The mission leader of Malaysian palm oil delegation, Yong Chinn Fatt, said that Pakistan has emerged as a good business partner for Malaysian suppliers and hope that the opportunities for better business between the two countries will be more strengthened.
Speaking at a meeting of Pakistan Soap Manufacturers' Association (PSMA) he said that members of PSMA and Government of Pakistan always co-operate with us.
On account of their efforts we succeed to achieve our export target last year, for which we are thankful to all of you.
He said that he is well aware of treatment of Government of Pakistan with soap industry and has complete knowledge about the hardships of Pakistani soap industry.
He hoped that these matters must be solved by arranging meetings among the high officials of ministries of both the countries.
Welcoming the guests, the Chairman, PSMA, M. Yakub Karim, said Malaysia and Pakistan are business partners.
The major imports from Malaysia consist of edible oils and soap raw materials. And now finished soap is also coming sometime directly and occasionally via third country.
He noted that the import of highly invoiced finished soap is disturbing our production and sales in the local markets and at the same time it is lowering the imports of soap raw materials but under the WTO rules we had to open our market and there is no remedy except to reduce custom duties and rates of utilities by our government.
Commenting on anomaly in Custom Tariff and discriminatory treatment, Yakub Karim said that Palm Stearin is a better raw material than Tallow for making good quality soap and essentially needed for soap industry.
Its rates normally remain lesser than Tallow. Consequently our processing cost as well as total production cost will be lower. But the government has imposed exaggerating custom duty when imported by soap industry.
While another industry that is oleo chemical industry, which is only one in Pakistan, also use the same raw material to primarily manufacture Stearic Acid for cosmetic industry it means for oleo chemical industry it is an intermediately material.
They have been provided a special concession on the import of palm Stearine under SRO 444(I) 2001. They have to pay only 10 percent custom duty while for soap industry the duty is Rs 9500 PMT that comes to 43 percent.
They are taking undue advantage of this privilege. The consumption of stearic acid is very low and the project become un-viable, therefore, they have started making fatty acid from palm stearine and selling to soap industry. All the soap industries have same manufacturing facility.
They convert palm stearine into fatty acid and than soap. When the process and purpose is the same, why this discriminatory treatment is given to them to deprive the soap industry. It is highly unjustified and illogical.
The palm stearine comes from brotherly country Malaysia mostly at cheaper rates than tallow from Australia, USA and UK. If this anomaly is rectified its import from your country will increase by 70000 tonnes.
The difference of rate between palm stearine and tallow in international market is approximately 100 dollars PMT.
There will be additional saving of 7 million dollars in foreign exchange and the consumers will get the most essential item, used every day at cheaper price.
He explained that soap industry is one of the major and most important industries in Pakistan.
There are 150 manufacturing units in organised sector while approximately 500 small or cottage factories are making soap.
The total laundry soap production in both the sectors is approximately 420,000 tonnes per year.
The production of toilet soap is 80,000 tonnes while washing soaps 300,000 tonnes. These industries are paying Rs 16 billion to the national exchequer under various taxes, at the same time approximately 150,000 persons are on various types of jobs, directly and indirectly.
Beside industrial importers there are hundreds of commercial importers, who are catering the need of small and cottage soap manufacturers, therefore, the stated statistics may be more.
The basic raw materials - fatty matters are imported, as there is no significant local production, mainly from Australia, New Zealand, USA, Canada, Malaysia and Indonesia.
Siraj Kassim Teli President KCCI, Members of Managing Committee KCCI, Faisal Iqbal-Country Manager of Malaysian Palm Oil Promotion Council and members of Pakistan Soap Manufacturers' Association attended the meeting