A Bloomberg Story.
Asad Umar’s expertise in hazardous materials should come in handy for his new job: managing Pakistan’s economy.
When the nation’s new finance minister was told two decades ago he couldn’t import chemicals through a Karachi port because of its storage terminal’s weak safety standards, he just went and built a new unit himself. Back then, he was a senior official at Engro Corp., where he eventually worked his way up the ranks to chief executive officer and turned the company from largely a fertilizer maker into one of the nation’s biggest conglomerates.
Shamsuddin Shaikh, who heads up Engro’s energy arm and worked for Umar for almost 18 years, says the storage unit shows how his former boss was willing to find unconventional approaches to meet challenges. He “reaches to the bottom of the problem” and has an attention to detail, skills that make the 57 year-old right for the job, Shaikh said. In his new role, Umar has no shortage of problems to fix. A borrowing binge has left the South Asian nation in need of a bailout of more than $12 billion, he said in an interview last month. Most analysts expect new Prime Minister Imran Khan, the former cricket legend, will soon be knocking on the door of the International Monetary Fund once again.
“What needs to be done should be done in the next few weeks,” Umar said in an interview in Islamabad just before his official appointment in August. “They should have been done six months back.”
Beyond the immediate crisis, Umar must also try to fix decades of economic boom-and-bust cycles, an over-reliance on debt-funding and income tax avoidance in a country where less than 1 percent of its more than 200 million people file returns. At the same time, he has to deliver on the prime minister’s pledge to boost welfare spending.
Umar isn’t scared of taking risks. After becoming head of Engro in 2004, he diversified the company into the dairy business, an industry that was until then dominated by global giant Nestle SA. The move helped turn Engro into one of the nation’s biggest companies with a market value that’s now more than eight times larger. His leadership wasn’t without fault: Engro was fined by Pakistan’s antitrust agency five years ago for excessively jacking up fertilizer prices. Umar also faced pressure from investors in 2011 when a newly-built fertilizer plant experienced gas shortages despite government supply guarantees.
“It’s going to be tough,’’ said Omer Yusuf, managing director of Lyra Pvt Ltd., a body armor factory in northern Karachi, who knew Umar during his corporate days. “But they’ve got a good team, Asad Umar is probably one of the most brilliant people I know — I’m hopeful.’’