punjab board of investment & trade

Punjab Board of Investment and Trade Untapped Investment Opportunities in Punjab

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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 3

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



• 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

POLICY INCENTIVES

• 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

• Business conducive policy regime

• Political commitment to Private Sector

Development

PUNJAB – REGION OF UNTAPPED OPPORTUNITIES

PUNJAB

7 Potential & Opportunities in Punjab

MARKET SIZE COMPARISON

Source: Data @ World Bank

93

82 75

68 63

49 40

34 29 27

22

Population in million Potential & Opportunities in Punjab 8

95 88

63

52 49

42

35

25 21

12 8 6

PUNJAB LEADS MANY COUNTRIES IN GDP

Source: Data @ World Bank

GDP in USD billion


WORLD BANK: EASE OF DOING BUSINESS 2011

1

79 83 102 107

116 123 127 134

167

Source: World Bank Ease of Doing Business Index 2011 Potential & Opportunities in Punjab 10

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5 6

7 8

9 10

11 12

13 14

15 16

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Source: FAOSTAT – United Nations, 2008 * Indigenous

GLOBAL RANKING IN AGRICULTURE & LIVESTOCK


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 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

15 UAE Pakistan Investment and Trade

Opportunities Potential & Opportunities in Punjab 15

58

20 1814

6

0

10

20

30

40

50

60

70

Total Goats baffalos Cows Sheep


Million Heads

• World's 3rd largest livestock

population

• 5th largest milk producer

• 43 breeds of livestock

• Livestock growing @ 4.2%

Source: Punjab Development Statistics 2010

EDGE IN LIVESTOCK

POULTRY


• 25,000 Poultry Farms in the

Country.

• 400 Hatcheries

• 150 Feed Mills

• 5.51 M.M.T Feed

Consumption

• $ 4 Billion Turnover

• 10-12% annual growth rate

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

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 19 (Source: Livestock Department


• 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.

PAKISTAN: DOOR TO REGIONAL HALAL MARKET

OPPORTUNITY


MEAT • Establishment of Integrated meat processing

facility

• Estimated cost US$ 5.7 Million,

• Location: Metropolitan Area

• 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

DAIRY •Dairy processing & value addition units

including Yogurt , Cheese, white cola/mint

cola, Goat milk products ,etc.

• 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 by-products 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

HALAL PARK IN LAHORE


PROJECTED ENERGY DEMAND


Source: Private Power & Infrastructure Board – Supply & Demand Position 2020

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


• 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

PUNJAB’S ENERGY SECTOR POTENTIAL


OPPORTUNITY TO DEVELOP 1 BILLION MT OF IRON ORE IN PUNJAB

• Flexible investment option for mining of Chiniot, Rajoa and Kalabagh Iron Ore deposits

• Setting up Steel mills utilizing the domestic Iron Ore

• RFP already issued

Deposits Status

Chiniot 123 MMT Proven

Rajoa 500 MMT Assessed

Kalabagh 300 MMT Estimated

Estimated value is over USD 170 billion

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

Background • Large untapped deposits of Iron Ore in Punjab

• Authetication of deposits and techno-economic

studies of Iron Ore deposits are in progress

• Iron Ore development is one of the top priorities of the government

• Fast-track development of Iron Ore projects

Image Source: Mines & Mineral’s Dept.; Information Source(s): Mines and Mineral Department Punjab 28

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

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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.

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 Public-

Private Partnership

Image(s) Source(s): PBIT; Information Source(s): Housing Dept.,

Background

• Total length of the ring road is 89 km or which 40km is completed (Northern Loop)

• 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

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

Market highlights

• Automobile growth over 12% per annum since 2002

• Urbanization has created the demand for quality road infrastructure

• Over 300k commuters transpire the existing roads of the southern loop daily

Image(s) Source(s): Transport Dept.; Information Source(s): Transport Dept. 31

PUNJAB: INDUSTRIAL ESTATES


the biggest industrial estate of Pakistan: 3500 acres

COMPANIES OPERATING CURRENTLY


Prime land for urban retail trade is also available

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Chairman/ Chief Minister

Vice Chairman

CEO

COO

DG Projects

Director Agriculture

Director Textile

Director Infrastructure

Director energy & Mines

DG Finance & Admn

DG Marketing/

IBD

DG facilitation

Director Legal

Director One window

Director Foreign Interface & chambers

BOD Advisory Board

PBIT Structural Integration

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

Facilitate investment

through one window

arrangement

Coordinate & implement trade &

investment policies of Federal & Provincial

govt.

Liaise with private sector, trade bodies &

associations to promote

trade/investment

Initiate Sectoral investment proposals

and maintain investment database

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

Alignment with Federal BOI goals

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PBIT’s Sphere of Influence

Chief Minister Punjab

Secretariat

Administration Provincial Ministries

Inspector General Punjab 36 Districts

PBIT

Federal Board of Investment

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PBIT’s Role and Focus as an IPA

PBIT’s Private Sector Focus

OVER 80% PROFESSIONALS

GOVERNMENT OFFICERS

SUPPORT STAFF

PROFESSIONALS

OVER 70% GOVT. OFFICERS

SUPPORT STAFF

TYPICAL DEPTS.

PBIT

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Services PBIT provides to Investors

1. One-to-One Relationship

2. Reduced Time to Market

3. Link Relevant Government Departments

4. Matchmaking between International businesses and local businesses

POTENTIAL INVESTORS

PBIT’s ONE WINDOW

OPERATION

42 RELEVANT GOVERNMENT AGENCIES FOR ACQUIRING PERMISSIONS AND

AUTHORIZATIONS

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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

PBIT’S STRATEGIC FOCUS AREA



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punjab board of investment & trade

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potential

iron ore

lahore availability

transport

information

current usd

5 million

potential