Rafiq Jindani

Degree

Master of Business Administration Executive

Faculty / School

Faculty of Business Administration (FBA)

Year of Award

2014

Project Type

MBA Executive Research Project

Access Type

Restricted Access

Executive Summary

This is a real time case study of the transformation of the Company in which myself Rafiq Jindani was a lead team member. The business group to which I am associated is a family owned conglomerate in Pakistan; owned by a father and his five sons. The Group is involved in Agro processing of commodities, poultry farming and fish meal businesses.

All the businesses were operating in a conventional method as most of the family own businesses operating in Pakistan. The change was initiated when one of the son, Mian Ahmed Akbar joined his father to learn the local trade after completing his studies from the United Kingdom. Later on, he decided to construct a state of the art rice processing mill in Karachi by the name of Brukfield Rice Pakistan (Pvt.) Ltd. In order to support the new project, in addition to the Bank financing & family equity, he started rice trading business. He succeeded to grab a reputed international customer and was making reasonable profits to support his under construction rice processing mill. Miscalculation was done in the cash flow cycle when short term liabilities from the Bank were utilized for the construction of long term asset. The problem aroused when out of nowhere the shipments of trading business was rejected from its buyer. This not only created problem for the trading business but also delayed the new rice mill project. However, family came to rescue and guaranteed Banks for repayment of their outstanding loans over the trading business and assured Mian Ahmed Akbar their full support for the completion of his dream project.

In the end of 2010, Brukfield Rice started its operations but was in tremendous pressure by the Banks, this was the time when the company was in search of some long term customers and ended up meeting with AI Dahra Agriculture UAE, who was and still is the largest single importer of Basmati rice from Pakistan. Brukfield was in continuous price negotiation with them and was desperate to have them as their customers. AI Dahra is the strategic partner for UAE Government and has tenders of rice for their food security program for the next ten years.

This was the time when Al Dahra wanted to have a rice mill in Pakistan as they wanted the edge their competitors by having a definite supply line in Pakistan. During the course of price negotiation with Al Dahra, they asked Mian Ahmed Akbar to sell them majority shares of Brukfield Rice Pakistan (Pvt.) Ltd. Here came an opportunity to get relieved from all the from the Banks and at the same time being involved in the operations, having local over pressures expertise and being the minority partners. Process of Joint Venture initiated and after thorough due diligence and completing other formalities, in the year 2011 final documents were signed off.

The real challenge began now as the majority shareholder having world wide experience introduced its policies and control systems which were not easily digested by the minority

partners which were not used to the same. It was the first of its kind Joint Venture of rice business in Pakistan and therefore it was very difficult for all the stakeholders to adjust. This includes suppliers and employees which were part of the previous management. All the key positions other then the CEO were appointed by the majority shareholder and were also reporting to them in UAE.Profit taking is the prime objective of every business but unfortunately both the partners failed to convert their experience and expertise into the company’s profitability.

Detailed transformation process of a local company into the Multinational Company has been described in this report and the problems which occurred after entering into partnership have also been discussed. Further, responses from all the stakeholders have been taken for suggested resolution of the problems encountered due to lack of synergy between the two partners.

Pages

90

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