Suicide bombings, assassinations of top Pakistan is one of the leading countries in the world when it comes to the export of raw animal hides that are then used for the production of finished leather goods by global design brands. Being an Islamic Republic, Pakistanis celebrate Eid-ul-Adha with rigorous fervour once a year. It is the time when cattle are sacrificed for the love of a higher entity. The resulting by-product of which, are raw animal hides. These are then processed on a rudimentary level into something that will not decompose and rot by treating them with a cocktail of chemicals that remove animal fat and fur from the hides. The process is referred to as ‘tanning’ of the hides. A tanned hide is what leads to the finished leather product after going through a series of steps. Tanning serves to preserve the hide so that it can be used later, towards a finished product.
Value addition refers to the phenomenon where value is added to something. It could be with respect to a product or a process. What value addition does is that it literally adds value in monetary terms. Say for example that someone sells a certain number of tanned skins on the open market. The price that the tanned skin will fetch will be a lot less compared to what a finished product made from the same skin; will be able to sell for. Therefore it makes a lot more sense to ‘add value’ to a raw material and then sell it instead of just selling the raw material.
Pakistan suffers from a huge trade deficit every year. Our imports far exceed our exports year in year out. What this does is that it puts extraordinary pressure on our already thin resources. In order to bridge this gap we need to add value to our raw materials/products before selling them off on the international market. Say, for example that an Italian design house were to locate its manufacturing operations to Pakistan instead of Italy, what this would do is that instead of us sending tanned hides to Italy, we would be sending finished goods. The price of the finished goods would be a lot more compared to the price of the raw hide, therefore giving us an advantage.
Value addition is not only valid in the context of leather goods but applies to other categories of products as well. Pakistan is naturally blessed with all four seasons and all kinds of terrain. This gives us the ability to be able to grow almost any fruit/vegetable known to man. The district of Sargodha for example, produces one of the best qualities of oranges in world. Multan and Southern Punjab are renowned the world over for producing the best varieties of mangoes. What these districts lack though, are food processing/packaging plants that process and package fruits to international standards. If the government was to help these districts towards setting up of fruit processing zones that processed these fruits with regards to internationally applicable rules and regulations and within health and safety concerns then Pakistan would be able to increase its exports ten-fold. The demand for mangoes especially and that too of the quality and taste that are available in Pakistan is massive the world over. What we need to do is to tap into this demand and help ourselves by different innovative techniques.
Taking cues from Bangladesh and India whose economies have prospered a great deal over the past few years due to value addition we can clearly see that Pakistan does not lag behind any country when it comes to the potential for being able to produce good quality products. What we lack though is the work ethic and the know-how required to add value to our products. What is required nevertheless is a seriousness and a willingness on the part of the government to act decisively towards introducing measures and laying the groundwork for the addition of value towards our exports. Our neighbours are acting fast and have discovered that lagging behind in this respect would only amount to a significant loss to their national exchequers. They add value, prepare convincing marketing strategies and are thus able to take advantage of their potential.
The writer is a business administration professional
