IFC and local banks to commit over $50 million in tyre manufacturing
facility in Sindh
The International Finance Corporation (IFC), in partnership with a
consortium of local banks including HBL, Meezan Bank, Bank Alfalah, and Habib
Metropolitan Bank, has committed $50.2 million in financing to support the
development of a state-of-the-art tyre manufacturing facility in Gharo, Sindh.
This greenfield project, led by Armstrong ZE Pvt. Ltd., aims to boost local
tyre production and reduce reliance on imports.
The financing package includes a $25 million loan from IFC and an additional
$25.2 million equivalent in Pakistani rupees from the participating banks. The
project is set to create over 1,800 direct and indirect jobs, strengthen local
supply chains, and introduce a locally manufactured international tyre brand to
the market.
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Addressing a Growing Need
Pakistan’s vehicle registrations have steadily increased, with approximately
30 million vehicles in 2023, including 23 million two-wheelers. However, local
tyre production has lagged due to limited technical expertise and a substantial
informal market, resulting in a dependency on imports. This project is expected
to enhance local manufacturing capacity, reduce import dependence, and improve
Pakistan’s foreign currency reserves.
Statements from Key Stakeholders
Azim Yusufzai, Chairman of Armstrong ZE, expressed gratitude for the
investment:
"This collaboration is a monumental step in advancing our mission to
deliver world-class, sustainable, and innovative tyre solutions to the
Pakistani market. The trust and support from IFC and partner banks reflect
confidence in our vision and potential to transform the tyre manufacturing
industry."
Khawaja Aftab Ahmed, IFC’s Regional Director for the Middle East, Pakistan,
and Afghanistan, highlighted the broader economic impact:
"This investment aligns with IFC’s commitment to enhancing Pakistan’s
value-added manufacturing capacity. It will not only improve access to quality
tyres but also stimulate job creation, increase productivity, and reduce
reliance on imports."
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Supporting Sustainability and Innovation
IFC will further assist Armstrong ZE through its Responsible Investing
Support in Emerging Economies (RISE) advisory program, enhancing the company’s
climate risk management, resource efficiency, and environmental processes.
Leveraging Global Expertise
The project will benefit from Armstrong ZE’s experience in the tyre
industry, backed by Zafco Group Holding, a UAE-based global importer and
exporter of tyres, and Zafar Enterprises, a leading tyre distributor in
Pakistan.
IFC’s Legacy in Pakistan
Since 1956, IFC has invested approximately $13 billion in Pakistan across
various sectors, including renewable energy, financial inclusion,
infrastructure, manufacturing, healthcare, and agribusiness.
This project represents a significant step toward strengthening Pakistan’s
industrial base, fostering innovation, and advancing sustainable development in
the region.
Source: Pro Pakistani