profitepaper pakistantoday 13th august, 2012

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Monday, 13 August, 2012

Engro merges personal history with national history KARACHI

E

ZAIN ALI

ngro Foods Limited, a subsidiary of Engro Corporation, celebrated their success on the momentous occasion of Pakistan’s 65th Independence Day as it unveiled its corporate campaign- Khud Pakistan- showcasing the roots of the company as being one Pakistan’s home grown multinational organizations.

Engro with its rich history of over four decades of developing the agricultural sector of Pakistan used dairy as a stepping stone to enter the foods business in 2005 to give further impetus to its already diversified business portfolio including fertilizers, petrochemical, energy, trading and chemicals storage and handling. In a span of just 7 years, with a compound annual

growth rate (CAgr) of 65% and a planned infrastructure investment in 2012 to the tune of PKr 8 billion, Engro Foods has become the country’s fastest growing local company catering to a wide demographic consumer base from high income groups to the more economically segment of the market both in Pakistan and abroad.

Serving over 5 million consumers nationwide every day, Engro Foods had revenues of about rs 19.76 billion during 1H-2012 with profitability registering an increase of over 450% to close at rs 1.02

billion. Since its inception Engro Foods has invested heavily in dairy development initiatives, cold chain infrastructure, enhancing capabilities of dairy farmers across Pakistan through innovative breakthroughs that have redefined the milk collection standards and benchmarks in the dairy industry. Employing over 12,000 individuals both directly and in directly, Engro Foods’ continues to touch and improve life for over160, 000 dairy farmers through improved payments cycles, guaranteed collection, and improved margins and up to a 15 % increase in milk yields.

Through its wide network of over 900 milk collection centers, Engro Foods Focuses its impact at the most economically challenged communities in Pakistan- an effort that has also been recognized at local and international fronts including the IFC managed g20 Challenge on Business Innovation where Engro Foods was declared the winner from over 300 global contracts.

Living its vision of elevating consumer delight worldwide the business established its global Business Unit (gBU) and acquired Al-Safa Halal – the oldest Halal meat brand in north America in 2010. With presence in key retail stores including Loblaws, Wal-Mart, Sobeys, Metro, Kroger etc. Engro Foods gBU has obtained a market share of 15 % in Canada and 3 % in USA in the branded foods category.

While talking to media, Afnan AhsanCEo Engro Foods added “story of Engro and that of Engro Foods is a source of national pride. The fact that in a short span of seven years a home-grown multinational company has been created- with a geographic footprint spanning across Pakistan, Afghanistan, United States and Canada- is testament to the vision and business acumen of the Company. Engro Foods is an example that through focused approach companies can create real business value- not just in the Pakistani market but also globally.

Not a small or medium term strategy Government to assist SMEs infrastructural development to reduce poverty

ISLAMABAD APP

The government has made strategic shift in its strategies to assist infrastructural development of Small and Medium Enterprises (SMEs) in order to enhance productively and exports of this particular sector to help reduce poverty in the country. Currently, the Small and Medium Enterprises Development Authority (SMEDA), is implementing 28 projects under Public Sector Development Programme with a total estimated cost of rs.2.8 billion in major SME clusters, official sources said. The impact of these projects on over-all development and prosperity would be tremendous and will result in enhancing the standard of living, poverty alleviation and human resource development. In addition to the implementation of a PSDP project portfolio, SMEDA in collaboration with United nations Development Programme (UnDP) has launched `Early recovery and restoration of Flood Affected Communities in Pakistan’ project with estimated cost rs.256 million that is aimed at establishment and operation of Business Support Centers in 29 districts severely affected by the floods. The aim is to provide communities support for economic development through extending small grants. “SMEs are considered an important tool for poverty alleviation, human resource development, accelerating economic growth and employment generation,” sources said. SMEs contribute over 30% to gDP, 25% to manufacturing export earnings, 35% to manufacturing value addition and employ around 78% of non-agriculture labour force, they maintained. The SMEs projects not only provide technical support to SMEs but also play an important role in poverty alleviation by generating direct and indirect employment in their respective areas.

‘Mark-up rate cut to stimulate private sector’ LAHORE APP

The Lahore Chamber of Commerce & Industry here Saturday said that State Bank of Pakistan’s decision to cut interest rate would help stimulate private sector growth and a flagging economy. LCCI President Irfan Qaiser Sheikh said the SBP governor deserves appreciation for accepting the private sector’s demand that has been opposing the SBP tight monetary policy stance for long. Irfan Sheikh said the step taken by the State Bank of Pakistan would help strengthen economic indicators and hoped that after two months when new monetary policy would be announced, interest rates would further be lowered to a single digit. The availability of cheaper liquidity to the business community was the need of the hour. The LCCI President urged the governor State Bank of Pakistan to review all other economy related banking policies and facilitate the private sector that is the engine of the growth. He said that in the developed economies, the markup rate is in single digit and they are maintaining it at all costs in the larger interests of their respective economies. Therefore, he said, the SBP governor should also bring it to a single digit in the next monetary policy.

WALL STREET WEEK AHEAD NEW YORK AgeNcIes

The S&P 500 is up 12 percent so far this year. Through July, it had its best first seven months since 2003 and its secondbest seven-month run since 1998. That sounds like a bull market.

But there is clearly a disconnect between the way markets have performed and the high level of caution among many investors. That is mainly due to the perception that things have the potential to go horribly wrong - incredibly fast.

The danger for investors is that they focus too much on the potential risks,

such as the break-up of the , and end up getting left on the sidelines when markets move higher as they have done since the start of June, said Doug Cote, chief market strategist at Ing Investment Management, in new York. “We are in a bull market,” he said. “The mistake investors have made is too much attention on global risk, and not enough attention on fundamentals that are very resilient.”

Cote believes that record high aggregate for S&P 500 companies this year and signs of improvement in the labor market mean investors should be taking on more risk rather than fretting about the dangers stemming from Europe’s

Bulls, bears and wallflowers

It’s another one of those moments that always follow a big move in the stock market: Either you’re a believer - or you’re not. Right now, the market has its fair share of both debt crisis.

NO EASY CHOICES: But for the more equivocal souls, the market is presenting a difficult dilemma, and strong convictions either way are elusive.

David Joy, chief market strategist at Ameriprise Financial in Boston, says it’s an uncomfortable time for many investors, who are caught between missing a rally and getting blindsided by some nasty event that sends markets into a tailspin. “It’s a dilemma that is uncomfortable to watch and to function in,” said Joy, who helps oversee $571 billion in assets. “It’s one of those markets where you’re running a big risk being out.”

Joy says the rally is being driven by the hope of more “easy money” policies from central banks in the United States, Europe and. He has had doubts about the

strength of the economy for many months. At the same time, he has been worried by the recent spate of cautious outlooks from corporate managers. But he also knows what investors ignore at their peril: “You can’t fight the Fed.” “I don’t like the fundamentals, I don’t like what I’m seeing economically, I don’t like what I’m seeing in terms of earnings forecasts going forward, but I recognize that central banks can trump all of those things,” Joy said. “You may be right on the fundamentals, but wrong on the price action of the market.”

CAUTION CUTS BOTH WAYS: But Joy is also cautious about what many are describing as early signs of stabilization in the U.S. economy after a soft patch earlier in the spring and summer.

The July nonfarm payrolls report,

which showed U.S. employers had done the most hiring in five months, is not enough to convince investors like Joy who want to see more confirmation before unwinding their defensive stance and getting more aggressive.

That cautious view that led him to cut his bond-equity allocation and lean more toward defensive areas of the stock market, such as consumer staples, healthcare and utilities, helps explain an oddity of the market’s rally since June. Much of the money heading into U.S. equity markets over the last two months has been heading into defensive sectors, some of it in a flight to safety from overseas markets, especially Europe. of two classically defensive sectors utilities and telecoms - the utilities sector is trading at a 24 percent premium to the S&P 500, compared with an average 5 percent discount over the last 10 years, while the telecom sector is trading at a 50 percent premium compared with the usual 5 percent, according to data cited

by UBS Wealth Management.

For Jeremy Zirin, UBS Wealth Management’s new York-based head of U.S. equities and chief U.S. equity strategist, that is both a red flag highlighting the market’s misgivings and a potential opportunity, should that differential start to narrow.

“We have a bit of a pro-cyclical tilt in our sector strategy within U.S. equity markets, largely because the market seems to be positioned so defensively,” Zirin said. “We have seen this flood of flows going into defensive safe havens with high yield, and we just think they are very highly priced.

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Business 02 BROADBAND GROWTH Don’t blame the economy!

While Pakistan’s impressive growth of Broadband Internet is being recognized internationally, some operators are conveniently blaming the economy to cover their own institutional limitations and lack of infrastructural capacity

Comment

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NAvEED SAEED

ESPITE ongoing economic challenges faced by the country, Pakistan is experiencing a phenomenal growth of Broadband Internet, which has become a household product. The current global economic recession has had a spiral effect worldwide and few segments have been able to resist its impact. However, this amazing growth of Broadband in the last one decade is an outstanding national success story.

High-speed Internet streaming is revolutionizing the way people learn, communicate, work and do business. Broadband Internet is now the backbone of corporate services and even small businesses. owing to their own limitations, some telecom operators are making misleading claims about the state of Broadband penetration in Pakistan by incorrectly linking it with the country’s economic situation. Contrary to such ill-informed claims made in haste, the country has witnessed 70 times increase in Broadband proliferation in the last six years.

The numbers speak for themselves.

According to Pakistan Telecommunication Authority (PTA) data, the number of Broadband Internet subscribers in Pakistan increased from less than 27,000 in 2005-06 to more than 1.9 million in 2012, which is no small feat. Internetworldstats.com puts Pakistan’s total Internet users at more than 29 million with a population penetration of 15.5%. The total number of fixed phones and mobile phone subscribers stand at 3.10 and 118.32 million, respectively. PTA data

further reveals that Broadband Internet put up an impressive growth rate of 28% from June 2011 to March 2012, surpassing mobile growth rate which stood at 9% for the same period. given these facts, conveniently blaming the economy to cover operators’ own institutional limitations and lack of infrastructural capacity tantamount to a disservice to the nation!

Broadband services were first introduced in Pakistan in 2001 by installing equipment on existing copper lines used for provision of telephony services. Initially, DSL Broadband services were only provided to a small consumer base of highend users in the big cities. But progress was slow and penetration negligible. In response, government of Pakistan introduced the Broadband Policy of 2004, revising backhaul bandwidth charges downwards to propel broader penetration.

In the face of rapidly increasing demand for affordable Broadband services and to fill the void of quality service provision, Pakistan Telecommunication Company Limited (PTCL) entered the country’s retail Broadband market in 2006. It was the last company to enter the market when there were 25 other operators already active on the ground. giving up its monopoly, the country’s largest and oldest telecom company strategically re-positioned itself in a fiercely competitive market while carrying its complicated but proud legacy.

The impact of this strategic move surpassed all expectations. PTCL’s entry in the Broadband market had a major impact and the retail tariff was rationalized significantly. Broadband services were made accessible to every nook and corner of the country. More than 10,000 customers were achieved within the first 120 days of PTCL Broadband Pakistan’s launch, where as it took four years for all the other market players collectively to reach 30,000 customers mark.

Today, PTCL is the number one Broadband service provider in Pakistan with 90% market share, having pioneered the most popular and diverse portfolio of products

and services ever offered in this market. It has surpassed market competition by leaps and bounds. For the first time in Pakistan’s history, the company celebrated this year the 1st million broadband customers mark.

PTCL has proved the fact that when a successful telecom operator comes to a country, it transforms the market.

It is pertinent to mention here that this Broadband growth has been achieved during recession years where average gDP growth rate has remained less than 4% per year. It is even more phenomenal considering the fact that it is now a household product i.e. one connection serves the whole family. A typical Pakistani household has 6.2 members on average, which accumulates into 29 million households, so the real impact is far greater.

Pakistan is ranked among the top few countries to have registered high growth in Broadband Internet penetration in recent years. According to global Broadband tracker, Point Topic’s 2011 report, Pakistan stood at fourth place in Asia with 46.2% growth in subscriber base; whereas, Sri Lanka and India were placed at 11 and 14, respectively.

The tremendous potential of Broadband Internet in Pakistan can be gauged by analyzing the last four years’ progress through PTA’s data. Broadband Internet penetration was less than 1% per household in 2008. In 2012, it has reached 7%.

This mammoth growth has fuelled a Broadband revolution, resulting in an increase in customer base and also helping wireless Broadband technologies to expand setting the economic wheel in motion.

PTCL has achieved this unprecedented success through an innovative customer approach, elimination of the traditional barriers, such as the upfront costs of installation and customer premises equipment. It has fueled the rise of businesses, jobs and opportunities.

Despite the hollow claims, the truth is that the growth trajectory of Broadband is not the same for all operators. Sluggish economy and power crisis is not the reason for this stark dichotomy. rather, it depends on an operator’s network, infrastructure capabilities, investment size, business model and growth strategy.

Technology takes time to grow, but once the wheel is set in motion the effect is viral.

If there are inconsistencies, revisit your business model and rationalize tariff along with greater excitement for the customers.

PTCL is a strong case in point for the Broadband sector. Its success can be set as an industry model. Banking on its previous success and believing in the strength of Pakistan’s economy and growing awareness of the people, PTCL group has made a commitment to invest rs.100 billion in the Broadband sector in the next five years. We believe in the potential and promise of this dynamic market. It’s not about economy; it’s about capability!

The writer is Senior Executive Vise President/Chief Commercial Officer of Pakistan Telecommunication Company Limited (PTCL).

Standard Chartered soap opera becomes Yank-Brit row US eyes control over global banking, while Britain eyes, well, some dignity if nothing else… snakes & ladders KUNWAR KHULDUNE SHAHID

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FTEr the British banking behemoth was accused of, well of plotting, planning and ‘supporting the terrorists’ while the poor old Americans suffered, their riposte has been through a barrage of cursing, exclamation marked with, “Damn You Yanks!”. SCB (Standard Chartered Bank) had ostensibly exposed the US to terrorists by concealing deals worth billions with Iran over the past decade or so – this despite a multitude of sanctions being imposed by Washington on fiscal dealings with Tehran. There are around 600,000 transactions with the Iranian government, worth around $250 billion that SCB has apparently hid from the world, and of course the US is adamant that this ‘treachery’ has struck them the hardest.

After a list of ‘breaches’ that the SC hierarchy was clarified about, their group executive director divulged the bank’s stance

on the whole debate when he lashed onto a curse blitzkrieg, which was followed by the question: Who exactly the Americans to tell the rest of the world whether or not they can deal with Iran? That might be a popular question in the current times, but being all defensive and accusing the US of antiBritish bias clearly shows that there has been more than something fishy going on in the backdrop of SC’s dealing since 2001.

SC’s dealing with Iran, or lack thereof, is a different debate altogether, but what

is undisputed now after this Standard Chartered debacle, is that Washington is now the indubitable regulator of world banking – and not only for the ‘targeted’ nations, but for its own ‘allies’ as well. The US already has full control over global oil markets – another subplot of this SCIran-US episode – and now it is pretty much clear that global banking is also a part of the American jurisdiction.

Meanwhile, banking ramifications aside, the whole thing has generated a lot of hullabaloo in the British political circles as well, with accusations of “anti-British bias” being echoed in the UK. The politicians from the UK are asserting that the move is a deliberate ploy on the part of the Americans to target London, which is undoubtedly the financial center of the region.

Anti-British bias, or not, either way the reputation of a renowned global bank has been deteriorated, which is vindicated by the slapdash market activity of Standard Chartered ever since the groundbreaking news broke.

CORPORATE CORNER Global recognition for PTCL with the ‘ESRI Special Achievement in GIS Awards 2012’ ISLAMABAD: In another landmark achievement, Pakistan Telecommunication Company Limited (PTCL) has been honored by U.S.-based Environment Systems Research Institute (ESRI) with the “ESRI Special Achievement in GIS Awards 2012” for outstanding achievements and organizational performance in geographic information systems (GIS) and programs. The award was presented at the annual ‘ESRI Special Achievement in GIS Awards’ ceremony held at San Diego, California, United States. PTCL’s Executive Vice President (EVP) Operations and Maintenance, Mateen Malik and General Manager Access Network Roshan Awan received the award from chief guest ESRI President Jack Dangermond. PRess ReLeAse

SOS in clean water partnership with National Foods KARACHI: SOS Pakistan – Feed The Children (Australia) in partnership with National Foods Ltd (Pakistan) will be running for Clean Water for the people living on the edge of the Thar Desert, Sindh Province, where Hindus and Muslims (40/60) live side by side on the boarder of Pakistan and India. The water issue in this region is so severe and terribly sad. It is our intention to highlight the water crisis to the international community. There is a SILENT EMERGENCY taking place in the whole of Pakistan and SOS and NFL have identified The Tharregion that is indeed so very poor on all levels and with your help we can make a difference in terms of delivery of Clean Water. PRess ReLeAse

Samsung launches new smart cameras, audio visualproducts LAHORE: Samsung Electronics Co., Ltd, a global leader in digital media and technology has created a new range of award-winning products. A launch ceremony was held recently, to present the new range of Smart Cameras and Audio-Visual products. The Managing Director of Samsung Pakistan, Mr. John Park said; “The new additions to our Digital Imaging and Audio-Visual products mark an evolution in Samsung’s technology, demonstrating our understanding that digital imaging and Home Entertainment are about sharing the best moments with family and friends”. Samsung smart cameras pioneer built-in Wi-Fi connectivity. So professional quality images can be easily captured, shared and stored now straight from a camera through Online Social Networks .The 3 new Compact System Cameras (CSC): NX1000, NX210 and NX20 feature a 20.3 Megapixel APS-C CMOS sensor, to give high quality images. PRess ReLeAse

Ayesha Khurram two-year anniversary LAHORE: Ayesha Khurram’s flagship store in Lahore, and the first retail store she ever opened up, has turned two years old. The store located at Z Block, DHA, was Ayesha Khurram’s first store in Lahore, and is where the designer, now best known for dressing up Katy Perry, got her big break from. “The DHA store is my baby because it was my first store,” said the soft-spoken designer who now operates from three stores, two in Lahore and one in Faislabad. “A first store is a big step for any designer, and I was extremely nervous yet excited when I was launching the DHA store.” The store in DHA stocks the complete range of Ayesha Khurram including the formal wear, semi-formal wear, bridals and of course prêt. Alongside these, the store also stocks a full range of Ayesha Khurram embroidered fabrics which are based on unique motifs such as birds, geometric patterns and linear styles. PRess ReLeAse

Glamgivers Peaktime exhibition at Grandeur LAHORE: CORALHina and Huma have given CORAL a new meaning, “precious”. Every CORAL outfit is specially selected, designed and styled keeping in mind the modern woman. A diverse fashion label; a little something for everyone. From bright colours to pastels, hand painted works of art, traditional embroidery to trend setting cuts. CRAZEE SHIRTSI am a graduate from MAJU. I have started this small business of casual wear shirts specialy for university student, working women and girls keeping in mind lines and cuts for a trendy yet casual look. Hi-She witnesses you to introduce the unique, interminable and a high-fashioned girl and women apparel according to every new and upcoming trend. In our first collection, we are starting up with simple casuals and and an elegant semi-formal Eid wears looks in an affordable range. So be ready and co-operate with us in welcoming the lady with a new life and look.

SADIA ELIAI love colors, art & designing & I like to merge them together! for casual wearing I simply worked on cuts & your comfort, for eid celebrations I worked on formal , Semi-Formal dresses with vibrant colors, motives & have used kora, dapka, sitara to add more value into it. PRess ReLeAse

KARAcHI: In the Holy month of Ramadan, shezan International Limited, always provide donations to various social organizations like sahara Trust Roshni Trust, shoukat Khanam, etc. Mr Muneer shahnawaz, chairman, shezan International Limited handing over cheques to representatives of sahara Trust and Roshni Trust.

Monday, 13 August, 2012