The ‘Sector Briefs’ presents a valuable resource on Pakistan’s leading and potential industrial sectors highlighting useful information and data in a concise way so as to facilitate entrepreneurs with informed decision making with regard to investment in a particular sector.

The Sector Briefs highlights sectoral situation analysis including existing capacity and production trend, trade data, technology level, investment opportunities, export potential etc. Efforts have been made to enlist leading players in the sector. Possibilities for foreign investors, wherever possible, of entering into technical collaboration or joint venture with Pakistani companies have been highlighted. In addition, outsourcing possibilities, especially in the engineering sub-sectors, have also been made part of the sectoral briefs.

Below is the list of sectors for which briefs are available and can be downloaded free of cost. For a detailed version, contact DARTWAYS for assistance by completing simple forms below:

Overview

The auto parts industry of Pakistan has come of age during the last 5 years owing to aggressively pursuing capacity expansion and technology upgradation on the back of major investments made by OEMs to meet rising vehicles demand. This coupled with opportunities created by export development inititives of the government provided auto parts industry the springboard to becoming part of global sourcing chain.

Industry Structure

The industry produces a diversified range of products including precision components for the OEMs, replacement as well as export market. About 90% of the companies are SME’s mostly in the tier 2 and 3 category with major clusters in and around Lahore and Karachi.  With 253 companies currently registered with PAPAAM plus many micro and small enterprises spread throughout the length and breadth of the country, the auto parts sub-sector provides a strong vendors base capable of manufacturing a wide range of parts and components. 

Technological Development

Majority of companies in the sub-sector are SMEs developing their approach and looking for professional support to reintegrate and redesign their work flow processes and improve quality through modern technologies, testing equipment and adoption of best manufacturing practices. Technology levels remain low to medium primarily due to high cost of technology acquisition. Automotive parts industry has seen a considerable growth during the last 5 years but achieving high volumes and entering into export markets remains a challenge. Another major challenge is development of critical parts involving high technology level. To further improve the quality of components which have already been developed and to go for high value added components and assemblies which have been planned by the industry for local development would need high technologies. Such components and assemblies include alternator, starter motor, water pump, fuel pump, fuel filter, seat reclining, power steering, engines, transmissions for car and LCVs and regulator rectifiers, ignition coils, piston, fuel cock, clutch assembly, sprocket cam, drum gear shift, magneto and oil pump etc for 2 /3 wheelers.

Exports

The sub-sector is exporting a diverse range of products to many countries including USA, Germany, Italy, UK, UAE, Bangladesh, France, Hungary, Spain and Turkey indicating capability of the industry in meeting quality standards and sophistication required by these markets. However, Pakistan’s imports of automotive components far outweigh its exports. Pakistan imports of major auto parts were US$ 727 million and US$307 million during 2007 and 2008 respectively. Export figures show a gradual increase during the last four years that may be attributed to increased international exposure of companies and projection of Pakistan as an emerging subcontracting destination during international trade fairs.  

Export Products

The Sector is exporting Cast & Machined Parts, Forged & Machined Parts, Transmission Components (Gears & Shafts and Wheel Hubs, Sheet Metal Parts, Rubber and Plastic Parts, Rubber mountings, Safety Seat Belts and Radiators   

 

The automotive sector of Pakistan comprises the following three major segments:

1.    Cars, LCV’s, buses & trucks, special purpose vehicles
2.    Auto parts & accessories
3.    Motorcycle & auto rickshaw

Overview:

The industry assemble and produces almost all kinds of vehicles including cars, LCV’s, buses, trucks, tractors, prime-movers & special purpose vehicles. The country requirements are mostly met through local production except for imports of certain categories of cars, trucks & prime-movers. Almost all cars, buses and trucks are being assembled under technical franchise agreements with foreign principals. There are five (5) car manufacturers producing 800, 1000, 1300, 1600 and 2000 cc cars, six (6) bus, eight (8) truck & prime mover, seven (7) tractor and six (6) LCV’s manufacturer in the sector.  

Products:

Cars, LCV’s, Buses & Mini Buses (AC & Non AC), Heavy, Medium and Light Duty Trucks and Chassis, Heavy & Medium Prime Movers, Special Purpose Vehicles, Air Spoilers, Semi Trailers, Fuel Tankers, Bowsers, Aviation Fuelers / Refuelers

Auto Parts and Accessories: Cast and Machined Parts, Forged and Machined Parts, Plastic and Rubber Parts and Body Parts

Motorcycles (70 cc - 125 cc) and Auto Rickshaws 

Exports and Potential:
 
The sector is exporting buses, trucks, bowsers, cars, LCVs, aviation fuelers/refuelers, fire fighting vehicles and semi-trailers to many countries.The industry has the potential to increase exports manifold with effective and focused marketing and undertaking market studies in potential countries.  

Thrust Products and Markets:

Existing export markets include Bangladesh, Afghanistan, UAE, Kenya, Sudan and Sri Lanka


 

Cutlery, in general, refers to all types of cutting instruments which may be used for industrial, commercial or domestic purposes. Cutlery products are generally classified into two categories namely kitchenware and non-kitchenware. The detail of products included in each category is depicted in table 1.

Cutlery Products

Located in the traditional metal workmanship triangle of Punjab, is the town of Wazirabad where the major part of the cutlery industry of Pakistan is clustered. However, some of the cutlery manufacturers are present in Sialkot, Lahore, Karachi and Dir (KPK) also. One important segment of industry (shaving blades and disposable razors) is entirely situated outside Wazirabad.

The history of metalworking in the vicinity of Wazirabad dates back to the times when Alexander the Great invaded India but it was in the time of British when the craftsmen of this area were recognised for their skills in cutlery. In its early days the town used to produce arms and ammunition for British Indian Army. During the World War II, the industry in and around Wazirabad, was manufacturing arms and accessories like bayonets, karpans, knives, daggers, etc. for allied forces. After the World War II, the market for war related products dried up. Soon after, most of the Hindu businessmen left because of partition of India and with it a huge sub-continental market was lost. This industry, therefore, had to go through restructuring and diversification. The industry emerged out of the crises with product diversification and started manufacturing cutlery, knives of various kinds, blades, scissors, shears, daggers, swords, replicas of swords and knives for decorative purposes and kitchenware. Ever since, the industry has grown and has weathered many up & down swings.

The industry essentially comprises of SMEs. There are over 400 units directly associated with the manufacturing of different cutlery products out of which 15-20 units may be classified as medium. More than 150 cutlery manufacturers are members of “Pakistan Cutlery and Stainless Steel Utensils Manufacturers Association”. The total installed capacity of the cutlery industry is to the tune of 8 million pieces whereas the production is 4.3 – 4.5 million pieces, according to the aforementioned association. The direct and indirect employment of this industry is estimated to be around 25,000. The cutlery industry contributes 0.11% to the country’s GDP and has a share of 0.25% and 6.5% in total exports and engineering exports respectively. The industry occupies the domestic market space (90 %+) and very few items of cutlery, kitchenware and blades are imported.

The major raw materials used by this industry include stainless steel sheet, re-melted metals, brass sheets, densified wood, camel bones, steel wire and plastics. Among different grades of steel being used for cutlery is Damascus steel which yields best finish for the products. All the raw materials used by this industry, whether produced locally or imported, are easily available.

Trade Statistics of Cutlery

According to trademap data, the global imports and exports were US$ 10,727 million and US$ 9,571 million respectively for the year 2009. The imports and exports of Pakistan were US$ 11.83 million and 52.88 million respectively for the same period. The details of the trade are given in table 2. The analysis of the data shows that Pakistan’s share in global exports is a mere 0.55% despite the potential.

Strengths, Weaknesses & Need Assessment

Over time, the industry has matured and the basic skill set is available at low cost but the skill set for higher value addition is unavailable. The industry also has sufficient production capacity and basic technologies which are now outdated. The productive assets are also outdated. The limited product mix and varieties in products is also hindering the growth of this industry.

The manufacturers also lack the knowledge of potential new markets and their dynamics. Moreover they have not yet been able to develop their brands and are dependent on third parties for marketing. The internal conflicts of the industry and the cut throat competition in prices are also adversely affecting the industry. Furthermore the industry also lacks the knowledge about quality standards and certifications and therefore quality management systems are almost nonexistent. Although there are a few companies who are large enough and have adequate managerial, technical, financial strength and sufficient export orientation

and experience but majority fall in SME and lacks these skills.

Thrust product wise studies of potential markets need to be done in order to assist and prepare the exporters for venturing into new markets. Knowledge dissipation about latest manufacturing practices, technologies, management practices and quality standards among the manufacturers need to be undertaken to enhance their competiveness. Skill sets both at technical and managerial levels need to be improved.

Overview

The farm machinery and implements sector of Pakistan produces large variety of agricultural implements and machinery including tractors. The industry, however, is dominated by micro and small enterprises most of which are operating from their backyard in small workshops mostly using locally produced conventional machinery. These units, ubiquitous all over Pakistan, outsource components to other small scale operators. The cities of Daska, Faisalabad, Okara and Mian Channu house major clusters of farm implements manufacturers.     
The farm machinery and implements manufacturing segment is large, fragmented and mostly unorganized. The industry is producing agricultural, horticultural and forestry implements for soil preparation and cultivation (ploughs, disc harrows, laser levelers, seeders planters, seeding drills, rotary tillers), harvesting and threshing machinery (paddy thresher, straw balers, pick up balers, mowers including cuter bar).
The industry, which at present caters mainly to local market,  is faced with issues of lack of standardization and quality, absence of design & engineering capabilities, weak management structures and financial muscle of manufacturers, unawareness about modern manufacturing practices and performance standards of equipment produced, untrained and low skilled workforce and prevalence of conventional obsolete and inefficient technology and production assets. Despite these issues, the industry has been able to manufacture and satisfy the needs of domestic farming sector in a big way. Some good manufacturers have even started exporting to Africa and Afghanistan.   
Little effort has been seen in the organized segment to undertake manufacture of standardized farm machinery and equipment for supply to local market. However, the effort had to be aborted for the reason of price in-competitiveness. The farming communities in Pakistan could not be attracted to buy better but expensive equipment due to affordability issues. The National Agricultural Research Council of Pakistan has also developed standardized design & drawing based quality equipment. But for some reasons, there is no co-ordination between NARC and private sector manufacturers. The Agricultural Engineering Departments of the Provincial Governments and their performance have also been below mark. A “Centre for Agricultural Machinery Industries” was established with financial assistance from Dutch Government at Mian Channu which serves as common facility centre and training institute for the cluster there. Overall, the current state of affairs is a mixed bag of performances and opportunities.

Need Assessment

Up-gradation of technology, research and development for new products, product development for after-market and non-mainstream OEM’s, product designing and standards development, vendor development for specialized manufacturing

Exports and Potential

The world trade market of over US$ 4 billion exists. Most of this market is for high end standardized products. But due to affordability issues in poor agricultural countries, a market for low end products also exists. Some estimates are that the world trade market for low end products is around US$ 500 million. Pakistan has already entered this low end international market and agricultural implements are currently exported to Nigeria, Kenya, Tanzania, Morocco, Ghana, Afghanistan, etc. All of this export is made through trading export businesses who work as consolidators and exporters operating in these countries. The export performance in numbers is, however, negligible. The improvement in current state of affairs can be managed through capitalizing on existing strengths and by overcoming the weaknesses.
Pakistan exports farm machinery and implements to quite a large number of African countries including Nigeria, Kenya, Tanzania, South Africa, Morocco, Ghana and regional countries including Bangladesh, Afghanistan and UAE etc. Most of these exports are made by consolidators, engineering or trading companies securing export orders and getting parts developed through various vendors. Potential exists for exporting to African and regional countries and development of parts for European companies. The chart below depicts Pakistan’s exports of farm implements during the last 5 years.

Tractor Industry Overview

Presently, there are 5 manufacturers/assemblers of tractors in Pakistan. The two leading players manufacture Massey Ferguson and Fiat brands under franchise arrangement. The industry produces 50, 60, 65, 75 and 85 HP tractors. The industry produced 54,375 units during 2007-08 with major share of 98% going to Millat and Al-Ghazi Tractors with combined production volume of 53,242 units.

Exports and Potential

Tractors are being exported to regional countries mainly to Afghanistan. Potential exist for exporting 100 HP – 200 HP tractors to India. Tractors being manufactured in India are relatively of higher cost and power and there is a niche market for low cost tractors.

Support Organizations

Home appliances industry was established in Pakistan in 1980s, on the basis of fiscal incentives offered by the Government of Pakistan. In the initial phase, the industry worked with low economies of scale but high production costs while remaining protected by high customs duties on import. With start of supply side reforms and reduction in import tariffs in 1990s, the home appliances industry received its first shock as it had to face competition from imported products. Fortunately, the market size started expanding and industry also restructured itself to stage a comeback with higher economies of scale and reduced costs of production. Amazingly, the industry which was not prepared to talk about exports at the time of Engineering Vision in 2002, took the initiative of exports itself. Though small in number, the industry exported refrigerators and freezers worth US$ 13 million in 2010, washing machines worth US$ 2.7 millions in 2010 and air conditioners worth US$ 4 million in 2010. The success is not without problems the industry faced while making its efforts to enter international market.

    The domestic home appliance engineering industry consists of medium to large size units in organized sector with enough managerial capacity. Product wise analysis of the industry is as follow:-

(i)    Refrigerators:

Refrigerator manufacturing in Pakistan has now matured. All the players in this product are in organized sector, have sufficient managerial and technical capabilities and sufficient financial strength to manage their organic growth. However, there are two shortcomings in this product. Firstly, the compressor and a few other critical components are not manufactured locally and have to be imported, which increases cost of production. Secondly, the industry only manufactures “direct cool” refrigerators and “no frost” refrigerators are not manufactured, which takes a large chunk of international market out of the potential of this industry to export. As far as competition in “direct cool” market segment in international market is concerned, the going is not smooth. Pakistan origin refrigerators have to compete with Chinese origin refrigerators which are cheaper as Chinese Government offers hidden subsidies.

(ii)    Freezers:

 Like refrigerators, the freezer manufacturing in Pakistan has also matured. All the manufacturers are in organized sector and have the same strengths, weaknesses and problems that are characteristic of refrigerator manufacturers.

(iii)    Air conditioners:

Air conditioners industry was established in Pakistan in 1980s through fiscal incentives and high a high tariff wall to protect local industry. It used to produce window type air conditioners. The whole of industry closed down as the consumer preference shifted from window type to split type energy efficient air conditioners. At the same time, Pakistan underwent a fiscal policy restructuring phase wherein through supply side reforms, the import tariffs were liberalized. For some years Pakistan was not manufacturing air conditioners. Around 2006, the activity restored but only to a limited extent. Now, air conditioners are being assembled in Pakistan through CKD/ SKD operation, only to avail the fiscal incentives offered by the Government. In its present state air conditioner manufacturers are not in a position to export and compete Chinese exporters who also supply CKD/ SKD kits to Pakistan. In fact, the industry needs to do a lot of inward thinking to integrate backward and add value locally so that they are able to reduce their costs and export at competitive prices.

(iv)    Washing Machines:

 Washing machines industry in Pakistan is clearly divided into tow groups: (i) the organized sector and (ii) the unorganized sector. The organized sector of washing machine industry started in 1980s through fiscal incentives and in its initial phase worked under high tariff walls. The washing machine industry survived the supply side reforms and matured. It produces approximately 150,000 units of single tub washers and 125,000 units of semi-automatic twin tub washing machines. No fully automatic machines are manufactured in Pakistan. In comparison the unorganized sector mainly clustered around Gujranwala and Lahore is stated to be much larger than the organized sector. Though exact figures of manufacture are not available there are varying claims of manufacture from 500,000 units to 750,000 units per year. This sector also claims to have exported small quantities to under developed African markets.

The strengths and weaknesses of this sector were indentified for capitalizing on strengths and overcoming of weaknesses. Strengths and weaknesses are listed in proceeding paras.

Strengths:

(i)    The Home Appliances sector has matured over its history and is ready to take off.

(ii)    Export orientation already exists at limited level.

(iii)    Economies of scale exist. The sector has occupied a large part (over 95%) of domestic market.

(iv)    Large pool of low cost human resource.

(v)    A number of basic technologies have already been acquired.

(vi)    The organized sector has sufficient managerial capacity to handle export business.

(vii)    Industry has freight advantage over Chinese competitors in Middle East and African markets.

Weaknesses:

(i)    The products are low tech. Refrigerators and freezers are based on direct cool technology. Fully automatic washing machines are not produced.

(ii)    A large part of washing machine segment is unorganized and does not have managerial capacity to handle export business.

(iii)    Knowledge about potential markets and their dynamics is not available with home appliances industry.

(iv)    The organized sector of home appliances industry needs to expand its production capacity and needs funding availability from financial sector.

(v)    Standards and certification requirements in target markets, need to be addressed.

Potential Matrix

           Note: The industry has an export potential of US$ 200 million in 15 years, if a head start can be provided.

Need Assessment:

(i)    Market studies in respect of refrigerators, freezers and washing machines with reference to potential markets to be done for assistance to exporters.

(ii)    Common facility centres for washing machine unorganized sector.

(iii)    Testing labs and assistance in standards and certification.

(iv)    Managerial capacity building in unorganized washing machine sector.

(v)    Technical skill set need to be improved.

(vi)    Targeted “export refinance” and “long term financing facility” for exporters in organized segment.

(vii)    Participation in trade fairs/ exhibitions, and in trade delegations.

(viii)    Assistance in developing after sale network in potential markets.

Clustered in the traditional metalwork skill triangle of Punjab province, the surgical instruments industry is over 100 years old. The industry is diverse and large, ranging from micro enterprises to small and medium scale manufacturing concerns, as well as large scale manufacturers. Surgical Instruments Manufacturers Association of Pakistan (SIMAP) has over 2000 members, out of which over 600 small and medium scale companies are involved in exports. In addition, significant export business is generated by trading houses having offices in USA and Europe. According to industry sources only 5% of the instruments produced are sold in domestic market, while the rest 95% are exported either directly or through export houses. Although exact production capacity is not known, it is estimated to be 2 million pieces a year with an investment in productive assets around Rs. 12 billion. The industry has achieved approximately 70% capacity utilization. Direct employment provided by this industry is approximately 150,000 workers. The industry claims to have achieved value addition of around 75%.

Product Mix & Technology:

The product mix includes surgical instruments, dental instruments, veterinary instruments, stainless steel hollow ware for use in hospitals, hospital furniture, manicure instruments and pedicure instruments. The industry uses imported as well as local stainless steel and steel forgings as major inputs. Most of the processing chemicals and materials are imported. Stainless steel of required grades is normally imported from Japan, Taiwan and Europe and is used for production of operation theatre instruments and hollow ware. The local stainless steel is mainly used in production of single use/ disposable instruments. Forgings are sourced mainly from Daska where a number of units having forging capabilities are located and concentrated. Major technologies and processes used by the industry are milling, shaping, grinding, polishing, hardening, tempering, ultrasonic cleaning, electroplating and etching etc.

Export Performance:

The export performance of surgical goods industry has been impressive. It has been the top foreign exchange earner amongst the engineering sub-sectors. The industry had exported goods worth US$ 185 million in 2005, US$ 171 million in 2006, US$ 241 million in 2007 and US$ 280 million in 2008. The exports have shown a growth trend throughout the history. However, according to critics from within the industry, the performance is negligible when compared with the potential. The questions they raise are about weak market penetration. The world market of surgical instruments is approximately US$ 50 billion. According to them, if the industry organizes itself by avoiding cut throat competition, the unit values of exported items can be much higher as compared to what they are getting. According to their estimates, the exports could have been around US$ one billion if full potential was realized.

On its part, the Government of Pakistan has been putting in efforts to assist surgical instrument industry to grow further. Surgical instruments have always been the focus of Ministry of Commerce and Trade Development Authority of Pakistan as far as facilitation for exports is concerned. The Federal Board of Revenue has always adjusted import tariffs to facilitate surgical industry to import its inputs at zero or minimal rate of customs duty. There are other zero rating schemes for import of inputs by the export sectors as well which can be used by the surgical instruments industry. More recently, the Government of Punjab has established a centre within the surgical cluster to serve as a common facility centre for testing, outsourcing of ancillary processes and training of manpower.

Export Potential & Markets:

There is an enormous potential for the surgical instruments industry in the world market. Considering the fact that Pakistani share in the world market of surgical instruments is merely 0.50%, the exports can easily be augmented as Pakistani Surgical Instruments are the most economical choice in the global market. The existing export markets include Germany, France, Italy, UK, Belgium, Hungary, Spain, Turkey, India, UAE and USA. The potential export markets for the surgical instruments are Europe, North & South America, Central America, East Asia, South Asia, Central Asian Republics, Middle East, African Continent and Australia. It is observed that there is a potential of exponential growth in exports. The industry is facing a challenge of brand development and product development. The conflicts within the sector are hindering the industry of its potential to reach an export target of over US$ 1.25 billion per year, within 10 years.

Strengths & Weaknesses:

The surgical instruments industry is not without inherent strengths and weaknesses. Over the time the industry has become mature and a large pool of low cost human resource with basic skill set is available. The availability of sufficient basic manufacturing capacities and technology add to the strength of this industry. Most of the products are generic and the industry is predominantly export oriented. There are few large companies who have adequate managerial and financial capabilities to expand internationally.

One of the major weaknesses of the industry is the absence of skill set for higher value addition. Majority of the micro or small sized units either lack or have little managerial skills and also do no not have all ancillary processes. Furthermore, the industry also lacks the knowledge about potential markets and their dynamics. Due to the absence of any brand development and marketing, the industry is mostly dependent upon third party marketing mechanism based in Europe. There is no research and development and new product development. Moreover cut throat competition within the industry is resulting into constant reduction of unit prices.

Need Assessment:

The industry needs to resolve its internal conflicts. Further, additional Common Facility Centres needs to be set up to provide testing facilities, assistance in standards and certification and assistance in design development and product diversification. Moreover the industry needs to improve its technical and managerial skill set. Product wise market studies of potential markets are required for assistance of exporters. The industry also needs guidance in brand development.  A business support centre may be set up to help micro and small scale manufacturers. Targeted financing facility for expansion of capacities, productive asset acquisition and technology acquisition may be provided. Effective participation in trade fairs and trade delegations can add winning flavour.
 

Over a period of time, textile sector has come to enjoy a central position in the economy of Pakistan. Its contribution to GDP is over 8%, which is tremendous by any standard. It provides direct and indirect employment to approximately 15 million people which indicates a huge livelihood dependence on this sector. It contributes to exports and foreign exchange earnings more than any other sector. Since, the primary input comes out of agriculture sector, it can be stated that textiles is an agro based industry and is vertically integrated into the economy. For Pakistan, which is a leading producer of cotton, the development of textile industry was obvious in order to make use of local resources. The government supported it and out of incentives now there are 1,220 ginning units, 520 yarn spinning units, 125 large units and 425 medium sized units producing basic textile products. Over and above cotton based textiles, synthetic filament units and polyester staple fiber units have also come up and contribute to textile sector.

The plastic resin industry produces resins which are further treated in plastics processing facilities and sold largely to the building and construction, packaging and consumer markets. Plastic resins are generally categorized into two types: thermoplastics and thermosets. Globally, thermoplastic resins dominate plastic resin sales and production.

Pakistan possesses a narrow petrochemical base producing limited number of polymers including Polystyrene (PS), Polyvinyl Chloride (PVC), Polyethylene Terephthalate (PET) and Urea/Melamine Formaldehyde. An attempt to set up the first PVC plant in Pakistan was made by the Federal Chemicals and Ceramics Corporation Limited (FCCCL) when it planned to set up a 20,000 tons per annum capacity plant in Kala Shah Kaku way back in 1994. This plant, unfortunately, did not come online. Later in 1999, Engro Chemicals through a joint venture with Japanese company set up the first PVC plant in Pakistan.

At present, no facilities for the production of two basic polymers polyethylene and polypropylene exist in the country with the result that these two constitute the bulk of Pakistan plastic resins imports. Import of PE and PP during 2009 stood at 0.424 tons valuing USD 700 million constituting 76 per cent of total plastics raw material imports. Pakistan annual consumption of plastic resins is over one million tons and demand may further grow on the back of new developments in plastic technologies and a rapidly expanding market for plastics due to its wider use and application in the building and construction, transportation, packaging, electrical and electronics, furniture and furnishings and household appliances industries.

Plastics raw material production in Pakistan is at low scale and does not meet the required demand. Presently, the total combined annual production capacity of four leading plastic resins producers stands at a little over 0.5 million tons while Pakistan total imports of all plastics raw material, as per Trade Map data, reached 0.525 million tons valuing USD 913 million in 2009. Pakistan was meeting its entire plastics raw material needs through imports till 1994. Pakistan has now started exporting PVC, PET resin and Polystyrene on a limited scale to Turkey, UAE, Italy, South Africa and Iran. Total exports of these three polymers stood at USD 176 million. Table below depicts leading plastic resins manufacturers covering their products and production capacities:

Below is brief description of plastic resins being manufactured in Pakistan, major producers and potential for growth in each segment:

PET Resin (Polyethylene Terephthalate)
The only producer of Polyethylene Terephthalate (PET bottle grade resin) is Novatex, a sister concern of Gatron Industries. Gatron was established in 1984 as a producer of texturized and flat polyester filament yarn. The company diversified into PET bottle grade resin to cater to the increasing demand of the bottling industry. The company, with an annual  production capacity of 235,000 tons of PET Resin (bottle grade), is not only meeting country’s demand but has also entered into export market. Gatron has its Polymerization Plant and Technology from Zimmer AG, Germany while the Solid State Poly-condensation Plant and Technology has been acquired from Sinco Engineering, Italy. Presently there is a huge potential for growth as demand is increasing due to high consumer usage in Pakistan. 

PVC (Polyvinyl Chloride)
Engro Polymer & Chemicals Limited, a subsidiary of Engro Corporation, is the only producer of PVC in Pakistan. The plant has annual production capacity of 150,000 metric tons. The company now has an integrated PVC facility after expansion and backward integration in 2009 for the manufacture of Ethylene Di Chloride (EDC), Chlor-alkali and Vinyl Chloride Monomer (VCM). The company was able to export 10,000 tons of PVC in 2009. At present only traditional PVC items are being manufactured i.e. pipes and fittings, shoes, cables, water conservation and compounding etc. With increased application of PVC in other products, there is good potential for growth in PVC consumption.  

Polystyrene (PS)
Pak Petrochemicals Industries is the only producer of polystyrene in Pakistan. The company was established in 1994. Pak Petrochemicals annual production capacity is 90,000 tons producing GPPS and HIPS. About 60% of this is domestically consumed while the rest is exported to Germany, South Africa, Lebanon, Egypt and Turkey. Due to increased demand, the Company plans to start local production of ABS in the near future. The company is planning to increase its polystyrene capacity by 40% initially and subsequently by 100%.

Methanol Urea (Melamine)
Dynea Pakistan Limited produces urea resin for use in industries like particleboard, chipboard, veneer board and melamine resin for lamination industry. Together with its wholly owned subsidiary, Visionite (Pvt.) Limited, it is also Pakistan’s largest producer of molding compound used for manufacturing dinner sets and electrical accessories. Manufacturing of formaldehyde and amino-plast resins and of molding compound were both pioneering ventures introduced for the first time in Pakistan. Now only a small quantity of molding compound is imported into the country and there are no imports of formaldehyde or liquid resins.

Another important plastic resin is ABS (Acrylonitrile butadiene styrene) which is currently not being produced in Pakistan. Demand of ABS is growing which has made setting up of a ABS manufacturing plant in Pakistan feasible. In addition the demand for PE and PP in Pakistan is also showing a rising trend thus making the production of both the polymers in Pakistan viable.