Tuesday, Mar 5, 2024
Update At 14:00    USD/EUR 0,92  ↑+0.0004        USD/JPY 150,53  ↑+0.105        USD/KRW 1.334,12  ↑+3.16        EUR/JPY 163,34  ↑+0.061        Crude Oil 82,60  ↓-0.2        Asia Dow 3.778,31  ↑+4.31        TSE 1.740,50  ↓-0.5        Japan: Nikkei 225 40.160,14  ↑+249.34        S. Korea: KOSPI 2.658,23  ↓-16.04        China: Shanghai Composite 3.047,20  ↑+7.8899        Hong Kong: Hang Seng 16.272,77  ↓-323.2        Singapore: Straits Times 3,12  ↓-0.011        DJIA 22,58  ↑+0.08        Nasdaq Composite 16.207,51  ↓-67.431        S&P 500 5.130,95  ↓-6.13        Russell 2000 2.074,31  ↓-2.086        Stoxx Euro 50 4.912,92  ↑+18.06        Stoxx Europe 600 497,41  ↓-0.17        Germany: DAX 17.716,17  ↓-18.9        UK: FTSE 100 7.640,33  ↓-42.17        Spain: IBEX 35 10.069,80  ↑+5.1        France: CAC 40 7.956,41  ↑+22.24        

Cementing Pakistan’s Progress

Interview - June 5, 2014
Gharibwal Cement Ltd. is one of the pioneers of cement manufacturing in Pakistan, producing cement since from around 50 years with complete devotion and quality. CEO of Gharibwal Cement Tousif Peracha talks to Upper Reach.
Gharinbwal has been at the forefront for the past forty years, in building a strong and solid Pakistan. It’s brand of cement has endured the test of time which is reflected by its performance in the Mangla Dam, the Qadirabad Barrage, the Rasool / Sulumanki Barrage, and so forth. Looking to maintain its market position in key centers of Punjab and Azad Kashmir, Gharibwal Cement Limited is now operating two cement plants, one with dry process the other with wet process.

Upper Reach: Investors around the world are hoping that Pakistan can make progress in some pressing issues. From your point of view, what is the next step for Pakistan?

We are experiencing continuous democracy. The next step is further advance in industrial growth, law and order, the power sector, and employment creation. Pakistan is now an industrial country. The country is going to be better because the government is setting a more reliable system.

There is more confidence in the government. Pakistan’s GDP growth is good. Its geographical location is a very good hub. The potential in the gas and oil sector is large. So, compared to other countries, globally I foresee a promising future.

What do you think Pakistan has to do in order to attract foreign direct investment?

Secure law and order, supply power and gas, and create a protection for foreign investment by law. Investors should be protected, both their capital and their lives. That is a very good attraction for investors.

What brought you back to Pakistan from Nigeria?

The policies of the government in 1992 were investor-friendly. Then, India copied our policies.

Our government has long term plans, and consumes a lot of cement. They are building a network to improve the connections within Pakistan. This will help the economy boost. Also, other enterprises will grow, like housing. The population is about 200 million people, so demand is huge.

What would you say is your main strength is in Pakistan, cement or glass?

Cement and glass are not complementary at all. Cement is basically dependent on government spending. That is happening now, because of infrastructure building. Today, we have 43 million tons capacity.

The glass situation is different. There are three types of glass. Other one is for bottling –for Pepsi or Coca Cola. Other type is pharmaceutical. The other one is tableware glass, the one you use for drinking water. We are trying to produce the three types of glass. Karachi is the biggest market for pharmaceutical.

So we are aiming at three different markets. There is also potential for exports to Africa. The bottling glass goes to all Middle East and Africa, because of our labor and gas costs. We are comparatively cheap in labor and gas, even cheaper than Dubai. So we are competitive there, that’s why we can export. We are also producing better quality products.

Given that your company is in the stock exchange, around 30% of the free float is owned by foreigners. What is your competitive edge?

Our locations are good. There is a huge potential demand, and it is growing. We focus on local consumption. And our transport costs are cheaper than anybody else. We have got a modern plant. We are going to make three different glass factories, to become more efficient. We understand market demand and signaling. This diversification raises our ceiling.

Do you see, maybe in the future, having a joint venture with UK companies?

Definitely. We are foreseeing it. We are going to diversify and invest in anything associated with cement.

How do you feel now, about returning to work to Pakistan?

Pakistan is my home country. My kids are living in London, and they were born in the US. But I am still holding my Pakistani passport. I am extremely happy I returned. I am making good profit, and the company’s growth is very good. My main goal was creating employment. That was my social duty. We are also doing social work. And that gives my internal happiness.

Could you tell us more about your non business activities?

We have our own organization. We produce schools, and we do charity work. But we try to keep that low, not tell everybody about our charity. It is a personal thing. But I wouldn’t be happy if I didn’t do this.

Do you think the example of a company like this is a good example to encourage other investors to come?

We are having an Islamic business conference. We are going to promote the attraction of investors to the country. We feel that the economy will come back to normal and growth will be extremely good. The return to the power sector is almost double than in India. That’s a very good return. There is very good investment, and with guarantee.

What would you like to say to the readers of the Times, that they should know about Pakistan?

Pakistan has never defaulted in the international context, not even under difficult situations. Anybody who invests here is allowed to take back the profit and the capital. There is no difficulty in doing that. Foreign investors have security. And the legal system is very good, as compared to countries like China. It has the same model than that in UK.

The price of our bonds went down, but they were never defaulted. We are an upcoming country.

Where would you like to find your company in 5 years?

The way commerce is going, you will see another country. My company will grow, but the whole country will grow as well. The gas problem will be over, and capital investment will double. I am very optimistic.

Some areas have problems with law and order, but that will improve. The government will secure it, and growth will be double digit. There is more investment coming. A lot of people want to put money in Pakistan, for example, in the power sector. This is so because there are secure returns. You can’t get this kind of returns anywhere in the world.