Dynamic leadership and challenges by (APSEA): An insight by the market leader (Khalis Group)

Brief History of APSEA: All Pakistan Solvent Extractors' Association (APSEA) is an independent representative body, which looks after the interests of member units and co-ordinates their problems with the Federal and Provincial Governments facilitating solutions.
All Pakistan Solvent Extractors Association came into existence in 1980 and has been recognised and licensed as an A class association. The administrative structure consists of a chairman, two vice chairmen, a central Executive Committee and a general body of members. Chairman is the head of the association whereas the two vice chairman oversea southern and northern regions respectively.
The Chairman and Vice Chairman are elected every year by direct votes of the general body. Likewise, Rana Iqbal Hussain one of the most experienced and well known industrialists of Pakistan and chairman of Khalis Group of Industries has been elected unopposed as chairman of APSEA for the year 2015-16.
Brief Introduction of the New Chairman
Rana Iqbal Hussain, chairman Khalis Group, is a seasoned businessman with vast experience in agriculture, trade and industrial sectors. He started his edible oil manufacturing business in 1992 from a remote industrial area of Sheikhupura and within a span of 2-3 years achieved tremendous growth by establishing a firm foothold in the market. The oil manufacturing plant of 100 Tons/day was eventually expanded to 300 Tons/day production.
This was not the end; keeping up with technological advancements, rapid industrial growth and innovative ideas of production, Rana Iqbal Hussain decided to set-up a Solvent Extraction plant in 2004. This backward integration move, which was against the trends of the market, would prove to be a huge success. It consequently established Tahir Omer Industries Ltd, the parent company of Khalis Group, as the largest crusher of oil seeds in Pakistan. The Solvent industry of Pakistan has grown rapidly and Khalis Group has been at the forefront of this expansion throughout by creating high quality oil and meal for the local market. By the Grace of Almighty Allah, Khalis Group is now amongst the top hundred taxpayers of Pakistan and has been duly acknowledged by Federal Board of Revenue and the government of Pakistan. Main products of Khalis Group are Khalis Banaspati Ghee, Khalis Cooking oil, Soybean, Canola and Sunflower meals, and Polyester Staple Fiber.
As Chairman APSEA
Sine taking over as chairman APSEA Rana Iqbal's scope of work and responsibility has broadened naturally and he has been on top of the core issues facing the industry. In a recent executive body meeting of the association, major decisions have been taken under his leadership, which will set the course for the industry for the coming year. He is taking steps to make APSEA stronger structurally and more effectual operationally. He believes in creating teams to do specific tasks so they can be performed efficiently and in an organised manner. Thus, he has delegated authority to committees made up of senior members to tackle various issues. Furthermore, he is conducting meetings with other stakeholders of the industry such as suppliers, shippers, brokers, terminals and other associations to improve collaboration and build stronger work relations. He has also expressed his desire to see the younger generation participate actively by playing a constructive role in the running of the industry and bringing in new innovative ideas.
He believes the solvent industry has a long way to go in transforming the vision of the association and members into reality, and is determined to work restlessly to achieve it. Though the industry at this stage is facing numerous challenges and problems, it is, nevertheless, being presented with substantial opportunities as well which must be availed intelligently.
Khalis Group
Khalis Group is the brainchild of Rana Iqbal Hussain. It is the market leader in manufacturing of banaspati ghee, cooking oil, semi processed edible oils, poultry meal and recycled polyester fiber. The companies working under Khalis group make environment friendly and hygienic products for its B2B clients as well as household consumers. Khalis Group is an exemplar for any aspiring business and entrepreneur to look up to as it has come up the ranks of the top corporations in Pakistan just under twenty-five years of operations.
Vision
Providing healthy products at affordable prices without compromising on quality by means of professionalism, sincere endeavours, intelligent direction and skilful execution. In a bid to supply best edible oil and ghee products of highest quality we take customer satisfaction as a priority.
Mission:
In this highly complex, fast moving globalized world, we are stepping forward into the future with a strong commitment towards quality, quantity and purity of products. With these principles in mind, our aim is to keep ourselves up with increasing demand of the edible oil industry of Pakistan. We deploy efficient and improved technological methods of production to come to the best quality goods.We believe that we will engage in sustainable practices of production and strive to maintain a customer-focused approach.
Industry Outlook:
Pakistan is the 3rd largest importer of Palm oil and other soft oil in the world. It imports around 2.4 million tons palm oil and 1.5 million tons of oil seeds annually to cater to domestic demand. The annual increase in edible oil consumption in Pakistan is approximately 8%.
Edible oil industry in Pakistan constitutes 10/12 refining units around 160 small and medium seed vegetable oil and ghee units with installed capacity of more than 3.5 million tons. Edible oil sector has about 65 to 70 solvent extraction units which are producing around 0.63 million tons by using locally planted cotton seed, rapeseed, mustard seed, canola and sunflower. Edible oil sector is contributing over Rs 50 billion to government in the shape of duties & taxes.
Problems and Potentials:
Our national consumption of edible oil is around 3 million tons of whichalmost 70% is met through imports of edible oil along with different seeds which are crushed to extract oil in order to meet the domestic demand. Import bill of edible oils and oilseeds is second highest to petroleumand petro products, and is thus a major contributor to the government exchequer.
Oil seeds crops have a strong bearing on our national economy as they constitute about 5% of total imports and 50% of agricultural imports. Domestic productivity enhancement of oil seed therefore is of vital importance. Beside crops factors, industrial aspects are equally important in managing edible oil requirements of the country, which makes it a complex issue.
The critical challenges being faced by the edible oil industry include:
-- Large percentage of imports
-- Dependency on imports
-- Limited Local production
-- Fluctuation in international prices of edible oil and seed
-- Dollar - Rupee Parity
-- High Import duty and taxes
-- Wide gap between demand and Supply
-- Environmental challenges
-- Transportation
-- Globalized economy
-- Export of Meal
-- Technological reforms
-- Energy crises
According to us, there are three main challenges and if we could tackle these practically then other associated problems will be resolved amicably:
-- Enhancement of domestic oil seed production and oil palm cultivation.
-- Restructuring of duty taxes and incentives to lower production cost & encourage meal export.
-- Technological reforms and up gradation to increase productivity of solvent extraction plants.
Pakistan being an agricultural country has a lot of potential areas for oil seed production. Oil seeds have considerable untapped yield potential that should be exploited by boosting yield per unit area through increasing coverage of cultivation region, and by giving special incentives to growers at all stages of crops. In case of canola, rapeseed and sunflower, the stated yield is about 40 to 45% of the cultivated area, whereas the actual yield is only 30 to 35%, which is below power of the potential of our agriculture land.
As far as, oil palm cultivation is concerned, this is the principle source of edible oil. Oil palm has the highest oil yield per unit area. In Pakistan, oil palm's increased promotional work started in 1996. A survey indicates that cultivation of oil palm would be successful on coastal areas of Sindh and Baluchistan. So far we haven't seen any encouraging figures of domestic production. Therefore, we are aiming to expand augmented development efforts towards enhancement of domestic production of sunflower, canola, soybean and cotton seeds.
There is also a need to develop and adopt low cost production strategies through reducing cost of seed, development of machinery such as planters, threshers, diggers and dryers in order to get more yields. Moreover, ensuring availability of quality seed at economical price to growers and disposal of their produce at reasonable price is an immediate necessity. These measures would significantly increase local oil seed production, reducing the bill and dependency onimport, and balancing foreign exchange subsequently.
Next phase for immediate attention and improvement is restructuring of duties and taxes and incentives to lower production cost and encourage export of meal of oil seeds. For this, we are continuously engaging in dialogues with government officials to raise duty on import of meals and bring about lucrative incentives on export of local meal and also bring uniformity in the duties of soft oils.
The increased emphasis and shift to soybean seed by the industry has changed the dynamics. It has brought about new challenges in production and logistics and companies are coming up with new creative solutions. To increase productivity, technologicalup gradation of solvent plants is being undertaken individually by member units with assistance of APSEA all over the country. Hopefully next year's yield, turnover and financial data will reflect the combined efforts of all stakeholders.