LAHORE - In engineering sector, only tractor parts makers have managed to export their components throughout the world, including Europe, America, Africa, Sri Lanka, Bangladesh, Afghanistan and India amidst severe energy crisis, security challenges, political instability and world’s highest interest rate in the country, tractor industry representatives stated.
Mumshad Ali, CEO of RK Gears pointed out that world’s renowned tractor manufacturing companies preferred to import parts for their tractors from Pakistan owing to their high standard and low cost to make cost effective tractors in world market. He said that Pakistan is currently exporting tractor parts, including gears, engine parts, transmission parts, rims and radiators.
Appreciating the performance of local tractor parts makers, who have presently introduced new technology power steering, turbo charge engine, green engine, electronic display and power brake, said that several foreign companies have failed to compete with Pakistani tractor due to its less cost.
For example, John Den, a US tractor company has flopped in Pakistan to compete local tractor makers, as they were not using domestic cheaper components. Though company imported Chinese tractor parts at zero duty but still they remained uncompetitive to operate.
The EDB, which should be a bridge between the public and private sector enterprises, giving them guidelines to set-up industry and facilitating them regarding latest techniques, has absolutely failed to achieve its target, as its chief has no experience of industry. It is claimed that he is ignorant of local engineering issues, which has witnessed a considerable growth despite unfavourable business-doing conditions in the country. Opposing the extension of Aitzaz Niazi, who is waiting for another term as Chief Executive Officer, Engineering Development Board (EDB), he appealed to the government to appoint a person from the engineering sector who should have enough knowledge of auto industry.
On the other hand, EDB CEO criticises local companies for old technology but the board itself is main hurdle in innovation and research, as earlier it delayed approval of Al Ghazi tractor’s advanced model of 4/4 for at least one year for unknown reasons, Mumshad said.
Saeed Iqbal, Director Sazgar Engineering, said that if Pakistan tractor industry is compared with the Indian industry, it is just 20 per cent of the India’s huge engineering sector but Pakistan’s tinny industry is producing tractor just for Rs600,000 while the same product is being sold in Indian market at Rs1.2 million. “This shows that Pakistanis are manufacturing tractors at 50 per cent less price than India,” he reiterated.
Tractor is a most economical agriculture tool in Pakistan as every successive government have given permission to import of tractors but every time it failed due to high price difference. Presently, there is no considerable import of tractor in the country despite the fact that tractors are being imported on zero duty, indicating that customers are availing the facility of cheaper and quality tractors at their doorstep, he claimed.
Tariq Nazir, CEO of Fabman Engineering, while criticising the statement of EDB Chief Executive Officer who had said that local tractor manufacturers had been using technology of 50s and producing substandard tractors in the country, observed that tractor is a machine not a car, whose models are changed every year. He said that world noted companies are still producing the 1960s model even in Europe. He said that in Pakistan landholding is not huge which requires heavy and modern technology tractors and owners can also afford it. He said that in Europe and the USA, the minimum landholding is 500 acres and their cultivators can afford the modern and costly tractors.
Usman Malik, Kortech CEO, welcomed foreign companies including Belarus Tractor Company in Pakistan, saying that it is in the interest of vendors, as their production and sale will rise due to arrival of new OEMs in the country.
Kortech CEO called for measures to overcome energy crisis, security challenges and political instability. He said that if these factors are not taken into account, they would continue to create problems for the economy in general and for the private sector in particular.
He said that the availability of cheaper liquidity to the business community was need of the hour as in the last five years SBP’s tighter monetary policy stance in the name of financial discipline had failed to give any results.
He said that the cut in discount rate will not only give boost to local investments because of ease in cost of doing business but foreign investors’ confidence will also go up and they would be willing to put their money in new ventures in Pakistan.