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Chinese co offers to set up mosquito coil plant as joint venture

RECORDER REPORT

KARACHI: A Chinese company has offered to participate in the establishment of a mosquito coil incense factory in Pakistan on joint venture basis.

According to the proposal received by the Board of Investment (BOI) from China Enterprises Information Networks, Nanjing Ninggang Mosquito Repellent Incense Development Company is one of China's major producers of insecticide and mosquitocide, which are most complete in variety at present, due to its 40 years experience in production of the Jingling brand mosquito coil incense.

The BOI has circulated the proposal among all the trade bodies to attract local investors in the project, which has a capacity of producing more than 20 varieties of four major categories of Jingling brand, series products of mosquitocide with an annual output of 50 million boxes of high grade mosquito coil incense worth U.S.$ 10 million.

The company has expressed readiness to supply technology and accessory equipments so as to jointly set up a small-scale anti-mosquito coil incense factory with an annual capacity of 5 to 8 million boxes. Based on Pakistani domestic evaluation, its annual production value will be 1.2 to 2 million dollars.

The Chinese company is willing to build such factory, namely on the basis of compensation terms to provide manufacturing equipment and to guide its installation and debagging up to the stage of normal production; to make over-production technology and formula and organise the training of technical and working personnel; to supply raw material and those relative auxilliary material which cannot be collected in Pakistan for the time being.

Under the condition of the completion of building structure and the fixation of electrical equipments fulfilled by the Pakistani party, the Chinese company shall send its personnel to direct the machinery fixing and personnel training to ensure that within three months the jointly built factory can be put into normal production.

The Chinese party will supply production machinery which can yield 5 million boxes of mosquito coil incense requiring 42 thousand U.S. dollars and 8 million boxes of mosquito coil incense requiring of 49 thousand U.S. dollars annually. The destination port of machinery delivery made by Chinese party will be Karachi. All the import taxes and inland transportation fare in Pakistan will be on Pakistani party.

In order to save the transport fare and investment fund for Pakistan, the Pakistani party can purchase or make such machinery with which five million boxes of incense requiring 60,000 dollars and eight million boxes of incense requiring 64,000 dollars can be produced annually. The Chinese party will guide in the purchasing, making and fixing of the machines.

The necessary construction project of the earlier stage in Pakistan will cost about $ 100,000 and its construction area will be 1,180 square metres. The Chinese party shall send three skilled men to take part in the earlier stage of construction for advisory purpose, and 10 technical personnel, including the above three men, to instruct in equipment installation and personnel training. Pakistani party shall be responsible for their round tickets, accommodation and board, and wages during their stay in Pakistan. Total sum of such fare is valued at $ 30,000.

The Chinese party will transfer the quality standard of products, formula of material, production technology and operation method inclusive of training of Pakistani technical personnel. These will amount to $ 50,000 at the expense of Pakistani party.

The funds for major equipment producing mosquito coil incense and the fare for technology, formula and training will amount to $ 122,000. For that, the Pakistani party should pay instant lump sum by letter of credit. From the date of formal signing of the agreement by both parties 50 percent the of money be paid, when the equipment installation is finished the other 30 percent will have to be paid and, on the point of normal production, the balance of 20 percent will have to be paid off.