Daily Times

KARACHI: Sazgar Engineering Works Limited (SEWL), a leading CNG auto rickshaw manufacturer, has decided to invest Rs 330 million more in production facility to meet a growing demand of 3 wheelers in the country.

In this regard, the company has decided to set up additional production facilities for auto rickshaw manufacturing. ‘In order to cope with the rising market demand of auto rickshaws and considering the future potential growth in automobile sector, the Board of Directors of the Company has approved to set up additional production facilities for the manufacturing of auto rickshaws at company’s owned land located near Raiwind, Lahore” , said SEWL’s Company Secretary Arshad Mahmood.

SEWL’s main manufacturing facility is located on Raiwind Road in Lahore spread over an estate of 5 Acres. An additional 27 Acres has also been purchased by Sazgar at Raiwind Manga Road in Lahore to meet the future expansion needs.

The company further stated in a filing with the stock exchange that after completion of this project the annual production capacity of auto rickshaws will increase from 20,000 units to 30,000 units annually.

“It is expected that this project will be completed by 30th June, 2018 while the estimated cost of this project will be around Rs 330 million’, Mahmood added.

The project to increase production capacity will be financed through 20 percent Debt and 80 percent Equity. The equity shall be arranged through internal cash generation of the Company.

‘It is hoped that this expansion will have positive effect on future earnings of the SEWL” Mahmood said.

Having major market share of auto rickshaw in Karachi, SEWL enjoyed benefit from the improved situation and registered a growth in its sales volume. SEWL sold almost Rs 2 billion worth of auto rickshaws in 2015 while the same in 2014 stood at Rs 1.8 billion.

SEWL manufactured 13713 units of CNG auto rickshaws in 2015 as compared with 13414 units of auto rickshaws produced in 2014 by the company. Sazgar auto rickshaw’s estimated price is Rs150, 000.

Industry experts believe that improved law and order position in the country has started affecting positively on the business activities.

They said that following the Sindh High Court’s order to the Sindh government to take strict action against the illegal motorcycle rickshaw running in the province of Sindh, auto rickshaws’ demand has been increased in Karachi and other major cities of Sindh which is benefiting the rickshaw manufacturers. The auto rickshaw is facing a tough competition in the market and the company has to put great emphasis on this business segment not only to maintain its existing sales volume but also to increase its market share, they added.