Secondary and Tertiary Industry

Secondary
 It is the changing of raw materials from primary or secondary sectors into semi-
finished or finished products.
 … Through processing or manufacturing.

Inputs
 Capital
 Land
 Power
 Labor
 Enterprise
 Raw materials
 Transport
 Machinery

Processes
 Smelting
 Weaving
 Spinning
 Checking
 Dyeing
 Printing
 Canning
 Moulding
 Mixing
 Stitching
Output
 Cement
 Fertilizers
 Cotton yarn
 Sugar
 Iron (pig)
 Coils
 Drugs
 Fans
 Tractors
 Galvanized sheets

Factors influencing industrial location

 Collecting all inputs
o On low costs
 Processing / manufacturing items
o On low costs
 Market distribution
o For high profit

Physical factors
 Natural route sites requirement (Flat Land, Vast Land, Cheap Land)

Human factors
 Capital, raw materials, skilled labor, transport, government policies, access to market,
industrial linkages.
Raw materials
 Basic commodity from which semi or finished products are made
 May be of primary sectors (directly from ground / sea)
o Like fishing, forestry, farming, mining, etc.
o For example: wheat, cotton (raw), limestone, etc.
 It may also be of secondary industry (processed / semi-manufactured).
o For example: cotton yarn, wood pulp, coils, etc.

Examples of raw material

(Draw diagram from copy)
Types of secondary industry
Cottage
 Home based
 Family labor
 Inherited knowledge
 Traditional tools
 Low capital invested
 Very small output

Small scale
 Small amount of land
 Small amount of machinery
 Small amount of capital (up to 10 million rupees)
 Small amount of labor (10 people)
 Small amount of raw material
 Small outputs
 Small profit

Large scale
 Large amount of bulky raw materials
 Large amount of power
 Large amount of machinery
 Large amount of labor

Labor intensive
 This is where skills of labor is more important than machinery)
 For example: Cottage industry.
Capital intensive
 This is where machinery is more important than labor
 For example: large scale industry like steel and ship making

Heavy industry
 This is where weight of the output is far more than its price

Light Industry
 This is where weight of the output is far less than its price

Principal industries of Pakistan

Cotton Textile
 50% of employment to industrial labor
 60% of exports
 Foreign exchange earned
 Fulfils local demand so less import needed
 Utilizes local raw material
 Main areas are: Karachi, Hyderabad, Multan, Quetta and Faisalabad.

Problems of textile industry

 Leaf curl virus which reduces raw materials (cotton)
 Recession in international market so less demand abroad which reduces exports
 Competition from South Korea / Egypt affects exports
 Lack of finance
 Load shedding of electricity and natural gas reduces/delays production
 Lack of government attention which effects development
Q: What are the advantages and disadvantages of
developing the cotton manufacturing industry in
Pakistan?

Advantages
 Established industry / good reputation world wide
 Creates jobs / employment so develops skills
 Traditional skills / cheap labor available
 Value added exports / large scale export / main export.
 Higher price (because it is processed / value added)
 Farmers can increase income

Disadvantages
 Lack of money to invest / investors
 Lack of modern skills / education
 Competition from other countries
 Old machinery so more breakdowns, slow, old products (need to import
machinery)
 Water shortage for manufacturing / conflict with other users
 Power shortage / power breakdown
 Poor roads and railways / transport to ports
 Government policy / changing policies
 Less land for growing food and other crops
 Problems of pest attack / climate problems/ poor harvest
 Effects of increase in urban population
o Increase in rural – urban migration.
 Named pollution increases linked to cotton manufacturing
o Noise pollution as noise of machinery is very loud (may cause deafness)
 Machines will replace manpower so loss of unskilled labor
 Lack of investment in other industries / services
Cement industry
 Limestone, sulfur, gypsum locally available which are the main raw materials
 Coal / natural gas is available as fuel
 High demand in construction industry
o … dams, barrages, etc
o … bridges, underpasses, roads, etc
o … lining canals
o … houses / factories / hotel, etc
 Pakistan has insufficient timber for construction so use cement in some other parts
o Because steel industry is small
 Main areas are Salt Range, Karachi and Hyderabad.

Q: Explain the importance of concrete (cement) to the

development of Karachi.
 Developing / increasing population / industrialization of offices, housing, ports, roads,
etc.
 Used to make infrastructure
o For better roads for transport
o For better bridges for easy access
 Stronger building material
o Which is long – lasting / more durable
o Which also has a modern appearance.
 Improving slums / squatters
Fertilizer industry
 Natural gas as fuel
 Sulfur and gypsum are locally available which are the main raw materials
 Green revolution in agriculture so more demand
o .. use of HYV seeds thus more chemical fertilizers
 Soil is deficient in nitrogenous matter, so chemical fertilizers provide organic nutrients
to soil
 Growing population so more demand of food
 Main areas are Multan, Faisalabad, Mechigot, Haripur

Q: What are the benefits of increasing fertilizer

production for the people and economy of Pakistan?
 Higher yield
 More food production rate
 More agricultural exports or improved Balance of Payment
 Reduces imports of fertilizer or improved Balance of Payment
 Higher GDP / GNP
 Less debt
 Higher farm incomes / profit
 More jobs
 Cheaper cost of fertilizer
 More industrial goods (e.g. cotton)

Sugar mills
 Sugar cane abundantly available in Pakistan which is the main raw material
 High demand of sugar in Pakistan due to high population
 Main areas are Peshawar, Faisalabad and Nawab Shah
  Sugar mills must be close to area of sugar cultivation because

o Sugar cane must be crushed quickly after cutting

 As it loses its weight rapidly
 Reduces sugar content rapidly
o It keeps down transport cost because sugar cane is bulky therefore expensive
and difficult to transport.
 Sugar mills work only 160 days a year. This causes the following problems
o Seasonal employment / unemployment for the rest of the year
o Skilled workers may be lost to other industries permanently
o Inefficient use of machinery
o Machinery deteriorates with lack of use

Solutions
 Casual / unskilled labor migrate to other employment like cottage industries
 Many workers are poor farmers who return to their farms with the extra income
earned
 Offer incentives to keep skilled labor
 Some labor may be retained to look after the machines.

By-products of sugar mill and their uses

Bagasse
 Chipboards
 Paper
 Animal fodder
 Fuel
 Electricity
Molasses
 Packaging plastics
 Ethylene (in chemical industry)

Steel industry
Pakistan steel mill Karachi (at Pipri, established with the help of Russia)
 Imported
o Iron ore
o Manganese
o Coal
 Locally produced
o Limestone
o Coal
o Water (Haleji lake)
o Chromite
 Outputs
o Pig iron
o Rolled and cast billets
o Raw steel
o Galvanized sheets
o Coils
 Provides raw materials for engineering and construction industry for heavy mechanical
complex Texila

Heavy Mechanized Complex Texila (established with the help of China)

 It is a heavy engineering center.
 Inputs (they are outputs of steel mill, Karachi are imported)
o Pig iron
o Rolled and cast billets
o Raw steel
o Galvanized sheets
o Coils
  Outputs
o Tractors / other machinery for agriculture
o Machinery / equipment for HEP plants / thermal power plants
o Boilers
o Cranes
o Construction machinery
o Railway equipment

Brick kiln industry

 Inputs (raw materials)
o Coal, oil, wood (as fuel)
o Clay (the main raw material)
o Water (usually from a tube well)
o Capital
o Labor
o Land
 Processes
o Digging (the earth)
o Mixing (the clay and water to prepare paste)
o Molding (to shape the paste like bricks)
o Drying (unbaked bricks in sunlight)
o Baking / heating (the bricks to make them stronger)
 Output
o Fired bricks

Importance
 Employment for both males and females
 Bricks are used in construction
o For building houses, offices
o For building bridges
o For lining canals
 Shortage of wood in Pakistan / wood is expensive.
o So bricks are used in flooring to replace wood
 Shortage of steel due to few steel industries
o So bricks are used in roofing replacing steel/iron
 Cement ix expensive so bricks are sometimes used to reduce construction cost
Problems
 Bonded labor
o Very low wages
o So labor take loans and are forced to work in the same industry
 It includes child labor
 Expensive fuel
 Air and land pollution

Main areas
 Peshawar
 Potowar Plateau
 Harappa
 Bhakkat

Industrial estates
 Special areas reserved for industries
 Government offers incentives
o Exemption from customs or imported machinery
o Tax holidays
o Electricity / power supply
o Better roads
o Private power stations are allowed
o Simplified procedures
 Examples are:
o S.I.T.E (Sindh Industrial Trading Estates) Karachi
o Hattar Texila.
 Why choose industrial estate?
o Employment
o Goods for local needs
o Goods for export
o Increase in GDP/GNP so increases national income
o Reduces imports
o Attracts more investors
o Development of infrastructure e.g. roads, power, telecommunication
 o Reduces emigration & if in rural areas, reduces rural – urban migration
o More competition so improves quality of goods
o Stimulates growth of service industries
 Problems due to industrial estates
o Cost / lack of investment
o Lack of skilled labor due to high illiteracy
o Loss of agricultural land / trees
o Lack of infrastructure e.g. electricity, roads, water
o Lack of government support
o Pollution e.g. water, air, land
o Need for more imports e.g. machinery, raw materials, oil.
o Increase in rural – urban migration.

Export processing zones

 Special zones / places reserved for manufacture of export products
 Incentives are offered
o Tax holidays
o Exemption on custom duties (import of machinery)
o Simplified procedure
o Relaxation in foreign exchange control
 Why choose Export Processing Zones?
o To increase exports and so to increase foreign exchange
o Promoting industrial developing
o Checking quality
o Attracting investment and experts
 Examples are: Landhi, Karachi and Sambrial, Sialkot
Features of formal and informal sectors of
economy
Formal
 Capital intensive
 Employment by institution
 Regular working hours
 Decided wages
 Quality of goods
 Work in offices / factories
 Legal / registered
 Mainly adults / no child labor
 Pension schemes

Informal
 Labor intensive
 Self – employment
 Flexible working hours
 No fixed wages
 Poor quality of goods
 At home
 May not be registered
 Child labor

Q: Explain the advantages and disadvantages of formal

and informal labor.
Formal
Advantages
 Guarantee of products
 Warranty available
 Can be replaced quickly
 Fixed timings
 Disadvantages
 Expensive
 Not available at odd times
 Fixed prices (non-negotiable)

Informal

Advantages

 Cheap
 No fixed prices (negotiable)
 Availability at different timings

Disadvantages

 No guarantee
 No warranty
 Usually non-replaceable
 May not be available at certain times.

Q: Why is fertilizer industry an example of formal

sector?
 Capital intensive
 Fixed timings
 Fixed wages
 Quality goods
Importance of cottage and small scale
industry
 Employment
 Women employment
 Fulfils local demands
o Restricts imports
o Saves foreign exchange
 Exported e.g. carpets to Saudi Arabia
o Earns foreign exchange
o Improves Balance of Payment / Trade
 Reduces rural – urban migration as most of them are in villages
 Development of rural areas e.g roads / electricity
 It suits Pakistan’s developing economy as it does not require expensive technology and
machines
 Waste of large scale industry can be used to make products here.
 Contributes to GDP / GNP

Problems
 Limited profit
 Economy of scale not achieved
 Lack of quality
 Outdated machinery & methods used
 Wholesalers / middle man makes the most profit
 Electricity not available in many villages so work only in day light hours
 Limited training and technical advice available
 Lack of marketing
 Poverty / lack of finance
 Child labor
 Illiteracy
Steps to improve
 Establishing small industrial estates
 Marketing facilities be provided
 Technical service centers be established
 Pre – investment counseling and guidance
 Loans on easy installment to purchase machinery
 Rural electrification
 Provision of roads from industries to markets for easy purchase of inputs / easy sale of
products
 Handcraft development centers have been established
 Organizations like PSIC, SSIC, etc have been established
 Tax breaks to reduce financial burden
 Dry ports for exports from inland cities
 Telecommunication improvements for better contact with the market
 More use of machinery
o Thus more value – added goods so more profits

Examples of cottage & small scale

industries
 Carpets
 Wood carving
 Embroidery
 Jewelry
 Sports goods
 Surgical goods
Q: Explain the importance of mechanization to the craft
industry and other small scale industries of Pakistan
 Faster
 Larger production
 Lower labor cost / cheaper
 Less work / easy / less tiring
 Standardized product / better quality.
 Can replace child labor
 New skills earned

Secondary industry and environment

 It produces
o Air pollution due to smoke
o Water pollution due to poor disposal of industrial waste in rivers, lakes, etc
o Noise pollution due to noise of machinery
o Land pollution when industrial waste is dumped underground

Effects
 Diseases e.g. deafness, diarrhea
 Contamination of sub soil water effects food crops and supplies of drinking water from
wells
 Industrial waste harmful for irrigation of crops
 Threat to marine life e.g. fish due to polluted water
 Threat to mangroves due to polluted water

How to control
 Awareness campaigns e.g. NGO’s should cooperate
 Protests / show of concern by public
 Strict enforcement of environmental laws
 Water treatment plants be installed to purify water
  Green trees be planted to reduce air pollution
 Industries should be established away from residential areas

Tertiary Industry
 Service sector e.g. public administration, defence, tourism, etc
 Tourism means the whole business of providing accommodation and recreation facilities
for those who are traveling, staying or visiting a place for a relatively short period of
time, primarily for pleasure seeking.

Advantages
 Invisible export therefore helps to earn foreign exchange which improves
Balance of Payment
 Source of employment for different people like tourist guides
 It helps to improved local areas infrastructures e.g. electricity, roads, water,
sanitation, etc
 Provision of other modern facilities e.g. shops
 Local tourists can utilize the facilities
 Development of cottage industry e.g. souvenirs
 Cultural linkage
 Reduces rural – urban migration because many tourists resorts are in rural areas
 Sustainable industry

Disadvantages
 Expensive to develop as Pakistan is a developing country
 Seasonal employment like tourists (winter or summer or spring, etc)
 Local culture destroyed
 Foreign tourists sometimes do not respect locals and their customs
 Litter / garbage (air and land pollution)
 Resettlement of local people
 Natural habitat destroyed due to deforestation
 Facilities may not be affordable for local tourists
 Locals may lose their traditional jobs
 Political situation and security situation (threat)
Tourist attractions
 Natural tourist sites e.g.
o Kaghan, Swat, Gilgit, Skardu, Hunza, Chitral
 Archeological
o Moen – jo – daro, Badshahi Mosque, Shalimar Gardens
 Modern buildings
o Faisal mosque, the Parliamentary building in Islamabad.