Pakistan: Different Experiences for Textile, Software Makers
By CHRIS CZIBORR
Pakistan isn’t a big market for Orange County. But local companies that tap the country for software development and textiles are reporting divergent experiences since Sept. 11 and Pakistan’s subsequent internal turmoil.
That divergence stems from the differing way those industries move product around.
For textiles, a bulk item, importers such as Santa Ana fabric and T-shirt maker Delta Knits Inc. are reporting delays and higher costs as U.S. Customs Service tightens up on inspections and shippers raise their rates.
“Slowly things have smoothed out, but Customs has charged us as much as $1,200 per container for inspection,” said Mohammad Riaz Ahmed, president of Delta Knits. “Shipping companies now are charging us $200 to $300 as a ‘risk charge.’ That’s steep,especially for raw materials like textiles.”
The hypercompetitive textile industry is extremely price-sensitive, making any operating cost increase burdensome.
Along with 25 OC employees, Delta Knits has 350 workers at a sister company in Karachi that spin cotton. The company sources cotton in Pakistan,one of the world’s top producers,as well as from Turkey, Indonesia and Bahrain.
Delta’s customers include Foun-tain Valley-based Summit Sportswear and Costa Mesa-based Hurley International Inc.
Ahmed said Delta Knits saw a lot of difficulties at the Port of Los Angeles following Sept. 11.
“Every container was sent through Customs inspection, which is usually a full inspection,” he said. “That was giving us a lot of delays and we incurred production losses because of that. Sometimes the Port of L.A. was delaying our cargo as much as 10 days.”
Ahmed also said he believes the company’s containers were singled out because they originated in Pakistan.
“Our first impression was that the delays were affecting products across the board, but we saw containers that weren’t from Pakistan that experienced no delays,” Ahmed said. “Containers from South Asia were more affected.”
Meanwhile, OC technology companies that develop software in Pakistan have reported no real difficulties since Sept. 11. That’s because of the way they move product around,electronically.
Humayun Rashid, president of Irvine electronic commerce software maker Xavor Corp., said his company’s work hasn’t experienced any disruptions because of events in Afghanistan and the region.
“From our point of view there hasn’t been any effect,logistically we operate as a virtual company with everything moving electronically,” he said. “When the whole military action was going on in Afghanistan there were some international travel disruptions, but we’re still signing deals with the same customers as well as new ones.”
Xavor has 25 Irvine workers and 65 in Lahore writing software for clients such as Britain’s Cable and Wireless PLC and Standard Chartered Bank.
The company plans to grow staff by 50% both here and in Pakistan in the next year,largely spurred by work for those two clients, according to Rashid.
He said the company hasn’t seen any disruptions at its Pakistan facilities from protests or anti-American sentiment.
“Places like Karachi and Lahore are moderate areas,things have been very smooth from a business point of view,” he said. “There’s a day-and-night difference separating the metropolitan regions from Pakistan’s northern tribal areas where a lot of radical sentiments exist.”
Nasir Javid, who heads Irvine banking and telecommunications software maker Prince-ton Technologies, also said his company’s software development work,split between 22 workers here and 60 at a Lahore site,has shielded it from potential problems in South Asia.
“The campaign in Afghanistan at its height led a lot of airlines to cancel flights between the U.S. and Pakistan. But as far as work is concerned we depend mainly on data links, not on travel, for our business,” Javid said.
He also said his company’s Pakistan facility hasn’t been disrupted by anti-American protests or activities.
“Lahore is well insulated from a lot of current events so nothing directly affected us,” Javid said. “Nothing appeared on the radar as an issue for us as far as anti-American sentiment is concerned.”
Mehboob Akhtar, president of Irvine e-commerce software maker Focus Software International Inc., echoed the observations of other companies that develop software in Pakistan.
“The current situation there is not affecting my business,” Akhtar said. “We do everything electronically,we don’t have to worry about shipments.”
Focus has nine employees in Irvine and no direct employees in Pakistan, though it outsources programming and software design work to 45 workers based there.
Focus’ clients include Irvine networking products maker Avaz Networks Inc., Irvine chipmaker Broadcom Corp. and Akron, Ohio-based Shin-Etsu Silicones of America Inc., which belongs to Tokyo’s Shin-Etsu Chemical Co.
