How Sugar industry can help ease Pakistan's energy crisis

Taking too much sugar may be bad for your health, but not for your country. Sugar industry can help ease the energy crisis faced by Pakistan for more than a decade.

The energy shortage is growing with ever increasing population and rising domestic consumption.  The production gap can be met by mobilizing sugar mills to produce electricity. The bagasse produced by sugar mills can be used to produce thermal energy for onsite use as well as production of electricity.

In many countries of the world sugar mills are earning more from selling electricity than they earn from selling sugar. Sugar industry is second largest, with 89 mills; agro based industry of Pakistan after textile and therefore offers tremendous potential to fill the energy gap.

A sugar mill crushing 2000 tons cane can produce 9 MW of electricity after meeting its own requirement. The total estimated power potential of Pakistan’s sugar industry is 2000MW. The cost of producing electricity is very low as the fuel (bagasse) is available at no cost. The raw material need not to be transported so considerable savings can be made on transportation head. Transportation losses can also be reduced as bagasse power plants are decentralized. Moreover, there is zero carbon dioxide emission as bagasse is a biomass. During combustion biomass re-releases carbon dioxide into the air.

Most of the sugar mills in Pakistan use bagasse to heat inefficient boilers of 26bar. The Indian sugar industry is using 50bar boilers, which uses half as much bagasse as used by 26bar boiler to produce the same megawatts of energy.

The high pressure boiler (80-100bar) available in Pakistan cost from 700 million rupees to 1 billion rupees. The high investment involves make it unfeasible for using these boilers only for 120 days, the cane crushing season. For the rest part of the year sugar industry wants to utilize coal and other biomass fuels like rice bran, corn cobs.

Cherat Cement announced expansion plan

Cherat Cement, on Monday, announced it would install a third cement production line at its existing site in Nowshera. Cement manufacturers are announcing expansion plans in the wake of growing cement demand.

CPEC is expected to generate additional cement demand of 1.5-3 million tons per annum

The new plant is expected to have an annual production capacity of 2.1 million tons, taking the company’s total output to 4.5 million tons a year. The company’s total production capacity is about 10% of the current installed production capacity in Pakistan.

The company was already working on its second production line, expected to have capacity 1.3 million tons. This plant is expected to come online in the second half of fiscal year 2016-17.

Cherat Cement Company Limited (CHCC) was established in 1981. CHCC started manufacturing, marketing and sale of Ordinary Portland Cement in 1985. At that time, the company had the production capacity of 1,100 tons per day, which was increased to 3,300 tons per day in 2005 after subsequent up gradations earlier.

The company supplies cement to the northern block; Punjab, KP, FATA and adjoining areas and exports its cement to Afghanistan and Indian Punjab. The company’s plant is strategically located, about 52 kilometers away from Peshawar, near the Pak Afghan border and this proximity to the border allows for lower distribution costs than its competitors.

Cherat Cement’s latest expansion plan will be entirely financed by debt, costing close to Rs13 billion, according to JS Research. This production line may become operational by year 2020. The company also intends to bring another Waste Heat Recovery along with the new line, according to the JS Research report.

The establishment of its first Waste Heat Recovery (WHR) in 2010, a Tyre Derived Fuel Processing Plant in 2012 and a Refuse Derived Fuel Processing Plant in 2013 helped company achieve fuel efficiency—now company is deriving more than one-third of its energy free of costs.                                                                                                            

Foreign investment in Pakistan: boon or bane?

In the last couple of days, Pakistan has witnessed an increase in foreign investment. Many local companies were acquired by foreign multinationals. Dawlance, Pakistan’s white goods manufacturer was acquired by Turkish group Arçelik . Furthermore, in the same week a Dutch based dairy cooperative FrieslandCampina acquired stakes in Engro for around $460 million.

This shows that international investors are viewing Pakistan as a growing market. Its huge population provides huge consumer base. The rise in middle class along with young population makes it attractive location for investment.  Many European countries are having population as much as Pakistan has graduates.

But is there any benefit to the nation of these huge investments from multinationals. In a nutshell we would say yes. But on a deep analysis we would say it is hard to say anything precise unless we take into account other factors.

Let us assume that Turkish group would enhance the quality of the products, manufactured by Dawlance, and would make them attractive to export markets. Definitely, in this case it would be good for Pakistan. Multinational companies have huge research and development departments with billions of dollars in budget which helps them in developing new and better products. Small companies like local ones cannot expend that much on research and development. Furthermore, small companies have issues with protecting patent rights. Hence, from this particular angle it is good that foreign companies are making inroads into Pakistani market.

With better quality and increased foreign clients’ satisfaction, country would be able to earn foreign exchange. This would also help Pakistan to move from exporter of low-tech to exporter of high-tech products.

The ability of multinationals to get a better deal from Govt. in matters of tax rebates is another thing to ponder. In countries like Pakistan, Govt. rules are more favorable to foreign big investors rather than local small investors. The exemption of duties and taxes extended to Chinese companies working on CPEC is one such example.

Exemptions in taxes make it more likely for these companies to earn heavy profits and pay high salaries to its employee. This would mean more and high paying jobs for locals as well as better employee retention for the multinational companies.

But there are more cases in which these companies hire foreign people than local ones. This would mean snatching jobs which could be provided by local companies to local people. Moreover, huge portion of profit earned, through getting tax rebates, by these companies is repatriated back to their country of origin.

Thus foreign investment is good for host country if it leads to transfer of technology; increase in exports, provides employment to local ones, pays taxes and duties to host country Govt. and improves quality of manufactured goods.

Pakistan's Logistic Giant

Agriculture sector contributes a lion share in Pakistan’s GDP. But presently Pakistan’s 40% agricultural produce is lost because of bad logistic infrastructure. And this company is experimenting with ways to provide logistic services to Pakistani agriculture sector with only three to four percent loss.

Starting from four employees, it now has over 400 people as its employs. With 700 customers including many national and multinational companies, it takes care of whole process of logistics including shipping, trucking and warehousing.

The company was started by Abid Butt in 2005, who earlier worked for a French logistic giant Geodis. At that time, in Pakistan, no one was available to provide end to end solution, so initial idea was to provide all services including trucking, warehousing and shipping etc by the same company. This led the company’s name being e2e supply chain management (pvt.) ltd. i.e. end to end supply chain management (pvt.) ltd. In 2011 butt’s company had around 76 million us dollars in annual revenues. The company grew 1918% from 2008 to 2010 and was nominated as Pakistan’s fastest growing private company by AllWorld network in 2012. Initial investment in e2e supply chain management (Pvt.) ltd. was arranged by him and his friend and was 1 million rupees (nearly 20000 us dollars at that time) each.

Company’s founder Abed butt is a LUMS graduate with a major in economics and also holds an MBA from INSEAD. After graduating from LUMS, Pakistan’s leading business school, Abid worked for Maersk. Later on he joined Geodis, and was posted in Paris.

He started his business from Karachi, Pakistan’s industrial and commercial heart. He started his entrepreneurial career by resigning from Geodis, risking a steady career growth. At that time he was making 15000 euros per month.

Related Links

allworld

money matters jang

Waste Management entrepreneur

Pakistan generates nearly 56000 tons of solid waste daily in urban areas only, and it is increasing at the rate of 2.4% annually. This solid waste is an opportunity for entrepreneurs.

This waste can be recycled, used to produce liquefied petroleum products, or electricity.  There are advanced waste-to-energy conversion technologies that are commercially viable and sustainable. Presently Fauji Cement Company is using municipal solid waste to produce electricity.

Garbage is not only a cheap source of producing electricity but it can also be used to produce fertilizers. It is profitably being converted to fertilizer by an entrepreneur from Lahore.

Asif Farooqi is a green entrepreneur. He is CEO of waste buster, a waste management company. He is the pioneer of the waste management business in Pakistan.

Some years earlier he started with 6 donkey carts that collected waste from house to house. Now his business waste buster has 200 garbage collection vehicle and employees 3000 people. His business is not only about making money but also conserving environment as well.

Mr. Farooqi informed in a report of al Jazeera that what started from six donkey carts has become a business employing three thousand people and all this money is generated from waste. His men collect garbage and other waste from narrow streets of Lahore and deliver to factory through garbage collection vehicles. His waste management plants separate garbage into organic, plastic and metals to produce liquefied petroleum products, and fertilizers for farmlands. 

Asif Farooqi holds masters degree in environmental engineering from northwestern university, USA with specialization in waste management. He has more than 20 years of experience in the field of environmental engineering. His company waste buster is based in Lahore. Many contracts have been won by the waste busters in Karachi and other cities of Pakistan.

 related links.

dawn

south asia investor review

al Jazeera

Textile Industry and Foreign Exchange Earnings.

Textile industry is Pakistan’s largest industry. It employees nearly 15 million people out of about 49 million workforce. Its share in GDP of the country is 8.5%. Majority of Pakistan’s exports are textile products and are exported to EU or USA. Pakistan’s share in international trade of textile is less than 1%.

Textile industry is a low tech industry. Companies involved in this sector do not pay much attention to research and development.

As a result of its being low tech., there is a strong competition among developing countries for the textile markets of the developed world. This makes these countries vulnerable to any fall in demand in the developed world. There are strong trends of deteriorating terms of trade against textile dependent nations. As these countries generally import machinery while export textile products.

The low ability of textile industry to earn foreign exchange leads them to have huge volumes of external debts. The instability of their currencies makes the situation worse by increasing the debt burden of these nations. As a result, balance of payment difficulties and huge fiscal deficit become a frequent problem for these nations.

The balance of payment and fiscal deficit problems leads them to borrow more from external donors. This borrowing hinders the economic growth of these countries as these loans have to be repaid. These underdeveloped countries have huge workforce which needs job opportunity. Lack of economic activity creates unrest among masses. This undermines the democratic process of these countries and military has to intervene from time to time. This happened in Pakistan, turkey, Bangladesh, Indonesia etc. 

Saltflow, Inc.

Saltflow, inc. is a conglomerate and has stakes in diverse fields. Saltflow was founded in 2005 by Arif Ayub, a Pakistani national. This group is based in Dubai, UAE.

Saltflow has annual revenues in excess of $570 million annually. Group is involved in a number of fields including construction industry, trade and retail industry, and technology industry. Group has expanded its presence to North America through acquisitions.

Group’s technology business is heavily centered in Russia and controls internet companies primarily targeted at mobile and financials solutions for consumers.

In North America group has stakes in retail and trade sector. Group has invested huge amounts in retail brands and is expecting good returns.

Group also has stakes in construction industry.

Presently group provides employment to more than 500 people.

related link 

Saltflow, Inc.

Netsol, software company from Pakistan

NetSol is a Pakistani software company. It was a small company started by three brothers in Lahore with 5 people. But now it has been registered at NASDAQ USA and employees more than 800 people. NetSol technologies is only company in Pakistan to have focused on certification. It is one of the hundred companies which have acquired CMMI level 5 certification. This is one of the reasons of its success because consumer is short of time and can trust the product developed by certificate companies.

NetSol technologies begin its operation in 1995 and got a major break through in 1996 when it got first major offshore contract with Mercedes Benz, Thailand. Since then it is receiving orders from many international clients.

Its product achieved world wide acclaim and some of its products are NetSol financial suit, e-CIB (electronic credit information bureau), etc. NetSol technologies has offices in different countries including United States, United Kingdom and Australia. It's headquarter is in California USA. In 2008 it has earned revenue of 37 million us dollars.

related link 

wikipedia

propakistani 

 

Internet Business

Recently Facebook went public. Its value is above 100 billion us dollars. There are many internet companies that went public and are enormously valued. But still majority of internet companies are private. Majority of these companies are built by people aged less than 40, like Mark Zuckerberg. Well known Cook family has started many internet businesses including the myYearbook. Internet offers enormous opportunity to entrepreneurs.  The fact is that internet has given rise to the global economy that has no borders. You can provide your services to different people of the world, belonging to different continents.

The best side of internet business is that there is practically zero marginal cost in this business. Secondly you do not need heavy infrastructure like transport, rails and roads, etc. this offers remarkable opportunity to entrepreneurs from third world countries. Monis Rehman is one such entrepreneur who started Rozee. It has been estimated to be worth more than 600000 us dollars. Scrybe Founder Faizan Buzdar has also made use of internet.

industries produced Pakistani billionaires

According to Forbes technology is the sector that has produced highest number of billionaire in United States after investment. The leading sector in the rest of the world according to Forbes is investment while fashion and retail ranks second.

GlobalTop 10 Industries Producing Forbes Billionaires

1. Investments: 143
2. Fashion & Retail: 123
3. Real Estate: 102
4. Diversified: 97
5. Technology: 90
6.  Manufacturing: 85
7. Energy: 78
8. Finance: 77
9. Food & Beverage: 69
10. Media: 64

Pakistan has a list of rupee billionaires, although completeness and correctness of this list is doubted. Although it is difficult to know which sector produced how many billionaires in Pakistan. But it can be seen from the list that majority of Pakistani billionaires come from diversified, textile and fashion, investment, landholdings, overseas business and media.

Big business houses in Pakistan used to invest in diversified sectors to manage risk.

Pakistan has huge textile and fashion industry and is growing at a high rate. Many fashion designers have started doing business on a global scale. Names like Maria b. Hassan Shehryar Yasin etc are having retail outlet around the world and their clients include many rich and famous people including family members of royal families. Fashion retail outlet like Chenone is having its retail outlets in different cities of the world.

Pakistani stock exchange is best performing stock exchange in the world. It has generated good returns for investors. Many international investors are also investing in Pakistan’s stock exchange. Pakistan has many mutual funds which provide opportunity to household investors to invest in stock exchange.

Pakistan has large land holdings since the colonial era and families manage to keep these large land holdings in their own families through inter-cousin marriages.

Many Pakistani billionaires have got their massive wealth from overseas business and investment in other countries. Sir Anwer Perwaiz is one such billionaire who got his wealth by establishing bestway group in UK.

Media is another such area where Pakistani billionaires have stakes. Jang group owned by Mir family is well known to have earned their wealth from their media business. Electronic media is a recent entry in this field As Pakistani government started issuing licenses to private television channels.

Pakistan's retailing industry big names

Pakistan’s retail market is estimated at over $42 billion a year. There are many international names in our retail and wholesale sector including metro, makro etc. There are many national brands as well that are busy in retailing business. Names of national retail businesses are given below along with brief introduction.

Canteen store department

Canteen store department is a chain of retail stores all over the country. This chain is run by Pakistani ministry of defense for the purpose of welfare. CSD sells a wide variety of products. Generally these are purchased in bulk by CSD and sold at concessional rates. Now CSD is open to all citizens of Pakistan but previously it was open only to government employees especially members of armed forces. Currently there are more then 100 shops owned and managed by the department.

RAHAT bakers

Rahat is a chain of bakeries in twin cities. There are 5 bakeries in twin cities of Islamabad and Rawalpindi. All 5 bakeries are owned and managed by noon brothers.

Savour foods

Savour is a chain of food retail outlets selling primarily rice dishes.

Gourmet bakers

Gourmet is a retail chain of bakeries. There are over a 100 stores in Lahore.

Bareeze

It’s a high-end fashion retailer. It is the chain of retail stores across Pakistan, India, UAE, Malaysia, and United Kingdom.

Chenone

Chenone is Chain of fashion stores having 20+ stores in Pakistan and Middle East. Chenone offers fashion clothing, foot wear, bed linen, kitchen accessories, and furniture.

Imtiaz supermarket

Imtiaz supermarket is a chain of supermarket in Karachi serving 60,000 to 70,000 people per week. Currently there are two supermarkets in Karachi with plans to grow further.

Naheed supermarket

It is another supermarket targeting middle class just like imtiaz supermarket. This supermarket attracts nearly 4000 customers daily.

Greenvalley supermarket

Greenvalley is a high-end supermarket chain, recently started by bahria town (pvt.) Ltd.

Sauda sulf

Sauda sulf is a chain of departmental stores in twin cities of Islamabad and Rawalpindi. Presently it has two flagship stores located in F-11 markaz, Islamabad and another one in chaklala scheme-3, Rawalpindi.

Pace shopping mall

Pace has 5 branches in Lahore, 1 in Gujrat and 1 in Gujranwala. Pace is owned by Mrs. Aamna Taseer, widow of slain governor Salman Taseer.

Cosmo
cosmo express and cosmo cash and carry are two types of retail outlets owned by sohrab group.

Pakistani movies entrepreneur

Shoaib Mansoor, very creative Pakistani film director, writer, and producer. He had produced many dramas for Pakistan television in the beginning of his career. He had written, directed, produced drama serial ankahi, fifty fifty, alpha bravo Charlie, sunehredin and gulls &guys. Alpha bravo Charlie and sunehre din were about military life in Pakistan army and were produced in collaboration with ISPR. He was the man behind vital signs. He was the mentor of junaid jamshaid, lead singer of vital signs.

In 2007 movie khuda kay liya was released. It was written directed produced by Shoaib Mansoor. The cost of movie was 1 million USD i.e. 60 million rupees at that time. Traditionally films in Pakistan costs rupees 3 to 5 crore i.e. half a million dollar.

This movie proved instant success and did business of 2.5 million us dollars.

In 2011 another film bol was released under the banner of geo films. This movie broke all the records of highest earning films in Pakistan. Within is 6 days of its release, it earned rupees 62.792 million rupees. Sahara one network acquired seven years satellite rights of this film for rupees 70 crore i.e. nearly 10 million USD.

Shoaib Mansoor is presently working on another project. He has earned money by providing good entertainment. His films and dramas are not only entertaining but also educative. Shoaib Mansoor or Shoman as he calls himself is a real genius of Pakistani business.

From small broiler farm to an empire

In his college days, when other students were dreaming of huge salaries, beautiful life, he saw the demand and filled it. He is the true entrepreneur. In 1964 he started a small broiler farm of 1000 chicks. This was a patriotic act by this daring entrepreneur to fulfill the protein needs of his fellow men and women. His first flock was reared in a spare shed at his family’s edible oil business. This small initiative of Khalil Sattar later became K&N chicken.

K&N chicken a name trusted not only by Pakistanis but also by many foreigners. K&N stands for the name of Khalil and his wife. Halal certified chicken is not only supplied to Pakistani consumers but also too many other countries. Many international food outlets, in Pakistan, purchases slaughtered chicken from K&N chicken. K&N not only incubates and grow chicken but also slaughter according to Islamic method. The whole process from breeding to serving chicken is carried on by K&N, to make sure that consumer get the healthy and clean food.

The company is also exporting chicken meat to other countries. But it has to face tough competition from subsidized meat from Europe. The company is doing well in value addition to remain competitive.

Pakistan presently has nearly 387 million poultry and quality of Pakistani halal chicken is best in the world. To enhance productivity of Pakistani farmers K&N has also introduced another breed of chicken i.e. Cobb 500 in Pakistan. This breed has resulted in superior performance on low density rations, lowest feed conversion ratio, highest growth rates, highest livability, most feed efficient, best broiler uniformity and competitive breeder performance. Cobb 500 is most widely used breed around the world.

About some nontraditional export industries of Pakistan

Surgical instrument industry

Pakistan has hundred years old surgical industry. It began when some British doctors got their instruments repaired by local skilled people. Today Pakistan has 8^th largest surgical instrument industry in the world. Pakistan manufactures more than 10000 types of surgical instruments. Instruments manufactured in Pakistan are famous for their quality and are equivalent to that of manufactured in Germany. Pakistan exports most of locally manufactured surgical instruments. Pakistan exports 250 million us dollar worth of surgical instruments that fetch low price owing to lack of branding. Pakistan manufactures 100 million such instruments every year and export to 140 different countries.

Fan industry

Pakistan has 12^th largest fan industry in the world. Pakistan manufactures 8 million fans per annum and export to 50 different countries. Pakistani fan industry provides employment to 100 thousand people. Pakistan exports fan worth of 30 million us dollars per annum.

Information technology industry

Pakistan is performing very well in this industry. IT exports are predicted to grow to 20 billion us dollars in 2020. Presently IT industry provide employment to .15 million people. Pakistan has nearly 1000 local software companies.

Footwear industry

Pakistan is 6^th largest footwear manufacturing country in the world and exports 11 million us dollar worth of footwear annually. Leather from sacrificial animal is life line for this industry. It provides employment to 1 million people.