LAHORE: Government should strengthen and support Pakistan Stone Development Company (PASDEC), a state-owned entity, in facilitating stone sector to reap maximum benefits from existing natural resources, said Khadim Hussain, chief executive officer of Hussain Trading Company.
“Pakistan has abundance of natural resources. PASDEC has so far done a good job despite having limited resources. There is a need for strengthening PASDEC by providing required funding,” he said, adding that the company could enable local industry to earn precious foreign exchange by exporting marble and granite after processing and value addition instead of providing raw product to the developed countries.
Hussain, who is also PASDEC board member and its human resources committee chairman, said that the government should support mining sector by providing resources in the shape of machinery and necessary training to manpower.
“Government’s support can help mining sector to reduce its losses. Presently, marble and other stones are being exported in the form of big blocks. By stopping this practice and encouraging processing and value addition Pakistan can increase foreign exchange revenues. More marble cities should be set up to boost the marble 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.
Out of 170 types of stones explored so far, Pakistan is exporting 53 varieties to various countries, mostly in the raw shape of big blocks.
Khadim Hussain is a self-made man who established Hussain Trading Company (HTC) about 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 served as an Executive Committee member of Lahore Chamber of Commerce and Industry, and the chairman standing committee on Pak-Italy trade promotion and marble industry. He is the senior vice-president of Anjuman-e-Tajran Ferozepur Road, executive member of Italian Development Committee (IDC-Lahore Chapter) and chairperson of subcommittee on Mines and Marble Industry.
Following are the excerpts of a rendezvous with him.
What was your first venture?
I set up Hussain Trading Company in late 1980s with the seed money of Rs3 million. Import of marble and its marketing was a big success. Now the company is dealing in marble, granite and ceramics with annual turnover of more than Rs300 million. The company has specialisation in grinding and polishing of marble. I am among the pioneers of marble exporters.
Issues of marble industry? Possible solutions
There is a need for reaping benefits from the best quality marble deposits in Pakistan. Government should strengthen PASDEC to provide technical resources and training to local mining industry. We should ban export of raw marble in big blocks. China is also getting raw marble from Afghanistan through Pakistan. 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.
Why there is not enough 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. 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.
Why people prefer tiles over marble at offices/homes?
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 need for raising awareness about the health benefits of using natural product such as marble.
Your take on volatile exchange rate and its impact on businesses?
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 marble sector as half of the products are given to dealers on lengthy credit of 60 days or more. Decline in profit margin and losses have become a routine. The scenario is not good even for export-oriented industries as they mostly relying on imported raw material. High energy tariffs have already increased the cost of doing business. Our products are not competitive in the international market due to increase in the input cost. Government should take practical measures to bring stability in the exchange rate.
How we can bridge trade deficit?
Policy makers 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. By supporting mining and value addition and processing of marble, Pakistan can tap the full potential of the industry and increase its exports considerably.
How do you see interest rate hike?
An increase in the mark-up rate has enhanced the borrowing cost of entrepreneurs. It is difficult for Small and Medium Enterprises
and the cottage industry to manage their businesses without getting loans. The State Bank of Pakistan should decrease 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 existing business environment?
The business environment is not good
both for the new entrants and the existing players.
High input cost, volatile exchange rate, high interest rate and multiple taxes have affected the businesses.
By providing a one-window facility and tax exemptions to new entrants, government can encourage entrepreneurship and improve the overall business environment in the country.
What is the future outlook of the overall business environment?
I am optimistic about the future of Pakistan due to abundance of resources and talented manpower. Government should take concrete measures for providing a conducive and enabling business atmosphere to new entrants and existing entrepreneurs. It should focus on agriculture, engineering, services, mining
and IT sectors instead of continuing the decades old practice of supporting large scale manufacturing and textile sector. Small and Medium Enterprises and cottage industry, which are the backbones of any economy, should be encouraged.
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 bridge between business community and policymakers and executors.