Panther Tyres’ phenomenally good 2021

After finally being publicly listed, the tyre company has made a strong debut showing

If you’ve never heard of Panthers Tyres, you’re not alone. The website, for instance, only features one lone annual report for 2021 (which was released to the Pakistan Stock Exchange on September 1). That’s because Panther Tyres only just became a publicly listed company this year, in February 2021. In fcat, it was oversubscribed 4.4 times over, and managed to raise Rs2.6 billion. That is not surprising; what is perhaps surprising is that the company did not go for an IPO sooner. After all, it was established all the way back in 1983. It is a welcome change; there are only two other publicly listed companies that manufacture tyres. So, who is behind this company? Panther Tyres took life as Mian Tyre and Rubber Company Limited, started by, you guessed it, someone called ‘Mian’ - Mian Iftikhar Ahmed, to be precise. He graduated with an engineering degree from Idaho in 1970, and then for the next 13 years worked for multinational companies. His own manufacturing business was to start in October 1983, which was later converted to a public limited company in 2003. Panther Tyres Limited is the first company in Pakistan to locally manufacture tyres for two wheelers, beginning in 1984, and three wheelers in 1993. Considering that Pakistan had been importing tyres before then, it is somewhat an achievement that just two years later, in 1996, the company was able to start exporting “Made in Pakistan” wheelbarrow tyres and tubes to European markets. That would kick off an exporting frenzy: today, the company exports tyres and tubes to different countries including Turkey, Poland, Macedonia, Egypt, Bangladesh, UAE, Afghanistan, Nigeria, Kenya, Sudan, Ethiopia, Algeria, Yemen and Somalia.

What about in Pakistan? Panther Tyres caters to two two broad markets locally, i.e. OEM (original equipment manufacturer) and replacement market. In that department, Panther Tyres has done very well, having maintained a long standing relationship with key OEMs such as Suzuki, Honda and Yamaha for more than 26 years. Meanwhile, the replacement market is the secondary market for tyre manufacturers, including distributors, wholesalers and retailers. This has picked up in recent years, since this market depends on increased imports, and increased sales of used vehicles. After sales from OEM, the vehicles become part of the replacement market, which means the size of the replacement market increases every year. All of this simply means more tyre demand for companies like Panther Tyres. In fact, the Company has built a large distribution network with more than 500 direct business partners. In April 2018, the company even ventured into trading automobile lubricants and spare parts, taking advantage of that distribution system.

Still, the local tyre industry only caters to 35% of demand; the remaining 65% demand is catered by imports. This is set to change. For one, the local industry, after many years, has started making high quality tyres at lower costs due to increased efficiency. Second, the federal government has started taking stricter measures against smuggling and under-invoicing.

That meant that this was the right time for the company to seek an IPO. It helped that the company had been doing financially alright. Sales in 2015 stood around Rs5.5 billion - this crossed the Rs10 billion mark in 2020. Meanwhile, profits hovered around the steady Rs200 million mark.

But nothing compares to the year 2021, which has been a record year for the company. This year, the company’s sales shot up to Rs16 billion. In fact, the compounded annual growth rate over the last five years has been at 22%. Exports sales of the company also increased from Rs878 million to Rs 1,350 million, posting a growth of 54%. While selling and distribution expenses during the year increased from Rs414 million to Rs581 million, it was offset by higher capacity utilization. This meant sales stood at an astonishing Rs851 million, compared to last year’s Rs251 million.

And Panther Tyres has been working diligently at investing back. The company generated 1,951 million cash from operations prior to working capital changes, and to support working capital requirements Rs.2,464 million were already invested. Another Rs 1,860 million was invested in plant and machinery in line with the expansion plan.

What expansion plan? The very plan that the IPO was needed for. All segments of segments of production are being increased, but especially relating to tractor.The first phase of the expansion will be completed by September 30, 2021 which will support the company’s sales plan for the year 2022. The second phase of expansion is expected to be completed by March 31, 2022, whereas the third phase is expected to be online by June 30, 2022. n

Unraveled

By Maxine Bédat cutting the cloth

This survey of the excesses of the garment industry puts a determinedly human face on the high cost of cheap clothing

Clothing has never been cheaper, nor its volumes so immense. A casual browse of the summer sales at Swedish fast fashion purveyor H&M unearths a sleeveless dress in white cotton for £3, and a pair of “Conscious” drawstring-waist trousers cut from a viscose-polyamide mix for £9. At Manchester-based Boohoo, which is running a 70 per cent off promotion, bandeau tops and a “Mindful” white cotton T-shirt will each set you back just £2. For less than a cup of coffee, you might be tempted to buy that T-shirt and, even if you didn’t really like it, toss it in a donation bin after a wear or two. At £2, what’s the harm? But there are vast — and for those of us in the west, often unseen — consequences to be paid for these small, mindless purchases, as Maxine Bédat outlines in her smart new book Unraveled: The Life and Death of a Garment. Although fashion’s abuses have been well documented for decades (see the sweatshop controversies of the 1990s) the problem has ballooned rapidly. In the first 15 years of this century, global garment production is estimated to have doubled to as many as 150bn items per year — a staggering figure when you consider the size of the global population (7.9bn) and the number of clothes already stuffed in our closets. The toll of our cheap fashion thrills is paid by the women (and it’s mostly women) who work 12 to 14-hour days on a gruelling assembly line making less than the legal minimum wage in Dhaka, Bangladesh — an experience one woman likens to a “cage”. It’s paid in the ink-black, sinus-clogging rivers where Chinese factories allegedly dump their chemical waste, and which dangerously feed the local crops. It’s paid in the early-onset cancers of pesticide-spraying farmers in Texas, who unload their cotton in opaque exchanges before it is shipped halfway around the world to be spun, woven and saturated with industrial chemicals (a third of a pound of which are involved in the making of an average T-shirt, Bédat reports). And it’s paid in our accelerating climate emergency, of which fashion, with its relentless demand for raw materials and energy to power its factories, is a significant contributor.

For those who have seen Andrew Morgan’s documentary The True Cost (2015), or read Elizabeth Cline’s Overdressed (2012) or Dana Thomas’s Fashionopolis (2019), all of which investigate the growing human and environmental abuses of the globalised garment trade, none of this might sound particularly new.

Bédat is a former lawyer and fashion entrepreneur who in 2019 founded the New Standard Institute, a not-for-profit that combats greenwashing in the fashion industry. What she brings to that growing body of literature is a meticulously researched, even-handed and remarkably human account of how fashion, in its pursuit of ever-lower prices and higher profits, became so reckless, dirty and inhumane.

The author’s journey begins in Texas, where she discovers what half a century of spraying fertilisers and chemicals has done to the soil and to farmers’ health, and yet why so few are willing to make the switch to organic. (It’s simply too costly for them to do without further government-sponsored financial incentives, and even though only 0.7 per cent of the world’s cotton is organic, there is not enough demand for it, meaning cotton sometimes trades at a lower multiple to conventional cotton than other kinds of organic crops.)

She then travels to China to see why manufacturing jeans there costs only a fifth the price it does in El Paso, Texas, once the denim capital of the world — low wages and poor environmental and worker protections have a lot to do with it. Later, in Bangladesh and Sri Lanka, she meets the seamstresses who toil in factories, some of whom are also coerced into sex work when there are not enough garments to sew.

Back in America, Bédat observes the robot-like way in which warehouse workers must operate at Amazon, now the US’s largest clothing retailer. And finally she looks at where our clothes, once discarded or “donated”, ultimately end up: often, in burning refuse piles in Africa.

Throughout — and this is where the book excels — she connects the dots between what she is seeing first-hand, and the many forces that have turned fashion into the dangerous and disconnected industry it is today. Among them, neoliberalism, labour unions, western trade policies designed to protect domestic manufacture that in fact have the opposite effect, and fashion brands’ shift away from making their own clothes to merely curating and selling them.

In profiling individuals and telling their stories, Bédat gives a human cast to a book that might have otherwise been mired in statistics, as so much writing about fashion and sustainability (mine included) often is.

But is it enough to get readers to change their shopping habits and to become, as she suggests in her final chapter, not just consumers but citizens advocating for change? Perhaps because of Bédat’s approach — so measured in her language, so careful not to sensationalise — I didn’t feel the same rousing drive to change my habits as I have after digesting certain articles and documentaries on fashion and climate. And the suggestions to buy less but better, and to put social media pressure on fashion executives, have appeared many times before.

Yet her stories of the people she so empathetically profiled in writing this book — the cotton farmer who said he’d “rather spray” than switch to organic, the sewing women living in shanties in Bangladesh and Sri Lanka, who profess no hope for themselves and only for their children — will stay with me a long time. Courtesy FT