Turkish company keen to invest in Pakistan

ISLAMABAD: Turkish company, LIMAK Group has shown great interest in investing in various sectors of Pakistan's economy.

"M/s LIMAK Group is keenly interested in Pakistan in energy, manufacturing, highways, bridges, seaport, airport construction, and cement sectors," Chief Executive Officer of the Group, Birol Erguven said here Tuesday during a meeting with Special Assistant to the Prime Minister and Chairman, Board of Investment, Dr Miftah Ismail.

Birol Erguven was accompanied by Deputy General Manger of LIMAK Energy, Serhat Dinc and International Projects Manger, LIMAK Construction, A.Koray Ergun.

The LIMAIK Group delegation is in Pakistan to explore the investment opportunities available in various sectors particularly energy, infrastructure, cement, airport and seaport constructions and management projects.

Ergun informed that presently LIMAK Group has been involved in four roads projects in Pakistan including Muslim Bagh-Qila Saifullah 50 KM section (N-50) Highway, Expansion of Sukker-Shikarpur-Jacobabad (ICB-5) N-65 Highway, 84.5 km of Hub-Uthal Section of National Highway, Qila-Saifullah-Zhob section of Highway (N-50).

The Group has also been short-listed together with Frontier Works Organization in pre-qualification of Kuramm Tangi Dam.

Speaking on the occasion, the Chairman, BOI said that the Pakistan and Turkey enjoy a robust relationship in multiple fields.

"However, it is important to enhance volume of investment and trade between the two friendly countries," he said and assured the Turkis delegation of his full support.

On the occasion, N.A Zubari, Senior Executive Director, Private Power and Infrastructure Board (PPIB) gave a very detailed presentation on Energy Policy and investment opportunities available in different power sector like power transmission lines, hydro, wind, coal, solar and thermal power projects.

Syed Aqeel Hussain Jaffery, Director, Alternate Energy Development Board, also gave a detail presentation about the opportunities available in different alternative and renewable energy in Pakistan.

Acting Secretary, Board of Investment, Imran Afzal Cheema on the occasion apprised the delegation that the government plans to construct highway from Karachi to Multan which is one of the big infrastructure projects and advised the delegation to look into this project for investment point of view.

Development projects: Japan offers $328,619 to three NGOs

ASTAFADA would be given $116,444, $102,745 to Participatory Welfare Services (PWS) and $109,430 to Sahara for Life Trust (SFLT). PHOTO: FILE

ISLAMABAD: 

Japan has decided to extend financial support of $328,619 to three Pakistani Non-Government Organisations (NGOs).

 Three agreements were signed between Hiroshi Inomata, Ambassador of Japan to Pakistan, and the representatives of the three organisations.

ASTAFADA would be given $116,444, $102,745 to Participatory Welfare Services (PWS) and $109,430 to Sahara for Life Trust (SFLT).

The grant to ASTAFADA will be used for the installation of a fresh water distribution system in three villages of Muzaffarabad (Azzad Jammu and Kashmir), the grant to PWS will be utilised for the construction of a primary school in District Layyah (Punjab), whereas the grant to SFLT will be used for installing life-saving medical equipment at the Sughra Shafi Medical Complex in District Narowal (Punjab).

Thumbs up: Pakistan meets criteria for CERN

The membership will open opportunities for the locals to learn from the developed world. PHOTO: REUTERS

ISLAMABAD: European Organisation for Nuclear Research (CERN) Director Scientific Research Sergio Bertolucci said on Thursday that Pakistan fits the criteria to become an associate member of the organisation in a press conference in Islamabad, Radio Pakistan reported

Bertolucci lauded Pakistani engineers and scientists and said that “Pakistan has a first class pool of scientists and engineers, a requirement to become an associate member of CERN.”

He added that Pakistan and CERN are working in close collaboration from quite some time and the work from Pakistan’s industries is favourable.

Also present at the occasion Pakistan Atomic Energy Commission (PAEC) Chairman Dr Ansar Parvez said that the membership will open opportunities for the locals to learn from the developed world.

Prime Minister Nawaz Sharif, on February 11, had told a four member CERN delegation that Pakistan is hoping for associate membership of the European organisation.

NDMA status to India will hurt Pakistani farmers

India is giving subsidies to its farmers of around $100 billion yearly, and supports around 30 crops, according to Doctor Tariq Bucha, Farmers Associates of Pakistan president. PHOTO: FILE

LAHORE: How can a taxed agriculture sector of Pakistan compete with the subsidised Indian Agri economy? This is the question which the farmer community of Pakistan is eagerly asking the Pakistan government amid the possibility of granting Non Discriminatory market Access (NDMA) to India.

“We are not against trade with India, but we have to make our sector first in order to compete with Indian agri market”, said Doctor Tariq Bucha, Farmers Associates of Pakistan president.

India is providing subsidy to its farmers of around $100 billion yearly, and supports around 30 crops, whereas in Pakistan wheat is the only crop which enjoys government support, Bucha said while talking to The Express Tribune.  On the contrary, Pakistan’s total agricultural production is $50 billion per year and the subsidies given by the government are less than 1% of GDP.

The Pakistani farmer has to give an input tax of up to 19%. The Indian government gives subsidies on major inputs like electricity, diesel, urea, freight, whereas Pakistani farmers have to bear the brunt. Lack of government support, lack of policy especially after the 18th Amendment, and very little research on enhancing crop productivity is what Pakistani farmers are facing, he added.

The Sindh Abadgar Board, in a recent meeting to review the impact of NDMA on Pakistan Agriculture sector, also stated that a comparative analysis of agricultural industry of both countries will be sufficient in clarifying that asymmetry exists in the subsidies that are extended to the farmers in both countries. The board also added that urea in India is Rs650 per bag which is around Rs1,094 in Pakistani currency. In Pakistan, cost for the same bag ranges from Rs1,786 and Rs3,600 respectively.

Bursting the bubble: Cadbury pulls off a Willy Wonka move with ‘Bubbly’

Launched in December last year, Bubbly was hard to find at many retail stores even in the upscale neighborhoods of Defence and Clifton until as early as week before Valentine’s Day, usually a peak time for chocolate sales. PHOTO: facebook.com/cadburypakistan

KARACHI: 

In what reflects Pakistani consumers’ growing appetite for branded snacks, Bubbly chocolate was a sold-out at many retail stores across Pakistan only three months after hitting the market.

Launched in December last year, Bubbly was hard to find at many retail stores even in the upscale neighborhoods of Defence and Clifton until as early as week before Valentine’s Day, usually a peak time for chocolate sales. This was also confirmed by market sources and the manufacturer itself – the latter, however, insisted the stocks were selling quickly because of high demand and this was not a supply chain issue.

Bubbly is the latest addition to the Britain’s famous Cadbury chocolate range manufactured in Pakistan by Mondelez International, Cadbury’s parent and the world’s largest snacking company based out of a Chicago suburb.

There couldn’t be a bad timing for the shortage of Bubbly as it coincides with peak winter season including Valentine’s Day and that, too, when the snacking giant is running an aggressive marketing campaign for its latest product. Besides a TV ad campaign, one can witness gigantic billboards marketing Bubbly along major thoroughfares of the country’s largest metropolis resulting in more traffic at the retailers’ end while the stocks are short.

“We remained out of supplies for Bubbly for about four to five days,” an official from Imtiaz Super Market – the largest chain of supermarkets in Karachi – told this correspondent. “Our findings are the product is short across many stores in the city,” he added.

Officials from Hyperstar and Naheed Super Market confirmed the availability of Bubbly but added the product was mainly available at mega stores.

As opposed to the feedback we got from the market sources, Mondelez insisted the product is in high demand and selling very quickly and the company has no issues with the supply chain.

“Since its debut, Bubbly has been flying off the shelves and it is this high demand that causes it to sell out as soon as it arrives in retail outlets,” the Company’s Corporate and Government Affairs Manager for Middle East Ismail Al-Ghussein told The Express Tribune in an email.

The company’s regional spokesman says their supply chain network in Pakistan is in excellent shape and operating effectively. “We are currently planning further increases in supply of Bubbly for Pakistan, which is one of the fastest growing snacks markets in the world, to meet the consumer demand.”

The company’s version was endorsed by Rehan Ansari, who had supervised the supply chain for Mondelez products – while working for their distribution company – until recently when he switched his job.

“It is clearly a case of extraordinary demand that the product was sold out at many places earlier than expected,” he said. Explaining, he said, the chocolate has a long production cycle. “They work five months in the summer – not a peak period for chocolate sales – to produce stocks for the winter season,” he said. The finished product goes through several lab tests for about four to five days to ensure it meets the quality standards, he said.

It is this long production cycle that the product takes a while to reach the market, Ansari said but one cannot ignore the extra ordinary demand, which they are unable to meet despite working on full capacity.

“I would call it a blessing in disguise for them. Launched recently, the product is already in high demand,” he said.

The supply shortage may be temporary but this certainly reflects the demand for their chocolate range. This is endorsed by the fact that their flagship Cadbury Dairy Milk is one of their fastest growing brands in Pakistan with sales of Rs1 billion a year.

Gas controversy: LNG terminal bid more than fair, says Engro official

Engro’s LNG terminal, which will be located at Port Qasim, will be the first in Pakistan and follows multiple attempts to import LNG that were bogged down by transparency issues. PHOTO: FILE

KARACHI: The lowest bid that won Engro Corporation the rights to build and run a liquid natural gas (LNG) terminal was offered despite strict conditions the government attached with the project, a top company executive told The Express Tribune. 

The terminal, with a capacity to handle 400 million cubic feet per day (mmcfd), is not protected by sovereign guarantee and the risk of any eventuality is transferred onto the investors, said Sheikh Imranul Haque, Engro Vopak Terminal Limited Chief Executive Officer.

“It will be an airtight agreement for the government,” he said. “There are clauses like the one which binds us to pay a penalty of $150,000 a day if construction overshoots the deadline. The government has also reserved the right to take over the terminal if we can’t run it. I think this is the fairest deal.”

A formal agreement has yet to be signed for work to start. State-run Sui Southern Gas Company (SSGC), which will receive the gas in its pipeline system, has forwarded its recommendation for a final nod to the Economic Coordination Committee (ECC).

But SSGC’s board approval for the project last month was followed by a notice to the stock exchange on February 7 that said certain unspecified conditions have to be met before anything happens.

This caused the industry to speculate that SSGC doesn’t agree with the take-or-pay requirement, which means Engro will have to be paid even if LNG is not imported through the terminal.

Haque says there shouldn’t be any confusion on the matter. “The take-or-pay clause was part of the request for proposal (RFP) document. It is not something which we inserted. This is what was offered to the bidders.”

The previous government came under increasing pressure over similar protection offered to investors in rental power projects. Known as capacity payment, the clause meant that the government had to pay a power producer for minimum capacity utilisation of the machinery.

On the other hand, industry officials say that such safeguards remain imperative considering the state’s weak fiscal and external account position.

In the past, independent power producers often did not have money to buy fuel and run the plants as they awaited payment from customers, which are state-run power distribution companies.

Engro won the bid for the project by offering 66 US cents per million British thermal unit (mmbtu) as tolling or handling charges. Awarded for a period of 15 years, it will generate $1.5 billion in revenue over its life.

“This number, $1.5 billion, looks very big. But its spread over many years and when looked at considering our investment, the return is not unjustified,” Haque said. “As a matter of fact, the return is less than the 17% offered to power projects.”

He said people criticising the tolling charge are not giving weight to the time value of money.  However, the company has refused to make public the size of investment.

“The project design of our competitors in the bid was more expensive than ours by at least $30 million. We could have raised our bid but we didn’t. Engro believes in fair play.”

Engro’s LNG terminal, which will be located at Port Qasim, will be the first in Pakistan and follows multiple attempts to import LNG that were bogged down by transparency issues.

Haque said a new jetty will be built near Engro Vopak’s existing liquid terminal. A ship with an onboard re-gasification plant and storage tanks, being hired from US based Excelerate Energy, will be permanently berthed at the jetty.

“This is the quickest way to meet our energy needs,” he said. “We would have approximately 335 days to make the terminal ready after the agreement is signed.”

The company won’t be importing LNG. The government will use Pakistan State Oil (PSO) to bring the supplies.

“I think this arrangement actually makes sense. Everyone would be comfortable with a state organisation getting sovereign guarantee to bring LNG,” he said.

New player: Primus Investment Management has now grown like no other, says CEO

Launched with Rs2.3 billion in August 2012, AUM of Primus Investment Management have grown at an average rate of 8.3% per month since inception. DESIGN: JAHANZAIB HAQUE

KARACHI: In the wake of unprecedented returns in the stock market, many asset management companies (AMCs) seem to be in a rush to push gullible individuals into equity investments.

But the decision of Primus Investment Management – a relatively new player that entered the mutual funds industry in August 2012 – not to jump on the equity bandwagon immediately while the stock market boomed was well-considered, according to the company’s chief executive officer Ahmed Ateeq.

“I was waiting for the right time to launch an equity fund,” Primus Investment Management CEO Ahmed Ateeq told The Express Tribune in a recent interview.

Primus Investment Management is now launching two new funds – Islamic Equity Fund and Islamic Money Market Fund – to cater to the Shariah-compliant segment of capital market investors.

With total assets under management (AUM) of Rs8.9 billion at the end of January, Primus Investment Management currently runs two money market funds – Primus Daily Reserve Fund and Primus Cash Fund – and a balanced fund under the name of Primus Strategic Multi-Asset Fund, which was launched last August.

“I challenge you to compare our fund’s performance with the first year’s track record of any AMC in Pakistan. None of the Pakistani AMCs have grown like we have,” Ateeq observed.

Launched with Rs2.3 billion in August 2012, AUM of Primus Investment Management have grown at an average rate of 8.3% per month since inception. In January, the year-on-year increase in AUM was over 140.7%. This makes Primus Investment Management the 13th largest player among 23 AMCs operating in the country in terms of AUM.

Although the company is just one-and-a-half years old, its AUM have surpassed many well-established AMCs that are backed by strong financial institutions, such as KASB Funds, PICIC Asset Management and Habib Asset Management.

Returns of Primus Daily Reserve Fund have been exemplary among the 21 money market funds of Pakistan. For example, its year-to-date annualised return on February 12 was 8.6%, which is the highest return posted by any money market fund in Pakistan over the same period.

Not just that, Primus Daily Reserve Fund has outperformed every single money market fund in terms of the annualised returns for 365, 270, 180 and 90 days, as of February 12, which is clearly a remarkable accomplishment for a new company.

One distinctive characteristic of Primus Investment Management, that Ateeq prides himself on, is his company’s capacity to redeem investors’ money, however big the amount is, in a single day without having to sell any assets.

Noting that other AMCs also redeem quickly, he adds that mostly they have to sell treasury bills in the market at unrealistic yields when they receive a big redemption request. “On the contrary, we manage our assets in a way that our maturity period is short. With our daily product accounts and negotiated rates with banks, our investment is so diversified that we never have to sell any investments,” he noted.

The company’s fund manager’s report for January shows 38.4% of portfolio allocation for the Primus Daily Reserve Fund consisted of cash at banks. Placements with banks and development finance institutions constituted another 1.7% and 10.2% of the portfolio allocation, respectively.

“We keep our money with AAA-rated banks only. No matter how big the redemption request is, all I’ll have to do is simply write a check and redeem it,” Ateeq said.