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Outline
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Expansion of business
Current position
Challenges
4 plans
Nishat Group
The history of Nishat Group dates back to 1951, when Mian Muhammad
Yahya founded Nishat Mills Limited.
This man of vision, courage and integrity, Mian Mohammad Yahya was
born in 1918 in Chiniot. In 1947 when he was running leather business in
Calcutta, he witnessed by the momentous changes that swept the Indo-Pak
subcontinent.
This is story of success through sheer hard work and an undaunted spirit of
enterprise. Beginning with a cotton export house, he soon branched out in to
ginning, cotton and jute textiles, chemicals and insurance. He was elected
Chairman of all Pakistan Textile Mills Association. He died in 1969, at the
age of 51 having achieved so much in so short time.
*The Nishat Group* Mian Muhammad Mansha Yaha is the captain of this
splendid ship having around 30 companies on board. Mansha, who owns
the Muslim Commercial Bank as well, is now setting up a billion rupee ($
17 m) paper sack project too. He is one of the richest Pakistanis around.
Nishat Group was country's 15th richest family in 1970, 6th in 1990 and
Number 1 in 1997. Mansha is on the board of nearly 50 companies. Chinioti
by clan, Mansha is married to Yousaf Saigol's daughter.
Nishat Group is one of the leading and most diversified business groups in
South East Asia. With assets over PRs.300 billion, it ranks amongst 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 has also interest in Insurance,
Power Generation, Paper products and Aviation. It also has the distinction of
being one of the largest players in each sector. The Group is considered at
par with multinationals operating locally in terms of its quality of products
& services and management skills.
Nishat has grown from a cotton export house into the premier business
group of Pakistan with 5 listed companies, concentrating on 4 core
businesses; Textiles, Cement, Banking and Power Generation. Today, Nishat
is considered to be at par with multinationals operating locally in terms of its
quality products and management skills.
A father of three sons, Mian Muhammad Mansha stands out the richest man
of Pakistan with a fortune worth $ 2.5 billion. He is also the biggest single
exporter in Pakistan. He hails from Chiniot, Punjab. ‘Chiniotis’ are one of
the leading industrialists of Pakistan.
Mian Mansha has catapulted to the top of Pakistan's richest families from the
15th position in 1970 and 6th in 1990 because of combination of factors like
his marriage to Naz, daughter of Yusuf Saigol. Like several other Chinioti
businessmen, Mian Yahya had a leather business in Calcutta (India) before
moving to Pakistan in 1947 and it was perhaps in Calcutta that he developed
friendship with Yusuf Saigol that led to the marriage of Mansha and Naz
Saigol sometimes around 1970.
The general perception is that MCB was privatized to Mian Mansha and his
associates because of his friendship with Nawaz Sharif. However, Mian
Mansha feels that, investing in the shares of Muslim Commercial Bank
(MCB) has been one of his biggest business slip ups. The privatization of
MCB remains a mystery, till to date. Nawaz Sharif came into power on
November 6, 1990, invited bids for the privatization of Muslim Commercial
Bank (MCB) on December 15, 1990 and announced its privatization to
successful bidder: Messrs Abdullah and others on January 9, 1991.
The stories from the past suggest that five bids were received for Muslim
Commercail Bank with ‘Tawakkals’ and ‘Adamjee’, being the highest and
second highest bidders. Adamjee who formed a joint venture with Yunus
Brothers, perhaps the biggest Export Houses in Pakistan, had incorporated
Muslim Commercial Bank in 1949. As previous owner, they had the first
right of purchase but, third lowest bid by Messers Abdullah and others, a
consortium comprising of 12 leading industrialists, mostly from Punjab and
headed by Mian Mohammad Mansha, was asked to match the highest bid
and declared winner. The consortium which called itself the National Group
comprised the following leading industrial groups and families:
Expansion of business
After almost half a century of undaunted success, Nishat group is among the
leading business houses of the country and ranks among the top 5 groups in
terms of assets and sales revenue. The group has its roots firmly planted into
four core business namely
Textiles
Power Generation
Banking
Cement
TEXTILES
The textile business is further subdivided into 2-textile division:
Nishat Faislabad
Nishat Chunian
The textile capacity of the group is the largest in the country. An addition of
20,000 new spindles, 100 new air jet looms and new dyeing plants has
increased the existing capacity of 242,000 spindles, 740 looms and dyeing
and finishing capacity of 5 million meters. The largest exporters of textile
products from Pakistan, for more then decade!
Nishat Mills Limited, the flagship company of the group was established in
1951. Its annual turnover for the year ------------ is over Rs.17 billion (US$
283 million). NML with the production facility of 270,000 spindles, 740
looms and dyeing & printing capacity of 7 million meters (7.65 million
yards) makes Nishat the largest composite textile set up in Pakistan.
POWER GENERATION
Nishat group has also been a pioneer in power generation in the private
sector of the country. Nishat setup the first power generation unit in the
private sector in 1995.
Power Generation
For continuous and smooth operations of the plant uninterrupted power
supply is very crucial. The company has its own power generation plant
along with WAPDA supply. The installed generation capacity is 23.84 MW.
BANK
In 1991, Nishat Group ventured into the financial sector through the
acquisition of Muslim commercial Bank. MCB has grown ever since and is
now the largest bank in the private sector. MCB has a network of over 1200
branches employing over 12,000 people.
Muslim Commercial Bank (MCB) is one of the leading banks with a deposit
base of about Rs.230 billion (US$ 3.8 billion). MCB with more than 1200
branches country wide is the largest private bank of Pakistan also operating
Internationally. Since its acquisition, the management has improved its
financial performance and now it is one of the most profitable banks of the
nation.
MCB is also the first Pakistani bank to be enlisted at London Stock
Exchange in October 2006 after attracting US $700 million worth of demand
for its US $ 150 million GDR issue.
Insurance
4 plans
2.4Strategy Followed
advantage
Their resources has been identified and classified in terms of strength and
weaknesses.
• Their corporate capabilities are much more but those which gives it a
competitive advantage over competitor are
• High quality product and Latest mechanized machinery.
3. Strategies Formulated
The strategy formulated by Nishat mills are focus strategy ,First they
were focusing on a narrow segment of cotton only but now they are not only
focusing but also looking to broader segment and pursuing a differentiation
strategy to differentiate their selves from other competitors.
3.1Industry structure
The industry in which nishatll mills is operating is consolidated
industry in which there are few giants companies like sitara ,Chenab etcc.
The tactic they use as an offensive tactic is Frontal Assault which
mean head to head with its competitors because they have superior resources
and willingness to persevere.
Growth strategies
• Vertical integration
• Horizontal integration
• Backward integration
Being involved in a forward integration they are their selves the distributor
of their goods manufactured.
Mostly they are involved in Taper integration which the firm produces less
then half of its own requirement and buys the rest from outside suppliers
So nishat mills follows this stratregy in sense that they innovate there
offering only if their competitor intend to do so.
• No change strategy
• Profit strategy
This strategy is followed by Nishat mills when there firm sale is not
normal or you can say declining so what they do is that they try to minimize
there cost like advertisingcost,Expenses,R&Dexpenses,But mostly they
reduce there expenses for shorter period of time because in long run they
may suffer losses.
3.4 Strategies Adopted for
MARKETING
HUMAN RESOURCE
FINACIAL
MARKET DEVELOPMENT
Product development
Market penetration
Market Skimming
These are al strategies of Marketing but the strategies on which nishat mills
is emphasizing is Product development and Market development by pursuing
these strategies they expand there product line and as well as products to
capture the more and more market
Challenges
SWOT Analysis
Strengths:
The major strength of Nishat is its location. The plant is
situated in Faisalabad which is renowned in the world for
textile production.
Nishat is using the best machinery available in the
market in its all the
Department, which helps Nishat to produce the world class
products to meet the needs of the customers.
As Nishat is a part of large industrial group, so it has no
need to search out the raw materials from the market
even during the peak season. For example, they can produce
high quality yarn.
Nishat management provides an excellent working
environment to its
Employees, which motivate them to work more effectively
and efficiently.
Nishat has strength to produce the quality products at
the lowest possible prices as compare to their competitors.
Nishat is an ISO certified company, which produce a
sense of satisfaction to its customers.Nishat also follow the
ISO Standards.
Quality control department equipped with most modern
machines is also a big
Strength of Nishat, which ensures the quality at every stage
of production. As a result the wastage is very minimal as
compare to competitors.
Adequate financial resources are also strength of
Nishat. Nishat has the assets of worth about us4.5$ Billion.
Nishat has highly educated and competent
management and skilled labour which contributed to the
success of Nishat.
Nishat focuses on the chain stores and other big
customers rather than focusing on the small
customers.Nishat also focus on the long lasting relations with
the customers. For these reasons its customers are very
loyal.
Nishat has a good reputation and image in the local as
well as in the
International market, which is also a major strength of
Nishat.
Weaknesses
NML is purely following the centralized management
style, due to which management has a burden of
decisions, which ultimately takes too much time.
As most of the machinery is imported from other
countries therefore sometimes few spare parts are not
available in the market which creates problems.
Although NML pays very high salaries to the top
management, it is not offering attractive salaries to the
other employees of the organization. Therefore the moral
of the employees is decreasing.
Due to low salaries the rate of turnout is very high
which hinders the growth of the organization.
The rate of overtime payment to the employees is not
comparable with market. NML is paying at the normal
wage rate for overtime while the overtime rate is always
high in all the organizations.
Due to centralized management there is n o delegation
of authority in NML which also hinder motivation of the
employees.
Less chances of promotion are available for the
employees in NML, which is causing dissatisfaction.
OPPORTUNITIES:
When the WTO will be implemented, there would be a
great opportunity of increase in exports if NMLl follow the
international standards and provide high quality products to
the customers at competitive prices
NML should try to implement the latest
ISOstandardsincludingISO14000 series, which will improve
their image and customer satisfaction in the local market as
well as in international market.
NML can explore the new markets for exports by giving
the different incentives to its employees in the export
department, which will improve its profitability.
There is a lot of potential in the local market for NiCad’s
products because people believe that Nishat products are
always of high quality. So NML should also focus on local
market.
Nishat can introduce its garments in the local market by
using the same
Stitching unit. This is also a great opportunity.
Threats:
WTO implementation is a good opportunity but it is also
a big threat at the same time it STI fails to provide good
quality and competitive prices to its customers.
There is no consistency in the government policies
regarding textile sector.
Incidents like September 11, 2001 attacks would also be
a major threat.
Political conditions of the country affect both NML and
its customers as well. On one hand it makes reluctant to the management to
make new investments.
On other hand its customers also hesitate before signing
new contacts.
Increasing rate of electricity and GST are also big
threats.
Currency fluctuations and exchange rates can also
create problems for NML.
Government is focusing on the industrialization and is
giving different
Incentives to the investors. It is also a big threat because the
number of
Competitors will increase.
More and more competitors (National and International)
are entering in the same markets and offering attractive
pric4es to the customer
PEST Analysis
Political Instability.
The political situation of Pakistan is not satisfactory. Due to the rapid
change in the Government every government sets its own new trade policies.
Govt. should apply sustainable policies for the beneficial of the exporters as
well as the investors.
Economic situation:
The economic condition of Pakistan can also affect the foreign investors
increasing inflation rate make the cost of production high and thus reduce
the profit margin of the investor.
Social situation:
The change in the lifestyle of the people affects the growing demand of the
NTM products. The change in the lifestyle and needs in different
demographics also affect the demand of the customers.
Due to all these changes NTM is performing excellent for the excellence
organization as well as for the customer.
Technological factor:
Technological advancement in all the sectors of the country has changed the
entire socio-economic environment. Especially in the textile sector there is a
lot of technological development.
Current position
Textile
NML today has 173,000 spindles, 284 Sulzer shuttle-less looms and 244
TSUDAKOMA air jet looms. NML also has the most modern textile-
processing unit, 2 stitching units and Power Generating plant with a capacity
of 33.6 MW. NML total export for the year 2000 was Rs. 9.1 billion (US$
143 million). Due to the application of prudent management policies,
consolidation of operations, a strong balance sheet and an effective
marketing strategy, this trend is expected to continue in the years to come.
The Company's production facilities comprise spinning, weaving,
processing, stitching and power generation.
Bank
MCB is one of the leading banks of Pakistan with a deposit base of Rs. 368
Billion and total assets over Rs.500 Billion. Incorporated in 1947, MCB
soon earned the reputation of a solid and conservative financial institution
managed by expatriate executives. In 1974, MCB was nationalized along
with all other private sector banks.
During the last fifteen years, the Bank has concentrated on growth through
improving service quality, investment in technology and people, utilizing its
extensive branch network, developing a large and stable deposit base.
Cement