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Pakistan had almost negligible industrial base at the time of its creation in 1947. In the past 50
years, the country has gone structural change purely from an agrarian economy to semi -
industrial state. Pakistan has developed many consumer goods industries. Heavy indus tries like
iron and steel, ship building, fertilizer and chemical industries have also been developed. The
main primary industries are:

1)‘ Cotton Textile Industry

2)‘ Cement Industry
3)‘ Sugar Industry
4)‘ Fertilizers Industry
5)‘ Steel Industry

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Cotton textile production is the most important of Pakistan's industries, accounting for about
19% of large-scale industrial employment, and 60% of total export s in 2000/01. Pakistan has
become self-sufficient in cotton fabrics and exports substantial quanti ties. Some long and extra-
long staple cotton is imported to meet demand for finer cottons. About 80% of the textile
industry is based on cotton, but factories also produce synthetic fabrics, worsted yarn and jute
textiles. Jute textile output amounted to 7 0,100 tons in 1999/00. The textile industry as a whole
employs about 38% of the industrial work force, accounts for 8.5% of GDP, 31% of total
investment, and 27% of industrial value -added.

Cotton passes through 3 stages:

À‘ Ginning: Cotton ginning is the first step by which cotton is separated from the seeds.
There are than 1200 ginning factories in Pakistan. They are located in the cotton
producing areas of Pakistan. About 85% of the ginning factories are located in Punjab
15% in Sindh. The ginning mills produce 10 million bales per year even though there
capacity is 20 million bales per year.
À‘ Spinning: In spinning factories cotton yarn is produced from raw cotton. It is very
important sector of the cotton textile industry. At present, out of 450 cotton mill s only
403 are producing yarn. A very large quantity of yarn is exported. The production of
yarn has risen from 6 million kilograms in 1948 to 1.9 billion kilograms in 2002 -03.
À‘ Weaving: The making of cloth from yarn is done in weaving units. About 50 of t hem are
operating in Pakistan, accounting for 5000 looms in 2002 -03. 570 million square metres
of cloth was produced in 2002-03.

Location of Cotton Textile Industry: There were 72 cotton mills working in Pakistan in 1948.
That has increased to 363 in 2002 -03. Karachi is the largest cotton textile centre in Pakistan. In

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order to encourage the growth of cotton industry, particularly in the cotton -producing areas, the
government has encouraged industries to set up elsewhere in the country. Karachi, however,
still dominates the cotton industry.

The second largest cotton centre is Faisalabad, which is located close to the cotton belt of
Pakistan. It has a large labour force and equally large market. Hyderabad is the third largest
cotton centre. It is located near cotton -growing areas and supplies cloth to the Sindhi and
international markets.

Apart from there major textile centers, cotton mills have been established in cotton gr owing
areas of Sindh (Tando Adam, Khairpur, etc.) and Punjab (Rahimyar Kahn, Multan, Sargodha,
etc.) top tap local raw materials and to serve local markets. Some cotton mills have also been
established in non-cotton growing areas which are far from the por t of Karachi. They have been
set up to serve local markets and to avail of the tax exemptions offered by the government to
encourage growth of industry.

Power Looms (Non-mill Weaving): Power looms are non-mill looms that run on electricity.
Over 225,000 are operating in the non -mill sector, which has provided employment to many
workers. The production of power looms was 45 times more cloth than the mill sector in 1997 -
98.

Towels, Hosiery and Canvas: Pakistan exports towels to USA, China, Western Europe and
other Muslims countries. There are 6500 looms in the country making towels. Hosiery is
another industry based on cotton yarn and is an important export item. A number of items are
manufactured, including vests, T-shirts, jerseys, sweaters, socks, gloves, etc. There are about
10,000 knitting machines in the country and most are located in Sindh and Punjab. Pakistan has
several thousand looms producing canvas and tarpaulins. The industry is export -oriented but
recently it has suffered.


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The main raw material of the cement industry is limestone, followed by a substantial quantity
of gypsum. Fortunately, Pakistan has large quantities of both, and the domestic market is also
sufficiently large.

Cement industry in Pakistan has come a long way since independence when country had less
than half a million tons per annum production capacity. By now it has exceeded 10 million tons
per annum production capacity as a result of establishment of new manufacturing facilities and
expansion by existing units. Privatization and effective price decontrol in 1991 -92 heralded a
new era in which the industry has reached a level where surplus production after meeting local
demand is exported.

The number of cement factories has been increased over years from five in 1947 to twenty -
four in 1999-2000.Out of these only 2 are owned by government while the others are owned by
private sector which also includes the army. These cement fac tories are located in every
province of Pakistan. The industry is divided into two broad regions, the northern region and
the southern region. The northern region contributes 87% in the total cement dispatches while
the southern region contributes 13%. Some of the main factories are:
Lucky Cement Fauji Cement DG Khan Cement Pioneer Cement

The cement industry of Pakistan entered the export markets a few years back, and has
established its reputation as a good quality product. Pakistan exports cement to India,
Afghanistan, Iran and UAE. The cement sector is contributing Rs 30 billion to the national
exchequer in the form of taxes. This sector has invested about Rs 100 b illion in capacity
expansion over the last four years. There are four foreign companies, three armed forces
companies and 16 private companies listed in the stock exchanges. The per capita consumption
of cement has risen from 117 kg in FY06 to 131 kg in FY 07. The main factors behind increase
in demand of cement were: 60 percent higher Public Sector Development Projects (PSDP)
allocation, seven percent GDP growth, increasing number of real estate development projects
for commercial and residential use, devel oping export market and expected construction of
mega dams.

The target for exports for 2010 is set to be 10 million tons. Currently, the export demand is
expected to be from new inductee India along with other countries like Gulf Cooperation
Council (GCC) countries, due to rising oil prices-led economic growth. More countries like
South Africa to make the football stadiums for the World Cup and Sri Lanka are also expected
to approach Pakistani companies for cement imports. However, export depends on factors such
as: ability to produce cement at Rs 85 per bag. In the meantime industry should explore new
markets for export or ready to lower prices of cement in local market.

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Pakistan is the 5th largest country in the world in terms of area under sugar cane cultivation, 11 th
by production and 60 th in; yield. Sugarcane is the primary raw material for the production of
sugar. Since independence, the area under cultivation has increased more rapid ly than any
other major crop. It is one of the major crops in Pakistan cultivated over an area of around one
million hectares. The total sugarcane production is 45.0 ± 55.0 Million Tons while the average
yield per hectare is 46.6 tons.

The sugar industry in Pakistan is the 2 nd largest agro based industry comprising 81 sugar mills
with annual crushing capacity of over 6.1 million tones. Sugarcane farming and sugar
manufacturing contribute significantly to the national exchequer in the form of various taxes
and levies. It contributes RS 12.16 billion to exchequer. Total sugarcane available for industry
is 30-45 tons while the average recovery of sugar is 9.1% (vs. world avg. of 10.6%) Sugar
manufacturing and its by-products have contributed significantly t owards the foreign exchange
resources through import substitution. Sugar Industry has a 1.9% share in GDP and employs
1.5 million people (directly and indirectly). The per capita consumption of sugar cane in
Pakistan is 25.8 kg per capita.

Sugar industry is mostly located in the rural areas of Punjab and Sindh. A small percentage of
total production is produced in the NWFP. Previously, Punjab was partly dependent on supply
of sugar from Sindh, but lately the establishment of some large scale units in Pun jab has made
the Province self-sufficient in the commodity.

Sugar production is seasonal activity. The mills, at an average operate for 150 days, and
supplies are made throughout the year. As the industry now has large daily crushing capacity
there are efforts to even further reduce.

There is tremendous potential for export of sugar, molasses and ethyl alcohol. In particular
molasses needs to be mentioned here as it has shown regular exports over the last few years.
The major buyers are Netherlands, UK, Germany, Spain, Italy and Korea. Netherlands is the
biggest buyer with over 40% share in overall exports.

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À‘ Improvement in sugar crop yield through R&D and planning

À‘ Improvement in procurement and storage to reduce wastages
À‘ Export potential of sugar/molasses
À‘ Development of Industries for proper utilization of by -products by adding equipment
(distillery, chipboard etc) which can earn / enhance revenues.
À‘ Blending of fuel ethanol with petrol.
À‘ Power co-generation by the sugar industry using bagass
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Pakistan has ten fertilizer plants, six state -owned and four private, with a total annual
production capacity of 6.2 million metric tons. Production in 2000/01 was 3. e66 million tons,
up 10.5% from 1999/00. The installed capacity of urea is 4.2 million tons and DAP is 0.650
million tons per annum. The demand of DAP in the country is around 1.3 -1.5 million tons per
annum, whereas, the consumption of Urea is around 5.2 mi llion tons as against production of
around 4.8 million tons. Fauji Fertilizer Bin Qasim Limited is the only fertilizer plant which is
producing DAP in the country. The local production of fertilizer is not sufficient to meet the
local demand; therefore, substantive quantity of fertilizer has to be imported every year. The
Government has also provided various incentives under Fertilizer Policy, 2001 to encourage the
fertilizer production in the country including following:

À‘ The Government is providing feed s tock gas at concessionary rates to the fertilizer plants
for production of Urea.
À‘ Rock Phosphate and Phosphoric Acid imported by manufacturers of fertilizer are
importable free of customs duty.
À‘ In order to provide fertilizers to the local farmers at affor dable prices, t he Government
is providing subsidy on local production as well as on the import of fertilizers.

The main fertilizer industries include:

À‘ Fauji Fertilizers
À‘ Engro Fertilizers
À‘ Duad-Hercule Fertilizers














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The establishment of steel industry is considered to be a milestone on the road to

industrialization. In 1973 the foundation stone of the first iron and steel plant was laid in
Karachi close to Port Qasim, with the technical and financial support of USSR.
Pakistan Steel covers an area of 75.4 square kilometers, including 32.9 square kilometers
of the Steel Township. The raw materials for the industry; iron ore, manganese and
coking coal; have to be imported. Pakistan Steel has two blast furnaces and has a
capacity of 1.1 million tonnes. Although the plant produces billets, hot rolled sheets, cold
rolled sheets, pig iron, etc., Pakistan is still not self -sufficient in iron and steel production
and has to import heavily from other countries.
The Pakistan Machine Tool Factory was established at Karachi in 1968 in collaboration
with a Swiss Company. It has grown into a sophisticated engineering complex, which
manufactures precision machines and tools for the engineering industry, transmission
components and automobiles parts.
In 1968, the government gave permission for a heavy mechanical complex to be built at
Taxila with Chinese aid. It started production in 1970. The factory has a steel melting
capacity of 60,000 tonnes and a production capacity for castings and forgings of up to
46,000 tonnes. It meets the needs of railways, automobiles and heavy machinery.
The Karachi Shipyard and Engineering Works was completed in 1956. It can build and
repair ships of up to 12,000 tonnes. A canal connects the shipyard with Karachi
Harbour.