Five trade ideas from Pakistan in the age of falling exports

A little subtlety; a little ingenuity

We export around Rs5 billion worth of sausage casings to the European market. This is a fast growing sector and in between the years of 2009–2011 this sector has witnessed an average annual growth rate of around 40pc

A guy from the town of Okara who was recently admitted to a university in Lahore always dreamed of starting a business. He thought if these big guys can export products why can’t I. But he did not have any money. What he had was just a skill and knowledge of his local cobblers market in Okara who knew the old art of crafting handmade leather shoes. He thought why not use their skill and build an online shop where people from all over the world can buy hand crafted original leather shoes. And here the idea of Markhor was born. He decided to raise the money fromkickstarter.com, a crowd funding platform. Surprisingly, he was able to raise $100,000 and with that cash in hand, what then happened is history. Themarkhor.com is now a global recognition for Pakistan’s hand craftedleather shoes. The lesson of this inspiring story is that anyone can make his or her dreams true provided if he or she decides to follow them with heart.

Given the present slump in Pakistan’s exports, everyone is pessimistic about how we can raise them. Exporters are worried about their decreasing earnings while the government is worried about its decreasing foreign exchange reserves. But, still there are some export ideas which can be developed as sustainable and profitable businesses even in this gloomy scenario. The key point is to focus on value addition, labour intensive industries, and those which do not require too much electricity usage.

Here are those ideas which can be pursued even in this weather of despair and of course, they can be started with comparatively less investment.

1. Sausage casings:

Sausage lovers know that their favourite sausage is usually wrapped in an invisible casing or covering which is either made of animal guts or cellulose based edible material but few of them know that Pakistan exports a lot of sausage casings to the world. We export around Rs5 billion worth of sausage casings to the European market. This is a fast growing sector and in between the years of 2009–2011 this sector has witnessed an average annual growth rate of around 40pc. The world trade in this sector is more than $1 billion. There are three main categories of natural sausage casings which are exported. Sheep casings, Cow casings, and Hog casings. China is the export leader in the world for hog and sheep casings while Brazil is the export leader for Cow casings. Other important exporters are USA and Argentina. Pakistan’s main export strength is in sheep casings. The main importers for the sausage casings are the European Union including Germany, Spain, Netherlands, Italy; and Japan. Germany is the world’s biggest importer for sausage casings. These casings are usually bought from the slaughter houses and usually received in a cleaned form. They are then measured, and salt is applied to them, dried and then they are stored in a cold place ready for export. Their pricing is done in hanks which is a measure of their length. One hank is usually equal to 82 meters. Their quality is determined by the number of holes they contain. The one which contains too much holes is usually wasted. The best quality sheep casings are usually imported from Afghanistan. One can get more information by googling Pakistan’s export of sausage casings as there are some pre-feasibility studies already available on the internet made by some government institutions of Pakistan. Although it is a little dirty business as there is some smell in a sausage casing manufacturing unit but the huge profit margin which this product has, can help overcome that smell.

2. Plastic flakes:

The plastic flakes is a basic simple industry in which plastic bottles which we use in daily life e.g. of beverages or mineral water are crushed and then exported to other countries in the world. The process flow and the investment required for this is also very minimal. You just have to collect the plastic bottles either through the local Kabariyaor from your city’s local solid waste management company, put them in boiling or hot water to remove the contamination and insert them in the crusher. A simple crusher machine also does not costs almost more than half a million rupees. What you need primarily is an export order to start this business; you can get the crushing done from any local manufacturer. These plastic flakes are usually exported to China from Pakistan and are used in the plastic recycling industry as China has a huge plastic recycling industry. China imports 56pc (by weight) of the global plastic waste. China and Hong Kong combined together import around $8 billion worth of plastic waste products. The primary exporter to China is European Union as a lot of plastic waste is produced there. Pakistan being in proximity to China and new logistic routes being developed for CPEC can help Pakistani firms to offer competitive rates to Chinese companies engaged in the recycling industry.

Pakistan is already exporting its fruits in the international market but another way in which it can add value to its fruit exports and fetch a better price is by exporting branded versions of dried fruit products

3. Dried seasonal fruits:

Pakistan is already exporting its fruits in the international market but another way in which it can add value to its fruit exports and fetch a better price is by exporting branded versions of dried fruit products. When I went for the first time to Thailand, I was quite amazed by seeing beautifully packaged dried cut mangoes at local shops. They had to put a little sugar on them because mangoes of South East Asia are not sweet and tasty like ours. Similarly, in Philippines, they sell banana chips which are made of dried pieces of bananas. USAID has started a project in Northern areas for packaging and storing of dried apricots which can be later exported to USA and European countries. Total European imports for dried fruits is more than 1.7 billion euros. Along with retail consumption they are also used as a raw material in cereals, bakery, desserts and confectionary products. Dried grapes and dates both constitute a major portion of the EU imports which represent a big potential for those Pakistani startups who want to trade in this sector.

4. Condiments and sauces:

With the advent of globalisation, the distinction between local tastes is disappearing and we are adapting to a global culture and a global taste. People in Pakistan are trying and getting adapted to the salsa sauce and tartar sauce while people in Europe are tailoring their taste habits to consume spicy sauces. This change represents huge opportunity for those who have a sense of creativity in food and have an entrepreneurial spirit as well. In the past, we have only exported pickles from Pakistan but now many kinds of condiments can be exported from Pakistan including tartar sauce, garlic dips, salsa and others. The global spicy sauces trade is around $600 million and if we add our true spicy flavor of South Asia in this trade, we can make a lot from it.

5. Handicrafts:

Handicrafts is another sector which can help Pakistan is individually and at a national level in boosting the exports. It is ironic that that India is having an export of almost $3 billion while we are having handicraft exports of only $250 million sources as quoted by some data sources while the actual may be even less. I think the reason behind our meagre handicraft exports is a lack of understanding of the demand and trends in the consumer markets and secondly Pakistan’s hard image in the west. In the handicrafts section, along with the physical value of the product, another important thing is the social or cultural value of that artifact which you are selling. You need to build a story around your product. We as Pakistanis have a confused identity as to who we are that is why we are unable to tell the foreigners about our identity and the wonderful civilisational history which we have. We should build the story of Pakistan as the Land of one of oldest civilisations in the world to sell our hand crafted products. In my view, one should read Aitzaz Ehsan’s The Pakistan Saga for building a secular identity of Pakistan other than Islam and India to build a story around his handicraft’s business.