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Special series : Apparel factories in Pakistan - Top interview
Rapid growth of 20% per annum based on high technology and an abundant labor force.
Contributing to the local community through the training of engineers and supporting of schools.
RAJIBY INDUSTRIES: Mr. Salem SULTAN, Chairman & CEO
Mr. Ekhlaque ALMED, Director of Operations
Interviewer: Mr. Toshihiko Kumagai, General Manager, JUKI SINGAPORE PTE. LTD.
The apparel factories representing Karachi.
The apparel factories representing Karachi.

The official name of Pakistan is the Islamic Republic of Pakistan. In 1947, they gained their independence as Pakistan from the British colony of India. In 1971, East and West Pakistan separated, with the eastern half becoming a separate country, the People's Republic of Bangladesh, and the western half remaining as Pakistan. Pakistan is a bridge connecting the Middle East and Central Asia, facing India on the east, China on the north, and Iran and Afghanistan on the west.

It is also known as the place where the Indus civilization, one of the four great civilizations of the world, originated, bestowing upon Pakistanis a vastly rich historical heritage. Due to an insufficient transportation infrastructure, however, this heritage has yet to be exploited as a tourism resource.

They have maintained a high economic growth rate of 8.4% in 2005 and 7% in 2006. The major industries are agriculture and textiles, mainly based on the cotton harvested in the northern part of the country, which has given rise to an active sewing industry. In the export market, textile products are major, comprising an approximate 50% share. Cotton related products, leather goods and clothing made of synthetic fiber are exported to the USA (approximately 25% of the total exports) and other countries.

Many companies are covering the entire processes, from the raw materials using cotton to the apparel products. In particular, there are a number of large apparel companies manufacturing denim material for jean products. Their technology level is high, with many of the famous US and European brands being OEM manufactured in Karachi and other cities in the southern part of the country.

Among this Pakistani jean industry, the company attracting the most attention is RAJIBY. They have built a school for the training of engineers where even non-employees are accepted, as well as a hospital that is open to the public. As such, they are very active in their contributions to the local community, and their management attitude is regarded as an ideal example for apparel factories in Karachi.

The transportation infrastructure, including roads, is being gradually improved, and the apparel factories of Pakistan will undoubtedly be attracting more attention in the future.

"We are offering our own brand "Aladin" in the domestic market, but we need to work harder for this brand. In the future, we hope to promote it in the export market." Says Mr. Salem Sultan, Chairman and CEO.
"We are offering our own brand "Aladin" in the domestic market, but we need to work harder for this brand. In the future, we hope to promote it in the export market." Says Mr. Salem Sultan, Chairman and CEO.
Integrated production from raw materials to end products.

Kumagai: When we visit apparel factories in the city of Karachi, everybody mentions your company name as the eventual goal that they are aiming for. We understand that your company is representing not only Karachi, but also the whole of Pakistan. When did your company start?
Sultan: The company was founded in 1971. So, more than 30 years have passed.
Kumagai: 1971 is the year that your country was also born. Are you not one of the oldest apparel factories?
Ahmed: Yes. There are some old ones among the textile factories handling cotton. But for the apparel factories where sewing is the major work, most of them are relatively new.
Kumagai: As I understand, your company is currently making and exporting jeans. Have you always made jeans?
Sultan: When we started, we were making dresses and traditional clothes called Shalwar. When we started studying items suitable for export, we reached a conclusion that jeans might be the best since we had the raw materials in cotton and we could cover the entire processes from raw materials to end product. So, we made denim, and then started making jeans.
Kumagai: I see. Your company has received the trophy awarded to the most superior exporting companies from PREGMA for five consecutive years. So, were you thinking of an export business from the beginning. And have been making denim material and the end product of jeans.
Sultan: Yes, we received the Superior Export Company award for five consecutive years. I think we are the largest exporting company in Pakistan.


Annual growth of 20~30%.
Export customers are Europe and the USA, almost 50/50.


Kumagai: What are you making now?
Sultan: We make jean bottoms mainly, and we cover from the denim material to the jean products. Five pocket basic jeans being the main product, we make approximately 1 million pieces per month of stretch jeans and high grade jeans for men, women and children. We also make approximately 1 million meters of denim material. We buy material from outside, as well, because our own production is not enough.
Kumagai: How many factories do you have?
Ahmed: We have seven sewing factories altogether. Each one is independent, covering all necessary processes of cutting, sewing, finishing, inspecting and shipping. The factories focus on production, while functions common throughout the company, such as general administration, personnel, training, finance, information processing, sales/marketing, material procurement and factory management, are attended to at our headquarters. We have approximately 5,500 employees and more than 2,000 modern sewing machines, 90% of which are JUKI.
In addition to these sewing factories, we have a factory making denim material. So, including the employees at the material factory, the total is more than 7,000.
Kumagai: Looking at your monthly production volume, it has been growing rapidly: 380 thousand pieces in 2002, 480 thousand in 2003, 600 thousand in 2004, 770 thousand in 2005, 900 thousand in 2006 and now 1 million for this year. And your sales amount has also been increasing: 22 million US$ in 2002, 28 million in 2003, 35 million in 2004, 45 million in 2005, 50 million in 2006 and 60 million for this year. In other words, at a rate of 20~30% per year. Who are your export customer countries?
Sultan: We export to America and Europe at almost 50% each. In Europe, 17 countries including the UK, France and Germany. While the total numbers are almost the same for America and Europe, the lot size for each order is very different. In the future, we hope to export to Australia, Japan and many more countries.
Major factors for the enormous growth are: 1. quality, 2. social responsibility and contributions.
Kumagai: What, do you think, are the major contributors to such enormous growth?
Sultan: I do not think any one or two reasons to be attributable. Various strategies that were selected from time to time have turned out to be correct as a whole, I think. However, if I am to pick a few, I think we put importance on quality and have made efforts on improving quality. Since the founding of the company, we have always put importance on quality in managing the factories. The introduction of JUKI machines and employee training are part of such efforts.
Kumagai: When we visit your factories, we find them to be very clean and neat, and we can sense that your policies on quality are really understood by every one working in the factory. Anything other than quality?
Ahmed: As the second point, maybe we can mention "social responsibility", which includes contributions to the local community, improvements in the compensations to our employees and providing a good working environment. No. 3 may be Customer Satisfaction, and No.4 is "In Time", or in other words, on time delivery.
Kumagai: At many factories, it is common to list No.1, Quality, and No.2, Punctual delivery, as the most important factors. And in many cases, both quality and punctual delivery are included in the Customer Satisfaction category. What is unique in your case, I think, is the fact that you named "social responsibility" after "quality", then "customer satisfaction" and "punctual delivery". It gave me a new impression.
Sultan: Punctual delivery is of course important. But in our case, we think we must be "socially responsible" and meet "customer satisfaction" as the basis first, and without those, there is no significance in our existence as a company. Because our customers appreciate that such are the policies of our company, we continually receive orders and our employees are happy to be working for us. I think our growth is the result of all these things.


The first in-company vocational training school in the country.
The medical clinic is also made open to the public.


Kumagai: While many apparel factories are implementing various ideas placing your company as the model, one of the ideas is to establish a sewing training school in the factory. I hear that your company is the model.
Sultan: Because there is no training school in Karachi where they teach sewing work, I started a school in 2002 to train our employees in the company.
Kumagai: How many people are trained and how long is the training?
Sultan: The curriculum covers basic training for any new employee without any experience in sewing to become capable of working in the shop. A group of 40 people will be trained for a period of about one month at one time.
Kumagai: After that, those people will be assigned to various shops, I guess.
Sultan: At the shop, those people will go through on-the-job type training for an additional one month to get used to the production.
Kumagai: The company is paying a salary during this training period, I presume.
Sultan: That's right. This school started in 2002, as I said earlier, and originally it was intended for the training of our own people. Later on, however, we decided to accept non-employees in the area as a contribution to the local community. As a result, the UNDP (United Nations Development Programme) decided to support us through our government. So now, the school is managed under public support.
Kumagai: I also heard that your medical clinic is made available to the public.
Sultan: We have a clinic for our employees. And we built it in such a way that it faces outside of the factory, so that people in the neighborhood may also use it.
Kumagai: You obtained ISO certification at an early stage. You are cooperating in blood donations as a whole company. Also, your company has cleared the requirements to do business with Wal-Mart. I am really impressed with your sincere efforts in your contribution to the local community and for your social responsibility. Thank you very much.
Sultan: Tank you very much.
A chain system is employed using a hanger line of 50 operators per line.

Business models are clearly held in mind.

The business models that the company is aiming at are as follows:

  • To benefit from synergistic effect
  • Emergence of corporate value and resulting connectivity
  • Economy of Scale
  • Specialization of functions and employee growth

Because of such a clear vision, the company is respected by other companies in the industry and is considered a model factory in the apparel industry. It is a rare case in that a company is actually being managed according to its vision.

In the area of compliance, the company is regarded highly for treating its employees generously by financially supporting employee marriages, which are costly, in addition to making the school and medical clinic open to the public.

With regard to the ISO certifications, the company has acquired the following certifications, which are helping the company in winning customer trust, in addition to their quality level.

  • SA-8000:2001
  • ISO-9001:2000
  • WRAP
  • GOTS
  • WAL-MART
  • OE-100 Guideline
  • H & M
  • OEKO-TEX
  • Jones Apparel Group
  • Next

Employee satisfaction demonstrated by the low employee turnover rate of 4~5% per year.

The employee turnover rate of the company, as managed based on the philosophy described above, is only 4~5% a year. Such a low rate is good evidence of a management style placing importance on compliance. While the company advertises in newspapers for staff recruitment, the vacancies are immediately filled. In other words, it is a place where many people want to work.

This company is doing made-to-order business, where the ordering process is such that the company first makes and delivers some samples accordingto the customer's requirements, then after inspection by the customer, a volume order is placed. In the case of materials, basically those made by the company are used. For supporting materials such as buttons, however, some are furnished by the customer and some are procured by the company. The yearly cycle is such that the company makes samples in August and September and starts delivering from November.

Because the basic data for sample manufacturing is a hand drawn design in many cases, the company starts by creating patterns for manufacturing.


Own branding

Currently, the majority of the business is OEM production, for their overseas business in particular. Their target for the future is to develop their own brand business. As they have the capability, it may not be too long before they start exporting products under their own brand.

The factory is managed using a unique chain system using hangers. One line consists of approximately 50 operators with 2,000 hangers used in the line.
The factory is managed using a unique chain system using hangers. One line consists of approximately 50 operators with 2,000 hangers used in the line.
 
If high quality is to be targeted, it is inevitable that high quality machines will be introduced. Based on such a policy, JUKI sewing machines have been introduced. They are gaining a high reputation from customers in Europe and in the USA.
Training center  A group of 40 people are trained on the basics of sewing machine operation during a one month period. After that, there will be an additional month of OJT (on-the-job training).
Training center
A group of 40 people are trained on the basics of sewing machine operation during a one month period. After that, there will be an additional month of OJT (on-the-job training).
Cleaning tests, analyses and testing of materials are conducted thoroughly at the laboratories.
Cleaning tests, analyses and testing of materials are conducted thoroughly at the laboratories.
2-needle, Lockstitch Machine with automatic thread trimmer and an organaized split needle bar LH-3166-7 for double stich
2-needle, lockstitch machine with automatic thread trimmer and an organaized split needle bar LH-3166-7 for double stitch
Computer-controlled, eyelet buttonholing Machine  with trimmer for needle and looper thread with gimp MEB-3200
Computer-controlled, eyelet buttonholing Machine
with trimmer for needle and looper thread with gimp MEB-3200
Automatic 2-needle belt-loop attaching machine MOL-254
Automatic 2-needle belt-loop attaching machine MOL-254
High-speed, cylinder-bed, needle-feed, double chainstitch machine MH-1410 for attaching waistbands Computer-controlled cycle machine with input function AMS-221E decorative stitch
High-speed, cylinder-bed, needle-feed, double chainstitch machine MH-1410 for attaching waistbands Computer-controlled cycle machine with input function AMS-221E decorative stitch

Breakdown of the 1 million pieces produced per month by item
S.No Product Types Customer No. of Pcs(Per Month)
1 Stretch Twill Bottom C&A 200 K
2 5 Pocket Basic Jeans South Pole (Young Men Division) 300 K
3 High Fashion Bottom H&M, Disney, Texline 200 K
4 High Fashion Bottom in Twill H&M, Disney, Texline 200 K
5 High Fashion Bottom in Poplin Disney 100 K

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