A TERM REPORT OF

INTERNATIONAL BUSINESS

Kohinoor Mills Limited

SUBMITTED TO: MR. SAJID NAQVI SUBMITTED BY: TANVEER AKHTAR M. YASIR IFTIKHAR AFIFA TANVEER RAHEELA KAUSAR HAFIZA SHABANA MES-08-08 MES-08-17 MES-08-14 MES-08-26 MES-08-15

Bahauddin Zakariya University Sub Campus Sahiwal www.bzu.edu.pk

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In The Name Of Allah Subhanahu, the Most Gracious the Most Merciful…

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Preface

Textile industry is considered to be the world’s fastest growing industries with global revenue in billions and trillions per annum. The sector is basically focuses on consumer likes and preferences, with activities purifying the needs for the consumer. The aim to write this report besides entertaining our study requirements. We suppose that this report might become helpful for an M.B.A student in the future while carrying out their research studies. This might help them as a source of secondary data. Keeping both these aspects in mind, we have tried our level best to put precise, accurate and easily understandable matter in this report. For this purpose we have kept our mind open to the suggestions and guidance from our friends and seniors. We hope that report would not only fulfill the requirements of my teachers but shall also be proved helpful for future readers.

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Acknowledgement

All our praises for ALLAH THE ALMIGHTY, who bestowed potentially upon us to accomplish this present report successfully. With all our sincerity, we express. Our gratitude to the HOLY PROPHET (P.B.U.H) and his fellows, who are the source of enlighten guidance and wisdom for the humanity. We have deep sense of gratitude to our honorable teacher Mr. Sajid Naqvi for his generous guidance for this report. We would also like to appreciate the praise-worthy efforts and the assistance of some people who have kindly helped us out in the completion of this report. They definitely include our parents, teachers and friends.

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INTRODUCTION:Kohinoor Mills Limited Formerly known as Kohinoor Weaving Mills Limited. The Company's principal activities are to manufacture and market textiles, covering weaving, and knitting, bleaching, dyeing and stitching. It also deals in yarn, bed linen, home furnishing, socks, cloth and other goods and fabrics made from raw cotton and synthetic fiber. The Company's manufacturing plant is located in Kasur, Pakistan. Company Name: Ticker: Exchanges: 2008 Sales PKR: Major Industry: Sub Industry: Country: Employees: Kohinoor Mills Limited KML KAR 6,130,600,000 Apparel & Textiles Apparel Fabrics PAKISTAN 4300

Kohinoor Mills Limited was incorporated as a Public limited Company on December 21st, 1987 and is located at 8th K.M., Manga Raiwind Road, District Kasur. The Company produces greige cloth from cotton, blended and synthetic yarns. The project was initially established with 48 Sulzer Ruti shuttle-less looms of 153" width from Switzerland with modern ancillary machinery to produce high quality fabric for export markets. Further expansions saw the installation of an additional 96 Tsudakoma air jet looms from Japan in 1990 and a third shed comprising 60 state of the art Picanol Omni 340 cm wide looms was installed in July 1998, twelve with batching motions. Another twelve Picanol Omni 340 cm wide looms were installed in 1999. In 2000-2001 old 48 Sulzer Ruti looms were replaced by 48 lated Picanol Omni Plus 380cm looms. In addition to that latest Picanol Omni Plus Jacquard Looms were also added as well as a yarn conditioning machine from Zorella was also installed. The entire manufacturing process from warping to fabric inspection is monitored through an on-line process control system from Barco. The marketing strategy is to explore new markets both in quota and non-quota countries.

Company Information:Board of Directors:Mr. Aamir Fayyaz Sheikh Mr. Asad Fayyaz Sheikh Mr. Ali Fayyaz Sheikh Mr. Rshid Ahmad Mr. Aamir Ameen Mr. Salman Akram Raja Syed Mohsin Raza Naqvi

Chief Financial Officer:Syed Mohsin Raza Naqvi

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Head of Internal Audit:Mr. Zeeshan Khurram

Company Secretary:Mr. Muhammad Rizwan Khan

Auditors:M/s Riaz Ahmad & Company Chartered Accountants

List of Key Persons:-

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KOHINOOR WEAVING Name :Aamir Fayyaz Sheikh - Chief Executive Officer Phone :92-42-5391941-45 Fax :92-42-5391946 e-mail :aamir.fayyaz@kohinoormills.com Name Phone Cell Fax e-mail Name Phone Cell Fax e-mail :Tahir Bashir Solehria - General Manager :92-42-5391941-45 :92-333-4998800 :92-42-5391946 :tahir.solehria@kohinoormills.com :Sohail Chaudhry - Marketing Manager :92-42-5391941-45 :92-333-4998887 :92-42-5391946 :sohail.chaudhry@kohinoormills.com

KOHINOOR HOSIERY Name :Asad Fayyaz Sheikh - Chief Executive Officer Phone :92-42-5391941-45 Fax :92-42-5393456 e-mail :asad.sheikh@kohinoormills.com Name :Muhammad Shafiq - General Manager Phone :92-42-5391941-45 Cell :92-333-4998846 Fax :92-42-5391946 e-mail :muhammad.shafiq@kohinoormills.com Name :Amer Faruqi - General Manager (Marketing) Phone :92-42-5391941-45 Cell :92-332-8465051 Fax :92-42-5391946 e-mail :amer.faruqi@kohinoormills.com Name :Bushra Siddiq - Marketing Manager Phone :92-42-5391941-45 Cell :92-334-4333211 Fax :92-42-5391946 e-mail :bushra.siddiq@kohinoormills.com KOHINOOR DYEING Name :Mohsin Naqvi - Managing Director Phone :92-42-5391941-45 Fax :92-42-5391946 e-mail :mohsin.naqvi@kohinoormills.com Name : Muhammad Aamir Alam Qureshi - Marketing Manager

KOHINOOR APPAREL Name :Haroon Asaf - General Manager Phone :92-42-5391941-45 Cell :92-333-4998822 Fax :92-42-5391946 e-mail :haroon.asaf@kohinoormills.com Name Phone Cell Fax e-mail :Shahan Nasir - Marketing Manager :92-42-5391941-45 :92-333-8447525 :92-42-5391946 :shahan.nasir@kohinoormills.com

KOHINOOR GENERTEK Name :Sheharyar Bokhari - Dy. General Manager Phone :92-42-5391941-45 Cell :92-333-4998869 Fax :92-42-5391948 e-mail :sheharyar.syed@kohinoormills.com

Phone :92-42-5391941-45 Cell :92-333-4998840 Fax :92-42-5391946 e-mail :aamir.qureshi@kohinoormills.com

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Main Functions of Kohinoor Mills Limited Kohinoor Mills limited have five different section, details are as follows,

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Kohinoor Weaving:-

Kohinoor Weaving is the flagship company of Kohinoor Mills Ltd. and is engaged in producing greige cloth from cotton, blended and synthetic yarns.

Machinery and Equipments:-

COMPANY Date Incorporated 21st December 1987

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Production Started Production Fabric WEAVING SECTION

1st July 1990 40 million m² Annually Flexibility to Produce Fabrics up to 143"

MAKE Tyoda

CAPACITY

SPECIFICATION

NO. OF MACHINES 72 12 12 48 8 8

Air Jet Looms Tsudakoma Weaving Looms Jacquard Sets Picanol Jacquard

ZA2051 209i R/S 190 CM 75" ZA2051 205i R/S 190 CM Air Jet Looms 110" ZA205i R/S 280 CM 110" Picanol Omni Plus 380 CM Picanol Weaving 150" Machine Looms LX-3201 For Picanol Omni Plus Jacquard Sets for Picanol LX-1600 For Picanol Omni Omni Plus Plus

INSPECTION & FOLDING Cloth Rolling

MAKE HJ-RI Al-Hadeed Engineering

CAPACITY 3200 MM DIA 1000 MM 75" - 110" 130" 75" - 150" 86" - 110"

SPECIFICATION Automatic Cloth Rolling Machine

No. of Machines 3

10 Cloth Inspection Machines 15

Cloth Inspection

Nazer Industries

WARPING Auto Coner

MAKE

CAPACITY

SPECIFICATION

Warping

Savio 60 Spindles Savio Automatic Cone Winder Machine Benninger ZELL ZCR-1800 ZB 24 TKD Warping Machines Dia 1016 MM (Bentronice-3800) Benninger

No. of Machines 1 1 2 1

SIZING Sizing

MAKE ZB 24 TKD

CAPACITY Dia 1016 MM

SPECIFICATION Sizing Machines

No. of Machines 1
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TKD – TKD

CT 4/4/4 UB

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BARCO Warping Sizing Looms

MAKE

CAPACITY

SPECIFICATION

Barco, Belgium Inspection Frames

Warping Sizing Weaving Inspection Barco Production Monitoring System Stocks - WIP (Computer Integrated Spares Manufacturing. Efficiency Downtime Production Planning

No. of Machines Connected 3 2 256

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BEAM STACKER

MAKE Genkinger ULD-4W

CAPACITY 145,000 KG

SPECIFICATION Yarn Conditioning Machine (Net Weight = 40,000 KG - Load Per Rod 1,800 KG)

No. of Machines 1

LABORATORY Uster Tensorapid Uster 4SX with Hairiness Tester Schroder Analog Elmendorf Tear Tester Zweigle semi-automatic twist tester Sartorious Moisture Analyzer Zweigle N265 Fast Count System Temperature control: 20 C +/- 2 Humidity: 65% +/- 2% through LUWA air-conditioning

Products:Kohinoor Weaving has the expertise to weave fabric ranging Thread Count from 150 to 850. Its product range mainly includes Plain (T-150 to T-300), Sateen (T-150 to T-850), Twill (T-150 to T-350), Dobby (T-150 to T700), Jacquard (T-600 to T-700), Panama / Oxford (T-300 to T-500).

Compliance:ISO 9001 - 2000 ISO 14001
Certified by Lloyds Register Quality Assurance UK Implementation Work in Progress

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Kohinoor Apparel:-

Kohinoor Apparel commenced its commercial production in March 2008 with production capacity of 1.8 Million pieces per annum. With our vertical integration advantage of weaving and dyeing we deliver quality products to our customers. We have state of the art equipment with complete automation from design to product engineering and production. Our core strength is our experienced team trained by apparel consultants with hands on experience in garment manufacturing and operations. We specialize in woven bottom wear garments ranging from the very basic pants to high fashion slacks, shorts and cargos. The focus is to create a seamless interface throughout the manufacturing process addressing delivery, cost and quality issues by providing the right product the first time, and at the right time. Lead time follow up from order placement to delivery of goods to the customer is the focal point of the apparel division. With extensive investment into systems right from order taking and procurement through to production and delivery, efficient planning is being done to achieve better lead times to the satisfaction of the ever growing customer demand. The support from in-house fabric weaving and dyeing gives a new concept and satisfaction to the customer for attaining quality under the same roof a better production lead time making us able to deliver the full package. Apparel Division places the highest emphasis on manufacturing its apparel products with consistent by incorporating efficient and flexible processes to ensure customer satisfaction. Total Quality management is achieved through effective control and continuous improvement of every process.

Machinery and Equipments:15

CUTTING Make Capacity

Gerber Spreader Gerber Spreader (SY251) 2000 Meter/Hour

Manual Cutter

End Cutter

Tape Cutter

Manual Cutter Type GERBER Technology Fabric Cutting M/C (Eastman 629X) Straight knife cutting machine with Specification automatic sharpener (10") No. of Machines STITCHING Make Capacity 1 3

End Cutter (Computerized)

Tape Cutter

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ETON Unit Production System ETON Unit Production System 12000 ~ 15000 Sets/Day

SpecificationComplete Eton Basic Production System Stitching Machines JUKI Juki Single Needle (DDL-5550N-7SpecificationWB/SV500/CP150) (DDL-8300) (8500) No. of Machines 95 + 20 + 10 Juki Double Needle (LH-3168SF) SROOBA BROTHER Brother Double Needle (Tn875 b 045) 9

Srooba Single Brother Single Needle Needle (Sarooba) (S-737-405) 52

(LH-3128SF) Fix Bar 27 + 2 28

Other Machines

MOCK FLAT STITCH/F ZIG WAIST LOCK/OVER USSING/A BUTTON MACHINES ZAG/SAFETY/PIN BAND/WRINKLE/RIVET/TAGGING/STR LOCK/LOOP UTO STITCH IPPING MACKING WELTING ETC. Button Machine (LK 1903 ASS) Safety Machine Pegasus (EX3216Waist Band Kansai (1508) Flat Lock 42P2/233-3x4) Machine (W1562-013) Pegasus Safety Machine Wrinkle Machine (Local) Zoje (ZJ 732-85) Mock Stitch Brother (BAS2361) Fussing Machine Haseema (HP450MS) Pocket Crassing VBE MACE (001-V) Auto Welling Machine Reace

Button Machine TK 373 Specification Safety Machine Over Lock Zoje (ZJ 732-38A) King Tex Button Hole Machine (LBH-1790) Ziz Zag Machine Zig (LZ-2290ASS-7) Rivet Stud (Local)

Loop Making Kansai (2000)

Dennison Plastic Tagging Soked (SM9700)

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Products:Kohinoor Apparel is producing a wide range of bottom wear products including Basic work ware, Chinos, Multi Pocket Trousers, Jeans, Shorts, etc.

Compliance:-

WRAP & SA 8000

Certified by World Wide Responsible Apparel Production

Kohinoor Hosiery:-

Kohinoor Hosiery is engaged in the production of high quality socks with a capacity of 9.6 million dozen per annum. Its core product is 108 needle sports/casual socks. Kohinoor Hosiery is designed to cater high volume customers with short through put time. Driven by market trends and customer requirement it has developed a wide range of performance socks. It has a Product Tracking System coupled with Effective Management Information System catering with both customer and management requirements. Further to which customer can access its order and shipment status through Customer Service Portal. Strict Quality Assurance right from procurement till dispatch of goods enables Kohinoor Hosiery to stay up to customer satisfaction level. Workforce: The Company enjoys the services of professionals in its various departments with a total workforce of 1900 individuals. Turnover: 17

It has a total annual sales turnover of US$ 32.16 Million.

Kohinoor Machinery and Equipment:Knitting Machine Type LONATI 108 Needle 4" Dia 132 Needle 4" Dia 84 Needle 5" Dia 144 Needle 4" Dia MATIC 108 Needle 4" Dia Total ADDITIONAL CYLINDERS 108 Needle 4" Dia CAPACITY 800,000 Dozen per Month Linking Machine Type Automatic Liner Linking Machine for Socks with Rosso Ultra turn Conti Complett Linking Machine Digitronic Rosso Truning Devices Total CAPACITY 960,000 Dozen per Month * Fully Computerized Machines That Produce Neat Toe Finish Bleaching & Dyeing Machine Type Continuous Bleaching Tunnel Machine with Auto Dozing & Auto Dryers from Kannegiesser Germany Rotary Dryers Pmt Italy Rotary Dryers Poly Craft Rotary Dyeing Machines Reb Impianti Italy Poly Craft Bleaching Machines Hydro Extractors Poly Craft Washing Machines Total CAPACITY
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No. of Machines 252 138 24 18 48 480 132

No. of Machines 35 4 40 79

No. of Machines 1 4 1 2 12 4 4 28

Bleaching Dyeing Boarding & Packing Machine Type Automatic Boarding Machines Tecnopea Italy (Electric) Automatic Boarding Machines Tecnopea Italy (Electric / Steam) Manual Press Machines

23,000 KGS 5,000 KGS

900,000 Dozen 210,000 Dozen

No. of Machines 17 16 14 47

Total CAPACITY Boarding 960,000 Dozen per month Packing 900,000 Dozen per month * Online Packing: Chain system at boarding for reduced handling time. * Offline Packing: Specialized in band/tag and assorted packing.

Kohinoor Products:Kohinoor Hosiery's product range comprises on Sports / Casual, Performance, Work wear and Medical Socks.

Compliance:• Our Social Compliance Audit are conducted by ○ C.S.C.C ○ VF Corporation ○ JC Penny ○ Target ○ Kmart/Sears ○ Wal-Mart ○ Fruit of the Loom etc.

Kohinoor Dyeing:-

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Kohinoor Dyeing is specialized in bottom weight apparel Fabrics. It has its expertise in processing Apparel Fabrics in 100% Cotton, Poly cotton blends and Stretch articles of Twills, Drills, Canvases, BFC, Oxford, Herring Bones, Dobby and Jacquard designs. Kohinoor Dyeing has state of the art Dyeing & Finishing plant producing, Dyed, White & PFGD Fabrics with a capacity of 3.0 Million meters per month. Equipped with most modern Dyeing & Finishing range it has its expertise in using Reactive, Disperse, VAT & Sulpher dyes for fabrics ranging 90 – 600 GSM with a working width of 1.80 Meters. Automated recipe storage and re-call system and automated chemical and dyestuff dosing system enables precision processing and best reproducibility. Through Strict process control and quality assurance, Kohinoor Dyeing is able to reduce shortfalls and B-Grade percentage, resulting in increased level of customer satisfaction. Kohinoor Dyeing is renowned throughout the world for its remarkable Finishes and Nice hand-feels. Special Finishes like Teflon’s, soil release, stain repellant, water repellant, fire retardant, Nanotex, anti-microbial, lubricant, Pre-cure are produced on regular basis. Kohinoor dyeing is using all the Okotex certified dyes and chemicals for all of its products. Kohinoor Dyeing is also processing Organic cotton fabrics to meet the changing need of its customers. Kohinoor Dyeing has a diversified customer base spread over different continents. It has long-term professional relationship with most of the High Street Labels and famous chain stores: U.S.A: Banana Republic, GAP, LEVI’S, Target, Tommy, VF, PVH, Ann Taylor, Liz Claiborne, Hagger, Arrow, Wal-Mart, K-Mart, White Stag, etc., Europe: Next, Mango, Zara, Brushka, C&A, British Home Store, Hema, Carrefour, Rose By, French Connection, Harveys, Argos, Farah UK, Tema, Amadues Jeans, and many more. Australia: Yakka, King Gee, Charles Parsons, Farah. South Africa: Wools Worth

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Machinery and Equipments:-

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PLANT DETAILS Capacity 3 million meters per month Fabric weight Range 100gsm – 500gsm Fabric cotton/poly cotton/Lycra Blends PRE-TREATMENT Make Capacity TWO ONE SINGING MERC STAGE STAGE & ERIZI BLEACHI BLEA 1.8 1.8 DESIZING 1.8 NG 1.8 NG CHING METE METE METER METER R R Two Stage One Singing & Continuou Stage Merceri Desizing s Bleachi zing Machine Bleaching ng Range Range Range 2001 OSTHOFF & BRUGMA N [HOLLAN D] 1 2001 2006 2001 BRUG MAN [HOLL AND] 1 PAD BATC H 1.8 METE R PAD BATC H 2001

Type Year of Manufacture

Manufacturer

JIANG BRUGMA SU N SAGA [HOLLA [CHIN ND] A] 1 1 PAD STEA M 1.8 METE R PAD STEA M 2004

No. of Machines DYEING

Capacity Make Type Year of Manufacture Manufacturer No. of Machines FINISHING Make Capacity

PAD PAD THERMOS STEAM OL 1.8 1.8 METER METER PAD PAD THERMOS STEAM OL 2001 2001

MONFOR BRUGMA BENNI BRUG TS N NGER MAN [GERMAN [HOLLA [GERM [HOLL Y] ND] ANY] AND] 2 1 1 1 STENTER SANFORI CURIN EMERI EMERIZING S ZING G ZING 1.8 1.8 1.8 1.8 METE METE 1.8 METER METER METER R R CURIN EMERI SANFORI STENTER G ZING ZING EMERIZING MACHINE S RANG MACH RANGE E INE
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Type

Products:-Kohinoor Dyeing product range comprises of dyed Cotton, Poly Cotton, Lycra, Poplin, Canvas,
Twill, Sateen and Dobby Fabric.

Kohinoor Genertek:-

Kohinoor Genertek is a power generation plant, engaged in power generation and distribution since 1995. Its has the generation capacity of 29.28 MW and comprises of the following types of Generation equipment. A Turbo mach 31.23 MW Gas Turbine with a waste heat recovery boiler, producing 14 Tons of steam/hour, which is used in textile production such as Processing, Dying and Weaving. Its also planned to recover the heat from hot water circuit and generate 800 R/T of chilled water for Textile and Office use. Three Caterpillar G3520C Gas Generators with a capacity of 1.95MW each. A duplex Waste Heat Recovery Boiler is also fitted with these engines, producing 3 Tons of steam per hour. A third Gas Genset will be added in near future to enhance the generation capacity of the Power Plant. Three Dual Fuel, furnace oil plus Gas, fired Niigata 18V32 engines with a combined capacity of 17.88MW. These Niigata engines are also fitted with Waste Heat Recovery Boilers to add 4 tons of steam per hour into the steam circuit. Workforce: The company enjoys the services of professionals in its various departments with a total workforce of
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65 individuals. Turnover: It has a total turnover of US$ 10 million.

Machinery and Equipment:PLANT DETAILS Capacity No. of Units Type of Facility Type of Technology Production Year Fuel Type POWER PLANT Model Manufacturer Specification Details Characteristics 5.96 * 3 + 7.5 + 1.95 * 2 Generation Voltage = 29.28 MW 6 Frequency Thermal Generation Diesel Electric 1996 Furnace Oil - Diesel Natural Gas Power factor

11000V 50 Hz 0.8 Lagging

Automatic Generation control Provided Ramping Rate Alternative fuel Auxiliary Consumption 1.0% / Second Light Diesel Oil 4251330 KWh During 2005 No. of Gen Fuel Type Sets

Commissioning Capacity Year

Niigata Engines

18 V 32 CLX

Niigata Engineering co. Ltd

Gas Turbine

Turbo mach Turbo mach TBM-T70

4 Cycle, Compression Ignition Water Cooled, Turbo charger type with charger Air Cooler, Rated 1995 - 1996 Output is 8250 PS for 5860 K w/h generated at 45Ċ or less Ambient Temperature LEROY SOMER GENERATORtype LSA 56BMBL 13-4P, 7.5 MW, 2005 Φ0.8, 9000KVA, RPM 1500, AMB TEMP 40Ċ

5.96 MW Each 8250 PS for 5860 K w/h generated 3 at 45Ċ or less Ambient Temperature

HSD HFO GAS

7.50 MW

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GAS HSD

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Caterpillars Gas Engines

CAT Caterpillar G3520-C

Cylinder And Arrangement 60 Degree V 20, Bore 170 mm (6.7 inch), Stroke 190 mm (7.5 inch), Total Displacement 86.2 L (5262 in3), Compression 2006 Ratio 11.3:1, Aspiration TA with SCAC (1), Rotation (Fly wheel end) Counter Clock wise, Firing Order 1-2-1112-3-4-15-16-78-19-20-9-1017-18-5-6-13-14 Lubricants

1.95 MW

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GAS HSD

FUEL & LUBRICANTS Fuels

Fuel Type

HFO - HSD - Natural Gas

Preslia 46 (imported) NGEO-350 Aurelia XL 4040 Grealed Oil 320 Lube Oil TLX 404 Corena AS 46 Mobile Parus SHC 1026 HFO Purifiers

PURIFIERS Lube Oil Purifiers Make Specification Capacity No. of Purifiers Alfa Laval MOPX 207 Type Alfa Laval MFPX 307 Type Centrifugal type with electric Centrifugal type with electric heater, Automatic Operation heater, Automatic Operation for for Sluge Discharge Sluge Discharge 2700 Liter/ H for 380 CST at 50Ċ 1800 Liter/Hour class Fuel 3 4

Products: - Kohinoor Genertek is producing un-interrupted Electricity and quality Steam for Kohinoor Mills.

Export Business Countries and Leading International Brands: 25

Kohinoor Mills Limited has a diversified customer base spread over different continents. It has long-term professional relationship with most of the High Street Labels and famous chain stores. Details are as follows,

United States of America:
Brands:
Banana Republic LEVI’S Tommy Wall Mart K-Mart Hagger White Stag

Europe:
Brands:
Next Mango Zara C&A British Home Store Rose By French Connection Hervey’s Farah UK Amadeus Jeans

Australia:
Brands:26

Yakka King Gee Charles Parsons Farah

South Africa:Brands:Wools Worth

Documents Used by the Organization for Export:1- Packing List 2- Commercial Invoice 3- Certificate of Origin 4- Certificate of Inspection 5- Bill of Lading
iiiShipping Documents Airway Bill

1- E-Form 2- Bill of Exchange

Purpose of Documents Used by Organization for Exports:Packing List: - Packing list is detail of goods packed according to complete specification of product. • Commercial Invoice: - Issued by the exporter for the full realizable amount of goods as per trade
• term. • •

Certificate of Origin: - It is required to certify on the invoice that the goods are of a particular
origin or manufactured/ packed at a particular place and in accordance with specific contract.

Packing List: - It shows the details of goods contained in each parcel / shipment. • Certificate of Inspection: – This document describes the condition of goods and confirming that
their quality & quantity is according to order. transportation sources i-e Sea and air cargo. • •

Bill of Lading: - Bill of Lading is of different types but Kohinoor mills mainly using two types of

Shipping Documents: - when company sends through sea then use shipping documents. • Airway Bill- when company use air cargo then airway bill of consignment. • E-Form: -E-form issued by bank. It is the requirement of state bank of Pakistan to fill E-form and
submit to state bank for record and any subsidy.

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pay a fixed sum of money of their consignment to their bank at future date. The future date may be either fixed or negotiable. This content can be found on the following page: http://www.investorwords.com/477/bill_of_exchange.html •

Bill of Exchange: - An unconditional order issued by Kohinoor Mills which directs the recipient to

Certificate of Shipment: - It signifies that a certain lot of goods have been shipped. • Shipping Order: - Issued by the Shipping (Conference) Line which intimates the exporter about the
• reservation of space of shipment of cargo through the specific vessel from a specified port and on a specified date. the shipper's name, cart/ lorry No., marks on packages, quantity, etc. concerned shed and is sent to the exporter. • •

Cart/ Lorry Ticket: - It is prepared for admittance of the cargo through the port gate and includes Shut out Advice: - It is a statement of packages which are shut out by a ship and is prepared by the

What is Letter of Credit?
A Letter of Credit is a binding document that a buyer can request from his bank in order to guarantee that the payment for goods will be transferred to the seller. Basically, a letter of credit gives the seller reassurance that he will receive the payment for the goods. In order for the payment to occur, the seller has to present the bank with the necessary shipping documents confirming the shipment of goods within a given time frame. It is often used in international trade to eliminate risks such as unfamiliarity with the foreign country, customs, or political instability.

Types of Letter of Credit Used by Company:Kohinoor mills limited only accepts the Confirmed LC, LC at Sight This content can be found on the following page: http://www.investorwords.com/2774/letter_of_credit.html

Role of Bank:Banks have played a tremendous role in promoting exports from Pakistan. They have been financing export bills. They have given credit for boosting in the past. They have provided guidance to exporters. They have encouraged potential exporters to identify areas and countries for exports. They have implemented the directives of the government of Pakistan by giving subsidized credit to exports

Banks provide an important role in exports,
1- Bank issued export form to the organization.

2- Bank perform medium of correspondent between organizations for collection of Funds 3- Banks provide its services of negotiating, collection of funds on behalf of organization. 4- Banks provide Finance Facilities for exports

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FAPC-1 FAPC-II FBP
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FAPC-1:-

Banks provide loans to the exporting firms are called Finance against packing Credit. This facility based on the funds required to complete particular export order.

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FAPC-II:-

This facility is a subsidized finance facility provided by the state bank of Pakistan to exporting firms through commercial banks. If a firm has annual exports more than $300 million. A running finance facility of 50% of total sales of company allocated 9% from which 7.5 % is financial charges of state bank and 1.5% is service charges of commercial bank.

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FBP:-

Banks also provide Foreign bill purchase finance facility to export oriented units. In this facility banks provide loans to cover the gap between Shipping products and receipt of payment.

Custom Procedure for Exports:-

Exports play a vital role in the development of any economy. One of the initiatives taken by the Government of Pakistan to enhance & boost exports is to provide various export incentives as well as streamlining export processes. Among other steps taken by Government, the simplification of the export clearance procedure is considered to be a vital step in the facilitation of the exporter. The following procedure has been explained in terms of various stages of inspection, clearance and documentation required.

The Role of Clearing Agents in Export of Products:-

Once the consignment to be exported arrives at the port, usually a clearing agent’s services are sought so as to facilitate the procedure of clearing the consignments. The documents to be provided by an exporter to the clearing agent are as follows: a) Packing list b) Invoice c) Form ‘E’ 1(State Bank form) d) Letter of Credit or Contract e) Certificate of Origin Provided the above mentioned documents are complete, the clearing agent prepares the shipping bill and files the documents with Custom department. A “machine number” is allotted to the Shipping Bill, and the case is forwarded to the Port Gate. The consignment is allowed to enter the port vicinity, and is registered at the gate according to the allotted number. The Deputy Superintendent (D.S.) marks the consignment for examination to the inspector of the examination hall. Once the inspector has examined the consignment, the case is marked to the D.S. for approval. 2% Export Development. Surcharge (EDS) of the invoice value shall be deducted through receiving banks upon remittance of export proceeds against the Export Development Fund (EDF). However, EDS has been waived off for small exporters and those who exceeded their exports more than 10%. Provided the D.S. approves the case, it is forwarded to the Superintendent with the examination report for final approval. The case if approved by the Superintendent is marked to the D.S. for “Out of Charge”. The container is given a final physical check and is sealed by the bonded carriers or the port customs authority. The loading programme is obtained from the shipping firm/cargo carrier for the country to which the consignment is being exported. Loading programme lists the schedule of various ships leaving port for the export destination along with the availability and 1 4 copies of Form E are issued by the intermediary, one copy is handed to the exporter and one copy is retained by the bank. The remaining two copies are required to be sent to the State Bank of Pakistan and
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the Customs department respectively.

Methods of Receiving Payments:1- Advance Payments 2- Letter of Credit

Company can receive its payments depends in which currency company maintaining its account in Bank. If company is maintain its account in US $, dollars will be credited in account upon realization of payment. If company is maintaining its account in PKR then bank will change the US $ into PKR on that day exchange rate and PKR will be credited in the account.

Role of Chamber of Commerce:The Chamber's basic function is to protect and promote the interest of trade commerce and industry. It strives hard to espouse the cause of private enterprise and to redouble its contribution in the socio-economic development to the country. Chamber of commerce played following important roles for export oriented units,

To issue Measurement Certificates as well as Certificates of Origin for the export cargoes and attestation of commercial documents. The Foreign Exchange is issued on Chamber's recommendations. It organizes Pakistan's Pavilions in the international fairs abroad to promote export. It also organizes Seminars, Training courses, Conferences on various opportunities available for Pakistani exporters to promote exports. It invites Minister's and Government functionaries to the Chamber to identify the problems being faced by trade and industry. A number of foreign trade delegations, dignitaries and diplomats visit the Chamber and exchange views on matters of mutual interest. It publishes Trade Directories, Statistical Data and other publications for the benefit of the export business community. Chamber of Commerce and Industry urged the government to provide Research and Development (R&D) support to all export-oriented industrial sectors. Chamber of Commerce provides Export Development Fund (EDF) relating to promotion of exports in various sectors. Exporters could obtain qualified export counseling and make a master international marketing plan before exporting business. Trade Missions in foreign countries are not equipped with proper information and material about Pakistani exportable products and chamber of commerce stressed that they should develop brochures and information material and provides it to our Foreign Missions abroad for better marketing of Pakistani products. Chamber of Commerce with TDAP conducts exhibitions in foreign countries so that exports could be increased by providing first hand knowledge and experience to buyers. Chamber of Commerce with the help of Ministry of Finance and technology building a comprehensive profile of countries containing e- commerce legal and regulatory data. It should follow-up consultations with department of Commerce's staff of global experts.

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Chamber of Commerce working to highlight the importance of Electronic commerce in boosting exports. Pakistan can improve its conditions by using E-commerce. Internet could play a dramatic role in boosting exports. All types of companies have the excess to internet through which they can increase trade internationally. The Internet is a power full tool revolutionizing all aspects of business. However, few firms are using the internet effectively to generate or support international orders because they are familiar with export requirements. Even developed country like America is the global scope of electronic commerce and build support for a private-sector led approach the e-commerce policy, both nationally and internationally.

Findings:Political environment susceptible law and order situation of the country, sharp rise in interest rate, on going recession in U.S economy and its repercussions on the rest of the world economy massive sui gas and electricity load shedding coupled with increased cost of doing business in Pakistan, shifting of textile industry to Bangladesh and India exerted pressure on the overall performance of the company. Further, sharp devaluation in the Pakistani currency, company may incur a heavy exchange loss being only an export oriented unit. As the major exports of the company to the U.S and England, the purchasing power of their people has been reduced significantly resulting they reduce in the international model. And company is not utilizing economic capacity of their plant which may effect on the financial performance of the company. Weaving division of the company is not fulfilling the demand of yarn of other divisions which could result the delay in completion of orders and increase the overall cost. It can also be harmful for the quality of final product. Despite the intense competition and rapidly changing market conditions the dyeing division show good progress, gained momentum in the capacity utilization of dyeing division. With the diversification of customer base, addition of new marketing channels and entry in European market by establishing hosiery division firm has reasonably increased its exports. The firm newly established apparel division started its stitching operations of institutional work wear, bottom wear apparels and casual trousers in line with vertical integration of company. Currently this division has not working at full capacity; however this new addition of apparel division will definitely generate more revenues in long run. The company has their on Genertek division which is mainly operating on sui gas but during the load shedding of sui gas they are using HFO- Fired back-Up NIIGATA Engines to generate electricity which is a source of heavy cost for the firm.

Suggestions:The company should develop a detailed strategy to overcome the grim economic conditions. addition of new narrow width looms in weaving division and backward integration, meeting in house demand of weaving production in dye house will not only bring synergy in inspection and packing cost, but will also bring in saving in respect of commission, taxation and transportation cost. ○ Company should find more new marketing channels to increase the sales of apparel division to use the economic capacity of apparel division.
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○ The firm should make arrangements of electricity from LESCO in case of gas load shedding to reduce the cost of their Genertek division. ○ China has closed their textile industry, which was a largest exporter of textile products. The company should focus to receive the orders of China from international buyers.

Reference:www.kml.com SMEDA Karachi Chamber of Commerce

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