Engro Polymer & Chemicals Ltd.
For those of you who’ve interacted with me recently, you know that among my current CSR passions is almost anything to do with value chain empowerment. And that’s precisely what the juicy parts of my conversation with Asif Qadir, President and CEO of Engro Polymer, were about. Now, at Engro Polymer, it’s all about value chain development, hard-core even. Upstream, downstream, you name it. All the way to the farmer who uses the drip irrigation that uses the PVC resin his company makes. (Talk about a high for nerds
tbl’s interaction with Qadir started out in relatively romanticizable drip-irrigated farms in Gadap, so this interview may reflect the breezy informality of the cheeku orchards and kerala vines.
The interview – in his office of course, no longer at Allah Buksh’s farms – really got started with him asking us the right questions.
After unabashedly asking what the triple bottomline approach really meant, he promptly re-ordered tbl’s ‘people, planet, profit’ tagline.
“This is how the bottom line works,” said Asif Qadir, firmly announcing profit as the first bottom-line. Of course, we at the barely-breaking even tbl offices vividly understand this. But the ‘how’ behind profits must be just as crystal clear.
“We’re not just doing what the law requires, but we’re trying to do a little more,” Qadir said when asked about toasty areas such as governance and transparency.
“As of July this year, we’re a listed company,” Qadir began. “Prior to this, as far as the [three major] shareholders were concerned, there was absolute transparency. However even at that point in time, we were following the SECP guidelines, in fact slightly more than SECP requirements.”
“We were looking at a new business line,” Qadir continued. “We didn’t pursue this line, because this has the potential of exposing our people to a business line in which there will be underhand dealings”. “This was about two years ago: a simple example of a reaffirmation of our commitment to ethics”.
Biodegradability >?< Minimalistic Consumption
So we’ve set the stage, you know we’re more excited about sharing the company’s value chain (VC) initiatives. At least, that’s how tbl fondly refers to Engro Polymer’s market development work.
Now, if like us, Engro Polymer’s value chain is a little mystified for you too, here’s the scoop: they make the resin that is then used by a myriad of industries to make PVC products. That includes everything from the ominous little ‘sample’ containers
the medical lab hands you to window frames.
But first, we wouldn’t be doing our job if we didn’t tell you that we did ask Qadir about the weighty environmental impacts of his products. We skipped through the lush green effluent pond and ongoing operational efficiencies bit to this part.
“The fundamental environmental impact comes from the nature of the product – it comes from chlorine”, he candidly states. Of course, we knew that, PVC after all stands for polyvinyl chloride.
“The net energy consumed, is still the lowest of all plastics,” balanced out Qadir. “The quantum of energy consumed is the least too.
And get this revolutionary idea: to Qadir, its nonbiodegradability traits are among his products ecofriendly traits.
“I don’t take that as a criticism, I take it as a positive effect”. I’ll admit, we weren’t ready for that one. “I find it to be more effective that a person will not be consuming a new product every two to three years,” he said. (Yes, we have a lot more to say about this, but that’ll be on tbl’s online forum) “The basic advantage is that it has an unlimited life”.
“It’s what you’re going to use things for,” he elaborated. He estimates that 60-70 percent of the resin his company produces goes into long life cycle products, such as pipes. “What you need to know is, what’s the chain?”
Grow Our Customers Businesses
Really, now we’re going to talk about the VCs that don’t necessarily have anything to do with chlorine, promise!
“Our customers are a wide range of people, from relatively larger to some who are very small,” shared Qadir. “We’ve had reaffirmations over time that we are an organization which focuses on a desire to grow our customers, to grow their businesses”.
“So, on the value chain side,” thought Qadir, “it’s a very significant initiative we have, providing technical and managerial support to enhance our customers’ business”.
“We work with all of our customers to reduce their power consumption, improve quality, reduce wastages, and how to develop market access,” said Qadir. Of the roughly 400 businesses he counts as customers, there’s not a single one that Engro Polymer teams haven’t visited.
The teams weren’t always missed and invited – as they are now. They were initially refused entrance. Yet now, the customers are fairly open about their business needs or the areas they need help and support in. Of course, being a monopoly helps Engro Polymer be so benevolent.
Customers of Customers
In addition to Qadir’s passion for agriculture, that has been conducive to encouraging the company to invest creative energy in developing a simple, userfriendly drip irrigation system – and thus boosting Pakistan’s agricultural sector. Allah Buksh’s farms,
the hosting ‘laboratory’ for this model showcased the almost fool-proof simplicity to us. One that will prove a harbinger of inter-connectedness of the triple bottom line, and all actors in a value chain.
Engro Polymer has also directly helped develop the capacity of one of its major customer groups the PVC pipe industry. Their processing capacity has more than doubled over the last five years. Ten years ago, the industry could manufacture pipes with a maximum diameter of 4 inches.
“And this year they’re producing 20 inch diameter pipes – and obviously enhancing the usages of it,” beams Qadir. Another VC example: “We took an industry that had been killed in Pakistan: the cable compounding industry,” Qadir shared. Of the 10,000 tons of cable compound that was previously being imported in Pakistan, now approximately 8,000 tons are being produced in Pakistan.
The best part: this not only comes full-circle, the TBL circle keeps growing. If the cable compounding industry is producing 8,000 tons, half of their raw input is Engro Polymer’s product. So this patient support to the industry has paid off with a 4,000 ton-strong market for the company. No wonder Qadir thinks “there is a phenomenal link between social investments and business”. “It’s not the number that you’re looking at today,” Qadir emphasized, exhibiting just the kind of foresight that excites tbl, “it’s the potential you’re looking at in the future”.
With successes such as these, the company’s sales have more than doubled in eight years, inherent market growth and other factors included. In 2000, Engro Polymer sold 37,000 tons of PVC resin. With their market development (or VC development as tbl might call it) taking shape in 2002, they will have sold 100,000 tons this year, 2008. This, is Qadir’s bottom-line.