Saturday, January 30, 2010

Businesses advised not to depend on govt assistance

The News
Saturday, January 30, 2010
By By Mansoor Ahmad
LAHORE: Successful entrepreneurs from knitwear, packaging and auto sector talking to The News have advised their counterparts in trade to promote best management practices and go for innovation instead of looking towards government for dole outs and facilitations.

They said that facilitations and concessions if offered by the government at any time would be more useful for those entrepreneurs that improved their efficiencies and management skills during the hard times. Those that expect to survive on dole-outs would come under pressure again when concessions are withdrawn.

They said that in a badly governed country like Pakistan it was a folly to pin hopes on government. They said the entrepreneurs would have to innovate and upgrade technology to produce value added products with maximum efficiency.

Pakistan Hosiery Manufacturers Association Vice Chairman Adil Butt said that the deteriorating economic conditions in the country were taken as a challenge by his organisation. He said his company used the research and development grant provided by the government after 2005 for the same purpose that prepared the company for competition. He said entrepreneurs that used the R&D grant to capture export orders at lower rates faced the music when this facility was withdrawn.

He said instead of brooding over high cost of doing business his company opted to increase production to achieve economies of scale and at the same time controlled wastages as the sponsor directors remained on the manufacturing floors to ensure that all guidelines of the good management practices are fully adhered.

Adil Butt said even after offering the clothing at extremely sharp margins the company earned more profit than it did during the boom of knitwear exports in the late 90’s. He said his firm gave nine bonuses to its entire workforce this year on the basis of high profits earned.

He said the steep depreciation in the rupee value did help the company a lot. However the basic point was that the firm has established its reputation as the quality knitwear supplier.

He said the earning would have been exorbitant had the government policies been supportive. The efficiencies now achieved he added would serve his company when economy resumes normal growth path supported by prudent government policies.

Nabeel Hashmi who is in auto-parts manufacturing and LPG distribution business said that the slump in car industry provided him an opportunity to diversify and start making parts for other industries.

He said auto-parts makers supply to the original equipment manufacturers according to the standards dictated by their principles in Japan and Korea.

This he added has equipped the auto-parts manufacturers to make precision components according to best global standards. Hashmi said now he is applying the same skill to make precision parts for other industries that were importing spare parts at exorbitant rates.

Hashmi said earlier his exports were limited to auto-parts only now he exports number of components for the engineering industries. He said he has further diversified in to making gardening gadgets for domestic market. Now he added he is forced to expand his manufacturing facility and construction is on at five times larger area in Sundar Estate.

Chief Executive Officer of SPEL Almas Hyder said that his company registered a growth of 50 per cent this year when most of the companies struggled to survive. He said the success was possible due to stress on diversity of business, stress on quality and prudent marketing. He said his concern diversified much before the economic slump started from auto-parts to die moulding and packaging. “We knew from our past experience that Pakistan’s economy is managed non-transparently through inconsistent policies that have subjected it to periodic ups and downs.”

Almas said the main emphasis of the management had been on quality and efficiency through upgradation of technology. He said during past three years his company has maintained robust growth. He said his exports are increasing along with the local sales. He said he has strengthened the human resource of the company by engaging the best brains in the industry that were retrenched by failing companies due to economic crunch.