IFC, local banks to invest $52.2mn for tyre production in Pakistan

The International Finance Corporation (IFC) and local banks will invest $52.2 million in a new greenfield tyre project launched in Pakistan with the aim of enhancing domestic tyre manufacturing.

According to details, this initiative receives backing from the Special Investment Facilitation Council (SIFC) and underscores the growing involvement of international financial institutions in the stabilisation of the country’s economy.

Located in the Gharo area of Sindh, this project aims to enhance local tyre production to meet domestic market needs while also increasing export potential.

The project involves a significant investment of up to $50.2 million from IFC and local banks into Armstrong ZE Private Company.

The initiative is expected to create over 1,800 jobs and improve sector competitiveness through technology transfer. It will introduce internationally standard tyres produced locally, ensuring the availability of affordable and quality products.

It is to be noted that, the registered vehicle count in Pakistan has consistently increased over the past ten years, culminating in an estimated total of around 30 million vehicles by 2023, which includes 23 million two-wheelers.

Nevertheless, the local tyre manufacturing sector faces significant limitations due to insufficient technical knowledge and technology, coupled with a large informal market.

As a result, the country remains largely reliant on imports. Decreasing these imports could also contribute positively to enhancing Pakistan’s foreign currency reserves.

The growing collaboration of international financial institutions in Pakistan’s development projects is a positive sign for the nation.

By increasing local production, the project aims to reduce reliance on imports and improve foreign exchange reserves.