Pakistan is eyeing to earn $1 billion from the export of its engineering products by 2007. In 2005, Pakistan’s exports of engineering goods stood at $540 million and a year earlier at $320 million.

Currently, engineering goods constitute 63 percent of the global trade against six percent of trade in textiles. However, around 60 percent of Pakistan’s exports comprise of cotton and cotton products. In other words, Pakistani companies have hitherto been concentrating on only six percent of the international trade and ignoring the 63 percent comprising of the engineering goods.

Realizing the importance of engineering goods in boosting the exports, the Pakistan government restructured its Engineering Development Board (EDB) in 2004 and assigned the reconstituted body the task of making the country’s engineering sector robust so that it can be used as a tool for increasing exports of engineering goods.

The restructured EDB proceeded ahead with the task entrusted to it by formulating a multipronged strategy aimed at “strengthening the engineering sector and integrating it with the world market to make it the driving force of economic growth.”

The EDB is now engaged in enhancing the engineering sector’s competitiveness through a program of deletion, indigenization, protection to local industry and removal of tariff anomalies as well as other impediments to the growth of the engineering industry by focusing its activities on four broad areas.

These include: Internal Reorganization, Policy Development & Integration, Sector/Business Development and Tariff Rationalization.

Convinced that the development of engineering sector parallel to the cotton sector has become vital for Pakistan’s sustainable economic growth, in particular in the wake of WTO regime, the government is lending full support to the EDB’s efforts aimed at taking the country’s engineering sector robust so that it can compete in the world markets and earn foreign exchange through increasing its exports to the global community.

Scores of countries have already used their engineering sector as a springboard or key industry to drive sustainable economic growth. For example, Turkey, Malaysia, Thailand and South Africa have achieved economic growth through the development of automobile industry, one of the top priority sub-sectors of the main engineering sector.

Likewise, Pakistan could use the engineering manufacturing sector as a driving force for development of its economy. If the country’s success in the motorcycle sub-sector is a guide, Pakistan can enhance production of indigenous automobiles and agro-machinery to achieve import substitution on the one hand and on the other to export its surplus to the neighboring countries. As far as motorcycles are concerned, Pakistan is annually producing 600,000 two-wheelers, enough to meet the domestic demand and exporting the surplus number to countries in the South Asia region.

With a view to developing confidence of Pakistani manufacturers find providing them opportunities to introduce themselves to the international buyers of machinery components and become part of the Global Supply Chain, the EDB encourages participation of sound and vibrant national engineering firms in trade and industrial fairs both within and outside the country.

Pakistan participated, earlier this year, in the Hannover Messe (Fair) in Germany, which was open to public from April 24 to April 28, with a delegation of 220 persons. In addition to exhibitors from 60 national companies in the engineering sector, Pakistan delegation included some professors from the engineering universities of the country to strengthen industry-academia linkages.

This was Pakistan’s second entry to the Hannover Fair. In 2005, Pakistan had participated in this fair with a delegation of 80 which, among others, included exhibitors from 35 engineering companies.

Encouraged with the rewarding and fruitful experience in 2005, a more confident engineering manufacturing sector of Pakistan participated in this year’s fair at a much larger scale.

Numerous Pakistani manufacturers of engineering products have bagged business orders and opportunities from the European market as a result of their participation in the Hannover Fair 2006, which enabled them to exhibit their products to the international community and Pakistani entrepreneurs a platform for interaction in their European counterparts.

At the Hannover Fair, the main Pakistan pavilion, this year, made an overwhelming impact in the Sub-Contracting, Power Generation and Factory Automation halls. Over 1000sq. meters of exhibition space was reserved for the Pakistan pavilion in the three separate halls at the fair grounds with the primary objective to project Pakistan as an emerging engineering destination.

A special directory containing details of all the participating exhibitors and delegates, including an attractive ‘Pakistani Delegate Bag’ and a giveaway mini-football, was also produced for visitors to the Pakistani booths. Research and Development Engineering Company, the manufacturers of precision engineering parts in Pakistan, was overwhelmed with the response it received this year.

The company’s Managing Director Rumi Moiz, said: “It has been a dream come true, the company that we have been benchmarking to emulate came to us to do business with our company. We are also moving on to Holland to continue negotiations with three other companies and sign an MOU with one of them.” Pakistan’s leading manufacturers of CNG dispensing machines, Telsa Industries’ Aamir Hussain said: “We too have received very good response from the international companies, it is quite visible that international organizations and European companies are beginning to recognize the potential for outsourcing engineering manufactured components, parts and equipment to Pakistani companies.”

Another participant from Pakistan, Farhan Junejo was of the view that the Pakistan delegation made a positive impact at the Hannover Messe 2006. “With this rate of success, there should be no looking back, and we have to sustain our presence here and continue to take part progressively so that Pakistan gets its deserved recognition in the engineering sector.”

The Hannover Messe is an annual feature and it is considered traditionally a benchmark for the engineering manufacturing companies to market and sell their products to a larger number of manufacturers from all over the world.

The EDB is organizing from Nov. 24-26 this year the Lahore Expo, which is likely to be participated by some 350 exhibitors. Out of the participants to the national exhibition, the EDB will select about 25 best engineering companies in various sector and give them National Championship awards.

The participation in the Hannover Fair and other such international events also allowed the exhibiting companies to come abreast with the current trends and many a company, on return to Pakistan, proceeded with upgradation of their production lines in order to meet future demands.

As far as Pakistan is concerned, Hannover and MIDEST fairs proved to be high watermarks for the engineering industry. These fairs not only provided platforms for the industry to pitch their capabilities to the world, but have also been instrumental in transforming mindsets, paving the way for business agreements, inculcating thoughts change/upgrade and, above all, set in a process of transfer of technology.

Another benefit of participating in international fairs is their vast latent potential for global connectivity, which provides opportunities to local companies to hedge against recession by exporting to various parts of the world, thereby decreasing dependence on the domestic or any other single market.

It is expected that these steps might gradually increase the share of engineering sector in the exports of the country to $1 billion by 2007 against $540 million in 2005 and $320 million a year earlier.

— Alauddin Masood is a freelance columnist based in Islamabad. [email protected]