ISLAMABAD: The government has asked Pakistan Electric Fan Manufacturers Association (PEFMA) to share its own business plan to replace inefficient fans as the government is unable to extend any financial support in this regard due to financial constraints, well-informed sources told Business Recorder.
The decision was taken at meeting held on July 19, 2024 under the chairmanship of Additional Secretary-1, Ministry of Industries and Production convene to further deliberate upon the matter and to develop the roadmap for enhancing local production capacity of efficient fans.
Commenting on NEECA’s proposed financing plan, the chairman of PEFMA informed that there are no capacity issues as the local fan industry has 6-7 million units/annum excess capacity and during first four years of the plan, current capacity will be sufficient to meet the set targets in the plan.
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He further informed that the capacity is closely linked with demand and with mature demand capacity will be enhanced organically. He affirmed that the local fan industry is fully capable to meet the additional targeted demand given in the Financial Plan.
He informed that the only constraint is working capital as the current capacity utilisation is around 40-50 per cent, the supply chain cycle is of 45-60 days and to maximise capacity utilisation fan manufacturers require 2-3 times working capital, however, he endorsed the financing plan for replacement of inefficient fans is very much achievable.
On his repeated proposal to provide soft loans to fan manufacturers as an aid, the chair categorically informed that the government is not in a position to provide financial assistance, the fan industry has to rely on their own resources and have to provide comments on the financial plan for replacement of inefficient fans besides providing a plan viable for local industry.
The chairman PEFMA sought further time to discuss the financial plan with PEFMA members and promised to provide endorsement/business plan of PEFMA in writing along with data of fan industry.
Regarding availability of fan industry data, the FBR (Customs) informed that the data of registered fan manufacturers utilizing concessionary regime of SRO 565(I)/2006 will be gathered and shared. The FBR (Sales Tax) informed that they will also expedite the provision of fan industry data available with them.
The representative from the NEECA informed that they submitted documents, relating to development of portal through Punjab Information Technology Board (PITB), to Power Division which are required by Finance Division for budget allocation. Power Division will further make progress in the matter.
After detailed deliberations, the meeting took the following decisions; (i) PEFMA will provide viable business plan based on their own resources along with fan industry data; and (ii) FBR (ST and Customs) and PSQCA shall ensure provision of data of fan industry available with them.
The power minister has recently informed a parliamentary committee that the country’s electricity demand for fans is about 8,000MW, which is limited only for a few months.
The PTI government had announced to replace inefficient fans and the former Minister for Science and Technology, Senator Shibli Faraz had visited a factory in Gujrat to see manufacturing of new energy efficient fans.
Former Minister for Power Khurram Dastgir Khan had also announced his government’s plan to replace millions of inefficient fans to save electricity.
Copyright Business Recorder, 2024
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