Ghandhara Nissan Limited (GNL) has provided an update on the progress of its Brownfield Project.
In a notification sent to the Pakistan Stock Exchange (PSX), the company announced that it is working on the procurement of plant & machinery for its automobile plant being set up under the Brownfield category of the Auto Policy 2016-21.
The Company is currently in the process of procuring plant & machinery for the project including jigs and fixtures.
Ghandhara informed that they are working on enhancing the capacity of the plant to meet the forecasted sales volumes.
They also informed that the Manufacturing team had visited Nissan Motor’s plant, in order familiarize themselves with the Datsun assembly process as per Industry’s best practices and to finalize the Machinery & Equipment requirements for the manufacturing facility.
The engineers from Nissan Motor Co. Japan have frequently visited the plant to support in the manufacturing preparation.
About marketing, the company stated that the company had recently carried a detailed market study through independent research agency to evaluate the project variables considering the current market conditions and external factors.
It also announced that the company’s dealer development team is currently working to find a potential location as part of the Network Development Plan which will be followed by finalization of Dealers’ Owner Criteria and advertisements for expression of interest for Datsun Dealerships nationwide.
Localization of Parts
Ghandhara Nissan, regarding the localization of parts, informed that a request for quotation has been shared with the potential vendors for the targeted parts.
The technical evaluation of the local suppliers has been completed and moving forth, a technical assistance agreement will be shared with the potential vendors for the development of critical parts, said the company.
Overall, there are ongoing discussions between the local and original suppliers to execute the deletion program, said Ghandhara Nissan.
Moreover, Nissan Motors Limited is closely working with Ghandhara Nissan regarding supplier development.
The company informed that a supplier conference, in the presence of NML research and development manufacturing management, is planned in February 2019 to request suppliers’ commitments to the deletion program.
The company had issued right shares during the financial year 2017-2018 to partially finance the investment for the revival of car assembly facility and allied activities for Datsun passenger car project.
Ghandhara stated that Pakistan’s economy has faced quite a few challenges over the past which has made a major impact on its Datsun project and the automobile industry in particular.
This challenges mainly include devaluation of the rupee against the US dollar and tightening measures by the State Bank of Pakistan (SBP) which included hiking interest rates to ensure macroeconomic stability.
The company is trying to accommodate such factors in its business plan and has accordingly engaged banks to conclude financial close (which is in advance stages) for its Datsun car project.
Ghandhara Nissan shares were trading at Rs. 101.80, up Rs. 4.84 or +5% with a turnover of 1.98 million shares.