STRATEGIC MANAGEMENT

Submitted to:
Mr. Shahbaz Islam

Submitted by:
Arsalan Narra
Imroz
Kiran Kanyalal (8893)
Khurram
Nabil
TEXTILE industry in Pakistan
Increase in the cotton production and expansion of textile industry has been impressive in
Pakistan since 1947. Cotton – bales increase from 1.1 million bales in 1947 to ten million bales
by 2000. Number of mills increased from 3 to 600 and spindles from about 177,000 to 805
million similarly looms and finishing units increased but not in the same proportion. It employs
50% of industrial labor force and earns 65% foreign exchange of total exports. Pakistan’s textile
industry experts feel that Pakistan has fairly large size textile industry and 60-70% of machines
need replacement for the economic and quality production of products for a highly competitive
market.

The Pakistan textile industry contributes more than 60 percent to the country’s total exports that
sum around 5.2 billion US dollars. The industry contributes approximately 46 percent to the total
output produced in the country. In Asia, Pakistan is the 8th largest exporter of textile
products. The contribution of this industry to the total GDP is 8.5 percent. Moreover, it provides
employment to38 percent of the work force in the country, which amounts to a figure of 15
million.

INTRODUCTION:
Toweller was established as a private limited company in the year 1973, initially having
operations limited to manufacturing terry towels only. The year 1979 brought a new phase in the
life of towellers. This year the company achieved, not only the top most position in the country,
as a manufacturer of terry towels and made-ups, but at the same time walked into other fields, i.e.
Bed wear, garments (both knitted & woven), home textiles and several other textile made-ups.
With continued successes and expansions, the company entered an entirely new league in the year
1994 and became a public corporation. Their assets had exceeded certain limits and it became
imperative that they show their worth to the people.
In appreciation of its contributions towards the development of the country's exports, the
company has the honor of having received Pakistan’s most prestigious and coveted export
performance awards and in addition to this they, for their high quality products, services and
performance standards, received international applause by being presented with the international
Asia award, the gold mercury international award and the Asian productivity organization's gold
medal. Besides these, the company has won numerous awards and recognitions, from various
local and international organizations.
The success story of Towellers must be attributed to the unfailing dedication of its people,
professionals in their respective fields, towards their customers as all standards and guidelines
given by them are followed and executed to the core. To prove this to the world in 1998, the
company strived and successfully managed to obtain the international quality standard of ISO
9002, for their exports.
The company has a very satisfied and devoted customer base of not only those who have been
with the company since its inception, but also those who have just entered into the industry. For
this new generation of textile buyers, the company has already begun broadening its product base,
with the recent inclusion of a printing mill and a facility to produce quilts and comforters, with its
own garneting unit. In addition to this, the latest technology in compaction has also been installed
in order to give the products the best possible finish.
The future, as it comes, has a lot more in store for the world, when Towellers intends to include a
spinning facility and much more.

VISSION

To be the world class organization into a modern and dynamic yarn, cloth and processed cloth
and finished product manufacturing company with highly professionals and fully equipped to play
a meaningful role on sustain able basis in the economy of Pakistan.

Mission
Produce quality and fault free products for its valued customers by continuous improvements,
providing proper training and development programs, upgrading of resources, setting quality
objectives by analyzing customers' feedback.

Toweller’s VALUES
 Quality Assurance:

A well-knit supportive management team is constantly assisted by a group of

trained and efficient employees to make the vision of the company come true.
Employees are regularly updated and trained, as the company believes in
continuous improvement. Quality Control managers oversee complete operation of
the Q.C department to ensure top quality during and after production in each
department.

 Environmental Awareness

Towellers Textile village is set up with the latest technology combining

environmental concerns with production with the set up of the affluent treatment
 plant and the reverse osmosis plant. At Towellers its all about being eco- friendly in
the way they produce and what they produce.

 PRODUCTS
Toweller limited has a wide variety of products. The products are very distinctly divided between
institutional and retail. In the institutional we cater to the health care, hospital and linen rental. In
retail we cater mostly to the importers and stores.

 TOWELS

 Retail Towels

 Institutional Towels

 Specialty Towels

 Bathrobes & Accessories

 APPAREL

 Woven

 Baby Products

 Socks

 Knits

 HOME FURNISHING

 Bed Linen

 Cushion Covers
  Table & kitchen

 Curtains

 Blankets and Spread

 Mattress Protectors

 Competitors
 Health Source Garment Coltd [Singapore]

 Century Miracle [Egypt]

 Eam Maliban Textilespvtltd [Sri Lanka]

 Eastko Apparelinc. [Taiwan]

 Roller Grill International [France]

 Sax Logistica De Mexicosa De Cv [Mexico]

 Textiles Kim S A [Guatemala]

 Textiles Kim S.a. [Guatemala]

 Dongsue Logistica Sa [Guatemala]

Source: http://www.greatexportimport.com/s-towellers_ltd/13930

 PARTNERS
 Allied Bank Ltd [United States]

 Askari Bank Ltd [United States]

 Billie Mulineaux Import Coordinator

 Fortune Fashions Ltd [United States]

 Textiles Unlimited Inc [United States]

 Sobel Westex 2670 S [United States]

 Phoenix Textile Inc [United States]

 Bob Barker Co [United States]

 Fuji Vegetable [United States]

  M.s Royal Blue Inc [United States]

 United Bank Ltd [United States]

Source: http://www.greatexportimport.com/s-towellers_ltd/13930

 PESt Analysis
PEST analysis can be useful before SWOT analysis because PEST helps to identify SWOT
factors. PEST and SWOT are two different perspectives but can contain common factors.

 Political, govt. & legal Forces

The political situation of Pakistan is not satisfactory. Due to the rapid change in the
Government every government sets its own new trade policies.

Govt. should apply sustainable policies for the beneficial of the exporters as well as
the investors.

 Economic forces

The economic condition of Pakistan can also affect the foreign investors
increasing inflation rate make the cost of production high and thus reduce the
profit margin of the investor. It has direct effect on Textile sector. Following table
is self explanatory in Economic contribution.

TEXTILE INDUSTRY'S ECONOMIC CONTRIBUTION (2008-2009)

Exports 54% OF TOTAL EXPORTS (US $ 9.57 BILLION)

Manufacturing 46% OF TOTAL MANUFACTURING
Employment 38% OF TOTAL LABOUR FORCE
GDP 8.5% OF TOTAL GDP
Investment US $ 7.0 BILLION
Market Capitalization
(Listed Companies) 5.0% OF TOTAL MARKET CAPITILIZATION
Source: Pakistan Economic Survey, SBP

 INFLATION.

The inflation rate in Pakistan was last reported at 12.91 percent in February of 2011.
From 2003 until 2010, the average inflation rate in Pakistan was 10.15 percent
reaching an historical high of 25.33 percent in August of 2008 and a record low of
1.41 percent in July of 2003. Inflation does not have direct effect on health of textile
sector but high cost of raw material like Dyes, Chemical, rising energy cost affected
textile industry badly. As far as Towellers Limited concern it rising cost also
increased.

 INTEREST RATES.

The benchmark interest rate in Pakistan was last reported at 14.00 percent. In
Pakistan the interest rates decisions are taken by the State Bank of Pakistan. The
official interest rate is the discount rate. From 1992 until 2010, Pakistan's average
interest rate was 12.78 percent reaching an historical high of 20.00 percent in
October of 1996 and a record low of 7.50 percent in November of 2002.

Interest is cost of business and it affects the highly leveraged firm which also has
going concern problem. Towellers Limted has 0.021% of it net sales in year ending
June 2010. but high interest rate can increase the cost of supplier which ultimately
cause increase in the material cost.

 TAX RATE

Tax Rate may be changed in budget of Pakistan and its normal tax bracket 35%.
Government has imposed Additional surcharge of 15% on Tax that can slightly
affect the profit of Towellers limited.

 FOREIGN COUNTRIES ECONOMIC CONDITIONS

Worldwide businesses were adversely affected by onset of global economic
recession. Slower sales of textile products in US and European markets can effect
the export of Towellers Limited There has been some recovery of economies from
the recession however; its effect is still far from over. In spite of this there is a
increase in Towellers Export from Rs. 3.41 billion to Rs. 4.00 Billion in 2009 and
2010 respectively.

 PRICE FLUCTUATION

The high cost of production resulting from higher cotton prices, rising energy costs,
increasing prices of imported inputs due to depreciation of Pakistani rupee, double
digit inflation and prolonged power cuts are posing serious threats to textile sector.
Due to recent flood 2010 badly affect the agriculture and the agriculture dependant
business such as textile sector in particular will have to face extremely tough
challenges including but not limited to raw material shortages causing prices of
supplies to increase, higher cost of imported raw material, expected devaluation of
Rupee and higher inflation.
COTTON prices in July 2008 it 3752 per mound (Per Maund of 37.32 Kgs.)

 AVAILABILITY OF FUNDS / CREDITS

Fund can be availed from banks and other financial institution and it has never been
any problem in Pakistan in spite of recession in the world. But it is given after
tedious formality. When it comes to Towellers limited it has Reserve of RS. 490
Million As on June 2010. These explain that the firm has sufficient funds at it
disposal.

 RUPEE EXCHANGE RATE

 The Pakistan Rupee exchange rate (USDPKR) appreciated 0.82 percent during the
last 12 months. From 1988 until 2011 the USDPKR exchange averaged 53.20
reaching an historical high of 86.20 in September of 2010 and a record low of 18.60
in December of 1988.

Devaluation of PKR is very obvious that it badly affects the Textile Industry and
Towellers is also the victim of it.

 Social and environmental forces

The change in the lifestyle of the people affects the growing demand of the
Towellers products. The change in the lifestyle and needs in different demographics
also affect the demand of the customers.

Due to all these changes Towellers is performing excellent for the excellence
organization as well as for the customer.

 Waste Management

Environmental problems associated with the textile industry are typically

those associated with water pollution caused by the discharge of untreated
effluents. Textile processing generates many waste streams, including water-
based effluent as well as air emissions, solid wastes, and hazardous wastes.
The nature of the waste generated depends on the type of textile facility, the
processes and technologies being operated, and the types of fibers and
chemicals used. Most processes performed in textile mills produce
atmospheric emissions.

 CSR

Corporate social responsibility (CSR) is about understanding your business'

impact on the wider world and considering how you can use this impact in a
positive way.
 Your business doesn't exist in isolation your employees, Customers,
suppliers and the local community is all affected by your business. Your
products, and the way you make them, also have an impact on the
environment. CSR represents care for social and environmental issues. It
consist

• Reduced raw materials and energy inputs

• Eliminated toxic materials use
• Reduced quantity and toxicity of emissions and waste (water) outputs.
• Better working conditions and increased workers motivation
• Decreased overtime and decreased reworking
• Improved health & safety, less illness and accidents
• Improved (company) image
• Increased ability to attract and retain quality employees
 Eco-Friendly

Towellers products are Eco-label means that quality label which ensures that
the product is manufactured through an environment friendly process

 Technological forces
 Technological advancement in all the sectors of the country has changed the
entire socio-economic environment. Especially in the textile sector there is a
need of a lot of changes in technological development.

 Biotechnology has impacted the textiles industry through the development of

more efficient and more environmentally friendly manufacturing processes,

as well as through the design of improved textile materials.
  The lack of R&D in the cotton sector of Pakistan has resulted in low quality

of cotton in comparison to rest of Asia. Because of the subsequent low

profitability in cotton crops, farmers are shifting to other cash crops, such as
sugar cane.

 Moreover the textile industry has obsolete equipment and machinery. The
inability to timely modernize the equipment and machinery has led to the
decline of Pakistani textile competitiveness. This is all due to lack of
technology.

 CONCLUSION
From the above PEST Analysis it is concluded that, all the political, govt., legal, economic,
social, environmental and technological forces have the direct impact on not only Towellers Ltd
but also on the whole industry. Ups and down of these forces are important to the Textile
industry. It is also highlighted that the Pakistan textile industry faces tough competition from the
Indian, Bangladeshi, Srilankan and Chinese textile industries and local policies have resulted in
Pakistani textiles facing a critical condition. This is all due to lack of resources and technology.