A rare success story – By NASIR JAMAL — PUBLISHED DEC 09, 2013

Some 27 years ago, a 21-year-old student of civil engineering at Lahore’s University of Engineering and Technology bought an insurance company under liquidation for only five million rupees, turned it around in two years, and sold it for 95 million rupees. It indeed is a rare success business story in the Pakistani context, but definitely no rags-to-riches fairy tale. Unlike thousands of other talented young Pakistanis with innovative business ideas but no money to execute them, Shahzad Ali Khan came from a wealthy, landed family from Vehari. So when he decided to venture into business in 1986, he did not face such financing issues. His father, Nawabzada Shafqat Ali khan, a scion of the ruling family of Maler Kotla, the only Muslim state on the Indian side of the undivided Punjab before independence, was willing to help him and give him the required capital. It was despite his serious doubts about the success of the venture. “My father gave me money, but he didn’t believe in my business skills,” Shahzad, who was the first person in the family to ever stumble into business, told Dawn. The success did not come by a ‘stroke of luck’. “I worked very hard on the company. I would go to the office after finishing my classes at the university and work till very late in the night. In a short time, the once loss-making Pakistan General Insurance Company turned into a successful venture,” he reminisced. Why did he sell a successful company? “I just wanted to prove to my father that I could succeed in business and earn money on my own even if I had no prior experience and was very young at that time. I bought the company for just a rupee per share and sold it for nineteen rupees a share, returned the money I had ‘borrowed’ from my father, and set up a new business – a solvent extraction plant – with the rest of the money I had earned from the sale of my insurance business,” the chairman of S.S. Group of Companies said. Two years later the domestic oil extraction industry went into a long recession. “I did not invest in capacity expansion or new projects for a very long time because the domestic solvent extraction industry went into a recession and every one suffered huge losses between 1990 and 1998,” he recalled. Still he didn’t wind up or sell his business. “I am a fighter by nature. Even consistent losses in the (edible) oil business could not make me wind up the project and go home.” After the conditions changed, Shahzad bought another solvent extraction plant and a ghee mill in the early 2000s expanded into textile and poultry feed businesses. Today he controls 15pc of the domestic edible oil and ghee market, and supplies top-end air jet quality yarn. His net worth is around seven billion rupees and his companies’ annual turnover has reached eight billion rupees. He is hopeful that his oil, yarn and poultry feed sales will cross the twelve billion mark in another two years as he is investing more money in his edible oil and poultry feed business. His business has grown slowly because his investments are always equity-based. “I’ve very negligible long-term loan. This puts brakes on your growth, but protects you from the interest rate fluctuations. Why work hard for banks?,” he laughed. The 48-year-old businessman, who was vice president of the Pakistan Central Cotton Committee and is on the board of Inter State Gas Company and Pakistan Mineral Development Corporation, strongly believes in the potential of Pakistan’s economy and its capacity to bounce back. “Our economy is not that big. It can easily be fixed. We have both potential and capacity to turn it around. The only thing we need is right set of policies and political will to motivate investors to set up new industrial projects,” he insisted. What is the right set of policies that can help to revive investment? Provision of continuous and cheap energy supply, low cost credit, and security of life and property. “Unless you can motivate domestic investors, you will not be able to attract foreign investors,” Shahzad argued. He was of the view that the government must focus on two sectors for quick economic revival and industrialisation: textile sector and agriculture. “The textile industry has potential to double its exports to 26 billion dollars in three to five years. But that will not be possible unless the industry gets uninterrupted supplies of gas and electricity and cheaper credit. “Secondly, we should invest in agriculture: develop high-yield seeds to increase crop output, improve irrigation system, etc and provide incentives for setting up agro-based industry close to the rural areas,” he said. “We can achieve sustained economic growth, create new jobs to absorb three million young men and women entering the job market every year provided the government starts implementing policies to help textile and agriculture. It will also take care of our problems related to terrorism and crime,” he contended. But that is not enough. “We also need to help develop entrepreneurship in the country through provision of finance to innovative and creative young people. We need to create success stories to inspire our younger generation. If I didn’t have my father’s support I may not have been in business today.” —Nasir Jamal Reference: http://www.dawn.com/news/1061373

About Jahanzeb Shaikh

I am a state of confusion that pretends to know something. Sometimes. Subject to change like any healthy garden full of fruit and decay at the same time.
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