Tausif-ur-Rehman
Hussain Ahmed Fazal, the Director of Hussain Textile Mills joined the family business of textile milling at an early age and with his hard work, passion and vision developed not only the infrastructure of the company to meet the changing
business environment but improved sales as well. When he joined the company, there were around 14,000 spindles and now it stands at 90,000 spindles and 131 air jet looms while the turn over last year stood at PKR. 15.764 billion.
His textile mill is now the largest producer of organic cotton yarn in Pakistan having a production capacity of 816480 kg per month. It manufactures all kinds of dyed fabrics including PFGD, PFP, PFD bleach and printed. The company enjoys the privilege of being one of the best sterilized labs in Pakistan with certification from Uster.
Another significant achievement of the mill is collaboration with Elan. “We collaborated with Ms. Khadija in 2013 for lawn and we have done 2 years successful lawn branding with her.” He said. The collection was widely regarded as a must-buy for lawn consumers. “It was an unexpected overwhelming response. The brand now stands among the top five lawn brands in Pakistan.”
Hussain believes that for a successful businessman it is important he does not lose sight of strategic goals, balanced product mix, careful risk management, and effective cost control measures.
“I have always believed in discipline but at the same time I developed a flexible and cooperative environment for my workers and staff members. I have made sure that our employees consider themselves as stakeholders in our achievements and that’s the reason we have strong presence in the emerging competitive market of textiles” Hussain said in an interview with the Economic Affairs. Below are the excerpts from the interview.
EA: What are the most important things needed in today’s competitive world for the success of any textile and apparel company?
Hussain Ahmed Fazal: Well, being agriculture based economy where we are among the best producers of cotton having flexible ways of value addition. I would say conducive working environment for workers, discipline in every field of work, regularity in policies and handling the current phenomenon of day to day strikes.
EA: What are the challenges you have identified in the clothing sector and how do you think an industry can rectify it?
Hussain Ahmed Fazal: I think what I have identified as a real challenge in the clothing sector is the lack of properly educated, skilled and motivated middle management. Thought most of the companies would go after highly educated managers but my experience has taught me that it’s the middle management which is the backbone of our industry supported by skilled labor. I know many people in this industry believe otherwise like hiring top educated people, sending them to international seminars to enhance their technical, managerial and analytical skills. But I would still stick to my point that the real challenge is finding the educated and motivated middle management if we want Pakistan to compete with worldwide competitors.
EA: The GSP plus status will enable Pakistan to export more than $1 billion worth of products to the international markets each year. Have you noticed growth in demand for your products since the grant of GSP plus status and what do you expect for the foreseeable future?
Hussain Ahmed Fazal: Well this is an important point that you raised and I would like to educate your viewers on this particular subject and talk about subject of GPS plus status. No doubt that it offered a big edge for Pakistan textile sector by getting 11% duty off to the European market. Like every business, textile sector has to consider the chain of demand and supply. First we have to understand how we can benefit from this GSP Plus status. If all goes well as planned, even then in textile, one sector spinning and weaving is getting benefit if we fix all variables. If European buyers take yarn or fabric then they have to do processing and fabrication in Europe and get benefit for very basic raw material where they can save money in some cents.
On the other side, with final product imports from Pakistan, they can get benefit in dollars as value added products. It means cost of production in Europe is same where as they get less benefit as duty of basic raw material like yarn or greige fabric but then a person who is importing ready to sell produce from Pakistan saves couple of dollars against each complete trouser, shirt or sheets.
Because of the sudden revaluation of Rupee vs. US Dollar merging 11% duty benefit from others, we are again at same level of Bangladesh and other competing counties without having any distinct benefit. Our input cost has increased significantly. The only way to get this benefit is if government can support to put up value added opening with attractive benefits so that Pakistan can get maximum benefits on value addition from other competitors.
EA: How have the designer lawn brands affected the un- popular non branded cloth manufacturers in Pakistan?
Hussain Ahmed Fazal: I personally believe that local brand recognition in Pakistan is playing an important role in our economy. If we compare with India and Turkey, their strength is domestic brand recognition that always compensates the market when international crises hit.
Similarly, during the last 7 years our local market demands have played an important role in brand recognition that will boost economy of the country along with exploring new horizons in south Asian countries like India, Bangladesh, and UAE etc. But at the same time we cannot put aside the non-branded portions that meet the need of 96% of our population. So the major portion of our economy will be based on conventional products where there will be flexibility in prices according to the buying power of our majority population.
EA: The general perception is that insurance for employees doesn’t exist for the working class in Pakistan so that they have a safety net to fall back on. What’s your take on that?
Hussain Ahmed Fazal: No, I’ll completely dispel this impression and put it on record that good companies offer accidental insurance and some good companies offer employees with full medical insurance. Social security is also playing an important role in this area.
EA: How do you see the architects not making the emergency exits plus the safety standards in our factories? How are the health and safety standards in local factories of Pakistan?
Hussain Ahmed Fazal: Here I would say that Pakistan is one of those countries where almost all industry is structured within international standards. Good factories are having certification from social compliances, as most of the leading brands/customers work with those companies that meet social compliance. In addition to that we have the edge of cheap lands and well organized structure that most of the companies in Pakistan possess. Also we have proper ventilation system which factories in the neighboring countries lack and the factories there are congested due to shortage of space.
EA: How is the government facilitating the textile industry and foreign investors in textile sector?
Hussain Ahmed Fazal: It is something that really needs attention because the government is not supporting industry like other countries; for example we are not offered export finance facility in most of the sectors by the government which is our key demand. Provision of non-stop supply or gas and electricity is another area where the government needs to support our industry.
EA: Who is the biggest importer of your products? Which country and region is most beneficial for textile trade?
Hussain Ahmed Fazal: Pakistan textiles are no doubt being exported to almost all the countries of the world but our major market has been Middle East, Europe, China and America.
EA: Which are the countries where you plan to focus for further development?
Hussain Ahmed Fazal: We have been focusing over the last few years on South Asian region and some countries of Latin America.
EA: Pakistan has seen a steep decline in exports lately; exported textile goods worth $1.054 billion in April against $1.235 billion in March — a decline of 14.6%. Is it only due to the power shortage? Do you think government should focus more on energy sector compared to the interest in building roads?
Hussain Ahmed Fazal: I would disagree that decline in export is the result of non-provision of electricity. There are other reasons as well like law and order situation, no continuity in policies on the part of the government and above all not offering the export finance facility to the mill owners by the government.
EA: How do you see the ministry’s goal of doubling the rate of value addition, which is currently at conversion of one million bales into $ 1 billion?
Hussain Ahmed Fazal: Yes, first government has to provide conducive environment where people can plan the forecast of demands and prepare themselves to fulfill them. It is only possible when a clear policy from the government is made to support value added factor with special incentives like export refinance with attractive benefits, rebate against export and stability in the textile zone as well as subsidized supply of Wapda/Gas supply for continuous production at reasonable prices to boost up the confidence of value added suppliers as well as newcomers in this sector.
Tausif-ur-Rehman is the Editor of Monthly Economic Affairs. Email: Islamabadpbc@gmail.com
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