Comment by Riaz Haq on May 5, 2018 at 7:31am

THE EXPRESS TRIBUNE > BUSINESS
ADB says ‘no need to panic’ over Pakistan’s economy
By Maidah Haris Published: May 4, 2018

https://tribune.com.pk/story/1701893/2-adb-says-no-need-panic-pakis...

MANILA: Asian Development Bank’s (ADB) former country director Werner Liepach said Pakistan will not need a bailout package as its economy was doing well, adding that there was no need to panic even as the current account deficit widens and foreign exchange reserves continue to fall.

Addressing a media briefing at the 51st Annual Meeting of the ADB Board of Governors in Manila, Liepach said remittances continue to remain strong and would help meet external sector challenges.

“Things are pretty much okay,” said Liepach. Overseas workers’ remittances touched a seven-month high at $1.77 billion in March 2018, which came on back of the second round of rupee devaluation, he added.

In its latest quarterly report, the State Bank of Pakistan also anticipated that the country would attract a maximum of $20.5 billion in remittances in fiscal year 2018.

Liepach, who is the director general ADB for Central and West Asia Regional Department, also maintained a positive outlook of Pakistan’s growth. He acknowledged that the budget deficit has gone up a little but it is “quite normal in election year”.

Currently, the country’s budget deficit is projected to stand at 5.5% of GDP at the end of fiscal year 2018, while SBP-held foreign exchange reserves currently amount to $11.51 billion.

Additionally, Pakistan’s current account deficit has continued to expand and the nine-month gap has increased to $12.03 billion. However, the ADB official remained optimistic.

“What’s happened is that imports have gone up quite a lot due to increased economic activity related to the China-Pakistan Economic Corridor (CPEC), which is not a bad thing.

“What is missing is that export growth hasn’t really gone as expected.”

He highlighted various factors that impact the growth of exports, including the overvalued exchange rate, which has been taken care of. “The latest information that I received is that exports are starting to pick up again,” he informed.

Now, due to the early rise in imports followed by late pick-up of exports, there has to be a reaction in the foreign exchange reserves, which is of concern, but Pakistan has a way of financing its reserves and “there is no need to panic”.

He added that ADB and the World Bank are not the only ones in town as Pakistan has managed to secure a loan from China. “The country is also contemplating tapping the capital markets, because the market has been responsive lately.”

Stressing on ADB’s role, Liepach said the agency always gave policy-based loans to finance structural reforms, which in no way is a bailout.

Comment by Riaz Haq on July 18, 2018 at 8:28pm

#HongKong’s #retail chain Cheong Hing plans to enter #Pakistan. Founded in 1960, the company's line of businesses include retail sale of home-furnishings such as china, glassware, and metal-ware for kitchen and table use.

https://www.thenews.com.pk/print/340032-hong-kong-s-retail-chain-pl...

Hong Kong-based companies including a retail chain store planned to enter Pakistan following a bilateral treaty signed between the two countries last year to avoid double taxation that may boost annual foreign direct investment inflows from approximately $35 million, officials said on Tuesday.

Officials at Trade Development Authority of Pakistan (TDAP) said Cheong Hing Limited intends to set up retail chain stores in Pakistan and currently in talks with different stakeholders. Founded in 1960, the company's line of businesses include retail sale of home-furnishings such as china, glassware, and metal-ware for kitchen and table use.

Pakistan has witnessed arrival of some global retailers in the past few years, but local businesses still dominate the retail sector. Wholesale and retail trade accounts for around 20 percent of the country’s economy of $300 billion, according to the State Bank of Pakistan.

Analysts said liberal FDI policy for retailing along with changing buying habits would continue to provide enough opportunities to global retailers to explore Pakistan’s market for any investment and expansion plan. New chains of grocery and lifestyle stores are likely to enter primarily in urban centres, while chains of retail outlets irrespective of channel are likely to continue expand their network.

Late last year, Pakistan and Hong Kong ratified a treaty to stave off double taxation on incomes of their individuals and companies. TDAP officials said Hong Kong’s Aalpes Global Group, which is in the business of creative planning, intends to set up company in Pakistan to expand business technology.

An official said Pakistan’s mission in Hong Kong is building its connection with the Securities and Exchange Commission of Pakistan. Besides, Sino-German Safety Science and Technology Industrial Park Company intends to study information technology market, and is already in talks with the local stakeholders.

Pakistan is one of the most liberal foreign investment regimes in South Asia with 100 percent foreign equity permitted in the manufacturing and infrastructure development sectors. The country offers a number of tax incentives to FDI projects in several sectors, spanning infrastructure, electronics and information technology and telecommunication services. Hong Kong’s FDI flow to Pakistan was recorded at $34.5 million during the July 2017 to February 2018 period.

Comment by Riaz Haq on January 17, 2019 at 4:22pm

#American #agribusiness giant Cargill to grow #Pakistan business with US$200 million investment for expansion across its #agriculture trading and supply chain, edible #oils, #dairy, #meat and animal feed businesses while ensuring safety, food traceability. https://www.thenews.com.pk/latest/420270-cargill-to-grow-pakistan-b...

Cargill renewed its long standing commitment to Pakistan by announcing plans to invest more than US$200 million in the next three-to-five years.

The announcement was made soon after Cargill’s global executive team, led by Marcel Smits, head of Global Strategy and Chairman, Cargill Asia Pacific region, and Gert-Jan van den Akker, president, Cargill Agricultural Supply Chain, met with the Prime Minister Imran Khan and other senior government officials to discuss the company’s future investment plans.

Being a global food and agriculture producer with a strong focus on Asia, Cargill aims to partner on Pakistan’s growth by bringing its global expertise and investment into the country.

The company’s strategy includes expansion across its agricultural trading and supply chain, edible oils, dairy, meat and animal feed businesses while ensuring safety and food traceability.

Cargill will bring world class innovations to support the flourishing dairy industry in Pakistan, which is already moving toward modernization, as well as the rising demand for edible oils backed by evolving consumption patterns and a growing market for animal feed driven by sustained progress made by the poultry industry in Pakistan.

Cargill’s proposed investments will support Pakistan’s overall economic development and contribute to local employment.

The visiting delegation informed the Prime Minister that M/s Cargill intended to invest in Pakistan as back as 2012 but were discouraged by mismanagement, corruption and non-availability of level playing field during the previous governments. However, investor’s confidence has restored after the incumbent Government and the policies being pursued by it.

The prime minister welcomed investment plans of M/s Cargill in the area of agriculture development, import substitution and enhancement of agricultural products.

He highlighted the efforts of the government towards ensuring transparency, providing the business community with level playing field and improving ease of doing business in the country.

The PM assured the delegation full support from the government.

Comment by Riaz Haq on February 11, 2019 at 7:37am

#Pepsi to invest $1 billion in #Pakistan. #Pepsico works with 160 #Pakistani #farmers to purchase only locally-grown #potatoes and #corn and supports 4,000 jobs while providing critical support for #rural economies . https://www.potatopro.com/node/99950

PepsiCo plans to invest US$1 billion in Pakistan over the next five years, the PepsiCo Chief Executive Officer (CEO) for Asia, Middle East and North Africa (AMENA) Mike Spanos told Prime Minister Imran Khan in a meeting held in Islamabad late last month. 

Mr. Spanos led a delegation of senior executives, which included Aamer Sheikh, chief financial officer, PepsiCo AMENA and Furqan Ahmed Syed, vice president and general manager, PepsiCo Pakistan. Demonstrating PepsiCo’s ongoing commitment to Pakistan, Mr Spanos discussed plans for the PepsiCo system to invest US$1 billion over the next five years.

The Prime Minister welcomed PepsiCo’s continued investment, and Mr. Spanos extended the company’s full support to the government on its socio-economic and reform agenda. The PepsiCo delegation noted the company’s appreciation for the government’s focused efforts towards providing a positive business climate for all companies operating in Pakistan. 

PepsiCo has been part of the business community in Pakistan for more than fifty years. The PepsiCo system (including company-owned snacks business and franchised bottling partners and distributors) brings more than 60,000 direct and indirect employment opportunities to the citizens of Pakistan. Together, the system has invested more than US$800 million in the last five years.

As one of the nation’s leading food and beverage companies, the company works with 160 Pakistani growers to purchase only locally-grown potatoes and corn for its products such as Lay’s and Kurkure. This supports an estimated 4,000 jobs while providing critical support for rural economies and empowering farmers with critical training on sustainable farming practices. 

Mr. Spanos extended an invitation to Prime Minister Imran Khan to inaugurate PepsiCo’s new snacks manufacturing facility in Multan early next year. The state-of-the-art facility represents an investment of US$66 million and is expected to create more than 1,500 direct and indirect employment opportunities for Pakistani citizens.

Comment by Riaz Haq on June 22, 2019 at 6:40pm

#Carrefour’s #ecommerce service to be launched in #Pakistan in 2020. Carrefour is already running e-commerce platforms in 10 of 14 countries it operates in. It's 7 #supermarkets in #Karachi, #Lahore, #Islamabad, #Faisalabad https://www.brecorder.com/2019/06/21/504665/carrefours-e-commerce-s...

BR Research: It has been ten years since Carrefour came to Pakistan. Please walk us through the journey so far.

Gyu Taeg Kim: I’d like to start off with an introduction of our group Majid Al Futtaim which is the leading shopping mall, communities, retail and leisure pioneer across the Middle East, Africa and Asia. Majid Al Futtaim holds the exclusive franchise rights to operate Carrefour in 37 countries and currently operates over 270 Carrefour stores in 15 countries. The recently announced Uganda market will be its 16th country.

Majid Al Futtaim opened its doors in Pakistan in 2009 by starting the first of its kind hypermarkets in the country called Hyperstar. Pakistan has immense potential and has a young dynamic population with an average age that is amongst the lowest in the world. The adaptation of the younger generation is much faster when it comes to embracing new retail channels. When I started off as Country Manager in January 2016, we were operating only two stores with one in Lahore and the other in Karachi. Since then it has grown to 7 hypermarkets and one supermarket with presence in Islamabad and Faisalabad as well.

In December 2018, Hyperstar was re-branded to Carrefour by Majid Al Futtaim across Pakistan. This year marks our tenth anniversary in Pakistan and since then, Majid Al Futtaim has invested Rs8 billion in Pakistan and has created 7000 jobs both directly and indirectly. We plan on providing employment to an additional 2000 people every year on the back of our expansion plans.

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BRR: What about future expansion plans?

GTK: Generally, we remain open to opportunities that will enable us to grow our footprint. We will focus on tier-2 cities in the next phase and plan to open stores in Gujranwala, Hyderabad and Multan within the next two years.

BRR: The footprint of Imtiaz Supermarket and the Al-Fatah group is growing rapidly in the supermarket segment. How do you view this competition?

GTK: The retail space in Pakistan enjoys healthy competition, which we embrace. While other retailers focus on very specific customer segments, i.e. mainly high-end customers or customers with lower spending power, categorized as C&D customers, Carrefour is able to cater to a wide variety of customer segments by offering an unbeatable choice, quality and value at the best price. At our hypermarkets we deliver a best in class shopping experience to our customers and create great moments for them every day. Our main business is consumer goods and fresh produce and in fact more than 70 percent of our total turnover is generated by these two categories.

BRR: How much is Carrefour’s market share in the modern trade space in Pakistan compared to its competitors?

GTK: In Pakistan, 20 percent of the total retail sector is modern trade, which was roughly 12 percent back in 2013. In the modern trade space, we have one of the top market shares. But if I consider it from the end consumer perspective, then we are number one followed by our local competition. We are occupying 30 percent and the remaining percentage is divided amongst our local competitors and other medium sized players.

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BRR: You mentioned that the majority of Carrefour’s revenue comes from consumer goods and fresh produce. Are you investing in the local value chain for these items?

GTK: We have increased direct purchasing from farmers and are ensuring guaranteed procurement in order to sustain prices for basic items throughout the year. The impact of Carrefour extends beyond millions of customers, to more than 700 suppliers and partners across Pakistan. This includes local farmers, manufacturers and producers.

Comment by Riaz Haq on December 20, 2019 at 9:03pm

#Pakistani fresh produce company announces a move into #retail with its new Go 4 Fresh stores that will stock local and imported #fruits and #vegetables, #smoothies, fresh #milk, synthetic ingredient-free ice cream, fresh fruit juices and dried fruits. http://www.fruitnet.com/asiafruit/article/180513/retail-revelation-...

Leading Pakistani grower-packer-exporter Ahmed & Company (IAC) has announced it will enter the retail market with a new fresh produce retail chain called Go 4 Fresh.

The stores will stock local and imported fruits and vegetables, smoothies, fresh milk, synthetic ingredient-free ice cream, fresh fruit juices and dried fruits.

This announcement was accompanied by the launch of a new brand also called “Go 4 Fresh” which will be available in both domestic and foreign markets. IAC plans to launch a range of fresh and value-added products under this brand, which will be exported to IAC’s established foreign markets spread over 30 countries.

The first Go 4 Fresh store is located in Karachi and will be formally opened on 21 December. IAC plans to open between eight and ten more stores across the city and then expand across the rest of the country.

Following this, the company will look at opening stores in the Middle East and the UK.

Waheed Ahmed, director, marketing of IAC, said these stores will benefit both consumers and growers in Pakistan by helping the local market meet the changing lifestyle requirements of the people of Pakistan.

“The company believes in giving back and in re-investing its earnings in the society to create greater employment,” Ahmed said.

“This is the right time to invest in Pakistan as the country needs revenue and employment to get out of its economic downward spiral.”

Comment by Riaz Haq on October 26, 2020 at 9:56am

The changing world means changing spending patterns and living habits at home as well as abroad. Pakistan is now the world’s fastest-growing retail market, partly thanks to the fact that disposable income has doubled since 2010. The number of retail stores, which is forecast to rise by 50 per cent between 2017 and 2021, is also being driven by the two-thirds of the populace under the age of thirty—and by the changing attitude to money among the young, who want to enjoy a good lifestyle now rather than save to enjoy one later.

Frankopan, Peter. The New Silk Roads (pp. 14-15). Knopf Doubleday Publishing Group. Kindle Edition.

Water is also a problem in South Asia, where India’s construction of the Kishanganga dam and hydroelectric plant has been a source of great concern for the government of Pakistan, who argue that these projects violate the treaty of 1960 that split the water resources of the Indus River between Pakistan and India. Anxieties about the dam, which was formally opened in May 2018, have been heightened by proposals to build as many as twelve hydroelectric plants on the River Kabul in Afghanistan—which would put further pressure on the resources of cities like Karachi, whose population is growing at more than 5 per cent per year and whose water board is only able to supply 50 per cent of its needs as it is.43 Not surprisingly, the Kishanganga

Frankopan, Peter. The New Silk Roads (p. 37). Knopf Doubleday Publishing Group. Kindle Edition.

dam has been referred to the International Court for Arbitration, and, perhaps equally unsurprisingly, the dispute has resulted in recriminations, soul-searching and suspicions of sabotage and conspiracy in the press in both India and Pakistan.44 Then there is the impact of climate change, which according to recent research will cause the Urumqi Glacier No. 1 to lose some 80 per cent of its ice volume in the next three decades—which will have obvious implications for Central Asia as well as for western China, where this and other glaciers play an important role in providing water for rivers but also as standby resources in times of drought.45

Frankopan, Peter. The New Silk Roads (p. 37). Knopf Doubleday Publishing Group. Kindle Edition.

Comment by Riaz Haq on January 11, 2022 at 10:49am

Motta’s, which started operations in 1986 as a single-floor store selling basic grocery items, now has three floors and has acquired two stores in DHA called The Mart by Motta’s. Diamond Superstore, which started in 1958 as a kiryana selling aata, has seven branches in Karachi, including one with a food court and a children’s play area; Naheed Supermarket (known for introducing pre-packaged masalas and pulses to the market) began as a 1,000-feet square outlet and Lahore’s Al-Fatah began operations in the 1940s (under the name Al-Hamra) and now has 23 branches. All the above believe they have barely scratched the surface of Pakistan’s modern retail sector.

https://aurora.dawn.com/news/1144173

A number of local modern trade stores, along with mid-sized and smaller general stores, have opened and/or expanded, especially following the launch of international modern trade (IMT) stores, such as Carrefour, Makro and Metro in the 2000s. According to Muhammad Ibrahim, Owner, Motta’s, once IMTs entered Pakistan, people realised that the grocery store business was not limited to a traditional general store experience; consumers could be offered more convenience and variety and the business was profitable and "cash-rich." Mohammad Sheikh, Director, Al-Fatah, adds that market expansion in the last couple of years has been “aggressive” especially during the pandemic. “If you are uncertain about how long the pandemic will last, the best business to invest in is groceries,” he says.

In 2020, Pakistan’s food and grocery retail market had total revenues worth $52.6 billion, representing a compound annual growth rate (CAGR) of 8.1% between 2016 and 2020, according to a report, Food and Grocery Retail in Pakistan. Although the market value of the modern retail sector cannot be adequately estimated due to the industry being largely undocumented, store owners agree that it has been expanding pre- and post-Covid-19.

“In the beginning, consumer needs were limited – people would shop at kiryanas or neighbourhood general stores – but now their expectations are changing. For example, as people become more aware of global cuisines, they want to prepare non-desi food, such as pastas and burgers at home and there is a rise in demand for those ingredients,” explains Sheikh. As a result, established stores like Al-Fatah, Diamond Superstore, Motta’s, Naheed Supermarket and many others have kept evolving by revamping their stores, opening more branches and investing in product variety to stay above the competition and meet consumer demand. Although 225 million Pakistanis have access to more than two million retail outlets, of which approximately 800,000 are grocery retail stores (kiryanas, kiosks, department stores, supermarkets and medical-cum-general stores), the ratio of grocery stores to the population is still not enough.

“Compared to our population, the number of operational stores is nothing – one to two percent maybe. We are at the infancy stage, so even if 1,000 stores like Naheed Supermarket open in Pakistan, there will still be room for growth”, says Munsub Abrar, Director, Naheed Supermarket.

Although investing in the grocery retail business remains an attractive proposition, what are the intricacies involved in opening and maintaining an LMT store and how sustainable is the business for new players?

1 Investment
It can cost between Rs 20 to 30 million (small, basic stores) to Rs 80 to 100 million (large-scale stores) to open a grocery store, depending on the size, type of furnishings used (fixtures, equipment, etc.) fixed costs (rent, salaries, etc.) and product inventory.

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Store owners agree that staying relevant is key and they must keep evolving, whether by expanding, investing in aesthetic changes to cater to the changing customer shopping experience or offering incentives, such as loyalty cards and working with brands on special discounts. Sheikh emphasises that their most loyal customers are the older generation but they need to cater to the new generation by keeping up with what they want.

Comment by Riaz Haq on March 13, 2022 at 11:50am

Retail sector contributes to 18% of Pakistan’s GDP: Razzak Dawood


https://mettisglobal.news/retail-sector-contributes-to-18-of-pakist...


March 10, 2022 (MLN): Pakistan’s retail sector contributes 18% of the GDP, employ 16% of the workforce, said Razzak Dawood Commerce Adviser Razzak Dawood in 1st Future of Retail Business Summit (FOR2022) jointly hosted by Terrabiz Conferences and Chain stores Association of Pakistan (CAP) in Karachi on Wednesday.

A central objective of the Summit was to bring Pakistan’s diverse retail sector onto one cohesive platform.

The adviser said that the retail sector was critical to fueling supporting sectors such as construction and transportation. He further stated that the growth of the retail sector was a strong indicator of development and progress in the country.

Industry stalwarts used the platform of cross-sector key stakeholders to identify areas where collaboration could be made and improvements could benefit growth. The aggregate representation of business and technology allowed participants to envision how they could create the future of their retail brands and be part of this accelerating ecosystem. Retail legends such as Seema Irfan, founder of Bareeze and Founder of Al Fatah stores, Irfan Shaikh shared insights into the challenges they faced in building brands and serving customers in Pakistan.

An underlying theme that was highlighted in addition to the future of retail, is how resilient brands survived the challenges of the pandemic and became more customer-centric upon their reopening. The conference was supported by Pakistan Fintech Association, P@SHA and A.F. Fergusson & Co. As Knowledge Partners.

The sessions were chaired by august speakers such as Steve Dennis (Amazon Bestselling Author); Nadeem Hussain (PFN), Amir Paracha (Unilever); Saira Awan Malik (TCS); Faisal Riaz (Dolmen Mall); Seema Aziz (Sefam;); Shamoon Sultan (Khaadi), Ehsan Saya (Daraz), Ibad Ahmed (PandaMart), Guest of Honor M. Azfar Ahsan (Board of Investment) among the many industry leaders from retail, brands, e-commerce, fintech and taxation. In a special video address at the summit, Commerce Adviser Razzak Dawood expressed his appreciation for the conference and how the event would play a critical role in shaping the future of retail in Pakistan.

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