Lucky Motors enters into an agreement with Samsung to produce Mobile phones in Pakistan

July 16, 2021 (MLN): Lucky Motor Corporation Limited (LMC), (a subsidiary of Lucky Cement Limited), which is currently engaged in the business of manufacturing, assembly, marketing, distribution and sales of Kia and Peugeot branded vehicles, parts, and accessories thereof, in Pakistan, has recently entered into an agreement with Samsung Gulf Electronics Co., FZE ("Samsung") for producing Samsung branded Mobile Devices in Pakistan.

In a notification to PSX, Lucky Cement informed that in pursuance of this transaction, LMC has also initiated the process of seeking necessary regulatory approvals to carry on the said business and in this endeavor, has filed an application with Pakistan Telecommunication Authority (PTA) for securing the license,

The production facility for producing Samsung Mobile Devices will be located at LMC's existing plant facility producing vehicles at Bin Qasim Industrial Park, Special Economic Zone, Port Qasim-Karachi.

The production facility is anticipated to be completed by end of December 2021. Further information on the amount contemplated to be invested in the production facility and the capacity thereof shall be discussed between the Parties (Samsung and LMC) in due course of time.

Sharing views on the aforementioned development, Mattias Martinsson, Founder and Chief Investment Officer at Tundra Fonder said, "with a mobile subscriber base of approx 185m people, Pakistan imported around 35 million mobile phones in 2020 (up from 28m in 2019, and 17m in 2018). Following Xiaomi, Samsung now is starting local production and more manufacturers will follow."

The main benefit of local production is not the FX it saves. Instead, it is the technical knowledge transfer and the improvement of the human capital base (NPV of future salaries increases with higher value-added employment), he added.

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