Chinese shy away from buying industrial land in Karachi

KARACHI: Chinese investors have not shown any interest so far in acquiring land in old industrial areas of Karachi including the Sindh Industrial and Trading Estate (Site).

Though Chinese are investing in the auto sector, they do not appear particularly keen on setting up manufacturing plants in other sectors.

Market watchers consider the cost of industrial plots as one of the factors discouraging Chinese investment in the port city’s industrial base.

Chinese are active in the auto sector – especially dealing in light commercial vehicles, cars and vans.

Some five Chinese auto companies in collaboration with local partners have applied for greenfield investment in setting up plants in Pakistan (three in Lahore and two in Karachi).

Chairman Pakistan Association of Automotive Parts and Accessories Association (Paapam), Mashood Ali Khan said his members are entering into joint venture deals with Chinese. “What we find alarming is that Chinese are entering the area of bike parts’ manufacturing without involving Pakistani partners,” he said.

He added that he has informed the government of this development.

“We will be happy if Chinese make us partners with 10-20 per cent stake as it will generate jobs in the country,” he said.

Chairman Site Association of Industry Asad Nisar Barkhurdaria said Chinese investors are procuring cheap land that is not available in Site area where prices hovers between Rs150 million to 200 million per acre.

“The Chinese are more interested in trading in various goods like tyres, consumer goods and plastic items instead of setting up factories,” he said. He went on to add the Chinese investors are looking towards the Port Qasim Industrial Area where land price is comparatively lower than Site and Korangi Industrial Area.

Mr Asad said in Site area, some Chinese investors have been present for the past several decades with diversified businesses.

Chinese supervisory staffs and petty contractors are more visible in KII and KIII projects, he added.

Chairman Korangi Association of Trade and Industry (KATI) Masood Naqi reconfirmed that Chinese have kept out of Korangi industrial area where rate ranges between Rs200m to Rs300m per acre.

“The Chinese are taking interest in the installation of waste treatment plant, RO plants, sewerage system, water desalination and some other mechanical and engineering works,” he said.

Meanwhile, Chairman Pakistan Apparel Forum (PAF) Jawed Bilwani said, “No Chinese companies have approached our forum for any trade and business deal.”

“I do not see any future scope in joint venture between China and Pakistan in the apparel sector when Chinese garments are cheaper,” he added.

Chairman F B Area Association of Trade and Industry (FBATI) Jawed Suleman said, “So far not a single Chinese company has shown interest in our area despite two meetings with Chinese Consul General.”

Chairman North Karachi Association of Trade and Industry (NKATI) Akhtar Ismail also shared similar views when reached for comment.