistan for investment and they have come on an exploratory visit to find out opportunities of investment and joint ventures in Pakistan. They also invited the ICCI delegation to visit China to find out business matchmakings.

Speaking at the occasion, LCCI President Atif Ikram Sheikh and Vice President Sheikh Abdul Waheed briefed the Chinese delegation about lucrative investment opportunities in Pakistan’s IT, construction, infrastructure development and other sectors. They said Pakistan was a big market of over 180 million people with strong demand for consumers’ electronics including computers, laptops, mobile phones, printers, copiers and digital cameras etc, and the Chinese investors should set up manufacturing plants in Pakistan to exploit these opportunities.

They said the government had started many construction projects in various cities while the CPEC would usher in more projects in energy and infrastructure development. They said Chinese investors should make Pakistan a production hub to meet domestic needs and export products to other regions. They assured that the ICCI would extend all possible facilitation to Chinese investors for investment and joint ventures in Pakistan.


Riaz Haq said...

After encouraging response, #Haier #Mobile #Pakistan to grow aggressively with #smartphone manufacturing in Q1 2016 http://tribune.com.pk/story/1013408/cellphone-market-with-encouraging-response-haier-to-expand-more-aggressively/ …

It has been barely seven months since Haier Pakistan further diversified its portfolio and entered the saturated cellphone market, but the overwhelming response has forced the company to pursue its expansion plans more aggressively.

Haier is the first company that is establishing a mobile phone assembly plant near Lahore with an investment of $5 million. The plant, which is likely to be completed by the end of the first quarter of 2016, will have the capacity to assemble 1.5 million cellphones annually.

“It takes years for a mobile company to diversify in such a competitive market, but we did it quite brilliantly. The coming year will be exciting for us as by March we will be launching the mobile assembly plant in Pakistan as per our commitment to bringing in technology and making our products more competitive,” said Zeshan Qureshi, Chief Executive Officer of Haier Mobiles, in an interview with The Express Tribune.

For Qureshi, the company’s product range has expanded to 27 in a short span, as it was only seven at the beginning. By March 2016, the company is hopeful that it will be able to further diversify the product range to around 35.

“The quality of our products is being appreciated in the market; this is due to our strong research and development wing that helped in selling over 0.5 million units in about seven months,” he added.

The price range is also flexible. Mobile sets are available at as low as $15 and go up to $300. The company has introduced three mobile categories for low, medium and high-end customers.

“We are about to launch a high-end product, V-6, which will be available at $450, the highest so far for our company,” Qureshi said.

He was of the view that any mobile brand should have a portfolio of 25 products in order to penetrate 100% in the market.

“At present, we have 80% penetration in Pakistan’s mobile market via our network of 18,000 distributors. There might be few areas remaining but we hope to reach those soon.”
The company has also introduced theft and accidental insurance for all its products through its 29 customer care centres.

Journey in Pakistan

Haier is operating in Pakistan’s market for 15 years and has established itself as a reliable name in household products. According to the company, every household has at least one appliance of Haier.

“The new era is of internet of things and every electronic appliance manufactured these days has these features. In order to connect these appliances with internet, we need a mobile or a tablet. And we have introduced mobiles to connect with the world,” he said.

Qureshi cited taxation and grey trafficking as areas that were affecting the brands. However, he said, it could be curbed if brands started investing in local markets as Haier was doing.

“We can only force the government to create an eco-system for mobile companies if they have strong presence and contribute reasonably to the economy, technology transfer and job creation.”

Riaz Haq said...

#Pakistan is "the only all-weather strategic partner" of #China - Global Times. #CPEC

http://www.globaltimes.cn/content/960904.shtml#.VoKzAasXjJs.twitter …


In April when President Xi Jinping visited Pakistan, China and Pakistan elevated the bilateral relations to "all-weather strategic cooperation partners." China has established partnerships with a lot of countries in the world, but Pakistan is the only one that is called an "all-weather strategic cooperation partner."

For countries with different social systems and ideologies that want to collaborate with each other, the China-Pakistan relationship has become a model to follow. This type of relationship is not based on common values and systems, but on same or similar strategic and security interests. Today common security concerns still exist, and some new concerns like global terrorism and maritime security have arisen for both sides in recent years.

Since the beginning of the 21st century, the basis of China-Pakistan cooperation has expanded. The "One Belt, One Road" initiative and China-Pakistan Economic Corridor has enlarged bilateral strategic and cooperative partnership to a more comprehensive framework.

Before, the basis of the all-weather partnership mainly included political, strategic and security cooperation, now the closer economic ties have become a part of this basis, which makes two countries form a "community of shared destiny." The two sides not only have common economic interest and common security concerns, but also share the dream of national peace, stability, and prosperity. "Shared destiny" is the solid foundation for our cooperation in international affairs.

China-Pakistan international cooperation has some key features as follows: First, China and Pakistan respect principles, value friendship, and "share weal and woe." When dealing with international affairs, both sides take the Five Principles of Peaceful Coexistence as the basic principle; when facing international affairs, both sides advocate justice and fairness, protect the common interests of developing countries, and have the courage to speak up.

In addition, China-Pakistan cooperation is always based on close communication and coordination, deep understanding of the other side's situation and interest, and full consideration of the other side's feeling. Pakistan always gives China full support on the Taiwan, Tibet, Xinjiang, and South China Sea issues. China is also a strong supporter of the independence, sovereignty, territorial integrity, and national dignity of Pakistan.

In 1972, the People's Republic of China used its veto power for the first time to support Pakistan at the UN Security Council by refusing to admit Bangladesh, the former East Pakistan, to the UN. After 1989, every time when China was blamed by the US and other Western countries at the UN Commission on Human Rights, Pakistan was always the first one to stand up and speak for China.

China and Pakistan conform to trends of the times, expand scope of cooperation, and jointly resolve challenges. After the Cold War, especially in the 21st century, the world has seen a trend toward peace, development, and cooperation.

Apart from traditional security issues, more and more non-traditional challenges arise. As a result, China-Pakistan cooperation has expanded from political and security fields to economy and trade, climate change, food and energy security. China takes the interests of Pakistan and other developing countries into careful consideration when it negotiates with Western countries.

Riaz Haq said...

#China #Pakistan Economic Corridor: 27 sites identified for Special Economic Zones (SEZs)| Business Recorder. #CPEC

http://www.brecorder.com/market-data/stocks-a-bonds/0:/1259793:economic-corridor-27-sites-identified-for-sezs/ …
The federal government has identified as many as 27 sites in provinces, Islamabad Capital Territory (ICT) and Gilgit-Baltistan for setting up of Special Economic Zones (SEZs) under the China Pakistan Economic Corridor (CPEC), it is learnt. Sources in the Finance Division and the Planning Commission told Business Recorder that provincial governments have also been requested to allocate land for sites of SEZs.

The federal government has identified seven sites in Balochistan for the establishment of SEZs. The sites identified in Balochistan for industrial estates are as follows: (i) Gwadar with 3,000 acres for mines, minerals, food processing, agriculture and livestock, (ii) industrial estate at Lasbela (1,290 acres, iron steel, hardware, paper industry, pharmaceuticals), (iii) industrial and trading estate at Turbat (1,000 acres, manufacturing), (iv) Dera Murad Jamali with 50 acres, (v) Winder Industrial and Trading Estate, (vi) mini industrial estate Khuzdar (50 acres) and (vii) Bolan Industrial Estate (1,000 acres). The government has identified three sites in Sindh to set up Special Economic Zones, which include Chinese industrial zone near Karachi (2,000 acres, Exclusive Chinese Industrial Estate), Textile City at Port Qasim, Karachi with (1,250 acres) and Marble City at Karachi with (300 acres).

As per official documents, eight sites in Khyber Pakhtunkhawa province have also been identified for special economic zones. They include, marble and granite based industrial estate at Mansehra (80 acres, mining), industrial estate Nowshera (1000 acres, manufacturing), expansion of Industrial Estate Hatter (424 acres, manufacturing), industrial estate at Chitral (80 acres, food processing) as well as Industrial Estate Ghazi (90 acres, manufacturing) and industrial estate Dera Ismail Khan (188 acres, manufacturing).

Industrial estate at border of Kohat and Karak and industrial and economic zone at Bannu (400 acre) in KP have also been identified as sites for SEZ under CPEC. The government has identified seven sites for special industrial zones in Punjab. These included Multan Industrial Estate phase-II (80 acres), Rahim Yar Khan Industrial Estate (450 acres), Bhalwal Industrial Estate (400 acres), DG Khan Industrial Estate (3815 acres), Mianwali Industrial Estate (600 acres), Rawalpindi Industrial Estate (200 acres) and Pind Dadan Khan Industrial City (10000 acres) for agri, textile, food processing, livestock, manufacturing & energy).

Additionally, the existing under-development sites would also be included in SEZs for the CPEC. One site for special economic zones in Gilgit-Baltistan Moqpondass (2,000 kanal, mining & food processing) and one for Islamabad Capital Territory has also been identified under the CPEC.

Riaz Haq said...

#Pakistan to manufacture cellphones and #smartphones- http://www.khaleejtimes.com/business/economy/pakistan-to-manufacture---cellphones-smartphones …

Rs800 billion to Rs1 trillion telecom revenue estimated in the near future.

Pushed by burgeoning demand, and encouraged by examples of China and India, Pakistan has decided to domestically manufacture cellphone and smart phones.

"Foreign investors, who are seeking investment in the telecom sector are likely to get big incentives," Ministry of Finance sources say. They include prospective investors, particularly from UAE, Saudi Arabia, and Asean. Some of these investors propose to join hands with Chinese companies which have reputed and cost-effective technology and trained manpower. Their pans are to make Pakistan as the production base to feed the Pakistan-Central Asia-Iran, and Middle Eastern and African markets for telecom and cellular products.

Domestically, with a population getting close to 200 million in Pakistan itself, there is a huge big market for these new, hand held sets as their demand is equally strong both in the urban as well as rural areas, like far away Gilgit-Baltistan on the Chinese border in the north and Chaman in the south, bordering Iran.

Beside China, which is a big suppler of mobile phones through official-channels imports and trade, thousand more of the mobs, smart phones, and the rest of these telecom products are smuggled duty-free into Pakistan every week.

"The decision has been made by our Ministry of IT and Telecom, Minister of State Mrs Anusha Rehman told this writer.

"As soon as our domestic manufacturing starts, Prime Minister Nawaz Sharif's government would have fulfilled one more promise to provide cheaper products to people, expand local manufacturing and ensure more jobs to Pakistanis," she also said.

The immediate steps to be taken are to float Expression of Interest (EoIs) for local manufacturing of mobile phones and smart meters under he revival and revitalisation plans of Telephone Industry of Pakistan (TIP) - the factory built by Seimens of Germany. It was the first factory which started making telephone apparatus and later on full fledged telephone exchanges and telecom equipment at Haripur in Khyber Pukhtunistan Province in 1950s. It is called of Mother of All Telecom products. This state-run factory has recently performed poorly both financially and production-wise.

IT and Telecom Ministry sources say after the recent launch of $46 billion China-Pakistan Economic Corridor (CPEC) prospects of Chinese investment in Seimens have brightened. It may run in public-private partnership mode, says Azmat Ali Ranjha, secretary, Ministry of IT & Telecoms. When it resumes working in that mode, the plant will start manufacturing mobile phones and smart meters. Zia-ul-Haq, managing director of Seimens says an EoI is expected to be submitted soon.

When the prospective investors look at the demand within the region and Pakistan, itself, it is huge - and still rapidly growing. Shipments of smartphones in Pakistan massively surged by 214 per cent on year-on-year basis during the first three moths of 2015 compared to the last year, says the just unveiled report of the International Data Corporation (IDC).

"The shifting dynamics of the Pakistan mobile market to the deployment of 3G/4G networks across the country and the subsequent rise in the demand of devices that are compatible with the infrastructure," according to the report.

IDC report further said Pakistan has traditionally been a feature phone market; indeed just three years ago in 2012, around 93 per cent of all mobile phone shipments in the country were feature phones since here was no network to support smartphones.

Riaz Haq said...

#CPEC for #Punjab or #Pakistan: Myth versus reality. #PTI #PMLN #PPP http://tribune.com.pk/story/1029155/cpec-for-punjab-or-pakistan-myth-and-reality/ …

The primary concern of the smaller provinces as reflected in the resolution of the K-P assembly that the western alignment is not on the priority list of the centre. This claim is wildly being repeated without any evidence to back it up. In fact, the work is underway on the western and eastern routes simultaneously. The Frontier Works Organisation is working to complete the missing 400km link between Gwadar and Surab passing through Quetta, Zhob, Dera Ismail Khan and Peshawar.

In order to make Gwadar operational in the shortest possible time, the eastern alignment linking Karakoram Highway to existing motorways is the best bet. Given high traffic volume, thriving industries and security on the eastern route, it is much more feasible to kick-start the project. With work in progress on the central, western and eastern alignments simultaneously – linking Gwadar, Pakistan to Kashgar, China within 15 years under the CPEC – there is no reason to make the whole project controversial by mere speculations.

Is motorway prerequisite for the corridor?

Some in the provinces are demanding Zhob-Mughal Kot (N-50) or Qila Saifullah-Wagum (N-70) on the western route be constructed six lanes on the pattern of Karachi-Lahore Motorway. It makes no sense because of negligible traffic at the moment on the route. Of course, this route would have to be expanded with the passage of time as the traffic volume increases with the economic activity along the corridor. Without going into the technical nitty-gritty, it suffices to say that the same size lane is being constructed across the border on Chinese side. So, motorway is not needed at this time on the western route.

Economic zones: K-P on top

Another major concern of the smaller provinces is the alleged shifting of the industrial parks along the original western route to the eastern route thus denying the dividends of the project to the people of K-P and Balochistan. Some fact checking reveals that Board of Investment (BoI) has identified 27 economic zones out of which eight fall in K-P. The committee of BoI tasked to identify the potential sites for economic zones has worked in consultation with the provinces. However, it’s subject to approval by the joint working groups of China and Pakistan.

CPEC energy goes into national grid

Some have questioned the criteria for the allocation of the energy projects to the provinces. As a matter of fact, the energy generated by the projects under CPEC would be added to the national grid for nationwide distribution regardless of its installation point. So, the location of the power plant does not really matter. Most of the energy projects are located either close to the source or the load centre.

Contrary to all the noise, benefits to the largest province Balochistan are also enormous. Once developed, Gwadar would serve as a game-changer not only for the country but also for the entire region. Preliminarily, seven industrial parks have been marked in the province, making it the second highest number after K-P. It would open new jobs for the locals, uplifting them from extreme destitution.

Who gets the lion’s share?

Here arises a question: who will benefit the most from the CPEC once executed as envisioned by its authors? It will benefit the whole of Pakistan given the presence of various projects under CPEC spread across the length and breadth of the country. All the provinces stand to benefit from the project as all the provincial capitals – including Lahore, Karachi, Peshawar and Quetta – would be the major nodes of the project.

Riaz Haq said...

#China's #CPEC investment in #Pakistan, largest ever in a foreign country, could grow even larger in 2016 and beyond

http://www.eurasiareview.com/17012016-china-pakistan-relations-forecast-2016/#.VpxRt1RZ6YU.twitter …

It appears that the recently announced China-Pakistan Economic Corridor (CPEC) will remain at the centre of Sino-Pakistan ties during 2016, and even beyond. The CPEC, signed in 2013, got a boost in April 2015 during Chinese President Xi Jinping’s Pakistan visit, where he announced the allocation of US$46 billion for its completion. This is the largest investment China has committed to another country, and the largest Pakistan has ever received.

According to some informed quarters, China may add to this volume if the implementation of the CPEC moves forward smoothly on the Pakistani side. The corridor intends to connect China’s western region with Pakistan’s Gwadar Port via a network of roads, rail and fiber optics.

The CPEC is a part of Xi’s grand strategic concept of “One Belt One Road” (OBOR) to connect with over 60 countries and regions. Under OBOR, besides CPEC, China has initiated other projects such as the Bangladesh, China, India, and Myanmar (BCIM) Corridor; Silk Route in Central Asia; and the 21st Century Maritime Silk Route. But the CPEC is regarded as the ‘flagship’ project among them due to various reasons.

It is the only corridor that involves just one other country, Pakistan, and with whom China has a ‘trust’-based relationship. Other corridors consist of different countries with varying degrees of relations with China. Moreover, the CPEC can provide China an access to the Indian Ocean by reducing both time and distance. This route is not only shorter in distance but avoids the Malacca Strait and the vast Indian Ocean dominated by rival Indian and US navies.

For Pakistan, the CPEC can bring large-scale investments in the energy sector, infrastructure building, and industry, giving a boost to its moribund economy. Once Pakistan is prepared, China may also move some of its industry and bring Pakistan into its chain of production. Above all, the CPEC will increase China’s stakes in Pakistan which will leverage Islamabad in regional affairs. It is this backdrop that demonstrates the centrality of the CPEC in future Sino-Pak relations.

From the construction point of view, the corridor has been divided into short, mid and long-term projects. In 2016, progress or completion of some projects for infrastructure development and energy are expected. Actually, it is the top priority of the incumbent government to finish some projects at the earliest to show its performance to the public.

According to the understanding that exists between the two countries, Chinese state companies will build several CPEC-related projects. 2016 will thus witness a number of Chinese engineers, technicians and workers coming to Pakistan. There are already over 120 companies and 1,20,00 technicians engaged in different projects in Pakistan. This increased number of Chinese nationals in Pakistan will add to two-way exchanges. At the same time, however, it will also raise the question of their safety and security. Pakistan has established a special force of 1,20,00 men under the army to provide security to Chinese expatriates and guard their construction work. But given the law and order situation in the country, these measures appear insufficient. Lack of sufficient security may restrict the free moment of Chinese workers and tourists.

Riaz Haq said...

#Pakistan's resource-rich territorial waters, as big as 30% of nation's landmass, being neglected by #Islamabad. http://tribune.com.pk/story/1030431/still-waters-pakistans-coastline-of-apathy/ …
Pakistan’s maritime zone is approximately 30% of its land mass – a region bigger than Punjab. Yet, the resource-rich marine remains a victim of abject apathy.

Special marine battalion to protect Gwadar Port, Chinese engineers

Last year in March, 50,000 square kilometres of continental shelf was added to the country’s existing 240,000 square kilometres after its claim was accepted by the United Nation’s Commission on the Limits of Continental Shelf. As a result, Pakistan gained exclusive rights over the seabed and subsoil resources spread over 290,000 square kilometres in the Indian Ocean. The country’s sea limit was also extended from the existing 200 to 350 nautical miles.

Lack of awareness about the importance of maritime, however, meant that barely anyone noticed this significant development achieved through tedious diplomatic efforts. Let alone exploiting subsoil resources, Pakistan has also failed to explore the full potential of seafood exports. An official study claims Pakistan’s coastal area produces more than 625,000 tonnes of fish, out of which only 131,000 tonnes is exported. If fully materialised, the exports can fetch an additional $2 billion. Moreover, according to WWF-P, approximately 1,000 species of fish and 12 species of cetacean, or marine mammals, are found in Pakistan’s waters.

There are over 30,000 fishermen in Pakistan, with another 700,000 people associated with the trade. Many use trawlers and small nets to catch fish, a practice considered harmful for marine life. Unsustainable practices in fishing, destructive gear, uncontrolled fleet size, and poorly-planned development are other factors leading to untapped potential.

Fighting fit: A place of hope and healing

The developed coastal areas of Karachi and Port Qasim are facing an even graver threat. The sea there is being used a dumping ground for sewage and solid waste, resulting in heavy pollution at Karachi Harbour, Gharo and Phitti Creek.

Call of the deep blue

The sea is Pakistan’s lifeline for trade. More than 90% of the country’s trade with other countries along with all its oil imports are routed through the sea. By 2020, it is estimated that the volume of this trade will reach a staggering $100 billion. There is, however, a snag. Pakistan National Shipping Corporation, which is the national flag carrier, has only nine vessels, of which four are oil tankers. As a result, the country pays more than $4.5 billion to foreign freight carriers every year. In fact, having only four oil tankers of its own puts Pakistan in a vulnerable position, one an enemy state can easily exploit in the event of a conflict.

Pakistan has had a shipyard since 1954. The shipping industry, however, has remained in disarray, with little heed paid to its upkeep. Fortunately, the government seems to be stirring from its slumber and is now in the process of reviving it. After the catastrophic oil spill in Karachi by the MV Tasman Spirit in 2003, an urgent need was felt for the formulation of a comprehensive anti-pollution plan.

Special operations: Pakistan, Bahrain hold joint naval drill

Subsequently, a comprehensive National Marine Disaster Contingency Plan (NMDCP) was prepared to deal with all marine disasters, including oil spills, search and rescue, and salvage operations. The execution of NMDCP was ordered by the chairman of the Pakistan Marine Disaster Management Board, which is headed by the Chief of Naval Staff.

Riaz Haq said...

Logistic, #Technology Park to be built for $1.5 billion in #Pakistan as part of #CPEC. #China

http://tribune.com.pk/story/1052973/cpec-logistic-tech-park-to-be-built-for-1-5-billion/ …

Federal Minister for Science and Technology Rana Tanveer Hussain said the Pak-China Science, Technology, Commerce and Logistic Park would be established in Islamabad at the cost of $1.5 billion.

Hussain, addressing a press conference, said it would be set up as part of the China-Pakistan Economic Corridor and serve as a platform for technological and commercial linkages between the two countries besides promoting investment and financing, e-commerce and research and development.

Game changer: All provinces will reap benefits of CPEC, says PM

The Minister said Pakistan would provide 500 hectares of land for the establishment of the Park and all other investment would be made by China. He said three sites had been tentatively identified and a delegation of Xinjiang Production and Construction Corporation would be arriving this month to finalise the site.

He said that the foundation stone of the project is expected to be laid in March next year and it would be completed in ten years in three phases. The minister said that this project would create job opportunities for 1,500 Pakistanis.

The minister stressed the need to move towards latest technology from obsolete one in order to compete with the rest of the world. In this regard, the government would allocate bigger share of the budget next year for the promotion of science and technology, he added.

The minister said that COMSATS Institute of Information Technology (CIIT), under the administrative control of Ministry of Science &Technology, had been holding Pak China Business Forums since 2012. In the forum, COMSAT invited Tech companies from China to participate with the main objectives of attracting Chinese investment in joint ventures in Pakistan.

Weighing in on benefits: Implementing transit fee on CPEC routes

Chinese companies have been showing increasing interest for the forum. From the 57 companies that visited in 2012, the number has risen to 125 in the 4th forum in 2015.

Riaz Haq said...

GFIVE a mobile communication brand of GFIVE Group is the first-ever mobile manufacturing company in Pakistan. GFive is listed in top 10 in terms of global sales volume, has continued to hold the title of the fastest developing communication company. With established strong sales network based on the 95 global operations centers (including Pakistan), G’FIVE expands its business in full communication industry, dedicated in providing smart phone service to more consumers globally.

Since 2014 GFIVE team made efforts to establish world leading standard manufacturing plant in Pakistan. Today by the Grace of ALLAH (ALL MIGHTY) GFIVE Mobile (Pvt) Limited is the Pioneer in Pakistan who assembled and produced GFIVE Smart Phone & Bar Phone handsets first time in Pakistan with labeling “Made in Pakistan”.

By installing State-of-the- Art Assembling Plant and Equipment approved by Pakistan Telecommunication Authority (PTA) with the capacity to produce over half million handset per month. Gfive started its trail production successfully in January 2016, and produced over 87,000 handset of Smart and Bar Phones which completely meets the high quality standards.

With the aim, GFive Mobile (Private) Limited started their first ever state of the art Mobile production line & assembling unit in Pakistan for feature & Smart Phone segments to serve our valuable Pakistani customers nation-wide back up with strong after sale services.

GFive management always primarily focus on introducing reliable products to their customers at a very economical prices with strong after sale services & support nation-wide, We always believe, Pakistan is a highly potential market for production & assembling mobile handsets after the introduction of 3G/4G and upcoming 5G services together with a significant development towards digitized Pakistan and this is the right time to serve our Pakistani people, who feel proud to buy first ever “Made in Pakistan” handset.

GFive Mobile (Private) Limited has kept very strong network coverage, which cover all major & connecting cities of Pakistan through our strong distributional channel include whole-seller, dealer/retailers, high profile corporate sector such as Hypermarkets, Mobile Operators, Online Stores and Banks, etc. In addition of this, we also kept presence of our own outlets, regional offices, direct sales team and Customer care Centres.

We wish and hope that Government will also lead the initiative through practical steps in this direction and encourage companies to setup such type of production & assembling units in Pakistan and put Pakistan on the world map where handsets are assembled and manufactured in Pakistan and GFive Mobile (Private) Limited is a pioneer and of-course trend setter in Pakistan telecom industry and being served Pakistan 100% by Made-In Pakistan” Handset.

We are proud of what we’ve achieved but this journey continues and we want to be better than we have ever been before as we strongly believe that we are bigger than ‘a handset provider’.

http://phoneworld.com.pk/gfive-as-first-ever-mobile-manufacturing-company-in-pakistan/

Riaz Haq said...

From United Nations Industrial Development Organization (UNIDO):

Pakistan Manufacturing Value Added (MVA):

MVA per capita at constant 2005 prices increased from US$135.03 in 2005 to $143.84 in 2014

MVA as percentage of GDP at constant 2005 prices in US$ decreased from 18.05% in 2005 to 17.41% in 2014

http://www.unido.org/Data1/IndStatBrief/A_Industrial_Performance_MVA_GDP.cfm?Country=PAK

India Manufacturing Value Added (MVA):

MVA per capita at constant 2005 prices increased from US$155.73 in 2005 to $168.42 in 2014

MVA as percentage of GDP at constant 2005 prices in US$ decreased from 15.10% in 2005 to 13.85% in 2014


http://www.unido.org/Data1/IndStatBrief/A_Industrial_Performance_MVA_GDP.cfm?Country=IND

China tops the list of world's 10 largest industrial producers. It is followed by the US, Japan, Germany and South Korea, according to United Nations Industrial Organization (UNIDO).

India ranks 6th in the world in terms of total manufacturing output in 2013, up from 9th place in 2008,

http://economictimes.indiatimes.com/news/economy/indicators/india-jumps-to-sixth-place-in-top-10-manufacturers-list-report/articleshow/51663535.cms

India's manufacturing value added (MVA) per capita of 161.7 in 2013 is among the lowest in the world. It's up from 131.9 in 2008.

In fact India's 2008 MVA per capita of 131.9 was lower than Pakistan's 141.1. Since 2008, Pakistan's MVA per capita has slipped to 139.1 in 2013 while India's has increased to 161.7 in this period.

Bangladesh's MVA per capita has jumped from 82.2 in 2008 to 118.3 in 2013.

On UNIDO’s industrial competitiveness index, most industrialized countries lost ground in the last three years. Among the five most competitive are four high-income countries (Germany, Japan, the Republic of Korea and the United States), along with China ranking fifth. The four are among the world’s most industrialized countries and, with China, account for 59 percent of world MVA.

https://www.unido.org/fileadmin/user_media_upgrade/Resources/Publications/EBOOK_IDR2016_FULLREPORT.pdf

Riaz Haq said...

Share of #smartphones in devices imports in #Pakistan jumps to 30% in 2016 from 7% in 2012. #3G #4G

http://www.brecorder.com/pakistan/business-a-economy/292097-share-of-smartphones-in-devices-import-touches-30pc-mark.html

Smartphones have registered around 30 percent share in overall cellular mobile devices imported in the country during last year which was only 7 percent in 2012.

In next two years, smartphones are expected to cross 55% of mobile phone imports in Pakistan as their adoption is expected to grow further due to expanding 3G and 4G networks.

A report issued by Pakistan Telecommunication Authority (PTA) revealed that smartphone has become a major source for innovation and new age of enhanced mobile phone use in personal life.

With introduction of larger screen-sizes, consumers are finding smartphones a convenient way to complete many activities what they used to do manually or through desktops.

Therefore, larger screen phones are an accelerator for increasing adoption o smartphone.

Companies are developing their mobile websites, which will further enhance consumer experience on smartphones.

Greater functionality, rich features and enhanced interfaces make the consumer experience on smartphones much more attractive than the features available on a desktop.

The report said share of internet activities through smartphones will grow in near future.Smartphones are more convenient to use and the younger generation has quickly adapted to use of smartphones.

The fall in smartphone prices and mobile data cost has also increased the adoption of smartphones in developing countries.

According to GSMA Intelligence data forecast, global smartphone adoption is expected to increase massively in coming years particularly in developing markets.Smartphone penetration in Asia- Pacific region has reached around 40 % in 2014, and forecast is that this will rise to 65 % by 2020.

Similarly, worldwide smartphone penetration was 50%, which is expected to increase to over 73% by 2020.

Availability of next generation mobile services after the auction of 3G and 4G spectrum in Pakistan in April 2014 has rapidly increased the adoption of smartphone in the society.During 2015, 123 percent increase in smartphone shipment to Pakistan.

Cellular mobile operators have also collaborated with smartphone manufacturers to promote smartphone usage in Pakistan.Companies have also started developing mobile apps and mobile websites keeping in view the fast adoption of smartphones in the country, which will increase the smartphone usage in future.

Riaz Haq said...

It's official: #GE Appliances now belongs to #China's #Haier http://cnet.co/1PeSkl1 via @CNET

http://www.cnet.com/news/its-official-ge-appliances-belongs-to-haier/

After six months and $5.6 billion, the appliance division of General Electric officially belongs to Chinese manufacturer Haier, the companies said at a press conference Monday.

Haier's purchase of GE's Louisville, Kentucky-based appliance division is an assertive attempt to build a stronger presence in the US appliance market. Haier, which is based in Qingdao, China, is the world's leading appliance manufacturer, but the company only holds 1.1 percent of the US appliance market (US customers might be familiar with the brand's refrigerators, air conditioners or rolling R2D2 mini-fridge). Meanwhile, GE Appliances claims nearly 14 percent of the same market.

For many US shoppers, the GE brand is synonymous with household appliances like refrigerators and ovens. But the multibillion-dollar sale to Haier gives GE the chance to rid itself of those consumer-facing appliances to focus on more lucrative industrial manufacturing (think jet engines, industrial power systems and locomotives).

In the short term, people won't see much of a change as a result of the acquisition, said Chip Blankenship, president and CEO of GE Appliances. The GE name will still appear on appliances, and customers will still receive the same support.

"We'd like (customers) to be confident that we stand behind our products as we always have," Blankenship said.

GE Appliances stated in a news release the sale will generate an after-tax gain of approximately $0.20 per share, but the company expects restructuring to offset those gains. When asked about potential layoffs of GE Appliances employees, Blankenship said, "we don't anticipate any change."


There's been talk of GE selling its appliance division for at least eight years. Sweden-based Electrolux came close to buying GE Appliances for $3.3 billion in 2014, but the US Department of Justice objected to the deal last year on the grounds that a merger of two leading manufacturers of cooktops, ranges and wall ovens would reduce competition and options for consumers. GE quickly rebounded with the announcement that it would sell to Haier in January.

Haier was initially set to buy GE Appliances for $5.4 billion, but the price increased by about $200 million because of "increased working capital in the business," according to GE. GE Appliances currently has 12,000 employees that produce appliances out of Louisville and facilities in Indiana, Alabama, Georgia and Tennessee.

Riaz Haq said...

#Turkey's Arcelik to acquire #Pakistan #Karachi-based appliance maker Dawlance for $258 millionNikkei Asian Review

http://asia.nikkei.com/Business/Companies/Turkey-s-Arcelik-to-acquire-Pakistani-appliance-maker


Earlier this year, Arcelik was outbid for General Electric's appliance business by Chinese heavyweight Haier. Later, another Chinese company, Midea Group, beat Arcelik in the race for Toshiba's home appliance business.

On Thursday, Arcelik announced that it has signed an agreement to acquire Dawlance, Pakistan's market-leading home appliance company. The $258 million deal is expected to receive regulatory approval and close by the end of the year.

The acquisition will provide Arcelik a foothold in the world's sixth-most populous country, which is expected to grow around 5% a year for the next three years.

It is also expected to give Arcelik's Asia-Pacific growth strategy another boost, following the company's recent $100 million investment in a Thai refrigerator plant.

Privately owned Dawlance was founded in 1980 in Karachi, where it has two manufacturing sites. It has another site in Hyderabad. Its workforce, which is also spread through its distribution, sales and service networks, is 3,000 strong.

It is Pakistan's leading refrigerator and microwave brand, No. 2 air conditioners and No. 3 in the laundry category. Dawlance in 2015 reported $221 million in revenue and $45 million in EBITDA (earnings before interest, taxes, depreciation and amortization).

"Arcelik's recent investments in Thailand and Pakistan [are expected to provide] a strong platform for growth in Southeast Asia," CEO Hakan Bulgurlu said, adding that European markets have reached a "saturation point for white goods" and are beset by "long-term economic malaise."

He continued: "Economic growth in Pakistan is leading to more disposable income and purchasing power whilst technological advances are making white goods more efficient and more affordable. Pakistan's rapid urbanization and social development is seeing the emergence of more single-family dwellings, creating more demand for consumer appliances."

The CEO also vowed to strengthen Dawlance's product offerings and brand position.

Arcelik is owned by Koc Holding, Turkey's largest industrial conglomerate, which is also active in energy, finance, consumer durables and auto manufacturing.

Arcelik had $5.2 billion in turnover last year. It leads Turkey's white goods and consumer electronics markets. With global brands like Beko and Grundig, Arcelik products are sold in 133 countries. Before the Dawlance deal, Arcelik had 10 brands under its umbrella and had become known for its aggressive acquisition strategy across Europe, Africa and Asia.

Arcelik is Europe's third largest white goods producer.

With its $324 million acquisition of South Africa's Defy Appliances in 2011, it became Africa's largest white goods maker.

Arcelik's total workforce after the Dawlance deal will reach to 30,000 across 18 manufacturing facilities, including those in Turkey, Romania, Russia, China, South Africa and Thailand.