KARACHI, April 28: Smuggled Chinese stationery items have made deeper inroads in the domestic market, and their presence can be gauged from the fact that a customer can have 5-10 Chinese pencils at Rs5 as against Rs2-3 for just one pencil produced by the local industry.

At wholesale, locally produced pencil is available at Rs300 per gross (144 pencils) as against Rs225 of Chinese pencils.

In case of fountain pens, locally made product can be purchased at Rs14-15 at retail stage as against Chinese pen at Rs20, but Chinese product attracts because of its metal case. If local producers intend to venture in making the metal case pen of same quality, it would cost them Rs30.

However, Chinese ball pen does not hold good image among the local buyers because of being poor in quality. Owing to this, the smuggled Chinese ball pen has been maintaining 25-30 per cent share for the past few years.

The market share of smuggled Chinese pencil now stands at 30 per cent as against just 10 per cent three years back, while the share of smuggled fountain pen now holds over 50 per cent market as compared to 10-15 per cent three years back.

In the country’s overall stationery market, local players enjoy the 50 per cent share, while 30-40 per cent share has been captured by Chinese products through mis-declaration, Afghan Transit Trade (ATT) and under invoicing.

Pakistan’s total size of stationery market is estimated at Rs6 billion in which writing instrument manufacturers share ranges between Rs1.5-2 billion while more than Rs1 billion falls in the category of smuggled, under-invoiced and mis-declared Chinese products.

Vice chairman, Writing Instrument Manufacturers Group of Pakistan (WIMGP), Riazuddin says that two more producers had entered the local markets but they were finding it very hard to survive in this uncertain market situation in which the share of smuggled items has been continuously rising. Currently there are six producers of writing instruments including the two new entrants.

Pakistan produces 300,000 gross per month, while production of ball pen hovers between 13-15 million per month. Production of fountain pen ranges between eight to 10 million per month.

“Local producers have been knocking the doors of the government to take action against the entry of Chinese items through illegal channels but to no avail,” he said adding that even Prime Minister has been approached in this regard.

He said that the cheapness of the Chinese pencils can be gauged from the fact that were now being sold in public transport openly. It has never happened before. However, he said that Chinese writing instruments cannot match with the quality of locally produced items. Only the cheap price factor, because of illegal entry by evading taxes and duties, is luring the customers otherwise if these are being released through legal means, the situation would have been different.

On an average, smuggled Chinese pencil is cheaper by 50 per cent as compared to locally produced pencil while in other items, Chinese items are cheaper by 30-40 per cent, he said.

The cumulative impact of duties and taxes on import of pencils comes to 50 per cent, while in case of fountain pen and ball pen the cumulative duties and taxes come to 55 per cent.

The local industry, falling in the category of organized sector, is frustrated by this situation. “We have no problem if the Chinese goods come through legal way by paying taxes and duties. We are concerned about illegal way the product enters the market like tax evasion and misdeclaration which makes local products uncompetitive,” he said.

Dollar Industries, a leading stationery item producer, has initiated a campaign against the sale of fake Dollar products, makers of counterfeit Dollar products and smuggling, Riazuddin, who is also the director of the company, said.

So far the company with the help of law enforcement agencies have captured several persons in Peshawar, Rawalpindi, Bahawalpur, Sadiqabad and Quetta who are involved in selling and making of fake Dollar products, he added.