PRESENT BY.

MASROOR


Industry Overview
The food and its allied products industry is considered Pakistans largest
industry
Pakistans food industry produces cooking oils, sugar, flour, dairy products
such as milk, butter, yogurt, cheese and ice-cream, biscuits, breads and
confectionery, fruit juices and fruit juice drinks, carbonated beverages,
snack foods based on rice, potatoes, corn and pulses, processed chicken,
jams, jellies, squashes, sauces, pickles, and some canned fruits
Pakistan is the 4rth largest milk producing country in the world
An estimated 33.25 billion liters of annual milk is produced
Approximately 50 million animals managed by 08 million farming
households.
The milk economy represents 27.7% of the total value of the Agriculture
sector.


Market Trends
The growth of processed milk is increasing by 20% annually.
People are getting more quality and health conscious with the
passage of time.
Due to impurities of loose milk, people are attracting towards
processed milk.



Dairy Industrial SWOT Analysis

STRENGTH
Good breed of buffalos and cows
4rth Largest Industry Dairy Industry in Pak.
Pak Dairy Industry is Cheaper than Austria,
America and other developed countries.
Farmers are engaged in agriculture and dairy
at the same time.
WEAKNESS
Small and scattered animal holding
Prevalence of traditional raw milk marketing
system
Milk processing predominantly dependant on
obsolete UHT technology
Inadequate infrastructure and institutional
facilities and support
Poor quality of animal health care and
breeding services; lack of professional
management
OPPORTUNITIES
Huge unsatisfied demand of milk and milk
products
Increase consumer awareness of healthy
eating
There is an opportunity for companies to
introduce value-added products like ice
creams, flavored milk, dairy sweets, etc
There is a phenomenal scope for innovations
in product development, packaging and
presentation
THREATS
Unregulated imports of dairy products at
cheap prices
Very low quality milk is provided by the
milkmen to dairy farms which is a very big
threat for the entire market.
The shortage of milk providing animals is also
a threat for entire milk industry.


Diversified Portfolio of Engro Pakistan
Engro Corporation Limited (formerly known as .Engro Chemical Pakistan
Limited.) is one of the largest industrial corporations in Pakistan.
It has following subsidiaries business units
Engro Fertilizer
Engro Foods
Engro Power Generation
Engro Polymer & Chemical
Engro EXIMP
Engro Vopak Terminal
Elengy Terminal Pakistan


Why did Engro enter the food business?
Big opportunity due to
population growth and
indigenous sourcing. There is a
huge population. One seventy
million is a very big market.
There are only a few countries
with such a huge population in
the world. Besides, our people
spend a lot on food. Our
economy is agro-based. We get
raw material at the local level.


Engro Foods (Pvt.) Limited (EFL)
Engro Foods Limited was formed as a wholly owned
subsidiary of Engro Corporation in 2005.
It start its operation in 2006 and engaged in the
manufacturing, processing and marketing of dairy products,
ice cream and fruit juices.
The Plant Located at Sukkur on 23 Acre Land
The Plant has been established at a Cost of Rs. 1 Billion
which provide direct employment to 1400 people.


Quick Facts & Figures
1,243 Employees
45% Market Share of Dairy Products
Market in
300+ Cities in Pakistan
18+ states in USA
4 Provinces in Canada
18th Largest Customer of Tetra Pak World Wide
2nd Largest Company of Chilled Milk Collection of Pakistan
2000+ Milk Collection Centers
35,000 farmers directly linked with EFL
2 Milk Processing Plants
Milk Production Capacity is 700 Thousand Liters per Day.
Total Assets Rs. 24,046 Millions


Departments in Engro Foods
Administration
Finance and Accounts
Human Resource
Marketing
Procurement
Management Information System
Production
Quality Assurance
Supply and Distribution


Products Portfolio


Vision Statement
Engro Foods will continue to make
investments
aimed at impacting lives and
delighting consumers
each day, every day, in a multitude
of ways.


Mission Statement
Build Branded food business to
improve quality of life by offering
tasty, affordable and highly
nutritional products to our
consumers while maximizing stake
holders' value


Objective
Engro foods main objectives are to
supply everyone their favorite Dairy
Products and to satisfy the
consumer needs and wants. Engro
foods second main objectives are
to provide profit to the
shareholders and increase the
market share
EFL-SWOT ANALYSIS
Strengths Weaknesses Opportunities Threats
SWOT ANALYSIS
STRENGTHS
Relation
with
Farmers
Strong bond
Customer
Response
Positive
response,
crossing
over 1.4
billion sales
Quality
World class
quality
Technology
Third
generation
plant,
Bactofuge
tehnology
SWOT ANALYSIS
WEAKNESSES
Outside farmers
Milk Supply
Dependent upon Tetra
Pak
Packaging
Hindrance of place
Distribution
SWOT ANALYSIS
OPPORTUNITIES
Govt. Funding
Funding to
farmers
Consumption
Increased
consumption
of Processed
Liquid Milk
Awareness
Dissatisfaction
with loose
milk
Increased
Population
Increase in
consumption
of process
milk
SWOT ANALYSIS
THREATS
Severe
Competition
High Prices Threat
Dairy Market Share
MARKET SHARE
Nestle
35%
Engro
27%
Uniliver
21%
Haleeb
17%
Sales


CORE COMPETENCIES
Good brand name
Doing business without interest
Latest technology and has a high production capacity.
80,000 liters
Distribution networks (600 distributors across Pakistan )



KEY SUCCESS FACTORS
Research & Development
Financial Position
Market Share
Product Quality
Price Competitiveness
Management
Global Expansion
Customer service
Network Sales And Distribution
Production Capacity



PESTEL Analysis

o EFL make strategies according to the laws and legislations.
o EFL abides to laws set by the government for trade policies,
government policies and completes its responsibilities in a
better manner.
P - POLITICAL FACTOR



PESTEL Analysis

EFL is strongly affected by both the Economic and the
Demographic.
E - ECONOMICAL FACTOR



PESTEL Analysis

EFL has helped to bring about a change in life style of the
Pakistani People by introducing Bactofuge technology
People awareness program for Olpers and Tarang
Bactofuge treated milk, which helps to improve the sale.
Usage of open Gawala milk & standardized packed milk.
S - SOCIAL FACTORS



PESTEL Analysis

Use of new technology gives firm there competitive
advantage.
EFL adopted Bactofuge Technology (Whereas Haleeb use
UHT Technology)

T TECHNOLOGICAL FACTORS



PESTEL Analysis

Environmental changes can cause failure of strategic plans
EFL is using environment friendly Technology
EFL has a friendly environmental culture within the
organization to make their employees comfortable and to
deal with the external problems
E - ENVIRONMENTAL FACTOR



PESTEL Analysis

o Check government policy about milk industry
o EFL strictly follows laws like, Minimum wage, working time,
minimum working age, & Environmental regulations
L LEGAL FACTOR



PESTLE Analysis

EFL renowned company since 2006, and the reason for its
important ethical value.
They dont sale on credit or on interest because they
consider it unethical and not according to the law of our
religion
E - ETHICAL FACTOR


Marketing Mix


Marketing Mix
Eye catching distinctive packaging of Olpers Milk (Red
Color)
Olwell will be positioned in a way that it will target people who
are goal-oriented and focus on their careers

POSITIONING


Marketing Mix
A massive advertisement campaign with Olper's logo on
every bill board, ads and newspapers
Free Tea using Olpers Milk will provided to the potential
buyers at major departmental stores for testing purposes

PRODUCT STRATEGY


Marketing Mix
Adopting competitive pricing strategy
Prices of the competitors are studied
Milk pack is around 70 Rs, we will introduce our milk with a
price slightly lower than this.
PRICING STRATEGY


Marketing Mix
Olper's milk launched in many major cities
Distribution into five major regions Lahore, Karachi, Multan,
Islamabad and Peshawar
Efficient transport facilities as well as warehouses and
storages in different cities
Trained & Experienced personals will be hired & 5% fixed
commission rate
Sales target set twice a month after discussion the market
situation with distributor
Incentives, bonuses, increments, and training will be provided
to the distributors and staff for further improvement in the
distribution field
DISTRIBUTION STRATEGY


COMPETITIVE ANALYSIS
As a new entrant EFL focused more on advertising to
compete with old ones like Haleeb, Nestle
Nestle maintained its value of gross profit margin around or
above 30% to ensure that it has a strong control over its
costs, and the efficiency of production. But on the other
hand, Haleeb faced a bit of down fall when Olpers
introduced their campaign



Product Life Cycle Omore
OMORE is at the introductory phase at the life cycle phase as it was
launched in 2009.
At the introduction stage, you should focus on the following
marketing factors:
pricing
distribution
promotion

omung lassis 2013 campaign
omung lassis 2013 campaign
An extension from its 2012 campaign, Omung
Lassi's 2013 campaign was geared towards
emphasizing love as a way to target young
audiences. In 2013, Omung Lassi launched its
Pyar Ko Vote Do campaign targeted to its young
market the energetic, and lively which are
dispersed in the country's colleges and
universities.

tarang IIFA 2013
Tarang IIFA 2013
Tarangs promise for bringing something
dhamakedaar every time for consumers led to its first
cross-border consumer promotion initiative in the
STC category ever - Tarang IIFA 2013. This campaign
was not only a new way to garner consumer interest,
but also excited Tarang lovers. With their daily
purchase of Tarang, consumers were offered the
opportunity to attend IIFA Awards 2013. The selection
took place over a lucky draw
Omore's monkey peel
the launch of mabrook
the launch of mabrook
For the first time, Engro Foods has taken the front-end
retailer model to market Mabrook. Mabrook is available
at dedicated Mabrook Milk Shops - retail outlets - that
are spread across Karachi, offering milk from dispenser
and pre-packed pouches.
Financial
Evaluation
of EFL

Business Revenue (Rs. in billions)




Ratio Analysis


Ratio Analysis



Comments on Some Financial Indicators
o Gross Profit Ratio
Decline in 2013 compared to last year was due to high inflation in input and utilities cost.
o Net Profit to Sales / EBITDA Margin to Sales
Externalities like aggravating power crises, law and order situation together with
distribution issues & one-time charges led to the deterioration of these ratios in 2013
o Return on Equity
From 2010 to 2012 these returns witnessed improvement on account of business
performance and growth. Decline in 2013 is mainly due to one-time charges coupled
with other issues discussed above
o Return on Capital Employed
This is in line with the profitability; the year 2013 was a test of Companys resilience to
face turbulent times after a smooth ride for few years back to back.
o Current Ratio / Acid Test Ratio
As a best practice, the Company intends to keep its current ratio higher than one. In
2013 this ratio was impacted due to the utilization of short term investments to finance
capital commitments.


Comments on Some Financial Indicators
o Cash to Current Liabilities
The Company has maintained a consistent ratio throughout
o Cash Flow from Operations to Sales
Due to burn up of cash in earlier years, the ratio was negative. However, with the
increased cash generation, the ratio has improved in recent years.
Future Strategy
In January 2014, the company has also taken price increase
in one of its brands to arrest the declining margins. The
Company is also working on various efficiency projects
including the Heavy Fuel Oil based power plant which will
result in lower energy costs. Moreover, the new powder plant
at Sahiwal which will be operational shortly is expected to
contribute towards stabilizing the Companys margins.
The management will continue to focus on key growth
parameters of innovation, brand differentiation and
continuous business expansion including expansion in new
products, e.g., pilot project for Mabrook (the fresh dairy
segment).
WHY WE
BELIEVE
ENGRO FOODS
IS A SUCCESS
STORY
Success Points
Growth in a short span of time:
The company laid its foundation few
years ago in 2004 and within such short
span of time Engro foods has shown
stupendous and extraordinary growth
compared to other dairy product
manufacturing companies.
Success Points
Dominating the market giants:
One of the key features that highlight
Engro foods as a success story is the
way company wiped out some of the
leading marketing giants such as
Haleeb off the charts and even giving
hard time to Nestle, Unliver etc. .
Success Points
Quality Product and Customer Trust:
A company is nothing without its customers
and from the very beginning Engro foods has
given notable significance to its customers by
providing them with quality products of
international standards at economical prices.
Recommendations/ Suggestions
Engro Foods should have much diversified bi-product line of
dairy products like Nestle & Haleeb
They should introduce new promotions to get customers
attention
EFL should expand its dairy farms so that they can get
competitive advantage
EFL should focus on Market Penetration, Market
Development and Product Development strategies with
more efforts to be the market leader
Recommendations/ Suggestions
They should go expand its capacity to enter into in
international market like Nestle.
Engro Foods can be into Co-branding with other brands like
Olpers with Lipton tea bags, Olpers with different biscuits
etc. to increase their sales
They can also move towards other foods products like
Nestle launch Kit Kat Chocolate, Meggi Noodles, Sweets
Candies etc.