EPZA: Enabling exports
The Export Processing Zones Authority (EPZA) was established in 1980 with the mandate to plan, develop and operate export processing zones (EPZs) in Pakistan. EPZA is an autonomous body working under the Ministry of Industries. It has a nine member board of directors, and is tasked with setting up EPZs in Pakistan.
Copyright Business Recorder, 2013
EPZA as a system has worked well in Pakistan, especially in Karachi. As an already established, known and tried system for attracting investments and generating exports from Pakistan, it can provide almost risk-free economic uplift.
As an organisational concept, EPZA facilitates, promotes and provides business support to those who wish to set up their units in EPZs. Primarily, it is a service-oriented organisation for the promotion of exports from Pakistan. EPZA itself is not involved in physical business.
OBJECTIVES The main objectives of EPZA are to improve industrialisation through commercial and marketing activities, provide country-specific investment linkages on reciprocal basis and to simplify paperwork and transfer of technology through foreign investment. For a more holistic picture of what EPZA does, consider that it attracts foreign capital, sets up export-oriented industries, assists in acquiring sophisticated technology, transfer such technology to Pakistan, generates employment and skill development activities, boosts exports and foreign exchange earnings and increases import of raw material from Pakistan.
INCENTIVES For businesses, EPZA provides developed land on highly competitive rates for 30 years lease. All zones are enclosed in a boundary wall with well-defined security parameters. EPZs enable business to import machinery, equipment and materials free of duty, while allowing them freedom from national import regulations and exemption from exchange control regulations. Repatriation of capital and profits is allowed to foreign investors, and there is no sales tax on input goods, including electricity and gas bills. Furthermore, duty-free vehicles are allowed under certain conditions.
EPZS IN PAKISTAN Over a period of time, EPZs have been established in different places in Pakistan to develop the natural resources of these areas and to provide job opportunities to locals. Zones which are currently operational include those in Karachi, Risalpur, Saindak, Sialkot, Duddar, Tuwairqi Steel Zone and Gujranwala.
RECENT ACHIEVEMENTS Inauguration of Gujranwala Export Processing Zone EPZA has very recently redefined its positioning and has introduced a new slogan "From Only Karachi to Alongwith Karachi". The idea behind this move is to offer opportunities to businesses located in other parts of the country. In line with this objective Gujranwala Export Processing Zone has been inaugurated to foster export culture in Gujranwala which will generate employment and commercial opportunities. After colonization we expect export to the tune of US $500 million.
ESTABLISHMENT OF LIAISON OFFICE IN 12 CITIES EPZA has been working closely with Chambers of Commerce in different parts of the country and 12 liaison offices have been opened in the premises' of these Chambers of Commerce. This way EPZA has joined hands with the local business community for boosting export based industrialisation, generation of employment and commercial opportunities right across Pakistan, from Sukkur to Mirpur AJK.
MOU WITH FAISALABAD INDUSTRIAL ESTATE & MANAGEMENT COMPANY (FIEDMC) In addition to this EPZA has signed MoU with Faisalabad Industrial Estate & Management Company (FIEDMC) to establish EPZ initially on an area of 200 acres in industrial City M-3 on Motorway. Establishment of EPZ in FIEDMC will add a new chapter in the country's export related industrialisation and would create new employment opportunities.
TUWAIRQI STEEL MILLS EPZ COMPLETION Tuwairqi Steel Mills EPZ after inauguration in January 2013 has started full scale commercial production with projected export of US $380 million. This project will give boost to exports from EPZA which are likely to increase by 100%.
INCREASE IN EXPORTS FROM EPZAS DESPITE WORLD ECONOMIC RECESSION It is worth mentioning here that despite unfavourable and challenging world economy, during the first seven months of current financial year EPZA investors registered exports of US $486 million and have contributed Rs 476 million as Presumptive Tax in National Exchequer. These figures are more than previous year's figures. During the current financial year approval for 24 new units has been given which will bring investment to the tune of US $19.483 Million and the exports are expected to increase by 100% (around 1 Billion US$).
ESTABLISHMENT OF INTERNAL AUDIT DEPARTMENT While EPZA is increasing its network all across the country, it is trying to keep its financial matters completely transparent. In order to maintain the transparency in financial matters an Internal Audit Department (fully independent) has been established. EPZA intends to handover this IA department to the private sector for maintaining continuous transparency.
ESTABLISHMENT OF MARKETING DEPARTMENT A Marketing Department has also been established for the first time in EPZA to create awareness on incentives and opportunities available in the zones located all over the country. EPZA management is continuously meeting / making presentations and inviting major Chambers/ Trade Associations to bring investments in EPZA.
CREATION OF HALAL ZONES Currently EPZA is aggressively pursuing for creation of Halal Zones in Karachi and Lahore. EPZA realises that this is a high potential export market to the tune of US $1.6 BIllion and should be effectively exploited. Pakistan's biggest competitive advantage in the region is the availability of an entire Halal production base which is primarily coming from a Muslim country which has a direct access to a large base of halal consumers in Afghanistan, Central Asia and the Middle East. Once Pakistan is able to make a breakthrough in this area its export figure and foreign currency reserves will substantially increase.
CLOSE LIAISON WITH COMMERCIAL COUNSELORS In order to bring foreign investment in the country, EPZA is in close liaison with Commercial Counsellors of Pakistan in different countries. For this purpose EPZA has translated its promotional material in leading languages for effective communication of its incentives and facilities. This material has been dispatched to Commercial Counsellors for further distribution to trade bodies / chambers for creating awareness about investment opportunities available in EPZA.
Commercial & Economic Counsellors from different countries have recently visited EPZA on invitation. Currently we are working with them for visits of investors to Pakistan and EPZA to explore business potential offered by Pakistan.
CREATION OF DISPLAY CENTER Considering the fact that Export Processing Zones are located all over the country, it has been decided to showcase the products which have been manufactured and exported from EPZAs. In this regard a Display Center is in the construction phase at EPZA Karachi. This Display Center will be of great utility at the time of visits of foreign delegates and investors.
ALTERNATE ENERGY PROJECT WITH KESC To ensure continuation of uninterrupted power supply at Karachi Export Processing Zone (KEPZ), EPZA is working with Karachi Electric Supply Company to establish a 25 MW power supply facility which will run on cow dung. This is a substantial initiative by EPZA in the area of alternate energy development for securing future power supply.
A power plant is also proposed for Gujranwala for which EPZA is currently working for exemption of taxes to make it a viable project.
CREATION OF HOSPITAL AND UTILITY STORE In order to provide maximum facilities to investors in Karachi Export Processing Zone (KEPZ), EPZA is building a Hospital and a Utility Store to further improve the working conditions for investors and their work force.
PROVISION OF ROUND THE CLOCK SECURITY Keeping a vigilant eye on the volatile law and order situation, EPZA has made special arrangements to provide round the clock security to the industries and their work force operating in its premises. Number of well trained and fully equipped security guards, check posts and surveillance vehicles have been significantly increased for patrolling purpose during any time of day and night.
Export Processing Zones Authority's recent achievements and future plans clearly suggest that Pakistan has a bright opportunity to improve its exports and foreign exchange reserves provided the Government extends its all out support to this institution which is already playing a colossal role in improving national economy.