LAHORE: The Airlink Communication Limited sent shockwaves through the market last Thursday after announcing that it had plans of setting up a manufacturing facility for AirV electric bikes in Lahore, an announcement that immediately made people wonder whether the company would be able to deliver yet again on its plan to diversify. This was stated in a notice that the company released to the Pakistan Stock Exchange (PSX).

Location of the AirV Electric Bike Manufacturing Plant

It was clarified by the AirV Company that the location of the AirV electric bike manufacturing plant would be within the existing manufacturing plant located in the Sundar Green Special Economic Zone (SGSEZ) in Lahore. Since Airlink is operating manufacturing plants in the same location, the new manufacturing plant for AirV electric bikes would make use of the existing facilities instead of developing everything anew. This strategy may prove to be cost-saving in terms of capital, although at the same time dependent on the success of Airlink’s overall manufacturing operations.

A Risky Gamble on Pakistan’s Changing Mobility Landscape

Airlink positioned the AirV electric bike manufacturing unit as a step towards diversification from its existing business lines of smartphones and IT distribution. The firm expressed its desire to tap into the growing need for electric mobility in Pakistan, which has grown tremendously due to increased cost of fuel and people’s need for an economical means of commuting. This is especially true in urban areas where economy and efficiency take precedence over range.

Despite this, the news comes at a time when there are several players vying for a position within the industry, increasing the competition even before the Airlink AirV electric bike plant begins production. In addition, experts from the industry warn that the early players in the Pakistan electric vehicle market have been facing challenges in terms of logistics constraints, lack of charging infrastructure, and unclear regulations.

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Management Has a Broad Mandate from Board

As per PSX filing, management of Airlink has been granted a mandate by its board to take up all the legal and other commercial actions necessary for setting up the AirV electric bike plant. The broad mandate provides management some flexibility but does not provide any transparency to the investors about their investments in the project.

One Part of a Larger Diversification Trend

This is far from being the first time that Airlink has gone beyond its core operations. Last year, the company formed a wholly-owned subsidiary called ZEXO Technologies (Private) Limited, which had an authorized capital of Rs 200 million. With this new factory producing the AirV electric bicycle, Airlink can be seen making a second significant foray into diversification within a relatively short period of time.

Background Information about the Company

Airlink Communication Ltd is a private limited company which was formed in January 2014 and then transformed to a public limited company in April 2019. This company has made its name by being involved in importing, exporting, and distribution of communication and information technology equipment such as laptops, smartphones, and tablets. However, moving to production of electric vehicles from AirV electric bike factory represents a big change from its previous business models.