EDB asks govt to encourage engineering industry

* Says domestic manufacturers of consumer goods facing stiff competition from foreign-made goods

By Fida Hussain

ISLAMABAD: The government has been warned that the local engineering industry will quickly lose market to cheaper China-made goods if the industry is not encouraged to export goods and carve a niche in the international market, a senior government official told the Daily Times on Thursday.

“This is the right time that the government encouraged the engineering industry. There must be an encouragement to the industry in Trade Policy 2006-07, otherwise the industry will not be able to keep its hold on consumers in the local market in the next few years as Chinese goods are quite competitive in terms of low prices,” CEO Engineering Development Board (EDB) Imtiaz Rastgar said.

He claimed that the engineering sector industry is well poised to take part in the country’s export from this fiscal.

The EDB has sent its proposals to the ministry of commerce for the upcoming trade policy in which we have identified household items such as refrigerators, deep freezers and washing machine as engineering goods to be exported.

Apart from 250,000 motorcycles, our plan also includes the export of more than 150,000 refrigerators in the current financial year.

The number of deep freezers and washing machines to be exported has not yet been decided, he said.

Consumer electronics and electrical sectors, which had seen a rapid growth in the previous two years, grew by a healthy 77 percent for electric motors, 20 percent for air conditioners, 12 percent for television sets, and 11 percent for refrigerators in the last fiscal.

Among automobiles, cars, trucks, light commercial vehicles (LCVs) jeeps and tractors exhibited healthy growths of 29, 58, 33 and 16 percent, respectively. Even the Planning Commission in the annual development plan 2006-07 said that automobile was distorted by the import of used cars and buses, especially the latter, whose production showed a decline of 62 percent.

Mr Rastgar said the production of steel items declined considerably in the last fiscal and there is a need that obsolete machinery, particularly coke ovens and the byproduct plant in the Pakistan Steel be repaired.

However, he said the government has allowed some considerable concessions for the import of raw materials used for manufacturing in the engineering sector. Pakistan is home to companies in the engineering sector, which are well known in some foreign countries. The need is to send their goods in the international market.

“The government has been striving for diversification of the country’s exports. In this regard, the EDB has sent its recommendation for taking steps on behalf of the government to encourage the engineering goods’ export in the current fiscal,” he said.

About the impression that there is saturation of capacity in some key sub-sectors, Mr Rastgar said the sector would expand once their goods got good response from consumers in the international market.

http://www.dailytimes.com.pk/default.asp?p...14-7-2006_pg5_3