Fit for business: Japan may set up automobile supply chain in Pakistan

Geopolitical location makes the country perfect to tap Central Asia: Hiratsuka.

LAHORE:

Declared by Japan as ‘fit for business’, the first ever Japanese business delegation, visited Pakistan last week to spot hidden opportunities to inject investments in three major sectors among which the automobile sector intrigued them the most, not only due to emerging potential of the market but also due to geopolitical location of country on the world map, which Japan seeks to tap for expansion of their automobile supply chain via land routes to access Central Asia in the future.

“Pakistan is blessed with some wonderful ports, among which Gwadar port is the best due to its location, if the Pakistani government makes efforts on infrastructural development to link its land routes to neighbouring countries, then we may export our automobiles from Pakistan to other Central Asian states in near future”, said Daisuke Hiratsuka, vice chairman of Japan External Trade Organization (Jetro), in an interview with The Express Tribune.

Hiratsuka left Pakistan on Thursday night along with a fifty-member delegation, who visited Pakistan to seek potential investment opportunities. Jetro is a non-profit official trade and investment promotion agency working under the aegis of the Government of Japan. The delegation visited Karachi, Islamabad, Lahore and Sialkot to meet with business groups and government officials. Hiratsuka declared Pakistan “the best in the region” for foreign investment but urged Pakistani government to patch up some of its investment policies for long-term plans.

Expressing his feelings, Hiratsuka clearly showed his interest in injecting investments to establish automobile accessories units in Pakistan. “The investments in accessories and supply chain network will not only help improve the supply chain of the Japanese automobile industry but will also generate employment opportunities and initiate a gradual shift of technology to Pakistan,” he said. The local industries attached indirectly with the automotive industry will also benefit hence; assisting manufacturers in slashing prices in this part of the region gradually, Hiratsuka added.

“We are looking to capture the emerging market of automobiles in Pakistan and the Central Asian states via land routes of Pakistan, however, this will not be possible without technology transfer to Pakistan”, he added.

Hiratsuka also expressed his interest in retail services and logistics along with its supporting industries after successfully venturing their investment in the local automobile sector. “We have observed a huge potential in these sectors and we will definitely go for it,” he said. He also pointed out the potential for electronic products in Pakistan. When asked if Japan was interested in importing agriculture products from Pakistan or invest in the sector, Hiratsuka said that the standard of fruits, vegetables or other commodities varies between two countries. “This was a large-scale project which needs time, research and huge capital influx to set up the supply network, we have not worked fully on this segment yet,” he added.

“We need only one Japanese investor to enter the Pakistani market, the rest will follow him for sure,” he said.

“The negative perception of Pakistan due to media reports needs to be changed in Japan, I am sure this will not be our only visit to Pakistan,” he said. Pakistani entrepreneurs were hardworking; people and have the potential. The foreign investment policies of Pakistan are the best compared with its neighbours. All these things impressed me and my fellow members and we are hopeful to return back to Pakistan with some initial investments, Hiratsuka added.

Published in The Express Tribune, October 13^th, 2012.