Service Long March Tyres (Private) Limited, a joint business between China and Pakistan and affiliated with Service Global Footwear Limited (PSX: SGF), has set its sights on expansion. In a recent meeting with Prime Minister Shehbaz Sharif, Chairman Li Qingwen and CEO Omar Saeed expressed their intentions to invest an additional $200 million into the Pakistan joint venture.
The objective of Service Long March is to achieve annual exports of $100 million, establishing itself as Pakistan’s leading producer of engineering goods. This ambitious plan demonstrates the company’s commitment to contributing to the country’s economy and bolstering its manufacturing sector.
In November 2019, Service Industries Ltd. and China’s Chaoyang Long March Tyre Company Limited joined forces to create a joint venture known as SLM (Service Long March). The primary purpose of SLM is to oversee the construction and management of a radial truck and bus tyre facility in Pakistan.
As a collaborative enterprise, SLM specializes in the production and distribution of radial tires designed for trucks and buses within Pakistan. Service Industries Limited and its parent company hold 18.91 percent and 32.09 percent shares in SLM, respectively, reflecting their significant involvement in the venture.
The $200 million investment represents a substantial commitment by Service Long March to the joint venture. This injection of funds will enable the company to enhance its manufacturing capabilities, expand its production capacity, and seize new opportunities in the domestic and international markets.
By channeling these funds into the Pakistan JV business, Service Long March aims to bolster its position as a major player in the engineering goods sector. The company’s vision aligns with Pakistan’s broader economic goals of increasing exports and attracting foreign direct investment. This investment not only demonstrates the company’s confidence in the local market but also signifies a long-term commitment to the development and growth of Pakistan’s industrial landscape.
The joint venture’s focus on radial truck and bus tires is strategic, considering the increasing demand for commercial vehicles in Pakistan. As the country continues to invest in infrastructure development and transportation projects, the need for reliable and durable tires is paramount. By positioning itself as a leading producer of these specialized tires, Service Long March aims to capture a significant market share and support Pakistan’s economic progress.
Moreover, the investment will drive technological advancements and innovation in the production of radial tires. By leveraging China’s expertise in the industry, Service Long March can introduce cutting-edge manufacturing techniques and improve the overall quality of tires produced in Pakistan. This transfer of knowledge and technology will not only enhance the company’s competitiveness but also contribute to the skill development of the local workforce.
Service Long March’s commitment to becoming a major exporter aligns with Pakistan’s ambition to expand its presence in the global market. By attaining an annual export target of $100 million, the company will contribute to reducing Pakistan’s trade deficit and enhancing its foreign exchange reserves. This will strengthen the country’s economic stability and pave the way for sustainable growth.
The meeting between Chairman Li Qingwen, CEO Omar Saeed, and Prime Minister Shehbaz Sharif signifies the government’s support for foreign investments and its commitment to facilitating a conducive business environment. The engagement of high-level officials demonstrates the significance of Service Long March’s investment in Pakistan’s industrial sector.
In conclusion, Service Long March Tyres (Private) Limited’s plan to invest an additional $200 million in its Pakistan joint venture highlights the company’s determination to grow and become a leading producer of engineering goods. This strategic move not only contributes to Pakistan’s economic development but also showcases the commitment of Chinese and Pakistani businesses to foster collaboration and mutual success. By leveraging their respective strengths and capitalizing on emerging opportunities, Service Long March is well-positioned to achieve its ambitious goals and propel Pakistan’s manufacturing sector to new heights.
