The International Finance Corporation (IFC) has teamed up with a consortium of local banks, including HBL, Meezan Bank, Bank Alfalah, and Habib Metropolitan Bank, to provide financing of up to $50.2 million to Armstrong ZE Pvt. Ltd. The funding will support the establishment of a greenfield tyre manufacturing facility in Gharo, Sindh, a project set to bolster Pakistan’s local tyre production capacity and reduce its reliance on imports.
Boosting Local Production and Economic Growth
The financing package consists of a $25 million loan from IFC, alongside up to $25.2 million in local currency investment from the participating banks. This landmark initiative aims to support the expansion of Pakistan’s automotive supply chain by providing a locally manufactured, internationally recognized tyre brand.
The project is projected to create over 1,800 direct and indirect jobs, contributing to both the economy and the automotive sector in Pakistan. With the number of registered vehicles in Pakistan approaching 30 million, including 23 million two-wheelers in 2023, there is a growing demand for tyres. Despite this, local production has been limited by challenges such as a lack of technical expertise and an over-reliance on imported tyres.
Reducing Import Reliance and Strengthening Local Competitiveness
This investment will help reduce Pakistan’s reliance on tyre imports, which will, in turn, support the country’s foreign currency reserves. The project is expected to introduce advanced technology to the local market, improve competitiveness, and help tackle the significant informal tyre market that has hindered industry growth.
Azim Yusufzai, Chairman of Armstrong ZE, expressed his enthusiasm for the collaboration, stating, “This investment is not just financial support but a testament to the trust and confidence placed in our vision and capabilities. Together with IFC and our banking partners, we aim to innovate, create jobs, and deliver sustainable tyre solutions to Pakistan, contributing to the nation’s economic and industrial development.”
IFC’s Role and Commitment to Pakistan’s Manufacturing Growth
Khawaja Aftab Ahmed, IFC’s Regional Director for the Middle East, Pakistan, and Afghanistan, highlighted the importance of the investment, saying, “This project underscores IFC’s commitment to enhancing Pakistan’s manufacturing capacity. By supporting Armstrong ZE, we aim to improve consumer access to quality tyres, spur economic growth, and reduce reliance on imports, fostering a self-sustaining automotive industry.”
The partnership also benefits from Armstrong’s collaboration with the UAE-based Zafco Group Holding, a global leader in tyre, battery, and lubricant distribution across over 85 countries. Additionally, the involvement of Zafar Enterprises, a leading tyre distributor in Pakistan, will ensure the success of the project.
Sustainable Investment and Long-term Impact
In line with its global mission, IFC will continue to support Armstrong ZE through its Responsible Investing Support in Emerging Economies (RISE) advisory program. This support will focus on climate risk management, resource efficiency, and the enhancement of environmental and social governance (ESG) practices within the project.
This initiative is part of IFC’s broader efforts in Pakistan, where it has invested approximately $13 billion since 1956. With a focus on sectors like renewable energy, infrastructure, manufacturing, and trade, IFC’s backing of the Armstrong ZE tyre manufacturing project represents a significant step toward sustainable industrial growth and innovation in Pakistan.
The establishment of the Armstrong ZE tyre manufacturing facility in Sindh is set to play a key role in transforming Pakistan’s automotive sector. With support from IFC and local banking partners, the project will not only create jobs but also foster innovation, reduce the country’s import dependency, and strengthen its position in the global tyre market.
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