& PRINTING INDUSTRY
enormous export potentials
July 01 - 07, 2002
The enormous export potentials of the paper and
printing industry remains an untapped treasure in Pakistan. Over the
years, the industry has attained a height where it is serving and
adequately meeting the entire paper and printing needs of the industry
including the multinational companies. The pharmaceutical and other
multi-national companies working in Pakistan are fully satisfied with
the quality of services, the paper and the printing industry is
providing to them. The industry has proved its worth not only within
the country but also carved a respectable place all around the world
and supplying quality printed products to Far Eastern Countries,
Middle East, European as well as the United States.
The credibility of this industry is reflected in
the fact that when foreign visitors were avoiding to visit this part
of the world following terrorist attacks at French Engineers in
Karachi, participants from over 25 countries visited the International
exhibition "PRINTPAK 2002" recently held at Expo Centre in
According to Ghias Ahmed Peerzada, Chairman,
Pakistan Association of Printing and Graphic Arts Industry (PAPGAI),
Pakistan printing industry has achieved a status which is recognized
all over the world. The local industry is becoming a reliable source
for printing quality labels for garment industry for the developed
world. Taiwan industry is getting the job transfer labels done from
Pakistan. Pakistan industry has earned a reputation in printing of
aluminum processing for which the most modern machines are being used
by a large number of companies in the country.
It is however surprising that despite having a
strong industrial and technical base, this industry has been neglected
in the country and so far no database is available regarding
performance of the industry. According to scattered information the
industry is earning around $6-8 million in exports, however there no
authentic information is available in this respect. The industry is
highly job oriented and provides jobs to millions of the people. It
has the potential to make a noticeable change in the export scenario
of the country, provided the industry is facilitated with proper
guidelines and marketing support from the relevant government
Elaborating the situation, Peerzada said that the
industry has not only its own export base, it also plays a vital
support role in all the exports of Pakistan. Every item of export from
the country needs an aesthetically designed and printed package
creates and conveys an image of the country as well as of the product.
From textiles to cosmetics and from pharmaceuticals
to food items, everything needs a helping hand from the printing
industry. The paper and printing industry is of the view that the
government, as well as the Export Promotion Bureau and the Board of
Investment must take concrete steps to tap this untapped export
treasure exists in the paper and printing and graphic arts industry.
However, the printing and graphic arts industry is
confronted with a number of problems today as the industry struggles
to get them resolved by raising issues at different forums and
suggesting possible solutions.
Issues relating to taxes and duties are the highest
concern to the industry.
The duty rebate, for example, available to the
printing industry, ranging from 5 per cent to 15 per cent, is not
sufficient enough for this vast sector which caters to the needs of
nearly all the industries of Pakistan. The printing industry pays
around 80 per cent as taxes and duties on its raw materials, including
paper and ink, imported from around the world.
Such wildly high taxes and duties on the import of
paper, ink and allied products coupled with insufficient duty rebates
leave the printing and graphic arts industry gasping for breath.
The taxes and rebate paradox forces the printing
and graphic arts industry to swim against the stream. Pakistan,
unfortunately, does not produce high quality paper to fulfil the
country's printing requirement. The industry has to depend on imports
together with high rate of duties, which make our finished products
almost unacceptable to the highly competitive international markets.
Ghias Ahmad Peerzada, Chairman, PAPGAI terms the situation suicidal
for the printing industry which has tremendous untapped export
potential. "We have everything with us, he said. In terms of
quality printing we can meet any challenge offered from anywhere of
the international market."
The paper and printing industry has achieved the
expertise along with modern technology of the highest repute. However
the high cost of imported raw material renders the industry abandon
the game even before going for a kickoff.
The industry is confident that with the proper
encouragement on the part of the government, Pakistan's printing
industry can conquer the international market in the United States,
Europe and the Middle East, thus earning a good name for the country
as well as lots of foreign exchange.
The customs tariff has always been an issue of
concern for the industry.
Salman S. Siddiqui, a leading businessman in paper
and paper board both in the import and export business says that it is
amazing that in the customs regime the paper imported into Pakistan is
being treated as the finished product.
Salman who is running his family business in paper
and paper board for the last 50 years under the name of Hamdam Paper
Mart, said that everybody knows that the paper is used for making
different products as a raw material but in Pakistan it is termed as a
finished product hence the importer has to pay the full import duty on
import of the paper.
While the facility of duty drawback is also not
available to the manufacturers of the paper products. The imported
paper must be declared as a semi-finished product at the customs
stage. Dr. Hafeez Pasha in his report had classified all products into
three categories. Finished products, semi-finished products and raw
materials. Although imported paper is technically, a raw material for
the printing industry, the industry is prepared to accept it as a
semi-finished paper as a finished product, which means a higher rate
of customs duty on it.
It is interesting to note that in a country like
Pakistan, where imported books, newspaper and magazines are exempted
from customs duty, the paper and paperboard is included in the
category with the highest rate of taxes and duties.
Abid Nisar, Vice Chairman of All Pakistan Paper
Merchants Association, says that literacy rate in Pakistan at its
lowest level. The policy makers in their statements always pay great
importance for education, but practically, all the basic needs for
which such as books and copies and other material required for
education has been subjected to the highest rate of custom duty. We
cannot produce quality books within the country mainly because of high
cost of paper. The education sector has to rely on imported books and
the so-called modern schools charge exorbitant prices for imported
books prescribed for various standards in our education system.
Abid Nisar, who is the Chief Executive of Allied
Business Corporation, suggests that if the tariff rates in this sector
are reduced, it would certainly help in lowering the prices of local
reading materials and increasing exports of high quality finished
Salman Siddiqui and Abid Nisar while discussing the
problems faced by the paper sector said that in the current import
policy, import of Stock Lots of Paper and Paper Board is not allowed.
The imposition of this conditionality does not seem quite realistic.
The concept of Stock in the case of Paper and Paper board does not
exist in its real sense. Because Paper like any other product, paper
does not have any expiry. Therefore imposition of this restriction
The CBR defines the stock of lot of paper and paper
board as, any lot of paper and paper board which constitute various
sizes and grammage and/ or has passed certain age or has deteriorated
in term of quality is termed as Stock lot.
The above definition does not apply to paper and
paper board. Primarily because, the mills do not make uniform and
paper sizes, but produce normally in big jumbo rolls conforming to the
size of their machines to achieve maximum economy. Then these rolls
are processed to adjust to the buyers and required sizes. In this
process, certain side run/small roll is formed which are also
categorized as prime quality. However, due to small sizes these are
cheaper than prime size stock. This stock is not inferior or
substandard in any sense.
As far as the expiry of paper is concerned, it was
mentioned that it does not have any expiry date like other edible
items. The old books and publications aging back over 100 years are
still available and the paper used in it remains perfectly intact over
Now when Paper & Paper Board is imported in
different sizes and grams, the customs examiner exercise their
discretionary powers and declare this prime quality stock as stock
lot. This frozen evaluation unnecessarily penalizes the genuine
importer and exposes them to undue harassment and pave way to
It is therefore proposed that a suitable
amendment/recommendation should be made to that import of paper and
& paper board is allowed unrestricted. Thereby, only two
categories in import of paper and paper board should stay i.e. prime
or waste, any other classification should cease to exist.
Waste paper is primarily imported for pulping or as
a raw material for producing certain recycled items. The import duty
on waste paper currently is 10 per cent as compared to 30 per cent on
paper and paper board. This provides a big leeway to the unscrupulous
element to take advantage, and hurt the genuine importer
Therefore, proper procedures should be adopted to
stop this official smuggling. Further, it is also recommended that,
the rate of duty on wastage paper should be brought at par with the
duty on Prime Paper and Paper Board.
Local manufacturers of coated paper &
paperboard has to pay excise duty at two stages. Firstly at
manufacturing stage. Secondly at converting/ coating stage. Many units
of converters are currently non-functional due to this compound excise
duty. If converting units are also brought at par with similar
converting units of corrugated carton's manufacturer, who is exempted,
from CED and only pay at source i.e. at purchase stage from local
paper mills. If this anomaly is removed the following products will
get official patronage, carbon-less paper, thermal paper, daizo/ammonia
paper, silicons paper, stencil paper, art paper, Carbon paper and
Ceiling of sales tax should be brought down to 10
Sales tax return should be filed in three months
for importers instead of one month.
There should be 1 per cent extra Sales Tax on sale
to Non-registered persons instead of 3 per cent.
PAYMENT OF INVOICES BY CHEQUE
It is proposed to totally abolish this condition,
this is mainly to facilitate the purchasers from upcountry who are
unable to conform to this term to pay in cross cheques.
WITHHOLDING TAX ON BANK DRAFT
To give the local banks a chance to flourish, it is
suggested that withholding tax on bank drafts should be abolished.
Foreign banks do their transaction online and by "Hundi"
system and thus do not charge any withholding tax on bank drafts.
Peerzada while highlighting the efforts being made
by the printing industry said that industry is striving hard to get
proper representation in the forum entrusted with the responsibility
of formulating the new Press Ordinance.
Currently, the printer is held responsible for all
published material along with the publisher and the editor.
PAPGAI believes that the actual responsibility of
publishing any printed material lies with the publisher and the editor
only. The printer, with limited resources and non-availability of
editorial staff, is not professionally competent enough to check the
editorial contents of the material brought for printing. Hence the
printing industry needs a respite from such colonial laws. The
printing industry desires the new Press Ordinance to be more realistic
and well defined in establishing the responsibilities of the publisher
and the editor, who share such responsibility in all the developed
countries under their prevalent laws.
Proper representation of PAPGAI in the formulation
of a new Press Ordinance could lessen the burden of the Printing
industry in this regard. PAPGAI also wants to make the procedure of
submission of a Declaration to the government by a printer, a lot
The printing industry of Pakistan is the second
largest labor oriented industry in the country and as technology
brings new changes in all walks of life, the printing industry also
feels the need for a modern, sophisticated training institute for
thousands of the workers spread across the country.
Today, 70 per cent of the paper imported in
Pakistan comes from Indonesia. Indonesia has given open incentives to
its paper industry, which resulted in tremendous growth in their
exports. If Indonesia can support its paper industry to become a major
exporter why should not Pakistan allow incentives to its paper and
printing industry to play its due role and exploit the available
openings in the world market. Another area, which invites immediate
attention of the government, is the promotion of recycling of paper
throughout the country. The entire developed world has adopted
recycling for environmental purposes.
Taking pride in the results achieved by the
recently concluded PRINTPAK 2002, Peerzada said that as the largest
ever show of printing and graphic arts PRINTPAK 2002 unfolded the
enormous potentials of the paper and printing industry has for
generating economic activity at a massive scale in the country.
The Pakistan Association of Printing and Graphic
Arts Industry (PAPGAI) continues to struggle for the country's
printing and graphic arts industry, which is the second largest
industry in terms of work force in Pakistan.
Giving the background of the paper and printing
exhibition which has become an international feature of Pakistan,
Ghias Ahmad Peerzada, told PAGE that it was in 1950 that the
Karachi Printers Association (KPA) was formed in the then federal
capital. Later on, the association was reorganized on an all-Pakistan
basis after 9 years and named PAPGAI, with its head office in Lahore
and Zonal offices in Karachi and the then East Pakistan in Dhaka.
It was recognized by the Ministry of Commerce, and
affiliated with the Federation of Pakistan Chambers of Commerce and
During the last five decades, PAPGAI has proved to
be the true representative body of the printing industry, working hard
for promoting the printing and graphic arts and watching interest of
In 1967, PAPGAI organized an exhibition and a
seminar in Karachi Arts Council. The first PRINTPAK exhibition was
held in 1990. The occasion proved to be a great success. Around 50
exhibitors participated in the exhibition. The quality of products
continued to gain its height and Pakistan was gradually introduced
around the world as a quality producer in the printed and packaging
products. Again, the PRINTPAK with a 2-year gap was held in 1992 and
1994 and due to some local circumstances was held in 1997. All these
occasions proved to be a success story of the paper and printing
industry of Pakistan.
Peerzada said that the 5th exhibition was scheduled
to be held in 2000 but due to unavoidable circumstances, the vent had
to be delayed for a few months. Later, it was decided to hold the
exhibition in October 2001. As preparations for the exhibition were
underway, the World Trade Centre was attacked by then terrorist on
September 11 bringing all economic activities to a standstill
consequently, the PAPGAI was compelled to postpone the exhibition for
a few more months.
The Chairman of PAPGAI Ghias Ahmad Peerzada and the
Chairman of PRINTPAK 2002 Owais Mirza Jamil finally succeeded in
holding the biggest ever printing and graphic arts event at the
Karachi Expo Centre.
The results achieved by the exhibition are
encouraging and a number of inquiries and even export orders in
different disciplines of the printing arts have been received from