TC March - April 2016
You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
www.tradechronicle.com Vol. 63 Issue Nos. 03 & 04 <strong>March</strong>-<strong>April</strong> <strong>2016</strong> Rs. 200/-<br />
Trade Chronicle<br />
PAKISTAN'S LEADING MONTHLY MAGAZINE OF COMMERCE, INDUSTRY & PUBLIC AFFAIRS<br />
Circulation Audited by<br />
ABC<br />
CONTENTS<br />
Founded by:<br />
Late Abdul Rauf Siddiqi<br />
Editor:<br />
ABDUL RAB SIDDIQI<br />
Special Feature's Editor:<br />
ABDUL RAFAY SIDDIQI<br />
Manager:<br />
Shoukat Hayat<br />
<br />
<br />
<br />
EDITORIAL<br />
Strategic Trade Policy Framework for<br />
2015-18: Export target looks challenging<br />
COMMENTS<br />
New Auto policy: hopefully attracts fresh investors<br />
Water crisis in Gwadar port<br />
Editorial & Business Office:<br />
Iftikhar Chambers<br />
Altaf Hussain Road<br />
Karachi-74000<br />
Phone: 92-21-32631587<br />
Fax: 92-21-32635007<br />
E-mail: arsidiqi@ptcl.net<br />
******<br />
Business Representative in<br />
Islamabad<br />
Waseem Ahmed Subhani<br />
Mob: 0333-5332280<br />
Editorial Representative in<br />
Islamabad<br />
M. Ajaib Malik<br />
Mob: 0300-5259936<br />
ARTICLES & FEATURES<br />
Special Report on Pakistan Day<br />
Turning dreams into reality<br />
The 12th International Safe Secure Exhibition - <strong>2016</strong><br />
concludes successfully<br />
FFBL – An ICON of Excellence<br />
SBP says strong LSM output to bolster growth<br />
Economy picking up; inflation behaving despite challenges<br />
By Shahnawaz Akhter<br />
The ‘E’ in CPEC<br />
By Aadil Nakhoda<br />
CPEC’s first phase to be completed<br />
by 2018: minister<br />
Trade policy sets export target at $35bn<br />
Representative in Lahore<br />
Humayun Iqbal<br />
Mob: 0322-4438182<br />
******<br />
Subscription Rates:<br />
Annual Rs. 1,000/-<br />
Foreign by Air Mail $75/-<br />
******<br />
Publisher:<br />
Abdul R Siddiqi<br />
Printer:<br />
Chronicle Printers<br />
Altaf Hussain Road<br />
Karachi-74000<br />
<br />
<br />
<br />
<br />
<br />
<br />
<br />
REGULAR FEATURES<br />
Cement Industry<br />
People & Events<br />
Automobile News<br />
Port & Shipping News<br />
Banking & Insurance News<br />
Telecommunication News<br />
Aviation & Hotel News<br />
Trade Chronicle - <strong>March</strong> - <strong>April</strong> <strong>2016</strong> - Page # 05
TRADE CHRONICLE<br />
We begin with the name of Allah, the Magnificient<br />
From<br />
Editor's<br />
Desk<br />
ABDUL RAB SIDDIQI<br />
Strategic Trade Policy Framework for<br />
2015-18: Export target looks challenging<br />
The long delayed Strategic Trade Policy Framework for 2015-18<br />
was finally announced by Federal Commerce Minister Engineer<br />
Khurram Dastgir Khan in middle of <strong>March</strong> this yearr. Government<br />
claims that keeping in view current trends in global trading<br />
environment and the trend in Pakistan's exports, the mid-term<br />
strategic trade policy framework was formulated through an extensive<br />
consultative process with all stakeholders spanning over almost a<br />
year. Enhancement of annual exports to US$ 35 billion, Improve<br />
export competitiveness, transition from ‘factor-driven’ economy to<br />
‘efficiency-driven’ &‘innovation-driven’ economy and increase share<br />
in regional trade were envisaged by June 30, 2018. We hope sincere<br />
efforts by all stakeholders; can pave the way to achieve this target,<br />
provided government resolve major export refund issue, energy<br />
crisis and other factors impacting business cost.<br />
The ingredients of policy looks appropriate as all exportable items<br />
were covered, except ambitious export target of US$ 35 billion,<br />
which looks challenging, as export more or less stagnate for last<br />
few years on economic meltdown all over the world. Pakistan’s<br />
exports crossed the US$ 25 billion for the first time in 2013-14.<br />
However, year 2014-15 had experienced decline in exports of about<br />
4.78% due to exogenous shocks coupled with domestic factors.<br />
Budgetary allocation of Rs. 6 Billion has been approved to<br />
implement the trade policy initiatives for year 2015-16. Let’s see<br />
whether government would release it in letter and spirit or may<br />
reportedly carry over in next budget to cover budget deficit of current<br />
financial year.<br />
A cursory looks of trade policy reveals that it consists of four pillars,<br />
in marked contrast to previous policies that either focused on import<br />
substitution or export promotion: product diversification and<br />
sophistication which one would hope envisages producing<br />
exportable products rather than exporting what we produce, market<br />
access, institution development and trade facilitation.<br />
The government announces some incentives for leather,<br />
pharmaceutical, fisheries and surgical instruments, keeping in view<br />
their export potentials. Matching grant upto a maximum of Rs. 5<br />
million for specified plant and machinery or specified items to<br />
improve product design and encourage innovation in SMEs – a good<br />
offer from government. Another wise step of government is to<br />
provide matching grant to facilitate the branding and certification for<br />
faster growth of the SME and export sector in Pakistan’s economy<br />
through Intellectual Property Registration (including trade and service<br />
marks), Certification and Accreditation.<br />
Trade Chronicle - <strong>March</strong> - <strong>April</strong> <strong>2016</strong> - Page # 06
TRADE CHRONICLE<br />
After successful establishment<br />
of Services Export Development<br />
Council and Leather Export<br />
Development Council, Ministry<br />
of Commerce intends to venture<br />
into non-traditional export<br />
sectors where value-addition<br />
and product diversification can<br />
be achieved. Accordingly,<br />
Pharmaceutical & Cosmetics<br />
Export Promotion Council and<br />
Rice Development & Export<br />
Promotion Council will be<br />
establishedd.<br />
The policy also carries some<br />
incentive for agriculture sector.<br />
It includes, 50% support on the<br />
cost of imported new plant and<br />
machinery for specified underdeveloped<br />
regions and 100%<br />
mark-up support on the cost of<br />
imported new plant and<br />
machinery on all Pakistan basis.<br />
The incentives provided to<br />
agriculture sector were<br />
commendable and their<br />
mechanism should be<br />
publicized.<br />
Experts and commentators<br />
believe that we should follow on<br />
the foot step of our regional<br />
competitors who extend massive<br />
subsidies on fertilizer and other<br />
inputs, including high quality<br />
seed as well as on the<br />
maintenance and expansion of<br />
the irrigation system.<br />
In order to diversify our export<br />
markets, an outreach strategy for<br />
Africa, Commonwealth of<br />
Independent States (CIS) and<br />
Latin America is being adopted.<br />
As part of the market penetration/<br />
outreach strategy, these new<br />
markets will be explored through<br />
Market Research, Opening of<br />
new Trade Missions, Exhibitions<br />
and Delegations, Linkages<br />
through Export Import Bank<br />
[EXIM Bank].<br />
Business community has<br />
expressed mixed reaction over<br />
Trade policy, while major export<br />
earning industries such as textile<br />
and leather have lodged their<br />
reservations.<br />
All Pakistan Textile Mills<br />
Association has brought in the<br />
notice of the government that<br />
textile industry is being<br />
devastated due to High Cost of<br />
Doing Business. For the<br />
restoration of viability and growth,<br />
the textile industry solicits,<br />
complete withdrawal of gas<br />
infrastructure development cess<br />
(GIDC) levied on the textile<br />
industry, immediate payment of<br />
all pending refund claims by<br />
FBR, zero rating of sales tax<br />
facility to entire textile chain,<br />
immediate imposition of 15%<br />
regulatory duty on dumped<br />
import of yarn and fabrics under<br />
chapter 55, provision of 5%<br />
DLTL on the entire textile chain,<br />
due to crop failure import duty<br />
on cotton should be abolished<br />
immediately. Similarly, Gulzar<br />
Firoz, Chairman Pakistan<br />
Tanners association (PTA) said<br />
the trade policy lacked of<br />
incentives for exports and<br />
particularly there is hardly any<br />
incentive for the leather sector.<br />
He said that even some important<br />
and necessary incentives which<br />
were in previous trade policy are<br />
missed out.<br />
We hope government would<br />
arrange meetings with<br />
stakeholders in post policy<br />
scenario to accommodate their<br />
issue in next fiscal budget.<br />
EDITORIAL<br />
COMMENTS<br />
New Auto policy:<br />
hopefully attracts fresh<br />
investors<br />
The long awaited Automotive<br />
Development Policy (ADP) for<br />
the upcoming five years, was<br />
announced by Minister for<br />
Defence Khawaja Asif in middle<br />
of <strong>March</strong> this year. The primary<br />
focus is tilted towards the<br />
facilitation of higher volumes,<br />
encouragement of newer<br />
investments and enhancement<br />
of competition together with<br />
insurance of consumers’<br />
welfare.<br />
Experts believe that this would<br />
potentially encourage foreign<br />
players to enter the Pakistani<br />
market, however, since the<br />
setting of new plants will take<br />
some time, existing players are<br />
expected to continue benefiting<br />
from the rise in demand. The<br />
policy intact the age limit for<br />
imported vehicles at 3yrs. The<br />
policy hopefully, will bring<br />
investment in auto sector which<br />
is flooded with Japanese makers;<br />
the revival of existing nonoperational<br />
or closed assembly<br />
and manufacturing facilities since<br />
before June 30, 2013 and by auto<br />
parts maker.<br />
The policy also offers step-wise<br />
reduction of 10% in duties on<br />
CBUs of 1800cc and below, each<br />
year in FY18 and FY19. This<br />
would provide sufficient cushion<br />
for the existing players till FY18<br />
and would significantly support the<br />
sales of the new model launches<br />
expected in FY17.<br />
Trade Chronicle - <strong>March</strong> - <strong>April</strong> <strong>2016</strong> - Page # 07
TRADE CHRONICLE<br />
Expert’s comments that the policy<br />
itself sounds impressive and offers<br />
some tax incentives for new<br />
entrants into the market, but it<br />
does not go far enough to tackle<br />
the existing monopolies. Allowing<br />
the continued import of used cars<br />
is not a policy, it is a necessity<br />
since existing car assemblies in<br />
the country are barely able to<br />
meet the demand. With European<br />
companies, including<br />
Volkswagon, and some Chinese<br />
investors expressing interest in<br />
beginning manufacturing in<br />
Pakistan, it would have been<br />
prudent for the government to be<br />
able to present a comprehensive<br />
package of preferential incentives<br />
for new companies to enter the<br />
market.<br />
The local industry has termed the<br />
policy balanced and hope it help<br />
kick start growth and provide<br />
more choices to consumers.<br />
However, Vendors have rejected<br />
it while Association of Pakistan<br />
Motorcycle Assemblers pointed<br />
out that the new auto policy had<br />
nothing for Chinese bike<br />
assemblers. The Federation of<br />
Pakistan Chambers of<br />
Commerce and Industry (FPCCI)<br />
remarked it as encouraging but far<br />
from perfection. We suggest<br />
government should ask the<br />
existing three major auto<br />
manufacturers who reportedly are<br />
mere assemblers to increse<br />
levels of deletion and localisation.<br />
The new auto policy is good, but<br />
it can only achieve its objectives<br />
of high level of localisation, lower<br />
prices with high quality products<br />
if the deletion policy is given at the<br />
time of granting approval to other<br />
major international auto<br />
manufacturers who show an<br />
interest in entering the Pakistani<br />
market. The given deletion<br />
schedule should be strictly<br />
implemented. This will help<br />
expand local vendor industries,<br />
encourage healthy competition<br />
and generate more employment<br />
and investment in locallyassembled<br />
spare parts.<br />
Water crisis in<br />
Gwadar port<br />
Pakistan’s Gwadar port is<br />
facing acute drinking water<br />
shortages after a three-year<br />
drought in the arid province of<br />
Balochistan and as a result, the<br />
Akara Kaur dam, the only<br />
source of water for Gwadar and<br />
surrounding areas, has almost<br />
dried up, media reports point<br />
out. Such kind of news attracts<br />
concern of Pakistani when the<br />
port city will become an<br />
international business hub at<br />
the end of the China Pakistan<br />
Economic Corridor (CPEC) –<br />
an ambitious US $46 billion<br />
project linking the deep water<br />
port on the Arabian Sea with<br />
the city of Kashgar in western<br />
China.<br />
CPEC in no doubt game<br />
changer for Pakistan’s<br />
economy and any irritants in its<br />
way should be removed before<br />
it impact viability of project.<br />
Government considers water<br />
supply to Gwadar Port is a key<br />
challenge. Hence a Rs11.2bn<br />
project to develop water<br />
treatment, supply and<br />
distribution was taken in hand<br />
to connect Swad and Shadikaur<br />
dams with Gwadar. However,<br />
media reports suggest that as<br />
of <strong>March</strong> 15, the Gwadar Port<br />
Authority (GPA) is still not clear<br />
on the financial modality of the<br />
Swad-Gwadar City Water<br />
Supply, nor about its second<br />
phase — connecting Shadikaur<br />
dam. The GPA is not aware if<br />
the project is to be developed<br />
through grant, an interest-free<br />
loan or a commercial loan from<br />
China. This confusion must be<br />
addressed.<br />
Furthermore, the warning from<br />
the governor of Balochistan<br />
regarding the risks that the<br />
depleting water resources of<br />
his province pose to the China-<br />
Pakistan Economic Corridor<br />
needs to be taken seriously.<br />
Today, the problem of<br />
groundwater pumping and<br />
falling water tables has become<br />
so acute that the subsidies<br />
provided on electricity for tube<br />
wells is reportedly larger than<br />
the cost of building the dam and<br />
its water conveyance system<br />
for Quetta.<br />
The president FPCCI rightly<br />
called for revisiting Indus Water<br />
Treaty as it was signed when<br />
issues like climate change and<br />
environmental degradation<br />
were not on the table therefore<br />
it should be revisited to soothe<br />
reservations of Pakistan. The<br />
recent influx of investment has<br />
put more pressure on water<br />
resources.<br />
It is heartening to note that the<br />
Federal Minister for Planning,<br />
Development and Reform<br />
Ahsan Iqbal, who is leading the<br />
CPEC project, said that<br />
ministry understood the gravity<br />
of crisis and was taking urgent<br />
steps to resolve the issue. “The<br />
federal government has<br />
designed a desalination plant<br />
project in Gwadar to purify the<br />
sea water,” he noted.<br />
Trade Chronicle - <strong>March</strong> - <strong>April</strong> <strong>2016</strong> - Page # 08
TRADE CHRONICLE<br />
Message from<br />
Mamnoon Hussain<br />
President of Pakistan<br />
(On the occasion of<br />
“Pakistan Day 23rd<br />
<strong>March</strong>, <strong>2016</strong>”)<br />
The 23rd <strong>March</strong> is the Day to renew<br />
our commitment to develop the<br />
country in accordance with the<br />
principles of justice and equity, the real<br />
objective of the creation of Pakistan.<br />
On this auspicious occasion, we pay<br />
tribute to the Father of the Nation and<br />
other leaders of the Freedom<br />
Movement who facilitated the<br />
creation of Pakistan by uniting the<br />
nation through their earnestness,<br />
wisdom and unparalleled sacrifices.<br />
Let me remind you on this important<br />
occasion that Pakistan came into<br />
Message from<br />
The Prime Minister<br />
of Pakistan<br />
Pakistani Nation is celebrating the<br />
76th Anniversary of Pakistan<br />
Resolution; adopted on 23rd <strong>March</strong><br />
1940 under the inspiring leadership of<br />
Quaid-e-Azam Mohammad Ali<br />
Jinnah. It changed the course of our<br />
history. The dream was achieved in<br />
the form of Pakistan as an<br />
independent country despite great<br />
opposition and challenges. The<br />
struggle was for a state where the<br />
principles of social justice and equality<br />
could prevail to ensure peace,<br />
tolerance and prosperity in<br />
accordance with the religious beliefs<br />
and cultural values of its citizens.<br />
Today, we stand determined to<br />
preserve and protect this country for<br />
our future generations.<br />
Pakistan Day<br />
being through a long democratic<br />
struggle and now the key to its<br />
stability and development also lies in<br />
democracy. Therefore, it is essential<br />
to promote the spirit of tolerance and<br />
patience which are the fundamentals<br />
of democracy so that the existing<br />
challenges of extremism and<br />
terrorism can be overcome by the<br />
nation.<br />
The resolution galvanized the nation<br />
and millions of people sacrificed their<br />
lives for the sake of independence.<br />
Pakistan was a reality within a short<br />
span of time. Today we are<br />
confronted with unprecedented<br />
threats and challenges in the form of<br />
extremism and terrorism, but we are<br />
resolved to defeat these evils. The<br />
menace of terrorism and extremism<br />
It is an unfortunate reality that<br />
terrorism has affected all segments<br />
of the Pakistani society. The terrorists<br />
have not spared educational<br />
institutions, public places and even<br />
places of worship, which demonstrate<br />
their negative and destructive<br />
mindset. I am happy that the Pakistani<br />
nation is united against this menace<br />
and fully determined to eradicate all<br />
forms of terrorism. We can win this<br />
battle by putting an end to our<br />
differences, promoting brotherhood<br />
and tolerance. Therefore, it is<br />
imperative to promote education in the<br />
country and transfer the fruits of<br />
development to every Pakistani in<br />
order to achieve this objective. I pray<br />
to Almighty Allah to bless us with the<br />
spirit to sincerely serve our country<br />
so that we can take Pakistan to the<br />
heights of glory by following in the<br />
footprints of our great forefathers.<br />
Ameen!<br />
will be completely wiped-out from our<br />
soil.<br />
On this occasion we reiterate our<br />
resolve to ensure freedom, equality<br />
and social justice for every citizen of<br />
Pakistan as enshrined in the teachings<br />
of Islam. Our government has taken<br />
landmark initiatives to safeguard the<br />
minorities living in Pakistan and<br />
empower Pakistani women. Our<br />
endeavours are aimed at<br />
mainstreaming the marginalized<br />
segments of our society as we<br />
believe that each and every Pakistani<br />
is an equal citizen of the land.<br />
Let us pledge to offer equal<br />
opportunities for every Pakistani<br />
citizen to achieve a pluralistic society<br />
where each and every man and<br />
woman work collectively for the<br />
Contd. on page # 10<br />
Trade Chronicle - <strong>March</strong> - <strong>April</strong> <strong>2016</strong> - Page # 09
TRADE CHRONICLE<br />
ON <strong>March</strong> 23, 1940, the Muslims of<br />
the sub-continent resolved to create<br />
a separate homeland, Pakistan. The<br />
decision was neither taken in haste<br />
nor precipitated by a sudden, dramatic<br />
turn of events.<br />
Turning dreams into reality<br />
Hindus and Muslims had lived in India<br />
for centuries but had remained two<br />
distinctly different cultural entities<br />
presenting marked dissimilarities that<br />
neither time nor assimilation could<br />
erase; they were like two streams<br />
running a parallel course. So manifest<br />
and so profound were the differences<br />
that the London Times, commenting<br />
on the Government of India Act of<br />
1935, had to ungrudgingly concede:<br />
“Undoubtedly the difference<br />
between the Hindus and Muslims is<br />
not of religion in the strict sense of<br />
the word but also of laws and culture,<br />
that they may be said indeed to<br />
represent two entirely distinct and<br />
separate civilizations.”<br />
This incontrovertible realization found<br />
a more convincing elucidation in the<br />
words of Quaid-e-Azam Muhammad<br />
Ali Jinnah:<br />
“Notwithstanding thousand years of<br />
close contact, nationalities which are<br />
as divergent today as ever, cannot at<br />
any time be expected to transform<br />
themselves into one nation merely by<br />
mean of subjecting them to a<br />
democratic constitution and holding<br />
them forcibly together by unnatural<br />
and artificial methods of British<br />
Parliamentary Statutes.”<br />
The background of Pakistan<br />
Resolution is such that in 1937,<br />
provincial autonomy was introduced<br />
in the sub-continent under the<br />
Government of India Act, 1935. The<br />
elections of 1937 provided the<br />
Congress with a majority in six<br />
provinces, where Congress<br />
governments were formed. This led<br />
Contd. from page # 09<br />
progress and prosperity of our<br />
country. Pakistan was envisioned to<br />
be a state where people could freely<br />
practice their faith without any fear<br />
or threat. I am optimistic that our<br />
collective efforts based on plurality,<br />
equality and justice would make<br />
Pakistan a state as dreamted by<br />
Quaid-i-Azam Muhammad Ali<br />
Jinnah.<br />
May Allah Almighty guide us in our<br />
efforts to prove ourselves worthy<br />
inheritors of the homeland<br />
bequeathed to us by Quaid-e-Azam<br />
and other great leaders of Pakistan<br />
Movement. (Ameen)<br />
President Mamnoon Hussain and Prime Minister Muhammad Nawaz Sharif<br />
taking salute on the occasion of Pakistan Day Parade in Islamabad on <strong>March</strong><br />
23, <strong>2016</strong>. Defence Minister, Chairman Joint Chiefs of Staff Committee and<br />
Services Chiefs are also present.<br />
Trade Chronicle - <strong>March</strong> - <strong>April</strong> <strong>2016</strong> - Page # 10
TRADE CHRONICLE<br />
to the political, social, economic and<br />
cultural suppression of the Muslims<br />
in the Congress ruled provinces.<br />
The Congress contemptuously<br />
rejected the Muslim League’s offer<br />
of forming coalition ministries. The<br />
Muslims were subjected not only to<br />
physical attacks but injustice and<br />
discriminatory treatment as regards<br />
civil liberties, economic measures<br />
and employment and educational<br />
opportunities. The Congress<br />
Ministries introduced the Wardha<br />
scheme of education, the object of<br />
which was to “de- Muslimize” the<br />
Muslim youth and children.<br />
Ian Stephens, former editor of the<br />
newspaper “Statesman” and an<br />
eyewitness to the working of the<br />
Congress Ministries, says:<br />
“The effect of this simultaneously<br />
on many Muslim minds was of a<br />
lightning flash.”<br />
“What had before been but guessed<br />
at now leap forth in horridly clear<br />
outline. The Congress, a Hindidominated<br />
body, was bent on the<br />
eventual absorption; Western-style<br />
majority rule?, in an undivided subcontinent,<br />
could only mean the<br />
smaller community being<br />
swallowed by the larger.”<br />
The animosity shown by the Hindus<br />
to the Muslim and their own<br />
experience of two-and-a-half year<br />
Congress rule strengthened the<br />
Muslims belief in their separate<br />
nationality. The discriminatory<br />
attitude coupled with attempts by<br />
the Hindu dominated Congress to<br />
suppress the Muslims impelled the<br />
Muslims to finally demand a<br />
separate sovereign state for the<br />
Muslims.<br />
However, the Muslim demand was<br />
violently opposed both by the<br />
British and the Hindus; and the<br />
Congress attitude toward the<br />
Muslims led to the hardening of the<br />
Muslims belief that only a separate<br />
homeland — Pakistan — can<br />
guarantee their freedom. This<br />
demand was put in black and white<br />
on <strong>March</strong> 23, 1940.<br />
However the path to independence<br />
and separate nationhood was<br />
strewn with a multiplying myriad of<br />
problems. First and foremost was<br />
the claim to nationhood vehemently<br />
contested by the Congress<br />
stalwarts and their supporters. How<br />
could a community of converts<br />
claim itself to be a nation? Gandhiji<br />
posed the question as he ridiculed<br />
the Muslim League’s claim to<br />
independent nationhood. The Quaid<br />
was quick to furnish the answer:<br />
“Mussalmans are a nation<br />
according to any definition of a<br />
nation, and they must have their<br />
homeland, their territory and their<br />
state…”<br />
“The Hindus and Muslims belong<br />
to two different religious<br />
philosophies, social customs,<br />
literature. They neither intermarry,<br />
nor interdine together and, indeed<br />
they belong to two different<br />
civilizations, which are based<br />
mainly on conflicting ideas and<br />
conceptions. Their aspects on life<br />
and of life are different.<br />
It is quite clear that Hindus and<br />
Mussalmans derive their inspiration<br />
from different sources of history.<br />
They have different epics, different<br />
heroes and different episodes. Very<br />
often the hero of one is a foe of the<br />
other and, likewise their victories<br />
and defeats overlap. To yoke<br />
together two such nations under a<br />
single state, one as a numerical<br />
minority and the other as a majority,<br />
must lead to growing discontent and<br />
final destruction of any fabric that<br />
may be so built up for the<br />
government of such a state…”<br />
After adoption of the Pakistan<br />
Resolution, Quaid-e-Azam had a<br />
clear objective before him and he<br />
struggled hard to achieve it. In one<br />
of the meetings, he said:<br />
“We are a Nation of a hundred<br />
million and what is more, we are a<br />
Nation with our distinct culture and<br />
civilization, language and literature,<br />
art and architecture, legal laws and<br />
moral codes, customs and calendar,<br />
history and traditions, aptitudes and<br />
ambitions. In short, as Muslims we<br />
have our own distinctive outlook on<br />
life.”<br />
He further said that by all cannons<br />
of international laws, we are a<br />
nation. In 1945, Quaid-e-Azam<br />
proclaimed that only Muslim<br />
League represented the Muslims,<br />
and proved it to the hilt during 1946<br />
polls, winning 100 percent seats at<br />
the Centre, and 80 per cent in the<br />
provinces. Nothing could have been<br />
more conclusive to shatter the<br />
Congress claim of being a national<br />
body. If the British had read the<br />
writing on the wall in this verdict,<br />
Pakistan could have come into<br />
existence two years earlier without<br />
bloodshed. With his charismatic<br />
personality Quaid-e-Azam turned<br />
the dream of a separate homeland<br />
into reality on 14th of August 1947.<br />
Thanks to the Quaid’s unwavering<br />
leadership and untiring efforts,<br />
Pakistan was transformed from an<br />
ideal into a reality in a short span<br />
of time. In 1947, seven years after<br />
the passage of the historic Pakistan<br />
Day Resolution at Lahore, the<br />
world witnessed the emergence of<br />
the largest Muslim state.<br />
Trade Chronicle - <strong>March</strong> - <strong>April</strong> <strong>2016</strong> - Page # 11
TRADE CHRONICLE<br />
The 12th International<br />
Safe Secure Exhibition -<br />
<strong>2016</strong> concludes<br />
successfully<br />
The 12th International Safe Secure<br />
Exhibition - <strong>2016</strong> concluded<br />
successfully at Pak-China Friendship<br />
Centre in Islamabad recently. It was<br />
organized by Pegasus Consultancy.<br />
While addressing a large gathering at<br />
the event Maj Gen. Asghar Nawaz,<br />
Chairman NDMA, (National<br />
Disaster Management Authority) said<br />
“The risk of disaster happening can<br />
be reduced with better preparation,<br />
being a chief disaster managers we<br />
cannot prevent the disasters but the<br />
risk of happening can be reduced<br />
with better preparation in response<br />
to its effects, Country is in Security<br />
Crises and this exhibition is a timely<br />
effort”.<br />
Chairman NDMA, compliments the<br />
role of organiser, Pegasus<br />
Consultancy by bringing together<br />
more than 200 companies from 30<br />
different countries.<br />
As the inauguration day was also a<br />
“World Civil Defence Day”, Air Vice<br />
Marshal (Retd) Ijaz Mahmood Malik,<br />
director general, Civil Defence,<br />
expressed that, “ Safety and security<br />
has become a global challenge and is<br />
a major concern for every individual<br />
and organization”. “Safe Secure<br />
Pakistan provides an excellent<br />
opportunity for international safety<br />
and security equipment<br />
manufacturers to reap the benefit<br />
from this potential market”, he<br />
expressed.<br />
Visits to<br />
www.tradechronicle.com<br />
Trade Chronicle - <strong>March</strong> - <strong>April</strong> <strong>2016</strong> - Page # 12
TRADE CHRONICLE<br />
FFBL – An ICON of Excellence<br />
Historical Perspective<br />
Fauji Fertilizer Bin Qasim Limited Plant<br />
is a modern Granular Urea and Di-<br />
Ammonium Phosphate (DAP)<br />
fertilizers manufacturing complex, built<br />
at a cost of US$ 468 million and located<br />
in Eastern Zone of Bin Qasim, Karachi,<br />
with Head Office at Defence Housing<br />
Authority Phase-II, Islamabad.<br />
Initially named as FFC-Jordan<br />
Fertilizer Company (FJFC), w.e.f. 17 th<br />
Nov 1993, with FFC (30%), FF (10%)<br />
and JPMC (10%) as main sponsors.<br />
The company was formally listed with<br />
stock exchanges in May 1996 and<br />
commercial production commenced<br />
w.e.f. Jan 2000. However, it<br />
continued to run in crises due to<br />
technical, financial and managerial<br />
reasons till 2001. DAP Plant was<br />
brought to suspension in 2001 due to<br />
accumulated loss of Rs. 6.5 Billion.<br />
It resumed production in Sep 2003,<br />
after a lapse of 2 years.<br />
Renamed as Fauji Fertilizer Bin<br />
Qasim Ltd. (FFBL) in 2003, as such<br />
Jordan Phosphate Mines Co. (JPMC)<br />
had sold its entire equity in the<br />
company. Accordingly, Phosphoric<br />
acid supply agreement with Jordan<br />
was terminated. The company turned<br />
out to be profitable after 3 years i.e.<br />
by 2004 and declared ‘maiden<br />
dividend’ in 2004. Profitability has<br />
constantly been on the rise since then<br />
and 2011 has been the most profitable<br />
year of the company. One of the<br />
milestones in the success of FFBL is<br />
its accreditation of ISO certification,<br />
which was achieved in Mar 2006 for<br />
both the Head Office and Plantsite.<br />
The current ownership is structured<br />
as under:<br />
· FaujiFertilizer Company : 49.88%<br />
· Fauji Foundation : 18.29%<br />
· Financial institutions and the general<br />
public : 31.83%<br />
• Total Shares : 934,110,000<br />
• Authorized Capital :<br />
Rs. 11,000,000,000<br />
• Paid up Capital :<br />
Rs. 9,341,100,000<br />
FFBL also holds membership of<br />
industry association and trade bodies;<br />
· Rawalpindi Chamber of Commerce<br />
· International Fertilizer Association<br />
Our Distinctions<br />
· FFBL is the only fertilizer complex<br />
in Pakistan producing DAP and<br />
Granular Urea thus making significant<br />
contribution towards agricultural<br />
growth of the country.<br />
· FFBL DAP has 41% market share<br />
with present capacity.<br />
· FFBL Urea has presently 5.2%<br />
market share with current production<br />
owing to gas curtailment. With 100%<br />
production capacity the market share<br />
comes to 17%<br />
· FFBL is selling its product with the<br />
brand name of “SONA”. Fauji Group<br />
has the largest fertilizer marketing<br />
setup in Pakistan (managed by FFC)<br />
comprising of 14 sales regions, 66 sales<br />
districts, a strong dealership network<br />
and extensive warehousing setup.<br />
FFBL has successfully accomplished<br />
13 million safe man hours.<br />
FFBL’s Corporate Vision<br />
· To be a premier organization focused<br />
on Quality and growth, leading to<br />
enhanced stakeholders’ value.<br />
FFBL’s Core Values<br />
• Professional Integrity<br />
• Winning working environment<br />
• Accountability<br />
• Creativity and Innovation<br />
• Corporate Social Responsibility<br />
• Focus on result<br />
Performance & Production<br />
FFBL fertilizer complex is state of the<br />
art manufacturing facility with<br />
advanced Distributed Control System<br />
for safe and efficient operation. The<br />
phosphoric acid being raw material for<br />
DAP plant is imported from Morocco<br />
and initially stored in tanks at Port<br />
Qasim. Design capacity viz-a-viz actual<br />
production of Plants is as under:-<br />
Utilities & Storage<br />
Trade Chronicle - <strong>March</strong> - <strong>April</strong> <strong>2016</strong> - Page # 13
TRADE CHRONICLE<br />
Well-qualified Human Capital<br />
· Plant workforce comprises of<br />
around 1,500 people with 200<br />
engineers, 700 technicians with<br />
varying degrees of experience, in<br />
addition to experts in the field of<br />
finance, supply chain, human capital<br />
management, information<br />
technology etc.<br />
· Plant has its own training<br />
department which provides technical<br />
training on-site along with outsourcing<br />
to specialists inside and outside the<br />
country.<br />
· Employees are extremely dedicated<br />
and highly motivated and have been<br />
able to complete projects at a time<br />
when it was very difficult to bring in<br />
experts from abroad.<br />
Financial Performance<br />
Assets & Liabilities<br />
Accreditation of International<br />
Standards<br />
FFBL has acquired following<br />
certifications in 2006:-<br />
· ISO 9001 : Quality Control<br />
· ISO 14001 : Environmental<br />
Management<br />
· OHSAS 18001 : Occupational<br />
Health and Safety<br />
FFBL Tower.<br />
FFBL has constructed 11 story<br />
Corporate Tower at DHA Phase II.<br />
Tower is now operational and all the<br />
departments have been relocated to<br />
one central Head Office. We reached<br />
this monumental step in November<br />
2015 and now living the dream.<br />
The quality of the architecture is<br />
emphasised by a number of features.<br />
Tower reflects the company’s<br />
philosophy that its employees are its<br />
major capital, and its aversion to the<br />
usual hierarchal structures. It<br />
contains state of the art features in<br />
Security, IT and Safety measures.<br />
This beautifully constructed building<br />
in many ways is a piece of art. The<br />
convex façade with the small carefully<br />
calibrated square holes allows for sun<br />
to penetrate the building and surround<br />
it with natural light. The double glazed<br />
large windows give us a spectacular<br />
panoramic view of the surroundings.<br />
Following are the salient features:-<br />
- Centrally air-conditioned building<br />
through dual fired absorption chillers.<br />
- Backup standby generators.<br />
- Intelligent fire detection and<br />
protection system.<br />
- CCTV security surveillance.<br />
- Public address and VOIP system.<br />
- Conducive work environment.<br />
- Building covered with plants and<br />
greenery which gives relaxed and<br />
homely feel.<br />
- Building management system for<br />
central monitoring and control of<br />
services.<br />
- 3 high speed elevators + 1 special<br />
purpose lift.<br />
- Common facilities:-<br />
√ Multipurpose Hall.<br />
√ Medical Center.<br />
√ Training Institute.<br />
√ Executive and Staff Dining Areas.<br />
√ Conference and Meeting Rooms.<br />
√ Gymnasium.<br />
√ Terraces on each floor for soak in<br />
the view, catch a fresh breath of air<br />
or even have a quiet smoke.<br />
Awards<br />
In recognition of FFBL performance,<br />
following prestigious honoures were<br />
awarded to the Company:-<br />
• Silver Medal of SAP Support<br />
Operation for the Year 2015<br />
andBronze Medal of the “SAP<br />
Customer Center of Expertise –<br />
Trade Chronicle - <strong>March</strong> - <strong>April</strong> <strong>2016</strong> - Page # 14
TRADE CHRONICLE<br />
2014by ‘SAP Software Corporation’<br />
in category of Support Operations.<br />
• 12th Annual Environment<br />
Excellence Award 2015 by National<br />
Forum for Environment and Health<br />
(NFEH)<br />
• Best Corporate Report Award –<br />
2011, 2012,2013& 2014 by ‘ICAP’<br />
and ‘ICMAP’.<br />
• KSE Top 25 Companies<br />
Award2010, 2011, 2012&2013 by<br />
‘Karachi Stock Exchange<br />
(Guarantee) Limited’.<br />
• Corporate Social Responsibility<br />
Awards 2012, 2013, 2014 and 2015<br />
by ‘National Forum for Environment<br />
& Health’.<br />
• Corporate Social Responsibility<br />
Award 2015 by ‘The Professional<br />
Network & EBU Ethical’.<br />
• Best CEO Awardfor the Year 2011-<br />
12 by ‘Mass Human Resource<br />
Services’ in chemical sector.<br />
• RCCI Platinum Award for the year<br />
2012 by ‘Rawalpindi Chamber of<br />
Commerce’.<br />
• Certificate of Excellence by Fire<br />
Protection Association of Pakistan<br />
(FPAP) and National Forum for<br />
Environment & Health (NFEH).<br />
JOINT VENTURE<br />
Pakistan MarocPhosphore S.A,<br />
(PMP) Morocco – A Joint<br />
Venture<br />
Phosphoric Acid, being the main raw<br />
material for DAP production is<br />
imported from Morocco. To ensure<br />
the continuous supply of this strategic<br />
raw material to run DAP plant at<br />
Karachi, Office Cherifien des<br />
Phosphates (OCP), Morocco, the<br />
biggest industrial group of Kingdom<br />
of Morocco and the Fauji Group<br />
(Fauji Foundation, FFC and FFBL)<br />
entered into a joint venture for its<br />
uninterrupted supply. The company,<br />
named as Pakistan Maroc Phosphore<br />
S.A(PMP) costing 2.3 billion<br />
Moroccan Dirhams (US$ 250 million)<br />
was formed at Morocco. The project<br />
has successfully been completed in<br />
record time and within the budget.<br />
Commercial production and shipment<br />
to FFBL started in <strong>April</strong> 2008 and May<br />
2008 respectively. Plant is designed to<br />
produce 375,000 MT per year of<br />
Phosphoric acid thus meeting the total<br />
requirement of DAP plant of FFBL.<br />
Surplus acid is sold in the international<br />
market.<br />
The Project is one of its kind with<br />
strategic significance of involving two<br />
of the largest business groups of two<br />
brotherly Muslim nations i.e, Fauji<br />
Group of Pakistan and OCP Group<br />
of Morocco. Its formal inauguration<br />
was performed by His Majesty the<br />
King of Morocco in October, 2008.<br />
Dignataries from Pakistan also<br />
attended the creemony.<br />
Significant benefits associated<br />
with this project are:<br />
· Production of 375,000 metric tons<br />
of phosphoric acid per annum is not<br />
only ensuring un-interrupted supply of<br />
raw material, catering for the entire<br />
post-BMR demand of DAP<br />
requirement of FFBL, but also a<br />
source of profit in the form of selling<br />
out the surplus production. This, in<br />
turn has enhanced FFBL earnings in<br />
the form of dividends.<br />
· This is the first-ever foreign<br />
investment by the Fauji Group. Apart<br />
from its contribution towards<br />
economic growth of Pakistan, it has<br />
added to the prestige of the country.<br />
· Long term raw material supply is<br />
guaranteed in an extremely turbulent<br />
international market.<br />
· PMP plant is spread on 118,000<br />
square meters land inside OCP<br />
complex near the Port of JorfLasfar,<br />
about 25 KMs from the city of El-<br />
Jadida.<br />
DIVERSIFICATION<br />
FFBL has recently diversified into<br />
various businesses after careful<br />
analysis of relevant markets.<br />
Following new projects has been<br />
ventured:<br />
FFBL Power Company Limited.<br />
To maintain the business<br />
sustainability, Coal Power Plant<br />
(CPP) Project having capacity of<br />
power generation of 118 MW is being<br />
set-up in SPV mode at a total cost of<br />
US$ 265 Million (+10%) with the<br />
objectives of supplying power &<br />
steam to FFBL and use the saved<br />
natural gas for enhanced Fertilizer<br />
production, greater Operational<br />
flexibility for FFBL and power export<br />
up-to 60 MW to K-Electric (under<br />
negotiation). The project is in detailed<br />
engineering phase. Expected<br />
Commercial Operation Date (COD)<br />
is December <strong>2016</strong>.<br />
Fauji Meat Limited (FML). With<br />
a vision to be the leading local &<br />
international Halal meat processing<br />
company, FML was incorporated in<br />
2013 as a public limited company.<br />
FML has setup a state-of-the-art<br />
Halal abattoir and meat processing<br />
facility near Bin Qasim Port, Karachi<br />
(Pakistan) with an estimated project<br />
cost of 60 million USD. The facility<br />
is spread over 47 acres of land<br />
including the plant and 3 day animal<br />
holding area. Daily production<br />
capacity of the plant is 100 tons/day<br />
of Meat (85 tons of Beef & 15 tons<br />
of Mutton) in both Frozen & Chilled<br />
categories for worldwide export. The<br />
plant is designed to meet the<br />
objectives of processing high quality<br />
meat (Cattle, Buffalo, Sheep & Goat),<br />
Value added products and Byproducts.<br />
• Pakistan’s only state-of-the-art<br />
Halal abattoir, which offers meat<br />
products in VACUUM packaging.<br />
Trade Chronicle - <strong>March</strong> - <strong>April</strong> <strong>2016</strong> - Page # 15
TRADE CHRONICLE<br />
FML will be the only meat processing<br />
company in the country which offers<br />
Rendered products including Bone/<br />
meat meal, Blood meal & Tallow<br />
conforming to International quality<br />
standards.<br />
• Understanding the importance of<br />
quality in this business and following<br />
traditions of ‘Fauji Group’, FML<br />
acquired the services of International<br />
consultants for plant design &<br />
construction. Equipment has been<br />
procured from the top world class<br />
manufacturers; conforming to the<br />
highest standards of International<br />
quality. Project is in testing phase and<br />
near to announce Commercial<br />
Operation Date.<br />
• Noon Pakistan Limited (NPL).<br />
FFBL together with FaujiFoundation<br />
have obtained controlling interest with<br />
51% voting and 51% non-voting<br />
shares of<br />
Noon Pakistan<br />
Limited on 04<br />
September,<br />
2015.In order<br />
to compete in<br />
current dairy<br />
industry, the<br />
Management<br />
decided to<br />
enter into<br />
Dairy business<br />
through a<br />
running Dairy<br />
entity; NPL<br />
with “Nurpur”<br />
a very strong<br />
brand. The<br />
acquisition will be beneficial for the<br />
Company as well as for all stake<br />
holders. The Company is now going<br />
for major expansion in its operations,<br />
which will reflect a better financial<br />
result in coming years.<br />
• Fauji Foods Limited (FFL). The<br />
Company was established to venture<br />
into viable opportunities in Food &<br />
Dairy sectors. Dairy processing was<br />
selected as having immense potential<br />
in the country.<br />
Investments<br />
• Foundation Wind Energy I & II.<br />
The Company has investedRs. 2.348<br />
billion in two wind power plants;<br />
Foundation Wind Energy- I Limited<br />
(formerly Beacon Energy Limited)<br />
and Foundation Wind Energy- II<br />
(Private) Limited (formerly Green<br />
Power Private Limited) of 49.5 MW<br />
each. Total estimated cost of each<br />
project is US Dollar 130 million. The<br />
projects have a “Debt to Equity” ratio<br />
of 75:25. Projects are located at<br />
KhuttiKun New Island in Taluka<br />
Mirpur Sakro of Thatta District.<br />
Land area of FWE-I & II is 1210 and<br />
1656 acres respectively.The<br />
Company holds 35% shareholding in<br />
each project. Both the Projects have<br />
achieved Commercial Operation Date<br />
(COD) and are operating<br />
satisfactorily.<br />
Askari Bank Limited (AKBL). As<br />
part of investment diversification,<br />
FFBL invested in Askari Bank Limited<br />
in 2013 and acquired 271,884<br />
thousands shares representing<br />
21.57% holding. The new<br />
management of AKBL initiated a<br />
major realignment strategy and<br />
business process re-engineering and<br />
is in the process of implementing state<br />
of the art IT core banking system to<br />
improve its operational efficiency.<br />
The investment offers a unique<br />
opportunity for Fauji Group to create<br />
an annuity business of immense profit<br />
which will enhance the returns to<br />
shareholders in the long run.<br />
CORPORATE SOCIAL<br />
RESPONSIBILITY<br />
Sustainable and responsible<br />
development has remained our<br />
primary concern since inception.<br />
FFBL has distinguished itself as a<br />
good neighbour. Not only have we<br />
consistently delivered outstanding<br />
returns to our shareholders, we strive<br />
hard to be a good employer, to be a<br />
catalyst for the social and economic<br />
development of the communities in<br />
which we<br />
operate, and to<br />
minimize our<br />
environmental<br />
impact.<br />
In Nov 2010,<br />
after approval<br />
by the Board, a<br />
long-term CSR<br />
Program was<br />
launched in<br />
collaboration<br />
with a<br />
renowned<br />
NGO, Human<br />
Development<br />
Foundation<br />
(HDF). As per MOU, the NGO has<br />
to implement all program activities in<br />
GhaggarPhattak Bin Qasim Town,<br />
Karachi and FFBL is to provide funds<br />
up to Rs 49.1 million over a period of<br />
5 years. HDF is engaged in<br />
community development activities<br />
with special emphasis on health and<br />
education promotion.<br />
Trade Chronicle - <strong>March</strong> - <strong>April</strong> <strong>2016</strong> - Page # 16
TRADE CHRONICLE<br />
SBP says strong LSM output to bolster growth<br />
Economy picking up; inflation behaving despite challenges<br />
By Shahnawaz Akhter<br />
Pakistan’s economy will pick up<br />
further during the second half of the<br />
current fiscal year thanks to the stable<br />
growth in large scale manufacturing<br />
sector on the start of multibillion<br />
rupees resource projects and a good<br />
winter rains this season that will<br />
bolster agriculture production, the<br />
central bank says recently.<br />
“ D e s p i t e<br />
challenging global<br />
economic<br />
conditions,<br />
Pakistan’s overall<br />
macroeconomic<br />
outlook appears<br />
stable,” the State<br />
Bank of Pakistan<br />
said in its ‘Second<br />
Quarterly Review<br />
on the State of<br />
Pakistan’s<br />
Economy’.<br />
“Growth is likely to<br />
pick up… fiscal position is strong;<br />
inflation is likely to stay low and risks<br />
on the external front have been<br />
moderate to a large extent.”<br />
The bank, however, kept its growth<br />
forecast unchanged at 4-5 percent for<br />
the current fiscal year of 2015/16. The<br />
SBP’s growth forecast is still below<br />
than the government target of 5.5<br />
percent. The economy grew at a rate<br />
of 4.2 percent in the last fiscal year<br />
ended June 2015.<br />
The central bank said a stable<br />
macroeconomic environment means<br />
that the economic growth would<br />
maintain the momentum.<br />
“We expect GDP growth during the<br />
FY16 to be higher than the last<br />
fiscal… We are optimistic on the<br />
industrial sector’s performance but<br />
cannot firmly assess the final<br />
outcomes in agriculture and services,”<br />
the SBP said.<br />
It said the growth momentum in large<br />
scale manufacturing (LSM)<br />
continued to remain strong in the first<br />
half of the current fiscal year,<br />
supported by better energy supplies,<br />
lower commodity prices and<br />
accommodative polices.<br />
The LSM sector grew 3.9 percent in<br />
the first half of the current fiscal<br />
against 2.7 percent in the previous<br />
year of the same period. Major<br />
contribution to LSM growth came<br />
from auto, fertiliser and construction<br />
allied industries.<br />
On the agriculture sector<br />
performance, the central bank said<br />
the prospects of surpassing targets in<br />
wheat and value addition in livestock<br />
are strong. “While initial estimates<br />
suggest a decline in area under wheat<br />
cultivation, a marked improvement in<br />
yields has increased hopes for a<br />
Trade Chronicle - <strong>March</strong> - <strong>April</strong> <strong>2016</strong> - Page # 17<br />
bumper for a third year in a row;<br />
timely rains and better input<br />
availability have reported improved<br />
the per-acre harvest,” the bank said.<br />
The SBP, however, also said overall<br />
growth does not portray a very<br />
encouraging picture in agriculture<br />
sector. “Preliminary estimates<br />
suggest that all<br />
Kharif crops<br />
have missed<br />
their respective<br />
targets; cotton<br />
and rice did not<br />
achieve last<br />
y e a r ’ s<br />
production<br />
level.”<br />
The central<br />
bank highlighted<br />
the public debt<br />
servicing<br />
obligations,<br />
which were not more than six billion<br />
dollars per annum until 2020. “Debt<br />
servicing of $5 billion due on <strong>2016</strong> are<br />
well within manageable level<br />
considering the present level of<br />
foreign exchange level,” the central<br />
bank said.<br />
The SBP estimated the current fiscal<br />
year’s inflation at 3-4 percent below<br />
the target of six percent. “The global<br />
commodity prices are not expected<br />
to recover anytime soon, and on the<br />
other, a stable Pak Rupee is likely to<br />
keep inflation expectations further at<br />
bay,” it added.<br />
The central bank maintained the<br />
lower inflation estimates on the<br />
government move to reduce domestic<br />
Contd. on page # 18
TRADE CHRONICLE<br />
The ‘E’ in CPEC<br />
By Aadil Nakhoda<br />
THE China-Pakistan Economic<br />
Corridor (CPEC), once completed,<br />
will become a major milestone in<br />
Pakistan’s economic history. The<br />
road networks that will extend from<br />
Gwadar to the Chinese border along<br />
with several power projects, and<br />
infrastructure development including<br />
export-processing and industrial<br />
zones, will benefit the economy.<br />
The Chinese government’s intention<br />
is clear. It wants to connect the<br />
western region of China to one of the<br />
closest seaports, Gwadar, with an<br />
efficient transportation network that<br />
provides easier access to a major<br />
supplier of oil and other natural<br />
Contd. from page # 17<br />
petrol prices by 6.6 percent and 11.9<br />
percent in February and <strong>March</strong> <strong>2016</strong>,<br />
respectively, following the freefall of<br />
oil prices to a 12-year low level in the<br />
international market.<br />
The bank said measures taken by the<br />
government in October 2015 would<br />
help the Federal Board of Revenue<br />
to maintain revenue collection<br />
growth. Expenditures will remain<br />
within target, it added.<br />
The pattern of lower borrowing from<br />
financial institutions would remain<br />
same in the second half of the current<br />
fiscal year as the government is<br />
expecting more external funding<br />
down the road, the SBP said. “The<br />
lower borrowing helped the increase<br />
in private sector credit off-take,<br />
which bodes well for the industrial<br />
sector performance,” it said. The SBP<br />
reviewed the first half of current fiscal<br />
year in which Pakistan had faced<br />
both positive and negative effects due<br />
to prevailing global conditions.<br />
resources necessary to develop its<br />
western regions. This strategy is in<br />
accordance with the Western<br />
Development Programmes<br />
introduced in the late 1990s to focus<br />
on the industrial development of the<br />
western regions. Gwadar’s proximity<br />
to the oil-rich and resource-intensive<br />
Middle East will let Chinese importers<br />
circumvent the alternative sea routes<br />
that involve passage through several<br />
countries in the Indian Ocean and the<br />
extensive land transport from its<br />
seaports in eastern China. It is likely<br />
that several tons of natural resources<br />
and industrial supplies will flow<br />
through Pakistan.<br />
A viable industrial development<br />
strategy is a prerequisite for economic<br />
growth. It is imperative that strategies<br />
It said that the decline in oil prices<br />
allowed a 39.8 percent fall in the<br />
country’s oil import bill, helping reduce<br />
the trade deficit by 1.6 percent in the<br />
first half. Furthermore, the passthrough<br />
of low prices by the<br />
government has contributed in<br />
pushing down the consumer price<br />
index inflation to a multi-decade low.<br />
Together, the low inflation<br />
expectations and stability on the<br />
external front allowed SBP to cut the<br />
policy rate to its historically low level<br />
of six percent in September 2015; this<br />
has spurred up demand for private<br />
credit, especially for fixed investment<br />
purposes, according to the review.<br />
On the flip side, the commodity recession<br />
has impacted the performance of crop<br />
sector, as the sowing area declined for<br />
many crops this season. “The cotton crop<br />
has been particularly affected, as its<br />
production is down also because of pest<br />
attacks and heavy rainfall,” the SBP said<br />
and added that the biggest impact of the<br />
global slowdown was seen on the<br />
country’s exports.<br />
are evolved that involve appropriate<br />
industrial policies as otherwise CPEC<br />
will just be a ‘transit’ route with no<br />
added benefits to Pakistan other than<br />
providing a shorter transport link to<br />
China and its trading partners.<br />
Western China contributes to<br />
approximately 20pc of economic<br />
activity and 30pc of the population of<br />
China. As it is likely that CPEC will<br />
be a conduit primarily for Chinese<br />
imports from the Gulf countries<br />
(classified as Bahrain, Kuwait, Oman,<br />
Qatar, Saudi Arabia, and the UAE)<br />
in the Middle East to western China,<br />
we need to analyse the current<br />
demand for Chinese imports from<br />
these countries.<br />
(Courtesy: DAWN)<br />
CPEC’s first phase to<br />
be completed<br />
by 2018: minister<br />
Minister Planning Development<br />
and Reform Ahsan Iqbal said<br />
recently, the first phase of China-<br />
Pakistan Economic Corridor<br />
(CPEC) would be completed by<br />
the year 2018.<br />
The minister, in a statement, said<br />
the production of 10,000<br />
megawatts of energy under CPEC<br />
would help overcome the energy<br />
crisis by 2018 as well as upgrade<br />
the existing road network of the<br />
country.<br />
Especially, western route through<br />
the construction of missing links on<br />
it would provide the safest and<br />
shortest passage of cargo from<br />
Gwadar seaport to upcountry for<br />
their onward movement to China’s<br />
western provinces.<br />
Trade Chronicle - <strong>March</strong> - <strong>April</strong> <strong>2016</strong> - Page # 18
TRADE CHRONICLE<br />
Commerce Minister Khurram Dastgir<br />
Khan has announced the mediumterm<br />
(2015-18) Strategic Trade Policy<br />
Framework, setting an annual export<br />
target of $35 billion by the year 2018.<br />
It will be<br />
implemented<br />
with a total<br />
funding of<br />
Rs18bn in a<br />
period of three<br />
years.<br />
Four major<br />
targets include:<br />
boosting exports,<br />
improving<br />
e x p o r t<br />
competitiveness,<br />
transition from<br />
factor-driven<br />
economy to<br />
efficiencydriven<br />
and<br />
increasing share<br />
in regional trade.<br />
The minister defended the export<br />
target saying it is realistic and<br />
achievable. For current fiscal year, the<br />
government has already approved an<br />
amount of Rs6bn. The minister said<br />
this amount will be disbursed among<br />
exporters through the State Bank of<br />
Pakistan (SBP) to avoid chances of<br />
corruption.<br />
To increase the sophistication level of<br />
identified sectors including fans, home<br />
appliances, rice, cutlery and sports<br />
goods, an incentive for technology upgradation<br />
will be provided in the shape<br />
of investment support of 20pc or<br />
mark-up support of 50pc up to a<br />
maximum of Rs1 million a year per<br />
company will be available for import<br />
of new plant and machinery.<br />
Trade policy sets export target at $35bn<br />
To boost exports of leather,<br />
pharmaceutical, fisheries and surgical<br />
instruments, grant of up to Rs5m will<br />
be provided for specified plant and<br />
machinery or specified items to<br />
improve product design and<br />
encourage innovation in small and<br />
medium enterprises (SMEs).<br />
Moreover, a Common Facility Centre<br />
for surgical sector will be established.<br />
Matching grant will be provided to<br />
facilitate the branding and<br />
certification for faster growth of the<br />
SMEs and exports sectors through<br />
Intellectual Property Registration<br />
(including trade and service marks),<br />
Certification and Accreditation.<br />
The manufacturing in surgical<br />
instruments, sports and cutlery is<br />
largely done under the brands of<br />
foreign companies, resulting in lower<br />
prices for manufacturers in these<br />
sectors.<br />
Trade Chronicle - <strong>March</strong> - <strong>April</strong> <strong>2016</strong> - Page # 19<br />
For cutting the cost of doing business<br />
and increasing the competitiveness of<br />
the value-added non-textile selected<br />
sectors, draw-back for local taxes and<br />
levies will be given to exporters on<br />
free on<br />
b o a r d<br />
(FOB)<br />
values of<br />
t h e i r<br />
enhanced<br />
exports if<br />
increased<br />
by 10pc<br />
and beyond<br />
(over last<br />
year’s<br />
exports) at<br />
the rate of<br />
4pc on the<br />
increase.<br />
Federal Minister for Commerce Khurram Dastgir Khan announcing the Strategic<br />
Trade Policy Framework 2015-18.<br />
To reduce<br />
t h e<br />
wastage of<br />
raw and<br />
semi-processed produce and increase<br />
income of the farmers and foreign<br />
exchange earnings, 50pc support on<br />
the cost of imported new plant and<br />
machinery for specified underdeveloped<br />
regions or 100pc mark-up<br />
support on the cost of imported new<br />
plant and machinery will be provided.<br />
The Ministry of Commerce will<br />
continue working on its three-pronged<br />
strategy of trade diplomacy in the<br />
multilateral, regional and bilateral<br />
arenas for increasing market access.<br />
Under the policy, four products<br />
including basmati rice, horticulture,<br />
meat and meat products, and<br />
jewellery were identified for focused<br />
markets — Iran, China, Afghanistan<br />
and the European Union.
TRADE CHRONICLE<br />
APCMA submits<br />
budget proposal<br />
The All Pakistan Cement<br />
Manufacturers Association<br />
(APCMA) has suggested to the<br />
Federal Board of Revenue to reduce<br />
the federal excise duty stepwise to<br />
zero as announced by the previous<br />
government to encourage cement offtake<br />
since this is never a luxury item.<br />
In the budget proposal sent to Board<br />
Chairman Muhammad Ali Tabba, his<br />
association counterpart said, "it's to<br />
be noted that the cement industry is<br />
subject to the FED at the rate of five<br />
percent of the retail price and the<br />
general sales tax at the rate of 17<br />
percent of the maximum retail price.<br />
These taxes come to around Rs 100<br />
per bag.<br />
"This incidence of high taxation<br />
encourages evasion and negatively<br />
impacts consumption. The<br />
abolishment of excise duty not only<br />
eliminates tax evasion but also<br />
enhances cement consumption at<br />
reduced price. Certain services are<br />
being taxed under the independent<br />
provincial sales tax laws, which are in<br />
vogue in Sindh, Khyber Pakhtunkhwa<br />
and the Punjab. Such services are still<br />
taxable under both the 2005 Federal<br />
Excise Act as well as under the<br />
provincial sales tax laws, which<br />
tantamount to double taxation.<br />
He went on, "It is recommended that<br />
the federal excise duty on all services<br />
rendered in Sindh, Khyber<br />
Pakhtunkhwa or the Punjab may be<br />
abolished as it would eliminate double<br />
taxation and reduce cost of doing<br />
business. Similarly, before preferring<br />
appeal to the Office of Commissioner<br />
Cement Industry<br />
(Appeals) or Appellate Tribunal, a<br />
taxpayer is required to deposit the<br />
impugned duty demanded or penalty<br />
imposed in the appealable order. This<br />
mandatory compulsion is considered<br />
as a hindrance<br />
in the<br />
dispensation<br />
of justice."<br />
He also said<br />
the identical<br />
provisions in<br />
the income<br />
and sales<br />
taxes had<br />
already been<br />
repealed, and<br />
it was<br />
suggested that<br />
the same<br />
should also be<br />
removed from the excise law.<br />
He said, "The Iranian cement is being<br />
flooded into border areas of<br />
Balochistan and is being sold at lower<br />
prices as compared to locally<br />
produced cement due to inferior<br />
quality of the cement and its low cost<br />
due to export sanctions. This<br />
phenomenon is very detrimental for<br />
local manufacturers and in the longer<br />
run can challenge the survival of local<br />
industry. Additional regulatory duty<br />
should be immediately imposed on<br />
imports of the Iranian cement and<br />
some prior approval mechanism from<br />
the government should be in place<br />
regarding quality of the Iranian<br />
cement being imported in Pakistan.<br />
"This regulatory duty is a must to<br />
protect the local industry from the<br />
influx of the Iranian cement. Also,<br />
recent increase in duty on import of<br />
coal from one to six percent has<br />
adversely hit the local manufacturers<br />
and has drastically increased cost of<br />
doing business. "This latest increase<br />
in import duty on coal should be<br />
reduced to Zero percent as this would<br />
keep open the option of using coal as<br />
alternative source of energy.<br />
"The government had enacted the Gas<br />
Infrastructural Development Act of<br />
2011 (2011 Act), whereby the<br />
government charged a cess to all gas<br />
consumers except those of the<br />
domestic sector. "In May 2015, the<br />
government passed the GIDC Act<br />
2015. A Suit in the Sindh High Court<br />
was filed, challenging the levy of GIDC<br />
as well as its retrospective effect. The<br />
court granted a stay against charging<br />
of the GIDC under the 2015 Act on<br />
the first date of hearing.<br />
"We request that the charge/levy<br />
GIDC should be abolished now. It<br />
has increased the cost of doing<br />
business of the industrial sector.<br />
Further in current market scenario of<br />
declining fuel prices including<br />
liquefied natural gas in the<br />
international markets it will render<br />
domestic products uncompetitive in<br />
export markets."<br />
Trade Chronicle - <strong>March</strong> - <strong>April</strong> <strong>2016</strong> - Page # 20
TRADE CHRONICLE<br />
People & Events<br />
Zahid Hamid made law<br />
minister<br />
The federal government has<br />
appointed Zahid Hamid, a leader of<br />
PML-N, as law minister.<br />
According to an official<br />
announcement, He will have<br />
additional charge of the minister for<br />
climate change. He was inducted in<br />
the cabinet as law minister when the<br />
PML-N came into power after 2013<br />
general elections. But, he had to<br />
resign shortly because he was being<br />
labelled as a supporter of former<br />
president retired Gen Pervez<br />
Musharraf.<br />
Mr Hamid was law minister in Mr<br />
Musharraf’s cabinet when he imposed<br />
emergency in the country on Nov 3,<br />
2007. He had joined the PML-N after<br />
the 2008 general elections.<br />
Zahid Saeed made<br />
CS Punjab<br />
Prime Minister Muhammad Nawaz<br />
Sharif has given approval to the<br />
appointment of Zahid Saeed as new<br />
Chief Secretary Punjab.<br />
Khizer Gondal has been appointed<br />
as Federal Secretary Industries and<br />
Arif Azeem made Officer on Special<br />
Duty, a PM’s Office statement said<br />
recently.<br />
Another two-year<br />
extension for DG IB<br />
Acknowledging the services of DG<br />
Intelligence Bureau (IB) Aftab Sultan,<br />
Prime Minister Muhammad Nawaz<br />
Sharif for the second time, extended<br />
his tenure by another two years.<br />
Aftab Sultan, a Grade-22 officer of<br />
the Police Service of Pakistan (PSP),<br />
was first appointed as Director<br />
General IB in June 2013 and his term<br />
was extended to one year in 2015,<br />
which was going to end on <strong>April</strong> 2<br />
this year.<br />
Born in 1954 in Faisalabad, he got<br />
his Bachelor of Arts degree and an<br />
LLB and later joined the PSP in<br />
1977.Owing to his excellent<br />
professional career, he was promoted<br />
to the position of DIG in 2000 and<br />
posted as Additional IG Finance and<br />
Welfare in Punjab Police in Grade-<br />
21.<br />
Mandviwalla elected<br />
Saarc Law president<br />
Barrister Mehmood Mandviwalla has<br />
been elected President of the South<br />
Asian Association for Regional<br />
Corporation (Saarc) Law.<br />
Mandviwalla was unanimously elected<br />
as the next president of Saarc Law<br />
during 13th Saarc Law Conference<br />
and 10th Chief Justices Conference<br />
in Nepal’s capital Katmandu.<br />
Ashtar Ausaf appointed<br />
attorney general<br />
Prime Minister Nawaz Sharif has<br />
appointed Ashtar Ausaf Ali, his adviser<br />
on law, as attorney general of Pakistan<br />
after accepting the resignation of<br />
Salman Aslam Butt. According to a<br />
brief official announcement issued on<br />
Monday night, “Prime Minister Nawaz<br />
Sha-rif has accepted the resignation<br />
of Salman Aslam Butt and app-ointed<br />
Ashtar Ausaf as the new AG”.<br />
Shaukat Hayat<br />
new IG NH&MP<br />
Shaukat Hayat has assumed the<br />
charge of 13th Inspector General of<br />
National Highways & Motorway<br />
Police. Shaukat Hayat, BS-22 officer<br />
of Police Service of Pakistan, has<br />
assumed the charge of Inspector<br />
General National Highways &<br />
Motorway Police. On his arrival at<br />
NH&MP Headquarters Islamabad,<br />
DIG Operations NH&MP Ghulam<br />
Rasool Zahid, DIG Headquarters<br />
Haleena Saeed and other senior<br />
officers warmly welcomed him.<br />
He is the 13th Inspector General of<br />
National Highways & Motorway<br />
Police. Shaukat Hayat is a notable<br />
police officer and previously he was<br />
serving as Additional Inspector<br />
General Police Khyber Pakhtunkhwa.<br />
Earlier, he had served on various senior<br />
posts of police department in KPK.<br />
Trade Chronicle - <strong>March</strong> - <strong>April</strong> <strong>2016</strong> - Page # 21
TRADE CHRONICLE<br />
SSGC sign MoUs with<br />
<strong>TC</strong>F, WWF<br />
Under its CSR initiatives, Sui Southern<br />
Gas Company Limited signed MoUs<br />
with Pakistan's two reputable nonprofit<br />
organisations, pledging its<br />
support to 'The Citizens Foundation'<br />
(<strong>TC</strong>F) and 'World Wide Fund' for<br />
Nature (WWF-P). In light of these<br />
MoUs, SSGC will provide financial<br />
support to <strong>TC</strong>F, Pakistan's leading<br />
organisation, committed towards<br />
promotion of education in<br />
marginalized / underprivileged class<br />
of the society.<br />
SSGC is supporting <strong>TC</strong>F for their<br />
Merck Marker Campus-II, Quetta<br />
and Ali Hasan Mangi Campus,<br />
Larkana for a period of three years.<br />
SSGC has been funding <strong>TC</strong>F for its<br />
educational activities since 2007.<br />
According to the another MoU signed<br />
with WWF-P, an international<br />
environmental organisation committed<br />
for preservation of environment, 10<br />
Biogas plants will be installed in village<br />
Managing Director SSGC, Mr. Khalid Rahman exchanging MoUs documents.<br />
Sonhari and Tousuf Hilayo some 35<br />
kms from Thatta in the surroundings<br />
of Keenjhar Lake where the<br />
inhabitants lack basic amenities.<br />
WWF-P is working in partnership<br />
with Community Based Organisations<br />
and SSGC has been collaborating<br />
with them for last several years.<br />
Managing Director SSGC, Khalid<br />
Rahman inked these MoUs on behalf<br />
of the utility, whereas Syed Asaad<br />
Ayub, CEO and Rub Nawaz, Senior<br />
Director signed on behalf of <strong>TC</strong>F and<br />
WWF-Pakistan, respectively. Khalid<br />
Rahman, while speaking on the<br />
occasion, appreciated both the<br />
organisations for their committed<br />
efforts in their respective areas of<br />
work and said that due to the passion<br />
of their managements and pursuing<br />
their burning desires to make a<br />
difference, both the NGOs have<br />
made a name for themselves. He said<br />
that SSGC will continue to support the<br />
good causes being undertaken by<br />
organisations serving the under<br />
privileged communities in Company's<br />
SSGC's franchise areas of Sindh and<br />
Balochistan.<br />
Dr. Daniel Ritz takes over<br />
as P<strong>TC</strong>L President & CEO<br />
The Board of Directors of Pakistan<br />
Telecommunications Company Ltd.<br />
(P<strong>TC</strong>L), Pakistan’s leading<br />
telecommunication and ICT services<br />
provider, has announced the<br />
appointment of Dr. Daniel Ritz as<br />
President & CEO of the P<strong>TC</strong>L Group<br />
with effect from 3rd <strong>March</strong> <strong>2016</strong>. He<br />
succeeds Mr. Walid Irshaid, who was<br />
President & CEO of the P<strong>TC</strong>L Group<br />
since <strong>March</strong> 2007.<br />
Photograph taken at a farewell dinner held in honor of His Excellency Mr.<br />
Suhrab Hossain, High Commissioner of Bangladesh & Mr. Abdul Kader Jaffer,<br />
former Pakistan High Commissioner to U.K. along with distinguished guests,<br />
local diplomats and elite of Karachi<br />
Trade Chronicle - <strong>March</strong> - <strong>April</strong> <strong>2016</strong> - Page # 22
TRADE CHRONICLE<br />
Prof Dr Arshad Ali joins<br />
HEC as Executive<br />
Director<br />
Prof Dr Arshad Ali, former Rector,<br />
National Textile University and<br />
founding Principal of the NUST<br />
School of Electrical Engineering and<br />
Computer Science (SEECS) has<br />
joined the Higher Education<br />
Commission (HEC) as Executive<br />
Director.<br />
HEC’s governing body, Commission,<br />
had approved the selection of Dr<br />
Arshad Ali as Executive Director<br />
during its 31 st meeting held on January<br />
11, <strong>2016</strong>.<br />
Decorated by the Government of<br />
Pakistan with Pride of Performance<br />
owing to his creative and strategic<br />
thinking and proven academic<br />
leadership skills, the association of Dr<br />
Arshad with academics and research<br />
spreads over 33 years. He has also<br />
been awarded with Sitara-e-Imtiaz<br />
that was conferred upon him on 23 rd<br />
<strong>March</strong>, <strong>2016</strong>.<br />
Dr Ishrat joins Engro as<br />
Senior Advisor on Education<br />
An announcement<br />
made by Engro<br />
Corporation, Dr<br />
Ishrat Husain,<br />
former Dean &<br />
Director of one of<br />
Pakistan's top<br />
business schools,<br />
has graciously<br />
accepted the<br />
position of Senior<br />
Advisor on<br />
Education to<br />
E n g r o<br />
Corporation's<br />
Chairman, Hussain Dawood.<br />
Hussain Dawood commented: "It is<br />
a recognised fact that Engro has<br />
produced some of the finest<br />
management professionals Pakistan<br />
has ever seen. It is the vision of<br />
Engro to invest in its people, and now<br />
we are privileged to have an<br />
outstanding leader in Dr Ishrat<br />
Husain to champion the realisation<br />
of our vision to institutionalise<br />
development of leaders through<br />
Karachi School of Business &<br />
Leadership."<br />
Dr Ishrat Husain remarked: "I am<br />
excited to have the opportunity to<br />
contribute towards the development,<br />
nurturing, and grooming of leaders<br />
for corporate, non-profit as well as<br />
public sectors, and facilitating<br />
conversation amongst them to build<br />
consensus on issues of national<br />
importance."<br />
NHA chief apprises<br />
secretary of progress on<br />
projects under CPEC<br />
The newly incumbent Secretary<br />
Communication Khalid Masood<br />
Chaudhry has visited National<br />
Highway Authority (NHA) head<br />
office where he was briefed about<br />
the organisation's financial and<br />
administrative matters and the various<br />
development projects. The briefing<br />
was made by NHA Chairman Shahid<br />
Ashraf Tarar.<br />
The chairman apprised the visiting<br />
secretary about the progress on<br />
projects under the China-Pakistan<br />
Economic Corridor (CPEC).<br />
He was told that work on 288km<br />
section of the western corridor from<br />
Burhan to Dera Ismail Khan and<br />
394km Sukkur-Multan Motorway<br />
would start next month and the Prime<br />
Minister was expected to perform the<br />
groundbreaking of both these<br />
projects.<br />
He said that 335km section of<br />
Karakoram Highway (KKH) from<br />
Khunjrab to Rai Kot was successfully<br />
completed whereas the Hazara<br />
motorway (Burhan-Havelian) would<br />
be completed by <strong>March</strong> 2017.<br />
The Chairman said that NHA had<br />
taken steps to encourage the private<br />
sector and the concept of BOT (Built-<br />
Operate-Transfer) in order to reduce<br />
load on the national exchequer and<br />
three major projects worth Rs 91<br />
billion were awarded on BOT basis<br />
which included Karachi-Hyderabad<br />
motorway (M-9) and up-gradation of<br />
Islamabad-Lahore motorway (M-2).<br />
He said NHA had saved over Rs 300<br />
billions in various projects through a<br />
transparent and vigilant award of<br />
works procedure. Secretary<br />
Communications expressed his<br />
satisfaction over the progress of<br />
various projects and hoped they<br />
would be timely completed.<br />
Trade Chronicle - <strong>March</strong> - <strong>April</strong> <strong>2016</strong> - Page # 23
TRADE CHRONICLE<br />
Automobile News<br />
Auto policy unveiled,<br />
existing players - winners<br />
or losers?<br />
In a recent development, the<br />
Economic Coordination Committee<br />
(ECC) has finally approved the long<br />
awaited Automotive Development<br />
Policy (ADP) for the upcoming five<br />
years, where the primary focus is tilted<br />
towards the facilitation of higher<br />
volumes, encouragement of newer<br />
investments and enhancement of<br />
competition together with insurance<br />
of consumers’ welfare. We believe<br />
this would potentially encourage<br />
foreign players to enter the Pakistani<br />
market, however, since the process is<br />
expected to take over 30months (at<br />
least), existing players are expected to<br />
continue benefiting from the rise in<br />
demand. Key Features of the policy:<br />
Under the new policy, ADP has<br />
categorize new investments into three<br />
segments, naming Category A, B and<br />
C (shown on the right). In this regard,<br />
following is a summary of the<br />
provisions approved under the ADP<br />
policy:<br />
1) The age limit for imported vehicles<br />
remains unchanged at 3yrs.<br />
2) Step-wise reduction of 10% in<br />
duties on CBUs of 1800cc and below,<br />
each year in FY18 and FY19. This<br />
would provide sufficient cushion for<br />
the existing players till FY18 and<br />
would significantly support the sales<br />
of the new model launches expected<br />
in FY17.<br />
3) Advance payment has been<br />
restricted up to 50% of the total price<br />
where delivery should not exceed two<br />
months from the booking date. Any<br />
delays shall result in discount @<br />
KIBOR+2% prevailing on the date of<br />
final delivery from the final payment.<br />
4) Category A & B: CKD imports of<br />
Minister for Defence Khawaja Asif announcing new Automotive Development<br />
Policy.<br />
non-localized part is fixed at 10% vs.<br />
25% for localized part for a period of<br />
five (A) and three (B) years for<br />
passenger cars and LCV segments for<br />
800cc and above. If the vehicle is<br />
below 800cc, rate would be 10% for<br />
three (A) and two (B) years,<br />
respectively.<br />
5) 100% one-off duty free import of<br />
plant and machinery for setting up<br />
new manufacturing facility for<br />
Category A Investors.<br />
6) Additionally, the tariff structure for<br />
existing players has been slightly<br />
changed for CKD units where sub<br />
components and components have<br />
been unified under a single duty<br />
regime of 10% (against 5% & 10% in<br />
the previous policy). Duty rates on<br />
CKD nonlocalized parts have been<br />
reduced from 32.5% to 30% and<br />
localized parts have been reduced<br />
from 50% to 45%. Duties for CBU’s<br />
remains unchanged except the<br />
exemption of RD (+1800cc).<br />
7) For CBU two and three wheelers,<br />
duties have been slashed from 65% to<br />
50%. While the policy creates a<br />
lucrative ground for newer players to<br />
step in, we believe the existing players<br />
(specifically INDU, PSMC and<br />
HCAR) would still end up beneficiaries<br />
in short to medium term due to:<br />
(a) time required for new entrants: It<br />
will at least take ~30 months to set up<br />
a new manufacturing facility or<br />
assembly line, providing room for<br />
existing players to bring in additional<br />
variants (which as per managements<br />
would take around 12 months) to<br />
maintain their market share and provide<br />
tough competition to the new entrants.<br />
(b) love for Japanese cars! Over the<br />
years, Pakistani users have shown<br />
greater interest in the Japanese cars<br />
owing to its comparatively cheaper<br />
spare parts, lower vehicle prices,<br />
availability of trained mechanical staff<br />
and greater re-sale value. On the other<br />
hand, historically, Korean players like<br />
Kia Motors and Hyundai Motors,<br />
European players like Fiat (CBU in<br />
90s) and American like Chevrolet did<br />
initially provided some competition for<br />
the existing players, but in the longer<br />
run failed to destabilize the position of<br />
the trio. Furthermore, although<br />
imported vehicles contributes sizably,<br />
over 90% of the imports comes from<br />
Japan with the same trio’s brands.<br />
(Courtesy: Invest and Finance<br />
Securities)<br />
Trade Chronicle - <strong>March</strong> - <strong>April</strong> <strong>2016</strong> - Page # 24
TRADE CHRONICLE<br />
Over 1 million attend 'My Karachi' exhibition: KCCI chief<br />
The three-day "My Karachi - Oasis<br />
of Harmony Exhibition", organised by<br />
Karachi Chamber of Commerce and<br />
Industry (KCCI) at Expo Centre, was<br />
visited by as many as one million<br />
people. Speaking at a news<br />
conference, KCCI president Younus<br />
Bashir said that the exhibition which<br />
concluded recently was visited by<br />
people belonging to different walks of<br />
life and they included diplomats, local<br />
and foreign businessmen, senior<br />
government officials and a large<br />
number of families.<br />
"Today, I am very happy to have seen<br />
overwhelming participation of local<br />
people as well as of foreign diplomats<br />
in the show," the KCCI chief said,<br />
adding that the exhibition was aimed<br />
at projecting Karachi's soft image in<br />
the country and abroad. He said that<br />
foreign diplomats in recent years used<br />
to be reluctant in participating in such<br />
events due to the city's poor law and<br />
order situation but, this year,<br />
ambassadors and consul generals of<br />
various countries, including Russia,<br />
Italy, Indonesia, Malaysia, Bahrain,<br />
Romania, Thailand, Switzerland,<br />
visited the exhibition along with their<br />
families. Some of them even set up<br />
their stalls and as such their<br />
Sindh Minister for Industries and Commerce, Muhammad Ali Malkani, Deputy<br />
Speaker Sindh Assembly Shehla Raza, Sindh Minister for Environment and<br />
Coastal Development Authority, Dr. Sikandar Ali Mandhro, Vice Chairmen<br />
Businessmen Group & Former Presidents KCCI Tahir Khaliq, Zubair Motiwala<br />
and Anjum Nisar and President KCCI Younus Muhammad Bashir cutting ribbon<br />
to inaugurate 13th My Karachi – Oasis of Harmony Exhibition <strong>2016</strong> at Karachi<br />
Expo Center recently.<br />
participation will help in attracting<br />
foreign investment in the country, he<br />
opined.<br />
Lauding the efforts of Rangers, police<br />
and other law-enforcement agencies<br />
in restoring peace in the city, Bashir<br />
urged the government to continue the<br />
ongoing Karachi operation till it<br />
achieves logical ends. "Any move to<br />
politicise the Rangers-led operation<br />
would tantamount to destabilising the<br />
city's peace and economy." he said,<br />
adding that durable peace was<br />
essential for the growth of the<br />
country's economy.<br />
Speaking on the occasion, prominent<br />
businessman Zuabir Motiwala said<br />
that the KCCI's exhibition is purely a<br />
non-commercial activity and it was<br />
continuously being organised for the<br />
last 13 years merely to project the<br />
city's soft image. The exhibition was<br />
visited by nearly one million people<br />
and around Rs 50 million was<br />
generated through the sale of various<br />
products which were showcased in<br />
the fair, he said, adding the KCCI will<br />
set up Gwadar-specific pavilion in its<br />
next exhibition and such a facility will<br />
help Karachiites in finding their role<br />
in the $46 billion CPEC project.<br />
CIO Fauji Fertiliser<br />
receives technology award<br />
The Fauji Fertiliser Corporation's<br />
chief information officer has<br />
received a <strong>2016</strong> Premier 100<br />
Technology Leaders Award.<br />
Brigadier Mukhtar Hussain (Retd)<br />
got the award from the IDG<br />
Computerworld during an<br />
AGENDA16 Conference held<br />
recently in American state of Florida<br />
for his diligence and dedication<br />
towards Information Technology<br />
regime and culture at the corporation.<br />
"The Premier 100 awards programme<br />
showcases the strategic thinking of<br />
an elite group of IT leaders who are<br />
using technology to digitally transform<br />
their organisations. These 100 men<br />
and women are working hand in hand<br />
with their business colleagues to give<br />
their organisations a competitive edge,<br />
while giving their employees a place<br />
to grow their careers. We're pleased<br />
to recognise their leadership and<br />
honour their achievements," said<br />
Scot Finnie, the Editor-in-Chief of<br />
Computerworld. The company is the<br />
leader in fertiliser manufacturing and<br />
excels in all areas of its operation<br />
including Information Technology.<br />
CIO FFC's achievements include<br />
leading the largest implementation of<br />
SAP ERP in Pakistan and<br />
establishing the state-of-the-art Tier<br />
3 Data Centre.<br />
Trade Chronicle - <strong>March</strong> - <strong>April</strong> <strong>2016</strong> - Page # 25
TRADE CHRONICLE<br />
Port t & Shipping News<br />
Senior Vice President of the Karachi Chamber of Commerce and Industry (KCCI) Zia Ahmed Khan presenting Chamber’s<br />
crest to Chairman of China Overseas Port Holding Company (COPHC) Mr. Zhang Baozhong during his visit to KCCI.<br />
COO COPHC & CEO Gwadar International Terminal Limited Capt. Xiaolong Dai, Vice Chairman BMG Anjum Nisar, Vice<br />
President KCCI Muhammad Naeem Sharif, Former Presidents Khalid Firoz and Iftikhar A. Vohra, Former VP Nasir<br />
Mehmood, Capt. Anwar Shah and others are also seen in the picture.<br />
Gwadar Port to become<br />
distribution centre for ME<br />
market: Zhang<br />
China Overseas Port-holding<br />
Company's (COPHC) chairman<br />
Zhang Baozhong has said that his<br />
organisation in collaboration with<br />
government of Pakistan intends to<br />
convene international fair annually at<br />
Gwadar to highlight the potential and<br />
importance of its port which will soon<br />
become distribution centre for the<br />
Middle-East market.<br />
"Gwadar Port holds immense potential<br />
for industrial investment due to the<br />
opportunities offered through<br />
establishing deep seaport which is<br />
capable to accommodate large vessels<br />
of up to 70,000 dead-weight tonnage<br />
(DWT)," he added.<br />
He was speaking at a meeting of<br />
Karachi Chamber of Commerce and<br />
industry (KCCI). COPHC's chief<br />
executive officer for Gwadar<br />
International Terminal Limited, Capt.<br />
Xiaolong Dai, KCCI's senior vice<br />
president Zia Ahmed Khan, vice<br />
president Muhammad Naeem Sharif,<br />
former presidents Khalid Firoz and<br />
Iftikhar Ahmed Vohra and managing<br />
committee's members were also<br />
present on the occasion.<br />
Taking about the importance of<br />
Gwadar Port, Zhang Baozhong said<br />
that distance between Karachi and<br />
Gwadar has been reduced<br />
considerably with the completion of<br />
Makran Coastal Highway (N-20). The<br />
Gwadar Port upon its completion will<br />
be a gateway and hub of world<br />
businesses and trades as all types of<br />
international commercial activities will<br />
be taking place there.<br />
He said that COPHC was granted 40<br />
years concession in 2013 to manage<br />
and operate the Gwadar port and<br />
Gwadar Free Zone and the objective<br />
of his organisation is to develop the<br />
port with state-of-the-art facilities.<br />
Zhang said that the facilities being<br />
provided at the largest free zone,<br />
spreading over an area of more than<br />
968,000 square kilometres, include<br />
bonded warehouses, manufacturing,<br />
international purchasing, transit and<br />
distribution transshipment,<br />
commodity display and supporting<br />
services and where the federal,<br />
provincial and local taxes are exempted<br />
and the COPHC also enjoys tax<br />
holiday of 20 years, thereby making<br />
it an attractive port for marine trade.<br />
Speaking on the occasion, KCCI's<br />
former president Anjum Nisar said that<br />
the Gwadar Port will prove to be a<br />
game-changer for Pakistan and it will<br />
certainly change the destiny of the<br />
country. He was of the view that the<br />
COPHC's plan of establishing<br />
deepest berth of 20 meters at Gwadar<br />
Port will provide berthing facilitates<br />
to largest vessels, thereby bringing<br />
prosperity not only to Pakistan but<br />
also to the entire region.<br />
KCCI's senior vice president Zia<br />
Ahmed Khan said that sea ports in<br />
any country around the world play an<br />
important role but, unfortunately,<br />
ports in Pakistan were lagging behind<br />
in terms of efficient use of available<br />
facilities, reliability in handling freight<br />
and contribution to sustainable<br />
transport system. Hailing the Chinese<br />
investment at Gwadar Port and the<br />
China-Pakistan Economic Corridor<br />
(CPEC) projects, he said: "We are<br />
also fairly optimistic that keeping in<br />
view the Chinese expertise, Pakistan<br />
is going to get a world class sea port<br />
at Gwadar which will be wellequipped<br />
with state-of-the-art<br />
technology and facilities."<br />
"If Gwadar Port is equipped with latest<br />
facilities being used globally and<br />
special attention is given to speedy<br />
clearance and shipment of goods, it<br />
will surely become the 'Port of Choice'<br />
for the business and industrial<br />
community of Pakistan", he added.<br />
Trade Chronicle - <strong>March</strong> - <strong>April</strong> <strong>2016</strong> - Page # 26
TRADE CHRONICLE<br />
The 67th Annual General Meeting of<br />
National Bank of Pakistan was held<br />
at Marriot Hotel Karachi on<br />
Wednesday <strong>March</strong> 30th, <strong>2016</strong>. The<br />
meeting was well attended by the<br />
shareholders. The Chairman Mr.<br />
Muneer Kamal and President Syed Iqbal<br />
Ashraf also attended the meeting.<br />
The shareholders were informed that<br />
the Bank achieved an exponential<br />
51% growth in pre-tax profit for the<br />
year as it increased by Rs. 11.2 billion<br />
from Rs. 22.0 billion for the year 2014<br />
to Rs. 33.2 billion for the year 2015.<br />
This is a complete turnaround from<br />
year 2013; and is higher by 368%<br />
from 2013. The increase in profit<br />
before tax is mainly derived through<br />
17% growth in core net interest/<br />
Banking & Insurance News<br />
NBP records 51pc growth in profit<br />
mark-up income, and 15% growth in<br />
non interest / mark-up income. To<br />
mitigate the impact of the policy rate<br />
cut, the Bank managed its earning<br />
assets portfolio-mix in an optimum<br />
manner. It was presented to the<br />
shareholders that the improved<br />
results were achieved through<br />
effective execution of strategies<br />
which encompass improving deposits<br />
mix for higher net interest income,<br />
portfolio optimisation and re-profiling,<br />
cost controls, business automation and<br />
expansion in branch network. The<br />
bank also focused on recoveries<br />
against non-performing loans.<br />
The Board of Directors in its meeting<br />
held on February 19, <strong>2016</strong>, had<br />
proposed a final cash dividend of Rs.<br />
7.50 per share (75%) for the year<br />
ended December 31, 2015. This<br />
translates into 92% dividend payout<br />
of the bank’s distributable profit for<br />
the year 2015 (after statutory reserve<br />
allocation) and is among the highest<br />
in the banking industry.<br />
Higher dividend payout reflects<br />
bank’s strong capital position with<br />
continuous focus on increasing<br />
stakeholder value by capitalising on<br />
opportunities to drive strong<br />
performance for the organisation and<br />
even higher payouts to the<br />
shareholders in the years ahead. The<br />
shareholders approved dividend<br />
payout of 75% cash dividend (Rs.<br />
7.50/- per share) as recommended by<br />
the Board of Directors of the bank.<br />
NBP and Citibank N.A.<br />
sign a customer<br />
facilitation agreement<br />
Citibank N.A., Pakistan (Citi) has<br />
entered into a Tax Payment<br />
Facilitation Agreement with National<br />
Bank of Pakistan (NBP). This<br />
arrangement will enable value added<br />
services to be provided to Citi's<br />
customers by NBP by replacing<br />
manual instruments with a more<br />
efficient electronic transfer<br />
mechanism leveraging on the State<br />
Bank of Pakistan's Real Time Gross<br />
Settlement System (RTGS).<br />
The signing ceremony was held at<br />
NBP's Head Office. Atiq Rehman -<br />
CEO Citi MEA, along with Nadeem<br />
Lodhi - CCO & MD Citibank N.A.,<br />
Pakistan and Syed Ahmed Iqbal<br />
Ashraf, President-NBP along with<br />
Signing agreement between National Bank of Pakistan and Citibank N. A.<br />
Pakistan. Seen in the picture from left to Right; Mr. Nadeem Lodhi - CCO & MD<br />
Citibank N.A. Pakistan, Mr. Atiq Rehman - Chief Executive Officer, Middle East<br />
& Africa, of Citi-MEA, Mr. Mudassir H. Khan - Senior Executive Vice President<br />
/ Group Chief, Commercial Retail Banking Group and Mr. S. H. Irtiza Kazmi -<br />
Executive Vice President/Divisional Head-CRBG, of National Bank of Pakistan.<br />
Mudassir H. Khan, SEVP &Group<br />
Chief, CRBG from NBP were<br />
present at the ceremony which was<br />
also attended by other stakeholders<br />
from both Bank's as well.<br />
This arrangement will result in<br />
streamlining the tax payment process<br />
for Citi's clientele by allowing the<br />
payment to be routed electronically<br />
and will result in faster realization of<br />
tax proceeds. As the tax collection<br />
bank for FBR, NBP has played a vital<br />
role in structuring this solution.<br />
Trade Chronicle - <strong>March</strong> - <strong>April</strong> <strong>2016</strong> - Page # 27
TRADE CHRONICLE<br />
UBL signs agreement<br />
with NTL<br />
HBL granted license to setup a branch in China<br />
United Bank Ltd (UBL) and<br />
NADRA Technologies Limited<br />
(NTL) recently entered into a formal<br />
agreement for the provision of biometric<br />
based transaction<br />
authentication services on the Bank's<br />
ATM network.<br />
With the signing of this agreement,<br />
UBL has become the first Bank in<br />
the industry to be officially connected<br />
with NADRA to facilitate customers<br />
to access their accounts and conduct<br />
'card-less' transactions on ATMs.<br />
With its rapidly increasing digital<br />
footprint, UBL has now become the<br />
largest bio-enabled ATM network<br />
provider in the industry offering this<br />
unique service in conjunction with<br />
NADRA. The signing ceremony was<br />
held at the UBL Head Office.<br />
Speaking at the ceremony,<br />
Muhammad Zaman, Head of Digital<br />
Banking UBL said, "Remaining true<br />
to UBL's ethos of customercentricity<br />
and legacy of innovation,<br />
UBL is now the first amongst its peers<br />
to join hands with NADRA to extend<br />
added convenience and security to its<br />
customers.<br />
Meezan Bank approves<br />
12.5 pc final cash dividend<br />
The 20th AGM of Meezan Bank<br />
Ltd was held at its Head Office-<br />
Meezan House, Karachi. The<br />
proceedings of the meeting<br />
included adoption of the Annual<br />
Audited Accounts for the year<br />
ended Dec 31, 2015 and approval<br />
of 12.5 percent Final Cash<br />
Dividend in addition to 17.5 percent<br />
interim cash dividend that was paid<br />
by the Bank, bringing the total<br />
payout to Rs 3 for the year.<br />
Mr. Sultan Ali Allana, Chairman HBL along with Mr. Nauman K. Dar, President,<br />
CEO HBL receiving branch license for china from Mr. Wang Junshou, Director<br />
General of CBRC Xinjiang.<br />
HBL is proud to be the first bank<br />
from Pakistan to receive a license<br />
for setting up a branch in China. It<br />
is also the first South Asian bank to<br />
get the permission to set up its<br />
banking operations in Urumqi, the<br />
largest city in the province of<br />
Xinjiang, which borders Pakistan<br />
along the traditional Silk Route.<br />
Urumqi is a growing commercial<br />
and trade center and the regional hub<br />
for the Belt and Road Initiative in<br />
Central Asia.<br />
To mark this occasion a special<br />
ceremony was held at the office<br />
of CBRC Xinjiang in Urumqi.<br />
Speaking on the occasion Chairman<br />
HBL, Mr. Sultan Ali Allana said,<br />
“We are extremely proud to have<br />
been granted a license to establish<br />
our branch operations in China.<br />
This is a moment of great<br />
happiness, and a reflection of the<br />
Bank’s regional and global<br />
standing. We are grateful to the<br />
banking and regulatory authorities<br />
of China and Pakistan for reposing<br />
their confidence in HBL.”<br />
He further added, “It is a historic<br />
occasion and we are confident that<br />
it will pave the way for greater<br />
collaboration between Pakistan and<br />
China. HBL Urumqi branch will be<br />
a cornerstone of CPEC, which will<br />
Insha’Allah not only contribute to<br />
trade and commerce between the<br />
two countries, but will also become<br />
a conduit of progress and<br />
development for the region and its<br />
people in times to come.”<br />
Also present at the occasion,<br />
President and CEO HBL, Mr.<br />
Nauman K. Dar said, “Pakistan and<br />
China have had strong political ties<br />
for over 60 years and the economic<br />
relationship is reaching new heights<br />
with the launch of CPEC.<br />
Trade Chronicle - <strong>March</strong> - <strong>April</strong> <strong>2016</strong> - Page # 28
TRADE CHRONICLE<br />
MCB Bank PMI decreases<br />
to 63.44 in <strong>March</strong><br />
Economic activity in the<br />
manufacturing sector expanded in<br />
<strong>March</strong> <strong>2016</strong> at a slower pace than in<br />
January, according to company<br />
executives surveyed in the MCB<br />
Bank Purchasing Managers Index<br />
(PMI). The PMI for the month of<br />
<strong>March</strong> registered a value of 63.44, a<br />
decrease from January's reading of<br />
64.54. As a rule of thumb, a reading<br />
of 50 or above indicates that<br />
manufacturing activity and the overall<br />
economy expanded.<br />
At present, the manufacturing sector<br />
appears to be growing at a solid pace<br />
with Large-Scale Manufacturing<br />
(LSM) increasing on a year-on-year<br />
basis by 4.12 percent in the July-<br />
January FY16 period, according to<br />
Pakistan Bureau of Statistics. An<br />
accommodative monetary policy has<br />
contributed to an uptick in credit to<br />
private sector and this is further<br />
supported by an increase in fixed<br />
investments for the fifth successive<br />
quarter according to the Monetary<br />
Policy Statement announced by the<br />
State Bank of Pakistan on 9th <strong>April</strong><br />
<strong>2016</strong>. With improvements in energy<br />
availability and lower input prices,<br />
supply conditions for manufacturing<br />
Meezan Bank conducts<br />
intensive Islamic finance<br />
course<br />
Meezan Bank, Pakistan's leading<br />
Islamic Bank, recently organised a '6-<br />
Day Advanced Islamic Finance'<br />
course for its staff members at its<br />
Learning & Development Centre-<br />
Karachi. This course forms part of<br />
the Bank's regular efforts to keep its<br />
staff members updated on the latest<br />
firms have also improved. On the<br />
downside, however, declining exports<br />
continue to weigh in on growth<br />
prospects. Pakistan's exports have<br />
declined by 12.92 percent, in dollar<br />
terms from July - <strong>March</strong> FY16 when<br />
compared with the corresponding<br />
period of the previous fiscal year,<br />
according to the Pakistan Bureau of<br />
Statistics. The <strong>March</strong> MCB Bank<br />
PMI indicates that manufacturing<br />
activity continued to grow for the 14th<br />
consecutive reading but at a much<br />
slower pace compared to January.<br />
New orders increased at a faster<br />
pace in <strong>March</strong>, registering an index<br />
value of 73.61, compared to 73.06 in<br />
January. However, the Production<br />
Index decreased 1.67 points to 67.50.<br />
Meanwhile, Inventory levels<br />
decreased by 2.22 points to 59.72<br />
(previously registered at 61.94).<br />
Therefore, even though new orders<br />
grew at a faster pace than before,<br />
manufacturers were able to fulfil<br />
orders using existing inventories to<br />
meet the increased demand.<br />
Meanwhile, supplier deliveries were<br />
slower at 53.06 compared to an index<br />
value of 51.67 in January. A reading<br />
of below 50 indicates faster deliveries<br />
and a potential cooling down of the<br />
economy and vice versa.<br />
Employment in the manufacturing<br />
developments in the field of Islamic<br />
Banking and Finance as well as to<br />
enhance their understanding of<br />
practical issues underlying day-to-day<br />
business and financing transactions.<br />
The course was conducted by<br />
industry renowned Shariah scholars<br />
and Meezan Bank's skilled<br />
professionals. Different modes of<br />
training including classroom training,<br />
discussions, group projects and case<br />
studies were employed during this<br />
comprehensive course. The course<br />
sector also grew further, registering a<br />
value of 52.78. However, the pace of<br />
growth of employment appears to<br />
have stalled with the index value<br />
dropping by 4.17 points.<br />
The Prices Paid and Prices Received<br />
indices both pointed to an overall<br />
increase in price levels (with index<br />
values above 50 for both) which<br />
corroborates with Pakistan's current<br />
inflation dynamics. CPI Inflation has<br />
experienced a reversal since<br />
bottoming out in September 2015 at<br />
1.32 percent YoY and currently<br />
stands at 3.94 percent YoY for the<br />
month of <strong>March</strong>.<br />
Manufacturing concerns reported<br />
that the rate of increase of prices paid<br />
has also increased, with the Prices<br />
Paid Index increasing by 3.61 points<br />
to 63.06. Similarly, the rate of<br />
increase of prices received also<br />
accelerated, with the index increasing<br />
3.61 points to 64.44.<br />
Overall, the manufacturing sector still<br />
remains on a moderate rate of growth<br />
and this indicates an uplift of the<br />
general economy. Manufacturing<br />
PMI serves as a leading indicator of<br />
economic activity as health of the<br />
manufacturing sector is typically<br />
highly correlated with future GDP<br />
levels.<br />
was designed to take Islamic finance<br />
professionals at the Bank -<br />
particularly those who deal with the<br />
high-end transactions, customers and<br />
other stakeholders directly- to<br />
advanced levels of practical<br />
knowledge. The program was<br />
tailored to enhance the professional<br />
skills of the Islamic bankers of<br />
Meezan Bank by stimulating<br />
discussions and developing their<br />
understanding of Islamic finance by<br />
combining theoretical concepts with<br />
real world business scenarios.<br />
Trade Chronicle - <strong>March</strong> - <strong>April</strong> <strong>2016</strong> - Page # 29
TRADE CHRONICLE<br />
MCB Bank in talks to<br />
buy NIB operations<br />
Summit Bank Appoints Mohammad Zahir Esmail as<br />
Its President and CEO<br />
MCB Bank announced recently that<br />
it is interested in buying the operations<br />
of NIB Bank.<br />
According to a filing with the Pakistan<br />
Stock Exchange (PSX), MCB Bank<br />
and Fullerton Financial Holdings Pte<br />
Ltd (FFH) were in a preliminary nonbinding<br />
discussion on a merger.<br />
The FFH is the majority shareholder<br />
of NIB Bank through its whollyowned<br />
subsidiary Bugis Investments<br />
(Mauritius) Pte Ltd.<br />
The terms of the transaction are in<br />
preliminary stages of discussion and<br />
are subject to, among other things, due<br />
diligence and all necessary regulatory<br />
and shareholder approvals. MCB and<br />
NIB will make an appropriate<br />
announcement should there be any<br />
further material development.<br />
The Chairman & Board of Directors<br />
of Summit Bank appointed<br />
Mohamad Zahir Esmail as its<br />
President and Chief<br />
Executive Officer.<br />
He will take over<br />
from the retiring<br />
President and CEO,<br />
Mr. Husain Lawai<br />
who retired after<br />
serving over 45<br />
years in leading<br />
positions and has<br />
been elevated to play<br />
his role as Vice<br />
Chairman on the Board of Directors.<br />
Mr. Esmail has 48 years of<br />
diversified banking experience<br />
including Conventional as well as<br />
Islamic. He joined the banking<br />
industry in 1968 as an Officer at<br />
Habib Bank Ltd, Karachi Pakistan.<br />
He had also been associated with<br />
Habib Bank AG Zurich, H.B.Z Bank<br />
South Africa, Habib Metropolitan<br />
Bank, Arif Habib<br />
Bank Limited and My<br />
Bank Limited where<br />
he imparted his<br />
professional<br />
experiences in the<br />
successful growth of<br />
these banks.<br />
On this occasion, Mr.<br />
Nasser Abdulla<br />
Hussain Lootah,<br />
Chairman of Summit Bank said,<br />
“With the experience and wellrecognized<br />
qualities that Zahir<br />
Esmail brings to the table, he was<br />
the best candidate to head the<br />
entity and we believe he will carry<br />
on the good work done by Husain<br />
Lawai.<br />
Sindh Bank earns<br />
Rs1,230m profit after tax<br />
The Board of Directors of Sindh<br />
Bank met on <strong>March</strong> 1, <strong>2016</strong> to<br />
review and approve the annual<br />
audited accounts for the year ended<br />
December 31, 2015. During the year<br />
the bank earned a profit before tax<br />
of Rs 2,051 million registering an<br />
increase of 27.3 percent as<br />
compared to Rs 1.612 million of last<br />
year. Profit after tax and earnings<br />
per share were reported at Rs 1,230<br />
million and Rs 1.23 respectively.<br />
The bank maintained an overall<br />
growth in deposits, advances and<br />
accounts opened as Deposits<br />
increased by 36 percent and stood<br />
at Rs 84.076 billion as compared to<br />
Rs 61.884 billion as on December 31,<br />
2014, Gross Advances rose by 13.4<br />
percent to Rs 46.708 billion as against<br />
Rs 41.201 billion as on December 31,<br />
2014, and number of accounts stood<br />
at 358,084 registering an increase of<br />
115 percent over 2014.<br />
The network expanded to 250 on-line<br />
branches spread over 125 cities/<br />
towns across Pakistan. This included<br />
13 dedicated Islamic Banking<br />
branches (IBBs) and two Islamic<br />
Banking windows (IBWs), providing<br />
a wide range of market based<br />
Shariah Compliant products and<br />
services. Another 50 branches<br />
including 7 dedicated IBBs and 13<br />
IBWs are planned to be opened<br />
during <strong>2016</strong>.<br />
The bank’s ATM network is also<br />
expanding at a fast pace, as 87 new<br />
machines were added during 2015,<br />
bringing the total to 192 ATMs.<br />
Plans are in the pipeline to add 73<br />
more machines to the network<br />
during <strong>2016</strong>.<br />
Trade Chronicle - <strong>March</strong> - <strong>April</strong> <strong>2016</strong> - Page # 30
TRADE CHRONICLE<br />
EFU Life wins CSR Award<br />
83rd AGM of EFU<br />
General Insurance held<br />
At the 83rd Annual General Meeting<br />
of E F U General Insurance Ltd held<br />
on <strong>April</strong> 2, <strong>2016</strong>, Members of the<br />
Company approved Audited<br />
Accounts of the Company for the<br />
year 2015. The Company earned<br />
after tax profit of Rs. 4.03 billion in<br />
2015 as against Rs. 1.83 billion in<br />
2014. The earnings per share was Rs.<br />
25/21 as against Rs. 11/43 last year<br />
2014. The written premium for the<br />
year crossed Rs. 15.2 billion.<br />
The Members approved the Board’s<br />
proposal and declared the final cash<br />
dividend @ of Rs. 4/50 per share (i.e.<br />
45%) and approved issuance of bonus<br />
shares in proportion of 1 (one) new<br />
ordinary share for every 4 existing<br />
ordinary shares held (i.e. 25%). This<br />
is in addition to already paid three<br />
interim cash dividends of Rs. 1/00<br />
each per share (i.e. 30%), making<br />
total distribution for the year to 100%.<br />
EFU Life Assurance Limited, a<br />
leading private life insurance<br />
provider in the country, has been<br />
conferred with ‘CSR Award <strong>2016</strong>’<br />
in the category of ‘Social Impact’<br />
at the 5th Corporate Social<br />
Responsibility Awards, organized by<br />
The Professionals Network and<br />
Ethical Business Update (EBU).<br />
This award is the first and only<br />
registered CSR Award of Pakistan<br />
registered with IPO. Ms. Aman<br />
Hussain, Head of Marketing, EFU<br />
Life Assurance Ltd., received the<br />
award on behalf of the company.<br />
The awards recognized the efforts<br />
of the companies who are at the<br />
helm of Social Responsibility efforts<br />
in Pakistan.<br />
EFU Life has been in the forefront<br />
in promoting and contributing to the<br />
causes of healthcare and education.<br />
It believes in playing a crucial role<br />
and building a positive relationship<br />
with the society in which it operates.<br />
For serving this purpose, EFU Life<br />
has joined hands with numerous<br />
renowned non-governmental<br />
organizations for a better and<br />
prosperous Pakistan.<br />
Govt to revamp State Life<br />
The government has decided to<br />
reform and modernise State Life<br />
Insurance Company (SLIC). Chairing<br />
a meeting to review State Life’s<br />
performance, Finance Minister Ishaq<br />
Dar said the government would<br />
extend all possible support to SLIC<br />
for structural reforms aimed at quality<br />
service delivery as well as encourage<br />
participation by the private sector. It<br />
may be mentioned that privatisation<br />
of SLIC is on the agenda.<br />
Mr Dar said after achieving<br />
macroeconomic stability the government<br />
is now focused on growth, and in this<br />
regard entities like SLIC have a key role<br />
to play. SLIC Chairperson Nargis Ghaloo<br />
briefed the finance minister about the<br />
financial profile of the corporation. State<br />
Life’s investment portfolio encompasses<br />
government securities, TFCs/approved<br />
government securities, equities, bank<br />
deposits, investment properties and<br />
policy loans.<br />
Trade Chronicle - <strong>March</strong> - <strong>April</strong> <strong>2016</strong> - Page # 31
TRADE CHRONICLE<br />
Telecommunication News<br />
Number of mobile phone<br />
users reach 129.85m by<br />
Feb-end<br />
Mobilink Digital Innovation Lab inaugurated by<br />
Minister of State for IT & Telecom<br />
Mobile phone users in Pakistan<br />
reached at 129.85 million at the end<br />
of February <strong>2016</strong>, after five mobile<br />
phone companies added a<br />
combined user base of 1.8 million<br />
customers during the reported<br />
month, according to data released<br />
by the Pakistan Telecommunication<br />
Authority (PTA) recently.<br />
Mobilink leads the charts with 37.48<br />
million customers while Telenor is<br />
closing in the gap with 36.02 million<br />
subscribers. However, after planned<br />
merger of Mobilink and Warid,<br />
Mobilink will be able to widen the<br />
lead with more than 48 million postmerger<br />
customers. Zong has 24.86<br />
million customers at the end of<br />
February <strong>2016</strong> whereas Ufone<br />
stood with 20.59 million customers<br />
till the time. Warid has a total of<br />
10.9 million customers.<br />
In a development which is to further<br />
drive digitization in the country,<br />
Mobilink has inaugurated its Digital<br />
Innovation Lab, a collaborative<br />
space for supporting and<br />
accelerating key Digital Initiatives.<br />
Ms. Anusha Rahman, Minister of<br />
State for IT & Telecom was the<br />
chief guest at the ceremony, and<br />
expressed the government’s support<br />
for all such initiatives.<br />
The Digital Innovation Lab is an<br />
innovation center where key<br />
internal stakeholders, industry<br />
professionals, thought leaders and<br />
Digital Entrepreneurs can utilize<br />
Mobilink’s expertise to create and<br />
explore innovative products and<br />
services in the Digital Space.<br />
However, the data shows that the<br />
number of 3G/4G users reached<br />
26.19 million by end February, <strong>2016</strong><br />
as compared to 24.709 million by<br />
end January <strong>2016</strong> showing a<br />
reasonable growth in modern<br />
mobile broadband services with<br />
each passing month. The number<br />
of 4G (Zong) users jumped from<br />
416,676 subscribers in January<br />
<strong>2016</strong> subscribers to 481,730 by end<br />
February. According to PTA, the<br />
number of Zong, Mobilink, Ufone<br />
and Telenor reached 5,430,155,<br />
7,930,515, 4,879,653 and 7,213,512<br />
3G users respectively by February<br />
<strong>2016</strong>. Warid LTE subscriber<br />
reached 257,726 during this period.<br />
Mr Liu Dianfeng, |CEO Zong along with his executive team members at a cake<br />
cutting ceremony held to celebrate recognition of best performance in QoS<br />
survey carried out by PTA.<br />
Trade Chronicle - <strong>March</strong> - <strong>April</strong> <strong>2016</strong> - Page # 32
TRADE CHRONICLE<br />
Aviation & Hotel News<br />
Pakistan Airways to be<br />
made premier airlines<br />
Turkish Airlines office opens in Islamabad<br />
The government has initiated serious<br />
working for developing the Pakistan<br />
Airways at par with international<br />
airlines. Officially, it has been<br />
termed the premier airlines of the<br />
country recently. Prime Minister<br />
Muhammad Nawaz Sharif chaired<br />
a meeting on the aviation affairs at<br />
the PM House where discussions<br />
took place about upcoming airlines.<br />
The participants of the meeting gave<br />
a comprehensive presentation to the<br />
prime minister for steps being taken<br />
for creating a premier airline that<br />
should be a reflection of the past<br />
image of the national flag carrier<br />
internationally. The meeting<br />
reviewed progress on bringing the<br />
Pakistan Airways on par with<br />
international airlines.<br />
Prime Minister Muhammad Nawaz<br />
Sharif directed the authorities<br />
concerned that the crew and staff<br />
of Pakistan Airways should be<br />
trained from best institutions and<br />
state-of-the-art services for<br />
passengers not less than any<br />
international standards, must be<br />
ensured. Except the core business,<br />
rest of the services should be<br />
outsourced to meet the professional<br />
standards, the prime minister added.<br />
He stressed that the airlines should<br />
set high service standards in the world<br />
for being the face of the country.<br />
There should be lean management<br />
structure for optimising airlines’<br />
efficiency and service delivery, and<br />
the emoluments structure should<br />
commensurate with the quality of<br />
human resource.<br />
Turkish Airlines has opened a new<br />
office location in the heart of<br />
Islamabad, strengthening its<br />
presence in the capital city.<br />
Strategically located in main F7-<br />
Markaz, the new office will be able<br />
to serve air travellers more<br />
conveniently. Ribbon cutting<br />
ceremony was attended by the<br />
dignitaries from the travel world,<br />
diplomats, media, government and<br />
private sector as well.<br />
On this unveiling, General Manager<br />
Turkish Airlines Islamabad, Yunus<br />
Mert, said that Turkish Airlines would<br />
continue to offer amicable and<br />
improved customer service at its new<br />
address at F-7 Markaz, Islamabad,<br />
PIA bill finally passed<br />
A joint sitting of the Parliament<br />
recently passed "The Pakistan<br />
International Airlines Corporation<br />
(Conversion) Bill, <strong>2016</strong>" to convert<br />
the national flag carrier into a<br />
public limited company.<br />
It also passed "The Privatisation<br />
which will allow it to serve their large<br />
client base not only from Islamabad<br />
but also those who come from the<br />
surrounding areas. Turkish Airlines<br />
being the leading airline in Europe<br />
continues to be delightfully different<br />
by offering unique customer service<br />
to its large client base.<br />
The opening of the new city office<br />
will not only provide convenience for<br />
travellers but also opportunities for<br />
businesses and professionals.<br />
Turkish Airlines look forward to<br />
continuing to contribute to<br />
Pakistan’s economic expansion,<br />
hence strengthening bilateral ties<br />
between brotherly countries, i.e.<br />
Pakistan and Turkey.<br />
Commission (Amendment) Bill,<br />
<strong>2016</strong>, The Emigration<br />
(Amendment) Bill, <strong>2016</strong> and The<br />
Civil Servants (Amendment) Bill,<br />
<strong>2016</strong>." The proceeding of the<br />
House remained suspended for two<br />
hours as opposition wanted to<br />
discuss first the issue of the<br />
Panama Papers while the<br />
government wanted to take up the<br />
legislation.<br />
Trade Chronicle - <strong>March</strong> - <strong>April</strong> <strong>2016</strong> - Page # 33