Chinese investors have shown keen interest for buying land to establish 'Chinese Textile Zone' in the proposed 'Textile City' at Karachi.
This was observed during separate meetings of the officials of Pakistan Textile City and Board of Investment with a 45-member Chinese delegation comprising government officials and businessmen, led by the Zhang Lei, Director General of the Department of Foreign Trade & Economic Co-operation, Jiangsu Provincial Government.
Other government officials were Director of Shaoxing County Foreign Trade & Economic Co-operation Bureau and the Second Secretary Department of Foreign Economic Co-operation, Ministry of Commerce, People's Republic of China. The objective of the delegation's visit was to evaluate the potential for setting up businesses outside China.
The delegation was organised by Consul General of Pakistan at Shanghai, and the E-commerce Gateway Pakistan. The meetings were held at the office of Pakistan Textile City here on Wednesday.
Dr Khursheed Nizam, President, E-commerce Gateway Pakistan, told Business Recorder that the deal for 200 acres land for establishing 'China Textile Zone' in Pakistan Textile City was expected and around $300 million investment was likely to come into the country after finalisation of the deal with Chinese investors.
Zaheer Hussain, CEO, Pakistan Textile City, in his presentation said that Pakistan Textile City, with a current paid-up capital of Rs 1.1 billion, comprises 1250 acres land and is a dedicated zone for the manufacture of value-added textile products. The estate is to be located in the eastern Industrial Zone of Port Qasim, Karachi, about 6 km from the National Highway.
He said that the project offers investors the facility to set up textile manufacturing plants in an integrated city and also aims to make Pakistan an international reference point in the textile sector.
Booking of plots for investors will start in between second and third quarters of 2006, while the facility is expected to be operational by June 30, 2007.
He said that if any investor wanted to start business before the given time, he could do so immediately and there was no restriction on it, "if the Chinese investors want to start 'Chinese Textile City' before June 2007."
He said: "We are ready to provide land to Chinese investors for setting up textile zone on competitively cheaper prices than the market rates." He said that the land would be leased out for 50 years, and the lease contract would be renewable.
All basic facilities, including exclusive textile environment, stable power, continuous water supply, sewerage and storm drainage system, security and fire fighting systems, effluent treatment plant, roads and advanced telecommunications infrastructure, proximity to port and one-window and all services would be managed by Pakistan Textile City.
About the objectives of this mega project he said it is committed to provide desired state-of-the-art infrastructure, augment production capacity of units, meet the challenges posed by WTO regulations, boost Pakistan's exports and foreign exchange earnings, facilitate import and export processes and to provide employment opportunities.
He said that textile processing lab, IT infrastructure, technical training centres, computerised weigh station, banks, freight forwarders, travel agents, courier company, post office, trauma centre, restaurant, public transport, mosque, fire station and private security would be established in the Textile City.
Different zones including denim, apparel dyeing, textile processing for bed inen, hosiery and knitwear, towels and weaving and the supporting industries including zips, buttons and threads, printing and packaging, warehousing and engineering workshops are planned to set up in the Textile City.
He said that in post-MFA environment specialised industrial zones would enhance competitive edge with concentrated synergistic environment, improve cost competitiveness by removal of inefficiencies, one-window support services, state-of-the-art infrastructure, stable supply of clean industrial water, electricity, gas and telecommunication network. Among advantageous of business environment he mentioned fast growing economy, among top five cotton growers, high quality cotton available below international price, free import of cotton permitted, skilled personnel at low cost, ample availability of cheap labour, low manufacturing cost, large and growing domestic market.
About incentives for foreign investment he said that there would be seamless investment procedures without government red tape, located at major port, 100 percent ownership or joint venture, full repatriation of profits, dividends and capital, repatriation of royalty, technical and franchise fees, import of machinery for high tech, value-added & export industries currently 5 percent, zero rated duties on raw material & accessories, investment allowance 50 percent.
He said that the textile sector comprises over 60 percent of total exports of Pakistan. Recognising the importance of this sector to economy of Pakistan the government, under personal direction of the Prime Minister, felt that it was essential to create a state-of-the-art dedicated industrial environment to upgrade the textile processing industry in Pakistan. It is envisioned that Textile City will upgrade the quality of the local industry and encourage leading international textile processors to set up JVs and individual operations in this state of the art environment
The objectives of the project include raising the level of local textile industry by creating a state-of-the-art environment, attract and encourage leading foreign textile industries to set up operations in Pakistan, encourage an environment for attracting joint ventures between foreign and local companies, attract leading edge technology to Pakistan, and to create an environment where economies of scale can be best achieved.
Rauf Sheikh, Director General, Board of Investment, in his presentation said that many policies including fiscal reforms, deregulation and privatisation, liberal investment regime and improved governance were being pursued by the present government to boost the country's economy.
He said that the improving economic indicators showed the improving economic situation in the country with the GDP growth of 8.4 percent, total exports $14.41 billion, foreign direct investment $1524 million and forex reserves $12.61 billion. He said that there are 83 industrial estates, zones and export processing zones in the different cities of the country.
Regarding Pak-China trade relations he said that total trade between the two countries was $1,024.9 million in the year while the FDI from China was $34 million in the year 2004-05, which is much below potential.
He said that 31 Chinese companies have already been working in Pakistan on different projects of engineering, oil and gas, infrastructure, mining, power, IT/telecom, automobiles and others.
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