IN 1998, Seth Mohammad Akber and his brothers suddenly found massive cash in their pockets after Coca-Cola decided to buy back its entire bottling and distribution operations from its franchise-holders in Pakistan — a deal his family was not willing to make.

“It was kind of a moment of reckoning for us all; we could split the money and each brother go his own way, spending his share the way he liked,” said Seth Akber — a large-holder cotton farmer, ginner, spinner and weaver from Rahimyar Khan — in an interview with Dawn.

“But then we told ourselves that we, as businessmen, were expected to return something back to our country. We needed to spend that cash on productive investments to create jobs for our people, rather than take it out of the country or put it away in bank accounts to rust.”

Between then and 2011, he went on to invest massively in the textile industry. “Today, our group — the Aslam Group of Companies — owns 162,000 spindles and 120 airjet looms and a large ginning factory. Our total assets, including agriculture land, are valued at Rs14-15b, with annual sales turnover of Rs12b,” he said.

‘If the businessmen must spend their capital on productive investments to create jobs and stimulate the economy, the government should create an enabling environment for them’

Seth Akber, who joined the family business as a cotton trader in 1972, has always been ‘on the move,’ investing in and expanding it. When the first Pakistan People’s Party government nationalised cotton trade, he bought the first Coca-Cola factory in Rahimyar Khan, close to his hometown of Khanpur, in 1975.

He continued to invest in this business until his family extended its control over 45pc of the market in Coca-Cola’s lucrative bottling and distribution business in the country, spread from Gujranwala to Rahimyar Khan to Sukkur to Quetta by the early 1990s. In between, he set up a juice factory, using local machinery, and also diversified into textile-spinning.

Why didn’t he diversify into textiles before his family was forced to sell back its bottling business? After all, they were (and still are) one of the major cotton growers from Rahimyar Khan and owned three ginning factories.

“It is true that we wouldn’t have invested in the textile industry in such a big way if Coca-Cola hadn’t decided to manage its bottling and distribution operations in Pakistan on its own. There is no limit to growth in beverages, or, for that matter, any other consumer business when the population and per capita incomes are growing. The deal with Coca-Cola virtually left us without a job. So we chose to invest and expand in textiles,” the chairman of Aptma-Punjab explained.

Many believe that Seth Akber has an ‘advantage’ over most of his peers and is better placed to expand into downstream value-added textiles to multiply his profits. Indeed, he planned to set up a finishing unit a few years back. But then gas and power shortages forced him to abandon the plans. Still, he is working on a project to venture into the textile retail business and launch his own brand.

Seth Akber thinks that both businessmen and the government need to complement each other if the economy is to grow. “If the businessmen must spend their capital on productive investments to create jobs and stimulate the economy, the government should pursue economic policies that create an enabling environment for them.”

However, he feels that the government has failed in creating an investment-friendly environment and in removing impediments to doing business. “Short-term, populist policies have overtaken the government, and the industry has slid to the bottom of its list of priorities. As a consequence, we have an enormous amount of capital sitting idle, instead of becoming a powerful economic stimulus.

“Even today, many are prepared to invest their money in new projects should the government reset its priorities and provide gas and electricity at affordable prices to factory-owners.

“If capital is flying out of the country, it is because of faulty government policies and adverse business conditions here and not because the businessmen want it. We trust our country and we want to invest in its economy. But we also need protection from ever-shifting economic priorities and changing policies of the government.”

He agrees that businesses’ confidence in the Nawaz Sharif government has dipped over time. “A politically unstable government must focus on projects and policies that are crucial to retain public support rather than make long-term economic policies.

“Instead of evolving balanced-growth policies, the government is taking ad-hoc decisions, protecting one sector at the expense of the other, as shown by its decision to fix the seed cotton price. So if business confidence has dropped and investment in the economy stalled, the government has itself to blame.”

Published in Dawn, Economic & Business, October 13th, 2014