History of Pakistan's Business and Industry

Pakistan's $1.1 trillion GDP ranks the country as the world's 24th largest economy in terms of purchasing power parity (PPP).  Pakistan has come a long way since independence in 1947 when it was a poor agrarian country struggling to survive. Business and industry sectors now account for more than half of Pakistan's economy while agriculture's contribution is down to 20% of GDP.

The story of the country's business and industry parallels the ups and downs in its national history. It is the story of business individuals and families dealing with uncertainties. It is also the story of how the captains of business and industry were impacted by major events in the nation's history, particularly the breakup of Pakistan and the creation of Bangladesh in 1971. It is the story of survival in the midst of political instability, policy discontinuities and the fight against terror in recent years. It is the story of how the businesses and industries thrived under pro-business rulers and suffered under anti-business governments. It is the story of how the country's economy has performed under pro and anti-business policies.

Pakistan Growth By Decades. Source: National Trade and Transport Facility

Captains of Industry:

The United States had Rockefellers, JP Morgans, Carnegies, Fords and others who built American business and industry. Japan has Hitachi, Honda, Mitsubishi and other big names credited with building its business and industry. South Korea is home to recognized global giants like Samsung, Hyundai and others. A handful of individuals and families, aided by their governments, have played outsized roles in industrialization and economic growth in most major economies.

The captains of business and industry neighboring India are also a few known large families including Ambanis, Birlas, Hindujas, Jindals, Mittals, Tatas, and a few others. They have contributed to economic growth in their country.

Pakistan had the so-called 22 families which began the process of industrialization in 1960s but they were devastated by the 1971 war.  What was left of their business and industry was nationalized by the PPP government led by Zulfikar Ali Bhutto  in 1970s. Many of these families have since recovered and rebuilt and several new ones have now emerged.  Their continued growth and Pakistan's economic progress depend largely on the continuity of business-friendly government policies in future.

Source: KASB Securities. Courtesy: Faseeh Mangi of Bloomberg News

Business and Industry in Pakistan:

Here are the top 11 publicly traded groups of companies listed on Karachi Stock Exchange. These groups make up a little over one-third of the total market capitalization of all the companies listed on the Karachi Stock Exchange.  The market caps here represent a snapshot and vary daily with stock trading:

 1. The IGI Group tops the KSE listed groups. Headed by Syed Babar Ali, it is a diversified conglomerate that includes IGI insurance, IGI Life, Packages Ltd and other businesses with a combined market cap of Rs. 677 billion making up 7.4% of KSE.

2. Dawood Group includes companies such as Engro Corp,  Engro Fertilizers, Engro Polymer, Engro PowerGen, Dawood Hercules, and Dawood Lawrencepur with a total combined market cap at Rs. 442 billion adding up to 4.8% of KSE.

3. Pakistani military's Fauji Foundation owns Fauji Fertilizer, Fauji Foods, Fauji Cement, Askari Bank, and Mari Petroleum. The Fauji Foundation Group has a total market cap of Rs432 billion, and a a total KSE share of 4.6%.

4. Mian Mansha’s Mansha Group includes MCB Bank, DG Khan Cement, Nishat Mills Adamjee Insurance, Nishat Chunian, Lalpir Power, and Nishat Power. It has total market cap of Rs. 408 billion, or 4.4% of KSE.

5. Habib Group includes Indus Motor Company, Thal Limited, Habib Insurance, Habib Sugar Mills, Bank Al-Habib, Habib Metro, and Shabbir Tiles. Total market cap for the group is Rs326 billion making up 3.6% of KSE.

 6. Bestway Group includes United Bank Limited (UBL) and Bestway Cement with total market cap of Rs. 310 billion, or 3.4% of KSE market cap.

7. Tabba Group has total market cap of Rs. 298 billion or 3.3% of KSE. The group includes Lucky Cement, ICI Pakistan and Gadoon Textiles.

8. The Atlas Group which includes companies such as Honda Atlas Cars, Atlas Honda, Atlas Battery, and Atlas Insurance has total market cap of Rs. 143 billion  or 1.6% of KSE.

9. Chinoy Group includes Pakistan Cables, International Industries, and International Steel. It has market cap of Rs. 90 billion or 1% of KSE.

10. The Saigol Group includes companies such as Pak-Elektron, Maple Leaf Cement, and Kohinoor Textile Mills.  It is worth Rs. 79 billion accounting for 0.9% of KSE.

11. JS Group includes Jahangir Siddiqui Company, JS Bank, Bank Islami, JS Investments, and JS Global. It is worth Rs. 43 billion or 0.5% of KSE.

In addition to publicly traded companies, there are several large highly valued privately held business and industry groups like Jang Group, Hashoo Group,  Bahria Town and others.

Dawood Group:

Dawood Group is the second largest among the top 11 publicly traded business groups which make up a third of the total market capitalization of the Karachi Stock Exchange.

In a keynote address at OPEN Forum 2018, the annual conference of Pakistani entrepreneurs in Silicon Valley, Husain Dawood of Dawood Group in Pakistan told the story of his family's business starting in 1947. This story is probably representative of most of the rest of business and industry groups in the country.

Seth Ahmad Dawood, the patriarch of the Dawood family, started his textile business in India before 1947. He lost everything when he fled to what became Pakistan after the partition of India. He rebuilt his business in both East and West Pakistan. The family lost half its business in what became Bangladesh in 1971. What was left of the business was confiscated by Zulfikar Ali Bhutto government in West Pakistan.

The Dawood family was able to rebuild its business under General Zia ul Haq's pro-business military government that followed after Zulfikar Ali Bhutto was deposed in a military coup.

The best days for Dawood Group came during General Musharraf's pro-business government in years 2000-2007 under Husain Dawood who took charge after his father Ahmad Dawood's death. He led the diversification drive from textiles into chemicals, foods, fertilizers, power and communications businesses.

Dawood Group invested $1 billion in world's largest fertilizer plant and took on a lot of debt. Musharraf government committed gas supply as incentive for the group to invest.  The PPP government led by Asif Zardari demanded payoff to deliver on the commitment to supply gas for the fertilizer plant. Dawood's refusal to pay off the PPP officials meant that the group's investment sat idle until 2013 when Nawaz Sharif's pro-business PMLN government came to their rescue.  Dawood group and other business and industry groups have thrived since 2013 with a pro-business government in charge.


Growth of business and industry in major American, European and East Asian economies has been led by a few large families aided by pro-business government policies.  Ford, Hitachi, Honda and Samsung are now household names but they all started small and built up in stable environments favorable to business. Pakistan had the so-called 22 families which began the process of industrialization in 1960s but they were devastated by the 1971 war.  What was left of their business and industry was nationalized by the PPP government led by Zulfikar Ali Bhutto  in 1970s. Many of these families have since recovered and rebuilt and several new ones have now emerged. Their continued growth and Pakistan's economic progress depend largely on the continuity of business-friendly government policies in future.

Related Links:

Haq's Musings

South Asia Investor Review

Who Owns Pakistan?

Pakistan Military Industrial Complex

Brief History of Pakistan Economy

OPEN Forum Silicon Valley 2018

Asian Tiger Dictators Brought Prosperity

Democracy vs Dictatorship Debate in Pakistan

Musharraf's Legacy

Is This a 1971 Moment in Pakistan's History?

Pakistan's Lost Decade of 1990s


Riaz Haq said…
Couple of interesting excerpts from Dr. Kaiser Bengali's lecture:

"As I said we started with less than a dozen manufacturing plants in Pakistan and they were also medium-sized manufacturing plants. One of them was Dalmia Cement Factory in Karachi. I remember that factory, it wasn’t functioning even when I first saw it but you could see that it was a very small old-fashioned kind of factory. The cement factories now are very technologically advanced but that was the kind of industrialization Pakistan had then. After we became independent, Pakistan was importing everything: toothpaste, toothbrushes, shoes, matchboxes, just about everything was being imported because we produced nothing. Even most food items were imported because we grew little. I remember in 1968, West Pakistan was not producing bananas; we couldn’t buy bananas in Karachi. So that was where we began, but by the end of the 50’s, we were producing a large variety of agricultural and industrial consumer goods."

"By the end of the 1950s, government offices were built up. In 1947 there were no government offices in Karachi. You probably hear your grandparents talking to you about how most government offices were operating out on the street. Residential housing was created; Pir Illahi Bux Colony and PECHS in Karachi were set up in 1950. Industrial and agricultural output had risen, and in fact by the end of the 1950’s, most of the very basic consumer goods were already being produced in the country like matchboxes, toothpaste and shoes and some textile units had already come up and we were producing cloth, etc. So there was some level of development that took place and we were no longer as deficient as we were a decade ago.

Then came the 1960s. The 1960s development effort moved into a higher gear. First of all the whole experience with the first 5 year plan: making the plan and implementing it, seeing the deficiencies, the flaws, the mistakes, and learning from them. Some people were sent abroad for training and they came back. One of them was Mehboob ul Haq. You know, he had gone abroad for his PhD, he came back. So there were some trained people who were now involved in the process of preparing plans. The fundamental thing that happened was that there was a planning board in the 1950s, which used to do the planning work with a minister for planning who headed it. In the 1960s, General Ayub Khan who was the President, created a planning commission with the president as its chairman. So you can see the political importance of this commission going up. From the planning minister now the president was actually chairing it and Ayub Khan was a very active chairman."

" So what happened since the 1990s? When you don’t invest, everything begins to creak; the infrastructure began to crack. And in the 1990s the growth rate began to decelerate. The governments in the 1990s also could not put money into investment and the rehabilitation of infrastructure because the debts that were incurred in the 1980s matured in the 1990s. And both Benazir’s and Nawaz Sharif’s governments had no fiscal space as they had to repay Zia’s debts. Every time the economic team met, the economic team meeting included the Finance Minister; the Secretary General Finance; the Secretary Commerce; Secretary Economic Affairs Division and Deputy Chairman, Planning Commission that’s the economic team all they discussed was when was the next payment due, and where will that money come from?"

Riaz Haq said…
#Pakistani giant #Engro to bet big on rising #middleclass in #Pakistan. Engro weighing acquisitions and starting new businesses in #agriculture, #healthcare, #realestate , #communications and other #consumer-linked sectors to profit from rising #incomes. https://www.thenews.com.pk/latest/368531-in-shift-pakistani-giant-engro-to-bet-big-on-rising-middle-class

Pakistan’s chemicals-to-energy conglomerate Engro Corp has seen its fortunes rise on the back of massive Chinese investment, but plans to shape its future growth around the country’s vast population and expanding middle class, its chief executive said.

Engro Corp, best known for its fertilizer and petrochemicals factories, as well as engineering projects, is Pakistan’s largest listed conglomerate, and after recovering from a brush with bankruptcy in the early part of this decade is now sitting on a $500 million cash pile.

It has been a major beneficiary from Beijing’s Belt and Road Initiative splurge, working with Chinese firms on coal and power projects worth billions of dollars.

Engro’s rising fortunes since 2012, when its factories were crippled by gas shortages, mirror the improvements in Pakistan, a nuclear-armed nation where economic growth has accelerated due to vast Chinese investment and a sharp drop in militancy and power outages.

In the near term, Engro’s outlook is linked to a mile-long $1.5 billion coal mine in the Thar desert near the border with India, part of Beijing’s pledge to invest about $60 billion in Pakistan.

But with Pakistan’s new government hinting it may review Belt and Road contracts due to concerns they were too expensive, some analysts see risks on the horizon for Engro and say planned power plants around the mine may struggle to obtain financing.

Ghias Khan, Engro’s chief executive, told Reuters this week he was “pretty confident” the government would not re-open deals with sovereign guarantees.

“If they do, that will have a very negative impact,” Khan said.

This year Pakistan’s economy has also been shaken by a shortage of dollars, and speculation Islamabad may turn to the International Monetary Fund to ease current account pressures.


Undeterred by Chinese investment jitters and the recently wobbly economy, Khan said Engro was weighing acquisitions and starting new businesses in agriculture, healthcare, real estate, communications and other consumer-linked sectors to profit from rising incomes in the Muslim majority country of 208 million people, 60 percent of whom are aged under 30.

“We’ve come to a realization what has gotten Engro where it is today is not good enough for our next phase of growth,” Khan said in an interview at Engro’s ocean-front headquarters in Karachi, an Arabian Sea metropolis.

“What we are proud of is our ability to execute large-scale projects and put up large industrial complexes. But we are mindful we have to get into businesses which are more related to the population growth, and take us closer to the consumers.”

In Karachi, mushrooming shopping malls and ever-rising number of cars on the road point to a multi-year consumer boom as people’s disposable incomes have doubled this decade, analysts say.

Khan compared Pakistan’s current economic level, population growth and per capita income, which stands at about $1,600, to where China, South Korea and India were at earlier points in their development.

“If you look at sectors that did well when they were where Pakistan is today ... like real estate, automobiles, healthcare, logistics - everything is somehow related or linked to population growth or the middle class,” Khan said.
Riaz Haq said…
Overseas Pakistanis extend support to Habib University for reshaping philanthropy


Habib University Foundation USA and members of the Host Committee held a Gala in Houston, Texas on Friday, in support of Habib University and its vision of setting a new standard for higher education in Pakistan. This was the first time that a fundraising event of this scope was held in the United States for a university in Pakistan.

The gala celebrated the generosity of Habib University’s distinguished community of benefactors or Mohsineen, and their steadfast dedication to supporting the University’s quest for transformational change in Pakistan's higher education landscape.

In his introductory speech, Mr. Wasif Rizvi spoke about Habib University’s goal of bringing about societal transformation and the role of philanthropy in higher education in helping create a solid community. “We need to de-link sustainability of education from student tuition fees,” he said while emphasizing to solve three critical challenges to improving higher education in Pakistan.

Mr. Wasif Rizvi further stated that “one of the reasons that we have been able to have this phenomenal response to developing a community of donors is because it is so rooted in our cultural inheritance.” He said that if the message is sincere and represents a great cause, then there is every reason to be optimistic that the community of philanthropists gathered together in Houston would continue to grow.

During the keynote address, Mr. Mehdi Hassan spoke about the importance of education in building a prosperous community and that it was a collective obligation to ensure that all children get good, college education.

“Habib University is a liberal arts college which offers degrees that will take us out of our comfort zones,” he said, adding that education is the most powerful tool we can use to change the world.

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