MAF Hypermarket's official website confirms that it plans to open 10 Carrefour stores in Pakistan, Syria, Iran and Bahrain.
MAF expands to Pakistan
DUBAI // MAF Hypermarkets, a subsidiary of Dubai's Majid Al Futtaim Holding, is planning to open seven hypermarkets in five Pakistani cities within the next two years, a senior official said yesterday. Mansoor Bajwa, the commercial consul at the Pakistan Consulate in Dubai, said the first of the seven Carrefour stores would open in Lahore by the end of this year.
According to reports in Pakistan's media, the investment by MAF Hypermarkets could be in excess of US$1 billion (Dh3.67bn). The reports said MAF could open as many as 10 Carrefour stores in the next five years, citing a meeting between the officials of MAF Hypermarkets Pakistan, a fully-owned subsidiary of MAF Hypermarkets, and Saleem H Mandviwala, the chairman of the Board of Investment (BoI), a Pakistan government body tasked with promoting and regulating foreign direct investments in Pakistan.
Mr Bajwa said he could not disclose the total size of the investment. "We have no idea what the total investment would be, but setting up a major chain of stores would take substantial investment." Officials with MAF Hypermarket were unavailable for comment on the deal, however the company's official website confirms that it plans to open 10 Carrefour hypermarkets in the next 12 months in Pakistan, Syria, Iran and Bahrain.
Mr Bajwa said the UAE investors were initially planning two Carrefour store in Lahore - construction of the first is already under way at a cost of 1.2bn Pakistani rupees (Dh54 million) - two stores in Karachi and one each in Islamabad, Multan and Faisalabad. "These stores will be open by 2010 and will create direct employment for 5000 people," he said. "We have facilitated the negotiations between BoI and MAF Hypermarkets and worked on this deal for over a year."
Mr Bajwa said that Pakistan, with a population of 170 million, was an attractive market for any retail chain. "The market is wide and there are ample opportunities for growth." MAF Hypermarkets owns and operates a wide portfolio of hypermarket chains in the UAE, Saudi Arabia, Egypt, Qatar, Jordan, Oman and Kuwait. It also has a joint venture with France-based Carrefour, the world's second-largest retailer.
MAF Group earlier this month announced that it would invest $1bn in Syria to build a mixed-use development complete with a hotel, serviced apartments and a mall anchored around a major Carrefour store. MAF's entry into Pakistan's retail sector is the first major announcement of foreign direct investment in the politically shaken nation since its former president, Pervez Musharraf, resigned in August.
Pakistan is facing tough economic times as the country's foreign exchange reserves are fast dwindling, from $14.3bn in June last year to $4.7bn last month, while the rupee has lost 25 per cent of its value this year and the stock market has dropped 35 per cent, according to a recent International Monetary Fund (IMF) report. A Pakistani delegation is meeting with an IMF team in Dubai to discuss a rescue package to avoid a balance of payment crisis.
According to an IMF spokesman, there will be several meetings in the next few days before a conclusion is reached. Foreign direct investment in Pakistan increased from $4.48bn for the 2005-2006 fiscal year to $8.4bn for the 2006-2007 fiscal year. The trend reversed as political instability shook the country and fell back to $5.19bn in the fiscal year that ended in June. Still, Pakistan's proximity to the Gulf and close ties with Gulf investors are expected to keep the country in the investment spotlight, if it remains relatively stable politically.
UAE and Pakistani officials had begun discussions regarding large-scale land sales to UAE investors for agricultural use, however the pace of negotiations for investments up to $500m in agricultural land has slowed down as the security situation in Pakistan deteriorates. UAE investors have significant investments in Pakistan's banking, telecoms and property sectors, and the UAE is the largest single foreign direct investor in Pakistan.