Making of a Hi-Tech Vendor

By: Mohsin Syed Hybrid Technics (Pvt) Ltd.

Resume



Education

 MS. Electronics Engineering California State University. Los Angeles, U.S.A. 1980.   B.Sc. Electronics Engineering, University Of Engineering, Lahore 1976.

Commercial Pilot License Holder.



Engineering Experience

  Design Engineer Saudi Consult Saudi Arabia 1976-80 Member design team Jubail & Yambu Industrial Estates   Project Manager Mc Graw Edison Co. Los Angles, California U.S.A. 1981-84 Design and manufactured about five million units of Seven different electronic products

Resume



Extra Corporate Activities

     Chairman Punjab Industrial Estates Development & Management Company (PIE) Member Board Pakistan Aeronautical Complex Pakistan Airforce Kamra President Board of Management, Lahore District of Technical Education and Vocational Training Authority (TEVTA) Convener Deletion Program Committee Electrical & Electronic Products. Engineering Development Board (EDB).

President Aircraft Owner & Pilot Association Pakistan Chapter.

Foreign Collaborations

  Sulzer Ruti 1998  Mitsuba Corporation 1992 Switzerland Sucker + Muller + Hacoba 1993 Japan Germany     Shindengen Electric 1994 Thies 1999 IRO 2000 Barco Sedo 2000 Japan Germany Sweden Germany

Case History Hybrid Technics

      Electronic technology in Kot Lakhpat Industrial Estate.

 Acquisition of land: 1984-1987    Change of line of business Two years No drainage – sewerage removal from factory area.

No garbage removal & disposal.

   Broken roads.

Changing sales tax laws.

Harassment from sales, professional tax and customs department.

2.2 kanal Initial investment Present investment Starting Staff Present Strength cost of plot Rs. 400,000 Rs. 5.0 Million Rs. 50.0 Million 15 150

Start Up

 Start up of Hybrid in 1985  Technical Achievements  Fisheries Motors  Suzuki Car Electrical and Electronic Parts  Start up of Negotiations with Atlas Honda Ltd. , Honda Japan and Mitsuba from 1987 – 1992

Launch of Winker Flasher Project

 Financing of Project by Local Bank  Guarantee by Atlas Honda Ltd.  To local Bank  To Hybrid Technics to purchase the parts for seven Years minimum or One Million parts which they have met.

 Actually 13Years of purchasing has been done and still continues.

Business Volume with AHL Business Growth with AHL

150 100 50 0 0.559

91-92 8.68

50.01

110.606

94-95 99-2000 2004-05 period

Total Business Growth

Total Business Growth 199.606

200 150 100 50 0 1.216

91-92 9.833

94-95 59.364

99-00 2004-05

Jobs Created By Hybrid Technics

200 150

No.s Of Employees

100 50 0 91-92 94-95 99 2000 2004 05

Period

Custom Duty Paid by Hybrid

Rs. in Mln

6 5 4 3 2 1 0 2.71

5.24

5.85

0.10

1991 1994 1999 2004 92 95 2000 05

Period

Taxes Paid by Hybrid

6 5

Tax Deposit

4

Rs. in Million

3 2 1 0 5.222

0.158 0.373

0.993

1991 92 1994 95

Period

1999 2000 2004 05

Launch of Second Project 1994 Regulator Rectifier

 Issue High Cost of Technology  Long term financing not available from commercial Banks any more  Leasing option utilized to solve the problem  Atlas Honda Ltd. Commitment of Five Years  Financial charges of Equipment included in pricing formula

HI-TECH CDI PROJECT 2002 Capacitor Discharge Ignition

 Cost of Technology and machinery extremely high  Machines leased again with great difficulty  Production still on and is in third year of production

Problems

 Acquisition of land  Project financing at very high interest rate of 20% – 22% initially.

 Running finance costs were initially high but are now down to reasonable levels  Non availability of good quality raw material  Harassment from Sales Tax and Income Tax officials due to high tax rate

Solution and Way Forward

 For construction of factories, Industrial parks with one stop facility across the country  Technology cost will be even higher for the next projects  OEM Should invest jointly with the vendor  Prudential rules of debt equity should be changed for Hi Tech Project  Training of staff at international level should be tax deductible or partly Government sponsored  Sales tax + Income tax should be streamlined for no contact with the tax collectors

Solution and Way Forward

(Continued……)

 Tariffs of completely built up units and their basic prices should be monitored by the Tariffs Commission, CBR and EDB for quick reaction to dumping by other countries in Pakistan  Raw material of excellent quality should be allowed at Zero to Five Percent (0% - 5%) duty by commercial importers also  Pakistan Should switch over from a deletion based Engineering Industry to an Export based Engineering Industry

Solution and Way Forward

     Tax rates should be as follows for the Private Limited Companies to go Public on the stock exchange Present Rates Proposed rates Public Ltd Co.

Private Ltd Co. 35% 43% 15% 20% Partner Ship 25% 25% This structure should encourage excess liquidity with the people to go into Industrial growth rather than residential and agricultural plots

Recommendations

 Training programmes for converting technologists to entrepreneurs  Venture Capital System should be established by GoP.

 Technology Acquisition from International Market should be facilitated by Multinationals based in Pakistan  Mid size Pakistani Engineering Companies should enter the International Business Chain

Thank You***