Newsletter for February 2018

This newsletter is sent to approximately 40,000 contacts in Germany and Pakistan.

Consul's Corner

Dear Friends, Today, I would like to use my monthly message to inform you about a Germany-related event in co-operation with Siemens, jointly organized by“Euler Hermes” and Standard Chartered Bank of Pakistan. Mr. Jan von Allwörden, Head of the Department of Underwriting at Euler Hermes andbased in the UAE, will come to Karachi for a workshop on “Export Financing” on Tuesday, 13 March 2018, 9.30 am, at the SCB Head Office, I.I. Chundrigar Road, Karachi.The workshop will begin with my opening remarks. The schedule is as follows:· Presentation by Euler Hermes - its activities in the region with special emphasis on Pakistan;· Presentation by Standard Chartered Bank on ECA and on lending structures;· Presentation by Siemens showcasing TP1000 Project and Euler Hermes’ support.· Networking Lunch. The session will be especially useful for senior executives responsible for financing in their respective organizations. Regarding the background of the workshop I would like to mention that according to the 2017 ADB “Trade Finance, Gaps, Growth and JobsSurvey”, the global trade finance gap is at $1.5 trillion, and 40% of it originates from Asia and the Pacific. Emerging economies continue to face thegreatest shortfalls. Whereas there are many complexities in addressing this gap, one solution is to understand the role of an Export Credit Agency(ECA). An ECA is a governmental, quasi-governmental, or private agency offering trade finance support to promote export growth for domesticcompanies in the ECA's home country. ECAs aim to help companies to expand into international trade either by bridging the gap or assisting themin offering their goods and services bundled with financing solutions in a situation where the end customer does not have access to financing. Mr.von Allwörden of Euler Hermes handles and administers the German Export Credit Guarantee system on behalf and on account of the FederalRepublic of Germany. He will share his knowledge and expertise on developing and delivering of all types of coverage solutions for the protection ofexport financing transactions against commercial and political risks. Backed by Allianz, one of the leading financial services providers worldwide,Euler Hermes is one of the world's leading providers of trade-related credit insurance solutions with more than 100 years of client support andresponsiveness to changing business environments. For further details and to register for the workshop (first come, first serve)please send an email to saiyed-farrukh.ali@sc.com Hoping to see some of you at the workshop,Yours sincerely,Rainer Schmiedchen, Consul-Generalwww.karachi.diplo.dehttps://www.facebook.com/GermanConsulateGeneralKarachi

Secretary General's Message

Dear Members and friends of GPCCI, It is a great pleasure and honour, as the Secretary General of GPCCI to address this first message in the newsletter covering February 2018. Withthe capable team at GPCCI including our members who contribute their valuable time and energy, I am sure we can continue to build GPCCI into avalued platform for furthering trade, growing economic ties, exchange of expertise, and social development between two beautiful and resourcefulcountries Germany and Pakistan.

A few events and workshops are in the pipeline for GPCCI members and I am in touch with our business contacts and members for a couple ofprojects as well. I would like to specially mention the Pakistan Poultry, Dairy, & Livestock Expo (PPDL), 2018 which is going to be organized byLandmark communication from 20-22 July, 2018. This exhibition will bring under one roof, the leading Poultry, Dairy and Livestock players fromPakistan and abroad, especially experts and leaders from all three industries. The key objective of this exhibition is to unify the key stakeholdersand provide them with diversified business opportunities by interacting not only with the International and national exhibitors but also with the seniordignitaries from the government sector. This is a great opportunity for German companies and organisations in this field to showcase their expertiseand products in this fast-growing sector of Pakistan, which has a lot of room for development and subsequent growth. You would also like to know that the GPCCI board is looking forward to develop Experts Groups under its umbrella. These groups will comprise oflocal professionals with expertise in various fields like textiles, logistics, travel & tourism, legal & corporate laws, taxation, banking and finance,education/ research and other significant areas. The groups can be a resource for the betterment of our member organisations, affiliates, andfriends here and abroad. I appeal to our members and friends with the expertise in these fields to come forward and devote their time and energy inthe relevant expert’s group with their valued guidance and help. Let us together grow GPCCI into an active and dynamic organisation. Best Regards,Danesh

National Single Window

National Single Window (NSW) is being initiated by the Federal Board of Revenue through Pakistan Customs to streamline import and export ofitems from Pakistani ports. Senior individuals from the FBR visited Pakistan Japan Business Forum (PJBF) to explain their initiative which is in linewith the International efforts to standardize a working system. Pakistan is amongst the few approached which has the capacity to conform andimplement it. During our interactive session with them, we pointed to the numerous anomalies that exists and which becomes a source ofbotheration to the manufacturers as well as to the traders by way of delays and documentation requirements. It was therefore agreed that PJBF being a lead Bi-Lateral Business Forum would invite a larger group of business community from other suchforums so as to make a presentation to them in order to get their feedback while implementing the NSW being an initiative which involves thebusiness community as the major stake holder. The meeting for this purpose was called on February 13, 2018. at 3 pm at the Custom House Auditorium. GPCCI members in addition to otherbusiness community representatives also attended the meeting. Afnan Khan, Deputy Director-PMO (NSW), Mr. Aftab Haider-consultant NSW, andMs. Rezwana Siddiqui-Additional Director- PMO NSW addressed the participants.

German Envoy Asks Pak Youth Equip With Modern Skills

Faisalabad - Pakistani youth must be equipped with most modern and latest vocational skills to make its products compatible with the internationalstandards, said Dr Jens Jokisch, Deputy Head of Mission at the German Embassy.

Talking to a delegation of Faisalabad Chamber of Commerce and Industry (FCCI), Dr Jens said that German organisation GIZ was already workingin Pakistan for the last many years to provide fundamental skills to its work force. About Pak-German relations, he said that two countries aretrusted trading partners. He said that the bilateral trade between the two countries stood at 2.6 billion Euros during last year. He said that many German companies were already successfully playing their role in the uplift of Pakistan economy while many more are planningto start their businesses in this country in near future. President FCCI Shabbir Hussain Chawla said that involvement of youth in productiveactivities is a big challenge for Pakistan. He said that many government institutions are imparting skills with the help of GIZ and other NGOs supported by donor organisations. "However, we must adopt new and high tech technologies to improve the quality of our exportable surplus in addition to entering into the emergingfield of technical textile," he said and added that that GIZ should also club vocational with entrepreneur skills so that the youth could start their ownbusinesses instead of running after jobs.Later, Engineer Suhail Bin Rasheed presented the FCCI shield to Dr Jens Jokisch while SVP Sheikh Farooq Yusuf presented a gift of local madetextile products to Ms Jens Jokisch. [Published in The Nation on February 19, 2018]

Pakistan is One of the Brightest Countries for Start-Ups

Providing words of encouragement to entrepreneurs, Tameer Bank’s founder and former CEO said on Sunday that given the youth demographic,Pakistan is one of the brightest countries for start-ups, as there is no dearth of talent, but lack of support from the corporate world. Nadeem Hussain was a panellist with designer clothing retailer Amir Adnan and entrepreneur Hareem Sumbul Bari at a session titled‘Entrepreneurship Today: Start-ups and Angel Investors’ on the third and concluding day of the 9th Karachi Literature Festival at the Beach LuxuryHotel. “Entrepreneurs need breathing room,” said Hussain, adding that though it seems a huge opportunity for commercial banks to invest in ventures,they do not do it and prefer power projects and the like. In these circumstances, he said, things are challenging for entrepreneurs, but “when you put your own money on the table, you learn very fast”. Headded that for now most of the aspirants are not familiar with the business and financial environment here.“There’s no age requirement to become an entrepreneur. Twenty-three incubators and accelerators are already in the market. Venture banking hasstarted. And Pakistan has got on the bandwagon. Foreign investment is pouring in.” Hussain said it is the best time to become an entrepreneur, but there’s guarantee for success. He said 95 per cent of the start-ups failed in thebeginning. For better results, an exceptional ecosystem and funding at post-seed levels are needed, he added. A brilliant idea Amir Adnan, who is a business graduate, shared his success story on how he started what is now one of the leading designer brands withRs10,000 in the 90s. “What you need is a brilliant idea that can generate revenue, otherwise it’s not going to take off.”He said the government can play a major role in helping start businesses because they will create job opportunities, and the social and economicconditions will ultimately improve. He lamented that entrepreneurs are troubled by tax collectors and the industry is talking with lawyers to prevent“harassment”. He suggested that there should be a mechanism to educate people about how to become part of the documented economy.“Entrepreneurs should have a 360-degree approach [multi-source assessment],” said the designer clothing retailer, adding that the deficienciescould be overcome with creating a pool of mentorship. Poise for investmentHareem Sumbul Bari said entrepreneurs should know they need an amount to bootstrap and maintain their positions as founders. “Poise yourselfso that others like to invest in you,” she advised them. She said the government should give tax holidays to start-ups and remarked that struggling entrepreneurs have a setup but it is not workingefficiently. Offering encouragement, she said everyone can start a business. By Zubair Ashraf [Published in The News on February 12, 2018

BASF breaks down 2017 automotive colours market

Islamabad: With the “BASF Color Report For Automotive OEM Coatings”, BASF’s Coatings division provides a global analysis of the colordistribution in the 2017 automotive market. Globally, white maintains its strong position in all segments and still is the number one color with amarket share of almost 40 percent. Together with black, gray, and silver, the achromatic colors continue to be the most prominent. When it comesto chromatic colors, the share of blue and red is almost equal, followed by brown. The global overview of the car segments shows: the smaller thecar the more vivid the color. With increasing sales and number of models, Sport Utility Vehicles (SUVs) significantly influence the popularity data. While white and black are stillstrong colors within this segment, red, blue, and especially brown are showing up more and more. This mirrors the expected growth and diversification of the model range of these robust vehicles. The figures of the European Color Report 2017reveal that achromatic colors are still the most popular. About 78 percent of all cars were painted white, black, gray or silver last year, marking acontinuing trend. Among the achromatic colors, the proportion of gray increased to 19 percent. Gray has now attained the same popularity as black.The growing share of gray is underlined by the increasing diversity of gray shades. With more than 100 variations, gray has the second highestnumber of shades after blue.“Gray – with its associations with concrete and glass – represents the most urban color and has increased strongly over the past years. Withshades from light and mid-grays to dark anthracite, it represents a huge variety and in so doing has gained its strong market position,” said MarkGutjahr, head of Automotive Color Design EMEA at BASF’s Coatings division. Of the chromatic colors, blue continues to trend strongly. While the overall share of 10 percent remained stable, the proportion of blue increasedconsiderably in terms of its share in the chromatic palette: nearly every second chromatic car produced in Europe 2017 was blue – a trendpredicted by BASF’s Coatings color designers and reflected in the numerous blue shades in the last color trend collections. With nearly 130different variations, blue also remained number one in terms of color diversity. The North American Color Report 2017 points out that new pigment technologies increase the demand for special effects that shimmer and shine.This leads to a larger variety within the color segments – especially with the achromatics white, black and silver/gray, which are the most popularvehicle colors in North America. Even in the growing segment of electric vehicles achromatic colors are still preferred – although gray/silverappears to be more popular than white or black at this early stage in electric vehicle development. Color aesthetics are being increasingly considered in combination with functionality, so the ability to be detected by sensors has more relevancethan ever before, and BASF will continue to monitor these developments. “Our trend research shows the continued importance of the achromaticcolor space, dominated by white, black, and gray. It’s critical for us to innovate in these areas, so we look for unique ways to find colors that capturethe essence of the customer’s brand to how it helps define the shape of the car,” said Paul Czornij, head of design for BASF Color DesignExcellence Group in North America. Blue and red are the key chromatic colors in North America. The blue color space is also very versatile and can achieve a large diversity of shades,ranging in lightness, saturation, and subtle hue changes. Other colors, such as orange, are showing up in the analysis. These shades provide moreoptions for the consumers to tie in to their particular preferences. The automotive coatings market in Asia Pacific is being driven by the increasing vehicle population and the diversity of the different regionalconditions which is also reflected in the Asia Pacific Color Report 2017. With an overall distribution of 49 percent, white is the most favorite color inthe region. Due to the cultural context in Asia Pacific, white colors are associated with the positive image of purity and intelligent advancedtechnology. Thus, white cars have been gaining a high-volume growth in Asia Pacific over the past couple of years. Apart from white, brown colors are also gaining popularity – especially for mid-size SUVs. Both white – especially pearl white – and brown arepositioned as stylish colors with luxurious flavor that are welcomed by the Asia Pacific market. Bright red, as a provocative yet smartly individualcolor area, is highly popular in the chromatic range of automotive colors within the automotive market in Asia Pacific. In general, red for automotiveattracts attention, which is an important factor in the mature markets of Asia Pacific. With the analysis of the global distribution of automotive colors, BASF’s Color Report For Automotive OEM Coatings supplements the AutomotiveColor Trends published annually by BASF’s Coatings division. While the trend collection presents color concepts that will shape the automotivefuture, the Color Report is concerned with the present-day market situation and thus refers to the data of the previous year. Within the last years,color diversity has increased and the possibilities for innovative color concepts are multifaceted. Therefore, BASF works closely with OEMs tocompose the desired look and feel, underlining the spirit of the automotive brands.

Hundreds of colors are currently in the market and include a broad selection of unique effects. Moreover, functionalities of coatings play anincreasing role. Paints with an integrated temperature management, for instance, strengthen a sustainable future mobility. As they minimize theheating of the car surface and thus the heating of the interior, savings in air conditioning lead to reduced fuel consumption or an extended range ofelectric cars. [Published in Pakistan Observer on February 10, 2018]

Germany sets up regional blood transfusion centre in Sukkur

SUKKUR: A regional blood centre, one of 10 such facilities being established in Pakistan, was inaugurated by German Development Bank (KfW-Kreditanstalt für Wiederaufbau) project director Wolfgang Molar on Wednesday, a message received here said on Thursday. Under the Safe Blood Transfusion (SBT) project of the bank, 10 regional blood centres are being established in different parts of the country, four ofthem in Sindh — one each in Karachi, Sukkur, Jamshoro and Nawabshah. The project also covers supply of equipment to blood banks of hospitals,training to blood services personnel and campaigns to motivate people to donate blood. Sindh Health Minister Dr Sikandar Mandhro and Secretary Fazlullah Pechuho spoke at the inauguration ceremony, which was attended by MPASyed Awais Qadir Shah, former MPA Haji Anwar Khan Mahar, Additional Health Secretary Dr Raheel Baloch, Sukkur Mayor Barrister Arsalan IslamShaikh, Dr Masooma Zaidi and senior health officials.Dr Mandhro expressed gratitude to the German government and the KfW Bank for their cooperation and collaboration in the furtherance of thenoble cause. He described a blood donor as a great human being, and expressed his confidence that the project would facilitate the process ofsaving precious lives and contribute to improving healthcare services. The four centres being established in Sindh were a great gift to the provincialgovernment and people of Sindh, he said. The minister pledged to organise awareness programmes at college and university levels to encourage blood donation. Health Secretary FazlullahPech uho appreciated the German KfW project and said it would help the provincial government and his department to provide better bloodtransfusion and other healthcare services to citizens. Project Director Wolfgang Molar told the audience that Germany and the bank were committedto improving the blood transfusion system in Pakistan, adding that the project would play a pivotal role in this regard. He noted that the Sindh government had undertaken to take best care of these facilities. He said the mobilisation campaigns to be organised timeto time in Pakistan under this project would focus not only on blood donation but also good care of donors’ health. [Published in Dawn on February 16, 2018]

Seminar on Supply Chain Management at DHA Suffa University, Karachi

On 16th of February, 2018, Mr, Lutz Fissenwert conducted a seminar at DHA Suffa University on Supply Chain Management. He spoke about thebest practices being followed by the Industrial sector globally. Mr. Lutz Fissenwert is a senior expert in the field of Supply Chain Management, andhas vast experience of working in the German corporate sector for over three decades. The seminar was attended by representatives from Ideas by Gul Ahmed and DHL. GPCCI (German Pakistan Chamber of Commerce and Industry)helped market this event to supply chain experts from the industry for which we are extremely grateful and obliged. After quick introduction, Mr. Lutz kicked off the first topic of the session, “Business Process Engineering” (BPR). Successful application of BPRimproves organizations efficiency and effectiveness which leads to an increase in profitability. A BPR is initiated in an organization by identifyingkey processes, and with the help of process owners, mapping them in an “As is” diagram. Subsequently, process owners are asked to review theprocesses, identify wastages and pain points. Root cause analysis tools such as DMAIC (Define, Measure, Analyze, Improve, Control) are used tounderstand the reasons behind the pain points in the processes and to understand how best to address them. With this new information in hand,process owners then redesign or “reengineer” processes. The final step of BPR is making a “Should be” map of the reengineered processes, andimplementing it in the organization. Mr. Lutz identified four relatively new strategies that are catapulting businesses around the world to become global leaders. They are: 1. Just in Time (JIT): Where previously companies would buy and store supplies in advance, JIT ensures that once an order is received, suppliesarrive “just in time”, and suppliers keep ownership of warehouse goods till they are consumed. In order to implement JIT companies need to

develop long term agreements and have strong communication with suppliers, and they should have advanced forecasting tools as well aselectronic data and the ability to track consignments. 2. Reduction in Operational Costs: Companies nowadays have started viewing their suppliers as long term partners, and have linked their planningand forecasting with suppliers, which results in and increase in efficiency and effectiveness. Additionally, careful analysis of data collected at pointof sales coupled with a continuous effort to improve quality helps companies identify pain points within business processes and resolve them. 3. Customer Support: Recently, companies are taking customer support to a whole new level and take pride in spoiling customers by giving themextraordinary attention. Separate customer support departments stay in close contact with decision makers and report changes in customerbehavior to organizations, who are flexible and agile enough to change and innovate accordingly. 4. Shift from Push to Pull Strategy: Previously, Companies would build inventories of product based on what they thought would sell, and wouldthen “push” the products to customers and sell to the best of their ability. More recently, customers are switching to a “pull” strategy, where theystart producing goods after orders are secured. Demand is created through marketing and pre-sales activities. The pull strategy results in reducedinventory and higher operational excellence. The next topic Mr. Lutz spoke about as “Six Sigma” which is a high quality target the successful company’s strive to achieve. Companies are able toachieve this high quality bar by avoiding waste, ensuring there in no variability in the quality of their products and services, and also by eliminatingdefects (also known as “Pokeyoke”). Many times, high inventory/stock levels and high working capital hide systemic wastes in organizations, and if proactive corrective action is nottaken, production flows can be negatively affected. Therefore it is imperative for organizations to be cognizant and drive out the eight deadly wastesfrom their organizations which include: Defects, Overproduction, Waiting, Not utilizing talent, Transportation, Inventory excess, Motion waste andExcess processing. To be successful, leaders must focus on continuous improvement (Kaizen), and be willing to change, innovate and rise above customerexpectations. In the past there was a mystery and intrigue about how companies become global Multinationals, but now thanks to subjects likeSupply Chain Management, the mystery has unfolded itself. Any company can choose to become a global leader by understanding andimplements core concepts such as those described by Mr. Lutz. In the final part of his presentation, Mr. Lutz shared the story of a start up in Germany by the name of “Astarte Manufacturing”. Launched by a lady,this home business made high quality processed dry fruits in thirty two variations, and supplied to exclusive stores.In 2016, the company received a loan of Rs. 4,100,000. Despite the seed capital and expert guidance, they had zero profits in 2017 and the ownerdidn’t receive any remuneration. After detailed planning, in 2018, sales increased by 50%, new products were added and the customer baseincreased. The year ended with “real black zero profits” which means that though there were zero profits, the owner received remuneration. Thebusiness continues to grow steadily in Germany. Mr. Lutz explained that there is no doubt that start-ups are hard to run and there is a high risk offailure. That being said, every successful business today started with someone willing to take a risk, and they flourished with the help of a support group. Countries and society eventually greatly benefit from successful businesses and they eventually become the backbone of economies. As thefamous saying goes, “Higher the risk, higher the return!”

Events in March 2018 and Beyond

1. Anti-Bribery and Compliance Management Workshop The Corporate Research and Investigation Group in collaboration with GPCCI is organizing an event “Discussion on Latest Anti-Bribery Insights andHow to Proactively Tailor your Compliance Program in regards with ISO 37001”. The main purpose of this event is to conduct a networking sessionon recent enforcement trends regarding bribery and anti-bribery compliance. Event Schedule:The event is scheduled in PC, Karachi on 7th March, 2018 from 3 p.m. to 6 p.m.

Event Agenda:The agenda of this event will be to have a discussion session focused around:

1. Consequences of corruption at the sector level and implications for economic growth and development.2. Introduction to some of the world’s strictest legislation on bribery through the German Bribery Act, Bribery Act 2010,FCPA etc

Benefits of ABMS such as ISO 37001 as the need of the hour in today’s world for large corporations and MNC’s.3. Question and Answers / networking/ promoting CRI products/service such as ABMS for marketing-branding- clients base.

2. Workshop on Export Credit Agency (ECA) in Offering Trade Finance to promote Export Growth in ECA's Home Country Workshop on Export Credit Financing in cooperation with Siemens, and jointly organized by “Euler Hermes” & Standard Chartered Bank ofPakistan. Event Schedule:Date: 13th March, 2018Time: 9:30 AMVenue: SCB Head Office, I.I Chundrigar Road, Karachi. Event Agenda:The workshop will begin with opening remarks of the Consul General of Germany, Mr. Rainer Schmiedchen followed by:

Presentation by Euler Hermes - its activities in the region with special emphasis on Pakistan;Presentation by Standard Chartered Bank on ECA and on lending structures;Presentation by Siemens showcasing TP1000 Project and Euler Hermes’ support.Networking Lunch.

Purpose of the Workshop:

The workshop aims to inform the participants about the role of Export Credit Agency (ECA) in offering trade finance support to promote exportgrowth for domestic companies in the ECA's home country. This session will be especially useful for senior executives responsible for financing intheir respective organizations. Mr. Jan von Allwörden, Head of the Department of Underwriting at Euler Hermes and based in the UAE, will come toKarachi for this workshop. Mr. von Allwörden of Euler Hermes handles and administers the German Export Credit Guarantee system on behalf andon account of the Federal Republic of Germany. He will share his knowledge and expertise on developing and delivering all types of coveragesolutions for the protection of export financing transactions against commercial and political risks Registration:For further details and registration, please send an email to saiyed-farrukh.ali@sc.com

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