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Topic: A Case Study on ALI ENTERPRISES


Submitted on: 18th November, 2012 Submitted To: Sir Adnan Anwar

INTRODUCTION: The textile industry of Pakistan is considered to be the back bone of Pakistans economy. It is a major source of foreign currency accounting for 7.4 % of GDP in 2011 and employs 38 % of the manufacturing workforce. An alliance named Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) was established in the year 1981 to offer guidance and assistance to manufacturers and exporters and to encourage a better environment for trade. Moreover a separate ministry for textiles is working since 2nd September, 2004 in Pakistan. Despite of all this, small incidents are part of the news every now and then but recently the Pakistan textile industry experienced its most terrible accident when Ali Enterprises, a garment factory in Karachi caught huge fire on September 11, 2012. The accident took place due to the explosion of a boiler which led the chemicals that were stored in the factory to burst into flames. Approximately 650 workers were working inside the factory when the fire broke out but unfortunately only a few could escape safely because the factory had only one accessible exit while all others were locked. Moreover the windows were covered with metal bars and the factory was fully packed with materials that include piles of clothes and chemicals. The generator was located in the garage, which was the only way out of the factory. Contradictory reports are available regarding the number of dead and injured people. However a figure of around 289 people killed while more than 250 people injured is frequently mentioned. According to media reports, a majority of victims were below the age of 35 years. BACKGROUND: Ali Enterprises is a garment factory that was founded in Karachi around 12 years ago. The major products are denim, knitted garments and hosiery. The company had a capital between 10 to 50 million dollars and annual sales around Rs. 5 billion. Seventy percent of the Ali Enterprises assets were insured by Reliance Insurance Company while the remaining assets were secured by Premier Insurance. The factory was a major exporter of garments to developed countries i.e. Europe and United States. The garments recovered from the factory carried an Okay logo, a label that is produced and sold in KIK stores in Austria, Germany and Eastern Europe.The factory is owned by Abdul Aziz Bhaila and his sons Arshad Bhaila and Shahid Bhaila. Shahid Bhaila is also CEO of Ali Enterprises. There are 1200 to 1500 workers who worked in shifts in the factory. The monthly earnings per worker is between 5000 to 1000 per month.

According to Pakistani Textile Workers Union (NTUF), a high working pressure and overtime with unpaid additional work were frequent at the factory. Moreover the factory was suspected of using child labour and locked workplaces similar to prison cells.