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Mehran Bottlers Ltd: A taste of Pakistan
On the 14th August 1947, Pakistan celebrated its first Independence Day as a newly formed sovereign state, following its divide from India during India's own independence from Britain. Three years later, on the same day, the Pakola brand was launched, and the patriotic green beverage has been tightly and nostalgically linked with Pakistan ever since. We spoke with Zeeshan Habib, CEO of Pakola's creators, Mehran Bottlers Ltd (MBL), about his family's company and the journey it continues on, within and beyond Pakistan.
"If you ask any Pakistani who has lived in Karachi, they'll tell you about Pakola and you'll see a smile on their face." Zeeshan speaks lovingly about both his company's signature product and his country, and his enthusiasm for both is contagious. They are both as much his heritage as the other; from the age of six, the now-CEO was educated at boarding schools in the UK, but in his summers, he would return to his family home, where he would spend much of his time in Mehran Bottlers' factory, run by his father Zafar Habib and, after his father's passing, his uncle, Arif Habib.
"All my friends were British, so when I came back to Pakistan, I didn't know any of the children. So, my mother would send me to the factory. I was running around the place – I would sit in the different departments, and as I grew up older, I would take part. I would work in marketing for two months one summer, then in purchasing the next year." In this way, Zeeshan experienced all of MBL at a lower level, learning the family business as he grew, and the company became a third home to him.
In 2002, once he completed his education, Zeeshan returned home for good, where he trained under his uncle for two years before Arif handed over the role of CEO. It was a legacy Zeeshan was proud to continue: "Pakola is a very strong, iconic Pakistani brand; I've always had a lot of confidence in the brand, and I've always felt proud to be a part of this family. I'm the third generation looking after this business; for me, it's not like work – it is my passion, to carry on the family tradition and to carry on the family name."
For those who have never tasted Pakola, the fizzy drink is a cream soda with a vanilla and rose based flavour. From the packaging to the liquid inside, the product is Pakistan green; whilst that may not seem like a colour that lends itself naturally to vanilla and rose, it ties in perfectly with the patriotic links that Pakola (whose name derives from Pakistan + cola) carries: "With Pakola, MBL has made a strong connection with Pakistan and all Pakistanis living abroad. We aim to connect Pakistani hearts and minds with the national spirit. The beverage was launched at the Pakistan Air Force Base on Independence Day 1950, in the presence of the first Prime Minister, Liaquat Ali Khan; hence, it evokes intense nostalgia and leaves an enduring association between itself and the country. As per its slogan, 'Dil Bola Pakola'!
On the topic of tradition, one of the most important lessons Zeeshan learnt from his family was how MBL should treat its people, continuing a tradition of kindness and care: "We migrated from India to Pakistan in 1950, and when we shifted, my family were involved in the shifting of a lot of people from our past too. We always made sure to contribute to the local community. When I was young at the factory, I would see my uncle taking care of the employees. He'd always treat them as family. It was these values that my family passed down to us – they were instilled in our minds and our DNA, in a way, and we are still following them today."
As well as its success at home, about 10% of all Pakola produced is exported. These exports are sold to the USA, Africa, Canada, Middle East, UK, Ireland, Sri Lanka, North America and Australia. In all of these countries, the beverage is found mostly in areas where there is a high Pakistani, Indian or Bengali population, and the sales account for 10% of MBL's total revenue. In 2018, these export sales have risen by 24%. "We see much more potential and look forward to a further increase by targeting more markets in the coming year."
Mehran Bottlers is a passion for Zeeshan, but serving as its CEO has not been without its challenges. Having spent much of his time in the UK, he was unfamiliar with living full-time in the culture, climate, and the business-world of Pakistan. "Having lived in England for 15 years, when I came back, it was difficult to adapt. The weather was hot and dusty, the food was very spicy – I was missing my fish and chips! – and my language skills were not so strong. I still think in English; I don't think in Urdu. So, I had to adapt."
"Running a business in Pakistan is not easy. There are a lot of external factors beyond our control that affect our business. For example, we'll be running production and the power will go out. Then, there are political issues; they could lead to shutting down a city of 20 million people." These sorts of complications were unfamiliar to someone who had largely grown up abroad, and each complication could affect MBL's supplies or production, which in turn could impact efficiency or sales, but Zeeshan learnt on the job. "Slowly and surely, you adapt yourself and improve, and plan so that these contingencies are taken care of."
Despite these challenges, Mehran is flourishing. The company operates one of the most modern can filling plants in Pakistan, producing top of the line cans ready for consumption. As well as producing Pakola, MBL also has franchises producing beverages for several other companies, including the UK's Vimto and the USA's Apple Sidra. On top of these contracts, however, perhaps the most major change for the company came when it began its work with Coca-Cola.
When Zeeshan become MBL's CEO in 2004, he took a look at the company's operations and decided that he wanted to diversify. He didn't feel that they were achieving all they could with their resources, and so he reached out to some household names: "I thought, this is very limited work when we could do a lot more, so why not reproduce beverages for other people, like Coca-Cola or Pepsi? So, I wrote to Coca-Cola." The soda giant didn't respond straight away, but as MBL continued to grow and updated its facilities, they got in touch. MBL now fulfills toll filling for the The Coca-Cola Company for Coca-Cola itself, Sprite, Fanta and Cappy Juice. Before this, The Coca-Cola Company imported all of its cans into Pakistan from the Middle East, so the contract with MBL saved the corporation a great deal of funds. As for MBL, this side of its business now accounts for around 50% of its total revenue.
The latest venture for MBL is with another well-known name. Heineken, one of the world's top beer companies, recently signed an agreement to allow MBL to produce non-alcoholic malt beverages under three of their famous brands: Amstel, Maltina and Solar Power. As a primarily Islamic country, Pakistan does not have an industry for alcoholic drinks, but non-alcoholic alternatives are still popular for the flavour. Producing a drink like this had been on Zeeshan's bucket list, and so when a member of Heineken fortuitously reached out to him over LinkedIn, they entered into two years of talks, and production is now set to begin this June.
The production of these drinks, along with MBL's other canned drinks – which account for the fastest-growing of its products – will soon take place at the company's new, state-of-the-art factory in Faisalabad. Based in Karachi, which is in the south of Pakistan and near the shore, MBL has always been placed in and ideal position for import and export. These imports used to include cans, which MBL would receive from the Middle East. However, the majority of demand for Pakola and MBL's other products is in the north of the country (for example, 75% of Coca-Cola's sales are in the north), and the transport costs to ship their product across the country were higher than exporting them to the UK.
This was all soon to change when British company Ashmore began work on a can manufacturing factory in Faisalabad, which sits in the north of Pakistan. This was to be the country's first can manufacturing facility. By chance, Zeeshan discovered that the land next to this development was for sale, and he saw an opportunity to solve two issues at once; developing a factory of their own next to this can manufacturer would save greatly on the shipping costs of selling MBL's products in the north, and on top of that, it would cut out the need to import cans from the Middle East, saving on both time and money. "I thought, if the cans are now going to be made in Pakistan, I should be right next to them." This decisive move seized an opportunity before someone else could, and is set to make MBL's work both cheaper and more convenient, which is always a welcome combination in business.
However, sometimes the right decision isn't to march ahead, but to wait. For example, MBL had everything in place for the launch of a Pakola Water line, but for now, those plans are on hold. The change came as a result of Pakistan's new water tax, which would make the venture unprofitable. This government response to Pakistan's lowering water level has many companies concerned – particularly beverage companies. "Water is our number-one raw material." The tax is considerably higher than its equivalent in Canada and other countries, and Zeeshan states that were MBL to pay it, the cost would be almost as much as their revenue. He is not alone in his concern.
"We are opposing the tax right now; not just me, but Pepsi, Coca-Cola and Nestlé – we have all joined together to oppose this. We understand that the water level is going down and we want to contribute towards the government resolving this issue, but it must be a practical and sensible solution. Under this new tax, it will cost companies like Coca-Cola $2 million extra per month to operate in Pakistan." As an entity, the united companies have all vowed to shut down operations in the country if they are forced to pay this bill, which Zeeshan suspects was imposed before its outcome had been fully calculated.
It is a difficult external challenge to face, but MBL's bonds with its fellow companies are strong, and its ambitions for the future are unshaken. On top of all the developments it currently has in the works, MBL is considering eventual expansion into energy drinks, aseptic juices and the possibility of juices in cans. "We believe in the growth of the beverage industry and are looking forward to capitalising the growth potential ahead of us. MBL's future hold the promises of even greater achievements, provided we remain forward-looking, performance-oriented and capitalize on our strengths, whilst eliminating our weaknesses."
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