[Pick the date]

International Business
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

Complete detail of organization including mailing address and contact numbers + email
Countries exported
Commodity of organization
Document used in export and import
Purpose of each documents
Role of bank for import and export
Role of freight forwarders and custom clearing agents in import/export
L/C and its types used in the organization
Methods of receiving and sending money used by the org.
Role of chamber of commerce

Leather Coordinators, a leading organization in Garment sector, is

my selection for this report assignment.
The establishment of LC in 1989 was in the shape of a single building near
Pull Bazar with a total staff of 25, later on in 1991 it shifted to Tufail Shaheed
Road and there the business expanded with a new building especially for
manufacturing of leather garments.
It has been establishing its roots with great care and it is the only garment
industry situated at Sahiwal.
It is actually a part the whole set-up which consists of a tannery and a
garment manufacturing industry, both are situated on the same land and the
tannery is the place which provides the industry with the leather that is
cleaned with various chemicals.
Initially the main objective of the organization was manufacturing
and export leather goods.
Mr. Sheik Muhammad Younis is the sole proprietor LC. Sheik
Muhammad Younis is the Pioneer of leather industry at Sahiwal
which is exporting the leather products. Muhammad Younis started
his business with the tannery process.
Achievements
With the passage of time Leather Coordinator introduced the new
era for the whole industry, so in 1995 they established a new
stitching unit at pull bazaar Sahiwal with the help of only 10
stitching machines.
And now leather Coordinator have 350 machines those are
producing the 20,000 garments per month. Leather Coordinator is
1.

IB report

Linta Sama

[Pick the date]

a quality exporting firm which has the ISO 9001 award, which
shows its best quality aims.
Mission Statement:
The organization where each grain & stitch is watched carefully.

Mailing List:
Leather Coordinators,
Tufail Shaheed Road
Sahiwal

Contact numbers:
Phn. numbers:0092-40-4220292 / 4
Fax numbers: 0092-40-4461263

Email address:
impexp@leathercoordinator.com

2.

Following are the countries where Leather

Coordinators is doing business with:

For EXPORT:
1.
United Kingdom
2.
France
3.
Germany
4.
Netherlands
5.
Hong Kong
6.
China
7.
Taiwan
8.
United States of America
For IMPORT:
1.
Germany
2.
Netherlands
3.
South Africa
4.
Hong Kong
IB report

Linta Sama

[Pick the date]

5.
6.
7.
8.
9.
10.
11.

United States Of America

Netherlands
France
Italy
Belgium
Turkey
Spain

Following are the major import quality firms.

1. Red Skin (France)
2. M.D.K (U.K)
3. Main Pol (Germany)
Parties include:
REDSKINS
ARTURO
MDK
GURTEX
HM MODEN
CRUSE
MILESTONE
JCC DONDERS
DEKKERS
ARMA
LEDER INT
INTERSTAR
SERGE PARIENTE
VENT CONVERT
AD INTERNATIONAL
NOBLE
LEATHER TEX
A&S

IB report

Linta Sama

[Pick the date]

With over 350 stitching machines, LC is producing about 20,000 pieces per
month of fashion garments like Polo, Rugby and Henley shirts along with
basic garments.

3.

Commodities being produced by this industry

is are Leather and leather products.

Product lines
As the part of its long term plan the initial product line was that.

Mans Jackets

Womens Jackets

Children Jackets

Leather Trousers

leather Waistcoats

Leather Skirts

Motorbike Jackets
Garment types:
Tops:
(1)
Crew neck
(2)
Polo
(3)
Rugby
(4)
Hood
(5)
Qzp
(6)
Full zipper
(7)
Raglan
(8)
Tank top
(9)
Henley
(10) High neck
(11) Mock neck
(12) V-neck
(13) V-insert
(14) Sleeve less
Bottoms:
IB report

Linta Sama

[Pick the date]

(1)
Short
(2)
Boxer brief
(3)
Boxer short
(4)
Pant
For Imports, Leather Coordinators is actually including commodities like:
1Chemicals for Processing and cleaning
raw hides.
2Raw Hides

4.

Documents used:

&

5.

Brief description of the documents used:

Firm must be registered in export promotion bearue. If a firm has national tax
number then that specific firm can export its products without registration.
Then company prepares its products samples and shows to different buyers
who want to purchase it. If the samples are up to the mark then they give
sample order (trial order) to the company, the order consist of minimum
quantity means only to check that the product is according to the sample.
Buyer check the quality, color, dye, reactive dye, yarn dye, shrinkage, weight
in grams, size, and freight charges etc. Freight charges mean who will bear
the charges buyer or seller and what its effect on price per unit. Negotiations
on price, when the price settled the buyer place the order.
To fulfill an order, the meeting held between managers to check the
requirement.

Arrange yarn
Knitting
Dyeing
Drying
Cutting
Stitching
Labeling
Pressing
Packing
Packing list
Shipment

IB report

Linta Sama

[Pick the date]

Prepare document, one copy send to Air port or sea port. Custom officers
check these documents for clearance.
Air way bill ----------- in case of air port
Bill of lading ----------in case of sea port

Term of shipment
1.
Freight on board (FOB)
Freight charges from Faisalabad to Karachi are bear by factory other charges
bear by the buyer.
2.
Carriage and Freight (C & F)
From factory to buyers destination port charges born by the seller.
3.
Carriage, Insurance and Freight (CIF)
From factory to buyers destination port charges born by the seller including
insurance expenses.
4.
Cash against documents (CAD)
Payments at sight means when documents received by buyer then payment
will be made.

Mode of shipment
1.
2.
3.

By Air.
By Sea.
Trans-shipment.

Types of documents
1.

Custom clearance documents.

Original commercial invoice (6 copies)
Original packing list (6 copies)
Form E. (incase of imports its replaced by i form)
Narcotics certificate (if shipment by Air)

2.

Buyers requirements.
Commercial invoice.
Packing list.
Bill of lading / Air way bill.
Certificate of origin.
Issued by Chamber of Commerce for Gulf countries, it is necessary for exporting
products to Gulf countries.
Single country declaration.

IB report

Linta Sama

[Pick the date]

We give guarantee to buyer that the material used in this product was made only
in Pakistan.
Multiple countries declaration.
For the finished goods or completion of goods we used imported material from
different countries.
Quality control report.
Buyers agent checks the quality and other documents etc.
Inspection certificate.
This certificate is used only for export in Canada.
Canadian custom invoice.
General system of preference (GSP).
It is used for European countries. It is used for custom purpose in the
buyers countries.
Container sizes

20 feet (standard)

40 feet

40 feet high cube.

Here it is what actually the routne is:

Pakistan Import Documentation:

Nowadays import license is no MORE required to import into Pakistan. Only
the following initial documents are required to import into Pakistan:
1. National Tax Number Certificate, which is issued by the Income Tax
Department on filing of application form accompanied with one attested
photocopy of NIC.
2. Current bank account is required for import proceedings and documents
3. Sales Tax Registration is required to import into Pakistan. For registration,
Form ST-1 is required to send to the local sales tax registration office via post
with acknowledgment due (courier is preferable). The local registration office
shall transmit filled up applications to the Central Registration Office based in
IB report

Linta Sama

[Pick the date]

CBR

Islamabad.

The

previous

requirements

of

furnishing

supporting

documents have been done away now there is no need to attach any
document with the application. The Central Registration having on line
access to database of NTN as well as of NADRA shall verify the particulars
declared in the application with database. On verification, it shall generate
and issue registration certificate to the applicant directly on his given
address.
4. Membership certificate of Chamber of Commerce and Industries or any
relevant trade association of Pakistan.

Pakistan Export Documentation:

Nowadays export license is no MORE required to export. Only the following
initial documents are required to export: -National Tax Number Certificate, which is issued by the Income Tax
Department on filing of application form accompanied with one attested
photocopy of NIC.
Commercial exporter is not required to register with sales tax department.
But if you pay the sales tax on purchasing the goods from local market it will
be better for you to get yourself register with sales tax department so that
you may claim refund of your input tax deducting on your purchases. Once
you are registered in sales tax department you will be obliged to file monthly
sales tax return irrespective of the fact that you have been involved in any
sales tax activity or not.
Current

bank

account

is

required

for

export

proceedings

and

documents. Membership certificate of Chamber of Commerce and Industries

or any relevant trade association.
Once the consignment, to be exported arrives at the port, usually a clearing
agent's services are sought. The following documents are required to provide
to clearing agent to clear the consignment: -Packing list
IB report

Linta Sama

[Pick the date]

Commercial invoice
Letter of Credit (LC)
Certificate of origin which is issued by the chamber of
commerce
National Tax Number Certificate
Form "E" (State bank form):
All exports from Pakistan which are subject to Foreign Exchange
Regulations are required to be declared on form 'E' which is in sets of four
copies each. The exporter should submit the full set of Form 'E' to the bank
after it has been completed and signed by the exporter himself or his
authorized agent.
While certifying Form 'E', bank should ensure that exporters give only
one address in Form 'E'. After the form is certified by the bank, it should be
submitted to the Customs/Postal authorities at the time of shipment along
with the shipping bill.
The Customs authorities will detach the original copy and after filling in
the portion relating to them and affixing their seal and signature thereon
forward it to the State Bank. The Customs authorities will return the
duplicate, triplicate and quadruplicate copies to the exporter or his
authorized agent who will retain the quadruplicate for his own record and
submit the duplicate and triplicate copies to the Authorized Dealer along
with the shipping documents within 14 days from the date of shipment.
Submission of Export Documents to the bank:All shipping documents covering goods exported from Pakistan and
declared on form 'E' must be passed through the medium of bank within 14
days from the date of shipment. The exporter must submit the duplicate
(bearing Customs seal and signature of Customs Officials with Code number)
and triplicate copies of form 'E' along with the shipping documents, invoices
etc., to the bank who had certified the form 'E'. An extra copy of the
shipper's invoice must be attached to the triplicate copy of the form 'E'.
IB report

Linta Sama

[Pick the date]

6.

A bank plays a major role in import and export industries.

i.

Banks manage the statistical figures

ii.

Banks also manage the record payments

iii.

Banks use TT to make the payments of the Import or Export

Shipments.
iv.

Basic function of an export-import bank is to provide export finance

either directly or, more commonly, by guarantee or insurance of privately

financed transactions.
v.

Export credits may be extended by export-import banks, private

commercial banks, or by the exporter in the form of supplier or buyer credits.

vi.

The bank may provide insurance cover or guarantee the loans availed

by the borrower for financing the goods to be exported or advance its own
funds as loan in certain special cases
vii.

In addition, the bank may facilitate and participate in limited recourse

project finance by way of loan or a guarantee or both.

viii.

Financing of services pertaining to engineering, construction, advisory

may also be a part of the bank function.

7.

Role Of Freight Forwarders:

A freight
forwarder (often
just forwarder)
is
a
third
party logistics provider. As a third party (or non asset based) provider a
forwarder dispatches shipments via asset-based carriers and books or
otherwise arranges space for those shipments. Carrier types include
waterborne vessels, airplanes, trucks or railroads.
Freight forwarders typically arrange cargo movement to an international
destination. Also referred to as international, they have the expertise that
IB report

Linta Sama

[Pick the date]

allows them to prepare and process the documentation and perform related
activities pertaining to international shipments. Some of the typical
information reviewed by a freight forwarder is the commercial
invoice, shipper's export declaration, bill of lading and other documents
required by the carrier or country of export, import, or transshipment. Much
of this information is now processed in a paperless environment.

PIFFA; The Pakistan

International
Freight
Forwarders Association is having more than 400 Freight Forwarding
companies as members, aims to provide effective representation
and support for Pakistan freight services industry to observe the
highest standards of professionalcompetence.

Objectives
The objectives of these standards are to:
a.
Uphold a high standard of business ethics and professional
conduct among freight forwarders;
b.
Promote a high level of professional education and experience,
essential to provide services;
c.
Encourage operation of financially sound and stable freight
forwarders;
d.
Contribute to combating fraud by ensuring improved services
by better qualified freight forwarders, and
e.
Provide guidelines to PIFFA in establishing and maintaining a
freight forwarding system.
Definitions
For the purpose of these standards:
Freight forwarder is one who undertakes forwarding of goods on
behalf of his customer, including if necessary, procurement and
coordination of one or more modes of transport. He may also
undertake to perform more modes of transport. He may also
undertake to perform other functions connected with the main
contract such as warehousing (including storage in transit) groupage
IB report

Linta Sama

[Pick the date]

or
consolidation,
packing,
documentation,
weighing
and
measurement of cargo container leasing, insurance, foreign
exchange transaction etc
Minimum staff requirements and professional qualifications
To be considered professionally qualified the freight forwarder
must:
a.
Employ two full-time competent persons qualified in the
services and handling functions described in Article 5;
b.
Two such persons should have completed PIFFA approved
freight-forwarding certified course or hold IATA or FIATA Introductory
Course Diploma or equivalent, and
c.
One of these persons shall have completed a PIFFA approved
training course in the handling of dangerous goods where such cargo
is handled.
Commercial Presence
The freight forwarder shall:
a. Maintain and operate at least one office, and
b. Have adequate insurance to cover its liability for loss of or
damage to exporter / importers cargo.
Processing and Handling
The freight forwarder shall maintain and offer the public the
premises, staff and equipment necessary for the performance of the
following function as a minimum:
a. Quoting freight charges, rates and conditions pertaining to such
rates and charges;
b. Required transport documentation of cargo;
c. Assisting customers in completing the required formalities for the
transportation of cargo including reservation services, and
d. Assisting customers in tracking of the cargo.
Financial Qualification
To be considered financially sound a corporate entity and where
relevant the freight forwarder individually must:
IB report

Linta Sama

[Pick the date]

a.
Have financial resources adequate to its business evidenced by
references from sources such as banks, financial institutes, auditors,
reputable credit references companies etc., and
b.
Have adequate liability insurance through an internationally
recognized insurance company or mutual club to cover all
professional liabilities.
The Freight Forwarder shall ensure that the above financial
standards are maintained.
Freight forwarders are of two kinds that are being involved in LC and these
are:
a.
Clearing agents
b.
Cargo agents
A.

Clearing agents:

Clearing agents are responsible to get the clearing license from the
Customers Authority (collector) and make sure that the goods are custom
cleared.
They make Shipping Bills (while exporting) and Bill of Entry (while importing).
B.

Cargo Agents:

Cargo agents are the members of IATA that stands for International Air Traffic
Authority and they are responsible for issuing B/L (Bill of Lading) or AWB of
the carrier.
They are also involved in the security aspects in the trading of any
commodity.
The cargo agents network members have overall knowledge, expertise and
have at their disposal specialists in all fields of transportation, customs
clearance, insurance, road, rail, barge, air transport as well as any other type
of transport and logistics services.
8.
A standard, commercial letter of credit is a document issued
mostly by a financial institution, used primarily in trade finance, which
usually provides an irrevocable payment undertaking.
The LC can also be the source of payment for a transaction, meaning that
redeeming the letter of credit will pay an exporter. Letters of credit are used
primarily in international trade transactions of significant value, for deals
between a supplier in one country and a customer in another.
IB report

Linta Sama

[Pick the date]

They are also used in the land development process to ensure that approved
public facilities (streets, sidewalks, storm-water ponds, etc.) will be built. The
parties to a letter of credit are usually a beneficiary who is to receive the
money, the issuing bank of whom the applicant is a client, and
the advising bank of whom the beneficiary is a client. Almost all letters of
credit are irrevocable, i.e., cannot be amended or canceled without prior
agreement of the beneficiary, the issuing bank and the confirming bank, if
any.
In executing a transaction, letters of credit incorporate functions common
Traveler's cheques.
Typically, the documents a beneficiary has to present in order to receive
payment include a commercial invoice, bill of lading, and documents proving
the shipment were insured against loss or damage in transit. However, the
list and form of documents is open to imagination and negotiation and might
contain requirements to present documents issued by a neutral third party
evidencing the quality of the goods shipped, or their place of origin.
After a contract is concluded between buyer and seller, buyer's bank supplies
a letter of credit to seller.
Seller consigns the goods to a carrier in exchange for a bill of lading.
Seller provides bill of lading to bank in exchange for payment. Seller's bank
exchanges bill of lading for payment from buyer's bank. Buyer's bank
exchanges bill of lading for payment from buyer.
Buyer provides bill of lading to carrier and takes delivery of goods.
A standard, commercial letter of credit is a document issued mostly by a
financial institution, used primarily in trade finance, which usually provides
an irrevocable payment undertaking.
It can be:
a.
Irrevocable
b.
Revocable
Letter of Credit (L/C)
Coordinators include:
1.

types

that

are

used

at

the

Leather

L/C at sight

When seller submits documents into the bank then payment will be made to
buyer.
2.

30 days from shipment date.

Payment will be made after 30 days of submission of documents.

IB report

Linta Sama

[Pick the date]

3.

60 days from shipment date.

Payment will be made after 60 days of submission of documents.

4.

90 days from shipment date.

Payment will be made after 90 days of submission of documents.

5.

120 days from shipment date.

Payment will be made after 120 days of submission of documents

To make it simple, the export process can be described as:
The export process starts from bargaining. A buyer contacts the company for
the purchase of the yarn. The contract may be direct or through middleman.
When the price and quality of the yarn is settled then contract from is filled.
The terms and condition are settled by the director of the company.
After the settlement of terms and conditions the buyer in the bank opens L.C.
L.C is of two types. L.C at sight and L.C at issuance. L.C at sight means the
L.C opening bank shall make the payment as soon as the shipping
documents are presented on its counter by the negotiating bank. On the
other hand L.C at since has different periods of maturity varying from 30
days to 150 days receiving original L.C from buyer, seller will dispatch the
goods as per details given in the L.C. After shipment usually following
documents are presented to negotiate

After a contract is concluded between buyer and seller, buyer's bank supplies
a letter of credit to seller.
IB report

Linta Sama

[Pick the date]

Seller consigns the goods to a carrier in exchange for a bill of lading.

Seller provides bill of lading to bank in exchange for payment. Seller's bank
exchanges bill of lading for payment from buyer's bank. Buyer's bank
exchanges bill of lading for payment from buyer.

IB report

Linta Sama

[Pick the date]

Buyer provides bill of lading to carrier and takes delivery of goods.

Bank for onward submission to L.C opening bank counter:

1.

Commercial invoice

1.

Bill of Lading

2.

E- Form

3.

GSP Form A

4.

Bill of Exchange

5.

Certificate of Origins

6.

Beneficiarys Certificate

7.

Certificate from Shipping Company

8.

Packing List

These are classified as:

IB report

Financial Documents
Bill of Exchange, Co-accepted Draft
Commercial Documents
Linta Sama

[Pick the date]

Invoice, Packing list

Shipping Documents
Transport Document, Insurance Certificate, Commercial, Official
or Legal Documents
Official Documents
License, Embassy legalization, Origin Certificate, Inspection Cert
Transport Documents
Bill of Lading , Airway bill, Lorry/truck receipt, railway receipt etc
Insurance documents
Insurance policy, or Certificate but not a cover note.
1-

Commercial Invoice

It is a sort of list which shows what is they exporting showing the:

1

Contract

L.C

E- Form

Shipping Company Name

This commercial invoice is sent to the buyers Central Bank. One copy of this
invoice is kept in Leather Coordinators.
2 - Bill of Lading
It is a list of goods issued by the shipping line stating that the good have
been loaded on board, freight prepaid and other specifications.
3- E Form
Form E is the basic document of export. Government control foreign
exchange through this form. Thus, it is one of the most important
documents. Exporter fills and signs it. Bank also countersigns this form. It
has four copies.
4- GSP from A:
It is used for European countries for custom purposes.
5- Bill of Exchange
IB report

Linta Sama

[Pick the date]

A bill of exchange or "draft" is a written order by the drawer to the drawee to

pay money to the payee. A common type of bill of exchange is the
cheque defined as a bill of exchange drawn on a banker and payable on
demand. Bills of exchange are used primarily in international trade, and are
written orders by one person to his bank to pay the bearer a specific sum on
a specific date. Prior to the advent of paper currency, bills of exchange were
a common means of exchange. They are not used as often today.
A non-interest-bearing written order used primarily in international trade that
binds one party to pay a fixed sum of money to another party at a
predetermined future date.
Bills of exchange are similar to checks and promissory notes. They can be
drawn by individuals or banks and are generally transferable by
endorsements. The difference between a promissory note and a bill of
exchange is that this product is transferable and can bind one party to pay a
third party that was not involved in its creation. If these bills are issued by a
bank, they can be referred to as bank drafts. If they are issued by individuals,
they can be referred to as trade drafts
6- Certificate of Origins
Issued by Chamber of Commerce for Gulf countries, it is necessary for
exporting products to Gulf countries.
7- Beneficiarys Certificate
Beneficiary certificate is issued by the seller as required by the buyer.
Usually the wording of this certificate is as
Certify that goods have been shipped per vessel shipping company name
and the shipping documents have been dispatched to the applicant under
L.C # _____.
8- Certificate from Shipping Company
Shipping company issues this certificate on the request of the buyer.
9- Packing List
Packing list contains the detail of all the items being exported. This list show
the carton number, container number, goods description gross and net
weight of total cartons and each carton.
IB report

Linta Sama

[Pick the date]

9.

The method of sending and receiving money used by the

Leather Coordinators is TT (Tele Transfer), in fact Export Payment; it is
always done by receiving TT, i.e. Tele transfer

10. Chamber of Commerce:

A chamber of commerce is a form of business network, e.g., a local
organization of businesses whose goal is to further the business interests of
the community. Business owners in towns and cities form these local
societies to advocate on behalf of the business community. Local businesses
are members, and they elect a board of directors or executive council to set
policy for the chamber. The board or council then hires a President, CEO or
Executive Director, plus staffing appropriate to size, to run the organization.
Generally, chambers of commerce serve the following purposes:

Creating a strong local economy

Promoting the community

Providing networking opportunities

Speaking with government on behalf of business

Political action, such as getting pro-business candidates elected to

office
Chamber of Commerce has a very important role in every country. They are
responsible for holding meetings of businessmen, every month, fortnight and
weekly on various issues and convey the latest and necessary information.
The Chamber is continuously in touch with parties across the globe for the
purpose of making clients for the industries of Pakistan, even Mr. Safdar from
Leather Coordinator is in touch with the Chamber to know of any upcoming
opportunity.
Recently in Hong Kong a Leather exhibition took place where LC got involved
too. This was possible not only because of Chamber of Commerce but also
other organizations like PGMA and PTA are kept in touch with.

Findings & Suggestion:

From all the data and information collected and the interviews we conducted
through face to face technique, it can be said that the staff is working hard to
cope with any challenges that come up their way n exporting or importing the
IB report

Linta Sama

[Pick the date]

products but the company is lacking the number of people working in their
departments, even in Export department.
The HR department needs to focus on this issue because one person has to
cope with the work of more than one worker at a time doing extra work.
Other than that what we have concluded is the described as following:
STRENGTHS

Latest machinery
ISO 9001 Certificate
Strong market image
Products innovation abilities
Strong Relations
WEAKNESSES
Centralized management
High cost of production
Small international market share
No motivated staff
Less promotional activities
Old staff
OPPORTUNITIES
Potential in market
Entering new markets
Addition new product line
Faster market growth
THREATS
Political instability in country
Economic instability
Though competition
Adverse government policies
Easy access of buyers in world markets
Technology

IB report

Linta Sama