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Punjab Board of Investment & Trade


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Punjab Board of Investment and Trade (PBIT) is Punjab’s premier Investment promotion agency linking Punjab to a global network of progressive investors – promoting projects with burgeoning potential and high IRR. This one-window-operation also facilitates investors by streamlining procedures and institutional processes through proactive policy advocacy within the government.

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Punjab Board of Investment & Trade

  1. 1. [Punjab Board of Investment and Trade Untapped Investment Opportunities in Punjab ] 1
  2. 2. TODAY’S AGENDA• Snapshot of Pakistan• Snapshot of Punjab• Overview of Potential Sectors• Overview of PBIT Potential & Opportunities in Punjab 2
  3. 3. SALIENT FEATURES OF PAKISTAN • Pakistan GDP is USD 162 Billion (current USD) • Ranked as the 46th economy in the world. • Population of 169 Million Potential & Opportunities in Punjab 3Source: Data @ World Bank
  4. 4. PAKISTAN: INVESTMENT DESTINATION OF CHOICE 1: Geo-strategic Location The gateway to the energy rich Central Asian States, the financially liquid Gulf States and the economically advanced Far Eastern Economies 2: Trained Workforce Proficient in English, hardworking and skilled mostly in engineering and medicine 3: Positive Economic Outlook One of the fastest growing economies of the world having touched a GDP growth rate of 8.4% in 2005. Over 170 million consumers. Foreign Direct Investment has risen sharply from an average of $300 million in the 1990s to over $3.7 billion in 2008-09 4: Investment Policies Tailor made to suit investor needs. No investment in Pakistan has ever been nationalized 5: Financial Markets Development of improved infrastructure in the stock exchanges of the country Potential & Opportunities in Punjab 4
  5. 5. POLICY INCENTIVES• 100% Foreign Equity is allowed• Remittance of capital, profits, dividends, etc is allowed• Advanced tax ruling• International arbitration enforcement guide• All economic sectors in Punjab open to FDI• Equal Treatment of local and foreign Investors• No government sanction is required• Only 5% customs duty on import of parts not available in Pakistan Potential & Opportunities in Punjab 5
  6. 6. Potential & Opportunities in Punjab 6
  7. 7. PUNJAB – REGION OF UNTAPPED OPPORTUNITIES • Punjab GPP 95 billion (Current USD) • 58.5% of Pakistan’s National Economy • Population of 93 Million • Most industrialized province of Pakistan • Fertile and well irrigated agricultural land PUNJAB • Business conducive policy regime • Political commitment to Private Sector Development 7Potential & Opportunities in Punjab
  8. 8. MARKET SIZE COMPARISON 93 82 75 68 63 49 40 34 29 27 22 Population in million Potential & Opportunities in Punjab 8Source: Data @ World Bank
  9. 9. PUNJAB LEADS MANY COUNTRIES IN GDP 95 88 GDP in USD billion 63 52 49 42 35 25 21 12 8 6 Potential & Opportunities in Punjab 9Source: Data @ World Bank
  10. 10. WORLD BANK: EASE OF DOING BUSINESS 2011 167 127 134 116 123 102 107 79 83 1 Potential & Opportunities in Punjab 10Source: World Bank Ease of Doing Business Index 2011
  11. 11. Potential & Opportunities in Punjab 11
  12. 12. 1 Fresh Buffalo milk 2 Wheat 3 Cotton lint 4 Fresh Cow Milk 5 Rice, paddy 6 *Cattle Meat 7 Sugar cane 8 *Buffalo Meat Potential 9 *Chicken Meat 10 Cottonseed 11 Mangoes, guavas 12 Hen eggs, in shellSource: FAOSTAT – United Nations, 2008 & Opportunities in Punjab 13 Indigenous Goat Meat 14 Dry Chillies & peppers 15 Onions, dry 16 Potatoes 17 Maize GLOBAL RANKING IN AGRICULTURE & LIVESTOCK * Sheep Meat12 18 19 Oranges * Indigenous
  13. 13. EDGE IN AGRICULTURE• Abundant Workforce; – 46% of total workforce in Pakistan employed in agriculture.• Four distinct seasons; – Summers, winters, spring and monsoon, all essential for the rich quality and flavor; characteristic of crops in Pakistan• Fertile Soil; – Alluvial soil of five rivers• Largest Contiguous Irrigation Network; – Largest system in the world covering 14 Million hectares. – Total length of the canals is about 61,000 km with communal watercourses, farm channels, and field ditches covering another 1.6 million km. Potential & Opportunities in Punjab 13
  14. 14. POTENTIAL INVESTMENT OPPORTUNITIES Fruit Concentrate/ Cost; US$ 1.5 Million Location; Multan/RY Khan/Khanewl/Bahawalpur Pulp Plant facility Capacity: 3 Tons/ Hour IRR: 23 % Integrated cold Export Pack houses: Cost/Pack house: USD 1.5 Million chain facility Locations; All over Punjab 14 Key strategic locations have been identified IRR: 36% Cold Storage Cost/Cold store: USD 2.1 Million Locations; 8 strategic locations including Rawalpindi/Islamabad IRR: 30.81% Refrigerated Cost of One Container Terminal: USD 8.5 Million Location; Lahore Containers: 200 Refers and 50 CA Reefers IRR:32% Fresh Fruit Cost: USD 1.0 Million IRR: 75% Processing (kinnow) Location; Bhalwal Industrial Estate Potential & Opportunities in Punjab 14
  15. 15. UAE Pakistan Investment and TradePotential & Opportunities in Punjab 15 Opportunities
  16. 16. EDGE IN LIVESTOCK• Worlds 3rd largest livestock 70 population Million Heads 60 58• 5th largest milk producer 50• 43 breeds of livestock 40• Livestock growing @ 4.2% 30 20 18 20 14 10 6 0 Source: Punjab Development Statistics 2010 Total Goats baffalos Cows Sheep Potential & Opportunities in Punjab 16
  17. 17. POULTRY• 25,000 Poultry Farms in the The per capita consumption of meat in Pakistan is Country. only 7 KG and 60-65 eggs annually. Whereas developed world consumes 41 KG meat• 400 Hatcheries and over 300 Eggs per capita per year• 150 Feed Mills• 5.51 M.M.T Feed Consumption• $ 4 Billion Turnover• 10-12% annual growth rate Potential & Opportunities in Punjab 17
  18. 18. Potential & Opportunities in Punjab 18
  19. 19. HALAL MARKET POTENTIAL; THE SLEEPING GIANT  Global Halal Product Market worth USD 3 Trillion  Halal Food Market worth USD 67 Billion  Growing demand for certified and hygienic Livestock produce locally and internationally  Production of processed meat & dairy unable to keep pace with growing demand  Shortage valued at USD 240 million including Meat, Dairy, Poultry & Eggs Potential & Opportunities in Punjab 19(Source: Livestock Department
  20. 20. PAKISTAN: DOOR TO REGIONAL HALAL MARKET• Regional Halal market of more then 360 million consumers• Direct neighbors (Iran, Afghanistan, China, India)• Allows sea access to China, Afghanistan• Land Routes to Central Asian States• Sea Routes to Middle East. Potential & Opportunities in Punjab 20
  21. 21. OPPORTUNITY MEAT DAIRY• Establishment of Integrated meat processing •Dairy processing & value addition units facility including Yogurt , Cheese, white cola/mint • Estimated cost US$ 5.7 Million, cola, Goat milk products ,etc. • Location: Metropolitan Area • Payback Period: 1.2Years • Capacity: • (small)6000 animals/ day • (large) 500 animals/day• Bone Chips & Gelatin plant(Estimated cost US$ 3.4 Million, Pay back in 1.6 years• Halal Tallow, Soap & Cosmetics units Potential & Opportunities in Punjab 21
  22. 22. HALAL PARK IN LAHORE• Availability of 40 hectares in the premises of Lahore Meat Processing Complex in the vicinity of Lahore• Availability of raw material for by-products manufacturing industries from LMPC and slaughterhouses in the surrounding cities• Excellent opportunity for by-products industries i.e. Soap, Gelatin, Cosmetics, Casing etc. as huge market for the by- products is available in Pakistan besides global halal market.• Lahore Meat Company can enter into Joint Venture or any mode of Public-Private Partnership for provision of safeguard• The interested parties are at liberty to offer their own proposals for Partnership or Joint Venture ship Potential & Opportunities in Punjab 22
  23. 23. Potential & Opportunities in Punjab 23
  24. 24. PROJECTED ENERGY DEMAND Source: Private Power & Infrastructure Board – Supply & Demand Position 2020 Potential & Opportunities in Punjab 24
  25. 25. ATTRACTIVE POLICY REGIMEFast – track project development at highest priorityGuaranteed purchase of electricity backed by Government of PakistanState Support - Modes of ownership Various Public Private Partnership models available Independent power producer (IPP) – Govt. of Punjab as a facilitatorPrice setting model employed- “Cost plus tariff”- Minimum 15% ROE guaranteed net of taxes (US$ based) Many of the variable operating cost are passed-on in the tariff modelSpecial incentives Tax benefits (capital-gains tax, income tax and turnover tax exemption)Hydrological risk taken by the power purchaser for hydropower projects. Up to 50 years of concession available Potential & Opportunities in Punjab 25
  26. 26. PUNJAB’S ENERGY SECTOR POTENTIAL• HYDEL PROJECTS: • 317 Hydel Sites with a potential of 600MW• CO-GENERATION AT SUGAR MILLS: • 46 Sugar Mills with a potential of 1100MW• COAL BASED POWER PLANT: • 245 million MT of Coal with a potential of 86,100MW• SOLAR POWER: • 2.9 million Hectares of unused desert land with a potential of 6,105,263MW Potential & Opportunities in Punjab 26
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  28. 28. OPPORTUNITY TO DEVELOP 1 BILLION MT OF IRON ORE IN PUNJAB Deposits Status Estimated value is over USD 170 billion Chiniot 123 MMT Proven• Flexible investment option for mining of Chiniot, Rajoa and Rajoa 500 MMT Assessed Kalabagh Iron Ore deposits Kalabagh 300 MMT Estimated• Setting up Steel mills utilizing the domestic Iron Ore Policy highlights• RFP already issued • Public Private Partnership (PPP) model Background offered to facilitate the private investor • Large untapped deposits of Iron Ore in Punjab • Punjab Mineral Company (PMC) is established to work with the private • Authetication of deposits and techno-economic sector studies of Iron Ore deposits are in progress • Iron Ore development is one of the top priorities of the government • Fast-track development of Iron Ore projects 28Image Source: Mines & Mineral’s Dept.; Information Source(s): Mines and Mineral Department Punjab
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  30. 30. COMMERCIAL & MODERN HOUSING • Opportunity for rapid construction of housing available for private investment in Gujranwala and Sialkot. • Land is being purchased in Gujranwala (500 acres) and whereas that in Sialkot (200 acres) has been purchased. • Registration and operation of Real Estate Investment Trusts (REITs) • Allows pooling of capital of a large number of investors to purchase, develop and manage real estate assets • Legal framework exists. • Government offers various tax incentives Market highlights • Shortage of 7 Million houses Project Highlights • Need to construct 330,000 every year • Existing housing stock is 12.07 million • Gujranwala – 500 acres units of which 30% is aging • Sialkot - 200 acres • Pakistan has 2% population growth rate • Investment required – US$ 40 Million and 33% of population resides in urban • Payback Period – 5 years centers • IRR - 45% • Punjab is urbanizing at a rate of 5-6% • Can be executed independently/ through JV or Public- every year. Private Partnership 30Image(s) Source(s): PBIT; Information Source(s): Housing Dept.,
  31. 31. Background Market highlights• Total length of the ring • Automobile growth road is 89 km or which over 12% per annum 40km is completed since 2002 (Northern Loop) • Urbanization has• 3 + 3 (with future created the demand for provision of 4th lane, quality road Metro and Service infrastructure Roads) • Over 300k commuters• Project includes 5 transpire the existing interchanges and 17 roads of the southern underpasses loop daily Available opportunities• Total construction costs at PKR 26 billion • Opportunity for the construction of the Southern Loop of the Lahore Ring Road for Private Investors • To be executed under PPP Mode • The government shall provide land free of all encumbrances • Concessions to be decided mutually upon completion of detailed financial model 31 Image(s) Source(s): Transport Dept.; Information Source(s): Transport Dept.
  32. 32. Potential & Opportunities in Punjab 32
  33. 33. PUNJAB: INDUSTRIAL ESTATES the biggest industrial estate of Pakistan: 3500 acres Potential & Opportunities in Punjab 33
  34. 34. COMPANIES OPERATING CURRENTLY Prime land for urban retail trade is also available Potential & Opportunities in Punjab 34
  35. 35. Potential & Opportunities in Punjab 35
  36. 36. Chairman/ Chief Minister BOD Advisory Board Vice Chairman CEO COO DG DG Finance & DGDG Projects Marketing/ Admn facilitation IBD Director Agriculture Director Legal Director Textile Director One window Director Director Foreign Infrastructure Interface & chambers Director energy & Mines 36
  37. 37. PBIT Structural Integration Alignment with Federal BOI goals Provide a one Monitor progress of Promote local andFormulate and review Initiate Sectoral window facility and investment , appoint international national investment investment proposals coordinate with commissions and negotiate investment policy and maintain concerned ministries agreements opportunities investment database Coordinate & Innovate and implement trade & re-think investment policies of Promote investment in Federal & Provincial private/public Punjab govt. partnership models Consider individual investment proposals Provide referral Facilitate and categories of (matchmaking) investment investment. services for Promote Punjab as Develop PBIT prospective through one into a the destination of window investors & choice for local Knowledge businesses arrangement Center of and foreign investors excellence Liaise with private sector, trade bodies & associations to promote trade/investment 37
  38. 38. PBIT’s Sphere of Influence Federal Board of Investment Chief Minister Punjab SecretariatProvincial PBIT AdministrationMinistries Inspector General Punjab 36 Districts 38
  39. 39. PBIT’s Role and Focus as an IPA 39
  41. 41. Services PBIT provides to Investors POTENTIAL INVESTORS1. One-to-One Relationship2. Reduced Time to Market PBIT’s3. Link Relevant Government ONE WINDOW OPERATION Departments4. Matchmaking between International businesses and 42 RELEVANT GOVERNMENT AGENCIES local businesses FOR ACQUIRING PERMISSIONS AND AUTHORIZATIONS 41
  42. 42. PBIT’S STRATEGIC FOCUS AREA1. Build Punjab’s image and perception2. Identify opportunity and develop concrete sellable projects3. Match-make investors, generate MOU/EOI/Agreements and follow-up on these with related departments till execution4. Undertake trade promotion to boost exports5. Carry out Business Facilitation and undertake policy advocacy Potential & Opportunities in Punjab 42
  43. 43. [ ] Get Connected Potential & Opportunities in Punjab 43