Al-Futtaim goes into top gear with $300m Renault plant in Pakistan

Updated 13 October 2018
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Al-Futtaim goes into top gear with $300m Renault plant in Pakistan

  • UAE group awaiting permissions to kickstart process
  • Manufacturers in Islamabad predict major demand for vehicles

KARACHI: If the plan gathers steam, UAE’s Al Futtaim Group could soon collaborate with Renault to set up a car manufacturing plant in Pakistan worth $300 million.

Industry analysts say that Pakistan’s automobile manufacturers were already increasing their production capacity in anticipation of the project.

“Pakistan is expecting 10 new players in the greenfield projects who will set up new plant and machinery while two existing players have announced plans for a brownfield project, which will upgrade their plants. Al Futtaim is one of the new entrants in the greenfield project,” Syed Danyal, an auto sector analyst at Topline Securities, told Arab News.

Al Futtaim plans to set up the assembling plant in Faisalabad, in the Punjab province, and is in the process of securing approval from Pakistan’s authorities. “The company plans to introduce Renault vehicles in Pakistan. The installed production capacity it aims to target is around 25,000 units per year that will be gradually attained,” Danyal added.

Headquartered in Dubai, Al Futtaim Group has presence in many countries including Pakistan, Afghanistan, Sri Lanka and Saudi Arabia and distributes Ford, Honda, Toyota, Nissan, Suzuki Chrysler, Volvo, Lexus and other auto brands under its banner.

Pakistan’s car assemblers expect that the demand for the vehicles will be 5,00,000 units by 2024-2025. The sale of new/imported cars in Pakistan currently stands at 268,000 units, which includes used cars imported mainly from Japan. The installed production capacity is currently 285,000 units per year, data released by the Pakistan Association of Automotive Parts and Accessories Manufactures (PAPAAM) showed.

“We are ready to welcome new entrants because their arrival will not only increase the market share but will create employment opportunities and provide people more options to choose from,” Muhammad Ashraf Shaikh, Chairman of PAPAAM, told Arab News.

Pakistan’s automobile industry is dominated by Japanese car assemblers with a visible presence of Korean brands, with recent additions of Chinese brands. However, the French car manufacturer Renault, would be the first European brand to produce cars in Pakistan, if the proposed plant is setup.

Pakistan’s domestic auto vending sector provides up to 70 per cent of locally made parts for cars and light commercial vehicles, up to 94 per cent for motorcycles, and up to 55 per cent for heavy vehicles such as buses. The overall investment in the sector is around Rs140 billion, according to PAPAAM’s data. 

“We are enhancing our capacity to meet the growing demand by putting up new machinery and technology with approximately Rs15-16 billion investment ,” Shaikh said.

Experts believe that the new entrants will not face immediate competition due to the incentives offered by the government under the Automobile Development Policy 2016-21. “The new entrants will enjoy concessional duty rates at least for the five years [that they are] in operations,” Aamir Allawala, a senior auto expert, told Arab News.

Allawala added: “The new entrants will pay only 10 per cent import duty on the auto parts which are not being manufactured in Pakistan while they will pay 25 per cent duty on the import of those available in Pakistan.”

At present auto manufacturers pay around 33 per cent on the account of various taxes, Allawalla said, adding that “the government should reduce taxes and resolve the issue of non-filer to expand the auto market”.

Pakistan’s automobile industry contributes around 2.8 per cent to the country’s GDP. With the arrival of new players, the economic activity is expected to double with many plyers vying for the market share. “At present the consumer segment of less than 1000cc cars has a lot of vacuum. Those entering this segment with a reasonable price bracket will benefit to a large extent,” Danyal said.


Islamabad, Baku seek deeper military ties during Azerbaijan visit by top Pakistani general

Updated 59 min 22 sec ago
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Islamabad, Baku seek deeper military ties during Azerbaijan visit by top Pakistani general

  • General Shamshad Mirza meets Azerbaijan president to discuss regional security dynamics
  • Pakistan has always been vocal in its support for Azerbaijan in its conflict against rival Armenia 

ISLAMABAD: Pakistan’s General Sahir Shamshad Mirza on Wednesday discussed enhancing defense ties and the evolving regional dynamics as he met Azerbaijan’s president and its senior civil and military leadership during his visit to the country, the army’s media wing said. 

Pakistan and Azerbaijan have been enjoying cordial diplomatic ties since 1992, with the two countries having a shared history of cooperation, particularly in the areas of trade, defense, and energy. 

In July, both governments signed 15 agreements in various fields including transit trade, mineral resources and tourism during Azerbaijan President Ilham Aliyev’s two-day visit to the South Asian country.

“During the interaction, both sides appreciated deep and historic relations between the two countries and discussed matters of mutual interest including evolving security dynamics of the region and enhancement of existing defense ties in multiple domains,” the army’s media wing, the Inter-Services Public Relations (ISPR) said in a statement.

Mirza met Aliyev, Azerbaijan’s Defense Minister Col. General Hasanov Zakir Asgar, Foreign Minister Jeyhun Aziz Oghlu Bayramov, Deputy Defense Minister and Chief of General Staff Col. General Karim Tofig Oghlu Valiyev and the Defense Industry Minister Vugar Mustafayev, the ISPR added.

Highlighting the importance of military cooperation between both countries, he reaffirmed Pakistan’s commitment toward peace and stability, the army’s media wing said. 

Azerbaijan’s leadership appreciated the sacrifices rendered by Pakistan’s armed forces and their professionalism, the ISPR said. 

Pakistan and Azerbaijan have a history of military and defense cooperation. In 2021, Pakistan participated in an eight-day joint military drill with Azerbaijan and Turkiye as part of their tripartite military cooperation agreement. 

Pakistan was also among two countries that provided support to Azerbaijan during the 44-day-long Second Karabakh War from September to November 2020, in which Azerbaijan fought against Armenian armed forces until the conclusion of a Russia-brokered truce. 


Saudi minister announces $2.2 billion investment deals with Pakistan enhanced to $2.8 billion

Updated 30 October 2024
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Saudi minister announces $2.2 billion investment deals with Pakistan enhanced to $2.8 billion

  • The deals between Saudi and Pakistani companies were signed during Saudi investment minister’s visit to Islamabad earlier this month
  • Saudi Crown Prince Mohammed bin Salman this year reaffirmed his commitment to expedite $5 billion investment package for Pakistan

ISLAMABAD: Saudi Minister for Investment Khalid bin Abdulaziz Al-Falih said on Wednesday $2.2 billion in agreements and memorandums of understanding (MoUs) signed between Saudi and Pakistani businesses earlier this month had been enhanced to $2.8 billion.
The business-to-business collaborations were signed on Oct. 10 during Al-Falih’s visit to Islamabad with a delegation of top investors and entrepreneurs from the Kingdom.
Pakistani Prime Minister Shehbaz Sharif is currently on a two-day visit to Riyadh where he attended the Future Investment Initiative (FII) forum on Tuesday and also held a bilateral meeting with Saudi Crown Prince Mohammed bin Salman who earlier this year reaffirmed the Kingdom’s commitment to expedite a $5 billion investment package for Pakistan.
“When we came to Pakistan, we concluded in three days 27 MoUs valued at $2.2 billion,” Al-Falih said in a televised press talk with Sharif. 
“And I mentioned during that time at various events that this was only the beginning. To prove that, here we are two or three weeks later, and I would like that that number has increased from 27 MoUs and agreements to 34 MoUs.
“So, we have been able to add another seven, almost two per week. And I think more importantly, the value of those agreements has also increased to $2.8 billion.”
The Saudi minister said five agreements signed during his trip to Pakistan were already operational and had resulted in exports from the South Asian state to the Kingdom. Al-Falih said Saudi Arabia would also absorb a greater and more qualified Pakistani workforce, especially in the health sector, in the foreseeable future.
“Remittances back to Pakistan will be on the rise,” the official said. “The first results will be seen in the next few weeks.”
Al-Falih said Saudi Arabia would also seek help from Pakistani technology firms to transform the way digital artificial intelligence was used for business and the economy.
Sharif thanked the Saudi government, especially Crown Prince Mohammed, for helping Pakistan secure a $7 billion International Monetary Fund (IMF) program last month by helping Islamabad meet its external financing needs.
The PM added that he planned to return to Saudi Arabia next month for more discussions on bilateral engagements.
“Together we are marching forward, together we are strengthening our brotherly relations,” he said.
The Pakistani PM’s visit takes place at a time when Islamabad is seeking to strengthen trade and investment ties with friendly nations, particularly the Kingdom, which has promised a $5 billion investment package that cash-strapped Pakistan desperately needs to shore up its dwindling foreign reserves and fight a chronic balance of payment crisis.


Chief minister of Pakistan’s Punjab calls for diplomacy with India to tackle smog

Updated 30 October 2024
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Chief minister of Pakistan’s Punjab calls for diplomacy with India to tackle smog

  • Maryam Nawaz Sharif says contemplating writing letter to Indian counterpart to seek “joint measures”
  • New Delhi was world’s second most polluted city on Wednesday followed by Lahore in neighboring Pakistan

ISLAMABAD: The chief minister of Pakistan’s most populous Punjab province on Wednesday called for diplomacy with neighbor and arch-rival India to combat smog as both nations grapple with hazardous levels of air pollution ahead of the winter months.
Rated the world’s most polluted capital by Swiss group IQAir for four years in a row, New Delhi was the world’s second most polluted city on Wednesday, the group’s live rankings showed, followed by Lahore in neighboring Pakistan. Baghdad in Iraq was ranked number one on the list.
When cooler temperatures take hold, pollution spirals and air quality deteriorates as temperature inversion traps pollution closer to the ground, packing hospital wards in Lahore and New Delhi with patients with respiratory problems.
Rising air pollution can cut life expectancy by more than five years per person in South Asia, one of the world’s most polluted regions, according to a report published last year which flagged the growing burden of hazardous air on health.
Addressing a ceremony to mark the Hindu cultural festival of Diwali on Wednesday, the Punjab CM Maryam Nawaz Sharif said Pakistan and India needed to coordinate actions to temper toxic smog, which winds carry across the border.
“There is an issue of smog in Pakistan’s Punjab, especially in Lahore. So, we must do this diplomacy with India,” Sharif said. “For the health of people there [Indian Punjab], for their betterment and the betterment of our side of the border, for our health, for the health of our people, until both Punjabs take joint measures, we won’t be able to fight smog.”
The annual practice of burning crop stubble left after harvesting paddy to clear fields for wheat planting is widely blamed for toxic pollution in the region before winter, causing disruptions such as school closures and construction curbs.
But people often also flout New Delhi’s ban on smoke-emitting firecrackers, usually burnt in celebration of the Diwali festival which runs from Wednesday to Friday this year, worsening pollution.
Sharif said she was contemplating writing a letter to her Indian counterpart, Bhagwant Mann, on the issue of combating smog.
“This is not a political issue, it’s a human issue, on which if we [Pakistan] are taking steps, then the Indian side should have a matching response, the same measures should be taken there because the winds don’t know that there is a boundary in between,” Sharif added.
Relations between India and Pakistan have gone through periods of thaw but have been largely frozen since they downgraded diplomatic ties in tit-for-tat moves in 2019.
In Pakistan’s Punjab, authorities have enforced new measures to combat hazardous smog, including making mask-wearing mandatory across the city of Lahore. New, shorter school timings have also been announced in the city while student assemblies will be conducted in classrooms rather than outdoor spaces. All outdoor activities at schools have been temporarily suspended. A ban has also been imposed on fireworks in Lahore until Jan. 31, 2025.
Breathing toxic air has catastrophic health consequences, with the World Health Organization saying strokes, heart disease, lung cancer and respiratory diseases can be triggered due to prolonged exposure.
According to the United Nations Children’s Fund, nearly 600 million children in South Asia are exposed to high levels of air pollution.


PM Sharif to visit Qatar today amid trade, investment push by Islamabad

Updated 30 October 2024
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PM Sharif to visit Qatar today amid trade, investment push by Islamabad

  • In 2022, Qatar Investment Authority said it aimed to invest $3 billion in Pakistan, lending support to its cash-strapped economy
  • During a visit to Qatar in 2022, Sharif invited Qatar’s $450 billion sovereign wealth fund to invest in energy and aviation sectors

ISLAMABAD: Prime Minister Shehbaz Sharif will undertake an official visit to Qatar from Oct. 30-31 to discuss bilateral ties with a special focus on trade and investment, the Pakistani foreign office said on Wednesday. 
In 2022, the Qatar Investment Authority said it aimed to invest $3 billion in Pakistan, lending support to the South Asian nation’s cash-strapped economy. Doha has also shown interest in airport management partnership and the Roosevelt Hotel in New York’s Manhattan owned by the Pakistan International Airlines.
During a visit to Qatar in 2022, Sharif, then in his first term as PM, invited QIA, Qatar’s $450 billion sovereign wealth fund, to invest in Pakistan’s energy and aviation sectors. He had previously mentioned renewable energy, food security, industrial and infrastructure development, tourism and hospitality, among sectors of interest.
“In Doha, the Prime Minister will hold bilateral meetings with the His Highness, Sheikh Tamim bin Hamad Al Thani, Amir of the State of Qatar and H.E. Mohammed bin Abdulrahman bin Jassim Al-Thani, Prime Minister / Minister for Foreign Affairs,” the foreign office said in a statement.
“In these meetings, the two sides will review the entire gamut of bilateral relations and explore new of cooperation especially in trade and investment.”
Delegations from the Qatar Investment Authority and Qatar Businessmen Association will also call on Sharif to explore investment opportunities in Pakistan, the foreign office added.
Sharif will also inaugurate the cultural exhibition, “Manzar: Art and Architecture in Pakistan from 1940 to Present,” on October 31.
“The exhibition will showcase Pakistan’s rich cultural and architectural heritage and underline deep people-to-people linkages between Pakistan and Qatar,” the foreign office said.


Pakistan dispatches firefighters to combat Koh-e-Sulaiman forest blaze in Khyber Pakhtunkhwa

Updated 30 October 2024
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Pakistan dispatches firefighters to combat Koh-e-Sulaiman forest blaze in Khyber Pakhtunkhwa

  • Two years ago, a significant fire broke out in the same mountain range in Balochistan that lasted for two weeks
  • The fire that burnt over 100,000 pine nut trees damaged people’s livelihood and was extinguished with Iranian help

DERA ISMAIL KHAN: Pakistan dispatched a 16-member team of firefighters to respond to a blaze in the pine nut forests of the Koh-e-Sulaiman range in the Darazinda subdivision on Wednesday, according to a statement circulated by Rescue 1122, the country’s premier emergency response service.
This is not the first such incident in the region’s pine nut forests. A significant fire broke out in the Sherani district, part of the same range that straddles Pakistan’s western provinces of Balochistan and Khyber Pakhtunkhwa, in May 2022.
The blaze lasted over two weeks, destroying a large portion of the ancient pine nut trees, with reports suggesting over 100,000 trees were burned, causing significant damage to the local ecosystem.
Rescue 1122 said in a statement it constituted the firefighting team and immediately dispatched it to the area upon receiving information about the latest fire.
“The rescue team has been equipped with all necessary firefighting gear, including fire extinguishers, personal protective equipment and other essential items required for working in mountainous areas,” the statement said.
“In such emergencies, methods like smoldering and starvation are employed to extinguish the fire, which involves cutting off the fire’s access to oxygen and fuel,” it added.

Firefighters try to extinguish a fire that erupted in the pine nut forests of the Koh-e-Sulaiman range in the Darazinda subdivision, Khyber Pakhtunkhwa on October 30, 2024. (Photo courtesy: Rescue 1122)

The rescue service explained such firefighting approach is used in areas where it is impossible to reach with fire trucks or tenders due to the high mountains, requiring firefighters to travel long distances on foot to implement the strategy based on the site’s conditions.
The 2022 fire in the Sherani district in Balochistan prompted Pakistan to seek assistance from Iran, which sent an air tanker to help extinguish the flames.

Firefighters try to extinguish a fire that erupted in the pine nut forests of the Koh-e-Sulaiman range in the Darazinda subdivision, Khyber Pakhtunkhwa on October 30, 2024. (Photo courtesy: Rescue 1122)

Such recurrent fires highlight the vulnerability of the region, where pine nut forests are not only ecologically valuable but also provide a livelihood for many locals.
Rescue 1122 noted that its Dera Ismail Khan team previously helped extinguish the fire in the Koh-e-Sulaiman mountain range within the Khyber Pakhtunkhwa region before assisting in firefighting efforts in Balochistan.
The team participated in the operation for several days alongside Rescue 1122 emergency response groups from Tank, Lakki Marwat and Bannu the statement added.