FPCCI's Export Trophy Award 1997-98
PM hopes trade community would double exports in next two years
By AMANULLAH BASHAR
Feb 08 - 21, 1999
The Export Trophy Awards 1997-98 ceremony was held in Karachi on Feb 2, 1999. The ceremony has been an annual feature being organised by the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) to felicitate and encourage the outstanding exporters for the last 22 years.
Although, the year1997-98, for which the awards were given away by Prime Minister Nawaz Sharif, remained short of the export target of $10 billion and the half yearly export receipt for the year 1998-99 are also not giving an encouraging signal, yet the business community was in a high spirit.
The representatives of the business community, while assuring their utmost support for doubling the exports within next two years, pointed out certain areas where immediate attention of the government is needed to remove the bottlenecks hampering the export growth. The cost of utilities, complexities of taxation system and absence of the export culture among the government officials, who are still adhered to the bureaucratic attitudes, were pin pointed as the most annoying factors restricting the exports.
Prime Minister Nawaz Sharif, while replying to various points, raised by Fazal-ur-Rehman Dittu, President FPCCI, said that the nation today was fighting back for economic survival. Appreciating the efforts of the exporters, the Prime Minister said that they were the vanguard of the army that was fighting the battle of Pakistan's economic revival. The Prime Minister said that the exporters, as the front-line soldiers, deserve praise and commendation for their contribution to strengthening of the national economy.
Giving the guidelines for attaining the cherished goal of economic uplift of the country, Nawaz Sharif said that working together, the government and the private sector, would hammer out policies which would not only be practicable but would also help in launching the successful export drive. The role of the government in all these spheres is that of a facilitator and trouble-shooter. Many new things have been introduced in the current trade policy that were not even dreamt of in previous regime. It is not easy to make bureaucracy to give up its traditional habits of exercising powers, developed over the years.
The Prime Minister said that the export culture is already there in businessmen. It is rather a part of their psyche. It is the bureaucrat who needs to be introduced to it. It is he to understand that unnecessary controls can be the death of trade and commerce. Senior government officers, long accustomed to exercising controls, are now reacting with more responsibility to the policy of easing restrictions.
Actually a quantum jump to be achieved in exports is possible only with increased industrial, agricultural and labour productivity. He said that basically this was achievable through good governance, incentives and initiatives to be provided by the government. The government had been doing all that it could offer to the export sector in this direction. He assured the audience that the observations of FPCCI would receive his utmost consideration. On the part of businessmen and industrialists, the emphasis should be on expanding the export base of value added and manufactured items.
The prime minister also appreciated the efforts of FPCCI in formulating recommendations for the revival of the sick units as well as for re-orientation of the tax structure. The Prime Minister said, "I believe in a system which generates much needed revenue to the state without throttling trade and industry or any other sector." Regarding to revival of sick units he said that these units could play their due role in strengthening the economy by consolidating the industrial base of the country if put back on the working track.
The Prime Minister while highlighting the government's efforts to facilitate exports, said, "The government firmly believes in removing the bottlenecks hindering the growth of country's exports and various measures in this direction are in the offing. The foreign missions have already been advised to take an active part in enhancing exports in collaboration with the Export Promotion Bureau (EPB) and the private sector."
In this connection, the Prime Minister cited the measures which have already been taken by the government to facilitate the export sector. These measures include the reduction in cash L/C margin from 30 per cent to 10 per cent, measures like No-Duty-No-Draw-Back (NDND) and reducing the mark-up rate on export financing to increase their cash flow and reduce pressures on the exporters.
The Prime Minister extended his appreciations for the recipients of the FPCCI Export Trophy and Gold Medals.
LIST OF 22ND EXPORT TROPHY AWARDS WINNERS
Three outstanding industrialists were declared as "Businessmen of the year" and were decorated with Gold Medals in three different areas i.e Investment, Industry and Trade. They were:-
1) .Mian Mohammad Latif, Chief Executive, Chenab Fabrics and Processing Mills Ltd, Nishatabad, Faisalabad. (Investment).
An annual export turnover of around $3 billion. Chenab is 100 per cent an export-oriented company which is well known for its high quality products in European, Australian, USA and Canadian markets. Chenab has been winning Best, Special Merit Trophy Awards consecutively for the last 6/7 years for its excellent export performance. It is a dynamic, enterprising and developing commercial organization. This unit is producing 180,000 metres of the finest quality fabrics, 15,000 units of textile casual/fashion garments and 50,000 of made-ups (house-hold items of international standard) per day. Chenab has now penetrated into the world market for its quality fabrics.
2) Tariq Rafi, Managing Director, Siddiqsons Group, Karachi (Industry).
Siddiqsons Groups is the largest exporter of Denim, contributing in excess of 50 per cent of the total exports from Pakistan with a fully integrated set up which includes Spinning, Dyeing, Weaving and Finishing.
Tariq Rafi is, the Chief Executive of Siddiqsons Denim Mills Ltd and is also Director of other Group of Companies. He is also Chairman of Pak-Asia Fund Ltd and Vice Chairman of the largest private commercial bank in Pakistan, having its five branches abroad. Tariq Rafi has recently established a tin plate manufacturing plant, first in Pakistan. This plant will have a capacity to produce maximum 120,000 tonnes of tin plate per annum.
3) .Dewan Ayub Khalid, Director Dewan Textile Mills Ltd, Karachi (Trade).
Dewan Mushtaq Group was initially established with the name of Dewan Textile Mills in 1971 at Kotri with 25,536 spindles and expanded in 1982 as Dewan Textile Mills Unit No2 with the same spindlage as Dewan No.1. It was further expanded with 11,000 spindles in 1998 and now having 36,536 spindles thus totaling 62,072 spindles in the year 1998. Both these textile mills have their own trading offices in Japan. The company has now decided to add 11,000 new spindles for count 30 and above and with the replacement of old machines with new ones to produce good quality yarn for increasing exports to Far Eastern and European markets.
President of Pakistan Trophy was bagged by Nishat Mills Ltd. Lahore. While the Best Lady Exporter Award was given to Mrs Naseema Nasir of Terry World Textiles, Karachi.
BEST EXPORT PERFORMANCE TROPHY RECIPIENTS
1. Chenab Fabrics and Processing Mills Ltd (Faisalabad) value of exports Rs2,763,132,000.
2. Sapphire Textile Mills Ltd (Karachi) Rs2,655,526,395
3. Leather Field (pvt) Ltd (Sialkot) Rs1,644,034,497.
4. Mekran Fisheries (pvt) Ltd (Sialkot) Rs1,498,944,774.
5. Mohammed Shafi Tanneries (pvt) Ltd. (Karachi) Rs1,305,819,957
6. SAGA Sports (pvt) Ltd (Sialkot) Rs1,080,872,183.
7. TAQ Enterprises Cargo Services (Lahore) Rs1,056,658,798.
8. Husein Industries Ltd (Karachi) Rs828,658,489.
9. Afroze Textile Industries (pvt) Ltd (Karachi) Rs531,745604.
10.Hakimuddin Hormusji and Sons (Karachi) Rs529,449,968.
11.Amin Ittefaq Rice Mills (Sheikhupura) Rs509,185,000.
12.Reliance Commodities (pvt) Ltd. (Multan) Rs482,000,000
13.Sapphire Fibres Ltd (Knitting Unit) (Karachi) Rs392,926,609.
14.Kings Apparel Industries (pvt)Ltd (Karachi) Rs343,000,000
15.Trans World International (Peshawar) Rs293,993.885
16.D.S.I.Corporation (Karachi) Rs288,891,816.
17.Atara Tarpaulin and Textile Industries (Karachi) Rs280,292,000
18.Ayesha Apparel (Karachi) Rs250,537,000
19.Ashraf Industries (pvt) Ltd (Sialkot) Rs218,474,379
20.Shahbaz Garments (pvt) Ltd Rs210,441,649.
21.Mian Akber Trading Corporation (Karachi) Rs174,269,488.
22.Leathertex Gloving (pvt) Ltd (Lahore) Rs137,461,376.
23.CoCo Traders (pvt) Ltd (Sialkot) Rs119,937,000
24.Dr.Frigz Surgical (pvt) Ltd (Sialkot) Rs110,412,174
25.Roshan Enterprises (Karachi) Rs83,000,000
26.Mehran Spice Industries (Karachi) Rs81,000,004
27.Assadullah Woollen Mills (Karachi) Rs59,300,000
28.Adamjee Insurance Company Ltd (Karachi) Rs53,250,580
29.Pakarts (pvt) Ltd (Karachi) Rs27,017,728
30Welcome Traders (Karachi) Rs10,360,000
31Qaim Automotive Manufacturing (pvt) Ltd (Karachi) Rs6,474,327.
SPECIAL MERIT TROPHY
Exporters from different parts of the country were given Special Merit Trophy Awards for exporting over Rs450 million.
28 Merit Trophy Awards were given to the exporters for exporting non-traditional items.
FPCCI awarded 87 trophies to the best exporters of 1997-98. These include: Businessman of the Year Gold Medals for the Industry, Trade and Investment; President of Pakistan Trophy; Best Lay Exporter Trophy; 31 Best Export Performance Trophies; 23 Special Merit Trophies; and 28 Merit Trophies.
Fazal-ur-Rehman Dittu, President FPCCI in his opening remarks said, "It is an undeniable fact that exports are the lifeline of any economy and this fact has been amply brought to the fore in the recent foreign exchange crisis faced by the country in the wake of economic sanctions imposed by certain developed countries and the international donor agencies due to nuclear blasts conducted by Pakistan."
The FPCCI Chief observed that the economy is still not out of the crisis and concerted efforts are still needed to give a real boost to exports and the national economy. The salvation of the economy, said Dittu, lies in export-led development. The fact that our exports have stagnated and we have failed to achieve the target of $10 billion during the last several years, clearly shows that our governments in the past only paid lip service to export promotion, said Dittu.
The FPCCI President welcomed the government's decision of entrusting the FPCCI with the task of formulating recommendations that should double exports in the next two years.
The Committee on Exports, headed by the Vice President of FPCCI, Maqsood Ismail, has formulated its recommendations which have been submitted to the government.
The FPCCI Chief urged the Prime Minister to constitute a high level task force for implementation of the recommendations adopted and a time limit of a fortnight be given to the task force.
"Another trouble area which is hindering export growth is the multiplicity of taxes," Dittu pointed out. In order to simplify the cumbersome taxation system, the FPCCI has also submitted its recommendations to the government. The committee, headed by Senator Ilyas Ahmed Bilour, former president, FPCCI, which was appointed by the Prime Minister for revival of the sick industrial units, has also submitted its report to the government. Implementation on its recommendations will result in early revival of viable units and availability of much needed surplus for increasing exports.
He said, "It is unfortunate that export culture has not yet taken its roots in the country. The government machinery has yet to realize the importance of exports, otherwise many of the problems that the exporters are facing today would not have arisen at all."
"The imposition of L/C margin restriction on imports, without caring about its ill effects on exports, the failure of the CBR to remove the inordinate delays in refund of Sales Tax and the promulgation of circulars 48 and 44 by the State Bank of Pakistan, threatening to declare exporters as defaulters if export proceeds are not remitted by the due date and to complicate procedure for obtaining export refinance are some of the worst examples of lack of export culture," Dittu said.
He suggested that in order to create export culture, government officials, including diplomats abroad who are contributing positively to export promotion either through removal of irritants and facilitation to export or through active salesmanship abroad, should be suitably rewarded.
He regretted that despite good policies, announced by the government after due consultation with the exporters, every time it appeared that a major break-through in export promotion was just round the corner but the euphoria soon fizzles out due to delay in their implementation contrary to the spirit of the policy decision. Such situation needs to be rectified at all cost, he asserted.
The FPCCI president was of the view that export of industrial or agricultural products can only increase if there is sufficient surplus over domestic demand. In order to achieve this goal, industrialization must take place to a much faster pace, factories must operate at optimum level and all cultivable land must be brought under the plough. This would, however, require re-orientation of the industrial and agricultural policies, he said.
Dittu pointed out that in the present world scenario when recession has gripped the developed economies, when South East Asian countries are still confronting serious financial crisis and a severe cut-throat competition has ensued in the international market, the exporters in Pakistan are increasingly finding themselves incompetitive due to high cost of production at home. Consequently Pakistan's exports have declined in the first six months of the current financial year as compared to the corresponding period of last year. The exports can only increase if production costs are brought down by reducing cost of utilities, by making raw material available at international prices and by lowering mark-up rates on export refinance and borrowings for working capital.
The exporters are perpetually facing cash liquidity problems mainly due to delays in refund of Sales Tax. An ideal situation would be exemption of exports from Sales Tax. If that is not possible, the system of Sales Tax refund be simplified by basing it on a pre-determined percentage of the FOB export proceeds.
"Pakistan can overcome the economic problems if the government and the people in general and the business community in particular join hands and work as a well-knit public-private partnership for all round progress and development," the FPCCI president concluded.
There is no doubt that the nation has to face the most difficult economic crisis that emerged as a result of the sanctions that followed the nuclear explosions, conducted by Pakistan. The situation has improved to a great extent following the successful negotiations and entering the agreements with the IMF, rescheduling of the external debt by the Paris Club and other donor agencies. Consequently, the threat of default has now been averted and the economy has got a breather to get back on track towards economic recovery. This relief period should, however, be used for consolidating all available resources to strengthen the national economy. A strong export base is the only option to face the most serious threat of huge debt servicing faced by the economy. Extra-ordinary steps are needed to inject a new life in the export sector. PAGE would like to cite the example of our neighbouring Sri Lanka which, in order to retain its position of the largest tea exporter, has done away with import duty on tea to continue its position as the leader in tea exports. Pakistan should also take such radical steps by arresting all cost pushing factors to enable our products competitive in the world market. Taxation regime, fuel price and utility charges are the areas where the government will have to give relief to the industry to achieve the goal of doubling the exports within next two years.