The Rise and Fall of the Dewan Group: A Brief Introduction.
The Dewan Group, also known as the Dewan Mushtaq Group (DMG), is one of Pakistan's most prominent and diversified industrial conglomerates. Established approximately 80 years ago, the group has evolved into a professionally managed entity with a significant presence in various sectors.
Throughout the 1990s, DMG's flagship company, Dewan Salman Fibre, was recognized as the top-rated private company in Pakistan. The group's industrial diversity was unparalleled, encompassing nine listed companies across sectors such as textiles, synthetic fibers, sugar and allied products, oil and gas exploration, automotive assembly and parts manufacturing, cement, and general trading.
In the automotive sector, DMG was notable for distributing luxury brands like BMW and Rolls Royce in Pakistan. The group also ventured into retail with DMART shops and employed approximately 16,000 individuals at its peak.
Despite facing financial challenges in the late 2000s, including significant debt defaults, the Dewan Group has remained a key player in Pakistan's industrial landscape. Its commitment to economic growth and sectoral diversification continues to contribute significantly to the country's development.
Today, the Dewan Group comprises over 17 companies, employing more than 12,000 personnel, with an annual turnover of around Rs. 46 billion (USD 759 million) and fixed assets exceeding Rs. 27 billion (USD 447 million).
The Dewan Group was once a powerhouse in Pakistan's industrial sector, with major stakes in automobiles, cement, textiles, sugar, and financial services. Founded by Dewan Muhammad Yousuf Farooqui, the group became one of the largest conglomerates in the country, but like many business empires in Pakistan, it eventually collapsed due to financial mismanagement, heavy debt, and internal conflicts.
The Early Years: Humble Beginnings and Expansion
The Dewan Group started as a trading business and gradually diversified into various industries. Under the leadership of Dewan Muhammad Yousuf Farooqui, the group made strategic investments in key industrial sectors, expanding its footprint in Pakistan's growing economy.
During the 1990s and early 2000s, the group saw immense success, especially in:
Automobiles – Dewan Motors partnered with Hyundai and Kia, setting up local assembly plants and capturing a significant market share in Pakistan's automotive sector.
Cement – Dewan Cement became one of the leading cement producers, benefiting from the country's construction boom.
Textiles – Dewan Salman Fibres dominated the textile industry, competing with major textile groups like Nishat and Gul Ahmed.
Sugar & Finance – The group also expanded into sugar mills, banking, and financial services, positioning itself as a key player in multiple industries.
The Peak of Success: A Business Empire
By the early 2000s, Dewan Group was a major player in Pakistan's corporate landscape, with assets worth billions and a strong presence in multiple sectors. The group's automotive division, Dewan Motors, was assembling and selling Hyundai and Kia vehicles, making it one of the top automakers in Pakistan.
Meanwhile, Dewan Cement was thriving, benefiting from increased government and private sector construction projects. The textile and sugar businesses were also profitable, making the group one of the largest industrial conglomerates in Pakistan.
The Decline Begins: Financial Mismanagement and Debt Crisis
Despite its rapid success, the Dewan Group overextended itself financially. The company took on massive debt to fund its expansion but failed to properly manage its financial obligations. Some key factors that led to its downfall include:
Over-borrowing from banks – The group accumulated billions in loans from financial institutions but struggled to repay them.
Global financial crisis (2008-2009) – The economic downturn impacted demand for cement, automobiles, and textiles, leading to declining revenues.
Collapse of Dewan Motors – The Hyundai and Kia partnership ended, causing the company to shut down its assembly plants and lose a major source of revenue.
Liquidity crisis and defaults – By the mid-2000s, Dewan Group defaulted on loan repayments, leading to legal battles with banks and financial institutions.
The Final Collapse: Loss of Control and Disintegration
By the 2010s, the group had lost control over key businesses due to its financial crisis. Banks took over Dewan Cement and other assets to recover their debts. The company's stock value plummeted, and investors lost confidence in its leadership.
Family conflicts and leadership struggles also played a role in the group's downfall. Internal disagreements over business strategies weakened the group further, making it impossible to recover from the crisis.
The Legacy: A Story of Rise and Fall
Today, Dewan Group is a shadow of its former self. While some parts of the business still operate, they no longer hold the same influence they once did. The group's decline serves as a cautionary tale about financial mismanagement, overexpansion, and the risks of relying too much on debt.
The rise and fall of the Dewan Group mirrors the challenges faced by many Pakistani business empires, where initial success is often followed by overreach, financial troubles, and eventual collapse. The story of the Dewan Group is one of ambition, rapid expansion, and ultimate downfall, leaving behind lessons for future entrepreneurs in Pakistan's corporate world.