By Jehangir Nasir & Sajawal Rahman
General Tyre and Rubber Company of Pakistan (GTR) has issued a clarification regarding some news items published in a certain section of the media. The news was regarding a potential investment of $200-$300 million by the company to set up a new production unit in the Special Economic Zone (SEZ) in Faisalabad.
According to the notification to the Pakistan Stock Exchange (PSX), the company’s Board of Directors informed that it had granted approval, on April 28 2017, to the management to carry out due diligence for the acquisition of land for future expansion, which was communicated to the PSX on the same date.
It further said that the management is in the process of evaluating various options and that the decisions regarding the plant’s location and magnitude of investment are yet to be made
The company further stated that the PSX and stakeholders shall be immediately informed once any decision in this regard has been taken by the Board of Directors (BoD).
Previously in April 2017, GTR notified the exchange regarding investment of Rs 1.26 billion as part of its business expansion plans in the future.
According to the media reports, the board had given a green signal to the management for acquiring a land worth Rs 1.26 billion to set up the company’s manufacturing plants and warehouse. 50 acres of land was decided for the manufacturing plant and an additional 20 acres for a dedicated warehouse in Bin Qasim Industrial Park, Karachi. However, GTR has confirmed that there have been no concrete steps as of now.
GTR’s script at the bourse was trading at Rs 84.33, up by 5% or Rs 4.01, with a turnover of 94,500 shares on Monday.
Pakistan’s largest tire manufacturer meets 20% of the overall demand for tires in the country. The company has already purchased the land for the plant following the board’s approval, informed GTR Chief Executive Officer and Managing Director, Hussain Kuli Khan, while talking to journalists.
GTR has already upgraded its production capacity by investing in the latest equipment.
New entrants in the Pakistani market including Hyundai, Renault, and Kia Motors are also interested in signing deals with GTR for their future demands.
Out of 17 million motorcycle and 13 million automotive tires, GTR produces 1 million and 2.5 million respectively whereas 45% of the market is captured by smuggled tires especially through Afghan Transit Trade.
GTR CEO implored that the new government must solve the issues faced by the industry, especially the smuggling of used winter tires which cause frequent accidents. He further added:
Owing to the influx of smuggled tires, many local industries have either shut down their operations or have been forced to move out, which has resulted in unemployment.
He further said that the Federal Board of Revenue (FBR) must ensure that there is proper documentation for every tire sold in the market.