Efficiency enhancement is the key, says Sadaqat Ltd CEO

Mukhtar explains how the company left its textile competitors miles behind

Sadaqat Limited will open a KHAS outlet, part of a retail chain for textile products, on Friday. PHOTO: COMPANY WEBSITE

FAISALABAD:
In an otherwise gloomy environment when exporting industries are struggling to keep their footprints in the global market, Sadaqat Limited, a public limited company largely banking on exports, has managed to earn fairly stable revenues on the back of efficiency enhancement and upgrade of production facilities.

Revenues of the textile-focused company rose to Rs11.6 billion in 2016, up 26 per cent over the previous year, said executives of Sadaqat Limited while talking to The Express Tribune.

The growth was better than its five-year projection as sales had been expected to rise at a compound annual growth rate of 11 per cent. The performance in 2016 was better than the previous year after the company’s gross margins had reduced in 2015 due to reduction in the average selling price. Now, gross margins are expected to largely remain stable, with improved revenues positively reflecting in the cash flow.

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In recent years, the management of Sadaqat Limited has focused on upgrading production facilities in order to achieve higher operational efficiency.

While the revenues are driven by exports, the company has now entered the local market by launching a retail chain, covering home and fashion goods under the umbrella of KHAS Stores.

“We plan to launch KHAS Stores in the international market in the near future,” said CEO Khurram Mukhtar. “The outlet presents its customers with a wide range of bed linen, hand-knotted carpets and rugs and home textile products.”

Last year, Mukhtar expanded KHAS Stores to 12 outlets and five more are likely to be opened soon. “After an encouraging response to KHAS Stores, we have started the business of lawn fabric and have found great response from the local market,” he said.


“We are also going to invest in the international market. The first step will be a store chain in the United Kingdom and after that in the United Arab Emirates and continental Europe.”

Even though the company is making steady progress, why its growth is all the more important is that it comes at a time when Pakistan’s textile exports have been constantly on the decline for the past four years. Sadaqat Limited’s CEO believes the management’s fast approach towards accepting change had something to do with the growth.

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“We have increased the production capacity to 6 million metres per month by investing more money and updating the old machinery,” he said. “We also invested Rs3 billion to install state-of-the-art machinery to compete in the market. All the old machinery was replaced by the latest automatic ones.”

Sadaqat Limited believes that in order to reap the benefits of the fast-changing global economy, more needs to be done by the management, particularly investment in the e-commerce sector.

“Our main focus now is on e-commerce and we are investing in expanding our web-based platform for the domestic market which certainly has a big potential,” said Mukhtar.

“Rapid transformation is happening globally from the brick and mortar stores to e-commerce and we have to adapt to the digital world to stay in business.”

Published in The Express Tribune, March 24th, 2017.

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