One of the business trends rising in Pakistan is assembling business. Throughout 2017 we have been listening to various news of different multinationals to start assembling of their products in Pakistan. Why Pakistani market is attracting international investors? Is assembling business helpful for local manufacturers and importers? These are the questions we are going to unfold in this article. Economy which is considered house of assembling business is Chinese economy, where cheap labor has contributed a lot to economy and assembling industry.
Major Industries in which foreign investors are expected to start assembling their respective products are automobile and cellphone industry. Group Renault and Al-Futtaim have signed definitive agreements to assemble vehicles in a new plant in Karachi, a statement said on Monday. However, the transaction remains subject to a number of conditions mainly relating to regulatory approvals.
The two parties expect that the plant will be built starting the first quarter of 2018. Car sales will begin in 2019 and be ramped up in 2020. Government granting permission to three new, but non-European, companies to set up their car assembly plants in Pakistan. The companies in collaboration with local partners will invest $372 million to set up the assembly/manufacturing plants. The Ministry of Industry and Production allowed United Motors Private Limited, Kia-Lucky Motors Pakistan Limited and Nishat Group to set up units for assembly and manufacturing of vehicles under the Greenfield investment category.
Cellphone industry is also looking to start assembling of cellphones in Pakistan which is a very bright sign for assembling business. The companies that are seeking government’s approval to establish assembly lines are:
· Mobo Mobiles
· Foxconn and
· Jio Phone
Pakistan Telecommunication Authority (PTA) is hoping that companies will start operations soon. An official from the authority said, “We expect these companies to start manufacturing mobile phones in their plants soon.”
Recognizing the growing market, he said,
Mobile phone users in Pakistan are fast shifting to hi-tech products; of the 24 million mobile sets being imported in a year, almost half are smartphones.
Guidelines were issued by PTA to attract foreign investments from mobile companies. This is an attempt to bring down the prices of smartphones as their demand is continuously increasing.
Local producers like super Asia, Haier, and Pak fan has successfully setup their assembly lines and assembling split units and other house hold electronics. Benefits for local producers is low import duties on parts as compared to finished products. Assembling of products increase margins for local producers and they can create their own brands. Motorbikes like United, Pak hero and Metro were Chinese imported technology assembled in Pakistan with local brands have earn good market value. LED lights industry is one of the growing industry with a bright future in assembling business. Few importers have started assembling and earning good profits, because of local assembling lot options are becoming available for consumers in cheap and different prices. Assembling is the future of manufacturing business in Pakistan in future lot of industries will emerge in Pakistan which were only imported from international market before.