Industrial Growth Of Pakistan By The Monnoo Family Business Essay

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Introduction & Background

The Monnoo Family is a traditional name in Pakistan that has been the story of success for the industrial growth of the country. A name that unique stands out as the pioneer industrial family that has played a significant role in the growth of the economy.

The growth of the Group down through the decades has played a positive role in dominating the local industry and providing a secure future for its employees. The transformations brought about in the local industries by the Monnoo Group have made them pioneers in the technological and customer oriented business conglomerates.

The Group now owns 12 Textile units, a Sugar Mill, Agricultural Farms and extensive research units catering to various agricultural products. As innovators in their fields, the Group has kept pace with the latest state of the art technologies, through which the Group now produces superior international quality products for clients worldwide. The Monnoo Group has developed with remarkable speed from a traditional, family owned textile company into a modern high-tech industrial and agricultural conglomerate. The core business of Monnoo Group is international product recognition in Textiles (Yarns, Ecru yarn, Fancy/Novelty yarns, Melange Yarns and sewing threads) and in Agriculture products (Sugar, Tissue Culture, Orchards and Farms).With outstanding growth and development in yarns and bringing about innovations in fancy yarns, they have one of the most sophisticated and modern mills in Pakistan.

After Partition, their acquisition of a rubber factory was traded for an old textile mill, installed with a total of 2400 spindles. By the year 1965 the group had a total number of 5 textile mills. During the troubled time of partition of the sub-continent, the Monnoo family shifted to East Pakistan and later on set up five Spinning mill operations, 3 in west Pakistan and 2- in east Pakistan.

A number of companies associated with the group are serving the country since its inception and are indeed amongst the pioneers of the spinning industry in Pakistan. Beginning with one spinning mill to 12 spinning mills consisting of more than 200,000 spindles with over 8000 employees. Most of the companies associated with the group are leaders in the areas of their activity, and have been ISO Certified.


We have built our reputation on quality, Flexibility, service, and integrity. Our real strength is personalized service in an expeditious manner. We continue to invest in the most modern equipment available so that we can manufacture a high quality product for our customers. We can design and develop various yarns for customers, and can supply small quantities as well as large quantities of our product. The mission statement of Monnoo Group is to be recognized as the premier fancy yarn supplier to the markets we serve by providing quality yarns while constantly focusing on our customer's expectation and maintaining a competitive position within the world of textile.

We recognize, utilize and develop the unique talents of each employee, while manufacturing the highest quality textile products. However, we have highly qualified amid professional staffs who are experts in their field. Our mission will be accomplished through excellence in customer service, sales and manufacturing supported by the teamwork of all associates. We will continue our tradition, established in 1940, of honesty, fairness and integrity in relationships with our customers, vendors and community.

Corporate Quality Policy/Assurance

Committed to assure a system to consistent quality at all levels of procurement, production, and marketing management according to specification and requirement of the buyers. Therefore, at Monnoo Group, we are dedicated to providing world-class quality products and service to achieve an exceptional level of customer satisfaction. We are working to continually improve all our products and services though total associate involvement. We all are committed to developing and strengthening good business relation with our external and internal customers and suppliers. We will continue to provide innovative, high quality products and services to enhance our customers' long-term growth by understanding their requirements and anticipating their future needs. Diversity, quality, value and services are the watchwords for every successful textile business today.

For Monnoo Group, these are not just slogans, but represent the core of how we conduct our business. To maintain our competitive edge as well as to meet the needs of a constantly evolving market dictated by current trends and specific demands, we are accredited to a number of quality assurance institutions and vendors e g Lycra Assured, Tencel Registration, Lenzing, APTMA etc. Therefore, our yarns are in products that carry the label of Ralph Lauren Polo, C.K, J.C. Penney, Tommy Hilfiger, and others reputed garment manufacturer. We have excelled with a customer base that is quality and performance oriented.

Corporate Philosophy

The essentials pillars of Product Quality, Innovation, Technological advancements, Customer satisfaction and above all Timely Delivery have been an motivating force behind our corporate philosophy. Maintaining a strong R&D background at our mills and a pleasant working environment that caters to the needs of our management and workers, a sense of commitment to our environment and to our workers is expressed. With services lauding the benefits of growth amongst our staff and maintaining a strong essence of nature preservation, Monnoo Group has brought about a new experience into the local market never kept before.

These pillars support our overall business philosophy and over the years, have enabled our company to grow and prosper as we develop our leadership qualities in the textile community. Ensuring that we are always a step ahead of competition in terms of product quality and innovation. Monnoo Group is ready as ever to continue our commitment of adapting to the growing needs of every customer with the highest level of technical and product array support available to assure that all needs and expectations are consistently met. Investing in the latest high-tech equipment and facilities as well as implement the strictest quality control procedures that meet international standards in the textile industry is strongly applied at Monnoo Group.

To implement an aggressive market-penetration strategy, we are continuously expanding our sphere of operations in the local and international marketplace. We have already gained a strong foothold in Asia, Middle East, North America and the Far East.


Monnoo Group of Industries a symbol of progress of Pakistan textile spinning industries. We are one of the early birds who achieved ISO 9000 certification in Pakistan with aim of striving for TQM. Commitment of the top management has played vital role in developing, implementing the quality management system.

We are working on SA 8000 social accountability and ISO 14000 environmental management systems.


We the Monnoo Group is committed to assure a system of consistent quality at all levels of Procurement, Production and Marketing managemen in order to meet the buyers specification and Requirements. Our quality policy is supported by department wise measurable quality objectives and it is ensured that customer requirements are determined and met with the aim of enhancing customer satisfaction. In addition to that, control of documentation has been established and maintained to provide evidence of conformity to customer requirement and of the effective operation of the quality management system. Management representative conducts management review meeting on regular basis for the improvement of the effectiveness of the quality management system and its processes and ensuring

1: The availability of resources

2: Customer feed back including Customer complaints and improvement of product related to customer requirements.

3: Use of Statistical Techniques like Fishbone diagrams to identify the root cause of the problems.

4: The effective implementation of the corrective or preventive action, follow up actions especially from previous management review. &

5: Process performance and Product conformity

Being a Quality Management System company, we are committed to strive for continuous improvement in every thing we do. We have developed a Customer Satisfaction Survey, this survey is one of out source for providing us with your highly valued feedback, improvement required to sustain this continuous improvement process. Customer Satisfaction Survey is available On-Line. If you have any complaints you can fill up the form and you will be contacted immediately.



Market reputation.

The customers of the Margalla's yarn product are widely manufacturer of hosiery, garments, weaving units and buying houses. The product is differentiated for various segments which are superior to the competitors and vital to the customers. The production department can attain the intention of reliability with cost effectiveness according to the desirability of the customers within delivery times.


The machinery of the company having the capacity to meet its production level according to the market's demand. The company has the comprehensive maintenance schedule, so that there is no time for machine to stand able. The machines do not cause any quality control problem.

The organization is using the latest machinery and current technology for the purpose of efficient production. They have imported machinery and equipments from Japan, Russia and china.


The company is well known in the market area for its quality products. The management is aware that how to produce quality in the products to satisfy customer's needs and specification.

Product Differentiation.

The company introduced new range of mélange yarn by the brand name of palette, the company also engaged in the production of Chain Yarn, Cotton Mercerized Yarn, Slub Core Spun Yarn, Singed Yarn, Covered Yarn, Neppy Yarn, Plied Yarn, Core Spun Yarn, Double Slub Yarn, Cone Dying Yarn, Cotton Yarn dyed yarn, and fancy yarn to meets its customer's specification.


The organization has its own power plant to produce energy for the utilization during production to decrease the breakup time.


Margalla textile mills have a residential colony for the families of their employees. Most of the employees are belongs from out side the city, so they provides them house for their residence because of this their employees more loyal with the organization.


Financial Resources













Gross Profit/Sales * 100







Net Profit After Tax/Net Sales *100







Net Sales / Total Assets







Total Debt / Total Debt + Total Share Holder Equity







Current Assets/Current liabilities







Current Assets-Inventory-Prepared Exp/Current Liabilities








As the above ratio gross profit margin shows that company is not able to make its gross profit more. Cost of goods is very high which results in low gross profit .only in 2006 gross profit is good.


as the above ratio net profit margin shows the negative results which means company is generating only loss. This loss is because of the increase in the cost of inputs like raw, material, energy, labor and finance cost.


This ratio tells whether or not company is making enough use of the money tied up in the business. As above ratio from 2004 to 2006 is good because it shows that company is generating one and half of the capital employed but the problem is that company also facing high cost.


This ratio shows how much of business is being funded by the owners and how much of the business is being funded by borrowed money. The debt ratio is high in company's financial position which is not a good sign because fixed interest payments that must be paid regardless of the company profit level.


This ratio shows the relation between the current asset and current liabilities. This ratio is good at 2004 but its going decrease in 2005 and vice versa which is not good sign. Anyhow this ratio is satisfactory because current assets are able to meet the current liabilities.


The liquidity ratio shows the proportion of funds that can easily be turned into cash to pay the current liabilities. This ratio is good in all years except in 2008.


There is no trainings program offered to enhance the productivity of their technical staff. There is lack of skilled people and direct force in the region. The employee's turnover rate is high due to various circumstances mainly late payments for salaries.


The market of textile is changing day by day and the management of the company could not cope with these current changes of recession and inflation. If we took the management over another organization so we could not use the existing managers.

Management stated here all the departments like Finance, Marketing , Human Resource.


The employees are not feeling safe in their jobs so that they are not participating actively in the company. They are not able to remove automatically remove any litter they find.


The company is effected by financial position so the management could not pay the salaries amount to the employees in time , To earn money may be a prime motivator for many but there is relative importance of social contact, belonging to a group, feeling valued and needed, and obtaining recognition. The employees feel lack motivation simply because of the huge communication gap between them and the management and due to the lack of concentration of the top management to them.


One of the major weaknesses as in a majority of the companies is the lack of co-ordination between the management and the worker. In short there is a weak point in their Human Resource management. Workers feel that they are being exploited and are not given the remuneration that they deserve.


The organization has imported the latest technology but not prepare the people to use the technology by the same time. Because of this the organization faces the hidden cost.


In any organization team work plays a vital role to enhance the production level. In Margalla textile mills there is no such kind of team work so there is misunderstanding between employees.


In the Margalla textile mills there is lack of co-ordination between the different departments which can be a barrier to achieve the organizational objectives.



New technology is available in the international market to meet flexible production level with cost effectiveness; the company can install those machineries and techniques to reduce cost and to improve the product quality.


The market which serves by the company is large. The competition is there in the market so there is barrier for new entrants because it required a great deal of capital. But Pakistan's textile products are well known in the international market.


Trade on World Wide Web is another opportunity for the industry. It allows the manufacturer to make available their products on the internet so that the cost ultimately decreased.

Change in environment

Change in the environment of the industry could be a favorable act for its survival. Change in environment means change in technology and the change in policies which are imposed by the Government.


The Pakistan is cultivating the cotton at vast level and suitable land for cotton cultivation. So the raw material is available within the country at enormous quantity.


In the international market Pakistan is known as a famous country in the textile industry which is producing a large number of textile products.

Kohinoor textile mills can expand their market to Switzerland Japan Italy and Canada.


The organization can improve their Research and development department to introduce new and latest design in the international market to compete with others.


There is continuous improvement in technology is going on through out the world, so Kohinoor textile mills can import new machinery & technology and can train their people to enhance their productivity level.


As the world is now globalizes then the new opportunities are also increased in textile industry. So Kohinoor can offer its product globally.


Advanced computer and information technology, telecommunication, data bases represents the efficient and effective medium for identifying and evaluating opportunities .There is an opportunity for Kohinoor textile mills to use market in technology and achieve more efficiency in productivity and more effectiveness in future as the technology is getting modern and more automated with the passage of time.



The textile industry is declining in employment terms, rising inflation, increasing imports, and the variation in the exchange rates in the country. So the industry is threatened by unstable economy.

Pakistan is also exaggerated from the economic recession in the current phenomenon, which affects about all the international and multinational organizations and the textile sector is affected by this economic recession and the exports of textile goods declined.


New political decisions about textile industry are not supportive because there is no subsidy is granted to the industry and the current scenario of inflation and economy recession is destructive for the textile industry. On the other side if there is change in the political circumstances in any country it would affected the quota's and MoU's as well.

The government is unwilling to provide further subsidies to the textile industry. The government is of the view that the textile industry has been 'pampered" enough and that they have provided the desired amount of incentives and concessions. They think that it is about time the industry resolve its own issues and bring about significant changes to ensure the sustenance and progress of the industry.

Interest Rates

The Interest rates in Bangladesh, India and China are comparatively low than in Pakistan. As in Bangladesh the rates are 8.5 to 9.0% , 5.25% in India (market rate is 10.25% , however exemption of 5 % is provided to the textile industry) and 5.58 % in China. Meanwhile, in Pakistan, the interest rates to have risen more than 150 percent, to 13.25 percent in last three to four years. The increase in interest rates has essentially crippled the small time textiles owner, while seriously hindering the growth of the textile tycoons which led to textile owners accusing the government and banks for maintaining detrimental policies. I believe that the actions from the new government that have a positive impact on the industry, as the textile provides employment to approx 38 % of our working class. A coherent plan should be devised by the Pakistani government that allows some sort of exemption/concession such as in India; the Export-Import Bank was set up for the purpose of financing and facilitating the industries, especially textile.

Electricity Shortage

The one of important problem that negatively affects the textile Industry of Pakistan is the non-guaranteed supply of power by WAPDA, due to which textile industry suffered heavy financial losses. Because of the the inconsistent electricity supplies, the production affects a lot, which resulted that industry could not meet its target for the quarter of Dec, Jan, and Feb, and the massive financial losses were borne by the textile owners, its also hit most vulnerable to the workers daily wages.

Inorder to cut cost, some textile units have built their own energy generating plants which runs on gas, but small units production depends entirely on the electricity supply of WAPDA.


The price of raw material is rising simultaneously so that the input cost is getting higher and due to the competition in the international market the prices of textile good is reduced by using new technologies in producing goods.


Good days in textile business are over. After the end of textile quotas the prices in the international market have come down, whereas in Pakistan with the increase in export refinancing rates during the year besides persistent rise in the raw cotton rates in local market cost of production has considerably increased, making our exports costlier than competing countries like China and India.


The best quality raw cotton export to rival countries at the cheapest rates has posed threat to the value-added industry of the country. Exporters and manufacturers from value-added industry expressed serious concern over export of top quality raw cotton especially to those countries that are competitors like India, would badly hit the biggest foreign earning industry of the country.


Terrorism is another immense threat for the export division as textile industry has approximately more than 68 % share of the total export of the country.


Due to the Lack of Research and Development in Cotton Sector of Pakistan, it resulted low quality of Cotton production and to low profitability,therefore farmers are shifting to other cash crops such as sugarcane, where the profitability is high.. Comparing the last year, the cotton area of Punjab alone sown less by 1.14 percent this season and because of the decreasing production of cotton every year, the textile owners argues about the ambitious Cotton Vision 2015 target of 20 million bales.

This is because of non existence of R&D in Textile Industry of Pakistan, which gives international competitors gaining more market share.


For the growth of an organization in any industry,the infrastructure plays an important role .Infrastructure facility like roads, power etc are not adequate in Pakistan due this lack of insufficient infrastructure cost incurring on there products is relatively high and there is a hindrance for proper and regular delivery in the market.