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Corporate Farming
 Government
Plan
The federal Ministry of Food Agriculture & Livestock (MINFAL) has identified
specific fields of agriculture sector of the country with a view to attracting foreign as well as local investors.
The objective of this step is to commercialize the agriculture sector. Besides identifying the harnessing of culturable waste land areas, government also pinpointed fisheries sector, production of mutton through raising of sheep and goats, dairy farming, dehydration of vegetables, off-season vegetable production, animal feed mills, fruit juice making plant, solvent oil extraction from rice bran, tomato paste production and sunflower hybrid seed production.
Proposals relating to foreign investment in agriculture sector would be
processed by the Board of Investment (BOI) in consultation with respective
provincial governments and later would be approved by the competent decision
making authority.
In this connection, an Investment Policy for the Agriculture sector was also
announced by BOI recently under which the import tariff on agricultural
machinery (not manufactured locally) will be zero rated.
There will be no upper ceiling on land holding for registered agricultural
companies. However, income of these companies would be taxable. Activities
including Land development/Reclamation of barren, desert and hilly land for
agriculture purpose and crops farming; Reclamation of Water front areas or
creeks; Crop, fruits, vegetables, flowers farming/Integrated agriculture
(cultivation and processing of crops); modernization and development of
irrigation facilities and water management; Plantation, Forestry and
Horticulture would be available for foreign investment in agriculture sector.
For this purpose the land for agricultural purpose can be obtained on lease
basis for long period, i.e. initially upto 30 years, extending for a further
period of 20 years. While, foreign company, allowed for investment in
agriculture sector, will not be allowed to transfer such land to any other
foreign company unless specifically permitted by the Federal and the concerned Provincial Government.
The culturable waste land: According to the experts of MINFAL Pakistan has a
total geographical area of 79.6 million hectares. Of this 9.1 million hectares land is culturable waste which is fit for cultivation but was not cropped due to lack of water availability, lack of interest, financial resource constraints etc. Saying that culturable waste area is almost half of the cultivated area, the experts said that development of this area is not only better for investment but also have potential to contribute to increase in agricultural production.
About half of the culturable waste area (4.87 million hectors) is in the
province of Balochistan from total 9.14 mh while there are 1.74 mh culturable
land in Punjab, 1.45 mh in Sindh, 1.08 mh in NWFP and NWFP.
Culturable waste land in Balochistan is mainly in the Kalat Division followed by Quetta, Nasirabad and Makran Divisions. In Punjab, culturable waste area is mainly in the Divisions of D. 0. Khan, Bahawalpur, Rawalpindi and Lahore. In Sindh, culturable waste area is located in Hyderabad, Mirpur Khas, Sukkur and Larkana Divisions. In NWFP, culturable waste area is located in D. I. Khan, Hazara and Kohat Divisions.
Similarly the experts of MINFAL elaborated about the other fields i.e. fisheries sector, production of mutton through raising of sheep and goats, dairy farming, dehydration of vegetables, off-season vegetable production, animal feed mills, fruit juice making plant, solvent oil extraction from rice bran, tomato paste production and sunflower hybrid seed production.
The details of the plan is as follows:
• As we know that Agriculture sector contributes 24.6 per cent to national GDP
• 46.8 per cent of labour force is employed in agriculture sector
• 49.0 per cent of total value of industrial production comes from agrobased industries, including textile and sugar.
• Two-thirds of total population lives in rural areas which, directly or
indirectly, depends upon agriculture for their sustenance.
• About 67 per cent of total export earnings are derived from agriculture based commodities/products.
AGRICULTURE SECTOR: INVESTMENT POLICY
1. The import tariff on agricultural machinery (not manufactured locally) will be zero rated. The list of specific machinery and equipment for this purpose will be notified later.
2. There will be no upper ceiling on land holding for registered agricultural companies. However, income of these companies would be taxable.
3. Following activities will be available for foreign investment in agriculture sector
Land development/Reclamation of barren, desert and hilly land for agriculture
purpose and crops farming; Reclamation of Water front areas or creeks; Crop,
fruits, vegetables, flowers farming/Integrated agriculture (cultivation and
processing of crops); modernization and development of irrigation facilities and water management; Plantation, Forestry and Horticulture
4. The proposals relating to foreign investment in agriculture sector will be processed by the Board of Investment in consultation with respective provincial governments and will be approved by the competent Decision Making Forum.
5. The land for agricultural purpose can be obtained on lease basis for long period, i.e. initially upto 30 years, extending for a further period of 20 years.
6. Foreign company, allowed for investment in agriculture sector, will not be allowed to transfer such land to any other foreign company unless specifically permitted by the Federal and the concerned Provincial Government.
HARNESSING THE CULTURABLE WASTE LAND
1. PROSPECTS
Pakistan has a total geographical area of 79.6 million hectares. Of this 9.1
million hectares land is culturable waste. Culturable waste is that cultivated farm area which is fit for cultivation but was not cropped. The reasons may be lack of water availability, lack of interest, financial resource constraints to buy proper equipment and inputs for cultivation of crops, remote areas from the villages/cities, etc. Culturable waste area is almost half of the cultivated area. Hence development of this area is not only better for investment but also have potential to contribute to increase in agricultural production.
About half of the culturable waste area is in the province of. Balochistan.
Province-wise break up is as follows:
CULTURABLE WASTE AREA
(MILLION HECTARES)
Pakistan
9. 14
Punjab
1.74
Sindh
1.45
NWFP
1.08
Balochistan 4.87
Culturable waste land in Balochistan is mainly in the Kalat Division followed by Quetta, Nasirabad and Makran Divisions. In Punjab, culturable waste area is mainly in the Divisions of D. G. Khan, Bahawalpur, Rawalpindi and Lahore. In Sindh, culturable waste area is located in Hyderabad, Mirpur Khas, Sukkur and Larkana Divisions. In NWFP, culturable waste area is located in 0. I. Khan, Hazara and Kohat Divisions.
2. PRODUCTION ASPECTS
Pakistan's climate is conducive to grow a variety of crops, vegetables and
fruits. Major crops produced are wheat, rice, cotton, sugarcane, maize, gram,
onion, potato, rape and mustard seed, and sunflower.
Major fruits produced include apple, dates, citrus, mango, grapes and guava.
Once the culturable waste lands are developed, there are bright Prospects that production of all the above crops could be started. The requisite technology, manpower and inputs to produce the crops is already available in the country.
3. MARKETING ASPECTS
Pakistan is deficit in food production and approximately Ps. 84 billion (US$1.9 billion) is spent annually on import of wheat, edible oils, pulses, tea and other food products. Thus there is already available market for these products in Pakistan. There is also potential for exports particularly of cereals, vegetables and fruits.
OFF-SEASON VEGETABLE PRODUCTION
1. PROSPECTS
Demand for off-season vegetables is tremendous and it has vast market in side
the country and out side in-Middle East and Europe.
Pakistan has technical know-how to produce off-season vegetables. Trained
manpower is available and the required greenhouse structure/material is also
available. It does not require very sophisticated greenhouses.
Vegetables such as tomatoes, cucumbers and sweet pepper can be produced. This
work can be started on a small piece of land near cities where it has market and can also be exported promptly.
Temporary greenhouses can be built using polyethylene sheets and bamboo or iron bars, or pipes. Water supply is assured through tube wells.
2. PRODUCTION ASPECTS
Production technology is not so complicated. All fertilizers and inputs are
available locally. Labour is cheap and readily available. Supervisory technical staff is also available. Training of staff can be provided and other technical assistance can be sought from National Agricultural Research Centre, lslamabad.
Land is available on reasonable rates which can be taken on lease or can be
bought as per requirements. Off seasons vegetable production project can be
started at small level in the beginning and expanded further as a when required. Initially it is suggested to start the project on S acres given the provision for expansion upto 25 acres.
3. MARKETING ASPECTS
Perishable vegetables will be marketed or exported immediately after harvest.
However, short term transit storage will be required quite oftenly which will be done at the farm in cold rooms.
To encourage export of fresh vegetables, a scheme of 25 percent freight subsidy on export of fresh vegetables is in vogue. This scheme is operated by the Export Promotion Bureau, Government of Pakistan. The expected investors can also make use of this scheme and export to foreign markets as much as they could.
SUNFLOWER HYBRID SEED PRODUCTION
1. PROSPECTS
Pakistan is deficit in edible oil production. About 67 percent of total
requirement is imported. Sunflower is an important oilseed grown in Pakistan.
During 1997-98, sunflower was grown on 98 thousand hectares in 1997-98 and
target for 1999-2000 is to grow sunflower at 162 thousand hectares. Sunflower
hybrid seed had advantage upto 30 percent of yield production over open
pollinated seed. This is why the farmers prefer to use hybrid seed and pay a
high rice.
2. PRODUCTION ASPECTS
Pakistan has the production technology and inbred lines to produce this seed.
Oilseed Programme of National Agricultural Research Centre, lslamabad will
assist the investor to set up the production system also provide seed of inbred lines as per the requirements of seed company.
The seed can be produced in Sargodha, Bhalwal, 0. G. Khan and Hyderabad
districts on irrigated lands during autumn season. The crop is planted in
thelast week of July and first week of August and is harvested in the first
andsecond week of November. After breaking of dormancy by storing it for 50
days, the seed is ready for sale in first week of January.
A seed company can start its business by producing 50 or 100 tonnes of seed and gradually raise the level of production upto 200 tonnes and 500 tonnes. The seed company would require establishing a small infrastructure in Pakistan for seed 'processing, seed storage and seed marketing. Some core technical manpower would be needed for the supervision of seed production, storage and marketing. All seed could be produced on farmer's field through contract farming or by acquiring land on lease and contracting out all the field operations.
3. MARKETING ASPECTS
A good seed crop can produce 300 to 360 ~kg processed and treated seed per acre. The cost of production of one kg seed comes to about Rs.1 50 to 170. It includes cost of seed production, transportation, processing, treating, packing, storage, overheads and marketing costs. The seed is sold to farmers for Rs. 250 to Rs. 300 per kg. In this way, the profit margin is Rs. 100 to Re. 130 per kg of seed.
The market for hybrid seed already exists in the county. The farmers growing
sunflower prefer to use hybrid seed in order to get better productivity per unit and hence they are willing to pay more price for hybrid seed as compared to other seeds. Thus, there will be no marketing problem.
DEHYDRATION OF VEGETABLES
1. PROSPECTS
At present dehydrated vegetables have demand from Army, -Pakistan International Airlines, Railways and hotels. Some units with limited capacity for dehydration of onion, potatoes and cauliflower are operating in Pakistan. Some dehydrated vegetables like garlic powder has utility in certain pharmaceuticals. Apparent household demand for dehydrated vegetables is also limited. The general consumers have not yet been exposed to the product.
Hence there exists a considerable suppressed demand for selected dehydrated
vegetables like onion, garlic, potato, bitter gourd, cauliflower, etc. It is
only mater of introducing the products to the consumers markets.
It is important to record that exports of dehydrated vegetables will be
commercially more profitable than processing for local market. Middle Eastern
and European markets are to be explored for export potentials.
2. PRODUCTION ASPECTS
During 1997-98, the production of onion was at 1.1 million tonnes, potato at 1.4 million tonnes, garlic at 0.08 million tonnes and caulifloUver at 0.2 million tonnes. These are mostly consumed in fresh form. The plant for dehydration of these vegetables could be established at vegetable growing areas like Peshawar, Lahore, Faisalabad, Sahiwal, Sargodha, Multan and Hyderabad. Vegetable growing areas like Peshawar, Lahore, Faisalabad, Sahiwal, Sargodha, Multan and Hyderabad.
3. MARKETING
a) Demand already exists with the defence forces, Pakistan International
Airlines and hotels. Consumer demand will have to be created through marketing techniques.
b) There is a great demand for the export of dehydrated vegetables to the Middle Eastern and some European markets.
TOMATO PASTE PRODUCTION
1. PROSPECTS
Pakistan produces about 0.3 million tonnes of tomato annually. During the peak season tomato sells at low pries due to larger sut,plies resulting in less return to growers. About 10 to 20 percent of production is wasted due to
defective marketing system and inadequate processing facilities, Sale price of tomato paste in local market indicated that this activity is financially viable if proper marketing arrangements are made.
Presently a quite a few companies including M/s Mitchell's Farms are producing tomato paste. The annual production capacity of all the companies together is also limited.
2. PRODUCTION ASPECTS
Tomato paste plant can be established in the main tomato growing areas of
Hyderabad (Sindh province), Quetta (Balochistan province), Parachanar (NWFP
province), Faisalabad and Multan (Pun]ab province). The main raw material for
tomato and other utilities required would easily become available in these
areas. The main product would be tomato paste and by-product would be peels and seeds convertible into animal feed. The conversion ratio of tomato to tomato paste is 8:1.
3. MARKETING ASPECTS
Tomato is very popular vegetable. It is used in fresh form in almost all the
recipes. Its price fluctuates very much. At the harvest season price is at the lowest while at the off-season prices rise to a very high level. The consumer generally look for a substitute. Tomato paste could serve as substitute. Apart from this, tomato paste needs to be introduced to consumers and market will have to be created through marketing techniques.
SOLVENT OIL EXTRACTION FROM RICE BRAN
1. PROSPECTS
Production of Rice (paddy) is estimated to be about 6 million tonnes and based on about 10 percent recovery of rice bran, 0.6 million tonnes of rice bran is available. The oil contents sin rice bran is 15 to 17 -percent. The existing oil extraction capacity in Pakistan is limited and as such a large quantity of rice bran is either used in poultry feed or exported.
The inedible oil extracted from rice bran is an important raw material in the
manufacture of soap, washing powder, etc. Pakistan is importing tallow and
during 1977-98, 62 thousand tonnes of tallow was imported at Rs. 1 .4 billion
for the manufacture of soap. This is an import substitution project and
establishment of such unit will help save foreign exchange on the import of
tallow.
2. PRODUCTION ASPECTS
Punjab and Sindh provinces are producing a large part of total rice produced in Pakistan. Rice bran, which is the main raw material, is easily available in these provinces. Other raw material will be Hexane (solvent). Main product would be crude oil while by-product will be rice bran meal.
Other related information is as under:
• Rice bran is available at very low price
• Project will operate 200 days during a year
• Consumption ratio of Hexane is 4 gallons per tonne of rice bran.
• The plant can also be used for oil extraction from oilseeds such as sunflower, soybean and cotton seed, etc.
• Bran of parboiled can produce edible grade oil
3. MARKETING ASPECTS
It is good and cheap substitute of tallow for manufacture of soap and washing
powder. Animal tallow is imported to meet the domestic demand for the same.
Hence market for the crude oil produced is readily available in Pakistan and can easily be sold to soap factories.
Apart from this, the product can also be exported to foreign countries.
PRODUCTION OF MUTTON THROUGH
RAISING OF SHEEP AND GOATS
1. PROSPECTS
Pakistan has large livestock inventory i.e. cattle 21.1 million, buffaloes 21.4 million, sheep 23.8 million and goats 44.2 million and has great potential for enhanced production provided feed shortages are overcome; improved health coverage is made available; and price controls are removed. In order to save
feed for better feeding the animals, a policy of enhancement of productivity per unit animal is being pursued. Therefore, apparently the number of animals are surplus to the requirement of the country. The marketing system is also
obsolete. Steps are in hand to improve the marketing structure.
Large areas of land in the districts of Bahawalpur, Bahawalnagar, Rahim Yar
Khan, Larkana, Jacobabad, Shikarpur and Khairpur area under developed and not
being utilized effectively. It is estimated that more than 10,000 acres of land is available for sheep and goat raising in these districts.
2. PRODUCTION ASPECTS
Large area of land in the districts of Bahawalpur, Bhawalnagar, Rahim Yar Khan, Larkana, .Jacobabad, Shikarpur and Khairpur is still under developed and not being utilized effectively. It is estimated that more than 10,000 acres of land is available for sheep and goats raising in these districts. These areas have good potential for dairy products.
Large area of land in the districts identified above is still under developed
and are nat being utilized effectively. It is estimated that more than 10,000
acres of land is available for sheep and goats raising in these districts. These areas have good potential powder and other dairy ~,roducts.
3. MARKETING ASPECTS
In order to exploit livestock resources it is proposed to set up dairy units.
The estimated cost for setting up dairy farms of 10,000 heads of sheep/goat is about Ps. 120 million capital cost (cost of land, shed, sheep/goats, etc.) and Ps. 5 million recurring cost (cost of grazing, concentrates, etc.).
Mutton is expensive than beef in Pakistan because consumers have a preference of mutton over beef. Hence a large market for mutton already exist in the country. However, there is also a need for proper and hygienic marketing of mutton. If this is done, the product will be readily salable.
There are also bright prospects of export of mutton to Middle East where most of the meat comes from Australia. Pakistan, being an Islamic country, will be
preferred by the Middle Eastern Islamic countries for import of mutton because of the way of slaughtering of animals.
DAIRY FARMING
I. PROSPECTS
Pakistan is blessed with a good genetic potential for dairy development. Milk
and other dairy products form an integral part of human diet in rural and urban areas of Pakistan. Buffalo is the principal source of milk and about 66 percent of total production of milk (24.2 million tonnes) is from buffaloes; 32 percent from cows and the balance 2 percent from goats and sheep. Despite good genetic potential, most of the animals produce considerably low quantity of milk due mainly to poor nutrition, management, disease control and lack of proper marketing of this highiy perishable commodity. In urban end sub-urban areas, the ost of milk production is much higher than in rural areas.
Under the traditional technology of collection and distribution, urban and
pen-urban production is the only feasible source of milk. Rurally produced milk remains untapped because the commodity is perishable, the logistic system is in-adequate and producers are not organized.
Attempts have been made by Punjab Livestock and Dairy Development, Punjab
ooperative Department and Sindh, Livestock Department to organize farmers for
better serving and increased production of milk but they have not been so
successful due to lack of desired infrastructure and start up funds for setting up collection/chilling centres, transportation and marketing of milk, However, Village Livestock Associations under Punjab Livestock Development Project in Sheikhupura and some dairy cooperatives and farmer's breeder associations are operational in Sargodha/Jhang/Sahiwal and Okara districts.
2. PRODUCTION ASPECTS
In order to exploit livestock resources it is proposed to set up dairy units to produce milk and calves. The estimated cost for setting up dairy farm of 1000 heads of buffalo/cow is about Ps. 100 million capital cost (cost of land, buffaloes/cow, sheds, vehicles, etc.) and Ps. 25 million recurring cost (cost of supply of fodder, etc.). the by-product will be manure.
There are large tracks of land which are culturable waste areas. The culturable waste areas could be used to establish dairy farms. Such areas are available at the lower price compared to cultivable land.
3. MARKETING ASPECTS
Market for milk and milk products is already there in Pakistan. It is estimated that increase in urban demand for milks is over 7 percent per annum. This has resulted in rapid rise in import of milk powder and other dairy products. The products of the proposed project can easily take place of the imported milk powder.
The availability of milk and milk by-products is relatively high in Pakistan as compared to other regional countries. The present per capita availability is 70 kg per annum which, however, is not evenly distributed between rural and urban population. This mainly is due to inadequate collection, processing and marketing facilities and highly perishable nature of milk in urban areas has further been aggravated by comparatively high urban demand generated by influx of population and higher income and improved economic conditions.
FISHERIES SECTOR
1. PROSPECTS
Pakistan is blessed with rich fishery resources available in the Exclusive
Economic Zone (EEZ) of Pakistan spread over an area of abput 250,000 sq km.
Pakistan has a coast line of about 1,100 km along the coast of Sindh and
Balochistan provinces. Pakistan's total marine production is estimated at 0.4
million tonnes which can be further enhanced to a considerable extent.
The total export from fishery sector during 1997 was US$ 172 million which needs to be further enhanced. Pakistan fishery being of diversified in nature has considerable opportunities for attractive foreign investment. The following specific areas are identified:
2. DEEP SEA FISHING OPERA TION
There is wide scope for the exploitation of meso-palegic resources reported to be in abundance in Pakistan's water and their further processing/ caniiing on board. Exploitation of tuna and tunalike species through tuna longliner has also prospects subject to availability of tuna in the EEZ of Pakistan.
3. SHRIMP CULTURE
In Pakistan, although preliminary experiment through pilot shrimp culture had
started by public and private sector, but some faced many difficulties, but
commercial viability of the operation has been proved. However, private sector is hesitant to make investment due to environmental and technical difficulties.
The area earmarked for shrimp culture is located in the western side of the
lndus deltic creek.
It has been observed that the salinity in seawater and in sub-soil areas is
increasing. In order to dilute the seawater during period of high evaporation, there is a need to have ample supply of fresh water. There $ need to establish a hatchery for shrimp. It is economically not viable to base the industry on imported seeds due to high mortality in transportation and also high costs involved. Bangladesh, which also had no shrimp culture before 1970's, is now one of the important country where shrimp aquaculture has got real boast in the past ten years. Their example can be followed.
4. PROCESSING OF FISH
The expansion in the processing of fish is probably the most important area
which needs private sector's involvement. At present, a major part of the food fish is either consumed locally or salted dried for export. With the exception of local consumption and small quantity of frozen and chilled fish exported to European countries and Middle East, a bulk of the fish is salted, dried and exported to Sri Lanka at very low prices. Majority of the fish catch instead of being exported, is converted into fish meal. Important food fish species like tuna, sailfish, marlins, groupers, dolphinfish, catfish sharks and various carangoids are not considered as good foodfishes, therefore, these are exportedto Sri Lanka in dried form.
There is ready market for these fish especially for fillets, steaks and in form of consumer packs in may parts of the world. Private sector may invest in this processing sector. Processing for value added fish products such as breaded, fermented, ready to cook, semi cooked and smoked products are probably the most important. It may be added that value added products from Asia (especially South East Asian Countries) are readily accepted in Japanese, European and American markets. Pakistan can also penetrate in these markets with its value
added products.
ANIMAL FEED MILLS
1. PROSPECTS
Use of balanced feed after genetic capability of a breed is considered second
most important factor to exploit potential yield of milk and meat. In view of
the long felt need, the University of Agriculture Faisalabad set up a small feed mixing unit to supply feed to dairy farmers. The commercial feed has gave very good results as compared to traditional feed, i.e. cotton seed cake. Encouraging results of this attempt by the University prompted private sector entrepreneurs to set up new cattle feed mills. Some of them could not compete with the traditional feed because of quality. However, the pilot unit set up by the University continue working.
2. PRODUCTION ASPECTS
The feed mill units are to be established near areas where dairy and livestock farming are already developed like Karachi, Lahore, Sahiwal, Faisalabad and Gujranwala. The utilities required are already available in these locations.
Raw material will be cotton seed cake, rape seed cake, rice bran, rice polish, wheat bran, maize oil cake, molasses, etc. Other raw material required include salt, bonemeal, urea, mineral supplements packing materials etc. These items are locally available in abundance. The main product will be cattle feed. Conversion ratio will be 1:1. Machinery for feed mills is locally available from Gujranwala. Machinery can also be imported.
3. MARKETING ASPECTS
What is mostly needed is to produce quality feed and put in efforts to introduce the same to the dairy farmers and common farmers who also happen to be small dairy farmers. The cost of milk production is going to be reduced if balanced feed is practices by the dairy farmers. Replacement of traditional feed, however, is going to take place gradually. For this purpose, the farmers will have to be made aware of importance of highly nutritive and balanced animal feed.
The market for feed thus will have to be created within the country and
prospects are bright for its export.
FRUIT JUICE MAKING PLANT
1. PROSPECTS
In recent years there is growing consciousness of the necessity of fruit juices in the country as they are a source of vitamins and mineral which are essential for the health. Nutritive value of fresh fruits is better than the processed but due to their perishable nature regular supply of fresh fruits throughout the year is not possible. Supply of fruits particularly in off-seasons can only be regulated by processing them into various products.
Pakistan is producing a variety of fruits which include apples, citrus, mangoes, banana, dates, apricot, guava, peers, fig, almond and peaches. Due to inadequate processing and storage facilities, large quantity of fresh fruits (10 to 15 percent) is spoiled in harvesting and marketing operations. These losses can be minimized by creating adequate processing facilities. The popular fruit juice could be of apple, mango/guava and citrus.
2. PRODUCTION ASPECTS
Pakistan is producing large quantity of apples, citrus, mangoes. During 1997-98, citrus production was at 2.0 million tonnes, mango at 0.9 million tonnes, apples at 0.6 million tonnes and guava at 0.5 million tonnes.
Citrus, mango and guava are mostly produced in Punjab province. Mango is also a major fruit in Sindh province. Apples are mostly (85 percent of total
production) produced in Balochistan province. As such Citrus Juice Extraction
plants could be established in Punjab. Mango/Guava Nectar Processing plants
could also be set in Punjab and Sindh provinces where raw material will easily be available. The apple juice extraction plants could be established in Balochistan province where apple is produced and easily available.
The main products could be straight fruit juices and fruit concentrates.
By-products will be peel oil and processing wastes convertible into animal feed and compost. Conversion ratio is expected to be 1.6 to 2.5:1.
3. MARKETING ASPECTS
Products and the by-products can find place in the domestic as well as foreign
markets. It depends on the investors how marketing campaign is launched and
products introduced in the local as well as foreign markets. It is, however,
estimated that the main products could find a big market in the Middle East
countries.
PRODUCTION OF FURFURAL FROM
SUGARCANE BAGASSE
1. PROSPECTS
Sugarcane is one of the Pakistan's major cash crop. It is produced on about 1
million hectares and production volume is 53 million tonnes. Total cane crushed in sugar mill was 41 million tonnes in 1997-98. Bagasse is the fibrous residue of the juice extraction process. It amounts to 25-30 percent of the cane weight and appears to be the most economic source of furfural presently available.
Furfural is used primarily as a solvent and as a source of furfural alcohol for making foundry core binder resins. Key intermediates made from petroleum and natural gas liquids used in nylon and urethane fibre production have taken furfural's previously most important market. Furfural is also one of the important solvents used in petroleum reef ing and need special attention and
consideration.
The entire demand of furfural is met through imports. The major user for the
furfural is Pakistan National Oil Refinery. With its expansion, the demand for furfural will be going up. The demand for acetic acid is also largely met
through imports.
2. PRODUCTION ASPECTS
The project has the following main features:
1. New technology for Pakistan
2. Import substitution with potential for export
3. A value added project
The plants will have to be imported and can conveniently be located near to
sugar mills, e.g. Mardan, Hyderabad, Faisalabad, Sargodha, Sahiwal and
Bahwalpur. The main raw material will be sugarcane bagasse; its availability is ensured as most of the bagasse production is being consumed by the sugar mills for internal energy generation. Other raw materials required will be sulfuric acid. The main product will be furfural and by-products will be acetic acid, Iightenls (methyl acetate). Conversion ratio will be 12:1.
3. MARKETING ASPECTS
The production of furfural and acetic acid will provide substitution for import of these chemicals. Market for main as well as by-products is already available in Pakistan. The domestic demand is expected to increase with the expansion in the capacity of oil refineries as Pakistan is trying to discover more oil reserves. Since the main users will be industries and not the consumers, heavy advertisements will not be required in this case.
In case there is sloe demand in the county due to any reason, the furfural could be exported. In this connection, potential foreign markets for the products can be explored.
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