Chief Executive Officer (CEO) Engineering Development Board (EDB), Raza Abbas Shah has said that the engineering sector’s exports will increase from the current level of $1.3 billion under the “Make in Pakistan” strategy.
He was addressing the representatives of the Pakistan Electric Fan Manufacturers Association (PEFMA) at a meeting to chalk out a plan for strengthening the local fan industry and enhancing exports in this important sector. The meeting was chaired by CEO-EDB and attended by Chairman Rafique Engineering Industries Ltd (Royal Fans), Director Development, Lahore Fans, Director, Champion Fans, a representative from National Energy Efficiency Agency (NECA).
PEFMA representatives said that the fan industry comprises 150 small and medium-sized units, with current exports of around $26 million and 20,000 employees. However, the exports have declined in the past few years due to various issues faced by the industry.
CEO EDB informed that the industry is well within its right to demand incentives from the government but it should be backed up with a business case to enhance exports and revenues to the exchequer in the medium to long term.
He emphasized the core competencies should be leveraged within the sector, which includes skills and competencies developed over the last 50 to 60 years, to create value-added products and cater to new markets and new customer preferences. He further added that EDB has initiated a tariff rationalization exercise for the budget year 2020-21 and requested proposals from the industry before the end of the current month.
Chairman Royal Fans informed that the electric fan industry is facing a number of hurdles in exporting to overseas markets which include restrictions by the banking sector on third party payments, absence of common warehousing facilities in major markets, and shipment and duty drawbacks.
He requested the government to extend its support and remove these barriers so that the true export potential of this sector can be realized. He added that Pakistani missions abroad are unable to provide reliable, accurate and comprehensive trade data on the pattern that is provided by other countries to their exporters to enable them to effectively penetrate foreign markets. He was optimistic about the potential offered by the China-Pakistan FTA-II which, he expected, will lead to the outsourcing of major engineering value chain components to Pakistan.
Director Champion Fans apprised that previously, TDAP has been extending 50% concession to the industry participants in international trade fairs/exhibitions, however, now the industry has to bear the cost. He proposed that TDAP should continue its previous practice to facilitate the industry for participation in international trade fairs.
He requested that EDB’s participation in such fairs/exhibitions be ensured as only EDB has the experience to truly understand and facilitate the engineering industry. Director Development Lahore Fans said that the government should extend support in tariff rationalization of input materials, provide support and funding for common R&D activities which cannot be undertaken by individual manufacturers, facilitate academia-industry linkages, and support the industry to incorporate and indigenize latest technologies like magnets and PCBs which are key components of DC-fans.
He further proposed that testing and certification facilities should be made available within the country at organizations like PCSIR etc, to not only enable the local industry to meet international standards but also ensure that substandard products do not enter the market.
This will save huge costs incurred for international certifications. Participants requested the EDB to play its role in coordinating with other government organizations and ensure a one-window interface for the local fan industry.
The NEECA representative also talked about the registration of solar panels and fan industry/LED lights for energy efficiency standards labeling, etc. He apprised that the provincial governments have initiated this exercise and issued instructions for volunteer registration of the domestic fan industry.