ICI Pakistan is planning to invest further in its soda ash business and is also evaluating the possibility of expanding the polyester staple fibre (PSF) segment, according to Chief Executive Waqar A Malik.
ICI Pakistan is now part of AkzoNobel NV, the largest global paints and coatings company as well as a major producer of specialty chemicals.
In an interview with The Express Tribune, Malik informed that the company currently has enough capacity to produce paints to meet market demand. “We introduced various new products in the paint business last year and are looking to increase operations in coming months,” he said.
Speaking on the topic of rising cotton and PSF prices, he said, “since polyester fibre raw material comes from crude oil, prices have risen sharply due to the international oil price hike over the last few months.”
“It is a global phenomenon – the sharp price increase was seen all over the world due to the surge in crude oil prices, but more importantly, prices shot up also because of the growing gap between demand and supply,” added Malik.
He informed that rising prices of cotton had led to a sharp increase in the use of PSF as an alternative. “Rising cotton prices have caused a decline in its use globally and people have resultantly shifted to PSF,” he explained.
Security, governance and tax collection
Malik expressed worry over the current security situation in the country, saying, “security is a problem for all companies operating in Pakistan and will remain so because our country is fighting a war (against terrorism).”
He however added, “We should also look at people who are better managing their businesses and making good profits in given conditions.”
Highlighting the positive side, Malik expressed optimism about the country’s future, saying, “Pakistan has been successful in feeding its huge population over the decades, which shows it is self-sufficient in many sectors such as food and agriculture.”
He explained that the first thing overseas investors looked at was how the country was being governed and managing problems. “Unfortunately, Pakistan is not managing its energy sector well and not enough planning is being done to solve the power crisis,” he lamented.
“In my view, investors will see how Pakistan strives to overcome the challenges such as increasing the tax net and reducing its non-development expenditures,” he said, adding that the government was paying over Rs250 billion annually to keep loss-making enterprises running – a major burden on the national economy.
Criticising the narrow tax base, Malik urged everyone to pay their taxes regularly. “Everybody has to share its responsibility in order to keep the tax system fair,” he asserted.
Malik expressed confidence his company would continue to grow, after ICI doubled sales and profits in the last five years.
“After the acquisition of ICI Pakistan by AkzoNobel, we are satisfied because both companies have a rich history and aim for excellence. Globally, ICI and AkzoNobel are in a good position and we feel things are similar in Pakistan,” he added.
Published in The Express Tribune, March 15th, 2011.