The current government has now been in power for over ten months. How do you see Pakistan evolving under the PTI government?
The changes taking place are so drastic and unprecedented that at this point, the policies are so new to our immature markets that we are unable to gauge through or conclude what is going to happen tomorrow or how it’s going to impact our economy in the long run but I can tell you that the impact will definitely be extreme, whether good or bad that remains to be seen. We are an under developed country with an immature market compared to Europe and the USA or even some South Asian economies, in terms of our infrastructure and our fundamentals as an economy we are still in the development stages. A lot of changes are being made which I believe are good for us and should have been made a long time ago but because it is happening so fast and in such a short period of time, it is going to take some time for the markets to absorb these changes. Looking at the past 10 months, our currency has devalued by 30% against the USD. Benchmark interest rate has gone up from 9% to 13.25% and there have been major changes in the tax structure which has led to instability in the economy. In my opinion, I feel that the government is trying to do too much too soon and that might go south as the businesses might not accept these drastic changes which would lead to a major slow down.
The international freight forwarding industry is the largest contributor to Pakistan’s GDP in the service sector. The logistics industry has seen an impressive growth in the past few years. Please give us your views on the logistics space in Pakistan and how can it be improved?
Logistics, supply chain and freight forwarding are the the backbone of our economy. Firstly, we are an energy deficit country and because of that we heavily rely on imported fuels and energy sources. Our secondary sectors is in the developing stage so we rely on our imports for energy, raw materials, machinery, luxury items, value added goods etc. For example, Pakistan is the 4th largest cooking oil consumer in the world, we import more than 2-2.5 million tons of seeds to make cooking oil. The infrastructure of shipping and logistics is of the utmost importance for any country that relies so heavily on imports. In order to lower our trade deficit, we need to be more efficient in our imports and the costs attached with it.
Along with that we need the government’s support to make the investment process easier and develop investor friendly channels so that foreign companies can come, develop a partnership and successfully conclude their projects. We have been hearing about Gwadar for years now but due to consistent political and economic instability we have not been able to gain any benefit from it yet. As far as shipping is concerned, we definitely need more ports and terminals. We only have two ports right now Karachi Port and Port Qasim. Within these ports we need more terminals each dedicated to a specific product such as coal, LNG, oil, seeds so that the operations become more efficient.
As for the logistics industry, the biggest problem is that it is completely undocumented and it is run in a very orthodox manner. Just recently the new government implemented a lot of health and safety standards in terms of how much weight you can load on the trucks. These standards have increased the freight cost but they will make the logistics more efficient in terms of time, documentation, tracking, security and efficiency.
So the development of new ports and terminals, development of road networks and implementation of internationally established standards for the land transport sector will have a significantly positive impact on the efficiency of the shipping and logistics industry.
Waterlink Group of Companies was established in 2001 to provide efficient and competitively priced supply chain services. What are your main objectives for 2019 and 2020? Who are your main clients?
Since the establishment Waterlink Group the vision and philosophy has always been the same, we have always wanted to become a one stop shop for the country’s shipping, logistics and supply chain requirements. When we entered this industry, WLG only worked as a freight forwarder, but since we kept reinvesting our profits towards vertical and horizontal integration. Today, without using any third party interference or services, we can take your cargo from the port and within our own supply chain infrastructure we can deliver that to your doorstep and vice versa. This includes the sea freight, terminal handling/stevedoring, custom clearance, warehousing and land transport, all under one roof. This not only makes us a one stop shop but it is also operationally efficient and lowers our costs. This is the competitive edge that we have gained in 20 years and we are continuing to do so.
We have also diversified our services and have entered the dredging industry, and have been involved in marine dredging as well. We also started a coal trading enterprise by the name of MJM Energy and Resources, MJM imports roughly 55,000 metric tons of coal in Pakistan, per month. Pakistan imports about roughly 4-5 million tons of coal every year. Going forward in 2019 – 2020 we see ourselves in the energy market, taking a bigger market share of the energy sector in coal and renewables. We plan on expanding our fleet, we are looking at having a stronger footprint in warehousing sector, and we want to take our warehousing network from Sindh and expand it towards Punjab.
Coming over to our clients; we work with a lot of companies. We work with Attock Cement, Fecto Cement, Dewan Cement, ICI Pakistan, PepsiCo Pakistan, Samsung, between 2002-2014 we were one of the main contractors in Pakistan for USAID, NATO, US Army for their Afghan transit.
With global logistics being transformed by digitalization. What steps is WLG taking to capitalize on changing global logistics patterns? How are you planning to further increase your profits in the years to come?
For a country like Pakistan, digitalization is very important because information is stagnant and infrastructure is weak. Companies around the world are now giving live tracking to their customers which enables them to determine delivery time down to the minute. Warehousing and Textile companies do not have inventory management systems in place. We have not given a lot of attention to our IT industry and it is essential in the shipping industry for us to compete with our neighbourhood countries.
Waterlink is currently investing in its internal IT systems in order to become more efficient and competitive locally and internationally. In my opinion the current government has a better outlook towards technology than previous governments did and I hope they can make some progress in that direction within their tenure.
You have offices in the UAE, USA, Afghanistan, Sudan, Kenya, and Canada as well as many local offices. Are you looking to expand your activities to other countries/regions and looking for further potential partnerships?
Pakistan is an emerging market and demand is increasing every day so at the moment we are just trying to keep up with the local demand although we want to increase our international presence. In the trading entity our international presence is more important as by 2025 Pakistan is expected to bring in 20 million tons of coal per year that would make it one of the world’s top 10 coal importers. We are looking for further partnerships with miners and commodity giants who are sitting on the supply end.
When it comes to the shipping industry, we have long term contracts with shipping firms such as
APL, DAMCO and DHL. We would like to take our trucking fleet model to other emerging markets too at some point in the future.
As one of the leading firms in the supply chain space in Pakistan. Which marketing strategies are you currently using to promote WLG and how would you like to develop them?
Our market reputation is our biggest marketing tool in Pakistan. For the rest of the world, we are trying to increase our footprint by opening offices in various countries, increasing our presence in conferences, and building new partnerships.
WLG is a very corporate socially responsible company and focuses on contributing to local communities, reducing its environmental impact and respecting workplace human rights. How important is CSR for WGC? and in which CSR projects are you involved in, lately?
When it comes to CSR, we do not just corner ourselves to one sector. We want to go paperless by 2025, it is tough in our environment but we are trying to achieve that. Last year we made a decision to improve the Male/Female ratio, to start with we want to bring the ratio 70:30. We also run an NGO in which every company in our group participates by giving a percentage of its profits on a monthly basis. The NGO runs a school, an eye clinic and a doctor’s clinic providing everything free of charge, we do not charge a single penny. The school educates around 600 children and we want to expand that into a college. Besides that, we engage other organisations to further their goals like a tree planting activity that we recently did with the World Wide Fund for Nature (WWF).
Our fleet of trucks is eco-friendly; the fuel is the best premium fuel so that carbon emission stays at a minimum. The Marine Group of Companies that we have been working with in different areas for a long time built a terminal by the name of Pakistan International Bulk Terminal in Port Qasim and that terminal was approximately a $250 million dollar project that was made according to international standards. This terminal is addressing all the environmental concerns in the coal handling industry. We are one of the first to go ahead and support them.
You have been a director at WGC since October 2014. You studied a Bachelor and Master’s of Law at the University of Buckingham before that. What do you aim to achieve in your professional life?
I want to turn this organization into one that is self-sufficient. My aim in that WLG should be able to reach a point where its growth and vision is not dependant on any CEO or board of directors, so that no matter who comes and goes 50 years down the line, our growth, vision and core values stay intact. That is my vision.
What is your final message to the readers of USA Today who consider Pakistan as a potential investment destination or are looking for partnerships in the logistics industry?
Pakistan is one of the most promising emerging markets in this region with an immense growth potential. There will be double digit growth in the coming years, I think the last 5 years are evident of this expectation. I would welcome everyone to come, look at our country, our markets and invest in them. They will definitely not be disappointed.
