Pakistan's sole PVC resin manufacturer eyes 'big opportunity' to supply construction materials to NEOM

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KARACHI: Engro Polymer and Chemicals Limited (EPCL), Pakistan's sole manufacturer of PVC resin material, said on Wednesday it is eyeing supply of the product for construction at Saudi Arabia's planned smart city NEOM which can help it earn $300 million in exports.

Neom, a $500 billion project, is a key element of the Saudi Vision 2030 plan as part of the kingdom's mission to diversify away from its oil-dependent economy. The project is estimated to create 380,000 jobs and contribute SAR180 billion to Kingdom's GDP. Saudi Arabia's flagship business and tourism development project at the Red Sea coast is expected to see massive construction in the coming months and years.

Polyvinyl chloride (PVC) resin is the raw material used to manufacture various construction materials. These include PVC pipes, Wood Plastic Composite (WPC) windows and furniture, Stone Plastic Composite (SPC) flooring, and cable insulation. PVC is also used to manufacture medical equipment.

"A big opportunity is knocking at the door in the form of Neom," Muhammad Farhan, general manager downstream business and market development at EPCL, told Arab News. Farhan was speaking at a media briefing at the Bin Qasim industrial zone in Pakistan's southern port city of Karachi.

"Neom is a $500 billion project that requires massive construction materials including PVC downstream products that are available in Pakistan," Farhan added.

"In fact, some of the Pakistani manufacturers have already bid for the supply of material to the kingdom."

Farhan said Pakistani manufacturers of PVC products had received overwhelming response from Saudi participants of the Big 5, a mega construction show held in Dubai in December 2022.

He said Saudis are exploring different options while manufacturers in the kingdom are looking for other manufacturers who can make products for them.

The EPCL official said the demand for the basic construction material, including cables and pipes, will increase in the first phase of construction at Neom and will keep booming for at least two years. Simultaneously, demand for value-added products for construction on the exterior, including SPC and WPC, will increase.

To take greater advantage of Neom's lucrative opportunities, Farhan said the government can play a vital role by engaging Saudi authorities and the Trade Development Authority of Pakistan (TDAP).

"We saw the interest of the Saudi participants in the value-added products – they want to import but they were also looking for investment in the kingdom for manufacturing and as a nation, we have access capacity and by utilizing that capacity we can avail the opportunity," he added.

Muhammad Idrees, EPCL's chief commercial officer, said the country is already exporting PVC resin to Gulf countries UAE. Bahrain, Oman, and Egypt because of the freight advantage.

"Engro has installed capacity of 300,000-ton resin production while the downstream industry has close to a million-ton capacity," Idrees said.

"The downstream PVC industry can fully utilize its excess capacity and earn $300 million in terms of export revenue by standardizing and improving the quality of finished products."

He said the $300 million PVC export potential could materialize within the next three to four years by the value-added industry through the export of surplus volumes and products.

Idrees said EPCL is collaborating with TDAP to explore global markets to export value-added PVC downstream products.

"In the last two years, the company exported surplus products worth $48 million to Turkiye and Middle Eastern markets, while import substitution of around $300 million contributed significantly toward solving Pakistan's balance of payments situation," he added.

Mahmood Siddiqui, vice president of manufacturing at EPCL, said the company has invested over $188 million since 2015 in plant expansion and other upgrade projects for higher efficiency, reliability, and diversification of operations.

Pakistan's per capita PVC consumption stands at 1.2 kg versus a global average of 6.1 kg. Per capita consumption growth, EPCL officials said, would be driven by rising per capita income, increasing urbanization, and robust domestic manufacturing in the coming years.

However, they said the company was facing challenges of importing equipment for additional plants as commercial banks refuse to open Letters of Credit (LCs) as Pakistan faces a dollar crunch amid a worsening economic crisis.

ISLAMABAD: The local administration of Khyber Pakhtunkhwa's Mansehra district on Thursday warned tourists to avoid Babusar Top mountain pass due to bad weather conditions it said could lead to avalanches and landslides.

Situated toward north of Pakistan's scenic Kaghan Valley, Babusar Top is a high mountain pass elevated at 4,173 meters or 13,691 feet above sea level. The tourist destination, which is popular among locals and foreigners alike, remains closed from October to June every year due to heavy snowfall. In the past, several tourists lost their lives after being stuck at the pass due to landslides.

Last year, two main thoroughfares — the Karakorum Highway (KKH) and Babusar Road — were blocked after heavy rains triggered landslides at multiple locations, cutting off the Gilgit-Baltistan region from other parts of the country.

"This is to inform all tourists and travelers that due to bad weather, the Babusar Top is at risk of witnessing avalanches and landslides," the office of the deputy commissioner in Mansehra announced in a Twitter post. "Therefore, travel toward the mountain pass should be avoided." the deputy commissioner of Mansehra district announced in a Twitter post.

"Once the road has been cleared, the local administration will make an announcement for tourists to resume their travel," it added.

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Meanwhile, all other areas in and around Naran and Kaghan, including Gittidas, Sharan Forest, Shogran, Siri Paye, and Saiful Maluk Lake are open for travel, the Khyber Pakhtunkhwa Integrated Tourism Development (KITE) Project announced on Wednesday.

خیبرپختونخوا سیاحتی معلومات :: 07 جون 2023 کسی بھی سیاحتی و سفری معلومات کے لیے برائے مہربانی محکمہ سیاحت کائیٹ پراجیکٹ کے KP Tourist Facilitation Hub 24/7 ہیلپ لائن 1422 پر رابطہ کریں۔#KITEDoT #KPTourism #ResponsibleTourism @PtdcOfficial @kafzal01 @WorldBank @WBG_IDA pic.twitter.com/iDtjOGvJYu

Northern Pakistan is home to the world's three famous mountain ranges — the Himalayas, the Karakorams, and the Hindukush. The area is blessed with high mountains, landscapes, lakes, glaciers, and valleys with breathtaking views.

With more than 20 peaks of over 20,000 feet (6,100 meters) and four over 8,000 meters, the area is a paradise for high-altitude climbers, trekkers, and hikers.

KARACHI: Pakistan stands to secure one board review under the current bailout package of the International Monetary Fund (IMF) if measures in its budget, set to be unveiled on Friday, meet the lender's expectations, a Fund official said.

The IMF program runs out this month with about $2.5 billion in funds, under three prior reviews, yet to be released, as Pakistan struggles to strike a deal with the lender while battling record inflation, fiscal imbalances and low reserves.

Passing a budget for fiscal year 2024 that meets program objectives is key to paving the way for a final review under the current bailout, the IMF's resident representative for Pakistan, Esther Perez Ruiz, said.

"The focus of discussions over the FY24 budget is to balance the need to strengthen debt sustainability prospects while creating space to increase social spending," she told Reuters on Thursday.

More such spending would defray the impact of inflationary pressures on Pakistan's most vulnerable, Ruiz added, but it needed more progress to identify spending and revenue-generating measures in order to achieve this.

Pakistan and the IMF have been engaged in budget talks.

KARACHI: Federal Minister for Finance and Revenue Ishaq Dar is scheduled to release the Pakistan Economic Survey today, Thursday, to present a comprehensive assessment of the country's economic performance, trends, and challenges ahead of the presentation of the federal budget.

The official document will provide a detailed overview of various economic sectors, including agriculture, manufacturing, services, energy, information technology, telecom, health, education, transport, and capital markets, etc.

The survey will also describe in detail the annual trends of major economic indicators related to inflation, trade, public debt, population, employment, climate change, and social protections.

"The Pakistan Economic Survey, containing the details of major socio-economic achievements during the outgoing fiscal year 2022-23, will be launched in a ceremony on Thursday, June 8, 2023, at 4:10 p.m. at the Auditorium of P-Block, Pak Secretariat," the finance division said in a statement. "Federal Minister for Finance and Revenue, Senator Mohammad Ishaq Dar, will chair the launching ceremony of the Economic Survey for the outgoing fiscal year."

Dar will also present the federal budget for 2023-24 in the National Assembly on Friday amid an inconclusive deal with the International Monetary Fund (IMF) under a bailout program signed in 2019.

The outgoing fiscal year has been unprecedented for the South Asian country in terms of the highest-ever inflation, slowing economic growth, and depletion of foreign exchange reserves, which triggered massive currency devaluation.

The cash-strapped Pakistan took various harsh measures, including energy tariff hikes, to get the IMF's nod for the conclusion of the ninth review of the bailout program, but it continued to remain off track for nearly eight months. The program, which was originally signed for $6 billion, was enhanced to $6.5 billion until June 2023.

As the tenure of the program is set to expire at the end of this month, Pakistani authorities have failed to revive the stalled loan program, which has also prevented funding from other donors.

The economic slowdown in Pakistan has also tanked the country's GDP growth, which is estimated to remain at 0.29 percent in the current fiscal year, FY23, as compared to the revised growth rate of 6.10 percent of the last fiscal year, FY22, according to the finance ministry.

Pakistan has witnessed a massive uptick in the inflation rate since late last year, which hit the highest-ever 38 percent in April. The inflation was also fueled by around 30 percent currency devaluation since June 2022 along with the impact of the Russia-Ukraine conflict that disrupted the global supply chain.

Despite these challenges, the government has approved an estimated 3.5 percent GDP growth target for the next fiscal year, FY24, said the planning minister, Ahsan Iqbal, on Tuesday.

As the finance ministry is set to announce the fiscal plan for 2023-24, the budget outlay is expected to be around Rs15 trillion, against Rs9.6 trillion proposed for FY23, assuming a record-high markup cost due to the high-interest rate.

The government is likely to set a tax revenue collection target of about Rs9.2 trillion for FY24, about 8.6 percent of the GDP, according to Topline Securities.

ISLAMABAD: The next generation farmhand in Pakistan may be a drone.

Since 2020, a woman-led Pakistani company called Kalam4Solutions has been teaching Pakistani farmers how to use drones that can hover above fields and perform backbreaking tasks like spraying pesticides and applying fertilizers in a fraction of the time it takes to do it by hand.

The goal of Kalam4Solutions, set up in 2018, is to provide high-tech relief for rural communities and help farmers save time, energy, and money in a country where agriculture is the largest sector of the economy, contributing around 24 percent to Gross Domestic Product (GDP), accounting for half of the employed labor force, and being the largest source of foreign exchange earnings through exports.

Kalam4Solutions has sprayed 3,000 hectares since it turned to drone technology in 2020. The company's teams — each comprising two technicians and two drone operators — are currently deployed at farms in the northwestern towns of Swabi and Mardan in Khyber Pakhtunkhwa province and in Rahim Yar Khan city in Punjab. A drone costs the company around $13,000 (Rs2.5 million) each and it charges Rs2,000 per hectare from farmers.

A drone can apply pesticides and fertilizer to a 40-acre-field in a day while a human can cover barely one acre in the same time period, and that too while lugging around heavy tanks.

"The vision is to make this technology accessible and available in every village of Pakistan so that the farmers get benefits through this technology," Syeda Rozena Saleha, the chief executive officer and co-founder of the company, said in an interview with Arab News this week.

"This is cost-efficient ... Its efficacy is more than a person. It has forty times more coverage."

Using drones to spray powerful fertilizers and pesticides is also safer for humans.

"Those who spray pesticides manually can contract lung and liver diseases, whereas spraying them from drones is safe for the farmers," Saleha said.

Syed Hasnain Shah, an engineer at Kalam4Solutions, added:

"The biggest advantage [of using drones] is to human life as there is a danger to human life when [pesticides] are sprayed manually. The second advantage is that a drone does the job of ten people in a day, which manually takes a lot of time."

According to a recent research study published in the journal "Acquaculture" titled, "Efficiency of Using Drones in Agricultural Production," the use of unmanned aerial vehicles helps increase crop yield by 20 percent and reduces costs by up to 15 percent.

Across Asia, the trend toward data-based precision agriculture and other digital tools is being driven by demographic changes, technological advances here and climate change, according to the Food and Agriculture Organization of the UN (FAO).

"They help farmers produce more with less water, land, inputs, energy and labor, while protecting biodiversity and reducing carbon emissions," the FAO said in a report last year on digitalization in agriculture.

"Farmers can optimize yields and obtain major cost savings, enhanced efficiency, and more profitability," it said.

Pakistani farmers agree.

"The drone has reduced our [pesticides spraying] cost comparatively, and we get better crop yield," said Mohammad Khalid, a sugarcane farmer in Mardan. "We are happy to utilize this technology for our benefit and hope it continues to make our lives easier by improving crop yields and profits."

But agricultural technology — or agri-tech — also poses risks from job losses to social inequities and data governance concerns and the technologies can be costly and hard to adopt, particularly for women and older farmers.

But Saleha believes the changes are for the better.

"Change is difficult at first, but once people are made aware, they adopt it very fast," she said. "When people adopt technology, it doesn't mitigate the jobs, it actually creates new jobs for farmers."

Saleha said drones could also be used for analytics and crop health management, allowing farmers to identify damage through aerial view and apply remedial measures to boost crop yields.

"We can integrate multiple payloads with it, not only fertilizers and spraying, but also very sensitive sensors that can help farmers identify any damage to their farmland," the CEO said.

"If the damage is identified at an early stage of crop growth, the farmer can take countermeasures against it … The production and overall yield of the farmland can also be enhanced four or five times."

Saleha's future plans include working on material innovation by building structural parts of the drones in-house instead of importing them at exorbitant rates, and looking for funding for her company.

"Multiple groups have reached out to us from the Middle East," she said. "They showed their interest in investment in this company."

ISLAMABAD: Afghanistan urged Pakistan on Wednesday to stop arresting Afghan refugees, after 250 were detained by counterterrorism officials and other agencies for not having travel documents.

Millions of Afghans fled to Pakistan during the 1979-1989 Soviet occupation of their country, creating one of the world's largest refugee populations. Since then, Pakistan has been hosting Afghans, urging them to register with the United Nations and local authorities to avoid risk of deportation.

Afghanistan's embassy in Islamabad said the ongoing apprehension of refugees in the capital, the garrison city of Rawalpindi and neighboring areas persists.

A diplomatic delegation met police to discuss the issue and learned that law enforcement officials have detained 250 refugees in recent days, including those with UN-backed documents giving temporary legal stay in Pakistan and freedom of movement.

The embassy said it is working toward clarifying the legal status of the detained Afghans and expediting their release.

"The Govt of I.R of Pak is urged to cease the arrest of Afg refugees & officially address its concerns, as it can adversely impact bilateral relations btw the two nations," it said in a tweet.

The embassy also confirmed that a female athlete, Arzoo Ahmadi, was briefly detained in southern Sindh province. She was in Pakistan taking part in a martial arts event and was arrested by police on Tuesday morning for not having travel documents. It was reported that she was taken to a women's shelter and later released.

More than one million registered Afghan refugees live in Pakistan, although the numbers entering the country leaped after the Taliban swept back to power in Afghanistan in August 2021.

Over 100,000 Afghans have arrived in Pakistan to avoid persecution at home, although the Taliban have announced a pardon and urged them not to leave the country.

Last December, images of locked up Afghan children in a Karachi prison caused outrage. They were among at least 1,200 Afghan nationals detained in multiple raids for entering the southern port city without valid travel documents.

The detentions underscored the strained relations between the two neighbors. Clashes have erupted at border towns and both countries accuse each other of not doing enough to combat militancy.