September 11, 2002	Wednesday	Rajab 3, 1423

LAHORE, Sept 10: What took place in New York and Washington on 9/11 and afterwards in Afghanistan proved to be a blessing in disguise for the multi-billion rupee consumer durables and home appliances industry, especially for the manufacturers of air-conditioners and televisions, in Punjab.

“The sales of local items have gone up considerably because of better vigilance on the country’s western borders and termination of the Afghan Transit Trade (ATT) in the aftermath of 9/11,” says a manufacturer of air-conditioners.

The domestic consumer durables industry has suffered hugely in the past one decade or more as a consequence of “unabated flow of smuggled items through the ATT as well as other channels”. “We’ve been exposed to unfair competition by international giants due to smuggling, which almost devastated the domestic manufacturers. The situation that obtained in the region after the US-led attacks on Afghanistan to dismantle the Taliban and the Al-Qaeda effectively disrupted the smuggling logistics and routes from that country to the indirect advantage of local manufacturers of these items,” an executive of a television assembling company told Dawn.

Pointing towards the havoc played by the smuggling through the ATT with the local television assembling industry, he claimed the number of units produced in the country dropped to just 72,000 in 1999 from 357,349 in 1988. “Although the production had started to go up due to lowering of import tariffs before 9/11 happened, the control over smuggling has helped the industry a lot to raise the number of units assembled by the local assemblers to 450,000 this year from 372,000 last year.”

He pointed out that several TV assemblers were forced to close down due to smuggling during 1992-97. “However, the situation has changed now. Both foreign and local investors have started to put in money in the home appliances and consumer durables field,” the marketing executive of a major home appliances manufacturer said, citing the examples of investments being made by the Chinese and the Japanese in this industry. “Had the sales of locally produced items not improved, no foreign investor would have risked setting up manufacturing facilities here,” he insisted.

Another senior manager of a company said the “demand for these items has always been there”. However, he added, “during the past one decade it was largely met by the smuggled items that cost the consumers less than the locally made or legally imported items.”

Once the smuggling was checked, the local companies were quick to recover the lost market share from the smugglers. “Someone has to meet that demand which is rising with the growing population,” he said.

The manufacturers, however, candidly concede that their “sales have not grown just because of more effective checks and controls on smuggling”. “The favourable government policies, the reduction in import tariffs, and other measures taken in the last couple of years have also helped us a great deal. But all these measures in fact contributed to checking the menace of smuggling which in the past could not be controlled despite administrative steps,” they added.