ECC likely to allow $6m investment in Saudi firm

Pakistani company is seeking to acquire 50% shares in Saudi steel unit

ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet, scheduled to meet on Wednesday, is likely to allow Eastern Products (Pvt) Ltd (EPPL) to remit $6 million for acquiring 50% shares in Sinsina Industrial Works and Metal Construction Company (SIW) in Jubail, Saudi Arabia.

SIW deals in steel fabrication and diversified steel products catering to the needs of oil and gas, petrochemical, power and cement industries. Sources told The Express Tribune that the State Bank of Pakistan (SBP) had endorsed a proposal in that regard after carrying out a detailed analysis.

Eastern Products had approached the SBP through its authorised dealer to seek approval for outward remittance of 22.5 million riyals (around $6 million) for acquiring 50% shares in SIW.

In order to liberalise and deregulate the country’s economy, the federal cabinet, in its meeting held on May 16, 2001, had allowed equity-based investments abroad by resident Pakistani companies on the basis of set criteria, which stipulated that cases of private sector would be dealt with by the State Bank and decided by the ECC.

The regulation was later amended when it was decided that proposals of up to $5 million would be approved by the State Bank. SIW had entered into a contract to sell 50% shares each to EPPL and Sinsina Corner Co for Contracting (SCC), Riyadh for a total price of 45 million riyals.

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EPPL is mainly engaged in the import, processing, blending, packaging and distribution of tea in Pakistan with the brand name of Vital Tea. Through its sister concerns, EPPL also operates in food, agriculture, chemical and personal care segments.

Wheat support price

The economic decision-making body is also likely to approve a revised minimum support price of wheat at Rs1,400 per 40 kg for crop season 2019-20.

The wheat review committee on Monday recommended an increase in the minimum support price from Rs1,365 to Rs1,400 per 40 kg. According to the committee, a stock of 2.235 million tons was available as on March 6, 2020.

The committee decided to recommend Khyber-Pakhtunkhwa (K-P) to procure wheat from the adjoining districts of Punjab.

It directed provinces and Pakistan Agricultural Storage and Services Corporation (Passco) to timely procure and meet the wheat target of 8.25 million tons for the 2019-20 season.

Of the total target, 1.8 million tons will be procured by Passco, 4.5 million tons by Punjab, 1.4 million tons by Sindh, 0.45 million tons by K-P and 0.1 million tons by Balochistan.

The ECC is also likely to ban the supply of wheat to the poultry sector as animal feed, which has also been recommended by the wheat review committee.

Published in The Express Tribune, March 11^th, 2020.

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