How Dawlance became a Pakistani engineering story

A two-and-a-half-hour meeting that never ended

Muzamil opens by telling the audience he flew from Dubai to the Islamabad studio specifically for this conversation, because he loves things that are made in Pakistan and made for Pakistan — and few brands fit that description as completely as Dawlance. The guest is Umar Ahsan Khan, the company’s CEO, and the story he tells is less a corporate timeline than an account of how one country builds an engineering company and then fights to keep it.

The pivot of his life arrives early. Khan was a corporate finance manager at ICI Pakistan, the number two to the CFO, twenty years into a steady multinational career, when a friend in the HR world called about a CFO opening at Dawlance. His first reaction was disbelief — why would he leave ICI for a family-run appliance company? But he agreed to a meeting with the founder, Bashir Dawood, at Dawlance’s head office. “From the moment I walked into that building,” he says, “I still sit there today.” Those two and a half hours, he tells Muzamil, changed his entire perspective on life.

What changed it was Dawood himself. The multinational world had taught Khan a great deal but had also kept him “raw,” carrying a degree with a shelf life of three or four years that nobody even asked about. Dawood had built something from nothing. He sat Khan down and told him the whole story — where Dawlance came from, what it had survived, and exactly what kind of person he needed and why.

Building a Pakistani brand when nobody believed in one

Dawlance started in 1980, in an ecosystem dominated entirely by foreign names. The fridges in Pakistani homes carried badges like Indesit, Kelvinator, and National — brands imported, sometimes assembled, and sold by traders. Dawood’s bet was contrarian for its moment: build a genuinely Pakistani engineering company and stand a homegrown brand against the imports.

The timing made the bet harder. The early 1970s nationalisation had pushed many industries into government hands and chilled private investment. “Here comes a young man who says, why not?” Khan says. Dawood designed fridges to local requirements — pulling in technology from China and Europe where he lacked it himself — and manufactured them at a first factory in Hyderabad. Two things made it work. He insisted on building locally whatever could be built locally, and he treated the brand as an asset rather than a cost, which Khan calls “a rare concept in Pakistan at the time,” when multinationals branded and local players did not.

Thirty-some years later the result was a name no foreign brand could displace. Khan makes the comparison explicit: in neighbouring countries, foreign appliance brands still hold significant refrigerator market share; in Pakistan they do not. He claims, without being able to prove it statistically, that roughly seventy percent of Pakistani households own at least one Dawlance product. The brand carried a reputation — “Dawlance reliable” — so embedded that he never has to explain what he does. At ICI he made soda ash and polyester fibre and had to describe both. At Dawlance the name does the work.

The sale that came with one condition

By the time Khan arrived, Dawlance faced two problems that his CFO mandate was built around. The first was succession: Dawood’s children had moved abroad, and while an IPO and a corporate structure could have solved ownership, it would not solve the second problem. Technology was flooding into the appliance industry, and a company that designed its products through foreign vendors needed a real technology partner to keep pace.

So the work became a search. Khan ran through the options — cooperatives, a listing — and watched each get shot down. The conclusion was to find an acquirer, with a requirement Dawood treated as absolute: the buyer had to keep the brand. This is where most of the road shows failed. Bidders wanted the asset and the market access, then planned to fold in their own name. Dawood’s whole point was that he had spent thirty-five years making a local brand that, in his words, should “make Pakistan proud” — and he would not let it be erased.

The fit finally came from Turkey. When Dawlance met Arçelik, Khan says, it was immediately clear this was a company that would retain the brand. The negotiation took years; an issue forced a two-to-three-year pause that the team had to manage deliberately. During that gap Khan left for an opportunity at House of Habib, but he was told plainly that if Arçelik came back, they would want him — and that is exactly what happened. The deal closed in November 2016. Arçelik sent the first CEO and CFO from Turkey for two years; in 2019 the company asked Khan to return and run it. “My heart was here,” he says. He came back as CEO.

What Arçelik actually is

Most listeners, Muzamil notes, have no idea who bought Dawlance. Khan explains the scale. Arçelik is a Turkish home-appliance company founded in 1955, and it sits inside Koç Holding — Turkey’s largest business group, representing roughly ten percent of the country’s GDP and around seven percent of its exports, and the only Turkish entry on the Fortune 500. Koç is run today by the family’s third generation, with the family on the board and professionals running the business.

Arçelik’s global brand is Beko, and Khan delivers the line that reframes the whole acquisition: Beko is the number-one appliance brand in Europe, across the entirety of Europe, having displaced legacy European names on their own ground. The group owns fourteen brands because, wherever it acquires a company, it retains the local name — Defy in South Africa, Arctic in Romania, Grundig in Germany — and it manufactures in only eight countries while selling in around a hundred and fifty. Pakistan is one of the eight. In Turkey, Arçelik holds about fifty-five percent of the market and is among the most loved brands in any category.

The behaviour Khan finds most striking is the patience. Arçelik told him from the start that an emerging market is a long-run play, and that you do not think short-term about it. The proof he offers surprises people: in seven years of ownership, Arçelik has taken no dividend out of Pakistan, no royalty on its own brand, and no technical service fee — and has reinvested more than $150 million of everything earned locally back into the business. “The first question they ask,” he says, “is how can we help you.”

Manufacturing, not assembly

Muzamil presses on the question every Pakistani consumer assumes they know the answer to: is this really made here, or is it a screwdriver job — components shipped in, badged, and boxed, like the mobile-phone and auto industries? Khan calls this the single biggest misconception about his company, and answers it with numbers. For a refrigerator, more than eighty percent of the components that go into it are made in Pakistan. The same holds for washing machines.

He walks through the depth of it. Dawlance runs the largest plastic-molding operation in the country, with capacity nobody else matches; it does all its own sheet-metal work; and the air-conditioner heat exchangers and copper tubing it imported three years ago are now built in-house. The assembly line, he insists, is a small part at the very end of the factory. Before it, individual shops inside the plant build the parts that eventually come together into the product.

The components that remain imported are the ones where Pakistan’s market is simply too small to make local production economically viable. The example everyone throws at him is the compressor. A compressor plant needs to make four or five million units a year to be viable — and about a billion dollars of investment. Arçelik is not in the compressor business; it keeps a small plant in Turkey only to stay connected to the technology. The technology itself is comparatively less advanced, Khan says, so the barrier is not Pakistani capability — “I think we underestimate the engineering minds in this country” — but economic scale, lost when China’s vast domestic demand let it build industries nobody can now undercut.

His position on subsidies follows from this. “We don’t believe in that,” he says. A company that hides behind incentives might survive short-term but will not build anything durable. The strategy is to be competitive at the factory gate against anyone in the world, because that is the only thing that lets you export.

Technology transfer, for once

The part Khan takes most pride in is the part Pakistani industry complains it never gets: real technology transfer. In the first two years after the acquisition, the work was benchmarking — auditing every product against Arçelik’s global standards, finding the gaps, and deciding what had reached the critical mass to localise. Automatic washing machines were being imported and selling well, so that line was localised first. The refrigerator range, good but short of Arçelik’s standards, was redesigned from scratch.

The bigger move was the decision to design in Pakistan at all. Arçelik built a Karachi R&D centre, equipped with laboratories and seeded with knowledge transfer from Turkey, and now staffed by sixty engineers doing structural, cooling, electronics, and software design. Every product Dawlance sells in Pakistan is now designed locally — the drawings do not come from Turkey, unlike most of the country’s industries. Local insight matters, Khan argues, because a fridge that sells in Turkey will not necessarily sell in Karachi, and a product built to local insight is the one that sells.

In March 2023 the company opened a second R&D centre in Islamabad, inside the science and technology park, focused on the connectivity and IoT software now spreading through appliances. It started with about twenty engineers, a number Khan expects to reach two or three hundred within a few years. It is the only Arçelik R&D centre outside Turkey designing connectivity for the group’s global products — not just Pakistan’s. South Asia won the work over India partly on cost and partly because, as Khan puts it, the region speaks English; the final decision was overridden in Turkey in Pakistan’s favour by the head of Koç’s durable-goods business.

Sustainability, talent, and the case against the talent myth

The conversation widens. On sustainability, Khan is unsentimental — the crisis is here, Pakistan saw it in last year’s floods, and Arçelik was the only home-appliance company to receive a Terra Carta Seal at COP26. The corporate purpose, he says, is “to inspire sustainable lives in every home,” which he reads as both the individual home and the shared one. Practically, that means moving categories to inverter technology that uses far less energy, and front-load washing machines that use sixteen litres a cycle against forty-six for a top-loader. Muzamil’s framing is that water in Pakistan is priced wrong — barely priced at all in most cities — so the business case for efficiency only sharpens as scarcity arrives.

The exchange that lands hardest is about talent. Khan starts on the familiar line — “we have amazing talent in Pakistan” — and Muzamil interrupts to disagree. We have the potential for talent, he argues, not the talent itself; the same line, double the headcount, will be out-produced four-to-one by a Chinese plant because that workforce was trained and ours was not. Khan concedes the point and sharpens it: through Arçelik’s global benchmarks, Dawlance now measures its own labour productivity against the group and matches it like-for-like, but the broader local industry lacks that data and that training. Both land on the same culprit — Pakistan relegated vocational training while chasing higher education, leaving the factory floor empty of skilled workers and the universities producing graduates the industry cannot use.

A thriving Pakistan, on a long enough clock

Muzamil closes with the question he asks every guest, with the caveats turned up: no “youth population,” no “if we do this” — project from the data, where is Pakistan in 2050? Khan answers as what he calls an eternal optimist, and grounds it in the same logic that brought Arçelik here. He sees a thriving, prosperous Pakistan. The timing might slip — 2045, 2055, he doesn’t know — but the shift is coming, because the current economic situation is not sustainable, and an unsustainable thing forces a solution.

His argument rests on a number. The conversation in his London years was whether to come back; today it is brain drain, people leaving. But two hundred and fifty million people cannot leave. A million can go, ten million can go, and the population still grows fast enough that someone steps into every vacated seat. For a population that size, he says, something will happen — a fire in people, or political forces, he won’t predict which — and Pakistan has had ten-to-fifteen-year windows of progress before. That is all one needs to fix the current account, lift exports, and build an exportable surplus of both products and people. Not everything can be made or exported from Pakistan, he and Muzamil agree; the task is to find the niches that become a competitive advantage, and they will emerge.

Khan ends where he began, with a decision he has never regretted. Thirty years ago he turned down a job offer in his hand to come home, and he says his career has matched a personal purpose statement written on a piece of paper years ago. He wants to stay as optimistic for the next thirty years as he was for the last. “One should never forget the strength of positivity,” he says. “That’s what this country really needs.”