Haq's Musings: Murree

Thursday, April 1, 2010

Pakistani Beer Company in KSE-100 Index

Murree Brewery Company (KAR-MURE), a publicly listed beer maker founded in 1861, has now been added to the Karachi Stock Exchange's KSE-100 index, according to media reports from Pakistan's financial capital Karachi. The Murree Brewery is one of the oldest public companies of the sub-continent. Its shares were traded on the Calcutta Stock Exchange as early as 1902, and is now the oldest continuing industrial enterprise of Pakistan, and among the top 25 performing public companies listed on the Karachi Stock Exchange.

The Karachi Stock Exchange KSE100 Index includes the top company from each of the 34 sectors on the Karachi Stock Exchange, in terms of market capitalization. The rest of the companies are picked on market cap ranking, without any consideration for the sector to make a sample of 100 common stocks with base value 1,000. As of Feb 26, 2010, the new index, with the inclusion of 11 new companies, makes up 91.11 percent of the total market capitalization of Karachi Stock Exchange.

Ten other companies, namely Security Papers Ltd, Pakistan Cables, TRG Pakistan, PEL (Pak Elektron Ltd.), Grays of Cambridge, Shifa International, PACE Pakistan, NetSol Technologies, Pakistan Telephone Cables and Clariant Pakistan have also been made a part of the widely watched shares Index, as of April 1, 2010.

The new entrants will replace First Habib Modaraba, Sigma Leasing, Fazal Textile, Nakshbandi Industries, Bannu Woolen Mills, Habib Sugar, Agriauto, Wazir Ali Industries, JS Global Capital, JS Bank and Silkbank Ltd.

After total prohibition imposed in the late 1970s under Zulfikar Ali Bhutto, and throughout 1980s under General Zia ul Haq, there has been a gradual relaxation that has allowed Murree Brewery to bring back Murree beer, vodka, gin and whisky in Pakistan. The Murree products are now available in legal liquor stores that operate openly in Karachi and other major cities. Although consumption of alcohol in public is banned, it is becoming increasingly available in private clubs and expensive restaurants. The company produces 660,000 gallons of beer every year and the 110,000 gallons of whisky that is stored in its cellars. A division of the company also produces and markets fruit juices in Pakistan. Its total annual sales last year were about Rs. 2.3 billion ($28 million). Murree's competitors include Quetta Distillery, as well as smuggled alcoholic beverages from the rest of the world.

In 2007, the Daily Telegraph reported that "the Islamic republic of Pakistan has won the distinction of producing the Muslim world's first 20-year-old malt whisky".

During the strict prohibition period, Murree Beer was produced in Austria for European markets and was available in various Pakistani and Indian restaurants in London, an enterprise which has since ceased since 2004.

The company is not allowed to export its alcohol products. However, Murree beer company is working on making it available in Indian and Pakistani restaurants in Britain under a promotion "Have a Murree With Your Curry" in collaboration with a licensee.

While Murree Brewery surprises some people and raises the eyebrows of others, this company is not alone in defying the generally known conventions of the Islamic Republic. A new class of entrepreneurs has emerged in Pakistan during the last decade who, in small but significant ways, have challenged the religious orthodoxy. They present a sharp contrast to the rising wave of Islamic radicalism that the U.S. and others view as an existential threat to Pakistan. And with many well-traveled Pakistanis importing ideas from abroad, they are contributing to Pakistan's 21st-century search for itself.

The new entrepreneurial outfits range from fashion apparel and cosmetics to upscale restaurants, personal fitness clubs and places offering men's hair transplants.

While most of the new entrepreneurs cater to Pakistan's young, urban consumers, there are a few who have found highly unusual niches for export markets. For example, Integrated Dynamics of Karachi designs, builds and exports unmanned aerial vehicles used by the US for border patrol duty on its southern border with Mexico. Recently highlighted by the New York Times, AQTH offers a more shocking example of a small, entrepreneurial Karachi company that caters to the $3 billion a year bondage and fetish industry in the United States and Europe. AQTH's mom-and-pop-style garment business earns more than $1 million a year manufacturing 2,000 fetish and bondage products, including the Mistress Flogger, and exporting them to the United States and Europe.

Here's a CNN report on Murree Brewery: