Carry BIG in a SMALL package

LAHORE: Volatile exchange rates, rising profit margins and a weakening rupee are major obstacles to harnessing the full potential of the Rs 20 trillion packaging industry, says Zaki Aijaz Qureshi , director of Roshan Packages Limited.

“The manufacturing sector mainly depends on imported raw materials and the packaging industry is no exception. Plastic, paper and tinplate packaging are highly dependent on imported raw materials. Exchange rate volatility and international commodity price trends have a significant impact on costs,” he said.

“The State Bank of Pakistan should take steps to stabilize the exchange rate. It is necessary to control speculation to stop the rupiah’s free fall against the dollar,” he said in an interview with BOL News.

“Inflation and high energy prices have increased the cost of doing business. Yes, inflation is a global problem due to the pandemic, but its impact in Pakistan is much more serious due to the depreciation of the local currency. The government should take measures to reduce the cost of doing business because our products are not competitive in the global market,” Zaki said.

Another challenge for the packaging industry is high interest rates. The packaging industry’s borrowing share is about 41 percent of its real capital. Short-term industry loans represent 59% of total borrowings.

Rising interest rates have made it difficult for the industry to manage day-to-day business, he said.

“Rising interest rates have increased the cost of borrowing. The government should bring the interest rate back to par with that of regional states to give cash-strapped small and medium-sized businesses some breathing space,” he added.

Zaki Aijaz Qureshi is a successful entrepreneur who has taken the family business to new heights through sound management and innovative practices. He officially joined the family business in 2000 and achieved unprecedented success through a number of initiatives.

He is a humble and down-to-earth man who believes in strictly following business ethics and giving proper care and importance to employees.

Interested in trade policy, he is the Central Chairman of Corrugated Board Manufacturers Association of Pakistan.

Zaki is a proud member of a literary family and the one who introduced Pakistani fruits and vegetables to other countries.

His father Dr. Aijaz Hassan Qureshi started Urdu Digest in 1960 which was the most circulated publication in Pakistan due to its attractive content.

Launched in 1989, Roshan Enterprises started exporting fruit and became Pakistan’s largest fruit exporter.

The United Kingdom, United Arab Emirates, Saudi Arabia, Iran, Malaysia, Singapore, Bangladesh, Russia, Vietnam, Philippines, Indonesia, Mauritius and Norway are among the main export destinations.

The company’s futuristic approach prompted the establishment of an in-house packaging unit. In 2002, Roshan Packages Limited was established to meet internal demand for corrugated packaging. It established European flexible packaging and coextruded film solutions factories in 2011 and 2015, respectively. It is now among the top three companies with a large market share.

Here are excerpts from a one-on-one with him.

What was your first adventure?

After completing my studies, I joined the family business in 2020. I am quite satisfied with my contribution so far. We have introduced innovations for the safe transportation of perishables to end consumers both in Pakistan and overseas. Major national and multinational companies are our satisfied customers.

Where is our packaging industry? What is its real potential?

Packaging is a Rs 20 trillion industry with majority of the market share captured by unregistered players. About 20 registered companies get 30% of the shares and the rest goes to those who pay no taxes at all. It is difficult for registered businesses to compete with those that pay no tax.

This mother of all industries has yet to be recognized as an industry. The government should document and register all businesses, as this would help bring the entire supply chain into the tax net. Furthermore, it will help provide a level playing field for all businesses.

How can we improve the export of agricultural products?

We should adopt the motto “grow for export” to take advantage of the country’s enormous potential. Agricultural zoning is necessary for crop diversification. The government should help farmers increase yield per acre and reduce pre-harvest losses. The cold storage and packaging industry should be strengthened to meet future demands. We should also focus on the export of agricultural by-products such as jam, fruit pulp and pickles.

How to fill the trade gap?

The government should take both short-term and long-term measures to address the ever-growing trade deficit. Our problems will persist unless we reduce our dependence on imports and increase exports to earn money. It is necessary to discourage the import of luxury items, especially cars.

We need to end unnecessary imports, reduce the cost of inputs to export-oriented industries, diversify products, add value and explore new export destinations. We should give due importance to all sectors such as IT, engineering and agriculture instead of continuing the decades-old practice of focusing on large-scale manufacturing and only on the textile sector.

How do you see interest rates rising?

An increase in the margin rate has increased the cost of borrowing for companies. Now it is more difficult for cash-strapped small and medium enterprises and cottage industries to run their businesses. The SBP should cut the interest rate and bring it back to par with countries in the region to give businesses some breathing room.

What do you think of the growth of e-commerce?

E-commerce has grown considerably in the
post-Covid-19 scenario. There is a need to take your fair share of the trillion-dollar global e-commerce industry. The entry of Amazon and Alibaba into the Pakistani market bodes well. The development will motivate other such businesses to enter the market and local players will focus on improving quality and service delivery.

What do you propose to improve the business environment in the country?

The environment is not good both for existing players and for new entrants. High cost of inputs, volatile exchange rate, high interest rate, inflation and multiple taxes have affected businesses. The government should design policies after due consultation with stakeholders. There is a need to provide one-stop shopping and tax exemptions for startups.

Controlling inflation, reducing the cost of inputs, checking for double taxation, reducing the profit margin and stable exchange rate are necessary for a good business climate.

What is the outlook for the overall business environment in Pakistan?

Pakistan has enormous resources and a talented workforce. The agricultural sector alone has the potential to pull the country out of the current crises. Our 60 p. 100 of the population are under 30 years old. The government should take steps to stop the brain drain. Institutions should be created for skills development. We must revitalize SMEs and crafts, which are the backbone of any economy.

What drives you to join business politics?

My policy aims to act as a bridge between colleagues and policy makers and implementers. I have always worked for the good of my fellow businessmen.

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