One project of the China-Pakistan Economic Corridor (CPEC), Transsion Tecno Electronics, is among those that face total shutdown in the sector .
Chinese engineers who were employed by Pakistan mobile assembly plants are departing the nation as the industry has ceased operations due to the country’s economic crisis.
Muhammad Azfar Ahsan, a former state minister and the chairman of the Board of Investment (BOI), has asked the government to get involved in a warlike revival of the mobile manufacturing sector.
One project of the China-Pakistan Economic Corridor (CPEC), Transsion Tecno Electronics, is among those that face total shutdown in the sector .
The former chairman of the BOI noted in a letter to the prime minister and the ministries of finance, information technology and telecommunications, planning and development, industries and production, and commerce that Transsion Tecno Electronics and 30 other mobile phone manufacturers, including well-known names like Samsung, Xiaomi, Vivo, Oppo, Nokia, Tecno, Infinix, and Itel, were experiencing a shortage of raw materials and components because they were unable to open Letters. The situation has compelled the companies to halt operations and make significant job cuts, it claimed.
A joint venture between China and Pakistan is called Transsion Tecno. As a CPEC initiative, it began production at the beginning of 2019. According to the letter, the company employed 2,500 workers, 400 Pakistani engineers, 12 Chinese managers, and 300,000 smartphones each month.
Aamir Allawala, CEO of Tecno Pack Electronics stated that a joint venture between Transsion Tecno and other companies, the industry employs 30 to 40 Chinese engineers.
There is no work for them here, so more than half of them have left, he claimed. The suspension of LCs began on December 27, 2022. Allawala stated that, as a result, all mobile phone plants had been shut down.
The letter cited Ahsan as saying that the sector requires $100 million per month to operate at even 50% capacity and maintain 35,000–40,000 direct and indirect jobs.
According to Nasheed Malik, an information and communication technology (ICT) analyst at Topline Securities, mobile assembly plants are currently experiencing the same difficulties as other sectors of the economy that rely on imported raw materials or spare parts.
These plants receive a meagre quota and are having difficulty obtaining LCs. Due to their inability to import completely knocked down (CKD) units, mobile assembly plants are only operating at a very low capacity, he claimed.
The lack of raw materials, brought on by the limitations on opening LCs, presented a difficult situation for Pakistani smartphone assemblers, according to JS Global ICT analyst Waqas Ghani Kukaswadia.
Pakistan mobile Plants have low levels of utilisation, and some units are on the verge of closing. The sector worries that if the situation persists, thousands of jobs could be at risk ” he said.
He continued that the decline in demand brought on by the current economic climate was another important factor in the slowdown. “Mobile phones are now more frequently requested as necessities than as luxury goods.
From low-end to high-end consumers, all market segments are catered to by our mobile phone companies. However, in an environment with high inflation, people often hold back on their demand and put off replacing their mobile phones.”
Despite the present difficulties, Malik believed that mobile assembly plants had bright future prospects. There are plenty of opportunities for local manufacturers to fill the gap because “our enormous population cannot afford expensive imported mobile phones,” he continued.
The former BOI chairman pleaded with the federal ministries and the government to set up foreign exchange to aid in reviving the labor-intensive sector’s operations. In order to boost growth and create job opportunities, Pakistan must continue to earn the confidence of both foreign and domestic investors, the letter explained.
He emphasised that the hi-tech sector is the foundation of the economy and that, if the problem is not addressed, it might become beyond repair. “We must demonstrate that Pakistan remains a land of untold potential and opportunities.”