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Mar 14, 2023

Change of guard at the helm of International Industries

Riyaz Chinoy steps down, Kamal Chinoy takes his place. Will things be more of

Riyaz Chinoy steps down, Kamal Chinoy takes his place. Will things be more of the same?

Let us play a word association game. If we say the name ‘Chinoy’, what does that name conjure up for you? If you are a foreigner, or someone interested in the arts and media, that name may remind you of Sharmeen Obaid-Chinoy, Pakistan's first Oscar winner (and it is a testament to SOC that she created an entirely distinctive brand name on top of an existing one).

But perhaps you are someone who is more interested in business, the name might remind you of the Chinoys, one of the industrialist families behind perhaps the most recognizable brand out there: Pakistan Cables. They are also behind International Industries, which manufactures steel pipes.

The company remains very much within the Chinoy family. But the question is, of course, which Chinoy. In a notice issued to the Pakistan Stock Exchange on February X, International Industries announced that there would be a change of CEOs: from Riyaz Chinoy, to Kamal Chinoy.

Who are these people? For that, it is necessary to go back to the beginning. International Industries is the brainchild of Amir Sultan Chinoy, an industrialist born, as many of Pakistan's family patriarchs have, on the other side of the border, in British India in 1921. He migrated to Pakistan and almost immediately had a massive impact on the industrialisation of the nascent country, incorporating International Industries (it initially dealt in electronic instruments). Chinoy initially named the company Sir Sultan Chinoy & Co. Ltd., after his father. In 1953, Chinoy sponsored the establishment of Pakistan Cables Ltd, for which International Industries acted as a distributor.

It was in 1966, that the company pivoted and began to produce cold rolled tube, and steel furniture.Towfiq H. Chinoy took over the company as Managing Director in 1977, and began to produce galvanised iron (G.I) pipe in 1982. In 1984, IIL was listed on the Karachi Stock Exchange. In 1989, the company set up the country's first private sector cold rolling mill, and began to export pipes in 1996.

In 2006, the company began to produce HDPE pipes, and then in 2015, it set up stainless steel pipe facility, and API lines pipes in 2016.

International Industries also owns a majority share of International Steel Ltd., which was incorporated in 2007 for flat steel products. This focuses exclusively on producing hot-dipped galvanized coil (HDGC), cold-rolled coil (CRC), and color coated galvanized coils (PPGI). The subsidiary has an annual manufacturing capacity of over 1 million tons and annual revenues of over Rs48.1 billion.

In addition, the company also owns Pakistan Cables Ltd, incorporated in 1953, which manufactures electrical cables, wires, copper rod, aluminium sections. It also has two wholly-owned subsidiaries: IIL Australia, which represents the group's interest in the Asia Pacific region; and IIL Americas Inc, which is Canadian, and represents the group's interest in North America.

Much of International Industries success, interestingly enough, has been in serving the furniture and bicycle industry, since 1969, and the auto industry since 1989. It started making bicycle parts, such as chains, rims mudguards etc, and began to cater to the growing two-wheel motorcycle market. In fact, more than 60% of bicycle and motorcycles manufactured in Pakistan use parts made by International Industries. That is a lot of bikes.

Today, that continued growth has paid off. The company is now Pakistan's largest manufacturer and exporter of steel, stainless steel and plastic pipes, with an annual manufacturing capacity of 817,000 tons and annual revenues of over Rs 26 billion. It exports to 60 countries across six continents, with exports exceeding $238.4 million.

The man at the helm of the company for the last ten years has been Riyaz Towfiq Chinoy, Towfiq Chinoy's son. He had worked at the company for 28 years, and will continue to serve on the board of IIL. The last ten years have seen some uneven results. Between 2010 and 2020, net sales of the company have improved.

In 2010, they stood at Rs13.5 billion, increasing to Rs18 billion by 2015, dipping the next two years, and then shooting up to above the Rs25 billion mark in 2018 and 2019. The year 2020 proved a poor year, with net sales again dropping to the Rs18 billion mark. The company's profit has similarly fluctuated: from Rs1 billion in the first two years of the decade, then falling to Rs300 million in 2013. It would not cross the Rs1 billion mark again till the year 2017, and stayed consistently above the Rs1.5 billion mark for the next two years, before posting the first loss in ten years in 2020, of Rs694 million.

Who is coming in to take his place? Kamal A. Chinoy. He is the cousin of Riyaz Chinoy, and according to sources, widely seen as the ‘competent’ one within the family. This would make sense: after all, he was the CEO of Pakistan Cables for 27 years, and is the current chairman of the Aga Khan Foundation. He has also been director of International Industries since 1984, and at one point was the architect of the company's sales and marketing practices. In picking this CEO, the Chinoy family has demonstrated that it would like older, safer hands, to steer their smaller company as well.

A flare catching article ,along with a good story line. It's evident that especially in South Asia, the existence of family controlled business groups, are highly interconnected.

Riyaz Chinoy is a visionary personality and would push for even more. Things would be the same because he has set up the platform in last 10 years making major inroads and expanding the products range of the company. Truly a great loss for IIL

One correction, Kamal Chinoy is the former Chairman of Aga Khan Foundation Pakistan.

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