Production at just one location can massively increase the probability of supply chain failures. A multi-regional procurement approach can remedy this – and increase independence from individual players.
One attractive production location that companies should keep an eye on is Pakistan: home to local hero World Wide Group (WWG), part of a group of established aviation and logistics companies. We spoke with Hassan Madni of WWG about Pakistan’s locational advantages and why production in the emerging country can be extremely profitable for European companies.
Export country Pakistan
Pakistan is undergoing a transformation: numerous reforms, a growing economy and a large number of young, well-educated people make the country an interesting production location for European companies. In addition to construction materials, steel products and vehicle parts, important production sectors include textiles, leather goods and sporting goods. The textile industry in particular manufactures for export. The main customers are the USA, followed by China and Great Britain, but German companies are also increasingly opting for production in the Pakistani market.
Local heroes as a success factor
To help companies diversify and future-proof their procurement strategy, Hermes International, a division of Hermes Germany, is cooperating with the Pakistani company and Local Hero World Wide Group (WWG) as part of a strategic partnership.
WWG has been active in the Pakistani market for 50 years and is part of an owner-operated group of established aviation and logistics companies in Pakistan. As one of the top 3 forwarders in the country which is 100 percent run by local management, WWG offers interested companies a comprehensive range of services in addition to regional expertise and a local network. We spoke with Hassan Madni of WWG about the emerging procurement market of Pakistan.
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Hassan Madni, World Wide Group
For which companies is Pakistan interesting as a production location? From your point of view, what are the most important advantages of the location?
Pakistan produces textiles and clothing as well as sporting goods such as footballs and cricket equipment, but also surgical equipment for operating rooms or the dentistry sector. The progressive opening of the market after the first wave of the pandemic has led to a huge surge in demand for these products.
While other markets were still closed off, companies looked for alternative procurement markets – and found a reliable and profitable alternative in Pakistan. As a result, local companies were able to secure many new orders and successfully execute them to on-time delivery.
In addition, an important locational advantage of Pakistan is its geographical proximity to Europe – but also to the USA. This gives companies a major speed and cost advantage over production at other locations in Asia. Goods do not have to be reloaded, but start their journey to Europe directly – another enormous cost and time advantage.
The pandemic continues to cause major disruptions in the international movement of goods. Why should companies still enter the Pakistani market now?
The ongoing disruptions are currently affecting all markets – worldwide. However, Pakistan offers European companies considerable advantages thanks to its direct sea freight connection to Europe.
Moreover, Pakistani companies have already presented themselves as reliable partners for international companies before and during the pandemic. The quality of products is also high: Fifa, for example, manufactures its footballs locally, and the majority of cricket equipment also comes from Pakistani production – to name just two examples.
In terms of production costs, Pakistan can keep up with other production locations and is overall an extremely attractive sourcing location worth exploring.
What should those responsible pay particular attention to when entering the market? What challenges await interested companies?
As in other countries in the region, know-how about regional peculiarities is of course useful.. In this context, cooperation with a local service provider is obviously advantageous for interested companies – and goes hand in hand with considerable efficiency gains.
Security problems caused by the war in Afghanistan are fortunately a thing of the past. Several major retail and fashion companies have subsequently opened their own offices in Pakistan to manage local sourcing processes. At WWG, we encourage buyers* to explore the Pakistani market and of course fully support them at all times.
What does this support look like? What specific services do you offer your customers?
We see ourselves as a full-service provider and offer our customers a comprehensive service in the field of procurement and cross-border logistics: our service includes the provision of shipping solutions, end-to-end logistics as well as warehousing and 3pl. In addition, we take care of customs clearance or carry out quality controls on request. Our experts support our customers comprehensively and with their know-how in all matters: from production and quality control to customs clearance and cross-border logistics.
How did the partnership with the Hamburg-based logistics provider Hermes come about? And what plans are you pursuing together with your partner Hermes International?
Hermes and WWG have been working together since 2012. Since then, we have been focusing on providing our customers with a steadily growing and high-quality service.
Our common goal is to further expand the German-Pakistani trade channel and to offer our customers the best shipping solutions. Furthermore, we support companies that want to enter the Pakistani market or deepen their relations. We are committed to helping European companies recognize the advantages of Pakistan as a procurement market and realize their full potential here.