Interview with Dr M Arshad, FPCCI Regional Chairman and CEO of Hi-Tech Group of Companies
Hard work, devotion and honesty of the purpose are the keys to success while short cuts often become long cuts
M Jahangir Hayat
LAHORE: The package announced for construction industry should be extended to all sectors to cope with the economic slowdown and revenue shortfall due to COVID-19. No source of income should be asked from any type of investor. Dubai is the one best instance of the model. If soybean is imported in Pakistan under import-friendly soybean policy on a large-scale we can export soybean meal to the whole world besides we can also take benefit of the US and China tariff war.
Afghan border is not just a border that opens ways to Afghanistan only but half of the world can be reached.
All the Central Asian States (CASs), including Tajikistan, Turkmenistan Azerbaijan and others can be the significant market for Pakistani products. The sword of overnight shift in government policies always remains hanging on the head of every company.
This was stated by Dr Muhammad Arshad, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Regional Chairman and CEO of Hi-Tech Group of Companies in an exclusive interview with Daily The Business here on Tuesday.
Below are some of the excerpts from the conversation.
The Business: What is your business background? From where did you start and where do you stand today?
Dr Muhammad Arshad: You may start smiling or laughing if, I tell you that I started my business of poultry with just 50 chickens. I was attached with the teaching profession and the university where I had been teaching an American Wooden-Cage Scheme, which was introduced for backyard poultry in Faisalabad. I succeeded in selling 50 birds and purchasing another 200 hens with the profit thereby. I revolved the very profit money two to three times and finally was able to hire a shed with a capacity for 3,000 birds for two to three years. After that I hired another shed with a capacity for 7,000 birds. I preferred to make feed for the birds by myself purchasing the raw-material from the market that handsomely added to my experience and I still value that very much. Because of that very experience no one can cheat me from inside my team and outside. In 1976 I joined a company owned by Air-Marshal Asghar Khan’s brother Commander Afzal Khan. This was one of the biggest companies in the poultry sector of the country. It was another huge opportunity for me to learn poultry in depth as I hesitated not to work from feeding the birds to scratching their wastes in the sheds. That very hands-on training has also proved a lifelong asset for me.
What prompted you to launch Hi Tech Group?
In 1984, I set up the basis of Hi-Tech Group, which was incorporated in 1986 and then in 1988. The success of the Hi-Tech Group is my romance with my profession. I believe that without romance with what are you doing you cannot succeed.
We have a sizable turnover which is many times more than that of hundreds of listed companies. There a numerous companies which are not listed on any exchange but they are being run on very sound footings for more than hundred years due to the personal involvement of the owners. Otherwise, there are so many examples of mega listed banks and companies even in the US that met their shamble due their chief executive officers and chief financial officers’ non-professional attitudes and corruption. This is one of the basic human instincts that no one gives his or her earning to anyone else. One of my friends suggested me to try Initial Public Offerings (IPOs) because of high turnover of Hi Tech Group but I told him if once I opt for IPOs that will be an end of my romance with my business. If there is no moral, physical, emotional and mental involvement, successful running of a business is next to impossible. Hard work, devotion and honesty of the purpose are the keys to success while short cuts often become long cuts.
What are the main activities and products of Hi-Tech Group?
Our Hi Tech Poultry Breeding Company produces chicken of the age of one day and we have a capacity of producing 10 to 15 million chickens monthly in accordance with weather and market conditions. However, on an average we breed seven million chickens. The biggest breeders are breeding upto 27 million chickens a month. I have followed the strategy not to put all my eggs in one basket instead I invested in feed and then in edible oil capping the breeding. Our edible oil plant is the largest one in whole Pakistan and Sahiwal. The plant crushes soybean seed and extracts edible oil. Our product is in great demand that I am considering increasing production of the edible oil. We have also ventured in to rice sector setting up a rice mill under the banner of Hi Tech Group which is based on one of the best infrastructures and is among the top 10 rice mills. We have adopted the best engineering and set up a state-of-the-art building in Sahiwal. We have also started dealing in animal pharmaceutical and eye on manufacturing the medicine for animal soon.
Which industry and sectors’ needs do your company caters and who are your competitors?
We have three to four registered brands for edible oil but for the time being we are catering the need of on the whole sale level customers. Dalda, Sufi and Kashmir are our main and regular customers, however, we supply upto 80 percent edible oil to Sufi and Kashmir as they are satisfied with the quality we provide. When soybean is crushed, we get upto 20 percent oil while remains which are call meal is used to produce feed for which we are the largest produces in the country. About 70 to 80 companies are dealing in edible oil.
Do you export your products?
We export rice and the soybean meal to Afghanistan. So far as Afghanistan is concerned, we have long been demanding from the government either to open the Pak Afghan border permanently or seal it. Afghan border is not a border that opens ways to Afghanistan only but half of the world can be reached.
All the CASs including Tajikistan, Turkmenistan, Azerbaijan and others can be the significant market for Pakistani products. Currently, Iran has occupied whole of the market in these states even though we can capture the market by selling the goods and articles on the cheapest prices as Iran has been facing sanctions and whatever products they deal in are not price effective. Iran has most often to buy goods on higher prices due to the sanctions. If Afghan border is permanently opens, Pakistan can not only earn huge foreign exchange but also explore new avenues.
What is happening is very sad as when border with Afghanistan is opened, prices of eggs get stable and when the border is closed both eggs and chicken have to be sold on thrown-away prices. The government needs to permanently opening the border taking good guard of the illegal activities. Unfortunately, we start crying when prices of tomatoes like products inflate but when prices deflate no one ever bothered to earn foreign exchange by selling such product abroad.
Recently, no one was ready to buy a truck of watermelon for Rs 5,000 which could be exported on fairly very good prices in abroad if managed well. This is what takes place every year. Imagine this is that watermelon which is sold in the UK on pieces of two to three pounds per piece.
Do you import or use indigenous raw material for making your products?
We import soybean for edible oil from the US and Brazil while export rice. Earlier, we imported soybean from India but have stopped due to unreasonable regulatory duty on Pakistani soybean meal in India.
We had been importing soybean meal from India on zero duty; however, Indian had levied 35 regulatory duty on Pakistani canola meal which propelled a dispute as to why Indian have imposed 35 percent RD on Pakistani canola meal while Pakistan was importing soybean meal from India on zero duty. The very dispute forced Pakistani government to impose 25 percent duty on the Indian soybean meal that stopped import of soybean meal from India. The imposition of 25 percent duty on Indian meal paved ways for the US soybean import and crushing thereby in Pakistan. Whole of the meal is consumed in Pakistan in poultry and cattle feeds and if Afghan border is permanently opened, it can be exported to Central Asian States as all the countries are rich enough except Afghanistan. Currently, Pakistan import two million tons of soybean and if the border is managed the import can be increased to three million tons.
What is manpower strength of Hi-Tech Group of Companies?
We have two types of staff: First type of employees are working on salary and are hired on permanent basis and second types of staff are employed on contractual basis. These employees are hired according to the crop season. Overall 5,000 employees are associated with Hi-Tech.
What type of issues do you face in producing, importing, exporting and marketing? And what do you expect from the government?
The sword of overnight shift in government policies always remains hanging on the head of every company.
We have been demanding import-friendly soybean policy for which the whole world is a market. If soybean is imported in Pakistan under the import-friendly soybean policy on large scale we can export soybean meal to the whole world besides taking benefit of the US and China tariff war.
Being FPCCI regional chairman, how do you see current state of economy and what are your suggestions about the upcoming Budget 2020-21?
We have submitted our suggestions to the Ministry of Finance, comprising over 100 pages for the upcoming Budget-2020 that contain feedback from all the sectors. Besides, we orally discussed the issues confronted by trade and industry with the top officials and are expecting a business- friendly Budget-2020. And the devil is always in the detail. Things will be elucidated once the budget is announced. So far as the state of economy is concerned, everyone knows that COVID-19 has badly impacted the economy and how to come out of it is the bigger question, which I have explained to the Prime Minister Imran Khan in a sort of one-to-one meeting where Mian Anjum Nisar was also present. I proposed to Prime Minister Imran Khan that the package announced for construction industry should be extended to the all sectors to cope with the economic slowdown and revenue shortfall due to COVID-19. No source of income should be asked from any type of investors. Dubai is one best instance for it as whoever you are and wherever you are from they would never ask you about your source of income for commencing any business.We should make it a part of the monetary policy so that investors trust could be revived. When the investors would have confidence, then they will not be answerable for their investment, more investment will come in the country generating employment making the economy strengthen. However, the investment should be accepted through the banking channels in order to register the black or parallel economy. The IMF and FATF will certainly object over it but what we need to do is to convince them with special reference to the COVID-19 pandemic. Turkey made progress on the similar formula as they ensured certainty for 15 to 20 year and the manufacturing is flourishing there. Industrialisation can never take place in uncertainties.
What is your take on the port terminal operators and shipping lines’defiance of the govt and FBR’s orders about relief of demurrage and detention charges to commercial and industrial importer amid COVID-19?
This is very unfortunate and tantamount to challenge the writ of the government. A large number of importers have been complaining to me about the issue that they were facing cash crunch due to the COVID-19 and lockdown and were not able to release their goods. Even, I myself was not able to get the relief on demurrages and detention. It is not the importers’ fault that they were confronted with cash crunch. The whole world has extended relief to the revenue generating sectors of their economy even the countries have offered loans to the trade and industry on zero percent mark-up rates.
However, in our case the trickledown effect of the relief initiatives have not reached to the targeted sectors due to the incompetence of the government machinery. The government should take notice of the defiance of the government authorities’ orders of extension in free time by the port terminal operators and shipping lines.The relief is the legitimate right of the commercial and industrial importers in the wake of the time when COVID-19 pandemic is ravaging the world.
Dr Muhammad Arshad is a dynamic, result-oriented leader with a strong track record of performance in turnaround and high-paced organisations. He has superior interpersonal skills, capable of resolving multiple and complex issues and motivating staff to peak performance and over 40-year successful experience providing fiscal, strategic and operations leadership in uniquely challenging situations in public and private sectors with emphasis on operations & management of Feeds, Edible Oils, Grain Mills, Poultry Breeders Farms, Hatcheries and Pharmaceuticals business.
Academic:Doctor of Veterinary Medicines, University of Agricultural Faisalabad, Pakistan-1976
Professional Portfolios: Regional Chairman & Vice President, Federation Pakistan Chambers of Commerce & Industry -2019-till date.
• Executive Committee Member, The Lahore Chamber of Commerce & Industry-2018-till date.
• Executive Member (PIAF), Pakistan Industrial & Traders Associations Front-2018-till date.
• Member University Syndicate, Cholistan University of Veterinary & Animal Sciences, Bahawalpur-2019-till date.
• Member of Body, Punjab Procurement Regulatory Authority-2019-till date.
• Chairman Standing Committee of (LCCI) for Agro Based Industry-2018-till date.
• Member Managing Committee REAP (Rice Export Association of Pakistan) since-2018-till date.
• Chairman APSEA (All Pakistan Solvent Extractor’s Association)-2019-till date.
• Chairman APSEA (All Pakistan Solvent Extractor’s Association)-2012 to 2014
• Faculty Member, Faculty of Veterinary Sciences University of Agriculture, Faisalabad, Pakistan-1979 to 1988
• Chief Executive Hi-Tech Feeds (Pvt.) Ltd., Pakistan-1988 till date.
Chief Executive-Hi-Tech Edible Oils (Pvt.) Ltd., Pakistan-2005 till date.
• Director Hi-Tech Poultry Breeders (Pvt.) Ltd., Pakistan-1991 till date.
• Chief Executive-Hi-Tech Grain Mills (Pvt.) Ltd., Pakistan-2016 till date.
• • Director Hi-Tech Farms, Pakistan-2005 till date.
• • Director Hi-Tech Pharmaceuticals, Pakistan-2008 till date.
• • Chairman University of Arts and Sciences, Pakistan-till date.
Project is in progress.
• Chief Executive Globex Mass Media (SMC-Private) Limited -till date.
Broadcasting, Telecasting, relay transmission under PEMRA rules and running 3-Web Channels namely Khabar Gaam with 581K-subscribers & 8.9M-viewers, Khair Gaam with 510-subscribers & 10.5K-viewers and Maskharian with 16.5K-subscribers & 1.2M-viewers.
• Chief Executive Galaxy Mass Media (SMC-Private) Limited, -till date.
Broadcasting, Telecasting and relay transmission under PEMRA rules.
• Chief Executive Super Star Traders (SMC-Private) Limited, -till date.
• Chief Executive Star M& T (SMC-Private) Limited, Pakistan-till date.
• • International Exposure/Visits.
• • Tour included to USA, UK, UAE, Canada, France, Italy, Australia, Japan, Singapore, Indonesia, Malaysia, Ukraine,
Cambodia, China and Thailand.
• • Attended numerous business meetings / conferences held from time to time in various countries of the World.
• • Attended Grains and Oil Seed Trade Summits at New-Orleans, USA (2012) and in Minneapolis Minnesota, USA (October
• • Attended the Exhibition while representing the Cargill Pakistan held at Shanghai, China in 2018
• • Attended the Exhibition while representing the Cargill Pakistan held at Krabi, Thailand in 2019.
• • Attended the Exhibition while representing the Cargill Pakistan held at Cambodia in 2019.
• Columnist / Writer • A literary personality having a deep vision in poultry, agriculture and financial markets.
• • Sports.
• • Member of Royal Palm Golf & Country Club
• • Member of Lahore Garrison Golf and Country Club
• • Member of Defence Raya & Golf Club.
• • 04-Times stuck hole in one shot.
• ➢ Twice at Royal Palm Golf and Country Club
• ➢ Once at Lahore Garrison Golf and Country Club
• ➢ Once at Defence Raya Golf and Country Club.