INDUSTRIAL AND

MANUFACTURING
INDUSTRY OF PAKISTAN
ABDULREHMAN AHMED SOOMRO
F16ME11
Introduction
Manufacturing Industry:

 Manufacturing sector comprises of two sub-sectors viz. Large Scale

Manufacturing and Small Scale Manufacturing. Large Scale
manufacturing covers the establishments registered under factories
Act 1934 or qualifying for registration (having 10 or more
employees) including Repair and Service Industries. Small Scale
manufacturing covers all such manufacturing establishments not
covered in Large Scale manufacturing.
Introduction:

 The economic adepts also calculated that it has three sub sectors
like Large Scale Manufacturing (LSM), Small Scale Manufacturing and
slaughtering as well. Presently LSM sector has 80 percent share in
manufacturing and 10.8 percent share in GDP whereas Small Scale
Manufacturing has 13.8 percent share in manufacturing and 1.9 percent in
GDP, while Slaughtering has 6.5 percent share in manufacturing and 0.9
percent share in GDP.
 Presently the Pakistan Bureau of Statistics (PBS) revealed that LSM index
entered negative growth of 3.33 percent year-on-year (YoY) in August. The
statistics show that the fall in big industrial production in August has caused
fears that economic growth in Pakistan may slow down.
INDUSTRIAL SECTOR

 The economic expert also mentioned in a statement that during 2017-18,

the LSM registered a growth of 5.4 percent YoY by missing the target of 6.3
percent. Between July-August, the growth dropped 1.17percent YoY.
Sources mentioned that the negative growth is chiefly the outcome of dip
in production of petroleum products 13.96 percent, followed by non-
metallic mineral products 13.91 percent, automobiles 12.82 percent,
fertilizers 9.98 percent, pharmaceuticals 6.86 percent, iron and steel
products 5.1 percent, chemicals 0.42 percent, textile 0.1 percent and
wood products plunged 57.98 percent, respectively.
Introduction
Other Parameters of Total Production

 The sector constitutes 80 percent of manufacturing and 10.7 percent of the overall GDP.
In comparison, small-scale manufacturing accounts for just 1.8 percent of GDP and 13.7
percent of manufacturing. The production statistics of 36 items acquired from the Ministry
of Industries and Production explained a negative growth of 3.27 percent in August.
 Furthermore, 65 items recorded by the provincial bureaus of statistics registered slight
growth of 0.96 percent. Statistics of 11 items received from the Oil Companies Advisory
Committee contributed pessimistically 1.02 percent to LSM fall in August. Economist
experts of Pakistan also mentioned that the industry-specific facts explained that
engineering products registered the highest rise of 10.30 percent, followed by food,
beverages and tobacco products 9.83 percent, paper and board 7.72 percent,
electronic products 5.48 percent, leather products 2.19 percent, and rubber products
1.23 percent.
On the other hand, in the automobile sector, the production of all vehicles entered
pessimistic growth during August, as against to the corresponding period a year ago.
Other Parameters of Total Production

 Tractors went down 16.41 percent, jeeps and cars 4.85 percent, motorcycles
19.46 percent, light commercial vehicles 8.42 percent, trucks 40.89 percent and
buses shrank by 18.18 percent during the year under review. It is also revealed
that fall in the chemical sector was chiefly driven by paints and varnishes,
which registered a drop of 3.19 percent, whereas caustic soda went up by
15.59 percent.
In pharmaceuticals, syrups, tablets capsules and injections went down by 4.42
percent, 7.34 percent, 11.5 percent and 9.47 percent, respectively. In non-
metallic mineral products, cement recorded a negative growth of 14.10
percent.
 Food, beverages and tobacco segment recorded a fall across the board in
the second month of the present fiscal year. A 6.11 percent fall was registered
in cooking oil production, followed by blended tea 2.91 percent, wheat and
grinding mill 2.08 percent. A meagre growth of 0.39 percent was registered in
vegetable ghee.
Graphs: data source (NFDC).
DATA SOURCE:(WITH RESPECT TO
CPEC).

 July recorded a meagre rise of 0.5 percent YoY. It is also hoped that
the China Pakistan Economic Corridor (CPEC) boost the manufacturing
sector of Pakistan. The experts mention that the governments of both
Pakistan and China had accepted that under the second phase of China
Pakistan Economic Corridor (CPEC), nine Special Economic Zones
(SEZs) would be built in all the four provinces, Gilgit Baltistan, FATA, and
Azad Jammu and Kashmir to increase industrialization in Pakistan. It is also
said that the government of Pakistan would facilitate many domestic and
foreign investors to organize their industries in dissimilar sectors. The experts
also mentioned that the construction of industries in these SEZs would not
only assist rise in economic activities in Pakistan but also help increase
country’s export besides creating hundreds of thousands career
opportunities.
Large Scale Manufacturing

 There are two sources of data on large scale manufacturing- Census of

Manufacturing Industries (CMI) and monthly data on manufacturing sectors
output. Census data is used to derive benchmark estimates after every five
years. The latest CMI for 2005-06 was conducted by Former FBS, in
collaboration with Provincial Directorates of Industries and Bureaus of Statistics.
 CMI measures production and structural changes of large-scale
manufacturing industries (LSMI). It provides data on values of inputs and
outputs, census value added, contribution to GDP, fixed assets, stocks,
employment and employment cost and industrial taxes. It takes into account
new industrial developments and captures new industrial products and
establishments. It is used to develop new weights for Quantum Index of
Manufacturing.
Prospect of Growth In Manufacturing
Industry

 Looking forward, we estimate Manufacturing Production in Pakistan to

stand at 7.50% in 12 months time. In the long-term, the Pakistan
Manufacturing Production is projected to trend around 8.00% in 2020,
according to our econometric models.
Small Scale Manufacturing

 Small-scale manufacturing is widely regarded by experts as the solution to

many economic problems confronting developing countries. A vibrant
small-scale manufacturing sector could particularly solve a variety of
problems, including unemployment, low growth and poverty. Planners now
realise that, since modern production methods are generally more flexible,
manufacturing can be undertaken anywhere, and at any level through
inter-firm linkages.
Advantages of Small Scale OR
Cottage Industry
 MACHINERY
SHOPPING MALL IN
CHINA.

Small Scale Manufacturing:

Small Scale Manufacturing

 It is evident that the government’s job is to provide a suitable atmosphere

for industry and the investor automatically does the rest. “Suitable
atmosphere” means that the ideal solution must be easy for an average
Pakistani to use and, through it, raise per capita income. The steps
required at this stage to facilitate a rapid entry of Pakistan into the rank of
manufacturing countries are as follows:

 “Rapid industrialisation through small-

scale manufacturing could solve a variety
of economic issues”.
Types of Small Manufacturing Industry

 Furniture manufacturing — For furniture manufacturing, the target

market should cut across both the rich and the poor, and the furniture
should be modular for ease of manufacturing and installation. It is indeed
a profitable business, especially if the produced furniture is modular or has
some innovation in design or material and is of high quality. Every entrant
can launch his unique brand to attract customers, from local consumers to
the international market.
Types of Small Manufacturing Industry

 Agricultural equipment manufacturing — Since there is a big

margin of improvement in the agricultural sector, small-scale agricultural
tools can be designed and manufactured with ease in the small units. The
focus should be to make the equipment lighter in weight, higher in
strength and more corrosion-resistant. Agricultural equipment is a highly
thriving and profitable business.
 Before starting this type of business, it is advisable, however, to conduct a
thorough market survey and feasibility studies to identify agricultural
products that can potentially be improved and sold readily.
Types of Small Manufacturing Industry

 Automobilere spare parts manufacturing — Automobiles are

subjected to wear and tear, hence the need for replacement of worn-out
parts. It is not a must to manufacture all parts of a car; for instance, the
investor can choose to specialise only in the manufacturing of brake pads
for different vehicle brands and models and still enjoy a huge patronage.
The bottom line is to conduct a thorough market survey and feasibility
studies which would help to identify the parts in a vehicle that usually wear
out and are in high demand in the market.
Types of Small Manufacturing Industry

 Hand tools manufacturing — There is a large market for tools such as

hammers, tin cutters, pliers, screwdrivers, shaping tools, scissors, punchers,
chisels, manual/hand saw, string trimmer, edging shears, half-moon
cutters, etc., and, if small improvements are done with design, then it is
indeed a profitable business venture.
Types of Small Manufacturing Industry

 Nails, nuts and bolts manufacturing — Nails, nuts and bolts are items
that are used in the construction industry, carpentry and, of course, in the
engineering industry (automotive et al). Started on a small scale, it can be
supplied to the cottage industry within ones location and, at the same
time, it can be done on a large scale, i.e., mass-producing nails, nuts and
bolts. Operating a large-scale nails, nuts and bolts manufacturing business
offers the privilege of exploring international markets.
SMALL SCALE MANUFACTURING ENTERPRISES.
PICTORIAL VIEW
Large Scale Manufacturing
Pictorial View
Pharmaceutical Industry
Cement Industry
Pictorial view.
Sports Industry Sialkot
Pictorial View
Growth Rate in GDP
SBP
Contribution In GDP of Pakistan
(Previous Data)

 Pakistan Industrial Sector is the second largest individual sector of the

economy accounting for 20.88% of the GDP. In 2017 it recorded a growth
of 5.02% as compared to the growth of 5.80% last year. This sector
comprised of large, medium and small-scale. Manufacturing is the most
vibrant sub sector of the industrial sector having 64.4% contribution in the
industrial sector and in GDP it accounts for 13.45%. Manufacturing (sub-
sector) is further divided in three components including large-scale
manufacturing (LSM) with the share of 51.26% in industrial sector, small-
scale manufacturing share is 8.80% in industrial sector, while Slaughtering
contributes 4.34% in the industry. From 2010-11 the large scale industries
contributes 4.4 % to the real GDP growth rate while the small scale
industries contributes 7.5 %.