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Mian Mohammad Mansha, the chairman of Nishat Group continues the spirit of
entrepreneurship and has led the Group successfully to make it the premier business group of
the region. The group has become a multidimensional corporation and has played an important
role in the industrial development of the country. In recognition of his unparallel contribution,
the Government of Pakistan has also conferred him with Sitara-e-Imtiaz, one of the most
prestigious civil awards of the country.
The Textile business is further subdivided into 2 textile divisions: Nishat Faisalabad and Nishat
Chunian divisions. 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 plant has increased the existing
capacity of 242,000 spindles, 740 looms and dyeing and finishing capacity of 5 millions
meters. The group is the largest exporter of textile products from Pakistan for more than a
decade.
Nishat provides quality piece dyed fabrics in heavy twills to some of the world's leading brand
names like GAP, Old Navy, Banana Republic, DKNY, Tommy Hilfiger, Chaps and Sears.
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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.
In 1991, Nishat Group ventured into the financial sector through the acquisition of Bank. MCB
Bank Ltd. 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.
Our vision of tomorrow is a better quality of life for the people of Pakistan
spindles was established at Bhai Pheru, Tehsil Chunian. It started commercial production on 10
March 1991. The capacity was enhanced to 19,200 spindles in 1998. In 1998, the Company
diversified its business interest by venturing into a weaving project with the installation of 99
air jet looms.
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Economic Environment
The year under review is from July 2006 to June 2007. During the year, country's economy
remained stable. However, Year 2006-07 was one of the most difficult years for Pakistan’s
textile industry. Higher cotton prices, higher wages and severe price competition reduced the
profitability margins across the whole textile industry. Cotton prices were higher by around 7%
whereas prices of yarn remained stagnant resulting into losses for the spinning industry. Higher
fuel prices and gas load shedding disrupting the operations of the power generation, resulted
into higher fuel charges. Tightening of monetary policy further increased the already high
interest rates.
The year under review is from July 2006 to June 2007. During the year, country's economy
remained stable. However, Year 2006-07 was one of the most difficult years for Pakistan’s
textile industry. Higher cotton prices, higher wages and severe price competition reduced the
profitability margins across the whole textile industry. Cotton prices were higher by around 7%
whereas prices of yarn remained stagnant resulting into losses for the spinning industry. Higher
fuel prices and gas load shedding disrupting the operations of the power generation, resulted
into higher fuel charges. Tightening of monetary policy further increased the already high
interest rates.
The reduced profitability of the company is attributable to a number of factors. This was the
first year our Home Textiles Plant came into production and initially capacity utilization
remained below break even level. During the year we had a partial shutdown in one of our
spinning units for shifting of machinery for change in the product mix. Higher cotton prices
and partial shutdown of the spinning unit resulted into a loss of around Rs. 150 million in our
spinning division during the year. Currently our Home Textiles Division is operating at more
than 80% capacity. Moreover after changing the product mix of the spinning units, our
spinning division is operating at above breakeven level. Keeping in view the present scenario
we are hopeful to have a higher profitability in next year.
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Investments
During the year under review, the Company made no substantial investment in the plant and
machinery. Presently we are operating with 142,196 spindles, 293 air jet looms, 1 Dyeing &
Stitching plant and captive power plants with the combined capacity of 33 MW.
Financial Structure
A conservative financial structure has been employed in view of the seasonality and cyclicality
of the textile industry. We have identified the targeted levels of the critical financial ratios and
decisions for future investments are made subject to the constraints of these financial ratios.
During the year under review, financial charges have increased by 31%. This is mainly due to
the general hike in the interest rates in the country. The illustration shows the last five years'
financial charges as a percentage of sales.
Business Strategy
Aggressive marketing has been the major factor in our consistent profitability over the past
years. Our strategy is to remain at the cutting edge in terms of exploring new markets and new
products. The focus is on niche marketing with specialized products. We have differentiated
our business through consistent quality, reliable delivery and proactive handling of customer's
needs.
Investment in state of the art technology and top quality human resources has been key element
of our business strategy. The organizational structure is lean with very little hierarchy and
bureaucracy compared to other organizations of similar size. This gives us the flexibility to
respond quickly to the changes in the market situation.
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Units of Nishat Chunian:
It comprises of 3 units:
Spinning
Weaving
Home Textiles
Spinning:
The spinning facility of Nishat Chunian consists of five units with a capacity of 150,000
spindles, producing 90 million pounds of yarn per annum. To maintain a consistent product
quality, stringent measures are taken not only in the sophisticated in-house labs, but throughout
the production process
Spinning Products:
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YARNS low hairiness, improved sheeting and fine
evenness, strength and elongation shirting
PLIED YARNS 2, 3, and 4 ply Our entire count range is also Knitted as well as
available in 2, 3 and 4 ply, auto- Woven Fabrics
spliced and knotless
Weaving:
The weaving mill consists of state of the art Picanol Omni, Omni Plus and Toyota air jet looms
in various widths ranging from 110 – 150 inches, providing greater flexibility in catering to
customer needs. The renowned European company Benninger-Zell manufactures the Sizing
and Warping machinery.
Products of Weaving:
Fabric Count
Design Description Composition Width
Category Range
Twills
Drills 100% Cotton , blends
Broken of Cotton with
Shirting:
Twills Shirting fabrics Polyester, Viscose,
Ne 40/1 –
Bedford with a weight range Linen, Nylon, Lycra,
120/1
Cords of 50-150 GSM Elaspan and 72
APPAREL
Ottomans and Bottoms with a Spandex; Cotton inches
Bottoms:
Canvases weight range of Slub, PC Slub and
Ne 5/1 –
Herringbone 200-450 GSM. Slub lycra; Spun
30/1
Matts Poly and Poly
Panamas Filament.
Ribstops
100% Cotton, blends
Sheeting fabrics of
of Cotton with
upto 1000 thread
Percales Polyester, Cool
SHEETING count with single
Satins Max®, T-400™,
AND ply yarn. Ne 40/1 – 141
Striped eVAP®, Modal,
UPHOLSTER 120/1 inches
Sateens Tencel, Bamboo
Y Upholstery fabrics
Poplins Fiber, Soyabean
made with plied
Fiber, Milk Fiber and
yarns
Amicor.
Dobby fabrics 100% Cotton and
FANCY Ne 20/1–Ne 128
Dobby Items made using up to blends of Polyester
ITEMS 80/1 inches
14 frames. and Cotton.
STRETCH One way Sheeting and Cotton blended with Ne 10/1 to
and two way apparel fabrics lycra or spandex Ne 60/1
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stretch
fabrics
Warp slub,
weft slub Upholstery and 100% cotton and PC Ne 6/1 tp Ne
SLUB
and cross apparel fabrics slubs 40/1
hatch
Home Textiles:
The dyeing and finishing plant has a monthly capacity of 3.0 million yards per month with an
equivalent stitching capacity. These plants are equipped with state of the art machinery
specially designed to cater to high thread count fabric.
During the dyeing, finishing and stitching processes, several measures are taken to ensure
timely delivery of high quality fabric. This includes special care in fabric handling, full width
rail stitching, PVA based size recovery, various devices to avoid creases and band mark
variation, special unwinding devices, efficient squeezers, a computerized dye dispensing
system and an on-line measurement and storage of data at every machine.
The dyed and finished Sheeting and Upholstery range comprises of high density fabrics with
widths up to 340 cm and yarn count range of Ne 40/1 – 100/1. This includes Percales up to 350
thread count and Sateens up to 800 thread count. We also produce high thread count sheeting
fabric of unmatched quality with 1000 thread count. Other products in this range include fabric
with upto 6 pick insertions, dobby fabric with intricate designs using 12-14 frames and fabrics
made using plied, slub, dyed and fancy yarns. In addition to 100% cotton, a number of fibers in
various blends are used including Polyester, Viscose, Modal, Tencel, Bamboo, Soyabean and
Milk Fiber. We also use Lycra, Cool Max®, eVAP, T-400™ and Amicor
NCL offer a wide range of dyes and finishes which can be adapted in accordance with
customer requirements. The various dyeing options include Pigment, Vat, Reactive, Sulphur
and Disperse. Some of the various finishes NCL can do are Water Resistant/Repellant, Soil and
Stain Resistant, Wrinkle Resistant, Anti-microbial, Ultra Soft Hand Feel, and Fire Resistant.
We have also developed antimicrobial, frangrant and ultra fast color finishes.
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Bed Linen:
Products in this category include Bed Sheet Sets, Valance Sheets, Bed Skirts, Quilt covers and
Comforter Shells.
Curtains:
The product range also includes Curtains, Pelmets, Cushions, Tie Backs, 5 pieces Drapery Set,
and Rod Percillia, which are offered to customers as separate items, as well as complete
Curtain Sets. We also offer Tier Swag Sets for kitchen windows and Shower Curtains
Table Linen:
Hierarchy Chart:
A hierarchy is an arrangement of objects, people, elements, values, grades, orders, classes, etc.
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BOARD of DIRECTORS
CHIEF EXECUTIVE
Accounts,
Marketing- Marketing- Marketing audit,
Site Purchase Admin Home Fabric -Yarn secretarial Finance
Textile works
Manager Manager
Audit
and it shows that who reports to whom and clear the confusions.
Accounts
and Tax
Technical GM Technical
Technical General GM
Director spinning Director
director Manager stitching
Spinning 1, 2 Processing
4, 5 Sinning 3 Weaving
A hierarchy chart of an organization shows the formal structute of an organization’s positions
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Swot Analysis :
SWOT analysis is a simple framework for generating strategic alternatives from a situation
analysis. It is applicable to either the corporate level or the business unit level and frequently
appears in marketing plans. SWOT (sometimes referred to as TOWS) stands for Strengths,
Weaknesses, Opportunities, and Threats.
A scan of the internal and external environment is an important part of the strategic planning
process.
Strengths (S)
Weaknesses (W),
Opportunities (O)
Threats (T).
The outcome from a SWOT Analysis enables organizations to focus on strengths, minimize
weaknesses, address threats, and take the greatest possible advantage of opportunities
available.
A firm should not necessarily pursue the more lucrative opportunities. Rather, it may have a
better chance at developing a competitive advantage by identifying a fit between the firm's
strengths and upcoming opportunities. In some cases, the firm can overcome a weakness in
order to prepare itself to pursue a compelling opportunity.
To develop strategies that take into account the SWOT profile, a matrix of these factors can be
constructed. The SWOT matrix (also known as a TOWS Matrix) is shown below:
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S-O strategies pursue opportunities that are a good fit to the company's strengths.
S-T strategies identify ways that the firm can use its strengths to reduce its vulnerability
to external threats.
W-T strategies establish a defensive plan to prevent the firm's weaknesses from making it
highly susceptible to external threats.
Strengths:
NCL’s strengths are its resources and capabilities that can be used as a basis for
developing a competitive advantage.
Nishat Group is the largest group in Pakistan in terms of sales, which were
approximately Rs.16 billion (US$ 400 million equivalent) last year.
Our textile division, Nishat Chunian has a spinning capacity of 144,803 spindles
located in 5 units.
The product range is 100% cotton yarn, ranging from 6/1 to 30/1 in carded yarns and
from 12/1 to 100/1 in combed yarns.
In addition to the above we are also in core spun stretch yarns of 2 and 3 ply yarns and
slub yarns. The total capacity is 59 million lbs of yarn per annum
The fabric is being exported to various companies in Hong Kong, Japan, Korea, USA,
South Africa, India and Europe.
The company believes in product innovation and has successfully leveraged its strength
in yarn manufacturing to make a variety of fabrics.
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NCL timely adds value to its product like addition of dying facility and home textile
manufacturing (mention the year of operations)
Most optimum cost of financing and exploration of for-ex transactions like hedging and
forward booking
Availability of abundant Raw Material helps to control costs and reduces the lead-time
across the operation.
Large varieties of cotton fiber are available and have a fast growing synthetic fiber
industry.
NCL has large and diversified segments that provide wide variety of products.
Produces greige fabric for apparel, sheeting, home furnishing and fancy items in 100% Cotton,
Polyester Cotton (PC) and Chief Value Cotton (CVC).
Fabric for apparel has been consistently catering to the demands of the export markets
as well as the local garment industry.
In sheeting we have successfully made sheeting fabric with counts up to 400 threads
using Ne 100/1. This high-count fabric is one of its kind and of unmatched quality.
With rising demand for fancy items, NCL has also ventured into producing items like
slub yarn fabric and stretch fabric.
NCL now ranks among the first rate stretch fabric producers in the national and the
international markets.
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Now installing 200MW power plant, which gives electricity to WAPDA network worth
approx US$ 235 million, which will give, guaranteed substantial returns to the shareholders
Weaknesses
The absence of certain strengths may be viewed as a weakness. For example, each of
the following may be considered weaknesses:
Lack of Technological Development that affect the productivity and other activities in
Infrastructural Bottlenecks and Efficiency such as, Transaction Time at Ports and
transportation Time.
NCL has to pay Higher Indirect Taxes, Power and Interest Rates.
Opportunities
The external environmental analysis may reveal certain new opportunities for profit and
growth. Some examples of such opportunities include:
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Elimination of Quota Restriction leads to greater Market Development.
Increased Disposable Income and Purchasing Power of Customer opens New Market
Development.
Emerging Retail Industry and Malls provide huge opportunities for the Apparel,
Handicraft and other segments of the industry.
Threats
Changes in the external environmental also may present threats to the firm. Some
examples of such threats include:
Continuous Quality Improvement is need of the hour as there are different demand
patterns all over the world.
Threat for Traditional Market for Power loom and Handloom Products and forcing
them for product diversification.
Geographical Disadvantages.
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CENTRALIZATION AND DECENTRALISATION:
Centralization:
In a centralized organization, the decisions are made by top executives or on the basis of pre-
set policies. These decisions or policies are then enforced through several tiers of the
organization after gradually broadening the span of control until it reaches the bottom tier
Decentaralization:
The decision making system of NISHAT CHUNIAN LIMITED is in between the centralized
and decentralized. In past it was fully centralized but as time is passing and the organization is
expanding and getting larger day-by-day the decision making system is getting decentralized.
Right now some of its policies are made by only top management and in some lower
management is also included so the system is not purely centralized not decentralized.
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