International Finance Corporation (IFC), in collaboration with a consortium of local banks, including HBL, Meezan Bank, Bank Alfalah, and Habib Metropolitan Bank, is set to provide up to $50.2 million-equivalent in financing to support the development of Armstrong ZE Pvt. Ltd.’s greenfield tyre manufacturing facility in Gharo town, Sindh. This strategic partnership aims to boost local tyre production, reduce imports, and strengthen Pakistan’s manufacturing capacity.
The financing package consists of a $25 million loan from IFC and an up to $25.2 million investment in Pakistani rupees from the consortium of local banks. This funding will enable Armstrong ZE to establish a state-of-the-art manufacturing plant, marking a significant step in introducing a locally manufactured international tyre brand to Pakistan. The project is expected to improve consumer access to quality, affordable tyres while contributing to job creation, strengthening local supply chains, and promoting private sector-led growth.
The tyre manufacturing sector in Pakistan has long struggled with constraints due to a lack of technical expertise, advanced technology, and a thriving informal market. Consequently, the country has relied heavily on tyre imports, which has put pressure on foreign currency reserves. However, the development of Armstrong ZE’s greenfield plant is set to alleviate these challenges by introducing local production capabilities, reducing dependency on imports, and boosting Pakistan’s foreign reserves in the long term.
Mr. Azim Yusufzai, Chairman of Armstrong ZE, expressed his appreciation for the support of IFC and its partner banks, stating, “Armstrong ZE is deeply honored to have earned the trust and support of IFC and our partner banks; HBL, Meezan Bank, Bank Alfalah, and Habib Metropolitan Bank. Their investment in this transformative project is not just a financial endorsement but also a strong vote of confidence in our vision, capabilities, and potential to shape the future of tyre manufacturing.”
The financing is expected to create over 1,800 direct and indirect jobs, further boosting Pakistan’s manufacturing sector. Additionally, the project will enhance the competitiveness of the tyre industry by facilitating technology and know-how transfers, allowing local manufacturers to adopt best practices and modern techniques in production.
IFC’s support goes beyond financial assistance; the institution will also provide advisory services through its Responsible Investing Support in Emerging Economies (RISE) program. This support will help Armstrong ZE strengthen its climate risk management, resource efficiency, and environmental and social processes to ensure a sustainable and responsible expansion.
Khawaja Aftab Ahmed, IFC’s Regional Director for the Middle East, Pakistan, and Afghanistan, highlighted the significance of the project, saying, “This investment exemplifies IFC’s commitment to improving Pakistan’s value-added manufacturing capacity. It will help improve consumer access to tyres while spurring the economy through job creation, increased productivity, and reduced reliance on imports.”
Armstrong ZE’s expertise in the tyre industry is backed by its parent company, Zafco Group Holding, a UAE-based global player in the tyre, battery, and lubricant markets with a presence in over 85 countries. The partnership is expected to foster innovation and contribute to the sustainable development of Pakistan’s tyre industry.
This collaboration between IFC, local banks, and Armstrong ZE is a testament to the growing importance of public-private partnerships in driving economic growth and industrial development in Pakistan. By investing in local manufacturing, the project not only contributes to Pakistan’s economic development but also helps address critical environmental challenges by promoting sustainable production practices.