Karachi, May 23, 2025 – Foreign investors operating in Pakistan have called on the government to provide tax relief for the beverage industry in the upcoming federal budget for fiscal year 2025-26.
(more…)Tag: beverage industry
-
Beverage Cans IPO oversubscribed three times; raises Rs4.6 billion
KARACHI: The book-building phase of Pakistan Aluminium Beverage Cans Ltd (PABC)’s Initial Public Offer (IPO) has concluded with an oversubscription of 3.3 times, the company said on Wednesday.
The IPO received an overwhelming response from institutional investors and high-net worth individuals as the strike price clocked in at Rs 49/share, 40 percent higher than the floor price of Rs 35, country’s only Beverage Can manufacturer said.
PABC has raised Rs 4.6 billion in total, making it the second largest IPO in the Private-Sector.
“The response to the book building has been phenomenal,” said Shahid Habib CEO of Arif Habib Ltd, Advisor and Book Runner of the Issue.
Several brokerages had issued almost unanimous calls to ‘subscribe,’ which resulted in investor demand amounting to Rs 10.8 billion against the IPO’s book-building size of Rs 3.3 billion.
The general public will subscribe to 23.4 million shares (25 percent of the total offer size) on June 29/30 at the strike price of Rs 49, the company said.
Azam Sakrani, CEO Pakistan Aluminium Beverage Cans Ltd, in his statement thanked the institutions and individuals investors for showing interest and trust in PABC and assured that their investment in company would yield greater dividends.
The company started its operations in 2017 as the country’s only local manufacturer of aluminum beverage cans.
PABC supplies beverage Can to the bottlers of all major carbonated drinks, including PepsiCo and Coca-Cola, in both Pakistan and Afghanistan. Exports to Afghanistan constituted 35 per cent of the company’s sales in calendar year 2020.
Established on a 20.9-acre piece of land in Faisalabad’s Special Economic Zone with a current rated capacity of 700 million cans per annum, PABC continues to enjoy a 10-year tax holiday. The company is increasing its rated capacity by almost 36 per cent to 950 million cans per annum by July next year.
It has grown its revenue at an annualised rate of 18.7 percent in the last five years. In the third full year of its operation (2020), the company’s net profit amounted to Rs 610.7 million, up 314 per cent from 2019. It expects its bottom line to grow at 140 per cent in 2021.
-
FED cut for beverage industry in budget likely
KARACHI: The government is seriously considering to bring down federal excise duty (FED) from existing 13 percent to 11.5 percent in the upcoming budget 2021/2022.
According to sources the tax authorities had received instructions to finalize proposals regarding beverage industry for reducing the rate of FED from 13 percent to 11.5 percent.
The FED rate on aerated waters, containing added sugar or other sweetening matter or flavored was increased to 13 percent from 11.5 percent through Finance Act, 2019.
It is interesting to note that Finance Minister Shaukat Tarin in a meeting last week with the delegation of the representatives of the Beverage Industry of Pakistan, said although he is supportive of adopting measures that can boost the industrial development, generate employment and help in expansion of businesses; any decision, regarding the taxation/ relief provided to any industry which has direct linkages with general well being and health of the public, will be taken after a careful analysis of all the facts and arguments.
The Diabetic Association of Pakistan (DAP) in a recent press conference presented alarming rise of diabetic patients in the country due to growing demand for sugar.
Therefore, the association demanded the authorities to double the taxes on sugar-sweetened beverages (SSBs) in the coming budget 2021/2022.
It said diabetes is growing at an alarming rate in Pakistan, which has the 4th highest burden of type 2 diabetes worldwide with more than 19 million cases.
The association demanded the government to increase the FED to 20 percent in the upcoming budget in order to discourage use of beverages.
“Unfortunately, beverages are becoming an increasingly essential part of household food consumption with more than a 10 per cent point increase in the last few years along with a gradual increase in production and decrease in the price,” according to a letter sent to the FBR by the association.
Health experts warned that diabetes was growing at an alarming rate in the country, and as per 2nd National Diabetes Survey of Pakistan 2016-17, every 4th Pakistani adult is suffering from type 2 diabetes.
“Overweight and obesity are key risk factors leading to early development of diabetes. According to the Non-communicable Disease (NCDs) Steps Survey (2014-15), more than four out of ten adults of Pakistan are obese or overweight, while 37 per cent have hypertension,” according to the survey.
WHO and the World Bank also recommended Pakistan for increasing taxes on beverages to reduce obesity and related diseases like diabetes.
The association demanded increase in FED to 20 percent, and create a category of beverages to include sugary drinks beyond aerated water (juices, energy drinks, flavored milk, iced tea, nectars etc.) to impose minimum of 20 per cent excise tax.