For All the Marbles

LAHORE: The government should give due attention to the marble and granite sector to reap maximum benefits of the existing natural resources, said Khadim Hussain, member board of director of the Pakistan Stone Development Company (PASDEC), Punjab.

“There is a need to focus both on the mining and the value addition portions. In this era, we are predominantly using blasting method for extraction of the precious stones. We need to increase the share of modern mining methods for extracting stones, which is merely 20 per cent at present.”

“This will help minimise the wastages at the initial stage, which is presently 60 to 70 per cent. The lack of value addition is causing export of precious stones in the form of big blocks. We export stones in raw form and import the finished products,” he added.

“Of the 170 types of stones explored so far, Pakistan is exporting 53 varieties to various countries, mostly in the raw shape of big blocks. Encouraging processing and value addition locally will help minimise the imports and earn the much needed foreign exchange for the country through exports of surplus quantity,” he said.

Hussain suggested the government to support, strengthen and patronise PASDEC, a state-owned entity, to materialise the dream of developing the ignored sector on modern lines.

“Pakistan has abundance of natural resources. PASDEC has so far done a good job, despite having limited resources. There is a need to strengthen PASDEC by providing the required funding,” he said, adding that the company could enable the local industry earn precious foreign exchange by exporting marble and granite after processing and value addition, instead of providing raw products to the developed countries.

For Hussain, who is also PASDEC human resources committee chairman, the government should support the mining sector by providing resources in the shape of machinery and necessary training to the manpower.

“The government’s support can help the mining sector reduce its losses. More marble cities should be set up to boost the industry and its exports,” he said, adding that Lahore, as a commercial hub, should be made a marble city.

“More than 200,000 individuals are employed by the industry. There are around 3,000 processing units and more than 1,400 operational quarries in Pakistan,” he noted.

The sector development on modern lines and proper training facilities for human resource will help generate huge employment opportunities.

Hussain is a self-made man who established Hussain Trading Company (HTC) around 34 years ago with a seed money of Rs3 million. Starting from the import of marble from Italy, HTC later entered export of finished local products to different destinations.

HTC is now dealing in marble, granite and ceramics with specialisation in grinding and polishing. The annual turnover of the company has now surpassed Rs300 million.

Having an interest in trade politics, Hussain has been elected as an Executive Committee member of the Lahore Chamber of Commerce and Industry (LCCI) for the third time.

He is also the chairman of the LCCI Standing Committee on Marble Industry and Pakistan-Italy trade promotion. He is the senior vice president of Anjuman-e-Tajiran Ferozepur Road, executive member of Italian Development Committee (IDC-Lahore Chapter) and chairperson of the subcommittee on mines and marble industry.

Following are the excerpts of an exclusive interview with him:

Issues of marble industry and possible solutions?

Balochistan and the Federally Administered Tribal Areas (FATA), which are now part of Khyber-Pakhtunkhwa are rich with natural resources. Though the law and order situation has improved considerably, access to these areas are still a big challenge due to the existing tribal system.

The government should take practical measures to improve access to these areas. Wastages at the early stage due to the use of blasting method is a big challenge.

The government should enable PASDEC to import required machinery to provide the same to the people relating to the mining sector on rent. Those intending to procure their own machinery should be facilitated with easy loans.

We should ban export of raw marble in big blocks. We could earn more foreign exchange by value addition and processing of local and Afghan products. We should follow the example of Italy, Greece and China who have excelled in value addition and processing of marble and other stones. To achieve this goal, the government should enable PASDEC to import latest machinery. It should also facilitate and help the private sector get the required machinery on easy loans.

Why there is a dearth of marble cities in Pakistan despite huge potential?

There are only three marble cities — Gadani, Karachi and Risalpur. PASDEC has planned a marble city near Rawalpindi. The marble city should be set up near Lahore, which is the central point and a commercial hub. More marble cities should be set up across the country to boost the local industry.

How marble markets in big cities can boost trade?

The marble markets should be set up in big cities of Pakistan on the pattern of other countries. It will improve access of the industry with the wholesalers, retailers and the end consumers.

Why people prefer tiles over marble in offices and homes?

The cost of using artificial tiles and natural marble in construction is almost the same. Using marble is more cost effective in the long run. You can repair the damaged marble but not broken tiles. There is a need to raise awareness about the health benefits of using natural products such as marble.

Trade deficit is a big challenge. Can the marble sector help overcome this issue?

The policymakers should take short- and long-term measures, such as reducing the input cost of export-oriented industries, diversification of products, value addition and exploring new markets.

We have the deposits of precious stones, which can fulfil our requirements for the next 100 years. By supporting mining and value addition and processing of marble, Pakistan can tap the full potential of the industry and increase its exports considerably within five to six years.

Your take on volatile exchange rate and the rupee depreciation?

The volatile exchange rate has negatively impacted businesses, in general, and legal imports, in particular. Different exchange rates at the time of placing orders and reaching shipments have caused huge difficulties. The situation is really difficult for the marble sector as half of the products are being provided to the dealers on lengthy credit of 60 days or more. A decline in the profit margin and losses have become a routine.

The scenario is not good even for the export-oriented industries, as they mostly rely on imported raw materials. High energy tariffs had already increased the cost of doing business. Our products are not competitive in the international market due to an increase in the input cost. The government should take practical measures to bring stability in the exchange rate.

How do you see interest rate hike?

An increase in the markup rate has enhanced the borrowing cost for the entrepreneurs. It is difficult for the Small and Medium Enterprises (SMEs) and the cottage industry to manage their businesses without getting loans. The State Bank of Pakistan (SBP) should decrease the interest rate and bring it at par with the regional countries to provide some relief to the cash-strapped small enterprises.

How do you see the existing business environment?

The business environment is not good both for the new entrants and the existing players. High input cost, markup and exchange rate and multiple taxes have affected the businesses.

What is the future outlook of the overall business environment?

I am optimistic about the future of Pakistan due to the abundance of resources and talented manpower. The government should take concrete measures to provide a conducive and enabling atmosphere to the new entrants and the existing entrepreneurs. It should give due attention to all the sectors, instead of continuing the decades-old practice of supporting only the textile sector.

Why did you join business politics?

I entered business politics to do something for my fellows. My politics is aimed at playing the role of a bridge between the business community and the policymakers and executors.