Industrial sector: types, problems and solutions

1. Introduction
 Industry refers to that sector which continuously busy in production of
different goods and services in the economy. It is one of the most important
sectors of any country and contributes toward the growth and development
of country
 At the time of independence, Pakistan having only 34 industries out of more
than 900 industries of sub-continent and in these 34 industrial units majority
is of very small in size. So Pakistan is far behind because of this unequal
distribution of industrial units and another reason there is no sincere effort or
policy making done for improvement of this sector from the time of
independence or afterward.
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2. Industrial Sector
The industrial sector comprises Mining and
Quarrying, Manufacturing, Electricity generation &
distribution & Gas distribution and Construction
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3. Industrial Sector
Manufacturing Sector
The manufacturing sector classified into three
sub groups
I. Large Scale Manufacturing (LSM)
II. Small Scale Manufacturing (SSM)
III. Slaughtering
 Manufacturing accounts 13.5 percent of Gross
Domestic Product (GDP)
 14.1 percent of total employed labor force
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4. Industrial Sector
Share of Manufacturing
Manufacturing
as % of
2000 2005 2010 2013
GDP 14.7 18.3 18.5 13.5
Employment 11.5 13.6 13.0 14.1
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5. Industrial Sector
Manufacturing Sector in Regional Countries
As % of GDP 1995 2007
Thailand 30 35
China 34 32
Malaysia 26 28
Indonesia 24 27
Vietnam 15 21
Cambodia 10 19
Pakistan 16 19
Bangladesh 15 18
India 18 16
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6. Industrial Sector
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 Large Scale Manufacturing (LSM) at 10.9 percent of
GDP
 Small Scale Manufacturing which accounts 1.7 percent
of total

7. Industrial Sector
Large Scale Manufactures of Pakistan
S.NO. Groups
1 Textile & Apparel
2 Food, Beverage and Tobacco
3 Petroleum Group
4 Pharmaceutical
5 Non-Metallic Minerals Products
6 Automobile
7 Fertilizers
8 Chemicals
9 Electronic
10 Leather Products
11 Paper & Paper Board
12 Engineering Products
13 Tyres and Tubes 7

8. Industrial Sector
Group wise growth performance of Large Scale Manufacturing
S.NO. Groups 2008-09 2012-13
1 Textile & Apparel -0.7 0.91
2 Food, Beverage and Tobacco -10.5 7.43
3 Petroleum Group -9.2 13.32
4 Pharmaceutical 0.9 6.61
5 Non-Metallic Minerals Products 4.8 -0.66
6 Automobile -39.0 -11.95
7 Fertilizers 21.5 13.24
8 Chemicals 3.8 -5.03
9 Electronic -13.3 2.38
10 Leather Products 2.9 -1.74
11 Paper & Paper Board 0.8 17.82
12 Engineering Products 0.8 -15.44
13 Tyres and Tubes -1.8 17.61
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9. Industrial Sector
Textile Industry
 Pakistan is the world’s 4th largest producer and 3rd largest
consumer of cotton
 In addition, Pakistan is the world’s second largest cotton yarn
exporter and third largest cotton cloth manufacturer and
exporter
 Textile and Clothing industry has been the main driver of the
economy for the last 50 years in terms of foreign currency
earnings and jobs creation
 The textiles sub-sector occupies a-pivotal position in Pakistan’s
economy, accounting for 8 percent of
GDP with significant potential for growth
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10. Industrial Sector
Textile Industry
 Cotton contributed 24 percent of the industrial sector’s
value-added output
 Employing 40 per cent of industrial sector’s work force
 Using 40 percent of bank credit given to the industrial sector
 Accounting for nearly 55 percent of Pakistan’s exports
 Provides a livelihood to more than 10 million farming
families
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11. Industrial Sector
Textile Industry
Global Overview
 Export of textile and clothing trade has slightly increased from US $ 706
billion in 2011 to US $ 709 billion in 2012 showing an increase 0.425
percent
 Besides this the exports of Pakistani textile and clothing trade has
decreased from US$ 13.7 billion in 2011 to US$ 12.9 billion in 2012
about decrease of 5.84 percent
 China continued to be the leading exporter of textiles and clothing
 In 2012-13 its share in world exports was 33 percent for textiles and to
38 percent for clothing
 European Union and United States are the major markets for clothing,
accounting for 38 percent and 20 percent respectively of world imports in
2012.

12. Industrial Sector
Exports of Textile and Clothing (US $ Billions)
2008 2009 2010 2011 2012
World Textile 250.2 209.9 250.7 294 286
World Clothing 361.9 315.1 351.5 412 432
Total 612.0 525 602.2 706 709
Pakistan Textile 7.2 6.5 7.8 9.1 8.7
Pakistan
Clothing
3.9 3.4 3.9 4.6 4.2
Total 11.1 9.9 11.7 13.7 12.9
Percentage of
World Trade
1.81 1.89 1.96 1.94 1.81
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13. Industrial Sector
Domestic Overview
Textile Industry Contains
1. Cotton Spinning Sector ( 472 Spinning Units)
2. Cloth Sector
3. Textile Made-Up Sector
Towels, Tents and Canvas, Cotton Bags, Bed Wear, Knitwear, Ready Made
Garments
4. Art Silk and Synthetic Weaving Industry
5. Woolen Industry ( carpets, rugs)
6. Jute Industry
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14. Industrial Sector
Engineering Sector
 Engineering sector account for around 63 product of
the world
 To achieve significant share of this market ----- we
have to gearing up our universities, poly-techniques
and factories--- for the kind of manufacturing and
design capabilities required by the world market.
 Engineering Development Board (EDB)---- to pursuit
this objective
EDB has been assigned the task of strengthening the engineering sector
and integrating it with the world market to make it the driving force for
economic growth
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15. Industrial Sector
Automobile Industry
 Automobile Industry is very dynamic driven by consumer
choice, comfort, and design.
 Wheelers, motorcars, light commercial vehicles, jeeps,
tractors, busses and trucks.
 Pakistan achieved some level of localization, it plans to
move to the next level of value addition.
 The consumption of automobiles in Pakistan is much
lower than the countries of the region ------latent demand
and potential to grow
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16. Industrial Sector
Fertilizer Industry
 The provider of one of the key inputs for crop
production----significant role in the agriculture
growth of Pakistan
 Total 9 urea, one DAP, three NP, three SSP, two CAN, one
NPks…..Total production capacity is 8,965 thousands tons per
annum.
 The actual production is 5,828 thousand tones per annum in 2012-13.
 Fertilizer sector is the second largest consumer of gas after the
power sector.
 The problem of gas supply badly affect its production
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17. Industrial Sector
Cement Industry
 Play a vital role in socio economic development to promote the export
and creates employment opportunities to both skilled and unskilled
manpower.
 Cement production is the most energy intensive within LSM.
 In 2000s the cement manufactures shifted from natural gas to coal.
 DG khan Cement, Lucky Cement, Fauji Cement have started using Bio-
Fuels.
 Bestwary, Cherat, Fecto, Lucky have installed heat recovery plants to
generate their own electricity.
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18. Industrial Sector
Cement Industry
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Cement Production Capacity and Dispatches (Million Tonnes)
Years Production
Capacity
Capacity
Utilization
(%)
Local
Dispatches
Exports Total
Dispatches
2009-10 45.34 75.46 23.57 10.65 34.22
2010-11 42.37 74.17 22.00 9.43 31.43
2011-12 44.64 72.83 23.95 8.57 32.52
2012-13 44.64 74.89 25.06 8.37 33.43
2013-14
(Jul-April)
44.64 75.23 21.30 6.69 27.99

19. Sugar industry
 Sugar is most common ingredient in our daily food like soft drinks, tea, bakery items
etc.
 Pakistan is the 5th largest country in the world in terms of area under sugar cane
cultivation, 11th by production .The sugar industry in Pakistan is the 2nd largest agro
based industry having up to 88 sugar mills with annual crushing capacity of over
43,913,336 tones. Pakistan consuming 4.4 million metric tons approximately.
 At the time of partition in 1947 only seven sugar mills. So Pakistan was importing sugar
from other countries. The first sugar mill was established in Sindh in 1961. Till 1998
there were 75 sugar mills in the country with the capacity of 2.4 million metric tons. In
2010 Pakistan had 81 sugar mills. Sugarcane is the primary raw material for the
production of sugar. After the independence, the area under cultivation had increased
more rapidly than any other major crop.
 Pakistan exports sugar products to Europe, Far Eastern (Korea, Taiwan and Philippines),
and Middle East (Dubai and Saudi Arabia).
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20. Sports industry
 Sports industry is very profitable industry of Pakistan. Pakistan making high
quality sports products which have very high demand in international markets.
The overall exports of sports goods in July 2013 were recorded at $28.067 million.
 Sialkot is famous for producing sports goods in the world.
 Pakistan exports sports goods to Germany, USA, UK, France and Italy. Others
were Spain, Netherlands, Hong Kong, Denmark, Canada, Belgium, Dubai and
Chile.
 Products:Inflatable soccer balls, Sports gloves etc
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21. Industrial Sector
Public Sector Industry
The public sector corporations:
 National Fertilizer Corporation of Pakistan
(NFC)
 Pakistan Automobile Corporation Ltd.
(PACO)
 State Engineering Corporation of Pakistan
(SEC)
 Pakistan Steel
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22. Industrial Sector
Other Industries
 Vegetable ghee and cooking oil industry
 Chemical industry
 Jute industry
 Mining industry
 IT industry
 Live stock industry
 Engineering and electronics items industry
 Food, beverages and tobacco industry
 Petroleum industry
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23. Industrial Sector
Problems of Industrial Sector
 Lack of Capital
 Inadequate Infrastructure
 Political Instability
 Technological Backwardness
 Low Foreign Investment
 Smuggling
 High Inflation Rate
 Limited Markets
 Low literacy rate
 Low production of Raw Material
 Energy Crisis
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24. Industrial Sector
 Make well planned strategies and policies that are able to run the industrial
sector in efficient way.
 Provide loans on easy installments with low interest rate to industrialists and
increase credit and other financing facilities to fulfill the need of capital for
investment.
 Improve infrastructure especially establish road networks to link industrial
units with markets.
 Make sure the supply of electricity to industrial sector by increasing the
electricity generation through focus on alternative methods to produce
electricity.
 Improve law and order situation to increase the foreign investment. Create
such environment in a country in which foreign investor feel secure.
 Establish new industrial estates to expand the size of industry and provide tax
concession to investors in investing in new industrial estates.
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Solutions

25. Industrial Sector
Solutions
 Make economic condition of a country healthier through better fiscal and
monetary policy. It will help in increasing the investment in industrial sector
also.
 Provide sufficient and cheap raw material to industry to lowering the cost by
increasing the production of raw material.
 Explore new markets for industrial products and increase the quality of local
manufactured products to compete in foreign markets.
 Using the advanced technologies to increase the efficiency. It will help in
lowering the cost and increasing the output.
 Increase technical institutions and provide skills to labor to increase the
productivity of labor.
 Focus on increasing the exports and especially on decreasing the imports by
making imports substitute goods in local industries.
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