The International Finance Corporation (IFC), a member of the World Bank Group, and a consortium of Pakistani banks, including HBL, Meezan Bank, Bank Alfalah and Habib Metropolitan Bank, would provide up to $50.2 million in financing to support Armstrong ZE Pvt. Ltd. in developing a greenfield tyre manufacturing facility in Pakistan.
According to a press release issued on Monday, the facility will be established in Gharo, Sindh to boost local tyre production.
“The financing comprises a $25 million loan from IFC alongside an up to $25.2 million equivalent investment in Pakistani rupees from local banks,” read the statement.
IFC said the project will introduce a locally manufactured international brand to Pakistan.
“The project is expected to create over 1,800 direct and indirect jobs and help increase the competitiveness of the sector through technology and know-how transfers,” it said.
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IFC shared that the number of registered vehicles in Pakistan has steadily grown over the last decade, reaching approximately 30 million vehicles in 2023, including 23 million two-wheelers.
“However, local tyre manufacturing remains constrained due to a lack of technical expertise and technology and a substantial informal market, making the country heavily dependent on imports,” it said adding that the reduction in these imports will also help improve the cash-starved country’s foreign currency reserves.
Armstrong ZE Pvt. Ltd. is a wholly owned company established of Pakistani origin, involved in the tyre business with operations in more than eighty-five countries.
“Armstrong ZE is deeply honoured to have earned the trust and support of IFC and our partner banks; HBL, Meezan Bank, Bank Alfalah and Habib Metropolitan Bank,” said Azim Yusufzai, Chairman of Armstrong ZE.
“Their investment in this transformative project is not just a financial endorsement but also a strong vote of confidence in our vision, capabilities, and potential to shape the future of tyre manufacturing.”
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As per the press release, IFC will also be supporting Armstrong through its Responsible Investing Support in Emerging Economies (RISE) advisory program, which will strengthen Armstrong’s climate risk management, resource efficiency, and environmental and social processes.
“IFC is committed to improving Pakistan’s value-added manufacturing capacity by partnering with strong companies that can scale up production,” said Khawaja Aftab Ahmed, IFC’s Regional Director for the Middle East, Pakistan, and Afghanistan.
“This investment exemplifies this commitment and will help improve consumer access to tyres while spurring the economy through job creation, increased productivity, and reduced reliance on imports,” he added.
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Meanwhile, Advisor to Finance Minister Khurram Schehzad stated that the Greenfield Tyre Manufacturing Facility project holds significant export potential, in addition to catering to a large domestic market.
“The project aims to save and generate foreign reserves for the country,” said Shehzad, adding that investor confidence has increased, and the investment environment is improving steadily.