livestock dairy industry opportunities challenges mr shamsuddin sheikh engro foods

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 Opportunities

Shamsuddin A. Shaikh

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ChallengesChallenges

ChallengesChallenges

StrategiesStrategies

StrategiesStrategies

OpportunitiesOpportunities

OpportunitiesOpportunities

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Pakistan Dairy Challenges

Quantity, Quality, Price

Demand/ • Demand continues to outpace supplyupp y ap • Actual production estimated to be between 20-22 bio

Vs 36 bio reported.

• Non-commercialized scattered farming NOT geared toachieving fast growth. No where in the world this hasworked

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Pakistan Dairy Challenges

Quantity, Quality, Price

Poor milkquality

Avg. TPC count in Pakistan +3 mio/ml vs.50,000 in Middle East which is also

UHT milk shelf life

3 months (Pakistan) vs. 9 months (Middle East)

Role of middle man vis-à-vis adulteration

Poor quality is major hurdle for exportopportunity

Processed milk goes through a number ofchecks versus gwala milk.

much higher then supply

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Pakistan Dairy Challenges

Quantity, Quality, Price

Impact onPrice

Lower avails Vs demand, creating price warCurrent SMP prices of US $ 2500 C&F Khi

 available in Pakistan

Highly volatile local market – only savior ins ape o mpor u y.

Collection in Pakistan much more expensivethan other countries. Lower avails versus a

number of buyers.

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Pakistan Dairy Challenges

Way  Forward

3 prongedapproach

Supply side

Quality approach

Yield improvement

Economies of Scale

Public/Private participation

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Pakistan Dairy

 Challenges

Supply Side

Barriers Absence of infrastructure & utilities support in milk shed areas

Increased culling trend to erode herd base

Recommendations Prioritize milk shed areas for investment

• Utilities access/support

• u e we ng programmes

• Electrification

• Security issues

Encoura e dair breedin farms

Set & enforce financing dairy targets/incentives

• Role of financial institutions/ micro-financing

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Pakistan Dairy Challenges

Yield  /  Quality Improvement 

Barriers Genetic Deterioration Poor breeding practices resulting in low yield animal

Absence of enetic ool records

Lack of focus on imported cattle breeds

Recommendations

Establish Independent Agency.

Establish targets & benchmarks

Establish bull pool among elite ‘progressive’ farmers

Herd Registration establishing ideal type

Availability of Bulls nationwide through ‘bull stations’ for AI & Rental

Encourage import of cattle through subsidy

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Pakistan Dairy ChallengesYield  /  Quality Improvements

Barriers Milk Price

Varying milk procurement standard

Adulteration & lack of recognition of premium for hygiene

Recommendations Govt. to establish regulatory framework for milkprocurement standard; policed by industry

Clear & consistent pricing structure

Quality parameters policed by authorities at farm gate

Industry to enforce hygiene premium

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Pakistan Dairy ChallengesYield  /  Quality Improvements

Barriers Animal Health Poor standard of vaccines & medicines

ro ve cos o mpor

Lack of cold chain handling & administration

Recommendations Tax free incentive to rural operating businesses i.e.crop insecticide companies for local production ofvaccines & medicine

• Import substitution benefits

,testing/policing

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Pakistan Dairy Opportunities

(Million Heads)

ves oc   opu a on

58.360

29.9 27.440

Pakistan1

0

Cattle Buffalo Sheep Goat Camel

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Pakistan Dairy Opportunities

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Consumer  

Consumer  

Dairy

B2Ba ry

Business

ce cream

BusinessFarm

Business

ce

Project

InvestmentUSD 57 MnEx ected rowth

Investment

USD 17 Mn

ExpectedInvestmentUSD 35 Mn

Investment

USD 9 Mn 

2011USD 100 Mn

xpec e grow2011

USD 34 Mn

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• Tarka , butter oil launched

• 2nd largest player of UHT industry

in Pakistan

• Ice cream brandOMORE launchedsuccessfully

 • First plant at

Sukkur commissioned

• Olper’s first

,powder launched

• Tarang – liquid teawhitener introduced

•

• Ice –creamproject approved

• Commercialdairy farm

launchedsuccessfully

• Tarang 125 ml inrocess

ENGRO

 –UHT milk

• Olper’s first brandextension –UHTcream launched

 becomes operational

• Model dairy farmoperational

• National distribution

launched• J & N in process

• Tea whitening powder in process

 FoodsLimitedformed

• Olwell Fist valueadded brandlaunched –UHT

HCLF

 attained

• 2nd largest milk collectioninfrastructure deployed

20092009

2005200520062006

20072007

20082008