orignal

Emco Industries

Internship Report

Presented To

The Principal,

Hailey College of Commerce

University of the Punjab, Lahore

Presented By

Abdullah Jawad

477

8th semester

B.com Honors

2006-2010


University of the Punjab, Lahore

Date

Sep 10, 2010

Letter of Transmittal

10 September 2010

Abdul Rasheed


University of the Punjab, Lahore.

Subject: Submission of the internship report.

Dear Sir

I feel immense pleasure in presenting to your good self, the internship report

as part of our course requirement. I found this report to be truly challenging in

many aspects, indeed very interesting in relation to the various interpretational

and engrossing exercises. Writing this report itself was truly comprehensive

learning experience.

The report covers some background and introduction of Emco Industries. It

covers analysis of financial ratios of two recent years and includes SWOT

analysis. It also covers the details of skills acquired during the internship

period and conclusions and recommendations.

I have tried my level best to complete the report with respect to the desired

requirements. However, if any explaining is required, I would be honored to

oblige.

Yours sincerely

Abdullah Jawad

Acknowledgement

I am very grateful to Accounts Manager Mr. Rizwan for giving me the

opportunity to do the internship.

I am also thankful to the employees of Emco Industries for their cooperation.

They have been very helpful in teaching me different procedures of relevant

information in as much details as possible. They never hesitated or did not

feel disturbed when I asked questions. It was a great opportunity to do

internship in such an organization. The experiences I have gathered will be

very beneficial in my career.

Table of Contents

Contents Pages

List of Illustrations/Charts ------------------------------------------------------------------------------------ 5

Executive Summary ------------------------------------------------------------------------------------------- 6-8

Historical Overview/Introduction ---------------------------------------------------------------------------

Introduction to Meezan Bank -------------------------------------------------------------

Branch Network ------------------------------------------------------------------------------

9-14

9-13

13-14

Corporate Profile ----------------------------------------------------------------------------------------------- 14-16

The Management Team ------------------------------------------------------------------------------------- 17-18

Vision and Mission Statements ---------------------------------------------------------------------------- 19

Ratio Analysis and Interpretation --------------------------------------------------------------------------- 20-27

SWOT Analysis ------------------------------------------------------------------------------------------------ 28-30

Skills acquired during Internship program ---------------------------------------------------------------

Introduction to Products --------------------------------------------------------------------

Profit Rates ------------------------------------------------------------------------------------

Current Weightages -------------------------------------------------------------------------

Pre-encashment Schedules ---------------------------------------------------------------

Car Ijarah --------------------------------------------------------------------------------------

Credit Administration ------------------------------------------------------------------------

Home Finance --------------------------------------------------------------------------------

Pay Orders and Cheque Books ----------------------------------------------------------

Other Facilities --------------------------------------------------------------------------------

Account Opening -----------------------------------------------------------------------------

31-78

31-47

48-51

52-55

56-58

59-60

61-63

64-66

67-69

69-72

73-78

Conclusion and Recommendations ----------------------------------------------------------------------- 79-80

Bibliography ----------------------------------------------------------------------------------------------------- 81

List of Illustrations

Illustrations Pages

Meezan Bank Key Data ---------------------------------------------------------------- 12

Earnings and Dividend Graph --------------------------------------------------------- 13

Credit Rating ----------------------------------------------------------------------------- 16

Shareholding Structure ------------------------------------------------------------------ 16

Organizational Structure ---------------------------------------------------------------- 18

Ratio Analysis Tables & Chats -------------------------------------------------------- 20-27

Introduction to Products ----------------------------------------------------------------- 31

Profit Payment Tiers --------------------------------------------------------------------- 35-46

Investment Tenure and Profit Payment --------------------------------------------- 43,46,47

Profit Rates --------------------------------------------------------------------------------- 48-51

Current Weightages ---------------------------------------------------------------------- 52-54

Pre-encashment Schedules ------------------------------------------------------------ 56-58

Entitlement Calculation (Car Finance) ----------------------------------------------- 60

Profit Calculation Method --------------------------------------------------------------- 63

Entitlement Calculation (Home Finance) ------------------------------------------- 66

Executive Summary

Historical Overview/Introduction

The parent company, The Imperial Electric Company (Pvt.) Ltd., was established in 1931 and has been involved in trading of electrical goods. Soon after the creation of Pakistan, the needs for import substitution was felt and the sponsors of the parent company made the decision to establish a small manufacturing unit for electrical goods.

In 1951, a very modest beginning was made by setting up a small facility

located in the basement of the offices of The Imperial Electric Company (Pvt.)

Ltd., for the production of electrical accessories. With single minded initiative

and efforts of Late Mr. AtaurRehman (the former Managing Director), the

facilities were continuously upgraded and a full fledged facility was

established in Lahore, Pakistan by 1954 under the same name of Electrical

Equipment Manufacturing Co. Ltd. (EMCO). The first comprehensive

Insulator Manufacturing Plant was in operation with the active participation,

know-how and machinery coming from Japan and France.

Keeping pace with the ever increasing and diversified demand of Insulators

for national utilities and electrical industries in Pakistan, it was decided in

1965 to expand the facilities to produce all types of insulators including those

required for extra high tension lines. At this stage, Associated Engineers

(Pvt.) Ltd., joined hands with The Imperial Electric Company (Pvt.) Ltd. (IEC)

to further expand EMCO.

The new plant located at Lahore Sheikhupura Road, Lahore was

commissioned in 1968 under the guidance of competent and seasoned

engineers of NGK Insulators, Japan. Since electrical ceramics is a very highly

specialized industry, requiring skill, experience, time tested formulae and

proven know-how, EMCO signed a technical collaboration agreement for

fifteen years with NGK, Japan, who are the world's largest and most

renowned manufacturers of insulators. With the active support of the

personnel from NGK and Pakistani engineers, EMCO was producing quality

insulators using mostly local raw materials. The plant is now manned by a

team of highly qualified and experienced Pakistani engineers apart form over

600 technicians and workers. The company has a present installed annual

capacity for the production of 6000 tons of insulators which is being upgraded

to 7500 tons by the end of 2006.

With the untiring efforts of the present Chairman, Mr. S. A.Mannan and the

late Managing Director, Mr. AttaurRehman, the company continued to be one

of the best facilities manufacturing quality insulators in the world. In 1983, the

company was listed on the Stock Exchanges of Pakistan as a Public Ltd.,

company and was renamed as EMCO Industries Limited.

In addition to electric porcelain, EMCO runs a full fledged department for the

production of chemical porcelain such as acid proof lining bricks, raschig

rings, saddles and special refractories. This line is now fully developed to

cater to the requirements of beverage factories, milk plants, chemical, edible

oil, fertilizer industries, for acid proof wares. EMCO, in 1995, signed a

licensing agreement with M/S. SIEMENS, Germany to manufacture Surge

Arresters from 66kv to 420kv (max. system voltage).

EMCO, in 2005, signed a know-how contract with M/S. HAPAM B.V.,

Netherlands, for the manufacturing of Disconnecting Switches.

EMCO firmly believes in a continuous research and development programme

to keep abreast with ever-diversifying requirements of porcelain insulators,

chemical porcelain and ceramic tiles. The normal production of insulators

requires rigid quality control, with limited performance tolerances

allowable. Considerable efforts, as such, are directed towards the production

of insulators with better performance characteristics and EMCO has all the in-

house testing facilities for this purpose. Moreover, our progress and

development is benefited by the rich experience gathered from NGK of

Japan. EMCO is still the only unit for manufacturing high tension insulators in

Pakistan and is not only supplying the entire requirement of the country, but is

also exporting to developing and developed countries all over the world.

Having achieved an enviable position in the field of electric ceramics, EMCO,

in 1983 decided to broad-base their manufacturing activities and utilize their

long experience in ceramics by adding an ultra modern plant for the

manufacturing of decorative WALL TILES with an annual capacity of 700,000

square meters. The entire machinery for the manufacture of tiles was

supplied by world renowned machinery manufacturers from Germany and

Italy. This plant was commissioned in 1985.

Another plant for Floor Tiles having an annual capacity of 1,000,000 square

meters was commissioned in late 1991. The machinery and know-how was

supplied by SACMI of Italy and the plant is producing comprehensive range of

Floor and Facing Tiles according to international standards. In 1996, the

need was felt to increase the production of the Wall Tile and subsequently an

agreement was signed with an Italian Company to supply machinery and

equipment to increase the output of the Wall Tile plant form 700,000 to

1,500,000 square meters per annum. This expanded facility was completed

in 1997. Currently the overall production capacity of both plants is 2,500,000

square meters. EMCO is the largest ceramic complex in Pakistan producing

over 30,000 tons of ceramics material annually.

Group

The parent company Imperial Electric Company (Pvt.) Ltd. was established in

1931 and the group now consists of the following companies

Emco Industries Limited

Established in the year 1954.

Commonly known as “EMCO”, they produce all types and sizes of high and

low voltage porcelain insulators and other porcelain products including high

voltage switchgear equipment. The plant was set up with the technical

collaboration of NGK Insulators Limited of Japan. EMCO is meeting

Pakistan’s entire demand for insulators and also export to a number of

countries in Middle East, Africa and Europe. EMCO also produces Wall and

Floor tiles.

The Imperial Electric Co. (Pvt.) Limited


They are leading OEM of Diesel Generating Sets (5 ~ 750 KVA). They are

also engaged in the indenting and sale of power generation, transmission and

distribution equipment and other industrial materials. They represent the

world's most renowned manufacturers which includes Copperweld, Puma

Power Plants, Alcoa, Foster Wheeler and Mirrlees Blackstone.

ICC (Pvt.) Limited


The company is engaged in design, supply of materials and construction of

transmission lines, substations, industrial plants, process equipment and pre-

stressed concrete pole plants.

ICC Textiles Limited

Established in the year 1990

The modern weaving plant is producing premium quality grey fabric, primarily

for the export market. It has an annual capacity to produce 40 million square

meters of grey fabric based on middle range cotton and cotton polyester

blends.The plant is equipped with 100 SulzerRuti Projectile P7100 weaving

machines and 72 high speed air jet JAT 710 weaving machines of various

widths from Toyota, Japan, along with complete European back process and

ancillary equipment.

Arabian Electric Transmission Line Construction Co.

Established in the year 1998

Commonly known as AETCON, was established as a joint venture between

ICC (Pvt.) Ltd., (Lahore, Pakistan) and Tamimi Company (Dammam, Saudi

Arabia) for the construction of High Voltage Transmission Lines and Sub-

stations on Turn-key basis.AETCON is presently registered in Abu Dhabi and

Kingdom of Saudi Arabia.

Vision and Mission Statements

Vision

While enhancing our "Stile" Brand as a Market Leader, Focusing our Human

Capital, continues to delight our Customers in the field of Building Materials,

Offering Best Quality Innovative Products at Prices Be-Fitting Stile Brand.

Improving Efficiency, Conserving Energy and being Environmental Friendly.

Taking into account the Stakeholders Interest.

Objectives

“Making our customers winners by constantly exceeding their expectations.”

Mission Statement

Our Mission is to maintain our position as the leader in the tile industry in

Pakistan and for this purpose we will continue to focus on:

We are committed to quality products and will provide our customers

with innovative sizes, designs and color scheme that they will be

delighted to have and shall provide them with excellent services to earn

their loyalty

We shall treat our employees fairly and shall provide conducive

working environment for them to learn and to grow with the company

The company shall earn adequate profits for its progress and growth

and for providing reasonable return to its stakeholder

ORGANIZATION STRUCTURE

Company EMCO Industries

Major Industry Electronic Products

Sub Industry Ceramic Tiles

Country PAKISTAN

Employees 1200

Corporate Information

Management Team

S.A. Mannan

Chairman

Tariq Rehman

Managing Director

HarisNoorani

Director Marketing

SuhailMannan

Director Production

Salem Rehman

Operative Director

AhsanMannan

Operative Director

MumtazHussain

General Manager Plant(Insulator & Tile)

Mansoor Jamal Butt

Chief Financial Officer

General Manager Marketing (Tile Division)

AttiurRehmanQureshi

Manager (S&M) Insulators

Auditors

Chartered Accountants

A. F. Ferguson & Co.

Registered / Head Office

Head Office

119-E/1, Hali Road, Gulberg-III, Lahore.P.O.Box No.36

Phone: (092) (42) 3587 2181 - 84

Fax: (092) (42) 3587 2191

Email: [email protected]

Factory Tile Division

19-Km, Lahore Sheikhupura Road, Lahore.

Phone: (092) (42) 7970293-4, 7970195

Fax: (092) (42) 7970593


Factory Insulator Division

19-Km, Lahore Sheikhupura Road, Lahore.

Phone: (092) (42) 7970293-4, 7970195

Fax: (092) (42) 7970592


Regional Office Islamabad

Plot No.269-A, Street No.6, I-9/3, Industrial Area, Islamabad, Pakistan

Phone: (092) (51) 443-1719/21

Fax: (092) (51) 443-0348


Regional Office Karachi

45-C.P & Berar Housing Society, Block 7 & 8, Amir Khusroo Road, Karachi.

Phone: (092) (21) 454 9827 - 9

Fax: (092) (21) 454 9861


Regional Office Lahore

204-Ferozpur Road, Behind Rehmanpura Bus Stop, Lahore, Pakistan.

Phone: (092) (42) 753-2802 - 3

Fax: (092) (42) 753-2801


Display Centre Lahore

204-Ferozpur Road, Behind Rehmanpura Bus Stop, Lahore, Pakistan.

Phone: (092) (42) 753-2802 - 3

Fax: (092) (42) 753-2801


Products

Emco industries have two types of products.

1. Insulators

2. Ceramic Tiles

Insulators

Suspension Insulators

Aero Form Insulators

Fog Type Insulators

Normal Insulators

Pin Type Insulators

Normal Pin Type Insulators

Post Insulators

Line Post Insulators

Station Post Insulators

Transformer Bushings

Transformer Bushing

Surge Arrestor

11KV

132KV

Dropout Cutout Insulator

Cutout Insulator

Shackle Insulator

Shackle Insulator

Guy Strain Insulator


Long Rod Insulator

Disconnect Switches

Suspension Insulators

Normal Insulators

Aero Form Insulators

Fog Type Insulators

Pin Type Insulators

http://www.emco.com.pk/insdetail.asp?id=31



Normal Pin Type Insulators B.S. Standard Type

Transformer Bushings

Transformer Bushing

Surge Arrestor

11KV




132KV

Dropout Cutout Insulator

Cutout Insulator

Shackle Insulator

Shackle Insulator








Long Rod Insulator




Ceramic Tiles

TRJ-805-006Traditional SeriesSize: 20 x 20 CM

TXB-008-107Prints & EffectsSize: 30 x 30 CM

Types

Geometric Series

Hala Series

Plain Deep Base

Plain pastel Base

Prints and Effects

Rustic Series(Floor Tiles)

Semi Matt – Granallia

Semi Matt –Plain

Semi Matt –Shaded

Semi Matt –Texture

Texture Dark Base

Texture Light Base

Traditional Series

Sizes

20x20 cm

25x25 cm

25x33 cm

30x30 cm

38x38 cm

Projects

Project : MALL ROAD UNDER PASS

NesPak

Lahore, Pakistan. This project was designed by EMCO. Emco tiles 30x30 cm are installed on both sides of walls.

Project : PACE PAKISTAN LTD.

Emco

Main Boulevard Gulberg, Lahore, Pakistan. Emco tiles 30x30 cm installed in all shops of three floors & wall tiles installed in different washrooms.

Project : SAHARA FOR LIFE TRUST

Sughra Shafi Hospital

Narowal, Pakistan. Emco tiles 20x25cm & 20x20 cm installed in major parts of the hospital.

Project : ISLAMIC UNIVERSITY

Higher Education Commission

Islamabad, Pakistan. Emco tiles both glazed & matt 20x20 cm installed in various parts of the university.

Technical specifications

Technical specifications of glazed floor tile according to European standard norms en-177 group BII,A

CHARACTERISTICSREQUIRED

VALUES

VALUES OF EMCO

PRODUTS

TEST ACCORDING TO

EUROPEAN NORM

Length & Width ± 0.5% ± 0.4% EN - 98Thickness ± 5.0% ± 2.5% EN - 98Straightness of Sides ± 0.5% ± 0.15% EN - 98Rectangularity ± 0.6% ± 0.25% EN - 98Surface Flatness (a) Deviation From Centre Curvature

± 0.5% ± 0.2% EN - 98

Surface Flatness (b) Edge Curvature

± 0.5% ± 0.25% EN - 98

Surface QualityMinimum 95% will be free from visible defects

¡Ý 95% EN - 98

Water AbsorptionAv.3<6 Individual Maximum 6.6

Av.3<4 Individual Maximum 4.5

EN - 98

Test reports

Analytical/test reports of ceramics wall tiles by P.C.S.I.R

Test ResultsWater Absorption 13%Dimensions Thickness 6.5 mm ± 2%Dimensions Rectangularity

± 0.2%

Surface Flatness - Centre Curvature

± 0.2%

Surface Flatness - Edge Curvature

± 0.2%

Surface Quality >95%Modulus Rupture 215 Kg/Cm

Dealers

Dealer Name City Address Phone FaxContact Name

MAGOON SONS

Lahore

85-FEROZEPUR

37531490-1

37587517

MR.TANVEER, MR.ALI

ROAD ICHRA

M.I.SANITARY STORE

Lahore

186-FEROZEPUR ROAD OPP GALAXY CINEMA

7575494-5

MR.IDREES

A.H.TRADERS

Lahore

172-H.COMMERCIAL ZONE,

5730301-5728839

MR.IMRAN MALIK

Laboratory

EMCO maintains a well equipped laboratory where fundamental research for development and routine quality control tests are carried out. Following are the quality control tests performed in laboratory on Raw Materials, Porcelain Bodies, Glazes, Cement and Plaster of Paris.

Raw Materials

* Visual Check* Refractoriness* Particle Size* pH* Viscosity* Chemical Analysis

Porcelain Bodies

* Particle Size* Water Content* Viscosity & Temperature* pH* Cake Hardness* Foreign Substance* Shrinkage* Sintering* Refractoriness* Chemical Analysis* Thermal Shock Resistance* Thermal Expansion

* Mechanical Strength* Dielectric Strength

Glazes

* Particle Size* Water Content* Viscosity* Color & Gloss* Refractoriness* Thermal Expansion* Chemical Analysis* High Temperature Fluidity* Body & Glaze Matching* Electrical Conductivity

Cement

* Flow Value* Mixing Ratio* Setting Time* Tensile Strength* Compressive Strength* Thermal Expansion

Plaster of Paris

* Mixing Ratio* Setting Time* Tensile Strength* Expansion* Sieve Analysis

Quality Control

EMCO has a very strict quality system and checks are kept at a number of stations of the manufacturing process. The system of quality assurance is according to ISO 9001.

SWOT Anylasis

Strengths

EMCO has the following strengths and is in more competitive position in

these areas than its competitors. Following are the main strong points of EMCO

Strong brand image

Strong dealer network

Strong quality, sale and service

Pioneer in Market

Market Leader in Ceramic Tiles

Strong grip in Construction Materials

Strong Management

Distribution of Authority

Strong research and development department

Free customer service

Strong Brand Image

EMCO has created the strong brand image in the mind of the customers

through higher quality and low price. The customers of the EMCO always prefer to

buy the EMCO Tiles.

EMCO is a popular company in Pakistan and every one knows about the EMCO

products and its brand. That’s why EMCO selling of Tiles are very high in the market

than the competitors selling.

Strong Dealer Network

It is also the plus point for the EMCO that it has also developed the strong

dealer network in the market. The dealers are always trying to sell the

EMCOproducts to the customers because they know there are high margin in the

EMCO products. They can get more money after selling the EMCO products. The

management of EMCO also provides more incentives to their dealers than their

competitors. Dealers are very conscious about the EMCO products and always guide

the customer in buying the EMCOproducts and tell them the more qualities of EMCO

products than others products.

Strong Quality, Sale and Service

EMCO is also in a strong position that it provides the superior quality to your

customers. It makes sense in the mind of the customers that EMCO products are

better in quality than the other companies’ products. EMCO also provides the after

sale service to their customers which delight the customers satisfaction. It is another

way to advertise the products because when customer is highly satisfied then he tells

the other ten persons that they should buy the EMCO products. It is the free publicity

of EMCO products that EMCO Company gains.

Market leader Ceramic Tiles

It is another strong point that EMCO is a market leader in Ceramic Tiles. The

Wall tile is more demanded by the customers than its competitor’s wall tilesbecause it

has more durability .EMCO always strives to provide the innovative features in

Ceramic Tiles. EMCOCeramicTilesis cheaper and has a higher quality than others

Ceramic Tiles. That’s why customers always purchase the EMCOwall tiles.

Number 2 in Ceramic tiles in Pakistan

After the Master TilesEMCO has a second position in Ceramic Tiles market.

EMCO always continuously strives to pursue the strategies adopted by the

competitors. As a consequence the price war starts among the companies so each

company reduces the prices and try to increase the sales of its refrigerators. EMCO

is also making efforts for the quality improvements than its competitor Master.

Strong Grip in Home Products

So EMCO is one of the companies, which is having a strong grip in the home

products i.e. wall tile, Floor Tile, etc that is a strong point for the company. EMCO is

penetrating the market by introducing the new home products like different sizes of

tiles and always trying to get the maximum shares in the market.

Strong Management

It is another plus point that EMCO has a strong management. Its employees

are more competent and fully skill and knowledge. They always cooperate the top

management in achieving the goals that are assigned to them. Employees are well

aware about the company objectives and so they are committed to the development

of company.

Distribution of Authority

Top management of EMCO delegates the power to the subordinates for

achieving the marketing objectives in a specified time period. So every manager has

an authority that use in achieving the Goals. He can easily handle the complaints of

customers and try to satisfy them. So it is a strong point for the EMCO because there

is decentralization of powers.

Strong Research and Development Department

EMCO has a strong research and development department that is

continuously trying to develop new features for the products.

R&D department spends huge amount of money for the development of

product. R&D makes research for introducing the new product and asks the

customers what they want extra in our products. For this purpose they hire the highly

qualified employees in R&D department. That is another strong position of EMCO.

Free Customer Service

EMCO provides free customer service to its customers. So the customers

always buy the EMCO products due to its free service and it becomes loyal customer

for the EMCO. EMCO always provides help to their customers for replacing the faulty

Ceramic tiles. EMCO always make efforts to satisfy the customers.

Public Limited Company

Although EMCO is owned by the EMCO Industries but its shares can be

purchased and sold in stock exchange market. So every one who is interested in

purchasing the shares of EMCO he can purchase. It is also called public limited

company. So people are more interested in buying the EMCO products.

Weaknesses

Like other companies EMCO has some weaknesses in operating the

business. If EMCO overcome on these weaknesses then it can become a

market leader in the home products. EMCO loose some competitive edge

in the following points

System variations

Lack of Product Variaty

Less Utilization of capacity

Financial Problems

System Variations

It is also the main weakness of EMCO that there are rapidly a change in

polices of selling the products.

That’s creates problems for the selling team how to sell the products to the

dealers because the top management requires the urgent amount of money. So

selling team sells the products sometimes on hard cash that will reduce the prices of

products that gives the benefits to the dealers and creates problems for the

management.

Lack of Product Variaty

EMCO has introduced more products of consumer items but there are more

needs to develop new consumer items like EMCO different styles and different sizes

of Tiles. Due to lack of productRange, Company cannot earn more profit because

consumers have high demand of these products and they say that if company is

investing in these products then we can keep all EMCO items and we never need to

keep other’s company products.

Less Utilization of Capacity

Due to lack of finance a company cannot utilize all its resources on its full

capacity. It increases the cost of products per unit that decreases the profit margin of

each consumer item. Sometimes company cannot allocate the resources according

to the requirements of production department that’s becomes the problem for the

complete utilization of resources. For the company it is also the main point of

weakness.

Financial Problems

Sometimes EMCO faces the financial problems because its stocks are so

much piled up in the stores that create the problem of cash flow because when the

stocks are not sold and the production is in process for 24 hours a day than the

company faces such problems. So a company aggressively researches the sources

of cash and stresses the dealers to sell the EMCO’s products to the end consumers.

Company sometimes sells their products on advance bases to the dealers and gives

them high margin of profit. That’s why a company is facing the financial problems and

company never pays attention on the alternative resources that will help in reducing

the stocks. That is a customer demand and due to this it is the main weakness of

company.

Opportunities

For the EMCO there are more opportunities for expansion the business. If

EMCO realize that opportunities then it will be more fruitful and profitable for the

company. Even if company does not take advantage of these opportunities then it will

loose its competitive position and high profit. Its competitors will give EMCO tough

time to pursuing the opportunities that are adopted by them. Following are the

opportunities for the EMCO.

Exploration of market in Pakistan

Increase in product range

Export opportunity

Increase in production capacity

Exploration of Market in Pakistan

EMCO has the opportunity to explore the market in all over the Pakistan.

Even though EMCO introduce its products in all cities of Pakistan but there are so

many places that have the capacity to absorb the EMCO’s products. These places

are tribal areas in NWFP and northern areas of Punjab and NWFP, central area of

SIND. If company introduces their products in these areas then it can get a large

amount of profit and increase its market shares.

Increase in ProductRange

It is the main opportunity for the EMCO that it can increase its product range

that will be a more profitable for the company. There are more needs to develop new

consumer items like EMCOdifferent style and size of ceramic tiles, Granite and other

items. Due to lack of productRange, Company cannot earn more profit because

consumers have high demand of these products. If EMCO does not take this

opportunity then it will loose high margin of profit and market share. It will reduce the

fixed cost and increase the efficiency of the employees.

Export Opportunity

EMCO Company has also the opportunity to export their products in other

international countries like UAE, SAUDI ARABIA, and other Arabic and African

countries. It will not only reduce the dependence on one market but also increase the

market shares and profits. It will also help the company to spread the fixed cost on all

of its production that will reduce the total cost and company will enjoy the high profit.

Increase in Production Line

Company can also increase its production line at the maximum level that will

increase the efficiency of the employees and also will reduce the total cost.

Sometimes company cannot allocate the resources according to the requirements of

production department that’s becomes the problem for the complete utilization of

resources. Company should look the market conditions then it will produce their

products.

Threats

EMCO Company in such a competitive era has many threats as well. These

threats are for the present situations and future. Company should make its policies

and strategies according to these threats. So following are the main threats for the

EMCO

Strong competition

China’s product introduction in the

market

Price war

Slow growth rate in Pakistan

Instability of government

Tax department

Investors

Strong Competition

There is very strong competition for the products in the market. So every

company tries to come in the number 1 position for achieving the maximum

shares in the market. Every company adopts different strategies for selling of

the products. It reduces the profit margin of each company and increase the

bargaining power of the buyers who will demand higher quality of products

and lower cost. That is the main threat for the EMCO Company.

China’s Product

China’s products are another threat for the Pakistani companies because

these products are cheaper than the Pakistani products. An even china

product not well in quality but it is comparatively in low prices than the

consumer’s home products that are manufactured by the indigenous

company. China products stress the indigenous companies to lower the

quality and prices that will not be profitable in the long run.

Price war

There is stiff competition in the products market that will cause the price war.

So every company reduces the prices of its products to increase the sales. It

will not only reduce the profit margin of the company but also reduce the

quality of products. So price war is the main threats for all the companies,

which are operating in these products.

Slow Growth Rate in Pakistan

There is also slow growth rate of home products in Pakistan that will increase

the stocks of the company. It becomes the burden for the company that how

to sell these stocks. Its main reason is that purchasing power of the buyer is

very low and it has no income to buy the expensive the home products. It is

also becoming a main threat for all the companies.

Instability of Government

The rapid changes in governments will become threats for the companies

because every government adopts its own policies for the industries. So it

increases the uncertainty for the investors who want to invest heavy amount

in their new projects. That’s become the major threat for the companies and

decreases the profitability. Due to fear of politically instability companies will

also not invest the heavy amounts.

Tax Department

Tax department is another major threat for the companies that will restrain the

business expansion. There is more complicated tax procedure for the

companies, which are interested to increase the investment in their

businesses. A tax department also asks the company from where it receives

the money and where this money will spend. Due to fear of heavy taxes

companies would not like to invest the heavy amount.

Investor’s

There are few people who have big investments and they are importing the

Chinese product by their own Brand name. This is a very big threat for the

company and company is trying to create some attraction for the investors to

demotivate the investors.

Conclusion

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