Page 42 - CMA Journal (May-June 2025)

Focus Section

Linear Trap of Pakistan's Industrial Sector: a nation already grappling with water scarcity, energy
Role of CBMs shortages, and urban waste crises¹².
The inability of Pakistani industries to innovate will lead
The industrial sector in Pakistan, which contributes
to economic marginalization, as international trade
around 19% to GDP and is dominated by textiles, cement,
increasingly shifts toward circular economy standards.
plastics, steel, automotive, and food processing
Pakistan remains locked in an outdated model that
industries¹¹, follows a linear economic model based on
rewards volume over value, growth over regeneration,
extracting, producing, consuming, and discarding. This
and output over meaningful outcomes. It is therefore
system has supported short-term growth but at the cost
urgent to realign the industrial base with the principles of
of long-term sustainability. The sector still relies heavily
the circular economy.
on virgin raw materials, energy-intensive production
processes, and waste disposal methods that lack Circular Business Models (CBMs) offer practical solutions
recovery or reuse mechanisms. to environmental challenges while enhancing resource
efficiency and economic resilience. For instance, the
For example, textile mills discharge untreated dye into
circular supply model, which promotes the use of
rivers; construction companies leave large amounts of
renewable and recovered materials, is especially relevant
debris unmanaged; and plastic manufacturers show little
to the textile and plastic sectors where raw material
regard for recycling or recovery, contributing to rising
waste and pollution are significant concerns. Product life
urban pollution. Although this linear approach was once
extension strategies, such as remanufacturing and
seen as standard economic practice, it now poses serious
refurbishment, can be applied in the electronics,
threats to resource security, environmental integrity, and
automotive, and machinery industries—many of which
industrial competitiveness. System inefficiencies persist
already operate through informal repair networks that
due to outdated production technologies, lack of
could be formalized and scaled¹³.
integrated value chains, and the absence of waste
valorization systems. Such practices are unsustainable for
Table 2: Circular Business Models (CBMs) and Their Applications in Pakistani Industries
CBM Type Applicable Industries Application Key Benefits
1. Circular Supply Model - Textile Use of renewable, Reduces environmental
- Plastics biodegradable, or recycled footprint, lowers import
- Paper & Packaging materials as inputs dependency, and minimizes
- Leather landfill contribution
2. Product Life Extension - Electronics Remanufacturing, repairing, Reduces waste, creates jobs,
- Automotive refurbishing, or re-using formalizes the repair economy,
- Machinery & Equipment components/products lowers consumer cost
- Mobile Phones
- Home Appliances
3. Resource Recovery - Construction Recovering raw materials, Cuts waste management
- Steel & Cement recycling waste (e.g., cement, costs, recycles materials into
- Food Processing steel, packaging waste, food inputs, enhances eco-
- FMCG waste) compliance
4. Product-Service - Agricultural Machinery Shift from product Lowers CAPEX for users,
Systems (PSS) - Heavy Equipment ownership to leasing/shared extends asset lifetime, creates
- Home Appliances services service-based revenue streams
- Office Equipment
5. Sharing/Exchanging - Transport & Logistics Shared mobility, co- Improves resource utilization,
Models - Hospitality utilization of industrial assets fosters collaboration, reduces
- Co-working & Manufacturing (factories, warehouses idle capacity
SMEs and tools)
- Warehousing
6. Circular Design - Furniture & Handicrafts Designing products for re- Enhances brand image,
- Footwear use, modularity, disassembly, supports eco-design
- Fashion & Apparel and recycling standards, extends market
reach to green consumers
7. Industrial Symbiosis - Chemical Waste or by-products of one Reduces production cost,
- Energy industry become the input of promotes regional industrial
- Agro-based industries another ecosystems, enhances
- Pulp & Paper sustainability practices
Source: Author’s compilation
40 ICMA’s Chartered Management Accountant, May-June 2025