Al-Karam Textiles SWOT Analysis

The following are the strengths of Al-Karam textiles

STRENGTHS

1)    ISO Certification:

Al-Karam Textiles have received ISO 9000, as well as ISO 14000 certifications from internationally renowned ISO auditors. This is a big strength because the existence of non-harmonized standards for similar technologies in different countries or regions can contribute to so-called “technical barriers to trade”. Al – Karam textiles, being export minded, have sensed the need to be certified, so that their clients in other countries are reassured of the quality of the product that Al-Karam offers is equal to or superior to the quality of an international standard. 

2) State of the art equipment

Al – Karam Textiles have imported the latest machinery from Europe. Their machinery comprises of equipment used in spinning and weaving. They use the latest type of loom, called the shuttle-less loom in their operations which is the latest technology and which is capable of producing a very high thread count rate, in the range of 100 threads per sq inch (the normal is 30-40). Therefore, their products are capable of meeting international standards of weaving, dyeing and printing, for example using dyes that do not irritate the skin. This is being done to get a competitive edge over rival firms so that when the WTO promulgates free economy in the whole world, Al-Karam will have no problem in competing with international competitors.

A-l Karam has a policy of continuously upgrading its machines to remain among the  most modern and efficient textile mills in the country.

3) Brand Name

Al-Karam Textiles have established a big name for themselves in the textiles and garments industry. Their brand name is very strong in the Pakistani mass and industrial market as well as some industrial buyers in the USA and Europe. Their brand name has a lot of appeal in the Pakistani mass market and they have very loyal customers, who trust the quality of design and the quality of the cloth itself.

4) Highly motivated workforce

Al-Karam Textiles employs about 9000 workers, who work in three shifts of eight hours each throughout the day. They are very motivated because they are paid better than other people in textile mills, and they like the atmosphere of working at Al-Karam. There is a labor union in Al- Karam Textiles, but relationships between the union and the management is amicable and not acrimonious. The best indication of the amicable relationship is that that there has been not a single strike at Al-Karma Textiles since its inception.

5) Diverse product range

Al-Karam Textiles have built a reputation for manufacturing high quality and diverse products and this is displayed in their product line. They have high-end products like bed-sheets, pillow cases, curtains, and fashion wear which are exported only, as well as medium-end clothing products like Chancellor Latha, Sana Safina’s, which cater to the men and women’s preferences respectively for design and fashion.

6) Availability of cheap labor

Although their workers are paid better than other workers in the same industry, their wage rate is still much lower than what workers get in other countries.  This, coupled with their modern machinery, gives them the competitive edge over rival firms in the global marketplace.

7) Access to high quality cotton (in short staple category)

Al-Karam Textiles produces yarn for its fabrics, as it has a composite spinning unit. This basically means that it makes its own thread, uses that thread to produce the cloth and use that cloth to make finished items like bedsheets, towels and clothes etc. For its medium-end products it uses the short staple cotton. Short staple cotton is a category of cotton which is readily available in Pakistan and which is of a very high quality. Al-Karam can use this category of cotton in its textiles for use in the composite plant for processing.

8) Dealings with high quality international brands

Al-Karam Textiles has linkages with high end international brands like IKEA, Nordstrom and Nautica. The organizations behind the brands use the superior quality of Al-Karam’s fabrics in their product line and market it by using their brand names. This association of Al-Karam with these top brands has enhanced the brand image of Al-Karam and has made it into a prestige brand among the industrial buyers of USA and Europe.

9) Own Power Generation

Al Karam Textile Mills are powered by their own 6.4 M Watt Generator and hence are not dependant on KESC power supply. Power costs in the country, especially in Karachi are among the highest in the world also load shedding plays havoc with production schedules. 

Weaknesses

Weak Information Systems
Al-Karam Textiles is an established textile company, which has excellent production facilities. They have excellent machinery and CAD/CAM systems. But it is still conventionally operated – most of the emphasis is on machine and worker efficiency. They still have not progressed to the information systems, which can help their cause in the international arena. Due to the quickly changing market scenario currently, they need efficient and accurate ways of processing data into information by using different types of information systems like expert systems, knowledge based systems, sales management, and online systems so that customers can track their orders over the Internet. This is currently being practiced by Gul Ahmed Textiles, their chief competitor. 

‘Seth’ culture
The work culture in Al – Karam textiles is like that of a traditional ‘Seth’ owned company. There is no little formal documentation in the offices, the people are hired on an ad-hoc basis, qualifications are not taken into account while selecting the people for their jobs, and the growth of the company is dependant on the wishes and whims (the personal vision) of the ‘Seth’. In these cases, it is hard to separate the owner from his company. The Seth’s personality decides the future path of the company. The company should be 0*.00-

Weak R&D facilities
There is hardly any investment in research and development in the Al Karam Textiles, or indeed in any other Pakistani industry, which puts Pakistani textile companies at a significant disadvantage in the world forum. Pakistan’s main competitors, India and China, on the other hand have been investing heavily in BMR for a longer period of time and so have infrastructure already in place to exploit the situation that is expected to arise in 2005 with the abolishment of quotas.

Lack of HR development
Modern technology in the textile sector requires educated and trained technicians.  Similarly, modern management techniques are a major need, particularly in areas of Marketing, Finance and Human Resource Management.

Opportunities

Big opportunities in the local low-end market
International brand of designer wear

Threats

Political/Economic Instability
Piracy of designs
Brand name infringement
Tough international and national competitors
Lack of conducive environment for business
Absence of quota under WTO
Anti-dumping laws
Uncertainty of Cycle

1) Long staple cotton not commonly available
Al-Karam currently has the policy of focusing on the higher profit margin sector of international industrial selling. This means that most of their attention in production and marketing is diverted into the international arena. These organizations buy higher quality fabrics from Al-Karam textiles – these require a higher count rate of threads per square inch. For these fabrics, the most suitable type of cotton is the long staple variety of cotton, which is not available in Pakistan

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