The Sialkot wonder

Umair Jalali is all praise for an enterprising city

The Sialkot wonder is exceptional within the annals of enterprising cities and has created a niche in couple of unusual enterprises that are global in context. Sialkot also has the honourable distinction of building its airport using its own resources and running it successfully. The high level of entrepreneurial skills harboured by Sialkot has resulted in enriching it by almost two billion dollars worth of exports emanating from the city. Though the city was once considered vulnerable owing to its proximity to the troublesome border with India but it never bothered about its vulnerability and went ahead with its zealous intention and created exemplary opportunities for its citizens that have also proved exceptionally beneficial to the country. For years Sialkot was known as a garrison town with its highlight being the large cantonment located on its outer premises housing a good number of uniformed personnel and was also a celebrated posting for the army ranks.

A few decades before Sialkot gradually started to appear on the map of Pakistan as a burgeoning industrial town specialising in sports goods and surgical instruments. It goes to the credit of the skillful manufacturing of both these products that they are valued the world over and earn plenty of foreign exchange. Interestingly making these products require global standards of expertise that Sialkot has very assiduously acquired and perfected them within a short span of time. Sports industry in Sialkot is rated in the category of small and medium enterprises (SMEs) and the pattern of this business is family-oriented. It is however pointed out that the Sialkot manufacturers glaringly lack a concentrated effort both in terms of production and marketing and most of them arrange and organise their own deals with the result that the sports industry is unable to develop its own brand and is compelled to produce goods for international sports brands. The result of this lack is quite obvious as Sialkot’s share in sports good is just one per cent though footballs singularly hold a global share of 11 per cent. Sialkot is currently a booming business centre with its own dry port and the latest addition to its enterprising spirit is the initiation and operation of a national airline known as AirSial.

Despite such handicap, the finesse of the footballs manufactured in Sialkot could be gauged from the fact that they became the match balls for the prestigious FIFA Football World Cup since 1982. Since the last three consecutive FIFA Football World Cups Sialkot-made footballs have been regularly used and the latest in the series renowned as Al-Rihla was used in Qatar Football World Cup. Sialkot-made hand-stitched inflatable balls are a great global hit and Sialkot very efficiently meets 70 per cent of the global demand for them. This product is so excellently manufactured that it constitutes almost half of the exports of sports goods from Pakistan. Sialkot footballs are highly rated and valued in Europe that is the hub of the game of soccer as most European football clubs dominate the sport. Most football exports are highly beneficial to Europe owing to zero-rated tariff offered under GSP Plus status by the European Union. Most global sports brands such as Adidas, Nike and Puma get their sports equipment from Sialkot particularly footballs.

Industrialists in Sialkot also manufacture a wide variety of sports goods including cricket kits, hockey sticks, rackets and protective gear. Sialkot–made hockey sticks are particularly famous in international sporting circles and a very high percentage of them used globally is manufactured in the city. Initially Sialkot provided inflatable footballs to international sporting brands as the sportswear was provided by Taiwan, South Korea and the US but with apparel industry growing weak in these manufacturing countries Sialkot also started to supply sportswear and this part of business in growing owing to increase in high-street use of hoodies and tracksuits.

Sialkot also excels in manufacturing surgical instruments that have a very high reputation and are internationally acclaimed. This line of manufacturing is rather old though is competitive yet is rated and the figures speak for themselves. It is widely accepted that this manufacturing line is worth billions of dollars globally but it only earned just $422 million last year. Despite the handicap of low technological expertise Sialkot still takes advantage of low manufacturing and labour costs and produces highly credible essential surgical items such as forceps, scissors, clamps and stethoscopes. It is mentioned that most of the steel used in the tools is sourced locally although part of it is imported from Germany.
Again due to lack of concentrated action, the surgical instruments industry in Sialkot is compelled to manufacture products specified by overseas buyers based in Europe and America. This is precisely the reason that the surgical output from Sialkot has been stuck at 0.7 per cent since the last decade. The pitiable aspect is that the Sialkot production fetches a pittance of the prices extracted by the global brand names from their users. It is pointed out that even many countries prefer to buy Sialkot-made surgical products from Western suppliers though they are aware of the fact that they were produced in Pakistan. Though business houses in Sialkot are homogenous costing little in terms of branding but their international supply is highly vulnerable as it based upon price structures determined by global distributors.

Though the surgical sector business is constant yet it has not grown exponentially as the figures bring to fore that the industry’s annual growth rate from 2016-2020 was 2.6%. Unlike the case with the sports goods industry, the manufacturing firms in Sialkot tend to subcontract the initial production of surgical goods to small workshops. Though the advantage of this practice is that it becomes labour-intensive hence low-cost in nature yet this process prohibits prospects of high-level branding and marketing. Such practices however make Sialkot manufacturing highly competitive in terms of costs as it can even successfully compete with China but the absence of wider aspects research and development constrains its international proliferation.

Like any other manufacturing process, Sialkot also faces challenges to both of its industries pertaining to currency fluctuations that the country is currently confronting and due to which raw material costs increases tremendously. The Sialkot industrial base also feels the crunch of the reduction of rebate levels from 4.8%, to 1.5%. The surgical instruments industry is also concerned about the changing medical regulations in the Western world post-pandemic that may render the industry liable to difficulties. The regulations are scheduled to change in 2024 but the problem is that the government agencies dealing with this matter are not taking any interest creating fears amongst the concerned manufacturers that once the impending change occurs many manufacturing units will cease to operate. Sialkot surgical instruments manufacturing industry is also gravely concerned about the lack of 3D printing practices available to it as this technology promises to be the future of this industry and not having access to it may seriously impede its productive ability. Moreover, like sports goods industry this manufacturing also is categorised as SMEs limiting its range of activities with the government not paying any attention to raise its level so that it can also avail the wider financial and fiscal facilities available to regular industrial base. TW