RICE, A BILLION DOLLAR BUSINESS
An Interview with Mr. Qaiser Ahmed Sheikh
Sep 17 - 23, 2007
Qaiser Ahmed Sheikh is a known name in the business as well as in the political circle of Pakistan. We met Mr. Qaiser and talked about his interest in the rice business which he developed in 1990 with the collaboration of a Malaysian company named "Bernas". This is the only company that is authorized to import rice by Malaysia and the Malaysian government has given them the right to do so on its behalf. Bernas established this business with Mr. Qaiser's company in 1993 and became known as "Qaiser Noman Bernas (Pvt.) Ltd.". With the help of this collaboration, rice is grown and polished and then exported to Bernas in Malaysia as well as to other regional and Middle Eastern companies. The rice polishing plant is located at SITE industrial area of Karachi.
Qaiser Ahmed Sheikh is also the chairman of Qaiser LG, which was a Joint Venture between Qaiser Brothers Pakistan and LG Group, the leading conglomerates of Korea. The joint Venture deal was signed in March 1991 in Seoul, South Korea. The estimate cost of project was US$ 8 Million. In the year 2000, the Qaiser Group purchased the whole stake of LG Group of South Korea and now Qaiser Group has 100 percent shares within the family.
Mr. Qaiser Ahmed Sheikh has been a former member of the National Assembly and was an independent candidate from NA-86. He was also the Chairman of the independent Group of National Assembly in Pakistan in year 1997 to 1999. He will be contesting the coming elections from his constituency. He has also been the president of Karachi Chamber of Commerce & Industry during 1987-88. With his endeavours, the second campus of the FAST university is set up in his hometown of Chiniot, which otherwise is a very small town.
While talking about the rice and its varieties, he mentioned that the Punjab plane produces the fine rice that is "basmati and super basmati" while the rice cultivated in Sindh Area is a coarse rice which is called "IRRI" rice. It is the main crop both in Punjab and the Sindh province. Rice has become a billion dollar crop and it is consumed both domestically as well as internationally. The Pakistan exports the quantity that is a surplus after domestic consumption; every year the crop size is getting bigger so there is a huge chance of its phenomenal growth over the years.
Defining the difficulties in the export business he pointed out that mainly in view of the aggressive competition with India, marketing and packaging drive has to prove its mettle internationally. Pakistan had to work more on the marketing strategy to aggressively face this cut throat competition. Also India has made much more technological advances. India is exporting par-boiled rice in which Pakistan is unable to compete yet because of not having proper technology. If Pakistan had more sophisticated machines available, there is a fair chance that it could also work towards that area. Moreover we have to really develop our marketing side as the rice that is normally being exported to the Middle Eastern countries are always labeled as the Indian Rice and that is because of the aggressive marketing that India is putting its efforts in to establish such an image.
On the R&D development, he said that we have to work in the areas of new seeds as unless we establish new seeds, we will not be able to produce new varieties of rice. Also we have to look into the corruption which is bringing a bad name to Pakistan. This corruption is in the sense that growers normally mix the banned varieties with the one that are exported through like we have this variety of 386 which is not permissible to export but due to its close resemblance with the 385 variety i.e. both of them are same in the size and shape hence it can easily be mixed through and as 385 is the variety that is used to export to other countries, Pakistan's name could be destroyed in the wake of such practices. Although the government is trying to look through this matter, it has still been unable to sort this problem out.
On the price variable, he said that the rice prices have gone high during the past few years and that has happened all around the world and not just in Pakistan. Here in Pakistan, the main factor for such a hike is that we have two crops that can be cultivated at the same time of the season that is sugar cane or rice. You can either grow sugar cane or rice in the same region and season. Last year, the sugar prices gone high and that's why in order to breach that gap, farmers mainly cultivated sugar cane. Now when the supply was low and the demand was high because of the same reason, the prices of rice gone up. This year, the rice production is very good and the growers get a good price for the crop too, hence the chances are of less fluctuation in the market price of the rice. He also pointed that new lands and planes for the rice and sugar cane separate cultivation is a difficult choice as it will take a long period to get materialized because mainly the agri lands are all in the use of the growers and if some new planes might be found out, the infrastructure for water supply needs to be established at those planes which will take a much long time. We are blessed that we have the only plane that is Punjab region where we can grow basmati rice which is one of it kinds around the world and this variety can't be cultivated at any other plane around the world because of the seasonal differences.
In his message he puts that there are few things that can motivate our farmers a lot, one of them is the easy loan on easy terms through micro finance schemes. Farmers can utilize those loans to use proper fertilizers, pesticides, proper seeds so to have a much higher yield from the same land. This will definitely give a good return to our crop production and its yield. Secondly the government should trust farmers and they should not ask for big collateral for small loans because that makes them feel quite insecure and not trusted. He also said that the motivation for profit is needed a lot and that can only be done through taking these small initiatives. One of the key factors that he pointed out is the insurance against crops, which he said is the necessity of every grower so that if any mishap may happen, he will not get devastated because of that. This is one area which needs to be established at a rampant speed so that farmers feel more secure and would be more willing to put their efforts towards growing the crops.