The Economy
Despite continued sluggishness of global economy, Pakistan's macro economic performance has been very positive. This has gained further strength from almost all state enterprises becoming profitable, and healthier financial results in nearly all sectors of private enterprises. Consumption of excessive capacities in various sectors and enhancement of capacities are currently carried out in several sectors. Decline in the interest rates has further boosted the economic activity. This decline, along with liquidity available with the banks, has introduced strong consumer based activity.
In addition, unprecedented foreign exchange reserves, repayment of costly loans and rescheduling of others, increased home remittance sand record revenue collections have provided the much needed room to the financial managers of the government to launch, improve and strengthen the economic policies of the country. All this seems to have finally created the long awaited vitality in the country, resulting in robust growth of market sizes for the company's products in both Power and Appliances divisions.
The growth momentum of Pakistan economy at around 7.0% in the last three to four years has triggered solid economic growth. This is evidenced by growing per capita income resulting into strong domestic demand, higher revenue generation at Federal level, which is allowing record level of development expenditure, coupled with overseas remittances exceeding US $ 4 billion per annum. In the above scenario pre-requisites for sustained economic growth appear to have gained a firm footing.Company's Business
The year preceeding is by the grace of God remarkable for your company and record level of sales and profitability have been achieved. Impressive sales growth performance is seen across all product categories.
Production and sales in appliances as well as power division have set new records. The company's commitment to bring improvement in its production technology with the aim to provide quality goods to its customers, thereby contributing to the economy has made these achievements possible. The company was able to penetrate the market better through improvement in performance criteria for its products, strengthening of quality assurance procedures, and improvement in customer liaison through better marketing and after sale service. Over the past three years, the company has made notable progress in increasing sales and profitability through innovation, competitive pricing and by operational efficiencies. Coupled with these is the strong PEL's brand image, which is widely recognized for the high quality of products and adherence to the highest performance standards. This has resulted in achieving a deeper market penetration in both power and home appliances markets thereby generating higher volumes.
PEL's strength stems out of its strong dealership network spread allover the country with over one thousand outlets and now extending its limits outside Pakistan. After sale service offered by PEL through widely spread more than 100 workshops also muscles our activities of sales and gaining customers confidence.
Cost competitiveness of the local industry has prevented Chinese products to capture any notable share in our domestic markets. This competitiveness is gaining strength from higher volumes and resultantly our products will not only continue to beat the competition from foreign products in our domestic markets but are also gaining ground in the export markets.
The consumer durables industry has recently experienced rapid growth in demand driven by lower product pricing, introduction of consumer finance initiatives, low interest rates and improved consumer purchasing power. Similarly construction activity in the country and infrastructure revamping in WAPDA and KESC, are the prime drivers behind the growth of power equipment industry. With the asset base of Rs 6.7 billion, PEL is well positioned to benefit from the growth in both the consumer appliances and power equipment markets.
Future Forecast
With a backdrop of almost all positive macro economic indicators and with the achievements of last two years, PEL is seeing a more robust year of growth in both Power and Appliances Divisions. This is evidenced by a much heavier order book compared to last year for the company's Power Division products and a more enthusiastic market for domestic appliances. PEL will continue to focus on quality and operational efficiency through innovation and transformation, and enhancing PEL's brand image in order to carve out a well-defined market for our products.
We have already made considerable investment in the expansion and modernization of our manufacturing plant. Further Capital Expenditure has also been planned especially in Power division for the development of new line of business, which includes manufacturing of Power Transformers and Grid Stations. This process will be sustained during the current year and is proceeding in tandem with the training and development of skills of our employees. It should result, in due course, in sound development of our business.
The economic future for the Company seems brighter with many key indicators moving in a favorable direction. It is hoped that national economy will continue to grow and rising prosperity will bring expanding opportunities for the Engineering Industry and for your Company.PEL DAEWOO Electronics Limited (PDEL)
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