According to the Ministry of Finance published report, in Pakistan the electronics registered a growth of 23.7 percent during FY2018-19, mainly derived from phenomenal growth of electrics motor which recorded a growth of 37.4 percent because of its wide usage in washing machines, refrigerator, air conditioners etc. it is also recorded that the demand for these goods increases in summer and manufacturers build up the inventories. Improvement of electricity supplies also contributed to the performance of this subsector. The fiscal year 2019 started with 7.4 percent growth mainly contributed by electronics 95.6 percent. However, the report also revealed that the electronic declined in August 2018 by -32.5 percent and in October 2018 it improved by 24.1 percent. However, steep rise witnessed in January 2019 in the electronics.
During the first quarter (Q1) of FY2018-19, the State Bank of Pakistan (SBP) statistics showed that continuing on its strong growth trajectory, the electronics industry registered a growth of 7.8 percent. The uptick was driven mainly by a rise in the production of electric motors and various cooling equipment. It is also recorded that the improvement in electricity supplies alongside an enlarged summer season drove the demand for the electronic goods. The consistent growth of the segment has attracted the attention of the international investors as well. For instance, TCL, the third largest television set producer in the world, has announced plans to expand its footprint in the Pakistani electronic market. Overall, macroeconomic environment remained challenging in the country. Different sources also mentioned that the electronics industry also took up the issue of smuggling of electronics goods in Pakistan as it is also causing mammoth damage to the industry.
The representatives of the industry also asked the government must seriously made policies and smuggling of electronic goods is taken up seriously, the electronics manufacturers will be in a position to export its goods to UAE and Africa as currently it is catering to the country. Presently the Government of Pakistan is moving towards IMF package and after its conclusion stability with reference current economic issues will be seen. Pak Rupees deprecation increased home appliance cost, beyond the consumer absorption limits resulted in manufacturer’s margin cut. On the other hand growing inflationary trends curtailed disposable incomes and ultimately lower buying.
Electricity shortage is almost cooped after power generation projects and augmentation of T&D infrastructure is main task to transmit the additionally generated electricity to end consumers. A temporary slowdown is seen on this and because of the reason ordering of electrical equipment by WAPDA distribution companies is slow.
After conclusion of IMF package, it is hoped the things will move on its natural pace. Sources also recorded that Arçelik is the third-largest manufacturer in Europe, while Dawlance is its fully-owned subsidiary in the country that produces the most reliable electronics and appliances for the consumers. Since acquiring Dawlance during 2016, Arçelik has invested greater than 36 million euros in its Pakistani subsidiary with an aim to enhance productivity through research and development (R&D) of new products, in accordance with the evolving needs of this growing market. More investments are being made in product designing and design facilities too, while new equipment and machinery are being deployed to further expand the wide range of Dawlance products. Additional capital of 16 million euros is predicted to be injected in 2019.
For producing domestic electrical appliances, Gujranwala is famous in Pakistan. Electrical appliances industry originated from fan and metal industries. Steel and metal products were being produced in Gujranwala since very early times and Gujrat was famous for producing fans, with the passage of time skills transferred from Gujrat to Gujranwala and industry evolved into domestic electrical appliances industry.
Suggestions for industrial development
- Government must unveil a solid industrial policy keeping in view the global requirements. In order to increase the share of the industrial sector in the GDP there is dire need to establish new industrial estate in the country.
- Industrialists be offered loans on easy installments, so as they could run industries smoothly in Pakistan.
- Latest markets for the local products are explored and the quality of local products be enhanced to rise the demand abroad.
- New technical universities and institutions be organized for the guidance of the labor and equip them with the modern techniques being used in Pakistan.
- Means of communication and basic infrastructure should be improved and enhanced to make the access easy.
- New and emerging entrepreneurs must be encouraged to lead the industrial sector and make investments.
- The crisis of energy must be resolved on priority basis and interrupted supply of energy to industry be ensured.
- Law and order situation must be improved to allure the investors to invest their money and time.
- More attentions should be given to increase export.
- Import substitution products are produced to encourage people to use local products. Realistic and up-to-date statistics is offered to this sector.
The Government of Pakistan must work out seriously for the growth of electronics manufacturing industry and there is also need to enhance technical collaboration between the government and international electronic companies in order to maintain standard and benefit of the products.