Almas Hyder is the Senior Vice President at Lahore Chambers of Commerce and Industry (LCCI), elected in October 2015. He is an engineer, an entrepreneur, and the founder of Synthetic Products Enterprises Limited (SPEL). SPEL is one of the leading manufacturers of technology intensive engineering plastic and packaging products in Pakistan. For more than 32 years, it specialises in manufacturing plastic products, especially parts for the auto industry and packaging for FMCG sector. The company also houses the largest CNC mould making facility in the country.
Apart from serving as the Chairman of SPEL, he has also served on the Boards of many government, education, training, development and policy-making institutions. He graduated from University of Engineering and Technology, and has completed the OPM in 2013 from the Harvard Business School. Following is the edited excerpt of what Almas Hyder plans to do at LCCI in his one-year tenure.
BR Research: Tell us about your experience as a business man?
Almas Hyder: I did my engineering from UET Lahore in 1974, after which I wanted to start my own business. I ventured into many things trying to find my bearings, ranging from making plastic shoes, and selling carpets, helmets etc, for setting up and advertising agency. And I didn't have the capital, so I had to develop that too.
In 1982, I entered the automotive sector when the local deletion program for the tractor industry came in. I started taking orders from MIllat Tractors at that time for producing automotive parts followed by Al-Ghazi Tractor, Pak Suzuki, Indus Motors, Honda, etc. Once I started my business in the automotive sector, there was no looking back for me; I accumulated capital over a period of time during which I experienced three recessions. We produce parts for every vehicle in the country, and we are the only source for those parts locally. We are cost competitive with our international counterparts, and we try to focus immensely on reliability ie we must provide the right quality and deliver it at the right time. If these are factored in appropriately, pricing is not an issue.
In 1988, we started another company by the name of SPEL Packaging Industries where we started manufacturing packaging for FMCG companies.
Today, 60 percent of our business is in the packaging, while 40 percent is in the automotive industry.
After taking a retirement, I now only serve as the Chairman of the Board at SPEL. And now that I am with Lahore Chambers of Commerce and Industry (LCCI), I want to share my knowledge and experience I have gained overtime.
BRR: As a Senior Vice President at LCCI, what are your plans here?
AH: Since chambers are political bodies, there is always a tussle going on over proposals. And there is a shortage of time since the tenures are short. So the idea should be to rally everyone around a few key ideas. To me, working on Ease of Doing Business Index is something that is doable within a year; there is going to be a lot of hard work and engagements with both the provincial and the federal government; and also the stake holders who are going to be the net beneficiary of the change I hope to bring.
Fortunately, I have been successful so far, and I have got a lot of support from the members of the Executive and Lahore Chambers. I am trying to disseminate the information regarding the index as much as I can, both personally and publicly through communication and press.
Interestingly, I have found the provincial and the federal government equally thrilled when we started engaging them since October this year, probably because it is part of their mandate as well to make things easier for the business community. Our progress has been very encouraging in these two months. Our mandate is Lahore, but I would want to leave behind a model that can be picked up by other chambers.
BRR: Will you please shed light on what exactly have you achieved in these first two months of your appointment as SVP?
AH: In the last two months, we have looked at all the indices of Ease of Doing Business. We started working on all the ten indices and their sub-indices for Pakistan by comparing them with the best in the world. We have also been working on finding the rules, regulations and the regulatory bodies involved in managing the indices.
Our focus has been to figure out why some countries are better than us. So far, we have been able to culminate that we have too many bodies at times, too many man hours used to fulfil regulations, and unnecessary multiple efforts for a businessman to share the same information with different bodies. Also there is a sequence of how things need to be done like unless you have a company, you cannot apply for income tax registration; and unless you have income tax registration, you cannot apply for sales tax registration.
If there is some national or a provincial portal, every department can just login to get all the information about a company. Despite the existing databases, this is not happening here because the rules have not changed. The rules are still manual, and the government needs to make efforts to bring IT communication in between to liaison various departments. Because the rules are archaic and there are bureaucratic hurdles, the system continues as such. Somebody has to work with the government, identify the rules and departments and make amends.
BRR: Have you identified these rules and any of their alternatives?
AH: This is what we are now working on, and for this we are largely engaging with the government. At times, their internal system is not available or accessible to us, so we have to work with these departments and let them come up with answers. Our job is to tell them about the best practices in the world; it is their job to tell us what bureaucratic hurdles impede their way. It is after this stage that we can get to a point where the rules can be changed.
The first of the indices for example is starting up a company. It takes 19 days to get all the registrations done officially in Pakistan compared to half a day in New Zealand. This is because we have eight different departments that issue these registrations including SECP, FBR, EOBI, social security, labour department, etc compared to only one portal in New Zealand that has all the information required by all the departments. Compared to our sequential way of setting up a company, New Zealand has one office that stores the entire venture's information that transmits it simultaneously to the relevant departments.
Similarly, if you want to get a 140kv electricity connection in Pakistan, it takes 179 days officially, whereas it takes 15 days in South Korea. Again all the paper work is essentially stopping Pakistan to get to the top. In reality it takes more than 180 days if you do not grease the wheels, which is another problem in the system.
Paying taxes is another cumbersome factor in Pakistan; you have to go 47 times to the bank in Pakistan to pay taxes of one company in a year, while it is 33 times in India, and 3-5 times in the best countries of the world. Every time you go the bank, you create an opportunity for audit. Hence, there are at least 47 opportunities of audit of each company in Pakistan.
Then there are some other factors like getting credit, which might not have anything to do with bureaucratic hurdles; credit to the private sector is only 16 percent of the GDP in Pakistan, while it is 51 percent in India. However, when you look at the complete picture with all the ten key factor of Doing Business, you realise that the related cost would come down tremendously if the lead time and the transaction costs are brought down.
BRR: The chambers in Pakistan do not have an institutional framework history where they have continuity in their operations, policies and initiatives. What is your take on institutionalisation of the chambers?
AH: The chamber is an autonomous body but it runs under the rules of the Ministry of Commerce. A lot of the issue has to do with the rules and regulations that govern these chambers. We had a system in Lahore Chamber where the tenure of the elected committee members was three years; you came in as the Vice President in the first year, Senior Vice President in the second, and the President in the third. The government changed the tenure to two years, with no office bearer to be re-elected the next year. The new rules and regulations have brought inconsistency into the system.
On the flipside, the tenure of one year is also an incentive; I have to make sure that something is done within this year. I should not be dependent on the next year, and for this my plan is to engage with the government departments, and create hype with conferences, workshops and interviews. If we are successful in selling our idea to the government, it will naturally show inclination towards the initiative even if the chamber does not pursue it later on. I hope there is going to be so much political value in what I am trying to do that those who come after me also find it useful to follow up and get the glory out of this change.
BRR: What are the other roles of the chamber?
AH: The role of chamber is very diverse and looks after the interest of the members. The members are all tax payers. The chamber regulates the behaviour of the members who import and export products. It creates a relationship of trust between the government, the embassies and the business community. It has an IT system that connects all the members. This is the only platform where anybody and everybody can connect with the business community of Lahore. We take trade delegations abroad and we do exhibitions in Pakistan as well as other countries. We have an advisory cell that helps businesses, start-ups, and related queries.
BRR: How does the chamber run financially?
AH: With 18,000 members, the total budget of this chamber is around Rs 60 million. This entire amount comes from the members in shape of membership fee and payment for services provided. Ultimately, all the money that comes in runs the secretariat.
BRR: How do you compare LCCI with chambers with the Delhi chamber?
AH: The Delhi chamber encompasses not only Delhi, but a larger catchments area. In Pakistan we have a chamber in every city now. So our catchment's area is very small. Because of that the fee base is narrow, and thus we do not have many people working in the organisation as we cannot pay very expensive salaries to very good employees. Lahore chamber was the only chamber for the whole of West Pakistan once. Over a period of time the membership has been chipped away into other chambers. Also, the secretariat is strong in Delhi, which means that the chamber is run by secretary general and not the president.
BRR: What recommendations do you have for the chambers?
AH: There is no one ideal model. They evolve overtime. We used to have a strong secretariat and a system, but that system is now being evolved. Rather than pointing fingers, we should understand that there is a weakness, and let the system evolve itself into improving itself. We need a system of stability and consistency in approach within the organisation. The rules need to be changed on the back end with provincial and federal governments on board.
BRR: What is your take on CPEC being the game changer?
AH: Pakistan has been waiting for some good news for a long time, and CPEC came in as good news. The positive aspect of CPEC can trigger more investment. I hope this good news create a euphoria.
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