The Business | EDITOWRednesIdaAy , FebL ruary 190, 26020 Is ChenOne, parent company Chief Editor about to make a comeback? Part I Irfan Athar Qazi , the retailer’s parent conglomerate, appears to be in the process of securing a restructuring E-mail: [email protected] agreement with its lenders. But will it be enough to revive the flagging chain and its export operation? BY HASSAN NAQVI vation and growth It is hard to think of it Shahkot in Nankana Sahib district. The than doubled its revenue, ending financial [email protected] this way now, but Chenab was once one of spinning unit is located in Toba Tek Singh. year 2007 with Rs8,161 million in revenue, n some ways, the story of Chenab ’s most innovative textile compa - “We [initially] produced textile goods for which represents an average annual growth Group, the textile manufacturing con - nies. When it opened its flagship store for the local market. In 1985, we initiated ex - rate of 15.7 percent. That growth, however, Tijarat House, 14-Davis Road, Lahore glomerate that is also the parent com - ChenOne in Lahore in 1998, that was the porting goods started from the Far East was fueled largely by debt. 0423-6312280, 6312480, 6312429, 6312462 panIy of the retail brand ChenOne, is not first time that Pakistani consumers had the from where we moved to Europe and then In 2001, the company had just under unique. Like many of Pakistan’s upper mid - opportunity to shop for home at a USA and we exported goods to around 42 Rs700 million in long-term debt. By 2007, Cell # 0321-4598258 dle-market companies – the ones just on the store that was more than just a glorified countries,” said Mian Kashif Ashfaq, CEO that number had ballooned to Rs3,322 mil - cusp of being large but not quite – Chenab warehouse: it showcased the company’s of ChenOne, and part of the second genera - lion, a nearly five times increase. tried to grow too fast with too much debt products on actual furniture and in settings tion of the family to enter the business. Yet cash flows were not keeping pace: during the easy money era of the Musharraf that allowed customers to visualise what It was the entry of that second genera - Chenab Ltd’s net income in 2007 was just 1st Floor Ahmed Plaza near Zong Office years, and crashed hard after the financial they would look like in their own homes, tion into the business that catalyzed some Rs75 million, even less than the Rs131 crisis of 2008, and has yet to recover since. creating the first aspirational home brand of the most innovative changes in the way million it earned in 2001. Yet the group Susan Road, , Ph: 041-8555582 Yet unlike some of the other financial car - in Pakistan, similar to companies like Bed the group does business. “In 1997, I joined kept expanding, particularly its retail chain, casses of the 2008 crash, the owners of Bath & Beyond in the United States. as a director and we established the first which opened up more stores throughout Chenab have continued to try to revive their The Chenab Group itself started off in store of ChenOne,” Kashif said. The retail urban Pakistan, particularly in the smaller ISLAMABAD / RAWALPINDI business. 1975, when Mian Muhammad Latif and his chain currently has 48 stores, including metropolitan areas of Punjab, where it took N-125 Circular Road, Ph: 051-5551654, And in recent weeks, some favourable three younger brothers decided to make the some overseas stores in the United Arab to developing not just its own stores, but 5532761, Cell # 0300-8567331 rulings in the ongoing bankruptcy pro - transition that many of Punjab’s large rural Emirates and one in Saudi Arabia. In addi - large shopping malls and complexes under ceedings for the company at the Lahore landholding families were making between tion to their core business, the group also the name ChenOne Tower. 3rd Floor Kehkashan Mall 172-I Block II PECHS High Court seem to indicate that it may be the 1950s and 1980s: moving their main owns some other smaller business, includ - The first ChenOne Tower opened in Opp Rehmania Masjid Main Tariq Road on track for a revival. Try out our new fea - source of wealth away from farming the ing CGI Ltd UAE, InterFab in Australia, 2005 in Multan, followed by another in Ph: 021-34524550, Cell # 0300-8251534 ture: Listen to the full article below The cotton – and other crops, such as sugar – Chenab Fibres Ltd, ChenSoft, Chenab Sargodha, which finally opened in 2009. group has submitted an ambitious revival and towards setting up the industrial units USA, ChenOne Worldwide, House of What is interesting is that ChenOne devel - plan to its creditors and many of them, led that would process and sell a finished Chenab and the ChenOne Foundation. oped its retail chain significantly before by Habib Bank, appear to be on board with good. Until it was shut down in 2017 as part of Ideas by . ChenOne started in giving the group one more try at reviving Mian Latif’s family was large landhold - the bankruptcy proceedings, Chenab Ltd 1997 and Gul Ahmed did not launch Ideas PSX and its fortunes, agreeing to a restructuring of ers in Toba Tek Singh, a district roughly derived about 70 percent of its revenue until 2003. its debts on relatively favourable terms, in halfway between Faisalabad and Multan. from home textiles – both its export busi - This despite the fact that even at its a bid to allow the company some financial In 1975, they set up Chenab Textile Indus - ness as well as through ChenOne stores lo - peak, Chenab Ltd was one third the size of bond yields breathing room to resuscitate and then tries, moving the family from growing cot - cally – and about 30 percent from apparel. Gul Ahmed in terms of revenue and thus The (PSX) index bottomed out grow its operations. Whether the plan will ton and ginning it towards spinning cotton Growth in the Musharraf years In 1999, had fewer resources to deploy in the cash- at 28,765 on August 16, 2019 and soared to 43,219 on Janu - work, however, depends not just on yarn and weaving it into cloth. when Gen Musharraf took power in a mili - intensive project of launching a retail chain ary 13, 2020. There were three factors that triggered the whether the banks will allow the company Over the years, the group diversified its tary coup, the Chenab Group was still a in Pakistan. The political connection Like market rally – falling 10-year bond yield, currency appreci - to restructure its balance sheet, but also activities and in April 1985, it created its lower middle-market business in terms of many wealthy landowning families in ation and current account deficit reduction, and political sta - whether its majority owners – Mian first corporate entity called the ‘Chenab size. Punjab that transitioned towards becom - bility. The first and foremost factor was bond yields. The Muhammad Latif and his family – have Fabrics and Processing Mills Ltd’. In And ChenOne at the time only had three ing industrialists, Mian Latif’s family has 10-year PIB yield in secondary market declined from 13.5 learned the right lessons from their mis - March 1991, it was converted into an un - stores, though its fourth store opened up in strong political connections. Mian Latif percent on August 21, 2019 to 12 percent on September 20, takes. In Chenab Group’s tale is the story listed public Ltd company. Thereafter, in Karachi that year. During the Musharraf has family members who have served in 2019 and bottomed out at 10.9 percent on December 12, of how even a relatively innovative, fast- 2000 the company’s name was changed to Administration, however, as the govern - elected office and are currently members 2019. The stock market rally started in September and con - growing company can lay the seeds of its its present name Chenab Ltd. Chenab – ment privatised the banks and encouraged of political parties. Mian Latif’s younger tinued till mid-January. Stocks valuation is based on future own demise if it tries to grow with too like many of the nation’s largest textile private sector lending, particularly for in - brother is Chaudhry Muhammad Ashfaq, cash flows discounted on 10Y yields. Lower the yield, much borrowed money. companies – is headquartered in the dustrial growth projects, the Chenab Group currently Central Vice President of the higher is the valuation. Intuitively, when bond yield comes And it is also the cautionary tale of how Nishatabad area of Faisalabad. The cloth- started expanding aggressively. For the fi - ruling Pakistan Tehreek-i-Insaf’s (PTI). down, institutions shift capital from bond to stock markets. a perfectly functional export-oriented busi - processing unit and stitching units are lo - nancial year ending June 30, 2001, Chenab Ashfaq is also a former member of the The short-term rates do not really matter for stock market ness can suddenly find itself debilitated cated at Nishatabad and the weaving units Ltd, the group’s main publicly listed com - National Assembly and a former member movement. This is evident from the fact that 3-12-month T- owing to a lack of financing once the banks are located at Sheikhupura Road, Kharian - pany, had revenues of Rs3,406 million. of the Punjab Assembly. Bills rates have largely remained unchanged in the past six decide to cut it off. The early years: inno - wala, in Sheikhupura district, and in Over the next six years, the company more To be continued months.The second factor was the stability in the currency market. PKR closed at 160.8 against USD on July 24, 2019. Ever since then, it has gradually appreciated to reach 154.5 on February 3, 2020. The current account deficit reduction continued in the pe - riod with a surplus during October 2019. Currency supply The reading list remained higher than demand in the interbank market and HAMID ZAMAN cluding those regulating SBP continued to buy from the market to offload its for - speech in Pakistan seems ward liabilities. The SBP foreign exchange reserves moved ast week, the for - uncannily similar to what up from $7.7 billion on September 27, 2019 to $11.9 billion mer PM Shahid Orwell portrays. Just look on January 24, 2020. Confidence in the external account Khaqan Abbasi who is rounded up and and currency stability boosted the stock market. The influx sugLgested that everyone in who is let go? of foreign portfolio investment in debt market cemented the parliament should read Beyond the current reali - currency stability in short- to medium terms. That has di - George Orwell’s book Ani - ties in the country, there is verted the flows in PKR assets. The option for institutional mal Farm. I think this is an also another issue here. investor is to select between bond and stock markets.With excellent idea. Mr Abbasi Somehow we are unwilling bond market yields falling, stock market becomes attractive suggested that he is willing to see big brothers any for investors. to buy some 200 copies of more. We aspire to become The third factor was the political stability. In October the book for his peers in countries where rights of 2019, rumours of Nawaz Sharif getting bail and leaving the the parliament. I really people are eroding — country started circulating. In November, he left for London wished that he actually had where public criticism of bought the books and dis - for medical treatment. In the past few months, many politi - the government is simply tributed them. Who knows, unacceptable. The big cal leaders in NAB custody have got relief. NAB's pressure someone might have actu - brothers are not just in on businessmen started easing as well. Markets hate uncer - ally read it. If he is unsure government, but also in tainty, with political rumour-mongering dying down, in - of whether this is a worth - large corporations. We are vestor confidence started building.Market pundits are while investment, I am equally blind to them. Our expecting year end (2020) index target of 47,000 to 52,000. happy to pitch in for a few current political leaders in Many analysts were expecting major gains to attain in the copies — I am sure many science and IT are smitten first half.In latest auction, SBP mopped Rs 58 billion others will do as well to by the Facebooks and against the target of Rs 100 billion. 10Y cutoff yields are up de-risk his investment. An - Googles of the world — by 10 bps. Therefore, chances of bond yields moving signif - imal Farm is a classic — ignoring the real issues of icantly up are less. Hence, stock market downside may be allegorically rich and pro - privacy, civil rights and limited. With oil and other commodity prices nose-diving in found in its impact. The ethics. Technology can be the aftermath of coronavirus outbreak, inflation could come book continues to be an remarkably empowering, down. Inflation is the key indicator to watch in months to endless source of meaning but without a sense of come, and movement of market is somehow linked to it. nearly 75 ethics, it can years after its take away publication in our most 1945. While I prized pos - do believe that sessions. many in the George Or - current gov - well reminds Fostering the culture of risk reduction ernment can us what hap - SARWAR BARI also discourage outsiders from working with their commu - volved in risk identification, drills and disaster prepared - benefit from pens in a nities directly. Over 27 years of my work with disaster- ness. Artists, singers, and poets can play an important role reading it, world where azards can be natural or manmade. But all disas - prone communities, I have faced resistance from local in sensitising the public about risks. A strict enforcement those who oc - such a deep ters are manmade as almost every disaster is a patrons. Some Indian scholars find a connection between of safety measures must be ensured, and a close coopera - cupied the fondness for result of repeated incongruities. Hence, risk cre - corruption and factional leaders as most local development tion between academia and policymakers must be high offices in big brother ation seems to be a bad culture and must be reversed by a takes place with their consent. The issue of ghost schools strengthened on disaster risk reduction (DRR). Mr Abbasi’s overtakes all H government were not en - values. culture of risk reduction. Consider this: a motorcycle is in Pakistan is an appropriate example here. So, what is to Above all, leaders of political parties must be motivated tirely angelic in their char - Reading Orwell is a riskier as it runs on two wheels. In order to reduce the be done? The PTI government has created a ray of hope to make DRR an integral part of manifestos. In short, acter either. Just take a good idea for yet another risk, wearing a helmet is mandatory by law. Yet, in Pak - through the new Punjab Village Panchayats and Neigh - spending a single rupee and minute on DRR will save look at who got to benefit reason. He talks about the istan, majority motorcyclists defy the law while authori - bourhood Councils Act 2019. Under Chapter II of the act, thousands of rupees and hours on recovery. Both, govern - from the previous govern - common person — the or - ties fail to enforce it. This fatalist attitude is also prevalent establishment of Common Assembly (CA) in each village ment bodies and NGOs, have been doing some of these ment contracts, and it does dinary citizen, one who across the classes and state officials. Therefore, one can and neighbourhood is mandatory. Every resident shall be activities. But most are inconsistent therefore, not impact - not take one long to see struggles and finds mean - conclude that as a nation, we are promoting a culture of its member and one-twentieth of the residents can call an ful. that some animals were ing in simple things of life, risk. extraordinary meeting of the CA while at least two meet - Recently, I presented Pattan’s case study in the Interna - more equal than others. and one who is often on the Pattan just completed a nationwide study on risk profil - ings shall be held in one calendar year. The CA could ask tional Forum on Telling Live Lessons from Disasters, I think reading Animal receiving end of manipula - ing, inclusive governance and enabling the environment “the government or local government in relation to any which was held to commemorate the 25th anniversary of Farm is a great idea — but tions by power. It is impor - for resilience building. We gathered the perspective of common need of the residents” through its chairperson. the Kobe earthquake. On January 17, 1995, an earthquake there is a book that is even tant to read him at this disaster-prone communities, local governments and CSOs. Though it is likely that most local patrons will capture the of 6.9 magnitude hit Kobe, killing more than 6,000, injur - more apt for the present time, when our ministers We will take the findings back to the communities for val - position of the chairperson of Panchayat councils and try ing 25,000 and displacing 300,000. It caused $132 billion time. It is by the same au - are more likely to appear in idation and then conduct action planning at the local level. to continue old practices, the law has created room for worth of damages. The Japanese called it the Great thor, titled 1984. While talk shows than in public The national report will also be shared with higher author - civil society to make local governance inclusive. More in - Hansin Earthquake. The President of Hyogo Earthquake Animal Farm was a story town halls, when they are ities, experts and media. The same exercise is being done clusive communities are highly cohesive, vocal, confident, Memorial, at the conference, said that without building a of poor governance, chaos more excited to take selfies in more than 50 countries. A global report will be pre - and resilient and less vulnerable to hazards and to the pow - culture of disaster, losses could not be reduced and this and corruption, 1984 has at movie awards than pared and used for advocacy. As far as the state of inclu - erful. Also, it is easy to instil transparency at the commu - could be achieved by keeping memories of disasters alive. been prophetic in capturing spend time with the brick - sive governance on disaster is concerned, most nity level because of close geographical and social Fifteen year ago, on October 8, a devastating earth - the reality of our time and layers in their constituency. respondents said — “not at all”. proximity. As mentioned, the [external] civil society must quake of 7.6 magnitude hit Pakistan’s northern areas and our state. In 1984, the idea Connecting with the com - Despite the continuity of civilian rule since 2008, pas - act as a catalyst to neutralise the unbridled power of local Kashmir, killing 90,000 people and leaving 3.5 million of a “Big Brother” is intro - mon person would do us sage of the 18th Amendment and establishment of local patrons and to unleash the potential of local communities, homeless due to the collapse of 780,000 buildings. Almost duced — one that should plenty of good. councils, citizens’ participation in public policy remains including those marginalised through exclusion and segre - 20,000 schoolchildren lost their lives due to faulty con - be all too familiar to every - In my heart of hearts, I an illusion. Most participants of the study blamed poor gation. We must not miss this opportunity. struction. Five years later, we were shaken by yet another one. Private lives of the cit - know that few, if any will governance, official corruption and political interference This should be the first step towards creating a culture disaster — widespread floods. According to the NDMA izens are regulated and read Orwell — not be - for their exclusion from consultative structures and in - of risk reduction. Broadly, “culture is the way of life of report, 20 million people were affected, while 1.3 million many people are actually cause his prose is hard, but volvement in disaster reduction planning and implementa - particular groups of people. It includes how group thinks, were rescued. The economic losses were equal to $43 bil - fine with this arrangement. because reading is not a tion, thereby confirming the assessments of a paper says and makes — its systems, attitudes and feelings. Cul - lion. For the next four years, Pakistan suffered from In 1984, people are forced priority. But I do hope that authored by Sirajul Haq, “Public Policy Process in Pak - ture is learned and transmitted from generation to genera - flooding during the monsoon season. While the country to give up their basic rights the parliamentarians read istan: Key Causes of Public Policies Failures”. He argues tion.” However, culture remains dynamic and fluid. It slowly recovered from naturally-trigged manmade disas - to a state that seems benev - something that makes that “massive corruption… lack of vision, poor monitor - could change with time and development. But our attitude ters, terrorism engulfed the nation. Despite, these repeated olent on the outside. Criti - them think, reflect and be - ing system, poor policy evaluations and centralized ap - towards risks has not. Most of us still ignore obvious risks jolts we could not develop a culture of risk reduction. cal thought by individuals come better. To quote proach in policy implementation and frequent political and hazards. The fatalist attitude — “risk will not harm Pattan has decided to commemorate the earthquake’s and criticism of the actions George Orwell — as he interventions as main causes of policy failure.” me” must be turned into — “I am vulnerable, hence must 15th anniversary by holding various events, involving of those in authority are writes about Charles Dick - Moreover, the centuries old client-patron model is still be aware of obvious and hidden risks”. Secondly, all civil society organisations, youth, journalists, academics, not just discouraged, they ens — “if men would be - fancied by the civil bureaucracy and appears to be the everyday disasters must be recorded; their accumulative artists and government institutions and political leader - are stamped out. You can have decently the world main factor of communities’ exclusion from public policy impact analysed and made public. Thirdly, in order to ship in a week-long ceremony. Please block the date and become an “unperson” if would be decent”. We debate and formulation. Sadly, mainstream political parties build risk sensitivity amongst the youth, textbooks should be ready to contribute to creating the culture of DRR in you are not in line. An need more decent men in rely on factional leaders (patrons) for vote catching. They contain the history of disasters and students must be in - Pakistan. analysis of recent laws, in - our parliament.