NATIONAL COLLEGE OF BUSINESS ADMINISTRATION &

ECONOMICS

FRONT LANE CAMPUS

Title of Thesis:
Nishat Group
By
Mubashra Nasir
Masters in Commerce
 A Thesis Titled

Nishat Group

Submitted to the NCBA&E (FLC) Lahore

In partial fulfilment of the requirements

For the award of the Degree of

Masters in Commerce

By

Mubashra Nasir

Roll No:

SESSION: 2017 -2019

DEPARTMENT OF BUSINESS ADMINISTRATION

NCBA&E (FLC) LAHORE

 DEDICATION

This study is wholeheartedly dedicated to our beloved parents, who have been our
source of inspiration and gave us strength when we thought of giving up, who
continually provide their moral, spiritual, emotional, and financial support. To our
brothers, sisters, relatives, mentor, friends, and classmates who shared their words
of advice and encouragement to finish this study. And lastly, we dedicated this book
to the Almighty God, thank you for the guidance, strength, power of mind, protection
and skills and for giving us a healthy life. All of these, we offer to you.
 DECLARATION

I, Mubashra Nasir Roll No.MCM-213, student of M.Com, session 2017-2019,

hereby declare that the matter printed in the report titled as

“Nishat Group”

Is my own work and has been submitted as research work to the NCBA&E FLC.

Dated Signature of Deponent

________________________

Examination Department

NCBA&E_FLC
 Acknowledgement

I am generously thankful to Allah Almighty, the most gracious, the most blessing,
all knowing, who favored me with the ability conduct this research. I offer regard,
respect and gratitude to Holy Prophet (PBUH) who is light of direction and
information for all of us. I would thank MS Ramsha Habib, my supervisor, who
coordinated, encouraged and reasonably guided me in this journey.

I’d also like to thank every person who helped me in social affair information and
giving data of different associations to my investigation, it would not be possible to
complete this survey without their cooperation, and help.

Finally, I’d like to thank my beloved parents for their support and hardships they
have gone through enabling me to complete my education.
 RESEARCH COMPLETION CERTIFICATE

It is certified that the research work contained in this project titled “Nishat Group” has been
carried out and completed by Mubashra Nasir Roll No.MCM-213 under my supervision.

Date: _________________ (Supervisor)

_______________________

Miss Rabbia Ijaz

Faculty Member

Department of Business Administration,

NCBA&E_FLC

Submitted Through:

________________________

Examination Department

NCBA&E FLC
 EXECUTIVE SUMMARY

Nishat Mil s Limited (“the Company”) is the most modern and largest vertically
integrated textile Company in Pakistan. The Company commenced its business as a
partnership firm in 1951 and was incorporated as a private limited Company in 1959.
Later it was listed on the Karachi, Lahore and Islamabad Stock Exchanges on 27
November 1961, 11 March 1989 and 10August 1992 respectively.

The Company’s production facilities comprise of spinning, weaving, printing, dyeing,

home textile and garment stitching and power generation.

Overall, the Company has 32 manufacturing units each specializing in a specific

product range located in Faisalabad, Sheikhupura, Ferozewatwan and Lahore.

A major portion of the Company’s earnings is export based. Over the the years, the
Company has achieved significant geographical diversification in its export sales
mix.

The Company has a very broad base of customers for its products outside Pakistan. It
has a long working relationship with the top brands of the world such as J.K.N.
International , Levis, Next, Pincroft Dyeing, Ocean Garments, Gap, Carreman, Tommy
Hilfiger, Tommy Bahamas, Crate & Barrel, Laura Ashley, American Living, Chaps, Hugo
Boss, Revman and John Lewis.

Nishat Mills Limited is also called the flagship company of the Nishat Group. Nishat
Group (“the Group”) is a leading business entity in South Asia. Its net worth makes it the
largest business house of Pakistan. The Group has grown from a cotton export house into
the premier business group of the country. Highly diversified, the Group has a presence
in all the major sectors including Textiles, Cement, Banking, Insurance, Power
Generation, Hotel Business, Agriculture, Dairy, Real Estate, Aviation and Paper
Products.
 Table of Contents

Sr. Contents Page No.

1 Company Introduction
2 History
3 Background
4 Awards & Achievements
5 Vision Statement
6 Mission Statement
7 Objectives
8 Products & Features
9 Organizational Structure
10 Departments
11 Marketing Plan
12 Swot Analysis
13 PESTEL
14 Financial Statement
15 Financial Analysis
 Introduction

Nishat Mills Limited aims to remain as leading Textile Company of the country. Our
Human Resource policy is based on principles that employees are our most valued asset
and important building block for sustainable growth. Management has developed
excellent relations with employees to achieve optimum level of performance and
commitment to excellence. The Company is an equal opportunity employer and hires
people from various ethnicities and both genders without prejudice or bias. The Company
has a coherent and market driven performance and reward policy which encourages
employees to participate enthusiastically in the achievement of company’s
objectives.

Nishat group is one of the leading and most diversified groups in Pakistan with
fixed/current assets of over US $ 5 billion .It is ranked among the top five business
houses of Pakistan . The group has strong presence in three most important business
sectors of the region namely textiles, cement and financial services. In addition, the
group also has reasonable market share in Insurance (Adamjee insurance), Power
generation and Aviation business .It also has the distinction of being one of the largest
players in each sector. The group has a remarkable position in the market as good as
any MNC operating locally in terms of its quality of products, services and management
skills.
 Company History

Nishat Mills Limited is the flagship company of Nishat Group. It was established in 1951.
It is one of the most modern, largest vertically integrated textile companies in Pakistan.
Nishat Mills Limited has 227,640 spindles, 789 Toyota air jet looms. The Company also
has the most modern textile dyeing and processing units, 2 stitching units for home
textile, Two stitching units for garments and Power Generation facilities with a
capacity of 120 MW. The Company’s total export for the year 2015 was Rs. 39.868
billion (US$ 393.683 million). Due to the application of prudent management policies,
consolidation of operations, a strong balance sheet and an effective marketing strategy,
the growth trend is expected to continue in the years to come. The Company's production
facilities comprise of spinning, weaving, processing, stitching and power generation.
 Awards & Achievements

 Federation of Pakistan Chambers of Commerce and Industry (FPCCI)

 Export Performance Trophy
 ISO-9001 certification
 IKO-TEX 100 certification
 SA-8000 certification
 City pad certification
 Vision Statement

To transform the Company into a modern and dynamic yarn, cloth and processed cloth
and finished product manufacturing Company that is fully equipped to play a
meaningful role on sustainable basis in the economy of Pakistan. To transform the
Company into a modern and dynamic power generating Company that is fully equipped
to play a meaningful role on sustainable basis in the economy of Pakistan

Mission statement:

To provide quality products to customers and explore new markets to promote/expand

sales of the Company through good governance and foster a sound and dynamic team,
so as to achieve optimum prices of products of the Company for sustainable and
equitable growth and prosperity of the Company.
 Background

Nishat Mil s Limited (“the Company”) is the most modern and largest vertically
integrated textile Company in Pakistan. The Company commenced its business as a
partnership firm in 1951 and was incorporated as a private limited Company in 1959.
Later it was listed on the Karachi, Lahore and Islamabad Stock Exchanges on 27
November 1961, 11 March 1989 and 10 August 1992 respectively.

The Company’s production facilities comprise of spinning, weaving, printing, dyeing,

home textile and garment stitching and power generation.

Overall, the Company has 32 manufacturing units each specializing in a specific

product range located in Faisalabad, Sheikhupura, Ferozewatwan and Lahore.

A major portion of the Company’s earnings is export based. Over the years, the
Company has achieved significant geographical diversification in its export sales
mix.

The Company has a very broad base of customers for its products outside Pakistan. It
has a long working relationship with the top brands of the world such as J.K.N.
International l, Levis, Next, Pincroft Dyeing, Ocean Garments, Gap, Carreman, Tommy
Hilfiger, Tommy Bahamas, Crate & Barrel, Laura Ashley, American Living, Chaps, Hugo
Boss, Revman and John Lewis.

Nishat Mills Limited is also called the flagship company of the Nishat Group. Nishat Group
(“the Group”) is a leading business entity in South Asia. Its net worth makes it the largest
business house of Pakistan. The Group has grown from a cotton export house into the
premier business group of the country. Highly diversified, the Group has a presence in all
the major sectors including Textiles, Cement, Banking, Insurance, Power Generation,
Hotel Business, Agriculture, Dairy, Real Estate, Aviation and Paper Products.
Showcasing its varied expertise

And acumen in every facet of its operations, the group companies hold the distinction of
being among the leading players in each sector.
 Products & Services

Spinning

Nishat Mills Spinning Division has over 227,640 spindles, which are operationally
organized into 8 spinning units. The entire machinery is from world-renowned
manufactures. All yarns made at Nishat are Ring Spun suitable for both knitting and
weaving. Besides the best Pakistani Cotton, long stapled American, Egyptian and US
Pima cotton is also used for fine counts. For our strong belief in product development and
innovation we have our own in house state of the art cotton and yarn testing laboratories.
Nishat spinning is one of the most trusted brands in the market due to its efficient
production and quality. Spinning production capacity for both Cotton and Blended
Yarns is 200 Tons / Day.

Cotton prices fell sharply at the start of financial year 2014-15 on the news of surplus
cotton crop in the local and international markets because huge stocks of cotton were
already available with the buyers. In fact, during the financial year under review,
trading of cotton in international markets was done at the rates which were the lowest
in the past four years. The Company started the procurement of cotton at the start of
the cotton season and completed its purchase at optimal price level.

Cotton prices had a bearish sentiment throughout this period. China played a key role in
keeping cotton prices low as their international cotton buying had reduced. Polyester fibre
prices also decreased due to sharp dip in oil prices.

Prices of cotton yarn also witnessed a fall which was relatively greater than the
decrease in cotton prices as the customers were aware of the cotton market scenario and
expected further reduction in cotton prices. Moreover, high cost of production mainly
due to expensive electricity and increased wages of workers, made selling yarn in local
and international market a challenge but our marketing team successfully secured a
satisfactory sale of yarn mix.
Hong Kong and China once again remained main markets for our Company’s yarn
while our marketing team worked very hard to get business from Malaysia, Japan
and Korea as well.

Demand of cotton yarn from Europe and the USA remained negligible.
 Weaving

Nishat Mills Weaving division has 789 modern Air Jet looms which produce approximate
11.3 million meters of fabric per month and makes it the largest weaving facility of
Pakistan catering to home textile and apparel fabrics.

Financial year 2014-15 was one of the toughest period for textile industry. Cotton prices
had a bearish trend. Similarly, polyester fibre prices also fell due to sharp dip in oil prices.
Both of these factors created a sentiment for decline in the prices of grey fabric. Our
Weaving Segment faced a difficult time during the financial year under review.

Our primary export market has always been Europe but due to strengthening of US Dollar
against Euro, our cloth sales volumes decreased. Economic slowdown of some major
European nations such as Italy and Spain also worsened the situation. This year, winter
season in Europe was mild and short. Most of the big retailers in Europe had their shops
full of winter clothes and even some of them offered discounts during the season.
Corduroy, which has always been our major product in winters, experienced a sharp
decrease in volume. Rise in sales was recorded in summer season but we faced price
pressure.

Our business in Japan also decreased. The reason for decline was again the decrease in
the value of Japanese Yen against US Dollar during the year. Export sales to China has
also slowed down during the last two months.

Turmoil in Middle East and war between Ukraine and Russia caused our work wear
business to slow down. Most of our customers for work wear were selling their products
in these markets. However as always, we have tried to diverse our product mix further by
venturing into product range like abrasive and technical fabrics. We are hopeful that by
end of financial year 2015-16, we shall be doing bulk business in these products
 Processing

Our fabric processing facility is one of the largest and most modern factories of Pakistan.
With an array of custom-made machinery, it has the capacity to produce 104 million
meters of fabric per annum. It is specially designed to handle heavy weight fabrics like
twills, drills, canvases / poplins, fabrics with minimum tension such as stretch fabrics and
all high density weaves. The advantage achieved by the customized design of its
machines is the result of an extensive research work with the help of world renowned
machine makers. To ensure that our customers get the very best we use more than 75%
dyes and chemicals of European origin. The standards are higher than ever, dedicated by
fashion, efficient productivity and further automation is engineered in the plant. To
maintain quality and international standards, an on-line Quality Control (QC)
Department has been setup. The QC department is augmented by a fully equipped
Laboratory, which scrutinizes the fabric process flow at all levels. Our extra ordinary
Research & Development work and highly trained marketing personal are pivotal to
sustain long term business relationships.
 Garments

Nish at Mills Limited has state of art garment manufacturing facility both for men and
women. The Apparel division has deployed 1767 high end sewing machines such as Vibe
Mac, Juki, Mitsubishi and Brother. The Division has the capacity to produce 7.20 million
garments per Annum. The construction of a new garment unit with a capacity of 7.2
million garments per annum is in progress.

The Garment wet process utilizes the modern techniques of Rinse, Enzyme Stone,
Enzyme Wash, Super Bleach, Reducer Wash, Tint Wash and Raisin Wash. In order to
obtain best results, our facility is geared with Tonelli Washing machines, Mainor
dryers, Wrinkle Curing Hangers and Barrel washing machines and Dryers for sampling.
Our qualified team members utilize the equipment to obtain optimal results and cater to
the specific needs of the client.

Financial year 2014-15 was difficult for Garments Segments too. Consistent increase in
wages and strengthened Rupee has put a dent on our profitability. The demand for
garments remained weak throughout the year. European businesses also struggled due to
a weak Euro.

To counter the industry challenges and achieve production efficiency, Garments Segment
has taken drastic steps in order to be a lean manufacturing unit. The brand new RFID
technology which we installed for sewing lines is the latest and most advanced method of
calculating efficiencies and wages. This will help in reducing precious down time and
increase productivity and lower wastage. The latest technology will facilitate shop floor
management with real time important data to streamline processes and manage issues on
a fast track. The installation has completed and the system is in operation.

Our aim for future is to remain competitive by bringing costs down through increased
efficiencies and focusing on large brands and retailers. Garments Segment has the
privilege of working with some of the best brands of the world and innovative product
developments is the key to our success
 Power Generation

Nishat Mills has established state of the art, modern, highly reliable and extremely efficient
captive co-generation power plants to cater in house energy requirements at all its
spinning, weaving, processing, stitching and apparel units. These facilities are using
Wartsila, Caterpillar, Cummins, Daihatsu, Jenbacher & Make engines for power
generation. Gas, Furnace Oil, Diesel, Coal & Biomass and Steam is being used as fuel
for power generation.

The Company invested in many projects in Power Division during the financial year
2014-15 to achieve key strategic objective of cost efficiency. Three tri fuel and highly
efficient Wartsila Generators were commissioned at Bhikki, Ferozewatwan and Lahore.

A 22 ton Coal Fired Steam Boiler to meet the enhanced steam requirements of Weaving
Division at Bhikki has been commissioned. This boiler generates low cost steam as
compared to the steam generated on furnace oil and rice husk based boilers.

The 9 MW extension of coal fired power plant is in progress and will be completed
soon. In addition to electricity, it will also produce 25 tons of steam per hour