Franchising in Pakistan

 

We have started to do a fair amount in franchising recently, which has been driven by demand from companies in our markets who are looking to launch new businesses with a little less risk. We already have a UK franchising consultancy working in the Baltic offering advice to local companies looking to develop franchises, and we have completed projects for a couple of large UK brands looking to find master franchisees in the Baltic. However, it seems clear to us that the real opportunity for international companies looking to develop their business through Franchise is in the Pakistani market.

Franchising is a relatively new concept, with Pizza Hut being the first into market in 1993, but since then the sector has grown from strength to strength. With over 100 global brands now trading successfully in the market, the food sector has been particularly strong in the last few years.

Many of the larger companies are already there, including McDonalds, KFC, Dominoes, Subway, Dunkin Donuts, Body Shop, Nike Retail, Debenhams, Mothercare and Nandos to name just a few. The growth is fuelled by the young, fast growing and increasingly affluent middle class. Pakistan has a population of over 180 million, with 80% being under 25. English is one of the official languages, which makes it easy to do business there, with 100% foreign ownership allowed for business, and 100% expatriation of profits and dividends allowed.

We see growth across a range of areas including retailing, hotels, restaurants and b2b. If anyone is interested in finding out more, let us know and we can arrange for a call with our local director.

 

 

Weekly Opportunity Update

Welcome to this week’s weekly update, As well as highlighting a few specific opportunities we have come across in the past week I also wanted to introduce you to a new service which we have been developing for a number of years, and which we  are now offering to  our potential clients. Obviously if you have any questions about anything below give me a ring or drop me an email.

Internationalisation Strategy Report:  This new service is based on the internationalisation audit which we have used for some time as an internal tool when engaging with clients.  The idea behind the service is helping companies understand the full range of benefits and challenges of working internationally (export, outsourcing, fdi, R&D, grant funding, supply chain development etc)  and how they would work for their business.  As well as looking in some detail at the business we are working for , and making recommendations on the types of international activity they should be considering, we will also look at possible business models they could adopt, issues around marketing, product development, IP, Licencing etc.  we will also conduct a brief survey of all our markets and give a company specific overview of the opportunities in each market, along with a series of recommendations on how the company should move forward.  The cost for this strategy report is £1950 plus VAT, and if the client then moves forward to undertake a market access project with us we will deduct that fee from the cost of the next project.  I think this is a really great way for a company to “take stock” of its internationalisation opportunities, and if you can think of any companies who might benefit from this type of intervention please feel free to introduce them to me and I will explain to them in more detail what is involved.

NEWS:

Astrosat: I have introduced a number of our relevant premium partners to Astrosat (satellite technology company ) they have just returned from a very successful trip to the Baltic where they secured there first clients, but also substantial (and I mean substantial) funding to develop the thermcert product and others.  This has proved that the option for high growth tech companies to move R&D to the Baltic and access large amounts of money is not only possible but relatively simple.  If you have clients with exciting technology or biotechnology, then it might be worth considering looking at this option, we asked Steve to write a blog about his experience http://ccbaltic.wordpress.com/2013/04/09/baltic-expansion-a-clients-view/.

Seminars: we are holding two seminars in May(7^th Glasgow, 8^th Aberdeen) on behalf of the Latvian Development Agency, there will be a group of engineering companies across looking for partners in the UK. The events are being supported by premium partners (Morisons in Glasgow and Brodies in Aberdeen) we would be very grateful if you could alert any clients or contacts from the sector who might be interested.  If you would like copies of the invitations please email Jolanta@consultcormack.com .

Pakistan: we have our Pakistan Country director Abdul Mann in the UK at the moment, if you would like to eet up with him and get an overview of the Pakistan market please let me know and we will arrange.

Opportunities:

Commercial Office Investment Opportunity: Recently completed 10 floor office in building in central Riga of 17169 sq M is for sale, 78% of the building is already let to high quality blue chip clients (eg IBM Latvia).  The market in Latvia is ripe for re-entering from a property investment point of view with good yields etc.  for further information email me and I can send further details. As well as this specific opportunity we also have a local asset manager looking to put together a 10 million euro fund to buy commercial real estate in Latvia, again further information available.

UK JV/Investment Opportunity: We are working with a well-established UK based hosiery design company.  They have products in many of the most prestigious international stores (eh Harrods etc) and supply products to some of the world’s biggest celebrities.  They are now looking for a strategic JV partner/investor who will allow them to consolidate production and also develop their brand for a more mass market audience.

Baltic Expansion, a clients view

There are huge opportunities in Latvia for export and collaboration, especially if you’re skilled in the absolute essential entrepreneurial skills of tenacity, initiative and innovation. There’s plenty business but you’ll definitely need more than just a guide.

I have recently returned from a trip to Riga and Ventspils where Astrosat is continuing to launch 2 high tech spin offs, one an environmental service and the other a pure R&D division to take lead within a space cluster of highly motivated technologists, universities and companies.

I was amazed when visiting the cluster in Ventspils at the breadth of facilities and skills that was, I felt, massively underutilised. We are now fully funded for incubation and busy stitching together those resources with some of our innovations to grow our own projects and deepen Latvian’s work within the European Space Agency.  In a few weeks, when all the contracts are in place, I’ll tell you a story about an old telescope over there that I climbed and which sums up Latvia and doing business over there perfectly.

And when I said fully funded – I really do mean it – immense and fast support for incubation in a completely different manner to how it’s done over in the UK is right there for the correct partners and ideas. Even if you haven’t got the full idea yet, go look at the resources over there and you’ll be amazed at what you can do. You need a lot less financial leverage to get started in Latvia due to the funding mechanisms which, combined with the skills available will give you a lot of sleep-filled nights.

We prepared for months for this with CCG and their highly talented team in Latvia and the UK so we hit the ground running and for sure, almost everyone we met was very pleased to talk to us and jump on any opportunity. It was a fun and extremely valuable trip. As with any exporting or cross border business you really will need a guide who is not just and address book for hire but who can strategically guide you and spend some “political capital” to ensure a warm, important and appropriate welcome to your business ideas. If you can find the right guide then you’ll find that key warm welcome, if not you’ll feel that Baltic wind pretty quickly.

So why is tenacity, initiative and innovation so key?

Latvia’s history has created a legacy which can create challenges but which also feeds the potential of working together and that’s where you’ll need you’re the entrepreneurial skills I mentioned above. The desire to grow as an economy is deep due to past struggles, but often so deep you may not get it on even the second glance.  Show tenacity and you’ll see the potential. There is a wealth of resource, talent and people – often clustered very close together giving you access to almost every element of business you’d need – but you will need to be a strong leader and take initiative to maximise and capitalise on this. There can be a tendency towards fatalism and negativity, which is very hard to see for any entrepreneur and it can be frustrating as there really is everything you’d need, but give them a good idea and they will follow you.

For me and I’m sure for similar high tech businesses, success will be about seeing the potential which simply needs good ideas and leadership to pull together. If you do have those skills then certainly head over to Latvia (and look around the other Baltic states too) plus I really  thoroughly recommend using Charles’ team as that vital guide.

 

A Criminal Waste

I have to declare an interest at the start of this blog, I have two daughters, but I guess that does not make me that unusual.  But it has focused my mind on a problem which many men seem to ignore.

The glass ceiling still exists, and despite the protestations of politicians, and pressure from the media it seems to be stuck there. For the life of me I cannot work out why.

Over the years, and in a variety of industries I have worked with a mixture of men and women, and some have been good and some have been bad. But what I have found, first as I became a boss, and then developed and run my own business, is that I am appointing women to most of the senior roles in my business.

So why am I doing this?  The answer is that it is simply on merit.  I know this is a generalisation but women work harder, they are more committed, they are more loyal, they are true team players, they don’t panic and they have the much-heralded ability to multi task.  In my business at the moment all the senior positions are held by women, my Client Director is an experienced executive, who has proved her worth in the workplace through developing a career which has included senior positions in major multinationals, and my Operations Director is a young, bright and dedicated professional, who at the age of 28 has proved her ability and unflappability.

Through my business I also get to work with an increasing number of women entrepreneurs, and I have to say that the businesses they run and develop are at least as good as those of men.  The question is why, if we have this huge talent pool, is it not exploited more fully?

The obvious answer is the biological difference, and the fact that some women require to leave the workplace to bear children.  But is that a reason to discriminate? Most people plan their families, so there is normally a way for a business to prepare for maternity leave.

I often wonder why it is that the Baltic states, where I work a lot, and which is a very patriarchal society, has the highest number of women in senior positions in Europe.  I guess it is down to an understanding that people who study and work hard, and who show commitment should be rewarded, and not discriminated against because of their biology.

The issue seems to stem from a fear of “investing” in someone who may at some point in the future decide to take a career break, firstly I would have to say from my own experience that men can be fairly unreliable, and there are many reasons for a person to leave a job.  Secondly how amazingly short-sighted it is to discount over half the potential working population because they may or may not decide to perpetuate the human race.

So come on let’s not waste all this talent, it seems criminal to me.

Weekly Opportunity Update

We have uncovered some interesting opportunities last week, I have put a brief summary of them below, if you would like more information on any please let me know.

• There is an opportunity for an international  onsultancy to prepare a report for the Ministry of Economy in Latvia on the effectiveness of their programme for attracting investment into the country.  Currently any person who invests over about 250,000 euro in real estate is able to claim temporary residency.  The Ministry wishes to understand if this should be reformed.  We have the full brief if needed.

• There is another opportunity in Latvia around the design and build of a new prison, this needs to be very energy efficient.  Companies with relevant experience should get in touch and we can potentially introduce them to the Ministry.

• We have access to wood chips through an Estonian company.  We are aware that there is huge demand, and up until recently we were unable to source production for international companies in the Baltic as there were none spare.  This is new production.

• We have a large Pakistani housing authority looking for media, telecom and information technology services.  They are keen to meet with telecom consultants and operators.

• We have a Pakistani company looking for large amounts of Urea, amounts over 50,000, and another looking to purchase a range of Electric Cables.

If any of the above are of interest to any of your clients please feel free to put them in touch. If you would like to have a chat about the sector with Maxim then please emailIlona@consultcormack.com and she will arrange a call.

 

Looking back to the visit in Latvia

It is often said  we should from time to time take a step back and try to” see ourselves as others see us”.  This is much easier said than done, however last week I was able to experience it in a small way experience that, when I got to see Latvia through the eyes of an educated and worldly British Journalist.

I was asked by one of the major Scottish newspapers to arrange a trip for their Business Editor to Latvia.  The angle for the story was that if Scotland voted for independence it too would become a small Northern European country at the edge of Europe, and as such would be subject to the same sorts of pressures and opportunities as Latvia.

There was also a sub plot, which was why on earth would any country still be considering applying for membership of the Euro. This perhaps was more down to the British prejudice against the single currency rather than a detailed examination of the economic facts.

I wanted to give the Journalist as full a picture as I could over a three day visit, and was able to arrange a number of meetings with politicians (including the Prime Minister) senior business people, academics and ordinary Latvians.

I of course wanted to present as positive picture as I could of the country, but realised soon into the trip I was going to be unable to control the journalists questioning or perhaps more worryingly the Latvian propensity to always paint any picture as darkly as possible.

It is a character trait I often wish I could change, there is nothing more frustrating, than working hard to persuade an international company that Latvia is a market they should seriously consider, and then for an educated Latvian to sit down with them and tell them that the country is “going to hell in a hand basket”.

However I was fascinated to see the country again through the eyes of someone else, my visitor’s view of Latvia was that of a country with so much to look forward too, with so much going for it, and with a political maturity which some of the more developed democracies could learn from.

He was truly amazed at the Latvian government and people’s ability to knuckle down and cope with a crisis which relatively speaking dwarfs those facing other countries.  The cuts made and accepted would cause civil unrest in a country like Scotland, where a threat to freeze teachers’ pay for a year is enough to bring people out onto the streets.

He also liked the pragmatic realism of the business leaders he met, realising there were still issues to be tackled, but also understanding that with the right vision the country can truly create a niche for itself that will allow the economy to grow and prosper.

The almost universal acceptance by all the people he met that the Euro was the only way to go impressed him, and made him understand that small countries need to anchor themselves to something; otherwise they will be tossed around on the massive waves of the global economy.

But perhaps most interestingly, despite the positive view of Latvia, it also underlined to him that Scotland is not and probably never will be able to cope with becoming independent, the idea of is appealing, but the trials and tribulations which Latvia has been through and successfully negotiated show a country with an entitlement culture like Scotland would simply be unable to make the decisions needed when the tough times come.

So I take two lessons from the visit, firstly those of us who live in or work in and care about Latvia have a duty to be more positive about what Latvia has achieved through the crisis, and secondly this type of austerity independence is only for a certain type of society, and in Scotland we simply could not cope with it.

Weekly opportunity update summary

19^th January

This week Italian company stood out with its opportunity in Franchise, selling stylish yet affordable consumer goods. They are looking to expand internationally and for country franchise partners. Meanwhile Latvia has signed a cooperation agreement with Belarus which will lead to close cooperation between Latvian and Belarusian universities. This offers opportunity for UK universities to enter Latvian education market. Also, UK universities are looking at developing their agent network (for student recruitment) in Russia and India. In energy sector Romania suggests an opportunity place to invest and develop solar power because the government there has set extremely attractive criteria for the development of Solar, which are set until the 1st January 2014.02.10

10^th of February

The weekly update looks in a little more details at the Romanian market this week. Renewable energy is a growing area in Romania, there had been a lot of investments in Solar power and Wind energy. Also infrastructure opportunities stand out because Port infrastructure modernisation for the Port of Constanta had been made and wastewater treatment plants project was established. Moreover, some of the agriculture and Romanian food opportunities have occurred as well: Romania`s National Fishery Agency will launch  bid for the design and execution of the Tulcea Fish Exchange Market, investing in farming is becoming more available for investors because of cheap local farmland, specialised agricultural advisory services are offered. Privatization of some remaining large state owned companies is also taking a place in opportunities: Romania is about to sell control package in national freight company CFR by May 2013. Romanian market is also experiencing online retail, outsourcing and IT development. As newest outsourcing news states – Romania is among top ten outsourcing locations in the world, which present investment into setting up new facilities or simply for using the existing services of reputable established suppliers. In addition, Norwegian Computas buys Romanian company from investor Florin Talpes and Office space rents fall in Bucharest, Romanian capital among Europe`s cheapest, attractive for outsourcing companies. Another field – tourism, where a number of visitors to Bucharest increased by 10% and what is important Austrians spent some EUR 52 million in Romania in 2012. To end with, Year opens with massive discounts on real-estate property seized by banks in Romania.

16^th of February

Latvian market presented some great opportunities in prison design and build sector. The government has announced a project to design and build a new 1000 place prison, the budget is from state money. We have spoken to people in the government and they are keen to see if there may be companies with experience in the design and/or build of prisons who might be interested in getting involved. The Baltic market also has something to offer as a private university there is looking for a number of strategic partners.  The university is looking at developing a vocational college, and are keen to find partners who can help with this, both from a course development and partnership/accreditation perspective. Lithuania has received a generous EU support of a 10% increase in funding over the past period (almost £10 billion), which is going to mean a range of opportunities for companies involved in Nuclear decommissioning, Energy, Transport, Telecommunication and Infrastructure projects. Meanwhile, we have demand for cosmetics from the Italian market, especially at the less expensive end of the market. In Italy, Life Science companies are looking to create partnerships with international companies looking for joint research projects.  There are also good opportunities to commission contract research from Universities in Lithuania, where the government will fund 50% of projects. Moreover, we are seeing increasing demand across our markets for access to successful franchise opportunities, both B2C and B2B.

23^rd of February

Our Lithuanian office has reported that we are beginning to see a new trend in companies looking for outsourcing and FDI in the market.  Recently it has been mainly companies looking to secure IT resource, now it is financial/legal companies looking for intelligent back office staff for data analysis etc.  We also have one of our Russian team across this week in Northern Ireland meeting with food production companies (especially meat companies) .  The Beef and Lamb ban has recently come off and there are massive opportunities for these companies to export to the Russian market.

Check out this new coverage in Scotsman!

http://www.scotsman.com/business/management/business-briefs-rbs-ladbrokes-cormack-1-2830495

If you would like to have a chat about the sector with Maxim then please emailIlona@consultcormack.com and she will arrange a call.