Pakistan international trade

STRENGTHS OF PAKISTAN INTERNATIONAL TRADE:

The followings are the strengths.

1. -Imported Machinery and plants in most of companies, which provide better quality
to over all process and flourish the impact of Pakistan at foreign level
2 -Pakistan’s fisheries industry has gone at the boos for previous few years
3- Textile growth of Pakistan has attracted the international trade and now Pakistan is
importing the textile goods to other countries.
4- Availability of foreign investment and loans has also played an important role in
softening the demand for bank credit. The moderation in fixed investment demand in
cement, construction and textile is more of a reflection of the fact that these industries
AND ALL OTHER STRENGHTS OF PAKISTAN TRADE had already expanded their
capacities in recent years and floatation of debt instruments (e.g., chemical, cement,
real estate and ship yard) in the domestic market cement, real estate and ship yard.
5- In the domestic market the compressive strength is a very important factor of
Pakistan international trade.
5- Large productive industries in Pakistan are currently operating at their maximum
capacity due to the boom in commercial and industrial construction within Pakistan
towards international trade.
6- Higher GDP growth and investment attract the international trade.
7 Cement and other manufacturing sectors demand growth rate was double the GDP
growth rate in last three years and enhance the foreign trade in Pakistan.
8- GDP growth is expected to continue to have same positive impact on demand
growth.
9- Government development expenditures count for one third of total consumption and
reduced the problems.

10- Infrastructure development in a region triggers private development projects having

even positive impact on manufacturing of Pakistani goods and demands.

11- .Pakistani industries are one the largest exporter in Asia, major markets are of
Afghanistan and Iraq will be after peace. Its increased GDP by exports, providing
cements in Large Dams Project and earthquake rehabilitations projects.

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Pakistan international trade

12 -Laboratory testing facilities meeting all American and European standards and
Vertical cement grinding mills, Cement industry called major Performance Blue Chip in
current.
13- Today, we find a relatively better scenario as compare to past. Most of the plants,
that used to operate on furnace oil, have now been converted into coal system, which
has substantially reduced cost of production.

WEAKNESSES

1 -The stage of industrial development, in most of the segments, is still at a very

low level of technology and the existing industrial base is very narrow and consists of
very basic industries such as cement, sugar, textile, cigarette, edible oil, fertilizer, soda
ash, caustic soda, PVC etc.
2- Impact of terrorism has dropped the economy of Pakistan
3- Urban areas have reduced the cultivated area, which has negative impact of trade for
foreign countries..
4- Since cement is a specialized product, requiring sophisticated infrastructure and
production location. So, most of the cement industries in Pakistan are located
near/within mountainous regions that are rich in clay, iron and mineral capacity.
Structure of Cement industry in Pakistan is as such that there is not much
substitutability to buyers. Which shows that the Cross elasticity of demand is negligible.
5. - The customer has no choice at all to switch between two brands.
6-The freight charges are a massive 20% of the retail prices. The plants located very
close to each other and tapping the same market will have to expand their markets
which will increase their freight expenses.

7-Consumers face a tough decision with regards to prefer which brand over which
because of the similar pricing of different industries. The formation of cartel by the
cement manufacturers have exploited local consumers a lot and this has led to the
concentrated degree of oligopoly,
8 - where the firms are acting as a single unit to perform their monopoly. Their
combined market power is simply a diluted version of the dominance that a single firm
with a monopoly market share can exert
9- Pakistan’s tourism industry has flopped in previous few years with 44 dollars.
10- The floods and natural disasters have negative effect on economy.

THREATS

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Pakistan international trade

1. Unanticipated increase in interest rates or less than expected demand growth might
create severe crises for the sector couple of years.
2. Lack of demand or depressed demand in future will prove to be lethal for the sector
that has just started to recover from the miseries of 90s.
3. Lack of demand forced DIFFERENT INDUSTRIES units to operate at very low
capacity utilization in nineties. There was a fierce competition among all the
production units in all over the world.
4. A price war was witnessed which ended up with no conqueror. Similar
apprehensions exist for the future when there will be plenty of excess capacity.
5. Main component of the cost is fuel. Pakistan's major industries have converted their
plants to coal considering it to be the cheapest fuel, but its price in international
markets has gone up by more than 300 per cent in the last one year, which directly
relate increasing the cost of production.
6- The demand of manufacture goods falls heavily during rainy weather in the country,
which directly affects the running cost of a unit.
7- Instead of appreciating the marketing skills of industries entrepreneurs to explore
new markets for industries.
8- It is only the government, which can provide relief to the consumers by cutting
down or abolishing the central excise duty.
9- Lower capacity utilization will reduce benefits of economies of scale. High leverage
will also adversely affect profitability of new plants.
10- New plants will gain market share at the cost of older players, which are not
undergoing expansion. Large idle capacity is will create panic in players and this
may result in price wars in the coming years.
11-IMF Package in Future can cause to decrease GDP and economical development in
Pakistan. Which will also be cause to stop development of infrastructure? So it will
have huge effect on industries also.

opportunities
1- The local manufacturing industries faces high upfront fuel costs. In order to
facilitate their conversion to coal, which is widely available in the country, the
government has given incentives for imported plant and equipment for coal firing
units.
1. The demand of Pakistani products is expected to continue to grow at the rate of
20 per cent for about four years to come. It may then follow traditional growth
rate of seven per cent per year. Announcement of major dams will dramatically
increase this demand.

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Pakistan international trade

2. . Deregulation after accession of Pakistan to WTO is expected to open the

window of competition from cheaper markets.
3. There may be no tariff after this deregulation on import of cement allowing its
entry into Pakistan from cheaper market at lower rate.
4. The banking sector of Pakistan is increasing the efficiency day by day.

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