Making of a Hi-Tech
Vendor
By: Mohsin Syed
Hybrid Technics (Pvt) Ltd.
Resume
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Education
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MS. Electronics Engineering California State University. Los
Angeles, U.S.A. 1980.
B.Sc. Electronics Engineering, University Of Engineering, Lahore
1976.
Commercial Pilot License Holder.
Engineering Experience
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Design Engineer Saudi Consult Saudi Arabia 1976-80
Member design team Jubail & Yambu Industrial Estates
Project Manager Mc Graw Edison Co. Los Angles, California
U.S.A. 1981-84
Design and manufactured about five million units of Seven
different electronic products
Resume
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Extra Corporate Activities
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Chairman Punjab Industrial Estates Development &
Management Company (PIE)
Member Board Pakistan Aeronautical Complex Pakistan
Airforce Kamra
President Board of Management, Lahore District of Technical
Education and Vocational Training Authority (TEVTA)
Convener Deletion Program Committee Electrical & Electronic
Products. Engineering Development Board (EDB).
President Aircraft Owner & Pilot Association Pakistan Chapter.
Foreign Collaborations
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Sulzer Ruti 1998
Switzerland
Mitsuba Corporation 1992
Japan
Sucker + Muller + Hacoba 1993
Germany
Shindengen Electric 1994
Japan
Thies 1999
Germany
IRO 2000
Sweden
Barco Sedo 2000
Germany
Case History Hybrid Technics
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Electronic technology in Kot Lakhpat Industrial Estate.
 Acquisition of land:
1984-1987
 Change of line of business
Two years
 No drainage – sewerage removal from factory area.
 No garbage removal & disposal.
 Broken roads.
 Changing sales tax laws.
 Harassment from sales, professional tax and customs
department.
2.2 kanal
cost of plot Rs. 400,000
Initial investment
Rs. 5.0 Million
Present investment
Rs. 50.0 Million
Starting Staff
15
Present Strength
150
Start Up
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Start up of Hybrid in 1985
Technical Achievements
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Fisheries Motors
Suzuki Car Electrical and Electronic Parts
Start up of Negotiations with Atlas Honda Ltd. ,
Honda Japan and Mitsuba from 1987 – 1992
Launch of Winker Flasher Project
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Financing of Project by Local Bank
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Guarantee by Atlas Honda Ltd.
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To local Bank
To Hybrid Technics to purchase the parts for seven
Years minimum or One Million parts which they have
met.
Actually 13Years of purchasing has been done and still
continues.
Business Volume with AHL
Business Growth with AHL
sales (in
million)
150
110.606
50.01
100
50
0.559
8.68
0
91-92
94-95
99-2000 2004-05
period
Total Business Growth
Total Business Growth
199.606
Sales (Rs.in
million)
200
150
59.364
100
50
1.216
9.833
0
91-92
94-95
99-00
2004-05
Jobs Created By Hybrid Technics
200
150
No.s Of
100
Employees
50
0
91-92 94-95
Period
99- 20042000 05
Custom Duty Paid by Hybrid
6
5
Rs. in Mln 4
3
2
1
0
5.24
5.85
2.71
0.10
1991- 1994- 1999- 200492
95 2000 05
Period
Taxes Paid by Hybrid
5.222
6
5
Tax Deposit 4
Rs. in
3
Million
2
0.993
0.158 0.373
1
0
1991- 1994- 1999- 200492
95
2000
05
Period
Launch of Second Project 1994
Regulator Rectifier
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Issue High Cost of Technology
Long term financing not available from
commercial Banks any more
Leasing option utilized to solve the problem
Atlas Honda Ltd. Commitment of Five Years
Financial charges of Equipment included in
pricing formula
HI-TECH CDI PROJECT 2002
Capacitor Discharge Ignition
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Cost of Technology and machinery extremely high
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Machines leased again with great difficulty
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Production still on and is in third year of production
Problems
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Acquisition of land
Project financing at very high interest rate of
20% – 22% initially.
Running finance costs were initially high but are
now down to reasonable levels
Non availability of good quality raw material
Harassment from Sales Tax and Income Tax
officials due to high tax rate
Solution and Way Forward
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For construction of factories, Industrial parks with
one stop facility across the country
Technology cost will be even higher for the next
projects
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OEM Should invest jointly with the vendor
Prudential rules of debt equity should be changed for HiTech Project
Training of staff at international level should be tax
deductible or partly Government sponsored
Sales tax + Income tax should be streamlined for
no contact with the tax collectors
Solution and Way Forward
(Continued……)
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Tariffs of completely built up units and their basic
prices should be monitored by the Tariffs
Commission, CBR and EDB for quick reaction to
dumping by other countries in Pakistan
Raw material of excellent quality should be allowed
at Zero to Five Percent (0% - 5%) duty by
commercial importers also
Pakistan Should switch over from a deletion based
Engineering Industry to an Export based
Engineering Industry
Solution and Way Forward
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Tax rates should be as follows for the Private Limited
Companies to go Public on the stock exchange
Present Rates
Proposed rates
Public Ltd Co.
35%
15%
Private Ltd Co.
43%
20%
Partner Ship
25%
25%
This structure should encourage excess liquidity with the
people to go into Industrial growth rather than residential
and agricultural plots
Recommendations
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Training programmes for converting
technologists to entrepreneurs
Venture Capital System should be established
by GoP.
Technology Acquisition from International
Market should be facilitated by Multinationals
based in Pakistan
Mid size Pakistani Engineering Companies
should enter the International Business Chain
Thank You***