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Public sector industries.

Public Sector Industries

The total sales of all the 75 units of the federal production ministry during 1989-90 stood at Rs. 43 billion and a net profit figure was Rs. 2 billion. The units paid Rs. 10 billion to the government in taxes. Most of the 75 units of the production ministry were now earning profits. Cement, fertilizers and automobiles were key sectors in which the ministry had shown remarkable success.

The ministry, it may be mentioned here controls the country's biggest manufacturing companies including the Pakistan Steel mills, there are eight corporations including Pakistan Industrial Development Corporation, Pakistan Automobile Corporation, Federal Chemical Corporation, State Petroleum Refining & Petrochemical Corporation, State Cement Corporation, National Fertilizer Corporation, State Engineering Corporation and Pakistan Steel Mills. These corporations employ over 75,000 staff. According to an official report, the criterion of success varied from industry to industry. The success depended on many factors such as location of the project, age of the plant and general condition etc. There were units which have strategic importance.

The government is keen to see that all industries under the production ministry grow in line with the new industrial expansion policy. At the same time, the government wants the private sector to play an equally important role. Its privatisation policy, a liberal industrial policy and relation of foreign exchange rules provide manifold incentives to the private sector for new investments in industry.


The Privatisation Commission announced the names of those units which were available for disinvestment. Out of 30 units 10 are listed on Karachi Stock Exchange. Workers were opposed to this decision and they observed strike on May 20, as a mark of protest. Following units are open for disinvestment which are listed on Karachi Stock Exchange:- - Dandot Cement Co. Ltd. - Sindh Alkalis Ltd. - Ravi Rayon Ltd. - National Motors Ltd. - Bela Engineers Ltd. - Millat Tractors Ltd. - Fazal Vegetable Ghee Mills Ltd. - Karachi Pipe Mills Ltd. - Quality Steel - Pakistan Engineering Co. Ltd.

Earlier bids were invited for Al-Ghazi Tractors and Bolan Castings, PACO has 40.1 per cent shares, while 7.4 per cent shareholding is with the other PACO units. These shares constituting 47.5 per cent of the total are likely to be offered for disinvestment. The NDFC has 33 per cent shares in Bolan Castings, and 11.9 per cent shares are already being traded in the stock market. Sources believe that disinvestment of these two units would not offer any problem because there is no question of extending right of first refusal to the original owners and sponsors as in the case of takenover units. In the case of takenover units, the Government has to offer the right of first refusal to the original owners and sponsors as provided in the Transfer of Managed Establishment Order 1978. So far the units set up in public sector after the nationalisation, the disinvestment process is relatively simpler as the ownership could be straightway transferred to the highest bidder.

Allied Bank is also for sale. Twenty six per cent of the share capital would be sold to the successful bidder and the remaining 25 per cent would be offered to the public through stock exchange. These shares too would be underwritten by the successful bidder. It is understood firms in the private sector will have to bid for 51 per cent of share. In addition to the price of acquisition of 51 per cent of the share capital of the company, the successful bidder will also be required to make firm arrangements for the repayment of the loans outstanding to the government.
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Title Annotation:Pakistan; Industry
Publication:Economic Review
Date:Jun 1, 1991
Previous Article:Industrial waste management in Pakistan.
Next Article:Downstream industries of Pakistan Steel.

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