What difference did you find between Pakistani and foreign companies?
Certainly, there are plenty of differences. But still, there has been a lot of progress in Pakistani companies. They have grown enough along with their evolving business culture. There are numerous Pakistani companies that you can proudly say they can stand shoulder to shoulder to international companies. They compete with multinational companies in terms of human resource, procedure systems and etc.
What is the level of the culture which you refer to and how long would it take to be evolved completely?
This culture has been developed in Pakistani companies to a large extent. There are many good examples of Pakistani companies which are in the export business including textile companies. Some Pakistani companies are ahead of the curve and some are catching up despite competing imports. There is a lot of change in culture and evolution and what I have observed during my decade long experience is that there is plenty of improvement.
If it is so then why is it not being reflected in Pakistan’s economy which is struggling for a long time?
I am an optimist when it comes to Pakistan’s economy. We are advancing with 4-5 percent growth rate and there is much more potential. We {Pakistan} have done good things. Look at corporate results, they have done well except for the last five to six months and companies have grown. In the stock exchange, the people have multiplied their wealth. Our Blue Chip companies have also seen growth. Our economy is facing structural issues. In the prevailing environment, our institutions are doing reasonably well.
How long would it take to bring about the changes in the economy that we wish to and start producing results?
The recent performance of the economy has been a little bit discouraging. But we were overextended with respect to the balance of payments, imports and etc. This is a temporary phase; we have to readjust and take tough decisions which will lead to a rough period spreading over 12 to 24 months with a higher cost of doing business. But the successive period would be another golden period of the country.
In such a difficult period of Pakistan’s economy how come Pakistan Cables succeeded in achieving success? What’s the secret?
Actually, there is a legacy of being the very first cable company in Pakistan. We have developed our company as well as our brand over the decades and our growth has been encouraging especially during the last five to six years. Our sales are almost Rs.10 billion, three times more than Rs.3 billion a decade back when I joined the company. Now we are the strongest brand in the cable industry. It’s continuous progress with best corporate practices and also the result of an unflinching struggle. But still we are a very comparative industry, we have to be on our toes all the time and every day is a new challenge. Also, we had an advantage of partnerships with international companies where we learned a lot in terms of best practices and technology etc.
The emergence of China in global markets has brought a big change. What is the biggest challenge Pakistan Cables is facing in such a changing environment?
It’s like a glass, half full and half empty. There may be a kind of thought that Pakistani companies would collapse as they cannot compete with Chinese companies for they are having huge support from their government. But equally present are opportunities in the wake of CPEC and you have nothing but a choice to accept a challenge and improve immediately. Living with an obsolete method, you are not able to survive, you have to relook at yourself and grab an opportunity to take full advantage.
Indeed, there is a threat with respect to the Chinese. Pakistani industries including cable industry are concerned as regards their survival. If Chinese setup plants in Special Economic Zones (SEZs) with multiple exemptions and their connections back in their countries, we have to be aware of that. What we have to do is to be as efficient as the Chinese.
Would not you take up with the government the issue of exemptions given to Chinese?
Yes surely. This is a big issue. Chinese get exemptions in duty and sales tax on import of finished goods including cables. If any company imports cables free of duties and sales tax then how can we compete with it? Our (Pakistani companies) net margins are three to five percent and growth is ten to fifteen percent. How can we afford the disadvantage of seventeen percent alone in sales tax? Cable Industries Association has felt the urgency and has taken up this issue with National Assembly’s Standing Committee on Finance and the Senate Standing Committee. We have raised this issue at all highest forums and have also got some protection with respect to regularity duties. I think the government has understood the issue and we have got a lot of support from the Senate Committee which recommended giving a level playing field to local industry. This is what we really want.
In CPEC, a large part is related to cables and we (Pakistani cable industry) have the capacity to meet the rising demand. I don’t know why there is a misperception that the local industry does not have the capacity. There are three to four big companies here. We are not small companies no matter we are facing tough competition in the local market.
The people are hopeful that the government will protect local industry at last and CPEC will be open for all. Thus, it will create a huge demand. What are your plans to meet it?
Yes, we have plans. We anticipate that at some point sanity will prevail as there are many so many reasonable people including Asad Umer and Razzak Dawood and many other understanding top bureaucrats in the government. Keeping in view Pak-China relationship, ultimately sanity will prevail.
In this backdrop, we think there is a lot of capacity in the future. We have already prepared for expansion including PMR and machinery etc. But still, we cannot overextend until these things turn clear.
Simultaneously, Pakistan Cables does see a lot of potential in electrification which is yet to take place a lot in the country. New Transmission lines are to be laid and the distribution system has to be set up in the country besides housing units and other projects in conceiving stage. Over 200 million people have to be given many facilities which naturally creates growing demand for over a decade or so.
Since you are in the cable business, I may ask what the actual lines losses in Pakistan are? Do you have some real digits?
There are two types of line losses. One, the technical losses and two, theft. Technical losses happen in transmission lines while losses due to pilferage are with distribution networks. Now, K-electric and DISCOs are going for Arial Bundle Cable (ABC) which will discourage pilferage in the distribution network. But as far as the transmission lines are concerned, they don’t have capacity matching with power generation capacity. You cannot evacuate full power capacity to your area. Also, old transmission lines which are traditional conductors called ACSR continue incurring technical losses.
To address this issue, we have introduced a new technology in Pakistan. It is called Aluminum Conductor Composite Coal (ACCC) produced by a US company CTC. ACCC gives 30 percent more output in the same cross-section. We have used ACCC in an NTDC pilot project. This is installed in various countries on 65 thousand kilometers in the world. This is a proven and genuine solution to the problem.
Would you like to tell us about Corporate Social Responsibility (CSR) initiatives of Pakistan Cables?
Nowadays, CSR has become like a buzz word. Also, the government is focusing on it during the last five-ten years. But our approach is 65 years old that focuses on ethics and best practices. We have always had a proactive CSR and taken many initiatives. Recently, we have received an award in CSR. Last year we launched with Karachi Biennale an initiative ‘Reel On Hai’ in which cable reels were painted by artists and displayed in Karachi.n
