Nishat Report Final (1)

7/23/2019 Nishat Report Final (1)

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Industry Profle

The textile sector enjoys a pivotal position in the exports of Pakistan. In Asia,

Pakistan is the 8thlargest exporter of textile products. The contribution of

this industry to the total GP is 8.!". It provides e#ploy#ent to about $!

#illion people, %&" of the country 'ork force of about ()#illion. The annual

volu#e of total 'orld textile trade is *+$8 trillion 'hich is gro'ing at -.!

percent. ut of it, Pakistan/s share is less than one per cent. The

develop#ent of the 0anufacturing +ector has been given the highest priority

since Pakistan/s founding 'ith #ajor stress on Agro12ased Industries. 3or

Pakistan 'hich 'as one of the leading producers of cotton in the 'orld, the

develop#ent of a Textile Industry #aking full use of its abundant resources

of cotton has been a priority area to'ards industriali4ation. At present, there

are $,--$ ginning units, ((- spinning units, $-( large spinning units and (-!

s#all units 'hich produce textile products. The industry consists of large1

scale organi4ed sector and a highly frag#ented cottage 5 s#all1scale sector.

The availability of cheap labor and basic ra' cotton as

ra' #aterial for textile industry has played the principal role in the gro'th of

the 6otton Textile Industry in Pakistan.


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Company Introduction

COMPANY PROFILE

The Nishat roup!

7ishat has gro'n fro# a cotton export house into the pre#ier business group

of Pakistan 'ith ! listed co#panies, concentrating on ( core business

Textiles, 6e#ent, 2anking and Po'er Generation. Today, 7ishat is considered

to be at par 'ith #ultinational operating locally in ter#s of its 9uality

products and #anage#ent skills.

Annual turnover of $: billion rupees.

$( billion fro# textiles.

;arn foreign exchange of *+ -%< #illion.

Pay taxes and levis of -,&8& #illion rupees annually

Nishat Te"tiles Limited!#

7ishat Textiles =i#ited is a public =i#ited 6o#pany incorporated in Pakistan

under the 6o#panies Act, $)$%>7o' 6o#panies rdinance, $)8(? and listed

on +tock ;xchanges in Pakistan.

The 6o#pany is engaged in the business of textile #anufacturing and of

spinning, co#bing, 'eaving, bleaching, dyeing printing, stitching, buying,

selling and other'ise dealing in yarn, linen, cloth and other goods and

fabrics #ade fro# ra' cotton, synthetic @ber and cloth, and to generate,

accu#ulate, distribute and supply electricity. 6o#pany is providing 9uality

products to its custo#ers 'ithin the Pakistan and outside the Pakistan.

Presently co#pany is exporting its all kinds if apparel products.

The textile business is further subdivided into -1textile division

7ishat 3aisalabad

-


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7ishat 6hunian

The textile capacity of the group is the largest in the country. An addition of

-&,&&& ne' spindles, $&& ne' air jet loo#s and ne' dyeing plants has

increased the existing capacity of -(-,&&& spindles, :(& loo#s and dyeing

and @nishing capacity of ! #illion #eters. It is the largest exporter of textile

products fro# Pakistan, for #ore than a decade.

O$er The Years!

$)!$ 7ishat 0ills =i#ited co##enced its business as partnership.$)!) The co#pany incorporated as private li#ited co#pany.$)


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'usiness ( Products!&pinnin)!

7ishat 0ills +pinning ivision has over $)8,$-& spindles, 'hich are

operationally organi4ed into 8 spinning units. The entire #achinery is fro#

'orld1reno'ned #anufactures. All yarns #ade at 7ishat are Cing +pun

suitable for both knitting and 'eaving. 2esides the best Pakistani cotton,

long stapled A#erican, ;gyptian and *+ Pi#a cotton is also used for @ne

counts. 3or our strong belief in product develop#ent and innovation 'e have

our o'n in house state of the art cotton and yarn testing laboratories. 7ishat

spinning is one of the #ost trusted brands in the #arket due to its eDcient

production and 9uality. +pinning production capacity for both 6otton and

2lended Earns is $8! Tons 5 ay.

*ea$in)!7ishat 0ills Feaving division has


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density 'eaves. The advantage achieved by the custo#i4ed design of its

#achines is the result of an extensive research 'ork 'ith the help of

'orld reno'ned #achine #akers. To ensure that our custo#ers get the

very best 'e use #ore than :!" dyes and che#icals of ;uropean origin.

The standards are higher than ever, dedicated by fashion, eDcient

productivity and further auto#ation is engineered in the plant. To #aintain

9uality and international standards, an on1line Huality 6ontrol >H6?

epart#ent has been setup. The H6 depart#ent is aug#ented by a fully

e9uipped =aboratory, 'hich scrutini4es the fabric process o' at all levels.

ur extra ordinary Cesearch J evelop#ent 'ork and highly trained

#arketing personal are pivotal to sustain long ter# business relationships.

arments!#

7ishat 0ills =i#ited has state of art gar#ent #anufacturing facility both for

#en and 'o#en. The Apparel division has deployed $


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aihatsu, enbacher J 0ak engines for po'er generation. Gas, 3urnace il,

iesel and +tea# is being used as fuel for po'er generation.

Nishat Linen!

7ishat =inen is a concern of 7ishat 0ills, the textile and ho#e fashion retail

chain that has rede@ned the industry 'ith acute attention paid to 9uality,

design and aMordability. 7ishat =inen prides itself on being the brand of

preference for discerning custo#ers 'ho are in search of things, uni9ue and

chic 'ithout co#pro#ising on aesthetics or price. *nsurpassed custo#er

service, including tailor1#ade orders, ensures our clientele re#ains loyal to

the 7ishat fa#ily.

3ro# bed linen to kitchen coordinates, upholstery to apparel, 7ishat =inen

has beco#e a household na#e as a creator of stunning, high19uality designs

at reasonable prices a feat achieved by fe'.

Competitors!

The co#petitors of 7ishat 0ills =td. are

6rescent Textile

Gul Ah#ed Textile

6henab Textile

Ar4oo Textile

Alkara#

+itara Textile

Bohinoor Textile


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Porter+s Fi$e Force Model!

Industry Ri$alry!

The rivalry in industry is very strong. 6urrently, there are #any @r#s

operating 'ith the good gro'th rate in the industry. 7ishat Textile 0ills

has a good gro'th rate in the #arket. 6henab Textiles, Al1Bara#

:


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Textiles, Bohinoor, 6rescent textile 0ills are considered as strong

co#petitors.

'ar)ainin) po,er o- &uppliers!

The suppliers of various ra' #aterials have a lo' bargaining po'er

because the ra' #aterials re9uired are produced in bulk such as

cotton.

'ar)ainin) po,er o- 'uyers!

2uyers enjoy a high bargaining po'er as Pakistan has a great nu#ber

of textile #ills, therefore it/s easy to s'itch fro# #ill to another.

Threat o- Ne, Entrants!

ue to easy and 'ide availability of ra' #aterials, it/s easier to raise a

textile #ill 'hich also serves as a threat to 7ishat Textiles.

Threat o- &u.stitute Products!

There are #any co#petitors doing good currently in the industry and

produce the goods of sa#e and better 9ualities 'hich serves as a

threat to 7ishat Textiles.

8


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&*OT Analysis!

&*OT MATRI/

&TRENT0& I+ )&&$ and IB1T;N $&&

6erti@ed

2iggest co#posite unit in

Pakistan

Lighest credit rating by PA6CA +elf o'ned po'er plant

=argest dyeing facility in +outh

;ast Asia

*EA1NE&&E& Celying on international #arket

Ligh cost of production

Ligh e#ployee/s turnover

Transit ti#e is #ore as

co#pared to foreign co#petitor

OPPORT2NITIE& FT regi#e i#ple#entation

6ost reduction by using #odern

and technology

=ocal #arket develop#ent ;ntering in ;nergy sector

>+ubject to Govern#entper#ission?

T0REAT& ;xport of ra' cotton and yarn

FT regi#e i#ple#entation

;xchange rate uctuations

Instable political and econo#icalconditions

Govern#ent policies

)


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&TRENT0&

I&O 3445 and I1O#TE/ 544 Certifed!

As 70= is #ainly focusing on international #arkets, and 'ith the

i#ple#entation of FT regi#e, these types of certi@cations are very helpful

to 'in the custo#er/s satisfaction.

'i))est Composite 2nit in Pa6istan!

70= is enjoying the status of being the biggest textile co#posite unit of

Pakistan, this strength is helpful to create econo#ies of scale that is the key

to success in international #arkets.

0i)hest Credit Ratin) .y PACRA!

70= has been a'arded highest invest#ent grade by Pakistan 6redit Cating

Agency >PA6CA?, 'hich 'ill #ake it easy for the 70= to raise long1ter#

funds.

&el- O,ned Po,er Plant!

7o' adays, having your o'n po'er plant is of crucial i#portance, because it

#akes sure un1interrupted supply of energy at very lo' cost, 'hich is helpful

in co#peting on international level.

Lar)est 7yein) Facility in &outh East Asia!

70=/s processing division got the largest dyeing in +outh ;ast Asia, #aking it

a candidate to accept those contracts fro# other co#panies that involve out

sourcing of dyeing facilities.

*EA1NE&&E&

Relyin) On International Mar6et!

$&


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70= has beenfocusing on international #arkets so there are chances that

this strategy #ay hurt its sales as there are rapid uctuations in international

#arkets, co#petition and buyers preferences.

0i)h Cost o- Production!

All Pakistani @r#s including 70= is suMering fro# high cost of production as

co#pared to the other countries like India, 6hina and 2angladesh, they are

cutting our throats by being cost co#petitive day by day 'hile at the sa#e

ti#e producing high 9uality stuM as co#pared to Pakistani @r#s.

0i)h Employee Turno$er!

Trends have been seen in 'orkforce data to leave the 70= on per#anent

basis, this is especially true for the lo'er level staM.

Transit Time Is More as Compared to Forei)n Competitors!

3oreign countries like India, 2angladesh and 6hina are very #uch eDcient

'hile co#pleting and consigning their orders to foreign buyers. 70= has

#ore transit ti#e as co#pared to its international co#petitors. The reason#ay be the contracts 'ith shipping co#panies or so#e internal process

proble#s.

OPPORT2NITIE&

*TO Re)ime Implementation!

Fith the abolish#ent of 9uota syste#, no' it is an opportunity for the 70=

to capture the international #arket share by providing lo' priced and high

9uality goods to international custo#ers. In this regard is

cost co#petitiveness is a special concern.

Cost Reduction .y 2sin) Modern Technolo)y!

$$


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As FT regi#e has opened the doors for free trade for the 'hole 'orld, no'

the only survival of the @r#s 'ould on the #ini#i4ation of production cost

and oMering innovative, high 9uality goods 'ith co#petitive price. 70= has

got strong @nancial support fro# 7ishat Group can help in ac9uiring this

opportunity.

Local Mar6et 7e$elopment!

7ishat 0ills has the opportunity to better cater the local custo#ers using its

products and retail stores of 7ishat =inen.

Enterin) in Ener)y &ector!

70= #ay get the privilege of generating and providing electricity for

residential and co##ercial areas of 3aisalabad, by negotiating 'ith the

govern#ent of Pakistan. Although local rules #ake it diDcult but still there is

a huge opportunity to capitali4e.

T0REAT&

E"port o- Ra, Cotton and Yarn!

Cecent trends in the Pakistan to export ra' cotton and yarn to foreign

countries is hitting like nails on the heads of textile value addition units,

although 70= has its o'n spinning facilities but so#eho' export of ra'

cotton is dangerous for it.

*TO Re)ime Implementation!

Abolish#ent of 9uota syste# presents a opportunity as 'ell as a biggest

threat to the Pakistani @r#s including 70=, as other countries are free to

capture the #arket, 'e the Pakistani @r#s are suMering 'ith high cost of

production #ay be driven out of the co#petition.

$-


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E"chan)e Rate Fluctuations!

70= #ost of the sales are co#prising exports, it receives pay#ent in foreign

currency especially A#erican dollars, ulti#ately these sales proceeds are to

be converted to Pakistani rupees, here co#e the #agic of exchange rate'hose uctuation can change a pro@table deal into a bad loss. 3inally,

if Pakistani rupees got strength against other currencies 'e 'ill get lo'er

value for our proceeds.

Insta.le Political and Economical Conditions!

6hanging Govern#ents, 'ar on terror, decreasing buying po'er and altering

buying trends and preferences of custo#ers are posing big threats to 70=, inthis regard 'e are confronting 'ith local an 'ell as international political and

econo#ical conditions.

o$ernment policies!

Govern#ent polices like high rates of taxes, KAT, duties oninternational

trades, high energy cost, re1organi4ing unions are causing a serious da#age

to the perfor#ance of over all industry including 70=.

$%


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TL; +TCAT;GE3C0*=ATI7

A7A=ETI6A= PC6;++

&TAE 5!

$(


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T0E INP2T

&TAE

$!


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I8 E/TERNAL FACTOR& E%AL2ATION 9EFE: MATRI/

1ey E"ternal Factors *ei)ht

Ratin) *ei)hted

&coreOPPORT2NITIE&FT regi#e i#ple#entation &.$$ % &.%%6ost reduction by using #odern and technology &.$- % &.%+ubject to Govern#entper#ission?

&.$& - &.-&

T0REAT&;xport of ra' cotton and yarn &.$- ( &.(8FT regi#e i#ple#entation &.$& ( &.(&;xchange rate uctuations &.&) - &.$8Instable political and econo#ical conditions &.$- % &.%related or unrelated?

--


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II8 T0E 'O&TON CON&2LTIN RO2P 9'C: MATRI/

-%


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verall 7ishat Textiles =td is at The 0aturity stage and its +2*s +pinning,

Feaving, Processing and Gar#ents can be placed in 9uadrant 6ash 6o' of

26G 0atrix, 'hile 7ishat =inen and Generating 3acilities are placed in +tar of

26G 0atrix.

-(

Process

Nishat

eneration

*ea$i

&pinni

armen


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III8 &*OT MATRI/

&TRENT0& *EA1NE&&E&$. I+ )&&$ and IB1

T;N $&& 6erti@ed-. 2iggest co#posite

unit in Pakistan%. Lighest credit rating

by PA6CA(. +elf o'ned po'er

plant!. =argest dyeing

facility in +outh;ast Asia

$. Celying oninternational#arket

-. Ligh cost ofproduction

%. Ligh e#ployee/sturnover

(. Transit ti#e is#ore as co#paredto foreignco#petitor

OPPORT2NITIE&

O &TRATEIE& *#O &TRATEIE&

$. FT regi#ei#ple#entation

-. 6ost reduction byusing #odern andtechnology

%. =ocal #arket

develop#ent(. ;ntering in ;nergy

sector >+ubject toGovern#entper#ission?

$. Provide electricity toresidential areas9&


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7ishat Textiles can i#port ne' technology to reduce its cost of production.

6o#pany can thus be able to penetrate in the #arket and capture #ore

shares by i#proving 9uality of goods and services, and provision of goods at

lo'er prices.

I%8 T0E INTERNAL #E/TERNAL 9IE: MATRI/

IFE TOTAL &CORE

&tron)

Moderate Lo,

0i)h

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Documents

Nishat Report Final (1)