PAKISTAN'S SURGICAL INDUSTRY HAS POTENTIAL TO SUBSTANTIALLY INCREASE EXPORTS
June 18 - 24, 2007
Although, Pakistan's surgical instruments industry has a nominal share of approximately US $200 million in a world market of US $30 billion, our industry has huge potential to increase exports to over US $800 million provided incentives are provided to this neglected sector.
The surgical industry in Pakistan has a history of more than 100 years when some British doctors had their surgical instruments repaired from the skilled workers of Sialkot and that laid the foundation of Sialkot Surgical Industry.
The Surgical Instrument Manufacturers Association of Pakistan was established in 1958 with an aim to help solving the problems of the surgical community. The Surgical Association has over 2100 members date, who are engaged in the manufacturing of Surgical Instruments to meet their export commitments in the International Market. The Surgical Industry represents manufacturers and exporters of Surgical Instruments, Dental Instruments, Veterinary Instruments, Pedicure and Manicure Items, Tailor Scissors, Barber Saloon Scissors and Beauty Saloon instruments.
The rising cost of utilities, increasing prices of raw materials, high banking service charges, high export refinance rates of central bank and an uneven taxation system are described as basic reasons of stagnant exports of surgical instruments which are hovering around US $180 to US $200 million per annum, a spokesman of Surgical Instrument Manufacturers Association of Pakistan (SIMA) told PAGE.
According to him, surgical instruments exports declined by seven million dollars during July 2006 to May 2007. Exports of surgical instruments stood at $183 million in July-May 2007 as against $190 million during the same period last year. He further averred that the leakage of production technology, increase in production cost and the export of steel scrap are playing havoc for the metal related industries because scrap is the major source of locally produced stainless steel, which fulfils approximately 30-percent of the requirements of the local surgical industry. He urged the Commerce Ministry and Central Board of Revenue to immediately impose ban on export of forging, semi finished and unfinished products.
India and China are re-packing or stamping 'Pakistan made' surgical instruments and selling them as their own brands, he pointed out.
A member of the Lahore Chamber of Commerce & Industry (LCCI), Ms Shamim Akhter told this scribe that lack of 'brand development' is another issue concerning this neglecting industry. Brand development is an exercise, which cannot be done by a company, as it requires huge resources and expertise, she opined.
She further said that the export of surgical forging, semi-finished and un-finished products is the most critical component of decline in the surgical instruments exports. 'If these products will be exported to other countries then the local industry will suffer heavily in shape of loss of export orders,' she added.
Quoting the example of India and China, she states that both the countries have no manufacturing or technical skills in this field, but they are rapidly penetrating the surgical business, only by branding with full support and assistance from their respective governments.
She said the surgical industry can start earning at least US $800 million annually within few years, provided, it is given incentives by the government. She said that the estimated world market of surgical instruments' industry is currently around US $30 billion, whereas our exports have been hovering around US $180 to US $200 million for the last one or two decades, despite the fact that there is no reason on the part of surgical manufacturers and exporters for this below par performance.
She said that the exporters don't face any serious international competition in the near future, at least in Asian region, as Pakistan is the largest supplier of medical instruments to United States of America, central European countries, Japan etc. She said that the surgical businessmen in Germany, Japan, UK, and USA have full support of their governments in terms of technology up-gradation, manpower training, export marketing strategies, linkages with academia amongst others.
What is needed are skill development centres, common facility centres, R&D support, brand development, promotion and export marketing strategies, direct linkages with universities and institutes, she added.
According to her, the total capital investment in the Pakistani Surgical Industry is estimated at over Rs.12 Billion. There are about 1900 small and medium Surgical Units with labor force ranging from 10-500. The number of workers in the Surgical Industry is about 100,000 ñ 150,000. The industry manufactures about 100 million instruments annually.
She further said that almost 74% of our production is sold to United States (29%), Germany (14%), United Kingdom (9%), Italy (5%), UAE (4.74%), France (4.12%), Republic of Korea (2.27%), Japan (2.24%), Mexico (2.20%) and Australia (1.63%). The remaining 26% are sold to the rest of the world.
Shamim claimed that we enjoy monopolistic position globally. No other country can produce surgical instruments in the price range and variety that we offer and the kind of quality we are able to manufacture at most economical rates. Pakistani Surgical Instruments are the most economical in the world coupled with unconditional guarantee of finest quality while our delivery time is the shortest in the world, she added.
World renowned companies of Surgical Instruments are entering Joint Ventures with Pakistani Companies, reflecting the confidence of multinationals in the abilities of Pakistani Surgical Manufacturers.
Over 40 million footballs worth $210 million are produced annually by nearly 60,000 highly skilled workforce of Sialkot. NIKE has placed a tender for importing 100,000 Soccer Balls monthly from Pakistan.
According to exporters, the stitching of soccer balls started in Sialkot during the 20th century with supplies sent to the British forces, but after independence, the industry grew at an impressive pace, making the world recognise the formidable position of Sialkot.
Today, almost all international buyers rush to Sialkot to secure their supply chains, building strong and long-term business relations with the local exporters.
It may be mentioned that in the 1980s, Sialkot gained international recognition when it produced the 'Tango' ball used in the 1982 FIFA World Cup, which led to further growth of the industry. With a century-old industrial base, Sialkot city has developed an incredible export culture over the decades, and is contributing up to $800 million to the national exchequer annually. The city is sprinkled with thousands of small and medium enterprises engaged in honouring their global export commitments for value-added quality goods including sports items, surgical instruments, leather products, gloves and musical instruments.
A spokesman of Sialkot Chamber of Commerce and Industry said that the local soccer industry would meet the export orders of NIKE and enjoy international recognition of meeting International labour standards.