January 15, 2007 Monday Zilhaj 24, 1427
Pakistani-Britishers shy of investing in homeland
By M. Ziauddin
ACCORDING to a UK-Pakistan Chamber of Commerce and Industry (UKPCCI) report there are more than 100 multi-millionaire Pakistanis in the UK. But so far Pakistan has seen only one of them ââ¬â Sir Anwer Pervez, who ranked 12th richest Asian in Great Britain ââ¬â coming in to invest in any significant way in the mother country.
I asked around to find out the reason for such a huge disinterest of Britainââ¬â¢s moneyed Pakistanis in their country of origin. Nobody had a cogent answer. So, I decided to ask Sir Pervez himself--the man who now owns three cement factories and co-owns one of our largest banks--the United Bank.
But then he too was not able to give me anything concrete to work on.
ââ¬ÅWell, I talk to them. I tell them how profitable it is to invest in Pakistan today. But some how they donââ¬â¢t seem to be interested. They still seem to look at Pakistan as a country of uncertainties, red-tape and upheavals where intending overseas Pakistani investors are looked upon with suspicion or eyed as prime candidates for conning,ââ¬Â Sir Pervez said while talking to me in his large but Spartan offices located in a large building spread over 242,000 sq foot of prime land in London.
Located at Abbey Road in Park Royal London this sprawling office building of his serves mainly as his companyââ¬â¢s( Cash and Carry) warehouse which perhaps is the largest of its kind in Europe.
He said none of those whom he had talked to seemed interested in investing in productive sectors like industries, ââ¬Åall that they seem to have done so for is to purchase property and shares.ââ¬Â
The reason why Sir Pervez has not been able to convince his business colleagues in Britain to invest in Pakistan like he had done and continues to do is not because his is not a success story but because the obstacles and hurdles he had to face in making a success of that story were on display for every one to see since 1992 when he first went to Pakistan to set up a cement plant lured by what then appeared to be reasonable duty and tax concessions made available to the sector.
But these concessions were withdrawn when he was halfway through to completing the project. Had he not had the financial room and an overwhelming desire not to be seen to be throwing in the towel in the face of adversity he would perhaps have walked away then and never ever gone back to Pakistan. But he refused to give up and fought tooth and nail with successive governments until the concessions were restored.He faced more hurdles but of different kind when he decided to set up two more cement plants in Chakwal taking advantage of location and logistics.
But again as he was busy in the spadework the permission was withdrawn on the grounds that cement factories threatened environment. In the UBL case he had entered into the bidding process in the interest of competition, but found the bank in his lap as the competition withdrew after pushing the price to an economically unviable point.
Those who had watched him fight his battles in Pakistan from here said that it was more because of Sir Anwerââ¬â¢s tenacity and stubborness rather than the investment environment of Pakistan which had paved the way for the investment of a billion dollar by the Bestway enterprises in Pakistan in the last 15 years. He is now in the process of putting up a power plant as well.He had a question for me. What had made the President change his mind about Chakwal cement plants? Elaborating,he added: ââ¬Å We had been told that as many as 11 top serving and retired army officers mostly perhaps from Chakwal had objected to the project and the President had cancelled the permission without listening to our side of the story. But then within a matter of a week, the decision was reversed.ââ¬Â
ââ¬ÅThat is what happens when you have a one- man rule in the country, ââ¬Å I said trying to fathom the mystery but failing.
Sir Pervez also runs a charitable organisation in Pakistan mostly dedicated to education but appeared expremely disappointed with its performance as according to him people whom he had appointed to run the charity lacked the right kind of motivation. He said he had so far changed as many as five CEOs.
In response to a question he said he had always found, the president, the prime minister and the chief ministers extremely helpful and ââ¬Å I did not find even a hint of corruption at the top level.I donââ¬â¢t know about the lower levels as normally I am not told about such matters by my people who manage in the field.ââ¬Â
Perhaps after having seen how difficult it was to establish industries in Pakistan even for a person like Sir Pervez those British Pakistanis who are rich enough but way down in the league like Mohammad Sarwar who made his fortune operating no-frills grocery stores and is also an MP and Shahid Luqman a banker and property developer (known to be second richest Pakistani in Britian after Sir Anwer Pervez) seemed to have played it safe and invested only in property and stocks. Shahid is said to have invested as much as $300 million in property mostly in Lahore and Gujrat.
Sir Pervez is the richest of all of the Pakistani diaspora in the UK with assets valued at 390 million pounds sterling. Of course he is not in the league of the Indian multi-mullionaire, Lakshmi Mittal who is worth 900 million pounds.
When asked why he is not in the game of take-overs and acquisitions like Mittal and other Indian multi-millionaires, Sir Pervez was candid enough to point out his weaknesses.
ââ¬Å Those who were in my team in those early days were like me not highly educated and also I did not have enough finances as well that had impacted on our growth and its direction,ââ¬Â he said.
He said in the beginning no bank was prepared to advance him money and when he established a chain of shops on his own, the suppliers were reluctant to give him credit.
Meanwhile, his two sons Rizwan Pervez,a business graduate and a chartered accountant and Dawood Pervez an Oxford graduate and a lawyer had joined him.
When I told him that now that he has the right persons in the right jobs as the elder son is Group Operations Director and the younger one Director and company Secretary, he could think of taking his company to greater heights, Sir Pervez said: ââ¬Å Yes now our company is in able hands. Two sons of my brother are also chartered accountants. I am sure they will manage the company better than we did.ââ¬Â
The Bestway Group started off as a cornershop in London in the 60's. The Group moved into the wholesale business in 1976. Recently it acquired Batleys Plc (the UKs oldest cash and carry business for traders); a food and drinks wholesaler with a turnover of over ã0.75 billion.
In 2006 the Group was the second largest cash and carry operator in the UK with combined annual turnover of ã1.6 billion. It trades from 49 warehouses covering over five million square feet and provides a wide variety of products to its customer base of over 100,000 in the independent retail and catering sectors. Bestway has a range of symbol group stores called Best~One and own label grocery brands called Best~in.
Sir Perves said, in the last Christmas season his stores like others did a roaring business, but conceded that ASDA ââ¬âlike huge supermarkets were giving his shops very tough competition.
ââ¬ÅWe are surviving because all our shops are free hold and our margin is also still the lowest,ââ¬Â he added.
Sir Pervez was the first-ever Pakistani knighted by Her Majesty the Queen of Britain.
It is not only the moneyed British Pakistanis who because they do not have enough confidence in the country are not investing in Pakistan but even the general consumer here seems to be suffering from the same feeling about Pakistani products and that is why perhaps imported Pakistani goods, mostly low end textiles on sale in London shops do not carry the `made in Pakistanââ¬â¢ label. But that is another story.
Pakistani-Britishers shy of investing in homeland
By M. Ziauddin
ACCORDING to a UK-Pakistan Chamber of Commerce and Industry (UKPCCI) report there are more than 100 multi-millionaire Pakistanis in the UK. But so far Pakistan has seen only one of them ââ¬â Sir Anwer Pervez, who ranked 12th richest Asian in Great Britain ââ¬â coming in to invest in any significant way in the mother country.
I asked around to find out the reason for such a huge disinterest of Britainââ¬â¢s moneyed Pakistanis in their country of origin. Nobody had a cogent answer. So, I decided to ask Sir Pervez himself--the man who now owns three cement factories and co-owns one of our largest banks--the United Bank.
But then he too was not able to give me anything concrete to work on.
ââ¬ÅWell, I talk to them. I tell them how profitable it is to invest in Pakistan today. But some how they donââ¬â¢t seem to be interested. They still seem to look at Pakistan as a country of uncertainties, red-tape and upheavals where intending overseas Pakistani investors are looked upon with suspicion or eyed as prime candidates for conning,ââ¬Â Sir Pervez said while talking to me in his large but Spartan offices located in a large building spread over 242,000 sq foot of prime land in London.
Located at Abbey Road in Park Royal London this sprawling office building of his serves mainly as his companyââ¬â¢s( Cash and Carry) warehouse which perhaps is the largest of its kind in Europe.
He said none of those whom he had talked to seemed interested in investing in productive sectors like industries, ââ¬Åall that they seem to have done so for is to purchase property and shares.ââ¬Â
The reason why Sir Pervez has not been able to convince his business colleagues in Britain to invest in Pakistan like he had done and continues to do is not because his is not a success story but because the obstacles and hurdles he had to face in making a success of that story were on display for every one to see since 1992 when he first went to Pakistan to set up a cement plant lured by what then appeared to be reasonable duty and tax concessions made available to the sector.
But these concessions were withdrawn when he was halfway through to completing the project. Had he not had the financial room and an overwhelming desire not to be seen to be throwing in the towel in the face of adversity he would perhaps have walked away then and never ever gone back to Pakistan. But he refused to give up and fought tooth and nail with successive governments until the concessions were restored.He faced more hurdles but of different kind when he decided to set up two more cement plants in Chakwal taking advantage of location and logistics.
But again as he was busy in the spadework the permission was withdrawn on the grounds that cement factories threatened environment. In the UBL case he had entered into the bidding process in the interest of competition, but found the bank in his lap as the competition withdrew after pushing the price to an economically unviable point.
Those who had watched him fight his battles in Pakistan from here said that it was more because of Sir Anwerââ¬â¢s tenacity and stubborness rather than the investment environment of Pakistan which had paved the way for the investment of a billion dollar by the Bestway enterprises in Pakistan in the last 15 years. He is now in the process of putting up a power plant as well.He had a question for me. What had made the President change his mind about Chakwal cement plants? Elaborating,he added: ââ¬Å We had been told that as many as 11 top serving and retired army officers mostly perhaps from Chakwal had objected to the project and the President had cancelled the permission without listening to our side of the story. But then within a matter of a week, the decision was reversed.ââ¬Â
ââ¬ÅThat is what happens when you have a one- man rule in the country, ââ¬Å I said trying to fathom the mystery but failing.
Sir Pervez also runs a charitable organisation in Pakistan mostly dedicated to education but appeared expremely disappointed with its performance as according to him people whom he had appointed to run the charity lacked the right kind of motivation. He said he had so far changed as many as five CEOs.
In response to a question he said he had always found, the president, the prime minister and the chief ministers extremely helpful and ââ¬Å I did not find even a hint of corruption at the top level.I donââ¬â¢t know about the lower levels as normally I am not told about such matters by my people who manage in the field.ââ¬Â
Perhaps after having seen how difficult it was to establish industries in Pakistan even for a person like Sir Pervez those British Pakistanis who are rich enough but way down in the league like Mohammad Sarwar who made his fortune operating no-frills grocery stores and is also an MP and Shahid Luqman a banker and property developer (known to be second richest Pakistani in Britian after Sir Anwer Pervez) seemed to have played it safe and invested only in property and stocks. Shahid is said to have invested as much as $300 million in property mostly in Lahore and Gujrat.
Sir Pervez is the richest of all of the Pakistani diaspora in the UK with assets valued at 390 million pounds sterling. Of course he is not in the league of the Indian multi-mullionaire, Lakshmi Mittal who is worth 900 million pounds.
When asked why he is not in the game of take-overs and acquisitions like Mittal and other Indian multi-millionaires, Sir Pervez was candid enough to point out his weaknesses.
ââ¬Å Those who were in my team in those early days were like me not highly educated and also I did not have enough finances as well that had impacted on our growth and its direction,ââ¬Â he said.
He said in the beginning no bank was prepared to advance him money and when he established a chain of shops on his own, the suppliers were reluctant to give him credit.
Meanwhile, his two sons Rizwan Pervez,a business graduate and a chartered accountant and Dawood Pervez an Oxford graduate and a lawyer had joined him.
When I told him that now that he has the right persons in the right jobs as the elder son is Group Operations Director and the younger one Director and company Secretary, he could think of taking his company to greater heights, Sir Pervez said: ââ¬Å Yes now our company is in able hands. Two sons of my brother are also chartered accountants. I am sure they will manage the company better than we did.ââ¬Â
The Bestway Group started off as a cornershop in London in the 60's. The Group moved into the wholesale business in 1976. Recently it acquired Batleys Plc (the UKs oldest cash and carry business for traders); a food and drinks wholesaler with a turnover of over ã0.75 billion.
In 2006 the Group was the second largest cash and carry operator in the UK with combined annual turnover of ã1.6 billion. It trades from 49 warehouses covering over five million square feet and provides a wide variety of products to its customer base of over 100,000 in the independent retail and catering sectors. Bestway has a range of symbol group stores called Best~One and own label grocery brands called Best~in.
Sir Perves said, in the last Christmas season his stores like others did a roaring business, but conceded that ASDA ââ¬âlike huge supermarkets were giving his shops very tough competition.
ââ¬ÅWe are surviving because all our shops are free hold and our margin is also still the lowest,ââ¬Â he added.
Sir Pervez was the first-ever Pakistani knighted by Her Majesty the Queen of Britain.
It is not only the moneyed British Pakistanis who because they do not have enough confidence in the country are not investing in Pakistan but even the general consumer here seems to be suffering from the same feeling about Pakistani products and that is why perhaps imported Pakistani goods, mostly low end textiles on sale in London shops do not carry the `made in Pakistanââ¬â¢ label. But that is another story.
