AHMED Kamal, chief executive of the Kamal Group, is well aware of the crucial importance for a business to ‘constantly innovate and evolve’ to avoid the risk of getting caught out.

“Business is a continuous struggle; you’ve got to be always on your toes and need to continuously diversify if you want to grow and sustain competition,” he noted during an interview with Dawn.

Hampered by years of erratic electricity and gas supplies in Punjab, as well as by high energy prices, shifting policies and poor security conditions, the need for textile producers to adjust their growth strategies was never as urgent as it is now.

Ahmed had realised this well in time and diversified into local retail home textiles and the women’s apparel market through a lifestyle store chain — So Kamal — which was launched two years back.

“At a time when we are becoming less competitive than our rivals, only the local market can generate future growth for the textile industry,” he asserted. “Our industry’s heavy dependence on exports is one of the major reasons it is in trouble as exports are stagnating. Chinese and Indian textile producers are thriving because they aren’t so heavily dependent on exports.”

However, diversifying into the local market isn’t the only focus of his new business strategy. He is creating a warehousing infrastructure in the US and the UK to facilitate his customers there and to increase his exports.

‘Foreign buyers are afraid of returning to Pakistan due to terrorism. We helped them cut their import costs by eliminating the middleman and reducing the shipment delivery time’

“Foreign buyers are afraid of returning to Pakistan because of terrorism. Therefore, we needed to pursue a strategy that would help them cut their import costs by eliminating the middleman and reducing the shipment delivery time. Many Chinese and Indian textile firms are successfully pursuing this ‘direct-to-stores’ strategy for increasing their overseas sales,” asserted the former chairman of the Pakistan Textile Exporters Association.

Ahmed has also launched an IT-based textile designing company. “We are now exporting textile designs to foreign stores and brands as well. It’s a very big market. A textile design can easily fetch $500-600. We already have found some customers and expect to expand our client base in the coming months. As a credible exporter, our company stands a good chance of attracting buyers for our designs,” he said.

Ahmed’s family had entered the textile business in the mid 1950s when it established one of the first five textile factories, Central Textile Mill, in Faisalabad. Today, the group has evolved into one of the country’s leading producers of filament yarn, home textiles, knitted socks and garments, and has its own processing and printing facilities. It is also operating eight retail stores.

The annual turnover of the group’s six companies stands at $200m, with 80pc of revenues still contributed by overseas sales.

Ahmed has a lot of confidence in the country’s textile industry. “It has immense growth potential and can easily generate additional revenues of $10bn if we are able to convert the $4bn worth of yarn and fabric being currently exported into garments, knitwear, home textiles and other value-added products.”

Nevertheless, he points out that the industry is facing numerous problems which are dragging down growth. “We are spending the better part of our day dealing with day-to-day problems rather than focusing on investment and growth.

“Each morning when I step into my office, I find only problems lying on my desk. I’m never sure if my factories will get power and gas to operate the machines next morning or not. How can we expand our businesses and make new investments in these conditions?” he asked.

He said the policymakers’ obsession with opening up the local market to imported goods had in the past destroyed Swat’s silk industry and Faisalabad’s polyester fabric production. Now, half of Kharianwala’s processing factories have closed because of gas shortages.

“Pakistan has become the second-biggest importer of used and smuggled clothes. Our policymakers just don’t realise that by letting countries like China and India flood our market with their goods, they’re helping shift hundreds of thousands of jobs to those countries.”

Similarly, policymakers’ insistence on ‘importing foreign investors’ instead of encouraging local businessmen is forcing local investors to leave the country and take their investments elsewhere.

“They’ll concede every incentive to foreign investors, but will not help their own industrialists revive closed factories and motivate their own entrepreneurs to invest. India and China not only protect their domestic markets and industry from the influx of foreign goods, but also respect their investors and businessmen and watch over their interests.

“No country that refuses to give its entrepreneurs and investors respect has ever progressed. When Modi became India’s prime minister, he invited his businessmen and told them that he wanted to see them grow 10 times bigger in five years,” he said.

But Ahmed is still quite optimistic about the future. “Give us some room to work, an opportunity to grow, and solve our legitimate problems regarding energy shortages, regressive taxation, stuck up export refunds of around $1bn, and give us the same respect and incentives that are offered to foreign investors. We will do wonders for this country,” he concluded.

Published in Dawn, Economic & Business, December 22th , 2014