Investment Opportunities in
Agrarian Sector of Sindh
Presented by
Sindh Board of Investment
World Bank Ranking –
Ease of Doing Business 2011
As per WB’s Ease of Doing Business Report 2012, Pakistan is third
ranking among the Asian Countries and 2nd best in the region in
terms of trading across borders, getting credit and in protecting
investors
144
122
132
105
89
91
Sri Lanka
China
Pakistan
Bangladesh
India
Iran
CENTRAL ASIA
MIDDLE EAST
Sindh’s Competitive Edge
ƒ Financial Capital of Pakistan – Karachi
ƒ Karachi Stock Exchange ; Headquarters of Banks, Financial
Institutions & Business houses
ƒ 42% of LSM located here
ƒ Two Seaports and an International Airport
ƒ The Regional Power House of the Future
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Thar Coal – 100,000 MW for 300 Years
Wind Corridor – 50,000 MW potential
Oil – 56% of country’s production
Gas – 70% of country’s production
ƒ Large Agricultural base with 5.45 m hectares of cultivable land
ƒ Trained, educated & affordable workforce
ƒ Coastline – 350 Kms with tremendous opportunities for tourism
and fisheries sector
Incentives for Investment
¾ Reduced foreign equity requirement (US $ 0.3M)
¾ Repatriation of 100% capital, profits, franchise fees
¾ Zero import duty on all capital goods, plants and
machinery
¾ Zero duty on raw material imported for production of
export material
¾ Zero rated import duty on Agri machinery (not
manufactured in Pak) for registered corporate Agri
projects
¾ A full incentive package for corporate farming
Public Private Partnership
Sindh PPP Framework
¾ Sindh PPP Act; Country’s first PPP law
¾ Provides legal cover to the Institutional Framework
(PPP Policy Board, PPP Unit, PPP Projects and
departmental PPP nodes)
¾ Regulates the contractual relationship between
public and private sectors
¾ Covers processes regarding project approval and
spending from
¾ Project Development Fund
¾ Viability Gap Fund
Public-Private Partnership
¾ Government Support
¾ Licenses and clearances , utility connections for power,
gas and water, land or rights of way
¾ Political risks ,delay of agreed user fee adjustments,
(MRG), early termination, credit enhancement, Force
majeure and Demand risk
¾ Direct financial assistance
¾ Viability Gap Fund
¾ International Financial Structures & Frame-work
¾ PPP Sindh offers international parameters of concession like
Force majeure cover, Political risk cover
Agriculture in Sindh
• Sindh's agriculture sector contributes 23% to the country's
GDP.
• Sindh has abundant fertile land, water resources, and
skilled work force to support modernized agrarian
production.
• Introduction of technology, efficient irrigation systems,
quality seeds, quality pesticides and modern implements
can help Sindh attain its true agrarian potential.
• The huge gap between Sindh's current agricultural
production and actual potential provides opportunities for
various types of investments in value addition.
Rice in Sindh
• Rice is the quintessentially Asian crop because 90% of rice
production and consumption is concentrated in this region.
• Pakistan is the 11th largest producer and 5th largest exporter of
rice.
• 30-35% rice production is given by Sindh while 60% comes from the
Punjab and 10% from other provinces.
• Major varieties produced in Sindh are Irri-6, Irri-9, D-98 while minor
varieties include Super Basmati. Lateefy variety developed in Sindh
is called “Sindhi Basmati.”
• In Sindh, rice is grown on about 2 million acres of land with per acre
yield at 45 – 50 maunds, which is lower side.
• Overall, Sindh produces 35% of the country’s rice with annual
production at around 3.5 million tons of which 2 million tons of
milled rice is produced by over 800 rice mills.
Cotton in Sindh
• Cotton is one of the four major crops of Pakistan and accounts for 8%
of the value-added in agriculture and contributes about 2% to national
GDP.
• Pakistan continues to remain one the key textile manufacturers in the
world.
• The two popular varieties of cotton grown in Sindh are NIAB and newly
introduced Bt (genetically modified variety).
• The cotton staple grown in Sindh is of medium length and medium-long
although medium staple is more widespread.
• Over 350 ginning mills in Sindh produce on average 3 – 4 million bales
of raw cotton annually with each bale on average measuring 50” x 20”
and weighing 170 kg.
• However, export of raw cotton bales is not beneficial in that finished
goods can result in 10 times more export earnings.
Date Palm in Sindh
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Dates are an iconic part of Muslim culture and one of the few fruits mentioned
repeatedly in the holy Quran.
Pakistan is the 5th largest producer of dates with total annual production at
around 650,000 tons in the form of over 300 varieties. Of the many varieties
produced in Pakistan, Aseel, Karblain, and Kupro are considered the best
varieties of Sindh.
Sindh alone contributes more than 55% of the total dates production in
Pakistan and the share is on the rise.
In Sindh, the highest concentration of date palm is in Khairpur district where
date palm trees grow like weeds and produce about 90% of dates in the
province.
Pakistani fresh dates are considered industrial quality by the developed world
and fetch only one-third the price of processed dates at only $ 600 per ton.
The key reason are poor post-harvest management and absence of value
addition.
Mango in Sindh
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Mango – “King of Fruits” is one of the two most delicious and admired tropical
fruits existing in the fom of hundreds of varieties around the world.
Pakistan is the 6th largest producer wherein Sindh and the Punjab are the
main
producers.
The total annual production of mangoes in Pakistan is around 1.6 - 1.8 million
tons out of which 0.6 - 0.7 million tons comes from Sindh (40%).
Sindh produces a large number of mango varieties including Sindhri, Saroli,
Dasehri, Sunehra and smaller quantities of other varieties.
Sindhri considered “King of Mangoes” comprises 70% of total production
volume in Sindh.
By all standards of colour, size, sweetness level, peel thickness and taste,
Sindhri is arguably the best mango variety in the world.
Mango cluster is beset with oft-cited problems: (1) low productivity at farm
level and (2) poor post-harvest processing resulting in lower international
price of $350-400 per ton as opposed to $1000 per ton for produce from other
Red Chillies, Guava, and Banana in Sindh
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Sindh is the largest producer of red chillies with annual production at 85,000
tons which amounts to 85% of the country’s produce.
In Sindh, a small town of Kunri, once called the “Chilli Capital of Asia” alone
produces 55% of Sindh’s produce.
Sindh remains undisputed leader in banana production because growth
conditions suitable for banana are available in this province only.
In Pakistan, annual production of banana is at around 140,000 tons out of
which 85% produce is contributed by Sindh alone. The main variety produced
is Dwarf Cavendish (locally “Basrai”) and Giant Cavendidh or Williams hybrid
variety.
While guava is considered an exotic fruit in Europe, in South Asia it is a
common man's fruit with Pakistan being the second largest producer in the
world.
Pakistan produces around 560,000 tons guava annually. Sindh is the second
largest guava producer in the country with annual production at around
71,000 tons (12-13% of total produce).
Livestock in Sindh
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Livestock is an important component of rural agriculture in Pakistan because
the animals are not only used for ploughing, transport, and as a source of dairy
and meat but also act as a safety net in case of crope failures.
In Pakistan, livestock contributed 11.6% to national GDP and provided 55.1%
of value addition in agriculture sector during 2011-12.
While other sectors and sub-sectors are suffering from saturation and
stagnation, livestock sector continues to register an optimistic real growth rate
of 4% annually.
Certain factors make the prospects of livestock husbandry especially profitable
in Pakistan: large cattle population, abundant agricultural inputs to be used as
fodder, and seasonal cross-border movement of large number of cattle from
India to Pakistan.
Livestock population in Pakistan mainly comprises cows, buffaloes, sheep,
goats, camels and poultry.
Sindh possesses quality livestock gene pool in the form of Nili-Ravi and Kundi
breeds of buffalos, Red Sindhi and Thari breeds of cows.
Dairy in Sindh
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With annual production of over 35 billion litres of milk, Pakistan today is the
4th largest milk producing country in the world.
Of the total milk production in the country, 70% is rural-based and 30% occurs
in urban areas.
The main dairy breeds are Kundi buffalo and Red Sindhi and Thari cows.
Of the total production, bulk is consumed by the local population in the form
of raw, unprocessed milk. Only 3-5% of milk produced in the country is
processed in one of the two ways: UHT or pasteurization.
At the domestic level, buffalo milk is preferred while for export purposes cow
milk is produced because of differences in tastes.
There are seasonal variations in milk production in Pakistan like fall in milk
supply during summer when the demand for milk is high resulting in price
increases.
Government of Pakistan envisages end to sale of raw unprocessed milk
starting from large urban centres because of related health concerns.
Poultry in Sindh
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Chickens are the most numerous poultry birds in the world and annually 50
billion chickens are reared and consumed.
Poultry is arguably the most important subsector of Pakistani agriculture in
terms of affordable food supply.
It is one of the most well-developed and vibrant segments of national
economy growing at a robust 8-10% annually as opposed to 4% growth rate of
livestock sector.
Poultry sector provides direct and indirect employment to 1.5 million people in
Pakistan. Poultry meat contributes 25.8% of overall meat production in the
country and the share is increasing.
Pakistan produces around 834,000 tons of poultry meat annually with per
capita consumption at 4kg per month. In addition, 3809 million tons of eggs
are produced annually.
In Sindh, there are more than 5,200 poultry farms and despite damage caused
by floods the poultry industry is on the rise. A large supply-demand gap exists.
Fisheries in Sindh
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Sindh is blessed with a vast array of fisheries resources. It has a coastline of
352 km which contains 71% of Pakistan’s fisheries resources.
The coastal waters are well-suited for fisheries production with just the right
salinity and temperature characteristics.
Indus Delta spread over 40,000 hectares consists of 18 major natural creeks
along with a large number of smaller creeks, backwaters, and mudflats all of
which are naturally suited for fisheries production.
Although the contribution of fisheries sector in GDP is a mere 1%, the sector
provides direct employment to 400,000 people and indirect employment to
another 600,000.
In contrast to other countries, the coastal belt of Sindh has over 40 species of
fish and shellfish and 15 species of shrimp.
The total annual production of fisheries is merely 0.7 million tons and valued
at $300 million. The domestic consumption of fisheries at 1.8 kg per capita in
Pakistan is the lowest in the region.
The annual growth rate of fisheries in 2010-11 was a meagre 1.9%.
Ostrich Farming Potential in Sindh
• Ostrich farming is a new investment avenue in Sindh, which promises
a brave new world for the prospective investors.
• Ostrich, native to Africa, is a hardy creature which can endure a
diverse range of climates and temperatures ranging from -20 to 56
degrees and its long life span can range from 30 to 70 years.
• The bird is being regarded across the world as a rich source of a wide
range of derivatives – meat, leather, feathers, oil and so on.
• A full-grown ostrich can weigh up to 160 kg and yield up to 80 to 100
kg of fat-free and low-cholesterol red meat.
• Ostrich also yields leather which is thick and durable but soft with a
natural texture on it. It also yields feathers, which have a number of
high-end uses.
• Production of large-sized eggs by females at an average weight of 1.5
to 3 kg is also prolific.
Rice in Sindh
Investment Opportunities
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Modernized Rice Mills
State-of-the-art rice mills can be established in Sindh to produced high-quality
milled rice at competitive price for profitable export to various destinations
especially under buyback arrangements.
Rice Mill Manufacturing Plants
Local capacity for manufacturing of rice mill machinery is limited and a
significant proportion of components is imported from China, the UK and
Japan. Machine tools plants can be established in Sindh for local
manufacturing of high-quality milling machinery.
Rice Bran Oil Extraction
Rice bran oil is produced from rice bran, the brown upper layer of rice grain
otherwise being wasted or being used for animal feed in Sindh, is considered
to be a great health food across the world. Currently, there is a vast unmet
demand for rice bran oil across the world.
Cotton in Sindh
Investment Opportunities
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Collaboration on Seed Development
Investment is the need of the hour for development of better quality and highyield cotton varieties of long and extra-long staple such as the quality pima
cotton of the USA. Buyback agreements can be made in this regard.
Modernized Ginning Plant
High-tech and high-volume modernized cotton-ginning plants can be
established in Sindh for production of clean and contamination-free cotton.
Delinting Plant
Delinting plants can be established to make use of linter covering on
cottonseeds to make better use of linter as well as cottonseeds. Viscose fibre
is produced from linter covering.
Textiles
Textile industry of Sindh is highly well-developed and is always a good avenue
for investment.
Date Palm in Sindh
Investment Opportunities
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Dates Dehydration Chambers
These chambers reduce ripening time from 9-8 days to 5-4 days and increase
profitability alongside enhancing quality of dates.
Dates Processing Plants
Dates processing plants are the essential need of dates sector in Sindh either
for processing of fresh dates in simple or value added form and/or for
production of dates derivatives like paste, syrup, vinegar and so on.
Investment in Khairpur Special Economic Zone
Date processing plants can ideally be established at Khairpur Special Economic
Zone, an special economic zone being developed under supervision of SBI. The
zone has a total area of 136 acres and will be equipped with a 20MW captive
power plant. There will be zero duties on import of machinery as well as tax
breaks for the first 10 years. The zone is ideally located on the main National
Highway.
Mango in Sindh
Investment Opportunities
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Mango Treatment Plants
Proper processing of mango is the dire need of the hour in order to capture big
price differential after value addition. For processing of mangoes there are
two technologies available: hot water treatment (HWT) and vapour heat
treatment (VHT). However, some experts argue that for Pakistani mango hotwater treatment is the best procedure.
Mango Pulping Plants
Mango pulp is in high demand by food companies nationally and across the
world because it is the basic ingredient for mango juices.
Mango Drying Units
Dried mango products are in high demand the world over because in dry form
the mango can not only be used for a wide variety of purposes like
manufacturing of mango powder, mango juices, mango jams and so on but
also because the dried mango has much better shelf life.
Red Chillies, Guava, and Banana in Sindh
Investment Opportunities
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Chilli Dehydration Plant
Currently, chillies are being sun-dried which leads to time lags and quality
reduction. A dehydration plant for red chillies can not only be run on
commercial basis but other vegetables like onions and garlic can be also
dehydrated in the same plant.
Pulping Plants for Mango, Guava, and Banana
Fruit pulp is used as basic ingredient for manufacture of fruit juices. A single
pulping plant can be used for pulping of different fruits, which promises better
profitability.
Processing Plant for Banana with Packing House
The post-harvest processing of banana requires a simple plant, which promises
high returns. Banana is harvested raw from the plants for artificial ripening
after careful cutting and transport to the processing plant where they are
passed through treatment process and later on packed.
Red Chillies, Guava, and Banana in Sindh
Investment Opportunities...contd.
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Cold Stores
Cold stores are an integral part of production chain in any economy especially
agrarian economy but unfortunately in Sindh cold stores are few and far
between. Year-round availability of perishable products like banana and guava
and their derivatives cannot be ensured without cold stores.
Livestock in Sindh
Investment Opportunities
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Livestock Farms
Sindh is a land of tremendous opportunities for establishing livestock farms for
fattening to supply meat.
Modernized Slaughterhouses
There is a vast unmet demand for modernized slaughterhouses in Sindh, which
can be set up under various arrangements including public-private
partnerships.
Meat Processing Plants
Slaughterhouses and processing plants can be vertically integrated to achieve
greater economies of scale.
Dairy in Sindh
Investment Opportunities
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Modernized Dairy Farms
High-efficiency modernized dairy farms for production of pasteurized milk can
be established in Sindh. Though the amount of seed capital is somewhat high,
the payback period is very small (2 years) and returns on investment are very
high.
Milk Processing Plants
Milk processing plants for production of UHT milk as well as powered milk are
another avenue for highly profitable investment in Sindh. Recently, Engro
Foods has established a state-of-the-art milk processing plant in Sukkur.
Silage Plants
Plants for production of fermented fodder called silage can be installed in
Sindh to meet the tremendous unmet need of high-nutrition fodder.
Poultry in Sindh
Investment Opportunities
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Controlled-Atmosphere Poultry Farms
Environmentally-controlled poultry farms are being established in Sindh
rapidly because mortality has been brought down to 2-3% only as compared to
the traditional poultry farms wherein mortality could be as high as 10-15%.
Meat Processing Plants
Poultry meat processing plants can be because they offer high returns and low
risk with high initial cost. Currently, there is little competition in this field and
first investors will gain foothold within a short time.
Feed Mills and Hatcheries
Feed mills and hatcheries are basic requirements of poultry farms but
currently only a few hundreds of both exist in Pakistan. While demand is high
from thousands of poultry farms the supply is low, which is resulting into high
feed costs for poultry farmers.
Fisheries in Sindh
Investment Opportunities
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Collaboration on Infrastructure Development
Enormous opportunity exists for collaboration on the survey, master planning,
and environmental impact assessment of coastal region along with
infrastructure development.
Mariculture
Mariculture is so far non-existent on the costal belt of Sindh though there is
significant inland aquaculture production. Mariculture is highly advantageous
because it is not hampered by lack of water as in the case of inland
aquaculture and the costs are very low as well because of culture activities in
natural environment.
Shrimp Farming
Shrimp farming is considered across the world to be highly profitable venture
but commercial shrimp farming has not been able to gain foothold in Sindh.
However, recently a private entrepreneur has established state-of-the-art
shrimp farm by the name of Reliance Aqua Farm.
Ostrich Farming Potential in Sindh
Investment Opportunities
• Ostrich Breeding
Currently, ostrich population in Pakistan is very low and chicks are being
imported from abroad. As such, imported chicks cannot be slaughtered for
meat and derivatives. The need of the hour is to start indigenous breeding of
ostriches to ensure steady supply as well as low prices. Pakistan Ostrich
Company, the pioneer investor in Sindh, is trying to establish breeding and
hatching in Karachi.
• Ostrich Farming
Ostrich farming is the essential link in the ostrich supply chain. The farming is
low-tech and cheap but new investors require proper training for effective
farming.
Khajoor Mandi Khairpur
Khairpur is single largest dates producing district of Pakistan
¾ 300,000 thousand ton/annum production
¾ City lacks wholesale market with efficient infrastructure
¾ Estimated Project Cost USD 41.5 million
¾ Planned under DBFOO structure under PPP mode
Salient Features
Date Section
• 250 Shops with
• Dry & Cold Storage
• Auction Sheds
• Auction Shed for growers
Banana & Vegetable Section
• 120 Shops with
• Cold Storage
• Auction Sheds
• Auction Shed for growers
Mango, Guava & Tomato Processing, Pulping &
Paste Plant
Agri Processing Plants
Sindh’s horticulture share of national production
73% banana,
53% dates,
88% red chillies
34% mangoes,
40% onion,
¾ Sindh produces
¾ 70,000 tons of Guava and
¾ 30,000 tons of Tomato per annum
¾ Guava and Mango pulp and paste already being exported to
Middle East Market
¾ Estimated Project cost of Processing Plant : USD 3.0 million
Halal Meat Park
Project titled “ Bhambhore Dairy and Meat Park” planned
In district Thatta, spread over 1300 acres
Availability of all required internal infrastructure
Chilling units, feed mills, slaughter houses; livestock and
fodder market within
¾ This Halal Meat Park can generate 1200 Metric Tons of
meat per year
¾ On Dairy side: 320-400 Metric Tons of milk daily
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¾ Estimated cost: USD 30 Million
Shrimp Aquaculture
ƒ Sindh coastline 350 km; 70% of country’s marine
resources
ƒ 0.3 million hectares of brackish water area; a net- work of
creeks, low lying areas and backwaters
ƒ Ideal conditions for Shrimp Aquaculture – natural
hatcheries in terms of water & air temperature, salinity, and
tides
ƒ 20,000 acres of dedicated land earmarked
ƒ Suitable for Banana, Tiger, Jaira and White shrimp
ƒ Estimated cost USD 27 million for 500 Acres of Shrimp
Aqua Farm
Thank you