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 3. FINANCE  4. POLICY
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INDUSTRY

Oct 29 - Nov 04, 2001

Sold off units not doing well

The privatized manufacturing units in Pakistan have failed to improve profitability. This is indicated by a financial analysis of the balance-sheet and income statements of 17 out of 35 companies privatized in 1991-92 and listed at the stock exchange. These units account for 80 per cent of the paid-up capital of the firms disinvested at that point of time.

The period covered is from 1983 to 2000, and the performance has been evaluated on the basis of average ratios before privatization for the period 1983-91 and post-privatization period from 1992 to 2000.

Most of the units, which were earning profits at the time of privatization, have incurred losses, says a research study by Abdul Samad of the College of Business Management, Karachi.

The sectors covered are engineering, cement, ghee and oil, automobile, chemicals and artificial fibres. The 17 companies whose performance has been reviewed, are: Metropolitan Steel, Zeal Pak Cement, Maple Leaf Cement, Gharibwal Cement, DG Khan Cement, Dandot Cement, National Motors, Millat Tractors, Pak- Suzuki Motors, Bolan Castings, Balochistan Wheels, Sindh Alkalis, National Fibres, Wazir Ali Industries, Associated Industries, Kakakhel Industries and Fazal Ghee.

No such study of the impact of privatization on units sold off, has either been carried by the government or the Privatization Commission.

The privatized manufacturing units have lost billions of rupees in bad debts and GHS payments, says the CBM study.

Without questioning the conclusions reached on the basis of balance-sheet and income statements of the companies, it may be pointed out, managers of public sector units have tended to show profits through window-dressing of the balance-sheet for obvious reasons. The government of the day gets taxes on these manipulated, not real profits. The managers win laurels for their so-called performance. But sustained losses ultimately expose the poor performance.

US likely to revive annual economic aid, says official

The United States is considering reviving Pakistan's annual economic assistance under USAID program which had been suspended many years ago.

"My department has proposed the revival of USAID to Pakistan and now a final decision has to be taken by the Bush government over the issue," said Mr Bear McConnell, Director of the Central Asian Task Force at the US Agency for International Development.

He told reporters on Wednesday at the residence of the US Ambassador to Pakistan that Official Development Assistance (ODA) for Pakistan was likely to be restored soon. However, he pointed out that his government would be taking any final decision about it.

Textile mills expedite cotton purchase

Textile mills have expedited cotton purchase following the recent increase of 15 per cent in textile quota and relief in tariff by the European Union.

This was observed at the second meeting of the Cotton Crop Assessment Committee at the Pakistan Central Cotton Committee on Tuesday.

The meeting was held under the chairmanship of M Shafi Niaz, advisor to the Chief Executive on food, agriculture and livestock.

The committee reviewed the status of the current cotton crop and synthesized the information furnished by the members. It was informed that the current cotton crop was sown over 3.125 million hectares as against the target of 2.56 million and 2.93 million hectares sown last year, showing an increase of 22 per cent over the target and 7 per cent over last year.

Gas supply from Miano likely next month

Sui Southern Gas Company Limited (SSGCL) is likely to receive gas supply from Miano next month following arrival of foreign experts working for operators, OMV.

The gas supply of 87 mmcfd from the field near Sukkur, which was due to be linked to the distribution system of SSSC from October, had been put off due to sudden exodus of the company's foreign staff last month.

A senior SSGC executive told on Thursday that the operators had verbally confirmed the arrival of experts from Austria.

NWFP fixes cane support price

Support price of sugarcane for the forthcoming crushing season has been fixed at Rs42 per 40 kg and will not be curtailed during the season.

This was decided in a high-level meeting held on Monday which was presided over by the NWFP Minister for Food and Agriculture Abeedullah Jan for determining the purchase price of sugarcane. Besides Minister for Industries NWFP, Owais Ahmad Ghani, Secretary Food and Agriculture, Brig. Azeem Khan, members and president Sarhad Chamber of Agriculture and representatives of all sugar mills in the province also attended the meeting.

Strategy evolved to boost sugar output

Minister for Food, Agriculture and Livestock (Minfal) Khair Muhammad Junejo on Saturday said that two-pronged strategy has been evolved to enhance local sugar production to save precious foreign exchange.

Addressing a one day seminar on 'sugar beet cultivation pros and cons' organized by Pakistan Society of Sugar Technologists, the minister said because of severe drought situation the country, during last two years, had spent Rs14 billion on import of sugar.

SME Bank lending operation from Jan

Newly-established SME Commercial Bank in the public sector will start lending operations exclusively for small and medium enterprises from January next.

"This is the first ever commercial banking institution for lending to the SME sector, major segment of the economy with Rs1 billion paid-up capital", chief of the institution, Kaiser H Naseem said on Wednesday.