Final Project Report

On
MANAGEMENT
(SAPPHIRE)

Prepared By

MUNEEB SHAFQAT SYED (MMKT-IAS-32-R-F19)

AIMAN TAHIR BUTT (MMKT-IAS-28-R-F19)
M. HAMMAS (MMKT-IAS-48-R-F19)
IQRA JAFAR (MMKT-IAS-29-R-F19)
M.SEHZAD (MMKT-IAS-07-R-F19)
HASHIR AHMAD (MMKT-IAS-08-R-F19)

Supervised By
PROF. AISHA RIZWAN

PRINCIPLES OF MANAGEMENT
INSTITUTE OF ADMINISTRATIVE SCIENCES
PUNJAB UNIVERITY
LAHORE

18 FEB, 2020.
 MANAGEMENT (SAPPHIRE)

DEDICATION

Our Parents and Teachers all who’ve given us their support during the development of this project
and for giving good ideas to prove ourselves as intellectuals in front of our Respected Teachers.

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 MANAGEMENT (SAPPHIRE)

ACKNOWLEDGEMENT

Praise to Allah Almighty, Lord of the worlds, the Merciful and the Beneficent, who gave us
strength, thoughts and co-operative people to enable us to accomplish this goal and fulfill the
required functionalities.
This was all not possible without the guidance, continuous appreciation and moral support by
PROF. AISHA RIZWAN. She was always there whenever we need his help and ideas. We are
really thankful to her who made our concepts clearer.
At last, we would like to acknowledge all of the assistance and contributions of Institute of
administrative sciences (IAS) for supporting us with all that is needed starting from the books,
and ending with the full care that it is providing us with, to help us to be professionals in the field
of MANAGEMENT.

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 MANAGEMENT (SAPPHIRE)

DECLARATION

We hereby declare that we have developed this project and accompanied report entirely on the
basis of our personal efforts. Not any of the portions of the project work presented has been
submitted of any application for any other qualification or degree of this or any other university
or institute of learning.

Students Name & Signature

MUNEEB SHAFQAT _________________________

AIMAN TAHIR BUTT _________________________

M. HAMMAS _________________________

IQRA JAFAR _________________________

M.SEHZAD _________________________

HASHIR AHMAD ___________________________

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 CERTIFICATE OF APPROVAL

It is to certify that the first semester final project of MANAGAMENT (Sapphire) was
developed by MUNEEB SHAFQAT, AIMAN TAHIR BUTT, M. HAMMAS,
IQRA JAFAR, M. SEHZAD and HASHIR AHMAD under the supervision of
“PROF.AISHA RIZWAN” and that in her opinion, it is in scope, fully adequacy and
quality of the degree of “master in marketing.”

PROF.AISHA RIZWAN

____________________________

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 Table of Contents

SAPPHIRE TEXTILES MILLS LTD. ............................................................................... 8

WHY PAKISTAN: ......................................................................................................................... 1
SAPPHIRE AT A GLANCE: ......................................................................................................... 1
 Over 14,000 employees ............................................................................................... 1
 Annual turnover US $ 435 Million ............................................................................ 1
COMPANY HISTORY: ................................................................................................................. 1
OUR MISSION :............................................................................................................................. 2
OUR VISION: ................................................................................................................................ 2
OUR VALUES : ............................................................................................................................. 3
LIST OF GROUP COMPANIES: .................................................................................................. 4
AWARDS AND RECOGNITIONS: .............................................................................................. 5
OUR CUSTOMERS: ...................................................................................................................... 6
HUMAN RESOURCE MANAGEMENT SAPPHIRE: ................................................................. 7
MANAGEMENT ............................................................................................................................ 8
PLANNING .................................................................................................................................... 8
SWOT Analysis: ......................................................................................................................... 8
Strengths: ................................................................................................................................ 8
Weaknesses: ............................................................................................................................ 8
Opportunities: ......................................................................................................................... 9
Threats: ................................................................................................................................... 9
 Strengths of sapphire: ................................................................................................... 9
 Weaknesses of sapphire: ............................................................................................... 9
 Opportunity of sapphire: ............................................................................................... 9
 Threats of sapphire: ...................................................................................................... 9
ORGANIZING ............................................................................................................................... 9
Forms of organizational design:.................................................................................................. 9

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 Organizational Structure: .......................................................................................................... 10
Spinning Department: ............................................................................................................... 10
Weaving Department: ............................................................................................................... 11
Bleaching Department: ............................................................................................................. 11
Dying Department:.................................................................................................................... 11
Printing Department: ................................................................................................................. 11
Finishing Department: .............................................................................................................. 11
Knitting Department: ................................................................................................................ 11
Household Textiles: .................................................................................................................. 11
Purchase department: ................................................................................................................ 11
Sales Department: ..................................................................................................................... 11
Quality Control: ........................................................................................................................ 12
Finance department: .................................................................................................................. 12
Research and Devp . Dept. ........................................................................................................ 12
Marketing department: .............................................................................................................. 12
LEADING ..................................................................................................................................... 12
Leading Theories: ..................................................................................................................... 12
Path - Goal Theory with Democratic Style: .............................................................................. 13
CONTROLLING .......................................................................................................................... 13
Products: ................................................................................................................................... 14
 Yarn: ........................................................................................................................... 14
 Fabric: ......................................................................................................................... 14
 Bed Linen: .................................................................................................................. 14
 Curtains:...................................................................................................................... 14
 Women range:............................................................................................................. 15
 Men’s range: ............................................................................................................... 15
MARKETING: ............................................................................................................................. 15
Marketing Plan: ......................................................................................................................... 15
 NEW PRODUCT: ...................................................................................................... 15
 PRICE: ........................................................................................................................ 16
 PLACE: ...................................................................................................................... 16

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  PROMOTION: ........................................................................................................... 17
ADVERTISING:........................................................................................................................... 17
Customer Driven Marketing Strategy: ...................................................................................... 17
Segmentation: ....................................................................................................................... 17
Targeting: .............................................................................................................................. 17
 Concentrated marketing:............................................................................................. 17
 Differentiation: ........................................................................................................... 18
 Positioning: ................................................................................................................. 18
 Financial Positions:..................................................................................................... 18
FUTURE OUTLOOK:.................................................................................................................. 19

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SAPPHIRE TEXTILES MILLS LTD.

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 WHY PAKISTAN:
- Pakistan has one of the largest canal irrigation systems in the world.

- Fourth largest grower in the World.

- Textile accounts for over 60 % of the total exports.

- Most modern and organized textile production setup.

- More than 50 years history of accumulated textile know-how.

- Well-established infrastructure of textile management and skilled labor.

SAPPHIRE AT A GLANCE:

One of the largest manufacturers and exporters of textile products in Pakistan, Sapphire
technology comes from Europe, Japan and USA. Capitalizing on the region’s principal crop,
cotton, we source this locally, and augment our offerings by providing imported fiber from the
world’s best crops. We work with specialized fibers bringing in the newest innovations from
major fiber and chemical producers, and our manufacturing from yarn to finished fabric is
performed in our facilities in Pakistan. Synergies are formed with offshore garment
manufacturing companies. Our products are marketed to the industry's biggest names in Asia,
Europe, Australia, and North America.

 Over 14,000 employees

 Annual turnover US $ 435 Million

COMPANY HISTORY:

The flagship company of the Sapphire Group of companies, Sapphire Textile Mills Limited

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(PSX: SAPT) was incorporated as a public limited company in Pakistan in 1969. The company is
one of the leading players in the textile composite sector, enjoying more than 10 percent share in
the listed sector's sales. Its market capitalization is an impressive RS 14 billion. However, with
less than five percent of its shares in the market (the rest in the hands of the company and its
associates), the ticker makes a rare appearance on the exchange.

Sapphire Textile operates in three main segments - cotton yarn, fabric, and home textile products. The
firm's manufacturing units are located in Sindh and Punjab. It happens to be the parent company to a
number of subsidiaries, including Sapphire Wind Power Company Limited, Sapphire Retail, Sapphire
Tech (Pvt) Limited, Sapphire Solar (Private) Limited and, as of late, Tricon Boston Consulting Corporation
(Private) Limited. However, the company is selling off Sapphire Tech and Sapphire Solar, both of which
are not involved in any operations.

OUR MISSION :
To build flexible manufacturing capabilities in the textile industry to cater to the growing and
evolving global demands, keeping a lead position in our business, maintaining our values based
on good business and ethics, and at the same time contributing in the development of the
community in which we work and live in.

OUR VISION:
To be one of the premier textile company recognized for leadership in technology , flexibility,
responsiveness and quality.

Our customers will share in our success through innovative manufacturing, certifiable quality,
exceptional services and creative alliance. Structured to maintain a depth competence and
knowledge about our business, customers and our worldwide market.

Our workforce will be most efficient in industry through multiple skill learning, fostering the
learning and teamwork and security of safest work environment possible recognized as excellent
citizen in the local and regional community through our financial and human resource support
and our sensitivity to the environment.

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 OUR VALUES :

P eople

R elationship

I ntegrity

D iversity

E nvironment

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 LIST OF GROUP COMPANIES:

 Reliance Cotton Spinning Mills Limited

 Sapphire Textile Mills Limited
 Sapphire Electric Company Limited
 Sapphire Fibers Limited
 Sapphire Finishing Mills Limited
 Sapphire Dairies (private) Limited
 Sapphire Holding Limited
 SFL Limited
 Sapphire Power Generation Limited
 Amer Cotton Mills (private) Limited
 Amer Tex (private) Limited
 Creadore A/s
 Corus Power (private) Limited
 Crystal Enterprises (private) Limited
 Diamond Limited
 Diamond Fabrics Limited
 Galaxy Agencies (private) Limited
 Hermes Power (private) Limited
 Nadeem Enterprises (private) Limited
 Neelum Textile Mills Limited
 Sapphire Wind Power Company Limited
 Sapphire Agencies (private) Limited
 Sapphire Enterprises (private) Limited
 Reliance Textiles (private) Limited
 Sapphire Finishing Mills USA Inc.
 Salman Ismail (SMC-private) Limited
 STM Corporation (private) Limited
 SFL Corporation (private) Limited
 Sapphire International ApS
 Yousaf Agencies (private) Limited

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 AWARDS AND RECOGNITIONS:

Recognition Recognized Body

Certificate of Appreciation at 8th ANNUAL National Forum For Environment
ENVIRONMENT EXCELLENCE AWARDS 2011 & Health
ISO 14001:2004 on manufacturing and export of
Bureau Veritas Certification
Home textile Products
SA 8000:2008 on manufacturing and export of
Bureau Veritas Certification
Home textile Products
Certificate of Recognition for outstanding
American Apparel and Foot ware
achievement in Socially Responsible Business
Association
Practices June 2003
Certificate of Confidence in textiles tested for Textex AG, Swiss Textile Testing
harmful substances Institute
SA 8000 Social Accountability International
Fairtrade FLO-CERT GmbH
GOTS/OCS Global Organic Textile Standards
Organic Content Standard
ISO 9001 Quality Management System
Oeko-Tex Standard 100
Sedex (SMETA) Sedex Members Ethical Trade
Audit
BCI Better Cotton Initiative

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 OUR CUSTOMERS:

WOVENS & HOME TEXTILES

Brand Region
H&M Sweden
PVH USA
GAP USA
OLD NAVY USA
OXFORD USA
AMERICAN EAGLE USA
FEDERATED USA
LEE USA / EUROPE
ZARA EUROPE
MANGO EUROPE
LINDEX EUROPE
C&A EUROPE
CHAPS USA
MAVERIC EUROPE
HERO EUROPE
RANGLER EUROPE / USA
JCP USA
TOMMY HILFIGER USA
MUSTANG EUROPE
OFTEN EUROPE
PULL AND BEAR EUROPE
ANN TYLER USA
BEIRHOLMS EUROPE
VF USA / EUROPE
VF-USA HONG KONG
CK USA
UFD USA
SPRINGS USA
T.J.MAX UK
TOLRA SPAIN
CROTEX ITALY
APE USA
COHEN & CHAPMAN UK

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 HUMAN RESOURCE MANAGEMENT
SAPPHIRE:

HR management of sapphire diamond fabrics mainly consist of two main persons

They organize HR policies and code of conduct. They directly report to HOD (head of
department) and next HOD informs the directors.

They help their employees in every situation and exhibit “transformational leadership”

their workforce collaborate with each other and help each other in any problem, they do not
encourage dictatorship

Transformational leadership is a theory of leadership where a leader works with teams to

identify needed change, creating a vision to guide the change through inspiration, and executing
the change in tandem with committed members of a group

They build a team of workers for dairy farm (UHT-Plant)

They also provide training to their team based employees.

They provide their employees with incentives which are:

Compensation to their employees.

They provide appropriate payroll to their employees.

They provide 2 types of bonus to employees which are annual base & eid bonus (divided into
two parts)

Implement the policies for employees regarding compensation, payrolls and bonuses.

They provide their employees with medical insurance as well as life insurance.

Medical insurance is for employees and for their family members as well but life insurance is
only for employees.

Sapphire also focuses on women empowerment. They provide them (women) a chance
to prove themselves. They provide them with opportunities.

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The main training method of sapphire is “on the job training”

they enjoy the easy access and short transit times that let them give us the best possible
turnaround times. The Sapphire Group, they have the ability to maintain a large in-stock supply
of fabric. At Sapphire, they ensure quality and consistency through highly advanced Japanese
and European machinery.

They have production plants in S. I. T. E. Kotri, S. I. T. E. Nooriabad, Chunian, District

Kasur Feroze Watwan, Bhopattian, Lahore. and they exports DENIM as well.
They have varieties of dairy products and they also have UHT plant.

MANAGEMENT
Management of the group is professionally qualified and broadly experienced. The directors
have held top positions in various textile bodies, export committees

PLANNING
The company has an integrated business plan in the context of which it aims to improve,
modernize and develop all its operations in order to maintain and enhance its competitive
position on both the Pakistan and international markets.

SWOT Analysis:

Strengths: characteristics of the business or team that give it an advantage over others in the
industry.

Weaknesses: are characteristics that place the firm at a disadvantage relative to others.

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Opportunities: external chances to make greater sales or profits in the environment.

Threats: external elements in the environment that could cause trouble for the business.

 Strengths of sapphire:
 Strong Security System
 High quality product
 Latest mechanized machinery.
 Highly qualified and skilled management
 Adequate financial resources

 Weaknesses of sapphire:
 High cost of production
 Small international market share.
 Less promotional activities
 Lack of benefits and rewards for the employees.

 Opportunity of sapphire:
 Organization can expand product lines.
 Organization can capture new market segments around the world.
 Organization can reduce the cost by proper utilization of resources.
 Organization can hire more well-educated and experienced person.

 Threats of sapphire:
 New Entry of competitors.
 Buyer needs demands changes.
 Political instability.
 Changed of government policies.

ORGANIZING
It is the process of arranging the organizational structure to accomplish organizational goal.

Forms of organizational design:

 Work Specialization.
 Departmentalization

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  Chain of Command.
 Span of Control.
 Centralization & Decentralization
 Formalization.

Organizational Structure:
The formal arrangement of jobs within an organization.

Ginning Department:
The first mechanical process involved in the processing of cotton is ginning where lint (fiber) is
separated from seed cotton (phutti).

Spinning Department:
Spinning is an ancient textile art in which synthetic fibers are twisted together to form yarn.

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Weaving Department:
Weaving is a textile art in which two distinct sets of yarns or threads are interlaced to form a
fabric or cloth.

Bleaching Department:
1. Back bone of the processing unit.
2. Improves whiteness by removing:
 Natural coloration
 Remaining trace impurities from the cotton

Dying Department:
Dyeing is the process of adding color to textile products like fibers, yarns, and fabrics.

Printing Department:
The Printing department of STML is working at its best & producing really good stuff. After the
printing from the rotaries, the route of the fabric depends on the dye class.

Finishing Department:
 Significant and important department.
 Hub in the processing,
 Every fabric has to be passed through this department.

Knitting Department:
After weaving, the most prevalent method of fabric construction is knitting. Its popularity has
grown tremendously over the recent years.

Household Textiles:
These units, equipped with high speed stitching machines and an intensive labor force, are
capable of making all of the different product size and style requirements of each individual
country.

Purchase department:
 Decisions to purchase
 New Asset
 Raw Material
 Reduction in cost
 High Quality Inputs

Sales Department:
 Commitment and dedication of employee

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  Determination of work
 Best management system.

Quality Control:
 Computerized testing
 Strength of yarn
 Density of cloth
 Fastness of colors.
 Fully equipped labs
 Pre-inspection of goods at different stages

Finance department:
In this department preparation of the Income statements, Balance sheet, Trail balance ,Cash
flows ,Production report etc. This department is helpful for the management in making
production plan and taking financing decisions.

Research and Devp . Dept.

 Inventions of new methods of production
 Designs of textiles
 Continuous improvement in existing textiles

Marketing department:
These units do marketing of the products ,export business ,quality products ,better services
,efficient after sales services.

LEADING
The process of influencing a group is called leading.

Leading Theories:
 Trait Theories.
 Behavioral Theories.
 Contingency Theories.
 Contemporarily Theories.

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Path - Goal Theory with Democratic Style:
A leadership theory that says that the leader’s (manager’s) job is to assist followers (employees)
in attaining their goals by involving them into the decisions and provide direction or support
needed to ensure that their goals are compatible with the goals of a group or organization by
using the mode of feedback.

CONTROLLING
The process of monitoring, comparing & correcting the performance.

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Products:
 Bed Linen
 Curtain
 Fabric
 Yarn

 Yarn:
Specializes in medium-to-fine-count cotton yarns and is also capable of producing yarns using a
wide variety of synthetic fibers including polyester, rayon and other man-made fibers.

 Fabric:
Running meter fabrics, packed to specific requirement.

 Bed Linen:
Quilt covers ,duvet covers, flat and fitted sheets, pillow covers, valance sheets, bolster case with
all sorts of fancy confectioning, embroidery and embellishments, packed to buyers' specific
requirement.

 Curtains:
Ready made curtains lined, un-lined and taptop curtains, plain or fully accessorized with
tiebacks, pelmets, cushion covers, in different styles of confectioning and embroidery, packed to
buyers' specific requirement.

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  Women range:
In women range, True Values is currently providing different designs of shalwar and kameez of
new fashion.

 Men’s range:
Textile Mills presents one of the astonishing collections of Men's Wear that have been given a
touch of perfection by our skilled designers.

MARKETING:

Marketing is to create value for customer & build profitable relationship with customer in order
to capture value from customer.

Marketing Plan:
 Product
 Price
 Place
 Promotion

 NEW PRODUCT:
Anything that can be offered to a market for attention, acquisition, use or consumption that might
satisfy a want or need physically.

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  PRICE:
The amount of money charged for a product or service,or the sum of the values that customer
exchange for the benefits of having or using the products or services.

Pricing Strategies:

Market Penetration pricing: Setting a low price for a new product in order to attract a large
number of buyers and a large market share.

 PLACE:
A marketplace is a location where goods and services are exchanged.

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  PROMOTION:
Short term incentives to encourage the sale or purchase of a product.

ADVERTISING:
Advertising is a form of communication us to persuade an audience (viewers, readers or
listeners) to take some action with respect to products, ideas, or services.

 Television
 Internet
 Magazine

Customer Driven Marketing Strategy:

Segmentation: The act of dividing large, heterogeneous (dissimilar) markets into smaller,
homogeneous (similar) submarkets.

Targeting: to reveal the firm market-segment opportunities ,to evaluate the various segments
,segment size and growth ,segment structural attractiveness ,company objectives and resources.

 Concentrated marketing:
A firm goes after a large share of one or a few sub-markets.

 Selected segments
 Specific products
 Specific markets

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  Differentiation:
Our Products Are Different from Others in Colors durability ,No shrinkage ,100% pure cotton
,Computer designed ,Soft and durable ,Attractive ,

We guarantee that our products are made from the best QUALITY and comes with DIFFERENT
COLORS and LATEST DESIGNS.

 Positioning:
To arrange for a product to occupy a clear, distinctive and desirable image relative to competing
products in the minds of target consumers.

 Financial Positions:

On the domestic front, the company saw a reduction in sales of about 34 percent during FY19.
Nonetheless, the company managed to keep the revenues in the positive trajectory.

The leading business segments, fabric and yarn while witnessing an increase in exports lost
business on the local front. As for home textile, it managed to grow in both the export and
domestic market. Yarn export during FY19 increased by 44 percent while losing 56 percent in
the domestic market. Fabric grew about 50 percent in export simultaneously losing 70 percent in

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domestic markets. Home textile on the other hand, registered an increase in both export and
domestic sales recorded at 18 percent and 41 percent respectively.

Company accounts suggest some relieve on the cost side due to the rationalization of energy
prices for the export-oriented industry and attribute the increase in sales to currency devaluation
seen during the year under review. For these reasons, STML managed to improve its gross profit
margin to 16 percent compared to 12 percent in the corresponding period.

Despite peaked interest rates, following a 5.75 percent increase during FY19, the company
reported a 7 percent net profit margin as opposed to 6 percent in the previous year.

FUTURE OUTLOOK:
The situation for textile industry as a whole was critical during the past year, this is corroborated
by the fact that 200 mills shutdown operation during the past year as reported by All Pakistan
Textile Mills Association (APTMA), yet Sapphire managed to not only witness jacked revenues
but also a healthy increase in margin. Keeping in mind, that dynamics for FY20 on policy level
may be different, the company will be impacted differently as well. By and large, keys factors
going forward will be the direction of currency, energy costs, raw-material costs and finance
costs.

Erratic movement from interest rates in either direction seems unlikely for the ongoing fiscal
year. Incase interest rates remain sticky or picks up further, it will weigh heavily on the bottom
line of the company as the company is highly leveraged-common among the industry.

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Raw material prices are not expected to drop either as local cotton crop yield is expected to see
reduction. However, domestic cotton prices are to be dictated by both international and domestic
forces. Impediments in supply, domestic demand patterns and international cotton indexes.

The currency so far in FY20 has remained largely stable. If this persists the company may not
see a massive growth in revenue, as it did during FY19. In this case, increasing revenues for the
next year will either stem from a price increment, given it is transferred to the customer, and
volumetric growth in sales. The focus of the company should be on volumetric growth, as price
increase may not be transferable at a time when competition is cut throat.

However this can also result in inventories piling up with weak demand in the mix-a right
balance is the best bet here.

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