Large Scale Manufacturing: Group Wise Analysis 

Engineering Post Report

Pakistan’s Large Scale Manufacturing (LSM) sector has as many as two dozen  groups or  sub-sectors  analysis and performance of some of these during the period July 2021-March 2022 for which information is now available from official sources concerned is being presented here for want of space. remaining LSM  sub-sectors will be covered  in these columns later on please.

LSM groups or sub-sectors  include Food, Beverages, Tobacco, Textile, Wearing Apparel. Leather Products. Wood Products,  Paper & board, Coke & Petroleum Products , Chemicals  and Chemical Products, Fertilizers, Pharmaceuticals,

Rubber Products, Non-Metallic Mineral Products, Iron & Steel Products , Fabricated Metal,  Computer, electronics and  Optical Products,  Electrical Products, Machinery and Equipment,  Automobiles,  Other Transport Equipment, Furniture and  Other Manufacturing  such as football and other sports goods.

Textile sector weight was reduced from 20.9 to 18.18 in Quantum Index of Manufacturing (QIM) 2015-16  but  still this was the highest among all sectors of LSM.

 The sector  grew by  3.2 per cent  during July-March FY2022 as compared to 8.0 per cent  in the same period previous year. Major growth originated from woolen segment production with the highest surge  of 38.9 per cent in blankets, 27.9 per cent  growth in woolen and carpet yarn and 19.1 per cent  in  woolen and worsted cloth respectively. Production of yarn and cloth  showed  marginal growth of 0.7 and  0.3 per cent respectively.

Congruent production units, invariant capacity  and elevated  cotton prices owing to demand  and supply gap  disruptions  moderated  the  growth momentum of the cotton sector. Depreciation of rupee  also restrained  the production of jute,  as most of the raw material is imported from Bangladesh . However, surge  in imports  of textile machinery, rising demand  for concessionary financing from textile firms  and  high exports  of this sector  showed a sizeable improvement  in the textile sector.

As per Pakistan Bureau of Statistics (PBS),  textile machinery imports  reached the level of US$  621.7 million from US$ 377.5 million sowing an increase of as high as  64.7 per cent during the period under report.

According to the State Bank of Pakistan,  out of Rs 202.9 billion  of total financing  of Long Term Finance Facility (LTFF) and Temporary Economic Refinance Facility (TERM) under fixed financing  Rs 94.6 billion  were borrowed by textile sector which accounted to as much as 46.6 per cent  of total financing to the private sector business.

Wearing apparel has been separated  from textile  with 6.08 weight i QIM  showed the growth of  34 per cent against the contraction of 35.6 per cent. The sector had gained  traction  local as well as in the international market  as garments production  grew  at  34.0 per cent  during the period, The export of garments also escalated  with  33.9 per cent growth in terms of  quantity  during the period under report.

Coke & Petroleum Products marginally grew by just 2.0 per cent during the period under report against 12.3 per cent in the same period previous year. High global  energy prices  depressed the overall  growth momentum . However,  pickup in the economic activities  especially automobile and resultant increase  in transportation activities  and oil  sales which showed an increase of 14.9 per cent  during the period under review  clocking at 16.3 million  tones partially offsite  the import of high fuel prices. Besides  production of jute  batching oil, jet fuel, kerosene oil , diesel and Solvant Naptha  remained encouraging as demand spurred from transportation. 

Iron and Steel  production  jumped by 16.5 per cent during  the period under review against the contraction of   8.6 per cent  in the same period previous year. Billets/Ingots, mainly used in the construction industry, grew by 32.8 per cent and  H/C.R.Sheets/Strips/ Coils) Plates  increased  by 7.9 per cent. Both reflected  the growth  momentum  in the automobile and construction-allied sectors. Non-metallic  Mineral  Products inched up to 1.1 per cent as compared to 18.5 per cent increase during the same period of the previous year.

Chemicals sector is divided into two components i.e. chemical products and fertilizers with the total weight of 6.48 in QIM. The chemical products  showed the growth of 15.2 per cent  against 14.5 per cent in the same period previous year. Sulphuric acid, hydrochloric acid, soda ash,  and toilet soaps remained the main major contributors  to overall growth  of chemicals. On the other hand,  Fertilizers production  showed a meagre growth of 3.3 per cent  increase in the last year.

Pharmaceuticals growth witnessed a dip of 0.4 per cent during July-MarchFY2022, against the growth of 10.55 per cent the previous year, triggered by  hefty decline observed in capsules, injections, tablets and galenicals. Electrical equipment also declined  by 1.1 per cent  against the hefty shrink of 17.1 per cent.

Paper and Board production increased by 8.5 per cent during the period under report as compared to dipl  of 0.6 per cent last year. Rubber Products nosedived  by 20.6 per cent during July-MarchFY2022 as compared to 13.1 per cent  growth  in the same period  of the previous year. Wood Products  jumped by as high as 157.5 per cent  as compared to contraction  of 46.2 per cent  last year. Production of Plover remained the sole contributor  to overall  pick up in the output of wood. Furniture production  drastically  increased by  as much as 301.8 per cent against   71.7 per cent in the same period last year.

Other manufacturing , particularly footballs production substantially increased by 37.8 per cent  as compared to 29.8 decline in the corresponding period last year. The sector picked up the growth  by pent-up demand  in the international  market  and marked  a growth of 40. 3 per cent in exports .

Production figures of selected  industrial items of Large-Scale Manufacturing  such Deepfreezes, Jeeps and Cars, Refrigerators  Upper Leather,  Cement , Liquids/syrups, Phosphatic fertilizers, Tablets,  Cooking oil,  Nitrogen fertilizers,  Cooking oil,  Vegetable ghee, Cotton yarn,  Sugar,  Tea blended,  Cigarettes are also available but not being mentioned here for want of space, please.