food industry of pakistan

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Page 1: Food Industry of PAKISTAN
Page 2: Food Industry of PAKISTAN

Group members: Adresh AkhtarM.Adeel

Page 3: Food Industry of PAKISTAN

Introduction. Pakistan food industry over view. Linkages. Food Industry Survey. Food Manufacturing Industries on KSE. PAKISTAN'S FOOD POTENTIALS. Availability of Food. Major Exports of Pakistan. Major Imports of Pakistan. Major Problems. Scope of Frozen Food in Pakistan. Value of Fast Food Industry in Pakistan. WTO tariff. SWOT Analysis. Recommendation.

Page 4: Food Industry of PAKISTAN

The food industry can make a variety of different products from a given commodity. These food products have different expiration dates and different economic value as a result of food processing.

Physical (heat), Chemical (preservatives) and Biological (fermentations) are used to preserve food.

The food industry adds value to commodities, creates a varied year-round food supply and does so at very low consumer cost.

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Backward linkages: Agriculture sector Fertilizers Butchers Farmers Forward linkages: Hotel & Restaurants Auto Industry (Transportation) Small Units (House Hold Units) Plastic Industry

Page 7: Food Industry of PAKISTAN

IN jan,1997  by iqbal haidari. According to the Census of Manufacturing

Industries there were 924 units engaged in the manufacture of Food and Beverages. According to the UNIDO it is the largest manufacturing industry of the country. Value of production stood at Rs.74.094 billion and manufacturing value added (MVA) stood at Rs.24.287 billion. Food processing is a relatively capital intensive industry. The share of food in the manufacturing industry has declined from 22.66 per cent in 1981-82 to 19.76 per cent in 1990-91. Figures for 1995-96 are not available.

Page 8: Food Industry of PAKISTAN

The growth rate in the food industry has been estimated at 10.00 per cent per annum. The most rapidly growing items are dairy products fish processed, bakery items, sugar, biscuits and confectioneries, fruit juices and other soft beverages. Rapid export growth has characterized fish preparation, fruit preserves, dry fruits, some beverages and sugar, and honey preparation. Food products (except rice) do not however, make up a significant proportion of Pakistani exports and there is a considerable potential for expanding such exports, specially to Europe and the Gulf region.

Page 9: Food Industry of PAKISTAN

As many as 86 food manufacturing companies are on the list of Karachi Stock Exchange out of total 783 companies (end January 1997). The paid-up capital of food companies stood at Rs.7.519 billion as end December 1996. They include, some of the biggest groups in the market such as Bawany, Crescent, Habib, Fecto, Premier, Lakson, Burma Oil (producing vegetable oils) Brooke Bond, Clover Foods, Lever Brothers and National Foods. The food manufacturing firms have generally performed well on the stock exchange in 1994-95 with capitalisation registering an above average increase. Net profit as percentage of share holder's equity has averaged at about 22 per cent during 1990-93 for the sugar and allied group, and about 25 per cent for the vegetable oil groups. The net profit ratio for the tobacco subsector has been 30 per cent. This compares well with the overall net profit ratio for KSE companies during this period, and averages to about 19 per cent.

Page 10: Food Industry of PAKISTAN

Thus, there is a significant scope for investment expansion in the food manufacturing sectors. Domestic demand is buoyant and export prospects are bright-although they are yet to be adequately explored. Several major companies including well known multinationals have substantial investment commitments and there are also a large number of middle sized upward mobile domestic firms. Scope, thus exists both for the establishment of wholly owned subsidiaries. There is also a need for technology transfer agreements which can facilitate the access of Pakistani companies, to modern technology and know-how in the areas of processing, preservation and packaging of food manufactures. Several Pakistani firms have developed ambitious modernization programmes.

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  No. of Paid-up Market Companies Capital Value  Sugar and Allied 38 466.594 4430.194 Tobacco 7 541.011 1823.451 Edible Oil 19 395.702 257.125 Food & Allied 22 1921.244 14,391.079  

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According to an eminent agriculture expert, Pakistan through intensive cultivation can increase its cereal grain production more than three times the amount currently produced in the country

The present cereal production is around 26.3 million tones.

A production target of 54 million tons of cereal production would be sufficient to meet Pakistan's entire food needs and also to enable it to be the major exporter of grains to South Asia and the Middle East.

Thus Pakistan has immense potential to turn into the food granary for the countries of Asia and Africa in view of its vast potential of water resources and its biggest canal system in the world.

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Pakistan's soil and climate are conducive to year round crop production.

Major sources of dietary proteins are cereals, pulses, fruits, vegetables and animals. In the case of rice Pakistan already exports more than a million tonnes of rice to Middle Eastern and South Asia countries.

Against the requirement of 20 million tonnes the production of wheat would be less than 18 million tonnes this year.

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Target for wheat crop for the year 1996-97 has been fixed at 18.0 million tonnes showing an increase of 5.3 per cent over last year. Of the target 18.0 million tonnes, Punjab would produce 13.5 million tonnes, Sind 2.47 million tonnes, NWFP 1.28 tonnes and Balochistan 911 thousand tonnes. Per hectare yield is extremely low unless this chief deficiency is firmly overcome the overall prospect for wheat will not brighten up. Yet another drawback is the wastage of wheat crop, Pakistan Agriculture Research Council (PARC) estimated that 40 per cent of wheat produced in the country is wasted annually either in the field, in storage or during transportation. Wheat stocks can be built for consumption and export only when scientifically constructed godowns are available in all regions.

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Rice is the most important cash crop in Pakistan and it has assumed the first position in regard to foreign exchange earnings. Pakistan has moreover, a distinction of being one of the only two producers of Basmati rice in the world though with some justification to be the world's finest, of delicate long grain and exotic. A unique combination of soil and climatic conditions confine this distinctive rice to Pakistan. While long grain rice has been grown with success elsewhere, notably in the United States, nowhere has it been possible to duplicate or rival the particular flavor characteristics of fine Basmati rice. Rice production is estimated at 4.2 million tons during 1996-97 as compared to 3.97 million formers harvested last year.

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The gross inadequacy of storage capacity is, however, acutely felt. Although the Rice Export Corp. of Pakistan (RECP) has now a storage capacity of 831 thousand tons as against 590,000 tons at the time of its inception, it leaves much to be desired. The storage capacity must be increased without delay to cope with the increasing exports. If that has been done, it will make a difference for the better. This year there would be an exportable surplus of 1.5 million tons as against 1.37 million tons exported last year. It is estimated that rice exports are likely to fetch about $595 million as against $503 million last year.

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Pulses are called the poor man's meat in view of their comparative cheap availability and for possessing high contents of protein, minerals and vitamin B. Pulses are now grown on a total area of 1.50 million hectares which constitutes hardly 8 per cent of the total cropped area.

If new varieties were evolved the yield of pulses could be increased from 25 to 50 per cent. The Eighth Five Year Plan estimated to increase the production of pulses from 780,090 tonnes in 1992-93 to 900,000 tonnes in 1997-98.

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Pakistan is ranked fourth after India, Cuba and Brazil in the world as area under sugarcane cultivation is concerned. However, cane per hectare yield is low. The 1996-97 production target has been fixed at 49.20 million formers. This is 7.6 per cent more compared to the crop of 45.47 million tons produced in 1995-96. Last year growers failed to achieve the target of 46.20 million tons as estimated production fell short of the target by one per cent. It was also 3.0% less compared to a crop of 47.17 million tons produced in 1994-95. With high rate of cane production, the sugar production has touched an all time high record of 3.0 million tons in 1994-95 making Pakistan not only self sufficient in sugar but also leaving surplus for exports. However, production in the last two years was dismal and Pakistan had to make arrangement to import sugar. Total sugar imports in 1996-97 (July-June) including 375,000 tons ordered by October are likely to be around 750,000

tons.

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Consumption of edible oil in Pakistan has increased rapidly. The demand has been rising by more than 50,000 tons annually over the past five years. In 1995-96 the requirement reached the level of 1.803 million tons and it is estimated that the demand for edible oil will be around 2.0 million tons in 1997-98. Pakistan's imports of edible oil stood at 1.20 million tons in 1995-96 worth $706 million. Imports have shown declining trends. The decline was attributed to smuggling from the borders of Iran and Afghanistan. They are easy routes to smuggle vegetable oil into Pakistan. Mostly Afghan traders are involved in smuggling. Edible oil imports have declined from $1394 million in 199495 to $1200 million in 1995-96. Per capita consumption of edible oil has increased from 11.83 kg. in 1990-91 to 12.60 kg. in 1995-96.

According to PVMA annual edible oil and fats consumption is little over two million tons. Almost 50 per cent of it is met by local sources including sunflower oil, rapeseed oil, and cottonseed oil. There remains a need to import about one million tons of different edible oils to meet the total requirement. At present 200,000 tons oil is imported above requirement which is smuggled to Afghanistan, or other countries.

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Pakistan is ranked fifth amongst the world citrus growing countries. At present Pakistan produces 5.0 million tons of fruits and vegetables annually. Since improved methods of cultivation are now in use both the production and acreage continue to rise. However, it is observed that 50 per cent of fruits and vegetables harvested in the country go waste during harvesting, transportation, preservation and storage. If only 25 per cent of the wastage could somehow be avoided Pakistan could earn $100 million worth of foreign exchange annually through the exports of fruits and vegetables. Pakistan is expected to have enough surplus of vegetables (onion and potato) and fruits, which will help in sustaining the growth and momentum of exports achieved so far. Exports of fruits and vegetables during 1996-97 stood at $62.022 million as compared to $54.570 million in the preceding year. The importers were mainly Gull countries including Kuwait and Singapore and Malaysia in the Far East. Through mechanized grading, quality of fruits has also been improved. Improvement in packing had also been made.

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It is estimated that the beef production in 1995-96 was around 937,000 tons, mutton at 544,000 tons. Poultry sector grew by 2.7 per cent over the last year. However, modern poultry production in Pakistan is constrained by high morality of flocks, high incidence of disease, poor quality of day old chicks and high cost of feed combined with improper marketing system. Despite various, concessions and incentive provided by the government, the poultry industry has yet to make a rapid progress. Pakistan has population of 14 million of layers and 190 million of broilers. Production of poultry meat was estimated at 308,000 tons in 1994-95. Eggs production stood at 5927 millions during the same year. The production of fisheries for the year 1995-96 is estimated to be 559,000 tons of which 419,000 forms is marine and 140,000 metric tons inland.

Page 22: Food Industry of PAKISTAN

Pakistan produces 20 million tons of milk annually which is half of milk produced by rest of the 49 countries of the Muslim world. Punjab alone produces more milk than all the 12 OPEC countries put together. Pakistan is also importing milk and milk products. In 1995-96 import of milk products stood at $30.6 million. The interest of dairy industry remained grossly neglected. Milk is available in abundance. What is required is modern technology to preserve milk for later consumption or for reducing the bulk for economic storage or for shipment for distant markets in and out of the country.

Pakistan is ranked amongst those few fortunate countries where milk is produced in excess of consumption. Yet it is ironical, 0.20 million tons of dry milk worth 1,000 million Rs. is imported every year, only because we have failed to keep national interest in view while assigning priorities. Instead of wasting foreign exchange on imports [TABULAR DATA OMITTED] of a commodity which is already available aplenty within the country, had we paid due attention towards development of an effective infrastructure, appropriate farm management and facilities of chilling, storage and transportation of milk, we might have been exporting instead of importing milk. What in fact was needed, was to conserve the 75 per cent of the dairy produce which is lost because it cannot be conveyed up to the consumer market. The short-sighted relief measure of imports has very adversely affected the dairy industry whose development stands strangulated.

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All tea is imported in Pakistan, valuing 170 million dollars a year. At that level, after edible oil, tea is the second largest food item imported. Tea imports are 1.5 per cent of the country's overall import bill of about Rs. 12 billion a year. Tea drinking, over the last five years, has doubled mainly because other drinks, especially fresh milk, have virtually disappeared as the dairy production was neglected. Another reason is high population growth a year.

According to Federal Bureau of Statistics, 114,447 metric tons of tea worth $169.2 million was imported 1995-96 against 116,629 metric tons, worth $187.78 million in the corresponding period of 1994-95, showing a decline of 1.87 per cent and 09.85 per cent in terms of quantity and value respectively. These figures don't show millions kg. of tea smuggled into the country via border areas of NWFP and Baluchistan. Owing to bulk smuggling, only 20 to 25 genuine tea importers were active against 200 firms two years ago out of 400 importers registered with Pakistan Tea Association (PTA). Pakistan mainly imports tea from Kenya and other African countries like Uganda, Burundi and Tanzania while multinational blenders also import tea from Sri Lanka, Indonesia and Bangladesh. Annual black tea consumption in Pakistan is 01 kilogram per head, slightly lower from British whose consumption is 1.25 kilogram per person.

Pakistan has the potential to plant tea over an area of 25,000 acres, out of an approximate 50,000 acres in the mountainous region. Pakistan's northern areas have an average of 50 inches of annual rainfall, and a rolling elevation of 3,500 to 6,500 feet above the sea level, which is considered conducive to tea growing. At least three past attempts to grow tea in Pakistan have failed in 1959, 1964, and 1977, mainly because of mismanagement. One reason for the 1959 and 1964 failures was politics.

Page 24: Food Industry of PAKISTAN

Per Capita Availability of Food

(Kg./per capita/year)

 

1991-92 1992-93 1993-94 1994-95 1995-96

 

Cereals 149.61 161.11 167.51 153.31 154.60

Pulses 5.66 6.82 5.00 5.65 6.21

Sugar 26.77 28.10 31.65 31.27 30.80

Milk 111.11 113.26 115.76 118.38 121.48

Meat 17.98 18.99 20.29 20.85 21.38

Eggs 2.30 2.25 2.20 2.40 2.45

Edible Oil 11.83 12.50 10.50 12.19 12.60

 

Caloric & Protein Availability:

 

Calories per day . 24.35 25.95 26.29 25.44 25.70

Protein per day . 63.44 67.66 68.20 66.12 67.88

 

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Political changes Monopolistic tendencies Lack of financing facilities Non-availability of skilled workers Lack of infrastructural facilities Low capacity utilisation and machinery Transport problems High production costs

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Contains 9 categories: Frozen bakery/seafood, potato, Frozen meat, vegetables, Frozen ready meals, Frozen pizza, Frozen desserts and Frozen fruit

Provides market value, volume, expenditure and consumption data by market, segment and sub segment

- Includes company and brand share data by categories

Highlights of this title

The market for Frozen Food in Pakistan increased between 2001-2006, growing at an average annual rate of 9.6%.

The leading company in the market in 2006 was Habit Hassan . The second-largest player was K & N with Quick Food Industries in third place.

Key reasons to purchase this title

- Discover the major quantitative trends affecting the Frozen Food markets

- Understand consumers consumption and expenditure patterns

- Understand the future direction of the market with reliable historical data and full five year forecasting

Page 29: Food Industry of PAKISTAN

Almost everywhere you look you'll see a familiar sign symbolizing our fast food nation. You find them on the corners of streets, off the side of interstates, airports, malls, schools, gas stations, your local shopping center, and even in hospitals. More money is spent on French fries than on higher education, personal computers, or new cars! Looking at how our society has become faster paced, it is no wonder less time is spent. Today, eating out definitely is part of our fast paced lifestyle, not just a special treat as it was in years past. Fast food is mainly targeted to children. The high fat foods taste good to these youngsters, which in turn make them believe that fast food is quick, easy and satisfying. Fast food restaurants are now making "value" meals for children that are increased in portion sizes. Today, fast food has become a fashion, as customers are not only eating, they are enjoying the environment not adults, children are also fond of going to the fast food restaurants for celebrating their memorable occasions like birthdays, results and even get together parties.

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WTO tariff bindings and applied rates for selected major products (percentage ad valorem)

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Thank You.