Improving country image is necessary for establishing internationally admired brands: CEO Be Be Jan Colours

BRR: Briefly recapitulate the progress of Be Be Jan Colours Limited since the inception of the Company.
Faisal Ellahi: Since its inception in 1971 the Be Be Jan Group has remained committed to delivering superior quality products to our customers, and to foster reliability such that our clientele are never unsure of the deliverables and what to expect from us.
When my father established this Company more than thirty years ago, the business was being operated as a trading house. However, over time the Company has expanded into manufacturing operations with weaving units in Karachi and Faisalabad with a combined capacity of 23 million linear yards per annum.
At present the Company is a leading manufacturer and exporter of home textiles including comforter sets, complete bed sets, sheets, curtains, quilt covers and other similar products. The Company's export markets are mainly comprised of Northern America and Europe.
BRR: How has the current global economic situation impacted the local home textile industry and what avenues of opportunity do you consider most viable?
FE: Regardless of the global economic situation which at the moment has taken a turn for the worst, any company with global or even regional ambitions must first establish a strong local presence. For now, there are such pressing concerns for textile mills as the energy crisis and deteriorating law and order.
As a result of these problems, you are finding that more and more companies are having a hard time simply managing daily operations and staying afloat. Under such testing circumstances it is very difficult for local companies including ours to pursue international expansion goals.
However, we are quite excited by the prospects of growing demand for home textile products in China and Malaysia. Although our Company has in the past been predominantly focused on exports to North America and Europe, we feel that going forward rising demand from the emerging economies and from other countries within our geographical proximity will be the real growth drivers for the textile sector.
I think it is imperative for policy makers to also realise that the textile sector in the country is hurting in the face of power shortages, rising costs of energy and overall rampant inflation. If the right policies are not enacted to rectify this situation, the country may seize to be a textile hub in the future.
BRR: Anecdotal evidence suggests that some textile firms have shifted operations from Pakistan to Bangladesh. What do you consider to be the primary driving force behind such relocation?
FE: First, exporters operating out of that country are able to reap the benefits of duty-free access to the European Union which adds to their margins. Then there are the issues of law and order and power shortage that we had discussed earlier. Here, let me highlight that the real concern is the high cost of alternative power sources. At the moment the only available alternatives are based on diesel or furnace oil and since these are relatively expensive, most firms shy away from these choices.
But, although some firms may have moved and some others may be considering the same, the overwhelming majority will remain here. The key focus has to be on value addition in the local industry. At the moment our products are mostly on the lower end of the value chain. So to boost the marketability of our products internationally, we have to step up our technical skills and add more value to our offerings.
The bigger players of Pakistan can go abroad, but that is not in their horizon. They are more interested in the financial services and commodity services. They say that they make more money in these rather than textile; that is from where they get the maximum returns.
BRR: You mentioned that the government should initiate measures to bolster the textile industry. Please elaborate on this suggestion.
FE: In terms of direct support to this sector, the government should provide loans on soft terms to firms, particularly those bringing in foreign exchanges by exporting goods to other countries. Keep in mind that the government's own excessive borrowing from the banks is largely to blame for the crowding out of the private sector and if this had not been the case, many companies that are experiencing difficulty in obtaining financing would not have had to face such issues.
Then there is a pressing need for concerted efforts to alleviate the energy crisis in the country. It is well known that there is a shortage of at least 7,000 megawatts in the country and considering the fact that no new projects are being started, this shortage will only exacerbate in the future. The government should create an energy fund that provides financing to private parties that want to set up power plants in the country.
Then there is also a need to expedite the taxation system and particularly the refunds that are owed to exporters in the form of R&D claims and duty drawbacks. Delays in these repayments are a major deterrent for textile exporters and in other countries; stakeholders are not pestered in such ways.
When we talk about value addition or about establishing our brands internationally, there is an implicit factor that the country's image internationally will also impact the perceptions of international buyers. So, we have to work on improving the image of the country as a whole. The clouds of terrorism and extremism bring bad press to the country and they also deter international buyers and investors from frequenting here. So that has to be another key focus area that must be tackled with practical, sustainable steps.