Major Assignment

Report on SMEs and CPEC

Name: Tayyaub Khalid (9254)

Program: MBA(1.5)
Semester: 3rd
Subject: Strategic Marketing Management
Submitted to: Madam, Hafsa Sadia
Submission Date: 20, July 2019

DEPARTMENT OF MANAGEMENT SCIENCE

City University of Management Science & Information
Technology Peshawar
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Contents

What are SMEs? 4

Defining SMEs in context of Pakistan: 4

China Pakistan Economic Corridor (CPEC) the new era of SMEs 6

SMEs and CPEC 6

1. Textile and Garment Business 7

2. Leather garments 8

3. Handicraft business (Wood Craft, Embroidery etc.) 8

4. Looms work (Carpets and Fabric) 8

5. Surgical Equipment 9

6. Sports Goods 9

7. Gems Stone 10

8. Granite and Marble 10

9. Cement Industry 11

10. Steel Industry 12

11. Banking Industry 13

12. Hotel and Restaurants Business 14

13. Fruit Processing 14

Reference 20

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China Pakistan Economic Corridor (CPEC) and its
impact On Small Medium Enterprises (SMES)

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What are SMEs?
These are Small and medium-sized enterprises (businesses). But there is still contradictory
point of view regarding, proper definition of SMEs:

Defining SMEs in context of Pakistan:

There is no uniform definition of SMEs in Pakistan. The SME Bank, SMEDA, Pakistan Bureau
of Statistics (PBS) and State Bank of Pakistan (SBP) have defined SMEs in different ways.
Under fifth schedule to Companies Ordinance 2015, Securities and Exchange Commission of
Pakistan (SECP) also classified large, medium and small companies exclusively. For example,
SMEDA defines a SME based upon the number of employees and total number of productive
assets. The SME bank uses only total number of assets as the criterion. PBS takes into
consideration only the number of employees. Whereas, SBP’s definition of a SME is based on
the nature of the business, number of employees, amount of capital employed and net sales
value per annum.

The SME definitions applied in various countries are based upon various criteria such as
number of employees, value of assets, sales and volume of output (Cunningham & Rowley,
2008). These definitions vary from country to country and also within countries. For instance,
France defines a SME as having less than 500 employees; whereas Germany uses less than 100
employees (see Table 1).Moreover, within countries, definitions may also vary by sector or
type of business. For instance in Japan, manufacturing, mining, and transportation and
construction industries defines a SME as having less than 300 employees or invested
capitalization less than 100 million yen. While wholesale businesses define a SME as an
organization employing less than 100 employees or capitalization less than 30 million yen. In
retail it is defined as businesses employing less than 50 employees or capitalization less than
10 million yen

These Small and medium-size enterprises (SMEs) play a significant role in the economic,
industrial and social development of a country. SMEs play a distinctive role in the
development, as it has been a source of employment creation and income generation. These
contribute in the development of a nation in maintaining the standard of life by increasing the
income of the people. SMEs have a major contribution in the development and competitiveness
of the economy. SMEs in Pakistan play a critical role in the economic growth, progression of
technological innovation, sourcing to large industries, cottage industries and promoting
economic renewal and social development. SMEs are one of the main sources to reduce

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poverty, expand national economy. It can be the foundation of employment and social uplifting.
Pakistan’s economy, like that of many developing countries is a direct reflection of its SME
sector. According to Economic Census of Pakistan there are 3.2 million businesses in Pakistan.
SMEs represent more than ninety percent of all private businesses and employ nearly 78
percent of the non-agriculture labour force in Pakistan (PBS, 2011). SMEs’ contribution to
Pakistan’s Gross Domestic Product (GDP) is more than 30%. Furthermore, the sector
represents 25% of exports of manufactured goods and 35% in manufacturing value added.
Almost 53% of all SME activity is in retail trade, wholesale, restaurants and the hotel sector.
As regarded 20% of SME activity is in industrial establishments and 22 % in service provision
(PBS, 2011). Recognizing the significant contribution of SMEs to economic diversification,
employment creation, income generation, and poverty alleviation, the Government of Pakistan
(GoP) has been putting much effort and resources towards the promotion of the development
of entrepreneurship and SMEs in general. For example, the GoP established a Small and
Medium Enterprise Development Authority (SMEDA) in October 1998 with the aim of
developing this sector. The GoP has also established an SME and micro finance banks to
finance this sector. Moreover, as per the directions of GoP, most commercial banks in the
country have specialized departments for the SME sector. However, regardless of their
economic importance, SMEs in Pakistan suffer from a variety of shortcomings, which have
confined their ability to adjust to the economic liberalization measures introduced by the GoP
and their capacity to take full advantage of the rapidly growing world markets. These
shortcomings include, for example, focus on low value-added products, absence of an effective
business information infrastructure, energy crisis, lack of strategic planning, low levels of
financial literacy, unskilled human resources and non-aggressive lending strategies by banks.

Pakistan economy is an economy of SMEs. Nothing portrays the reality of Pakistani business
environment better than the nature of its SME sector. Therefore, it is significant to clearly
identify different categories of SMEs and takes into account various types of enterprises (even
small local enterprises or partnerships) under one definite definition. Previously there has been
lengthy debates and arguments regarding the major thresholds in the definition of SMEs
(Soomro & Aziz, 2015). Many countries across the world have struggled over to determine
appropriate size of SMEs and also to overcome the challenges that impede the progress of
SMEs. Economist, practitioners and academicians verified that SMEs are found to elevate
growth, create employment, reduce poverty and alleviate foreign exchange earnings.

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China Pakistan Economic Corridor (CPEC) the new era of SMEs
China Pakistan economic corridor known by the acronym CPEC is a collection of infrastructure
projects throughout Pakistan originally valued at $46 billion, the value of CPEC projects is
worth $62 billion as of 2017. CPEC is intended to rapidly modernize Pakistani infrastructure
and strengthen its economy by the construction of modern transportation networks, numerous
energy projects, and special economic zones. Vast network of highways and railways tracks
are to be built under the aegis of CPEC that will span the length and breadth of Pakistan.
Modern transportation networks built under CPEC will link seaports in Gwadar and Karachi
with northern Pakistan, as well as points further north in western china and central Asia. A
1,100 kilometre long motorway will be built between the cities of Karachi and Lahore as part
of CPEC, while the Karakoram Highway from Hasan Abdal to the Chinese border will be
completely reconstructed and overhauled. The Karachi–Peshawar main railway line will also
be upgraded to allow for train travel at up to 160 km per hour by December 2019. Pakistan's
railway network will also be extended to eventually connect to China's Southern Xinjiang
Railway in Kashgar.

China-Pakistan Economic Corridor (CPEC) aims to link the landlocked western Chinese region
of Xinjiang to Gwadar, allowing ships carrying China's oil imports and other goods from the
Persian Gulf to use a much shorter and secure route and avoid the existing troubled route
through the Strait of Malacca.

SMEs and CPEC

CPEC is passing from Gwadar (Pakistan) to Xinjiang (china), CPEC include predefined special
economic zones and hubs. It offers equal growth opportunities to all the provinces, existing
and new businesses, by giving them access to proper transportation systems, and easy access
to international markets. There are several new business opportunities for large, medium and
small enterprises and there are various opportunities for existing businesses which can be
gained and contribute to the economy in the form of GDP, state revenue, employment, poverty
reduction and growth of Pakistan. As Small and Medium Enterprises (SMEs) are 90% of the
total enterprises in Pakistan, which makes it crucial for them to be linked to China-Pakistan
Economic Corridor (CPEC) projects, said Dr Shahid Rashid, Executive Director CPEC Centre
of Excellence, during a seminar held in the Lahore School of Economics (LSE). He said that
the entrepreneurs have the most important role to play since they can provide the platform and
the tools needed to bridge the gap between Special economic zones (SME's) and CPEC. A

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round-table conference was also held by the title "Role of CPEC to develop special economic
zones (SEZs), SMEs and Human Resources", jointly organized by CPEC Centre of Excellence
and Federation of Pakistan Chamber of Commerce and Industry (FPCCI). By recognizing
importance of Small and Medium Enterprises (SMEs) they said it can play a key role in the
development of the China-Pakistan Economic Corridor (CPEC), considering they are the
majority shareholders of business in Pakistan. Pakistan has huge potential in several industries
but due to energy and economic crises it got left behind…

There are many SMEs which can benefit from CPEC, and can play a vital role in the success
of China-Pakistan Economic Corridor:

1. Textile and Garment Business

2. Leather Garments
3. Handicraft (Wood Craft, Embroidery etc)
4. Looms Work (Carpets and Fabric)
5. Surgical Equipment
6. Sports Goods
7. Gems Stone
8. Granite and Marble
9. Cement Industry
10. Steel Industry
11. Banking Industry
12. Hotel and Restaurants Business
13. Fruit Processing

1. Textile and Garment Business

Textiles and apparel is the largest industrial sector of Pakistan and plays a significant role in
its economy, particularly in export earnings. It has been observed that the small and medium
enterprises (SMEs) within the apparel sector also contribute to exports. CPEC is an opportunity
for our country to motivate these small and medium industries to be the part of something
bigger. Government need to support these industries and these SMEs suppliers must become
more competitive and join international platform where they network with other international
SMES, designers and executives and jointly address common concerns. These SMEs can form
strategic alliances with larger-scale sector and come up with a comprehensive plan for reducing
their production costs and activities spread over a much larger geographic area and also achieve

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compliances in the process. Government can motivate such alliances though performance
based tax benefits. These SMEs need to diversify their target markets and explore marketing
avenues such as digital marketing that will promote their business with very little marketing
expenditure. Another golden opportunity for SME is contract manufacturing form china,
particularly since the Pak- China economic corridor is being established. CPEC offers equal
growth opportunities to all the provinces by giving them access to proper transportation
systems, and easy access to international markets and resolution of the energy crisis.

2. Leather garments
According to Pakistan bureau of statistics leather industry ranks the second biggest export-
oriented industry of the country after textiles. Moreover Pakistan’s share in world leather trade
is almost 1%. Pakistan has huge potential for these products. Pakistan mostly export these
leather products to US and Europe, CPEC offers equal growth opportunities to all the provinces
by giving them access to proper transportation systems, and easy access to international
markets and resolution of the energy crisis. Pakistan’s exports need to target to diverse markets
such as Africa and Russia where there is potential for leather garments. Government needs to
strengthen bilateral trade and an association such as SMEDA needs to attract investors and
develop strategies for the SME with respect to CPEC, Russia and Japan.

3. Handicraft business (Wood Craft, Embroidery etc.)

CPEC is not only an infrastructure project, it can boost the economy of Pakistan by reducing
the energy crises and uplifts the industrial sector of Pakistan. It also promote tourism in the
country which ultimately increase the demand of handicraft items, like wood crafts,
embroidery, mud craft etc... Pakistani people is very skilled and hardworking and makes
different types of handicrafts. As there a huge demand of handicraft in the developing and
developed world, but people don’t have knowledge and adequate resource for export. Now
when CPEC provide easy access to international markets, if government support these small
businesses in exporting these handicraft, it can not only contribute in the national income, GDP
and reduce the trade deficit, but also reduce the poverty and promote employment.

4. Looms work (Carpets and Fabric)

There is a huge demand of handmade fabric and carpets within and outside the country and
now when CPEC provide easy access to international markets, by expending the divers target
markets and exporting these items in different countries we can not only earn plenty of money

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but also contribute in national income, can create new jobs and skilled labour and source of
income for many people and can take part in reducing poverty and unemployment.

5. Surgical Equipment
Pakistan is also known for its high quality surgical instruments and it is a source of income for
numerous citizens of Pakistan. Pakistan exports these surgical instruments to different
countries like: United States of America, Germany, United Kingdom, France, Brazil, Italy,
japan, United Arab Emirates, Australia, and India. And industry contributes sufficient amount
in national income and contribute in GDP of Pakistan, This industry has huge potential with
CPEC, easily access to china and Russia, Canada, Belgium, Netherlands which are in top 10
worlds potential markets for surgical instruments, we can target new markets. Now there is
potential opportunity for new SMEs to take place and plan to fulfil the future demand. Chance
for new entrepreneurs to start new SME, take advantage of coming opportunity, plan for right
target market and plan to satisfy their demands.

6. Sports Goods
Pakistan is also a manufacturer and exporter of the sports goods and sport industry of Sialkot
is one of the leading exporting sector of Pakistan. The country exported sports goods worth
$332.516 million during July-June (2017-18). Among the sports products, the exports of footballs was
$166.881 million during the fiscal year. The exports of gloves was $111.740 million and exports of all other
sports products were $53.895 million. Pakistan sports goods industry is facing competition with
India, Vietnam and some other countries. Pakistani sports product has quite value in all over
the world. Our foot balls has high demand in various countries. Pakistani foot balls are played
in several international matches and world cups... sport goods industry is the income source of
enormous people of Pakistan. And contributes to the economy of Pakistan in form of national
income, GDP and is a sufficient part of our export.

There is huge demand for our sports product all over the world but still there are some markets
left. CPEC planned to provide proper transportation systems, and easy access to international
markets and resolution of the energy crisis which can boost the industry and help in
achievement of industry true potential. Access to the new markets can give competitive
advantage and provide different opportunities for the existing and new SMEs to target the right
market, contribute in form of national exports, create new employment opportunities,
contribute in form of GDP, and contribute to the society, take part in poverty reduction.

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7. Gems Stone
God blessed Pakistan with three mountain ranges of Gilgit-Baltistan; Himalayas, Hindukush
and Karakoram contain many minerals and Gems including emerald, ruby, sapphire,
aquamarine, moonstone, and amethyst. The Gemstones has high value and demand in Europe,
UAE and all over the world, which can not only generate revenue but also establish a new
industry, but due to the lack of proper resource and skills either sold in raw form to other
countries in cheap or it is unutilized, and wasted. CPEC is an opportunity for the Pakistan
SMEs to make a strategic alliance with china to take skill or use resources and extract these
Gemstones and export it in the finished form to the demanded markets like UAE and Europe
etc. it will not only earn sufficient earning for the SMEs but also contribute in resolution of the
problem of trade balance. It also creates new employment opportunities and stablishes new
industries.

8. Granite and Marble

Pakistan is the 6th largest mineral extractor of marble and granite in the world. In spite of the
huge size of deposits and long-term export potential, Even Onyx, a rare marble, is abundant in
the Chagai district of Balochistan; its dark green variety is found in five countries only. Its
reserves are estimated at 34m cubic meters. Over 1400 quarries and 3000 processing units are
operational in the country, employing about 30000 workers. But still the country’s annual
production of such stones has stagnated at around 2.5m tonnes, which contributes merely 2%
to the global market. As china accounts for 60% of Pakistan’s total marble exports. China and
Italy purchase raw products like slabs and blocks and re-export value-added items like mosaic
work, inlay designs and tiles around the world, including to Pakistan. Russia, United States of
America and European counties demand finished marble products. Saudi Arabia alone imports
marble products worth $1500m. This suggest there is need for developing technology to
capture value-added export markets.

But the major obstacles in the expansion of the mining industry are the persistent electricity
blackouts, outdated quarrying techniques, inconsistent supplies of raw materials, and lack of
infrastructure in areas where quarries and processing units are located. But now china - Pak
economic corridor (CPEC), alliance with china in different project of energy and infrastructure
will be the resolution of infrastructure and energy crises of Pakistan, as well as collaboration
with China, we can access new technology and advance machinery and get proper skills in the
field which can provide uplift to the granite and marble industry of Pakistan. As CPEC provide

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easy access to the international market it can also open doors to new markets like Russia,
Europe and America, as well as develop existing markets. With development of these small
and medium enterprises Pakistan can not only take step forward toward resolution of trade
deficits, but also provide numerous employment opportunities, raise skilled labour and uplift
new SMEs which can contribute to the economy.

9. Cement Industry
Pakistan unlike China, India, United States, Iran, Turkey, Brazil, Russia, Saudi Arabia,
Indonesia and Vietnam may not be among the top ten cement producing countries in the world.
However, it is widely accepted in the world that the quality of Pakistani cement is second to
none. Pakistan is the country, which has been exporting cement to the cement manufacturing
countries such as India. It is a fact that the Indians appreciate the quality of the Pakistani cement
compared to their own. The recent skirmishes between Pakistan and India halted the cement
exports from Pakistan to India since the Indian government imposed taxes to the hilt. Pakistan,
a cement exporter to South Africa, Iraq, India, Afghanistan etc., does not heavily rely on export
of cement since the domestic requirement is more than sufficient to make the Pakistani cement
manufacturers go for more and more investment and expansion plans. At the same time, export
is an advantage never to be missed. Out of 159 cement producing countries and territories,
Pakistan is one of the leading manufacturers in terms of quality.

Local demand of cement in Pakistan could never be satiated since urbanization is quite rapid
and the infrastructure development plans are on the go due to burgeoning population. China is
the largest cement producer in the world by installed capacity and production with over 2,500
million metric tonnes of cement. India produces over 280 million metric tonnes of cement. The
USA being the third largest cement produces over 83 million metric tonnes. Iran is one the
leading global cement producers with over 80 million metric tons. Pakistan is also considered
one of the leading cement manufacturers with around 49 million tonnes and the expansion plans
do suggest that Pakistan would be producing over 70 million tonnes in a couple of years.

Pakistan is the world’s 14th largest cement producer, it has approximately 24 cement plants in
Pakistan contribute billion of rupees to the national exchequer. If smuggling is controlled, the
government may get even higher amount which would be beneficial for both the government
coffers as well as for the manufacturers whereby promoting the local industry. Over 50% of
the demand for cement is by the builders for multifarious housing projects whereas the rest
comes for infrastructure development. Pakistan’s road network and its development is of core

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significance since over 90% national passenger traffic and freight movement takes place by
land so the requirement of more and more roads is always there. Pakistan’s domestic
consumption stands at 41.147 metric tonnes currently, which is set to witness a surge owing to
CPEC in particular and investment from the Gulf countries in general. As CPEC several
infrastructure projects are on the way so there will be high demand for cement industry. The
economic slowdown in China, which consumes over 60 percent of the world’s cement may
bring export opportunities for the Pakistani cement manufacturers. On the other hand demand
within the country is expected to increase significantly because of ongoing local housing and
infrastructure projects as well as Naya Pakistan housing schemes in different cities. Further,
the US economic sanctions on Iran might open doors for the Pakistani cement manufacturers
to export cement in substantial quantity to Afghanistan and the African countries. Which may
come as an opportunity for the existing and new small and medium enterprises (SMEs) to fill
the demand gaps within the country as well as by targeting and capturing new markets like
Africa. This not only boost the economy by reducing trade deficits and contribute in GDP,
creating employments, but also creates more sources of revenue for state as well as citizens of
Pakistan.

10.Steel Industry
Pakistan is ranked 28th in number of iron production country, volume of 5million tons but
considered as fastest growing steel producer according to World Steel Association. Other
nations seeing strong growth in steel production are Iran, Vietnam and Egypt, ranked 13th, 19th,
and 23rd. Some of key player in Pakistan steel industry are Aish steel mill (ASM), Amreli
Steels, and Agha steels.

Being the fastest growing steel producer, shows huge potential of the industry, if government
support the industry in form of tax relaxation to the new SMEs and provide adequate resources
to these SMEs they can play a vital role in the economy. Pakistani industrial sector suffered a
lot because of terrorism and energy crises of Pakistan but now it’s time to take future in your
own hand prepare for the future opportunities. As CPEC energy and infrastructure project on
the way as well as several new housing projects like; President of Pakistan also announced the
Naya Pakistan Housing Project in different cities. There are also planned economic zones in
the CPEC, which can create huge demand for the steel industry. It will be and opportunity for
these existing SMEs to take advantage of these demand and also for new SMEs to take place
and fill the demand gap. CPEC is also providing easy access to the international markets, if
government provide some tax relaxations to new SMEs for few years, it will be quit beneficial

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for the future of Pakistan industrial sectors. It will be an opportunity for new entrepreneurs to
step forward and start new business. It will create employment, contribute to national income
and helps in reduction of poverty.

11.Banking Industry
Pakistani banking sector consists of commercial banks, foreign banks, Islamic banks,
Development finance institutions (DFI’s) and Micro- finance banks. Currently there are 26
commercial banks, 6DFI’s and 11 Micro- finance banks operating in the country.

As China Pakistan Economic Corridor is in the process of execution it (CPEC) provides the
industrial sector of Pakistan with an opportunity to modernize and become more efficient and
competitive. The various energy projects, coupled with improvements in infrastructure and
road networks, would help address some of the key constraints to growth. More importantly,
the development of Special Economic Zones (SEZs) would enable industries to smoothen
supply chains, enhance collaboration and innovation capabilities, and help reap significant
economies of scale. However the process required time, and adequate capital on every stage
china planned to invest in the energy and infrastructure reforms as well as planed economic
zones in different places but it’s not enough…

We may need capital from the banking sector because some firms may want to prepare their
self by expend for the future competition and gaining competitive advantage. There is also
opportunity for new entrepreneurs to start their own SMEs and take advantage of coming
opportunities for that they need funds, they need capital to start with….so these financial
institutions are the way for them for gathering funds. But CPEC project is passing form Gwadar
to china, it is huge distance, where it passes there must be need of food, drinks, water, fuel auto
shop and other necessities, so there are numerous Small business opportunities for local people
to start a business in their local area near to the CPEC route.

As Small and Medium Enterprises (SMEs) are 90% of the total enterprises in Pakistan, which
makes it crucial for them to be linked to China-Pakistan Economic Corridor (CPEC) projects.
So commercial as well as Mico-finance banks can play their part in it by starting their new
branches near CPEC route and expending there business in china. It will contribute in the
national income, gives new entrepreneurs and locals an opportunities to start their own business
and make their living, create employment, contribute to national income and GDP, and
reduction of poverty.

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12.Hotel and Restaurants Business
The hotel and restaurant business has been present in Pakistan since its independence in 1947.
In Pakistan this industry contributes a large proportion to the country’s economy. The hotel
and restaurant industry contributes to a large percentage of country revenue. At first these were
not many hotel to begin with but as time passes, the country saw the gradual establishment of
local and international hotels. The hotel Mehran is an example of an early local hotel. The
Avari towers rose as a prominent hotel chain present in Karachi, Lahore, Islamabad and Dubai.
At the moment there are four major five star hotel operating in the country; pearl continental,
Marriott, Avari Towers, and Sheraton Hotel. There are some other names Serena hotel and
Carlton Hotel, which are relatively new compared to the previous four. During the time when
Pakistan tourism was on the highest, there was huge scope for hotel and restaurant industry,
when terrorism come to Pakistan in the form of bombing and target attacks in Karachi it
destroyed the hotel and restaurant industry. In previous few years when Pak-army took stand
against terrorism and target killing and destroyed all the bunkers of terrorists in Waziristan and
did Karachi operation, now people of Pakistan and tourist feel safe and secure. People are
coming out to enjoy in restaurants and tourist are coming to Pakistan to see the beauty and
cultural heritage of our country, northern areas, Swat, Naran Kaghan, Hunza, Chatral etc..
Taking and spreading positive image of Pakistan.

Now CPEC is a positive opportunity for large, small and medium hotel and restaurants to
spread their branches in the areas CPEC is passing through and near economic zones or tourism
hubs, northern areas like; Swat, Naran Kaghan, Hunza, Chatral etc because it will be huge
markets for foreign business community as well as tourists. There will be massive demand for
hotels to stay and restaurant for food choices whether it’s local food or processed food, Chinese
or Pakistani. It will be big uplift for the hotel industry of Pakistan. There is an opportunity for
new entrepreneurs to take step forward and start their own hotel or restaurant business, make
their living, create new employment, contribute to the national income, reduce poverty and
society.

13.Fruit Processing
Pakistan is blessed with all four seasons; spring, summer, fall, and winter, which is the reason
that Pakistan is also blessed with all seasons vegetable and fruits. Pakistan has an ideal climate
for cultivation of a variety of fruits. Thus an assortment of tropical, sub-tropical and temperate
fruits are grown in the country. Different varieties of fruits are cultivated on an area of more

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than 764,258 hectares with a total production of more than 7,018,002 tonnes (Fruit, Vegetables
and Condiments Statistics of Pakistan 2014-15). The problem with the horticulture sector is
that farmers do not earn enough due to lack of knowledge about proper methodology,
technology and procedures involved in raising fruit trees and fruit picking. On the other hand,
the intermediaries are better informed to harvest at a lesser rate through cheap labour. However,
the middle man's knowledge is also limited and this leads to a 30% loss in fresh produce
which can easily be remedied through proper platforms to address matters pertaining to
horticulture efficiency and agrarian management and development. There is also a dearth
of well-trained horticulturists to help growers in proper harvesting, packaging, transport
and marketing.

Production and Potential

The production of Fruits and their exports are suffering due to the non-existence of an all-
inclusive policy which can balance the local demand with challenges in export growth. The
Federation of Pakistan Chambers of Commerce and Industry (FPCCI) suggests that there is
a requirement of a comprehensive policy on horticulture production and exports, so the
problem of domestic availability of fruits and their expor ts can be solved in the long run. For
example, Pakistan is importing apples from abroad while it is in surplus in terms of apple
production. It is alleged that the production data on fruits and other horticulture items is not
accurate and is based on approximations and projections rather than actual data. The problem
with such a practice is that traders are not able to make sound judgment regarding import or
export requirements. Pakistan’s fruit exports are 0.37% of world fruit expor ts. In 2016, $435
million worth of fruits and nuts were exported while current world fruit trade stands at $117
billion. Fruit exports of Pakistan experienced a growth of 5% between 2015 and 2016.

Pakistan can certainly gain from focusing on the export potential of fruits given the scale and
volume of production. Pakistan is still a big exporter of several fruits. Pakistan is the sixth
largest producer of Kinow .Kinnow is the most exported fruit of Pakistan.32.5 percent of total
export is to the middle East alone. It is also exported to Indonesia, the Philippines, Sri Lanka.

Pakistan is on 10th number among largest citrus producers. Still, it consumes larger part of its
citrus production locally and only exports 10% of its production. In citrus exporting countries,
Pakistan is at 20th number. Brazil, China, USA, Mexico and India are largest citrus producing
counties in the world.

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Mango is the second most exported fruit from Pakistan. Pakistan stands fifth amongst mango
growing countries. It is grown in Punjab over an area of 48413 hectares. Mango from Pakistan
is well known for its taste and quality in other countries. Mango is exported to neighbouring
and European countries, i.e. Afghanistan, Bahrain, Dubai, Kuwait, Saudi Arabia, United
Kingdom, France, Malaysia and Singapore. Other World’s top mango producing countries are
India, China, Thailand and Mexico.

A large amount of dates are exported to USA, India, Canada, UK, Denmark, Germany and
many other countries. Pakistan has become the third largest exporter of dates. The annual
production of dates in Pakistan is estimated at around 535,000 tonnes of which 86,000 tonnes
are exported. Of the 300 varieties of dates produced in Pakistan, Begam Jangi of Baluchistan,
Aseel of Sindh and Dhakki of Dera Ismail Khan are sought after the world over due to their
exotic taste. Worlds’ top 5 date producing countries are Egypt, Iran, Algeria, KSA and UAE.
Pakistan is 7th largest date producer and 3rd largest date exporter.

Chinese company urged to establish fruit processing units along CPEC rout

The Board of Investment (BoI) Monday urged the Chinese company, China Zhongde
International Investment Group to invest in establishing fruit processing units along the China
Pakistan Economic Corridor (CPEC) in Gilgit Baltistan.

“The major portion of fruits produced in Gilgit Baltistan goes waste due to lack of processing
facilities,” Secretary BoI, Azhar Ali Chaudhry said during a meeting with the six member
delegation of the company headed by its Chairman, Gaobing Zhao.

Senator Talha Mehmood and senior management of the BoI were also present on the occasion.
The Secretary said that investment in fruit processing units would not only be beneficial for
the people of Gilgit Baltistan but also a lucrative business for the company. He expressed the
hope that initiative would be fully supported by the Gilgit Baltistan government. Earlier,
Director General Board of Investment, Sohail Ahmad gave a detailed presentation to the
Chinese delegation on the investment opportunities in Pakistan. He informed the delegation
that Pakistan was providing uniform treatment to local and foreign investors in almost all
sectors of economy. He said that Special Economic Zone Act was approved by Parliament in
2012 which could be developed with public private partnership while the provincial
government cold play front line role. Earlier, Gaobing Zhao informed the BoI officials that his
company was interested to invest in various sectors of country. He said that the company was
interested to invest in energy with focus on distribution side, agriculture, infrastructure and

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other sectors of the economy. He expressed satisfaction on the investment policies of the
country and said that he looks forward to invest in Pakistan.

So there is huge potential of fruit and vegetable processing industry of Pakistan and because
China is also interested to invest in the fruit processing industry with in the CPEC route and
CPEC, itself provide an easy and direct access to the international markets like Russia and
China, opens a new door for future export opportunities. Also provide many national and
international investors an opportunities to invest. CPEC provide huge opportunities to new
local entrepreneurs to step forward and start their own Enterprise. Create new job opportunities,
make their living, contribute in national income, GDP and to society.

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Conclusion

China Pakistan economic corridor known by the acronym CPEC is a collection of infrastructure
projects throughout Pakistan. CPEC is intended to rapidly modernize Pakistani infrastructure
and strengthen its economy by the construction of modern transportation networks, numerous
energy projects, and special economic zones. Which provide different national and
international firms an opportunity to expend their operations and young entrepreneur to step-
forward, start their business enterprise and make their living, create new employment
opportunities, reduce poverty, contribute in the national income and GDP.

Vast network of highways and railways tracks are to be built under the aegis of CPEC that will
span the length and breadth of Pakistan. Modern transportation networks built under CPEC
will link seaports in Gwadar and Karachi with northern Pakistan, as well as points further north
in western china and central Asia. A 1,100 kilometre long motorway will be built between the
cities of Karachi and Lahore as part of CPEC, while the Karakoram Highway from Hasan
Abdal to the Chinese border will be completely reconstructed and overhauled. Which will
increase the demand of cement, and steel. Pakistani cement is known for its best quality, even
cement producing countries like India imports from Pakistan. To fill the future demand for
cement, companies are increasing their production capacity, there is also opportunity for young
entrepreneur to step forward and start new SMEs. The Karachi–Peshawar main railway line
will also be upgraded to allow for train travel at up to 160 km per hour by December 2019.
Pakistan's railway network will also be extended to eventually connect to China's Southern
Xinjiang Railway in Kashgar. Which will create huge demand for the steel, and boost the steel
industry of Pakistan, Pakistan also has huge potential for Exports. Its an new opportunities for
existing and new SMEs to facilitate that demand.

It also provide huge opportunity for Pakistan exporters to direct and easy access to the
international market. Which not only facilitate China in export of different commodities but
also Pakistan in different sectors like cement industry, Marble, granite, steel, gemstones,
handicraft, fruit, and food industry.

Commercial as well as Mico-finance banks also can play their part in it by starting their new
branches near CPEC route and expending there business in china. It will contribute in the
national income, gives new entrepreneurs and locals an opportunities to start their own business
and make their living, create employment, contribute to national income and GDP, and
reduction of poverty.

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As these Small and Medium Enterprises (SMEs) are 90% of the total enterprises in Pakistan,
which makes it crucial for them to be linked to China-Pakistan Economic Corridor (CPEC)
projects, said Dr Shahid Rashid, Executive Director CPEC Centre of Excellence, during a
seminar held in the Lahore School of Economics (LSE). He said that the entrepreneurs have
the most important role to play since they can provide the platform and the tools needed to
bridge the gap between Special economic zones (SME's) and CPEC. SMEs can Play a biger
part in the success of CPEC if SMEs importance realized and government support these new
or existing industries.

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Reference
1. https://www.researchgate.net/publication/330133899_Horticulture_Sector_Fruits_of_
Pakistan_-_Export_Potential
2. http://www.app.com.pk/chinese-company-urged-to-establish-fruit-processing-units-
along-cpec-rout/
3. http://cpec.gov.pk/
4. http://cpec.gov.pk/news/9
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6. http://www.cpecinfo.com/news/after-cpec-hotel-industry-has-witnessed-a-40-precent-
increase-in-occupancy/NTEzMg==
7. http://www.cpecinfo.com/news/cement-industry-to-receive-major-boost-after-
cpec/NjQxMQ==
8. http://www.cpecinfo.com/news/cpec-opens-new-avenues-of-value-addition-in-textile-
sector/NDk2NA==
9. http://www.cpecinfo.com/news/cpec-to-help-boost-bolachistan-handicrafts-industry-
/NzY2
10. http://www.cpecinfo.com/news/marble-industry-set-to-receive-a-boost-through-
cpec/NjU0Mg==
11. https://tribune.com.pk/story/1538189/2-pakistans-gems-jewels-exporters-drool-cpec/

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