Diversification holds the key to success

Imran Ghafoor is the CEO of Sitara Spinning Mills Limited, as well as director of various other companies of the Sitara group of industries (energy, Textiles, Chemicals, Fabrics, etc.) A graduate of the University of Punjab and the Boston University, USA, Ghafoor is also vice chairman of the standing committee on WTO, Faisalabad Chamber of Commerce & Industry (FCCI) and Executive Member of All Pakistan Textile Manufacturers Association (APTMA).
Diversification holds the key to success Sitara Group is "one of the top ten business groups in Faisalabad - the others being Chenab, Bismillah, Amtex, Rafhan, Arshad, and Ibrahim amongst others. Although, some of the countrys leading business groups are joining hands with each other to combat common issues, the culture is yet to penetrate across the spectrum.
"In Faisalabad, the culture of mixing money is quite low compared to Karachi. The business community of Faisalabad generally believes that people in Faisalabad, do not prefer to come up with a joint venture," Imran Ghafoor, CEO of Sitara Spinning Mills and Sitara Peroxide Ltd. told BR Research.
And perhaps, he is right, considering that for the last four years, Fesco (Faisalabad Electric Supply Corporation) is up for privatisation, but no one in Faisalabad is willing to go for joint ownership.
Imran, who is also the Vice President of the Young Entrepreneurs Organization in Faisalabad, is perhaps aiming to change this culture. "I think its right to build ties with people and we can run a good business with good people with mutual understanding," he said. YEO is an organisation of young business leaders geared up to help assist the business community through its platform.
Faisalabad is home to a lot of leading textile players - a lot of them who have roots in Faisalabad and "will likely expand their business in Faisalabad". However, there are a couple of drawbacks the city needs to overcome before it rises as an investor-friendly industrial city.
"The disadvantages in Faisalabad are low education and poor health services. People who are already in Faisalabad are less likely to shift their business elsewhere because shifting is a very difficult task, but the new ones might not be attracted," said Imran.
Imran, who is also a member of Faisalabad Development Board that consists of 20 businesspeople tasked to upgrade the citys infrastructure, however, says that "FDB has taken keen interest in designing and executing some important projects in the area of horticulture, supply of clean drinking water and upgrading of roads infrastructure". This means that if FDB follows through, there would be no reason for investors to migrate.
DIVERSIFICATION GAINS For Imran diversification holds the key to future success of his group. "Every other person wants to enter the textile business, but we go for diversification; it has very high risks, but if you minimise them, you have high returns. Diversification is challenging," he said.
The group has lately added a high-tech plant called Sitara Peroxide Ltd, which produces hydrogen peroxide - a bleaching agent that is used as a necessary component of textile, paper, leather and food industries.
Following the setup of the Sitara Peroxide plant, the group is now setting up a new unit, costing Rs400 million, which is a packaging project to pack liquid hydrogen Peroxide and caustic soda. "We are starting with five machines which are going to be imported from Taiwan and erection works is in progress. We look for new business avenues as part of our continuous growth and expansion programme," he said.
In other business plans, the group is planning to go for investments in agriculture and dairy farming amongst other non-textile and non-chemical sectors.
"We have bought 12-15 murabba space in Jirrawala for farming. We are growing vegetables, wheat and rice. First we bought it just for informal farming, but now we are going for professional corporate farming," said Imran, adding that they, however, are not buying any additional land for the time being.
The group seems to have an inclination towards the mechanisation of supply of fruit and vegetables. "The handling of fruit and vegetables is not good and almost 50 percent is wasted from the farm level...the banana which sells for Rs10 in farms is sold for Rs50 because half of it is wasted. There is no proper food storage, coolers, mandi, etc so food handling is a challenge," he said.
Imran says his group is also conducting research on dairy farming which shows that there is plenty of space for dairy farming in Pakistan." We will enter directly into marketing of pasteurised dairy products because it is the need of the city," he said.
The group is also considering ideas for delivering dairy products directly to homes, a model in which "there will not be any use of going into packaging because milk will be mainly delivered through carriers."
"Delivering directly will save packaging cost and the only cost will be the cost of delivery. It is workable in the bottle form with temporary seals to protect it from germs. We are working with Australian companies and the work is still under research," he said.
Working along the same lines, Imran says they can extend their dairy business further into butter and cheese. "Ninety percent of cheese is imported in Pakistan, and there are 10 different types of cheese. So we think that we can produce at least some of that cheese in Pakistan,"
The Sitara Group is also interested in opening an Islamic Bank as a joint venture simply because it is interested in Islamic finance. "Since the regulations are high, we are considering collaborating with a Saudi group or some foreign banks with a percentage of investment in shares."
Interview by Ali Khizar Aslam