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HMC facing severe financial crunch

Manufacturing cattle fodder plants for sugar mills might pull the Complex out of crisis

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By Syed Shamsul Hasan
(Sugar Technologist), Chinar Army Public School and College, Murree
June 28 - July 04,1999

The prestigious Heavy Mechanical Complex, Taxila, was established in early sixties with Chinese assistance to manufacture heavy machinery within the country. It is among most prestigious engineering companies working under Ministry of Production and equipped with modern machinery and skilled persons capable to produce sugar mills, cement plants, heavy agricultural machinery and road rollers etc.

Long ago I warned the then Managing Director of the Complex that the Complex will have to compete with other indigenous companies after saturation stage in Pakistan is reached and fresh orders for complete sugar and cement plant equipment are exhausted. Later on, when the author negotiated for the largest sugar mill of the country with HMC team consisting of its new managing director, deputy managing director and half a dozen of general managers including chief sugar mill designer, it was astonishing to learn that overheads of the Complex were so heavy that no one ever placed order for the manufacture of individual equipment of a sugar mill except complete plants.

HMC Taxila has also exported at least two complete sugar plants to Bangladesh and to Indonesia after competing in international tenders. It has also manufactured more than a dozen of complete sugar plants which are doing well in Pakistan. The Complex has facilities to manufacture complete sugar plant in the shortest possible time. In Private sector, only Ittefaq Foundry or the related companies have the facility to manufacture different sugar mills equipment on large machines simultaneously to save time. Government-owned Karachi Shipyard and Engineering Works Karachi has also this facility while many other firms of Gujanwala and Lahore also manufacture different parts of sugar mill plant and other heavy machinery required in defence and cement plants, sophisticated machinery like prime movers etc are no where manufactured within the country and are imported. Officers and workers of HMC Taxila have now acquired proficiency in manufacture of equipment of sugar, cement plant and road rollers etc. The largest sugar mill of Pakistan has also been manufactured by HMC Taxila under the guidance of the author wherein international laws of sugar engineering and technology regardless of the cost have been strictly adhered to render the plant most trouble free and modern.

It is now said that HMC Taxila is facing a financial crisis and heavily indebted and the banks along with other financing institutions have finally refused to provide funds even for disbursement of salaries and wages to officers and workers. Leaders of workers union have been demanding "high level probe" into so called scandalous mishandling and mismanagement. Union leaders claim that no government during past 15 years or so has bothered to intervene for correction of the financial affairs of the Complex. They have been vehemently disputing the misleading impression of "Good Financial Health" by so called corrupt, dishonest, irresponsible and incapable management who have allegedly been looting, plundering and blatantly mismanaging the affairs of the Complex. According to management, the financial affairs have deteriorated to such an extent that it is now impossible to restart jammed wheels of the Complex or to disburse even salaries and wages.

The author is of the view that the entire financial crisis and strains on liquidity are primarily due to too high overheads of the Complex. Since other indigenous companies can manufacture heavy equipment at far lower cost, nobody would ever go to HMC Taxila to place orders for manufacture of equipment at higher cost which includes their too heavy overheads. Since saturation point in sugar etc has already been reached in Pakistan, HMC must lower its overheads in order to be competitive with other companies who can manufacture different equipment. The author has had a detailed meeting with the Managing Director HMC Mr. M. A. Janjua in the office of Minister Production at Islamabad last year. I had also sent some photocopies of useful papers for his study but not even the acknowledgment was ever received which speaks of interest in improvement and also of his job security in Government. I feel, there is still time and "two birds can be killed by one stone". Besides providing job to HMC, tonnes of foreign exchange can be earned if the Complex reasonably reduce its overheads and starts manufacture of molasses urea-bagasse pith based cattle fodder plants on international pattern for attachment with NWFP and Punjab Sugar Mills. Production of extra wheat in Pakistan would be an added advantage which within 3 or 4 years could be as high as 4 million tonnes at existing rate of yield. South Africa and Mexico mix some vitamins and minerals to their manufactured cattle fodder for claiming superiority of their manufactured cattle fodder over-grown one raised anywhere in the world. We, in Pakistan waste 4.5889 million hectares of our land in sowing of cattle fodder every year which could be utilized for growing wheat or canola like Denmark and Holland where entire land resource is reserved for human food but still they supply their dairy products to entire world and feed their ruminants on manufactured cattle fodder instead of grown one.

HMC Taxila and Ittefaq Foundries can make cattle fodder plants for sugar mills of NWFP and Punjab while Karachi Shipyard & Engineering Works can look after Sindh Sugar Mills. For separation of pith from bagasse, imported depithers are lying idle at Charsadda which can be easily copied. Fibre of Bagasse would be more acceptable to the boiler engineers of sugar mills which will follow one another like sheep for their own profit. Their molasses which is very cheap in international market would find a newer more profitable use while earning of foreign exchange from Central Asian States and other countries would also be possible. It is expected that once the ice is broken all 74 sugar mills of Pakistan will waste no time in lining up before HMC Taxila, Ittefaq Foundry and Karachi Shipyard and Engineering Works Karachi. The rush of super mills would certainly result in additional production of wheat and canola.