June 7, 2002	Friday	Rabi-ul-Awwal 25,1423

KARACHI, June 6: The mounting tension on Pak-India border has not affected the business of leading consumer product giants which continue to show steady growth.

Foreigners, working at key posts in multinationals like Lever Brothers and Procter and Gamble, are still here and “there is business as usual these days.”

The investment plans of these consumer product giants remain intact. Except for Colgate Palmolive Pakistan Limited (CPPL), which has increased its inventory coverage by one month — otherwise there is no such plans to raise imported raw material inventories by other MNCs in the wake of Pak-India stand-off.

A survey was conducted by Dawn to find out the impact of war fear between the two arch-rivals and its impact on the sales, future investment plans, departure of expatriates and inventory stocks of leading household producers.

It was found that sales of only one of the leading producers have declined considerably in border areas.

“Our sales in border areas have been affected following the rising tension between Pakistan and India,” Amar Naseer, Company Secretary, Lever Brothers Pakistan Limited (LBPL), told Dawn.

He said there has been varying degree of uncertainty in the economic and political environment since September 11 incidents in the USA. In spite of this, he said, “our business continues to show steady growth and the business persists to drive down costs rigorously,” he added.

Answering a question whether expatriates in Lever have left Pakistan, he, however, did not give the exact number of foreigners working in the company, saying, “the expatriates in our organization hold significant business responsibilities and remain committed.”

On investment plans, Amar said the company will continue to invest in Pakistan in line with our business plans. “Our investment is mainly in our people, our brands and our supply chain infrastructure,” he added.

On stocks of raw material, he said the company continues to manage inventories as per business requirements. “We manage our business proactively by taking relevant measures for resolving emergent situations. We keep a balance between immediate short-term actions and long-term commitment,” he said.

Lever posted 48 per cent growth in pre-tax profit to Rs717 million in January-March 2002, from Rs484 million in the corresponding period of the previous year. With effective tax rate maintained at 38 per cent, the after tax profit increased to Rs442 million, from Rs301 million.

Net sales for the Jan-Mar 2002 period amounted to Rs5,289 million, reflecting 6.7 per cent growth over sales amounting to Rs4,959 million in the similar quarter of 2001.

A senior executive in Colgate Palmolive Pakistan Ltd (CPPL) said the company’s inventory coverage for imported raw material, which is currently four months, has been enhanced to five months from the current month under the on-going situation. The official said that this measure to build up inventories is being taken to avert any shipping line disturbance in case a war breaks out. He said same step to enhance imported raw material stocks was taken after September 11.

However, there has been virtually no change in business activities and markets response after May 8 blast and India- Pakistan tension. “Our second quarter is typically more buoyant and because of this the demand has not slackened,” he said.

The recently released accounts of Colgate for the nine months (July-March 2001-2002) shows that the company has earned a net profit of Rs134 million on sales of Rs1.6 billion. This shows an improvement over net profit of Rs123 million earned on net sales of Rs1.4 billion in the similar period of last year.

According to the official there is no foreigners in the company. CPPL has current total investment in Pakistan to the tune of Rs453 million and “We intend to invest up to Rs300 million more during the next 12 months,” he added.

“Under the prevailing situation the company continues to proceed with its planned expansion investment,” the executive said.

The gross sales of Colgate Palmolive during Jan-March 2002 stood at Rs743 million as compared to Rs652 million. Similarly gross sales in July-March 2001-02 were Rs2 billion as against Rs1.7 billion in same period of 2000-01.

Deputy General Manager, Procter and Gamble Pakistan, Saad Amanullah said, “the current situation has not impacted our business and there is business as usual.”

The company has few foreigners, involved in various projects, who are still working and they intend to stay, he said.

“There has also been no change in future investment plans and the company will continue to invest in future,” Saad said adding that in February, an investment of $3 million was made to increase production capacity of toilet soap factory.

He said there is also no panic to increase inventories of imported raw material and “we will continue to import as per requirement.” He recalled that the company did go for stocking raw material after September 11 catastrophe in the US.