The Pivot

New Rivers’ goal is to make slavery obsolete within three generations through disrupting slave-based industries, wherever they exist .......

2024 - So far

Those of you who have been part of the New Rivers journey for the past year or more will be aware of our focus on brick making in Pakistan. Our aim is to operate a brick factory without the use of slave labour as a way to demonstrate a profitable alternative to slave-based brick manufacturing.

This year, we have been exploring options to lease a factory which significantly reduces the cost of entering this industry. Unfortunately, political unrest in Lahore has disrupted brick factories and the wider construction industry throughout 2024. The result has been an irregular demand for bricks. The assumption that all bricks produced by a factory would be sold without delay no longer exists.

Our business model requires the sale of most of the bricks we produce for us to provide living wages, education, clean drinking water, and improved nutrition to the families living at our factory while still generating a profit. The inconsistency in the demand for bricks has caused us to add another step to our plans to lease a brick factory. We will now ensure a sufficient demand for bricks from our specific factory before entering into a lease.

A conservative production capacity for a factory is 39 weeks each year. Approximately, two months of production are lost during the rainy season and another month is lost when the government shuts down all brick production due to pollution. We are looking to secure sales for at least 20 weeks’ production before we enter into a lease. Presently, we have sales confirmed for approximately 10 weeks’ production, plus any sales generated internally through our own construction projects.

Challenges

There are also some significant headwinds we have been facing in Pakistan which have increased in recent months. The security situation in Pakistan and particularly in Lahore is very serious. Our team now needs armed guards at their homes and in their vehicles when they travel outside of their neighbourhood. A few months ago, our national director was attacked when she was traveling by car. General violence and crime has been on an upward trend throughout 2024. The level of targeted violence against Christians has increased on a greater scale. Prominent Christian leaders, like our national director, are particularly vulnerable. She has reduced her ministry activities as well as the work she does for New Rivers. Our management team in Lahore also faces these risks but to a slightly lesser degree.

Prior to 2024, the changes we plan to implement at our brick factory would result in some minor opposition. However, taking any steps which will increase the risks to our team in the current climate in Lahore would be unwise. Therefore, operating a brick factory in the near future is not viable from a business perspective and from a team welfare perspective. Fortunately, the circumstances in Lahore do not extend to all parts of the Punjab state where we are licensed to operate. Babar, our manager who ran our recycling center and other ventures in a rural part of the Sialkot area, is able to operate with only limited opposition. Additionally, the city of Sialkot is a major manufacturing hub for a wide range of products which are exported from Pakistan.

The Pivot

It is very important that we do not lose sight of our ambitions to operate a brick factory as a slave-free model. We need to balance these ambitions with the current increased financial and security risks of operating a factory. A worst-case scenario would see us leasing a brick factory in the coming months and implement the positive changes for the families to then have the factory fail to generate the revenue needed to sustain the business and our long-term goals for the families working at our factory. It is not lost on us that every day that we are not operating a brick factory is a day where at least 20 to 30 families remain enslaved. However, we are faced with business realities which require us to shift from operating a brick factory in the short-term in order to secure our long-term goals. Therefore, we are pivoting our operations in Pakistan.

During my 2022 trip to Pakistan, I noticed the wide range of locally produced quality products. I then despaired that products of this quality are not readily available in Australia at reasonable prices. Unfortunately, the labour conditions for those producing these goods in Pakistan are often poor and for some products there is a clear dependence on child and slave labour. New Rivers can do something to improve these working conditions.

New Rivers’ goal is to make slavery obsolete within three generations through disrupting slave-based industries, wherever they exist (not only the brick industry in Pakistan). The need for us to pivot our Pakistani operations provides us with an excellent opportunity to expand the scope of the industries in which we are involved. Our plan is to develop an

e-commerce business for Pakistani products as an alternative revenue stream. Through our interactions with suppliers we will get footholds in a range of industries to explore ways that we can improve working conditions. We will also be able to conclusively identify products which are using child labour and slave labour. These activities will likely lead to us developing manufacturing capabilities to disrupt the slave-based models we identify.

Sialkot will be the focus of our pivot due to its relative security and current status as a manufacturing centre within Punjab. Babar will be leading the development of these operations while the governance of New Rivers Pakistan will continue to be handled in Lahore. Further operational and governance changes may be required over the coming months.

We are currently working on launching an e-commerce business featuring quality handmade leathergoods. Our team in Australia and Pakistan are developing our initial product list, and establishing avenues for postage between our two nations. We will let you know when the 'shop' is live!

If this is the first blog you are reading from New Rivers, we highly recommend you visit our other blogs. In particular - check out 'Rethinking Ethical Investing: A New Rivers Perspective'.

Join Our Mission:

For more information on how you can be part of making slavery obsolete through your investment with New Rivers, follow this link to learn more and join other investors. 

We are always interested in feedback and new ideas that people may have with respect to changes that can be made at the brick factories and any other businesses that New Rivers is involved in. We look forward to hearing from you - email us at info.newrivers@gmail.com.

Pictured: Manfred, Michelle (centre) and the New Rivers Team