KARACHI: While the overall big industry output showed a positive trend in December 2019 as per official figures, manufacturers paint a somewhat different picture saying the figures are contradictory.
According to Large Scale Manufacturing (LSM) data, food, beverage and tobacco surged 41.57 per cent in December 2019 by and 4.3pc in 6MFY20, emerging from a negative trend.
Under this category, soft drinks jumped 16pc year-on-year to 156.879 million litres during December 2019 while juices, squashes and syrups production grew by 30pc to 32.43m litres.
An official in a multinational food company expressed surprise over growth in December which is a lean period for liquid products due to chillier weather.
“Increase in December output does not make any sense. Liquid products’ consumption usually gains from March.”
Pakistan Beverages Ltd Director and former president Karachi Chamber of Commerce and Industry (KCCI) Siraj Kassam Teli explained the food category is very broad and the main money is Coke and Pepsi.
He said December saw only 2-3pc increase and full growth after special discounts was only 5pc compared to last year. “I doubt that beverage has seen more than 5pc rise anywhere,” Siraj added.
As per LSM figures, ghee and cooking segments continue to post increases during both December 2019 as well as 1HFY20 despite rising prices.
Korangi Association of Trade and Industry (KATI) President and Pakistan Vanaspati Manufacturers Association (PVMA) former vice chairman Sheikh Umer Rehan said the LSM figures differ from our industry’s sales data.
He expressed surprise that the index has shown lower production of ghee and cooking oil at 942,000 tonnes in six months while actual industry data gives a value of 2.2m tonnes.
According to Rehan, the country’s annual edible requirement is 4.2m tonnes which includes 3m tonnes import of palm oil, 800,000 tonnes of imported seed oil and 400,000 tonnes from local cotton seed and sunflower.
Disagreeing over the increase in production of ghee and cooking as mentioned by LSM, he said consumers’ buying power has shrunk, forcing manufacturers to bring in one kg/litre ghee and cooking pouch whose sales are more brisk than five and 2.5kg/litre packs.
Meanwhile, leather products were higher by 16.10pc in December and 11pc in the six-month period.
On the other hand, endorsing the recently published data, Pakistan Leather Garments Manufacturers and Exporters Association (PLGMEA) Patron in Chief Fawad Ejaz Khan said it is true that leather sector and its exports are progressing which is evident from rising trend in foreign sales of leather garments and gloves by 10-12pc and footwear by 18pc in 6MFY20.
He said “our sector continues to get more orders from foreign buyers which will further boost exports in the coming months.”
However, Khan said the sector, which is based on imported raw materials, has been facing liquidity issue due to delay in various refunds like DLTL, sales tax, etc.
Production of liquefied petroleum gas (LPG) also entered positive zone in December 2019 while remaining in red in 1HFY20.
All Pakistan LPG Dealers Association Senior Vice Chairman Ali Haider said some storage plants, which were approved by Oil and Gas Regulatory Authority (OGRA), had been commissioned in November and December while more companies had applied for getting a licence for storage plant.
He said the countrywide problem of low gas pressure in winter season had forced many people to switch over to LPG, whose production rose despite the fact that some producers had gone for annual maintenance in December.
During the month, production went up to 76.417m litres versus 66.374m litres, while the first half output slightly fell 7.4pc to 407.027m litres.
To meet local demand, import of LPG swelled to $123 million IHFY20, from $114mwhile the same during December 2019 came in at $38m, as compared to $27.5m in same month last year.
Local petrol and diesel output in July-December 2019 fell by 8.68pc and 10.21pc but they both showed 21pc and 10pc growth in December 2019 versus same month previous year.
A petrol and CNG pump owner and member of All Pakistan CNG Association, Sameer Najmul Hassan, attributed growth in petrol and diesel to extended closure of CNG pumps from Dec 15, 2019 to date owing to low gas pressure in Sui Southern’s system.
He said a large number of people had taken costly ride by turning towards petrol while many transporters had started plying their vehicles on diesel. When CNG was easily available prior to Dec 15, consumers used to fill limited quantity of petrol.
CNG stations would return to their normal business from next week following improvement in gas supply in SSGC’s system after change in weather. “This situation will again bring back motorists towards CNG, thus bringing down consumption of diesel and petrol,” he added.
Published in Dawn, February 16th, 2020