Profit E-Magazine Issue 78 by Profit (by PT)

CONTENTS

12 12 News in Numbers 14 Roshni Rides: the ‘Waapistani’ startup with an American ethos 20 Could electric vehicles break the dominance of the Big Three car companies in Pakistan?

28 28 Could this app help the government eliminate smuggled cigarettes? 32 What is Ali Mukhtar’s big plan for Fatima Gobi Ventures? 36 After the storm, dark clouds still hover over oil refining sector

37 37 Cement sales signal recovery in construction industry 39 Khabees Orat - making money, one venting meme at a time!

welcome

Seriousness of purpose on climate policy It is a sad thing when one so consumed by one’s own propaganda and nonsense that one cannot get oneself to admit the truth. This is what is happening in the case of the current administration and its climate policy, where the government finds it much more convenient to blame India and even the supposed sins of past rulers for the acute crisis rather than admitting reality. Half of Punjab cannot breathe, and the government of Pakistan cannot be persuaded to acknowledge the truth, even in the face of coughing and wheezing children and the elderly. And that truth is that, while pollution across the border is certainly a factor, the bulk of the polluted air in the northern parts of the country is due to local causes. A combination of factors, including the burning of stubble by farmers as well as the massive – and highly ill-advised – increase in coal-fired power production have contributed to the literal lack of breathing room in the most densely populated parts of the country. Lest anyone forget, we should remind everyone: Lahore and Faisalabad had much more breathable air in the autumn and winter prior to 2013. It is only after the obsession with Thar coalfields as some sort of “national asset” and the obsession with increasing power generation by any means necessary that the air became intolerable. What kind of national asset chokes children halfway to death? But, unfortunately, the government finds these truths highly inconvenient to think about, be-

cause if it acknowledges that coal-fired power plants are a problem, it will have to come up with another solution to the nation’s chronic energy shortage. And that might actually require, you know, thinking. Heaven forbid the government of Pakistan ever be forced to do such a thing. This is not to suggest, of course, that all is lost. The government appears to have resisted lobbying from the powerful incumbent car manufacturer lobby to pass a bill in Parliament that will encourage the import and production of electric vehicles in Pakistan, the subject of our cover story this week. And off-grid solutions continue to gain market share in the power generation space in Pakistan, especially given the unreliability of the national electricity grid. But some things are simply too big and too important for the government to ignore the problem and pretend all is well. We need the government to step up and act like an adult on climate change and environmental protection.

Farooq Tirmizi Managing Editor

Executive Editor: Babar Nizami l Managing Editor: Farooq Tirmizi l Joint Editor: Yousaf Nizami Reporters: Syeda Masooma l Muhammad Faran Bukhari l Taimoor Hassan l Abdullah Niazi l Ahmed Jamil Bilal Hussain l Director Marketing: Zahid Ali l Regional Heads of Marketing: Muddasir Alam (Khi) l Zulﬁqar Butt (Lhr) l Mudassir Iqbal (Isl) l Layout: Rizwan Ahmad l Photographers: Zubair Mehfooz & Imran Gillani l Publishing Editor: Arif Nizami l Business, Economic & Financial news by 'Pakistan Today' Contact: proﬁt@pakistantoday.com.pk

FROM THE MANAGING EDITOR

The above chart is an important one, both for the story it tells and the story that is not often told among Pakistanis when it comes to investing their money. Traditional thinking on Pakistan when it comes to money – such as it is – has held that gold is a safe investment and that it never goes down in value. The reality, however, is much more complicated: that gold can not only go down in value, but that it can also stay down for extended periods of time, suggesting that Pakistanis should consider gold as a much more risky investment than they currently do. Over time, of course, gold yields positive returns, and over a 20-year period – with returns of 14.3% per year – handily beats inflation. Nevertheless, gold is both risky and yields less in terms of returns than stocks, and does not have a useful purpose like real estate.

News IN NUMBERS

This chart is a continuation of previous charts where we have shown the exports of rock salt becoming a bigger component of Pakistan’s total export mix. As one can see, rock salt production jumped significantly in 2014 and has since then stayed at relatively elevated levels. It is hypothesised that this jump in production has come largely from the export of rock salt – particularly pink “Himalayan” rock salt – to the United States and Europe over the last five year. We say “Himalayan” in quotes because Khewra, where much of the salt is extracted from is not actually in the Himalayas, and the term was coined by savvy marketers in developed economies rather than Pakistan’s own rock salt producers, who likely continue to receive a pittance for their work and value they create.

News IN NUMBERS

Roshni Rides the ‘Waapistani’ startup

with an American ethos Four Pakistan-Americans under the age of 26 are running a million dollar ride-sharing company in Karachi. Um, how?

Hanaa Lakhani

By Meiryum Ali

anaa Lakhani’s professional career path is the kind that would give the average Pakistani parent some anxiety. Around this time two years ago, the 26 year old was an operations analyst at the investment bank JPMorgan in New York. Today, she is the chief marketing officer for a tiny startup tucked away in a building close to Kaybees, in

Moneeb Mian

Gia Farooqi

Bahadurabad, Karachi. A bit of a change, to say the least. The driving force (haha) [Editor’s note: laughing at your own bad puns is just sad] behind this career upheaval is the ride-sharing startup Roshni Rides. The project is the brainchild of four founders: Hanaa Lakhani, Gia Farooqi, Hasan Usmani, and Moneeb Mian. All have backgrounds similar to Hanaa’s: all four are of Pakistani origin but were born and raised in New Jersey, attended Rutgers Business School, and then in 2018, packed their bags and moved to Karachi – with $1

Hasan Usmani

million in prize money in hand to jump start their company. Roshni Rides is unique for many reasons. For one, its entrance in the Pakistani market appears to be at the right time. Uber and Careem have already familiarised many Pakistanis at least with the concept of ride-sharing. Airlift and Swvl, brand new companies announced In Pakistan with much fanfare this year, are providing bus and shuttle services. Roshni has slowly but steadily grown in the two years since 2018, and has found its niche as an alternative to van wallas for women.

But that’s not why you should pay attention to Roshni. What makes the startup compelling, is that fundamentally, this is a story of how a bunch of American college kids decided they could pull this off in a country they have never lived in before. It is a story of how to approach a very Pakistani market with very can-do American spirit. At the most recent 021Disrupt conference, Rabeel Warraich, founder of Sarmayacaar, coined a term for people like this: “Waapistanis.” Roshni Rides is the perfect example of that diaspora trend.

The competition that started it all

anaa met her cofounders while studying at Rutgers Business School as an undergrad. The four were all majoring in supply chain management, so often saw each other in the same classes. Plus, they were all Pakistani-American, and Muslim. “Just being in America and spotting another Hijabi or Muslim in your class group, you just automatically gravitate towards that,” says Hanaa. “‘I look like you’ – that’s how our initial friendship really began. I grew up in a predominantly all-white neighbourhood, with a majority Jewish and Christian community. I really wanted to go to Rutgers because it was a place where I could be friends with other Muslims.” In her junior year at Rutgers, the group of friends decided to compete in a case-study competition. These were fairly common at business school, and involved companies coming to campus and posing problems for students to solve. Their first competition was for the American transportation company C.H. Robinson. Their group won first place out of 15 other groups. Their prize? $50. “That was really exciting for us as college students,” Hanaa recalls.

“There’s just a lot of infrastructure barriers here that you wouldn’t even think of in America. For example, banking and the finance industry here is so underdeveloped to the point that everything still requires a physical check with a physical signature. Like, I don’t even have online banking from my business account” Hasan Usmani, COO of Roshni Rides And that was just the start. The next year, they won a campus-wide competition, this time working on an e-commerce solution for the American chain store Target, cementing their friendship and strong work relationship. After graduation, Hanaa, who was a year ahead of her friends, went off to work at JPMorgan, the largest financial institution in the world by assets, as an operations analyst. But in her own words, despite it being the “typical glamourous job” that any business student would want, she was bored and unfulfilled. That is when Hanaa discovered the Hult Prize competition, an annual competition for new for-profit companies that want to make a social impact. Over 250,000 students across campuses compete with one another pitching different social enterprises. Fortunately, one of the competition’s loopholes was that there could be one member on the team who was a non-student. This was Hanaa’s out. She called up her old friends at Rutgers and convinced them to apply, and the four began researching on their concept in October 2016, or Version 1. The four had come up with a plan for a bicycle

sharing platform for refugees settlements in Jordan. The proposal was modelled after the bicycle sharing company Citi Bikes, based in New York. Version 1 helped them win the campus round in December 2016. But afterwards, a judge helpfully pointed out: “You guys are creating a business for refugees camps in Jordan, but all four of you are Pakistani-American and have never been to Jordan. You don’t even speak Arabic, so how are you going to make this business a reality?” Good point. The group then decided to do something in the country their parents had migrated from. That led to Version 2, a solar-powered rickshaw shuttle service in Orangi Town, Karachi. Version 2 helped them win the regional competition in March 2017. In May and June of that year, the group flew out to Orangi Town to conduct a pilot project. To fund it, they leaned into their Pakistani and Muslim communties, and actually managed to raise $30,000 through LaunchGood, a sort of Muslim-focussed GoFundMe. The team rented an office space, bought three solar-powered rickshaws, and waited… It turns out there was just one problem: nobody in Orangi Town cared about the solar panels. “People are not going to pay extra something just because it looks glamorous. That two month study involved a lot of learning,” say Hanaa. So they decided to drop the solar idea, as environmentally friendly as it was, and go

RIDE-SHARING

for Version 3: a rickshaw pick and drop service. After attending an accelerator program between between July and August 2017, they pitched their idea in the final round at the UN headquarters in September 2017. Version 3 helped them win the Hult Prize, and $1 million. “It was kind of a mixture of emotions, like wow I have never received this many text messages in my whole entire life. There are so many Muslims in our area that were rooting for us and watching the pitch live. We’ve always had support from our Rutgers Muslim community, and our local mosques in New Jersey.” says Hanaa. In January 2018, the team packed up their belongings in New Jersey and headed to Karachi – permanently.

Roshni Rides today

o what does Roshni Rides look like today? Well, as soon as the team arrived, they switched over to Version 4, a pick and drop service for working women. As Hanaa puts it, “We realized people don’t want to stay in their settlements. The real opportunity and the real money is in the main city of Karachi.” Version 4 is basically a B2B service that connects corporations with a large female workforce to use Roshni Rides for daily use. Roshni received their first client in July 2018. Today, its clients include Daraz, HBL and Aman Foundation. At the same time, because of their renewed focus on women, and how women use cars and call transport in Karachi, they decided to simultaneously launch Version 5 in September 2019: a carpool service for individual women and school children. “We wanted to reach out to vulnerable communities that don’t really have great solutions out there for them.” says Hanaa. Despite all of these variations within the last two years, Hanaa still reacts at the mention ‘pivot’. “Pivot implies that you do not know what you were doing. We’re instead redefining. We’ve always wanted to be a company that listens to our customers’ wants, rather than just pushing a solution.” Today, Roshni Rides operates out of bright orange coloured office to match its logo, with five rooms in Bahadurabad. The office is a bustling space with around 30 people employed, including the four founders. Gia Farooqi is the CEO, Hasan Usmani, the COO, and Moneeb Mian is the CFO. The startup employs around 160 drivers that complete around 20,000 rides a month. Most of the cars are hatchbacks, that pick and drop two to three women per ride. Most of their customers are women who live in North

“We’re focussed on unit economics, and sustainability. If we are able to make X amount of women’s lives easier, and make their commute dignified, then that’s what we’re going to do” Hanaa Lakhani, chief marketing officer of Roshni Rides Nazimbad, Gulshan-e-Iqbal and Gulistan-eJauhar, i.e. areas in the north of Karachi, who travel every day for work to Korangi, Clifton, and Defence in the south of the city. Roshni’s view of the mobility market is a little like this: Uber and Careem are for people who can afford a nice luxurious car ride, while Airlift though cheaper, is a shuttle model more suited for men. Roshni’s niche is for women looking for a last-mile solution, where the car can pick one up from the front gate. Besides, Roshni found that a hatchback supply model was more profitable than a shuttle service. The main competition is in fact, van wallas, who women often use to make daily trips. Roshni prides itself on two aspects. For one, it is incredibly proud of its vetting process for drivers. “We would be nothing without the drivers we have, they make up our Roshni family that we have here.” says Hanaa. The company’s four step vetting process involves multiple security checks and in-person interviews. “If you have a bad driver, really out of necessity, women just deal with it.”

Roshni is aiming to change this, by partnering with Care Foundation in Pakistan to provide training for drivers on how to talk to customers, particularly women. Secondly, Roshni prides itself on being quite lean financially. Along with revenue earned from the rides, the $1 million won in 2017 has been financing this entire operation for the last two years. About 75% of that initial seed money has been used up, according to Hasan Usmani, the COO. Roshni also does partnerships with different brands, including in vehicle advertisements. I was introduced to the concept of an ‘experience basket’, or a bag of goodies that each Roshni Ride has. “People are stuck in cars from anywhere to half an hour to an hour every day – why not think about things that they want if they’re stuck in traffic?” says Hanaa. Roshni has partnered with large brands like Unilever, who stock samples of their shampoo in the basket, to much more obscure local brands like Primary Skincare (a cult ton-

The Roshni Rides team with former US President Bill Clinton, after winning the 2017 Hult Prize

er and face mist famous on Instagram). But in the future, how is Roshni going to grow without extra investment? Just this October, companies like Airlift, a shuttle service raised $12 million, and Egyptian bus company SWVL announced a $25 million investment in Pakistan. Where are Roshni’s millions? While ever polite, Hanna is practically dismissive of that kind of fundraising, calling it ‘celebrity play’. “SWWL and Airlift are burning hundreds and thousands of rupees on simply just running cars around; empty by the way, all of them are empty. We know how much they are burning...literally just for brand presence.” Instead she dubs Roshni’s lean approach a ‘responsibility’ on the founders part, or an ‘amanat’. It easy to criticize Airlift for wasting rupees, but at least one still sees Airlift buses all over Karachi, whereas Roshni still does not have that kind of brand presence. But that is fine for Hanaa. She says Roshni is focussed on developing their product and app first, pointing out Airlift’s technology is quite glitchy and their tracking capability does not work. “We’re focussed on unit economics, and sustainability. If we are able to make X amount of women’s lives easier, and make their commute dignified, then that’s what we’re going to do.” she says.

The American Twist

small digression: this reporter herself is 25 years old. I mention this because one of the first things you notice is how young everyone in the office is. No, seriously young. Take Hasan, who met me wearing slides, sweatpants, a Marvel shirt and a backwards baseball cap. As per Hasan, being young has its advantages and disadvantages. “The advantages are that we’re hungry, we’re passionate. We’re willing to put in the work and effort that’s required to do whatever we’re going to do. The cons are obvious, that we don’t have as much experience.” But despite everyone’s relative youth, it is still striking how professional everyone is. It’s a very specific, very American, kind of corporate talk, from the poised, carefully con-

Roshni’s view of the mobility market is a little like this: Uber and Careem are for people who can afford a nice luxurious car ride, while Airlift though cheaper, is a shuttle model more suited for men. Roshni’s niche is for women looking for a last-mile solution, where the car can pick one up from the front gate. Besides, Roshni found that a hatchback supply model was more profitable than a shuttle service. The main competition is in fact, van wallas, who women often use to make daily trips structed answers that Hanaa gives, to the sort of blunt confidence that the other founders exhibit. Hanna chalks out that kind of attitude to their experience in business school. “Literally in our business school classes we were taught how to formally write emails, how to dress, how to even give a handshake. There all cues of being a professional: eye contact, smiling, body language, etc.” “Coming here as a professional end was a bit of a struggle because Karachi is a bit more lax – not as lax as other cities in Pakistan, but for us, lax. And there’s this culture here of ‘Inshallah it’ll happen, ho jayega, ho jayega, but things don’t actually end up happening.” Hasan echoes that sentiment, noticing that despite his young age, he has been put in the uncomfortable role of micromanaging a lot of his juniors. “We want to create more, let’s say, an autonomous work culture” Specifically he wants to create that startup culture of ‘exploration’, of being comfortable with failures. It is easy to see why he thinks that: the 24 year old moved across continents to set up a ride-sharing app with little support, and a mild language barrier. Of course he is comfortable with failure; but try instilling that in Pakistan. Being American comes with another set of challenges ie navigating the state of Pakistan. For one, none of the founders were expecting the amount of red tape found. Says Hasan: “There’s just a lot of infra-

It is a story of how to approach a very Pakistani market with very can-do American spirit. At the most recent 021Disrupt conference, Rabeel Warraich, founder of Sarmayacaar, coined a term for people like this: “Waapistanis.” Roshni Rides is the perfect example of that diaspora trend

structure barriers here that you wouldn’t even think of in America. For example, banking and the finance industry here is so underdeveloped to the point that everything still requires a physical check with a physical signature. Like, I don’t even have online banking from my business account.” Hanaa said setting up a bank account took three months in Karachi – a process that would have taken less than an hour in New Jersey. Then, there is a Karachi-specific problem: the founders had never encountered mafias before. During their pilot project in Orangi, the team struggled to get permits from the government, all the while trying to hope their rickshaws were not going to be burnt down by the transportation or water mafia. “That’s a huge learning lesson, especially for us coming from places like America where mafias and stuff like that just aren’t a concept,” says Hanaa. Maybe not quite true. The Sopranos may be fiction, but it had basis in reality. And the notorious mobster John Gotti was based just across the river in New York.

Looking to the future

hile Hanaa may talk about Roshnis’s amanat to be lean, the truth is, the company is looking to grow. As per Hasan: “We want pick and drop or carpooling to be synonymous with Roshni. If there’s any woman that wants a pick and drop, the first thing that’s going to come to her mind is Roshni.” He estimates the company is about 20% close to achieving that goal. With improvement in their model and technology, Roshni might even be ready for mass scale. Their next steps are still to look for investors, to raise money at least greater than $1 million. It should not be a problem. After all, as Hanaa says very matter-of-factly, since their undergraduate days, “we’ve always been great at pitching”. n

RIDE-SHARING

AUTOMOBILES

By Bilal Hussain

he infamous cartel of Japamese auto manufacturers have been ruling the roost in Pakistan’s car market for a lifetime. The big three – Suzuki, Honda and Toyota – have managed to stifle out any competition that has reared its feeble head, and have strong-armed an entire country into driving the same few variations of sedans and hatchbacks. The division is simple enough: Suzuki caters to the different hatchback needs of the populace, while Toyota and Honda duke it out over a cheap and a luxury sedan model each (City-Corolla and Civic-Camry). For a brief moment, the big three had some competition in the form of refurbished, imported Japanese vehicles. While most of these are also Toyotas and Hondas, they are not controlled by the local manufacturers. But with the government desperately trying to reduce the current account deficit by discouraging imports, making the import of Japanese cars virtually impossible on a large scale and thus not affordable, it looked like this threesome was even more entrenched than before. Things seem bleak. Safety standards are questionable in these vehicles, especially the ones on the cheaper end, which have no airbags. The market is starved of options, yet scared of anything new because of how major the decision to get a car is in Pakistan from both a cultural and economic point of view. What could possibly break the monopoly of the big three? Well, it might just be electric vehicles, and they could possibly help save the planet in the process. The federal government has finally approved the Electric Vehicle Policy 2019, and the driving force behind the policy has been the Ministry of Climate Change. And while the resident Minister of State, Zartaj Gul Wazir, might be the kind of simpleton who believes that the Prime Minister’s piety is fixing the environment, the ministry

itself still has enough intellectual bandwidth to realise the simple maxim: electric vehicles good, fossil fuels bad. It is a sign of hope that there is at least a realisation that Pakistan must move towards electric vehicles. Perhaps it is because we are so much in the thick of it, but we are somehow spared the worst of climate change denial in this country. According to the few people in the electric vehicles business, the EV policy approved by the government has been acclaimed as a ‘game changer’, and it has all the ingredients to transform the transportation in Pakistan while setting up a whole new EV industry in Pakistan. In brief, the Electric Vehicle policy significantly lowers the taxes on all kinds of imports as well as domestic manufacturing of electric vehicles in Pakistan. For new electric

“It will help us reduce carbon emission, which has been the main reason behind climate change. EVs will be very economical for individuals, as they will reduce fuel costs and maintenance expenses considerably. Our rough estimates indicate that individual motorists could save 85% to 90% on their maintenance and fuel costs if they switch to EVs” Ehteshamul Haq, chairman of the Pakistan Electric Vehicles Manufacturing Association (PEVMA)

vehicles, the cars will face a 1% sales tax and 1% customs duty on the EV-specific parts of a car, which will reduce the overall estimated taxes paid on import. For used vehicles, the tax will be 15%, much lower than the 25% to 100% taxes that most other imported vehicles typically have to pay. And for manufacturers and assemblers, a 1% sales tax is all that the government will collect for at least the first seven years of this policy. But despite Parliament giving the nod to the EV policy, the main man behind it suggests caution before celebration. Malik Amin Aslam, advisor to the Prime Minister on climate change, has said that the incumbent players will continue to have the competitive advantage in the market. Electric vehicles are yet to be seen on Pakistan roads but Malik Amin Aslam says in

“There are a lot of reservations related to the low duties on the import of electric vehicles. Apart from the engine and transmission, almost everything is common between an electric vehicle and a common combustion engine car. If the duties are so low for electric vehicles, then who would manufacture in the auto industry?” Sohail Bashir Rana, chairman of Pakistan Automotive Manufacturers Association (PAMA) matter of few months, the EVs will be a familiar sight.

End of the road for oil?

ccording to a research by BNP Paribas quoted in a Forbes article, oil would have to be priced at $10-$20 a barrel to remain competitive as a transport fuel, given the promising future of the still-nascent electric vehicles industry. The BNP Paribas research suggests that the economics of renewable energy make it impossible for oil to compete at current prices. The author of the report, global head of sustainability Mark Lewis, says that “renewable electricity has a short-run marginal cost of zero, is cleaner environmentally, much easier to transport and could readily replace up to 40% of global oil demand.” And with the EV Policy now in place in

Pakistan, the people looking to tap the EV market, which is yet to get rolling in the country, are upbeat and hopeful that the country seems ready to embrace the important technological change. Ehteshamul Haq, the managing director of SZS Group, an engineering and oil field services company that is now seeking to enter the electric vehicles space, says that there was no reason to resist technology, which would be benefiting the society at multi-levels. SZS is among few groups who have been endeavoring to initiate and tap electric vehicles’ industry in Pakistan. And Ehteshamul Haq has been elected the chairman of the newly formed Pakistan Electric Vehicles Manufacturing Association (PEVMA). “It will help us reduce carbon emission, which has been the main reason behind climate change. EVs will be very economical for

individuals, as they will reduce fuel costs and maintenance expenses considerably. Our rough estimates indicate that individual motorists could save 85% to 90% on their maintenance and fuel costs if they switch to EVs,” he said. “When the use of oil decreases for our domestic transport, then certainly the bills for import of oil will also reduce, which will help us reduce our import expenses. It would reduce our current account deficit as well,” he added. Meanwhile, Malik Amin Aslam has said that Pakistan could save up to $2 billion on oil imports annually if Pakistan is able to follow the guidelines put in the policy. Ehtesham was in agreement with the government, saying that the whole world was now adapting EVs with open arms, so that even laymen understand that it is a very beneficial technological shift in the auto industry - one that the whole world must now take seriously. According to Global EV Outlook 2019, published by the International Energy Agency (IEA), the global electric car fleet exceeded 5.1 million in 2018, up by 2 million since 2017, almost doubling the unprecedented amount of new registrations in 2017. China remained the world’s largest electric car market with nearly 1.1 million electric cars sold in 2018 and, with 2.3 million units, it accounted for almost half of the global electric car stock. Europe followed with 1.2 million electric cars and the United States with 1.1 million on the road by the end of 2018 and market growth of 385,000 and 361,000 electric cars from the previous year. Norway remained the global leader in terms of electric car market share, at 46% of its new electric car sales in 2018, more than double the second-largest market share in Iceland at 17% and six-times higher than the third-highest Sweden at 8%. Electric two/three-wheelers on the road exceeded 300 million by the end of 2018. The vast majority are in China. With sales in the tens of millions per year, the Chinese market for electric two-wheelers is hundreds of times larger than anywhere else in the world. In 2018, electric buses continued to witness dynamic

AUTOMOBILES

“They should have let us know that they would be taking this direction for Pakistan’s auto industry, then we might have come here with a different plan. Now we have invested on combustion engine assembly plant, and suddenly there is a completely different policy that may change the industry dynamics drastically” Norez Abdullah, CFO of Hyundai-Nishat Motors developments, with more than 460,000 vehicles on the world’s roads, almost 100,000 more than in 2017. And now it appears that Pakistan may join the global race to convert transportation to electric vehicles. With the EV policy finally approved by parliament, Malik Amin Aslam is hopeful. He tells Profit that the EV Policy has come after months of rigorous work and lobbying, and that going back is not an option for

the ministry, or even the future of the country. He is confident enough in the policy that he believes electric vehicles could be an everyday sight within a matter of months.

Endless possibilities

he great thing about new technology is that people do not necessarily use it as it is meant to be used. While Malik Amin Aslam says electric

“People in the rural areas won’t be buying EVs because they struggle to get electricity even for domestic use. Where will they charge these EVs? Secondly, drivers in the Northern areas won’t be fond of EVs either because you need propelling power in those areas and EVs don’t have that” Asad Ali, research analyst at BMA Capital

vehicles will be zipping around on the roads in a few months, what he might not know is that at least one electric vehicle is already making its way along the streets of Lahore, powered not only by electricity, but free, off the grid electricity. Zubair Khaliq, an engineer that runs Multiline Engineer, imported a Nissan Leaf back in 2016, much before even the semblance of an EV Policy was around. While the import costs meant spending a pretty penny, he is currently driving the car completely off the grid, charging it off solar panels he has installed on the roof of his office complex. The car gives him around 5.7 Kilometers per every kilowatt-hour (kWh) that he charges it. Calculating on the basis of electricity grid prices which are currently about Rs12 per kWh, that implies a cost of Rs2.11 per kilometer to run a Nissan Leaf, even if one were to charge it using the grid. By contrast, Pakistan’s favourite car – the Toyota Corolla – gets an average of 12 kilometres per litre of petrol. Given the current cost of one litre at Rs111.74, that puts the fuel cost of a Corolla at Rs9.31 per kilometre. Speaking to Profit, Christopher Robinson, an analyst for the US-based Lux Research, a data analytics and research company, said that not only were electric vehicles the future of transport, but electric vehicles sustained by renewable sources such as solar were vital. “Powering electric vehicles with renewable energy is the most sustainable transportation solution in the context of the environ-

ment. Emissions are only created during the manufacturing process and transportation of the vehicle and solar panels, and the overall carbon footprint is quite low. In a financial context, electric vehicles may not always be the lowest cost option” he said. There are other elements of course, Robinson points out that although battery costs have fallen dramatically, roughly 80% over the last decade, electric vehicles still remain more expensive than internal combustion engines. “However, they are typically cheaper to run as they are more efficient, fuel costs are lower (electricity is generally cheaper than gasoline), and electric vehicles require less maintenance. This means drivers, or fleet operators like buses and taxis, can see a financial benefit when considering electric vehicles.” “Lastly, the government can play a strong role in encouraging the adoption of BEVs. In countries with the highest rates of electric vehicle adoption, such as Norway and China, the government has offered generous financial subsidies for the purchase of electric vehicles as well as exemption from some taxes or registration fees” he ended.

Antithesis

hile the EV policy might seem like a shining city on the hill, the current players in the auto industry and the auto part makers are not happy at all. They have unanimously expressed reservations over the approval of the EV Policy, and have time and again said that they were not taken on board by the government on this. Pakistan Automotive Manufacturers Association (PAMA) Chairman Sohail Bashir Rana has said that the cabinet may have approved the policy. but it will not be implemented right away without a say of Ministry of Industries. “There are a lot of reservations related to the low duties on the import of electric vehicles. Apart from the engine and transmission, almost everything is common between an electric vehicle and a common combustion engine car. If the duties are so low for electric

Takeaways from EV Policy 2019 According to the policy, the government looks to n Ownership of small EVs and buses to be at par with their Fossil Fuel Vehicles (FFVs)

counterparts by 2020 and cost ownership of all types of EVs to be at par with their FFV counterparts by 2025 around 250 million EVs on road by 2030, excluding two and three wheelers. n Market development and public awareness through incentives and subsidies on EVs especially to the companies willing to setup EV related industry in Pakistan. n (Years 1 and 2): Fuel import bill substitution through targeted penetration of EVs through local assembly and manufacturing. n (Years 3 and 4): Reasonable local adoption and export of electric vehicles and their components through indigenous research, development, assembling and manufacturing. n (Years 5 and beyond) With the target penetration of first five years the country will conservatively get around Rs110 billion yearly through savings and earnings. n Mitigate climate change through a reduction in emissions from transport sector. Create a pivot to industrial growth in Pakistan and encourage auto and related industry to move towards and local EV manufacturing. n Forge links with the global EV value chain for export potential of EVs and their parts. Meet the objective of generating employment through Green Economy initiatives. Reduce oil import bill. Use electricity in off-peak times for useful purposes. Develop affiliated industry such as battery manufacturing, charging infrastructure, etc. To achieve these goals, government has given enticing incentives including negligible custom duties on import of EVs, EV CKDs and chargers that has been displayed in the charts.

vehicles, then who would manufacture in the auto industry?” questioned Sohail. He reiterated that the policy is yet to be finalized and would change since it has a little say from the Ministry of Industries. Meanwhile, Adeel Gauhar, who prides himself to be the only person selling electric vehicles in Pakistan, concurs that while the policy may look enticing, until the government finally issues SROs (Statutory regulatory orders), there are many catches. Adeel Gauhar is partner at Jawad Corporation, which imports and sells Sunra Chinese electric bikes in Karachi and has a showroom at Karachi’s Dolmen Mall. He has had very bad experiences related to custom duties, and has consistently been disappointed by the way things have been handled by government agencies.

“If this policy is enforced in letter and spirit then I would be selling electric [bikes] at Rs90,000. The price stood at Rs140,000 at the moment,” he said. Asad Ali, a research analyst at BMA Capital, an investment bank and securities firm, does not think that EVs would be posing any challenge to the combustion engine in the near future for multiple reasons. “People in the rural areas won’t be buying EVs because they struggle to get electricity even for domestic use. Where will they charge these EVs?” he questioned. “Secondly, drivers in the Northern areas won’t be fond of EVs either because you need propelling power in those areas and EVs don’t have that,” he said Moreover, Asad also thinks that there will be several nitty gritties in the final SROs by the government, which would not be as

Contribution to pollution by automobiles have a world average of 20% but our automobiles contribute 40% of the total pollution in the country. So this is a place we have to work on if we want to have lesser carbon footprints as a nation” Malik Amin Aslam, advisor to the Prime Minister on climate change

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“Powering electric vehicles with renewable energy is the most sustainable transportation solution in the context of the environment. Emissions are only created during the manufacturing process and transportation of the vehicle and solar panels, and the overall carbon footprint is quite low. In a financial context, electric vehicles may not always be the lowest cost option” Christopher Robinson, senior analyst at Lux Research much enticing for people to invest in the EV business as it looks at the moment in the ‘half baked’ policy.

The inevitable

owever, Malik Amin Aslam said that there is no two ways about it, and EVs would be preferred because of the sheer environmental impact they would have. It does not matter to him who accepts or rejects or questions the policy. “Contribution to pollution by automobiles have a world average of 20% but our automobiles contribute 40% of the total pollution in the country. So this is a place we have to work on if we want to have lesser carbon footprints as a nation,” he stressed. Sarosh Hashmat Lodi, Vice Chancellor of NED University in Karachi, who has been leading the research on electric vehicles, said that the advent of EVs was inevitable, and if someone was trying to hinder the technological change in the auto industry for any reason, they were committing a crime. It is not actually illegal to lobby against any policy, so perhaps the professor was speaking metaphorically. Malik Amin Aslam said that all the

“Renewable electricity has a short-run marginal cost of zero, is cleaner environmentally, much easier to transport and could readily replace up to 40% of global oil demand” Mark Lewis, global head of sustainability research at BNP Paribas Asset Management

stakeholders, including incumbent and new auto manufacturers, should come together and establish a consensus to create a roadmap to achieve the goal of 30% new sales by the year 2030 set by the Prime Minister. At the same time, however, Norez Abdullah, CFO of Hyundai-Nishat Motors, is disappointed at the government for taking a completely different course of action after enticing new players in the country’s auto fray. “They should have let us know that they would be taking this direction for Pakistan’s auto industry, then we might have come here with a different plan. Now we have invested on combustion engine assembly plant, and suddenly there is a completely different policy that may change the industry dynamics drastically,” Norez said.

The Export Opportunity

ne of the things that Malik Amin Aslam was most excited about was that not only would EVs help Pakistan reduce carbon emissions and oil import bills, but also offer an opportu-

nity to tap into the Right Hand Drive (RHD) Electric Vehicles export market as well. “We will also be using our cordial relations with China to help us establish export market for Right Hand Drive (RHD) Electric Vehicles. Most of the production in China are of LHD EVs, so we believe we can achieve that target to manufacture RHD EVs and export from Pakistan in collaboration with China,” he said. Moreover, he said that work has been done for the transfer of technology for manufacturing of batteries with China, and hopefully Pakistan would also be able to produce its own batteries for EVs. “There are multiple options. There are swappable batteries and then there are solar powered batteries. We have multiple options in front of us, and we will work on that,” he said. He further said that EVs were more adaptable for localization as compared to Fossil Fuel Vehicles (FFVs). “We will be able to localize EVs more as compared to combustion engine vehicles that have always been localized lowly and have never achieved their localization goals.” At least half of the cost of a locally produced car is derived from imported parts – CKDs, which makes car prices prone to currency fluctuations. He further said that it was now a matter of months that people would start seeing EVs on road. However, he said that initially the focus will be on two and three-wheelers, which are approximately 20 million in the country as compared to the 3 million four-wheelers (present road traffic in the country). “In the next five years, we want to have 400,000 bikes and 100,000 three-wheelers on the road. Moreover, we will hopefully have brought 100,000 four-wheelers also by that time,” he said. n With additional reporting by Abdullah Niazi

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Could this app help the government eliminate

SMUGGLED CIGARETTES?

A European company, in collaboration with a military-owned company, won the contract to help the FBR crack down on smuggled tobacco products, but some people are not happy

By Ahmad Ahmadani and Syeda Masooma

ould the answer really be as simple as an app? For decades now, the tobacco industry has lobbied the government of Pakistan to crack down on smuggled cigarettes and other tobacco products, and the government has been inclined to help them, in large part because the government itself derives an inordinate amount of taxation revenue from the industry. But after decades of failing to make a dent in smuggling activity, the government may finally have found a solution that uses sophisticated technology to help crack down on smuggling activity. But as with everything in the government, matters are complicated with allegations of wrongdoing over who got the contract to set up the government’s tracking and tracing systems. First, some context is in order.

Tobacco and taxes

s a percentage of the size of the economy, tobacco is a tiny fraction, accounting for just over 3% of consumer spending in Pakistan, and less than 2% of the total size of the economy. Total Pakistani consumer spending on tobacco products is just shy of $300 million, according to Profit’s analysis of data from the Pakistan Bureau of Statistics. Yet the industry punches above its weight when it comes to its importance to Pakistan’s taxation system. In the fiscal year ending June 30, 2019, the tobacco industry accounted for Rs117 billion in taxes paid to the government, according to data from the Federal Board of Revenue (FBR), or about 3.1% of total revenue collected that year. Of that amount, Rs90.9 billion was paid in the form of federal excise duties and Rs26.1 in the form of sales taxes. Tobacco may be the most heavily taxed sector in Pakistan. Despite there being several companies larger than it, Pakistan Tobacco Company – the local subsidiary of British American Tobacco and the largest tobacco company in the country – paid more in taxes than any other entity in the country. During the calendar year 2018, Pakistan Tobacco paid Rs92.2 billion in the form of excise duty, sales tax, custom duties, surcharges and income

tax, more than any other single company. Yet, as much as the government collects in taxes on the cigarette industry – which operates as a virtual duopoly between Pakistan Tobacco and Philip Morris Pakistan – there is considerable evidence to suggest that, were they able to crack down on smuggling, the government could collect even more. Experts in the field frequently estimate that the total proportion of cigarettes consumed in Pakistan that are smuggled is close to 24%, which implies an estimated revenue loss of Rs20 billion for the government. Needless to say, the FBR has considerable motivation to try to solve the problem. There is also a foreign affairs angle to the matter. Pakistan is a signatory to the Framework Convention on Tobacco Control (FCTC), which the country ratified on November 3, 2004 and also acceded to the FCTC Protocol to Eliminate Illicit Trade in Tobacco Products on June 29, 2018. Pakistan is one of 181 countries that signed on to the FCTC since 2004 and is among 56 parties that have ratified the protocol to eliminate illicit trade in tobacco products. The protocol stipulates that any tobacco track and trace solution shall be independent of the tobacco industry. As a signatory to the FCTC, Pakistan now has to establish a project to implement a ‘Track and Trace System’ for all tobacco products that are manufactured in, imported into or are transiting through its territory. Such a measure is necessary not only for monitoring and protecting the government’s revenue proceeds from this industry but also to address the illicit trade in tobacco products taking place within Pakistan’s borders. Once established and running, this ‘track-and-trace’ system is also likely to become part of a regional, or global, international track-and-trace regimes for tobacco products. Under Pakistan’s treaty obligations, the

FBR is mandated to issue a license for a trackand-trace system that would work towards preventing leakage of revenue, under-reporting of production and sales of tobacco products and ensuring proper payment of FED and sales tax on the manufacture and sale of tobacco products. The track and trace system will be developed, operated and maintained by the licensee for tobacco products manufactured in and imported into Pakistan.

The Inexto-Peruri-NRTC consortium

ased on guidelines laid out by the International Monetary Fund (IMF), the FBR conducted an auction to hand out the licence for setting up a track-and-trace system in Pakistan, which would be designed to build a technology-based solution to help monitor the illicit trade of tobacco products into the country. The auction attracted interest from leading technology providers in the field, including Swiss security technology firms SICPA and Inexto, the UK-based DeLaRue and OpSec, US-based firms Authentix and SURYS, among others. The consortium that won the bid included three companies; a subsidiary of the French Impala Group, Inexto, the world’s largest tobacco track-and-trace software provider, Indonesian state-owned Peruri, one of the world’s largest tax stamp printers, and the Pakistan government-owned National Radio Telecommunication Corporation (NRTC). NRTC is owned by the Ministry of Defence Production and manufactures sophisticated military grade communication equipment for the Pakistan Army, and also exports such equipment to a number of countries including Saudi Arabia, Nigeria, Sri Lanka, and Malaysia. After the bidding process, the FBR declared the consortium the winner, and granted a license

“The contractual agreements and arrangements are in place to guarantee that no other parties including Big Tobacco can influence the design, solution or project. NRTC is using the Inexto track-and-trace technology for its solution, which is a 100% independent solution and has no links with the tobacco industry. There is no ownership of Inexto shares directly or indirectly by any tobacco or tobacco-related companies” Haider Bajwa, spokesperson for National Radio Telecommunication Corporation (NRTC)

to the local component of that consortium, the NRTC. The initial contract will last for a period of five years and mandates the company to establish, maintain and operate the entire track-andtrace system for the tobacco sector. This license was issued at a price of Rs731 per 1,000 stamps. In a country that consumed close to 40 billion smuggled cigarette sticks in 2018, that could amount to a substantial amount of revenue for the government as well as the company providing the solution. The new solution is expected to allow the tracking and tracing of all legitimate products through a mobile app, not only by the FBR but also by the consumers. If any product is scanned by the app and found to be smuggled, counterfeit or “duty not paid “, the product can be flagged and the government can remove it from the market and perhaps even destroy it. Individuals involved in dealing with such flagged products can also be charged with smuggling and tax evasion, in line with Pakistan’s criminal code. The state-of-the-art mobile app that the NRTC has brought as part of the solution is supported on both iOS and Android mobile operating systems and is available via both the Apple App Store and Google Play Store for free. In addition, surveillance cameras will be installed on manufacturing sites, and once the products have been verified, they will be stamped and will continue to be monitored from FBR control rooms. The solution is simple to use, secure and real time. It has two unique features designed specifically for Pakistan: the track-and-trace digital code and a covert digital fingerprint that provides full authentication. The mobile solution is available to all parties. The track-and-trace solution is currently used in Russia, Switzerland, Burkina Faso, the European Union (EU), Mexico, and Lithuania. Haider Bajwa, a spokesperson for NRTC told Profit in an interview that the contractual agreements and arrangements are in place to guarantee that no other parties including Big Tobacco can influence the design, solution or project. He said that the NRTC is using the Inexto track-and-trace technology for its solution, which is a 100% independent solution and has no links with the tobacco industry. “There is no ownership of Inexto shares directly or indirectly by any tobacco or tobacco-related companies,” he said. Sources familiar with the matter explain that the use of the NRTC system combined with a structured enforcement strategy will help reduce smuggling. It will also enable the law enforcement agencies to keep a real time check in the field, verify and confirm the providence of any products, determine the legitimacy of the said products, and confiscate or destroy them if

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needed. In addition, all checks and information will be available to the FBR control rooms for review and analysis. “The whole process is designed to comply with the FCTC protocol of the World Health Organization (WHO),’’ said Haider. “By stopping illicit trade, illegal sale of tobacco will be subsequently controlled.”

So, what’s the problem?

RTC says it rightfully won this bid. So who has a problem and why? Malik Imran, a representative of the Campaign for Tobacco-Free Kids, a non-profit organisation that lobbies against the tobacco industry, alleged in an interview with Profit that the award of the license by the FBR lacked transparency. He said that the FBR, while granting a license for the establishment and operation of the entire track-and-trace system for tobacco products, has “ignored technical assessments” and has “granted the license to the lowest financial bidder”. “The FBR had amended the rules to facilitate a particular company,” said Imran, adding that the board compromised the technical capabilities for the track-and-trace license by choosing the lowest financial bidder with no past experience in establishing such systems. He claimed that Inexto, the cloud-based global tracking system and brand protection solution, which is partnered with NRTC, also has business links with Philip Morris International, the parent company of Philip Morris Pakistan. He said that Philip Morris had obtained the track-and-trace services of Inexto for its own surveillance. “NRTC won the bid because of its association with Inexto, which is a front company of the tobacco industry and receives business from the said international company,” Malik Imran said. “FBR should make the technical assessment (weighted average) of the participants public.”

“NRTC may not have the experience but it is a partner of Inexto, which has vast experience in establishing, maintaining and operating the track-and-trace system in the tobacco sector” Hamid Ateeq Sarwar, Member Inland Revenue, FBR Malik Imran is not alone in making that allegation. In 2018, a study from the Tobacco Control Research Group at the University of Bath, using a range of sources including internal documents and whistleblower testimony, claims the industry is now going to elaborate lengths to control the global track-and-trace system that the United Nations has said must be put in place to counter smuggling, according to a report published in June 2018 in The Guardian, a British newspaper. The report specifically cited Inexto as being effectively owned by Philip Morris. When Haider Bajwa was questioned about the track-and-trace license being awarded to NRTC, he responded by saying that the corporation along with its consortium partners has won this project on true merits and experience, and is capable of delivering the expected results within the stipulated time frame given by FBR. He said that the NRTC solution will cost Rs3.5 billion less as compared to the 2nd lowest responsive bidder – NIFT. He said that if the technical and financial score is combined, the NRTC would still score the highest amongst all bidders. This was subsequently confirmed by the FBR as well. “The revenue board intends to increase the

“The FBR had amended the rules to facilitate a particular company. NRTC won the bid because of its association with Inexto, which is a front company of the tobacco industry and receives funding from the said international company [Philip Morris International]. The FBR should make the technical assessment (weighted average) of the participants public” Malik Imran, representative of the Campaign for Tobacco-Free Kids

tax revenue by approximately Rs20 billion to Rs30 billion annually with the implementation of the track-and-trace system for tobacco products,” he added. Sources familiar with the tobacco industry in Pakistan believe that owing to the nature of business of NRTC, it is perhaps the only local company amongst all 13 applicant consortiums that possesses the needed expertise and required security protocols of military standards. This would ensure that the highly sensitive trackand-trace data would be protected with highest military grade standards and will not be shared with any foreign company, unlike in the case of other competitors. They said that NRTC, with its local hardware partners, have prior implementation experience of track-and-trace and hardware in Pakistan’s tobacco, pharmaceuticals, and fast-moving consumer goods (FMCG) industries. No other consortium has relevant and necessary prior local experience in implementing or maintaining track-and-trace systems. However, at the same time the FBR official Dr Hamid Ateeq confessed to NRTC coming second in technical evaluations. Speaking to Profit, he maintained that technical evaluations were conducted by the FBR committee to assess the participants of the bid and that Reliance Solutions Pvt Ltd scored best in technical evaluation while the license winner (NRTC) stood second. “NRTC may not have the experience but it is a partner of Inexto, which has vast experience in establishing, maintaining and operating the track-and-trace system in the tobacco sector,” he added. If the industry experts are to be believed, the consortium appears to have fairly won the bid. Nonetheless, Inexto’s alleged ties to Philip Morris suggest that the government’s own rules as well as international guidelines were not necessarily followed. It remains unclear as to whether that will have an effect on the efficacy of the system itself, though it does cast some shadow of doubt over the transparency of the process. n

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What is Ali Mukhtarâ&#x20AC;&#x2122;s big plan for

Fatima Gobi Ventures?

With a $20 million fund, Fatima Gobi Ventures looks to jump-start some of Pakistanâ&#x20AC;&#x2122;s most promising startups. Will it be successful?

By Taimoor Hassan

atima Ventures is the investment arm of one of Pakistan’s leading conglomerates, Fatima Group, and is a frontrunner amongst the Venture Capital firms in the country. What sets this VC apart from others? Besides offering incubation and acceleration in partnership with LUMS, and providing access to an extensive network spread across various industries, Fatima Ventures has recently partnered with Gobi Partners, one of the most successful VC’s in Asia, to launch Fatima Gobi Ventures. To better understand the vision of the company, we sat down with CEO of Fatima Ventures, Ali Mukhtar, talking sustainability, the startup ecosystem in Pakistan, his partnership with Gobi, and more. Taimoor Hassan: What is your position in the company? Ali Mukhtar: I am the founder and CEO of Fatima Ventures and General Partner Fatima Gobi Ventures TH: What is your educational background and what did you do prior to starting Fatima Ventures (FV)? AM:Prior to launching FV, I was overseeing Fatima Group’s strategy and investments. I am a board member of Fatima Group and a board member of the National Incubation Center (NIC) Lahore that is housed in the Lahore University of Management Sciences (LUMS). I am a graduate of University of Pennsylvania in the US.

neurs. That shows that we have exceptionally dedicated and talented entrepreneurs and if the same opportunities can be provided in Pakistan, there is no reason why we won’t see great companies that are homegrown. TH: When did FV start its operations and what is it about? AM: Fatima Ventures was established in 2015 and co-launched an early-stage tech fund with Gobi Partners in March 2019. Fatima Ventures is an early stage VC fund that invests in scalable tech companies. This includes providing capital to our founders, helping them develop successful market strategies in order to enable growth, and connecting with a global network of mentors, investors, and customers. Fatima Ventures, in partnership with LUMS and Ignite, has also setup NIC Lahore; an incubation center which is aiming to create 200 companies over the next five years, and hopefully create thousands of jobs in the process. In the incubation center, startups are offered a plug and play facility and have access to mentorship from global experts to help them test and scale their minimum viable products (MVPs). TH: What is the operating philosophy of Fatima Ventures? AM: In any business success can and should be considered in two parts: i) what are the financial returns? ii) and what is the impact on the community at large? Our vision is to be a major contributor towards the development of the tech ecosystem in Pakistan.

TH: What was the motivation/ inspiration that got you started in this business? AM: I think the motivation and inspiration for any business ultimately comes down to identifying need gaps and prevalent opportunities in the market. I have always been interested in technology and its potential for positive impact. This is especially relevant to a place like Pakistan that, as a developing market, is greatly positioned to provide considerable returns in both social and monetary terms.

TH: What is the ultimate cause that you have dedicated this business towards? (earning profits, boosting entrepreneurship, social impact or others?) AM: I am motivated by enabling a new generation of entrepreneurs through providing them with the opportunity to build businesses that serve millions of customers. Ultimately, Venture Capital has many stakeholders, so whether it’s our shareholders, our founders, or the community in which we operate, we are dedicated to seeing that they all come out as winners.

TH: What people or life experiences have influenced you to enter the Venture Capital (VC) space in Pakistan? AM: Pakistani tech entrepreneurs have been extremely successful in the Silicon Valley in the US and other parts of the world. Successful companies such as Careem, FireEye, Afiniti, Keeptruckin and many others have all been developed by Pakistani entrepre-

TH: What opportunity did you see in Pakistan in the VC space to start this business? AM: Pakistan is positioned to be one of the fastest growing digital markets. With a population of 220 million people and consumption of close to US $300 billion, Pakistan’s demographics show a growing middle-class and a sizeable young population, indicating

a much higher propensity to consume as compared to previous generations. The internet penetration in Pakistan is also amongst the fastest growing in the world, enabling the ‘connected consumers’ within the country to adopt technology in their day to day activities. Pakistan provides its startups with unique opportunities that are otherwise saturated in other markets. Pakistan also has an advantage to learn from global trends such as in China, South East Asia, and India, and to accordingly tailor a model that is suited to its market. TH: What are the strengths of your company that help to exploit those opportunities? AM: Fatima Ventures is the first venture capital firm in Pakistan that is a Fund, as well as an incubator and accelerator; allowing us to support our startups at various stages of their life cycle. In addition, we have one of Pakistan’s leading conglomerates Fatima Group at our back, allowing Fatima Ventures to access a vast network of industries and expertise. This, coupled with our partnership with Gobi Partners, has helped us leverage their investment experience of over 250+ companies and establish a diverse pool of tech founders and mentors both locally and abroad. TH: What is the competition like in the VC space in Pakistan and who are your competitors mainly? AM: We believe that Pakistan’s startup ecosystem is at an inflection point and more funding will quickly enable the sector to develop. We look forward to collaborating with other local and foreign VCs and investors to co-invest and support the tech startups. TH: What challenges have you faced in Pakistan as a VC fund? AM: The government is working on various programmes to promote the sector which include incubators/accelerators, digital skills training programmes, financial inclusion policies and various tax incentives. The current government is also actively pushing further regulatory interventions and incentives for the sector. However, a major challenge will be the timely and effective implementation of these regulations and to see that they operate in harmony with all the relevant bodies. TH: Please give a little background on Gobi VC and the size and scale at which they operate AM: Established in 2002,Gobi Partners is

VENTURE CAPITAL

a China and South East Asia based venture capital firm with over $1.2 billion in assets under management (AUM). Gobi Partners has raised 13 funds thus far and invested in over 250 startups. It has expanded to ten offices across Asia including Bangkok, Hong Kong, Beijing, Shanghai, Ho Chi Minh, Jakarta, Kuala Lumpur, Manila, Singapore, Tokyo, and now Lahore. TH: What is Gobi’s operating philosophy? AM: Gobi adheres to hypothesis-driven investing. Instead of chasing the hottest trends, they stick to what they know and only invest in what they believe in. TH: Why does Gobi want to invest in Pakistan? AM: For the same reasons why we established Fatima Ventures. Pakistan is positioned to be one of the fastest growing digital markets - not only because of its demographics, but because of the high internet penetration in the country. Gobi has also previously compared Pakistan’s potential for growth to that of South East Asia, particularly Indonesia’s. So as an early investor in that market, it is well positioned to identify and implement successful business models that can be applied to Pakistan’s startup ecosystem. TH: What is the size of the Fund? AM: It is US $20 Million TH: How many startups are you looking to invest? AM: Our target is to invest in around 20 to 25 startups. TH: What type of startups or sectors would be the focus of your Fund? AM: Sectors we will be investing in include e-commerce, fintech, travel, logistics, SaaS, consumer-tech, healthcare, and Taqwatech an investment vertical that targets innovative startups offering products and services to the global Muslim population. TH: What would you look for in startups/ entrepreneurs before you make those investments? AM: I am sure this has been repeated many times, but really the most important factor is the founder and his ability to build a talented team that is better than him/her and that shares the same level of motivation. Later on, as the company grows from seed to various series of funding, it is the size of the market, the traction, and in the later rounds, it is about revenue growth and positive unit economics.

Separately, Profit talked to Managing Director at Gobi Partners and member of the investment committee (IC) of Fatima Gobi Ventures, JamauludinBujang, about the state of entrepreneurship in Pakistan. Jamal has 18 years of corporate experience in the private sector and five years of experience in the public sector. He was appointed as the CEO and Board Member of Malaysia Venture Capital Management Bhd. (MAVCAP). Jamal worked with two foreign-based finance institutions for a cumulative period of three years and spent 13 years in Malaysia’s leading investment bank. TH: What is your definition of entrepreneurship? JamaludinBujang: Entrepreneurship is self-empowerment. It is a self-driven initiative taken on by someone to improve himself and the society around him by solving real life problems with innovative solutions. TH: What is your perception about the state of entrepreneurship in Pakistan? JB: The entrepreneurship ecosystem in Pakistan is nascent but growing and flourishing at a fast pace. The country has all the right components to be a thriving tech ecosystem, such as a growing economy, a large population base (40% of which are middle-class consumers), and it has a significant amount of diaspora that are returning to set up businesses in their home country; all of which point to a strong emerging ecosystem. TH: What are the challenges to boosting entrepreneurship in Pakistan? JB: The key challenge is domestic regulations. To facilitate foreign investments, policymakers should come up with a strategy to liberalize the current systemin order to facilitate foreign direct investment (FDI) in the country. TH: In the present form of the Pakistani economy, to what extent can entrepreneurship alleviate Pakistan’s economic issues? JB: Technology can greatly assist Pakistan to transition into sustainable economic growth. It could enable the country to be better integrated with the regional markets and technology could also assist Pakistan by tackling the structural issues it is facing in areas such as financial inclusion, energy, education and health. Entrepreneurship not only has the potential to alleviate Pakistan’s societal issues, but also can create mass employment opportunities leading to wealth creation.

TH: How should the government intervene, if at all, to enable entrepreneurship as a key driver of the economy? JB: The government has done quite well thus far to encourage entrepreneurship through a number ofprogrammes, one of which is the setting up of five incubators around the country to help spur the formation of new tech companies. To ensure these early stage companies are supported post incubation, the government should also set up initiatives to empower local VC fund managers as well as attract foreign VCs via funding programmes. The government could also encourage private sector participation in the tech space by providing tax breaks for groups that invest in the domestic ecosystem. TH: In the context of Pakistan, what impact can universities have on the entrepreneurial ecosystem? JB: Universities can play a key role in identifying problems across various industries, and by promoting entrepreneurial programmes that enable startup founders to solve real life problems by engaging with experts and mentors, both from academia and industries. TH: Tech incubators have recently gained traction to launch and support new businesses. How successful have they been? JB: Tech incubators have played an instrumental role in creating awareness of the startup ecosystem in Pakistan. They have also played an important role in connecting various stakeholders in the industry which include startups, investors, mentors, as well as customers. These incubators have rigorous programmes that enable startups to launch and grow their businesses successfully. TH: Incubators only focus on disruptive businesses but a vast majority of the businesses are conventional. How can they be supported and promoted besides promoting disruptive businesses? JB: Incubators should promote the use of innovation and technology regardless of the nature of the business, be it conventional or disruptive. Conventional businesses can enjoy great benefits from adopting tech which can increase efficiency, reduce costs, as well as unlock new customer segments that could not be addressed without the use of technology. TH: A word of advice for aspiring entrepreneurs JB: Don’t just start a venture unless it’s something you truly love and are good at, or unless you can dedicate yourself to becoming an expert in that field over the coming years. n

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After the storm, dark clouds still hover over

oil refining sector Pakistan’s oil refineries appear to be woefully unprepared for a change in regulations that will significantly lower the price of one of their core products

t has been a terrible year for Pakistan’s oil refinery sector, which has been hammered with losses that resulted from the combined forces of an economic slowdown that hit their revenues, massive currency depreciation that hit their costs, and the shift in the country’s power generation fuel mix that rendered a quarter of their products redundant. But for the refinery industry, it seems their fate is to get out of the frying pan and into the fire. Because this coming year is expected to cause even more pain in a sector that is only just barely beginning to breathe after having taken a pummeling. The story starts in March 2018, when the International Maritime Organisation (IMO) decided that the shipping sector will reduce its sulphur emissions from the current cap

of 3.5% of emissions down to 0.5%, which would render most forms of furnace oil as fuel redundant, which in turn will cause furnace oil prices to plummet. The change goes into effect on January 1, 2020, and the Pakistani oil refining sector appears to have been caught asleep at the switch. “While refineries across the globe have been adapting to the changing regulations, Pakistan’s refineries continue to operate on the outdated hydroskimming technology which could pose serious challenges in the wake of IMO2020,” wrote Arsalan Ahmed and Ali H. Zaidi, research analysts at JS Global Capital, an investment bank, in a note issued to clients on November 14, 2019. “We feel it pertinent to point out that not too long ago, on the direction of the government, the sector invested billions of rupees in diesel desulphurisation and isomerisation projects. Now, with the new regulations, the only viable solution is to again invest humungous sums just to survive in the evolving industry dynamics. So do we take this to be just another day in the capital intensive industry or a massive failure in planning?” they continued. The impact on demand for furnace oil is expected to be quite sharp. The International Energy Agency (IEA) estimates that demand for high-sulphur furnace oil will drop from 3.5 million barrels per day (bpd) to 1.4 million bpd, a 60% decline that will take place virtually overnight. The impact on prices is already being felt in both the local and international markets for furnace oil. Domestic prices of furnace oil dropped 33% in November, compared to last month, one of the most rapid declines in oil prices recorded. And furnace oil is hardly a profitable business for oil refineries in the first place. “It should be noted that furnace oil is already a negative margin product

(gross margins have averaged negative $6.4 per barrel in the calendar year to date) and after this change, the margin is expected to worsen significantly,” wrote Ahmed and Zaidi in their note. The problem for the sector, of course, is the fact that it may be too late to even do anything now, with the deadline hovering so close. Both the time and cost it would take to fix the problem – given the dilapidated state of the refinery sector’s technology – would make the solutions redundant by the time they come online. “A cracker unit requires not only 3-4 years but a massive investment of $500-600 million for a 50,000 bpd refinery,” wrote Ahmed and Zaidi. “Even if work starts today, by the time these units come online, larger and more advanced refineries with a combined capacity of 1.1 million bpd (as per media reports) that are already in the pipeline may be operational. It should be noted that the sector currently has a capacity of 0.4 million bpd.” It is highly unlikely, say analysts, that the government would be in a position to bail out the industry, not least because of the cost, which is likely to be highly difficult for the government to bear given the fiscal constraints the government is currently – and perennially – operating under. In terms of the industry as a whole, about 23% of Pakistan’s oil refining capacity is dedicated to the production of furnace oil, according to data from the 2018 Pakistan Energy Yearbook, all of which stands to be affected. In addition, asphalt and lubricants, which use furnace oil as an ingredient – and account for a further 3% of production capacity – are likely to be affected. Among the refineries, Byco is likely to be the worst affected since about 33%

of its production is furnace oil, compared to just 16% at Attock Refinery. And the collapse in furnace oil prices is likely to have knock-on effects on the rest of the energy industry. As furnace oil becomes cheaper, it may start to get more economical to use furnace oil as a fuel for power generation rather than regassified liquefied natural gas (RLNG) which could have potentially disastrous consequences. “Pakistan has already signed contracts for import of RLNG on a take-or-pay basis. If furnace oil surpasses RLNG on the merit order list, it could be catastrophic for the country’s gas infrastructure, particularly when the country’s existing network has repeatedly been overfed to dangerous levels in the recent past, as per media reports,” wrote Ahmed and Zaidi. The merit order list indicates the relative cost of each type of fuel that a power generation company can use for its production needs. Many power generation units have the capacity to run on either furnace oil or natural gas and hence monitor the relative prices of both commodities so that they can switch over to the cheapest fuel source as needed. It is unclear how long the local refinery

sector could keep supplying the cheap furnace oil before effectively having to shut down production owing to financial losses, though. So perhaps the effects on the power sector might be short-

lived. Nonetheless, given the massive amounts of capital needed in the sector, and the amount of time it takes to plan for projects, this lack of foresight is a bad sign for the industry. n

Cement sales signal recovery in construction industry Production is up 5% in the first four months of the fiscal year, compared to last year, driven largely by domestic private-sector construction activity

he Pakistani cement sector – widely seen as a proxy for home and commercial construction and infrastructure development activity – has seen sales increase by 5% over the first four months of the fiscal year ending June 30, 2020, according to data released by the All Pakistan Cement Manufacturers Association (APCMA), signaling what some analysts believe is at least a temporary recovery in the construction industry. The news came as something of a surprise to market analysts, who had anticipated a continuation of the slump that had appeared to affect the industry over the last several months. “The surprise rebound can be attributed mainly to the demand from private sector where housing schemes resuming/starting production played a part,” wrote Shahrukh Saleem, a research analyst at AKD Securities, an investment bank, in a note issued to clients on November 4, 2019.

The data backs up Saleem’s comments: while export sales were up 17% in the first four months of fiscal year 2020 compared to the same period last year, they account for just 17.4% of total cement sales during that period. The much bigger impact came from domestic sales, particularly in the northern part of the country, which saw a 12% increase during that same period, compared to a 31% decline in the southern part of the country. The bulk of the gains seen by the sector appear to largely be coming from three companies – Maple Leaf Cement Factory, Cherat Cement, and DG Khan Cement, all three of which were able to significantly increase their sales in October. “As per our channel checks, during the month of October, Maple Leaf Cement (MLCF) and Cherat Cement Limited (CHCC) are expected to post a massive jump in total sales by 86% and 91% to 541,000 tons and 370,000 tons, respectively,” wrote Karim Punjani, a research

analyst at Topline Securities, a securities firm, in a note issued to client on November 5. “This was primarily led by healthy domestic sales and aggressive marketing after their capacity additions.” “DG Khan Cement (DGKC) also depicted strong growth in volumes during October 2019; up by healthy 20% year-on-year to 773,000 tons driven by domestic demand which in turn was up by approximately 28% year-on-year to 644,000 tons,” wrote Punjani. The cement industry is highly bifurcated, with plants located in Punjab and Khyber-Pakhtunkhwa usually serving only the northern parts of the country and the plants located in Sindh and Balochistan serving the southern part of the country. This is at least in part due to the fact that the cost of transporting cement across long distances – in the absence of reliable rail transportation – can be prohibitively expensive. However, in recent months, it appears that

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the price differential between the southern and northern markets is high enough to start influencing that intra-country trade in cement. “[One] factor playing a part in the North’s growth and both the regions facing divergent trends is players located in the North supplying their product in the South to take advantage of the price difference between the two regions which currently stands at Rs141 per [50 kilogram] bag,” wrote Saleem. But a big part of the divergence appears to be the fact that construction activity for housing has picked up steam in Punjab but has not quite caught up in the other provinces yet. This appears to be driven at least in part by the provincial government gearing up to remove regulatory obstacles to the construction of new homes in the province, while such projects in other provinces continue to remain stalled. “Demand from the private sector has spearheaded an exuberant increase in local dispatches

of the North after some housing schemes have started construction while the authorities have proceeded to operationalise projects that were stalled previously, according to our correspondence,” wrote Saleem. One more factor playing a role in cement sales may be the inventory build-up by cement wholesalers and distributors, who were temporarily exempted by the government from the condition of having record the computerised national identity card (CNIC) number of every person with whom they have a transaction exceeding Rs50,000. Most cement sales significantly exceed that number, but the vast majority of cement distributors and wholesalers are not registered businesses, effectively operating as unregistered sole proprietorships that do not pay any taxes. The government had tried to bring those traders – along with those in other sectors – under the tax net, though the Federal Board of Revenue

(FBR) has been struggling in that effort thus far. The relaxation of the CNIC condition will last until the end of January 2020, following which it is unclear whether the FBR will be willing to extend it or renew their enforcement efforts. Nonetheless, the good news in October is a welcome change from the third quarter of 2019, when the industry’s revenue declined 10% from the previous quarter, according to data compiled by AKD Securities. The industry swung from profits of Rs1.6 billion in the second quarter to losses of Rs1.7 billion in the third quarter. The preliminary numbers from the first month of the last quarter of 2019 seems to suggest that the industry may yet recover from its disastrous third quarter. Given how much of the recovery appears to be the result of the temporary lifting of restrictive government regulations, it is unclear how sustainable that recovery is likely to be for the remainder of the fiscal year.

CONSTRUCTION MATERIALS

Khabees

Orat

making money, one venting meme at a time! A biting social commentary page with a unique template, how did Lubna Akhtar’s ‘Khabees Orat’ become a money-making phenomenon? By Syeda Masooma

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t happened almost completely by mistake, but at some point in 2016, Lubna Akhtar realised that the hobby Facebook page she was running was making her money – and more money than the grueling human resources (HR) job that was keeping her occupied for most of her day. What had started out as quite the little joke was suddenly offering the possibility of profit. The first paycheque that Lubna received via her Facebook page was a trifling Rs75,000, but it was enough to make her think of what could be. A Facebook page may not exactly be big business or even an up and coming entrepreneurial venture, but it was definitely offering very real, very cold, very hard cash. A lot of it for a passing hobby, especially considering it was more than what Lubna was getting for a month’s hard sweat and toil. The Facebook page in question is the now entrenched Khabees Orat, which uses still images of women from vintage American advertising along with biting Urdu text that serves as a subversive commentary on society, politics, and the trivialities of everyday life. The page has over a million followers – much more than Profit’s own presence on Facebook, and unnervingly close to the following of the magazine’s parent publication, Pakistan Today. What is even more impressive than Khabees Orat’s host of followers is that it is a significantly engaged following – something social media experts and marketers start salivating at. In recent times, a social media slowdown and Lubna's shifting interests and attentions have meant that the page is not making anything anymore for all intents and purposes. But the reality is that it was once upon a time, and while it might not have been the definition of raking it in, it was also enough to beg the question, can you quit your job to admin a Facebook page full time? How exactly do you take home a neat little cheque from a Facebook page every 40 to 60 days, and manage to quit your job while you are at it? How does a small-scale Facebook

business work, and is it something anyone can feasibly do? Profit sat down with Lubna to get the story of the catchy phrases, biting jokes, and how Khabees Orat rose to fame, made money, and then stopped making money, all the while disregarding countless social conventions.

Unintentional beginnings

hen she was studying at theA National University of Modern Languages (NUML), Lubna and her friend Mehwish were the class clowns. Their constant stream of sharp wit and unapologetic roasts made at the expense of their friends was when they were first lovingly dubbed ‘Khabees’ by said stung friends. Back then, there had been a Facebook page called ‘Bitchy Urdu Cards,’ the precursor to Khabees Orat. Much as Lubna does now, Bitchy Urdu Cards used images of women and families from vintage ads from the 1950s with Urdu text to create sharp social commentary. The idea was just something that clicked. Vintage ads from the 1950s and 60s are from the first age of advertising – from the post-World War II economic boom in the United States

“There are some issues which I neither knew nor anticipated, but as I started working with different startups, I realized them. Also, while many pages and businesses approached me, there were also many pages who were using my designs even without my knowledge” Lubna Akhtar, Owner Khabees Orat

that gave birth to the creative executive and real-life Don Drapers and the Mad Men, named after New York’s Madison Avenue, where many of the biggest ad agencies were then headquartered. Today, these early mass marketing campaigns are relegated to Buzzfeed lists about sexist ads from the era. Using the images from the very same sexist ads and adding to them Urdu text commenting on societal issues from the perspective of women turned the simple act of meme-ing into a subversive act – one turning sexism on its head in this small Facebook pocket. As a carefree, undergraduate student with a smart retort for everything, Lubna began sending in content to Bitchy Urdu Cards, just for fun. The page would then post these images created by Lubna, crediting her along the way. But at some point, the owners of this original page either ran out of ideas or simply lost interest. They eventually stopped posting regularly, not just Lubna’s contributions, but altogether. What did Lubna do? Make Khabees Orat of course. In these early days, the page was simply a creative outlet, a sarcastic venting board to make observations and social criticism. Even though Bitchy Urdu Cards had been where it first started, and where Khabees Orat’s unique template comes from, the inspiration for the larger exercise came from a wider source, most of them from other Facebook pages – Aunty Acid is an example. She said that what attracted her the most in such pages was the boldness that their posts exude. “I probably chose this as a way out for all my anger and aggression regarding whatever is happening around us. I am a quiet and reserved person in real life by nature so taking it all out through a character felt good,” said Lubna.

Khabees Orat has even taken on issues such as honor killing, political correctness, raising children, and other social stereotypes prevalent in Pakistani society. As a result, Lubna has received a lot of hate mail and several threatening messages too, but all that has ended up making the page get bolder and ‘bitchier’ and along with it more popular.

How it happened

t was also a matter of convenience that just fit well with her overall aims from the page. “The page where I started, bitchy Urdu cards used the same images – English characters and Urdu language. I realize that pages evolve and change their characters and memes. But I kept the basic character because of several reasons. One, the pictures are easily available online. Two, I am not good with Photoshop etc. And Three, I can focus primarily on lines instead of the images. So, keeping the same character means I get easy access to the images I require. Then, considering the fact that the page got its traction primarily for the same character, so why risk it all? And finally, I am still in love

with the images myself, so I don’t have any reason to change it.” While she might have been at the receiving end of her posts being stolen, she has steered clear of falling into the same trap. “The images I use are being used by many other people and pages, sometimes fans also send me images, so the basic characters I use are not exactly claimed by anyone as copyrighted and I have never received any complaint either. Sometimes I also use local images of local celebrities and twice it happened that I used images which belonged to a photographer. Both times I got calls from them, one told me to credit him and the other said to take off the photo and I did that.” As the popularity of their image increased, businesses also started taking interest. And this is where Khabees Orat the hobby started becoming Khabees Orat the small-scale online business. It all started with Kaghaz, another Facebook page that produces paper products. An interesting nugget here – Lubna is now married to the owner of Kaghaz, Ozair. “Someone asked them to produce notebooks with my designs so they approached me for permission. Then I also started with the owners of ‘Notebook’, another similar startup. Then another company “Muggay” also contacted me for permission for the designs and to work with them. Many other pages also approached me but it was mostly them coming to me instead of me looking for producers,” recalls Lubna. However, the union with other Facebook pages and merchandise dealers has not all been smooth sailing for Khabees

Orat. “There are some issues which I neither knew nor anticipated, but as I started working with different startups, I realized them. Also, while many pages and businesses approached me, there were also many pages who were using my designs even without my knowledge. In the beginning I fought back, complained and asked such pages to stop using my designs without my permission.” The business model of such an initiative is quite interesting, in the sense that there is indeed zero investment in monetary terms, little financial risk, and decent profits. For all intents and purposes, Lubna is a creative agent for hire with a unique brand of her own. Lubna’s designs were used by these different businesses, and the merchandise came directly to her with a certain price tag. Then, it was up to her to decide how much margin she wants to keep on top and sell those products through her popular page. There are, of course, some negotiations, but ultimately, as the owner of the distribution channel, it was Lubna who had the authority to decide the price. This is the general norm of how Facebook pages that also produce merchandise work. You might have come across several such businesses producing hoodies and mugs with university logos, or for instance taking the popular posters from Aurat March and so on. Another benefit for such a creative page is that the job of production, advertisement, and taking and delivering orders is all done by the producers of the merchandise, and the owners of the designs get their margins comfortably without having to handle the sales process. “The producers already have big sales and they already have an established market so they produce a said product and quote the price that they are offering,” she said. For more popular products, and if they are also cheaply produced higher margins can be added. In Khabees Orat’s case that would be kitchen magnets. But there are also some products that just needed to be kept in the collection despite lower sales, because it fits the overall portfolio of designs. “For

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me that would be cushions, they don’t sell much so I keep lower margins there, but they are still available”. Since the manufacturers are responsible for marketing and order management, they also get to be the ones who decide the primary target market for such products. However, the designers and creative content creators play a major role thereby positioning their content in a certain way. “For my page the demography is mostly female, approximately 70%, and usually 18 to 28 years old. So, I know that it’s the same group that will also become buyers of the products with my designs and therefore composition of customers of merchandize is also pretty much the same. But sometimes certain products gather a specific demography as well, for example kitchen magnets are bought by housewives mostly.” Lubna said, “When I started working with Muggay in 2016, I was already doing a proper job as an HR professional with an IT company and I was earning well. My first payment [from Khabees Orat designs] was Rs75,000 that was higher than my salary and I was amazed. That’s when I realized the potential of earning but soon after that some problems with Muggay led me to stop working with them. One of their ex-employees contacted me and told me that at that time more than 70% of Muggay’s business was coming from my designs. That also encouraged me to pursue this hobby as a money-making venture. But even until now I haven’t had the chance to completely utilize merchandise as an earning opportunity.”

The mechanics

owever, once you have reached a certain number of followers on a social media platform, some other doors also open for generating money. One of them is promoting brands and product placement. That too, comes with its own challenges. “I promote brands and I earn well from it. Sometimes though these brands ask me to promote the posts with their products and that negatively impacts my organic reach.” She also said that when she focuses on the monetary side, the creative side suffers, and that harms the overall performance of the page and thereby the financial side too in the long-run. All of this is done without Lubna having to spend a single penny, not on the products and not towards social media platforms, like Facebook. “I have not had to pay Facebook or any other platform. In fact, it is one of the major reasons I have stepped back from direct ad promotions. Because that’s where you have to spend money on the posts because brands ask you to boost it and that seriously disturbs your organic reach and it disturbs the overall

following as well”. She is not worried about the competition although she does feel “envious” in her own words, at times when she sees something really creative. “If I see another page that is really creative and really popular, I do feel that I have to keep up with competition. But the content that I create is quite specialized and different so I have never had the experience of losing out my followers or customers of merchandize etc.” For now, Khabees Orat continues to periodically share content or even sometimes create it, but remains largely inactive. The inactivity also means that no cash is really coming in, and the simple explanation for that is that Lubna has moved on to other things. Happily married, Lubna has moved to Karachi and is at the mo-

ment put her little accidental venture on hold while she traverses a new city. But it is something she wishes to come back to at some point, and with its following and content, it might just be as fertile as it was at its height. “I hope to have a store some day with a myriad of products all featuring Khabees Orat designs. Once I understood that there is so much potential in this, I also planned ahead to realize that potential. But it will take a while" Lubna explains. With the nature of online businesses and the ever expanding and ever mysterious world of Facebook, perhaps the most ironic thing is that such a shop would probably drown. The Facebook business, however, is still thriving at a stable pace. n

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Profit E-Magazine Issue 78

Articles inside

Khabees Orat: Making money, one venting meme at a time!

Could This App Help the Government Eliminate SMUGGLED CIGARETTES?

Roshni Rides: The ‘Waapistani’ Startup with an American Ethos