Gul Ahmad

Submitted BY:
Nabila Aslam
Submitted To:
Sir Taswar
Roll No:
F21BMGMT3M07008
Program:
MBA Non-Business 2.5(weekend)
Subject:

Semester:
3rd
The Islamia University of Bahawalpur

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History:
Gul Ahmed began trading in textiles in the early 20th century. In 1953, the group decided to
enter the field of manufacturing under the name Gul Ahmed Textile Mills Limited, and was
incorporated as a privately limited company.

Introduction Gul Ahmad:

Gul Ahmed Textile Mills Limited is a Pakistani textile company which manufactures and sells the
story of textiles in the sub-continent is the story of Gul Ahmed. The group began trading in textiles in
the early 1900s. The group entered in the field of manufacturing with the establishment of today’s
iconic name of Gul Ahmed Textile Mills Ltd since 1953. After its listing on the Karachi Stock
Exchange in 1970, the company has been making rapid progress and enjoying a leading position in
the world of textiles.

With an installed capacity of more than 130,000 spindles, 300 state-of-the-art weaving machines and
most modern yarn dyeing, processing & stitching units, Gul Ahmed is a composite unit – making
everything from cotton yarn to finished products. The company has its own captive power plant
comprising of gas engines, gas & steam turbines and backup diesel engines. Believing in playing its
role in protecting the environment, Gul Ahmed has also set up a waste water treatment plant to treat
100 percent of its effluent, bringing it to NEQS levels, a spokesman of the company told PAGE.

The story of textiles in the sub-continent is the story of Gul Ahmed. The group began trading in
textiles in the early 1900s. The group entered in the field of manufacturing with the establishment of
today’s iconic name of Gul Ahmed Textile Mills Ltd since 1953. After its listing on the Karachi Stock
Exchange in 1970, the company has been making rapid progress and enjoying a leading position in
the world of textiles.

CEO Gul Ahmad:

Mohammed Zaki Bashir

Chief Executive Officer. Mr. Mohammed Zaki Bashir joined Gul Ahmed Textile Mills Limited in 2005
and subsequently joined the Board in 2008. He is currently the Chief Executive Officer of Gul Ahmed
Textile Mills Limited.

Head Office:
Karachi is the most populous city in Pakistan and one of the most populous cities in the world, with a
population of over 20 million. It is situated at the southern tip of the country along the Arabian Sea
coast. It is the former capital of Pakistan and capital of the province of Sindh.

Export:
Gul Ahmed is a network of composite textile mills which manufacture everything from yarn to
finished products and one of the largest exporters of textiles to Sweden. Their goal is to

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increase exports and provide exposure and access to Pakistani fashion designers and brands to
the Scandinavian markets.

SWOT Analysis
Strengths

• Image and branding

• Pioneers in apparel fabric for both ladies and gents
• In-depth relationship with export customers
• Competent, vastly experienced and loyal staff and workers
• Global presence – wholly owned set-ups in UAE, Europe and USA to market the products
• Edge in technology – state-of-the-art plant and machinery
• In-house power generation
• Composite mill from cotton to made-ups
• Cordial relationship with the workforce
• Strong raw material base as Pakistan is the fourth largest producer of cotton

Weaknesses
• Export dependent on limited customers
• Highly labor intensive industry
• Labor productivity is very low
• Leverage is somewhat higher than the desired level

Opportunities

• Growing retail market including expansion of women’s and men’s apparel

• Growth in exports as a result of GSP Plus status from European Union
• Less explored USA, Canada and Australian markets
• Expand web-based sales
• E-marketing

Threats

• Internal security situation and the looming war in the region

• Deteriorating economic conditions in the country compounded by increasing debt burden and circular
debt
• Irrational taxation policies
• Continuous increase in energy prices and gas shortage affecting production and its cost
• Worsening of the economic conditions in Europe and America
• Textile industry is comprised of a large and unorganized sector, and the large number of competitors
mostly in this sector especially in the ladies fashion fabric fray
• Key employees lured by competitors
• Shortage of raw material (cotton) due to natural disasters like heavy rain, floods, etc.

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• Worldwide surplus production capacity resulting in price-cutting war between the competitors

Environmental Overview (PESTEL Analysis)

Political Factors
• Political situation is yet to be fully mature
• Security concerns
Economic Factors

• Change in discount rates impacts financial cost

• Rise in energy cost
• Currency fluctuations
• Existence of facilities to exporters like Export Refinance Facility and Long-Term Financing Facilities
• Investors are pulling out their capital by relocating, business shrinkages or shutdown due to energy
crisis

Social Factors

• The customers are very much fashion oriented and the companies are keen to develop and introduce
new products setting new fashion trends
• The customers are very particular towards their safety while using the products and therefore our
products require proper compliance with regards to consumer protection measures
• Growth in population is out-spacing the annual growth, resulting in unfavorable impact on the
economy.

Technological Factors

• Technology change defines how fast technology advances. The Company is continuously monitoring
technological advancement in production and is willing to adopt changes. It has state-of-the-art
production facilities.
• Low research and development efforts in the industry and absence of industry specific think tanks
• Increasing trends of online shopping

Environmental Factors

• Environmental factors especially recent heavy rains and flooding has affected overall economy.

Legal Factors

• Increasing indirect taxes

• Trade and textile policies are not fully implemented. Policies by new government are awaited.

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EFE Analysis:

External Factor Evaluation (EFE) Matrix is a strategic analysis tool used to evaluate firm's
external environment and to reveal its strengths as well as weaknesses.
opportunities Weigh Rating Weighted
t Average
T
1 To invest and venture into cosmetics market 0.1 4 0.4
2 Expand local markets by reducing their cost 0.08 4 0.32
3 Open production plant to Bangladesh 0.06 3 0.18
4 Facilitation for seas candidates for internships. 0.07 4 0.28
5 Increase research and development 0.06 3 0.18
6 Sponsorship in sports programs 0.1 4 0.4
7 Acquisition of small textile industries to make 0.08 3 0.24
products new
8 Ideas expansion internationally 0.08 4 0.32
9 Involved in health awareness programs and training 0.07 4 0.28
drills
Threat

1 Law and order situation of the country 0.8 1 0.8

2 Economics instability 0.5 1 0.5
3 Rising production cost 0.2 2 0.4
4 competitors 0.1 2 0.2
5 Changing preference of customers 0.02 2 0.04
Energy crises e.g. electricity and gas 0.03 1 0.03
Total 1 3.06

Conclusion:

Strategy 1:
Instead of targeting elite class and high class prices, it should offer special discount offers during
the period economic downturn so as to retain the customers during recession.

Strategy 2:
It should export their products globally by observing the changing preferences of their
customers.