On December 3rd, Ashfaq Awan was stunned by the news that his former manager Priyantha Kumara Diyawadanage had been murdered in a mob lynching, and his body burnt and desecrated. “I worked at Rajco Industries under Mr Priyantha four years ago, and I’m not exaggerating when I say his expertise in industrial engineering and textiles changed the way Rajco and a large portion of the industry in Sialkot work,” he said. For Awan, Priyantha was not just a boss but a mentor – a man that he says “taught me not just work but settled my life in so many ways. I will forever be grateful.”
Priyantha was not the only Sri Lankan factory manager working in Sialkot. Over the years, as Sialkot has developed and grown its industry an influx of foreign workers have come into the city as quality managers for export oriented manufacturing. While the grisly incident has been followed by wide ranging condemnation from all over the country, Sialkot as a city is now coming to terms with the aftermath.
While there have been no reports of sanctions or cancellation of orders by foreign buyers so far, there have been incidents of buyers taunting local manufacturers over the incident and factory owners being concerned about the possibility of orders to Europe being canceled. Complicating the picture is the fact that the heinous murder, that has drawn worldwide attention, happened in the heart of the productive process of a large company with many foreign buyers, in a city whose business community has vast international networks. A stream of foreign visitors circulates through the city on a regular basis.It is for this reason that Sialkot’s business community has banded together to build an international airport in their city with their own resources, as well as an international airline. They are keen to present their city in the best possible light.
Only a day before the incident, for example, Belgium’s ambassador to Pakistan was in the city as a guest of the Sialkot Chamber of Commerce and Industry, welcomed by Sheikh Zohaib Rafique, the Senior Vice President of the chamber, to “ensure dedicated efforts to further improve two-way trade under the light of the GSP+ status” according to a press release issued on that day. Besides trade, the discussions with the Belgian ambassador also focussed on technology transfer and exploration of joint ventures with Belgian companies, especially with the upcoming Sialkot Industrial Zone being built in the city.
But Priyantha’s murder the very next day cast a dark shadow on all these efforts.While it is still to be seen the sort of long term impact this has on the city and its industry, its business community is attempting to come together and save face. Two days after the ambassador’s visit, Zohaib Rafique had to call on the government “to ensure a transparent and swift investigation and make an example out of this case” according to a statement released by the chamber. And another statement issued the next day by Mian Imran Akbar, the President of Sialkot’s chamber said “December 3, 2021 would go down as a dark day in the history of the bustling city of Sialkot” and described the perpetrators of the lynching as “the worst of humanity”. The statement ascribed the incident to a “personal vendetta on part of some laborers in the garb of alleged religious tilt”.
To understand better the impact that the incident will have on business and industry in Sialkot, and whether this will result in any consequences for Pakistan’s exports, it is important to look at how the textile industry in Sialkot is structured and what the exact response has been.
The Sialkot equation
Rajco Industries, according to one source in the Sialkot Chamber of Commerce, is the largest setup of sportswear production in the city. Their size and skill is enough that in the recently concluded ICC T20 World Cup, the uniforms of the Pakistan cricket team were manufactured by Rajco Industries. As one of the largest producers of sportswear, Rajco has a lot of foreign clients including large brands. “Their biggest client was Fila, an Italian brand that was sold to the United States in 2003” one senior member of the Sialkot Chamber tells Profit. “Rajco has had a very good relationship with Fila for many years and has been exporting directly to their European and American markets”.
“They had other very large brand-name buyers as well in a number of different countries” he continues. “Their production capacity is quite high, and in such a situation it is very easy to end up compromising on quality. That is why Priyantha was hired in the first place.”
Priyantha Kumara had been working at Rajco Industries as a Quality Control Manager. Large fashion-wear brands – Fila, Nike, Adidas,- need places where their clothes could be manufactured cheaply without compromising on quality. Over the years, Pakistan, India, and Bangladesh’s textile industries have filled this role, getting massive orders from these brands. With cheap labour, raw materials, and very little regard for working conditions the Indian subcontinent fit the bill perfectly.
However, large brands have very specific criteria for the clothes they want to sell, which means even if there are small inconsistencies or imperceptible flaws in the clothes like a wonky stitch or a mismatched button, they land up in the rejected pile. While these rejected clothes then end up spawning an export leftover business, a large number of rejected clothes means delayed orders for the buyers in foreign countries. For this reason, when signing a contract, these buyers make it a point to ensure that the quality control of the manufacturer they are buying from is rigorous.
And from a quality control point of view, Sri Lankan managers are famous in the textile industry. Sri Lanka has a highly developed stitching industry, one of the most complex and mistake-prone processes in the garments and sportswear, which is why a lot of factories prefer having experienced Sri Lankan managers to monitor their quality control standards. “There is a large stitching industry in Sri Lanka, with lots of companies that have billion dollar plus exports” says Zia Alamdar who owns the Faisalabad based Fashion and Trends Pvt Ltd. “Our top three exporters haven’t been able to touch one billion between them”. He himself has a Sri Lankan manager to oversee his operations whom he hired from one of his buyers. “They used to send him to do quality and compliance audits,” he says. “So I asked them why not just let me put him on my payroll and he can monitor the production process directly?”
These managers are generally known for being hard workers, with a mellow temperament and connect easily with Pakistani workers. They also bring considerable expertise in their field with the ability to teach their employees the necessary skills to make sure that they have very few flaws in their products. In fact, a lot of business schools in Sri Lanka have specific courses for textile management and countries like Pakistan and Bangladesh, where large scale textile manufacturing is a major export product, become attractive employment opportunities for them.
Factories also prefer hiring Sri Lankan managers not just because of their skills and the per-unit productivity increase that they bring, but also because when they are pitching to a prospective client they can tout their managers as a reason for why their production unit should be chosen. In fact, as one source tells us, in a lot of cases foreign clients often request that manufacturers bring in Sri Lankan managers to keep an eye on quality. Because of this, there is a significant number of managers from Sri Lanka in Pakistan’s textile industry, especially in garments and stitching, that are responsible for quality control. These managers are then always employees of the local company with packages of around $2000 to $3000, but they are very much there as quality inspectors for the sake of the foreign clients.
“Priyantha was an employee of Rajco. It is not clear whether he was a contractual employee or that he was actually Fila or Nike’s (another company that had dealings with Rajco) representative at Rajco. However, while he was working as a quality control manager, he was hired and paid by Rajco and had been working there for many years”, says a textile exporter from Sialkot that had dealings with Rajco and Priyantha. “There are many technicalities in the sportswear business. Large brands often reject products on the slightest stitch being a little crooked or the colour of a particular shirt not perfectly matching the color gradient. Priyantha was an expert in this field, he had studied from abroad and had been to many countries on training workshops related to this,” says the earlier mentioned member of the Sialkot chamber.
“Priyantha had all the right expertise and most importantly was qualified and knew all of the latest technology very well.” He was not the only one. As mentioned before, these Sri Lankan managers are considered trustworthy and give these industries a significant boost in both the managerial and technical spheres. The use of these managers has been one of the things that has helped Pakistani exports and the textile industry. They have also often been pointmen for foreign buyers, which is why and for such a heinous crime to happen to one of them makes things even worse from a business perspective.
The business community’s response
In the days following the brutal murder, other than the heroics of Malik Adnan who tried to save Priyantha from the mob, the only other significant gesture has come from the business community of Sialkot. A number of industry leaders banded together to announce that they had collected $100,000 for the family of Priyantha Kumara, and committed to send the family, the salary that he was earning on a monthly basis, forever.
The gesture does little in the way of repairing the loss that Priyantha’s family is facing. However, it is a gesture that shows the business community of Sialkot is trying, and that they do not want this to spell the death of their industry. The businessmen of Sialkot are already famous for their cooperation with each other, and the creation of an international airport and AirSial to boot has been proof of what they can achieve when they work together, which is often. However, the current fear is that the murder will result in foreign buyers, particularly Europeans, either pulling out from existing contracts or not entertaining Pakistani pitches in the future.
Pakistan is already at a disadvantage when it comes to exports. The country’s largest export is easily textiles, and even in that it regularly lags behind. Pakistan’s competitive advantage is low, and mostly comes from cheap labour and easily available raw materials. But despite cheap labour, the production cost of making things here is higher than other countries like Bangladesh, Turkey, Vietnam, Taiwan and India, which makes it difficult to compete in the foreign market.
Power tariffs are high in Pakistan which means exporters and manufacturers face high electricity bills which then results in them cutting costs by compromising on quality. This also means that manufacturers are hesitant to introduce and use technology, which also leaves Pakistan behind in the race. This means that the import bill does not go down and the export bill does not go up.
On top of all that, the murder of Priyantha Kumar might mean that European buyers in particular could become more wary of placing orders from Pakistan. The public in these regions does not want to be buying from brands that could possibly be responsible for human rights violations. And the concern has already seeped into the industry’s narrative. Following this incident, there have been rumors that some international companies have hinted to Sialkot companies that they may not be able to work with them in future but these rumors have not been confirmed by any exporter yet though many exporters fear that sometime in the future they may face such problems.
Muahmmad Salman who is the owner of Aslaons International and deals in the export of sportswear and fashion wear informed Profit about the concerns and reservations of exporters after the Sialkot tragic incident that exporters who work for European countries may face a big challenge in the coming days.
“In fact, Europe is already a market for our exporters from where work orders are hard to come by. In such a scenario, the Sialkot incident could affect our reputation and in future we have to be prepared for such a situation. Before this incident some of our clients had come to Sialkot and were our guests. They were also touring the city and roaming freely here but after this incident all of a sudden they stopped their activities and stopped going out. Now they may go back in a few days. I am not saying that these clients will take back their orders from us but this incident must have affected them,” he said.
“No member of our association has complained so far, but this may not be the case for long,” says Chaudhry Muhammad Arshad, the former chairman of Pakistan Sports Goods Manufacturers & Exporters Association. He believes that the incident was extremely wrong and heinous, and that instead of the perpetrators and fanatical elements, it might be the exporters who will have to bear the brunt of the incident. “Right now in the future we may have to suffer the consequences of this incident in the form of losing our clients and access to new markets,” he added.
Mehboob Hussain, who is the owner of Saith Leather Industry which mainly deals in welding gloves, working gloves and leather, says the incident has already impacted his relationship with his clients. “Although my clients are very old and my relationship with them is very deep, still one of my Arab clients taunted me that you people are burning foreigners alive in Pakistan” he tells Profit. “The reaction from the Middle East may yet be very slight” he adds. “The major reaction will come from the European side. Getting business from that region is very hard as their terms are very strict and on top of that, the recent incident will bring an immense impact on export orders.”
Incidents of political posters being put up in factory premises occur all the time, some business owners tell Profit. “We also have some problems sometimes with workers putting up posters and stickers for which we have appointed a masjid committee which includes an Imam masjid, our GM, our factory lawyer and so on” says Alamdar from Faisalabad. He says such acts usually pick up around certain religious occasions like Eid Milad un Nabi or when religious conferences are being held in the city. Removing them becomes a sensitive issue, especially if the posters contain images or words of a religious nature. Factory owners are finding the issue becoming increasingly sensitive especially when foreign buyers have to be brought to the premises for inspections and headlines have already been swirling around protests or riots. Keeping factory premises clear of political and religious posters and graffiti is turning into a challenge.
The Sialkot culprits should be hanged in public
These handful people cannot grasp the extent of damage they have caused to Sialkot’s economy
The country has to make a choice between prosperity and poverty. Provincial assemblies must promulgate laws for the ban of religious activities (excluding Namaz) including display of religious symbols at work places.
Employers should immediately respond to this incident by making and implementing rules for banning all kinds of religious activities (excluding Namaz) at business and factory locations. They must enforce wearing of secular cloths. They must enforce rules to stop employees from engaging in discussion on religion.