South Asian Free Trade Area

Submitted by:
Sheikh Muhammad Danyal
Shermeen Wasif
Sumbla Tayyab
Syed Muhammad Ali Raza
Zoha Niazi

Submitted to:
Mr Fakhar Jaffery
Date: 4 th April 2015
Product no 1 : Jeans (Denim)
Country: Sri Lanka
INDUSTRY ANALYSIS
The textile industry in Pakistan is the largest manufacturing industry in Pakistan. The textile
industry continues to be the second largest employment generating sector in Pakistan and the 8th
largest exporter of textile products in Asia; and contributes 9.5% to the GDP providing
employment to about 15 million workforce of the country.
Textile exports were $10.5 billion by 2007. Textile exports share in total export of Pakistan has
declined from 67% in 1997 to 55% in 2008 due to governments unhealthy policies. Pakistan is
all set to increase its textile exports by three billion dollars this year since textile sector has
improved its production capacities over the last few years (Ahmad, 2014).

The following chart shows the Exports and Imports of Sri Lanka with respect to Pakistan.
250
200
150
Exports

100

Imports

50
0
2001

022002

032003

042004

052005

062006

072007 08

SWOT ANALYSIS
STRENGTHS
Raw Material
Fourth Largest Producer of cotton
Cheap Labor
Domestic Market (High Demand)

WEAKNESSES
No value addition for products
More raw material export now
Political instability
Untrained labor force
No technological advancements
Poor infrastructure (weak industrial
base and Load Shedding issue)

OPPORTUNITIES
THREATS
Reducing cost of production
No Quota System
Extending the product line
New competitor in market
Increased Marketing
Modernization
Collaboration
with
foreign
Shortened Fashion Lifecycles
companies

MARKET SEGMENTING AND TARGETING

The consumers would be targeted based on their demographics (age, gender and income) and
psychographics (inner satisfaction and fulfilling their wants). As Jeans are global in scope,
therefore, there would be a huge market. Marketing global segments could also be done as many
customers have comparable preferences, regardless of language, culture, economics or politics.
This is also referred to as Intermarket Segmentation. In order to determine target markets, a
set of factors for evaluation should be set.

Market segment size & growth: The right size and market growth rate are unique to
each exporter. The best market is not always the largest one.

Overall attractiveness: Market research should provide a good idea about how
competitive a market is for products like yours or potential substitutes to yours, as well as
price sensitivity for distributors and consumers.

Company goals, capabilities and resources: Consider your own goals and objectives
against your companys ability to provide marketing support.

PROCEDURE FOR EXPORTING READY MADE GARMENTS TO SRI LANKA

Firstly, the firm needs to be registered for exporting anything from Pakistan whether its private
a corporation. Secondly, it is a must to have a National Tax Number (NTN) and Sales Tax
number by the government. Without this, the company cannot receive payment and get custom
clearance. Thirdly, the firm needs to open up an account in the bank. Also, if the company is
receiving payment through Bank Transfer, the E-Form is needed from the bank for the custom
clearance and sales tax. Lastly, the firm needs to get a freight forwarder and shipping agent.
GOVERNMENTAL CONTROLS
Talking about governmental controls, there are no quotas since 2005. Before that, there were
quotas based on mens wear, womens wear, etc. Furthermore, there are no duties for exporter
but the importer has to pay duties according to the products import specifications and countrys
requirements. Many transactions are done in dollars as it is less hassle in money conversion
according to the exchange rate. For license requirements, invoice is prepared in which price and
quantity of our garments are set. Then there is E form, assigned by the bank. It includes NTN
number, ID card number, mode of shipment (Air or Water), quantity and price, etc.
ONLINE TRADE AGREEMENT AND ORDERS
The trade agreements are made online as the whole process is based on online communication.
First of all, sampling is done on different website to attract products target market, we will carry
out exhibitions or stalls through buying houses in Sri Lanka. Once the customer is interested in
buying our readymade garments, then online contracts would be made through L/C.
MODES OF ENTRY
The channel of distribution is an integrated system with the manufacturer on one end and the
final user on the other. We are dealing with direct export selling.. However, this approach is best
for achieving maximum profit and growth.

PAYMENT METHOD
We would use Sight letter of credit i.e. if the documents are in order and have been presented
on/before the expiry date, they are accepted by the bank; the exporter receives payment. It would
be a transferable confirmed L/C. If it has been confirmed by the exporters bank, that banks
responsibility is to pay the exporter if it does not receive payment from the importers bank.
CHANNEL MEMBERS

Clearing agents: It is the Customs Clearance agent who would know the working of all
the Customs Rules and Laws. They are responsible for checking whether the consignment
doesnt consist any banned products, volume, check quality, etc.
Freight forwarders: is a person or an organization that organizes shipment from
manufacturers to final customer. Forwarder contracts with the carrier to move the goods.
Different freight mode includes by air, ships, trucks or railroads. Documents that are
revised by a freight forwarder are Goods declaration (GD), Invoices, and Bill of Lading.
Insurance Company: For exporting Jeans, if any importer requires the insurance of the
product, then the company would insure the shipment.
Banks: needed in the process of payment. If the exporter has shipped the consignment,
the bank will contact importers bank for payment.
CONCLUSION
Textile industry is the backbone of the Pakistans economy. We have to seriously analyze its
strengths and weakness so as to make the textile industry more competent among its rivals. What
we really need here is to work out the plan and to implement it accordingly and although much
work has to be done by Government of Pakistan, it also the responsibility of the entrepreneurs to
cooperate and foresee the challenges and opportunities ahead. We can always win the race as it is
never too late to safeguard and grow this vital and promising sector of our economy.

Product no 2 :

Sahar With Citrus Pvt Ltd

Country to export :
Out of other Safta Countries like India , Bhutan , Nepal
AFGHANISTAN

and Maldives . I choose

Product I am going to launch and export :

Sahar with Citrus pvt ltd (Kinnows)
Reason to choose this product for Exports :

According to the World Trade Organization (WTO), the biggest export market of
Pakistani kinnow was Afghanistan in 2014, which bought $45.3 million worth of kinnow,
followed by Russia, whose purchases totaled $28.5 million in the same year. Because
they have the demand for our kinnow and Pakistan is not meeting their demand right now
And the cheap trade without taxes due to the Safta Agreements it will be totally free for
my firm Sahar with citrus ltd

According to statistics :

A Myth
that Afghanistan consumes Kinnows :
A Journal of Market potential for Pakistani Citrus fruit (Kinnow) in world By Dr. Noor
Ahmed Memon elaborates the current situation for exports to Afghanistan :
Dr Noor Ahmed says that WTO figures are contentious, noting that Afghanistan could not
possibly import that much kinnow from Pakistan because of its tiny population and weak
purchasing power. My suspicion is that Pakistani kinnow goes to central Asian states from
Afghanistan
Reference : Published in The Express Tribune, November 28th, 2012.
http://www.foodjournal.pk/2014/Jan-March-2014/PDF-Jan-March-2014/Dr-Noor-Kinnow.pdf

The key players in this trade to start my Business In Pakistan :

The channels through which I could export Sahar with Citrus Kinnows :

By license
given to
Afghani
Distributor

Open LC via
MCB

Whole Format of proposal to Export my Kinnows :

Use GAC
logistics
private Ltd

Product No 3 : Cement
Cement Industry of Pakistan
What is Cement?
Cement is a material with adhesive and cohesive properties that makes it capable of bonding
mineral fragment into a compact and rigid mass. The word cement seems to have been derived
from the middle age English cyment, and Latincaementum.

All Pakistan Cement Manufacturers Association (APCMA):

APCMA is the apex body of the cement manufacturers of Pakistan. It is registered body under
section 3 of the Trade Organization Ordinance 2007 wide license no 14, dated April 26, 2008
issued by Ministry of Commence. It was incorporated on14th of September 1992 under section
32 of the Companies Ordinance 1984.

Members:

Lucky Cement
Cherat Cement
Fecto Cement
DG Khan Cement
Attock Cement
Maple Leaf Cement
Fauji Cement
Pioneer Cement
Kohat Cement

Time for Action

Pakistan cement exports to its main international market of Afghanistan have fallen by a quarter
in the first nine months of the current fiscal year 2014-2015. Pakistan exported 2.06Mt cement to
Afghanistan in the July-March period of FY14-15, compared to 2.75Mt in the comparative
period of the previous fiscal, according to data by the All Pakistan Cement Manufacturers
Association (APCMA) which means that Pakistan is losing ground in Afghanistan to exports
from Iran and India. So, in this alarming situation, we should compete in this market and again
gain market share in the cement industry of Afghanistan.

Mode of Entry in the Market

I have chosen to do franchising agreement or do partnership with any existing APCMA member
company who does the export to Afghanistan.
Dealership for International Markets

OR
Registration as Exporter

Steps
Following are the steps for the mode of entry in the market:
Certificate of Chamber of Commerce in Pakistan
National Tax Number Certificate.
Export Import License (Jawaz Nama In the name of Partner in Afghanistan)
Blank Cheque in the name of The Company (As Security)
Copies of NIC
Contract (Agreement) on stamp paper worth Rs. 100 each attested by Notary Public or
Oath Commissioner.
Bank Statement last three years.
Company Profile/ Business Experience.
Affidavit (Non Default in Pakistan or Abroad) on Stamp Papers worth Rs. 100 each
attested by Notary Public/Oath Commissioner.
Partnership Deed attested on Stamp Paper worth Rs. 100 (Between Owner of the
Company & the person who own Jawaznama)