The current government has now been in power for over eleven months. How do you see Pakistan evolving under the PTI government?
With the new government in power some major structural changes are taking place. For the first time in our history, we are realizing that we have been living way beyond our means and that we have overspent. There is a deliberate, well thought out and a determined effort to document the economy, this is slowing down the economy and hurting all businesses including ours but I believe that it was necessary. This could have been managed in a better way but I believe we are on the right track.
The Engineering Consultancy Industry has seen an impressive growth in the last few years. Please give us your output of the engineering consultancy industry space in Pakistan and how can it be improved?
One of our business segments is engineering consultancy and our scope is limited to the oil & gas and mining sectors. We are channel partners of IHS Markit, who are one of the largest and most reputed in the world. There is definitely a huge opportunity and a great growth potential in this segment, especially since Pakistan’s consultancy segment has not done well in the past. The sector is still below maturity because of numerous reasons most significant among these is policy focus and experience diversification. This is generally true for our engineering sector at large. In the 60s Pakistan was one of the leading destinations for investments, including foreign, with a particular interest in the engineering sector. Our engineering industry was probably more advanced and growth focused in the in the 60s than it is today. GM, Ford, Chrysler & Bedford had local assembly units. Our airline was amongst the best and growing, our railway was way better and we made good quality agriculture equipment and implements. Today, we are dependent on the imports, primarily from Chinese. Even, the capacity to correctly spec and design has been lost. The engineering sector is in need a of major investment initiative. Government seems willing to assist where necessary. Thus, a good investment and growth opportunity.
Akbar Associates Group was established in 1983, it is a multi facet business house with over five hundred full time employees, paid-up capital of over Rs 250 Million and average annual turnover of approximately Rs 5,000 Million. What are your objectives for 2019 and 2020?
In 2019, our main objective is to survive. The volatility of the financial sector has surprised everybody, especially with the devaluation and the escalation interest rates. Pakistan does not have an export surplus and local inflation is primarily driven by supply shortages than excess liquidity, therefore, to my mind, there was absolutely no reason for both these measures. In addition to this volatility, our financial managers continue to burden, both the enterprise and the entrepreneurs, with numerous and regressive taxation. To quote Ronald Reagan who quoted Ibin-e-Khuldum “At the peak of the empire taxes were few and revenue was in abundance and at the decline of the empire, taxes were many but the revenue was scarce”. When you increase taxes, you impair enterprises. Pakistan today finds itself a rock and a hard place. To pay its debt it needs revenue. To collect it needs to impose additional taxes. The exercise is causing shrinkage of economy and will result in further reduction in total tax collection. We do realize that Pakistan was living beyond its means but to generate revenue you need firms to continue investing and to create jobs, which is not the case at the moment.
In the fiscal year 2020, Akbar Associates is restructuring and refocusing on areas such as services. The primary reason is the unfair tariff advantages available on imports of goods particularly from China. I believe that if we are able to survive the next 12 months without any major injury or loss, we will be able to progress faster and further.
You are present in the supply chain of oil & gas, LPG, oilfield services, mining, civil engineering, herbal products and the software sector. What are the main projects you are currently working on and the future projects you are looking into?
One of the major sectors where we are refocusing our effort is mining; it is also the oldest sector of our business. Akbar Associates acquired our mining arm some 30 years ago. We are sitting on the second largest barite reserves in the country. We are the second largest barite and major miners of carbonate and soap stone. We have to refocus and find ways to enhance our mining capacities and processes.
Another sector that we are focusing on is IOT. Like many other software startups in the country, we also flirted with the idea and were able to develop a unique hospital management system that for the first time in the world brings engineering management skills and philosophy to medicine. The Beta Version has completed its testing phase and we are now working on the Alpha. The product once ready will also have a built in self enhancing-correcting AI (Artificial Intelligence) and SCM (Supply Chain Management) modules. In developing some of this software application, we realized that no company in Pakistan is working on providing the necessary hardware to support full functional deployment of this and many similar initiatives in medicine and other fields. Thus, the IOT initiative.
Another reason of this realignment are the unfair tariff regimes that is eroding competitive advantages of the local engineering goods manufactures as against imports, particularly from China.
As one of the biggest player in the engineering and logistics space in Pakistan. The company’s vision is of becoming a major Pakistani company with regional presence. Are you looking for potential partnerships or looking to expand your activities to other countries?
We are definitely looking for potential partnerships; so far, we are working as technology importers. We have licensing agreements with US companies for provision of goods and services locally. Some of the products that we have developed are now getting registered both locally and internationally and our pricing is definitely one of the most competitive in the world. We are looking at exploring opportunities to send some of these products to the US and beyond.
You have been CEO of Akbar Associates Group since 1991, you have previous experience as a division manager at Schlumberger and have studied a Bachelor’s and a Master’s in the US. What do you feel most proud of in your personal life?
My biggest achievement has nothing to do with my business; it is my role in bringing education to the underprivileged. I associate with Al-Azeem School System where we have close to 18.000 students getting top of the line education in 18 schools by a team of highly motivated teachers, mostly female, who are paid better than market salaries. Yet our cost per child is no more than US$ 2.00 per month. Where possible we encourage that parents pay this or at least a small token of this because our experience of providing free of cost education shows lack of parental ownership and poor results. Al-Azeem students have consistently topped their high school certificate exams are able to compete and win amongst the best in the country.
If you talk about the company, Akbar Associates was the first organized mining company in Pakistan. We were the first API licensed engineering goods manufacturer in Pakistan.
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 engineering, logistics or mining sectors?
Pakistan is a big country that is full of opportunities and offers significant growth potential with attractive returns and a large frontier area. So come and explore! We could be the new middle east for US and European mining companies, particularly those looking for non-ferrous metals, rare earth elements, gems and glad stones. If Akbar Associates can be of any assistance including early scouting, we will be glad to do so.