AKRAH LEATHER

Executive summary
The entrepreneurial venture we are going to practice is to step in, in the leather business. This
venture will help to stand up on our own feet. World leather industry is huge and never
ever going to be closed down although could face ups and downs as the history of leather
products is as old as human beings are, and leather products are need more than a want of us, so
the scope of leather products could never die although it might face difficulties, which is the part
of business Pakistan is always considered as important player of this ground since after its
independence, Leather industries contribution towards exports is always essential part of the
exports share, but importantly for last 9 years there is marginal contribution in exports. This may
have some certain reasons important are the intense competition, new players like Bangladesh,
China, Turkeys strong position gained in last decay. Importantly electricity shortfall, raw
materials prices and very importantly War against Terrorism put negative effects on leather
industry. As said by, former chairman of Pakistan Tanners Association, Agha Saidain in a
presentation given to the Ministry of Commerce recently, It was pointed out that the livestock
sector was badly damaged in the war-affected areas of Fata, North Waziristan and Swat.
Transportation of hides and animal skins has completely stopped from the war-affected areas.
Despite low exports, the price of hide sand skins are showing an upward trend due to scarcity
created by the war on terror in the areas which were previously rich in livestock. The negative
perception of the country in the world community has adversely affected business and we
are getting 20 per cent less price for the same product manufactured in other countries. Price is
the only attraction to the buyers who have created fences against Pakistani goods. So it shows
that there are lots of problems in the industry but still is attractive one as history could repeat
itself, and we believe we can get something positive out of it. Statistics shows there are
considerable problems for last five years, as share of leather garments decreased from 2.39% to
2.16% in 2009/10 comparing with 2008/09. Same is the trend in other categories of leather
goods, leather tend declined by .27% and other leather products only leather gloves by .07%, the
same trend is in the first quarter of 2010 as trend of leather exports of leather sector, in terms of
monetary value as in 2009 was 744,40400$ and in 2010 is 614,69500$although this impression
may discourage for investment but we believe that opportunities arises is difficult conditions and
we all are ready to cash this opportunity by taking risk
Competition with in the market of Pakistan is not intense but facing difficulties as told by Agha
Saidan. Many Companies like Bata shifted their manufacturing operations in country like China
and Bangladesh where advantage of cheap labor is attractive. So with in the
geographic boundaries of Pakistan competition in manufacturing may not intense, but in selling
there is competition lies and we believe our business strategy of dealing customer according to
his demand could give us an edge, as we can say, We are the Leather Tailor. At the same time we
will focus on bulk quality productions for our business clients. We believe our two dimensional
strategy give us competitive edge over our competitors. We divided the market into two
segments one is local, our national market where we will focus on change of trends and needs
and wants and will supply according to that, national market may give essential share in respect

of Leather Shoes so mainly we decide to concentrate on shoes manufacturing for Pakistan

market, other categories like jackets, gloves will also there but we consider that we will focus
more on shoes manufacturing for local market. International market is attractive ones earnings
in dollar contribute a lot in ones pocket. We will contact our international clients through
websites and also planned to participate in exhibitions around the globe, although its is difficult
one and our limited resources may create hurdle but it is essential for business development to
have direct access to your clients, so Future plans are there for expansion with increasing our
products demand in market. Future Trend shows that there will be no shortage of raw materials
as demand and supply of our live stock will increase, and at the same time lather industry could
get the advantage by utilize this opportunity, at the same time market demand is gradually
increasing in international market specially and a bit in national market, Demand is there and we
are ready to supply. We are ready to run in the field of entrepreneur, ready to take the risk, not
ready to freeze our feet in the slavery of job.
AKRAH LEATHER
Name of business
Reflects Your Personality
Email
akrahleather@yahoo.comPhone No +92404220140
Business address
Thokar niaz beig Road
Vision
Become the Pakistans largest exporter of leather garments in 2020.
Mission
Provide customers satisfaction through quality products
Name of business principal
Rafi Ul Shan
Nature of business
It is manufacturing business of leather garments including jacket, ladies hand bags, key
chain,shoes, skirts, belts and wallet. We shall purchase finished leather from different suppliers
thenmake different products mentioned above according to the customers demand. At early stage
of business we will focus on jacket, skirts and handbags, with the passage of time we will
expandour product line. In other words we have defined wallet, belts and shoes as expansion
of business.
Identification of finance
First of all we have decided our capacity of units per month that is 350
pieces.I n i t i a l / f i x e d
c o s t R s
.
0 . 2
m i l l i o n O p e r a t i n g
c o s
t / e x p e n s e R s .
0 . 5
m i l l i o n R
e
s
e
r
v
e
R
s
.
0
.
5
m
i
l
l
i
o
n
Total investment Rs. 1.2 million
Report of confidence
Every person has his own perception about any business same case with me. According to
theindustry analysis and future trend in leather garments I recommend that leather goods are
themain source of Pakistan exports to boost up the economy. There is 4 to 5% of total export

fromleather. There was $1,088 million in 2004-05 from leather export so it is clear that it has
greatdemand and also a gap between demand and supply. It has more chances to grow as large
scaleas compare to other traditional business.Online shopping is increasing day by day so it is
necessary to sell our products online, sellingonline company can get potential buyers at lower
cost. Pay Pal has over 184 million accounts, soit is clear that online shopping preferences is
increasing day by day.
Industry analysis
There are about 350 leather garment manufacturing units in the organized sector in the
country.Total annual installed capacity of these units is estimated to be 15 Million leather
garments (of all kinds) per annum.
Business trend/ future need
Leather product is a fashion symbol for teenager and youth generation in the western world
likeUAS, Canada, Germany, France and Italy. Now in these days every business is
facing declinedue to the global crisis but in future it is predicted that the winter season period
is increasing ascompare to the summer. Leather products are treated as fashion symbol and to
protect the bodiesa g a i n s t c o l d . S o w e h a v e f o r e c a s t t h a t t h e f u t u r e n e e d / t r e n d
i s b r i g h t d u e t o t h e a b o v e t w o reasons.
Total Market Size
95% of the leather garments manufactured in the country are targeted towards exports. In2003,
an estimated 8 million pieces of leather garments were exported from the country.Local
consumption of leather garments is minimal and is estimated to be less than 90,000 pieces per
annum.
Target Customers
Export market is the primary market for a leather garment-manufacturing unit. In the
exportmarket, major customers include chain stores and major garment brands in Europe and
USA.Major customers of Pakistani leather garments are Germany, USA, United Kingdom, and
UAE& France. The business is done either directly to the buyers or through middlemen.
Competitors analysis
It is very important to analyze the competition environment of the industry in order to
competesuccessfully. It is good for strategy making to identify the strengths and weakness of
competitorsand try to differentiate itself from them.
AKRAH LEATHER
Our main focus to export our garments (goods) in western world, Indian garments products
areo u r r i v a l s b e c a u s e t h e y h a v e
h i g h m a r k e t s h a r e i n l e a t h e r g a r m e n t s . I n d i a n d e s i g n e r s a r e innovator in
garments. In our business customers are the main innovators and designer of
the products, they can customize their products through our website and can
send their order alongtheir own designs. We shall also target the South African
market where quality is not issue because they are price conscious. It means that we are
dealing two kind of customers as price andquality conscious.
Direct competitors
It includes the following local and international competitors. In Sahiwal there are
many smalland larger producers are competing our products as


Qamar tanneries Ltd.

Yousaf tanneries Ltd

Latif tanneries Ltd.We have international competition as

China

Bangladesh

India

Turkey
Indirect competitors
The rexion sheet makers are also main competitors in the national market and
internationalmarket.
Market segmentation
Market is divided into two major segments as

National market segmentation

International market segmentationBoth further divided into following

Individual/ single consumer

Business customersIndividual consumer are those who will purchase small amount of
items for their personal useand business customers cover all the wholesalers, retailers and
others business who will sell themto their customers.
Market/ industry forecast
L o c a l i n d u s t r y i s f a c i n g d i f f i c u l t t i m e s t o d a y. D u r i n g J u l y - N o v e m b e r
2 0 0 8 - 0 9 , t h e l e a t h e r exports of Pakistan faced a decline of 27 percent while
India, which exported 43 percent moreleather garments, witnessed 27 percent
increase in its leather exports during the same period.Indian government
is giving rebate to the exporter so it decreases the cost of
producers. Globalrecession is also another reason for decline in exports but now
government of Pakistan is alsothinking about rebates and tax relaxation to the exporters. So
it can boost our economy as well asleather industry particularly exporters.Basically demand is
divided into two parts as

Seasonal demand

365 days demandEvery business has its seasons for demand so leather products have
also seasonal demand. Itc o v e r s s o m e s t a t e s o f U S A . I n 3 6 5 d a ys d e m a n d a l l

t h o s e c o u n t r i e s w h e r e w i n t e r s e a s o n i s COMSATS Institute of Information

Technology Sahiwal
onger as compare to other so in these countries products is demanded always. (UK,
Canada &Russia etc)
Description of Venture
Product
We are dealing in leather garments including

Leather jacket

Ladies handbags

Leather shoes

Leather belts

Leather skirts

Leather wallet

Leather glovesMostly company will focus on global market including Canada, USA, Germany,
France, Italyand UK. Local demand is very small as compare to international market but
the leather shoesdemand is high.
Service
Company will give online sale services for its customers to access the global market.
Customerscan order through company website for customize their products. We are also giving
shippingfacility or service for the delivery of goods on behalf of customers.
Size of business
The business size of the AKRAH Leather is 15 employees including 5 partners. Following is
thedetails of the employees. It is small size of business having annual capacity of leather jackets
of 4200 having marketing department, finance, human resource, IT and operation department.
Wewill reinvest our net profitCOMSATS Institute of Information Technology Sahiwal
AKRAH LEATHER
COMSATS Institute of Information Technology
SahiwalJ
o
b
/
P
o
s
i
t
i
.
o
f
e
m
p
l
o
y
e
t
t
i
n
g
M
a
r
2
P
a
c
k
i
n
m
a
s
t
e
r
1
F
i
o
n
m
a
s
r
1
S
k
i
l
l
e
d
i
t
c
h
e
r
s
5
P
r
t
n
e
s
5
S
w

o
e

N
C
t

s
s
g
u

o
u
e
s

e
S

a
r
e

e
T
l

e
o
1

r
t

1
a

Production Plan
Manufacturing process
After receiving the finished leather from the supplier the following procedure is adopt by
theorganization.
Matching
Leather made from different skin/hides inherently varies in grain style for each other. In
thematching process the grain and color of leather are matched on per garments requirement.
This ismost critical part in the whole process and requires expertise of the matcher.
Cutting
After the matching, the cutter cuts different panels of a jacket with the help of the design
patternsand knives. The list of panels includes Front, Back, Collar, Sleeves, and Cuff etc.
Generally,design patterns made of cardboard are used in cutting process. In case
single type/designgarments are to be manufactured in large quantities, then press machines with
metal dyes canalso be used. Average wastage of leather in cutting process ranges between 15 to
25%. InPakistan, a cutter cuts 15 to 20 jackets per day per shift (shift 8 hours).
AKRAH LEATHER
Assembly
After the cutting process, fusing is added to different panels of the garment, as per
designrequirement. Fusing machines or irons are used for this purpose. Generally, half fusing is
doneon the end area where stitching is to done and full fusing is applied on front & back panel
for providing garment outlook. Fusing reduces stretch ability and adds stiffness to the
leather making it convenient for the stitchers to stitch. In this process, accessories are added and
rolledtogether for sending to the stitching section. Major accessories include lining (Cotton,
Viscose,and Satin), zippers (Metal, Nylon), padding, wadding, shoulder pads, buckles, buttons,
labels andthread.
Stitching
Next to assembly is the stitching of different panels of the garments by using sewing
machines.Two stitching methods, depending upon the quantity produced, are currently being
employed inthe industry.1. One stitcher one garment2. Chain process (Assembly Line)In the first
method, one stitcher stitches together all the panels of the garment. All the allied processes
(folding etc.) required during sticthing are also performed by one person. Dependingupon the
garment type & size, on an average, output per stitcher per shift is 1 to 2 garments. Thesecond
method is more efficient and average productivity level per stitcher in some cases rises between
4-8 garments per day. In the chain process, an assembly line is made in which eachstitcher is
assigned one specific process out of the total processes required for garmentmanufacturing.
Ultimately, the stitcher gets specialized by constantly performing one task resulting in production
efficiencies and better quality. In each assembly line, there are sevenstitchers who perform the
following sub-processes:

Folding


Lining Stitching

SleevesCOMSATS Institute of Information Technology Sahiwal

Back

Front

Pocket

Panel Joining
Finishing
Finishing is the last process in leather garments manufacturing. In the finishing
process, buttons/snaps are attached to the garment, extra thread and fibers are clipped off. After
this process garments passes through touching process, in which chipped off and out of
matchingleather grains are treated to give the garment a good look. The garment then moves to
ironingstage after which hangtags, price tickets, etc are attached. The final stage is the quality
check bythe quality inspectors. Their job is to check the conformance of the
manufactured garment to thecustomers specifications. The quality check is followed by the final
packing of the garment.
Physical plant
In our physical plant only one thing is included Building of hostel but this building is also
rented.Company operations require a building having 6 to 7 rooms. Details is given below

Raw Materials Store

Cutting and matching room

Stitching room

Fusing or finishing room

Packing room

Company office

Wash room
Utilities Requirements
COMSATS Institute of Information Technology Sahiwal
lectricity

Telephone

Water
Machinery and plant

Mostly Japanese stitching machinery is used in the leather industry. Although,

the Japanesemachinery is expensive but it has an established market share, because of the easy
and speedyavailability of spare parts and machine mechanics. Our building has 7 rooms having
road for transport that we can receive and deliver the goods easily.There are the following
machinery is required for the operations
Use machineries also available at reasonable price and good conditions.
Names and suppliers of raw materials
Recently we are dealing two main suppliers of finished leather in Karachi & Sialkot.
Finished leather suppliers

Sharafat Hussain (Karachi & Sialkot) 0322-7080748

Azlan Ali (Sialkot) 0346-7487823COMSATS Institute of Information Technology Sahiwal

AKRAH LEATHER
We will try to contact more suppliers to make the strong vendor relations.
Material provider
We are purchasing thread, buttons, size label, care label and zip from local supplier of Sahiwal.
SheikhAnjum is a material provider of leather product material including button, size label, and
care label, zipetc so it is very cost effective because in which transport is eliminated.
Operational Plan
Basically operation plan is mixture of following three activities as under,

Description of companys operation

Flow of order for goods

Technology utilizationSo let see each and every aspect of operation plan as under,
Description of companys operation
In our case we are performing overall our activities with respect of following functions

HRM department

Finance department

Operation department

Marketing department

IT department
Human Resource
We have categorized the functions of human resource into selected field as requirements

Recruitment & selection

Compensation

Training
Akrah Leather Business Plan
Ratings: (0)|Views: 7,110|Likes: 114
Published by friendfo
It is a complete business plan of leather garments in Pakistan environment. It is Entrepreneurship
Business Plan.
See more
AKRAH LEATHER
Use machineries also available at reasonable price and good conditions.
Names and suppliers of raw materials
Recently we are dealing two main suppliers of finished leather in Karachi & Sialkot.
Finished leather suppliers

Sharafat Hussain (Karachi & Sialkot) 0322-7080748

Azlan Ali (Sialkot) 0346-7487823COMSATS Institute of Information Technology Sahiwal

Name of machine No./amountO
v
e
r
l
o
c
k
M
a
c
h
i
n
e
1
S
t
i
t
c
h
i
n
g
M
a
c
h
i
n
e
6
I
r
o
n
r
e
g
u
l
a
r
1
C
u
t
t
e
r
s
7
Scissors
7F
a
c
t
o
r
y
T
a
b
l
e
s
7
S
c
a
l
e
5
I
n
c
h
t
a
p
e
5
S
h
o
w
c
a
s
e
1
Water cooler 5G
e
n
e
r
a
t
o
r
(
1
.
5
K
V
A
)
1
F
u
s
i
n
g
M
a
c
h
i
n
e
(
o
p
t
i
o
n
a
l
)
1
Total 47

AKRAH LEATHER
We will try to contact more suppliers to make the strong vendor relations.
Material provider
We are purchasing thread, buttons, size label, care label and zip from local supplier of Sahiwal.
SheikhAnjum is a material provider of leather product material including button, size label, and
care label, zipetc so it is very cost effective because in which transport is eliminated.
Operational Plan
Basically operation plan is mixture of following three activities as under,

Description of companys operation

Flow of order for goods

Technology utilizationSo let see each and every aspect of operation plan as under,
Description of companys operation

In our case we are performing overall our activities with respect of following functions

HRM department

Finance department

Operation department

Marketing department

IT department
Human Resource
We have categorized the functions of human resource into selected field as requirements

Recruitment & selection

Compensation

TrainingCOMSATS Institute of Information Technology Sahiwal

AKRAH LEATHER

Performance appraisal
Finance department
Finance department will perform all those functions according to the need
o f t h e b u s i n e s s including

Budgeting

Payrolls

Financing

Preparing statements

To issue the credit to other departments after documents

To put check and balance on capital

Operation department
Our operation activities are based on supply chain management system for our product, name
&number of suppliers which are concerned in our project and process of manufacturing as a
whole.The connection with customers is also a major function of our operation plan.
Here we make a proper direct to our suppliers as well as our customers. The overall activities
regarding productmanufacturing to supply toward customer is associated with this function.

To select the appropriate suppliers


To check the performance of current suppliers
Marketing department
It is very critical department of our business because production/manufacturing is not a big
task but it is very important how to reach the customers, so marketing department
will perform thefollowing functions.

Pricing

Promotion

AKRAH LEATHER

Distribution

Demand forecasting
IT department
We a r e a l s o g i v i n g o n l i n e s h o p p i n g s o i t i s n e c e s s a r y f o r u s t o f o c u s o n
t h e i n f o r m a t i o n technology as well as its importance. It will perform the following functions.

Update the website

Promotion through e-marketing and different website

Invoicing of bills

Make query

Customers & suppliers contact via emailWe will focus on information technology plan as
first preference because our customers canaccess throughout the world via internet,
so it is necessary for company to focus on internet marketing and its applications
Technology utilization
Technology is an essential part of every business similar case with leather products in every
steptechnology is used for different purpose like wear housing, leather dying, processing,
andtransport, stitching, cutting and packing. Now we have explained it in different processes
toknow its importance.
Leather tanning
Leather tanning consists of two meta-processes: wet blue production and finishing. The
former involves removing unwanted substances (salt, flesh, hair, and grease) from a rawhide,
trimmingit, treating it to impart the desired grain and stretch, and finally soaking it in a chrome
bath to prevent decomposition. Finishing involves splitting, shaving, re-tanning, and dying the
wet blue.Five clean technologies are considered here: two associated with dehairing and two
associatedwith chrome tanning.
High exhaustion:

Using special inputs and procedures to ensure that more of the chrome in the tanning
bathactually affixes to the hide and less ends up in waste streams.
Enzymes in the dehairing bath:
In this process biodegradable enzymes for lime and sodium sulfide are used to remove the hairs.
Precipitation of chrome:
By using alkalis to precipitate out the chrome in the tanning bath, then collecting the
resultantsludge and processing it with sulfuric acid to recover the chrome.
Recycling the dehairing bath:
AKRAH LEATHER
This simple technology requires only fixed investments in a holding tank, a pump, and a
filteringsystem to remove suspended solids (usually a simple wire mesh screen). Because the
chemicalinputs into the dehairing bath are relatively inexpensive, only minor cost savings
accompany theenvironmental benefits.
Recycling the chrome tanning bath:
These reusing contents of the tanning bath instead of discharging them into the sewer after
asingle use. Like recycling the dehairing bath, this simple technology requires only
fixedinvestments in a holding tank, a pump, and a simple filter. It can reduce chrome use by
up to20%.
Finishing of raw leather
In this process different technology is used to finalize the leather into good and colorful
shape. Itincludes pressing, cutting and dying.
Storing in manufacturing unit
To store the finished leather it is necessary that store room must be protected from
moisturizer,water and other chemical that can damage it.
Pattern
In which jackets pattern is made by board, basically design is made by this board that helps
thecutter to cut easily.
Cutting
In which different cutters are used to cut the leather into different parts according to the pattern.It
is a special kind of cutter that is used in leather cutting.
Stitching machine
After cutting the leather it is stitched by the stitchers with special machine shown below. It
isdifferent from ordinary sewing machine that is used in home.
Fusing or finishing
AKRAH LEATHER
After stitching the jacket button and extra thread is clipped off by the clip cutter then it is
movedto the ironing person where jacket is ironed that gives it some extra shining and soft
surface.
Packing
In which jacket is packed also tagged with company logo and stickers. To look nice it isdecorated
by well looking material.
Marketing Plan

Pricing
We have two type of customers individual and business, so different pricing strategy for both.We
are offering customize products for individual consumer so we will charge premium price but
business partner we will charge standard price that will exist in the market.
Value based price
According to the customization in products, customers can add new attributes and their
favoritedesign so we can charge value based price at every customize product.
Cost based price:
Its another pricing option for us in which certain percentage of profit is charged at cost. We
willcharge 20 percentage profits at any cost.
Distribution
We will focus on direct distribution through any courier/logistic company to
provide productsdelivery at given time.
Promotion
We will use different promotion tools for our customers asOnline marketing
AKRAH LEATHER
We are dealing online shopping so it is necessary to advertise our products on different
socialmedia sites like face book, tagged, my space and twitter so it is good promotion tool for
our products.
Showbiz magazine
Leather goods are fashion symbol for teenager in USA. We are focusing youth/teenagers
(wholike fashion) biker jacket, wallet, belts and gloves are our main products so we will promote
our products in showbiz /fashion magazine.
Product forecasts
As we have dived into segments we believe there will be increasing demand in leather shoes
category butleather jacket, gloves and other leather products may not have great demand in
the local market. On theother hand there is demand of Pakistani leather products other than shoes
is huge. We have flexibility inour operation to deal with flaunting demand in both market and
their demand
Controls
Organizational plan
Form of ownership
It is partnership among 5 members with equal investment, loss and profit. Every partner
will perform duties according to his specialize field.
Identification of partners or principal shareholders
We are five partners in this business with equal investment of Rs. 240000/
each.I . U s m a n A l i I I . S h a f i q U r R e h m a n I I I . I m r a n K h a n COMSA
TS Institute of Information Technology Sahiwal
AKRAH LEATHER
I V.H a m a yu n K h i c h i V . W a s e e m H a f e e z
Authority of principals
The principal authority is given to Mr. Usman Ali but he can not pay/ withdraw of money
withthe approval of Mr. Shafiq Ur Rehman. Both will deal in join account.

Management team background

All the members will perform their duties according to their specialization. Every
member hasknowledge of marketing, finance, accounting and human resource. But their duties
are accordingto specialization.
Roles and responsibilities of members of organization
1.
Mr. Usman Ali will deal in marketing department; he will perform all marketingactivities like
pricing, promotion, public relations and product forecast.
2.
Mr. Shafiq Ur Rehman will perform the human resource functions along Mr. ImranKhan.
Recruitment & selection, compensation, training and planning are the basicduties of them. Both
are responsible for labor availability and their duties.
3.
Mr. Hamayun Khichi will perform finance and accounting functions as costing, budget
allocation, making invoices and preparing financial statements.
4.
Mr. Waseem Hafeez will perform operational activities, he will keep maintain andrepair of
production plants and machinery and assist the labor at any problem.
Assessment of risk
Evaluate weaknesses of business

Shortage created in local market due to exports of raw and finished leather

Requirement of high working capital

High cost of electricityCOMSATS Institute of Information Technology Sahiwal

AKRAH LEATHER

Economies of scale is a important factor, as most of units in Pakistan have smallcapacity, which
means higher cost, and this results in decreasing competitivenessin the international markets.

Wastage due to unskilled labor

New technologies
New technology has great impact on every business same case with leather in
which tanning process might be more affected by any new innovation. Our operation might be
influenced(cutting, stitching and finishing) by new technology. Innovation in internet or online
shoppingcan also change in website transaction process so it is necessary for our IT department
to make a plan for future how should adopt these changes when it happens.
Contingency plans
We planned that in case of failure we will go for two options1-selling out the whole
infrastructure, as there are firms who might interested in investment and their this purpose could
help us in order of exit from this situation.2-selling machines and other equipments less then
market price, the reason is to exit from the business asearly as possible to save
our time.Importantly we will do short term agreements in order of rental building and will do

short term contractwith labor.In case of failure our step might help us to exit as early as possible
and save our coast of time.