Mr. Anwar Javed, Managing Director, Pakistan Lubricants (Pvt.) Ltd., By Nasir Mahmood
Anwar Javed, Managing Director, Pakistan Lubricants (Pvt.) Ltd in his exclusive interview recollecting the history of his family efforts in oil business disclosed that Pakistan Lubricants founded in late 60s when lubricant industry was initiated in the country. Before this we were importing lubricants while the country had no oil refinery. Initially government had sanctioned six blending plants including ours. Out of six three were multinationals and three companies were local like us. Pakistan Lubricants, Haroon Oils, and Jamia belonged to local private sector. Today, this growth has reached up to 55 oil-blending plants,” he said.
As we have a culture of mushroom growth in all sectors without any proper planning, the same fate was being faced by this industry, which has destructed its viability. Each and every government whether it was a democratic or military regime pleased its own people by issuing approvals unnecessarily to establish new blending plants in the country. It was done more rapidly in military regimes. This inflation and the highest number of 55 plants have eliminated their viability.
All successive governments instead of checking the full capacity utilization of already installed plants and without carefully studying the need of further plants frequently issued more permission to their blue-eyed people. However, even in those circumstances by the Grace of God we have not only survived but also carrying a popular brand of Master Oils all over the country. The reason is that our total emphasis is on maintaining the quality of products. We have never compromised on quality.
My father Ghayasuddin Ahmed was the founder of Pakistan Lubricants Company and it was started in 1967. In early 70s after completing education I joined my father and now my son belongs to third generation involved in this business. Ultimately, young blood brings more advanced ideas and new business concepts in each and every section of life. The present corporate concept of Master Oil and new media campaign is obviously designed by my son in the light of my life-long experience. And you can watch the result is quite encouraging.
Among the early starters Shell Company purchased Jamia and Haroon Oils is survived but they are now converted into a public limited company while we are still running as private limited concern. Perhaps this is a reason why they are not seemed much active in the field like us.
Among presently sanctioned lot of 55 most of the companies did not bother to adopt latest technology, bring innovation in the field and even they do not have their own brands in the market. Instead, they were looking for shortcuts just to earn more and spend less. They are simply purchasing the raw material from refineries, which is called Base Oil, and sell it in the market without any processing or value addition. The margin is obviously very thin therefore, such companies are gradually eliminating from the scene. Most of the units are already shut down but their sanctions are still valid. In branded products there are not more than six or seven manufacturers existing in the market, while others' existence is only on paper. They are neither developing plants nor any brand but they are spoiling the market through sales of inferior and unbranded products.
Another segment of those suppliers is active in the market, which has no approval from the government or any lawful authority. They are only registered with Sales Tax Department, which is not sufficient for doing oil and lubricants business. Hence this segment is more harmful for legal manufacturers like us. They have no plants, no machinery and no sites except their homegrown enterprises. But they are patronized by unscrupulous elements within the government authorities. This corruption is destroying the efforts of organized sector in oil and lubricants field. We belong to organized sector our all transactions are controlled and monitored by government, including purchase of raw material, additives and sales etc. but unorganized sector is doing such transactions scot-free they don't have to maintain any record or documentation of their purchases or sales. About 20 to 25 such operators are active in the market all over the country. They are called sales tax registered units and they don't have any permission or approval from Ministry of Petroleum and Natural Resource. If you go through a market survey you will be astonished to see that 99 percent of the shelf products belonged to such suppliers. They neither are paying government duties and taxes nor are they maintaining quality of the products. Their price is cheap hence the buyers are trapped for purchasing inferior products without sensing what damage was occurred to their vehicle engines and machinery.
This issue was brought and discussed time and again with concerned ministry but relevant authorities were reluctant to take any measures against such culprits, which is not a healthy sign. This attitude will ultimately promote activities of unorganized sector resulting in complete destruction of the organized sector in the country. This mafia is very strong that has nullified our all efforts at the government level whether it was in ministry, FBR or other departments.
Replying to a question about PSQCA he said: Yes! There is a government body in the name of PSQCA (Pakistan Standards and Quality Control Authority) but amazingly it has never interfered or took cognizance of this grave situation. Instead the government has delegated the power of checking lubricants quality control to Hydrocarbon Development Institute of Pakistan. They come only periodically to check the quality at our plants but this is an exercise in futility which is useless. These teams have never delivered the goods nor did they grab any sub-standard product or its manufacturer at any level. This means that there is no sub-standard oil or lubricants being sold or manufactured in Pakistan and we shall keep our eyes closed.
They should take samples of oil and lubricants from the open market and check quality of the products being sold there without any discrimination.
No doubt EDB (Engineering Development Board) is also directly involved with oil and lubricants industry and its day-to-day affairs but you will be surprised to know that it has never approached us or any other company of this trade.
We have another problem in marketing of the products that when we approach the big corporations like Pakistan Steel and PIA for participating in tenders for bulk supply or annual contract they say that they are bound to purchase the products of PSO only. This is very strange and solemn discrimination. In principle they should call open tender that could be participated by PSO too, check the quality and price and then place the order for purchasing. But they are not doing so. This attitude is badly affecting our business and the lubricant industry as a whole. Such corporations should ask for generic grades of lubricants but instead they demand for PSO brands and its supplied grades. It has monopolized all government organizations by PSO, which is not fair. We are not provided level playing field.
Smuggling of oil products is another menace being faced by this industry. Neighboring country Iran is the biggest source of smuggling and through out the year its products are flooded into Pakistani markets. Excise & Taxation department and the FBR authorities must check it but they don't bother.
Local vendors in making of fake lubricants are also misusing imported Carbon Oil. Carbon Oil is the basic need of tyre manufacturers but its open import is promoting the business of fake lubricants. This is an end product of crude oil in black color, which is a raw material for rubber manufacturing having no quality of oil but in our country it is being added in liquid oil to convert it into lubricants and greases, which is harmful. Only National Petro-carbon should import it. FBR and the Petroleum Ministry agreed on it but even then they have imposed no restriction on its import by general importers.
Commercial importers are also involved in trading of foreign oils and lubricants while the country has no need to import such items. We are already self sufficient in this sector. Therefore, precious foreign exchange should not be wasted on import of such items but our hierarchy is ignorant of its importance, I don't know why. Inferior oils are being imported from Dubai, Sharjah and Ajman, and sold in the market by inexperienced importers but nobody cares.
In view of the prevailing circumstances and law and order situation in the country strict security of the oil installation areas is of very much importance but this sensitive matter is frequently being ignored by government agencies. I want to bring this vital issue in the knowledge of competent authorities and urge to take care of it. This lapse could be very dangerous for the safety and security of these installations we should bring it on top priority, Anwar Javed Concluded.
