Millat Tractors Limited on Thursday announced that the company had decided to explore the option of joining the upcoming joint venture between Hyundai Motor Company and Nishat Mills Limited for the production of passenger cars and light trucks.
Company CEO and Director Sohail Bashir Rana has been authorised by the board of directors to initiate discussions with the consortium in this regard, said a notice Millat Tractors sent to the Pakistan Stock Exchange.
In the first week of February, Nishat Mills announced that it would enter into a joint venture with Korean automobile giant Hyundai Motor to set up a greenfield project – completely new infrastructure – for the assembly of vehicles.
Nishat Mills, which is part of the Nishat Group, is one of the largest integrated textile mills in Pakistan.
In the notice, Millat Tractors also declared a net profit of Rs1.76 billion in the first six months (Jul-Dec) of financial year 2016-17, significantly up by 242% compared with Rs515 million in the same period of previous year.
Earnings per share (EPS) rose to Rs39.79 compared to Rs11.62 in the corresponding period a year ago.
The history of Millat Tractors goes back to 1964, but its assembly plant was set up in 1967 for the production of tractors imported in semi-knocked down (SKD) condition.
From the production of just 8,000 units per annum with only two main product varieties in 1992, today the company is able to produce 45,000 units with eight different main models.
After the announcement of the new auto policy in March 2016, a number of foreign automobile companies have unveiled plans to set up their plants in Pakistan.
Just two months ago, Lucky Cement, one of the largest cement-makers in Pakistan, said it would set up a car plant in collaboration with Kia Motors with an investment of Rs12 billion. Both leading Korean automobile companies, Hyundai and Kia, used to assemble cars in Pakistan, but left the market mainly due to the liberal used car import policy during President Pervez Musharraf’s tenure.
In November 2016, French carmaker Renault also agreed to pour capital into a new factory in Pakistan and the production phase is expected to start in 2018.