food-industry

2. Group members: Adresh Akhtar
M.Adeel

3.  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.

4.  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.

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

7.  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.

8.  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.

9.  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.

10.  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.

11. 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

12.  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.

13.  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.

14.  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.

15.  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.

16.  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.

17.  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.

18.  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.

19.  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.

20.  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.

21.  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.

22.  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.

23.  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.

24. 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

27.  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

28. 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
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- 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
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forecasting

29.  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.

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

37.  Thank You.