Karachi, May 08: Engro, the country’s leading conglomerate, has its eyes set on future growth by exploring global markets and possible deals in Pakistan outside its conventional businesses through a more agile investment approach.
In an exclusive interview with Bloomberg, Abdul Samad Dawood, Vice Chairman at Dawood Hercules Corp. and the sponsor of the group, outlined the global ambitions of Engro Corp through investment deals and a couple of overseas operations in developing countries over the next five years. The process is in early stages and could include taking control of some of the companies. According to him, the investments will be “like a very Berkshire Hathaway-esque sort of an approach.”
“We’re pushing our team that ‘yes, invest in Pakistan, but if we don’t go global now, or make that attempt to go global and go to other countries, when are we gonna do it?” said Dawood. The group will continue to look to home even as it explores opportunities in other regions, Dawood added, with the investment size for deals potentially larger in Pakistan since there are opportunities across multiple industries.
Earlier this week, Dawood Hercules Corporation Limited and Engro Corp announced a realignment of the Group structure, which positions the Group for next phase of growth, backed by capital allocation across wider investment opportunities.
Under the new framework, DH Corp would be rebranded as Engro Holdings Limited, and Engro Corp would become a wholly-owned subsidiary of Engro Holdings. This exercise would synergize investment efforts at the Engro Holdings level, enabling agile and efficient deployment of capital from Engro Corp to a wider set of opportunities, which is advantageous to shareholders of both companies. This revitalized approach incorporates consistent feedback received over the years from minority shareholders to have a more flexible investment strategy in a wider range of sectors to improve returns.
A report by KASB Securities highlighted that, “The underlying aim is to add agility into the Group’s investment process where on a standalone basis prior to proposed restructuring DAWH/DH Corp has undertaken sector agnostic investments in public equities and ENGRO continued investing in allied industrial verticals. The strategy aims to mitigate economic volatility in the investment process by allowing capital allocation to flow into non-core investment opportunities.”
In a challenging external environment, Engro Corp is poised to maintain its growth momentum with this agile and wider investing approach, added an analyst.
