Main Page > PEL Profile

Pak Elektron Limited (PEL) is the pioneer manufacturer of electrical goods in Pakistan.

It was established in 1956 in technical collaboration with M/s AEG of Germany. In

October 1978, the company was taken over by Saigol Group of Companies. Since its

inception, the company has always been contributing towards the advancement and

development of the engineering sector in Pakistan by introducing a range of quality

electrical equipments and home appliances and by producing hundreds of engineers,

skilled workers and technicians through its apprenticeship schemes and training

programmes.

The company comprises of two divisions:

 Appliances Division

 Power Division

APPLIANCES DIVISION

This Division of PEL consists of appliances manufacturing.

PEL Air Conditioners

PEL window-type air conditioners were introduced in 1981 in technical collaboration

with General Corporation of Japan. Ever since their launch, PEL air conditioners have a

leading position in the market. PEL air conditioners cooling performance has been

tested and approved by Copeland and ITS USA. With the shift of users preference from

window type to split type air conditioners, PEL has started manufacturing split type air

conditioners.
PEL Refrigerators

The manufacturing of refrigerators started in 1986-87 in technical collaboration with M/s

IAR-SILTAL of Italy. Like the air conditioner, PEL's refrigerators are also in great

demand. Today, PEL Crystal has 30% market share. Its cooling performance is tested

and approved by Danfoss, Germany and its manufacturing facility is ISO 9002 certified

by SGS Switzerland.

PEL Deep Freezers

PEL deep freezers were introduced in 1987 in technical collaboration with M/s Ariston of

Italy. Because of durability and high quality, PEL deep freezers are the preferred choice

of companies like Unilever.

POWER DIVISION

PEL Power Division manufactures energy meters, transformers, switchgears, Kiosks,

compact stations, shunt capacitor banks etc. All these electrical goods are

manufactured under strict quality control and in accordance with international standards.

PEL is one of the major electrical equipment suppliers to Water and Power

Development Authority (WAPDA) and Karachi Electrical Supply Corporation (KESC),

which are the largest power utilities in Pakistan.

Over the years, PEL electrical equipment has been used in numerous power projects of

national importance within Pakistan. PEL has the privilege of getting its equipment

approved and certified by well-reputed international consultants such as:

 Preece, Cardew and Rider, England

 Harza Engineering Company, USA

  Snam Progeti, Italy

 Societe Dumezm, France

 Miner & Miner International Inc. USA

 Ensa, France

In spite of stiff competition from emerging local and multinational brands, PEL Group's

appliances and electrical equipments have remained in the spotlight due to constant

innovation. Strategic partnership with multinationals of repute have enabled the PEL

Group to incorporate new technologies into existing product ranges, thus giving the

Pakistani market access to innovative, affordable and quality products.

Main Page > Group Profile

In 1948, the Saigols migrated from Calcutta and initiated their business in Lyallpur (later

named to as Faisalabad), the textile city of Pakistan, under the banner of Kohinoor

Industries Limited.

Kohinoor Textile Mills

The Saigols set up the first major textile unit - The Kohinoor Textile Mills under the

umbrella of Kohinoor Industries Limited. The Kohinoor Textile Mill has state-of-the-art
quality control from raw material to finished product manufacturing. Its laboratory is top

rated amongst the best laboratories in Pakistan for testing of textile raw materials, other

inputs and yarn.

 Initial Capacity:25,000 spindles

 Current Capacity: 71,648 spindles

Pak Elektron Limited (PEL)

In 1978, the Saigol Group of Companies purchased major shares of Pak Elektron

Limited. At that juncture, the company was only manufacturing transformers and

switchgears. With the Saigols in management, PEL started expanding its product range

by entering into Air Conditioner manufacturing.

The PEL Group comprises two divisions

Appliances Division

Power Division

Appliances Division

PEL’s Appliances Division is the flag carrier of the Saigol Group. This Division of PEL

consists of home appliances manufacturing.

In 1981, PEL window type air conditioners were introduced in technical collaboration

with General Corporation of Japan.

In 1986-87, the company started manufacturing of refrigerators in technical

collaboration with M/s IAR-SILTAL of Italy.

In 1987, PEL deep freezers were also introduced in technical collaboration with M/s

Ariston of Italy.

In 2006, the Company has started manufacturing of split type air conditioners of various

capacities as the customer choice has shifted from window type to split type air

conditioners. The product has received good response from the market, which

encourages the company to multiply its production in the coming years.

Today, PEL has become a household name. Its products are not only in great demand

in the local market but the Company has also started exporting its appliances to foreign

markets.

Power Division

PEL Power Division is one of the major electrical equipment suppliers to WAPDA &

KESC. Since 1956 the company manufactures transformers, energy meters,

switchgears, kiosks, compact stations and shunt capacitor banks. PEL also has had the

privilege of getting its equipment approved and certified from well-reputed international

consultants such as:

 Preece, Cardew and Rider, England

 Harza Engineering Company, USA

 Snam Progeti, Italy

 Societe Dumezm, France

 Miner & Miner International Inc. USA

 Ensa, France

Pak Elektron Limited alone has a turnover of over 180 million US Dollars.
Saritow Spinning Mills & Azam Textile Mills

In 1987, the Saritow Spinning Mills and Azam Textile Mills  were established under the

banner of Saigol Group of Companies. Saritow Spinning Mills is a spinning unit with

25,440 spindles capacity. Facilitated with the most modern and efficient Japanese and

European machinery, its knitted yarn is renowned in the Far East and Europe for its fine

quality. Azam Textile Mills is reputed for its carded and combed yarn, which is quite

popular for premier knitting and weaving.

Kohinoor Power Company Limited

In 1991, the first power unit commissioned in Pakistan, in the Private sector, was

Kohinoor Power Company Limited. Its present production capacity is 15 MW.

Kohinoor Energy Limited

1995, another power unit, Kohinoor Energy Limited, was established. Kohinoor Power

Limited is a 120 MW power plant located on the outskirts of the city of Lahore. This

project has an annual turnover of $80 million.

ELECTRONICS INDUSTRY

Threatened by tariff discrepancies, corruption and smuggling

 By AMANULLAH BASHAR
Jun 19 - 25, 2000

The proliferation of Information Technology across the globe has opened new dimensions for the
electronics industry especially for those countries having a sound industrial base in this particular
industry.

It is however unfortunate that except a few cosmetic steps, no genuine efforts were made to establish this
important industry in Pakistan. Currently, Pakistan is merely involved in assembling the electronics goods,
especially the TV sets, while major manufacturers are not producing radios, which still have a large
market in our rural areas.

Unlike automobile industry, there was no deletion policy adopted in electronics industry as a result of
which transfer of technology did not take place. All major components in electronics industry are imported.
This situation indicates that even large multinational companies assembling TV sets are as a matter of
fact engaged in import business, as they are actually selling the imported parts just after giving them the
shape of an assembled product. Sources said that the picture tube, the main component used in TV
manufacturing is not produced within Pakistan and the entire electronics industry is using the imported
components.

As far as electrical appliances are concerned, Refrigerators, Deep Freezers, Air conditioners are being
manufactured within the country, yet the industry is depending on imported Compressors for
manufacturing these items. Pakistan has a considerable market for a host of electrical items almost all of
them are being imported or smuggled into Pakistan. One of the major reasons for not developing the local
industry is the culture of giving preference to the imported goods as compared to those produced locally.
One should however accept the harsh fact that usually the poor quality goods produced locally were
enough to shift the interest of the consumers towards the imported goods.

Spelling out the facts which gave way to the menace of smuggling in Pakistan, specially the electronics
goods; sources identified the double standards of duty structure for Karachi and Sust borders at
Karakuram (Silk Road), as the loophole of this industry.

Describing the official discrimination in tariff rates as one of the major concerns of the electronic industry
and the business community engaged in import business.

The import of energy saver bulbs, is the glaring example of this discrimination between Karachi and the
Sust Border. The duty rate for energy saver bulbs is one dollar for Karachi while it is merely 35 cents at
Sust Border.

Abdul Khalique Jafarani, Chairman, Pakistan Electrical & Electronics Merchants Association (PEEMA)
while talking to Page on this issue described this discrimination as a sort of smuggling under official
cover.

Corruption at Customs stage where undue discount on import price and quantity discount and lower ITP
valuation is given to the favourites are dragging down the local electronics industry, said Sarfrazuddin,
Chairman of Pakistan Electronics Manufacturers Association.

Although the National Accountability Bureau (NAB) has taken action against the corrupt in CBR yet action
again certain people involved in gross violations was still awaited. These elements openly violated the
rules and their names are with the NAB but action has not been taken against them for the reasons best
known to the authorities.
Sarfraz feels that rampant corruption, under invoicing, and of course the smuggled electronics goods and
electrical appliances which have flooded the local markets are the major concerns of the electronics
industry in Pakistan.

Welcoming the steps taken by the present government for documentation of the economy and the present
campaign launched for Tax Survey, Sarfraz fully supported the government stance to bring the black
economy into the tax net. The wild and free undocumented economy is another major hurdle in the proper
growth of the regular industry already in the tax net. Instead of sharing the socio-economic responsibility,
those out of tax net are in fact trying to put the entire burden on the formal economy. This is quite unfair.
Even the immunity scheme announced by the government is a sort of favour to the black economy as
under this scheme those who had always evaded the taxes would whiten their black money only after
paying a 10 per cent of the declared money. This gives a bad taste to the regular taxpayers that paid their
taxes in all those years while those who were outside the ambit enjoyed the tax evasion.

Sarfaraz, however, expressed the hope that with the firm determination of the present government to
bring the informal economy into documentation will improve the situation both in the public and private
sector.

Apprising the prevailing situation, the representatives of the electronics industry have written to the
government that due to inconsistent policies and rampant smuggling of Television sets, the local industry
has been adversely affected.

Since Radio sets manufacturing has almost come to zero level, the electronics industry is merely confined
to production of Television sets in Pakistan.

Despite the fact that some big multinational companies are engaged in this business the electronics
industry is not capable to produce television sets with local components. A very insignificant percentage
of deletion has been achieve by this industry, otherwise the major and basic components are still being
imported even after passage of 50 years in Pakistan.

Following production chart of television sets gives a real picture about the total strength of the electronics
industry in Pakistan.

Yearwise comparison of production/ revenue

Year Quantity Total Revenue

1996/97 72,573 290,541000
1997/98 104,470 305,777000
1998/99 224,286 351,906000
1999/2000 288,834 499,840000

The above figures regarding level production and revenue contributed by the industry can be taken as a
perfect case to see as to how the exorbitant taxes affects the growth of production and revenues. For
example, in the year 1996-97 there was a 10 per cent regulatory duty, 18 per cent sale tax and 5 per cent
central excise duty imposed on this industry. In that year the volume of production as well as revenue
contribution both were at the lowest ebb. In the year 1997-98, there was a general withdrawal of
regulatory duty and a general reduction of Sales Tax from 18 per cent to 12.5 per cent and waiver of
Central Excise duty. These withdrawals altogether brought a positive change both in volume of production
as well as revenue contributions reflected in the chart. In 1998-99, the government went a step ahead by
reducing import duty to 5 per cent on five major components, which produced encouraging results. The
reduction in tariff regime did not hurt to the receivables of the government. Instead these positive steps
gave a quantum jump to the revenue from Rs290,540,000 to Rs499,840,000 in the current year. The
outcome of these tax reforms introduced in the electronics industry proves that lowers the tax rate higher
the volume of tax paid by the people. This pattern can be taken as a model for rest of the tax regime for
enhancing the overall tax net in this country.

Welcoming the government's crusade against smugglers and illegal traders, the electronics industry has
suggested to the government to review its policy for providing more incentives/ concessions to the
industry. Acknowledging the efforts of the government through remedial measures and incentives allowed
to the industry in the past, the industry representatives observed that the steps did help not only to survive
during those difficult days but also were able to generate comparatively higher revenues for the national
exchequer.

In the face of the current challenges unduly arresting the growth of the electronics industry, Pakistan
Electronics Manufacturers Association (PEMA) has strongly recommended to the government to bring
down the current rate of duty from 5 per cent to zero level. PEMA feels that if the suggestions were
approved, it would counter effectively the illegal trade and other ills besides giving a strong production
base to the electronics industry in Pakistan.

Currently, following is the duty structure on the following basic components imported by the electronics
industry:

Components   PCT Heading Duty Recommended

Rate Rate
Picture Tube 8540.1100 5% 0%
Deflection Yoke 8540.9100 5% 0%
Transformers 8504.3100 5% 0%
Tuner 8529.9090 5% 0%
Remaining Kit Respective Nos. 10 % 5%

Elaborating the benefits expected out of above recommendations sent to Abdul Razzaq Dawood, the
Federal Minister for Commerce and Industry, Sarfrazuddin, Chairman, PEMA told PAGE that with the
implementation of these recommendations, the electronics industry in Pakistan would produce the
following results.

• Current production level could be doubled.

• Employment for thousands & thousands skilled and non-skilled could be created.

• Current revenues for the government from the local TV Industry would increase manifold.

If implemented, the recommended incentives would enable the local industry to compete effectively with
the smuggled TV sets thus helping Government in eliminating the menace of this illegal trade from the
country.

This would ensure availability of quality products at competitive prices.

Recalling the bad days when the electronics industry was passing through one of the worst period of its
history, Sarfrazuddin said that in 1997, PEMA launched a very aggressive campaign against smuggled
Japanese popular brands of TV sets and took some unprecedented drastic actions. So much so, it forced/
compelled the dealers to boycott sale of smuggled TV sets.

The government did not only appreciate the crusade launched by PEMA but it also helped and supported
the electronics industry. Due to serious and continuous efforts of PEMA to create awareness among the
dealers and consumers abut the adverse impact of smuggling on the economy of this country and also on
the local industry, the industry has achieved encouraging results. One of the positive outcomes of this
campaign was arrival of a popular TV brand into local production. Earlier this brand was involved in large
scale smuggling into Pakistan market. This company decided to produce its brand locally by acquiring the
industrial facilities of an idle member industry. As a result of that one of the sick units was also revived to
production. That company set a good example for other brands which also followed suit. Sarfraz said that
this industry therefore proudly helped in generating unprecedented revenues to the national exchequer by
way of:

Increasing local production significantly

Indirectly forcing the smugglers to use legal channels thus helping in generating revenues on imports
which hitherto was not coming.

The PEMA Chairman however conceded that the success and the achievements of this industry were not
possible without help the and support from government by way of fiscal incentives announced in 1998.

He observed that local production of TV sets because of the facts mentioned above increased from 72000
in 1996/97 to 288,834 in 1999-2000 resulting in sharp increase in revenue from Rs290.0 million in 1996-
97 to Rs499.8 million in 1999-2000. It is worth to mention that government did not suffer any loss of
revenue because of reduction in duty but in fact benefited considerably.

He said that during various meetings with the Central Board of Revenue in the past while agreeing to the
current tariff structure for this industry, it was agreed that government would favourably consider
industry's recommendations. The significant point of the recommendations emphasize for reducing duty
on five components to zero per cent provided the industry generated the same revenue to the
government.

Electronics merchants

Abdul Khalique Jafrani, Chairman of Pakistan Electrical Electronics Merchants Association (PEEMA) spelt
out his views about what he called official smuggling through Sust Check Post. He said that all over
Pakistan all commercial importers and industrial importers are registered in Sales Tax Department and
they are issued Registration Number. However, at Sust check post the importers are not registered nor
issued Registration Nos. from Sales Tax Department. Customs are clearing cargo to these unregistered
importers at Sust Border without sales tax numbers. Even there is no record about the volume of import
through that border. As against that at Karachi and other Dry ports the importers have to file returns every
month and they have also to maintain the input and output registers. Why the Sust border importers are
exempted of this formality. Jafarani described this practice as a clear case of smuggling under the official
patronage hence damaging and harming the national exchequer depriving it of hundred of millions rupees
every month.

Jafarani said those incorrect declarations of value, false and improper quantity and description of goods
imported from China through Customs post at Sust border are still in practice. He observed that at Sust
border neither complete description of imported goods is recorded in the bills of neither entry nor the
normal values or values fixed under Section 25B of the Customs Act 1969 are applied. He demanded of
the present government that to prevent this gross irregularity, all goods should be imported through Sea
route and if the Sust importers want to transit their goods they can take the cargo to Rawalpindi or other
dry ports from Karachi.

The PEEMA chairman strongly urged the government that taxes should be collected equally in all parts of
the country. In case the equality is not restored and all the segments of the business class were not
treated at par, the government may lose its credibility resulting a huge loss of in the shape of moral values
as well as national income.
He also suggested that the issue of Sust border affecting the overall trade in electronics and electrical
appliances should be discussed with customs authorities in China. They may be requested to supply the
copies of export manifest/ export bills filed by the exporters showing the appropriate value, quantity and
description of goods and the assessment in Pakistan may be made as per these documents.

Goods consigned for areas other than northern areas may be examined and assessed at Dry port
Rawalpindi or Islamabad. The customs officials at Sust shall seal the containers and accompany the
consignments to Rawalpindi Dry port where these shall be released after filing of correct declaration and
payment of correct amount of duties and taxes.

Competent, trust worthy staff having know how of customs appraisement be posted at Sust border who
shall examine the goods as per Examination Manual issued by the Central Board of Revenue and apply
the correct values for assessment purposes.

Since most of the electronics goods imported at Sust borders ultimately find their way into Karachi and
other major markets of the country. This on going practice is rendering the genuine importers
incompetitive in the market. If the situation allowed prevailing, the total import of electronic goods will
naturally divert from Karachi to Sust border, as there seems to be no wisdom in competing with smuggled
goods after importing at costly duty rates.