Thursday, July 27, 2017

5 Pakistani Companies Among Forbes 200 Best Under $1 Billion in Asia

Five Pakistani companies are featured in the Forbes magazine’s latest annual ranking of the 200 best companies with under $1 billion in revenue in the Asia-Pacific  region. Pakistan's representation of 5 on the list is down from 7 last year. The number of Indian companies on the list is down to 3, less than half of the seven companies that made it in 2016.

Among Pakistan's five companies on the list is Ferozsons Laboratories which is making its debut this year. The company's revenue jumped 93% last year.

The list highlights 200 Asia-Pacific public companies with less than $1 billion in revenue and consistent top- and bottom-line growth. This year’s candidates come from 13 countries and averaged 55% growth in sales, a 24% profit margin, and 113% growth in earnings per share.

China tops the Forbes 200 list with 71 companies followed by Japan 41, Taiwan 30, South Korea 22,  Vietnam 10, Singapore 7, Australia 6, Pakistan and Malaysia 5 each, Thailand 4, and Hong Kong and India 3 each.

The Pakistani companies on the list are Agriauto Industries, Cherat Packaging, Ferozsons Labs, Gandhara Industries and Searle Companies. There are 3 Indian companies on this list: 8k Mile Software Services, Kellton Tech Solutions and Manpasand Beverages.

Of the 5 Pakistani companies on the list, two are in auto industry, two in pharmaceuticals and one in package manufacturing. Here are brief descriptions of the companies as published by Forbes:

Agriauto Industries Ltd. manufactures and sells components for automotive vehicles, motorcycles, and agricultural tractors. Its products includes shock absorbers and struts; motorcycle shock absorber and parts; sheet metal press parts; and other parts such as manual type window regulator and door/door hinges. The company was founded on June 25, 1981 and is headquartered in Karachi, Pakistan.

Cherat Packaging Ltd. is engaged in manufacturing, marketing and selling of paper sacks and polypropylene bags to the cement industry in Pakistan. It provides cement bags made from kraft paper and polypropylene granules. The company was founded in 1991 and is headquartered in Karachi, Pakistan.

Ferozsons Laboratories Ltd. engages in the manufacturing and trading of pharmaceutical products. It produces tablets, capsules, syrups, suspension, creams, and ointments. The company was founded on January 28, 1954 and is headquartered in Lahore, Pakistan.

Ghandhara Industries Ltd. engages in the manufacture and market of vehicles. Its products include pickup, trucks, and buses. The company was founded by M. Habibullah Khan Khattak on February 23, 1963 and is headquartered in Karachi, Pakistan.

Searle Co. Ltd. engages in the manufacturing of pharmaceutical products and a low calorie sweetener. It also engages in selling of food and consumer items and manufacturing of pharmaceutical items for other companies. The company operates through the following segments: Pharma, Consumer and Investment Property. Searle was founded on October 5, 1965 and is headquartered in Karachi, Pakistan.

Pakistani companies are riding the rising tide of the nations's middle class consumption. They are benefiting from increasing consumer confidence and growing demand for cement, branded food products, pharmaceuticals and vehicles. Overall consumer products and services companies have been on the rise on Forbes Asia list, an indication of Asia’s success in moving towards a consumer economy.

Related Links:

Haq's Musings

Credit Suisse Wealth Report 2016

Pakistan: A Majority Middle Class Country

Karachi School of Business and Leadership

State Bank: Pakistan's Actual GDP Higher Than Officially Reported

College Enrollment in Pakistan

Musharraf Accelerated Development of Pakistan's Human and Financial Capital

China-Pakistan Economic Corridor


Ahmed F. said...

Impressive. Some of the companies have been around for a long time and are proven survivors.

Riaz Haq said...

Ahmad: "Impressive. Some of the companies have been around for a long time and are proven survivors."

There are 3 criteria for picking companies for this list:

1. Publicly traded

2. Fast growth in both top line (revenue) and bottom line (profits)

3. Revenue under $1 billion

Names in the list change each year based on the criteria

Rks said...

Impressive figures. Pakistan is ahead of countries like India, Thailand, New Zealand, Malaysia, Indonesia and at oar with Australia and Singapore.

Riaz Haq said...

In its last annual State of the Economy report, the State Bank of Pakistan too notes that the decent performance of the pharmaceutical industry, which grew by 6.5pc in 2015-16 on top of 7.6pc the previous year, “conceals some underlying issues, such as strict regulation, unpredictable price structure, lack of patent protection, abundant supply of counterfeits, and lack of US Food and Drug Administration (FDA) approved plants. “Hence, not only is the size of the industry in Pakistan (worth less than $3bn) small, its exports are also low.”

Pakistan’s pharmaceutical exports have stagnated at around $200 million for the last several years.

“Individual companies have done what they could to boost their export turnover by more than doubling it since 2010,” contends Ijaz A. Mumtaz, the chairman of Fazal Din and Sons, one of the oldest local pharmaceutical manufacturers and retailers.

He was sorry to note that successive governments had ignored the pharmaceutical industry’s potential to spike the country’s export revenues.

“Pakistan can raise its sales of generic medicines in the world market to $2 billion to $5bn in the next five to 10 years.

“This is provided the government aids the industry in getting access to the American and European markets by helping firms improve their technology and obtain accreditation certifications. We don’t have enough resources for that.”

Pakistan’s drug exports are mostly limited to South East Asian and African markets, which do not apply very stringent quality controls on exporting firms.

A quantum jump in pharmaceutical exports, however, requires access to Europe, America and other developed countries with a strong drug regulatory framework and quality standards.

With the country’s exports coming under tremendous pressure, decreasing by around a fifth in the last three years from the peak of above $25bn in 2013-14, many are calling for broadening the the country’s export base by tapping the potential of such sunshine industries as pharmaceutical, poultry and so on.

“It is high time we expanded the very narrow base of our exports with textiles, leather and its products, and rice forming more than 70pc of the total export revenues, and remove barriers in the way of other industries so as to encourage them to claim their rightful share in the global markets as India has done,” says Mubashar Bashir, a chartered accountant and industry analyst.

Riaz Haq said...

Pakistan exports surgical goods, medical instruments worth US$ 339.19 million in 2016-17

Pakistan exported surgical goods and medical instruments worth US$ 339.19 million during the last fiscal year ended on June 30, 2017, as against the exports of US $ 358.766 million of the corresponding period of last year.

The exports of above mention goods were recorded at US$ 358.766 million during the financial year 2015-16.

According to the data of Pakistan Bureau of Statistics, the cutlery exports grew by 2.52 percent and reached at US$ 82.436 million in the fiscal year 2016-17 as compared to the exports of US$ 80.404 million in the same period last year.

Meanwhile, the exports of chemical and pharma products increased by 9.21 percent as chemical and pharmaceutical products valuing US $ 878.463 million exported as compared the exports of US $ 804.337 million in the same period last year.

During the period from July-June, 2016-17, about 44,250 metric tons of fertilizers manufactured valuing US$ 10.158 million exported as compared the exports of the same period last year.

During the last financial year ended on June 30, 2017, exports of fertilizers manufactured grew by 100 percent as compared the corresponding period of last year, the data added.

According to the data, about 9,029 metric tons of pharmaceutical products worth US$ 212.291 million exported which was up by 3.63 percent against the exports of last year.

The country had earned US$ 204.846 million by exporting about 11,112 metric tons of pharmaceutical products during the year 2015-16, it added.

Riaz Haq said...

#Pakistan’s status grows in #market indexes. #MSCI #EmergingMarkets #PSX #Karachi … via @WSJ

Pakistan has gotten a leg up from the indexing world and could get more attention from investors because of it.

In May, index provider MSCI Inc. decided to give Pakistan emerging-market status and added it to the MSCI Emerging Markets Index. MSCI had previously classified the country as a frontier market.

Emerging markets are more economically developed than frontier markets by definition and generally are considered less risky by investors. Much more money is invested in funds that track emerging-markets indexes than in those that track frontier-markets indexes.

“The great thing about being added to an index is that pretty soon there will be inflows of money to the country,” says Satya Patel, a portfolio manager at Matthews Asia in San Francisco. For one thing, when a country is added to an index, funds that aim to track that index need to buy stocks in that country.

“In this case, they will sell dollars and buy Pakistani rupees in order to buy the local stocks,” Mr. Patel says. Ultimately, the inflow of foreign currency helps stabilize a country’s economy, he says. Having a sizable stash of foreign currency typically helps a country maintain the flow of imports and support the home currency on world markets. It also provides reserves for possible use in an economic or political crisis, which can help reassure foreign investors that their money is safe in the country.

Mr. Patel says Pakistan’s new status also may help draw attention to the investment opportunities there, aside from index-related purchases.

“One of the most surprising things is that Pakistani companies are the best-run companies in Asia,” he says. “Part of that has to do with that they have operated in a challenging environment for the past few decades.”

Riaz Haq said...

#China plans $4 billion petrochemical complex near #Karachi in #Pakistan #CPEC

A Chinese proposal to set up a refinery along with a downstream petrochemical complex near Karachi is advancing steadily as requests for 500-1,000 acres has been submitted to the provincial governments of Sindh and Balochistan.

The estimated cost of the project is about $4 billion.

This was disclosed by Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Zubair M. Tufail after a meeting with the visiting Chinese delegation, led by Ms Li-Jial, Director Tianchen Engineering Corporation (TCC), at the Federation House on Wednesday.

Ms Li-Jial and Mr Tufail agreed in principle to establish and exchange investment missions to further enhance trade relations between the two countries.

The Chinese asked for land in Karachi since they found rents in Gwadar Free Zone to be too expensive, Mr Tufail told Dawn. “Port Qasim does not have enough space for a project of this size,” he said. “So they have asked for land a few kilometres away or in the Hub area, which falls in Balochistan

They will go with whichever provincial government best facilitates their interests, Mr Tufail added. “Any of the two provincial governments give better deal they would go for it and this would be a win-win situation for both the countries.”

Mr Tufail said both the provincial governments are interested in this project but would depend how they make a land deal with the Chinese investors.

The complex envisions a number of jetties, a refinery with 10 million tonnes per year capacity, as well as downstream processing facilities for naphtha and its component chemicals. “Currently we are importing $2bn worth of these chemicals from the Middle East” Mr Tufail said, adding that the complex could help reduce Pakistan’s external deficit.

Building of the complex will take four to five years, he said, “since they’re starting from scratch”.

Talks on the proposal have been under way for over a year now, but the proposal has begun to take shape more recently with the formal submission of a request for land.

Ms Li-Jial speaking on the occasion said that TCC would like to invest in Pakistan to enhance investment opportunities.

“Over the years, China had been extending cooperation in different sectors of the economy in Pakistan and lately there had been a sudden jump in these relations for the mutual benefit of both countries,” she added.

The FPCCI president said that Pakistan could benefit from the TCC’s vast experience in oil refinery, energy, chemical complexes and other projects and explore investment opportunities mutually beneficial to both the countries.

Riaz Haq said...

Pakistan's economy surging as GDP growth sees record with 5.3 percent

akistan's government said Tuesday that the country's GDP has seen record growth of 5.3 percent.

Per capita income increased to $1,629, according to government data.

In a briefing to Prime Minister Shahid Khaqan Abbasi and other cabinet members, Finance Division officials said that during the current fiscal year GDP recorded increased growth.

Large-scale manufacturing achieved 5.6 percent growth and the fiscal deficit was reduced by 5.8 percent as percentage of GDP.

Almost 8,300 new companies were registered during the current year while FDI witnessed an increase of $2.4 billion in financial year 2016-17.

The World Bank in recent reports predicted that Pakistan's GDP growth in fiscal year 2017 was expected to climb to 5.2 percent, the highest in nine years and that the growth rate would continue to accelerate, reaching 5.5 percent in fiscal year 2018 and 5.8 percent in fiscal year 2019.

Local economists said the reports showed FDI was mainly being led by China.