Landi Renzo to set up CNG kits assembly plant in Karachi

Landi Renzo will soon set up a plant to assemble kits of compressed natural gas (CNG) here, said Italian Consul General Domenico Benincasa on Wednesday. Addressing third annual meeting of the Diplomatic Affairs Sub-committee of Karachi Chamber of Commerce and Industry (KCCI), he said that Italian oil and gas giant, ENI, was planning to further expend extraction and exploration activities in Pakistan
Furthermore, SNAM Progetti, another engineering giant, had signed a contract to build a huge urea plant, he said, adding that there was a big potential for Italian investors in Pakistan in sectors like tanning and leather products, textiles, jewellery, marble and granite, woodworking, agribusiness etc.
In all these sectors, he said, Pakistan was endowed with raw material, craftsmanship and a manufacturing tradition that could provide a good base for investment and Italy had world-famous technology and know-how.
Unfortunately, the structure of Italian enterprises, that were mostly small and medium sized, were hesitant to them make investment in such a distant and not well known country as Pakistan.
In other words, the risk involved in investment in Pakistan was too high for average Italian companies, he added. The Italian Consul General said that during the last three years, Pak-Italian trade had increased from 600 million to one billion Euro or by 40 percent. Last year only (2006), Italian exports to Pakistan reached an all-time high of 550 million Euros.
This was an encouraging figure, but since Pakistan was undergoing a process of industrial growth and technological up-gradation that might create an increasing demand for Italian products and ultimately raise that figure much higher, he added. Despite huge potential, Italian exports might be too expensive for this market, as the Euro was much stronger than dollar, he said.
As for Pakistan exports to Italy, he said that Pakistan exports were also at a significant level of 430 million Euros last year, but the trend of growth was much slower due to harsh competition from other Asian countries that had aggressively increased their exports to Italy.
He pointed out that Italy was a rich and quality conscious market and the potential was certainly there for Pakistani exporters to increase their trade volume, provided they concentrated on research and development so as to manufacture medium and high quality products. These would find more eager buyers in Italy and easily beat competitors from countries supplying products of low quality, he added.
Replaying to a question, he said: "We have to admit that Pakistan's security situation is not considered to be good in Europe, and that our investors, being generally very cautious, will tend to stay away from countries that are not regarded as peaceful and stable, however exaggerated this perception may be."
He said that recently he was posted in India and during his stay there, his perception about Pakistan was very bleak. However, after being posted in Pakistan, his perception had changed, he said, and added that ground realties were much different as compared to what was projected abroad.
Speaking on the occasion, KCCI President Majyd Aziz said that in Italy too, there were many industries, which facing problems due to high cost and moving to some other countries, and suggested that Pakistan was the best place to re-locate them.
Welcoming the guests, Chairman of the Diplomatic Affairs Sub-committee Arshad Islam sought Italian companies help in small and medium enterprise (SME) management, training and skill development.