Wednesday, January 22, 2020

Lower Import Duties Rattle Pakistan's Mobile Handset Makers

Pakistan Federal Board of Revenue has recently announced that “Sales Tax and Income Tax at import stage has been drastically reduced in case of smartphones of Rs15,000 or below". This action was apparently taken after Digital Pakistan Initiative led by Tania Aidrus asked for it. It has come under fire from the country's nascent mobile phone and smartphone manufacturing industry which is producing low-cost mobile phones. Pakistan's mobile handset market is the 8th largest in the world. Current annual demand is for about 40 million units of which 13 million are assembled in Pakistan while the rest are imported, according to a report by Dunya News. The import bill for Fiscal Year 2020 is expected to be about $1.2 billion. Boosting it will save billions of dollars of precious foreign exchange. It will create tens of thousands of jobs and spawn new auxiliary manufacturing industries for chargers, headphones, USB cables, cases, etc.  In future, Pakistan could become a significant exporter of mobile handsets.

GFive Promo. Source: GFive

Mobile Phone Demand:

There are currently 164 million mobile phone users in Pakistan, the 8th largest in the world.  The current annual demand for mobile phones in the country is estimated at about 40 million units, according to Pakistan Telecommunication Authority (PTA). The fastest growing demand is for 4G smartphones.

According to Pakistan Bureau of Statistics, mobile-phone imports (HS Code: 8517.1219) reached $498 million in 5 months period from July to November 2019,  64% jump over the prior year. Fiscal 2019-20 imports are expected to reach $1.2 billion.

Earlier, the growth rate for 4G handsets jumped from 16% in 2018 to 29% in 2019. Imports of mobile handsets soared 69% from $ 364 million in 2018 to $ 615.7 million in 2019. Pakistan is world's seventh largest handset importer and the 8th largest mobile phone market.

Pakistan Telecom Indicators. Source: PTA

Domestic Manufacturing:

Pakistan Telecommunication Authority (PTA) has granted permission to 26 local companies for manufacturing out of which 15 are currently in production. Among those currently producing mobile handsets in Pakistan are: E-Tachi, GFive, Haier, Infinix and Tecno. They are producing  13 million mobile phones.

Domestic manufacturers claim that they can meet 80% of demand for mobile handsets over the next 2 to 3 years if they are sufficiently protected by higher tariffs on imports.

Domestic mobile phone manufacturing industry will save billions of dollars of precious foreign exchange. It will create tens of thousands of jobs and spawn new auxiliary manufacturing industries for parts, chargers, headphones, USB cables, cases, etc.  In future, Pakistan could become a significant exporter of mobile handsets.


Pakistan's mobile handset market is the 8th largest in the world. Current annual demand is for 40 million units. Domestic plants produce 13 million units while the rest are imported.  The import bill for Fiscal Year 2020 is expected to be about $1.2 billion.  The country's nascent mobile handset manufacturing industry fears a serious early setback if the FBR decision to lower duties on imports of foreign made mobile phones is not reversed. It is being blamed on Tania Aidrus, Prime Minister Imran Khan's advisor on Digital Pakistan Initiative, who would like to increase availability of mobile handsets. Domestic mobile phone manufacturing industry will save billions of dollars of precious foreign exchange. It will create tens of thousands of jobs and spawn new auxiliary manufacturing industries for chargers, headphones, USB cables, cases, etc.  In future, Pakistan could become a significant exporter of mobile handsets.

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Pakistan's Gig Economy 4th Largest in the World

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Riaz Haq's Youtube Channel


Riaz Haq said...

Mobile set manufacturing policy being finalised: chief of EDB’s board

Chairman EDB's Board, Almas Hyder on Wednesday said that final touches are being given to Pakistan's mobile set manufacturing policy which will be ready within the month.

While talking to Business Recorder, Hyder stated that the working on mobile set manufacturing policy began eight months ago and so far three-four meetings have been held to prepare the draft policy for the government.

In reply to a question, he said the main reason for the delay in finalization of draft policy was due to gathering of data and the formulation of procedure to acquire technology.

“Policy document is being finalised. I think one more meeting will be required to give it the final touches. We want to make it a driver of export," he added.

Almas Hyder maintained that the main purpose of the policy was to make engineering sector one of largest export-oriented sectors of Pakistan. This implies if the export of textile sector earns $ 12 billion per annum, then engineering sector would cross $ 12 billion benchmark within the next 8 to 10 years. He said that cell phone industry can contribute $500 million to $1 billion in exports of engineering goods.

“We will attract local as well as global players of mobile set manufacturers," he continued.

Mobile phone manufacturing is one of the biggest industries worldwide. This industry is now moving out of China and into countries such as India, Bangladesh, Indonesia and Vietnam.

A couple of days ago, Adviser to the Prime Minister on Commerce and Industries and Production and Investment, Abdul Razak Dawood said that the government will give incentives to local mobile phone manufacturers.

Ministry of Industries and Production announced last year that the mobile set manufacturing policy will be unveiled in November 2019. However, despite several consultations with stakeholders over a period of 10 months EDB has yet to present a draft to the Ministry of Industries for submission to ECC for approval.

Currently, there are more than 10 domestic assemblers of mobile phones. Most of them are producing 2G feature phones & waiting for Government policy to upgrade themselves to manufacturers of 4G smart phones. A Pak-China joint venture to locally assemble smart phones has already been set up in Karachi with an initial investment of Rs 160 million.

Prime Minister Imran Khan has been directing his economic ministries to create an environment conducive for investment, domestic & foreign, in the sub-sector which would lead to creation of job opportunities.

Industry sources state that mobile phone assembly is a labor intensive activity which if duly incentivised, can create over 120,000 jobs within a period of three years. Most of these jobs will be for skilled workers & young electronics engineers graduating from local universities.

Industry is demanding a clear roadmap from the Government – from assembling mobile phones and progressively encouraging localization of components & mother board assembly – over a period of 3-4 years.

Representatives of local manufacturers believe that after successfully introducing IMEI registration by the PTA in March 2019 all chances of smuggling and grey imports of mobile phones have been eliminated. This industry can now be used as a game changer for creating a base of Electronics sector in Pakistan which has a requirement of around 40 Million handsets on an annual basis.

Riaz Haq said...

GVCs – a fillip for exports

Sync with Global Value Chains (GVCs) is imperative for Pakistan to grow its struggling exports. In 1990, the ratio of GVCs to traditional share in exports was 40:60. Today it's almost at 50:50. Pakistan has lagged behind. Emphasizing on catching up, SBP has published a special section on GVCs in its recent quarterly economic update.

GVC in modern world can be explained by the iPhone example. Designed in US; assembled in China and Vietnam; components to assemble are supplied by South Korea and Japan; and sold across the globe. The GVCs have made the economies think beyond domestically available resource based value added exports. For example, Bangladesh has become the second biggest world supplier of garments without any cotton production. Vietnam has created its niche in outer structure and final assembling of mobile phones by importing high tech components; it's the world third biggest mobile phone manufacturer including 40 percent of Samsung mobiles.

Meanwhile, Pakistan has continued concentrate on traditional exports within its low base in developed markets. The share in global demand of developed world shrunk from 81 percent in 1995 to 62 percent. The share of emerging economies is expected to increase further to 51 percent by 2030. Pakistan should look for new markets in a non-traditional way.

In 1995, foreign value added components of Pakistan's exports was 4.8 percent. In 2015, the ratio inched up to 5.6 percent. Consistently, 95 percent of country's exports are on value addition on domestic components such as cotton, rice, animal hides etc. Our foreign value addition in textile products is in the form of chemicals and dyes, high quality cotton, manmade fiber etc. Such process is termed as backward participation.

Pakistan's share in GVCs is mostly in forward participation i.e. some other country adds value in Pakistan's exports to re-export. For example, yarn and fabric are exported to China, Bangladesh and Turkey, which produce and export value added products to stores like Zara, Marks & Spencer and H&M.

Pakistan needs to create linkages with original brand manufacturers, and original brand designers. The textile sector lacks diversification in higher unit value manmade fibers. A good example within the country is of denim trousers (jeans) where exporters are contributing in the supply chain of brands like Target, Gap, Levi's etc.

There are two other sectors where we have footprints in GVCs – Medical Devices and ICT services. In the former, the skill set is clustered in Sialkot and 98 percent participation is in precision metal instruments. The low value addition does not lure multifetal enterprises (MNEs) to invest in Pakistan. These have production facilities in Malaysia, Mexico and Dominican Republican. Upcoming SEZs and EPZs should focus on bringing MNEs to become part of GVCs.

The way forward is to enhance Pakistan's share in GVCs within sections of existing exports – positioning for brands by improving quality standards in forward participation. Find new avenues to develop backward participation. World top five exporting sectors are electrical and machinery, petro chemical and non-metal minerals, transport equipment, metal products, and financial intermediaries and business activities. Pakistan's share ranges from 0.00 to 0,03 percent in global exports of these sectors.

The foremost important factor for enhancing footprint in GVCs is to liberalize trade (tariff) policy. For details read “National Tariff Policy – the long haul". SBP noticed that the tariff liberalization started in 2000s is non-uniform, “Some industries such as automobile and steel, have continued to enjoy higher protection, which fueled an anti-export bias". Government should end the protection to redirect the flow of productive capital in export oriented sectors.

Riaz Haq said...

The Standard Chartered SDG Investment Map reveals an almost USD10 trillion (USD9.668 trillion) opportunity for private-sector investors across all emerging markets to help achieve the UN’s Sustainable Development Goals (SDGs), with Pakistan representing USD96.2 billion of that totals. The study identifies opportunities for the private sector to contribute to three infrastructure-focused goals between now and 2030: SDG 6: Clean Water and Sanitation, SDG 7: Affordable and Clean Energy and SDG 9: Industry, Innovation and Infrastructure across emerging markets. Need for private investment intensifying.

The greatest investment opportunity in Pakistan is found in achieving and maintaining universal access to electricity (a key SDG 7 indicator), representing a USD44.7 private-sector opportunity. This considers the proportion of the population currently without electricity access (29 per cent), projected population growth, and the growing demand for power as the economy develops.

There is also significant opportunity for investment in digital infrastructure, with a potential private-sector contribution of around USD34 billion needed to achieve full digital adoption (measured by a combination of mobile phone subscription rates and internet connectivity). Digital access is a key indicator for SDG 9, which encourages improvement in industry, innovation and infrastructure. The other SDG 9 indicator in Opportunity2030 is transport infrastructure. To significantly improve Pakistan’s transport infrastructure by 2030 indicates a USD13.5 billion investment opportunity for the private sector.

The opportunity in the water and sanitation sector is smaller but could make a significant impact. Almost a quarter (24 per cent) of Pakistan’s population still do not have access to clean water and sanitation, a key SDG 6 indicator. Closing this gap by 2030 will require significant investment, with an opportunity for the private sector to provide around USD4 billion of the funding.

Shazad Dada, Chief Executive Officer at Standard Chartered, said: “Pakistan has demonstrated strong commitment to the UN Sustainable Development Goals by becoming the first country to adopt the SDGs as part of its national development agenda through a parliamentary resolution. The private sector will play a crucial role in enabling Pakistan to hit these targets and there is substantial opportunity for investment that supports infrastructure development, including digital, energy provisioning as well as clean water and sanitation.

“Opportunity2030 provides an important map of the SDG opportunities for private sector investors looking to invest with impact and improve the lives of millions of Pakistanis over the next decade.”


Market Water and sanitation (SDG 6) Access to power* (SDG 7) Transport infrastructure (SDG 9) Digital access (SDG 9) Total
China USD26.1bn N/A USD2.310tn USD492.8bn USD2.829tn
India USD19.2bn USD701.5bn USD176.9bn USD226.5bn USD1.124tn
Indonesia USD4.0bn USD147.5bn USD75.5bn USD53.7bn USD280.7bn
Bangladesh USD3.2bn USD73.9bn USD21.6bn USD33.3bn USD132.0bn
The Philippines USD1.9bn USD61.3bn USD26.1bn USD28.2bn USD117.5bn
Nigeria USD5.7bn USD32.3bn USD28.8bn USD47.4bn USD114.2bn
Pakistan USD4.0bn USD44.7bn USD13.5bn USD34.0bn USD96.2bn
Thailand USD0.7bn N/A USD40.6bn USD17.0bn USD58.3bn
Vietnam USD1.3bn N/A USD20.1bn USD24.4bn USD45.8bn
Kenya USD2.3bn USD15.6bn USD9.1bn USD13.0bn USD40.0bn
Malaysia USD0.4bn N/A USD25.8bn USD8.8bn USD35.0bn
Ghana USD0.8bn USD7.8bn USD4.1bn USD6.9bn USD19.6bn
Sri Lanka USD0.2bn USD7.3bn USD4.6bn USD4.1bn USD16.2bn
Uganda USD0.8bn USD6.1bn USD2.8bn USD4.0bn USD13.7bn
Zambia USD0.7bn USD4.0bn USD1.6bn USD3.2bn USD9.5bn

Riaz Haq said...

Incentives in the works to diversify exports

The Imran Khan government plans to introduce significant time-bound, structured fiscal incentives and protection for 20 industries other than the five zero-rated sectors besides ensuring their easier access to cheap short- and long-term finance for diversifying and boosting the country’s stagnating exports.

The incentives will be part of the new Strategic Trade Policy Framework (STPF) expected to be finalised in the next couple of months, Commerce Secretary Ahmed Nawaz Sukhera told Dawn on Thursday.

"The government is looking beyond the five zero-rated export sectors including the textile. It is time we also focused and facilitated industries like light engineering, chemicals, IT, etc with substantial potential to diversify and increase our exports," he said.

"Textile industry does have the potential to enhance its foreign sales but it can push our overall exports only so much. We need to encourage other industries with untapped potential."

Pakistan’s trade gap has shrunk 31pc to $11.6 billion in the first half of this fiscal year to December, primarily on the back of 17 per cent compression in imports, which dropped to $23.2bn. Meanwhile, exports have risen by a mere 3.2pc to $11.5bn despite steep currency devaluation during last one and a half years and energy subsidies given to textiles, which fetch 55-60pc of the country’s total proceeds from foreign sales.

According to a World Bank report, the country’s share in the global exports has declined from a peak of 0.18pc to 0.13pc in 2018 with the bulk of them are resource-based or commodities.

"We are moving in the direction of export-led economic growth and away from import substitution policies. The global experience shows that you cannot pursue both export growth and import substitution policies simultaneously; so we have decided to increase competitiveness of our industries with export potential," Sukhera said.

The stabilisation on the external front in the recent months has created room for the State Bank to help exporting industries, and enhance the financing limit for exporters though its subsidised loan schemes — Export Finance Scheme (EFS) and Long Term Finance Facility (LTFF) — by Rs100bn for the full year.

Under EFS exporters are eligible to receive short-term loans at 3pc to meet their working capital requirements while LTFF caters to their needs for long-term funds to import machinery and plants. For the textile sector, LTFF is available at 5pc and for others at 6pc.

SBP Governor Reza Baqir, who has repeatedly underscored the importance of increasing exports to pull the country out of the frequent boom-and-bust cycles, says the scope of these schemes will be extended to more industries and sectors with export potential.

Experts say the current account stability based on massive import compression is hurting the industry and could backfire if exports are not increased substantially and swiftly. The current account deficit has squeezed by 73pc in the first six months of this fiscal year.

Riaz Haq said...

In this age of of global supply chains, very few if any products are made in just one country; multiple countries add value to the finished product. Some make components while others build subassemblies and still others do the final assembly. All countries participating in the value chain create jobs and make money in the process

Riaz Haq said...

PTCL to build #Pakistan’s first high-perf #telecom 200G #network with #Nokia. PTCL CTO: “We have enhanced the existing capacity from 100G optical network to 200G to take care of the growing traffic in these cities (#Karachi, #Lahore, #Islamabad)” #fiber

Pakistan Telecommunication Company Limited (PTCL) has deployed Nokia’s technology to expand the capacity of its recently installed 100G transport network to 200G optical network for both domestic and international traffic.

This capacity expansion has been carried out in the major cities of Islamabad, Lahore and Karachi to keep pace with the growing demands for capacity from both individuals as well as enterprises.

The deployment makes PTCL the first operator in Pakistan to deploy high-performance 200G 8 Quadrature Amplitude Modulation (QAM), an optical long-haul technology offering more capacity at lower cost. The upgrade of its optical network allows PTCL to address the growing demands of bandwidth, enabling its enterprise and individual users in Pakistan’s largest cities to use high-bandwidth services and applications such as HD and 4K video.

In addition, the network upgrade allows PTCL to enhance network capacity with the Software Defined Network (SDN) capabilities of Nokia’s optical solution. Further, the unique flexgrid technology will enable PTCL to upgrade to 300G or 400G in the future over the same installed base.

Saad Muzaffar Waraich, Chief Technology & Information Officer, PTCL, said: “We have enhanced the existing capacity from 100G optical network to 200G to take care of the growing traffic in these cities.”

Carlo Corti, Director of the Optics Business Development, MEA, Nokia, said: “Our field-proven technology enables PTCL to provide the best-in-class network experience to its subscribers. With our 200G technology, PTCL is now in a position to cost-efficiently address the ever-growing demand for capacity.”

Riaz Haq said...

Pakistan urgently needs pathway for higher growth. Must be export-led by Sakib Sherani

AS large parts of the economy grind into recessionary conditions, the clamour for policy focus on growth is increasing. However, the government’s policy mix is constrained under an IMF-led stabilisation programme, with no space for a stimulus in either fiscal or monetary policy. Under the current programme, the government is bound to achieve fiscal consolidation over three years of almost 6.5 per cent of GDP — the highest reduction in the fiscal deficit in Pakistan’s history over a similar time span.

Under the IMF stabilisation framework, short-run economic growth is not collateral damage — it is virtually ground zero, the epicentre of policy focus. Achieving a sharp correction in the external current account imbalance in the shortest possible time requires an equally sharp compression in imports. The contractionary policy mix adopted as a result leaves businesses struggling for survival — via the sucking out of purchasing power and the overall increase in cost of doing business (on borrowing, imported inputs and energy use).

In its latest monetary policy statement, the State Bank appears to indicate an abandoning of its unrealistic and overly optimistic assessment of growth prospects for the current fiscal year — something I have been pointing out for the last several months. With near-term growth prospects bleak, and unemployment and high inflation imposing a punishing burden on large swaths of the populace, there is a clear need for a policy framework that delivers less pain while achieving the broad aims of not just stabilisation but wider reform.

Pakistan needs a return to high rates of economic growth, but only one that is sustained, sustainable, export-led, jobs creating, and inclusive — rather than the four-year boom-bust cycle the country has been trapped in ie a better quality of growth. To achieve this requires serious structural as well as institutional reform — some of the very measures such as documentation and widening of the tax base that are contributing to challenging business conditions and pessimistic investor sentiment. So what can the government do differently, to ease the pain?


In response to the Great Financial Crisis of 2007, countries ranging from the US to Singapore sought to insulate businesses from the effects of the recession by a host of heterodox policy measures. The US government pumped nearly $700 billion in fiscal stimulus measures alone in response to the recession, over and above the aggressive and unprecedented expansion of the US Federal Reserve’s balance sheet. Measures taken included recapitalisation of financial institutions, capital injections in the Big Three auto companies as well as insurance firm AIG, launching programmes such as ‘cash-for-clunkers’, cutting payroll taxes, and extending unemployment benefits. An expanded public works programme to create jobs was also launched.

Similarly, Singapore adopted maintaining citizen employment during the crisis as an explicit policy goal and launched a ‘jobs credit scheme’, effectively temporarily subsidising the wage cost of firms.

While Pakistan cannot match the scale of such measures given its fiscal constraints and public debt level, the foregoing presents examples of precisely the kind of bold thinking and heterodox policies that are required. Some possible measures that can be undertaken include:

— Extend energy tariff subsidy to indirect exporters/export sector supply chain.

— Underwrite fresh loans to SMEs.

— Provide interest rate subsidy on new loans/expand access to concessionary finance.

— Swap existing high-cost loans with subsidised credit schemes for certain high spillover sectors (with high linkages and employment intensity, for example)

— Ensure access to credit for credit-constrained SMEs.

— Ensure timely release of tax refunds due.

— Provide tax credits for new investment.

Riaz Haq said...

#Pakistan #MobilePhone #Imports Jump 79.46% in 7 Months of FY19/20. mobile #broadband (BB) penetration is up from 51.8 million subscribers in January, 2018 to 76.8 million in Nov 2019, an increase of 25 million in #smartphones sales.

According to the data issued by Pakistan Bureau of Statistics (PBS), Pakistan imported mobile phones worth $760.582 million during July-January (2019-20) as compared to $423.818 million during July-January (2018-19), showing a growth of 79.46 percent,

As compared to last year, on a year-on-year basis, the import of mobile phones witnessed a growth of 141.65 percent in January 2019. The imports during January 2020 were $144.437 million against $59.77 million in January 2019.

On a month-on-month basis, the import of mobile phones witnessed an increase of 22.73 percent during January 2020, as compared to $117.682 million during December 2019.

Overall, telecom imports saw an increase of 31.36 percent during July-January 2019-20 as compared to last year. Total imports were recorded at $1.029 billion during this period compared to $783.453 million during the same of last year. Telecom imports stood at $184.474 million in January 2020 as compared to $161.895 million during December 2019 i.e. registered 13.95 percent growth.

Other telecom apparatus imports witnessed a decline of over 25.33 percent in July-January 2019-20 as it stood at $268.546 million against $359.635 million during the same period last year. When compared to December 2019, other telecom apparatus imports registered a decline of 9.45 percent and remained at $40.037 million in January 2020 compared to $44.213 million in December 2019.

Telecom experts are linking the phenomenal growth in mobile imports to the implementation of Device Identification Registration and Blocking System (DIRBS). According to Pakistan Telecommunication Authority (PTA) it has blocked a total of 50 million devices since implementation of DIRBS.

According to PTA these includes 32 million GSMA valid and 18 million non-standard i.e. non-compliant devices. Such devices were brought into Pakistan through grey channels causing security issues and revenue loss to the government of Pakistan.

Since implementation of DIRBS, mobile broadband (BB) penetration has increased from 51.8 million subscribers in January, 2018 to 76.8 million in November, 2019 showing an increase of 25 million due to increased usage of smart phones. The total cellular mobile subscribers reached 165.4 million by the end of November 2019.

As per DIRBS regulations, all devices operating on mobile networks within Pakistan as of 15th January, 2019 were registered. Devices with programmed IMEI which were not as per GSMA standard operating on mobile networks as of 15th January, 2019 were paired/ linked with the mobile number being used.

Riaz Haq said...

Infinix becomes first smartphone brand with manufacturing facility in Pakistan

Infinix, with its latest and high-quality premium products, is one of the leading smartphone brands in Pakistan. It has continued growing stronger, and one of the primary reasons is the company’s continuous investment and contribution to the economic and labor empowerment in the country. Now very proudly Infinix becomes the first smartphone brand manufacturing in Pakistan.

Fully aligning with the country’s initiative of “Made in Pakistan”, the company keeps growing its investment to contribute to turn the country into a regional tech hub, and it just got one step further towards its mission and local commitment to put Pakistan on road to progress and prosperity. This Chinese smartphone brand’s manufacturing facility being located in the country helps prevent unnecessary worry of Corona Virus and the inaccessibility of newest Infinix products, and also fulfills its aim of playing its role in empowering the local labor, and particularly women, as 60% of the workforce working in the Infinix Pakistan factory are women.

The manufacturing vicinity was also visited by the Consul General of the People’s Republic of China, Mr. Li Bijian, who applauded Infinix’s contribution in promoting local employment in the country.

Talking about their company mission, CEO of Infinix Pakistan Mr. Joe Hu said, “Infinix’s vision as a company is to enrich our customer’s experiences, whether it is through our products, or what goes in their manufacturing. To be able to play a small part in the empowerment of the labor force in Pakistan, and particularly the women of the country is an important step further towards our mission.”

Riaz Haq said...

EDB-BoM gives go-ahead on mobile device manufacturing policy

In a meeting of the Board of Management of Engineering Development Board (EDB), chaired by Mr. Almas Hyder, the mobile device manufacturing policy was approved for submission to Ministry of Industries & Production. The policy has been drafted, after extensive stakeholder consultation, with the objective to encourage local manufacturers in this sector through technology acquisition & localization.
The proposed policy is expected to promote local investments and FDI. Local device manufacturing activity is projected to create 200,000 direct and indirect jobs in the country alongside development of efficient manufacturing eco-system and linking Pakistan to the global supply chain. Needful to mention is that Pakistan is the 7th largest market for mobile sets with annual sales of 34 million sets in 2019. With an increasing demand and competitive advantage of labour cost, it can develop into a major industry capable to generate export surplus to sell its brand of “Make in Pakistan” in the international markets.
The Board also deliberated on the Electric Vehicle Policy drafted by EDB in consultation with concerned stakeholders. It was proposed to have a comprehensive policy framework to not only cater for EV but that covers emerging technologies in this sector as well as ensuring that the supply chains of the existing players may not be disrupted. The Board emphasized on the need to have a favorable incentive regime to promote local investments and attract FDI.
A comprehensive plan for participation of engineering sector in international trade fairs/exhibitions were also presented in the meeting. The members appreciated efforts made by EDB’s management to promote engineering sector of Pakistan.
The Chairman advised to organize trade delegations to various Free Trade Zones of African to tap the huge export potential in this region. Members also advised to look for trade opportunities in European and American markets.
CEO-EDB also briefed the Members on the competitive/efficiency improvement and export enhancement exercise being undertaken by EDB. In this regard 350 companies, Associations, Chambers were approached to invite proposals in order to address the anomalies in tariff cascading, procedural delays in availing benefits like DTRE and technological constraints in meeting international bench marks.

Riaz Haq said...

A high-profile panel discussion on Pakistan’s digital future attended by prominent players in the local digital industry was hosted by Serena hotels as part of its public diplomacy initiative called ‘Raabta’.

The event titled ‘Re imagine our Digital Future – Preparing to Thrive or Survive?’ was hosted by raabta curator and prominent journalist Sidra Iqbal.

A lively and thought-provoking discussion was held about the challenges facing the local digital economy in face of its rapid expansion, and the challenges and opportunities this brings in terms of innovation, governance, job market, cyber risks, regulation and ease of doing business.

“The focus of the event is to discuss the potential benefits and costs arising from global digital technology changes and, importantly, anticipate public policy solutions to emerging problems that will shape the future of society and the economy for generations to come,” said Sidra Iqbal. “Change can come within a generation if managed properly, rather than waiting for millennia. We are asking if the policymakers going to be reactive to the digital revolution or take the bull by the horn and prepare an environment for the digital economy to thrive?”

The keynote speaker at the event was ‘Digital Pakistan’ initiative chief Tania Aidrus, who spoke about the five pillars that form the cornerstone of the government’s digital policy, which include access and connectivity, digital infrastructure, e Government and digital skilling. Tania said the response to the PM’s digital initiative was overwhelmingly good and it felt like a movement already. She said a lot is happening in the digital arena but it’s important to keep an end view in sight and take a strategic approach. She said the efforts at provincial and federal levels have to be synchronized to achieve the objectives on a broader scale. She said the internet is a democratizing force and digital allows equitable access to knowledge provided the affordability of digital infrastructure was enabled and commodities like the internet are not taxed as a luxury item.

The panel included prominent figures of the local digital landscape including GM of Careem Zeeshan Hasib Baig, MD Ehsan Saya, CEO Foodpanda Nauman Sikandar Mirza, Chief Corporate and Enterprise Officer Jazz Ali Naseer, MD KPITB Dr Shahbaz Khan and Chief Business Support Officer U Microfinance Bank Sharmeen Niaz.

Zeeshan Hasib Baig said that Careem has enabled 500,000 jobs which shows that going digital will not take away jobs as some fear, however it will change the way we work and make it more efficient so the focus can be on better quality leading to productivity gains. He said digital companies like Careem are improving livelihoods, moreover they are allowing females much better mobility for work and leisure.

Ali Naseer from Jazz said “we need to change the lens of how we look at things and there needs to be a paradigm shift in our traditional processes to allow for digital to be effective lest we become redundant.” “Whilst we have 3G/4G broadband license since 2014 but less than 40% of the population is connected on broadband currently which is a travesty.”

Nauman Sikander Mirza of food delivery service Foodpanda Pakistan said that Pakistan’s digital economy was in very early stages with no e-commerce companies operating in the country and very few government entities using automation.

MD of online selling platform Ehsan Saya spoke about digitization boosting the trade industry like never before despite the fact that the majority of the population is not accustomed to buying online. He said the e-commerce will pick up eventually when the government improves regulation.

Riaz Haq said...

#Pakistan #mobilephone #manufacturing co to export soon. Transsion Tecno is operating 3 production lines with a capacity to assemble 3 million #smartphones annually. The company has plans to localize production of 49% of handset parts in next 3 years.

Transsion Tecno mobile manufacturing firm, a joint venture between Pakistan and China is all set to manufacture 49 percent of its mobile phones in Pakistan in the coming years, informed Federal Minister for Economic Affairs Hammad Azhar.

“They will be focusing now on exports as their plant in Pakistan is most efficient of all owned by Transsion group globally (excluding China)," said Azhar, after his meeting with Transsion Tecno CEO, Aamir Allawala, at their phone assembly plant.

The minister said that in the next three years the company has targeted to localize production of 49pc of handset parts. “A huge export potential e.g. Vietnam is exporting USD37 billion of handsets annually," he said

Hammad said Transsion Tecno started producing three million handsets per annum and is increasing its production to up to 13 million handsets within a year.

He said that the introduction of DIRBS [Device Identification, Registration and Blocking System] has eliminated the menace of smuggled sets, and has been an instrumental factor in opening up the market.

Currently, Transsion Tecno is operating three production lines with a capacity to assemble 3 million smartphones every year. In terms of human resources, the company has on board 750 skilled workers, 70 engineers, and nine Chinese experts.

Aamir Allawala, the CEO of Transsion Tecno in his interview with BR Research had said that mobile phones can become Pakistan's biggest export item, surpassing textiles, if the country is able to tap into this market.


An interview with Aamir Allawala, CEO Transsion Tecno Electronics ‘Mobile phone exports can surpass textiles’

Amir Allahwala: "There are 164 million mobile subscribers. The handset market size is about 40 million units with 27 million units currently being imported and 13 million (which are mostly 2G) manufactured locally in the country. These are feature phones and we believe the future is smart. If we had to put a number to it, the potential handset market size should be over 60 million units annually. This would make us one of the top 10 handset markets in the world."

Riaz Haq said...

BR Research: Start by telling us about this new venture for mobile handset manufacturing in Pakistan.

Aamir Allawala: This project, I would say, marks the beginning of CPEC Phase II and it is a clear signal that Pakistan is open for big foreign investment. In the smartphone industry, this is the first Chinese investment in Pakistan. I would first like to give you a little bit of a background about us. Our company Tecno Pack has been in business since 1971. We have been manufacturing automobile parts (for cars, tractors and motorcycles) over the past few decades, and we did a recent Joint Venture project with Suzuki Japan with an investment of Rs2.87 billion. We employ about 2100 workers at our 5 manufacturing plants. Over the years, we have ventured into electronics manufacturing as well. We found this opportunity for mobile manufacturing, saw the wide gap that exists in the market, and immediately grabbed it. This brought our new partnership with Transsion Holding which is a Chinese manufacturer of mobiles phones, one of the top in the world in terms of volumes with sales of over 124 million in 2018. Apart from China, it has factories in India, Bangladesh, Ethiopia and with this new investment, Pakistan.

BRR: What is the total investment, your equity and the current assembling capacity of mobile phones?

AA: The total investment is Rs480 million and we have a 60:40 arrangement with Transsion China. Currently we are operating three production lines with a capacity to assemble 3 million smartphones every year. In terms of human resource, we have on board 750 skilled workers, 70 engineers and 9 Chinese experts.

BRR: How big is the mobile phone market in Pakistan and what is the potential here?

AA: There are 164 million mobile subscribers. The handset market size is about 40 million units with 27 million units currently being imported and 13 million (which are mostly 2G) manufactured locally in the country. These are feature phones and we believe the future is smart. If we had to put a number to it, the potential handset market size should be over 60 million units annually. This would make us one of the top 10 handset markets in the world.

This is a big space. We need a new plan for Pakistan where we are not just importing and consuming, but also contributing to the production and creating jobs. The first step to do that is to get into industrial assembly. We can train more skilled workers and build an industry foundation by adopting phase-wise localization. As localization grows, technology transfer happens and industry expands. Mobile phone manufacturing can be that industry.

We have examples from countries where the mobile phone industry has transformed the whole economy Look at Samsung in Vietnam. In 2014, Samsung set up its first factory in Vietnam and today, Samsung has an investment of over $17 billion in the country. It contributes 28 percent in Vietnam's GDP, it has more than 100,000 employees and in terms of mobile phones, nearly $37 billion of exports are made by Samsung from Vietnam. When other countries saw Vietnam's growth, they have raised their hands to participate.

India is bidding to become the next China. In mobile phones, within three years of announcing a mobile manufacturing policy, they have 268 factories producing mobile phones and accessories with 61 brands in production including Samsung, Apple, Oppo, Vivo etc. They have now become the second largest mobile producer in the world after China. Last year India produced 225 million units and 95 percent of mobile phones sold in India are made in India.

Then there is Bangladesh. It started final product assembly–which is the first step– in 2017. Brands include Samsung, Oppo, Vivo, Infinix etc. and it is now assembling mobile phone motherboards as well.

Riaz Haq said...

PTI govt approves mobile phone manufacturing policy

The mobile phone manufacturing policy would ensure “localisation and indigenisation of parts of mobile phones”, said the finance ministry.

“The country faces a serious security threat as there is a growing concern of Indian-manufactured smartphones using other countries’ Type Allocation Code within the initial eight-digit portion of the 15-digit International Mobile Equipment Identity (IMEI) used to uniquely identify wireless devices,” said the information technology ministry.

It may be technically very difficult for Pakistani authorities to identify and restrict the import of Indian assembled/manufactured smartphones with other countries’ IMEI numbers, it added. Samsung is currently operating the world’s largest mobile handset factory in India.

Under the Mobile Device Manufacturing Policy, parts of mobile handsets will be used in the entire range of mobile handsets produced in Pakistan instead of being limited to a particular model. The policy will have a positive impact on allied industries including packaging and plastic. The expected manufacturing of high-end brands would give the domestic industry an opportunity to become part of the global value chain, said the finance ministry.

Tax incentives

The ECC approved the removal of regulatory duty charged on the import of completely and semi-knocked down (CKD/SKD) manufacturing devices by Pakistan Telecommunication Authority (PTA)-approved manufacturers under the Input/Output Co-Efficient Organisation (IOCO)-approved import authorisation. The ECC approved the abolition of fixed income tax of up to Rs1,740 per handset on the CKD/SKD manufacturing of mobile devices having an import value of up to $350.

However, it increased the fixed income tax on the $351-500 category handsets by Rs2,000 or 37% to Rs7,400 per set. Similarly, the mobile sets having an import value of more than $500 will be subject to an additional Rs6,300 or 68% income tax, bringing total per handset income tax to Rs15,570.

The ECC approved the removal of a fixed sales tax on the CKD/SKD manufacturing of mobile devices.

PTA will also allow activation of handset manufacturing in the country under import authorisation under the special category to eliminate misdeclaration in the parts category at the import stage.

The activation of completely built units (CBUs) imported through notified routes after payment of all levied duties and taxes, as fixed by the government from time to time, will continue till further amendment.

The government also approved a research and development allowance of 3% for local manufacturers on the export of mobile phones. The locally assembled and manufactured phones will be exempt from a 4% withholding tax on domestic sales.

The government will maintain tariff differential between CBU imports and CKD/SKD manufacturing till the expiry of the policy. The domestic industry will ensure the use of local parts and components as per the road map in the draft policy.

Riaz Haq said...

#Pakistan Business Council warns accession to the World Trade Organization’s (#WTO) treaty of free #trade of #IT products to break #cellphone & other #electric products #manufacturing dream. #technology #Smartphones #Electronics #informationtechnology

PBC, in a report on Thursday, expected the information technology agreement (ITA) to cause jobs and revenue losses and suppress potential for exports.

“The ITA will result in a net loss to the economy by replacing locally manufactured products with imported ready-to-sell products in the ITA listed categories,” said the council. “This will not only undermine the efforts to encourage investment by electronics manufacturers in Pakistan, but it will also cost Pakistan its independence to apply policy interventions to gradually increase its product space for exporting electronic products.”

The agreement aims to eliminate custom duties and reduce non-tariff measures which restrict trade in IT and electronic products. The goal is to increase global trade and competition in IT goods and services, increase adoption of technology and spur innovation in the sector. ITA accounts for 97 percent of world trade in IT and electronic products with trade volume of $3.7 trillion in 2019.

“There is an inconclusive evidence to suggest ITA is an appropriate avenue to expand a country’s capability in manufacturing and exporting electronics and IT products,” said the PBC. “Whilst counties that a signatory to the ITA have increased their IT and electronic product exports, non-signatories have also increased exports manifold.”

India and Bangladesh use cascading tariff structure to increase localisation and manufacturing of electronics in their countries. India, being signatory to the agreement, is facing international disputes in the WTO for adopting policies for localising manufacturing of electronics, claiming them to be against the ITA protocols.

The information technology agreement is not bound on any member country of the WTO. It has so far been signed by advanced economies that already have strong exports base of IT products.

Pakistan’s imports of ITA related products rose six-fold between 2003 and 2019, significantly higher than the global average. The imports recorded a compound annual growth rate of 13.2 percent during the period. The growth rate was much higher than the global average of 8.4 percent, according to the PBC

The business council said the country has experienced de-industrialisation due to policies that discourage manufacturing and make it easier to import finished products.

PBC said allowing across the board zero duty on components and finished, ready-to-sell electronics, will result in closure of existing manufacturing units, and also discourage additional investments in production facilities for electronics.

“By disallowing cascading of tariffs under ITA, and removing the advantage for local manufacturing, for example as envisaged in the mobile phones manufacturing policy, companies such as Samsung may lose interest to invest in smartphone assembly in Pakistan,” it said. “Not only will this have an adverse impact on the external account, Pakistan will also miss opportunities to acquire technologies in manufacturing electronics by reducing the chances of foreign companies to enter Pakistan.”

The council said the Federal Board of Revenue estimated revenue loss of Rs3.5 billion from 105 tariff lines following Pakistan’s accession into the ITA.

Though imports of ITA-based products are a good proxy measure of technological adoption and accession to ITA will lead to zero-rated imports of electronics, it will further delay development of IT manufacturing sector.

Riaz Haq said...

Local mobile phone manufacturers have urged the Ministry of Industries and Production to implement Cabinet decision of exempting four percent withholding tax on the sale of Pakistan made handsets.

In a written letter to the Engineering Development Board (EDB) the Pakistan Mobile Phone Manufacturers Association (PMPMA) while urging the Ministry to exempt the sales of local manufactured cell phones from 4 percent withholding tax has requested for the implementation of June 2, 2020 Cabinet decision.

The letter was sent to Chief Executive Officer (CEO) EDB by PMPMA, copies of which have also been sent to Industries Minister and other Ministries, the Association revealed.

According to official sources the PMPMA since the approval of the mobile device manufacturing policy in June 2020, has repeatedly requested the relevant officials for the implementation of the policy in letter and spirit, so that they can optimise their operations but so far the ministry does not appear to be serious in implementing the policy.

This was the industry’s perception after the meeting held in the office of Minister of Industries on 3rd September, 2020 and subsequent follow up meeting with the Chairman and CEO (EDB) held in Lahore on 18 September, 2020.

Pakistan Mobile Phone Manufacturers Association deliberated the issue and raised the following five point opinion in the letter: (i) the exemption of 4 percent withholding tax on local sales of locally manufactured mobile phones is an integral part of the mobile device manufacturing policy approved by the federal cabinet on 2nd June, 2020.

(ii) The exemption is absolutely critical to provide a level playing field to the local industry which consists of more than 15 manufacturers and provides employment to over 7 to 10 thousand. Moreover the local cell phone manufacturers are planning to expand their plants to produce more handsets to meet the local demand for mobile phones.

(iii) If the exemption, already approved under the MDMP, is not notified, it shall disturb the differential envisaged under the MDMP between the duty and taxes on CKD/SKD kits of locally manufactured mobile phones as compared to CBU imports into the country.

(v mobile phone industry is strategic a sector which, if properly incentivised, can provide employment opportunities to over 200,000 Pakistanis, and within a short period of time, create export opportunity worth billions of rupees.

Riaz Haq said...

Infinix #mobile phone factory in #Karachi is producing around 3 million mobile devices per year. It is reshaping the #smartphone experience in #Pakistan with its latest offerings. Here's how - Sponsored - DAWN.COM.

Infinix, a leading smartphone brand in the Pakistani market has caused a stir in the world of tech in a short period of time.

Leading the future in the smartphone world in Pakistan, the brand has set new benchmarks in innovation-led manufacturing through cutting-edge technology, exquisitely designed dynamic smartphones, and conquered global life experiences with a winning combination of technology tossed with fashion.

Infinix is well known for being bold and forward-leaning.

Instead of playing it safe, it has taken the risk and moved fast. Instead of waiting for others, it has set the direction for competitors.

The tech innovator has completed five strong and successful years in the market, growing from strength to strength, becoming the most loved, and trusted choice in Pakistan; a legendary brand that challenges the norms with devices explicitly designed for the country's youth to learn about the opportunities and challenges of global expansion, focusing on fast-moving high-tech space.

Here's a rundown of Infinix’s journey of becoming a success story in Pakistan.

How it all began
The journey started in 2013 with a strategy of complete line of mobile devices.

With the SURF series 39's initial release, the brand introduced ‘ALPHA’ and unveiled the high-end ‘Marvel series’ which received fantastic response. The same year, Infinix broke through the market with the launch of the ‘Zero series’. Its popularity with the masses instantly made it a premium smartphone brand in the emerging markets.

The company's success depended not only upon the quality product but also the reliability & benchmark it had set. During its trailblazing tenure in 2015, the brand witnessed top sales record for any single product with the launch of ‘HOT’. Simultaneously, the ‘NOTE series’ was introduced to cater to the business and daily functionality for consumers.

Aware of the nature of its millennial audience and financial restraints, Infinix took a giant leap in 2016 by introducing a winning combination of tech and fashion, i.e. the ‘S series.’

Infinix has currently been marked as the largest mobile phone production and assembly company in Pakistan. The existing factory produces 3 million units per year.

Exquisite design
Infinix innovations have a clear purpose: represent infinite possibilities and distinctive characteristics.

Influenced by French designs and investments, they make life better and easier. The designs are more personal, intelligent, and deliver an experience that flows seamlessly and continuously wherever you go. It combines power and functionality, whether you are at work or play at home or away.

Tech innovation
A brand that envisions phones as an expression of self-discovery and has struck a chord with users who prioritise fashion and technology through daily interactions, Infinix's range of intuitive products has become a lifestyle by default, representing intelligent and trend-setting experiences around the world.

In a developing country like Pakistan, smartphones, in general, are unable to reach the masses due to their high price points. Infinix designs smartphones for techies who are on the lookout for stylish and aesthetic designs at the best value for money.

Presence around the globe
The company has its footprints across the world; however, its contemporary design, the need for digital technology, and effective functionality have made it incredibly popular across more than 70 countries in South East Asia, South Asia, Africa, Latin America, and the Middle East.

Riaz Haq said...

Interest in cellphone assembly grows as smuggling falls
PTA has so far permitted 24 companies to assemble handsets in Pakistan

Last month, Pakistan began local manufacturing of mobile phones, which is expected to open further avenues of investment in the country and create employment opportunities.

Chinese company Transsion Holdings and Pakistan’s Tecno Group have formed a joint venture called Transsion Tecno Electronics Ltd (TTE) with the Chinese company having 40% shareholding while the remaining 60% stake is held by the Pakistani firm.

The joint-venture company – the first 3G/4G smartphone manufacturing facility in Pakistan – has initial capacity to produce 1.8 million units annually on a single-shift basis with over 800 skilled workers below 30 years of age.

“The value of Pakistan’s mobile phone market stands at Rs366 billion, which is even higher than the value of the auto sector which is around Rs360 billion,” remarked TTE CEO Asif Allawala. “Interestingly, the government drafts policies conducive for the auto sector but ignores the mobile phone industry.”

He added that the industry would not be able to sustain much longer if the import of smartphones remained cheaper than local manufacturing.

Mobile industry worldwide

The mobile phone sector ranks among the five biggest industries in the world with sales revenue of $522 billion and over 6 billion devices sold annually.

China has been enjoying the label of being the global hub of handset manufacturing since 2010. The country exports mobile phones worth over $150 billion a year.

However, the handset production is now moving out of China due to rising labour cost and a prolonged trade war with the US.

“On average, Chinese labour costs $600 per month while Pakistan’s labour is much cheaper at only $120 per month,” said the TTE CEO.

However, Pakistan still remains far behind in the race of providing cheap labour force as many other Asian nations are increasingly luring mobile phone assembly companies by offering low-cost workers.

Most of the demand for mobile phones stems from Asia and Africa while markets in Europe and North America are on a saturation point, hence, their trend remains more or less flat each year. This provides a further incentive to the mobile phone manufacturers to relocate their units to Asian nations.

According to Statista, 1.5 billion units of smartphones were sold in 2019 worldwide. The number had been 122 million in 2007.

Pakistan’s market

Pakistan has 164 million cellular subscribers out of a population of 207 million. The country ranks seventh among world’s largest handset importers.

Alone in 2015, the country saw 114 million mobile subscriber identity modules (SIMs) sold with 46 million supporting 3G/4G while 68 million were 2G subscribers.

“Due to its mammoth size, no global brand can ignore Pakistan’s market,” said TTE Director Aamir Allawala. “The country’s annual market size, including 2G, 3G and 4G, is estimated at 34 million units.”

That meant the country’s demand for mobile phones remained in millions every year as a cellphone, especially smartphone, was changed by many consumers after two to three years, he said.

Pakistan Telecommunication Authority (PTA) has successfully tackled the handset smuggling. Government’s endeavours to curb grey channels have yielded results as the country recorded 110% increase in legally imported mobile phones in 2019 compared to 2018.

“According to analysis, an increase of 110% has been seen in legal import of devices from the formal channel,” confirmed a PTA spokesperson to The Express Tribune.

Over more than a year ago, the government started blocking the mobile sets (smuggled phones) that were not approved by PTA with the help of Device Identification, Registration and Blocking System (DIRBS).

Riaz Haq said...

#Pakistan on brink of inking #industrial accord with #China for industrial cooperation to develop B2B joint ventures, build Special Economic Zones (SEZs) and industrialization under the second phase of #CPEC. #economy #industry #business #manufacturing

“Prime Minister Imran Khan has already given approval to it. After consultation, both the countries will formally sign this framework agreement,” a senior official said.

On Tuesday, representatives from both the countries held the fifth meeting of Joint Working Group (JWG) on industrial cooperation under CPEC through video conference.

The Chinese side appreciated the efforts undertaken by Pakistan to elevate the MoU (Memorandum of Understanding) on industrial cooperation into a Framework for an increased cooperation under CPEC and agreed to continue consultation for its signing at the earliest. They also hailed the idea of joint industrial diagnostic studies followed by an action plan.

Khashih-ur-Rehman, Additional Secretary/Executive Director General, Board of Investment (BOI) and Ying Xiong, Director General, National Development & Reform Commission (NDRC), China co-chaired the meeting. Representatives from line ministries, provincial governments, and embassies attended the meeting.

Rehman remarked that elevation of the MoU on IC (Industrial Cooperation) between Pakistan and China into a comprehensive framework would create new avenues for strengthening industrial cooperation under CPEC which is also open to third party participation.

Cooperation would likely enhance B2B and project to project (P2P) ties, balance and modernise existing industry, expedite SEZs development and promotion, seek technical and financial assistance from China, increase production capacity, and facilitate businesses with support of financial institutions from both sides, etc, he added.

Asim Ayub, Project Director of Project Management Unit (PMUC-CPEC-ICDP) on Industrial Cooperation of BoI, appreciated the Chinese side for accepting the Draft Framework Agreement shared by the Pakistani side in early November 2020.

Early signing of the Framework Agreement on IC would help both sides achieve maximum objectives of CPEC in line with its long-term Plan, Ayub said, adding that immense efforts had been ensured by Pakistani to devise the Draft Framework, taking all the provinces and other stakeholders on board and final approval of the Honorable Prime Minister was also obtained accordingly.

He stressed a Framework Agreement was the need of the hour for a measurable impact with regards to Industrial Cooperation, SEZs, Business to Business (B2B) and People to People (P2P) collaboration.

Ayub said Pakistan highly regarded the idea of Industrial Diagnosis by the Chinese side and extended its highest support to the group of experts from CIECC for the Textile Industrial Diagnosis last year. However, he was of the view that the Industrial Diagnosis needed to be carried out in a joint manner involving experts from both sides who might submit the Diagnosis Report to the JWG along with an Action Plan that would be imperative for the respective industrial sector.

The meeting also discussed progress made on Rashakai, Dhabeji, Alama Iqbal Industrial City, and Bostan SEZs under the CPEC, the revival project of Pakistan Steel Mill, China Pakistan Young Workers Exchange and Cooperation, and Karachi Coastal Comprehensive Development Zone.

Riaz Haq said...

Smartphones Policy to Create 50,000 Jobs in the Next Few Years

There are about 16-18 cell phone manufacturers operating in Pakistan and a few others are coming. These plants are providing jobs to about 25,000 people – mostly young boys and girls. The industry experts are of the opinion that 50,000 more jobs will be created in the segment in the next few years. Some say that 70 per cent of jobs would be for women.

One auto parts manufacturer in Karachi delved into the smartphone assembling in the early days and is producing around 500,000 units a month for the local market. He is confident that the capacity would double in a year and the production will reach a million units a month.

Another player in Lahore is making a state-of-the-art mobile assembly facility which is going to be operational in January 2021. The aim is to reach 500,000 units a month by March-April; and by June-July, the facility will start expanding. The aim is to reach a million units a month by the end of 2021. The assembler is the biggest importer of smartphones in Pakistan and is doing backward integration.

The mobile phone formal industry is growing fast. In yesteryears, around 800,000-900,000 units used to be imported a month in Pakistan through formal channels. After the induction of Device Identification, Registration and Blocking System (DIRBS), illegal imports of the phone is no longer possible. Due to this and lockdown, smartphone imports went up to 2-2.2 million in June 20. Overall, the monthly average import in Pakistan is standing around 1.3-1.5 million units a month in 2020.

Majority of the phones are in the category of $200 or low, and all these would probably be assembled in Pakistan within a couple of years. Any company that would not decide to assemble in Pakistan could be wiped out in the cheap smartphone segment. That could be a worry for Samsung. The company operates in all segments. Its premium phones would keep on coming as imported units – but the segment is small. If the company doesn’t start assembling here, it risks losing market share. it is still mulling on the assembly idea.

Apart from Samsung, big Chinese brands such as VIVO and OPPO are also weighing options of starting assembly in Pakistan, and VIVO could be one big player in a few years in the local market assembling. Once big companies come in and set up units in Pakistan, parts manufacturing may start taking place at home. There will be a huge spillover for the local assemblers.

The smartphone policy is envisaging in stage 1 (2020-21) to start assembling units here – that is happening and credit goes to EDB and Ministry of Industries. In stage 2, the plan is to have a charger, Bluetooth, handsfree, and motherboard (PCB) assembly by 2022. Housing and other plastic parts manufacturing to start in 2023, and stage 4 is to make display and battery by 2025.

For all these steps, big Chinese and Korean players should come and assemble here. PM Imran Khan should take this initiative and talk at the government-to-government level. The ground is being laid. The industry players are charged, the gaps in cellphone and data penetration still exist and the government needs to work on rolling the right infrastructure. The smartphone assembly could well be the first step of Pakistan venturing into the tech hardware.

Riaz Haq said...

Pakistan: 1.2 million #smartphones manufactured in first two months of 2021. These phones were manufactured at the 33 local #mobile devices assembly plants in #Pakistan. #manufacturing – Gulf News

The number of smartphones assembled and produced in January and February 2021 indicate a significant increase as compared to the last two years. The country produced 2.1 million smartphone devices in 2020 and 119,639 in 2019, according to Pakistan Telecommunication Authority (PTA).

The country has produced over 25 million mobile devices including 4G smartphones following the successful implementation of PTA’s Device Identification, Registration and Blocking System (DIRBS).

“With the successful execution of DIRBS, the local assembly industry has evolved from infancy to well-growing stage, with significant growth seen in the local assembly of smartphones,” PTA said. The system implemented in 2019 also led to a significant increase in legal imports of mobile devices.

In 2020, Pakistan approved its first mobile device manufacturing policy to attract investment and encourage manufacturers of major cell phone brands to set up plants in Pakistan.

Job opportunities
The policy also aims to create more job opportunities in Pakistan, create smartphone research and development centers and boost the production of electronic equipment in Pakistan.

The government’s offered several tax incentives and abolished withholding tax on locally assembled phones which encouraged the investors to set up companies in Pakistan, says Minister for Information Technology and Telecommunication Syed Amin ul Haque.

Leading smartphone brand Infinix currently has the largest mobile phone production and assembly plant in Pakistan where 3 million units are produced each year.

Vivo, Airlink and Advance Telecom are the three new companies that will soon establish their manufacturing units in Faisalabad, Lahore and Karachi.

PTA also received several mobile device manufacturing applications after finalizing its mobile device manufacturing regulations which “will help create more jobs in this technical sector, as well as enable consumers to buy locally manufactured mobile devices.”

5G connectivity
Pakistan’s telecom sector offers attractive investment opportunities as it boasts of 178 million mobile phone subscribers with 93 million 3G-4G users, according to the January 2021 data.

Pakistan is also set to launch 5G mobile phone connectivity by December 2022 following a successful trial by PTA in February 2021.

The demonstrations included remote surgery, cloud gaming and overview of anticipated 5G technology applications for social and economic development of Pakistan.

“With the successful 5G trial in a limited environment, we believe that this technology will unlock new realities for eHealth, smart homes and cities, agriculture, autonomous vehicles, cloud computing, Internet of Things and Artificial Intelligence” Nadeem Khan, acting CEO of PTCL Group said.

Riaz Haq said...

#Pakistan Engineering Development Board on #mobile #phone #manufacturing : TranssionTecno’s Itel, Infinix & Tecno are producing 650,000 units per month in #Karachi. Airlink’s plant in #Lahore has production capacity of 500,000 to 800,000 units per month.”

In recent news, the Engineering Development Board (EDB), which is a technical arm of the Ministry of Industries and Production (MoIP), has begun working on a framework for the local assembly of tablets, smartphones, and other related mobile accessories in the near future.

The MoIP further stated that the smartphone industry could be larger than the existing automotive industry in the upcoming years due to the high demand for devices across the country. Hence, this report has been formulated in line with the Mobile Device Manufactur­ing Policy of the Pakistan Telecom Authority, whereas the manufacturing plants fall under the ambit of the EDB.

EDB further added:
“TranssionTecno, Kara­chi-based company assembles three brands including Itel, Infinix, and Tecno, has increased local assembly from 150,000 units to 650,000 units per month. Airlink Communication Ltd has commenced its test trials at its plant in Lahore, and has the production capacity of 500,000 to 800,000 units per month.”

Moreover, the EDB General Manager Policy Asim Ayaz stated that this policy provides sufficient advantage to the local manufacturing of smartphones especially below the price range of $200 in comparison with imported sets which normally are too costly for consumers to purchase.

Riaz Haq said...

Smartphone brands in Pakistan:

The smartphones of Infinix have become popular for rendering quality products with excellent specs and features at an affordable cost, Because of this, it has witnessed growth in terms of value in the Pakistani market for the whole year. Its value rose from 11.6% in Q1 of 2020 to 27.6% in Q2 of 2020. Afterward, it witnessed a slight decline of 6.5 % in Q3 of 2020 then again increased a bit to 23.4% in Q4 of 2020. Even if you see the last four quarters, its value has remained constant without large fluctuations. Similarly, in terms of units, its share has also witnessed a similar trend, it increased in Q2 and witnessed a bit of decline in Q3 of 2020 and again jumped to 27.5% in Q4 of 2020.

The smartphones of Vivo are also popular in the Pakistani market. Due to this, they are also witnessing growth in terms of value in the recent era. Their market value of Vivo witnessed a positive trend except for Q2 in which it saw a decline. In the last two quarters, its share increased from 17.1 % in Q3 of 2020 to 22.2 % in Q4 of 2020. Similarly, in terms of units sold, a similar trend has been followed. The decline was only witnessed in Q2 of 2020 while in the last two quarters its share has increased from 15.3% in Q3 of 2020 to 20.2% in Q4 of 2020.

As Tecno and Infinix are subsidiaries of the same parent company, So the notion is the same, providing quality products at an affordable price. Therefore, its value has also not much fluctuated and seen a bit of decline in Q3 of 2020 after increasing in Q2 of 2020 as you can see in the above-mentioned graph. But again its value rose from 9.5 % in Q3 of 2020 to 14.3 % in Q4 of 2020. Simultaneously, in terms of units sold, its share has increased and seen a constant trend from 16.5 % in Q3 of 2020 to 19.0 % in Q4 of 2020.

iTel is making gradually evolving in the Pakistani market because of its budget price. In terms of units sold, its share has not much fluctuated. It has seen a bit of decline in the Q2 of 2020 but its share increased from 5.5% in Q3 of 2020 to 8.8% in Q4 of 2020.

Oppo is renowned for providing the best camera phones. It has been witnessing a rising trend in 2019 but this time around its share has been falling in all Q1, Q2, and Q3 quarters as you can see in the graph, and its share in terms of value has fallen to 10.4 % in Q4 of 2020.

Unfortunately, the tech giant Samsung has not been able to grasp a major portion of the market share. However, its share hasn’t witnessed many fluctuations both in terms of units and value. In terms of units, its share increased in Q1 of 2020 and decreased in Q2 of 2020 then increased to 8.6% in Q3 of 2020 and fallen again 8.0 % in Q4 of 2020. However, on the other side, in terms of value, it has witnessed a growth of 0.1 % in the last quarter and only seen a decline in Q2 of 2020.

The other smartphone brand share include Huawei, Xiaomi, Realme, Apple etc. These brands are also seeing a decline in the local smartphone market. In terms of units sold, their share has decreased significantly from Q1 of 2020 to Q4 of 2020. Similarly, in terms of value, their share has decreased from 25.6 % in Q1 of 2020 to 17.5 % in Q4 of 2020. The tech-giant Huawei due to the non-availability of Google service has literally vanished from the local market.


The afore-mentioned data is updated and taken from a very reliable source. If you have any queries regarding it, you can tell share them in the comment section!

Riaz Haq said...

Hammad hopes smartphones sector to be bigger from automobile industry

:Federal Minister for Industries and Production Hammad Azhar expressed the hope that smart phones manufacturing sector would prove to be even bigger from automobile industry in Pakistan and in next 10 years, its export revenues might be equal to country’s textile sector.

He was addressing as chief guest at the inaugural ceremony of Airlink Smartphone Assembly Line here at Quaid-i-Azam Industrial Estate Kot Lakhpat on Saturday.

Airlink Chairman Aslam Hayat Piracha, CEO Muzaffar Hayat Piracha and Engineering Development Board (EDB) Chairman Almas Hyder also spoke on the occasion, while Lahore Chamber of Commerce and Industry (LCCI) President Mian Tariq Misbah and a large number of businessmen and industrialists were also present.

Hammad Azhar said that effective and well-conceived industrial policies of the PTI government were now resulting into industrial revolution and robust economic growth.

He mentioned that when PTI came into government in 2018, around 70 to 80 per cent of smart phones sold in the local markets were smuggled lot. Curbing mobile phones’ smuggling was a herculean task, he continued, the government studied anti-smuggling strategies of other countries, and introduced DIRBS (Mobile Devices Identification, Registration and Blocking System) under which no mobile phone could be activated in Pakistan without clearing/paying all relevant duties and taxes.

“We have also removed all the reservations and apprehensions of the traders and all other stakeholders in this regard and due to effective policies of the government, there is no smuggled phone in the local markets and the government is collecting 60 to 70 billion rupees duty/tax from mobile phones. These measures also created ample space in the local market for the local manufacturers of smart phones,” he maintained.

Federal Minister added that government had also introduced Mobile Phones Manufacturing Policy-2020 and now five major players of this sector were setting up their manufacturing units in Pakistan.

“This is our landmark journey and now we are moving from local market towards export of smart phones,” he said and cited that Vietnam’s annual export revenues from mobile phones export stood at US $ 45 billion, which forms 25 per cent of its GDP.

Riaz Haq said...

Non-textile exports rise in 8MFY21

The exports of engineering goods went up 19.74pc and surgical instruments 4.92pc. In the engineering sector, the export of electric fans posted over 15pc growth followed by transport equipment 0.95pc and other electrical machinery 17.16pc respectively.

Riaz Haq said...

GST removal on locally-assembled units: Samsung, OPPO may start manufacturing cellphones

M/s Samsung and M/s OPPO are likely to start local assembly in Pakistan soon after removal of sales tax on locally assembled mobiles from above $ 200 category.

Mobile Device Manufacturing Policy 2020 was approved by the ECC in May 2020. The decision was subsequently ratified by the Cabinet on June 2, 2020.

The mobile device manufacturing policy provides sufficient advantage to the local manufacturing of mobile phones especially below $ 200 category in comparison with imports in completely built condition. M/s VIVO, M/s Airlink Communications, M/s Inovi Telecom are amongst the new investors in local assembly of mobile phones that have already started their trial production in February 2021.

The combined capacity of these three companies is more than 1 million mobile handsets per month whereas M/s Transsion Tecno, a Karachi based company assembling three famous brands including Itel, Infinix and Tecno , has increased local assembly from 150,000 units to 650,000 units per month owing to increase in demand soon after the policy was launched. In addition to the new entrants in mobile assembly, few experienced companies like G-Five and Q Mobile was already operating in the market, while M/s Samsung and OPPO are poised to enter local assembly in Pakistan market and are probably waiting for the implementation of approved recommendation of policy to remove sales tax on locally assembled mobiles from above $ 200 category. By introduction of new players and capacity enhancement by existing companies, Pakistan will soon be able to meet major portion of local demand, which was around 3.6 million per month in CY 2020.

The local manufacturing companies are moving rapidly from 2-G non android market to the 4-G smart phones as the local manufacturing has ensured availability of mobile handsets at competitive prices to customers.

Engineering Development Board (EDB), a technical arm of Ministry of Industries and Production (MoIP) was made the secretariat of Mobile Policy.

The policy has provisioned a 3 % export rebate for the local companies to enter into export market. From the initial success of the policy and increased demand in local and international market, the local assemblers are optimistic about export of locally assembled mobile phones.

The mobile phone manufacturing industry is expected to become larger than the automotive industry of Pakistan in terms of turnover in a few years and employment is expected to grow manifold. To further boost the electronics sector, work has already started on preparing appropriate framework for local assembly of tablets, allied equipment and mobile accessories in near future in line with its vision to improve the entire eco system, and make this the fastest growing sector in terms of employment and exports in the near future.

Riaz Haq said...

Smartphone manufacturing get a boost

Smartphone manufacturing policy was unveiled in March 2020. And by now there are commitments from a few players to assemble 1.5 million units a month – 18 million units per annum in a year’s time. Last week, Airlink did a launching ceremony of its factory situated in Lahore. The factory is following international standards and has a capacity to produce 500,000 units a month with a plan to ramp up the assembly to make 800,000 units each month by April 2021 in full three shifts. Based on seasonality and other demand factors, the company is geared up to produce 6 million units a year.

Apart of Airlink, another factory in Karachi has a capacity to produce 6 million units a year. These two factories are functional. Airlink was into the mobile phone distribution business and is now vertically integrated from assembling to retailing. The other company - Transsion Tecno has a long experience of manufacturing in automobile parts. Another player, Vivo has also bought land for factory in Faisalabad and is panning to produce 300,000 units a month. Yet another company Inovi Telecom’s claim is to assemble 200,000 units a month.

Combining all these, around 18 million units a year (1.5mn units a month) will be produced in Pakistan by 2022. Right now, the market size of smartphone is around 36 million units a year – mainly relying on imports. This market size has a potential to grow as a good chunk of consumers are on feature phones and these may slowly transit to smartphones. Plus, every year, there are around 2 million youth coming of age for smartphone use.

That is why Samsung and other players are thinking about starting to assemble in Pakistan. Samsung is big in Pakistan and is catering to high, middle, and low-end smartphones. In the low and medium size, the company must come in local assembling to remain viable – as per new policy, the smartphones under $200 price would not be viable to sell as imported units.

The existing two players (Airlink and Tecno) are contract manufacturers. Samsung is eying a partnership with a contract manufacturer in Pakistan. It is in talks with a few select groups in Pakistan for partnership including biggies like Nishat and Lucky. Samsung is also considering Airlink for partnership – the edge Airlink would have is its expertise in selling.

Smartphone assembling is a low capex and high working capital business. Airlink’s capex is around Rs600-700 million; but its working capital requirement is much bigger. If it sells at an average price of $60 per unit, for 500,000 units, it will be selling around Rs5 billion worth of phones a month. The WC need would be somewhere around Rs20 billion (considering three cycles a year). The company has arranged the working capital from bank credit lines; but is also planning to list on the stock exchange. This will be first of its kind listing on the PSX.

Riaz Haq said...

#Samsung plans #smartphone assembly in #Pakistan. Smartphone imports in Pakistan have swelled by 63% to $1.860 billion in 11MFY21 from $1.138bn in the same period last year. There are over 100 million #mobile #broadband subscribers. DAWN.COM

South Korean tech giant Samsung has been in talks with three investors for setting up a mobile manufacturing unit in Pakistan.

Sources said out of three parties, one has a franchise from Korea which has already set up vehicle assembling plants in Pakistan under Auto Development Policy (ADP) 2016-21, while other two are different parties.

They said so far no agreement has been signed as Samsung, after short listing various companies, is in the process of finalising its plan to award the licence to one of the companies for cellphone manufacturing.

The world’s biggest smartphone maker said in an earnings estimate on Wednesday that it expected operating profit of around 12.5 trillion won ($11 billion) for April to June, up from 8.15 trillion won a year earlier.

Companies being shortlisted for award of licence

“The Korean company aims to start local assembly of cellphones in the last quarter of this year,” a source, who is looking after the development in the mobile phone sector, told Dawn on Wednesday.

Market sources said Samsung may prefer the option to ink the agreement with one of the Korean companies operating in Pakistan owing to comfort level which it may not find with non-Korean firms.

The Engineering Development Board (EDB), an arm of the Ministry of Industries and Production (MoIP), approved Mobile Device Manufacturing Policy (MDMP) in 2020 and so far 21 companies have been given the green signal for mobile device manufacturing authorisation from March to June 2021.

As per EDB list, factories’ locations include Rawalpindi, Karachi, Lahore, Faisalabad and Islamabad. Some prominent brand names include Nokia, Oppo, Infinix, Tecno, Itel, Vivo, Alpha, Realme, VGOTEL, DCODE, Calme, Xcell, Spice, TCL, Alcatel, etc.

Sources said that the government has framed MDMP to encourage foreign players to take a plunge in Pakistan for setting up cellphone manufacturing unit. The aim is to produce the product under the banner of “Make in Pakistan” and to discourage imports.

Cellphone imports, as per figures of Pakistan Bureau of Statistics (PBS), have swelled by 63pc to $1.860 billion in 11MFY21 from $1.138bn in the same period last fiscal year.

According to the Economic Survey 2020-21, during July 2012 to February 2021, telecom sector has attracted over $3.9 billion of Foreign Direct Investment (FDI). The FDI in telecom during July-February FY21 was $101.1 million. Telecom operators have invested an amount of $363.9m during July-December FY21.

The main driver behind this investment is the cellular mobile sector which has invested $253.5m during the period. The overall investment in the telecom sector during the first eight months of FY21 crossed $465m. Pakistan’s cellphone subscribers have reached 183.48m till May 2021.

Riaz Haq said...

#China #tech-giant Xiaomi to Set up Local #smartphone assembly unit in #Pakistan. Xiaomi is following the footsteps of other major brands like Tecno, Infinix & Realme which have recently opened their local #manufacturing units in Pakistan. #mobilephones

In a landmark development, the Chinese tech giant Xiaomi has announced that it will set up a local assembly unit in the country in three to four months, according to sources. The latest development will not only generate employment opportunities for the indigenous people but will also boost the local smartphone manufacturing space in the country. Furthermore, the local manufacturing of smartphones will also attract foreign direct investment (FDI) and ramp up a foreign exchange through exports.

Tech-giant Xiaomi to Set up Local Assembly Unit in Pakistan: Source
Basically, Xiaomi is following the footsteps of other major brands like Tecno, Infinix, Realme, etc. who have recently announced to open their local manufacturing unit in Pakistan. It will greatly benefit the company as Xiaomi is currently one of the most loved brands in Pakistan. It can be evident if we look at the sale of its recently launched devices like Mi 11, Note 10, etc. The primary reason behind its huge demand is that it renders quality, consumer-centric (gaming phones, camera phones, etc.), and affordable products.

Furthermore, as we know that Xiaomi deals in a range of accessories and IoT products. So if the company’s smartphone local assembly becomes a success story then the company will surely install other product manufacturing assemblies as well.

Currently, Pakistan is the 7th largest importer of mobile phones with a humungous market size of over 40 million users. Thus, consequently, local manufacturing will also save foreign exchange on mobile phone imports.

Riaz Haq said...

Lucky Motor to produce of Samsung-branded mobile #smartphone in #Pakistan beginning in December 2021. Plant will be located at LMC’s existing plant facility producing vehicles at Bin Qasim Industrial Park, Special Economic Zone, Port Qasim, #Karachi.

Lucky Motor Corporation (LMC), a subsidiary of Lucky Cement Limited, has entered into an agreement with Samsung Gulf Electronics Co., FZE (Samsung) for the production of Samsung-branded mobile devices in Pakistan, stated a notice sent to the country’s stock exchange on Friday.

“In pursuance of this transaction, LMC has also initiated the process of seeking necessary regulatory approvals to carry on the said business and, in this endeavor, has filed an application with the Pakistan Telecommunication Authority (PTA) for securing the license,” added the notice.

The notice added the production facility for producing Samsung mobile devices will be located at LMC’s existing plant facility producing vehicles at Bin Qasim Industrial Park, Special Economic Zone, Port Qasim, Karachi.

Secretary informs parliamentary panel: 'Samsung poised to enter local market; two firms short-listed'

“The production facility is anticipated to be completed by end of December 2021. That further information on the amount contemplated to be invested in the production facility and the capacity thereof shall be discussed between the Parties (Samsung and LMC) in due course of time.”

LMC is currently engaged in the business of manufacturing, assembly, marketing, distribution and sales of Kia and Peugeot branded vehicles, parts and accessories thereof, in Pakistan.

The development comes as a major landmark for Pakistan that has been pushing to join the league of smartphone manufacturing countries.

In a bid to boost Pakistan's telecom and manufacturing sector, some 21 new companies have been authorised to start local manufacturing/assembly of mobile phones.

Shahid H. said...

So, mobile industry is dying world over Lucky Group is going to bring second hand machinery to produce phone. They would over invoice the machinery will not pay the custom duty. Which is not corruption. Because Zardari is corrupt

Riaz Haq said...

Shahid: "So, mobile industry is dying world over Lucky Group is going to bring second hand machinery to produce phone. They would over invoice the machinery will not pay the custom duty. Which is not corruption. Because Zardari is corrupt"

Pakistan spent $2 billion on smartphone imports last fiscal year, and they're rapidly growing. I expect this import bill related to components and equipment for assembly to be significantly lower. Local assembly will also create jobs & grow exports

Riaz Haq said...

#China's Oppo to set up a dedicated assembly line in #Pakistan for Realme to produce #5G-enabled #smartphones and another for artificial intelligence (#AI) products at affordable rates. #Mobile #technology #Telecommunications #Internet #Broadband

Many smartphone companies have expressed their intention to begin production of mobile phones in Pakistan after cellular giant Samsung collaborated with the Lucky Group to produce high-quality phones in the country.

Now, the companies are making efforts to introduce 5G phones in the local market.

Chinese smartphone manufacturer Realme has shared plans to launch 5G-enabled phones in Pakistan at affordable prices after its parent announced the establishment of a local assembly line in the country.

Speaking to The Express Tribune, Realme Regional Marketing Director Sherry Dong said that the brand received an excellent reception in Pakistan, hence the company was now prioritising the country to introduce 5G mobile phones.

She added that the company was the first smartphone brand in Pakistan to sell over a million devices in less than a year, which was a significant milestone and paved the way for new investments and introduction of diverse products.

She announced that the company was planning to set up a local assembly line for its products after which top-notch technology would be available in Pakistan at affordable prices.

Read More: Why 5G is still out of Pakistan’s grasp

A few years ago, Realme’s parent company, Oppo Mobile Telecommunications Ltd, had expressed its interest in setting up a mobile assembly plant in Pakistan.

Giving further details, she said that the facility would have two separate assembly lines - one for each brand.

With a dedicated assembly line for Realme, the company will introduce 5G-enabled mobiles as well as other artificial intelligence (AI) products at affordable rates.

“5G is the future, therefore, we have to provide up-to-date technological products to Pakistani consumers at affordable prices,” she added.

The company utilises online marketplaces to promote its products because e-commerce has grown significantly in Pakistan due to the Covid-19 pandemic.

Keeping this in view, the management of the smartphone company has decided to introduce its own digital store in Pakistan’s online marketplace.

“We entered into partnerships with a couple of local companies to sell our products, but now we have decided to establish our own digital outlet in Pakistan,” she said.

Sherry added that digital platforms in Pakistan had matured over the past couple of years, but they still lagged behind regional countries.

She pointed out that the company faced some issues with Pakistan Customs as delay in release of shipments had caused shortage of its products.

Riaz Haq said...

Mobile Distributor Plans Pakistan’s Biggest Private Sector IPO

Air Link Communication Ltd. plans to raise at least 5.85 billion rupees ($36 million) through an initial public offering this month, which would be the largest from a non-state firm in Pakistan.

The Lahore-based company plans to sell new and existing shares at a price between 65-91 rupees each, Chief Executive Officer Muzzaffar Hayat Piracha said in a reply to queries Friday. It will take investor orders on Aug. 30 and 31 and then price the offering.

Pakistan has seen a record streak of IPOs this year. Air Link, which started operations about a decade ago and has since become one of the largest distributors of phones in the country, saw sales rise 50% to 3.6 million units in year ended June.

The company plans to issue 60 million new shares and Piracha will sell 30 million from his holdings, said Kamran Nasir, CEO at JS Global Capital Ltd., consultant and bookrunner to the transaction. The IPO will be the largest since Interloop Ltd. raised about 5 billion rupees in 2019.

Air Link, which has also recently expanded into mobile assembling, plans to use the funds to expand its distribution network. It aims to have 150 outlets by 2026 from 14 currently, which will boost margins together with the assembly business, said Nasir.

The company expects its revenue to triple to 129 billion rupees and net income surging 500% to 9.2 billion rupees by fiscal 2025 from 2020, according to Nasir.

Riaz Haq said...

In what seems like an odd move for all involved, Pakistan's telecommunication regulator – the Pakistan Telecommunication Authority (PTA) – has announced approval for Lucky Motor Corporation (LMC) to manufacture Samsung mobile devices.

The local automobile manufacturer is a joint venture between Lucky Group and South Korea's Kia Motors, and manufactures and distributes Kia cars built in a purpose-built plant in Karachi's Bin Qasim Industrial Park.

"The authorization to manufacture Samsung Mobile devices in Pakistan is a landmark achievement and will further revolutionize the vibrant mobile manufacturing ecosystem in the country by ensuring presence of major local and foreign players in the market," declared the regulator.

The PTA has issued similar Mobile Device Manufacturing (MDM) authorizations to 25 foreign and local companies to produce the tech in Pakistan. The devices will be both sold in the country as well as exported.

Samsung and Lucky inked the deal back in July. The production facility will be located at LMC's existing Karachi auto plant and is scheduled for completion by the end of 2021.

PTA tweeted, celebrating the job opportunity potential stemming from the new plant:

Samsung's decision to partner with an automobile manufacturer may seem unusual but, according to Pakistani brokerage and research firm Topline Securities, Samsung has form setting up factories in the region to serve domestic and export markets. In Bangladesh, for example, Samsung uses a local factory established in 2018 to produce 95 per cent of the 2.5 million mobile devices sold in-country.

Pakistani English-language daily The Express Tribune offers another reason the Lucky Group could be interested: the paper reported this week that an increase in prices for steel and other raw materials, plus shipping cost hikes, have caused a rise in vehicle prices even as COVID-repressed demand for cars was gradually rebounding.

The deal means Lucky Group has diversified into more affordable products, while Samsung has boosted local capacity, given local buyers a good reason to consider its wares, and diversified its manufacturing base.

Riaz Haq said...

Tweet from Almas Hyder, Chairman of Engineering Development Board (EDB):

Today 5500 units smart phones have been exporter from INOVI telecom to Middle East market. A good start for Pakistan.

Riaz Haq said...

#Pakistan begins #export of #smartphones . After authorisation from Pakistan #Telecom Authority (PTA), Inovi Telecom has exported 5,500 units of 4G smartphones carrying "manufactured in Pakistan" tag to the United Arab Emirates (#UAE). #electronics

"PTA congratulates the company for this landmark achievement. This is the result of concerted efforts for the development of the mobile device manufacturing ecosystem in the country," the authority said in a statement issued on Saturday.

It said that the successful implementation of the Device Identification Registration and Blocking System (DIRBS) and enabling government policies including the mobile manufacturing policy have created a favourable environment for mobile device manufacturing in Pakistan.

"As a part of this policy, Inovi Telecom Pvt. Ltd was issued mobile manufacturing authorisation by PTA on 9th April 2021," it added.

Within four months, according to PTA, the company has managed to export "manufactured in Pakistan" phones.

In recent times, the telecom sector has emerged as a prominent contributor to Pakistan’s economy as its share in the national exchequer soared 129% in 2020 compared to 2019, despite economic pressure arising from Covid-19.

In July, Lucky Motor Corporation entered into an agreement with Samsung Gulf Electronics to produce Samsung mobile phones in Pakistan at its automobile plant at Port Qasim.

In comments to The Express Tribune, Tecno Pack Telecom CEO Aamir Allawala termed the joint venture excellent development for the country

Samsung was a mobile phone giant and its decision to assemble phones in Pakistan was an indication of the success of the Mobile Device Manufacturing Policy (MDMP) launched by the government in June 2020, said Allawala.

The vision of the policy was clear i.e. by 2022, 80% of all mobile phones sold in Pakistan should be locally manufactured, he said.

The brands already being manufactured in Pakistan included Tecno, Infinix, Itel, Vivo, Oppo and Realme while Nokia was in the process of setting up a plant and kick-starting operations in September 2021, Allahwala further said.

Riaz Haq said...

Samsung's building a TV assembly plant in #Pakistan to churn out 50,000 units yearly. Samsung Electronics is also establishing a new #smartphone #manufacturing line in the country.- SamMobile

Samsung Electronics is building a new TV manufacturing plant in Pakistan. The project will be finalized in collaboration with R&R Industries, and the factory is scheduled to become functional in the final quarter of the year. The news was confirmed via Twitter by the Advisor to the Prime Minister of Pakistan, Abdul Razak Dawood.

According to the news, the building of Samsung’s new TV manufacturing plant was made possible in part by the Made-in-Pakistan policy, which provides incentives to bolster the domestic manufacturing industry.

Through its new TV factory in Pakistan, Samsung will be able to produce roughly 50,000 units every year, though it’s not clear what TV models will be made there, exactly.

Samsung will also build phones in Pakistan
Aside from the new TV manufacturing plant built in collaboration with R&R Industries, Samsung Electronics is also establishing a new mobile phone manufacturing line in the country.

This was announced by Lucky Motor Corporation a couple of months ago, the latter of which will repurpose its automotive plant at Port Qasim to assemble Samsung mobile devices. By 2022, 80% of all mobile phones sold in Pakistan could be manufactured locally, though not exclusively at the Port Qasim assembly plant.

Riaz Haq said...

OPPO #Pakistan targets 5mln #mobilephone exports. The #Chinese company has plans to upgrade its assembly plant to a #manufacturing plant in Pakistan with a target to make 5 million mobile phones per annum. #smartphone

OPPO Pakistan has plans to upgrade its assembly plant to a manufacturing plant in Pakistan with a target to make 5 million mobile phones per annum.

OPPO Pakistan CEO George Long made the announcement during his meeting with Federal Minister for Industries and Production Makhdum Khusro Bakhtyar at his office on Wednesday.

Highlighting that the company also aimed to establish a research and development centre for transfer of technology and skill development of IT professionals in Pakistan, Long said OPPO was optimistic about exporting locally manufactured sets from the country.

Welcoming the announcement, the minister said that the government of Pakistan’s investment-friendly policies have improved the business ecosystem in Pakistan.

He said that local manufacturing of mobile would not only keep prices under control for local customers, but would also enable expansion of the mobile phone industry to become a bigger player in the economy. Bakhtyar said that this growth would result in the creation of numerous employment opportunities within the industry as well as associated industries in the country.

Earlier this month, the Pakistan Telecommunication Authority (PTA) had floated the draft ‘Mobile Device Manufacturing Regulations and Authorisation’ for the promotion of domestic manufacturing of mobile phones.

Riaz Haq said...

Chinese smartphone giant Xiaomi to set up local manufacturing plant in Pakistan
Dawood says initial production of Xiaomi will be around 3 million handsets per annum

One of the world’s largest mobile manufacturers will set up a handset manufacturing plant in Pakistan, announced Adviser to Prime Minister on Commerce and Investment Abdul Razak Dawood.

On his official Twitter handle on Tuesday, he cherished that the Make in Pakistan was bearing fruits as Xiaomi had partnered up with Airlink Communications to manufacture smartphones in Pakistan.

The production facility would be established at Quaid-e-Azam Industrial Estate, Lahore, he said adding that 2.5 to 3 million handsets will be produced per year.

“The production facility will become functional in January 2022 and it will create 3,000 direct and indirect jobs,” he remarked.

In comments to The Express Tribune, Tecno Pack Electronics Chief Executive Officer (CEO) Aamir Allawala said that Pakistan was among the top 10 handset markets in the world.

He cherished that Mobile Device Manufacturing Policy 2020 had begun bearing fruits.

Allawala highlighted that investment of global mobile brands in local manufacturing was nearly nil until June 2020 despite a huge domestic market.

Until that period, the duties and taxes on completely built units (CBU) mobile phones were kept low – at the same level as their parts and components, he added.

In July 2020, the government created a reasonable differential in duties and taxes between CBU and completely knocked down (CKD)/ semi-knocked down (SKD) mobile phones under the mobile device manufacturing policy, he said.

This encouraged almost all foreign brands to start local assembly of mobile phones with a plan of indigenisation of its parts, he added.

“Currently, Tecno, Infinix, Itel, Oppo, Vivo, Realme and Nokia are producing smartphones in Pakistan,” Allawala said, adding that Samsung would begin production from December 2021 and Xiaomi from early 2022.

“By January 2022, 90% of all mobile phones sold in Pakistan will be made in the country,” he said.

The next step will be localisation of parts and boost in smartphone exports and all companies are making efforts in this regard, he added.

Talking to The Express Tribune, information and communications technology (ICT) expert Parvez Iftikhar termed Dawood’s announcement great development provided that manufacturer sticks to smartphones only.

It would not only provide jobs and other benefits to the economy but also help in increasing 4G penetration in the country, which is a pre-requisite for 5G, he added.

“It is time to not just celebrate but also to build upon it and increase our bandwidth in terms of exports, local infrastructure, policy making as well as setting a vision,” according to SI Global CEO Noman Ahmed Said.

He emphasised the need to work towards meeting and matching international standards and inculcate that skill at the collegiate level for youth engagement.

The net smartphone sales were around 1.3 million this year, which indicated the booming market share that we were currently heading towards, granting more employment opportunities as well, he added.

Riaz Haq said...

#Samsung starts producing mobile phones in Pakistan. #Pakistan imported #smartphones worth $644.673m in first 4 months (July-October) of 2021, up from $557.961m during the same period of last year, registering a growth of 15.54%. - DAWN.COM

KARACHI: One of the world’s largest manufacturers of mobile phones, Samsung, has finally started production in Pakistan, lifting hopes of the authorities and the industry that this would cut down the import bill of the country in the months to come.

The development came to light on Tuesday at a meeting of the company’s top managers with the Senators who visited the production site in line with the plan to receive a briefing on the growing new sector and challenges ahead for the cellphones manufacturing industry in Pakistan.

“We were informed that Samsung has formally started its production,” Faisal Subzwari, chairman of the Senate’s Standing Committee on Industries and Production, told Dawn.

He headed a delegation of members of the Senate panel which visited Samsung’s production unit and an auto manufacturing plant, and held a meeting with the management of Export Processing Zone.

The company aims to manufacture around 3m handsets every year

“It’s really good to know that the company has started production within a short span of four months,” Mr Subzwari said. “We visited the production facility which was designed on modern lines and obviously the local manpower, support of local industry and conducive environment provided by the government led to such achievement. But still I believe that we need to move forward from just growing in the assembling area to localisation of the industry.”

The country has witnessed robust growth in local production of cellular phones. During the first 10 months of this year, the Pakistan Telecommunication Authority (PTA) data says, the production of mobile phones by local manufacturing plants has almost doubled to 18.87 million against the import of mobile phones which stood at 45m.

However, despite the increase in local production of mobile phones, the import remained on a higher side. The PTA data says that mobile phones worth $644.673m were imported during the first four months (July-October) of 2021 compared to $557.961m during the same period of last year, registering a growth of 15.54 per cent.

The industry believes that it may take time to achieve the desired results but with the fresh start in an absolutely new industrial avenue, things have finally started moving in the right direction.

“With production of around 250,000 to 300,000, we aim to produce around 3m cellphones every year,” Mohammad Ali Tabba, chief of the Lucky Group which partners with Samsung to produce cellphones in Pakistan, told Dawn. “The whole production line is manual with no robotic assistance. So you can imagine how much workforce is required offering employment in this absolutely new area of engineering in Pakistan.”

He agreed that the country needed to move towards localisation from its current status of assembling industry and believed it was more the role of the industrial sector than the government to go for modification and compatibility.

“It’s not only the local production of cellphones but also a host of opportunities which it brings. From employment to investment and from export opportunities to local capacity building, it carries immense potential,” said Mr Tabba.