naveed mohsin

8/8/2019 naveed mohsin

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Mr. Muhammad Sarwar owner of the hira apparels, Mr. Hassan and the Accountant Mr

zaman are discussing the current situation of the Pakistan economy. The textile sector

is very important for the Pakistan economy. Their business is related to the textile

industry which is also affected by the economic factors. Pakistan economy has beenheavily hitted by slow down and down turn prevailing globally and small and medium

size industries are badly affected due to it said Mr. sarwar. He also said that it is very

difficult to survive in this environment due to increasing trend in the cost of inputs,

loadshading andDeteriorating political, law and order situation in the Country.Textile crisis is becoming severe in the Country due to over all recession and slow down

of economies around the globe. Our Textile sector is heavily export oriented and

International sales in Textile Markets suffered a lot as a consequence of which

manufacturer and traders who supply goods & services to exporters have suffered

heavy losses. Such provider of Good & Services to direct exporters are usually

operating at small or medium scale and they remains at the mercy of export houses.

Power loom sector is worst example of such a hard hit from direct exporters, majority of

which enjoys status of Corporate Entities. According to the norms of trade small scale

suppliers of grey fabrics provide woven fabrics to exporters with out any documented

arrangements enforceable at law. They work on Kachee Parchi system and have no

security regarding their debts with exporters.

Another reason is the higher rates of electricity in the country. Labour crises are also

becoming prominent due to all above reasons. For example a Factory previously

working 24 hours is operating only for 12 hours resulting in lower production. On the

other hand permanent & temporary labour costs remains the same. Daily wagers are

paid inspire of the shutdown due to power in order to retain them on the payroll.

Hira appreals was founded by Mr. Muhammad Ibrahim in the year 1990. Primarily run

by Mr. Muhammad sarwar; the elder son of Mr. Ibrahim, the hira appreals started its

operations on a small scale and having the capacity of knitting 20 bags of yarn per day.

Although the family was new to this business but with aid of experience gained by Mr.

sarwar, he realized that in order to reduce costs the production level has to be

increased since the fixed costs (Land cost, Salaries etc.) would be there in any way. So

in 1988 he decided to invest in a new knitting machines having a capacity of 35 bags

per day.

Within a decade or so, the family remained in the same business, until 2003, a new iqra

stitching unit was founded under the umbrella of hira apperals. In the year 2007,

businesses were divided among the sons of Mr. Ibrahim and Mr. Sarwar became the

owner of these two factories; the hira apperals and Iqra stitching garments. Significant

developments were seen after that when Mr. Sarwar gained full control of the factory.

He even diversified into other business of dying , named hira plant. With continuously


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increasing demands of garments, Mr. Sarwar invested in a new machinery imported

from Taiwan having the capacity of 50 bags per day , previously it was 35 bags. Now

Mr. Sarwar has been joined by his son Mr. hassan; who is young, ambitious and

qualified. Mr. hassan is continuously working on to see the improvements he may

implement for the betterment of his business. His vision is to firstly improve on the

processes, and quality.

Hira apparels functions in 2 units. The first one is The knitting Unit where scrap yarn

bags received and converted into the fabric. The second unit is stitching unit, where the

different garment products are made. The output of the first unit is reused in the second

unit. Other than the internally made garments, additional products are order to other

garment units, if required, to meet market demands.The accounting procedures of the

company are not very formalized. There is one person in charge of the whole finance

and accounting department. Mr. zaman, the accountant to the company handles

recording of all expenditures and revenues.

Mr. Sarwar the owner of hira apparels conducted business matters in the traditional

ways of the industry. Nothing from the sophisticated management theories were used

over the years. Mr. Sarwar used an intuitive approach where profitability was the main

aim. When Mr. hassan (son of Mr. sarwar) came back after completing higher education

from islamabad, he took over as new management. He had new ideas and new

approaches to run the business. He realized that in spite of profitable operations, hira

apparels was missing out on a lot of opportunities.

Mr. hassan aimed to realign the organization, to maximize gains from the available

prospects. His first task was to restructure the activities of the financial department. Nonew employees were hired but Mr. zaman, the sole accountant of the company was

given new tasks.

Political factors

Law, govt agencies and pressure group that influence and limit various organizations

and individuals in a givn society are included in political factors. Recent political

changes will hopefully have negative effect on the economy during the next financial

year. And the exports of the country decrease due to poor police of govt. in this way the

foreign exchange earnings decreased as decrease in export. Already textile sector

suffer in crises if the govt could not make sound policies to encourage the export of the

country then this sector will destroy.

Economic factors


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the hira ,s products are at maturity stage and have positive image in local and

international market. A present and future capacity of the products of hira apparels is

forcasted to be good because of the designs which are made, up to standards of new

generation. The economic environment consists of factors that affects consumer

purchasing power and spending pattern. In most of the international market the

consumption of hira,s product are considered best in quality. Changes in major

economic variables such as income, cost of living, interest rates and savings and

borrowing patterns have a large impact on the market place. The economic factors are

in favor of hira apparels.

Social factors

The culture and social environment is made up of institutions and other forces that

affect a societys basic values, perceptions and preferences and behaviors. People

grow up in a particular society that shapes their basic beliefs and values. This is the

policy of hira apparels that the product for exports are designed according to the beliefsand values of the international consumers. The products are made according to the

changing lifestyles and liing and disliking of the customers.

Technological factors

Hira apparels has good financial resources and in a position to install the latest

machinery and introduce latest technology in their production department. They have a

ability to designs new products after the introduction of new technologies in designing

and production department. Introduction of new technologies creates new markets and

opportunities for hira apparels. Companies that do not keep up with technologicalchanges soon will find their roducts out dated and they will miss new products and

market opportunities. Because of good financial resources hira apparels introduce new

technology in all its departments.

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