“Sapphire Textile

Mills Ltd.”
Final Project for
International Marketing
 Group Members
• Imran Zafar MA (Mkt. 01)
• Zainab Ismail MA (Mkt. 16)
• Madiha Hassan MPA (Mkt. 20)
• Irfan Mazhar MPA (Mkt. 21)
• Hammad Asghar MPA (Mkt. 22)
• Asif Naqvi MPA (Mkt. 23)
 Mission & Values
Mission:-

To build flexible manufacturing capabilities in the textile

industry to cater to the growing and evolving global
demands, keeping a lead position in our business,
maintaining our values based on good business and ethics,
and at the same time contributing in the development of the
community in which we work and live in.

Values:-
 
 People
 Relationship
 Integrity
 Diversity
 Environment
 Vision
• To be one of the premier textile company
recognized for Leadership in Technology,
Flexibility, Responsiveness, & Quality.

• Our workforce will be the most efficient in

industry through multiple skill learning, the
fostering of learning and the fostering of
teamwork and the security of the safest work
environment possible recognized as excellent
citizen in the local and regional community
through our financial and human resources
support and our sensitivity to the environment.
 Sapphire at a Glance
• Business history of more than four decades.

• The parent company of sapphire group of industries

was incorporated in 1969, named Sapphire Textile
Mill Limited.

• One of the largest textile company in Pakistan.

• Core Business portfolio (Yarns, Wovens, Knits, &

Home Textiles).
• 24 Manufacturing facilities in Pakistan.
• Managed by highly qualified and trained textile
engineers.

• Strategic Alliances with offshore companies.

• Extensive product development cell to cater Clients

Needs.

• Reaching 35 destinations across the globe.

• Actively involved in community welfare programs.

• Employing more than 12,500 people.

• Annual turnover US $ 255 million.

• Capital & Reserves (Equity) are Rs. 2,797,114,637 at June

30, 2005
 Markets…

North America

Asia
Europe

West
Africa
South
Africa
South
America

Australia
 Control & Ownership
• Control is Centralized. One man is running
the whole show (Muhammad Abdullah
Chairman Sapphire Group).

• Previously it was Single Ownership but

now it is Family Ownership, because all
the directors are from one family.
 Phase of International
Involvement & Sales Ratios
• It is in “Regular Foreign Marketing” phase of
international operations.
– The reason behind is that it has no office outside
Pakistan, all the orders are taken via internet, faxes,
phones, & buying houses.
Local
Sales
• Sales Ratios are: 32%

Export
Sales
68%
 Sales Figure & Production
Costs
• For the year ended June 30, 2005

Head Rupees

– Sales & Services 5,338,810,168

– Cost of Sales & Service 4,734,528,479
– Gross Profit 604,281,689
– Other Expenses 99,411,389
Comparison of Last Five
Millions
Years
8
7
6
5 Sales
Cost of Sales
4
Gross Profit
3
Assets
2
1
0
5 4 3 2 1
 Trade Barriers
• Tariffs: These barriers are
eliminated now from 1st January 100
92.9
2005. 90
83.223 85.046
80
– The other taxes which they have paid 70
72.481
in 2005 are about 92.9 million. 60
Comparison of the Taxes paid during 50 48.628 Taxes Paid in
last five years are: 40 Millions
30 27.4
20 20.4
10
• Non-Tariff: Some of these 0
barriers still exist like; 2001 2001 2003 2005

– Standards: like Child

labor, Social standards, Two units
can’t be together, From which country
you have import the Cotton.
– Quotas: Although
Pakistani govt. has taken off the
quota, but still there are quotas
imposed by the USA & Europe.
 Duties & Taxes
• Duties:
– Govt. of Pakistan has taken of all the Duties on
Imports of Cotton, but there is “5 %” import
duty on the import of Machinery.

• Taxes:
– Another good step taken by the Govt. of
Pakistan was the elimination of GST from 6 th
June 2005.
 EPRG Model
• According to this model Sapphire Textile
Mills Ltd. Stands in the first one i.e.

Ethnocentric: Because Planning, Decision

making, Strategies, and Top management are
under centralized control.
Mode of International Operation
& Management Structure
• Sapphire Textile Mills Ltd. is basically in
Import/Exports operations.
– Cotton is imported from various countries
depending upon the specifications of the buyer.
– Garments are exported to different countries.

• Management structure is:

– Matrix Structure
 Modes of Doing Business
• Authority & Decision Making:
– Top-Level Management Decisions
• Because family ownership is there, that’s why all the
powers are concentrated at Top Level (Directors
Level).
• Communication Emphasis:
– Direct Dealing
• They directly deal with their customers in the
international market via phone, emails, faxes, face-to-
face. They face lot of difficulties while communicating
with German & French clients because they don’t
speak English even if they know it.
• They have a web site ([Link]). But it is
only in English language.
• Formality & Tempo:
– Business is conducted in formal manner but the
speed of business depends upon the client.
• P-Time vs M-Time:
– Sapphire Textile Mills Ltd. is basically M-Time in
terms of Order Preparation while in terms of
other operations it is P-Time.
• Negotiating Emphasis:
– They negotiate with their clients before any deal
but in this negotiations Sapphire is dependent on
its clients. Sapphire’s basic aim is to create win-
win situation.
 Laws abided by & Methods of
Conflict Resolution
• In order to operate in the International arena
Sapphire Textile Mills Ltd. have to abide the

– Internal Labor Laws.

– Child Labor Laws.
– Recycling of Waste Materials.
– Minimum Wage Rate applied by the Govt. of Pakistan.
– Health & Safety Laws.

• Conflicts are normally resolved through

consultation method.
STEPLE Analysis
• Social:-

– Actively participating in Well being programs (funding

Scholarships to University Students)

– Certificate of Recognition for Excellence in Social Responsibility

Award by AAFA’s (American Apparel & Footwear Association)
for 2002-03.

– Schools for the children of their workers.

– Adopted measures against Child Labor.

– Producing Synthetic fiber (Man-made fiber) which is water

absorbent with good look.

– Air Max technology which is producing a cloth, which keeps the

body temperature same.

– Working on Anti-fungus, and Anti-perspirent cloths.

• Technological:-
– Continuously upgrading their technology which
helps in getting standard quality products.

– Use of Computerized Machinery is leading

towards the reduction of human contact with
machines.

• Ecological:-
– Proper treatment of Waste Water which can
cause diseases to humans as well as to water-
beings.
– Effluent Treatment Plant ensuring global
environment requirements.
• Political:-
– Complicated & time-taking Export/Import
documentation procedures.

– Scattered arrangements of the concerned departments.

– Friendly Foreign Policy.

– Subsidies on electricity are not provided which leads to

increased production costs.

– Image building in the International Arena.

– Price settlement of Cotton.

• Economical:-
– On the whole 60% of Exports of Pakistan, are
from Textile Sector.

– Abolition of quotas by the govt. of Pakistan has

resulted in the increased trade.

– High rate of Inflation (20%) is causing higher

Cotton prices.

– Higher Petrol prices are leading towards the

increased production costs and sales costs.
• Legal:-

– Boycott of Israel.

– Removal of GST, previously it was 15%.

– Removal of Import duties on Cotton imports and

reduction on import duties of Machinery up to
5%.

– Industrial and Labor laws.

– They have to follow the ISO series.

Conclusion of STEPLE Analysis
• This analysis indicates that overall it is in good position but
there are some factors which are posing some problem for it.

• Those variables which are in its control are in very good

position the main problem comes from the Political sector.

• The eased and consolidated procedures of documentation

would reduce the time & headache.

• The stabled prices of Petrol & Inflation would helps in the

reduction of production costs.

• Subsidies if govt. can be able to provide, would make

Sapphire and other textile exporters competitive in the
international market.
SWOT Analysis
Strengths:-

– Latest & Computerized technology (Air-Jet looms).

– Brilliant quality of yarn brands through which they prepare

the quality home textile.

– One window solution provider (Cotton Spinning

Yarn Fabric Stitch Finish Product.

– Lowest turnaround time of one weak for any sample.

– Exciting range of colors.

– Variety of finishes (Easy care, Wrinkle free, Water

repellent, Soil release, Anti-microbial, Flame retardant,
Fluorescent finish).

– Continuous R&D processes for the company and the client

(Anti stain & soil release as per client requirement)
• Weaknesses:-
– Centralized decision making.

– Although they are in the textile business from the last four
decades but they have not a single brand of their own.

– Unable to meet the demands of the client, which results in

order delays.

– They are a bit reluctant in exploring new markets and new

customers.

– Some of their employees are de-motivated up to some

extent b/z the incentives which Sapphire provides them
are limited.

– No proper marketing at International level.

• Opportunities:-
– There are markets in the International Arena which
are still unexplored i.e. Latin America, Central Asia,
Africa.

– In domestic market they are not focusing too much

although they are getting 32% of their profits from
this market.
• Threats:-
– In the International Market there is number of
competitors who are becoming threats to Sapphire
Textile Mills Ltd. like
• China
• India

– In the domestic market there is not much competition

left. Because Ammar Textile Mills Ltd. is not a threat
now more due to its management.
Adjustment of Controllable with
the Uncontrollable Variables
• They have to adjust their controllable
variables (4P’s) with respect to the
uncontrollable variables of each region in
which they operate.
– Price is Adjusted with Economic & Competitive
forces.
– Product is Adjusted with Geographic & Economic
forces.
– Channels of Distribution remains the same (1st
preference is Sea and in some cases Air).
 Problems
• They want to curtail their costs of production
but they can’t because Pakistani cotton is
contaminated which in turn affects the
quality of Yarn and finished product (home-
textile).

• High cost of Production due to high

electricity charges and no subsidies.
 Localization Issues
• They are facing only one localization problem
i.e.
– Localization of Product:-
• In fact they are customizing their product with the
requirements of the client.
• The finished product is home-textile but it is prepared
& finished according to the specifications of the
problem.
 Current Strategy regarding
International Operations
Basically they are following the strategy of
Adoption because they have to adjust their-
selves with respect to client.
 Suggestions
• Just like Chen one Sapphire Textile Mills Ltd.
have to launch its own branch to cater the
local market at large.

• Explore the unexplored Markets. e.g Central

Asia, Latin America

• Reduce their production Costs to be in

international competition, by reducing their
Rejection rate (30%).