KARACHI: Ismail Industries Limited, the manufacturer of popular biscuits Cocomo, has announced its plans to expand its businesses outside Pakistan and set up a subsidiary in the UAE.

The move, an indication of business relocating abroad due to poor economic conditions in Pakistan, was made public on Friday, through a notice issued to the Pakistan Stock Exchange on Friday.

“The Board of Directors (BoD) has resolved to establish/set-up a wholly owned subsidiary of the company in Abu Dhabi, UAE.”

The confectionery company informed its shareholders that the subsidiary would manufacture, market, sell, and distribute all kinds of food, including biscuits, confectionery, and other confectionery.

The company said it would “seek all necessary regulatory approvals” and proceed with its plans after completing all formalities.

The UAE, particularly Dubai, has been the choice destination for foreign and Pakistani investors who have shifted their wealth to the Gulf state.

According to the data prepared by the US-based non-profit Centre for Advanced Defence Studies, over 23,000 listed properties in Dubai belong to Pakistani nationals up till 2022.

These were valued at $10bn two years ago but are now worth $12.5bn, if not more, given the 25 per cent increase in property prices in the emirate.

Local exporters and importers have also set up offices in Dubai for facilities which are not available in Pakistan.

Businesses and industries have been grappling with chronic issues like the shortage of electricity, gas and water in Pakistan. Now the deteriorating law and order situation in most parts of the country and particularly the commercial hub, Karachi, is fueling uncertainty for the businesses and their proprietors.

Earlier, Treet Corporation had incorporated a wholly-owned subsidiary in Dubai and told its shareholders that it was a “strategic move”, reflecting their intention to expand their investment in Dubai.

Last week, CNBC reported that the UAE is set to be — for the third year in a row — the world’s top destination for the wealthy. It expects to see a record-breaking inflow of 6,700 millionaires by year’s end.

These inflows into the UAE are largely boosted by movement out of the greater Middle Eastern region, India, Russia, Africa and more recently, the United Kingdom and Europe, according to the research.

However, the shifting of Pakistani companies and investments to the UAE, particularly Dubai, is an indication of the stifling business environment in Pakistan which could force more companies out of Pakistan.

Published in Dawn, June 29th, 2024