Pakistan-Malaysia Business Review: Chairman Pak-Malaysia Business Council of FPCCI

Pak-Malaysia Business Council of Federation of Pakistan Chambers of Commerce & Industry (FPCCI) is playing a vital role in facilitating business with both the countries. Pakistan and Malaysia have strong business relationship since 1970 when Pakistan imported Palm Oil from Malaysia for the first time.
The Pak-Malaysia Business Council welcomes the visit of the Prime Minister of Malaysia Tun Dr. Mahathir Bin Mohamad to Pakistan in the current month. Dr. Mahathir is a visionary person and has a huge following in Pakistan. His visit will play a major role in strengthening economic and other bilateral issues between the two brotherly countries.
The main items of Malaysian import and export are as follows:-
a) Main Exports:
Palm Oil and its derivatives, Semiconductors and Electronic Equipment, Petroleum and Liquefied Natural Gas, Wood and Wood Products, Rubber, Textiles, Chemicals Solar Panels, Machinery etc.
b) Main Imports:
Petroleum Products, Electronics, Machinery, Plastics, Vehicles, Iron and Steel Products, Chemicals.
Trade between Pakistan and Malaysia comprises of the following Major Items:
1) Exports from Pakistan to Malaysia
a) Cereals including Rice,
b) Fish and Crustaceans and Other Aquatic Invertebrates
c) Fertilizers
d) Other Made-up Textile Articles, Sets, Worn Clothing and Worn Textile Articles, Rags,
e) Mineral Fuels, Mineral Oil and Products of their distillation, Bituminous Substances, Minerals.
2) Imports in Pakistan from Malaysia
a) Palm Oil and Vegetable Fats and Oils and their Cleavage Products, prepared Edible Fats,
b) Machinery, Mechanical Appliances, Boilers, Parts thereof.
c) Organic Chemicals
d) Plastics and articles thereof.
e) Man-made Filaments, Strip and the like of Man-made Textile Materials.
The quantum of export to and import from Malaysia (mainly Palm Oil) is reflected from the following Table:-
In view of the trade deficit, Pakistan's Prime Minister and his team during their last visit to Malaysia urged the Malaysian Government to review the trade imbalance with a view to take all necessary steps to improve the position.
Palm Oil is the cheapest edible oil in the world and Pakistan is benefited by this oil imported from Malaysia and Indonesia.
Pakistan imports of Palm Oil are continuously increasing. It was about 2.57 Million tons in the year 2016, which increased to about 3.14 Million tons in 2018.
Malaysia has consistently been the top exporters of Palm Oil to Pakistan during past three decades. However, from 2014, Malaysian share is continuously declining, whereas Indonesian share is increasing, as would appear from the following statistics:-
The main reason is aggressive Indonesian Sales in Pakistan market after G2G Preferred Trade Agreement (PTA) with Indonesia.
The Malaysian Government has levied Export Duty on Crude Palm Oil (CPO) at certain level of prices (at above RM 2,250), which also discourages export of CPO. Therefore, for increase in export of Palm Oil from Malaysia, Export Duty on CPO need to be removed/rationalized by Malaysian Government, which will result in increased the sale of Malaysian Palm Oil by at least 20%.
Malaysian entered into Joint Ventures in Pakistan in the field of Power, Telecommunication, Oil Exploration, Edible Oil Refinery, dedicated Jetty and the largest bulking storage facility at Port Qasim.
Dr. Mahathir Bin Mohamad, the then Prime Minister of Malaysia initiated and also witnessed the signing ceremony of JV Agreements in the year 1993, for Joint Venture Projects with three Malaysian Palm Oil giants, namely FELDA (now FGV), K. L. Kepong & IOI with Pakistan's Westbury Group of Companies.
The salient features of Joint Venture Projects are briefly discussed below:-
A). JOINT VENTURE PROJECT OF EDIBLE OIL BULKING INSTALLATION
{Mapak Qasim Bulkers (Pvt.) Limited (MQB)}
MQB Terminal is built on about 7.5 acres of land at located in Edible Oil & Molasses Area at Port Qasim. The total storage capacity of MQB numerous Storage Tanks, (ranging from 500 tons to 6,000 tons capacity) is presently about 138,200 tons of Edible Oils, which happens to be the largest Edible Oil Terminal in Pakistan.
B). JOINT VENTURE PROJECT OF EDIBLE OIL REFINERY
{Mapak Edible Oils (Pvt.) Limited (MEO)}
MEO Edible Oil Refinery - a Joint Venture between FGV (previously FELDA) & KLK, Malaysia and Westbury Group, Pakistan was commissioned for commercial production in April, 2006 and formally inaugurated by the President of Pakistan on 25th July, 2006.
MEO also established Seed Crushing and Solvent Extraction Plant Unit for crushing and extraction of oil from oilseeds (Canola Seed, Rapeseed, Sunflower Seed and Soybean Seed).
C). JOINT VENTURE PROJECT OF LIQUID CARGO TRMINAL (JETTY) AT PORT QASIM
FWQ Enterprises (Pvt.) Limited, Karachi (FWQ)
FWQ is a Joint Venture Company of Westbury Pakistan and FGV Malaysia (previously FELDA). It established "Liquid Cargo Terminal" (LCT), adjacent to Marginal Wharf Berth - I (MW-I) at Port Qasim on Build, Operate & Transfer (BOT) Basis, which commenced its soft commissioning for operation on 30th March, 2009 and formally commissioned by the President of Pakistan on 14th August, 2009.
Liquid Cargo Terminal (LCT) is a state-of-the art facility, with a designed capacity of handling annually four Million tons of bulk liquid cargo. The Terminal is fully equipped for handling tanker vessels with liquid cargoes of Edible Oils, Molasses and its derivate and it is connected to on-shore, Common User Manifold, through an approach/pipe trestles.
By the grace of ALLAH, all these Joint Ventures of Pakistan with Malaysia have performed very well. Pakistan is a big supplier of IRRI and Basmati Rice. The Malaysian annual requirement is of one million Tons for domestic consumption. The share of Pakistan is around 100,000 Tons, which is about 10% of the annual requirement. Malaysian Government may consider this aspect so that Pakistani gets a better quota for Rice export to Malaysia at competitive price.
Pakistan also has keen interest to export Halal Food, Fruits, Mango and Kinnoo (Mandarin), vegetables etc. Incidentally, Malaysia has imposed 5 to 7% duties on import of Mango and Mandarin respectively, which need to be reviewed.
Pakistan welcomes Joint Ventures in Malaysia, apart from additional industry like;
-- Edible Oil,
-- Halal Food,
-- Infrastructure Development,
-- Telecommunication,
-- Palm Oil Plantation,
-- Port Development Activities
The Investment Policy of Pakistan is most attractive and foreigner can invest 100% in most industries, except infrastructure.
Pakistan High Commission in Malaysia has played a vital role in establishing Malaysia-Pakistan Business Council which is headed by Dato' Seri Nazir Merselam. The Pak-Malaysia Business Council of Federation of Pakistan Chambers of Commerce & Industry has invited a delegation from Malaysia in the 2nd half of this year, mainly to enhance possibility of export goods from Pakistan.
Pak-Malaysia Business intends to hold a one-country exhibition and an investment conference in Kuala Lumpur to boost joint ventures between the two brotherly countries.
Pak-Malaysia Business Council shall endeavor to make its best towards enhancing bilateral, economic and trade relations between Pakistan and Malaysia.

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Year                 Export              Import           Balance

                       from                from          of Trade

                   Pakistan            Malaysia

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2012                  252.4             1,855.9         (1,603.5)

2013                  219.0             1,653.6         (1,434.7)

2014                  227.4             1,215.7           (988.3)

2015                  229.0             1,058.1           (829.0)

2016                  171.6             1,170.2           (998.6)

2017                  167.4             1,176.8         (1,009.3)

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Calendar      Total Imports            Share of          Share of

Year          (Million/Tons            Malaysia         Indonesia

                                 (Million/Tons)    (Million/Tons)

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2014                  2.321               0.637             1.684

2015                  1.569               0.349             1.220

2016                  2.410               0.443             1.968

2017                  2.829               0.577             2.252

2018                  2.083               0.601             1.482

(Jan-Sep)

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