LAHORE: Pakistan Electronics Manufacturers Association president Muhammad Farooq Naseem has said that their industry is working internally to kick start the exports of home appliance products from Pakistan to some nearby countries.
He said that this mile stone needs some years as there are some hurdles which needs to be cleared first.
“The home appliances industry of Pakistan has invested Rs30 billion in last couple of years to enhance its capacity and has managed us to achieve over 50% localization, with these investments we can now compete with China in those components which we produce locally”, Naseen told Express Tribune.
He added that we are in an internal discussion as if we can export some of our products initially to some regional countries like Afghanistan, Central Asia, East Africa and Middle east if not to the rest of the world.
“To achieve this target we have to shift our industrial base to Karachi as transportation cost is a major issue for us. We can send our products to Dubai for export purpose in two days whereas it took almost two weeks to export our products to China, the only viability for us to export from Punjab is to Afghanistan and Central Asian countries, but they are not populous areas and in our business population matters”.
The Home appliances industry of Pakistan few years back was largely operated through imports or assembling. Traditionally this industry was hit with the huge influx of rampant smuggling and under invoicing primarily under Afghan Transit Trade.
However, in 2018, there have been some external and internal factors beginning to create a level playing field for some the formal sector. These includes product prices in China, huge upsurge in shipping costs, FATF laws curtailing grey channel payments, inclusion of home appliances in schedule III of sales tax and now the drive of government to bring market transactions into the tax ambit.
Pakistan’s home appliances industry comprises of refrigerators, air conditioners, televisions, washing machines, water dispensers, small kitchen appliances, home theaters devices etc. As per PEMA, the estimated size of their industry is valued at a retail price of Rs350 billion by December 2021. The industry is contributing around Rs150 billion in shape of taxes.
Talking about the on-going crisis in Pakistan, the president of PEMA said that this crisis also hit their industry as peoples, buying power has been reduced. “The recent floods mostly in rural areas have destroyed everything and we are expecting that sales of home appliances are also likely to suppress in the months to come”.
He added that crops have been destroyed and farmers are not in a position to pay their debts, how can they even think of purchasing home appliances in such a circumstances.
Nevertheless, we are now here to expand our base, the government has also accepted our role we are playing in country’s economy that is why they have allowed us 50% quota on import of raw materials for next four months.
“The country needs some heavy engineering base locally as without this no industry can flourish. We primary steel mill is not operative since years and we are entering in the fourth industrial revolution where artificial intelligence and robotics will create a huge impact on human lives. The government should consider establishing a heavy industrial base in Pakistan either by encouraging locals our through foreign investors like China to compete the world which will be hi-tech in near future”, Naseem added.
