Industrial Estates in Saudi Arabia

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Industrial Estates in Saudi Arabia Powered By Docstoc
					Making of a Hi-Tech
     Vendor



By: Mohsin Syed
Hybrid Technics (Pvt) Ltd.
    Resume
   Education
       MS. Electronics Engineering California State University. Los
        Angeles, U.S.A. 1980.
       B.Sc. Electronics Engineering, University Of Engineering, Lahore
        1976.
       Commercial Pilot License Holder.
   Engineering Experience
       Design Engineer Saudi Consult Saudi Arabia 1976-80
       Member design team Jubail & Yambu Industrial Estates
       Project Manager Mc Graw Edison Co. Los Angles, California
        U.S.A. 1981-84
       Design and manufactured about five million units of Seven
        different electronic products
Resume

   Extra Corporate Activities
       Chairman Punjab Industrial Estates Development &
        Management Company (PIE)
       Member Board Pakistan Aeronautical Complex Pakistan
        Airforce Kamra
       President Board of Management, Lahore District of Technical
        Education and Vocational Training Authority (TEVTA)
       Convener Deletion Program Committee Electrical & Electronic
        Products. Engineering Development Board (EDB).
       President Aircraft Owner & Pilot Association Pakistan Chapter.
Foreign Collaborations

   Sulzer Ruti 1998            Switzerland
   Mitsuba Corporation 1992         Japan
   Sucker + Muller + Hacoba 1993    Germany
   Shindengen Electric 1994         Japan
   Thies 1999                       Germany
   IRO 2000                         Sweden
    Barco Sedo 2000                 Germany
Case History Hybrid Technics
   Electronic technology in Kot Lakhpat Industrial Estate.
        Acquisition of land:          1984-1987
     Change of line of business       Two years
     No drainage – sewerage removal from factory area.

     No garbage removal & disposal.

     Broken roads.

     Changing sales tax laws.

     Harassment from sales, professional tax and customs
       department.
   2.2 kanal                  cost of plot Rs. 400,000
   Initial investment         Rs. 5.0 Million
   Present investment         Rs. 50.0 Million
   Starting Staff             15
   Present Strength           150
    Start Up

   Start up of Hybrid in 1985
   Technical Achievements
       Fisheries Motors
       Suzuki Car Electrical and Electronic Parts
   Start up of Negotiations with Atlas Honda Ltd. ,
    Honda Japan and Mitsuba from 1987 – 1992
        Launch of Winker Flasher Project

   Financing of Project by Local Bank

   Guarantee by Atlas Honda Ltd.
       To local Bank
       To Hybrid Technics to purchase the parts for seven
        Years minimum or One Million parts which they have
        met.
       Actually 13Years of purchasing has been done and still
        continues.
Business Volume with AHL

         Business Growth with AHL
             150                                110.606
 sales (in
 million)




             100                        50.01
                     0.559     8.68
             50

              0
                   91-92     94-95    99-2000 2004-05

                                period
Total Business Growth
                       Total Business Growth
                                                    199.606

               200
Sales (Rs.in




               150
  million)




                                          59.364
               100
                       1.216     9.833
               50

                0
                     91-92     94-95     99-00     2004-05
Jobs Created By Hybrid Technics


           200
           150
  No.s Of
           100
 Employees
            50
             0
                 91-92 94-95    99- 2004-
                               2000 05
                      Period
Custom Duty Paid by Hybrid

                                      5.85
                               5.24
            6
            5
 Rs. in Mln 4           2.71
            3
            2
            1    0.10
            0
                1991- 1994- 1999- 2004-
                 92    95 2000 05
                     Period
Taxes Paid by Hybrid
                                          5.222
              6
              5

   Tax Deposit 4
      Rs. in   3
     Million                      0.993
               2
                    0.158 0.373
              1
              0
                   1991- 1994- 1999- 2004-
                    92    95   2000   05
                        Period
    Launch of Second Project 1994
    Regulator Rectifier
   Issue High Cost of Technology
   Long term financing not available from
    commercial Banks any more
   Leasing option utilized to solve the problem
   Atlas Honda Ltd. Commitment of Five Years
   Financial charges of Equipment included in
    pricing formula
    HI-TECH CDI PROJECT 2002
    Capacitor Discharge Ignition

   Cost of Technology and machinery extremely high

   Machines leased again with great difficulty

   Production still on and is in third year of production
     Problems
   Acquisition of land
   Project financing at very high interest rate of
    20% – 22% initially.
   Running finance costs were initially high but are
    now down to reasonable levels
   Non availability of good quality raw material
   Harassment from Sales Tax and Income Tax
    officials due to high tax rate
    Solution and Way Forward
   For construction of factories, Industrial parks with
    one stop facility across the country
   Technology cost will be even higher for the next
    projects
       OEM Should invest jointly with the vendor
       Prudential rules of debt equity should be changed for Hi-
        Tech Project
   Training of staff at international level should be tax
    deductible or partly Government sponsored
   Sales tax + Income tax should be streamlined for
    no contact with the tax collectors
    Solution and Way Forward
    (Continued……)

   Tariffs of completely built up units and their basic
    prices should be monitored by the Tariffs
    Commission, CBR and EDB for quick reaction to
    dumping by other countries in Pakistan
   Raw material of excellent quality should be allowed
    at Zero to Five Percent (0% - 5%) duty by
    commercial importers also
   Pakistan Should switch over from a deletion based
    Engineering Industry to an Export based
    Engineering Industry
    Solution and Way Forward
   Tax rates should be as follows for the Private Limited
    Companies to go Public on the stock exchange
                     Present Rates       Proposed rates
   Public Ltd Co.         35%                  15%
   Private Ltd Co.        43%                  20%
   Partner Ship           25%                  25%
   This structure should encourage excess liquidity with the
    people to go into Industrial growth rather than residential
    and agricultural plots
    Recommendations
   Training programmes for converting
    technologists to entrepreneurs
   Venture Capital System should be established
    by GoP.
   Technology Acquisition from International
    Market should be facilitated by Multinationals
    based in Pakistan
   Mid size Pakistani Engineering Companies
    should enter the International Business Chain
Thank You***

				
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