Foreword

It gives me immense pleasure in illuminating the performance of the Ministry

of Industries for the year 2010-2011, based on various activities conducted in the

Ministry as well as its support organizations.

The document highlights the policies framed either directly by this Ministry

or through its support organizations to promote industrialization in the country as

well as special emphasis given by the Ministry on various emerging sub-sectors. The

achievements made during the period under review would contribute towards

creation of the enabling environment for growth and promotion of social &

economic well being of the people and Industrial development in particular with an

objective to achieve efficient sustainable and equitable development.

I hope this document would prove to be a useful document for the

improvement that would be a welcoming readers and researcher’s gesture.

Aziz Ahmad Bilour Secretary Dated:

MISSION

“ To play a leadership role in formulating and implementing a comprehensive

strategy for rapid industrialization of Pakistan which aims at maximizing job

creation and enhancing Pakistan’s international competitiveness”

OBJECTIVES

Focus on not just industry, but more broadly on social and economic

systems as a whole.

Promote innovation and facilitate creation of knowledge base assets.

Identify industrial cluster groups and facilitate and incentivize their

development along with backward and forward linkages.

Promote movement along the value chain from lower value added activities

towards higher value added activities and provide support to Research and

Development and Product design as a catalyst.

Enhance global orientation to adapt and respond to the changing global

environment.

Improve the requisite economic foundation by focusing on the development

of human resource, technology acquisition, physical infrastructure and

business support services to increase productivity.

To ensure optimum capacity utilization and revival of sick units.

Encouraging BMR and expansion program for existing Industrial Sector.

Give top priority to knowledge based assets and provide sufficient

resources to investors so that could get the pertinent information from one

window for effective decision making.

To ensure creation of an enabling environment to the entrepreneur /

prospective investor through a well defined, integrated and coordinated

network of information system, supported and facilitated by the

organizations under Ministry of Industries.

It is the mission of the Ministry of Industries to create a conducive

environment so that interests & fears of the investors are taken care of.

The associated departments shall therefore be given line of action for their

expected achievements, while Ministry of Industries shall monitor their

performance.

Ministry of Industries intends to balance the interest of the stakeholders

through its supportive organizations on regular basis.

The Ministry of Industries has also taken initiative to start cooperation at

provincial level so that the impediments faced at that level can also be

resolved.

The Ministry is also determined to provide technical assistance and

education commensurate with the requirements of industry. If required

establishing new Centers or Institutes besides strengthening the existing

Institutions or Centers to impart required knowledge and skills to

potential investors.

Chapter-I

INTRODUCTION

Introductory:

Ministry of Industries & Production (MOIP) being a catalyst body for the

Government of Pakistan to facilitate Industrial growth in the country, both in Public and

Private sectors and also in partnership with the private sector has to play a significant

role in creating an enabling environment for industrial growth in Pakistan having

abundance of raw materials, cheap labour, entrepreneurship and domestic consumer

market of 170 million people, is endowed with all requisites to climb the ladder of

industrialization . It has been mandated with the task to achieve the Government

objectives to forge ahead in all the Industrial sectors with the required pace and

motives. It is needless to say that the achievement of Industrial growth is GDP.

Industrialization is a major tool in the hands of any Government for the purpose in the

present times. With these objectives in view MOIP devised its strategy and moved

forward with all its resources at its command.

Functions of Ministry:

As per schedule II of Rules of Business 1973, at present this Ministry has been

assigned the following functions:

1. National industrial planning and coordination.

2. Formulation of industrial policy.

3. Employment of foreign personnel in commercial and industrial enterprise.

4. Keeping a watch, from the national angle over general price trends and supply

position of essential commodities; price and distribution control over items to be

distributed by statutory orders between the provinces.

5. Administration of the Essential Commodities Control Order (1971), Boilers Act

and Pakistan Garments Corporation

6. Import and distribution of white Oil

7. Explosives (excluding the administration of Explosive Substances Act) and safety

measures under the petroleum Act and Rules made there under.

8. Prescription and review of criteria for assessment of spare parts and raw

materials for industries.

9. All matters relating to state Industrial Enterprises, especially, in basic and heavy

industries.

During the period 2010-2011, the board functions performed by the Ministry of

Industries and Production were:

Initiatives to boost Industrialization in the country and the steps taken for

promotion of social and economical well-being of the people.

Policy / Reforms formulation & implementation.

Development of Industrial parks on the principle of Public –Private Partnership.

Technology and skill up-gradation for Industrial development.

Provision of consumer goods at affordable prices through Utility Stores.

International exposure to Pakistan Engineering Industry.

Facilitation of product diversification and capacity expansion.

Operational performance of public Corporations/ Units.

In order to implement the above-mentioned functions, strategies followed and the

achievements made during the year as well as the future plans of the Ministry are

discussed in the subsequent pages.

Chapter-2

Industry Overview

Increasing efficiency of the Industrial sector is a critical of Economic

development. Industry’s role for the economy in post WTO era has become crucial not

only to safeguard local industry, but also to benefit from increased trade opportunities in

the global market, subsequently strengthening Pakistan’s economic performance. The

strength of Pakistan economy depends on the dynamism of businesses that can

respond to opportunities as they emerge, and that can restructure and adapt to market

demands. This, however, is only possible through favorable policies developed through

regular interaction with the private sector.

Ministry of industries and production entrusted with the task to provide the vision

for industrial development set on an ambitious course to play a leadership role in

formulating and implementing a comprehensive strategy for rapid industrialization of

Pakistan which aims at maximizing job creation and enhancing Pakistan’s international

competitiveness. Achievement of goals as set out in the vision statement require

pragmatic steps for policy formulation with respect to industrialization, tariff

rationalization, strengthening of engineering sector & its integration with world markets.

Training & enhancement professional education being a prerequisite for developing a

workforce that is equipped with skills for improving competitiveness & productivity.

Following successful international models for rapid industrialization the Ministry

embarked upon developing a comprehensive industries strategy during the year under

review. This effort drew upon the expertise and experience of industry, academia and

public sector. The strategy lays down strategic direction for achieving a strong position

with competing economies.

Fertilizer Sector:-

A. Annual Production & Demand of Urea & DAP

(Qty in Million Tons)

Description Annual Production Annual Consumption

Gap

Urea-Without Gas Curtailment

6.7 6.4 +0.3

Urea-With Gas Curtailment

5.4 6.4 -1.0

DAP 0.6 1.5 -0.9

*Source: NFDC

B- Incentives for Fertilizer Industry

The Government has also provided various incentives under Fertilizer Policy,

2001 to encourage the fertilizer production in the country including following:-

The Government is providing feed stock gas at concessionary rates at

approximately 50% lower rates to the fertilizer plants for production of Urea as

compared to the price for commercial users.

Government of Pakistan also provides subsidy on import of fertilizers for

difference between the landed cost and local sale price.

C. NEW PLANTS INTHE PIPELINE

A new fertilizer manufacturing plant at Sadiqabad, Distt. Rahim Yar Khan, owned

by M/s Fatima Fertilizer Company of capacity of producing 0.4 Million tones of

urea, 0.45 Million Tonnes of of CAN, 0.4 Million Tonnes of NP and 0.3 Million

Tonnes of NPK, has started production from 24th November,2009

M/s Engro Chemical Company New fertilizer plant which will produce around 1.3

million tons of urea has also started its production.

D. Prices of Fertilizers

Prices of Urea remained Rs.1031/50 Kg bag on average for the period

July 2010 to June 2011 whereas price of DAP remained Rs.3151/50 Kg bag for the

period July 2010 to June 2011. Prices for the week ended on 30-08-2011 remained as

under:

(Rs/50 Kg Bag)

S# Description Price

1 Urea-Sona 1695

2 Urea- Kisan 1735

3 DAP 4054

*Source: FBS

E. International Urea Prices as on 31-07-2011

Particulars Urea DAP

FOB US$/Ton 530 635

C&F (FOB+$40 Freight Charges) 570 675

Price in PKR (1 $US= PKR 87) 49,590 58,725

Add: Port Handling Charges (12.5%) 6,199 7,341

Landed Cost (PKR/Ton) 55,789 66,066

Landed Cost (PKR/ 50Kg Bag) 2,789 3,303

*Source: NDFC **Above cost has been calculated excluding Govt taxes & duties.

F. Import of Urea

The Government of Pakistan is importing 3, 75,000 Tons of Urea in 2011

and import of 1,50,000 tons of urea has been tendered.

Cement Sector:- At present there are 24 large scale cement units with an installed capacity

of around 41 million tons per annum in addition to two small scale units. All the cement

units are in private sector. Production during 2010-11 is reported at around 31 million

tones. The capacity utilization of cement plants during the period remained around 73

%. The national average retail price of cement during 2010-11 was recorded at Rs. 337

per 50 Kg bag. The latest national average retail price of cement is Rs. 397 per 50 Kg

bag as recorded on 04-08-2011.

2. Pakistan has vast resources of lime stone used as major raw material for

production of cement. Due to gap in demand and supply in the neighbouring countries

i.e. Afghanistan, UAE and other Gulf countries, there is high potential of export of

cement via land and sea routes. Presently, Pakistan’s cement is exempted from the

Sales Tax and Federal Excise Duty (FED). However, the domestic consumption is

charged with Sales Tax (@ 16 %) and Federal Excise Duty (FED) (Rs. 500 per ton).

The export of cement during 2007-08, 2008-09, 2009-10 and 2010-11 was recorded at

7.7, 10.7, 10.6 and 9.4 Million Tones respectively.

3. The import of cement and coal used as fuel for the cement plants is

allowed at 0 % customs duty and 16 % sales tax. As per investment policy of the

government, the import of plant machinery & equipment for manufacturing sector is

allowed at 5 % customs duty.

Edible Oil / Ghee Sector:-

No. of Cooking Oil / Ghee Units 94

Edible Oil Situation 2009-10 (Provisional)

Particulars Qty (Million)

Local production (table A below) 0.662

Import (tables B+C below) 2.068

Total availability 2.730

Industrial Use 10 % 0.273

Edible Use 2.457

Import: Local Production ratio 76 % : 24 %

A- Local Oilseed Production 2009-10

Crops Oilseed (M. Ton)

Edible Oil (M. Ton)

% Share % Share in total availability

Cotton seed 3.240 0.389 59

Rapeseed-Mustard

0.160 0.051 8

Sunflower 0.513 0.195 29

Canola 0.070 0.027 4

A- Total 3.983 0.662 100 24 %

B- Edible Oil Imports

Category Quantity (M. Tons)

% Share in edible oil imports

% Share in total availability

Palm Oils 1.704 98

Soybean 0. 027

2

Others - -

Total 1.731 100 64 %

C- Oilseed Imports

Category Quantity (M. Tons)

Estimated Edible Oil Recovery

% Share in Oilseed Imports

% Share in Total Availability

Soybean 0.00014 Negligible

Low Erusic Acid Rapeseed (Canola)

0.68 0.272 81 %

Sunflower Seed 0.161 0.0643 19 %

Other Rapeseed 0.00014 Negligible

Total 0.84 0.337 100 % 12 %

(Provisional) import bill of edible oil/ oilseed 2009-10: Rs. 144.71 Billion (US $ 1.72 Billin)

(Source: Pakistan Oilseed Development Board (PODB))

The national average retail price of loose packed ghee and tin packed cooking oil / ghee is Rs. 167 and Rs. 198 per Kg / liter respectively as recorded 04-08-2011. The international FOB price of RBD Palm Olein was recorded at US $ 1152.50 per ton as on 04-08-2011.

Sugar Sector:- Sugarcane is an important cash crop in Pakistan. Pakistan is an important

cane producing country and is ranked fifth in world cane acreage and 15th in sugar

production. There were 86 Sugar Mills in the country in 2010-11 of which 82 were in

functional state.

The province-wise break up is given below:

Functional Sugar Mills

Province Sugar Mills

Punjab 45

Sindh 32

NWFP 05

Total 82

Source: Pakistan Sugar Mills Association

Production:

Sugarcane production was estimated at 53.74 mills metric tones in the

year 2010-11 and increase of 9 percent over the previous year due to both a reduction

in area harvested and average yield. The total installed sugar production capacity

utilized by the mills was about 60-70 % depending upon the sugarcane production and

sugarcane purchased by the mills. On the basis of estimates of average monthly

consumption of 3.50 lac tons, the stock sufficiency was up to end December 2010.

Thus, sugar was sold at USC outlets at Rs. 55/- per Kg throughout Pakistan in the

month of Ramdan.

Forecasted Production and Consumption of Sugar:

In the year 2011-12 refined sugar production is forecast at 4.123 million

metric tones, primarily due to an expected increase in both area and production of

sugarcane. As the country’s requirement is 4.495 MMT, domestic production will be

supplemented through imports.

Sugar consumption is forecast at 4.495 MMT for the year 2011-12. Total

per capita refined sugar consumption is estimated at 25 Kilograms per year, based on

improved domestic supply and strong demand. Retail sugar prices are expected to

continue to hover around Rs. 70 (US $ 0.56) per kilogram. The stability of retail prices

will depend upon timely imports and prevailing prices in the international market.

Production Policy:

The Ministry of Food, Agriculture and Livestock (MINFAL) is in

consultation with the Pakistan Sugar Mills Association (PSMA) in an effort to increase

sugarcane productivity and to increase the capacity of sugar mills. The Government of

Pakistan is also looking forward to amend the Sugar Factory Control Act 1950 in order

to create a more conducive market environment for stakeholders. A Technical

Committee has been appointed by the Government of Pakistan to develop a

methodology for linking sugarcane prices with sugar recovery rates. This qualitative

measure should improve the production dynamics and profitability for both farmers and

millers.

GENERAL PRICE TREND:

A rising trend is witnessed in the general price level over the year 2010-11

and CPI inflation was recorded at 14.1% in July-April 2010-11 as compared to 11.5% for

the same period of the last year. The major reason in price hike was the escalated food

prices along with commotions in supply due to floods and increased prices of imported

fuel and food stuff. Food inflation rose to 18.4% as against 12.0% in the same period of

the last year while non-food component remained 10.4%.

Chapter-3

PUBLIC SECTOR DEVELOPMENT PROGRAM & POLICY

The objectives targeted in the PSDP broadly aimed at rejuvenating the industrial sector through focus on

Skill development,

Technology up gradation,

Cutting out on energy losses,

Development of emerging sectors to achieve the goals of diversification through public private partnership.

The specific core objectives:-

Innovation and efficiency in industrial sector promoted by building high skilled

human capacity through targeted worker skill development programs.

Facilitation to industrial sectors through the provision of technology through

technological up gradation; provision of sophisticated machines, equipment, tools

& spare in common facility centers and machine pools; CAD/CAM facilities.

Research and development in key industrial sectors to achieve competitiveness

for domestic products in the domestic as well as international markets.

Targeted development of small and medium business entities to boost

employment and reduce poverty

Cost effective provision of industrial parks entails private sector management of

industrial estates; attracting FDI by providing foreign investors clear incentives

such as 100% ownership and the right to repatriate capital; joint public-private

ventures with a view to eventually privatize industrial estate development.

Industrial installations and other initiatives on pilot basis for demonstration effect

in order to attract private investment and to boost efficiency and competitiveness.

Development Sector: Achievements of Development Section of P&P Wing, Ministry of

Industries and Production during the year 2010-11 are as follows:

An expenditure of Rs. 1229.778 million had been incurred under PSDP 2010-

11 in implementation of development projects of Ministry of Industries against

revised allocation of Rs. 1548.6 million. (Detail is placed at Annexure-I)

Twenty seven (27) ongoing development projects were executed during the

Financial Year 2010-11.

Six (6) new development projects were initiated during the Financial Year 2010-

11.

The project Khadi Crafts Development Company, Multan will be ready for

inauguration in September, 2011.

The project Energy Efficiency in Textile Sector was completed in 2010-11.

The development projects executed during the year were geared to act as

demonstration effect to provide common training facilities, technological

transfer and common machinery pools. The basic thrust of the development

projects was on technology driven growth within a framework to encourage

economy of scale, value addition and diversification of products in order to

make our products competitive in the international markets.

In addition to the projects discussed above, at present this Ministry has

submitted thirteen (13) projects to the Planning Commission for consideration

at CDWP/ECNEC level (Annexure-II).

Policy & Planning – III

Following subjects are being dealt in the section P&P-III,

1. Coordination for annual Trade Policy Matters.

2. Matters related to Transit Trade with Afghanistan.

3. Coordination for WTO matters.

4. Matters related to EDF.

5. Matters relating to EMDF.

6. Matters related to the Working Group on Industrial Pollution and Chemicals.

7. Matters related to trade agreements including FTAs/ PTAs.

2. In addition to the above subjects, matters related to the project titled

"Institutional Development in the Ministry of Industries with respect to WTO" and

“Formulation of Industrial Policy Document” have also been dealt in this section. Brief

description of the project and Industrial Policy Formulation are as under.

3. "Institutional Development in the Ministry of Industries MOI

with respect to WTO”.

Objectives & Achievements of WTO Unit

Objectives

The principal focus of the WTO Cell is to provide institutional support to the MOI

on WTO related matters and issues. WTO Unit is to be the focal point on WTO non-

agriculture related matters in the Ministry. The project will help to achieve the following

objectives: -

i. To create capacity within MOI to respond to need for action in trade related matters at all levels, and coordinate WTO related activities in the country affecting non-agriculture sector.

ii. To meet the informational and analytical needs associated with the WTO negotiations on non-agriculture and in the process to improve the capacity for participation in the ongoing WTO negotiations, and

iii. To participate in WTO process e.g meetings on WTO, etc.

Achievements (2010-To date) Policy related Matters/Issues

Represented the Ministry in the Capital Based Working Group

(CBWG) on Trade Facilitation Agreement of the WTO in the various

meetings held in Islamabad

Provided support for the preparation of ‘Pak-India trade expansion list”

Represented the Ministry on public hearings before the NTC regarding

tariff rationalization requests by local manufacturers.

Provided support in addressing starred Assembly and Senate

Questions regarding industry & trade related matters

Prepared various briefs/analysis on trade related issues

FTAs/ PTAs

Represented the Ministry in Pak-Indonesia PTA Negotiations

Gave input for Pakistan-Sri Lanka FTA, CEPA Negotiations

Gave input regarding industrial goods for Pakistan-Turkey PTA

Negotiations

Provided input for the Joint Committee Meeting to be held under

Malaysia-Pakistan Comprehensive Economic Partnership Agreement

(MPCEPA) including Pak-Malaysia FTA

Seminars

(Held in collaboration with various Chambers)

“Current State of Play in WTO Negotiations with focus on NAMA” –

(Rawalpindi Chamber)

“Tools to understand NAMA -- Understanding the HS Codes” -- (Islamabad

Chamber)

“NAMA Negotiations and Industrial Sector Analysis” -- WTO Cell

“WTO Developments and Current State of Play in NAMA” –

(Islamabad Chamber)

Seminars on “General Awareness about WTO”

“Surgical & Sports Industry of Pakistan” (Sialkot Chamber)

Quarterly Newsletter

Newsletters aim at disseminating information on WTO & trade related matters to

the Government and private stakeholders. Current trends in industry and trade

along with suggested measures to grapple with the prevailing problems, issues,

in these areas are highlighted through focused contributions. An update on the

state of the play in negotiations at the WTO in Geneva and developments in

different areas of negotiations are also underscored in these publications.

First Issue of Newsletter (January-March 2011)published in April

Second Issue of Newsletter (April-June 2011) published in August

The published Newsletters were distributed to Government Departments/

Organization, Chambers of Commerce & Industry, Trade Bodies & Association,

Pakistan’s Mission Abroad and Foreign Embassies in Pakistan and other

Public/Private stakeholders.

4. Formulation of Industrial Policy Document.

P&P-III Section has also been involved in Formulation of Industrial Policy

document 2011. The Draft Industrial Policy has been placed on the website

www.moip.gov.pk of the Ministry of Industries and Production. The comments of all

stake holding Ministries and other interested parties have been solicited. Based on

feedback the next draft is to be finalized. P&P-III Section has also been involved in work

related to the project titled “Institutional Development in the Ministry of Industries (MOI)

with respect to WTO” which was launched in MOI&P in 2006.

5. Trade Policy

Formulated proposals for Trade Policy in consultation with the relevant

stakeholders and submitted to the Ministry of Industries for onward communication to

Ministry of Commerce.

Chapter-4

Public Sector Corporations/Organizations

SMALL AND MEDIUM ENTERPRISES DEVELOPMENT AUTHORITY

SMEDA has been extending its Assistance to SMEs in the relevant Industrial Units with

collaboration with Industrial Co-operation Agency (JICA) Gesellschaft fur Technische

Zusammenarbeit (GTZ), Senior Export Services (SES) of Germany Asian Productivity

Organization (APO) and Korea International Co-operation Agency (KOICA) while new

partnerships have also been established with UNIDO, World Bank and bfz (Germany) in

energy and productivity as detailed below:-

(a) SMEDA-GIZ Collaboration in REEE Programme

SMEDA in collaboration with German International Cooperation (GIZ) has initiated a

Renewable Energy and Energy Efficiency (REEE) Program for Industrial sector of

Pakistan. Major activities performed under this program are elaborated hereunder:

(i) Implementation of Energy Management System (EMS)

EMS Program aims to introduce a sustainable system of Energy Conservation in the

Industrial sector of Pakistan. With the sponsorship of implementation cost from GIZ and

in collaboration with All Pakistan Textile Mills Association (APTMA), Energy

Management System (EMS) has been successfully implemented in 25 textile units

during the FY 2010-11. Each participating factory is getting benefit of EMS

implementation and an appropriate amount of energy has been saved up to 10~15% in

spinning & Weaving, and 25~30% in Processing.

(ii) Energy Manager Training Programme

The Program includes the Training for energy professionals involved in energy

management in industry. With the support of GIZ, an Energy Manager Training Program

has been initiated at SMEDA as a regular feature. During FY2010-11, three batches of

Energy Professionals from different industrial sectors have been trained under this

program in collaboration with University of Management & Technology (UMT), Lahore

and involving foreign and local experts.

(iii) Development of Energy Service Companies (ESCOs)

SMEDA with the support of GIZ is developing a pool of local consultants having

expertise on the subject of Energy Efficiency as “Energy Service Companies (ESCOs)”.

The objective is to build an adequate technical capacity of local services providers to

effectively implement Energy Management System (EMS) in industrial sectors of the

country. This training program will upgrade existing capacities of local service providers

to a level that will enable them to provide high quality services in Energy Efficiency.

During FY 2010-11, six ESCOs have been developed through a defined process.

(iv) SMEDA-JICA Collaboration for Energy Efficiency Programme

SMEDA AND JICA have initiated the Energy Efficiency Program for SMEs in Pakistan.

JICA placed an Energy Expert, Mr. Morihi to TAKAYAMA at SMEDA for a period of six

months (July-December 2010), who worked along with SMEDA team and conducted

Energy Audits in 4 units of light engineering sector on Lahore and Karachi.

(v) Gas Appliances Efficiency Program with World Bank

ISC energy team, on the request of World Bank conducted a survey with

representatives of Gas Appliance Manufacturers in order to asses the potential of

energy savings in Domestic Gas Appliances. Interviews were conducted at Lahore and

Gujranwala and the report was submitted to the World Bank for further articulation of the

project. The project is in development phase on the basis of the findings of this survey

and expected to execute in the FY 2011-12.

(vi) Promoting Sustainable energy Production & Use from Biomass with UNIDO

UNIDO is implementing a project for the provision of services relating to the “Promoting

Sustainable Energy Production & Use from Biomass”. The overall aim of the project is

to promote market based adoption of modern biomass energy conversion technologies

for process heat and power generation on Small & Medium Enterprises (SMEs) and

rural communities in Pakistan. ISC-SMEDA is the main implementation partner in the

project with UNIDO and AEDB. Under this project, SMEs have been identified for the

installation of the pilot projects. The tenure of this project is 3 years starting within year

2011.

(vii) Energy Audits by ISE Team and Local Consultants

Following a cluster development approach, ISC energy team conducted 10 Energy

Audits in Marble Cluster in Jehlum. Key areas of energy wastages were highlighted and

implementation plans for beneficiary units proposing remedial actions were developed.

Also, ISC team conducted Energy Audit of 1 Auto Parts unit in Karachi by involving local

Energy Efficiency Experts.

(b) Business Development Support

SMEDA conducts a range of seminars, workshops and training programs for managerial

and technical up gradation of SMEs. During 2010 -2011,a total of 239training programs

and seminars were organized by SMEDA where 8,467 persons were provided training

in more than 45 cities across the country . In terms of investment facilitation, 12 pre-

feasibilities and 24 business plans were developed in various business sectors.

SMEDA’s Legal Services Cell, through its helpdesks at all SMEDA regional offices,

assists SMEs in resolving their legal issues. In this regard SMEDA has set up a network

of Third Party Facilitation Centers (TPFCs) across the country to provide experts legal

advice and consultations SMEs, members of chambers and commerce and trade

associations. During the year, 02 new TPFCs were established in Karachi and

Sargodha bringing the overall no of TPFCS to 05.to facilitates SMEs in terms of legal

documentation, 08 new commercial contract templates were up loaded on SMEDA

website bringing the total number to 50.

EXPORT PROCESSING ZONE AUTHORITY

Ministry of Industries is following a policy for the development and growth of Industries

through establishment of Export Processing Zones. Export processing zone (EPZ) in

the country. All zones & projects of Karachi, EPZA are in operational except Karachi,

EPZA Phase-III, Gujranwala, EPZA and Gwader EPZA which are under process for

development. The Export performance of Zones during 2010-11 is as under:-

Name of Zone Million US $

Karachi, EPZA, 321.00

Saindak, EPZA 239.00

Duddor EPZA 12.00

Risalpur EPZA 1.00

Sialkot EPZA 1.00

Tuwairqi Steel Mill EPZA

0.448

Total= 575.00

Major Achievements of EPZA during FY 2010-2011

Seventeen new projects were sanctioned while permission for expansion of six new

units was granted during FY 2010-2011 with export commitment of US $ 58.874 Million.

A capital investment of US $ 46.155 Million was made by the units which were

established in the zones during 2010-2011. Besides, EPZA has revived 15 sick units for

new prospective Investors.

ENGINEERING DEVELOPMENT BOARD

(a) ONE CUSTOM SYSTEM

Computer based One Customs System (OCS) Development was in

operational in July, 2009 with Association of FBR/PRAL, for streamlining and effective.

Monitoring of Tariff Based System (TBS). EDB allocates quota of imported inputs to

OEMs & Vendors, which is debited on line through OCS to access to this system for

year round monitoring of TBS. Scope of the system is being expanded to include sales

tax payments` by respective OEMs & Vendors.

(b) AUTOMOBILE INDUSTRY

(i) AUTO SECTOR The auto sector recorded growth in all the segments except buses since

2001-02. Following table depicts recent performance of the auto sector.

Products 2009-10 2010-11 % Age Change in 2010-11 over 2009-10

Cars 121.790 133.983 10.01

Trucks 3,727 2.957 -20.68

Buses 7.16 5.77 -19.41

Jeep & LCVS 16.940 20,025 18.21

Tractors 72.980 72.261 -0.99

Motorcycles 1,380,184 1,533,862 11.13

The auto sector recorded positive growth in Car segment, Motorcycles Jeeps & LCVs

during FY 2010-11 as compared to same period of the preceding year whereas the

Trucks, Buses and Tractors Witnessed a decline in their production as compared to

the previous year (2009-10).

(ii) AUTO INDUSTRY DEVELOPMENT PROGRAMME (AIDP)

Government of Pakistan has approved Auto Industry Development Programme

(AIDP) in November, 2007 for the development and to improve the competitiveness of

auto sector for the country. AIDP mainly focused on the Tariff and non tariff initiatives

like, technology acquisition fund. Auto cluster development and HD etc.

AIDP development by EDB and approved by ECC (November, 2007) which includes-Tariff and Non- Tariff Initiatives for auto Industry.

Five Years Pre- announced tariff (2007-12) for the entire Auto Sector announced in the budget 2007-08.

Non-TARIFF Policy Initiatives i.e.

a. Human Resource Development.

b. Safety, Quality and Environment Standards.

c. Technology acquisition support Scheme.

d. Export Development.

INTERNATIONAL EXPESURE

(i) CAPICTY BUILDING AND INTERNATIONAL LINKINGES

In order to enhance core competence of the engineering industry of Pakistan

EDB has broadened its role as a Business Support |Organization (BSO) Facilitation and

support is being extended to engineering industry in the shape of providing senior

Volunteer Experts from various international organizations which are deployed with

the industry to advise then on technical and non- technical issues. These experts work

without charging and consultancy fee. In this regard, EDB has development linkages

with various international organizations to provide Short Term Experts services to local

industry with the objective to improve production process quality of product,

management capabilities according system improvement etc.

EDB has so far arranged Dutch and German experts for 16 companies which cases of 9

companies are in pipeline.

(ii) CENTRE FOR PROMOTION OF IMPORTS FROM DEVELOPING COUNTRIES (CBI) DUTCH COMPANY In additional to above, Institutional arrangement between EDB & CBI is

being made. Draft Agreement has already been approved by Cabinet and has been

vetted by Law Division and Parliamentary Affairs Division. The same shall be signed

after getting final clearance from the Cabinet.

Following services will be provided to the Industry under this institutional arrangement.

Export Coaching Programmes for engineering sector priority

industries.

Training/Capacity building on market access & doing business

in the EU.

Information on EU markets & other developments.

NATIONAL ENGINEERING EXPORT DEVELOPMENT STRATEGY (NEEDS) Pakistan’s Engineering Industry has a large potential to grow and

contribute towards GDP and exports. However, the huge potential of export growth in

engineering goods remains unutilized due to multiple reasons. There has been no

specific focus on the development and promotion of Engineering Industry of Pakistan

in the way as other traditional sectors have been promoted.

In this regard, EDB has taken an initiative and developed National Engineering Export

Development Strategy (NEEDS). The objectives of the Needs are:-

* Identify and frame the challenges and issued confronting the

Engineering industry.

* Identify sustainable solutions for competitiveness and exports.

SECTORAL INITIATIVES FOR EXPORT DEVEOPMENT In pursuance of implementation of the Sectoral recommendations in the

NEEDS document, work has been initiated on various sectors for their export

development in this regard cutlery sector has been given priority and initiatives have

been undertaken jointly with BSF in the following areas:

To improve product quality, BSF and EDB will create awareness in the

industry through training courses on international certifications (CE, UL

etc.) and quality standards.

EDB will take up the matter with CBI to provide export service to industry

coaching, Export Marketing Training, Market Intelligence Training,

Effective Trade Fairs Participation Program etc.

EDB will also arrange export service from PUM for Product Quality

improvement.

TARIFF RATIONATIZATION The main objectives of the tariff rationalization exercise are:-

Reducing cost of doing business by decreasing cost of inputs.

Encouraging local industry.

Simplifying procedures for Customs duty, Sales Tax and Federal Excise.

To counter the menace of under –invoicing, Smuggling and Mis-declaration.

BUDGET EXERCISE About 2000 proposals were received by EDB for budget exercise for

financial year 2011-12, which were evaluated at EDB in consultation with stakeholders

and forwarded to FBR accordingly.

DEPARTMENT OF EXPLOSIVES The Department of Explosives has revised the Explosives Rules, 1940, Mineral Gas

Safety Rules, 1960 and Gas Cylinder Rules, 1940 has been replaced and new rules

namely Mineral and Industrial Gas Safety Rules, 2010, have also been framed.

The statistics of activities:

S.No Activities Islamabad Karachi Lahore Multan Peshawar Quetta Total

1. License Granted

62 138 342 234 43 56 875

2.

License Renewed

528 2,567 993 472 102 132 4,794

3. License Cancelled

05 10 131 50 - - 196

4.

License Suspended

11 - - - 02 - 13

5. License Expired

66 41 75 667 - 9 858

6. Inspection Conducted

259 1,102 1,819 34 288 2,021 5,523

7. Vehicle Approval

471 842 1,662 12 205 1,741 4,933

8. Gas Cylinder Approval

- - - - - 207 207

9. NOC/Permit - 20 557 610 - 1 1,188

10 Layout GPL - - 117 - - 14 131

11 Court Attendance

- 23

222 23 - 1 269

12

Revenue Earned (Thousand Rs.)

77,645 29,516 50,727 16,085 29,751 16,701 220,428

13

Expenditure Incurred (Thousand Rs.)

9,700 3,836 4,821 3,770 2,125 2,208 26,463

NATIONAL PRODUCTIVITY ORGANIZATION

Achievements

To out-reach and address the customize needs of each region on the instructions of

Board, NPO established Regional Offices in Karachi, Multan, Lahore, Faisalabad,

Peshawar whereas the Regional Offices in Quetta and Muzaffarabe (AJK) are in the

pipeline. The following initiatives also taken by NPO for which the number of post from

50 to 100 increased.

Shifted Head Office and upgraded Lahore Regional Office

NPO acquired the Membership of World Confederation of Productivity Science

(WCPS) and World Network of Productivity Organizations (WNPO) and started

more interaction with European, African and North American Productivity Centers

especially Turkey, China, South Africa, Canada , UK & USA

NPO initiated Benchmarking study in Industries, Fisheries, and Horticulture

sectors with the help of UNIDO by developing 24 Master Trainers under

UNIDO’s TRTA-II program . Later on 200 consultants/trainers & 40 companies on

management systems and 10 companies on CE marking will be developed

Quarterly publication of Productivity Zine & E-zine.

Launched the Prime Minister Quality Award Programme based on US

Malcolm Barlidge Award and designed by the author of Thailand Quality

Award.

Conducted 73 audits of Energy Efficiency for Textile Sector on the instructions

of Prime Minister of Pakistan. Up to 10% energy saving identified for audited

units. Further phase-2 of the project for 200 units was approved but waiting for

release of funds.

Launched a Project of Energy Efficiency for Steel Sector Up to 25% energy

saving identified for test audited units. The project for 150 units was approved

Enhancing innovation & competitiveness in Leather sector Project concept

developed awaiting government approval through Ministry of Commerce

Initiated NPO’s first agriculture sector project on Peach for Prosperity at Swat

funded by BSF, Ministry of Finance

Hosted UNDP Disaster Risk Reduction (DRR) office for industrial sectors and

specially focusing on motor vehicle gas cylinders

APO audit team appreciated NPO’s projects and international programs

Conducted 10 APO’s International Programs by utilizing APO’s International

Resource Persons at Lahore & Karachi as compare to 1 Program in 2009

Conducted 6 International e-Learning (VC based) Training Programs as

compare to 5 Program in 2009

151 personnel recommended for APO Training programs out of which 60

persons attended APO’s international trainings inspite of APO financial

constraints as compare to 126 personnel recommended for APO Training

programs out of which 68 persons attended APO’s trainings in 2009

Signed MOUs with Bahauddin Zakaria University, University of Management

Technology for productivity courses and DAS-Pakistan for International

Certification programs

Launched National Register for Trainers and Consultant Scheme (Career

path for potential Trainers and Consultants) to cope human resources deficiency

in NPO

Successfully conducted Energy Conservation Trainings at Lahore,

Hyderabad and Quetta and more trainings to be conducted in 08 cities of

Pakistan

NPO is conducting EE Audits of Public Sector Buildings (Prime Minister

Secretariat, Pak Secretariat and Peshawer University)

NPO is developing Industrial Sector Management Information system (MIS) for

ENERCON

NPO has been appointed Regional Coordinator for CIS as well as SAARC

countries except India to nominate fellowship.

Year 2009-10

Total Participants

Year 2010-11 Total Participants

Training

North 29 1085 47 1955

Lahore 10 344 29 783

Multan - - 15 439

Karachi - - 16 392

E- Learning

Islamabad 3 57 68 952

Consultancy

North 3 279 7 197

Lahore 5 286 8 495

Grand Total 50 2051 190 5213

Future Plans

NPO signed MOU with World Confederation of Productivity Science (WCPS)

and World Network of Productivity Organizations (WNPO) in the last World

Congress to develop international curriculum on productivity

NPO to arrange World Productivity Congress on the eve of APO’s 50th

anniversary to elaborate international success stories by productivity with the

collaboration of UNIDO

NPO to launch Internationally Certified Distance Learning Courses.

Arranging two International Mega Programs with APO in March & November

2011 after gap of 2 Years in Agriculture Sector

To launch DRR awareness campaign for industry and industrialists with the

coordination of UNDP

To establish Center of Excellence at Lahore on the pattern of Singapore Center

of Excellence

To improve Pakistan’s ranking in Global Competitiveness Index

NATIONAL FERTILIZER CORPORATION

The demand of Urea Fertilizer in the Country outstripped its supply as the Domestic

Production was not sufficient to meet the requirement of the farmers leading to its

shortage, black marketing and resultant hike in prices. In order to defuse the force

majeure crisis, National Fertilizer Corporation imported the Urea Fertilizer and

distributed to farmers through its distribution network of National Fertilizer Marketing

Ltd. The comparative position of Sales & Profit against the import and distribution of

Urea Fertilizer during the year is as follows: -

(Rs./Million)

2010-11

2008-09 2009-10 (Prov.)

- Sales 12317.802 22925.230 12692.249

- Pre-tax Profit 637.326 785.466 803.831

- Taxes & Duties paid 327.784 236.620 319.993

PAKISTAN INDUSTRIAL TECHNICAL ASSISTANCE CENTRE

1. Overview of Performance (2010 – 2011)

1.1. Back up Support and Advisory Services

SME’s and Industry are being benefited by PITAC through its Technological Back

Up Support & Advisory Services in the fields like Design and Development of

Jigs and Fixtures, Manufacturing of Gauges, Heat Treatment Facilities, 3D

CAD/CAM, Mold Designing ,Mold Processing, Assembly & Polishing, CNC

Machining Centre, EDM Sinker/Wire Cut & Injection Molding.

During the period under review 265 Job Orders worth Rs 31, 68,726 were

booked. A total of 243 job orders worth Rs 30, 42,357 were completed and

delivered to the customers. Besides that enquiries for Advisory Services for

guidance and improvement in manufacturing processes, tooling, improving

quality and productivity in production processes etc were handled.

The various jobs done by PITAC are not from commercial view point but to help

develop local industry and to solve their manufacturing problems. Such Jobs lead

industry towards self reliance , improvement in technical know how ,saving

production equipment from break downs and to bring freedom from imports from

imports as far as possible. It has also helped in development of SMEs.

1.1.1. Highlights of Some Important Typical Works

Design and development of 02 No’s of Injection Molds for Service Tapping Tee

Body 2" x 1 1/4" and 2" x 3/4" for M/S Mechfit Industries Ltd, Lahore. It is used

on the High Pressure Sui Gas Pipe Line, to create branch lines from Main

Domestic Sui Gas Supply. Before its development, its being imported from

U.S.A, PITAC helped the M/s in the design and development of the stated part

and encouraged Import Substation as well as help the SME in retaining the

foreign exchange.

Grinding, Lapping and Inspection for Y Type and T Type Fixture for M/S N.D.C

Islamabad

Die and Punch Segment is being manufactured for M/S PECO.

A Sealing Part to be used in Tissue Paper Packing Sealing for M/s Harris Silicon

is being developed and successfully installed.

Profile Grinding of Roller for M/S 3K Enterprises have been done and delivered.

Design and Manufacturing of Housing Crack for M/s Power Vision Multan Road

Lahore.

Development of Depth, Plug, Snap Gauges and Inspection Fixtures for Quality

Control and Assurance of the Precision parts of Tractor for M/S Millat Equipment

Limited.

Designing and Manufacturing of Form Roller for M/S Orient Electronics (Pvt) Ltd.

Design and Manufacturing of “O” Ring Mold for M/s Sheikh Fayyaz G.T Road

Lahore.

Calibration of Tachometer is being done for M/S Ali Engineering Lahore.

Induction Hardening of Pivot Axial Shafts for M/s Ravi Enterprises.

Induction Hardening of Knob Shafts for M/s Mecas Engineering (Pvt) Ltd Lahore.

Calibration of Digital Temperature Gauges for M/S Koled Kraft (Pvt) Ltd Lahore.

Design and development of Tagging Needles used in Textile Sector for

M/s Azad Engineering (Pvt) Limited.

Timing Mark Gauge was being manufactured and delivered to M/s Millat Tractor

Limited.

Calibration of Weigh Scale, Vernier Calipers, Micrometer for M/s Mechfit

Industries Limited.

Manufacturing of Plug Gauges for M/s Rimtaj Pvt Limited.

Surface Grinding, Lapping and Inspection of Round Plates for M/S N.D.C

Islamabad

Precision Surface Grinding of Lower Cutting Plates for M/S SPEL (Pvt) Ltd.

Manufacturing and Cylindrical Grinding of Pins and Bushes for M/s Guard Filter

(Pvt) Ltd.

1.2. Human Resource Development Training Programs

The centre has continued to offer HRD Programs on various subjects of

Management and Technical Interest. The content of the courses have been

carefully designed to meet the requirements of the Industry and have kept under

review to being them in conformity with the changing needs. The HRD Programs

consists of Regular Training Programs, Special Training Programs and

Seminars/Workshops/Symposiums. The regular training Programs are mainly in

the field of Mechanical Trade of 06 – 10 weeks duration whereas Special

Training Programs can be designed on request from various organizations.

1.2.1. Regular Training Programs

These programs are mainly in the field of Metal Working and cover the following

subjects:

Jigs and Fixture Design

Press Tool, Cutting Tool and Gauge Design

Injection Mold Design Basic / Advanced

AutoCAD (Civil / Electrical / Mechanical)

Piping Design

Air Conditioning and Refrigeration

Programmable Logic Controllers

CNC Machining Centre Operation and Programming

CNC Turning Centre Operation and Programming

CNC EDM Sinker / Wire cut Operation and Programming

3D CAD/CAM (DelCAM Power Shape / Power Mill)

3D CAD/CAM (Master CAM)

Advanced Measuring Techniques with Co-ordinate Measuring Machine (CMM)

Injection Molding Operation and Programming

Basic Welding

TIG / MIG Welding

Heat Treatment Techniques

Engineering Draughting

Inspection and Quality Control

Electrician

Welding and NDT Inspection NDT Level –I NDT Level –II

Welding Inspection Level – I Welding Inspection Level – II

Instrumentation and Process Control System

MS Project / Primavera (P3)

Quantity Surveyor

Spoken English / IELTS In Year 2010 – 2011, total 3070 Trainees get trained in the stated Training Programs. The Trends in the recursive and admired training programs are shown below:

1.2.2. Human Resource Development Seminars / Workshops /

Symposiums

During the Year 2010 – 2011, the following Human Resource Development

Workshop / Symposiums were organized by PITAC independently or in

Collaboration with other Private / Public Sector Organizations.

Seminar On Inspection and Quality Control

This one day seminar was conducted on 26th October 2010 .The Inspection and

QA/QC Experts Mr. Masood Ahmad and Mr. Nadeem Shahbaz conducted the

seminar. The Objective was to make people aware of the Advanced Measuring

and QA/QC Techniques. The 95 Participants which comprises of QA/QC

Engineers, Quality Inspector from both public and private sector attended the

seminar.

Seminar On Engineering Draughting

This one day seminar was conducted on 01st December 2010 .The Lead

Instructor of Engineering Draughting Training Course Mr. Nadeem Anwar

conducted the course. The Objective was to make people Basic Draughting

Techniques and enlighten them with the Imperative Role of Draughting Methods

in Industry. The 23 Participants which comprises of Draughtsman, Students

attended the seminar.

Seminar and Workshop on Project Management

This one day seminar and workshop on Project Management were conducted on

02nd January 2011 and 07th February 2011 respectively. Mr. Kashif Khan having

extensive Project Management Experience of Well Known Construction Firm in

Pakistan conducted the seminars. The main purpose was to make people aware

of the Project Management Life Cycle, its Do’s and Don’ts while planning the

Project, Project Execution, Monitoring and Analysis in accordance with the

PMBOK 4th Edition. The 12 and 43 Participants which comprises of Project

Managers, Planning Engineers, attended the seminar and workshop respectively.

Workshop on Six Sigma

The one day seminars were conducted on 04th January 2011 and 08th February

2011 respectively. Six Sigma tends to improve the quality of process outputs by

identifying and removing the causes of defects (errors) and minimizing variability

in manufacturing and business processes .It uses a set of quality management

methods, including statistical methods, and creates a special infrastructure of

people within the organization who are experts in these methods. Resource

Person has extensive Total Quality Management experience. The total 17

Participants from both public and private sector attended the seminar.

Workshop on Foundry Techniques / Practices This two day a seminar

was conducted on 02nd – 03rd February 2011. It was NPO – PITAC

Collaborative Seminar conducted by Mr. R.N Bhome International Metallurgical

Engineer having over 40 Year of Experience. The total 17 Participants from both

public and private sector attended the seminar.

PAKISTAN INSTITUTE OF MANAGEMENT

SOME FACTS ABOUT PIM

PIM’s STARTUP February 1954 by Executive Order of Mr. Ghulam Farooque Founding Chairman PIDC. First Director of PIM Mr. Irshad H. Khan. First Office in Karachi Dockyard Building. Initial Task: To provide in-house management development services to PIDC and its projects/organizations.

INDEPENDENT / AUTONOMOUS STATUS FOR PIM In March 1956 as per the decision of PIDC Board of Directors PIM was made an

independent / autonomous organization under the PIDC umbrella and was given a

separate Mission, Charter and Performance Criteria and asked to work/provide services

at the national level for accelerated management development.

PIM’S MISSION STATEMENT

“Progress Through Better Management”

PIM’S CHARTER PIM is to take lead role in Management Development in Pakistan on a no-profit- no-loss basis through:

1. Management Training & Development

2. Management Education

3. Management Counseling

4. Management Consultancy

PIM’s CORE VALUES

1. Professionalism 2. Competence 3. Respect for People 4. Fairness 5. Unpretentiousness

PIM’s PERFORMANCE CRITERIA

1. Number of Training Courses Conducted

2. Number of Managers Trained

3. Number of New Management Techniques Introduced into Pakistan through Training, Education and Consulting.

4. Revenue Generation:* 66% Self Generation, 33% Grant-in-Aid- by GOP *This formula was followed till 1984; today PIM generates about 90% of its own revenue.

PIM TODAY PIM is a small organization which specializes in providing management development

services to all sectors of the Pakistani economy.

The mix of PIM’s client group is as follows:

Private Sector 38%

Multinationals 29%

Public Sector 12%

Federal & Provincial Govts 9%

Armed forces 7%

NGOs 5%

PIM employs 140 people of which 26 are faculty and the rest is support staff. It has two

offices: Karachi (head office) and Lahore (Branch office). Currently PIM conducts over

300 training programs annually and trains over 5,500 managers from all sectors of the

economy. PIM has 430 organizations as registered members of PIM and they are

intensive users of PIM’s management development services.

In the field of Management Education PIM is a small but qualitative player and offers a

full MBA program for in-service executives in Karachi and 18 four month Diploma and

Training programs for in-service managers. Additionally PIM is also involved in:

1. Management Research

2. Publication of a Monthly News Letter ( Management Outlook) and a Quarterly Journal (Pakistan management Review)

3. Holding regular Panel Discussions & Guest Speaker Sessions

UTILITY STORES CORPORATION OF PAKISTAN (PRIVATE) LIMITED

Brief History

Utility Store Corporation was established in July 1971, by taking over 20 retail outlets

from the Staff Welfare Organization. Passing through various stages of expansion and

reorganization, the Corporation at present is operating 5700 stores throughout the

Country.

Sale Achieved During the Last Four Years The Corporation is one of the largest Organization under the control of Ministry of

Industries having a network of 5700 Stores spread through out the Country. The

Corporation has achieved sale of Rs. 47.89 Billion in the year 2007-2008, Rs. 48.73

Billion in the year 2008-2009, Rs. 52.932 billion in the year 2009-2010 and Rs.63.530

Billion in the year 2010-11.

Operational Management The Corporation is operating 9 Zonal Offices located at Abbottabad, Peshawar,

Islamabad, Sargodha, Lahore, Multan, Sukkur, Karachi and Quetta and 62 Regional

Offices through out the Country.

Operational Results The Corporation has earned Net Profit of Rs. 602.55 Million in the year 2006-2007 Rs.

2087.540 Million in the year 2007-2008, Rs. 452.051 Million in the year 2008-2009 and

Rs. 708.865 Million in the year 2009-10.

Employment Generation

The total of the employees of the Corporation is 15141 persons, which include 6795 as

Regular Employees, 3648 as Contractual Employees and 4698 as Daily Wagers. The

Corporation has provided new job to more than 10,000 people in different scales during

the last three years. The Corporation also reinstated 699 sacked employees whose

services were terminated during the period 1996-1998 in pursuance of the ordinance

promulgated by the Government by the purpose.

No burden on Government Ex-Chequers The Corporation is not a burden on the Government Ex-Chequers. All kinds of

operational expanses, which include the cost of salaries, wages, cost of selling and

distribution, rental of the buildings and payment of taxes are being met by the

Corporation itself from the gross profit margin of sale proceeds.

Payment of Taxes The Corporation has paid various Taxes amounting to Rs. 13.563 Billion in the National

Ex-Chequers, out of which Rs. 1376 Million were paid during the year 2007, Rs. 2582

Million during 2008, Rs.4150 Million during the year 2009 and Rs. 4620 Million during

the year 2010.

Successfully for discharge of obligatory functions The Corporation has successfully discharged its obligatory functions of provision of

Essential Commodities at reduced prices. The prices of Essential Commodities being

sold at USC outlets are 5 to 10 % less as compared to Open Market.

Penetration into Rural Areas The Corporation has penetrated to in the rural areas by opening of stores at Union

Counsel level. Present percentage/ratio of the coverage of the stores in urban and rural

areas is that the Corporation is operating 34% in the urban areas and 66% in the rural

areas.

Sale of Sugar as subsidized rates The Corporation in compliance with the decision of the Economic Coordination

Committee is selling Sugar to the consumers at subsidized rates. Through this

subsidized operation Economic Relief of more that 10 billion has been availed by the

consumers.

Ramzan Relief Package 2010 The Corporation in compliance with the directive / decision of the Federal Cabinet has

successfully conducted Ramzan Relief Package 2010, through which the Essential

Commodities which includes Atta, Ghee/Oil, Dall Channa, Baisen, White Gram and

Dates were sold on subsidized rates. Economic Relief of 2 Billion was availed by the

consumers on the sale of these six items. In addition the Sugar was also sold on

subsidized rate and the prices of about 800 items were also reduced through obtaining

additional discount from the suppliers and by narrowing USC own margin. This has also

provided a relief of 1 Billion to the consumers.

Ramzan Relief Package 2011 It has been experienced over the last many years that during the holy month of Ramzan

due to demand and supply position, the private sector increases the prices of essential

commodities which are mostly consumed by the Fasting People. In order to provide

relief to the consumers, the Ministry of Industries submitted a Summary to the Economic

Coordination Committee of the Cabinet seeking its approval for Relief Package for the

Holy Month of Ramzan 2011 involving a relief of Rs. 2 billion. The items included in the

package were Atta, Ghee/Oil, Dal Chana, White Gram, Dall Moong, Dall Mash, Baisen,

Dates, Rice Basmati, Rice Sella, Broken Rice, Syrups, Squashes, Tea, Milk Tetra Pack

and Spices. The Summary moved by the Ministry of Industries was considered by the

Economic Coordination Committee of the Cabinet in its meeting held on 30-6-2011.

The ECC accorded approval for the following: -

The following 16 essential commodities were sold on subsidized rates as mentioned

against each: -

S # Name of Commodity Amount (Rs) of subsidy

per kg

1. Atta 06.00

2. Ghee/Oil 14.00

3. Dall Chana 10.00

4. White Gram 10.00

5. Dall Moong 10.00

6. Dall Mash 10.00

7. Baisen (Chakki) 10.00

8. Dates (Khajoor) 10.00

9. Rice Basmati 10.00

10. Rice Sella 10.00

11. Broken Rice 10.00

12. Syrups (Sharbat) (Bottles) 10.00

13. Squashes (Bottles) 10.00

14. Tea (190 gram) 40.00

15. Milk Tetra Pack 5.00

16. Spices 10% on all USC Spices

In addition to above mentioned 16 items which were sold on subsidized rates as

mentioned against each, sugar was also sold on subsidized rate of Rs. 55.00 per kg. by

the grace of Almighty Allah, the Ramzan Relief Package was successfully implemented.

The Corporation achieved the sale of about Rs. 50.00 billion during the Holy month of

Ramzan. This provided much needed relief to the general public through Ramzan Relief

Package. Adequate stocks of both the subsidized as well as non-subsidized items were

available throughout the Country. There had been no complaint of non-availability of

stocks on USC outlets during the Holy month of Ramzan. Separate counters were also

arranged for the sale of single item. No long and lengthy queues were witnessed in front

of stores. In short, the arrangements of Ramzan Relief Package were appreciated both

by the public representatives as well as consumers.

Special Role of USC The Corporation apart from discharging its obligatory function of provision of essential

consumer items to the public at the prices lower that those prevailing in the open market

have also accomplishes its special role of provision of Food Security to the affected

people in the National Climate.

Flood Relief Operation 2010 The Corporation provided more than one million bags of dry ration consisting of

essential commodities which include Atta, Ghee / Oil, Sugar, Rice Pulses, Dry Milk,

Tea, Biscut, Candles and Match Box, to various Agencies which include Emergency

Relief Cell of the Cabinet, National Disaster Management Authorities, Ministry of Water

and Power, Pakistan Bait-ul-Mall, Privatization Commission, Senate of Pakistan, Save

the Flood Victims and other various Agencies for distribution among the Flood affected

people.

Sindh Flood Relief Operation 2011 The Corporation provided more than 500,000 bags of dry ration consisting of essential

commodities which include Atta, Ghee / Oil, Sugar, Rice Pulses, Dry Milk, Tea, Biscut,

Candles and Match Box to National Disaster Management Authority (NDMA) and

Pakistan Bait-ul-Mall (PBM)

Future Plan In order to provide the essential consumer items to more segment of Population at

reduce prices, the Corporation has planed to opened 2000 more stores through out the

Country. This will not only provide the required economic relief to the middle and lower

middle income people but at the same time it will create job opportunities for the

unemployed young youth.

PAKISTAN STEEL

INTRODUCTION:

Pakistan Steel is the country’s first and so far the only integrated steel plant, having a

production capacity of 1.1 million tones per year (mtpy). Established with the techno-

economic assistance of the erstwhile Soviet Union at a cost of around 24.7 billion and

came into operation in phases starting from year 1981. The project was completed in

January 1985. The existing technology adopted for Steel Making at Pakistan Steel is

through Basic Oxygen Furnace (BOF) route. This is the most popular and advance

Steel Making Technology, adopted for about 65% of steel making in the world. With

the present capacity of 1.1 million tones per year (mtpy) Pakistan Steel’s share of

domestic market is hardly 17% while rest of the country requirement is met through

imports and local melters.

SALIENT FEATURES / ACTIVITIES

Completion Cost : Rs.24,700 million

Project location & Site: Pakistan Steel is located 40 KM South East of Karachi at Bin Qasim in close vicinity of Port

Muhammad Bin Qasim. It is spread over an area of 19,087 acres (about 29 sq. miles)

Major Activity : Production & sales of prime quality iron & steel products.

Main Products : Coke, Pig Iron, Rolled & Cast Billets, Hot Rolled Sheets/Coils/Plates, Cold Rolled Sheets/Coils, Galvanized Sheets, Formed Section.

By-Products : Coal-tar, Ammonium Sulphate, Blast

Furnace Granulated Slag.

ORGANIZATIONAL SET UP / MANAGEMENT

Pakistan Steel Mill Corporation Limited was incorporated as a Private Limited Company

under Companies Ordinance 1984. The Steel Mill is wholly owned by the Government

of Pakistan, and functions under the administrative control of Ministry of Production &

Industries. The Corporation is governed by it’s Memorandum & Articles of Association.

Its affairs are managed by a Board of Directors nominated by the Government. All

administrative & financial powers for managing the affairs of the corporation vest in the

Board which may delegate the same from time to time to the Chief Executive and other

functionaries. The day to day business of the Corporation is carried out by the Directors

/ Principal Executive Officers under the supervision of the Chief Executive Officer.

PERFORMANCE / ACHIEVEMENTS:

The overall performances for the last five years are tabulated as under: (Rs. in Million)

Financial year Capacity

(%) Net

Sales

Net Profit / (Loss)

Accumulated Profit/

(Losses)

Taxes & Duties Paid

2006-2007 89 29,937 3,159 8,025 6,492

2007-2008 82 40,624 2,081 9,536 8,252

2008-2009 65 33,184 (26,526) (16,990) 8,976

2009-2010 40 22,778 (11,524) (28,514) 4,474

2010-2011 36 26,134 (11,480) (39,994) 5,389

MAIN REASONS FOR LOSSES

- Pakistan Steel sustained a loss of Rs. 26.5 billion in the year 2008-09 against

profit of Rs. 2 billion in the year 2007-08. The sale was decreased due to global

economic recession, sharp decline in sale price of products, purchasing of raw

material at high prices due to long term supply contract, increase in personal cost

and the valuation of stock at net realizable value (N.R.V)

- Due to the heavy loss during the year 2008-09 Pakistan Steel entered into severe

financial crunch.

- In subsequent years due to financial crunch, Pakistan Steel could not maintain

supply chain of raw material and hence forced to run at low capacity utilization

which is resulting in further increase piling of accumulated losses.

PRODUCTION / SALES STATUS:

P r o d u c t s

Production

(‘000’ Tons)

Sale

(Rs. in Million)

2010 – 11 2009 -10 2010 – 11 2009 -10

Budget Actual Actual Budget Actual Actual

Production in terms of capacity

utilization of Raw Steel 47% 36% 40% - - -

Raw Steel 522 396 443 - - -

C o k e 419 301 345 6,592 100 27

Molten Metal/Pig Iron 571 433 483 616 364 356

Rolled Billets - - 46 140 149 1,949

Cast Billets 47 4 26 2,489 251 1,031

H.R. Coils/Plates 418 358 338 19,084 17,572 12,791

C.R. Coils 115 88 92 7,038 6,255 4,974

Galvanized Coils/ Sheets 10 3 6 803 338 372

OTHER PERFORMANCE:

Pakistan Steel initiated a comprehensive indigenization Plan in 2007-08. The main

objective of indigenization was to reduce the dependence on import and to increase the

proportion of local raw material in its process and to make the production economically

viable based on the following objectives:

To mobilize the local resources for shedding the partial dependency on

the imported iron ore and the development of mining sector of the country.

To cut down cost of materials and to save foreign exchange

To promote the socio economic uplift of the remote mining areas of the

country, especially Baluchistan.

Supplies of local raw material are being encouraged. Pakistan Steel is procuring

expeditiously local iron ore from the mine owners/authorized suppliers as per PPRA

rules through contract as short term policy and utilizing about 200,000 tons iron ore per

year through this source, presently 70% of local lump Iron Ore is being used in the

production process. Pakistan Steel is also actively engaged to get the mining operation

at its own, on the three acquired iron ore leases in Baluchistan i.e LUFTO, KULLIKOH

and BELAR as per our long term policy.

Captive mining is being pursued vigorously, speedy working has been started for

captive mining arrangements in Baluchistan Province from where more than 2,000 tons

per month material is being mined & transported for utilization at plant which will be

enhanced to 10,000 M. tons per month of boulders on the prospective exposed iron ore

bodies. Pakistan Steel has successfully managed to substitute completely the import of

manganese ore and now 100% manganese ore requirement are being met through

local sources (mostly from Balochistan).

The idea of using indigenous material has not only proved beneficial to Pakistan Steel

but it also helped to save substantial amount of Foreign Exchange to the tune of US

Dollar 42.851 million upto now. It has also created a healthy economic activity through

out Balochistan and has created employment opportunities in the remote areas of

Balochistan and Khybar Pakhtun Khuwa.

Pakistan Steel has completed revamping / repairs of its Coke Oven Battery No.2 and

recommissioned it in October, 2008 and since then it has been giving production at full

capacity. Labour Union activities, which had remained suspended / banned for a long

time, have been restored and a CBA has been elected and become functional.

Pakistan Steel is a major contributor to the national exchequer. It has paid an amount of

Rs.99.3 billion towards duties and taxes to the Government since 1984-85 to June,

2011. The project has thus repaid more than the cost of the project which is Rs.24.70

billion. Further to this an amount of Rs.1 billion is paid to the Government of Pakistan

as dividend during September, 2007. Pakistan Steel has also making noteworthy

contribution in the realm of social obligations. In this regard Pakistan Steel is providing

residential, medical, educational, recreational and sports facilities for its employees as

well as to the people of adjoining areas. These facilities includes 125 Bed Pakistan

Steel Hospital, Quaid-e-Azam Park, Cricket Stadium Park, Pakistan Steel Cadet

College, Sports Complex and construction of fly over at Quaidabad T-Junction which

was assigned to Pakistan Steel by the President of Pakistan.

ACTION PLAN / STEPS TAKEN FOR IMPROVEMENT:

The Board of Directors has been reconstituted and highly professional

directors have been placed on the Board which includes six Directors from

Private Sector and six from the Public Sector.

Restructuring of the organization is being done. The position of CEO has

been segregated from that of Chairman of the Board strictly in accordance to

company ordinance 1984.

Best corporate practices are being adopted and the Chairman of the Board

are elected by the Board of Directors. Powers of the CEO has been

rationalized and the management is made accountable for performance

targets including budgetary targets, identifying key successes factors and

contingency planning. Frequency of Board meeting has been increased. Four

sub-committees of the Board have been constituted for establishing

objectivity and effectiveness of the Board. Management Executive

Committee headed by the CEO and comprising of heads of key functions is

holding weekly meetings with proper agenda. Changes in key management

are being done by hiring highly professional personals on these posts.

Steps are being taken to restore raw material supply chain.

Emphasis is being made for production and sale of value added products.

Utilization of 0.15 million tons sludge, lying unused for last 25 years have

started to use in the process in addition to iron ore.

Emphasis is being laid on production and sale of value added products. As

the higher gross margin towards recovery of fixed cost is available on

production of flat products.

By improving liquidity position and restoration of supply chain, the plant will be

operated at 60% capacity; the sales target is estimated at Rs.49 billion

assuming that PSM tariff rationalization demand shall be met by FBR.

BAILOUT PACKAGE:

Prime Minister Approved Bailout on June 11, 2010

Cabinet Ratified December 29, 2010

GOP Loan Rs.3 billion received in June 2010

Loans Rescheduling Rs.7.6 billion in Jan 2011

EXPANSION PLAN:

Keeping in view the demand of steel in the country and to enhance the existing capacity

of the mills, Government of Pakistan intends to increase the production capacity of

Pakistan Steel from the present 1.1 million tons to 1.5 mtpy in Phase-I and upto 3.0

mtpy in Phase-II. As per directive of MOI&P, Expression of Interest (EOIs) was invited

by Pakistan Steel from internationally renowned companies for participation in the

expansion project. EOIs have been received from 10 international firms experienced in

setting up of steel plants, which would be evaluated by a consultant to ensure

transparency in the process.

Pakistan Industrial Development Corporation

Revised Role and Development Activities

With a view to facilitate the pace and areas of industrialization in the country particularly

the post WTO competitive scenario, the role of PIDC has been redefined. The Board of

Directors of PIDC now comprises of total 15 members, out of which 10 are from private

sector and the Minister of Production is its Chairman.

VISION

To foster a spirit of enterprise, facilitate entrepreneurs and promote development of

internationally competitive industry

ROLE

PIDC to be the Primary Vehicle for facilitating industrialization by creating enabling

environments for different segments of industries

Skill Development Centres (SDCS) in Northern Areas

08 no. Skill Development Centers (SDCs), 04 each in Khyber Pakhtunkhwa and Azad

Kashmir was planned by PIDC, after the devastation of the Earthquake in 2005. For this

purpose Rs. 200 Million was earmarked under PC-1. However only four centers could

be established in KP only, at Batgram and Khaki. All these units have been

commissioned and are in operation since 2008, having so far trained and educated

5200 no. of students. All these four units are now under process of handling over to KP.

Subsidiary Companies

PIDC has established following 08 no. Sectorial Development Companies under section

42 of Companies Ordinance 1984

i. National Industrial Parks Development & Management Company (NIP).

ii. Technology Up gradation and Skill Development Company (TUSDEC).

ii. Karachi Tools, Dies and Moulds Company (KTDMC).

iii. Pakistan Stone Development Company (PASDEC).

iv. Pakistan Gems and Jewellery Development Company (PGJDC) and

v. Pakistan Hunting & Sporting Arms Development Company (PHSADC).

vi. Furniture Pakistan

vii. Aik Hunar Aik Nagar (Ahan)

Joint Venture Companies

PAKISTAN CHEMICAL AND ENERGY SECTOR SKILLS DEVELOPMENT COMPANY (PCESSDC) The company has been incorporated with total capital cost of Rs.209 million with

PIDC‘s share of Rs.100 million. PCESSDC has been incorporated as a Joint Venture

with M/s. Engro Chemical Pakistan Limited at Dharki, Sindh. Establishment of Technical

Training Center is underway on 16.4 Acre area. Formal inauguration of the Center/

Commencement of classes is scheduled to be taking place during 2011. The company

aims to provide quality technical education offering three-year diploma in the fields of

chemical and Mechanical Technology, to turn out skilled manpower required by a

number of fertilizer, oil and gas companies and power plants in the region.

SOUTHERN PUNJAB EMBROIDERY INDUSTRIES

The company has been incorporated as Joint Venture in June, 2009 with M/s. Alico

having project cost of Rs. 816 Million with equity ratio of 25: 75. The company having its

head office in Multan, envisages setting up high quality embroidery manufacturing units,

spread in and around Multan. Through this setup, not only the country will be having a

high class state-of-the-art embroidery manufacturing facility but it aims at providing job

opportunities to 4000 plus artisans available in the area. This company also plans

setting up training facilities for developing the skills of local artisans, mostly belonging to

womenfolk, on modern lines. The plans also aim at exporting the product. This project is

expected to kick off with its production by September 2011.

Feasibility Studies for Mega Projects

i. Development of Coal Port/ Terminal for imported coal in Pakistan

Contract for award of work for conducting the feasibility study was signed with M/s.

Scott Wilson Ltd., UK on December 19, 2007 and the study was completed in May

2008. An attempt was made through press ad in September 2008, to attract

entrepreneurs to use this feasibility report for their planned Power Projects and make

PIDC their equity partner. No success achieved. Subsequently feasibility study was

referred to Private Power Investment Board (PPIB) to sell the study through them as

they are also endeavoring finding entrepreneurs to setup coal fired power generating

units near the port. Various meeting held but no break through achieved. Lately, in April,

2010, matter has been referred to MoIP seeking their approval to a proposal for setting

up the project coal terminal by pooling up the funds from the public sector giants like

KPT, PQA, Pak Steel etc. Decision a-waited.

ii Developing a vision and Feasibility of Petrochemical Production Facilities in Pakistan.

KBC of Singapore and ENAR Petro-tech Services have been engaged to carry out the

study. PIDC has received the final report from the consultant in October 2009. The

Report presented to BOD, approval awaited.

iii Leather Sector Development Strategy

PIDC has sponsored a feasibility study for Leather Sector Development Strategy

through SMEDA who has engaged M/s J.E. Austin for the purpose. The report has been

approved by steering Committee. .

iv. National Fertilizer Strategy

Consultancy services of Arthur D. Little (Middle East) limited were hired for this

assignment. The study was completed by consultant & received at PIDC in November,

2009. The same has been sent to MOIP for consideration & approval. The study was

referred to ECC by the Ministry and it has reportedly been approved. Further action is

being taken at the Ministry level.

HEAVY MECHANICAL COMPLEX, TAXILA Heavy Mechanical Complex (HMC), Taxila was established under 3rd. Five Years Plan,

with the technical and financial co-operation of government of People’s Republic of

China, to implement government’s industrial policy to shift emphasis from consumer

goods to capital goods manufacturing industry. HMC started its operations in 1971.

Later in 1977, Heavy Foundry & Forge (HFF) was established, also with the co-

operation of People’s Republic of China, to produce heavy castings and forgings. This

project was inaugurated by Shaheed Zulfiqar Ali Bhutto, the prime minister of Pakistan,

who emphasised the need of heavy engineering sector in his inaugural address in the

following words, “the role of engineering sector, particularly of heavy engineering

is of paramount importance in developing economy. Meaningful industrial growth

can only start after heavy engineering base is provided. Because of nature of this

industry gestation period is long and returns are slow but equally they are

essential”. In 1990, Heavy Foundry & Forge was merged into Heavy Mechanical

Complex.

PRODUCTION FACILITIES

The facilities in the company are unique and largest in the country, under one roof. The

facilities include design & engineering, foundry & forge works comprising of steel

casting, cast iron & non-ferrous castings, die & free forgings, heat treatment and pattern

making shops, mechanical works comprising of fabrication, machining, assembly,

galvanizing facilities and non ferrous fabrication facilities. HMC can undertake projects

right from designing to manufacturing, installation and commissioning of plants. The

details of facilities are as follows;

Mechanical Works

Design & Engineering Machine & auxiliary shop;

(Area – 15,150 sq.m, No. of machines – 190, max. crane – 50 t) Fabrication Shop:

(Area – 21,842 sq.m, No. of machines – 198, max. crane – 100 t) Assembly Shop; (Included in machine shop) Galvanizing shop;

(Area – 1,036 sq.m, No. of equipment -11, max. crane – 5 t) Non-Ferrous fabrication shop:

(Area – 2,800 sq.m., No. of machines – 6, max. crane – 5 t) Heat Treatment shop:

(Area – 1,000 sq.m., No. of equipment – 26, max. crane – 5 t)

Forge Shop: (Area – 3,100 sq.m., No. of machines – 24, max. crane – 25 t)

Surface Preparation & Painting: Quality Assurance: (Metrological & NDT)

Foundry & Forge Works Technology Department Steel Foundry:

(Area – 20,040 sq.m., melting capacity – 60,000 t/yr., max. casting – 32 t, ingot – 50 t)

Cast Iron & Non-Ferrous Foundry: (Area – 10,236 sq.m., capacity – 5,000 t/yr., max. casting C.I – 28 t, N.F 1.5 t)

Hydraulic Press Shop (3150 ton press): (Area – 8,592 sq.m., capacity – 4,000 t/yr., max. forging – 35 t)

Die & Free Forging Shop: (Area – 8,740 sq.m., capacity – 2,500 t/yr., max. forging, free – 0.5 t, die 150 Kg)

Machine Shop: (Area – 6,120 sq.m., No. of machines – 31, max. crane – 32 t)

Heat Treatment Shop: (Included in casting & forging facility)

Pattern Making Shop: (Area – 4,572 sq.m., No. of machines – 11, max. crane – 3 t)

Grinding Media Shop Quality Assurance:

(Mechanical, Chemical & quick analysis labs.)

PRODUCT RANGE & DEVELOPMENT:

HMC has made significant contribution in local development of heavy engineering

projects like sugar plants, cement plants, oil and gas processing plants, equipment for

petrochemical and chemical plants, Over head travelling cranes, steam boilers,

pressure vessels, heat exchangers, road construction machinery, heavy castings and

forgings. HMC has also developed several products for defence sector. Details of HMC

efforts and contribution in development of local engineering capabilities is as follows;

Original capabilities Present capabilities

Sugar plants 1500 tcd capacity plant - Upto 12000 tcd capacity plant (44 items) - Industrial alcohol plant Cement plants 600 tpd capacity wet process - 500-5000 tpd dry process (19 items) - White cement plan

Industrial boilers 10 ton, low pressure (13 kg) - Water tube, upto 100tons

- Medium pressure - Fire tube Upto 20 tons, - Heat recovery boilers Road construction machines - Static road roller 10-12 ton static road roller - Vibratory road roller - Asphalt mixing plant - Stone crusher Cranes 32 & 75 ton overhead electric - Upto 250 tons - Gantry cranes - Portal cranes Truck chassis (long members) Railway axles (wagon) - Wagon & loco axles Steel structures - Industrial steel structure - Steel bridges Power plants - Utility boiler parts (not included) - Turbine house equipment - Steel structure - Radial gates - Hydel turbine Process plants (Not included) - Pressure vessels, columns - Heat exchangers, - Gas processing plants - Oil refinery equipment - Fertilizer plant equipment. - Chemical plant equipment. Heavy castings - Heavy castings Heavy forgings - Heavy forgings

- Parts & components for defence products

Major process plants & equipment supplied HMC has supplied the following major equipment to-date; Sugar Plants

28 complete plants

29 major expansion projects

Equipment & spares Cement Plants

6 complete plants

Major equipment for 22 plants

Engineering & design services

Replacement equipment & spars Oil & gas process plants

Dakhni gas processing field, complete facility

Pindori gas processing plant expansion project

Static equipment for Lasmo Bhit field project Industrial boilers

About 200 boilers of capacity 1 ~ 80 tons EOT & gantry cranes

About 300 cranes of lifting capacity up to 250 tons

Major equipment supplied for thermal power plants

210 MW Bin Qasim TPS Units 3 & 4: (Deutche Babcock) Manufactured evaporators, super-heater & economizer coils, headers,

heat exchangers, pressure vessels, steel structure, stack, tanks.

210 MW Bin Qasim TPS Units 5 & 6: (Hitachi-Babcock) Manufactured evaporator, super-heater & economizer coils, headers, SH

headers, heat exchangers, pressure vessels, steel structure, tanks, buck stays.

320 MW Muzafargarh TPS Unit 4:(CMIC) Manufactured LP heaters, de-aerator tank, headers, cranes, pressure

vessels, steel structure, tanks, ducts, stack, cw pipes.

HUBCO TPS:(IHI) Manufactured plate & profile structure for power boilers.

AES Lalpir (Nichimen), Rouch (Rouch), Habib Ullah Energy (C+H Montage) Steel structure, stack, ducts, hoppers, casing for heat recovery boilers.

Major equipment supplied for hydropower plants

Gazi-Barotha HPP: (Voith) Manufactured spiral casing for hydro turbines (5x290 Mw), draft tube

liners, pier nose liners, pit liners, HP vessels. Supplied EOT cranes 70 & 6 tons, monorail crane 5 tons.

Tarbela HPP: Supplied draft tube gates, lifting beam, sill cleaning device. Supplied gantry crane 50 tons, semi-gantry crane 250 tons.

Warsak HPP: Manufactured draft tube gates, bulk head gates, trash rack, draft tube

gates & trash rack followers, head covers, bottom rings, wicket gates. EOT cranes 50 & 5 tons.

Malakand-III HPP: Designed, manufactured, installed & commissioned penstock (dia. 4

meters) – 1st. time by any local company.

Kundal Shahi HPP: Complete rehabilitation of imported 1 MW power plant.

Others: Spillway gates (13x11 m), bulkhead gates (3x3 m) for Khanpur dam. Sluice, fixed wheel, head regulation gates for Abbasia irrigation project. Small turbine runners up to 5 MW.

EXPORTS

Besides meeting local requirement of plant and machinery, HMC has exported 4 sugar

plants, one clinker grinding plant, over head travelling cranes, road construction

machinery and host of other items to friendly countries as follows;

Indonesia Subang sugar mills (3000 tcd) Bangladesh Natore sugar mills (1500 tcd)

Pabna sugar mills (1500 tcd)

Sks clinker grinding plant(1450 tpd)

E.O.T cranes for railways

Boilers

Sri lanka Gates for irrigation system (Mahawali Development Project) Kenya Asphalt mixing plant

Ghana E.O.T. cranes for railways Sudan Evaporation station for sugar mill Saudi arabia 4 tph heat recovery boiler Ethiopia Sugar mill (8000 tcd)

FINANCIAL

Financial performance of the company for the last five years is tabulated below;

PERFORMANCE AT A GLANCE

YEARS 2005 ~ 2011

Year Ending 30th. June

Sales Gross Profit/ (Loss)

Pre-Tax Profit/ (Loss)

Loans

Inventory Orders in hand

Long term

Short Term

2005 1403.10 189.00 50.80 490.30 150.00 762.60 1986.14

2006 1773.00 236.80 29.70 466.40 150.00 835.30 1868.57

2007 1767.80 183.00 18.80 441.00 150.00 633.00 1084.08

2008 1530.50 183.40 10.80 430.60 150.00 1016.40 1713.75

2009 1915.70 17.10 (285.80) 429.00 150.00 996.60 1114.50

2010 1983.40 202.13 1.08 428.10 150.00 842.00 1400.98

2011 2251.42 239.49 3.146 428.10 150.00 1033.51 2102.366

PROFIT & LOSS

YEARS 2010 & 2011

Description Actual Jul-Jun 2010

Budget Jul-Jun 2011

Actual Jul-Jun 2011

Variance over

Actual last year

Budget

Sales (mnf.) 1,983,408

2,040,055

2,251,416

268,008

211,361

Cost of Sales 1,781,277

1,802,241

2,011,922 230,645 209,681

Gross Profot/(Loss) 202,131 237,814 239,494 37,363 1,680

Operating Expenses - - General & Admin. 159,061 173,864 168,575 9,514 (5,289) Selling & Distribution 24,101 28,178 35,764 11,663 7,586

Total Opr. Expenses 183,162

202,042

204,339 21,177 2,297

Operating Profit/(Loss) 18,969 35,772

35,155 16,186 (617)

Financial Expenses (78,141)

(79,617)

(81,807) 3,666

2,190

Other/Interest income 60,427

66,340

49,964

(10,463)

(16,376)

WPPF (63) - (166)

(103)

(166)

Profit/(Loss) before Tax 1,192 22,495 3,146 1,954

(19,349)

Prior year adjustments 11,847 - 24,045

Taxation (9,917)

(20,401)

(22,514)

12,597

2,113

Profit/(Loss) after Tax 3,122 2,095 4,677 1,555 2,583

SALES BREAK UP BY PRODUCTS

2006-11

Foundry & Forge products 20%

Road Rollers 3% Railway axles

0%

General Commercial 12%

Power plants equipment 5%

Oil, Gas & Process plants 8%

EOT Cranes 3%

Boilers (Sugar plants) 22%

Sugar plant equipment 24%

Cement plant equipment 3%

FUTURE DIRECTION OF THE COMPANY

Since its inspection in early seventies, HMC has excelled in many disciplines. HMC can

rightly be proud of its achievements made in local development of manufacturing

technology for capital goods especially in Heavy Engineering Sector like Sugar Mills,

Boilers, Cranes, Heavy Castings / Forgings and such many other similar products.

Inline with its policy of indigenization of technology for the growth of local industry,

HMC, in addition to other areas, is specifically working on the following areas/ products;

Naltar-III Hydropower Project

HMC has manufactured and supplied large number of equipment for hydropower plants

for various projects in the country. Now, Government in view of need and large potential

of hydro-electric power generation has entrusted HMC with turn-key execution of 16

MW, Naltar-III hydropower project, as a model local project. Formalities for award of

contract to HMC are being completed by the concerned ministry. The Planning

Commission has constituted an inter-ministerial committee for coordination and timely

execution of the project. Decision to award a turn-key hydropower project to HMC will

pave way for localization of technology for hydropower plants.

High pressure boilers for co-generation

There is large potential for power generation in sugar industry by replacing the existing

low pressure boilers with high pressure boilers. HMC has been regularly designing,

manufacturing and supplying bagasse fired boilers to sugar industry, according to their

needs. Now, HMC has completed the design of high pressure bagasse fired boiler and

is offering to sugar industry. The indigenous availability of high pressure boilers will help

in expediting co-generation in sugar industry, which will go a long way in reducing the

electricity shortage in the country.

Falling film evaporators

HMC has been meeting the entire requirements of the sugar industry for more than

three decades. It has been keeping pace with the developments in sugar industry for

performance improvement to provide the industry with better equipment. Recently HMC

has developed falling film evaporators, which improve the performance with energy

conservation. HMC has offered this product to local industry.

Future plans for energy sector

HMC now, has to develop its capabilities as EPC Company, to make significant

contributions in energy sectors, keeping in view the domestic requirements on priority

along with export potential for engineering goods to increase the country’s export. On

the initiative of Ministry of Production, HMC had prepared future plans for up-gradation

of its design and manufacturing capabilities and had submitted two PC-1s. These PC-1s

have been approved by CDWP and ECNEC. Allocations have also been made in the

PSDP. PC-1s are for the following projects;

ESTABLISHMENT OF DESIGN INSTTUTE

HMC has prepared a PC-I for establishment of energy specific design institute. The

project costing Rs.665 million will enable to develop local capabilities to design

complete power plants (Thermal, hydro & renewable), gas processing plants and other

process plants in the country.

UP-GRADATION OF FACILITIES

HMC has prepared a PC-I for up-gradation of its facilities (ESTABLISHMENT OF

TURBINES & POWER PLANTS EQIPMENT MANUFACTURING FACILITY). The PC-I

is based on manufacturing of equipment for power plants including turbines. The project

will cost around Rs.21.5 billion. It shall up-grade steel melting & refining, forgings,

fabrication and CNC machining facilities.

Chapter-5

Emerging Sectors Wing Emerging Sectors Wing of this Ministry was entrusted with extended mandate to facilitate industrial growth. In pursuance, the Ministry has established independent companies as subsidiaries of the Pakistan Industrial Development Corporation (PIDC) which are based on Public Private Partnership to speed up industrialization process in provincial headquarters and prominent urban industrial clusters. Following is the latest position of ongoing projects undertaken by these companies to achieve their objectives:

A) Technology Up-gradation and Skill Development Company (TUSDEC)

Achievements during the FY 2010-2011 TUSDEC continues to record significant progress in its quest to upgrade technologies and enhance skills in key strategic industrial clusters such as Engineering, Cement, Ceramics, Garments and Skill Development. To-date TUSDEC has implemented the following projects worth Rs. 2.5 billion.

Skill Development Centres (SDCs) at Batagram and Khaki (KPK)

Four Skill Development centres in Batagram and Khaki (earthquake affected) are operational and have received a tremendous response from the local community. The SDCs are offering free-of-cost courses in 14 different disciplines. Till date both the SDCs have trained more than 3400 students. These SDC's are not only offering short courses but also offer one year diploma courses to improve the livelihood of the earthquake affected people in the area.

National Institute of Design & Analysis (NIDA), The Advanced CAD/CAM Training Centres (Lahore, Karachi, Peshawar, Quetta and Sialkot)

The Advanced CAD/CAM Training Centres are operational in Lahore, Karachi, Sialkot, Peshawar and Quetta. These Centres have conducted 719 courses and approximately 8346 students have completed their training in various fields such as architecture and graphic design, mould design, architectural drafting, CAD/CAM designing with composite materials and graphic design for print media. Furthermore, five similar centers are planned for the districts of Larkana, Hyderabad, Kasur, Bhawalapur, Okara and Sargodha.

Cement Research and Development Institute (CR&DI) TUSDEC has upgraded and revitalised the CR&DI. The objective of the Institute is to conduct research on cement and allied material, product diversification, adoption of new technologies, standardisation of various specifications and creating technical linkage between cement producer and domestic consumer.

CR&DI has tested 1251 cement samples of various projects across country and earned revenue of about Rs. 08 million. The clientele list of CR&DI is increasing and many high profile companies have been on board as a result of successful and satisfactory service delivery.

FATA Job Market Survey for FATA Development Program–Livelihoods Development

TUSDEC has been entrusted by FDP-LD to conduct a survey based skill mapping in four agencies of FATA, three FRs and four cities of KPK and Karachi to identify the disconnect (Skill Gaps), between the training industry and the job market, that results in low or under employment. The project intends to identify the reasons behind the skill gaps and to provide viable solutions so that the trained manpower of FATA region be absorbed in the job market.

Ceramics Development & Training Complex (CDTC) (Execution phase)

TUSDEC is setting up a Ceramics Development and Training Complex as a Common Facility Centre under ADB CFC Programme to upgrade the ceramics industry through transfer of current technology, kilns for energy-efficient firing, engineering support, consultancy, testing of raw material and manpower training, etc.

B) National Industrial Parks Development and Management Company (NIPs) National Industrial Parks Development and Management Company (NIPs) was established and registered with Security and exchange Commission of Pakistan (SECP) in March 2005. It plans to establish state of the art National Industrial Parks in provincial headquarters, prominent urban centers having clusters of different industries and rural areas infested with poverty. Under this initiative, NIP is developing the following Industrial Parks.

1. Korangi Creek Industrial Park (KCIP)- Karachi 2. Bin Qasim Industrial Park (BQIP)- Karachi 3. Rachna Industrial Park (RIP)- Sheikupura, Lahore 4. Agro Industrial Park (AIP)- Okara

Korangi Creek Industrial Park (KCIP)- Karachi

The project was officially launched on March 9, 2010 after inviting offers from prospective industrialists and entrepreneurs through a national media campaign. Meetings with various industrialists and Associations were also held followed by Q&A sessions and distribution of Brochures. The industrial plots are being offered presently in the Low Density Zone at the price determined by the Economic Coordination Committee of the Cabinet in its decision dated Oct 31, 2007. The infrastructure development work was initiated on fast-track basis and the following progress has been made till date:

Leveling and Grading of land has been completed, Soil stabilization and topographical survey is complete, Plot Demarcation is complete, Construction of 2.8 million gallons underground tank and 50,000 gallons

overhead tank is complete, External Boundary wall has been partly completed, Supply of 0.5 mgd has been sanctioned by Karachi Water & Sewerage Board, Supply of 9.7 mmcfd gas for industrial and 5.0 mmcfd for commercial

consumption has been sanctioned by the Sui Southern Gas Company, Laying of pipelines for external Gas Network is complete, 5Km long line for bulk water supply is in tendering stage, Internal water & sewerage lines network is complete, Main Power Distribution System for Road Lighting is in continuous development

phase, Entrance Gate & Access Road is complete, The Horticultural work based on Drip Irrigation System at KCIP site has been

completed, Electrical, Gas, Water & Main Internal Road Distribution network package shall

be completed by June 30, 2011, 48 MW Power Plant on BOO basis has been tendered, Construction of power sub-station and Main Distribution station are progress and

are nearing completion, Main Power Distribution, design and construction drawing work has been

completed and in tendering stage,

The allottees of the plots in Korangi Creek Industrial Park (KCIP) have started submitting their building plans to the NIP for further processing in coordination with Cantonment Board, Korangi Creek (CBKC).

C) AIK HUNAR AIK NAGAR (AHAN) COMPANY

AHAN is a not for profit company registered under Section 42 of the Companies Ordinance 1984 with SECP (Securities & Exchange Commission of Pakistan) and is operating as a subsidiary of Pakistan Industrial Development Corporation (PIDC) with the following objectives:

To support poverty alleviation initiatives of Government of Pakistan through facilitating rural craft persons, artisans and poor producer groups in accessing services such as skill trainings, product development, quality assurance, marketing, technological up-gradation and support in access to micro finance.

To cater for neglected sector of hand crafted products produced in rural, semi urban areas.

To instill substantial input in rural economy of the country that will lead to economic uplift of the rural artisans and craft persons. AHAN Completed Projects

Regions No. BENEFICIARIES

Male Female Total

Sindh 23 898 1,610 2,508

Punjab 19 2,266 1,780 4,046

Khyber PK 19 2,215 4,018 6,233

Baluchistan 18 1,034 5,927 6,961

Total 79 6,413 13,335 19,748

Percentage 32.47% 67.53%

D) SOUTHERN PUNJAB EMBROIDERY INDUSTRIES (SPEI), MULTAN

The Company M/s Southern Punjab Embroidery Industries has been formed on 5th June 2009 under the Company’s Ordinance 1984. Southern Punjab Embroidery Industries (SPEI) is a joint venture project based on Public / Private Partnership Concept. The project would generate economic activity in the Southern Punjab with the following objectives:

Job Creation in the fields related to Spinning, Weaving, Designing, Marketing etc

Women Empowerment

Effective Utilization of Renowned Fabric of the Region

Skill Development of local population

Development of Ethnic Embroidery Products

Poverty Alleviation and employment generation

Product Development with Higher Productivity

E) FURNITURE PAKISTAN

The basic structure of the Furniture Pakistan was formulated in 2007-08 and in 2009, the company initiated its operations under the administration of Pakistan Industrial Development Corporation (PIDC) with the following objectives:

1. To enhance the quality of Pakistani wood products manufacturing, 2. To attain global competitiveness in furniture industry by using state of the art

machinery, techniques and practices, 3. To establish industry linkages with global value chain, 4. To recommend to the Federal and Provincial Government Policy reforms to

facilitate furniture industry, 5. Develop database and information resource with regards to domestic and global

market trends and to capture the market share by practicing best standards and practices,

6. To introduce innovative marketing tools and branding of local manufactured furniture products,

7. To develop productive work force through better training and up gradation of skills,

8. To provide environmental friendly solar based drying facilities of wood to save wastage of the scarce wood resource and for cost effective production.

In order to achieve its objectives, Furniture Pakistan planned to setup following projects: Common Facility Training and Manufacturing Centers (CFMCs) Furniture Pakistan is establishing two CFTMCs in Chiniot & Peshawer in order to

produce skilled workers in the market with the capacity of 700 skilled workers per year.

Construction work has been started on fast track basis.

Wood Seasoning Facilities

10 Solar kiln units have been installed and have become operative in Lahore and

Gujrat, these kilns capable to process 300-1000 cubic feet and the company has also

planned to install more units in different areas.

F) Karachi Tools Dies and Moulds Centre (KTDMC) The company was established to support Pakistan automotive industry by acting as a

hub for the production of the industrial dies and moulds. In order to achieve the vision,

company has set the following targets:

I. TARGETS AND ACHIEVEMENTS OF 2010-11

S. No Targets and achievements - 2010-11

Actual progress-2010-11

1 Manufacturing of 27 average size dies/ moulds

Manufactured 26 average size dies/ moulds

2 Training of 345 students 350 students trained through various short and long courses

Affiliation from any local or foreign university for diploma and degree program.

Agreement reached in principle with NED University for affiliation of Degree Program

3 84 cycles of Heat treatment Plant 45 cycles performed on Heat Treatment Plant.

II. ACTIVITIES of KTDMC DURING 2010-11

• Agreement signed with PUM Consultants, Netherlands, for free services of senior experts under their Vocational Education Higher Categories and Level (VEHICALE) project.

• Agreement reached in principle with NED University for affiliation of Degree Program.

• Various seminars conducted relating to dies & moulds technologies and engineering software.

G) Pakistan Gems and Jewellery Development Company

Pakistan Gems and Jewellery Development Company has been established as a

Public-Private partnership to develop the value chain of Gems and Jewellery industry

from mine to market. The company aims to establish Pakistan as a high value added,

internationally competitive, world class hub for precious stone cutting and Jewellery

manufacturing by means of supporting and facilitating the gemstone miners, processors

(cutters/polishers), Jewellery manufacturers, traders (retailers/ wholesalers/exporters)

and other stakeholders across the value chain and ancillary trades. The company has

undertaken the implementation of the following initiatives to achieve its objective.

Geological Surveys for ascertainment of Gemstone Reserves,

Boutique Mining,

Gems/Jewellery Exchanges

Gem Identification/Certification Laboratories,

Assaying and Hallmarking Centers,

Gems and Jewellery Common Facility Training and Manufacturing Centers

(CFTMCs),

Marketing/Branding through:

• Participation in International Shows,

• Local Gems and Jewellery Exhibitions/Events,

• Market Studies and Surveys,

• Advertising and Promotion,

PROJECTS MADE OPERATIONAL AND CARRIED FORWARD IN 2011

1. Gems and Jewellery Manufacturing and Training Centre - Lahore

2. Gems and Jewellery Manufacturing and Training Centre - Karachi

3. Gem Exchange and Gem Lab, Peshawar

4. Gems and Jewellery Manufacturing and Training Centre – Gilgit

5. Gem Exchange and Gem Lab, Quetta

6. Marketing and Branding.

H) Pakistan Stone Development Company (PASDEC) Pakistan Stone Development Company (PASDEC) has been established and registered

with SECP as a not-for-profit company under section 42 of Companies Ordinance 1984

as a subsidiary of Pakistan Industrial Development Corporation (PIDC).

Project Status Model Quarry

The First Model Limestone Quarry of Pakistan is operational at Naal, Kuhzdar

Baluchistan, where state of the art wire cutting quarry technology has started operation

for the first time in the history of Pakistan under the supervision of local and

international quarry experts. Khuzdar is rich in limestone and has one of the finest

qualities of stone in the world. Besides, this Province has huge reserves of Granite &

Onyx .This Project is a Public Private Partnership between PASDEC and local mine

lease holder. For this quarry, Italian machinery has been imported and Italian Quarry

master is hired for the development of quarry and a training program for local quarry

masters and technicians (machinery operators) was also undertaken. The total

production of the limestone quarry since May 2008 was about 8,000 tons. The target

production of the quarry is 4000 to 5000 m3 /year of standards dimension block.

The second model quarry has been established in Chitral. The quarry excavation

machinery has been deployed & first bench has been developed. The quarry has

started production.

The third Marble quarry has been established in the district of Buner. This region is a

huge quarry cluster in the North, which contributes to 45-50% of the raw material for the

processing/cutting units in Peshawar, Islamabad and adjoining clusters. PASDEC

started bench quarrying using diamond wire saw cutting techniques. Also underway is a

comprehensive on the job training program for operators and quarry foremen. PASDEC

has planned this program to develop workforce/manpower needed for mechanized

quarrying to develop technical skills in wire saw cutting, drilling techniques, bench tilting,

shaping blocks, loading and handling and quarry safety & first aid.

Machinery Pool

Two machinery pool projects have been established to upgrade existing Marble and

Granite quarries in the country according to international standards. These projects

provide machinery on rental to private quarry owners. One project is established at

Risalpur, NWFP while another is at Gadanni, Baluchistan. The project consists of

machinery like Wire saw, Chain Saw, Stitch drills, Compressors, Loaders, Excavators &

other tools. PASDEC also offers quarry development consultancy to the mine/lease

owners.

Warehouse

To strengthen the supply side of stone sector, PASDEC has established a warehouse

facility at Gadanni. The warehouse facility is meant to provide staking and cutting

/squaring services for blocks on rental basis. It is designed to house standardized raw

material for Marble & Granite Processing Industry & provide a single place for all sorts

of buyers and sellers within and outside the country.

Marble City

PASDEC has established first Marble City, Industrial Estate in the city of Risalpur on

185 acres land provided by Sarhad Development Authority (SDA). PASDEC and NIP

will develop infrastructure and services. Also 300 acres of land is being allocated by the

Government of Sindh at Hub River Road to establish Karachi Marble City. Marble City

would also be established on 300 acres land acquired at FATA. The Government of

Pakistan has planned following Marble Cities:

Marble City Risalpur.

Marble City FATA

Marble City Karachi

I) Pakistan Hunting & Sporting Arms Development Company (PHSADC)

Pakistan Hunting & Sporting Arms & Development Company (PHSADC) was

established in 2007 with its Head Office at Peshawar. PHSADC was formed to develop

and harness the total national potential of dormant hunting and sporting sector with a

view to help upgrade existing traditional ‘Cottage Level’ skill already available in the

hunting & sporting arms industry of Pakistan. There will be a special focus on Durra

Adam Khel (DAK) to develop it into an organized industrial cluster (SMEs). It aims to

help Pakistan acquire significant share in the World of Hunting Sporting Arms and

Accessories trade market. For this purpose, the company would maintain a display

centre, weapons archives and library. It will undertake capacity and quality building

initiatives at Durra Adam Khel (DAK) and by developing Common Facility and Training

Centre, Industrial Estate and Gunsmith School at Peshawar. It will engage foreign

buyers and generate interest of international buyers, hunters and shooters in products,

services and commercial activities in Pakistan.

J) Gujranwala Tools Dies and Moulds Centre (GTDMC) GTDMC will be a combined Common Facility and Skill Development Centre. The Centre

will focus on sheet metal dies, moulds, heat treatment and surface finishing. The

objective of the project is to provide the Gujranwala industry and its neighboring

localities with advanced Tools, Dies and Mould technology. Gujranwala Tools Dies and

Moulds Centre (GTDMC) are fast approaching its completion and will very soon run into

operations for use by local industry. It is equipped with the most modern machines

including 5-axis machining centers, rapid prototyping equipment, selective laser

sintering, 3D scanning, CMM, laser cutting, laser marking, surface texturing, heat

treatment and more. It will provide local industry ready access to process their

requirements, use the machines and obtain training in utilizing and assimilating the

latest precision technology. The centre will foster growth of local industry through value

addition, increased precision, quality enhancement and competitiveness.