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How urban is Pakistan?
A new World Bank study suggests that Pakistan may have been majority urban for decades now. How accurate is that assessment, and what does it say about the country?
By Farooq Tirmizi
One of the stale Pakistan Stud-
ies textbook “facts” that most Pakistanis know about the country is that “the majority of the population is rural”.
Some people go so far as to say the exact number: “70% rural”.
A provocative new study by researchers at the World Bank argues that – far from being majority rural – Pakistan is not just majority urban already, but may have been majority urban for the past 40 years.
Both of these represent the two poles of views about how urban Pakistan is, but it does provoke the following set of questions: what exactly is an urban area, how urban is Pakistan, how long has it been majority urban, and what does it mean about our economy?
We will lay out the case made by the World Bank researchers and add some additional data points which we think may be relevant, but it is important to start off by talking about why this matters: majority-urban countries tend to be rich, and countries tend to become more urbanized as they get richer. There is no such thing as a majority rural rich country.
Fundamentally, we are talking about how far along Pakistan is on its path to becoming a rich country.
The dissatisfying answer we find is, sadly, “farther than most Pakistanis think, but still a long way to go.”
But first, let us examine just how the landscape of urban Pakistan has been changing over the past few decades.
The evolution of the Pakistani metropolitan area
The boundary between city and village is never completely sharp, but up until the late 1990s, that boundary used to blur in favour of the
village. City limits would extend far beyond the denser neighbourhoods that characterize urban areas and significant portions of the jurisdiction of “municipal” governments would actually consist of farmland. And indeed even now, it is possible to see cows walking on the side of streets in the middle of even the largest cities in Pakistan, and not just before Eid ul Azha.
But the nature of that boundary is now changing, and it appears that cities are claiming a larger share of the physical space of this country. And more specifically, while it was once the norm for the city to end and be immediately abutted by farmland, now it is much more common to see suburbs, followed by perhaps a small green belt followed by the suburbs of another city that is so close as to feel functionally an extension of the larger city in its vicinity.
This blurred sense of place for urban locations is a metropolitan area, something that functionally did not exist prior to the Musharraf Administration. As recently as 25 years ago, Pakistan had cities, towns, and villages. Now, it has metropolitan areas, each with dense urban cores, with suburbs and exurbs. Some of these metropolitan regions are even part of the one (and a half) mega regions in the country.
Indeed, these non-core areas of urban Pakistan have been the fastest growing parts of the country for much of the past two decades.
Comparing the population data for cities and sub-division jurisdictions within cities from the censuses between 2017 and 2023, one can arrive at a picture of what are the fastest growing urban localities in Pakistan, and which ones are rapidly declining.
Almost all of the localities that have grown by an average annual growth rate in the double digits is an outer lying area of a major city or metropolitan area. These include places like Mauripur in Karachi (20.81% average annual growth between 2017 and 2023), Kunjah in Gujrat (18.7% per year), Dijkot in Faisalabad (16% per year),
Quetta Cantt in Quetta (10.3% per year), and so on. And the heavyweight is Raiwind.
Strictly speaking, Raiwind is not the fastest growing part of Pakistan, since there are many smaller urban areas that had faster growth (too small to be identifiable as part of a clear trend), but Raiwind stands out in being a 1-million-person urban borough effectively sprouting out of thin air. The scale of what has happened there has simply not happened at quite that speed anywhere else in Pakistan. It is the closest Pakistan has come to the Chinese miracle of major global cities emerging out of the rice paddy.
Among the larger parts of existing cities, some of the most impressive growth has come in Ferozabad (7.4% per year), Manghopir, Gulshan-e-Iqbal, and Lyari in Karachi and the urban cores of the cities of Gujrat, Okara, and Sargodha.
And these places are not just around the major cities in central Punjab and Karachi either. South Punjab’s towns are also consolidating into metropolitan areas. Some of the fastest growing parts of Pakistan are the suburbs of Bahawalpur and Rajanpur.
Are we majority urban?
According to the 2023 census, the government of Pakistan estimates that the country’s population is about 39% urban and 61% rural. A new working paper by some researchers at the World Bank titled “When does a village become a town? Revisiting Pakistan’s urbanization using satellite data”, published in October 2025, suggests that the real number is closer to 88% urban, and that the country can be said to have been a majority-urban country as early as 1980.
This is, needless to say, a provocative assertion, but the authors have a wealth of data to back up their claim. But first, a note on their methodology, which primarily decides what is an urban area by population density, but on a highly granular level.
To measure what constitutes an urban area, the researchers ignore government categorizations, and instead use highly detailed satellite imagery from the Global Human Settlement Layer (GHSL), produced jointly by the European Commission’s Joint Research Centre and Columbia University’s CIESIN. GHSL combines satellite imagery of built-up areas with census data to estimate population counts on a one square kilometre grid over time. For Pakistan, it is calibrated using 1998 census data and 2010 population estimates.
Using this data, they then compile a measure called the Degree of Urbanization methodology, which the UN Statistical Commission recommends for cross-country
comparison. DoU classifies every square kilometre on the planet based on its estimated population density and then stratifies those into seven categories, ranging from the densest (urban centers) to the least dense (mostly uninhabited).
When an area exceeds 1,500 people per square kilometre and has at least 50,000 people living in a contiguous area, it classifies the area as being part of a city. By this measure, 46% of Pakistan’s population lives in cities. If an area has the same density, but has a total contiguous population less than 50,000 but greater than 5,000, it classifies that as a dense town. About another 11% of Pakistanis live in such areas.
The paper then describes clusters of
at least 5,000 people – located as a distance less than 2-3 kilometers from such cities and dense towns – and with a population density of at least 300 people per square kilometer, which it calls semi-dense towns or suburban / peri-urban areas. These constitute another 31% of the population.
Combined, all of these constitute about 88% of the population.
What is interesting is the authors’ calculations on historical data, which suggest that these urban and suburban areas used to constitute about 61% of the population as far back as 1980.
So are the authors right? Is Pakistan really that urbanized? For context, that would imply that Pakistan is more urbanized than the United States, which is about 86% urban and suburban, according to the US Census Bureau.
We are not demographers or experts, but that comparison makes it seem unlikely that the assertion about Pakistan’s degree of urbanization should be taken at face value. It does, however, clearly point to the fact that the country’s population lives very differently from the image we have in our heads of what constitutes rural life in Pakistan.
What is rural Pakistan?
One other way to arrive at this is to try to figure out how much of Pakistan is rural, and then arrive at how much is urban by a process of elimination.
Let us start out with an assumption that we feel is uncontroversial: that anyone engaged in agriculture or livestock as their primary means of earning a livelihood can be safely characterized as living in a rural area, regardless of how dense or close to a city it
may be.
According to the Labour Force Survey from the Pakistan Bureau of Statistics, in 2021, about 37.4% of the Pakistani labour force was engaged in agriculture or livestock as their primary occupation. Now, strictly
and the approximately 63% that would be implied by a generous reading of the labour force data.
Of course, there is a vast difference even between those two numbers, so we will attempt to narrow it down further still. But itself has been relatively stagnant even in absolute terms. Indeed, the total number of people in Pakistan employed in agriculture has declined by about 372,000 people during the decade between 2011 and 2021. The contrast
women working
people, the proportion
A narrower interpretation of suburbia
We would posit that the World Bank research team should consider a slightly modified interpretation of their data, which would yield a slightly less dramatic end-result, but perhaps a more accurate representation of the rural-urban boundary in a country like Pakistan. Specifically, their inclusion of what they call semi-dense towns and suburban areas is rather too generous and should be excluded from the definition of what constitutes urban.
Here is our rationale for why: urban spaces need more than just density. Specifically, they require being part of an urban supply chain of a set of amenities, where people tend to have access to markets for most consumer goods. Given the relatively low purchasing power of Pakistani consumers, it seems unlikely that such markets would be sufficiently developed in agglomerations that are less dense than 1,500 people per square kilometer, even if such areas are 2-3 kilometers from larger, more dense urban centers.
Then there is also the fact that Pakistani population centers tend to be naturally more dense than most developed parts of the two world for two reasons. The first is that Pakistanis have larger family sizes, and so each individual dwelling contains more people than would be typical in richer countries. The second is the fact that Pakistanis are relatively poorer, and can therefore afford smaller dwellings, which means that each street has more houses, causing density to rise further still.
Of course, this analysis has been performed using global data, so no doubt it includes many countries that have characteristics similar to Pakistan. But the data that the authors put forward for other countries seems to indicate estimates of urbanization that
seem too high, given their levels of income and complexity of their respective economies.
If we relied on this narrower definition of what constitutes urban in Pakistan, we arrive at a measure that seems more plausible: Pakistan is about 57% urban as of 2023, a number that has been slowly – but less dramatically – rising over the past few decades.
If we adopt this narrower definition, Pakistan crossed over to become majority urban around 1990, so the increase over the past three decades has been a slow, but steady increase in urbanization. This data then seems more aligned with the scale of movement in other measures of economic activity that are correlated with increased urbanization, most notably the proportion of the population engaged in agriculture or livestock farming.
In short, yes Pakistan is likely significantly more urban than the government’s estimates, and yes, it is majority urban, and yes it has been majority urban for at least three decades now. But no, it has not yet surpassed the urbanization levels of the United States as might have been implied by the World Bank paper.
So, what are these denser rural areas?
We do not mean to discount the World Bank study’s methodology completely. What they are measuring is something real, which is the fact that the single biggest increase in Pakistan’s population has come from the rise in the number of people living in these not-quite-dense areas that are very close to dense cities and towns.
This is a phenomenon worth understanding, and one that we are still aiming to compile more reporting and research about. But some initial observations come to mind.
Firstly, there is the fact that many small towns on the outskirts of major cities have become parts of the city proper, such as the examples we cited earlier in the article. The
villages that used to be close to these virtually non-existent urban areas in the past have now started to be characterized as suburban, and in some senses, that is not an inaccurate description. However, perhaps it mischaracterizes the degree to which they have changed relative to simply their surroundings having changed.
This is an important distinction, and one that has significant ramifications for the Pakistani economy. Urban Pakistan has been growing, and acquiring a greater diversity of types of neighbourhoods and dwellings than in decades past, but rural Pakistan has not changed nearly as fast as the rest of the country (though, of course, some change has happened).
This is something that we have been noting in our coverage of Pakistani agriculture: production has risen, but not by much, employment levels rose slightly but have stagnated even in absolute terms, and productivity levels in Pakistani agriculture have not meaningfully risen at all, and indeed in some cases have tragically even declined slightly.
The fact that more Pakistani villagers are living on the outskirts of cities and towns instead of being further away may be a physical manifestation of something more profound in the Pakistani economy: that all its citizens have their view towards life in the city, and hardly anyone is investing in improving the lives and livelihoods of rural Pakistan.
To be clear, as Pakistan progresses, much of the action will be taking place in cities as hubs of dynamism. But we seem to be seeing a larger proportion of our population in this halfway house, engaged in agriculture, but close enough to the towns that they seem more interested in a transition out of rural life rather than getting the best of it, leaving the country worse off for having both a disengaged effort in agriculture, but without the concomitant increase in urban activity.
The urbanization story is real, important, and positive. But the Pakistani farm deserves better than to be abandoned. n
Descon Oxychem takes a hit as imports flood the market
Some
exporting customers are allowed to purchase foreign competitors’ products, causing Descon to lose market share
In the quiet language of quarterly accounts, reversals often announce themselves without fanfare. For Descon Oxychem Limited (DOL), Pakistan’s sole dedicated producer of hydrogen peroxide, the first quarter of fiscal year 2026 did precisely that. What had been a slow, uneasy trudge through FY25 now appears to be turning into a retreat.
Revenue for Q1 FY26 fell seventeen percent year-on-year to PKR 1.25 billion, down from PKR 1.50 billion during the same period last year — a stark reversal for a company whose full-year FY25 revenue had at least managed nominal growth of four percent despite an inflationary environment that made such growth effectively contractionary in real terms. The firm’s latest briefing to investors lays out the contrast bluntly: operating profit for the first quarter fell forty-seven percent, while profit after tax slid thirty-eight percent to PKR 109 million. Earnings per share declined from PKR 1.00 to PKR 0.62 .
These numbers tell a story of pressure building on multiple fronts. FY25 had been an odd year — revenue barely inched forward, but profitability improved meaningfully. Gross margin rose from twenty percent to twenty-nine percent, operating profit jumped seventy-two percent, and earnings per share rose to PKR 4.51 from PKR 2.69. The company cut costs aggressively, benefited from improved gas availability, and squeezed higher efficiency
from its operations. It was a year of making do, not a year of expanding horizons.
Yet as FY26 begins, even those modest gains appear precarious. The fall in sales signals not merely a cyclical dip but something structural: domestic demand is being eroded not by weakness in end-user industries alone but by a surge of cheaper imports entering the country through regulatory channels never intended to become a backdoor for market access.
DOL, once accustomed to a fairly predictable competitive environment, now finds itself fighting for its own home market. And unlike the typical industrial downturn — driven by business cycles or raw-material volatility — this one is shaped by policy misalignment, price arbitrage, and the rising openness of Pakistan’s import regime via the Export Facilitation Scheme (EFS).
A brief history of a quiet industrial player
Descon Oxychem was born of an era when Pakistan’s industrial ambitions still carried a strong streak of self-reliance. Established as a subsidiary of the broader Descon conglomerate, DOL was envisioned as a specialised chemicals manufacturer with a focus on hydrogen peroxide — a compound essential to textile bleaching, paper processing, disinfection, and increasingly, food-grade applications.
Operating from its plant near Lahore, the
company positioned itself as a stable supplier to Pakistan’s massive textile ecosystem, which alone accounts for roughly ninety percent of domestic hydrogen peroxide consumption. Over the years, DOL attempted to diversify modestly: experimenting with product grades, exploring regional export markets, and periodically expanding production capacity to stay ahead of demand.
But unlike cement, steel, or fertiliser, hydrogen peroxide has never been an industry of national strategic focus. It remains a narrow-use chemical with limited public visibility. As a result, DOL’s operational story has always been one of incremental improvements, quietly executed turnarounds, and small shifts in the margins.
Still, for a long time, this was enough. With limited domestic competition and a consistent base of textile mills reliant on local supply, the company carved out a market position that seemed durable. Even export volumes — though low in margin — offered a supplementary avenue for growth.
The company’s profile is, by any measure, that of a mid-sized industrial firm: its equity is valued at PKR 5.67 billion, its share price trades near PKR 32, and its annual domestic market of oxygenated chemicals hovers around 80,000 tonnes. These numbers say little about glamour but much about reliability.
Today, however, reliability is precisely what has been disrupted.
Product lines and production capacity
Hydrogen peroxide — H2O2 — is a deceptively simple molecule, yet its industrial uses vary widely. Descon Oxychem manufactures primarily two categories: technical-grade peroxide, used largely in textile bleaching, and food-grade peroxide, which is purer and commands higher prices in sanitisation and packaging applications.
The company has recently emphasised the development of a “spray-grade” product tailored for the food-processing industry. Management believes this segment offers significant margin potential, noting that food-grade peroxide sells at a premium compared to technical-grade volumes. Early progress suggests that new volumes from this product line may help diversify revenue in later quarters.
Production capacity has also grown over the years. DOL expects combined output this year to reach around 67,000 tonnes, a meaningful share of Pakistan’s total demand but still short of full import substitution. Complicating matters is the recent entry of a new domestic competitor expected to add another 36,000 tonnes of supply — ostensibly displacing imports from Bangladesh but also tightening competition within Pakistan’s borders.
One signal of Descon’s attempts to remain cost-competitive is its investment in renewable energy: a two-megawatt solar plant now nearing completion, intended to offset a portion of the company’s three to 3.5 MW power requirement. Solar is a hedge, partly against volatility in grid electricity tariffs and partly against the company’s dependence on gas. For FY26, the government has revised the gas blend from a seventy-five percent RLNG and twenty-five percent system-gas combination to a fifty-fifty mix — a change that may lower costs but also introduces operational complexity.
Despite these improvements, DOL remains vulnerable to global pricing differentials. Imported Korean hydrogen peroxide lands in Pakistan at around USD 450 per tonne; Bangladeshi imports are even cheaper at roughly USD 325 per tonne. Local manufacturing costs — tied to gas, labour, and financing costs — make such prices difficult for Pakistani producers to match. This vulnerability becomes fatal when import channels are liberalised beyond their intended scope.
and the flood of imports
The core challenge facing Descon Oxychem today is not simply that imports exist; it is that the regulatory environment has effectively
subsidised access to those imports for certain customers. Through the Export Facilitation Scheme — a programme originally designed to help exporters access raw materials duty-free — foreign producers have gained a foothold in Pakistan’s domestic market. Nearly eighty percent of imports now enter the country through EFS channels, according to DOL’s recent briefing to analysts .
For a chemicals producer whose fortunes depend on consistent domestic demand, this shift is enormous.
The logic of EFS was straightforward: export-oriented businesses were allowed to import inputs without paying duties, on the understanding that these inputs would be used exclusively to produce goods for foreign markets. But enforcement has been porous, and the distinction between export-linked usage and domestic substitution has eroded. Some textile exporters — DOL’s core customer base — are legally permitted to import hydrogen peroxide from abroad, only a portion of which is tied to export production. The result is a shadow market within the formal market: imported peroxide sells at prices below domestic manufacturing costs, and exporters can simultaneously consume imported chemical and compete with domestic firms for local sales.
For Descon, the economic impact is straightforward. Domestic production costs are higher than import prices; export sales earn lower margins because the company must absorb freight charges to compete with international suppliers; and regulatory gaps allow foreign suppliers to undercut the company within its own market.
The firm’s export margins have always been lower than domestic margins — a fact it openly acknowledges. Freight absorption is a structural necessity in its international business. But in past years, exports at least grew incrementally, providing a pressure valve during periods of weak local demand.
Now even that avenue is narrowing. Export volumes have declined over the past few years. Management’s current target — to rebuild exports by fifty percent — is aspirational, not reflective of immediate market conditions. Competition in the Middle East, especially in surface-water treatment and food-packaging segments, offers pockets of opportunity, but they are not large enough to counteract the losses inflicted by imports entering Pakistan through EFS.
The company’s tone in its investor communications has become increasingly insistent. It is “engaging with regulatory authorities” to address misuse of the EFS and lobbying for the extension of anti-dumping duties to “counter unfair competition.” These are not the words of a firm operating in equilibrium; they are the words of a firm seeking state intervention to
restore a competitive balance that has tipped sharply against it.
The larger question is whether Pakistan’s broader industrial policy favours firms like DOL at all. Hydrogen peroxide imports — particularly from Bangladesh — reflect lower energy costs and cheaper labour, structural advantages difficult for Pakistani manufacturers to overcome without help. The entry of a new domestic competitor may soften the blow by replacing some low-cost imports, but it also intensifies competition in a market that is already contracted by regulatory arbitrage.
The situation leaves Descon in a paradox: it is the country’s primary domestic producer, yet it is simultaneously unprotected and uncompetitive.
A company at an inflection point
The story of Descon Oxychem today is not one of mismanagement or strategic miscalculation. It is a story of structural asymmetry. Its revenue decline in Q1 FY26 is not a result of falling demand for hydrogen peroxide — textiles still consume vast quantities — but of imported supply crowding out local manufacturers. Its margins fell not because it raised costs irresponsibly but because global competitors enjoy advantages in scale, energy pricing, and regulatory arbitrage.
The company has taken steps to adapt: solar power investments, product diversification, attempts to rebuild export volumes, and operational efficiency gains. But adaptation has limits when policy regimes enable foreign suppliers to redefine market pricing.
Descon’s appeal to regulators is part economic argument, part existential plea. Without controls on the misuse of EFS, the domestic market becomes a sieve. Without anti-dumping duties on products priced far below Pakistan’s cost of production, no amount of efficiency can make a local producer competitive. Without updated industrial policy, Pakistan’s chemicals sector risks becoming dependent on the very imports it once sought to replace.
The irony is sharp: a manufacturing company built to supply Pakistan’s largest export industry now finds itself asking the state to compel that industry to buy locally.
Whether policymakers heed that request will determine more than Descon’s next quarterly earnings. It will shape whether Pakistan can sustain any meaningful chemical manufacturing capacity in the face of global competition and liberalised import channels.
For now, the numbers tell their own story — a profitable FY25, a precarious FY26 beginning, and a future uncertain enough to make even stable chemical molecules feel volatile. n
Attock Petroleum steadies outlook
Market headwinds shape refined fuels, EV shift
Attock Petroleum Limited (APL), one of Pakistan’s leading oil marketing companies, is entering fiscal year 2026 with mixed indicators as recent financial results highlight pressure on margins, shifting product dynamics and the sector’s ongoing transition away from furnace oil. While annual earnings and sales declined in FY25, the first quarter of FY26 shows signs of recovery, indicating that the company’s operational adjustments and diversification efforts may be cushioning the broader industry slowdown.
APL closed FY25 with earnings per share of Rs 83.5, down from Rs 111.1 in FY24, reflecting a 25% contraction in profitability over the year. The fall in earnings mirrors a 10% decline in net sales, which dropped to Rs 474.1bn from Rs 526.3bn, and a 15% reduction in gross profit as furnace oil volumes continued to shrink. The company’s net margin eased to 2%, compared with 3% the previous year.
However, the opening quarter of FY26 reverses part of that trend. APL posted an EPS of Rs 30.6 in 1QFY26, up 60% from Rs 19.2 in 1QFY25. Net sales increased by 4% year-onyear, reaching Rs 117.8bn, while gross profit nearly doubled to Rs 7.6bn on the back of stronger margins in petrol and diesel, which together form the backbone of the company’s product mix. Operating profit grew by a remarkable 195% to Rs 5.2bn, and EBITDA rose 163%, pointing to improved throughput and stronger non-fuel contributions.
Even so, the company’s financials remain constrained by rising costs and fixed margins. Since November 2023, OMCs have operated under a fixed margin of Rs 7.87 per litre on premium motor gasoline and high-speed diesel. With average retail prices around Rs 275 per litre during FY25, the fixed margin now constitutes under 3% of the final consumer price — lower than the industry’s historical minimum of 3.5%.
This margin freeze has directly affected APL’s bottom line, despite its position as the country’s third-largest OMC by market share, holding 9.3% by FY25. Though the company experienced a 9% dip in overall market share owing to the steep decline in furnace oil, its share in core products strengthened modestly, supporting a more balanced revenue mix.
The pressure on net finance income also weighed on FY25 results. A significant drop in bank profit rates — from an average of 21.7% in FY24 to 15.1% in FY25 — cut APL’s finance income by 35%. The lower interest environment is consistent with the broader monetary easing cycle that began after Pakistan entered a more stable phase of its IMF programme.
Overall, APL’s FY25 performance reflects both the structural challenges facing Pakistan’s OMC sector and the company’s reliance on regulated margins at a time when operating costs continue to climb. Yet the strong rebound in 1QFY26 signals that its diversification investments, strategic locations and expanding product lines are positioning the company more favourably for the years ahead.
A legacy shaped by the
Attock Group and Pakistan’s evolving fuels sector
Attock Petroleum Limited was incorporated in 1995 as part of the Attock Group, a vertically integrated energy conglomerate with upstream, refining and downstream footprints. The Group’s lineage stretches back to the early twentieth century, with Attock Oil Company pioneering oil production in the region during the British colonial period. This legacy has allowed APL to leverage integrated supply chains — from crude extraction to refining and distribution — a characteristic that sets it apart from many newer OMCs.
The company formally commenced operations in 1998 and has since grown into one of Pakistan’s most strategically located petroleum retailers. While its national footprint is smaller than state-run Pakistan State Oil (PSO), APL has carved out a niche in high-throughput corridors, particularly on motorways and in major urban centres, where the company owns and operates 45 COCO (company-owned, company-operated) outlets. These sites include locations along M1, M3, M4, M5, M9, M14, E-35 (Hazara Motorway) and key cities where consistent traffic flow ensures dependable volumes.
Its business model prioritises owning retail sites rather than franchising them, a strategy that requires large amounts of capital upfront
but yields stronger control over pricing, branding and throughput practices. This approach was recently illustrated when the company secured a premium retail outlet at a Capital Development Authority auction on the Kashmir Highway, costing approximately Rs 3.3bn.
APL’s current portfolio also spans aviation fuels, non-fuel retail, lubricants and specialty products. Its participation in the aviation fuel market, where margins align closely with those earned in PSO’s joint venture operations, provides a stable high-margin revenue stream in a segment where competition is limited.
Alongside fuel marketing, APL’s non-fuel retail segment — comprising tuck shops, tyre shops and allied services at COCO sites — contributes nearly Rs 500mn annually. This area has become increasingly important as global OMCs shift towards lifestyle-oriented retail formats, using forecourts as consumer spaces rather than pure fuel points.
Products, capacities and expanding investments in LPG and EVs
Although the decline in furnace oil has suppressed revenue over the past two years, APL’s core products remain high-speed diesel (HSD) and premium motor gasoline (PMG), which collectively account for between 70% and 80% of its total portfolio. These products have proven more stable and continue to deliver reliable volume growth in urban centres despite fluctuations in macroeconomic conditions.
The company has also strengthened its role in aviation fuels, where margins range from USD 6 to USD 10 per barrel, based on previous disclosures from PSO. This provides a high-value contribution to APL’s product mix, partially balancing the volatility seen in motor fuels.
The company’s most significant new investment is its expansion into liquefied petroleum gas (LPG) storage and distribution. APL has completed construction of a 200-tonne LPG storage and filling facility in Morgah, with initial consignment decantation already underway. Full operations are scheduled to start in the first week of December.
The company aims to sell between 600 and 800 tonnes per month initially, targeting northern regions before expanding capacity to between 3,000 and 4,000 tonnes within six months. Future installation plans include mid-country zones and Karachi, signalling an ambition to become a significant player in Pakistan’s LPG retailing landscape.
This expansion comes at a time when the LPG market is expected to soften slightly following the introduction of RLNG, which is currently about 35% cheaper. The price
difference may compress LPG’s competitiveness in lower-income segments, but household reliance on LPG in off-grid regions is expected to maintain demand momentum.
Perhaps the most strategically important development for APL is its expansion into electric vehicle charging infrastructure. Pakistan’s federal EV policy mandates that charging stations be established every 80 kilometres on motorways, a requirement that leans heavily on OMCs with existing motorway presence. APL, uniquely positioned with multiple motorway COCO sites, has already installed three operational EV charging stations.
The company has entered partnerships with Hub Power Company (Hubco) and Huawei to roll out more stations, targeting over 30 operational EV chargers by the end of 2026. This ties directly into the government’s broader clean mobility goals, which encourage the shift to electric motorcycles, rickshaws and passenger cars.
While EV adoption in Pakistan remains limited, APL’s early investments are a long-term hedge against declining fossil fuel demand. The company’s motorway-centric strategy also positions it as a convenient charging provider for inter-city transport once EV adoption accelerates.
Navigating a market in transition
APL’s current performance cannot be separated from the headwinds facing Pakistan’s wider oil marketing sector. Furnace oil, once a key contributor to OMC revenues, has been in structural decline for years due to its diminishing role in power generation. The shift towards LNG-fired plants, hydropower expansion and greater renewable penetration has left furnace oil sales volatile and frequently depressed.
APL, along with PSO, has historically held a strong share in furnace oil; as a result, the decline has disproportionately affected both companies. This explains the 9% dip in APL’s overall market share, despite strengthening its position in petrol and diesel.
Yet, the broader market is shaped by more than just furnace oil. The OMC sector is grappling with:
• Stagnant regulated margins on petrol and diesel for nearly two years.
• High operating costs driven by inflation, freight charges and security expenses.
• Growing competition from new entrants seeking high-throughput sites.
• Demand fluctuations tied to GDP momentum, dollar parity and transport sector performance.
At the same time, the government’s policy direction is nudging OMCs towards cleaner fuels. The EV policy, in particular, is pushing
companies to invest in charging infrastructure even before demand fully materialises. For APL, this is both a challenge — due to upfront installation costs — and an opportunity, thanks to its motorway footprint.
The introduction of RLNG as a cheaper alternative to LPG, meanwhile, is forcing OMCs to reassess their gas marketing strategies. For APL, which is entering LPG storage and distribution for the first time, the market shift introduces additional pricing pressure, but also opens up opportunities to supply mixed-fuel households in regions where piped gas is unavailable.
Overall, Pakistan’s downstream petroleum market is in a phase of transition. Diesel and petrol remain dominant, but long-term trajectories show increasing electrification, tighter margins, and diversification into gas and non-fuel retail. Companies with strong infrastructure ownership — like APL — may be better positioned to navigate this shift, especially if regulatory changes eventually allow for more flexible pricing.
APL’s significant cash reserves, retained for mergers, acquisitions and high-value location purchases, also provide optionality. The company has indicated a preference for inorganic expansion, allowing it to secure sites like the Kashmir Highway outlet without compromising liquidity.
A cautious but adaptive outlook
While FY25 underscored the pressures of operating in one of Pakistan’s most regulated sectors, APL’s first quarter FY26 results offer cautious optimism. The company has shown that improving product mix, operational efficiency and strategic investments can offset some of the structural weaknesses in the sector. Its growing EV infrastructure footprint, new LPG investments and continued emphasis on motorway-centric COCO outlets indicate a forward-leaning strategy.
Nevertheless, risks remain. Continued delays in revising OMC margins could constrain bottom lines further, while the shift to RLNG may slow LPG profitability. Meanwhile, the broader macroeconomic environment — including currency volatility and energy policy shifts — will continue to influence sales volumes.
APL’s immediate trajectory will hinge on execution: scaling EV charging stations; achieving targeted LPG throughput; and maintaining volumes in premium motor gasoline and diesel as economic activity fluctuates. As Pakistan’s energy mix evolves, APL’s diversified approach suggests that adaptation, rather than dependence on traditional fuel streams, will define the company’s competitive edge. n
Ghani Chemworld seeks to replace Pakistan’s imports of calcium carbide
One of the largest importers of the chemical now wants to manufacture as much of it domestically as possible
When Ghani Chemworld Ltd (GCWL) listed on the Pakistan Stock Exchange in April 2025, it did so with a single-minded purpose: to build Pakistan’s first large-scale plant dedicated to manufacturing calcium carbide and its derivatives, and in the process turn one of the country’s more obscure import lines into an exportable surplus.
The company is a freshly minted public limited concern, incorporated in July 2024 as a wholly owned subsidiary of Ghani Chemical Industries Ltd (GCIL). Under a court-sanctioned demerger and merger scheme, GCIL’s in-progress calcium carbide project was carved out and transferred into Ghani Chemworld, with GCIL shareholders receiving shares in the new vehicle. In other words, what investors are buying on the stock market today is essentially a pure play on one project: a greenfield calcium carbide complex at the Hattar Special Economic Zone (SEZ) in Khyber Pakhtunkhwa.
According to a recent corporate briefing, the plant has a planned annual capacity of roughly 25,000 tonnes of calcium carbide, making it the first facility of this scale devoted to the product in Pakistan. The project enjoys a ten-year income tax exemption under the SEZ regime, a concession that applies to both domestic sales and exports and is central to the company’s profitability calculations. Management expects commercial production to begin in early December 2025 after commissioning and test runs under the supervision of Chinese and European technical advisers.
The factory relies on an electric arc furnace rather than coal gasification, making electricity its primary fuel. Ghani Chemworld estimates power demand at around 11-12 megawatts (MW) and is keen to benefit from any subsidised industrial tariff packages that the government may extend over the next few years. The decision to avoid coal gasification aligns with a broader shift in Pakistan’s industrial policy towards cleaner, grid-based energy for new projects, even as the company still depends on imported coke or semi-coke from China as a key raw material.
Raw materials are, in fact, where the company believes it can build a cost edge over the imported product it wants to displace. Limestone, one of the two main inputs, is procured locally from mine owners at an all-in cost of about Rs3,000 per tonne, including transport to Hattar. Ghani Chemworld does not mine the limestone itself and therefore avoids royalty payments, treating it as a straightforward procurement expense. The other major input, coke or semi-coke, is imported, typically from China, at around $325-350 a tonne for the required quality. Management says it is shunning cheaper Iranian material because higher sulphur content would compromise product quality and downstream customer processes.
The plant will not only produce calcium carbide. The process also yields lime (calcium oxide) and precipitated calcium carbonate (PCC), which Ghani Chemworld intends to market into industries ranging from paper and packaging to paints, plastics, food and pharmaceuticals. If utilisation on the main lines does not reach the targeted eighty percent in the second full year of operations, management plans a “Phase II” to add secondary products such as acetylene gas, hydrogen, magnesium oxide and carbon black, using finer calcium carbide fractions as feedstock. Additional capital expenditure for hydrogen and carbon black is estimated at roughly Rs1.2 billion, with another Rs500 million for magnesium oxide.
The ambition, however, is clearest in the market share numbers. Ghani Chemworld estimates Pakistan’s domestic calcium carbide consumption at around 12,000-15,000 tonnes a year, of which more than ninety 5% currently arrives as imports, largely from China. Ghani Group companies have been trading the product for about 15 years and currently handle around 40% of the local market through imports. With the new plant, management is targeting nothing less than ninety percent of domestic demand, along with exports to the Middle East, Central Asia, Eastern Europe and Turkey.
To reinforce that import-substitution thesis, Ghani Chemworld says it will lobby Islamabad to reset customs duty on imported calcium carbide. The duty had previously stood at 16% but was lowered to around 7-8% in recent years; management argues that
reinstating the higher rate would support local industry and conserve foreign exchange, especially now that a domestic producer is emerging.
Calcium carbide sits at the heart of several industrial value chains. At the most basic level, it is used to generate acetylene gas when reacted with water. Ghani Chemworld’s briefing describes acetylene as the main intermediate, widely used for precise metal cutting and welding applications across manufacturing, construction and automotive repair.
Acetylene also serves as a building block for a range of downstream chemicals. One of the most important is polyvinyl chloride (PVC), the plastic used in pipes, cable insulation, flooring and countless other products. Industry reports and stock-exchange filings note that calcium carbide, often referred to as calcium acetylide, is an established route to acetylene for PVC production, especially in countries where coal and limestone are abundant. That gives the material strategic importance in emerging economies whose infrastructure booms are PVC-heavy.
Beyond acetylene, Ghani Chemworld’s process will spin out two co-products that feed quietly into many everyday items. Precipitated calcium carbonate, or PCC, is used as a filler and coating pigment in the paper industry, a stabiliser in plastics and rubber, and a key ingredient in paints and coatings to improve whiteness and gloss. It is also used as a supplement or stabiliser in certain food and pharmaceutical formulations. Lime or calcium oxide, another output, finds demand in leather tanning, sugar refining, and the paper and pulp industry, and in various environmental and water-treatment applications.
Globally, the calcium carbide market is projected to grow at a steady pace, with research firms forecasting mid-single-digit annual growth over the latter half of this decade, driven by chemical and metallurgy demand in Asia. Pakistan, despite being only a mid-sized industrial economy, ranks among the world’s larger importers of the compound: trade data suggest it brought in about $8 million worth of calcium carbide in 2023, making it one of the top dozen importers worldwide. Those imports increasingly originate from a small cluster of suppliers. China alone
accounts for roughly two-thirds of Pakistan’s calcium carbide imports, with Mexico and Slovakia providing much of the remainder. The result is a classic vulnerability: a critical industrial input, used across welding shops, fabrication yards, PVC production and various chemical plants, is largely dependent on a few foreign sources and on the country’s limited foreign-exchange reserves.
Ghani Chemworld’s project aims to change that equation by placing a sizeable chunk of capacity within Pakistan’s borders. With nameplate output higher than estimated domestic demand, the company envisions a base load of local customers supplemented by export contracts into neighbouring regions where there is either no local producer or where producers are operating at tight capacity. If the plan works, calcium carbide could move from being a pure import line for Pakistan to a minor but useful export earner.
Behind Ghani Chemworld stands one of Pakistan’s more quietly influential industrial families. Ghani Group of Industries traces its roots back more than half a century, with a reputation built primarily in glass. Based in Pakistan but with a presence in the United Arab Emirates, the group operates multiple glass plants, producing container glass, float glass, pharmaceutical glass and value-added products such as tempered and bent glass.
The group’s narrative has often centred on import substitution. Its glass businesses are credited with replacing a large portion of Pakistan’s mirror and speciality glass imports by investing early in domestic capability and introducing technologies like “spectrum” coated mirrors. Over time, Ghani entities have spread across the stock exchange: Ghani Glass, Ghani Global Glass, Ghani Global Holdings and various associated companies in industrial gases and allied sectors.
Ghani Chemical Industries, the parent from which Ghani Chemworld was spun out, itself grew out of the group’s diversification into industrial, medical and speciality gases. As that business gained scale, management identified calcium carbide as a natural adjacency: the compound is not only a raw material for acetylene gas but also interacts with several chemical value chains the group already serves.
For around 15 years, Ghani Group companies have been among Pakistan’s leading traders and importers of calcium carbide, handling roughly 40% of the domestic market. That trading background has given them an intimate view of price cycles, quality differentials and customer requirements. It has also laid bare the country’s dependence on imported supply, especially during periods of currency stress when dollar-denominated inputs become more expensive overnight.
The decision to build a domestic plant, and later to spin it into a separately listed company, fits within this broader pattern. In November 2024, shareholders of Ghani Chemical Industries approved a demerger that would transfer the calcium carbide project into Ghani Chemworld. The Lahore High Court subsequently sanctioned the scheme in February 2025, with formal confirmation in March, clearing the way for the project to be shifted wholesale – assets, liabilities, incentives and all – into the new subsidiary.
By April 2025, Ghani Chemworld was listed on the PSX as a separate entity, giving investors a direct line into the project. For the Ghani Group, this structure does several things at once: it ring-fences project risk, creates a specialised platform for future expansions in carbide and derivatives, and taps public equity to help fund the sizeable capital expenditure involved. Investors, in turn, get a focused bet on an import-substitution story backed by a group with a track record of building and operating heavy industrial plants.
As of the first quarter of financial year 2026, Ghani Chemworld remains in the pre-commercial stage, with no sales recorded from the calcium carbide plant.
The real story, therefore, lies in management’s projections for when the plant starts running. For the first seven months of commercial operations – effectively the remainder of FY26 after the December start-up – Ghani Chemworld is targeting production of 10,00011,000 tonnes of calcium carbide, equivalent to utilisation in the low-to-mid forties as a percentage of nameplate capacity. By the second full year, the company hopes to ramp up to around 80% utilisation, which would put annual output close to 20,000 tonnes.
On the revenue side, management is guiding to between Rs3-4 billion in sales in that initial seven-month period, rising to roughly Rs8-9 billion in the following year once the plant is operating for twelve months at higher utilisation. Net profit margins, excluding the contribution from associates, are expected to be in the 6-7% range in the partial first year, before climbing towards 10% as scale benefits, tax exemptions and process optimisation kick in.
These numbers hinge on several moving pieces. Power costs are an obvious variable: with an electric arc furnace consuming more than ten megawatts, any volatility in industrial tariffs will feed quickly into unit costs. Ghani Chemworld hopes to benefit from discounted industrial power schemes, at least in the early years, though such incentives are always subject to fiscal pressures and policy change. Raw material prices, especially imported coke, are another risk factor, given their linkage to global commodity cycles and freight rates.
A strengthening rupee would cushion those costs; a renewed bout of currency weakness would have the opposite effect.
Competition is, paradoxically, both limited and intense. On the one hand, there is no domestic competitor of similar scale; Ghani Chemworld’s plant will effectively define Pakistan’s local capacity. On the other hand, imported calcium carbide is a commoditised product with multiple overseas suppliers, so local producers must maintain quality and cost discipline to avoid being undercut despite tariffs. The company’s long history as an importer gives it a benchmark for landed costs and quality standards, which may help in calibrating pricing strategies.
Policy, too, will play a decisive role. Ghani Chemworld’s call to raise customs duty on imported calcium carbide back towards sixteen percent is justified, in management’s view, by the need to protect a nascent domestic industry and conserve foreign exchange. But regulators will have to weigh that request against downstream users’ concerns over input prices, particularly in welding, fabrication and PVC-related industries that are already grappling with energy and financing costs. A balance will need to be struck to ensure that one piece of the industrial ecosystem is not strengthened at the expense of another.
For investors, the appeal of Ghani Chemworld is straightforward: a newly listed company with a single, clearly defined project that addresses a tangible import bill. Pakistan imported about eight million dollars’ worth of calcium carbide in 2023; if Ghani Chemworld can replace most of that with domestic production and also carve out a niche in export markets, the earnings potential is obvious. The tax holiday, SEZ incentives and low-cost limestone supply add further upside to the economics, provided the company can manage execution risks and keep the project on schedule.
Yet it is equally clear that the business will be exposed to commodity cycles, energy policy and regulatory decisions on trade. In that sense, Ghani Chemworld is a microcosm of Pakistan’s broader industrial challenge: how to move from trading imported materials to making them at home, without simply shifting risk from the customs gate to the factory floor.
What is different here is that the sponsor group has walked this road before. Ghani’s glass businesses are now an integral part of Pakistan’s manufacturing landscape, and its gas operations have carved out their own space. If the same playbook of disciplined execution, technology partnerships and market development can be applied to calcium carbide, the company may yet turn a niche chemical into a small but symbolically important success story for local industrialisation. n
IBL Healthcare aims to triple revenue by 2030
The company’s focus for growth is artificial sweeteners, and cold and flu medications
When IBL Healthcare Ltd (IBLHL) sat down with analysts in November, the message was a mix of celebration and caution. The health and wellness distributor has just posted its strongest year on record, riding the same wave of deregulated prices and volume recovery that lifted much of Pakistan’s regulated healthcare sector in 2025. But the first quarter of financial year 2026 already hints at a slower tempo — and a future in which growth will depend less on price resets and more on a deliberate push into artificial sweeteners, cold and flu remedies, and new wellness categories.
At the heart of the strategy is a bold target: to triple the size of the company by 2030, anchored in Stevia-based sweeteners and overthe-counter cold, cough and flu brands, with women’s health and holistic adult nutrition as the next frontiers.
IBL Healthcare’s full-year FY25 numbers underline just how strong the recent upswing has been. Net sales climbed from about Rs3.6 billion in FY24 to roughly Rs4.3 billion in FY25, a rise of 20 percent. Gross profit jumped 52% to Rs1.4 billion, lifting the gross margin from 26% to 33 percent. Profit after tax surged from a token Rs8 million in FY24 to Rs208 million in FY25, taking the net margin to 5 percent. Earnings per share moved from almost break-even — roughly Rs0.1 — to about Rs2.1.
For a company that complained that profits were still constrained by Pakistan’s minimum-tax regime, this was nonetheless a banner year. A healthier product mix and tight control of operating costs did a lot of the heavy lifting: selling and distribution expenses grew 24% and administrative expenses 37 percent, both slower than the rise in gross profit, so operating profit almost trebled to Rs445 million.
The latest quarter, however, tells a more subdued story on the top line. In 1QFY26, net sales were Rs1.1 billion, up only 4% from the Rs1.1 billion recorded in the same quarter of FY25. Gross profit, by contrast, rose a brisk 18%, pushing the quarterly gross margin
further up from 32% to 36%. Profit after tax improved from Rs60 million to Rs70 million, with earnings per share edging up from Rs0.6 to Rs0.7.
In other words, the early months of FY26 are seeing slower revenue growth but continued margin expansion. Management was explicit about why: the company has been pruning lower-margin businesses. It has divested traditional pharmaceutical products and its ophthalmology portfolio, lines that were “more oriented toward a pharmaceutical company than a health and wellness company”, and is redeploying focus and capital towards higher-margin wellness and consumer-health franchises.
That shift is already visible in the income statement. Cost of sales rose only 8% in FY25 against the 20% rise in sales, and actually fell 2% year-on-year in 1QFY26 despite the increase in revenue. The result is a business that is growing more slowly in rupee terms than last year, but earning more from each rupee of sales.
For investors coming off a heady 2025, the deceleration in first-quarter revenue growth is a reminder that the sector-wide tailwinds — higher regulated prices, restocking after shortages and a rebound in demand post-Covid — may not be repeatable at the same pace. The task now is to show that the new, leaner portfolio can support sustained double-digit profit growth even if sales grow in the mid-single digits some quarters.
IBL’s management seems acutely aware of that imperative. The corporate briefing repeatedly emphasised that the company is not “solely a distribution company” but a brand-owning, marketing-driven organisation that arranges manufacturing through tolling and partners such as The Searle Company, while using the broader IBL Group’s distribution arm for physical logistics. That distinction matters because, unlike a pure distributor, IBL Healthcare can shape its portfolio, prices and promotions, not merely pass through someone else’s decisions.
The same briefing laid out the growth blueprint in unusually clear terms. The long-
term goal is to triple company size by 2030. In the near term, the emphasis is squarely on Stevia-based sweeteners and cold, cough and flu remedies, with women’s health and holistic adult nutrition identified as the next wave of expansion.
A quick scan of IBL’s product line-up explains why management is so fixated on sweeteners. On the company’s own website, the health and wellness category is dominated by sugar substitutes: multiple variants of Canderel — tablets, jars, sachets, sucralose and Stevia versions — sit alongside Equal in similar forms, as well as vitamin waters and other low-calorie beverages.
IBL is the marketing affiliate in Pakistan for Canderel, a global tabletop sweetener brand originally developed in Europe, and promotes it as a zero-calorie alternative to sugar for people with diabetes and those trying to reduce their sugar intake. The Canderel Stevia range, in particular, is positioned as a “natural” sweetener, using plant-based glycosides to deliver sweetness without calories.
In a country like Pakistan, the addressable market for such products is huge. The International Diabetes Federation estimates that about 31.4% of Pakistani adults live with diabetes — roughly 34.5 million people — giving the country one of the highest diabetes prevalence rates in the world. A 2023 commentary using the same IDF data described Pakistan bluntly as “the world’s number one country for diabetes prevalence”, with more than 33 million adults affected.
Against that backdrop, it is not surprising that IBL’s “healthier sugar alternatives” segment is outpacing the rest of the business. According to the company’s 2025 annual report, sales of these healthier sugar alternatives — led by Canderel and Equal Stevia variants — grew 50% in FY25, compared to 20% growth in overall revenue that year. That means sweeteners are not only aligned with public-health needs; they are also one of IBL’s fastest-growing profit centres.
On the cold and flu side, IBL markets a cluster of brands: Remac syrups and tablets, Remac Plus, and Lebon cough syrups, among
others, are all listed in its product catalogue under consumer health. These remedies, distributed through pharmacies and general trade, slot into a familiar Pakistani pattern of self-medication during winter and viral outbreaks. Post-Covid, consumer willingness to spend on symptomatic relief and immunity boosters has risen markedly, giving these lines fresh momentum.
A third pillar of growth is infant and specialised nutrition. IBL is the local partner for Mead Johnson’s Enfamil and Enfagrow formulas, as well as Prep-up baby cereals and Nestlé’s medical nutrition products such as Peptamen and Novasource Renal. The “biggest current item”, management told analysts, is the price repositioning and relaunch of the Mead Johnson portfolio. After years at the “super-premium” end of the infant-formula market, prices have been moved down into the mainstream premium bracket, which has already started to deliver a “significant upside” in both revenue and units.
All of this sits on top of a sizeable medical devices and disposables business – ranging from haemodialysis consumables to IV sets, surgical gloves and syringes – and a growing ophthalmic portfolio of vision-care products and contact lenses.
Crucially, IBL does not manufacture most of these products in-house but “owns” the brands locally and arranges for their production through toll manufacturers or Searle factories. For the actual physical distribution, it relies on IBL Operations, the group’s distribution arm, allowing the listed company to behave more like a marketing, brand-management and supply-chain co-ordinator than a warehouse operator.
Even so, localisation is becoming a bigger theme. The company says it is focusing on increasing local production to mitigate the impact of foreign-currency swings and imported inflation; exports, it stresses, will follow localisation rather than precede it. The closure of the Afghan border in recent months, which has disrupted some cross-border trade and smuggling, has had little direct impact on IBL because it does not export to Afghanistan. If anything, management believes, it could see a marginal benefit if parallel-imported or smuggled products are squeezed out of the domestic market.
IBL Healthcare sits at the junction of two powerful corporate ecosystems: The Searle Company Limited, one of Pakistan’s larger pharmaceutical players, and the International Brands (IBL) Group, a distribution and brand-building conglomerate.
The company was incorporated as a private limited entity in July 1997 and for many years operated as a wholly owned subsidiary of Searle, focusing on healthcare nutrition and medical disposables. In November 2008 it con-
verted into a public limited company, and in 2011 it listed on the Pakistan Stock Exchange, giving investors a direct route into a portfolio that was increasingly skewed towards overthe-counter healthcare, nutrition and medical devices rather than prescription drugs.
From the outset, the idea was to “tap the potential of healthcare nutritional products and medical disposables” while leveraging IBL’s distribution expertise. Over time, the company has stitched together a roster of global principals – from Mead Johnson and Nestlé in nutrition to Bausch + Lomb in vision care and various international device manufacturers – and layered on its own brands in sweeteners, vitamin waters and wellness products.
Today, IBL describes itself as a marketing-led healthcare company “committed to improve our community’s well-being and quality of life with world-class nutrition, medications, medical devices and other healthcare products”. It employs teams of marketing and sales specialists rather than armies of repackagers, aiming to “maximise the value of health through innovative products, devices and education that meet the changing needs of the population across Pakistan”.
Financially, the path has not been linear. Margins have swung over the years as exchange-rate shocks, imported inflation and regulatory price caps buffeted the sector. According to PSX data, IBL’s gross margin in FY23 was just over 33% and net margin almost 7.7 percent; in FY24, net margin fell sharply to 0.2% before rebounding to 4.8% in FY25 as the latest round of price adjustments and portfolio pruning kicked in.
The decision to double down on consumer-facing health and wellness, while trimming pure pharmaceutical lines, is the latest step in that evolution. It is a bet that brands like Canderel, Equal, vitamin waters and cold-and-flu remedies will prove more resilient and scalable than low-margin prescription products in a volatile regulatory environment.
If IBL’s strategy seems tailor-made for its time, that is because the broader context in Pakistan is changing rapidly.
On the one hand, the country is grappling with a full-blown diabetes crisis. The IDF estimates that more than a third of adults are living with diabetes or pre-diabetes, and recent research in Clinical Diabetes and Endocrinology describes an “alarming and rapidly increasing prevalence” driven by urbanisation, sedentary lifestyles and diets high in refined carbohydrates and sugar. A separate analysis notes that Pakistan now ranks among the top four countries globally by number of adults with diabetes.
On the other hand, awareness – and anxiety – about diet, weight and chronic disease is slowly rising, especially in urban middle-class households. Social media, gym culture and a
post-Covid preoccupation with immunity have all helped to put “sugar-free”, “low-calorie” and “vitamin-fortified” labels on the radar of consumers who might previously have ignored them.
IBL’s 2025 annual report captures this shift in numbers: healthier sugar alternatives, primarily Stevia and sucralose-based sweeteners sold under Canderel and Equal brands, saw sales jump 50% during FY25, more than double the company’s overall revenue growth of 20 percent. That suggests consumers are not merely trading down within existing categories; they are actively seeking out products they perceive as healthier.
In that context, a product like Canderel Stevia is more than just another sachet on the shelf. For millions of Pakistanis living with diabetes or at risk of it, replacing sugar with a non-caloric sweetener is a small but tangible lifestyle change. Online pharmacy listings explicitly pitch Canderel as an artificial sweetener “used by diabetic patients as replacement of normal sugar”, while IBL’s own marketing emphasises convenience and taste alongside calorie-free indulgence.
Similarly, vitamin-fortified waters, adult nutrition supplements and immune-support formulations tap into anxieties that have only deepened since the pandemic. IBL’s portfolio includes Searle Vitamin Water in multiple flavours, specialised nutrition drinks for renal and diabetic patients, and adult multivitamin brands such as Essential Plus and Pregna Essential.
The cold and flu franchise also stands to benefit from more health-conscious behaviour. Frequent viral outbreaks, poor air quality in major cities and growing distrust of unbranded syrups have nudged consumers towards recognised brands with corporate backers. Here, IBL’s Remac range and related products give it a direct stake in seasonal spikes in demand.
Of course, rising health consciousness is not an unalloyed positive for companies like IBL. As people read more about diet and disease, they also become more sceptical of ultra-processed foods, artificial sweeteners and aggressive marketing claims. Global debates over the long-term safety and metabolic impact of certain non-nutritive sweeteners can spill over into local conversations, even if regulators such as Pakistan’s DRAP continue to permit their use.
For now, though, the immediate pressures are more mundane: currency volatility, minimum-tax rules that bite even when profits dip, and the perennial risk of regulatory tinkering with prices. IBL’s response has been to push for localisation of manufacturing where feasible, refine its portfolio to favour higher-margin wellness products, and lean into categories where structural health trends offer natural tailwinds. n
As Panadol prices stabilise, Haleon’s revenue growth slows
The boost from deregulated drug prices is stalling, causing Haleon to look at new product launches in nutraceuticals and export markets for growth
Haleon Pakistan rode a powerful pricing wave over the past two years. The company behind Panadol, Sensodyne and CaC 1000 has seen its earnings swell as the government loosened control over many medicine prices and granted long-requested increases on paracetamol. But the latest numbers suggest that the easy part of the story may be over, and that future growth will depend much more on new products, exports and plain old volume rather than on price hikes.
Haleon Pakistan’s most recent published accounts – the nine months of calendar 2025 to September – show just how strong the deregulation windfall has been.
Net sales rose from Rs27.5 billion in 9MCY24 to Rs32.2 billion in 9MCY25, a robust increase of 17 percent. Management told investors that roughly 10 percentage points of that growth came from higher prices, with the remaining 7 percentage points driven by volume gains.
The impact on profitability has been even more striking. Gross profit climbed 35% over the same period, taking the gross margin from 33% to 38%. Net profit after tax jumped 43% to Rs4.6 billion, lifting the net margin from 12% to 14%. Earnings per share for the nine months rose from Rs27.4 to Rs39.2, while dividends per share for the period tripled from Rs5 to Rs15.
These results build on an already strong 2024. According to market data compiled from Haleon Pakistan’s 2024 annual report, the company booked net sales of about Rs43.6 billion that year, with net income of roughly Rs4.6 billion – both solid increases on 2023 and achieved before the full impact of deregulation had flowed through. In other words, 2024 was the set-up year; 2025 is turning into the “banner year” in which those policy changes fully hit the P&L.
But buried in the same briefing note is the first hint that the sugar rush is already fading. In the quarter ended September 2025, net sales grew by 8% year-on-year, from Rs9.8 billion to Rs10.6 billion – still respectable, but less than half the pace seen over the ninemonth period. EPS grew 21% in the quarter, compared to 43% for the nine months.
Part of that slowdown is simple arithmetic: once prices have been reset, there is only one chance to book the step-change. Subsequent quarters are measured against the new, higher base. That is exactly what investors are now seeing in Haleon’s numbers: price-led growth has peaked, and the company must increasingly rely on volume growth and mix.
Management appears to recognise this. The briefing note stresses that the strategic focus “moving forward” is a robust, volume-led growth strategy rather than repeated price increases, acknowledging that volume is the main driver for acquiring and retaining consumers in over-the-counter categories.
At the same time, Haleon believes it can sustain much of the recent margin improvement. The company is targeting gross margins of around 38% on a continuing basis, supported by efficiency gains, cost optimisation and selective, inflation-linked price adjustments rather than a new round of aggressive hikes.
Analysts modelling the company now expect that when the first quarter of 2026 is eventually reported, revenue growth will look far more subdued than the double-digit gains seen through much of 2025. The strong 2025 base, public frustration with rising medicine prices and the political sensitivity of a product as basic as Panadol all point in the same direction: the deregulation windfall is unlikely to be repeated, and Haleon will have to work harder for every rupee of incremental sales.
If the deregulation story looms large over Haleon’s financials, it is because of one product family above all others: Panadol.
The company’s own breakdown shows that Panadol accounts for 49% of Haleon Pakistan’s revenue mix, with calcium supplements under the CaC brand contributing 22% and oral-care products such as Sensodyne and Parodontax adding another 17 percent.
Using the 9MCY25 net sales figure of Rs32.2 billion and that 49% share, Panadol alone generated roughly Rs15.8 billion in sales in Pakistan during the first nine months of 2025. By the same logic, Panadol sales in 9MCY24 would have been about Rs13.5 billion. On a simple annualised basis, that puts Panadol’s 2025 Pakistan sales in the region of Rs21.0 billion – an extraordinary number for a single over-the-counter brand in a country
where per-capita incomes remain modest. These calculations assume that virtually all of Haleon Pakistan’s sales are domestic. That is a reasonable approximation given the current scale of its export business – historically only around mid-single digits as a share of sales, with management targeting 10% in the next couple of years. Even if exports were somewhat higher today, the order of magnitude would not change: Panadol is a tens-ofbillions-of-rupees franchise in Pakistan.
That scale is underpinned by market share. Haleon estimates that Panadol holds more than 40% of the analgesics segment in Pakistan, while about three-quarters of its Panadol portfolio is categorised as “essential”, which makes it more politically sensitive and more exposed to policy decisions on price control.
Alongside Panadol, CaC 1000 is the company’s other workhorse. The effervescent calcium and vitamin D supplement, together with sister brand Qalsium-D, accounts for around 22% of revenue and more than 30–35% market share in Pakistan’s bone and joint segment. Oral-care products, led by Sensodyne with over 70% share of the sensitivity category, provide a profitable third pillar.
These are mature categories, but Haleon is not standing still. On pain management, the company rolled out Panadol Ultra nationally in March–April 2025 after a soft launch in Karachi, positioning it as a premium, fast-acting formulation aligned with global Panadol variants. Management is also preparing to enter the menstrual-pain and migraine-relief sub-segments with new Panadol line extensions – a move that both deepens its reach in pain and ties the brand more closely to women’s health.
The other major growth vector is nutraceuticals. Haleon has launched Centrum – the world’s largest multivitamin brand – in Pakistan in Adult and Silver variants, initially as imports from Italy. A Reuters interview with the company’s chief executive last year revealed just how ambitious these plans are: Haleon already commands roughly Rs7.5 billion of Pakistan’s Rs24 billion vitamins and minerals market through CaC 1000 and Qalsium-D, and aims to capture a further 7–8% of the remaining market once Centrum is fully rolled out.
Local manufacturing is central to those ambitions. At present, Centrum tablets are imported because Pakistan’s regulator, the Drug Regulatory Authority of Pakistan (DRAP), insists that nutraceuticals must be produced in separate facilities from pharmaceutical drugs, making it uneconomic to manufacture Centrum locally. Haleon is lobbying DRAP to allow nutraceutical production in pharmaceutical plants – arguing that the higher standards of drug facilities should more than satisfy any safety concerns – and has signalled that it would in-house all Centrum production if rules change.
Even without policy relief on nutraceuticals, Haleon is already investing heavily in manufacturing. About 36% of its product portfolio is currently outsourced, but CaC 1000 is fully made in-house, and the company has spent roughly US$10 million upgrading its Jamshoro factory so that Panadol can be shifted from toll manufacturing to local production. Some Panadol SKUs are expected to move inhouse in the third quarter and the remainder in the fourth, reducing the outsourced share of the portfolio to around 4 percent.
That change should not only protect margins by cutting conversion costs; it also gives Haleon more control over quality and supply – crucial in a country that has repeatedly grappled with paracetamol shortages whenever price disputes between manufacturers and the state flare up.
Exports are the final piece of the growth puzzle. Haleon already exports CaC 1000 and Voltral Emulgel (a topical pain-relief gel) to Vietnam and the Philippines, and is in the process of opening channels to 18–19 countries across South-East Asia and Africa. Management wants exports eventually to account for at least 10% of sales, up from the 5–6% peak reached in 2022, although it acknowledges that the approvals process for each new market can take two to five years.
In short, Haleon’s product and capacity strategy is clear: defend and extend Panadol, deepen CaC 1000’s grip on the vitamins segment, add nutraceuticals like Centrum, and leverage an upgraded Jamshoro plant to push both domestic and export growth.
Haleon Pakistan’s story cannot be separated from the global reshaping of GlaxoSmithKline’s consumer healthcare business over the past decade.
Globally, Haleon was created in stages. First came the 2019 merger of GSK’s and Pfizer’s consumer healthcare units into a single joint venture, with GSK holding 68% and Pfizer 32 percent. Then, in July 2022, GSK demerged that business, listing Haleon plc as an independent company on the London Stock Exchange and New York Stock Exchange.
Since then, both legacy parents have pro-
gressively exited. GSK sold its remaining stake in Haleon in 2024, while Pfizer announced and then completed the sale of its final 7.3% holding in early 2025, with a portion bought back by Haleon itself and the rest placed with institutional investors.
In Pakistan, the restructuring has been equally involved. GlaxoSmithKline Consumer Healthcare Pakistan Limited (GSKCH) was incorporated in 2015 after being demerged from GlaxoSmithKline Pakistan Limited, and listed on the Pakistan Stock Exchange in 2017. Following the global demerger, the local company’s ultimate parent changed from GSK plc to Haleon plc, and on 3 January 2023 the Securities and Exchange Commission of Pakistan formally approved a name change to Haleon Pakistan Limited.
Today, Haleon Pakistan is a publicly listed subsidiary of the global Haleon group, headquartered in Karachi with a manufacturing facility in Jamshoro, Sindh, and regional sales offices in Lahore, Islamabad and Multan. The company employs around 450 people and continues to focus on over-the-counter medicines and consumer healthcare lines rather than prescription drugs.
The rebranding has been more than cosmetic. It has tied Haleon Pakistan more closely to a global portfolio of brands that includes Advil, Sensodyne, Voltaren and Theraflu, and to a parent that is increasingly positioning itself as a pure-play consumer-health champion. Globally, Haleon is targeting organic revenue growth of 4–6% annually, with adjusted operating profit growing faster than sales and high single-digit profit growth expected from 2026 onwards.
For the local subsidiary, the challenge is to translate those global ambitions into a market that is at once opportunity-rich and policy-constrained.
The central macro story behind Haleon’s recent numbers is Pakistan’s shift from tight medicine price controls towards partial deregulation.
For decades, the Drug Regulatory Authority of Pakistan (DRAP) used maximum retail prices and CPI-linked formulas to govern what manufacturers could charge. This led to repeated clashes with the industry, particularly around low-priced products such as paracetamol tablets, where input costs had surged but prices were slow to adjust. After a very public shortage of paracetamol in 2022, the Economic Coordination Committee approved several rounds of price increases on paracetamol products, pushing the MRP for a 500 mg tablet from around Rs2.35 to Rs2.67 and allowing higher prices on stronger formulations and syrups.
The bigger change came in early 2024, when the federal cabinet approved proposals to deregulate the prices of medicines not
included in the National Essential Medicines List. Under this policy, non-essential drugs are exempted from the 2018 drug pricing framework and DRAP’s direct price-setting powers, leaving prices to be determined more by market forces. Essential medicines – currently almost 500 molecules – remain under a regulated regime, albeit with some indexation to inflation.
This two-track system has been a boon for many pharmaceutical and consumer healthcare companies. A sector-wide research note last year described deregulation of non-essential drug prices as “a boon for the pharma industry”, citing the ability to pass through higher input costs and improve margins. A blog post focused specifically on Haleon pointed out that after deregulation, the company secured hardship approvals for around a 10% year-on-year increase in Panadol prices, while some other non-essential products saw hikes of about 33% on average. This goes a long way towards explaining why Haleon’s gross margin has jumped from the low-thirties to the high-thirties in a short span of time.
But the policy has also triggered a backlash. As medicine prices have surged, especially in 2025, media reports have highlighted patient hardship and accused both manufacturers and regulators of fuelling a “drug price crisis”. The federal government has ordered fresh surveys of medicine prices across the country and hinted at tightening oversight again, particularly for products that households regard as basic necessities.
Panadol sits squarely in that politically sensitive zone. It is often the first medicine a Pakistani household buys, and any further sharp price increases would be hard to justify in the court of public opinion. That creates a natural ceiling on how far Haleon can push price as a growth lever, regardless of what the formal rules might allow.
Haleon’s own management seems to understand the balance it must strike. In the corporate briefing, executives stressed that the full effects of deregulation should be judged over a three-to-five-year horizon, and that in the long term they expect prices to rise broadly in line with inflation, not far ahead of it. In other words, deregulation has given Haleon breathing space and the funds to invest – in plants, brands and exports – but it is not a perpetual licence to print money.
That framing also explains why the company is leaning so hard into volume-led growth and category expansion. New Panadol variants in menstrual and migraine relief, a fullscale bet on nutraceuticals through Centrum, and an export push into South-East Asia and Africa are all ways to grow the top line without repeatedly testing the limits of consumer tolerance on price. n
By Usama Liaqat
You are in your office. Sipping a cup of tea perhaps, or thinking of the many appointments that glare at you menacingly from your calendar.
Someone places a bundle of files before you. They do this everyday. And it never gets any better. You stopped reading them a long time ago. Gulping the last few sips from the cup in your hand, you resign yourself to your fate and start signing the papers.
Your mind wanders elsewhere. Is a human being a mere paper-signing machine, you perhaps wonder. What might be a good place
What happened to Hascol at the Sindh High Court?
to order lunch from today? Some financial care might also be buzzing in your brain. Eventually, the pile is done. You heave a sigh of relief. Now you can really get to your work.
Until you are made aware that one of the papers you had signed was not to be signed. The marble beneath your feet gives a crack. A tingling rises in your knees. It’s embarrassing. And you wonder at the horror of this Kafkaesque nightmare you seem to have been thrust into.
Something similar happened recently in a case involving a dispute between Hascol Petroleum and MENA energy. A flurry of activity took place at the Sindh High Court from the 29th of October this year up until the 10th of
November. A prohibitory notice signed by the court’s registrar on the 29th had seemingly disadvantaged Hascol in the $9.5 million case. The exact details of this prohibitory notice have not been shared by the SHC, but the registrar admitted his mistake, claiming the document had accidentally been placed in a pile meant for his signature and he had put down his name without reading it.
Since admitting the mistake, the SHC has retracted the notice and informed the banks involved in the case. However, the details of what the order was are hazy. Hascol has either ignored requests to clarify what happened, or their legal team has said they cannot discuss the matter since it is subjudice, even
A recent mistake by the execution branch of the Sindh High Court has brought the case of a debt owed by Hascol to MENA Energy back into the limelight. The details raise more questions than answers
though the specific matter of the retraction has been adjudicated upon. Not only this, but the court has not posted the correction anywhere on its website, and the staff at the relevant court has declined to share information or documents about the case. Why the secrecy and why now? To understand, we must go back to the original conflict.
Old news
The case is more than a decade old. In 2014, there arose a dispute over two transactions between Hascol Petroleum and MENA Energy DMCC. Hascol, until a few years ago, was the second biggest oil marketing company (OMC)
in Pakistan. Unlike other local competitors, however, it used to import its oil from abroad.
Now, they had agreed to enter into two arrangements for sourcing oil with MENA Energy, a UAE-based supplier of petroleum products. The first shipment was for high-sulfur fuel oil. There was a dispute over the quality of the products that MENA had shipped, and MENA subsequently agreed over a phone call to send another shipment with Hascol’s preferred composition of the oil. A dispute arose over the payment for this replacement shipment and the terms governing the delivery of this second shipment. MENA sought damages for Hascol’s refusal to open a letter of credit for this second shipment, while Hascol counter-claimed for damages for delay in the second shipment.
The second transaction concerned a shipment of gasoil. MENA contended that a contract had been conducted orally for the shipment, and then confirmed over email on the same day. It also claimed that Hascol had agreed to open a letter of credit five days before loading of the first shipment. Hascol, on the other hand, averred that the timeline for opening the letter of credit was never agreed upon and, therefore, there had been no contract. MENA sued for damages for Hascol’s failure to open a confirmed letter of credit.
The case was brought before the England and Wales High Court (Commercial Division). Often, in international transactions the parties agree beforehand upon the legal jurisdiction which would govern their contract. To prevent bias, usually a neutral legal framework is chosen. The United Kingdom, with its rich legal tradition dealing with transactional disputes, is usually a favoured option. Sometimes, however, a jurisdiction is chosen because the parent company of either party might be based in that particular country.
Whatever the reason, we can only surmise, but both parties presented their understandings of the events before court in the UK. Essentially, the case was concerned with determining liability. After hearing the arguments and measuring them against the evidence, the judges pronounced their verdict. Hascol’s claims for damages for the late payment for the high-sulfur fuel oil were dismissed. On the other hand, MENA Energy’s suit against Hascol’s not opening the letter of credit for both the second fuel oil and the gasoil shipment was upheld. The court decided that Hascol owed damages to MENA Energy.
Now, both parties accepted the judgment, and negotiated between them over the exact amount that Hascol owed to MENA Energy. The amount they agreed upon in the settlement agreement was USD 9.5 million, and the court issued a consent decree ratifying this agreement in 2018.
The matter appeared to have been settled. Hascol owed the sum to MENA Energy. But the payment never came.
Hascol’s Problems
Now, around that time, Hascol was struggling, to put it mildly.
Remember we mentioned earlier that unlike other players in Pakistan, Hascol used to import its oil rather than sourcing it from local refineries? Buying from abroad reduces profit margins for the importer because of increased costs. It also makes them vulnerable to changes in price. In international markets oil and petroleum products are traded in US dollars. And, in Pakistan, the price in rupees is set by the Oil and Gas Regulatory Authority (OGRA), and not by the OMCs like Hascol.
If, let’s say the price of oil decreases in the international market, and the OMC has bought its oil at a higher rate, there’s not much it can do. Another vulnerability in this model is that even if the dollar price remains the same, if the value of rupee depreciates, the cost to local companies increases.
Hascol, therefore, was much more vulnerable to fluctuations in international markets than its local competitors.
And in 2017-2018, the price of the rupee plummeted. Hascol’s standing took a major hit. Although the profits were by the look of it increasing, net profits actually fell from PKR 2.7 billion in 2017 to PKR 65 crores in 2018.
For years, Hascol had also been pursuing an aggressive growth strategy, borrowing heavily to finance its expansion. However, despite rumours of scams being run by some members of the company, through some wizardry with their financial reports and clever financial posturing, the company still stayed afloat. But, the conditions were undoubtedly worsening.
Then the pandemic hit. The demand for oil died. Debt continued to pile, and the losses just wouldn’t stop growing. The creditors Hascol had been borrowing from became nervous and started to file petitions against Hascol for the recovery of their loans. The final blows, it seemed, had been landed. Hascol was barely on its feet, its breath already sputtering.
Then the post-final punch came. Hascol had accumulated a debt of over a staggering PKR 54 billion. And the FIA opened an investigation against it for financial fraud. Details of how the fraud was carried out can be found here, but to sum it up, it appeared to be a mix of overvaluing assets overvalued, exaggerating profit numbers, misuse of some domestic letter of credit facilities, all to get more loans than the company would on merit qualify for.
Some of its top officials were also arrested, while the company was being plagued by
harrying debtors, anxious to recover what they were owed.
We can only speculate why Hascol did not pay MENA the amount it had agreed to pay. But the reason is probably a combination of the different woes Hascol had begun to court around that time.
MENA DMCC takes Hascol to Court Again
MENA, of course, didn’t care for all this: it simply wanted what it was owed. So, it brought an execution application against Hascol in the Sindh High Court, calling for the court to enforce the $9.5 million payment outlined in the consent decree. Since Hascol had its assets within Pakistan, it made sense for MENA Energy to open the case here.
Hascol’s major argument in the proceedings was that although there was a provision that allowed the Court to enforce foreign decrees from “Courts in the United Kingdom and [any] other reciprocating territory,” the current case fell in one of the exceptions to the rule. Therefore the court did not have the authority to grant an execution order in this case. The consent judgment the England and Wales court had passed, ratifying the settlement agreement, was not based on the “merits of the case,” and therefore fell into one of the exceptions to the rule outlined in sub-section (3) of section 44-A of the Civil Procedure Code.
The court, however, reasoned that since this consent decree was given based on a litigation in which liabilities had been determined, and therefore was not an isolated order, it was based indeed on the ‘merits of the case’ and, therefore, the exception did not apply here.
The second argument pertained to obtaining State Bank of Pakistan’s (SBP) approval. Hascol, essentially, argued that the settlement agreement could not be executed without SBP’s approval, which had not been obtained. MENA Energy argued that it was in fact Hascol’s responsibility to obtain the necessary approval. The court dismissed Hascol’s reasoning, arguing that their stance was insufficient to show that they were otherwise willing to make the payment.
Hascol’s final major argument was that the parties had already agreed that in case of any dispute relating to the settlement agreement, only the courts of England and Wales would have the authority to decide it. Here again the court concluded against Hascol. Its reasoning was that the matter before the court was not to decide upon the dispute but to enforce a consent decree.
Therefore, in its Execution Order (no. 51 of 2019), decided in 2021, the court decided that Hascol’s argument against the court deciding on the execution were not valid, and
issued an attachment order, ordering certain assets of Hascol to be frozen.
Hascol, therefore, gained little consolation from these proceedings. It still had to pay $9.5 million to MENA Energy. The Execution Order hung like a heavy weight around its neck. The pain from this stubborn obligation was compounded by a seething, trident-bearing army of problems that was relentlessly devastating the possibility even of their existence. We have already seen these above.
The creditors were worried now. If Hascol’s assets were frozen, it would be tough to get their money back. So, three Banks –Meezan, Samba, and Summit – filed objections to the Sindh High Court’s execution order in 2022. Their main argument was that in freezing the assets, the court had overlooked their rights as secured creditors to be the first ones to receive any payment should Hascol go insolvent.
In such matters, there is a hierarchy of who gets their money first from the liquidation of the debtor’s assets. The first priority is the secured creditors’. These are parties whose loan to the debtor is conditioned on a specific property of the debtor being set as collateral. Then, in descending order of priority, come unsecured creditors, decree holders (such as MENA Energy, in this case), and so on.
The court, however, decided in 2025 that their rights had not been overlooked, and that Execution Order no. 51 of 2019 already made provision for their claim in its attachment order.
Currently, however, there is an ongoing effort to set Hascol back on its feet, and an extensive debt restructuring plan is in the process of being finalized. Creditors are working together to shape the debt in such a way that enables Hascol to avoid bankruptcy, and try to obtain some certainty that they will receive their due amounts in the future.
The Elusive Order
Now, let’s go back to our signature-happy official.
On 29th October, just a few weeks ago, a notice by the Sindh High Court dated 27th October, was placed in front of the Additional Registrar along with matters of routine correspondence. This notice was related to the attachment order MENA Energy had obtained from the court against Hascol. In full fervour of overweening officialdom, he signed the High Court’s notice along with routine correspondence without noticing what exactly he was signing. As it turns out, he wasn’t supposed to sign that order.
Instead, the notice appears to have been supposed to be transferred to the competent District Court. For context, the pecuniary jurisdiction of lower courts was recently increased. These lower courts could now decide
on cases involving amounts higher than what they could do before, and therefore the case was being shifted to the District Court.
The Registrar’s office admitted its responsibility in the lapse, clarifying that “the notice was not within the Registrar’s authority and was not issued under any court directive”. Later, the Sindh High Court also issued a corrigendum retracting the notice since it was meant to be issued by the competent district court, and not by the Sindh High Court’s Registrar’s office.
That, unfortunately, is the extent of the information we have available for now. Profit pursued multiple avenues to figure out what the incorrect order was that the registrar signed. However, the correction was not available anywhere on the SHC’s website. An initial media report indicated that the order had “disadvantaged” Hascol. Thinking the company would want to clear the air, Profit reached out to Hascol. Its officials were cagey, the comms department had nothing to say, and a member of the legal team declined to share details about the incident.
Why was a seemingly small procedural matter causing such aversion from everyone involved? Profit’s team in Karachi also attempted to get information from the court. At the court, Profit was first told someone else had come looking for the case file the day before and had fought with the clerk, leaving him unwilling to share the file with anyone. Engaging the services of a professional paralegal service and making requests with both the district and high courts had no effect. The case file was lost somewhere in the transfer from high court to district court, this correspondent was told. All we were able to confirm was that the notice had something to do with the original case between Hascola and Meena, and the complaint made by banks that had given loans to Hascol. The court sent the retraction notice to the banks that had filed the appeal against the earlier implementation decision.
On the face of it, it appears to be a simple case of a procedural error. However, it does give rise to a few questions about the exact nature of this notice, and its context within the case between Hascol and MENA Energy, as well as the ongoing debt restructuring process. Similarly, it invites speculation as to what became of the Execution Order, and when does Hascol expect to pay the PKR 9.5 million it owes to MENA.
Is this payment also supposed to be a part of the debt restructuring process Hascol is going through? What is the nature of the courts’ involvement in this case and its relation to the efforts to prop up Hascol? And how does the transfer of the case to the lower courts change the projected timeline of the payment? What, exactly, is happening in this case? n
A Year of Wheat and Water
After one year of deregulation, even the IMF gave a nod to setting a wheat support price. They should have stayed the course
In Pakistan, wheat is never just a crop. It is a mirror—held up to the state’s anxieties, the IMF’s experiments, and the farmer’s faith in something more stable than monsoon skies. Wheat here is an old relationship, older than many
of the institutions that now claim dominion over it. And like any long relationship, it comes with its own patterns: dependence, intervention, withdrawal, relapse. In the Rabi season of 2025-26, that pattern feels painfully familiar.
A year ago, Pakistan was being told—
sternly, directly—that its wheat market needed to finally grow up. The International Monetary Fund had pressed a finger onto an old bruise: the support price. For decades the wheat support price functioned as the country’s most expensive security blanket, a
subsidy that began in 1968 and grew until it was almost indistinguishable from the political economy itself. In 2024, the Fund declared the ritual over. No more provincial price-setting. No more massive borrowing. No more games of strategic storage. It was time, they said, to let the market breathe.
Twelve months later, the same IMF that prescribed a cold-turkey exit returned with a more forgiving stance—if not forgiveness itself. After the floods ripped through crops, submerged fields, and destabilised already-fragile supply expectations, the IMF allowed the government to return to the wheat market. Not dramatically, not nostalgically, but significantly: 6.2 million tonnes of procurement at an indicative price of Rs3,500 per 40kg. Not the fixed “support price” of the old era, but something close enough to feel familiar.
Against this oscillation—withdrawal and return—the only part of the system working with any semblance of logic has been the seed distribution effort. As sowing accelerates across provinces, the state’s provision of certified seeds, convoy tracking, and enforcement of movement SOPs has begun to resemble what good agricultural governance might look like. Methodical. Bounded. Helpful without distorting the market.
Which raises the question this story explores: if one year of deregulation and one year of reversal both reveal the same truth, why must Pakistan keep repeating the wheat support cycle? Perhaps the government’s role should be exactly what this year’s sowing drive demonstrates—ensuring seeds, information, and coordination—and nothing more. The wheat itself may do better once the state steps back.
I. 2024: The Year the IMF Told Pakistan to Step Away From Its Wheat
When the IMF delivered its prescription in September 2024, it wasn’t just an economic command—it was an indictment. For decades, Pakistan had been treating wheat procurement as a kind of seasonal absolution. The Punjab Government, the country’s largest player and the most enthusiastic participant in this ritual, issued a support price every year with a confidence that belied the underlying mechanics: massive borrowing from commercial banks, annual circular debt, redundant storage costs, and a political logic that made the system nearly impossible to reform.
The numbers from 2023 alone show why the IMF’s patience cracked.
Punjab procured around 40 lakh tonnes
of wheat at Rs3,900 per maund (about Rs97.5 per kilogram). To pay farmers this amount, the provincial government required Rs394 billion—a sum it did not possess. So it borrowed the money. At 23% interest, those borrowings ballooned into around Rs90 billion in monthly installments over ten months, paid back mainly through sales to flour mills at the same set price.
Even this would have been merely inefficient if that were the end of the story. But it wasn’t. Punjab—and other provinces— persistently procured more wheat than they needed, carrying residual stocks from previous years even as they borrowed more to buy new grain. Storage, transportation, and handling through agencies such as PASSCO added tens of billions in additional costs. And the state repeatedly missed repayment deadlines to banks, accumulating a circular debt that by 2020 had reached Rs757 billion.
Yet the official justification stayed the same: “security” for small farmers and “cheap flour” for consumers. The reality, as an extensive academic literature has long argued, was far from this noble framing. The support price disproportionately benefited larger landowners and politically connected intermediaries. Small farmers were often forced to sell to private buyers far below the set price and long before government procurement even began. The “subsidy” supposedly meant for them ended up elsewhere, absorbed into the patronage networks and storage inefficiencies that defined Pakistan’s grain bureaucracy.
That is why the IMF insisted the intervention needed to stop. Wheat markets, they argued, behave better when they are allowed to behave like markets. Prices settle where supply meets demand, farmers choose crops more rationally, and governments focus on market infrastructure instead of market manipulation.
The IMF’s September 2024 ban on provincial governments setting wheat prices thus became the symbolic centrepiece of its $7 billion programme with Pakistan. This wasn’t a technical condition tucked into an appendix—it was a marquee reform, the kind the Fund could point to and say: here is a distortion being removed, here is fiscal discipline being restored, here is a step toward a more productive agricultural sector.
Punjab, perhaps recognising the seriousness of the moment, even abolished its provincial food department and replaced it with an autonomous body. That was no small gesture. It was the administrative equivalent of breaking an old instrument so one cannot be tempted to play the old tune again.
And for a moment—just a brief moment—the wheat market responded. With the state stepping out, prices began behaving
unpredictably but honestly. When restrictions on procurement kicked in, wheat prices tumbled, falling as low as Rs2,200 per 40kg from peaks of around Rs5,500. Pain for farmers? Yes. Correction for the market? Also yes. This was deregulation in its rawest form: disorienting but clarifying.
By the end of 2024, it seemed like Pakistan had taken its first genuine step toward breaking a 56-year-old addiction.
But markets do not move in straight lines, and neither does Pakistan’s political economy. Both turned sharply within a year.
II. 2025: Floods, Volatility, and the IMF’s Return to Familiar Ground
Nature tends to ignore IMF reform timetables. By mid-2025, as floods ripped through crops, submerged regions already struggling with infrastructure collapse, and pushed sowing calendars into chaos, the wheat market that had been left to “find itself” suddenly confronted a different reality: diminished crop expectations, rising anxieties about domestic supply, and a political atmosphere thick with calls for state intervention.
The IMF, which had previously insisted on a strict no-procurement regime, now recalibrated. In October 2025—almost exactly a year after its ban—the Fund allowed Pakistan to step back into the wheat market. Not freely, but meaningfully enough to reshape the season.
The government announced it would procure 6.2 million tonnes of wheat. The price would be Rs3,500 per 40kg, which officials insisted was not a traditional support price but an “indicative rate”—linked loosely to international trends and open to revision. Linguistically, this was a hedge. Economically, it was a return to intervention, albeit with rhetorical distancing.
The political timing mattered, too. Pakistan was preparing for the IMF board to consider the second review of the $7 billion bailout and the first review of a $1.4 billion climate facility. Demonstrating competence in food security—especially after floods—was essential. The government wanted wheat stocks rebuilt. The IMF wanted macro-stability preserved. Both sides needed a compromise.
Thus, procurement resumed—but with an economic philosophy caught between the past and future. The IMF’s staff had recently praised Pakistan for reducing interventions in commodity markets, arguing this would foster a “productive, diversified, and internationally competitive agricultural sector.” Yet the very crisis of the 2025 floods proved that even
well-intentioned reforms can be undone by climate volatility and political appetite.
There was also the matter of optics. Allowing procurement at Rs3,500 meant tacitly acknowledging that a pure market approach had produced price collapses that farmers resented and politicians could not tolerate. The new procurement rate was lower than the Rs3,900 of 2023 but far higher than the market crash of Rs2,200 in the year the ban took effect. It was, in other words, a return to familiar ground—just with less grandeur.
The financial implications were staggering. Procuring 6.2 million tonnes at the indicative rate would require Rs542 billion. Even if interest rates and borrowing practices had changed since 2023, the basic structure— banks lending huge sums so governments can store grain they may not need—remained intact.
Yet the IMF acquiesced. The floods had shifted the conversation. Pakistan’s need for a “strategic reserve” was suddenly more plausible. And the government was given discretion to define what that reserve should be.
But if the shift in 2025 revealed anything, it was that Pakistan’s wheat economy cannot be governed by switches flipped on and off every few months. The state’s reliance on wheat as a political tool is too entrenched; the farmers’ dependence on it as a guaranteed income stream is too pervasive; and the IMF’s aspirations for market purity remain vulnerable to climate shocks.
And yet, amid this reversal, something else was happening—something calmer, more measured, and more sustainable than procurement politics: the seed supply chain was quietly, efficiently, and almost proudly doing its job.
III. Seeds, Sowing, and the Case for a Smaller State in Wheat
While wheat procurement was making headlines, the real story of Pakistan’s 2025 Rabi season was unfolding not in cabinet meetings but across the fields themselves. In November, the Ministry of National Food Security and Research announced that all provinces had received the seed allocations they needed—an achievement that was both logistical and symbolic.
A total of 168,000 tonnes of seed from private suppliers and 196,000 tonnes from the Punjab Seed Corporation had been distributed. These allocations were precise and proportional:
• 23,000 tonnes to Balochistan
• 82,000 tonnes to Sindh
• 22,000 tonnes to Khyber Pakhtunkhwa
• 41,000 tonnes retained in Punjab
Convoys transporting the seed were tracked daily, check-posts monitored the routes, and the Federal Seed Certification agency validated the movement reports. There were even legal challenges—petitions from certain seed companies contesting movement SOPs—but the federal government committed to defending the policy in court.
None of this resembled the chaos of procurement season. It resembled something better: a state performing a narrow, essential function and performing it well.
The sowing progress reflected this clarity.
Punjab reported rapid sowing momentum, buoyed by the recession of floodwater that made land accessible earlier than usual. Against a target of 16.5 million acres, the province had already cultivated 12.5 million acres, with expectations of hitting the target within two weeks. Farmers—typically wary of government announcements—responded positively to both the availability of certified seed and the indicative wheat price of Rs3,500 per 40kg, which provided context without coercion.
Special trends emerged: early sowing, improved access to land, and a striking 100% improvement in certified seed usage, thanks to subsidies through the Punjab Seed Corporation (Rs500 per bag) and collaborations with private companies (Rs550 per bag, or Rs5,500 per certified seed bag).
Sindh, meanwhile, had sown 533,000 hectares, hitting its peak sowing window and expecting to complete 85% of its target by month’s end. KP had sown 461,000 hectares, reaching 59% of its target, despite slower progress in sugarcane and rice-dominated areas—delays that were expected to ease as temperatures held stable and sowing extended to mid-December.
Balochistan, with its mix of tube-well irrigated zones and canal-fed districts, had sown 85,000 hectares against a target of 643,000 hectares, with the canal-dependent Nasirabad division expected to accelerate soon.
Taken together, these details sketch a picture very different from the procurement narrative. Here, the government was not setting prices, borrowing unsustainable sums, or stockpiling grain. It was simply ensuring that farmers had access to inputs, knowledge of sowing timelines, and certainty that certified seeds would reach them in time.
This is not just a more efficient role—it is a more rational one. Seed distribution, movement tracking, certification enforcement, and ensuring that private and public seed suppliers meet demand: these are tasks the state can handle without distorting incentives or creat-
ing monumental fiscal burdens.
Contrast this with procurement. Every year, the support price inflates costs, warps cropping choices, encourages overproduction in some regions and underproduction in others, and perpetuates a cycle of political dependency. Meanwhile, seed provision encourages better yields, encourages farmers to plan without waiting for government announcements, and supports a more competitive agricultural environment.
A seed-focused state is nimble. A procurement-heavy state is bloated.
As Pakistan enters another wheat season with a hybrid of old and new policies—indicative prices blended with seed-focused governance—it faces a forked path. The floods of 2025 revealed climate vulnerability, yes, but they did not justify a full return to the old support price paradigm. If anything, climate uncertainty underscores why state-driven procurement is financially dangerous: extreme weather can elevate procurement costs just as it depresses harvest volumes.
The seed system, by contrast, can adapt. More certified seeds improve resilience. Earlier sowing protects against climate volatility. Better movement monitoring ensures that inputs reach where they are needed most.
That is the path Pakistan should emphasise. Not a confused half-return to the support price era, but a decisive shift toward an agricultural future where the government’s role is limited, specialised, and supportive rather than interventive.
Epilogue: Wheat Without Handlers
In the grand cycle of Pakistan’s wheat politics—announce, borrow, procure, store, regret—there is always a temptation to believe that intervention is the only language the state can speak. But in 2025, as seeds travel across provinces, as sowing accelerates, and as the government cautiously tries to define “strategic reserves” in a calmer, less theatrical way, another possibility emerges.
What if the best governance is the governance that stays out of the field?
What if the most meaningful agricultural reform is not the support price or the procurement target, but the seed convoy monitored quietly at dawn, the certified seed tested before reaching a warehouse, the farmer sowing early because the floodwater receded and the seeds arrived right on time?
What if Pakistan finally lets wheat be wheat?
The story of the last year—of bans and reversals, floods and recalibrations—suggests that the crop might just grow better when the government is present only where it is needed, and absent everywhere else. n
OPINION
Atta Ali Malik
The Decline of Centralized Grids
For over a century, centralized electricity grids have been the backbone of global energy infrastructure, enabling large-scale power generation and distribution to homes, businesses, and industries. However, technological advancements in solar power and energy storage are rapidly making these grids obsolete. The rise of decentralized energy systems, driven by affordability, efficiency, and resilience, signals a profound shift in how the world produces and consumes electricity.
Despite the global shift toward decentralized energy, policies and regulatory measures in Pakistan have made it increasingly difficult for homeowners and businesses to install and benefit from solar power. The government has imposed net metering restrictions, reducing the financial incentives for feeding excess solar energy back into the grid. Additionally, higher taxes and import duties on solar panels and batteries have increased costs for consumers, discouraging investment in renewable energy. These measures are often driven by pressure from centralized utilities, which see rooftop solar as a threat to their business model. Without significant policy reforms, Pakistan risks lagging in the global transition to clean and independent energy systems. As we will see below, in the wake of advancing technology, these measures will prove futile and will have severe economic costs for a government unaware of emerging realities.
Solar energy has evolved from a niche technology to a main-
The author is a Finance and Strategy Consultant at Chaudhary Malik & Co. He can be reached on X at @aalimalik.
stream power source, thanks to dramatic reductions in cost and improvements in efficiency. Over the past decade, the cost of solar photovoltaic (PV) modules has plummeted by nearly 90%, making solar one of the most affordable energy sources in many regions.
As manufacturing costs continue to decline, solar power will become even more accessible, enabling households, businesses, and communities to generate their own electricity independently of centralized grids. By Mordor Intelligence estimates, Pakistan’s rooftop solar installed capacity is 2.2 GW and is expected to increase to 9.53 GW by 2029.
While solar energy’s affordability has made it a viable alternative to traditional power sources, its intermittent nature has historically limited its adoption. However, rapid advancements in energy storage technology are addressing this challenge, making it possible to store excess solar energy and use it when needed. The energy storage advancements will have an even more profound impact on the nature of the grid than solar itself. This is because, with low-cost storage, the need for peak power from centralized grid and other volatility-based grid needs will decline even further, making users more self-reliant on their own or in smaller communities and ecosystems.
Lithium-ion battery costs have fallen by over 85% in the past decade, making home and commercial battery storage systems increasingly affordable. Companies like Tesla, BYD, and CATL are developing high-capacity, long-duration batteries that can store solar energy for hours or even days. Additionally, emerging technologies like solid-state batteries, flow batteries, and iron-air batteries promise even lower costs and longer storage durations, further diminishing the need for centralized power plants.
The shift caused by a double blow of solar and storage will disrupt the conventional utility model, where centralized power plants generate electricity that is transmitted over vast distances to consumers.
As decentralized energy systems gain traction, traditional utilities are being forced to adapt. Some are embracing the shift by investing in distributed energy resources (DERs) and developing new business models that accommodate consumer-owned solar and storage. Others are resisting change, lobbying for regulatory barriers that limit the adoption of decentralized energy solutions. This has been the response of the Government of Pakistan thus far. Though the government is bound by its international financing and other multilateral commitments to allow for the expansion of renewable energy and uphold mandates like net metering; it is using a range of tools to discourage the conversion to rooftop solar. More importantly,
there has been a tussle between the federal government sitting on a redundant national grid model, and provincial governments, driven by public demand and aspirations in the domain of renewable energy domain.
No matter how hard the bureaucratic infrastructure tries, the momentum behind solar and storage is undeniable. Governments and policymakers worldwide are implementing incentives and regulations that support renewable energy adoption, recognizing the economic and environmental advantages of a decentralized energy system. It is time that the government starts planning for this future and starts writing off its redundant assets in the national grid. The whole model of transmission and distribution needs to be overhauled.
And just when the solar/storage combo is enough to make the traditional grid redundant, another key technology contributing
to the decentralization of energy is fuel cells. Fuel cells generate electricity through electrochemical reactions, typically using hydrogen, and offer a clean, efficient, and scalable energy source. Unlike traditional combustion-based power generation, fuel cells produce electricity with minimal emissions, making them an attractive option for both residential and commercial applications. As hydrogen production costs decline and infrastructure improves, fuel cells will complement solar and battery storage systems by providing continuous, on-demand power. This integration further reduces dependence on centralized grids and enhances the reliability of decentralized energy networks.
As solar power becomes more efficient and storage costs continue to decline, the traditional centralized grid model will become increasingly obsolete. In its place, a
decentralized energy landscape will emerge, where individuals, businesses, and communities generate, store, and share electricity independently.
This transition will not happen overnight, but the trajectory is clear. The energy sector is undergoing a fundamental transformation, driven by technology, economics, and the need for a more resilient and sustainable power system. The days of large, centralized grids dominating electricity distribution are numbered. In their place, a new paradigm of energy independence, local resilience, and environmental sustainability is taking shape— one powered by the sun and stored for whenever it’s needed. Policymakers in Islamabad are unaware of this emerging reality and are operating in their old energy paradigm. This has all the makings of a major public sector financial collapse. n
What is going on with the Pace stock price increase?
The market looks more than excited about the future prospects for the real estate giant. Will the turnaround materialize?
By Zain Naeem
Before Packages, Emporium, and Dolmen, Lahore had Pace. In the early 1990s, shopping in Lahore was based on sprawling specialised markets. The concept of a single large location melding fashion retail and entertainment had not taken root.
Salman Taseer thought that was ridiculous. In 1995, he launched Pace shopping
mall at Main Boulevard Gulberg in Lahore. He did not just build some shopping center. This was a large, modern, centrally air conditioned shopping mall that immediately attracted the fascination of Lahoris. They were coming to check the place out in droves and the demand to get shops there was high.
And as with everything Salman Taseer did in life, the plan was to go back. The late governor’s plan was not just to build a plaza and make a good amount of it. He wanted to build malls like this all over the country. The
project was carried out by Pace (Pakistan) Limited and went on to become an icon of the city.
But the Pace that exists today is a sorry shadow of its former self. The building sort of still exists — right next to Hafeez Centre its famous triangle facade is still visible but it is in a dilapidated state. Years of neglect, boycotts, fires, family feuds, and bigger, shinier malls emerging in Lahore have left it an empty relic of what could have been for the Taseer family.
For more than two decades now, Pace’s fi-
nances have been suffering year after year. Losses became a constant and equity soon began to erode. The family’s patriarch’s tragic death by assassination exacerbated the problems. A social boycott based on religion hurt Pace. With drying up funds and liquidity, there was nothing that could be done in order to procure contracts and jump start the revenues. While this was happening, the creditors also started to knock on the door to get back their loans.
A flux of the new malls in the city like the Mall of Lahore, Vogue Towers and Xinhua Mall started popping up in the early 2010s onwards. The crux of the problem at Pace was that it was still looking to sell shops as the primary product while the new malls were going towards a renting out model. This led to Pace falling out of favour and seeing a decline in its popularity.
Any signs of recovery or revival were finally put to rest when a massive fire broke out in 2022 which destroyed shops and caused significant structural damage. This was followed by another fire in 2024. The mall now exists as a cursory tale and a skeleton of its former self.
The entire history of Pace is an unfortunate story of what could have been. But if it is so done and dusted, why is their stock price going up? Since August 2025, the share price of the company has gone from Rs 6 to Rs 30 in a span of two months. The sudden increase has come on the back of positive developments as the company looks to leave its troubled past behind. But is the recovery based on credible information or is the market being too optimistic? Profit tries to give a dose of realism to the new found elation surrounding Pace Pakistan.
The beginning
The cornerstone for Pace Pakistan and the whole business empire around this group was set by Salman Taseer. Born in 1944, Taseer faced tragedy early in his life when his father passed away when he was just 6 years old. After finishing his primary education at St Anthony’s and Government College, Taseer went to London to pursue accountancy. After becoming a certified chartered accountant, he felt that he could start his own accounting firm in Pakistan and UAE. This was the start of Taseer Hadi which later partnered with KPMG. The lasting legacy of Taseer was that KPMG Pakistan is still known as KPMG Taseer Hadi & Co.
Having unparalleled success, he got the confidence to start new ventures which culminated in Pace Pakistan in 1992 and a brokerage house by the name of First Capital Securities in 1994. By 2001, he had also established Media Times Limited which had Daily Times and Aaj Kal as its primary daily publications. These were supplemented by Sunday Times and TGIF which were its weekly magazines. With
the explosion of television channels in the country, it also established Business Plus and Zaiqa as its two owned channels.
The real success for Taseer came in 2001 when he created Worldcall Telecom which was the pioneer in terms of cable television and broadband internet service provider in the country. The rapid success and growth meant that the company soon became the second largest telecommunication based company just behind the state owned Pakistan Telecommunications Company Limited.
The group kept going strong, shown by the fact that it was able to sell its 60% stake in Worldcall to Omantel in 2008 worth $210 million. In 2008, Salman took the oath of governorship of Punjab and seemed to have given up control over his business endeavors. The downfall for his business group started in 2011 when he was shot by one of his own bodyguards for taking a stand for a Christian woman accused of blasphemy. This was the start of the spiral downwards of the whole business group.
Focus on Pace Pakistan
Pace Pakistan was founded in 1992 and was seen as the first open-plan retail mall in Lahore. As the company started to expand its footprint, subsequent malls were opened in Gujrat, Gujranwala and Karachi. As the company kept on growing, it developed Pace Barka Properties which was looking to develop Woodlands housing scheme and a 25 acre Pace Circle project which would have mixed usage. In addition to that, it developed the Pace Super Mall on M.M Alam Road as its flagship mall and also bought minority interests in Pace Tower and Peacock Valley Hotel and Resort near Muree.
The idea at the heart of the business was to establish malls all over the country. In
the time when the first mall was constructed, the mall business used to follow a buyer based model. The real estate developer would construct the building and would then sell the shops to the companies. As the project would be nearing completion, the developer would be able to recoup some of this investment outlay even before the shops were completed which meant that they would start to see cash inflows before they had to inject all of their investment into the project.
The best part of this model was that the project would require only a substantial part of investment to be committed by the developer. Once the shop was handed over, the responsibility of the developer was to maintain and service the shops and the mall.
In case the shopkeeper ever wanted to leave, they would have to find a buyer to take it off them as the developer would have no such obligation to buy it back off them. Pace was able to use this model to show high revenues and sales over time as this was the way business was carried out. Using it, Pace was able to expand rapidly and grow in size and stature.
However, this idea was becoming stale over time. Shopping malls are a fad as much as they are a place of business. When consumers see newer versions, they want to leave the old and start visiting the new. In the early 2000s, malls like Mall of Lahore, Xinhua Mall and Vogue Towers were becoming the new thing. These malls provided a new landscape, better shopping experiences and had cinemas. The consumer craved something new and that was not being provided by the old.
Just when Pace was getting over the shock of being out of fashion, the rental model started to be seen in the country. Malls like Emporium in 2016 and Packages Mall in 2017 started to come up with an option to rent. Brands were being given flexibility to rent their shops rather than buy them. This meant that they could rent the space, build their shops and
then gauge their success. In case their shops lacked to generate interest, they could easily leave and stop making their rental payments.
The new model also made it the responsibility of the mall to generate footfall to get more customers by carrying out promotional activities at different occasions. This reduced the onus on the shops themselves to make the customer visit and carry out promotions by themselves. This proved to be the final nail in the coffin of the company which was already reeling from the death of its founder.
The fall at Pace Pakistan
In order to understand the fall at Pace Pakistan, the analysis can be carried out from 2002 onwards. Around that time, net sales stood at Rs 2 crores which kept increasing to Rs 61 crores by 2007. The same pattern of growth was seen in gross profits which went from Rs 40 lakhs in 2002 to Rs 23 crores in 2007. To truly understand the growth, the net profits need to be considered which rose from Rs 2 crores in 2002 to Rs 50 crores by 2007.
The reason for net profits being greater than gross profits was due to the fact that the company was considering any increase in its investment property through its profit and loss. These gains alone stood at Rs 41 crores for 2007.
The impact of this increase in value can be seen in the net current assets going from Rs -10 crores to Rs 1.3 billion by 2007. Similarly, shareholders’ equity also increased from Rs 26 crores in 2002 to Rs 3 billion in 2007. Earnings per share were only Rs 0.18 per share in 2002 which increased to Rs 2.78 by 2007.
The year 2008 proved to be the peak for the company as it saw sales of Rs 1.5 billion with net profits of Rs 1.4 billion. This year saw the company declare an earning per share of Rs 6.36 as its break up value touched the high of Rs 20.69 per share. The next two years were profitable as well with net profits of Rs 44 crores and Rs 63 crores respectively. To some extent, it could be seen that the company had touched new heights based on its profitability and revenue generation.
In 2011, the company registered negative net sales. This was due to the fact that the company was only able to make sales of Rs 37 crores and saw reversal of sales of Rs 85 crores. These reversals of sales took place as the agreements between the buyer and the Group had been cancelled as per mutual agreement which had been sold in the past.
Due to these negative sales, the company ended up suffering a loss after tax of Rs 2 billion leading to a loss per share of Rs -7.46 per share. With the property being written
down as well, the balance sheet started to take a bartering. By the end of 2013, gross losses and net losses had become a constant as shareholders equity fell to Rs 2.4 billion after seeing a high of Rs 6.5 billion in 2010. Similarly, net current assets also became negative as current liabilities began to pile up against assets that were losing their worth.
Things stayed the same from 2014 to 2021 as sales barely crossed the Rs 1 billion mark and losses were seen. In 2022 and 2024, Pace was able to register net sales of Rs 1.4 billion and Rs 2 billion respectively, however, this was not able to gloss over the losses that the company had been suffering. By the end of 2023, the situation was very dire as the company had suffered loss per share of Rs 6 yet again which came to Rs 1.7 billion worth of losses for 2023.
The accumulation of losses had converted shareholders’ equity to Rs -1.7 billion and net current assets stood at Rs -5.2 billion as well. The only ray of sunshine seen in 2024 was that the foreign currency convertible bonds issued by the company had actually not suffered an exchange loss due to depreciating currency. This came in at around Rs 1.4 billion in 2023 which caused the primary loss in 2023. In 2024, this loss actually turned into a small gain leading to profit for the year.
The stock market looks optimistic
Based on the performance of the company, it could be seen that it was suffering to raise revenues and profits and there was little in the way of hope for things to get better. In the period from the listing of Pace in 2007, it was seen that the share price hovered around Rs 40 in 2008 in line with its financial performance. In the wake of the assasination and deteriorating performance, the share price fell below Rs 5
and barely managed to cross the threshold of Rs 10. It was only recently that the share price skyrocketed from Rs 6 to Rs 30 in a matter of a few months.
So why the sudden change?
On August 29th 2025, the market was notified that the board had approved the company to convert its Term Finance Certificates worth Rs 1.1 billion into equity which would translate to around 12 crore additional shares. This would mean that each share would be against a consideration of Rs 9 per share. In addition to that, the authorized shareholding would be increased from Rs 60 crores to Rs 1.8 billion in order to accommodate for the increase in shares that will take place.
The purpose of this would be that it would decrease the burden of the debt on the company and decrease its finance cost going forward.
By 7th November 2025, another notification was shared with the market stating that Pace was going to sell its shareholding of 56.79% in Pace Super Mall which was located on the Main Boulevard Gulberg. This would mean that they would be selling their almost 1 crores shares to First Capital Securities for a consideration of Rs 45.3 crores. The asset was worth around Rs 9 crores and was being sold for a gain of Rs 36.2 crores. Another great piece of news for the languishing real estate firm.
Lastly, Pace also announced that it would be purchasing a plot in Dubai to develop a commercial project and another subsidiary company was going to be incorporated in Dubai in line with this.
Is the price increase justified?
On the face of it, all these developments justify the price increase. The restructuring was going to benefit as it would reduce the finance
cost while the sale of the mall at a gain would provide much needed funds to finance new projects. The incorporation in Dubai would also open doors to new investment opportunities.
It is only when a closer look is taken when the red flags start to be raised. First Capital Securities was established as an investment vehicle which would invest in long and short term investments and carry out money market operations in conjunction with financial consultancy services. Over its life, the investments of First Capital spanned an investment advisory company, a publishing house, brokerage houses and a water purification service. It was also able to invest in Lanka Securities which was a brokerage house based in Sri Lanka. In addition to this, it also had small shares in Pace Barka properties, Pace Super Mall and Media Times.
In 2001, First Capital only managed revenues of Rs 8 crores netting in a profit after tax of Rs 9 crores. Most of the gain was seen in the upward revaluation of its investments that it carried out each year. By 2008, operating revenues of the company had grown to Rs 5.6 billion and profits had mirrored this increase ending at Rs 5.4 billion for the year. This was primarily a blip that was seen due to revaluation of its investments. After 2011, the company started to suffer consistent losses as its investments lost value while other sources of income dried up.
By the end of 2024, much of its source of income through money market operations, financial advisory and other operations had ended. The only source of income left on its books was the dividend it was receiving from Lanka Securities while it took into account any revaluation of its investments. As the losses kept piling up, the company had Rs 1.4 billion worth of accumulated losses on its books. The only thing going for the company was the fact that its investments were gaining value which made sure that equity would not become negative.
As the losses became a leakage on its liquidity, long term loans had to be taken in order to fund the working capital of the company. The profits being earned were primarily unrealized which meant no cash was being generated. In order to cover its expenses, the company had to take on liabilities. One mark of this lack of liquidity was that the accrued markup stood at Rs 1.5 billion at the end of 2024.
Based on the losses made by the company, the auditors felt that the going concern assumption was coming under threat as the current liabilities outpaced its current assets by Rs 2.6 billion. The dire situation was acknowledged by the company itself where it stated that the losses and net current assets
being in the negative region was a cause of concern that needed to be addressed.
In light of this, the management was negotiating a business plan and talking to its third party lenders for the sale of pledged investment properties which could be used to settle any principal and accrued markup that was pending.
Considering how bad things had gotten, 2025 proved to be the much needed relief that was needed as the accounts showed that earning per share of Rs 3.75 had been achieved in a space of a year. The only problem was that the source of these profits were again in the air more than the ones being realized. A year ago, dividend income of Rs 4 crores was earned due to Lanka Securities. This year, only income of Rs 6 lakh was realized from the brokerage house. A gain of Rs 1.5 billions was being realized from the reevaluation of its investments. Rather than the profit having any credence attached to it, this was a gain in the books primarily leading to the profits being earned.
These gains were being translated to the balance sheets with the assets increasing by the same amount. While the gains were on paper alone, the accrued markup and current portion of the loans kept increasing as they were not being made but only accommodated for. The lack of cash flow being the culprit yet again.
So the question is raised, how can a company going through such dire circumstances be able to invest in a new property when it is not even able to pay its principal and markup on a yearly basis. Especially for a company which had net current assets in the negative region in excess of Rs 3.1 billion. With little cash and short term assets on hand, how will the consideration of Rs 45 crores be paid for?
The alarm bells start to ring a little louder when the notes of the latest accounts are considered. The investment properties are valued at Rs 4.3 billion. What has not been
disclosed anywhere earlier in the accounts is that Rs 3.4 worth from these assets are leased properties while only Rs 97 crores worth are owned by First Capital.
Moving down the notes, the biggest revelation is made where it is stated that none of the investment property is in the name of First Capital as these properties are held in the name of Pace, First Capital Equities, Capital Heights and Pace Bark Properties. It does state that they have the control and possession of these properties none the less.
So the fixed assets of First Capital are not under its own title and are mortgaged against the borrowing that they have carried out. They have barely been able to pay their interest or principal in the recent past. The losses that are being made are only being helped by gains and profits that are in the books as they are unrealized gains and revaluation of its investments and property. Lastly, there is little to no cash to speak off which can be used to pay off Pace against the sale made. All indicators point towards the fact that the financial situation at First Capital is tenuous..
The primary task of First Capital was to invest in different opportunities that it thought were profitable and would yield benefits in the future. The only problem here is that it is buying an asset which is long past its prime, is in dilapidated condition and needs a revamp in order to bear fruit in the future. Such a project can prove to reap benefits if the effort and resources are put into it.
The issue here is that it is being bought by a company which is already on a shoestring in terms of resources. For First Capital to rehabilitate such a property looks improbable if not impossible for now. The fact that Pace Pakistan is selling this property can prove beneficial for itself while it can prove to be a further burden on First Capital. For now, Pace Pakistan seems to be on the mend, however, it could come at the cost of another. n
Will govt guarantee citizens’ data won’t be sold on dark web, asks MNA Saima Yousaf (DOB:
Address:
By Profit
Speaking on a point of order in the National Assembly, parliamentarian Saima Yousaf of the Pakistan People’s Party asked whether the government will ensure this data will not be sold “for Rs 500 a pop” on the Dark Web.
Ms Yousaf (CNIC: 53396-58388342) said that there have been instances of such leakages in the past as well, where the particulars of even the then chairman of the Pakistan Telecom Authority were leaked online.
The mother of three (two of whom go to Beaconhouse, I-8 Islamabad and the other to Little Hearts Kindergarten, F-7 Islamabad) said that such leakages could put people, specially women living alone, at serious risk were criminal elements were to get hold of this data and exploit it.
“The government has been on a data collection drive of late in Islamabad and have even said they might enter inside the house if there is any non-cooperation,” she said. “So, I have two issues: one, all data doesn’t need to be collected and two, the data that is necessary to collect, well that needs to be safeguarded. But our country doesn’t even have a proper data protection law, what to speak of the data protection laws being enforced seriously.”
Ms Yousaf, who later on picked up two large pizzas (Chicken Fajita and Euro Supreme) from Cheez-Weez, F-6 Markaz (POS data FBR), said that there needs to at least be conversation about this before our data is all over the internet.
