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Punjab Board of Investment and Trade
Untapped Investment Opportunities in Punjab
1
TODAY’S AGENDA
• Snapshot of Pakistan
• Snapshot of Punjab
• Overview of Potential Sectors
• Overview of PBIT
Potential & Opportunities in Punjab
2
SALIENT FEATURES OF PAKISTAN
• Pakistan GDP is USD 162
Billion (current USD)
• Ranked as the 46th economy
in the world.
• Population of 169 Million
Source: Data @ World Bank
Potential & Opportunities in Punjab
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PAKISTAN: INVESTMENT DESTINATION OF CHOICE
1: Geo-strategic Location
The gateway to the energy rich Central Asian States, the financially liquid Gulf States and the economically
advanced Far Eastern Economies
2: Trained Workforce
Proficient in English, hardworking and skilled mostly in engineering and medicine
3: Positive Economic Outlook
One of the fastest growing economies of the world having touched a GDP growth rate of 8.4% in 2005.
Over 170 million consumers. Foreign Direct Investment has risen sharply from an average of $300 million in
the 1990s to over $3.7 billion in 2008-09
4: Investment Policies
Tailor made to suit investor needs. No investment in Pakistan has ever been nationalized
5: Financial Markets
Development of improved infrastructure in the stock exchanges of the country
Potential & Opportunities in Punjab
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POLICY INCENTIVES
• 100% Foreign Equity is allowed
• Remittance of capital, profits, dividends, etc is allowed
• Advanced tax ruling
• International arbitration enforcement guide
• All economic sectors in Punjab open to FDI
• Equal Treatment of local and foreign Investors
• No government sanction is required
• Only 5% customs duty on import of parts not available in
Pakistan
Potential & Opportunities in Punjab
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Potential & Opportunities in Punjab
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PUNJAB – REGION OF UNTAPPED OPPORTUNITIES
• Punjab GPP 95 billion (Current USD)
• 58.5% of Pakistan’s National Economy
• Population of 93 Million
• Most industrialized province of Pakistan
• Fertile and well irrigated agricultural land
PUNJAB
• Business conducive policy regime
• Political commitment to Private Sector
Development
7
Potential & Opportunities in Punjab
MARKET SIZE COMPARISON
93
82
75
68
63
49
40
34
29
27
22
Population in million
Potential & Opportunities in Punjab
Source: Data @ World Bank
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PUNJAB LEADS MANY COUNTRIES IN GDP
95
88
GDP in USD billion
63
52
49
42
35
25
21
12
Potential & Opportunities in Punjab
Source: Data @ World Bank
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6
9
WORLD BANK: EASE OF DOING BUSINESS 2011
167
102 107
79
134
127
116 123
83
1
Potential & Opportunities in Punjab
Source: World Bank Ease of Doing Business Index 2011
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Potential & Opportunities in Punjab
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Source: FAOSTAT – United Nations, 2008
Potential & Opportunities in Punjab
Oranges
17
* Sheep Meat
16
Maize
15
Potatoes
14
Onions, dry
13
Dry Chillies & peppers
12
Indigenous Goat Meat
11
Hen eggs, in shell
10
Mangoes, guavas
9
Cottonseed
8
*Chicken Meat
7
*Buffalo Meat
6
Sugar cane
5
*Cattle Meat
4
Rice, paddy
3
Fresh Cow Milk
2
Cotton lint
1
Wheat
Fresh Buffalo milk
GLOBAL RANKING IN AGRICULTURE & LIVESTOCK
18 19
* Indigenous
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EDGE IN AGRICULTURE
• Abundant Workforce;
– 46% of total workforce in Pakistan employed in
agriculture.
• Four distinct seasons;
– Summers, winters, spring and monsoon, all essential for
the rich quality and flavor; characteristic of crops in
Pakistan
• Fertile Soil;
– Alluvial soil of five rivers
• Largest Contiguous Irrigation Network;
– Largest system in the world covering 14 Million hectares.
– Total length of the canals is about 61,000 km with
communal watercourses, farm channels, and field ditches
covering another 1.6 million km.
Potential & Opportunities in Punjab
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POTENTIAL INVESTMENT OPPORTUNITIES
Fruit Concentrate/
Pulp Plant facility
Cost; US$ 1.5 Million
Location; Multan/RY Khan/Khanewl/Bahawalpur
Capacity: 3 Tons/ Hour
IRR: 23 %
Integrated cold
chain facility
Export Pack houses:
Cost/Pack house: USD 1.5 Million
Locations; All over Punjab
14 Key strategic locations have been identified
IRR: 36%
Cold Storage
Cost/Cold store: USD 2.1 Million
Locations; 8 strategic locations including Rawalpindi/Islamabad
IRR: 30.81%
Refrigerated
Containers:
Cost of One Container Terminal: USD 8.5 Million
Location; Lahore
200 Refers and 50 CA Reefers
IRR:32%
Fresh Fruit
Processing (kinnow)
Cost: USD 1.0 Million
IRR: 75%
Location; Bhalwal Industrial Estate
Potential & Opportunities in Punjab
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UAE Pakistan Investment and Trade
Potential & Opportunities in Punjab
Opportunities
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EDGE IN LIVESTOCK
• World's 3rd largest livestock
population
70
60
• 5th largest milk producer
Million Heads
58
50
• 43 breeds of livestock
40
• Livestock growing @ 4.2%
30
20
20
10
18
14
6
0
Source: Punjab Development Statistics 2010
Total
Potential & Opportunities in Punjab
Goats baffalos Cows Sheep
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POULTRY
•
25,000 Poultry Farms in the
Country.
•
400 Hatcheries
•
150 Feed Mills
•
5.51 M.M.T Feed
The per capita consumption of meat in Pakistan is
only 7 KG and 60-65 eggs annually.
Whereas developed world consumes 41 KG meat
and over 300 Eggs per capita per year
Consumption
•
$ 4 Billion Turnover
•
10-12% annual growth rate
Potential & Opportunities in Punjab
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Potential & Opportunities in Punjab
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HALAL MARKET POTENTIAL; THE SLEEPING GIANT
 Global Halal Product Market worth USD 3 Trillion
 Halal Food Market worth USD 67 Billion
 Growing demand for certified and hygienic Livestock produce
locally and internationally
 Production of processed meat & dairy unable to keep pace with
growing demand
 Shortage valued at USD 240 million including Meat, Dairy,
Poultry & Eggs
Potential & Opportunities in Punjab
(Source: Livestock Department
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PAKISTAN: DOOR TO REGIONAL HALAL MARKET
• Regional Halal market of more then
360 million consumers
• Direct neighbors (Iran, Afghanistan,
China, India)
• Allows sea access to China,
Afghanistan
• Land Routes to Central Asian States
• Sea Routes to Middle East.
Potential & Opportunities in Punjab
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OPPORTUNITY
MEAT
DAIRY
• Establishment of Integrated meat processing
facility
• Estimated cost US$ 5.7 Million,
• Location: Metropolitan Area
•Dairy processing & value addition units
including Yogurt , Cheese, white cola/mint
cola, Goat milk products ,etc.
• Payback Period: 1.2Years
• Capacity:
• (small)6000 animals/ day
• (large) 500 animals/day
• Bone Chips & Gelatin plant
(Estimated cost US$ 3.4 Million, Pay back in
1.6 years
• Halal Tallow, Soap & Cosmetics units
Potential & Opportunities in Punjab
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HALAL PARK IN LAHORE
•
Availability of 40 hectares in the premises of Lahore Meat
Processing Complex in the vicinity of Lahore
•
Availability of raw material for by-products manufacturing
industries from LMPC and slaughterhouses in the surrounding
cities
•
Excellent opportunity for by-products industries i.e. Soap,
Gelatin, Cosmetics, Casing etc. as huge market for the byproducts is available in Pakistan besides global halal market.
•
Lahore Meat Company can enter into Joint Venture or any
mode of Public-Private Partnership for provision of safeguard
•
The interested parties are at liberty to offer their own
proposals for Partnership or Joint Venture ship
Potential & Opportunities in Punjab
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Potential & Opportunities in Punjab
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PROJECTED ENERGY DEMAND
Source: Private Power & Infrastructure Board – Supply & Demand Position 2020
Potential & Opportunities in Punjab
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ATTRACTIVE POLICY REGIME
Fast – track project development at highest priority
Guaranteed purchase of electricity backed by Government of Pakistan
State Support - Modes of ownership
Various Public Private Partnership models available
Independent power producer (IPP) – Govt. of Punjab as a facilitator
Price setting model employed- “Cost plus tariff”Minimum 15% ROE guaranteed net of taxes (US$ based)
Many of the variable operating cost are passed-on in the tariff model
Special incentives
Tax benefits (capital-gains tax, income tax and turnover tax exemption)
Hydrological risk taken by the power purchaser for hydropower projects. Up to 50
years of concession available
Potential & Opportunities in Punjab
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PUNJAB’S ENERGY SECTOR POTENTIAL
• HYDEL PROJECTS:
• 317 Hydel Sites with a potential of 600MW
• CO-GENERATION AT SUGAR MILLS:
• 46 Sugar Mills with a potential of 1100MW
• COAL BASED POWER PLANT:
• 245 million MT of Coal with a potential of
86,100MW
• SOLAR POWER:
• 2.9 million Hectares of unused desert land
with a potential of 6,105,263MW
Potential & Opportunities in Punjab
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OPPORTUNITY TO DEVELOP 1 BILLION MT OF IRON ORE IN
PUNJAB
Deposits
Status
Estimated value is over USD 170 billion
• Flexible investment option for mining of Chiniot, Rajoa and
Kalabagh Iron Ore deposits
Chiniot
123 MMT
Proven
Rajoa
500 MMT
Assessed
Kalabagh
300 MMT
Estimated
• Setting up Steel mills utilizing the domestic Iron Ore
• RFP already issued
Background
• Large untapped deposits of Iron Ore in Punjab
• Authetication of deposits and techno-economic
studies of Iron Ore deposits are in progress
Policy highlights
•
Public Private Partnership (PPP) model
offered to facilitate the private investor
• Punjab Mineral Company (PMC) is
established to work with the private
sector
• Iron Ore development is one of the top priorities
of the government
• Fast-track development of Iron Ore projects
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Image Source: Mines & Mineral’s Dept.; Information Source(s): Mines and Mineral Department Punjab
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COMMERCIAL & MODERN HOUSING
• Opportunity for rapid construction of housing available
for private investment in Gujranwala and Sialkot.
• Land is being purchased in Gujranwala (500 acres) and
whereas that in Sialkot (200 acres) has been purchased.
• Registration and operation of Real Estate Investment
Trusts (REITs)
• Allows pooling of capital of a large number of
investors to purchase, develop and manage real
estate assets
• Legal framework exists.
• Government offers various tax incentives
Project Highlights
•
•
•
•
•
•
Gujranwala – 500 acres
Sialkot
- 200 acres
Investment required – US$ 40 Million
Payback Period – 5 years
IRR
- 45%
Can be executed independently/ through JV or PublicPrivate Partnership
Market highlights
• Shortage of 7 Million houses
• Need to construct 330,000 every year
• Existing housing stock is 12.07 million
units of which 30% is aging
• Pakistan has 2% population growth rate
and 33% of population resides in urban
centers
• Punjab is urbanizing at a rate of 5-6%
every year.
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Image(s) Source(s): PBIT; Information Source(s): Housing Dept.,
Background
Market highlights
• Total length of the ring
road is 89 km or which
40km is completed
(Northern Loop)
• Automobile growth
over 12% per annum
since 2002
• Urbanization has
created the demand for
quality road
infrastructure
• 3 + 3 (with future
provision of 4th lane,
Metro and Service
Roads)
• Project includes 5
interchanges and 17
underpasses
• Total construction
costs at PKR 26 billion
• RFP for the project
available at
http://pportal.punjab.g
ov.pk/portal/docimages
/29756EOI_Advertisem
ent.pdf
• Over 300k commuters
transpire the existing
roads of the southern
loop daily
Available opportunities
• Opportunity for the construction of the Southern Loop
of the Lahore Ring Road for Private Investors
• To be executed under PPP Mode
• The government shall provide land free of all
encumbrances
• Concessions to be decided mutually upon
completion of detailed financial model
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Image(s) Source(s): Transport Dept.; Information Source(s): Transport Dept.
Potential & Opportunities in Punjab
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PUNJAB: INDUSTRIAL ESTATES
the biggest
industrial
estate of
Pakistan:
3500 acres
Potential & Opportunities in Punjab
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COMPANIES OPERATING CURRENTLY
Potential & Opportunities in Punjab
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Potential & Opportunities in Punjab
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PBIT Structural Integration
Alignment with Federal BOI goals
Formulate and review
national investment
policy
Innovate and
re-think
investment in
Punjab
Promote Punjab as
the destination of
choice for local
and foreign
investors
Provide a one
window facility and
coordinate with
concerned ministries
Initiate Sectoral
investment proposals
and maintain
investment database
Coordinate &
implement trade &
investment policies of
Federal & Provincial
govt.
Facilitate
investment
through one
window
arrangement
Promote
private/public
partnership
models
Develop PBIT
into a
Knowledge
Center of
excellence
Monitor progress of
investment , appoint
commissions and negotiate
agreements
Consider individual
investment proposals
and categories of
investment.
Promote local and
international
investment
opportunities
Provide referral
(matchmaking)
services for
prospective
investors &
businesses
Liaise with private
sector, trade bodies &
associations to
promote
trade/investment
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PBIT’s Sphere of Influence
Federal Board of
Investment
Chief Minister Punjab
Secretariat
Provincial
Ministries
PBIT
Inspector General
Punjab
Administration
36 Districts
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PBIT’s Role and Focus as an IPA
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PBIT’s Private Sector Focus
SUPPORT STAFF
SUPPORT STAFF
GOVERNMENT OFFICERS
OVER 70% GOVT.
OFFICERS
OVER 80% PROFESSIONALS
PROFESSIONALS
TYPICAL
DEPTS.
PBIT
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Services PBIT provides to Investors
1. One-to-One Relationship
POTENTIAL
INVESTORS
2. Reduced Time to Market
3. Link Relevant Government
Departments
4. Matchmaking between
International businesses and
local businesses
PBIT’s
ONE WINDOW
OPERATION
42 RELEVANT GOVERNMENT AGENCIES
FOR ACQUIRING PERMISSIONS AND
AUTHORIZATIONS
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PBIT’S STRATEGIC FOCUS AREA
1.
Build Punjab’s image and perception
2.
Identify opportunity and develop concrete sellable
projects
3.
Match-make investors, generate MOU/EOI/Agreements
and follow-up on these with related departments till
execution
4.
Undertake trade promotion to boost exports
5.
Carry out Business Facilitation and undertake policy
advocacy
Potential & Opportunities in Punjab
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Potential & Opportunities in Punjab
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