SM Vert Integ Report Final

8/4/2019 SM Vert Integ Report Final

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BACKWARD INTEGRATION STRATEGY

OF SUCCESFUL PAKISTANI COMPANIES

MASTERS OF BUSINESS ADMINISTRATION

STRATEGIC MANAGEMENT PROJECT REPORT

Prepared by

Merajuddin Mazhar 0936118

Muhammad Salman Shamim 0936119

Syed Muhammad Rehan 0836168

Project Manager

Dr. Mustaghis-ur-Rehman

A project in partial fulfillment of the award of

Masters of Business Administration

Shaheed Zulfiqar Ali Bhutto Institute of Information

Technology - SZABIST


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B INTE TION ST TE OF SUCCESFUL PAKISTANI COMPANIES


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ACKNOWLE EMENT

The most pleasant part of writing this reportis to thankthose who have contrib ted to it

The list of expressions of thanks no matter how extensive is always incomplete.

These acknowledgements are no exception.

After Almighty Allah we are grateful to ourteacher Dr. Mustaghis-ur-Rehman who has

helped us in every step and stage for compiling and making this report.


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ABST ACT

Backward integration can provide a tool for economic development in lesser developed

countries. At a micro level, transaction cost analysis provides an explanation for the

degree of vertical integration found in import channels. Macro level consequences of

backward integration are derived and policy recommendations are suggested to achieve

greaterbackward integration.


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TABLE OF CONTENTS

CHAPTER1: INTRODUCTION ................................................................................................ 6

1.1 Vertical Integration............................................................................................................ 6

1.2 key Driving Forces Vertical Integration ............................................................................. 7

1.2.1 Cost reductions ........................................................................................................... 7

1.2.2 Offensive Market Power: ............................................................................................ 7

1.2.3 Government policy: .................................................................................................... 8

CHAPTER2: LITERATURE REVIEW...................................................................................... 9

CHAPTER3: BACKWARD INTEGRATION STRATEGY OF SOME SUCCESFUL

PAKISTANI COMPANIES ...................................................................................................... 13

3.1 Chenab Textile Ltd .......................................................................................................... 13

3.1.1 Vision....................................................................................................................... 15

3.1.2 Mission..................................................................................................................... 15

3.1.3 Vertical Integration Strategy ofthe Company:........................................................... 15

3.1.4 Backward Integration:............................................................................................... 16

3.1.5 Spinning: .................................................................................................................. 16

3.1.6 Weaving: .................................................................................................................. 17

3.1.7 Preparation: .............................................................................................................. 17

3.1.8 Dyeing:..................................................................................................................... 18

3.2 Ismail Industries: ............................................................................................................. 19

3.2.1 Mission Statement: ................................................................................................... 20

3.2.2 Vision Statement:...................................................................................................... 20

3.2.3 Continuous Inclusion of New Products:..................................................................... 20

3.2.4 Value chain analysis: ................................................................................................ 20

3.2.5 Ismail Industries Brands Tree:................................................................................... 21

3.2.6 Backward Integration Strategy of Ismail Industries: ................................ .................. 23

3.2.7 Plastic Division of Ismail Industries Limited - Pakistan ................................ ............. 23

3.2.8 Products ................................................................................................................... 23

3.2.9 Technology............................................................................................................... 24

3.2.10 Philosophy of Business........................................................................................... 24

3.3 House of Habib:- ............................................................................................................. 25


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3.3.1 Companies hold by house of habib: ......................................................................... 25

3.3.2 Indus motors history: ............................................................................................... 26

3.3.3 Auvitronics History:- ................................................................................................ 27

3.3.4 Vertically Integrated Auvitronics for Indus Motors:............................... .................. 27

3.3.5 AgriAutos: ................................................................................................................ 28

3.3.6 Vertically Integrated Agri autos For Indus Motors:-............................... .................. 29

REFRENCES............................................................................................................................ 30


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LIST OF FIGURES AND TABLES

Page No

Figure 2-1 Historical Context of Vertical Integration 10

Figure 2-2 Operationali ation of Vertical Integration 12

Table 3-1 Chenab Production Facility 14

Figure 3-1 Ismail Industry CBU 21

Figure 3-2 Candy Land SBU 21

Figure 3-3 Bisconi SBU 21

Table 3-2 Asto Pack Details 23


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CHAPTER 1: INTRODUCTION

1.1 Verti l Integrati n

Verticalintegration is all about owning upstream suppliers and its downstreambuyers. It

also increases or decreases the intensity of control with respectto companys inputs and

distribution of outputs [Werner Z. Hirsch]

There are two types of verticalintegration:

1. Backward integration

2. Forward integration.

Backward integration is all about companys control of its inputs or supplies similarly

forward integration is all about companys control ofits distribution.

Over the years the strategic reasons for opting for a vertical integration strategy have

changed. Firms have used vertical integration in last decades to achieve economies of

scale and also it was used for smooth operations in mid 20th

century for supply of vital

inputs. Backward integration or forward integration is also considered as cost reduction

strategy.


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1.2 key Driving Forces Vertical Integration

There are multiple factors that contribute in the organi ation and existence of huge

integrated firms despite inherentinefficiencies. These canbe:

Reduced costs

Weak supply networks

Increased market power

Government policy

These factors are important during the early stages of an industry.

1.2.1 Cost reductions

There is a cost related advantage forintegrated firms over smaller firms when they avoid

costs on transactions in immature markets, mainly during early stages of market

development. Transaction costincludes the cost of measuring outputin all ofits

dimensions and the consequence of not measuring it perfectly. This is another reason

that forcers larger firms tobecome suppliers of global firms.

Economies of scale is also achievedby firms from reduced costs through verticalintegration, consequently otherbenefits which are also achieved includes:

y Improved Assets Management.

y Decreased fixed costs.

y Lesser raw material and procurement costs.

1.2.2 Offensive Market Power:

Since large integrated firms have increased access to resources like finances, human and

technology and they have morebargaining power,therefore,they arebetter positioned to

develop markets forthe new products


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1.2.3 Government policy:

Large integrated firms influence and benefits from government policies. In the early

stages ofindustrial development capital,labor and product markets as well as regulatory

environment are poorly developed and hence governments have greater control overtheallocation of resources. Larger firms in such emerging marketsbenefits from government

policies and graduallybecome more vertically integrated and hori ontally diversified.

Large vertically integrated firms are likely to emerge in high scale economy industries,in

situations where premium products arebeing pioneered. Because it can have a significant

impact on a business units position in its industry with respect to cost, differentiation,

and other strategic issues,the vertical scope ofthe firm is an important consideration in

corporate strategy.

.


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CHAPTER 2: LITERATURE REVIEW

Verticalintegration isbasically a strategy of corporate. It hasbeen the vital force in U.S.

business for managerial style and development related to high productivity. In the pastvertically integrated companies havebeen the main source for change and have increased

wealth for shareholders (Kathryn). Most of the times it was not identified by the

researchers that verticalintegration can work as an effective strategy, provided thatit was

used wisely,that wasbecause they usually took an aggregated view ofit.

Vertical integration can provide several advantages including the temporary state of art

ones that canbe measured againstthe advantages of flexibility to develop the innovations

in technology.

Firms that initiate an early vertical integration, link to a specific technology in an

inflexible fashion and can encounter the risk ofbeing wrong as well as the cost can be

extensive. Butifthese initiators are rightthen verticalintegration can serve as a toolthat

can help establish industry standards, orderthe disordered environments or decrease the

operating costs appreciably. Thus pilot plants shouldbebuiltby the firms earlierto learn

about distributors and suppliers before the intelligence gains can be matched by the

competitors experience.

An economic overview explains thatindustries that are operating in stable environments

and have large capital investments persists on being integrated, while firms having a

volatile market have rolledback (Ashay Desai et al). The two industries that will operate

on high integrated level are the mining and oil exploration industries.


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Figure 2-4 Historical Context of Vertical Integration

Several operations in the marketing as well as production of similar products is controlled

by a vertically integrated firm and its management follows an integrated profit policy

(Werner Z. Hirsch 1950). Vertical integration can workin the direction to the chief raw

materials, to the final consumer or in both directions simultaneously. Backward vertical

integration means thatthe unitthat started outthe verticalintegration is closerto the final

consumerthan any other unit. Forward verticalintegration means thatthe unitthat started

out vertical integration is far from the final consumer than any other unit. (Srinivasan).There are only few examples of pure vertically integrated firms. The reason is that the

ample volume has to be handled by such firms before they can introduce vertical

integration. Itbasically points outtowards large marketing and production volume which

is generally linked with several plants (hori ontal integration) or numerous commodities

orboth.

Firms usually choose the degree of verticalintegrationby their make orbuy decisions.

(Rudie Harrigan). Thus vertical integration is then analyzed from a long term profit

maximization viewpoint. It forms itsbasis on two grounds;


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(a)Strategy that relates to the future which is mostly and always different from the

present

(b)Strategic decision entail resource commitments

A firm that emphasizes on long term therefore willbase its vertical integration decision

on the probable changes as well as on the current changes in technology.

The two main results are:

1. Ifthe competition is high then integration is negatively affectedby technological

change.

2. The most advantageous level of integration and degree of completion in industry

are negatively related.

The findings propose that firms should examine outsiders regularly to evaluate if some

activities can be done by them more cheaply than in-house. Extensive integration will

have to give way to narrowerintegration with the maturity ofindustries.


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Figure 2-5 Operationalization of Vertical Integration


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CHAPTER 3: BACKWARD INTEGRATION

STRATEGY OF SOME SUCCESFULPAKISTANI COMPANIES

3.1 Chenab Textile Ltd

One of countrys leading textile group and one of the biggest exporters of domestic

textile products is Chenab group of Industries. Set up in 1974, as Chenab Fabrics &

Processing Mills Limited and latertransformed to Chenab Limited. Mian M. Latif and his

father Late Haji M. Saleem founded the industry, he was also known as a cotton

industrialist

It is regarded as one of leading manufacturers and exporters garments and related

products in Pakistan and is appreciated forthe high quality products. Since its operations

in 1975, Chenab hasbeen involved in all activities ranging from spinning to retailing and

is a successful organization when we considered it as vertically integrated unit. Its per

annum capacity of processing and finishing fabrics is more than 70 million meters into

and is highly effective and efficient. Chenab also offers a product range of:

y Bed linen,

y Bedspreads,

y Curtains

y Table linen

y Kitchen accessories

Chenabis also known for producing mens casual and formal wear, products for women

and children is alsobeen produced that has exclusive designs and fabrics in competition

with global markets.

State ofthe art machinery is an added competitive advantage for Chenabindustry.

Chenab has one ofthe larges processing facilities in textile industry in Pakistan and


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3.1.1 Vision

To be a competitive and customer focused organization with continuing commitmentto

excellence and standards.

3.1.2 Missiony Tobebusiness house of first choice for customers.y Tobe change leader.

y To produce innovative, relevant a cost effective products.y Setting and maintaining high standards

y To earn profits by achieving optimum level of production by using state othe arttechnologies.

y To provide ideal working conditions to employees and to take care in theircareer planning and reward the according to their skill and responsibility.

y To meet social and cultural obligations towards the societybeing a patrioticand conscientious corporate citizens.

3.1.3 Vertical Integration Strategy of the Company:

The fashion domain is real dynamic and highly aggressive. Chenab keeps a very vigilant

check and balance on world fashion industry. Product innovation, research and

development are achieved through this proactive strategy. People from different fields are

formed into teams to deal with this strategy. These fields include marketing, designing

and textiles. These expertises are combinedby Chenab forthe production of value chain

based on creativity upon the idea generatedby a technically skilled person. This value is

then furtherimprovedby marketing professionals who converts technical feasibility into

fashion and so the journey from imagination to physical implementation is thus

completed.

Textile industries are usually known for fabric manufacturing and itsbyproducts. Here at

Chenabthey alsobuild up long-termbusiness associations with customer and this canbe

only ensured through greater customer satisfaction and highest quality production.

As a vertically integrated organization, Chenab has an edge which beyond compare by

any other firm in this whole region. Research and developmentis the area which is under

heavy investmentby Chenab to support their proactive strategy through which new

products and new ideas are generated. They have Ginning, Spinning & weaving plants


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which allow them to create an array of weaves with differenttypes of yarn/fibers. Chenab

own its outlets throughoutthe country named ChenOne, resulting in bothbackward and

forward integration atthe same time andbenefiting from them.

3.1.4 Backward Integration:

With a capacity to process 0.5 billion meters per month of finished fabric the

manufacturing facilities related tobackward integration at Chenab comprises of:

y Ginning

y Spinning

y Weaving

y Processing

Chenabby all means is the largesttextile industry in the region

3.1.5 Spinning:

Pakistan textile industry has seen major changes due to its modernization in last few

years. The spinning division at Chenab Ltd. (Spinning Division) is fully automated with

computers and state ofthe arttechnology and all the equipments have been streamlined.

Thus the mechanical speed has greatly increased due the inclusion oftechnology.


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The process of opening of cotton bales is also fully automated at Chenab. To provide a

uniformblend of fiber properties threads frombales are mixed andblended together. To

attain highest efficiency atthe new automated high-speed feeding equipment and factthat

fiber properties are consistent, the bales are grouped in a systematic manner so that

production or feeding is done according to properties of fiber.

3.1.6 Weaving:

The oldest method from which fabric is made through yarn is weaving. Though the

modernized way is much faster and complex thebasic principal remains the same.

Cloth was traditionally woven by a wooden shuttle that moved horizontally back andforth across the loom, interlacing the filling yarn with the horizontally, lengthwise warp

yarn. Modern mills use high-speed shuttle less weaving machines that perform at

incredible rates and produce an endless variety of fabrics.

3.1.7 Preparation:

Customized fabric operation is the first crucial step towards the guaranteed final quality

of all finishing processes. Different fabrics are quality controlledbefore they go to

singeing,bleaching and mercerizing lines. Hi-tech equipment controlledby sophisticated

systems ensures total reliability and consistently optimal operations.


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3.1.8 Dyeing:

Equi pped with environment friendly Singeing, continuous bleaching, chainless

mercerizing and wider washing ranges compliments the back processes mandatory for

quality dyeing and printing of up to 200,000 meters a day.

A state ofthe arttesting lab equipped with the latest precision testing instruments assures

that specific customer standards are met.

Chenabs highly qualified and experienced technicians are able to cope with ever-

increasing quality standards and changing customer requirements. Their work starts from

the receipt of raw materials up to the time the final finished products have passed through

inspection/testing at all stages. The Company has also proven its commitmentto quality

by achieving distinct certifications and awards.

To ensure color consistency and quality computerized control systems management is

applied at all the dyeing lines process. The widest imaginable colors and the most

extraordinary range of dye stuffs are achieved due to the massive and continuous dying

lines. Continuity, fastness and uniformity of products and fabrics are ensured dyeing atChenab.


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3.2 Ismail Industries:

ISMAIL INDUSTRIES Ltd. was incorporated as a public limited company in 1989.

Ismail industry under the name of CANDYLAND manufactures very good quality

confectionery products. Also underthebrand name BISCONNI ,they acquired abiscuit

company from IBL (Meiji) in 2002 consequently expanding their portfolio and entering

into manufacturing ofbiscuits. In orderto caterto lower priced segment as competition

from small-scale manufacturers was increasing, they launched FIRST, another

confectionery company, in 2003. Ismail Industries has now, recently established a unit

forthe manufacturing of Cast Polypropylene by the name of ASTRO PACKto pursue a

backward integration strategy and portfolio diversification.

With the state-of-the-art technology and most updated process technology, they are

considered as pioneers in the country. They have realized how important efficiency and

creativity is to achieve stability and growth in dynamic and competitive environment.

Putting people first strategy is the reason for their success. The company therefore

continues to train, recruit and retain the best professionals in the field. More food

technologists are employed by them than any other confectionery manufacturer in

Pakistan and also they have an extremely modern laboratory capable of developing

innovative products and testing products and ingredients for quality and consistency. The

company pride on their selves as they are an equal opportunity employer and they have a

diverse team who is playing their roles in various departments for the success of the

company.

Societal concerns and contribute to the environment is their vital responsibility as good

corporate citizens. ISO 9001-2000 certificationbenchmark was achieved by them which

serves as a key strength forthem.

Around more than 30 countries, they export their confectionary products around the

globe which includes USA, Australia, Europe, Africa,Middle East and Far East and they

have a very strong business relationship in these countries for more than 20 years. The


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reason forthis long lasting relationship with their customers is the commitmenttowards

better quality and satisfaction of customers around the globe. A dedicated R&D

departmentin the company to keep the company sideby side with the latesttrends in the

industry. They have a very strict Quality Assurance Programs to ensure the adequate,

proper and safer products to end users.

3.2.1 Mission Statement:

To become the top confectionary producers in Pakistan and South Asian markets

which retaining our competitive advantage through excellent quality of own products

that are continuously redesigned and innovated to satisfy customers

3.2.2 Vision Statement:

We aim to offer high quality product to our customer by remaining the most

technologically advanced company in this field. We strive to be brand leaders in all the

categories that we compete in. We wish to have substantial presence outside of

Pakistan through export and local manufacturing

3.2.3 Continuous Inclusion of New Products:

As the confectionary products have very short span of life thats why company puts

greater emphasis on continuous development of new products in every fourto six months

through its dedicated R&D department. The middle line managers also use well known

international products as its benchmark for newly developed products so that they can

produce thattype of high standard products in the local market of Pakistan.

3.2.4 Value chain analysis:

Ismailindustries value chain activity initiates from the raw material and ends in the hands

ofthe consumer. The value chain continues towards the end ofthe product distribution

and each step ofthe value chain adds value to cost as well as consumer.


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3.2.5 Ismail Industries Brands Tree:

Figure 6-1 Ismail Industry CBU

Figure 3-2 Candy Land SBU

Figure 3-3 Bisconi SBU


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3.2.5.1 CandyLand

CandyLand is one ofthebusiness units of Ismail industries which have highly advances

and sophisticated technology and therefore the CandyLand is the only one in Pakistan in

confectionary manufacturer to invest in such an extensive range of machinery.Companys commitment to its consumers is reflected through its continuous expansion

and tobuild high customer expectations and striving to exceed them every time; they are

continuously working hard.

3.2.5.2 Bisconni

Bisconni is another strategic business unit that manufactures an extensive variety of

biscuits and cookies. This business unit of Ismail industries is also continuously

expanding its range of products and recognized itself as a major player in the biscuit

industry in Pakistan in a very short span oftime.

3.2.5.3 SnackCity

Snackcity is their latest expansion in food items which is another strategic business unit

of Ismail Industries. They have invested in the worldsbest equipmentto produce potato

chips and other savory snacks. Though snackcity was incorporated in June 2006buttheir

products have gained popularity and status amongstits consumers in a very short period.


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3.2.6 Backward Integration Strategy of Ismail Industries:

Previously, for packaging their products they have different vendorsbut recently they felt

thatthey can do itby their self and they have launched their plastic division to fulfilltheir

packaging needs through Astro-Pack. The reason for this backward integration is also

customer focus because they want the adequate and quality products to serve to their

customers timely.

3.2.7 Plastic Division of Ismail Industries Limited - Pakistan

Astro-Packis one ofthe eminent pioneers in inventive solutions to hard packaging needs

of the mounting market of Pakistan. Today's stretchy packaging companies require

special films to tender the best solutions to meet new packaging challenges that now

come into viewbecause of high tech and faster converting and packaging machines.

Their products include new generation of films,buttoday they havebecome a necessity,

especially when quality conscious customers can not afford to have sealing failures or

weak tear resistance. Their CPP twistable grade films are best suited to replace PVC

based films, which are a possible health hazard, when used in food items. Laminationgrade films add to the ultimate seal strength and improve gloss in a laminate.

3.2.8 Products

Following Products are currently available at Astro-Pack,but custom made films for

unique applications are also made to fulfillthe customers needs.

Films Type Code Standard Gauges ApplicationsLamination Grade APL 20, 25, 35, 50 Microns F/F LaminationMetallizable Grade APM 20, 25 Microns MetallizationTwistable Grade APT 33, 38 Microns Candy wrappers

White Opaque Grade APW 25, 50 Microns F/F LaminationTable 3-2 Asto Pack Details


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3.2.9 Technology

Astro-Pack has invested in the latest technology without compromising the quality of

end products. The total production system ensures that parameters are closely monitored

to keep the consistency of the product. The auxiliary equipments / testing equipmentshave alsobeen selected to match the quality ofthe plant. They havebeen acquired from

thebest machinery manufacturers in the world.

Their plant is backed by the support and expertise of GRUPPO COLINES. Their

technical and marketing teams have been trained in Italy at their training centers and

facilities. Astro-Packs world-class technology has capability to produce special films

from three layer structures to five layer high barrier films, depending on the unique

requirement ofthe consumers product.

3.2.10 Philosophy ofBusiness

Astro-Packbelieves in up to date and depth study of new trends and new product

developments. They are fully aware that the recent developments in converting and

induction of high speed machines has left very little room for packaging materials that

have low performances. Today's converter or customer cannot afford to compromise on

quality.

They strongly believe that "customer is a king " and to grow, they need to keep their

selves in line with their "needs" and "wants". They realize thatin the present competitive

market, their customers deserve to get the best, in terms of quality, so that they have

minimal wastage oftime and materials. After allit adds up to more profits....!


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3.3 House of Habib:-

The history ofthe House of Habib goes back to middle of the previous-to-last century

when Esmail Ali of Jamnagar, India, set up a small utensil factory in Bombay. His son

Habib Esmail,born in 1878, founded the House of Habib. Habib was very young when

his father died, forcing him tojoin thebusiness of his uncle Cassum Mohammad. Cassum

Mohammad was the owner of Khoja Mithabai Nathoo, a merchant, and a manufacturer of

copper and brass utensils. It was because of his association with Mithabai Nathoo that

Habib Ismaeel came tobe known as Seth HabibMitha.

The House of Habib holds many distinctions in Pakistan's history. Habib Bank was

shifted to Pakistan on the personalbidding of Quaid-e-Azam Mohammad Ali Jinnah. He

came to the aid ofthe nascent state "evenbefore the Govt of Pakistan was ready to issue

appropriate government paper" with a Rs 80 million loan when the Reserve Bank of India

failed to deliver Pakistan share ofRs 750 million heldby it. Itis said thatMohammad Ali

Habib gave ablank cheque on Lloyd Bankto the Quaid-e-Azam who wrote Rs 80 million

in it.

The Habib family set up offices in Vienna and Geneva as early as 1912 and incorporated

Habib and Sons in 1921, which dealtinbrass, metal scraps and gold with "Lion of Ali" &

Zulfiqar embossed on it. The Habib Bank still uses this as its insignia.

3.3.1 Companies hold by house of habib:

The Habib group today consists of:

y Finance division - Bank AL Habib, Habib Metropolitan Bank, Habib Bank AG

Zurich, Habibsons Bank, Habib African Bank, Habib Overseas Bank, Habib

Insurance Limited,

y Motors - Indus Motors Company and Agri Auto


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y Manufacturing - Shabbir Tiles and Ceramics, Thal jute, AuVitronics, Thal

Engineering, DYNEA Pakistan Limited, Baluchistan Laminates, Noble (PVT)

Limited, Pakistan Papersack Corporation Ltd., Horn Plastics Canada

y Retail - Makro Habib Limited.

y IT - Noble Computer services.

3.3.2 Indus motors history:

Indus Motor Company (IMC) is a joint venture between the House of Habib , Toyota

Motor Corporation Japan (TMC) , and Toyota Tsusho Corporation Japan (TTC) for

assembling, progressive manufacturing and marketing of Toyota vehicles in Pakistan

since July 01, 1990. IMC is engaged in sole distributorship of Toyota and Daihatsu MotorCompany Ltd. vehicles in Pakistan through its dealership network.

The company was incorporated in Pakistan as a public limited company in December

1989 and started commercial production in May 1993. The shares of company are quoted

on the stock exchanges of Pakistan. Toyota Motor Corporation and Toyota Tsusho

Corporation have 25 % stake in the company equity. The majority shareholder is the

House of Habib.

IMC's production facilities are located at Port Bin Qasim Industrial Zone near Karachiin

an area measuring over 105 acres. Indus Motor Companys plant is the only

manufacturing site in the world where both Toyota and Daihatsu brands are being

manufactured.

Heavy investment was made to build its production facilities based on state of art

technologies. To ensure highestlevel of productivity world-renowned Toyota Production

Systems are implemented.

IMC's Product line includes 6 variants of the newly introduced Toyota Corolla, Toyota

Hilux Single Cabin 4x2 and 4 versions of Daihatsu Cuore. We also have a wide range of

imported vehicles.


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3.3.3 Auvitronics History:-

AuVitronics Limited (or AVT as it is commonly referred) was established as a publiclimited companyby House of Habib in July 1983. AVT is the pioneerin using modern

technology forthe production of audio/video cassettes in Pakistan. Itis also the industry

leader.

AVT enters the next century by diversifying into plastic moulding parts and sub-

assemblies, in technical collaboration with a Malaysian company, for the automobile

industry.

The company has over 300 employees. AVT takes pride in providing significant

employmentto females, which comprise over one third ofthe work force.

3.3.4 Vertically Integrated Auvitronics for Indus Motors:

Auvitronics Ltds corebusiness was media production in which they were making Audio

and video cassettes afterwards when these data carrying technologies were diminishing

Auvitronics started new ventures to explore. In 1993 when Indus motors commissioned

Its plant at port qasim auvitronics relaunched itself as plastic molding company with

same equipmentsbut different dyes. Now a days 70% of Indus motors Plastic, asbestos

and other molded items are suppliedby Auvitronics Ltd.


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Products Supplied by AVT to Indus motors:-

y Lamps

y OuterMirrors

y Bumpers

y ExteriorOrnamentation

y Grill, Cowl Top & Wheel Cap.

y Decorative Parts

y Steering Wheels

y Garnishes

y Scuffs & Mirrors

y Handle Assembly Inside

3.3.5 AgriAutos:

Agriauto Industries Limited is a public limited company incorporated in 1981 and quoted

on the stock exchange. The company is one of the leading automotive components

manufacturers in the private sector and the first company in Pakistan to acquire TS16949

certification.

Technical Collaborations with leading international companies have added to the

company's technical versatility. The product range covers both original equipment

manufacturers (OEM) and after market.

Quality control is maintained at all stages of manufacturing. The company follows

international standards i.e. B.S.S., S.A.E, ASTM, JIS, ISO & TS-16949, as the basis of

quality control program. Agriauto's production lines are backed by well-equippedstandard room and have persistently sought to consolidate technological and product

excellence. Agriauto is a part ofthe prestigious House of Habib Group.


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3.3.6 Vertically Integrated Agri autos For Indus Motors:-

Agri autos wasbasically formed in 1981 to manufacture Tractors and other heavy

drilling,construction machinery . Later on House of Habib utilized its capabilities for

manufacturing automobile parts for Indus motor.

Products Suppliedby AVT to Indus motors:-

y Shock absorbers.

y Cylinder sleeves.

y Gaskets.

y Camshafts.

y Doorlocks and hinges.

y Steeringbox.


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Toyota Indus Motor Company Limited Corporate Website

http://www.toyota-indus.com/

Werner Z. Hirsch (1950) Toward a Definition of Integration Vol. 17, No. 2 (Oct.,),

pp. 159-165

(article consists of 7 pages)

Wernerfelt et al (1986) Technical Change, Competition and Vertical Integration

Documents

SM Vert Integ Report Final