Generic PBIT Presentation - Version 1 0 (4)
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1
Punjab Board of Investment and TradeUntapped Investment Opportunities in Punjab[ ]
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TODAY’S AGENDA
• Snapshot of Pakistan
• Snapshot of Punjab
• Overview of Potential Sectors
• Overview of PBIT
Potential & Opportunities in Punjab 2
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SALIENT FEATURES OF PAKISTAN
• Pakistan GDP is USD 162 Billion (current USD)
• Ranked as the 46th economy in the world.
• Population of 169 Million
Source: Data @ World BankPotential & Opportunities in Punjab 3
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PAKISTAN: INVESTMENT DESTINATION OF CHOICE
1: Geo-strategic LocationThe gateway to the energy rich Central Asian States, the financially liquid Gulf States and the economically advanced Far Eastern Economies
2: Trained Workforce Proficient in English, hardworking and skilled mostly in engineering and medicine
3: Positive Economic Outlook One of the fastest growing economies of the world having touched a GDP growth rate of 8.4% in 2005. Over 170 million consumers. Foreign Direct Investment has risen sharply from an average of $300 million in the 1990s to over $3.7 billion in 2008-09
4: Investment PoliciesTailor made to suit investor needs. No investment in Pakistan has ever been nationalized
5: Financial MarketsDevelopment of improved infrastructure in the stock exchanges of the country
Potential & Opportunities in Punjab 4
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Potential & Opportunities in Punjab 5
• 100% Foreign Equity is allowed
• Remittance of capital, profits, dividends, etc is allowed
• Advanced tax ruling
• International arbitration enforcement guide
• All economic sectors in Punjab open to FDI
• Equal Treatment of local and foreign Investors
• No government sanction is required
• Only 5% customs duty on import of parts not available in
Pakistan
POLICY INCENTIVES
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PUNJAB[ ]
Potential & Opportunities in Punjab 6
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• Punjab GPP 95 billion (Current USD)
• 58.5% of Pakistan’s National Economy
• Population of 93 Million
• Most industrialized province of Pakistan
• Fertile and well irrigated agricultural land
• Business conducive policy regime
• Political commitment to Private Sector
Development
PUNJAB – REGION OF UNTAPPED OPPORTUNITIES
PUNJAB
7Potential & Opportunities in Punjab
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MARKET SIZE COMPARISON
Source: Data @ World Bank
Punjab
German
y
Turkey
Thailan
d
France
South
Korea
Argentina
Canad
aNepal
Malaysi
a
Australi
a
93
8275
6863
4940
3429 27
22
Population in millionPotential & Opportunities in Punjab 8
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9588
63
52 4942
35
2521
128 6
PUNJAB LEADS MANY COUNTRIES IN GDP
Source: Data @ World Bank
GDP in USD billion
Potential & Opportunities in Punjab 9
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WORLD BANK: EASE OF DOING BUSINESS 2011
1
79 83102 107 116 123 127 134
167
Source: World Bank Ease of Doing Business Index 2011Potential & Opportunities in Punjab 10
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Potential & Opportunities in Punjab 11
AGRICULTURE[ ]
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Fres
h Bu
ffalo
milk
Whe
at
Cott
on li
nt
Fres
h Co
w M
ilk
Rice
, pad
dy
*Catt
le M
eat
Suga
r can
e
*Buff
alo
Mea
t
*Chi
cken
Mea
t
Cott
onse
ed
Man
goes
, gua
vas
Hen
egg
s, in
shel
l
Indi
geno
us G
oat M
eat
Dry
Chi
llies
& p
eppe
rs
Oni
ons,
dry
Pota
toes
Mai
ze
* Sh
eep
Mea
t
Ora
nges
12
34
56
78
910
1112
1314
1516
1718
19
Source: FAOSTAT – United Nations, 2008* Indigenous
GLOBAL RANKING IN AGRICULTURE & LIVESTOCK
Potential & Opportunities in Punjab 12
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EDGE IN AGRICULTURE
• Abundant Workforce; – 46% of total workforce in Pakistan employed in agriculture.
• Four distinct seasons;– Summers, winters, spring and monsoon, all essential for the
rich quality and flavor; characteristic of crops in Pakistan
• Fertile Soil;– Alluvial soil of five rivers
• Largest Contiguous Irrigation Network;– Largest system in the world covering 14 Million hectares.
– Total length of the canals is about 61,000 km with communal watercourses, farm channels, and field ditches covering another 1.6 million km.
Potential & Opportunities in Punjab 13
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POTENTIAL INVESTMENT OPPORTUNITIES
Potential & Opportunities in Punjab 14
Fruit Concentrate/ Pulp Plant facility
Cost; US$ 1.5 MillionLocation; Multan/RY Khan/Khanewl/BahawalpurCapacity: 3 Tons/ HourIRR: 23 %
Integrated cold chain facility
Export Pack houses: Cost/Pack house: USD 1.5 MillionLocations; All over Punjab14 Key strategic locations have been identifiedIRR: 36%
Cold Storage Cost/Cold store: USD 2.1 MillionLocations; 8 strategic locations including Rawalpindi/IslamabadIRR: 30.81%
Refrigerated Containers:
Cost of One Container Terminal: USD 8.5 MillionLocation; Lahore200 Refers and 50 CA ReefersIRR:32%
Fresh Fruit Processing (kinnow)
Cost: USD 1.0 Million IRR: 75%Location; Bhalwal Industrial Estate
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15UAE Pakistan Investment and Trade OpportunitiesPotential & Opportunities in Punjab 15
LIVESTOCK[ ]
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58
20 1814
6
0
10
20
30
40
50
60
70
Total Goats baffalos Cows Sheep
Potential & Opportunities in Punjab 16
Million Heads
• World's 3rd largest livestock population
• 5th largest milk producer
• 43 breeds of livestock
• Livestock growing @ 4.2%
Source: Punjab Development Statistics 2010
EDGE IN LIVESTOCK
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POULTRY
Potential & Opportunities in Punjab 17
• 25,000 Poultry Farms in the
Country.
• 400 Hatcheries
• 150 Feed Mills
• 5.51 M.M.T Feed
Consumption
• $ 4 Billion Turnover
• 10-12% annual growth rate
The per capita consumption of meat in Pakistan is
only 7 KG and 60-65 eggs annually.
Whereas developed world consumes 41 KG meat
and over 300 Eggs per capita per year
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HALAL[ ]Potential & Opportunities in Punjab 18
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HALAL MARKET POTENTIAL; THE SLEEPING GIANT
Global Halal Product Market worth USD 3 Trillion
Halal Food Market worth USD 67 Billion
Growing demand for certified and hygienic Livestock produce locally and internationally
Production of processed meat & dairy unable to keep pace with growing demand
Shortage valued at USD 240 million including Meat, Dairy, Poultry & Eggs
Potential & Opportunities in Punjab 19 (Source: Livestock Department
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Potential & Opportunities in Punjab 20
• Regional Halal market of more then 360 million consumers
• Direct neighbors (Iran, Afghanistan, China, India)
• Allows sea access to China, Afghanistan
• Land Routes to Central Asian States
• Sea Routes to Middle East.
PAKISTAN: DOOR TO REGIONAL HALAL MARKET
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OPPORTUNITY
Potential & Opportunities in Punjab 21
MEAT• Establishment of Integrated meat processing
facility
• Estimated cost US$ 5.7 Million,
• Location: Metropolitan Area
• Payback Period: 1.2Years
• Capacity:
• (small)6000 animals/ day
• (large) 500 animals/day• Bone Chips & Gelatin plant (Estimated cost US$ 3.4 Million, Pay back in 1.6
years• Halal Tallow, Soap & Cosmetics units
DAIRY•Dairy processing & value addition units
including Yogurt , Cheese, white cola/mint
cola, Goat milk products ,etc.
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• Availability of 40 hectares in the premises of Lahore Meat Processing Complex in the vicinity of Lahore
• Availability of raw material for by-products manufacturing industries from LMPC and slaughterhouses in the surrounding cities
• Excellent opportunity for by-products industries i.e. Soap, Gelatin, Cosmetics, Casing etc. as huge market for the by-products is available in Pakistan besides global halal market.
• Lahore Meat Company can enter into Joint Venture or any mode of Public-Private Partnership for provision of safeguard
• The interested parties are at liberty to offer their own proposals for Partnership or Joint Venture ship
HALAL PARK IN LAHORE
Potential & Opportunities in Punjab 22
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ENERGY [ ]
Potential & Opportunities in Punjab 23
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PROJECTED ENERGY DEMAND
Potential & Opportunities in Punjab 24
Source: Private Power & Infrastructure Board – Supply & Demand Position 2020
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ATTRACTIVE POLICY REGIMEFast – track project development at highest priority
Guaranteed purchase of electricity backed by Government of Pakistan
State Support - Modes of ownershipVarious Public Private Partnership models available Independent power producer (IPP) – Govt. of Punjab as a facilitator
Price setting model employed- “Cost plus tariff”-Minimum 15% ROE guaranteed net of taxes (US$ based)Many of the variable operating cost are passed-on in the tariff model
Special incentives Tax benefits (capital-gains tax, income tax and turnover tax exemption)
Hydrological risk taken by the power purchaser for hydropower projects. Up to 50 years of concession available
Potential & Opportunities in Punjab 25
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• HYDEL PROJECTS:• 317 Hydel Sites with a potential of 600MW
• CO-GENERATION AT SUGAR MILLS:• 46 Sugar Mills with a potential of 1100MW
• COAL BASED POWER PLANT:• 245 million MT of Coal with a potential of
86,100MW
• SOLAR POWER:• 2.9 million Hectares of unused desert land
with a potential of 6,105,263MW
PUNJAB’S ENERGY SECTOR POTENTIAL
Potential & Opportunities in Punjab 26
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MINING[ ]
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OPPORTUNITY TO DEVELOP 1 BILLION MT OF IRON ORE IN PUNJAB
• Flexible investment option for mining of Chiniot, Rajoa and Kalabagh Iron Ore deposits
• Setting up Steel mills utilizing the domestic Iron Ore
• RFP already issued
Deposits Status
Chiniot 123 MMT Proven
Rajoa 500 MMT Assessed
Kalabagh 300 MMT Estimated
Estimated value is over USD 170 billion
Policy highlights
• Public Private Partnership (PPP) model offered to facilitate the private investor
• Punjab Mineral Company (PMC) is established to work with the private sector
Background
• Large untapped deposits of Iron Ore in Punjab
• Authetication of deposits and techno-economic studies of Iron Ore deposits are in progress
• Iron Ore development is one of the top priorities of the government
• Fast-track development of Iron Ore projects
Image Source: Mines & Mineral’s Dept.; Information Source(s): Mines and Mineral Department Punjab 28
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CONSTRUCTION[ ]
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COMMERCIAL & MODERN HOUSING
• Opportunity for rapid construction of housing available for private investment in Gujranwala and Sialkot.
• Land is being purchased in Gujranwala (500 acres) and whereas that in Sialkot (200 acres) has been purchased.
• Registration and operation of Real Estate Investment Trusts (REITs)
• Allows pooling of capital of a large number of investors to purchase, develop and manage real estate assets
• Legal framework exists.• Government offers various tax incentives Market highlights
• Shortage of 7 Million houses• Need to construct 330,000 every year• Existing housing stock is 12.07 million
units of which 30% is aging• Pakistan has 2% population growth rate
and 33% of population resides in urban centers
• Punjab is urbanizing at a rate of 5-6% every year.
Project Highlights
• Gujranwala – 500 acres• Sialkot - 200 acres• Investment required – US$ 40 Million• Payback Period – 5 years• IRR - 45%• Can be executed independently/ through JV or Public-
Private Partnership
Image(s) Source(s): PBIT; Information Source(s): Housing Dept.,
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Lahore Ring Road (Southern Loop) with over 300k daily commuters
Background• Total length of the ring
road is 89 km or which 40km is completed (Northern Loop)
• 3 + 3 (with future provision of 4th lane, Metro and Service Roads)
• Project includes 5 interchanges and 17 underpasses
• Total construction costs at PKR 26 billion
• RFP for the project available at http://pportal.punjab.gov.pk/portal/docimages/29756EOI_Advertisement.pdf
Available opportunities
• Opportunity for the construction of the Southern Loop of the Lahore Ring Road for Private Investors
• To be executed under PPP Mode• The government shall provide land free of all
encumbrances• Concessions to be decided mutually upon
completion of detailed financial model
Market highlights• Automobile growth
over 12% per annum since 2002
• Urbanization has created the demand for quality road infrastructure
• Over 300k commuters transpire the existing roads of the southern loop daily
Image(s) Source(s): Transport Dept.; Information Source(s): Transport Dept.
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INDUSTRIAL ESTATES[ ]
Potential & Opportunities in Punjab 32
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PUNJAB: INDUSTRIAL ESTATES
Potential & Opportunities in Punjab 33
the biggest industrial estate of Pakistan: 3500 acres
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COMPANIES OPERATING CURRENTLY
Potential & Opportunities in Punjab 34
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PBIT[ ]
Potential & Opportunities in Punjab 35
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PBIT Structural Integration
Formulate and review national investment
policy
Innovate and re-think
investment in Punjab
Promote Punjab as the destination of
choice for local and foreign investors
Provide a one window facility and coordinate
with concerned ministries
Facilitate investment
through one window
arrangement
Coordinate & implement trade &
investment policies of Federal & Provincial
govt.
Liaise with private sector, trade bodies &
associations to promote
trade/investment
Initiate Sectoral investment proposals
and maintain investment database
Promote private/public
partnership models
Develop PBIT into a
Knowledge Center of excellence
Monitor progress of investment , appoint
commissions and negotiate agreements
Consider individual investment proposals and categories of investment.
Promote local and international investment
opportunities
Provide referral (matchmaking)
services for prospective investors & businesses
Alignment with Federal BOI goals
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PBIT’s Sphere of Influence
Chief Minister Punjab
Secretariat
AdministrationProvincialMinistries
Inspector General Punjab 36 Districts
PBIT
Federal Board ofInvestment
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IMAGE BUILDING
INVESTMENT GENERATION/
CREATION
INVESTOR FACILITATIO
N/ SERVICING
PBIT’s Role and Focus as an IPA
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PBIT’s Private Sector Focus
OVER 80% PROFESSIONALS
GOVERNMENT OFFICERS
SUPPORT STAFF
PROFESSIONALS
OVER 70% GOVT. OFFICERS
SUPPORT STAFF
TYPICAL DEPTS.
PBIT
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Services PBIT provides to Investors
1. One-to-One Relationship
2. Reduced Time to Market
3. Link Relevant Government Departments
4. Matchmaking between International businesses and local businesses
POTENTIALINVESTORS
PBIT’s ONE WINDOW
OPERATION
42 RELEVANT GOVERNMENT AGENCIES FOR ACQUIRING PERMISSIONS AND
AUTHORIZATIONS
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1. Build Punjab’s image and perception
2. Identify opportunity and develop concrete sellable projects
3. Match-make investors, generate MOU/EOI/Agreements and follow-up on these with related departments till execution
4. Undertake trade promotion to boost exports
5. Carry out Business Facilitation and undertake policy advocacy
PBIT’S STRATEGIC FOCUS AREA
Potential & Opportunities in Punjab 41
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Potential & Opportunities in Punjab 42
Punjab Board of
Investment &
Trade
23 – Aikmen
Road, GOR
1 ,Lahore.
Pakistan+92-42-99205201
www.pbit.gop.pk+92-42-99205171
OFFERING A ONE-WINDOW FACILITY TO BOOST
INVESTMENT AND TRADE IN PUNJAB
Get Connected
[ ]