KARACHI: Samsung, the world’s largest smartphone company, has recently announced a joint venture with Lucky Motor Corporation (LMC), a subsidiary of Lucky Cement Limited, to manufacture the smartphones in Pakistan.
The automobile giant has also entered into an agreement with Electronics pioneer for the production of mobile phones at its automobile plant at Bin Qasim Industrial Park, Special Economic Zone, Port Qasim, Karachi, a notice sent by Lucky Motor Corporation to the Pakistan Stock Exchange (PSX) cited.
“In pursuance of this transaction, the Lucky Motors has also initiated the process of seeking necessary regulatory approvals to carry on the said business and, in this endeavor, has filed an application with the Pakistan Telecommunication Authority (PTA) for securing the license, the notice added.
It further stated that “The production facility is anticipated to be completed by end of this year. That further information on the amount contemplated to be invested in the production facility and the capacity thereof shall be discussed between the Parties (Samsung and LMC) in due course of time.”
Meanwhile, the Engineering Development Board had approved Mobile Device Manufacturing Policy in 2020 and so far 21 companies had been given the green signal for the mobile phone assembly authorization from March to June 2021.
An official of Lucky Cement Ltd, speaking with an English publication revealed that the company will start cellphone manufacturing as soon as the production facility is ready. Responding to a query on the range of production, the official said it will be a wide range of models while he didn’t mention the exact stats about the total investment and job creation in light of this mega venture.
Experts believe that the investment size is reportedly around $100 million where cash requirement is not a major concern as Lucky Motors, according to an estimate, will generate average earnings before interest, taxes, depreciation, and amortisation of Rs15 billion over the next two years from its auto assembly plant.
The project is said to garner around $300-600 million of the annual budget and the project can make net profits of Rs1.0-1.5 billion in starting years.
The group is also engaged in the business of manufacturing, assembly, marketing, distribution, and sales of KIA cars and Peugeot branded vehicles, parts, and accessories in the South Asian country.
The development comes as a major landmark for Pakistan that has been pushing to join the league of smartphone manufacturing countries. Meanwhile, some 21 new companies have been authorized to start local manufacturing and assembly of mobile phones in Pakistan.
The incumbent government is also providing duty protection to the mobile phone production company under the Mobile Device Manufacturing Policy – which aimed to reduce prices of locally manufactured phones.
Before entering Pakistan, the electronics giant had set up an assembly plant in Bangladesh back in 2018. The initiative has been termed a huge success as it is currently producing around 95 percent of the Samsung phones in Bangladesh.
Meanwhile, the trend of imported mobile phones in Pakistan depicted a hike of a staggering 63 percent, per the Pakistan Bureau of Statistics (PBS). The overall telecom imports into Pakistan increased by 47.18 percent by going up from $1.587 billion in 2019-20 to $12.337 billion during the current fiscal year. The data revealed the mobile phone imports during May 2021 at $175.501 million against the imports of $111.056 million last year.
