Thai businesses urged to invest in Pakistan

Infrastructure projects in Pakistan worth a combined US$4 billion (Bt126.6 billion), as well as sectors such as power plants, food and jewellery, are at-tractive for Thai investors, who |could use the country as a corridor to penetrate South Asia and |the Middle East, Pakistan’s am-|bassador to Thailand and businessmen operating in the country said yesterday.

Ambassador Sohail Mahmood said he would like Thai investors to recognise Pakistan as a potential location for expanding their markets.

He described Pakistan as the gateway to the Middle East and South Asian countries, adding that there are a number of Thai investors already reaping huge dividends in Pakistan.

Among the most interesting and attractive sectors for foreign investors are infrastructure, agriculture and jewellery.

According to Pakistan’s Infrastructure Project Development Facility (IPDF), the country invests about $37 billion per annum in new infrastructure.

The IPDF also has infrastructure projects worth a combined of $4 billion in the pipeline awaiting investments from abroad. Most of the projects are in transportation, logistics, hydropower plants, education and healthcare.

Some interesting projects, such as the revival of Sind Engineer-|ing, have an attractive return |on investment of more than 20 per cent.

Pakistan has a population of 180 million, the sixth-largest in the world, and the country needs infrastructure in key areas like housing, rail and roads.

Punjab is a big state with a population of nearly 100 million, and is an interesting destination for industry. The state accounts for 60 per cent of Pakistan’s economy, according to the IPDF.

Suchai Assawapanyawongse, managing director of Thai Urethane Group, said the company had operated TU Plastic Industry in Pakistan since 1993. The business now has annual sales of $25 million.

Thai Urethane is a manufacturer of polyurethane artificial leather and chemicals for coating materials supplied to the automotive industry, and polyurethane for the apparel, sporting goods and furniture sectors.

The company currently has two manufacturing plants in Lahore, which is about 50 kilometres from the Indian border. It is investing in a third plant in the country.

Suchai said he had decided to invest in Pakistan because it allows 100-per-cent ownership to foreign investors. Investors are also able to fully own land.

The weaknesses of investment in Pakistan are the complex tax system, uncertain regulation, a currency that is devalued every year, and higher interest rates than in Thailand, he added.

Corporate income tax in Pakistan is 35 per cent, while personal income tax is 20 per cent. Companies are also charged both import and export taxes.

However, the opportunity to |penetrate the Middle East and South Asian markets is definitely a plus for investing in Pakistan. So, if Thai investors can understand both the strengths and weaknesses, it offers a good opportunity for their investments, said Suchai.