Chapter 4

76
CHAPTER NO: 4
INDUSTRIAL ESTATES IN PAKISTAN
4.1 BRIEF HISTORY OF PAKISTAN
Pakistan emerged as an independent sovereign state on the 14th of August 1947 and is
the sixth-most populous country in the world having a population size of 180 million in
2014.Pakistan symbolizes “the land of pure” and has been the centre of the great Indus
Valley civilization dating back at least 5,000 years. The historical excavations of
historical sites at Taxila, Harappa, and Mohenjo-Daro dating back to 3,000 B.C speak
volumes about its rich cultural heritage.
4.2 INDUSTRIAL CLUSTERS OF PAKISTAN
Pakistan ranks forty-first in the world and fifty-fifth worldwide in factory output.
Pakistan's industrial sector accounts for about 24% of GDP. Cotton textile production and
apparel manufacturing are Pakistan’s largest industries, accounting for about 66% of the
merchandise exports and almost 40% of the employed labour force.[1Cotton and cotton-
based products account for 61% of export earnings of Pakistan. The consumption of
cotton increased by 5.7% over the past five years while the economic growth rate was
7%. By 2010 the spinning capacity increased to 15 million spindles and textile exports hit
15.5$ billion. Other major industries include cement, fertilizer, edible oil, sugar, steel,
tobacco, chemicals, machinery and food processing. The government is privatizing large-
scale parastatal units, and the public sector accounts for a shrinking proportion of
industrial output, while growth in overall industrial output (including the private sector)
has accelerated. Government policies aim to diversify the country's industrial base and
bolster export industrial development. (For GDP ratio see figure 5.1)
The history of industrial estates in Pakistan goes back to 1947when the first industrial
estate was established in Karachi. Thus Pakistan embraced the concept early. While small
industrial estates
Were introduced in the 1960s and the Punjab Small Industries Corporation (PSIC)
responsible for establishing industrial units was established in 1973.
4.3FOREIGN AND DOMESTIC INVESTMENT
Foreign direct investment (FDI) has emerged as a major source of private external
inflows for Developing countries. During more than last two decades most of the
countries have liberalized their FDI regimes and pursued investment-friendly economic
policies to attract investment.FDI has triggered technology spillovers, assisted human
capital formation, contributed to international trade integration, helped in creating a more
competitive business environment and promoted enterprises development. These
developments contributed positively to higher economic growth, which is the most
effective tool for alleviating poverty. There seems to be huge scope for investment in

77
hydel and coal based power projects, alternative energy like wind power, and natural gas
transmission from foreign lands. The country also needs infrastructure, world class
education systems, exploration of its natural resources and mechanization of industries.
Foreign investors can exploit all such opportunities .Foreign Direct Investment (FDI) in
Pakistan stood at$ 853.5 million during July-April 2013-14 as against$ 658.2 million last
year, posting an increase of 29.7 percent. Oil & Gas Exploration remained the major
sector for foreign investors .Pakistan will undoubtedly attract foreign direct investment
with the resolution of the energy shortages and improvement in the law and order
situation. The Board of Investment (BOI has approved new investment policy recently to
provide more investment friendly environment to investors. In particular, efforts are also
going on to encourage the setting up of fruit processing industries and more export
processing zones in the country, so that sustained high economic growth through exports
may be achieved and series of investment opportunities may be generated.
4.4 ECO-INDUSTRIAL MEASURES TAKEN BY PAKISTAN
To control the spread of pollution and dangerous chemicals, Pakistan’s industrial
park development company established special areas for boiler-based industrial units.
Pakistanis have become more aware about the effects of pollution, as dust and smoke
particles reported there are two times the world average and five times that of the
developed world. Rachna Industrial Park, as well as the Combine Effluent Treatment
Plant facility, was established to present hazardous chemicals from polluting drinking
water. The park is being set up to supply uninterrupted power and quality drainage
infrastructure for the region. The Pakistani government for supporting this eco-friendly
park putting the needs of its people and environment first. Not only will Rachna
Industrial Park utilize sustainable operations, but the nearby treatment plant will ensure
all industrial wastes are properly treated before disposal.
4.4.1 STEPS REQUIRED TO BE TAKEN FOR ECO-INDUSTRIAL
DEVELOPMENT IN PAKISTAN
Overall, the pace of Eco- industrial progress has been slow due to various factors
most important being the lack of energy.
 Government may give due importance to environmental factors by ensuring
construction of the CETP and solid waste landfill site, and regulation of air pollution.
 Financial support is required for establishment of Eco-industrial clusters and technical
training centre.
 Ensure continued energy supply including gas and electricity, Assist in exploring
alternate forms of energy to fulfill long term energy demands and sustainable
industrial development.

78
 Develop a policy framework to support a labor intensive industrial strategy for
economic growth by encouraging small enterprises and by facilitating a cluster
strategy at the SIE.
4.5 INDUSTRIAL ESTATES IN PAKISTAN
Among the developing countries, Pakistan was one of the first to embrace the idea of
industrial estates. Sindh Industrial Trading Estate (SITE), Karachi, spread over an area of
4,250 Acres was established in 1947. It is the oldest Large Industrial Estate of Pakistan.
By 1965, there were 3 Large Industrial Estates in operation while 28 small industries
were either proposed, under construction or already in operation11. Small Industrial
Estate was introduced in the province of Punjab in 1960’s by the West Pakistan Small
Industries Corporation which set up the first five industrial estate sat Gujranwala, Sialkot,
Gujarat, Bahawalpur and Lahore. The Pun-jab Small Industries Corporation (PSIC)
established in 1973 has been responsible for establishing industrial estates since then and
is currently managing 22 small industries in Punjab. However, this early momentum
could not be converted into an advantage, due to poor management, weak infrastructure
development and inability to provide attractive incentives to private entrepreneurs.
Resultantly, most industrial estates in Pakistan have not been successful in providing a
comprehensive set of infrastructure and facilities needed to facilitate entrepreneurs and
attract new industry. Many existing industrial clusters and areas have turned into poorly
managed estates that fail to provide basic facilities like road network and a sewerage
system. Additionally, minimal steps have been taken to avoid environmental damage and
the estates have ended up contributing to enormous air and water pollution.1
It is pertinent to note that the Punjab Small Industries Corporation (PSIC) has been the
main institution responsible for undertaking, managing and supervising Small Industrial
Estate projects in the province of Punjab. Punjab Industrial Estate Development and
Management Company (PIEDMC) were formed by the Government of Punjab in 200312
to upgrade the existing poorly managed estates and to create new estates which are more
organized, well planned and environmentally friendly. The vision and primary
goals of the company were to promote rapid industrialization in Punjab through the
creation of industrial estates of international standard. Initially, the management of
Multan Industrial Estate and Quaid-e-Azam Industrial Estate (Kot Lakhpat Industrial
Estate), previously being managed by PSIC was transferred to PIEDMC in 2004. These
estates were upgraded while the construction of Multan Industrial Estate Phase II was
started. However, Sunder Industrial Estate (SIE) was a new estate envisioned and
developed by the PIEDMC. The main goal was to set a precedent for industrial
development in Punjab by providing quality infrastructure and a comprehensive set of
1 Gloeckner, Peter H , Industrial Estates : an instrument for industrial development and promotion (Lahore: Ferozsons, 1966)

79
facilities2
.
4.5.1 TEXTILE INDUSTRY
Historically, Pakistan’s textile industry and clothing sector has always been a major
contributor to the foreign exchange earner and still contributes.
ACHIEVEMENTS
 4th
largest grower of cotton after USA, China and India
 3rd
largest consumer of cotton
 3rd
largest exporter of cotton textiles
 2nd
largest supplier of cotton yarn with 26% share of the international market
STATISTICS
 Over 1.3 million farmers, out of total of 5 million are involved in cultivation of this
crop
 Industrial Sector is the second largest individual sector of the economy accounting for
24% of the GDP (see table no 5.1)
4.5.2 FERTILIZER INDUSTRY
Fertilizer is any organic or inorganic material of natural or synthetic origin (other than
liming materials) that is added to a soil to supply one or more plant nutrients essential to
the growth of plants.( see figure 5.2 for fertilizer industry ratio).
4.5.3 CEMENT INDUSTRY
Cement industry is one of most prominent and energetic organization having
operations and interactions with cement industry.
 Pakistan exports increased by 47% in last fiscal year.
 Pakistan is ranked 5th in the world’s cement exports.
 5th
position leaving Germany behind.
 Exported $700m in past year.
4.5.4 SUGAR INDUSTRY
 At the time of independence in 1947, there were only two sugar factories in Pakistan.
 At present there are 106 sugar mills operating in Pakistan.
 It is the 2nd
largest industry in Pakistan after Textile Industry.
 106 sugar mills in the country.
 Sugarcane acreage in Pakistan is 5th
in the World and it is grown on over 1 million
hectares.
 Pakistan ranks 15th
in the World for sugarcane production.
 By-products Ethanol (used as a fuel) &Alcohol (used by pharmaceutical industry).
2 During the tenure of Mr. Pervez Elahi, the Chief Minister of Punjab

80
Table 7 :( EXPORT VALUE)
Source: yarnsandfibers.com
Figure 4.1 :( GDP Ratio)

81
Figure 4.2 :( FERTILIZER INDUSTRY RATIO)
Figure 4.3: STATISTICS

82
4.5.5 SPORTS INDUSTRY
“Sports' are all forms of physical activity which, through casual or organized
participation, aim at expressing or improving physical fitness and mental well-being,
forming social relationships or obtaining results in competition at all levels”
 Football
 Cricket bats
 Hockey sticks
 Boxing gloves
 Volley balls
 Swimming suits
 Golf balls
 Badminton rackets
 Basketballs
STATISTICS (see figure 5.3)
 The export of sports goods, increased by 7.85% from US$39.180m →US$42.257m
last year
 Sialkot export 70% of total world demand for hand-stitched inflatable soccer balls
(footballs).
 40 million balls annually worth US$210 million.
4.5.6 TELECOM INDUSTRY
Telecommunication is the transmission of information over significant distances to
communicate.
 Telephone
 Mobiles
 Internet
GLASS INDUSTRY
 The glass industry in Pakistan, though developed, still has space for improvement.
 There are about 37 glassworks in the organized sector, with the production capacity
ranging between 10 tones and 200 tones per day.
 The major ceramics industry are Karam Ceramics, Swat Ceramics, Master Tiles,
Shabbir Tiles and Emco Industries
4.5.7 LEATHER INDUSTRY
The leather made ups and finishing industries symbolize an important division in
Pakistan, Earning approximately more than 8 million $ as a foreign exchange earnings to
the country.
4.5.8 SURGICAL INDUSTRY
Pakistan surgical industries (PVT) limited was established in 1974 and now has
become one of the leading manufacturers of surgical.

83
4.5.9 AUTO MOBILE INDUSTRY
The business of producing and selling self-powered vehicles, including passenger
cars, trucks, farm equipment, and other commercial vehicles.
Automotive engineering is a driving force of large scale manufacturing, contributing US$
3.6 billion to the national economy and engaging over 192,000 people in direct
employment.
4.6. COMPARISON OF PAKISTAN WITH ASIAN OTHER INDUSTRIAL
SECTORS
 Pakistan 23.93%
 India 26.3%
 Bangladesh 28.5%
 China 46.9%

84
Figure 4.4: GDP Contribution of different sectors of economy
Pakistan India Bangladesh Sri Lanka
Table 8: GDP Growth
0
1
2
3
4
5
6
7
8
9
GDP Growth
GDP Growth

Chapter 4

More Related Content

What's hot (20)

Viewers also liked (8)

Similar to Chapter 4 (20)

More from Altaf Hussain (9)

Recently uploaded (20)

Chapter 4