A step in right direction


Mar 07 - 13, 2005



The government has decided to streamline the Engineering Development Board (EDB) and Pakistan Industrial Development Corporation (PIDC), the two significant organizations with a view to assign greater role to the engineering sector as the engine of knowledge-based growth to make Pakistan an engineering hub of the region.

Federal Minister for Production, Industries and Special Initiatives, Jahangir Khan Tareen speaking at the inauguration of Pak Suzuki production expansion facilities, last week, disclosed that one billion dollar export of engineering products is our target in 2005.

In view of the available potential, the target was well within reach of the engineering sector.

Jahangir also observed that more than Rs10 billion have been collected on account of Workers Participation Fund but unfortunately this fund was not being utilized in the past. Sincere initiatives have been taken now to utilize this fund for the welfare of workers, which ultimately reflect in the growth of the engineering and the manufacturing sectors, said the minister.

Actually the most significant growth in the automobile sector, which is usually described as the mother industry, was reflected in the huge investment for expansion, replacement and modernization of almost all the automobile manufacturing units to cope with rapid growth of vehicles demand in Pakistan.

Expansion for production facilities at Pak Suzuki is a quantum leap from 50,000 to 80,000 units per annum. It would substantially contribute to the growth of the automobile industry in Pakistan.

This phenomenal increase in production capacity would bring relief to the genuine customers who would be able to get delivery of most popular brands of Suzuki vehicles at factory price in much reduced waiting time.

The minister said that he, as guardian of the industry, strongly advocates that the government should maintain policies conducive to the survival and growth of both automobile manufacturing and the SMEs servicing as vendors to the principal manufacturing units and added that the consistent and bold economic steps of the government have started yielding results in the form of growth in this vital sector of the economy, which can be seen today reciprocated by the confidence foreign investors are showing in the form of huge investment in this sector.

The auto industry in Pakistan has entered the era of maturity and with the passage of time in the wake of increasing growth rate of GDP it would further contribute to industrialization and modernization of the engineering side of the economy. The industry is not only one of the largest employers directly but also creates jobs both upstream and downstream for dealers, service workshops and after sale market.



The minister said, the availability of auto financing at competitive and reasonable rates offered by the leasing and financial sector is a new vista of employment. He said that Rs22 billion were given for auto leasing by banks and other leasing companies in 2003 but the amount jumped to Rs50 billion in 2004. He said that threat posed by WTO elimination of TRIMS is to be taken as challenge by a population of more than 150 million people. An average 6.5 percent GDP growth and a gap in the average per capita ownership of vehicles with the world average are to be exploited to the advantage of the country.

Pak Suzuki Motor Company has emerged as number one in the world in terms of producing vehicles with CNG kits. The deletion levels of the components achieved by Pak Suzuki can also be described as the benchmark for the industry to follow.

Jahangir Tareen was of the view that the government sees the automobile industry as a nursery for nurturing SMEs required to support the poverty alleviation plan of the government and the government even ready to provide necessary support wherever possible within international commitments.

Speaking on the occasion, Managing Director Pak Suzuki, Kenichi Ayukawa observed that in early 2004, the company had embarked on setting up a most modern integrated plastic parts injection molding shop with a conveyorized plastic parts paint line. The project went into commercial operation in May 2004 and this was soon followed by expansion of Press Shop through addition of another integrated Tandem press line of five high capacity Mechanical Presses, expansion of body painting line by addition for electro deposition tank and paint booth and BMR of vehicles final assembly line, welding facilities and vehicles testing facilities.

In response to the call of the government to take concrete measures to curb the menace of premiums and long waiting periods on delivery of Suzuki vehicles, Pak Suzuki is now geared up to meet the current demand. The investment made in expansion facilities amounts to Rs2.98 billion. Further investment of one billion rupees is in the pipeline for product upgradation. The expansion will create more than 1,400 additional jobs in two years of which about 575 will alone be at Pak Suzuki.

In fact the emerging automobile sector can ignite a real spark to the growing economy of Pakistan if it was driven in the right direction with the sincerity of the purpose to bring an engineering revolution not only to meet the local demand but exporting vehicles to the available untapped market in Central Asia, Bangladesh and African region. This purpose can only be achieved when our auto sector starts production of vehicles at a massive scale to operate on the economy of the scale.