QAISER Bashir started QSA Surgical as an ‘offshoot of the family business’ around 40 years ago with an investment of Rs2,000.

Today, it has paid-up capital of Rs300m and is one of the 50-odd large suppliers of high-end surgical instruments from Sialkot to top brands in Germany and the United States. A growing concern, QSA Surgical employees 1200 people, carries out entire production in-house in its manufacturing facility situated on the Daska-Sialkot Road and fetches around $7m in export revenues.

“Our company enjoys a high level of ‘customer loyalty’ because of the quality of our products,” Qaiser told Dawn in an interview. “Our confidence level with our customers is very high and they have continuously giving us more and more business in spite of (their concerns about timely shipment of their orders owing to poor) security conditions in the country. The trust reposed by our customers in us has helped us grow continuously over the years,” he asserted.

Sialkot is known for forging skills and manufacture of metal implements for a very long time. The 1895 District Gazetteer, for instance, notes the ‘skill of its ironsmiths in producing high quality ornamental damascening and inlay work, and their ability to repair and manufacture large quantities of caskets, shields, swords, spearheads, knives, razors, stirrups, etc to an excellent degree of workmanship’.

It was the local artisans’ skill and knowledge of forging metals that gave birth to the surgical instruments industry in the city towards the end of the 19th century. The demand from a Mission hospital in the city initially for the repair and later for the manufacture of (surgical) instruments is believed to have laid the foundation of the large cluster of this industry here. The ‘big push’, however, came only with the start of the World War II when the city emerged as a major supplier of the surgical instruments for the British army fighting the war in countries like Burma (now Myanmar). After footballs, surgical instruments are the second major reason for Sialkot’s global fame and their exports fetch $300m, or one-fifth of the city’s $1.5b export revenues, every year.

“It is an all-weather business. Economic recessions and crises do not affect demand for our products. Healthcare is a growing business around the world,” said Qaiser. “We have a very big potential of increasing our exports to $5b in a very short time. The opportunity is out there but we do not have technology, literate and skilled labour and marketing skills.”

He laments that instead of focusing on improving their quality and exploring the foreign markets, a vast majority of the 3,000 companies - most of which are very small and single room-based firms - operating out of the city are busy undercutting their rivals by offering lower prices to the buyers.” All these factors, according to him, discourage businessmen in this trade from making major investments in technology, research and development (R&D), and skill improvement.

Little wonder then that the surgical instrument manufacturing largely remains a cottage industry, producing mostly low-quality, low-priced basic products with a negligible share in the world trade. Few firms, if any, produce directly for the international brands. Mostly, they produce for the middlemen who repackage surgical instruments exported from Pakistan in Europe and the US and sell at much higher prices.

Sialkot ,where surgical instrument manufacturing is clustered makes, and exports both disposable and reusable instruments that constitute approximately 60pc and 40pc of the total exports of industry. About four fifths of the industry’s export go to the US, Germany, the UK, France, Italy, Dubai, Japan and Netherlands, and the remaining to the rest of the world. Nevertheless, the negative factors are not deterring his company from investing in capacity expansion. “We hope to grow faster in the next five years and double our sales. We are continuously adding new machines and equipment from Germany and the US to improve our quality and diversify into new products,” he said.

What is prompting him to make investment? “Pakistan has many advantages over the rival countries. Availability of cheap labour is the most important of those advantages. It makes Pakistan a favourite destination for procuring surgical instruments for European and American companies. “Our prices are so low that it is hard for anyone to compete with us. What we lack is literate, skilled and efficient workforce, and modern technology. If we somehow succeed in improving the skills of our workers and bring in new technologies, no one can stop us from boosting our exports,” he argued.

This is the last article in the four-part series on the economy of Sialkot