Mr. Muhammad Sarwar owner of the hira apparels, Mr.

Hassan and the Accountant Mr

zaman are discussing the current situation of the Pakistan economy. The textile sector
is very important for the Pakistan economy. Their business is related to the textile
industry which is also affected by the economic factors. Pakistan economy has been
heavily hitted by slow down and down turn prevailing globally and small and medium
size industries are badly affected due to it said Mr. sarwar. He also said that it is very
difficult to survive in this environment due to increasing trend in the cost of inputs,
loadshading and Deteriorating political, law and order situation in the Country.

Textile crisis is becoming severe in the Country due to over all recession and slow down
of economies around the globe. Our Textile sector is heavily export oriented and
International sales in Textile Markets suffered a lot as a consequence of which
manufacturer and traders who supply goods & services to exporters have suffered
heavy losses. Such provider of Good & Services to direct exporters are usually
operating at small or medium scale and they remains at the mercy of export houses.
Power loom sector is worst example of such a hard hit from direct exporters, majority of
which enjoys status of Corporate Entities. According to the norms of trade small scale
suppliers of grey fabrics provide woven fabrics to exporters with out any documented
arrangements enforceable at law. They work on “Kachee Parchi” system and have no
security regarding their debts with exporters.

Another reason is the higher rates of electricity in the country. Labour crises are also
becoming prominent due to all above reasons. For example a Factory previously
working 24 hours is operating only for 12 hours resulting in lower production. On the
other hand permanent & temporary labour costs remains the same. Daily wagers are
paid inspire of the shutdown due to power in order to retain them on the payroll.

Hira appreals was founded by Mr. Muhammad Ibrahim in the year 1990. Primarily run
by Mr. Muhammad sarwar; the elder son of Mr. Ibrahim, the hira appreals started its
operations on a small scale and having the capacity of knitting 20 bags of yarn per day.
Although the family was new to this business but with aid of experience gained by Mr.
sarwar, he realized that in order to reduce costs the production level has to be
increased since the fixed costs (Land cost, Salaries etc.) would be there in any way. So
in 1988 he decided to invest in a new ‘knitting machines having a capacity of 35 bags
per day.

Within a decade or so, the family remained in the same business, until 2003, a new iqra
stitching unit was founded under the umbrella of hira apperals. In the year 2007,
businesses were divided among the sons of Mr. Ibrahim and Mr. Sarwar became the
owner of these two factories; the hira apperals and Iqra stitching garments. Significant
developments were seen after that when Mr. Sarwar gained full control of the factory.
He even diversified into other business of dying , named ‘hira plant’. With continuously
increasing demands of garments, Mr. Sarwar invested in a new machinery imported
from Taiwan having the capacity of 50 bags per day , previously it was 35 bags. Now
Mr. Sarwar has been joined by his son Mr. hassan; who is young, ambitious and
qualified. Mr. hassan is continuously working on to see the improvements he may
implement for the betterment of his business. His vision is to firstly improve on the
processes, and quality.

Hira apparels functions in 2 units. The first one is “The knitting Unit” where scrap yarn
bags received and converted into the fabric. The second unit is stitching unit, where the
different garment products are made. The output of the first unit is reused in the second
unit. Other than the internally made garments, additional products are order to other
garment units, if required, to meet market demands.The accounting procedures of the
company are not very formalized. There is one person in charge of the whole finance
and accounting department. Mr. zaman, the accountant to the company handles
recording of all expenditures and revenues.

Mr. Sarwar the owner of hira apparels conducted business matters in the traditional
ways of the industry. Nothing from the sophisticated management theories were used
over the years. Mr. Sarwar used an intuitive approach where profitability was the main
aim. When Mr. hassan (son of Mr. sarwar) came back after completing higher education
from islamabad, he took over as new management. He had new ideas and new
approaches to run the business. He realized that in spite of profitable operations, hira
apparels was missing out on a lot of opportunities.

Mr. hassan aimed to realign the organization, to maximize gains from the available
prospects. His first task was to restructure the activities of the financial department. No
new employees were hired but Mr. zaman, the sole accountant of the company was
given new tasks.

Political factors

Law, govt agencies and pressure group that influence and limit various organizations
and individuals in a givn society are included in political factors. Recent political
changes will hopefully have negative effect on the economy during the next financial
year. And the exports of the country decrease due to poor police of govt. in this way the
foreign exchange earnings decreased as decrease in export. Already textile sector
suffer in crises if the govt could not make sound policies to encourage the export of the
country then this sector will destroy.

Economic factors
the hira ,s products are at maturity stage and have positive image in local and
international market. A present and future capacity of the products of hira apparels is
forcasted to be good because of the designs which are made, up to standards of new
generation. The economic environment consists of factors that affects consumer
purchasing power and spending pattern. In most of the international market the
consumption of hira,s product are considered best in quality. Changes in major
economic variables such as income, cost of living, interest rates and savings and
borrowing patterns have a large impact on the market place. The economic factors are
in favor of hira apparels.

Social factors

The culture and social environment is made up of institutions and other forces that
affect a society’s basic values, perceptions and preferences and behaviors. People
grow up in a particular society that shapes their basic beliefs and values. This is the
policy of hira apparels that the product for exports are designed according to the beliefs
and values of the international consumers. The products are made according to the
changing lifestyles and liing and disliking of the customers.

Technological factors

Hira apparels has good financial resources and in a position to install the latest
machinery and introduce latest technology in their production department. They have a
ability to designs new products after the introduction of new technologies in designing
and production department. Introduction of new technologies creates new markets and
opportunities for hira apparels. Companies that do not keep up with technological
changes soon will find their roducts out dated and they will miss new products and
market opportunities. Because of good financial resources hira apparels introduce new
technology in all its departments.