PHP dips into reserves to save salaries

PHP Family, one of the country's leading business conglomerates based in Chattogram, has 10,000 employees on its payroll and Tk11 crore is paid to them as salary bill every month.

Like any other companies, it has also been experiencing a significant slump in sales since the Covid-19 pandemic began its onslaught on the country's economy in March. The group has registered around 50% drop in turnover during the pandemic.

However, PHP Family has not cut the salaries of its employees. The group is now paying its staffers from profits it made earlier. It has also given six extra bonuses to them this year, to keep their morale high at this time of crisis.

Moreover, the group is also planning to pay a bonus to its workers in the upcoming Eid-ul-Adha.

When many companies are resorting to slashing salaries and laying off staff for survival by cutting costs, PHP Family is leading by example as it has decided to share its previously-made profits with workers in this difficult time. This is how the group stands apart from others.

PHP (Peace, Happiness and Prosperity) started its journey in 1999. It comprises over 30 companies that are operating in diversified business sectors such as steel, float glass, aluminium, textiles, power, petro refinery, financial services, agro, automobiles and others. The group has an annual turnover of Tk5,000 crore.

In an exclusive interview with The Business Standard, PHP Family's Vice-chairman Mohammed Mohsin said, "We will not cut salaries, we are against it. We have been making profits for a long time. Have we ever shared the profits with our employees? The answer is obviously no. If anyone says he or she has never made profits in their entire business life, they are lying. It is obvious that there are both profits and losses in businesses. In the present situation, taking away a portion of workers' salaries is not ethical."

They are cutting misspending to tide over the current crisis from slump in sales to continue to thrive, he also said.

"We now have a slogan: 'Eating less to feed everyone'. I think savings should start at home. Trimming unnecessary spending at home will automatically be reflected in workplaces," said Mohsin.

They are keeping open communication channels with their workers. They are regularly informed of any crisis. If there is a need for salary cuts, the management discusses it with the workers first and makes their next plan.

"We will find a way out; for example, we will increase productivity and sell products collecting money from the market. There is nothing to hide. We will discuss all issues together," he added.     

Regarding the slump in sales, he said their sales are now not the same as in pre-pandemic times. They have resumed sales just a month before. "I cannot tell you exactly in percentages about how much our sales have dropped, but it was massive. For instance, earlier, we would sell 100 tonnes of steel a day, but it has now come down to only 20 tonnes." 

He said many of their competitors have kept their factories closed. "Our market share has fallen but not as much as they [Competitors] experienced," Mohsin added.

In this time of crisis, the companies which are keeping commitment and maintaining quality are doing better and others are struggling, he said adding that they are now leading the market for holding on to quality.

The ongoing situation might continue for one or two more years, and they are ready accordingly, the PHP's vice-chairman said.

PHP Family's Vice-chairman Mohammed Mohsin

People will get used to the new situation within one or two years if it continues that long. He sees a positive change in the people about preferring local products. Earlier, people preferred foreign products, but the pandemic crisis has helped develop the belief that it is possible to survive without imported products.  

"It [Covid-19] is causing the development of a kind of love towards local products. Even if the situation continues like this, local companies like us will survive with people switching to local products. Keeping it in mind, we are making our next plan," he added.

How is PHP coping with the pandemic situation?

PHP has imported a specialised chip from Korea for all its workers. The chips will identify Covid-19 patients if they come close to them. They hang it around their necks. If any positive patient comes close to them, it emits a signal. The workers are now working without the stress of getting infected.

"PHP does not have magic to cope with the pandemic situation very quickly. The whole world is suffering. We cannot import our chemical and raw materials due to Covid-19. We are trying to find the way to deal with the situation," Mohsin said.

"In the meantime, all of our factories have resumed operations on a limited scale. We are closely monitoring everything online. We are holding meetings online. We have shifted to virtual work taking advantage of technology. It is saving time."

What does PHP think about the government's stimulus package?

PHP will not apply for any loan from the stimulus package. Mohammed Mohsin said the government should offer them support from the package if it finds them contributing to the country's economy.

Mohsin said the government is saying that they are giving stimuli to all, but it is essential to oversee if all are getting those properly.

"Carrying coals to Newcastle is all-pervasive. None is coming to hold an umbrella over us in a storm. We do not deny the contribution of the garment sector, but the government cannot pass us by as we have 10,000 employees. I am running my factories using local raw materials and people are consuming our products. Whether our factories make profits or incur losses, it is inside the country. We are contributing to the economy, so our contribution should be rewarded," said Mohsin.

He said there are small industries in the country; in a general view, these individually look minor, but together they have a massive contribution to the economy. They are taking risks though their investments are small. Their small investments are substantial to themselves, given their capacities.

"But we are neglecting them very much. They are being deprived of what they deserve. Our Prime Minister Sheikh Hasina has taken a good and timely initiative to support them with a stimulus package. She herself should form the committee that will distribute the money among them."

"The government says we will get an interest-free loan. Banks have only one product that is money. They are reluctant to give us loans as they will not get interest. We have to open letters of credit buying dollars," he concluded.