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P&G says Peltz's plan would lead to higher costs, lower profits
(Reuters) - Procter & Gamble Co on Thursday said activist investor Nelson Peltz's plan to boost shareholder value would result in higher costs, lower profits and another restructuring that could lead to a breakup of the company.
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Corruption leads to unhealthy competition, lower profits
LAHORE: In Pakistan, the officials are often more invested in seizing a larger share of the pie, rather than creating a larger pie, which leads to conflict.
This is the reason that we find noncooperation between politicians, unhealthy competition between manufacturers, and unethical imports that do not benefit the importers, but are a boon for officials that get their share from all importers. The nation is in destruction mode.
Our exporters for instance compete with each other rather than competing with the exporters of other countries. They undercut each other’s price that has eroded their profit margins.
Pakistan by the way is the cheapest supplier of all textile products. Exporters from all other countries charge much higher per unit price for similar textile products. Lower margins have deprived them of accumulating enough resources to go for technology upgrade.
This is further marginalising them in global markets. So, to make up for lower margins, they resort to all types of malpractices. The government withheld approved refunds of sales tax of the textile sector recently because the official records showed that this year’s refund claims were higher than the refunds claimed by the textile sector last year.
This has created suspicion on two counts. The first is that five export sectors, including textiles, were zero-rated from July 2016. Secondly, the exports this year have declined and the unit prices have also declined so the refund claims should have been lower.
Exporters say the export refunds were approved by the concerned tax officials and should not have been rolled back. The exporters also openly accuse that they have to pay speed money for the release of their refunds. The going rate for approval of claim has allegedly gone gradually up from five percent to 15 percent. The officials thus have an incentive to approve as much refunds as possible.
The suspension of refunds has provided the state an opportunity to scrutinise the approved claims. If the refunds claimed were found in excess of actual dues, this would prove the connivance of the officials with the exporters.
It would be fair to punish the guilty and compensate those whose genuine refunds were withheld as a result of this exercise. The auditor should also be tasked to examine how many genuine refund claims have not been processed. This will indicate as to how many refund claimants have refused to grease the palms of the refund processors.
In the domestic market, another type of competition is going on. The manufacturers tend to compromise on quality to lower the cost and beat the competition. A term very popular in the markets is “do number maal” (first copy) which is in fact the copy of a popular brand. The seller claims that the quality is the same as that of the product of some popular brand, but the price is much lower.
The sales of such copied products is higher than established brands in clothing, electronics, fans, air coolers, toffees and other processed edibles. The cheaper clothing prints fade after two or three washings and the cheaper electronics consume much more power than the product of an established brand.
In case of electronics, the consumers pay a higher bill for life by saving some amount. The manufacturers of quality products gradually lose most of the market and the ‘copies’ prosper. They usually operate outside the tax net. The officials are fully aware of their existence, but look the other way as they are adequately compensated.
Almost all finished products are heavily under-invoiced. Anyone importing a product on its actual price cannot survive in the market. However, under-invoicing too has lost its attraction, as importers do not earn the expected higher profit.
Since the cost of every product that is imported in Pakistan is the same for almost every importer, they have to compete with each other in the normal way, without enjoying any price advantage over the other importer.
However, the true beneficiary of under-invoicing is the bureaucracy that knows the actual price of the product and needs to be ‘pleased’ for allowing under-invoicing.
Corruption leads to unhealthy competition, lower profits
C&C expecting lower full year operating profits Drinks company C&C Group has said it expects its full year 2017 group operating profit to be in the region of €94m to €96m. Sourced through Scoop.it from: www.rte.ie
Engro Corporation, posts spectacular turnaround in earnings profitability in the first quarter of 2013 (1QCY13)
KARACHI: Engro Corporation, arguably Pakistan’s most prominent business conglomerate, has swung back into profitability in the first quarter of 2013 (1QCY13) after posting significant losses in the same period of the preceding year. Engro’s net profit summed up to ...
published on http://alternativeenergy.com.pk/pakistan-news/engro-corporation-posts-spectacular-turnaround-in-earnings-profitability-in-the-first-quarter-of-2013-1qcy13/
