Monday, 16 July, 2012

BOI chairman hopes toattract foreign investmentby getting bills approvedISLAMABAD:Board ofinvestmentChairmansaleem HMandviwalasays theapproval ofspecialeconomic ZoneBill by theparliament willattract foreigndirect investment and encourage localinvestors. Addressing a pressconference‚ he said the Bill has beenenacted to meet the global challenge ofcompetitiveness. He said the law willensure consistency and transparency ineconomic policies and restore theconfidence of investors. Mandviwalasaid the special economic zones wouldhave exemption from custom dutiesand taxes for all capital goods importedfor the development‚ operations andmaintenance of a zone. He disclosedthat some of the investor countries likeKorea‚ China and Japan are expectingto benefit from the scheme as soon as itbecame operational. NNI

‘International marketdetermines POL prices, not us’

NEWS DESK

For Muslims, ramadan means a breakfrom the everyday. Along with the fasting,prayer and devotion, “the pace of lifechanges significantly during this month,”says Nader Hashemi, professor of Middleeast and islamic Politics at the Universityof denver’s Josef Korbel school of inter-national studies. “The time for entertain-ment and traveling is severely limited, youspend time with immediate family.They’re celebrating, gathering. Mosque at-tendance goes up. it’s a month of charity,of more giving to the downtrodden,” BruceKennedy of the daily Finance reports.

in countries where islam is the major-ity religion, daily work schedules are oftenturned upside down during ramadan,which will start in a week’s time. “And whathappens, by and large, is most governmentoffices and most national businesses tendto slow down or almost shut down, so thatpeople can basically rest during the hotdaylight hours,” says riz Khan, a broadcastjournalist who has worked with BBC, CNNand most recently Al Jazeera english inWashington dC. “everything comes to lifein the evening after sunset.”

On some stock markets, there is re-portedly a “ramadan effect,” a month-long rally. “during the Holy Month, wefind that on average, stock returns are al-most nine times higher in predominantlyMuslim countries than during othertimes of the year,” finance professorAhman etebari recently told the voice ofAmerica. But riz Khan notes that ra-madan does not necessarily mean traderscan take a holiday, especially during thecurrent global economic downturn.“Talking to my friends in the financialworld in places such as dubai…they areaware of the fact that they need to keepup with the West,” he says. “The Arabmarkets cannot lag behind so far thatthey end up being adversely affected.”

RISING PURCHASING POWER: Theholiday also means special foods. “Basedon the example of the Prophet Mo-hammed (pbuh), Muslims are encour-aged to break their [daily] fast withdates,” said Hashemi. “Probably thesepeople don’t eat a lot of dates during theyear, but date consumption skyrockets[during ramadan], as do certain specialsweets eaten during the eid festivals.”

in the Us, the market for halal-certi-fied foods (permitted by islam) hassoared in the past decade. The islamicFood and Nutrition Council of America(iFNCA) recently estimated an 80 percentgrowth in the market for halal-certifiedingredients and food products since 2005.“This increased interest for Us halal mar-ket ingredients and products,” accordingto the iFNCA statement, “may reflect theoverall estimated $170 billion Us dollarpurchasing power of American Muslims.”

in the Muslim world, ramadan alsobrings with it new clothing and specialentertainment. “Television scheduling isvery much geared around that,” saysKhan. “Programming for the ramadanmonth is specifically made for the huge

audiences that watch it. soap operas [andother] types of programming are very,very popular.”

But like Christians who bemoan thecommercialisation of Christmas, manywithin the Muslim community are con-cerned that ramadan is losing its mean-ing and becoming a commodity. “Manypeople fear the original reason of the fasthas been lost,” says Khan. “These thingshave given away to, in some cases,overindulgence in the evening andovernight. People stay up all night andthey overeat. in some places food con-sumption goes up two or threetimes...and people actually put on weightduring ramadan, which defeats the pur-pose of it. People are inverting their days

and finding an easy way out and thenoverdoing it.”

A TIME TO BUY: ramadan ends witheidul Fitr, a celebration of feasts and gift-giving. Like Hanukkah or Christmas, eidand other Muslim holidays have becomemajor sales opportunities for retailers. infact, Best Buy (BBY) came under criticismfrom some organisations last year for aline on one of its ad circulars wishingMuslims a “Happy eid al Adha.” Aspokesman for the Council on American-islamic relations (CAir) said the BestBuy ad “makes perfect business sense toacknowledge and celebrate a holiday thatone out of four people celebrate.”

Muslims parents in the Us, says

Hashemi, often see eidul Fitr as a way ofcompensating for their children celebrat-ing a holiday other than Christmas. “Theywill use that as a way of reminding youngMuslim-American kids that they will beable to exchange gifts. They’ll buy theiryoung children the equivalent of what aChristian American family would buytheir young children on Christmas day.so they won’t have a tree, but they’ll usethat day to go buy significant gifts tomake their children happy.”

“You can think of it as parallel toChristmas,” says Khan, “in the sense thatit is definitely families coming together,people hosting each other, the exchangeof gifts. Kids love it because they get theirpresents, and they get a lot of attention.”

The good that Ramadan does to economyAccording to a recent study, on average, stock returns are 9 times higher during the holy month

ISLAMABAD

APP

Adviser to the PrimeMinister on Petroleumand Natural resourcesdr Asim Hussain saidthat the petroleum

prices would be raised according tothe international market rates.

Talking to Pakistan Television(PTv), he said that there was a chanceto raise the petroleum prices this timeas per their rising trend in the inter-national market. However, the finaldecision to change the prices will betaken by the Oil and Gas regulatoryAuthority (OGrA), he added.

replying to a question about the clo-sure of CNG stations, he said that thecountry had no capacity to provide gas toall the CNG stations. “There are two op-tions: either we have to phase out the CNG

stations in few years or CNG will have tobe provided just to the public transportwhile the private vehicles will be trans-ferred to Liquified Petroleum Gas (LPG).”

dr Asim said that the policy-mak-ers and public should take this diffi-cult decision to save industry,fertilizers and power sector because as“we have limited gas.” “We are not giv-ing required gas to the power sector.in coming winter our industry can beclosed due to shortage of gas and evenit will be difficult for us to fulfill thedomestic requirements,” he added.

replying to a question about theLiquified Natural Gas (LNG) project,dr Asim Hussain said some anti-Pak-istan forces were making propagandaagainst the project. However, the gov-ernment was consciously working onthis project. “We have nominated apartner for the LNG project and alsodiscussed it in different meetings”.

Dr Asim

Hussain

says

country has

no option

but to phase

out CNG

stations

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02Monday, 16 July, 2012

Business

NEWS DESK

Here are the top 7 reasons whybusinesses fail and tips for avoid-ing them. According to statis-tics published by the smallBusiness Administration (sBA),

seven out of ten new employer establish-ments survive at least two years and 51 per-cent survive at least five years. This is a farcry from the previous long-held belief that50 percent of businesses fail in the first yearand 95 percent fail within five years, Patri-cia schaefer of Business KnowHow reports.Better success rates notwithstanding, a sig-nificant percentage of new businesses dofail. expert opinions abound about what abusiness owner should and shouldn’t do tokeep a new business afloat in the perilouswaters of the entrepreneurial sea. There are,however, key factors that — if not avoided— will be certain to weigh down a businessand possibly sink it forevermore.1. YOU START YOUR BUSINESS FOR THEWRONG REASONS Would the sole reason you would be startingyour own business be that you would want tomake a lot of money? do you think that if youhad your own business that you would havemore time with your family? Or maybe that

you would not have to answer to anyoneelse? if so, you should better think again.2. POOR MANAGEMENT Manya report on business failures cites poor man-agement as the number one reason for fail-ure. New business owners frequently lackrelevant business and management expert-ise in areas such as finance, purchasing, sell-ing, production, and hiring and managingemployees. Unless they recognize what theydon’t do well, and seek help, business own-ers may soon face disaster. They must alsobe educated and alert to fraud, and put intoplace measures to avoid it. A successfulmanager is also a good leader who creates awork climate that encourages productivity.He or she has a skill at hiring competentpeople, training them and is able to delegate.A good leader is also skilled at strategicthinking, able to make a vision a reality, andable to confront change, make transitions,and envision new possibilities for the future.3. INSUFFICIENT CAPITAL A common fatal mistake for many failedbusinesses is having insufficient operatingfunds. Business owners underestimatehow much money is needed and they areforced to close before they even have had afair chance to succeed. They also may havean unrealistic expectation of incoming rev-

enues from sales. it is imperative to ascer-tain how much money your business willrequire; not only the costs of starting, butthe costs of staying in business. it is impor-tant to take into consideration that manybusinesses take a year or two to get going.This means you will need enough funds tocover all costs until sales can eventuallypay for these costs. This business startupcalculator will help you predict how muchmoney you’ll need to launch your business.4. LOCATION, LOCATION, LOCATION Your college professor was right — locationis critical to the success of your business.Whereas a good business location may en-able a struggling business to ultimatelysurvive and thrive, a bad location couldspell disaster to even the best-managed en-terprise.Some factors to consider: Where yourcustomers areTraffic, accessibility, parking and lightingLocation of competitorsCondition and safety of buildingLocal incentive programs for businessstart-ups in specific targeted areasThe history, community flavour andreceptiveness to a new business at aprospective site5. LACK OF PLANNING

Anyone who has ever been in charge of asuccessful major event knows that were itnot for their careful, methodical, strategicplanning — and hard work — successwould not have followed. The same couldbe said of most business successes. it iscritical for all businesses to have a businessplan. Many small businesses fail becauseof fundamental shortcomings in their busi-ness planning. it must be realistic andbased on accurate, current informationand educated projections for the future.Components may include: Descriptionof the business, vision, goals, and keys tosuccessWork force needsPotential problems and solutionsFinancial: capital equipment and supplylist, balance sheet, income statement andcash flow analysis, sales and expenseforecastAnalysis of competitionMarketing, advertising and promotionalactivitiesBudgeting and managing companygrowthIn addition, most bankers request abusiness plan if you are seeking to secureaddition capital for your company.6. OVEREXPANSION

A leading cause of business failure, overex-pansion often happens when business own-ers confuse success with how fast they canexpand their business. A focus on slow andsteady growth is optimum. Many a bank-ruptcy has been caused by rapidly expand-ing companies. if expansion is warrantedafter careful review, research and analysis,identify what and who you need to add inorder for your business to grow. Then withthe right systems and people in place, youcan focus on the growth of your business,not on doing everything in it yourself.7. NO WEBSITE simply put, if you have a business today, youneed a website. Period. in the Us alone, thenumber of internet users (approximately 77percent of the population) and e-commercesales ($165.4 billion in 2010, according to theUs department of Commerce) continue torise and are expected to increase with eachpassing year. At the very least, every busi-ness should have a professional looking andwell-designed website that enables users toeasily find out about their business and howto avail themselves of their products andservices. Later, additional ways to generaterevenue on the website can be added; ie sell-ing ad space, drop-shipping products, or rec-ommending affiliate products.

CORPORATE CORNER

KARACHI

sTAFF rePOrT

Pakistan, despite being an “impressive greatcountry” for foreign investors from themultinational companies (MNCs) like Pep-siCo international, has a “tough” businessenvironment owing to the lingering problemsranging from energy crises to the absence ofeffective laws on intellectual property rights(iPrs) and a sky-high interest rate regimecurrently standing at 12 percent.PepsiCo is one such international brandwhich, since its arrival in Pakistan in 1967, hasturned to be the biggest food and beverage re-tailer in Pakistan having invested over a billiondollars to set up 14 bottling plants, a concentrateplant and a snacks manufacturing plant acrossthe country where over 20,000 Pakistanis areearning their livelihood in a respectable manner.in a recently-conducted detailed interview withPakistan Today (PT), Qasim Khan, a Us-edu-cated Pakistani who is PepsiCo’sgeneral managerand president for the North and south Asia Busi-ness Unit that, in its scope, ranges from Japan toMongolia, talked at length about the immense po-tential as well as challenges the MNCs like hisown are presently facing in Pakistan.

What is the current size and scope of your business in Pakistan?

QASIM KHAN: PepsiCo international is intri-cately linked towards the development of the cor-porate sector in Pakistan as we were one of thefirst multinationals to start operations in Pakistanin 1967. Now we are the biggest Food and Bever-age Company in terms of the retail turnover inPakistan having seven beverages franchises acrossthe country. We also brought in Foreign direct in-vestment in the shape of a concentrate plant setup in Hattar. Today, Pakistan is the 6th largestmarket for Pi worldwide and we have threebrands; Pepsi, dew and 7-UP which are bigger

than our rivals in terms of volume contribution. Pepsi is in-grained as a household brand while our contributions to-wards the development of sport, specifically cricket andmusic industry is unparalleled. We have been the pioneersof developing both these industries while strengthening ourbeverages brands over the past many decades. since 2006we also introduced the famous Lay’s potato chips brand inPakistan by investing in a state-of-the-art plant which em-ploys over a 1000 people. We have made strong investmentsin the agricultural sector of Punjab by introducing latesttechnologies for potato growers and are looking to expandpotato growing into the country’s northern areas. We alsoplan to export potatoes to other countries around the world.Our snacks portfolio consists of leading global brands likeLays, Cheetos, Kurkure and Wavy.

How do you see the current business climate in Pakistan?

QASIM KHAN: The business environment is tough. Theenergy shortage, high inflation and high interest rates forlocal partners are the biggest roadblock towards any com-pany evaluating putting up a manufacturing facility in Pak-istan. However in the same breath the potential that Pakistanpresents is immense and multinationals who have been inPakistan for some time understand this very well. An im-provement in the investment environment will only makeour job easier to convince investors to come to Pakistan.

The current challenges you are facing in Pakistan?

QASIM KHAN: Like any industry, we have some food andbeverage specific challenges and some general macroeco-nomic challenges.ABSENCE Of IPR LAWS: We have a lot of potential inPakistan around agro based industries. However, Pakistancurrently does not have any law around the iPr protectionof seed varieties. This limits our ability to expand our agroprogram on the foods side as it has become difficult to in-troduce our own potato seed varieties.TAxATION: Pakistan has one of the highest taxes on bever-ages in the world. We are the only food category product tohave an excise tax on it. in a high inflationary environment, thisseriously inhibits our ability to invest and expand employment.NEED fOR LEvEL PLAYING fIELD: ensure that allcompanies pay the required taxes. in addition to discour-aging further investments, this acts as a major public rev-enue loss for Pakistan. We recommend that Governmentof Pakistan form a task force to ensure all players complywith the quality and taxation laws in our industry.ENERGY SHORTAGE: This impacts our business signif-icantly and limits further investments.PT: OK, now tell us what made PepsiCo invest in Pakistan?Qasim Khan: Pakistan’s opportunity is driven from the fol-lowing facts:LARGE MARKET: it’s the 6th most populace country inthe world with approximately 70 percent population underthe age of 30.TRAINED WORKfORCE: A large trained and produc-tive population represents a big opportunity to Pakistan tobenefit from its demographic dividends.INvESTMENT POLICIES: Pakistan’s policy trends havebeen consistent with liberalization, de-regulation, privati-zation and facilitation being the cornerstones of its policy.LARGE AGRO BASE: The strong agriculture base pres-ents a great opportunity for our food business to expand inthe future. We realize that Pakistan is the 11th largest wheatproducer, 12th largest rice producer and the 5th largest milkproducer in the world.GEO-STRATEGIC LOCATION: it can be a gateway be-tween the energy rich Central Asian states, the financially-liquid Gulf states and technologically-advanced Far easterncountries. This alone makes Pakistan a market teemingwith possibilities.INCOMES ON f&B: A significant amount of individualincomes (as high as 40 percent) are spent on food and bev-erage representing a huge opportunity for the industry.Financial Markets: The capital markets are being modern-ized, and reforms have resulted in development of improvedinfrastructure in the stock exchanges of the country. The se-curities and exchange Commission of Pakistan has im-proved the regulatory environment of the stock exchanges,corporate bond market and the leasing sector.

How PepsiCo succeeded in Pakistan?

QASIM KHAN: Our success in Pakistan is a combinationof multiple things like strong global brands, great brandbuilding and execution. A product portfolio advantaged to-wards growing further in the future. very strong, focused

and competitive bottling partners and an extremely robustdistribution network developed by the latter. Further, inPakistan, people are extremely optimistic, extremely re-silient, extremely ambitious, extremely hard working andstrongly entrepreneurial in nature.

Elaborate on the concept of Performance with Purpose and its implementation in Pakistan?

QASIM KHAN: The Performance with Purpose means de-livering sustainable growth by investing in a healthier fu-ture for people and our planet. As a global food andbeverage company with brands that stand for quality andare respected household names—Quaker Oats, Tropicana,Gatorade, Lay’s and Pepsi-Cola, to name a few—we will con-

tinue to build a portfolio of enjoyable and wholesome foodsand beverages, find innovative ways to reduce the use of en-ergy, water and packaging, and provide a great workplacefor our associates. in Pakistan, we have taken innumerableinitiatives which not only demonstrate our ideas aroundcorporate citizenship but also how we can integrate per-formance with purpose in our daily operations:1. We ran an extensive flood relief and rehabilitation pro-

gram focusing on education, livestock provision and de-velopment of water infrastructure in the flood affectedareas. some of the key achievements have been:

a. A total of 17 schools have been reconstructed in themost impoverished of areas. 40 percent of the 700children that will be impacted will be girls.

b. Provision of Livestock is an important source of liveli-hood in rural Pakistan and our program has benefittedmore than 650 poor households.

c. drinking water and irrigation systems that we put upin swat are providing much needed relief to the peopleand have not only helped in managing water relateddiseases but have also developed irrigation infrastruc-ture for farmers.

2. We have added juices, water and Quaker oats to ourportfolio to give consumers a choice of healthy andwholesome products.

3. We have reduced our packaging weight which haseliminated 80 million plastic bottles from the system.An interesting fact on this is that these bottles put to-gether would form a chain longer than the earth’s di-ameter. The amount of bottles saved could contain theentire exxon valdez oil spill in 1989. This has also pre-vented a significant amount of CO2 emissions(12,000MT).

4. We have been able to eliminate all waste to landfillfrom our snacks facility. This was achieved by partner-ing with feed manufacturers and developing processesthat allowed Nutritional Waste from sundar to be usedas a key ingredient for high quality cattle feed. TheBio-degradable waste was developed into organic fer-tilizer through composting.

5. Year on Year reduction of over 20 percent in energyand water consumption by more efficient usage.

6. Launch of a massive volunteer program named “Help-ing Hands” where we have been running regular vol-unteer programs with The Citizens Foundation. Over100 of our employees are regularly volunteering ingood causes to make this program a success.

What’s your advice for the firms seeking to investinternationally or Pakistan specifically?QASIM KHAN: i advise them to do two things: First, visitPakistan yourself to see the passion of the workforce and thepotential of this great country. secondly, get the experiences ofother MNCs operating here. i am sure you will be impressed.

Grappling with the

challenging Pakistani economy

PepsiCo General Manager andPresident Qasim Khan talks to

Pakistan Today on the challenges MNCs face in Pakistan

Unveiling therevolutionary ideas

KARACHI: A revolutionary businessplan competition that spanned over sixmonths from January to July called‘INVENT’ 2012 was held at IBA, Karachi.It attracted 137 Universities from allover Pakistan and more than 2500students who went through six monthsof grueling business plan exercises.These exercises provided an enormousopportunity of learning for studentsthrough trainings, workshops andespecially through mentoring providedby the industry personnel. Press releAse

HUM TV rocks Lux StyleAwards 2012 KARACHI: HUM TV won five out ofseven Lux Style Awards in the satelliteplays categories last night, proving itsplace as the number one channelamong the entertainment channels ofPakistan. Press releAse

RAWALPINDI: Students of the Cooking Class-2012

organized by Pearl Continental Hotel Rawalpindi

along with Mr. Abdul Hayee Acting General

Manager of the Hotel and Mr. Asad Shah Public

Relations Manager of the Hotel.

Apple does not careabout being green

NEWS DESK

For many, Apple seemed to be an eco-leader in consumer electronics, but itswithdrawal from a leading greenproduct registry is causing many toquestion the company’s motives. But thereal reason may just be about dollarsand cents, Barbara e Hernandez of NBCreports. Apple has bowed out of ePeAT,a nonprofit product rating groupbacked by manufacturers and the U.s.environmental Protection Agency,according to the san Jose MercuryNews. The reason? Likely because itsnew MacBook Pros can’t be takenapart and recycled, which is aviolation of the non profit’s greencertification standards.

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