Survival of Electrical Capital Goods Industry Made in Pakistan Products should be given priority

By Engr. Ishtiaqul Haq

The Electrical Capital Goods Industries (ECG) in Pakistan have been contributing in the development of Pakistan since last 6 decades. In the last decade the industry is facing tough competition with imported goods from China & Korea in particular. The Free Trade Agreement (FTA) with different countries are also one of the factor, which are affecting growth of the industry in Pakistan.

The multinational companies are closing their setup in Pakistan. Apart from security issues, the local policy and environment are not conducive, despite PEPRA rules are in place, its implementation is weak.

Recently Pakistan Business Council (PBC) has taken initiative and suggested many steps to revive economy, resulting more job opportunities for the people.

One of the suggestion to have 5 million housing unit target in next five years if implemented will definitely revive the economy.

It is established fact, the construction of housing unit creates opportunities for more than two dozen industries in general but it will also revive the electrical capital goods industry e.g. cable, motors, switchgear and transformer industry.

These housing units shall also require minimum 10,000 MW additional power and related distribution & transmission network, therefore this one action shall have ripple and cascading effects in the economy. The regulatory duty on silicon steel sheet needs to be withdrawn, as in Pakistan no such material are manufactured. All transformers are manufactured through imported electrical steel sheet from Europe and Japan.

Finished transformers are imported from China on various projects having lower duty. The Chinese companies also getting about 15% export rebate on the export of their engineering goods resulting local companies are facing tough competition & closure.

Due to cost cutting measures, the industry is not investing in R&D activities as required in the development of new products.

The industry needs long term (over 10 – 15 years policies, which will support the investment in technology & know-how transfer).

One of the most important element as a nation to focus now is on “Made in Pakistan” products. This should be our main slogan. Even Super Power USA is now focusing on “Made in USA” initiative.

These all initiatives is needed for creating job opporxtunities locally rather than outsourcing of the jobs.

The ECG industries in Pakistan need financial space in taxes enabling them to invest in technology (machine, methods, engineering software etc.) and Human Resources development (skill development & training in different areas) to remain in the competitive mode as well as more new products are manufactured locally.