Tayyab Aijaz is the founder and CEO of Roshan Packages. Roshan is amongst the 100 fastest growing companies in Pakistan and is considered the pioneer of the organised fresh fruit and vegetable packaging sector. The business portfolio of the firm includes corrugation packaging, flexible packaging, offset printing, fresh fruit processing and export.
A member of the EDB's committee on paper and paper Board, Tayyab is also the Managing Editor of the Monthly Urdu Digest, which was his family's first business endeavour. Following is an excerpt from the conversation that took place at a recent sitting that he had with BR Research.
HORTICULTURE NEEDS ATTENTION
Roshan Packages had its humble beginnings as a fruit and vegetable exporting business concentrating on the export of mandarins and mangoes to the Middle Eastern markets. It were the unsightly wooden crates in which the fruit was sent out that caught Tayyab's eye, who decided that better packaging would translate not only into better pricing but also help Roshan tap into bigger markets.
And he still believes that the local horticulture industry has a huge potential to grow despite the lack of any concentrated efforts to bring the sector under any kind of regulatory umbrella.
There is a lot of discordant growth in the horticulture sector, even during these times of hardships, says Tayyab, who stresses the need to invest in infrastructures that facilitate this growth.
We need bigger parties to come into the sector, invest into processing and value addition of the fruits and vegetables which can then be exported to the neighbouring countries, he stresses, saying that the sector is not excessively capital intensive. He also believes that rapid results can be achieved if the Government puts some effort taking into account the biggest issues plaguing the industry.
The creation of sufficient entry and exit barriers, appropriation of funds to reform cold storage facilities in a bid to curtail post-harvest losses are some of the issues that are of paramount importance to the sector's growth. Additionally, Tayyab hopes that the incoming government will expand the effort to improve trade relations with neighbouring countries and create an enabling environment that facilitates this fledgling sector.
"Huge quantities of our Mandarins go out to Afghanistan through Quetta and Peshawar, and an even bigger untapped market for the country's various varieties of citrus fruits, mangoes and vegetables exists in the landlocked countries surrounding the nation" says Tayyab, who believes that the right mix of policies and some re-organising could help the government earn billion of Rupees in foreign revenues through horticultural exports.
THE GROWTH OF PACKAGING
With such rapidly increasing acceptance of packaged food items in the country, the sector has the potential to grow like never before, says Tayyab, who believes things are ripe for the picking, but only for the firm's which are geared to meet up to the challenges of this rapidly evolving and fast paced business.
No country can do without a robust packaging sector, and an innovative and healthy packaging industry means that your products will find better markets, at higher prices, he says. Currently, the sector is largely unorganised with the handful of bigger players dominating the scene. Roshan, having pioneered the concept, is the market leader in the fruit and vegetable corrugated packaging sector and is considered the third largest market shareholder in sector on the whole.
THE PLIGHT OF THE PRINTING INDUSTRY Currently, paper and paperboard is being imported into Pakistan under the category of "finished products", due to which it is subject to custom tariffs of up to 25 percent, even though a majority of nations around the world levy duties of up to five percent on the same.
This creates an absurd anomaly, since the paper is used by a large number of packaging manufacturers as a raw material for creating cardboard packaging for essential items such as shoes, electrical appliances etc. Additionally, the printing industry of course depends on the same as their most essential of raw materials.
This is an issue that needs immediate attention, says Tayyab, who explains in detail the effect this is having on the printing industry in particular. "No one has yet been able to explain the wisdom behind this step" he says, saying that the paper is further subject to 16 percent sales tax and a withholding tax of 0.5 percent, which exponentially drives up the costs for people who are for example, printing textbooks.
"Then you allow the same textbooks to be imported into the country on a zero-tariff basis, essentially crippling the local manufacturers who fail to come up to par with the foreign imported goods," he says.
The problem stems from grouping these two together, he says, stressing that while they do share common grounds, printing and packaging sector should be unmerged with the paper industry as the two have inherently different raw materials and pricing dynamics.
He believes that the government needs to sort out their priorities in this regard and do away with the protectionist policies. "It is all well that you are trying to help out one sector, but the dilemma is that you also need to cover the interests of paper's downstream industrial consumers who are forced to depend on imported raw material because the paper produced locally is just not good enough," he says.
ADDRESSING THE SKILL GAP "Even during these hard economic times, when everyone says there are not enough jobs, we have been constantly hiring, but I find that there is a huge skill deficit that needs addressing," says Tayyab.
This is an industry wide issue, where everyone from plant operators to engineers from good schools lack the kind of knowledge the industry requires, says Tayyab, who believes that improved industry linkages with technical and vocational training institutes as well as institutes of higher education are the dire need of our times.
"If I talk about packaging industry specifically, I can tell you that there is no lack of jobs, in fact, I have been unable to find a professional on corrugated packaging in the country, and I have been looking for a better part of a year," he relates.
Everything from designing the structure specific to different products and materials used in the packaging which can improve shelf life of the product requires intensive R&D endeavours, says Tayyab, and collaboration with institutes of higher education were in the works for Roshan Packages to address some of these issues.
GROWING A FAMILY OWNED ENTERPRISE At Roshan, we realised early on that if we wanted to build an institution that took forward our heritage, we had to go down the corporate governance route and we are committed on making true to that goal.
We have a number of things in the pipeline, he relates, saying that the plans for an IPO were also to further the same cause. The challenge remains to grow, but do so in a sustainable manner, and the kind of success we have had thus far has principally been because we understood the importance of transparency in processes and ensuring that we had the right person for the right job.
"Currently, the firm, which is completely a family owned enterprise, is being run entirely by professionals and the family plays very little role on the operations side. We principally look over the strategic development side, and we are planning very soon to introduce an independent industry professional on our board of directors".
Additionally, the firm is also interested in setting up a brown paper manufacturing plant with the strategic alliance of a major global industrial manufacturer of brown paper, and talks are under way in this regard. "There are great challenges ahead," he says, "but even better rewards await those who have geared up and who have developed their systems in anticipation of the better times to come".
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