Wednesday, October 5, 2011

FMCG Companies Profit From Rural Consumption Boom in Pakistan

Away from the violence and the troubles of the big cities, the economy of rural Pakistan is booming. Flush with cash from bumper crops at record commodity prices, the farmers are spending on tractors, cars, motorcycles, mobile phones, personal grooming items, packaged foods and beverages and other consumer products like never before.



Higher crop prices have increased farmers’ incomes in Pakistan by Rs. 342 billion in the 12 months through June, according to a government economic survey. That was higher than the gain of Rs. 329 billion in the preceding eight years, according to a report by Bloomberg News. Companies like Millat tractors, Honda Atlas Motorcycles, Pak Suzuki Motors, Engro Foods, Telnor, Nestle, Colgate-Palmolive, Proctor and Gamble and Unilever have been big beneficiaries of the current rural consumption boom.

Nestle Pakistan's chief Ian Donald has summed up the rising demand for his company's products as follows: “It’s a common perception that China and India are much bigger in terms of growth than Pakistan. But for Nestle, the per capita consumption of our products in Pakistan is twice as much as we have in China and India.” It should be noted that Nestle is the world's largest packaged food company, and Pakistanis' per capita consumption of milk and dairy products is about 2.5 times higher than in India. According to the FAO, the average dairy consumption of the developing countries is still very low (45 kg of all dairy products in liquid milk equivalent), compared with the average of 220 kg in the industrial countries. Few developing countries have per capita consumption exceeding 150 kg (Argentina, Uruguay and some pastoral countries in the Sudano-Sahelian zone of Africa). Among the most populous countries, only Pakistan, at 153 kg per capita, has such a level. In South Asia, where milk and dairy products are preferred foods, India has only 64 kg and Bangladesh 14 kg. East Asia has only 10 kg.

Here are a few key points excerpted from a recent Businessweek story on rise of the rural consumer in Pakistan:

1. Unilever and Colgate-Palmolive Co. are sending salespeople into rural areas of the world’s sixth most-populous nation, where demand for consumer goods such as Sunsilk shampoo, Pond’s moisturizers and Colgate toothpaste has boosted local units’ revenue at least 15 percent.

2. “The rural push is aimed at the boisterous youth in these areas, who have bountiful cash and resources to increase purchases,” Shazia Syed, vice president for customer development at Unilever Pakistan Ltd., said in an interview. “Rural growth is more than double that of national sales.”

3. Consumer-goods companies forecast growth in Pakistan even as an increase in ethnic violence in Karachi has made 2011 the deadliest in 16 years for the country’s biggest city and financial center.

4. Nestle Pakistan Ltd. is spending 300 million Swiss francs ($326 million) to double dairy output in four years, boosted sales 29 percent to 33 billion rupees ($378 million) in the six months through June. “We have been focusing on rural areas very strongly,” Ian Donald, managing director of Nestle’s Pakistan unit, said in an interview in Lahore. “Our observation is that Pakistan’s rural economy is doing better than urban areas.”

5. Haji Mirbar, who grows cotton on a 5-acre farm with his four brothers, said his family’s income grew fivefold in the year through June, allowing him to buy branded products. He uses Unilever’s Lifebuoy for his open-air baths under a hand pump, instead of the handmade soap he used before. “We had a great year because of cotton prices,” said Mirbar, 28, who lives in a village outside south Pakistan’s Matiari town. “As our income has risen, we want to buy nice things and live like kings.”

6. Sales for the Pakistan unit of Unilever rose 15 percent to 24.8 billion rupees in the first half. Colgate-Palmolive Pakistan Ltd.’s sales increased 29 percent in the six months through June to 7.6 billion rupees, according to data compiled by Bloomberg. “In a generally faltering economy, the double-digit growth in revenue for companies servicing the consumer sector has come almost entirely from the rural areas,” said Sakib Sherani, chief executive officer at Macroeconomic Insights Pvt. in Islamabad and a former economic adviser to Pakistan’s finance ministry.

7. Unilever is pushing beauty products in the countryside through a program called “Guddi Baji,” an Urdu phrase that literally means “doll sister.” It employs “beauty specialists who understand rural women,” providing them with vans filled with samples and equipment, Syed said. Women in villages are also employed as sales representatives, because “rural is the growth engine” for Unilever in Pakistan, she said in an interview in Karachi. While the bulk of spending for rural families goes to food, about 20 percent “is spent on looking beautiful and buying expensive clothes,” Syed said.

8. Colgate-Palmolive, the world’s largest toothpaste maker, aims to address a “huge gap” in sales outside Pakistan’s cities by more than tripling the number of villages where its products, such as Palmolive soap, are sold, from the current 5,000, said Syed Wasif Ali, rural operations manager at the local unit.

9. Its detergents Bonus Tristar and Brite are packed in sachets of 20 grams or less and priced as low as five rupees (6 cents), to boost sales among low-income consumers hurt by the fastest pace of inflation in Asia after Vietnam. Unilever plans to increase the number of villages where its products are sold to almost half of the total 34,000 within three years. Its merchandise, including Dove shampoo, Surf detergent and Brooke Bond Supreme tea, is available in about 11,000 villages now.

10. Pakistan, Asia’s third-largest wheat grower, in 2008 increased wheat prices by more than 50 percent as Prime Minister Yousuf Raza Gilani sought to boost production of the staple.“The injection of purchasing power in the rural sector has been unprecedented,” said Sherani, who added that local prices for rice and sugarcane have also risen.

11. Telenor Pakistan Pvt. is also expanding in Pakistan’s rural areas, which already contribute 60 percent of sales, said Anjum Nida Rahman, corporate communications director for the local unit of the Nordic region’s largest phone company.

While the presence of multinational consumer product giants like Nestle and Unilever receive more coverage in the western media, the Euromonitor report finds that Pakistani FMGC companies like Engro Foods, Haleeb Foods, Shezan, Tapal, Shan and others dominate the packaged food business in Pakistan. Here's an excerpt from a recent Euromonitor report on Pakistan:

Although multinationals are paving the way for innovations and taking into account consumers’ demands by launching new products and advertising them heavily, it is usually the domestic companies which win the competitive battle in volume terms as they focus less on expensive and more conventional items which already have a consumer base. Nevertheless, multinationals carry strong brand names and target the higher class with premium products, thus taking their reasonable share in value terms.



Supermarkets/hypermarkets is the most steadily growing distribution channel with a new player Hyperstar. As urbanization is increasing, people tend to leave their families and live separately and therefore there is sometimes no housewife at home to be responsible for the purchase of fresh items close to home. Supermarkets/hypermarkets became more popular over the review period, being gradually considered more convenient as this channel can offer a wide selection of products in one place. Pakistanis are becoming more used to planning their meals for several days and supermarkets/hypermarkets work on offering as wide an assortment as possible. Nevertheless, traditional retail outlets such as independent and small grocery retailers continue to have a good name not just because of the lower unit prices offered but also because of their selection as most of them are specialized.


Pakistan continues to face major problems as it deals with the violent Taliban insurgency and multiple internal and external threats and crises of stagnant economy, scarcity of energy and the lack of sense of security. However, it is clear from the consumer spending data that Pakistanis are a resilient people, and they continue to defy the persistent prophecies of doom and gloom.

Pakistan is just too big to fail. I fully expect Pakistan to survive the current crises, and then begin to thrive again in the near future.

Related Links:

Haq's Musings

Pakistan's Sugar Crisis

Poll Finds Pakistanis Happier Than Neighbors

Pakistan's Rural Economy Booming

Pakistan Car Sales Up 61%

Resilient Pakistan Defies Doomsayers

Land For Landless Women in Pakistan

60 comments:

Riaz Haq said...

Stock and credit markets respond positively to rate cut by Pak central bank, according to The Express Tribune:

KARACHI: The bond and equity markets have reacted strongly to central bank’s surprise decision of slashing the interest rate to bring it on a par with pre-2008 crisis levels.

Karachi inter-bank offered rate (Kibor), the benchmark six-month lending rate, plummeted 95 basis points in a single day to a 26-month low of 11.96%, according to a Topline Securities research note.

Furthermore, yields of the actively traded one-year treasury bills and the benchmark 10-year Pakistan Investment Bonds fell by 75 basis points and 60 basis points to trade around 11.90-93% and 12.00-05%, respectively.

The State Bank of Pakistan (SBP) on Saturday cut its benchmark discount rate from 13.5% to 12%.

The rate cut has also benefitted well the stock market on account of better earnings for leveraged companies and reduction in risk-free rate, adds the note.

The Karachi Stock Exchange’s benchmark 100-share index opened with a gap of approximately 350 points to skip over 12,000 points for the first time in two months on Monday.

Profits of leveraged companies to jump 2-8%

Heavily leveraged companies from the cement, textile and fertiliser sectors – whose loans are floating and linked with Kibor – will have to bear lower interest charges from January 2012 following quarterly loan re-pricing in December, says the note.

These companies will be the major beneficiaries of the cut in discount rate, the fee commercial banks pay to borrow money from the SBP. DG Khan Cement, Engro and Pakistan State Oil will be some of the major gainers as their annualised earnings will increase by 7.8%, 6.5% and 2.1%, respectively, adds the research note.

Overall, the rate cut will augment earnings growth by 0.5% in 2012.


http://tribune.com.pk/story/271244/chain-reaction-surprise-rate-cut-takes-kibor-to-26-month-low/

Riaz Haq said...

Here's an Express Tribune story on rapid growth of branchless banking in Pakistan:

With State Bank of Pakistan demoing a constructive regulatory approach for branchless banking, a number of players are now evolving to offer branchless banking in Pakistan as a viable business model, said a report published by CGAP.

CGAP says that Pakistan has become one of the fastest developing markets for branchless banking in the world.

According to the report, SBP has issued four branchless banking licenses and is considering several others. Meanwhile, the government is planning to further encourage the mobile banking by planning to distribute the government payments through branchless banking.

There are currently two major operators in the market with several to jump in during the next couple of years.

Easypaisa, a joint venture of Tameer Microfinance and it’s parent company Telenor, claims to have over half a million mobile accounts. Easypaisa claims to have processed bill payments and domestic money transfers of worth Rs. 43 billion (US$500 million), unveils the report.

UBL Omni, another branchless banking service launched in April 2010, has reportedly won several contracts to disburse payments for nongovernment organizations and government schemes.

UBL claims to have 5,000 agents, countrywide, disbursing payments to around 2 million recipients.

New players including Mobilink, TCS, Bank Alfalah, Askari Bank and MCB are expected to enter the branchless banking market.

CGAP says that next 12 months will be critical for the newly emerging branchless banking sector in Pakistan. The evolution of the sector will likely yield important lessons for the rest of the world.

You can download the complete report by clicking this link.


http://tribune.com.pk/story/273178/pakistan-is-among-fastest-developing-market-for-branchless-banking-report/

http://propakistani.pk/wp-content/uploads/2011/10/Mobile_Banking_Brief_Pakistan.pdf

Riaz Haq said...

Nishat Group entering packaged milk market in Pakistan, according to Bloomberg:

Nishat Group, owner of Pakistan’s largest lender by market value, plans to enter the consumer goods business by starting milk production this year, Chief Financial Officer Inayat Ullah Niazi said.

“We have bought land outside Lahore and after beginning milk production, we will add other products to the line,” Niazi said by telephone from Lahore today. He didn’t provide more details.

Niazi said the group, which owns MCB Bank Ltd. and Nishat Mills Ltd., the nation’s largest textiles exporter, sees growth potential in Pakistan for consumer goods, particularly food products. The government plans to spend 3.5 billion rupees ($40 million) to improve the dairy industry, including expanding infrastructure, in the fiscal year ending June 30, and boost economic growth in the period to 4.2 percent from 2.4 percent.

“Dairy is one of the fastest growing businesses in Pakistan,” said Abdul Aziz Anis, who oversees $35 million in assets including shares of MCB and Nishat Mills, as chief executive officer of Karachi-based Alfalah GHP Investment Management Ltd. “There is huge growth potential in the consumer business, but the only question is the buying power of the population with still-high inflation.”

Nishat Group joins Nestle SA in expanding in dairy in Pakistan. The Vevey, Switzerland-based company said in August that it plans to double dairy output in Pakistan by spending 300 million Swiss francs ($334 million) in the next three to four years. Companies including Unilever and Colgate-Palmolive Co. are also expanding sales of consumer goods in the South Asian nation as demand for products such as Sunsilk shampoo and Colgate toothpaste bolster local units’ revenue.

Inflation in Pakistan rose 11.56 percent in August from a year earlier, the fastest pace in the Asia-Pacific region after Vietnam, according to data compiled by Bloomberg. The State Bank of Pakistan cut the discount rate to 12 percent from 13.5 percent this month to help spur investment in the nation, which has been hit by flooding and terrorism.


http://www.businessweek.com/news/2011-10-19/pakistan-s-nishat-group-to-start-milk-production-this-year.html

Riaz Haq said...

Occasional and isolated but nonetheless tragic suicide cases like Raja Khan's in Pakistan get a lot of media coverage as they should. Meanwhile, over 200,000 farmer suicides in India have passed with little media attention in India.

Here's a Washington Post report on rising suicides in India:

NEW DELHI — Ram Babu’s last days were typical in India’s growing rash of suicides.

The poor farmer’s crop failed and he defaulted on the $6,000 loan he had taken to buy a tractor. The bank’s collectors hounded him, even hiring drummers to go round the village drawing attention to his shame.

“My father found it unbearable. He was an honorable man and he couldn’t take the humiliation. The next day he hanged himself from a tree on his farm,” his son Ram Gulam said Friday.

Babu’s suicide went unreported in local newspapers, just another statistic in a country where more than 15 people kill themselves every hour, according to a new government report.

The report released late Thursday said nearly 135,000 people killed themselves in the country of 1.2 billion last year, a 5.9 percent jump in the number of suicides over the past year.

The suicide rate increased to 11.4 per 100,000 people in 2010 from 10.9 the year before, according to the statistics from the National Crime Records Bureau.

Financial difficulties and debts led to most of the male suicides while women were driven to take their lives because of domestic pressures, including physical and mental abuse and demands for dowry.

A 2008 World Health Organization report ranked India 41st for its suicide rate, but because of its huge population it accounted for 20 percent of global suicides.

The largest numbers of suicides were reported from the southern Indian states of Kerala, Tamil Nadu, Andhra Pradesh and Karnataka, where tens of thousands of impoverished farmers have killed themselves after suffering under insurmountable debts.

The loans — from banks and loan sharks — were often used to buy seeds and farm equipment, or to pay large dowries to get their daughters married. But a bad harvest could plunge the farmer over the edge.

Sociologists say the rapid rise in incomes in India’s booming economy has resulted in a surge in aspirations as well among the lower and middle classes, and the failure to attain material success can trigger young people to suicide.

“The support that traditionally large Indian families and village communities offered no longer exists in urban situations. Young men and women move to the cities and find they have no one to turn to for succor in times of distress,” said Abhilasha Kumari, a sociology professor in New Delhi.


http://www.washingtonpost.com/world/asia-pacific/government-report-says-15-people-commit-suicide-every-hour-in-india/2011/10/28/gIQAVFGWOM_story.html

Riaz Haq said...

Here's an excerpt from a Unilever report on ice cream consumption in Pakistan:

0.5 kg consumption per capita but growing at double digit rate

http://www.igisecurities.com.pk/pdf/Unilever_Pakistan_Limited_Initiating_Coverage.pdf

Riaz Haq said...

Here's a NY Times story about soil renewal for agriculture in Pakistan:

LAHORE, PAKISTAN — In the Pakistani village of Sharbaga, about 130 kilometers from Lahore, a 70-year-old farmer named Mohammed Ali and his wife plant rice seedlings in a wide field. They stand ankle-deep in muddy water holding thin green leaves that they deftly press into the ground. It is hard work under a blazing sun, but this seemingly mundane task is a significant development that can help rural Pakistanis improve their lives.

Just a few years ago, this rice paddy and most of the surrounding fields in this village of 5,000 were barren. For decades the land has lain fallow because it is saline from poor groundwater.

In 2006, the government of the state of Punjab, traditionally Pakistan’s breadbasket, and the United Nations Development Program started an agriculture project to rehabilitate saline farmland by treating it with gypsum. The Punjab government pays for two-thirds of the project’s six-year, $17 million budget, while the U.N. program pays for the rest.

Nearly six million hectares, or about 15 million acres, across Pakistan, including 2.3 million hectares in Punjab, are barren because of salinity and water logging. Gypsum’s calcium composition can neutralize saline soil. Within a season of applying the white powder, farmers like Mr. Ali had transformed a long-degraded land into a field that yielded bountiful crops of rice and wheat.

Forty-three percent of Pakistan’s population of 170 million depends on agriculture for their livelihood and two-thirds of the country’s citizens live in rural areas. Projects that help improve the lives of people on the ground are critical to creating stability in Pakistan, and yet these are often overlooked.

Sustainable agricultural growth is a “necessary condition for rural growth, employment generation, poverty reduction and social stability,” said a 2009 report on Pakistan’s agricultural potential by Weidemann Associates, an economic development consulting firm near Washington. The report was prepared for the U.S. Agency for International Development in Pakistan.

The biosaline project in Punjab has already helped lift 50,000 households out of poverty by raising incomes. From 2007 to 2010, the increase of rice and wheat production on rehabilitated land totaled 417,016 tons, worth $122 million.

Dozens of enthusiastic farmers who gathered to meet a visitor to Sharbaga this past summer were unequivocal about how the agriculture project had improved their lives. Before the project, there were few ways to make money in the village aside from sporadic manual labor. Farmers owned small parcels of largely infertile land, and most of the men migrated to cities for work in factories or as temporary laborers.

Now, all the men said their farming incomes had double or tripled, to as much as $230 a month, compared with the $90 or less that they could earn working in a factory, and migration to the cities is declining.
---------
Reviving agriculture has been life-changing for many rural Pakistanis. Zeba Bibi, who also cultivates a garden in Liliani village, wants to know how she can make her mango trees healthier and more productive. She aspires to one day buy a tractor with extra income from crops grown on her family’s desalinated land. “We are looking forward to a better life,” she said.


http://www.nytimes.com/2011/11/17/business/energy-environment/soil-renewal-puts-pakistans-poor-on-stronger-ground.html

Riaz Haq said...

Here's an Express Tribune report on Carrefour hyper stores expansion in Karachi:

KARACHI: Hyperstar – a Dubai-based chain of hypermarkets – is starting its Karachi operations at Dolmen Mall, Clifton from today (Monday), a much anticipated development that came two years after its first Pakistaani store opened in Lahore.

Owned by Majid Al-Futtaim Group, Hyperstar is retail franchise of Carrefour, the world’s second largest retailer after Walmart. The company will kick off its opening ceremony at 2pm on Monday, a company official said, it will be the first hypermarket in Karachi. A retail hypermarket is different from wholesalers such as Makro.

Hyperstar Karachi will be spread over 100,000 plus square feet and display 30,000 products, said Mubashir Jalili, who is the vice president of development at Hyperstar Pakistan.

The store’s selling area is spread over 65,000 square feet while its warehouse is spread over 20,000 square feet. The mall can accommodate 3,000 cars, Jalili said, and a higher number of motorcycles.

In 2009, the company launched its first store in Lahore where it achieved remarkable results – achieving Rs1 billion in revenues in its first year and set to cross Rs3 billion ($35 million) this year, according to sources familiar with the matter.

The company – whose Lahore store alone attracts more than one million customers every month – has already identified four more locations for Karachi and three for Lahore, Jalili said. Hyperstar wants to expand its chain of stores first in Karachi and Lahore then in Islamabad and other metropolitan cities of the country, he added.

MAF group’s second hypermarket in Karachi is under construction at Lucky One Mall near UBL Sports Complex, the site which previously housed the now defunct Fazal Mill.


http://tribune.com.pk/story/291394/whats-in-store-citys-first-hypermarket-opens-today/

Riaz Haq said...

Quality seeds essential for agriculture development, reports APP:

Supply of good quality seed is the base of sustainable and developing economy. "For improving the seed quality Pakistan Agricultural Research Council (PARC) Scientists are making appreciable efforts in agriculture research sector", Dr Iftikhar Ahmad, Chairman, PARC said while speaking in a meeting here on Tuesday.
The meeting on "Review of Variety Release and Seed Production System in Pakistan" was jointly organized by PARC and International Center for Agricultural Research in the Dry Areas (ICARDA). The PARC Chairman further elaborated that seed supplied to farmer is an important measure for achieving enhanced agricultural production. "Due to lack of awareness and information about quality seed we are unable to achieve required productivity, and the bad quality seed has the potential to threaten food security for whole country", he added.
Foreign delegate from ICARDA, US Department of Agriculture (USDA), and International Maize and Wheat Improvement Center (CIMMYT) were present on the occasion. Provincial presentation under the guidance of Secretary Agriculture, Government of Punjab, Arif Nadeem and heads of other agricultural institutes from Sindh, Balochistan, and Kheyber Pakhtoonkhwa graced the occasion.
Dr Iftikhar Ahmed, who chaired the meeting emphasized on improved varieties for quality seed that are basic requirements for enhancing the agriculture productive as well as in livestock sector.
He said that seed certified Cooperation Department also established in Khyber Pakhtunkhwa, Sindh, Balutistan, Baluchistan as in functioning Punjab province for betterment of farmers and also launched a campaign for awareness of quality seed.
During a roundtable meeting of which 30 members participated from across the country discussed current challenges that are being faced to the seed sector.
The members of the meeting special focused on accelerating the transfer of new improved varieties to farmers. The meeting was a follow-up of a three-week mission sponsored by ICARDA during which seed specialist Dr Mishael Turner had wide-ranging consultations with both public institutions and private companies.
He was of the view that the threat posed by epidemics of rust diseases of wheat had raised awareness about the need to move new improved resistant varieties rapidly from research institutes to farmers through the variety release system.
These concerns enabled ICARDA to secure funding from USAID to compare variety release procedures in different countries.
Discussion among the participants covered many issues affecting plant breeding and the seed industry in Pakistan and provided an open exchange of opinions among the stakeholders. Key themes that emerged from the meeting included the need to strengthen public private partnerships and the ways to improve capacity building for all partners of the seed sector.
There was an agreement among the participants that the new Ministry of National Food Security and Research should take up these issues as soon as possible.


http://nation.com.pk/pakistan-news-newspaper-daily-english-online/Business/14-Dec-2011/Quality-seed-vital-for-agri-development

Riaz Haq said...

Here's an Express Tribune report tiled "Nokia Sees Pakistan Becoming a High-Growth Market":

KARACHI: Foreign delegates and local entrepreneurs discussed challenges facing businesses, sought greater industry-academia collaboration and highlighted business models to succeed in an emerging market at the 12th Management Association of Pakistan (MAP) Convention on Leadership Challenges for Business Success here on Wednesday.

Emerging markets will account for 80% of the world’s growth the next decade and Pakistan will be an important emerging market in future, Senior Vice President of Nokia India, Middle East and Africa Shivakumar said in a speech titled “Winning in emerging markets”.

Speaking to a conference packed with businessmen, Shivakumar – who is also the senior vice president of All India Management Association (AIMA) – said growth in developed economies has slowed down dramatically and the world is now looking at emerging markets, which account for 42% of population and 13% of income.

Pakistan is listed in four categories of emerging markets including Dow Jones 35 and emerging and growth level economies (EAGLES), he said. “Pakistan will be an important high-growth emerging market.”

In order to succeed in an emerging economy, he said, it is important to understand its segments and consumers. The emerging market consumers – most of whom live under $2 a day – are value-sensitive and not price-sensitive, he said and added entrepreneurs have to work on their business models to accommodate that segment of consumers who believe in the doctrine of “pay more, get more” and “pay less, get less”.

Sharing his experiences, he said, there are three things that he applied and succeeded. “Always put the country’s interest first, keep fixed costs very low and turn as many cost variables as possible,” he said.

“Never cut the features and offer your product at half the price. Consumers don’t want an incomplete product.”

Speaking to the participants earlier on, event’s chief guest and State Bank of Pakistan Governor Yaseen Anwar said it is time for all business leaders and managers to take the lead. Leaders must be more aware of the challenges facing the country – inflation, unemployment and power crisis.

There are no shortcuts to sustained economic development, Anwar said. “We need to develop the right strategies and then translate these strategies into action.”

AIMA President Rajiv Vastupal also addressed the event, saying IMF has lowered growth projection for both 2011 and 2012. “Today’s corporate leaders must focus on innovation to counter the global economic challenges,” he said. He elaborated the successful example of Apple’s iPad, which was launched during recession and earned a great success.


http://tribune.com.pk/story/306766/nokia-sees-pakistan-becoming-a-high-growth-market/

Nasir Zuberi said...

Dear Mr. Riaz, thank you very much for a insightful article & providing a consolidated document on the subject matter.
My only question is the picture, I am forced to taking this as an endorsement from your side that credit goes to PPP for this growth??
Where as facts depict a absolutely different picture, government is printing approximately Rs. 3 billion per day which is directly adding to inflation and this is not mentioned here.
Approaching Rural Markets has been the focus of various FMCGs, few of them are PTC, Unilever, Tapal, EBM, Natioanl Foods and many other similar organizations. But giving credit to PPP is not the right thing to do.
Please correct me on this, It will be a learning for me.
Regards.

Riaz Haq said...

NZ:"I am forced to taking this as an endorsement from your side that credit goes to PPP for this growth??"

The rural boom is not an accident. It's the result of the PPP policy of high support prices for commodities like wheat, sugar, cotton, etc which has transferred hundreds of billions of dollars from urban to rural economy benefiting the PPP vote bank.

The downside of it are as follows:

1. The high food prices have sparked high inflation, forcing the central bank to tighten monetary policy.

2. It has reduced government tax revenues because the agricultural income is not taxed by either the federal or the provincial governments, and resulted in growing budget deficits.

3. It has slowed industrial and service sectors in the urban areas because of credit crunch in the private sector.

Riaz Haq said...

Here's Punjab CM pitching his province's potential as the food basket to the world, reported by Daily Times:

Pakistan is as an emerging country of fully traceable products for the world to meet food supply demand of increasing global population.
Chief Minister, Punjab, Muhammad Shahbaz Sharif at a meeting with EU ambassadors said Punjab government has diverted substantial resources to develop science-based, vibrant and internationally linked agriculture sector that could not only meet the food security challenges but also compete in domestic as well as in international markets.
Punjab Government has entered into certification regime to produce fully traceable agricultural and livestock products to reach high-end markets of the developed world and to enhance export upto $2 billion annually, he added.
He said Pakistan has the potential to become 10th largest economy of the world after Germany. He apprised the distinguished envoys Punjab government has allocated Rs 2.024 billion for a mega project to improve supply chain of selected agricultural and livestock products for improving quality and introducing traceability as per international market standards and requirements.
He said participation of Punjab in the forthcoming International Green Week (IGW), Berlin Germany would be an excellent opportunity to showcase traceable agricultural and livestock products from Punjab and to project Pakistan.
He said display of traceable agricultural and livestock products at IGW would open the doors of high-end markets of the world leading towards generation of tremendous business opportunities for Punjab, Pakistan.
He said Punjab government was benefiting from Star Farm and Metro to enhance capacity of our producers, suppliers and traders to boost exports.
Ambassadors from 18 European Union countries including Lars-Gunnar Wigemark, EU ambassador to Pakistan were present in the meeting.
Lars-Gunnar said Punjab has tremendous potential in agriculture and livestock sectors to get its due share in global trade of food products. He lauded Punjab government for adopting techniques and standards required for food safety and quality, and linking its traceable agricultural products to the global markets.
Arif Nadeem, Secretary Agriculture said 15-20 fully traceable fruits, vegetables, rice and meat products would be showcased at IGW for which capacity of about 25 exhibitors has been built for compliance of Global GAP and International Featured Specifications (IFS) by Star Farm.
He told METRO would organise Pakistan week in their chains in Berlin, parallel to the IGW event, therefore, fresh produce to be brought in Germany would not only be displayed and sold at the event but also at the Metro stores/chains in Berlin.
He said a vendor selected for the event has prepared thematic design of Pakistan pavilion, which contains Business to Business (B2B) and Business to Consumer (B2C) areas for display of products.
The concept, ‘farm to fork’ will be demonstrated through cooked dishes of traceable products as well at the
occasion, he added.
Rizwan Khan, Vice Chairman, Punjab Board of Investment and Trade highlighted the significance of International Green Week scheduled for January 20-29, 2012 at Berlin, Germany and briefed about aesthetics and media coverage of the event, embassy coordination and back end support in terms of product development.
The diplomats of EU Countries and others expressed satisfaction on the level of preparedness of Punjab government for participation in the forthcoming IGW, Germany.


http://www.dailytimes.com.pk/default.asp?page=2011\12\18\story_18-12-2011_pg5_7

Riaz Haq said...

Here's an Express Tribune story speculating about Wallmart entry in Pakistan retail market:

...“We have not made any announcements concerning Pakistan,” said Megan Murphy, Walmart’s international corporate affairs manager in an e-mail. Walmart does not comment on market entry speculation, she added.

Murphy, however, said their priorities are to “concentrate on the markets where we already have operations and look for growth opportunities in markets where customers want to see us and where it makes sense for our long-term growth.”

While Pakistan clearly does not fall into the first category, its regulatory environment has been far more welcoming than neighbouring India, where the government was recently forced by populist protests to roll back reforms that would have allowed Walmart and other foreign retailers in. The Pakistani retail market, currently estimated at $42 billion and rapidly growing, is viewed as an attractive opportunity for foreign investors.

“To say Pakistan is not on Walmart’s opportunity radar screen, I don’t agree,” said Afnan Ahsan, CEO of Engro Foods, one of the largest consumer goods companies and a subsidiary of the Engro Corporation.

Pakistan is a very large and concentrated consumer opportunity. Karachi alone accounts for 40% of any consumer business, Ahsan said. “It is on every big player’s radar screen,” he added.

Despite recent troubles, Pakistan’s $210 billion economy has been mentioned by several global analysts as a potent force to be reckoned with in the future, including Goldman Sachs’ Jim O’Neill, the man famous for creating the term BRICs. Goldman includes Pakistan in its list called the Next Eleven, economies that are expected to become some of the most important sources of global growth.

The growing middle class – one-third of the country’s population of 180 million, of which 55% age below 30 – has already prompted international players like Germany’s Metro Cash and Carry and France’s Carrefour to enter the market.

MCC has recently acquired Makro and now has a network of 10 stores in Karachi, Lahore, Faisalabad and Islamabad. Hyperstar – Carrefour’s joint venture with the UAE’s Majid Al Futtaim Group – has one store each in Karachi and Lahore. It also announced opening of four more stores in Karachi and extend its chain to every metropolitan city in Pakistan.

Besides international wholesalers and retailers, local supermarkets – Imtiaz Supermarket in particular – have also been expanding their businesses.

Government officials also have a more welcoming attitude. “Personally speaking, Walmart will be very viable in Pakistan,” said Liaquat Ali Gohar, head of marketing at the Small and Medium Enterprise Development Authority. He said that the retail sector so far has not been able to meet the overall demand.

While the retail sector has grown significantly over the last few years, most of the development took place in the big cities. Misbah Iqbal, a consumer goods analyst at AKD Securities, pointed out that the rural people – about 55% to 60% of the total – are still underserved.

Pakistan is rapidly urbanising, Iqbal said. Despite many new entrants in the supermarket business, all of them are attracting huge traffic and growing significantly, she said, though largely in the major metropolitan areas.

Poor infrastructure in rural areas prevents investment. Nevertheless, many consumer goods companies are actively marketing to rural consumers, creating awareness about branded products, Iqbal said. Retailers will automatically benefit from that, she added....


http://tribune.com.pk/story/311892/retail-expansion-worlds-largest-chain-silent-on-entering-pakistani-market/

Riaz Haq said...

Proctor & Gamble Pakistan wins award for corp social responsibility, reports The News:

The US Secretary of State Hilary Clinton presented Proctor & Gamble (P&G) with the thirteenth annual Secretary of State’s Award for Corporate Excellence (ACE) for the company’s exceptional corporate social responsibility (CSR) efforts in Pakistan.

Bob McDonald, Chairman of the Board, President and Chief Executive Officer of The Proctor & Gamble Company accepted the award in a ceremony held at the State Department in Washington, DC on Wednesday.

US Consul General in Karachi William Martin and P&G Pakistan Country Manager Faisal Sabzwari joined the ceremony in Washington via digital video conferencing.

Addressing a news conference at the Karachi Consulate, Martin said that this was the first time that a firm based in Pakistan had received this prestigious award.

He said this recognition is likely to help boost foreign investments in Pakistan as international organisations are bound to take notice of the quality work being conducted in the country. He stated that this award signified the interest American investors have in Pakistan.

He further said that this award had been presented to a firm run and managed by Pakistanis which highlights the progressive social attitude of the people here. Sabzwari said that P&G Pakistan had made massive investments in the country, the last one being a $40 million investment into a laundry manufacturing facility.

He also mentioned the new plant established by the organisation in Port Qasim. Speaking about the award, he said that this year, 62 nominations were received for American companies operating in 38 different countries. Of these, some 13 companies were selected as award finalists. P&G Pakistan and Nigeria were selected as the winners among this group.

P&G Pakistan was awarded the ACE for the company’s efforts under its ‘Live, Learn, and Thrive’ CSR programme, including humanitarian assistance efforts to provide clean drinking water, food, hygiene products. It also made medical care available to over 1.9 million affected residents after the devastating 2010 floods. It also established a network of schools and supported orphanages. “A total contribution of over $2 million was made in flood aid,” he said.


http://www.thenews.com.pk/TodaysPrintDetail.aspx?ID=88426&Cat=3

Riaz Haq said...

Here's an Express Tribune story on the opening of British Dept store Debenhams:

When Pizza Hut opened its first franchise in Pakistan in 1993, few were familiar with the concept of franchising. Soon it became a household name, and was followed by other fast food franchises. Many observers viewed these import-oriented luxuries in an underdeveloped country like Pakistan, with scepticism and considered it a waste of our precious foreign exchange. However, the trend of foreign retail outlets continues to expand into other products, services, and brands.

The press launching of the 200 years old British department store, Debenhams’ branch in Karachi earlier this month on 27,000 square feet space, at the upbeat Dolmen City Mall, was attended by important personalities, like, UK Minister of State for Trade and Investment, Lord Stephen Green and UK Cabinet Minister Baroness Sayeeda Warsi. It appears to have pushed the retail franchising business to another level. The skeptics are turning into fans.

This will be the first international department store in Pakistan offering a complete range of product categories synonymous with Debenhams, including a full range of women’s, men’s and children’s clothing, as well as, home, beauty and accessories. It is promised to be a truly world class shopping experience.

“I am very bullish on retail, not just for local but also foreign brands,” said Yasin Paracha, Managing Director, Team-A Ventures (Pvt) Ltd, which is the franchisee in Pakistan for Debenhams. “Foreign brands will perhaps give Pakistan that softer image we need; that we are normal people, with normal tastes and preferences and actually do drive in cars and wear western clothes! Furthermore, foreign brands will give the local brands the required positioning on the brand scene and will give customers the choice to decide where they want to spend their money.”

It is worth noting that before the fast food franchises, auxiliary industries like the home-delivery service and suppliers of quality poultry, meat etc, according to modern quality standards, hardly existed.

Paracha is very upbeat about the employment possibilities this presents. “This creates immense number of jobs; the average requirement per 1,000 square foot, of retail space is around six, which means Dolmen City, with a leasable area of 650,000 square feet will provide jobs to around 4,000 people! These will be mostly undergrads who might struggle to find good jobs in offices. Here they have the chance to work in a comfortable environment, look nice, and develop the discipline to deal professionally with customers. It also provides students the opportunity to work. Almost every teenager in the UK has worked in a retail environment.”

About government revenue and taxation, Mr. Paracha says, “This adds immense revenue, as most brands will progress towards declaring and paying taxes, they are too much ‘in your face’ to avoid it. Furthermore, instead of considering this as an outflow of foreign exchange, it actually saves it, as most people spend on shopping when they travel, they will convert to shopping within the country if they have the option and the right environment.”...


http://tribune.com.pk/story/325554/the-fast-track-growth-of-foreign-retail-franchises-in-pakistan/

Riaz Haq said...

"As the green revolution tapered off, a poultry revolution began; in the late 1970s. Ever since, Pakistan has been gnawing away at broiler chicken and there’s no turning back", wrote Punjab's director general of board of investments in a recent Op Ed in Dawn.

In 2011/12 K&N’s expects to produce 80 million layer and broiler chicks, reports thepoultrysite.com.

In the 1960’s and 1970’s, obtaining safe, reliable sources of poultry feed was an insurmountable challenge in Pakistan. This led Khalil to set up his own feed mill to produce feed for K&N’s operations at Karachi in 1971. With the growing need of feed for the integrated production operations in Central Punjab province and Northern areas of the country, a feed mill established by a multi-national company at Lahore, was acquired by K&N’s to take advantage of low-cost feed ingredients available in the Central part of Pakistan.

The growth of commercial poultry production through the decades changed the mindset of consumers towards farm raised broilers and eggs, helped by lower prices and greater availability. Today, Desi chicken and eggs are produced in lower volumes and considered more of a delicacy.

Yet the strength of the live/wet chicken market culture, the negligible overheads of roadside sales – a butcher’s knife costs less than US$1 – and the reassurance of Halal slaughter remain significant influences slowing the uptake of processing, says Adil Sattar.

Practical problems, particularly the limited availability of cool chain facilities and frequent power breakdowns, have to be overcome with production and distribution of processed products inevitably involving high overheads.

"Earlier, within our industry, poultry processing was considered a non-viable poultry business activity as many firms had tried but ended up closing down their operations," says Adil. "At K&N’s, we endeavoured to develop the market, and other companies are now looking to start processing operations."

Today, chicken is the most popular protein source in Pakistan, primarily through the industry’s growth and success leading to lower cost and widespread availability, with per-capita consumption about 7kg (15.4lb) per year. The tradition is to eat chicken at home, always skinless cooked in curries, with rice or barbecued.

Restaurants offer local cuisine including a variety of curries, barbecue dishes and different types of rice, with a number of upmarket cafes and restaurants serving western cuisine and many of the international fast food caterers such as McDonald’s, KFC, Pizza Hut, Nando’s, Hardees and Subway also present.

Riaz Haq said...

Here are excerpts of Express Tribune story on Nestle Pakistan's record revenue and profits:

Even as the economy continues to grow sluggishly, Nestle Pakistan announced another year of record breaking profits, which grew by 13.5% to reach Rs4.7 billion – or about Rs102.94 per share – on the back of a 26% increase in revenues, which reached Rs64.8 billion.
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Managing Director Ian Donald – a South African national who has been with the global parent company for 40 years – believes the key for Nestle to grow in Pakistan is primarily by growing the packaged foods market.

“Take the example of yoghurt. We are 80% of the market when it comes to packaged yoghurt. But that packaged segment is only 2% of the total market,” he said in an interview with The Express Tribune. “So it doesn’t really matter what our market share is. We need to grow the whole packaged segment.”

A key constraint to growing that segment, however, seems to be the limited purchasing power of the ordinary Pakistani consumer. “Our single biggest challenge is how to get the right quality product to the consumer at a price that they can afford,” said Donald.

Over the past year, inflation has not helped matters. While Nestle’s global food portfolio is highly diversified, in Pakistan it focuses heavily on milk and dairy products. As milk prices continue to rise by more than 20% a year, the company has not been able to pass on the entirety of that effect to its customers. This is at least partially reflected in its gross profit margins, which shrank by 1.2% to 25.8% in 2011. Energy costs have continued to go up as well. Nonetheless, the company was able to grow the volume of products sold by a healthy 12%.
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“We have a lean mindset,” said Giuseppe Bonanno, the company’s head of finance and control in Pakistan. The company’s operating costs are certainly lower than most of its competitors. For instance, Nestle’s logistics costs are about 12% of revenues, compared to between 18% and 19% for both Unilever Pakistan and Engro Foods, two of its biggest competitors. Part of the advantage is economies of scale: Nestle about as big as both of its rivals combined. But part of it, said Donald, is that the company invests heavily in its infrastructure. In 2011, the company invested about Rs8.9 billion in building up its capacity.

Nestle already has a gigantic infrastructure in Pakistan. The company collects milk from over 190,000 farmers spread out over an area of about 145,000 square kilometers.

Another part of its growth strategy seems to be augmenting and developing its existing brands rather than adding newer brands to its line-up in Pakistan. “We cannot afford to invest in too many brands because we cannot grow all of them,” said Donald.

However, the company has introduced brands such as Nido Bunyad, which is a powdered milk product targeted to the rural consumer at a price that is competitive with non-packaged milk.

The rural economy seems to be a key market for Nestle. “It seems to us that the rural economy is growing faster than the urban economy. However, we are also consciously driving growth in the rural markets,” said Donald.

The company identifies its fastest growing markets as Peshawar, Multan and areas that it describes as “peri-urban”, areas that lie on the outskirts of most large cities and form a part of its metropolitan area.

Nestle’s growth in Pakistan has been a mixture of both organic as well as through acquisitions. When asked about whether Nestle might pursue acquisitions in the future, Donald replied: “We are always open to considering opportunities.”

As part of its plan over the next three years, the company will spend about 320 million Swiss Francs in growing its presence in Pakistan.


http://tribune.com.pk/story/333671/despite-stellar-earnings-nestle-pakistan-aspires-for-better-results/

Riaz Haq said...

Unilver Pakistan reports record sales and profit, according to Business Recorder newspaper:

Unilever Pakistan Limited has delivered profit after tax of Rs 4.094 billion in the year ended December 31, 2011, up 25 percent on previous year's profit of Rs 3.273 billion.

The company's earning per share increased to Rs 308 in the period under review against Rs 246 in the same period a year back.


The board of directors of the company in its meeting held here on February 9, recommended final cash dividend of Rs 202 per ordinary share ie 404 percent.

With the interim dividend of Rs 105 per ordinary share already paid during the year, the total dividend for the year 2011 amounts to Rs 307 per ordinary share of Rs 50 each against Rs 246 per ordinary share paid in 2010.

Total profit distributed byway of dividend amounts to 99.7 percent in 2011 against 99.9 percent in 2010.

The final dividend will be payable to the members on the number of ordinary shares held by them at the close of business on March 27.

According to the financial results sent to Karachi Stock Exchange, the company's sales increased by 16 percent to Rs 51.876 billion in 2011 against Rs 44.671 billion in 2010.

The cost of sales increased to Rs 33.792 billion against Rs 30.094 billion.

The company said the operating conditions in Pakistan remained tough as economic growth for the second consecutive year was marred by floods, prolonged power outages, rising commodity costs and adverse security environment.

Notwithstanding this, consumer demand remained resilient.

Unilever further strengthened its foothold by launching seven new brands - the highest ever in a single year.

The company now has a footprint that is significantly broader and a reach much deeper, helping millions of Pakistanis feel good, look good and get more out of life, it added.

Home and Personal Care continues to deliver double digit growth in key categories; laundry, hair care and skin care.

Six new brand launches, product renovations and market activations continue to be the drivers.

Beverages sales grew mainly on the back of price increases following an inflationary material cost environment, compounded by government levies.

Smuggled tea continues to pose a threat to branded players; high government levies lead to high consumer price, deny the formal sector fuel to grow and provide smugglers incentive to evade.

Despite challenges, ice cream sales grew by 11 percent fuelled by strong innovation and launch of Fruttare.

Greater focus on costs, a better product mix and pricing actions helped improve gross margins.

Input cost continued to increase on the back of rising commodity costs, margins, however benefited from improved scale and timely but measured price corrections.

This helped preserve consumer value.

Greater scale and improved mix led to increase in gross and operating margins by 223bps and 73bps respectively, resulting in 25 percent higher profit after tax and earning per share.

The company's profit before taxation increased to Rs 5.925 billion in 2011 as compared to Rs 4.780 billion in the year 2010.


http://www.brecorder.com/company-news/single/601/235/1152662/

Riaz Haq said...

Here's a Fiber2Fashion report on Pakistan's bumper cotton crop:

With around 14,548,845 bales already reaching the ginneries by March 15, Pakistan’s cotton output for the current season is expected to surpass record 15 million bales, according to Pakistan Cotton Ginners Association (PCGA).

PCGA Chairman Amanullah Qureshi said the country’s cotton output for next season is pegged at 17 million bales.

He reiterated the need for formulation of National Cotton Policy in consultation with all the industry stakeholders including ginners and growers, so as to protect their interests.

Mr. Qureshi said the Government should develop a mechanism to stabilise the cotton prices, instead of leaving the farmers and ginners at the mercy of textile mill owners.

He claimed that all production estimates presented by Governmental agencies and departments have proved to be incorrect, while those by PCGA have proved right.

He also called upon the Government to approve a bailout package for cotton cultivators who suffered a loss of over Rs. 225 billion due to textile millers lobby.

The PCGA Chairman urged the Government to direct the Trading Corporation of Pakistan (TCP) to buy a minimum 0.7 million bales of unsold cotton from ginners.


http://www.fibre2fashion.com/news/textile-news/newsdetails.aspx?news_id=109146

Riaz Haq said...

Here's Express Tribune on rising sales of international global brands in Pakistan:

Faisalabad has historically been a city that conducted the manufacturing for global brands. Yet as the middle class in Pakistan expands, it appears that many of the city’s residents are affluent enough – or aspirational enough – to become consumers of those brands, resulting in booming sales for retailers and local franchisees of international brands.

Most of the sales of branded clothing and jewellery is taking place through franchises that have bought the right to sell these products to consumers in Faisalabad. The demand for these products is fuelled by the vast segment of the middle class that can afford to buy global brands but not necessarily to fly out to Dubai – or even to Karachi and Lahore – to buy them.

A series of interviews conducted by The Express Tribune, both amongst consumers and retail managers, suggests a voracious and growing appetite for branded clothing lines. And it seems that the economic slowdown has done nothing to decrease sales in this segment of the market.

“The higher income buyers of international brands never seem to get affected by economic disorder in the country,” said Sohail Safdar, a franchise manager for Charles & Keith, the Singapore-based company that sells its own brand of women’s shoes and bags. “Many of our buyers do not want to have to travel abroad to buy these products. That has created a boom in retail sales and led many retail franchise owners to think hard about expansion.”

“Sales of international brands keeps getting better and better and has begun to lure in even more brands,” said Syed Suleman Raza, a manager at one of the Nike franchises in Faisalabad.

The underlying cause of the trend seems to be a willingness by a large part of the Pakistani middle class to be willing to pay significantly higher prices for what they perceive to be higher quality. And given their longer durability, many branded products are seen as good value for money.

“Branded tend to be more and last two to three seasons,” said Sonia Razzaq, a shopper at one of the upscale malls in Faisalabad.

Nonetheless, prices are steep for many products, with shoes frequently costing Rs5,000 per pair or more. Jackets, shirts and women’s dresses go for even higher, commanding prices in the range of Rs10,000 or higher. These prices are well beyond the reach of most ordinary Pakistanis and yet a sizeable proportion of the population can easily afford them.

“Our customers are very brand-conscious and buy these products without any hesitation at the price tag or any attempt at bargaining,” said Sheikh Sultan, a manager at a franchise of The Body Shop, a UK-based cosmetics brand.


http://tribune.com.pk/story/354707/the-rise-of-the-pakistani-middle-class-international-brands-compete-for-faisalabads-attention/

Riaz Haq said...

Here's an APP report on Pak food exports so far this fiscal year:

The exports of fish and fish preparations surged by 14.69 percent during the first eight months of current fiscal year (2011-12) against the corresponding period of last year.



The exports of fish and fish preparations were recorded at $195.284 million during July-February (2011-12) as against the exports of $170.274 million during July-February (2010-11), according to data of Pakistan Bureau of Statistics (PBS).



However, in terms of quantity, the fish exports witnessed nominal increase of 0.34 percent by going up from 74,265 metric tons to 74,518 metric tons.



On month-on-month basis, the seafood exports also witnessed positive growth of 13.88 percent during February 2012 when compared

to the same month of last year.



The fish exports during February 2012 were recorded at $21 million against the exports of $18.441 million during February 2011.



However, as compared to the exports of $21.401 million recorded during January 2012, the exports during February witnessed negative growth of 1.35 percent, the data revealed.



In terms of quantity, the fish exports increased by 5.57 percent in February 2012 when compared to the exports of February 2011, however decreased by 2.62 percent when compared to the exports

of January 2012.



The overall food exports from the country witnessed nominal increase of 0.59 percent during the first eight months by going up from $2.601 billion during July-February (2010-11) to $2.616 billion in July-February (2011-12).



The major food products that witnessed positive growth in exports included.



The food products that witnessed increase in exports during the period under review included rice (other than basmati), exports of which increased by 2.91 percent, fruits (15.02%), leguminous vegetables (1,315%), tobacco (37.85%), oil, seeds, nuts and kernels (59.84%), meat and meat preparation (16.46%) and other food products

(45.80%).



The commodities that witnessed negative growth in exports included basmati rice (17.78%), vegetables (36.69%), wheat (53.22%) and spices (1.49%).



The overall exports from the country during the period under review witnessed negative growth of 0.48 percent by going down from $15.263 billion to $15.189 billion.



Imports into the country, during the period, increased by 16.36 percent by going up from $25.600 billion to $29.788 billion.



Based on the figures, the trade deficit during the first eight months of the current fiscal year was recorded at $14.599 billion, against the deficit of $10.337 billion last year, showing an increase of 41.23 percent.


http://www.thenews.com.pk/article-42262-Pakistan-seafood-exports-surge-by-15pc-in-8-months

Riaz Haq said...

Here's a BR report on State Bank of Pakistan's ag loans target for the year:

The State Bank of Pakistan has set Rs 285 billion target for disbursement of agriculture loan among small farmers for current fiscal year.

Director Development Finance of SBP Karachi, Dr Muhammad Saleem said this while addressing "Agricultural & Industrial Awareness Convention-2012" here on Tuesday.

Khyber Pakhtunkhawa Higher Education Minister Qazi Muhammad Asad Khan participated as chief guest in the convention organised by the State Bank, Rawalpindi in collaboration with commercial banks and insurance companies.

More than 120 stalls of handicrafts, clothing agriculture equipment, handmade beautiful jewellers, banking products and food, etc, were set up by women from various organisations and banks to promote rural culture and potential of trade in these areas.

Horse dancing and culture displays made this event more beautiful.

More than 1500 people including students, farmers and women participated in the convention.

Chief Manager State Bank Akhtar Raza, Group Head of United Bank Ltd (UBL) Jameel Ahmed, Vice Chancellor Hazara University Haripur, Professor Dr Sahawat and others were also present on the occasion.

Dr Muhammad Saleem said the SBP had set Rs 270 billion agriculture loans target for small farmers in the previous financial year while actually Rs 260 billion loan was distributed among farmers.

He said that agri loan is being given to farmers through one-window operation.

He said farmers could give better output if banks provide them loan in time on easy instalments.

"Agriculture is backbones of our economy and its share in Gross Domestic Product (GDP) is 21 percent.

Livelihood of 47 percent people is directly or indirectly is linked with agriculture sector.

The SBP is playing pivotal role in progress of agriculture sector by providing loans especially to small farmers," he said.

Dr Muhammad Saleem said the SBP formulates policy in consultation with all the stakeholders including farmers.

The SBP changes its policy with passage of time by keeping the necessities of farmers in view.

Addressing the convention, Khyber Pakhtunkhawa Higher Education Minister Qazi Muhammad Asad Khan said land of Haripur is fertile and the farmers of this area can give maximum production if they were given some financial support for seed, fertiliser and tractor and other inputs necessary for increasing production.

He urged the SBP to set up its branch in Haripur for promotion of small industries and agriculture sector.

About the Haripur University, He said Haripur has also become a part of the community of 120 universities.

"The government should increase budget for education to 4% of GDP.

The quality of education can only be improved by increasing the budget for this sector.

Group head of UBL, Jameel Ahmed said the State Bank has good legal framework and governance in the region.

The employees of the Bank are servants of people.

"It is your money and used to benefit you," he added.

Vice Chancellor Hazara University Haripur, Professor Dr Sahawat said knowledge-based economy and use of latest technology is of vital importance for progress of agriculture sector.


http://www.brecorder.com/agriculture-a-allied/183/1175388/

Riaz Haq said...

Here's a Zee News report on crop yields in South Asia:

Productivity of major food crops such as wheat, rice, maize and pulses in India is almost half of that in neighbouring China, according to a data.

In fact, yield of staple grains like maize and pulses in India is even less than that of countries like Pakistan, Bangladesh, Nepal and Myanmar, the data presented in Parliament by Agriculture Minister Sharad Pawar last week said.

The productivity of rice in India is 3,264 kg per hectare, while in China it is 6,548 kg a hectare, the data compiled by UN's agriculture body FAO for the year 2010 said.

It is also high in Bangladesh at 4,182 kg/hectare and Myanmar at 4,123 kg per hectare.

China also tops the list in wheat with yields of 4,748 kg per hectare, whereas for India it stands at 3,264 kg a hectare.

India stands at the bottom in terms of maize and pulses productivity compared to China, Pakistan, Bangladesh, Nepal, Sri Lanka and Myanmar.

Bangladesh leads the tally in terms of maize yields with 5,837 kg per hectare, followed by China at 5,459 kg a hectare, Myanmar 3,636 kg/hectare, Pakistan 3,558 kg per hectare, Nepal 2,118 kg every hectare, Sri Lanka 2,806 kg a hectare and in India it is 1,958 kg/hectare.

In pulses, China tops the list with 1,567 kg per hectare followed by Myanmar at 1,114 kg a hectare, Bangladesh at 871 kg/hectare, Nepal 791 kg per hectare, Pakistan 762 kg every hectare, while in India it stands at 694 kg per hectare.

Pawar said that productivity depends on factors like rainfall, extent of inputs such as fertiliser, micro-nutrients, seed replacement rate, duration of crop, extent of area sown under any crop and the nature of lands used for cultivation.

To enhance the agricultural production, the government is working on frontier areas of research like marker assisted selection, stem cell research, nanotechnology, cloning genome resource conservation, Pawar said.

The National Institute of Abiotic Research Management has been established in Maharashtra to address issues related to impending climate change, he added.

That apart, the National Institute of Biotic Stress Management and Indian Institute of Agricultural Biotechnology are in the pipeline for undertaking high quality research, the minister added.


http://zeenews.india.com/business/news/economy/major-crop-productivity-in-india-just-half-of-that-in-china_44529.html

Riaz Haq said...

Here's an ET story of a celebrated CEO's departure in Pakistan:

(Asad Umar's) tenure at Engro has certainly been a remarkably successful one. When Umar took over as President and CEO of the company in January 2004, Engro was largely just a fertiliser manufacturer with a small petrochemical subsidiary. Under his leadership, however, the company turned into a diversified industrial conglomerate, with interests ranging from fertilizers, foods, petrochemicals, chemical storage, energy and commodity trading.

Small wonder, then, that Dawood was effusive in his praise of Umar when announcing the departure to the company’s employees, noting that under his leadership, Engro’s revenues had grown from just Rs13 billion in 2004 to Rs114 billion in 2011, growing at an annualised rate of nearly 36.4%. (Inflation during that time averaged 12.6% per year.)

Even within the core fertiliser business, Umar took Engro from being a local player to a globally competitive one, leading the firm into the $1.1 billion project that set up the world’s largest single-train urea manufacturing plant in Pakistan.

Umar’s 27-year career at Engro began in 1985, when the company was still a subsidiary of ExxonMobil, the global oil giant. “I still remember the exact figure of my first salary: Rs8,170 per month. My boss at the time said ‘Well, frankly they are paying you too much.’” As CEO of Engro Corporation, Umar was paid Rs68.6 million for the year 2011, which comes to a monthly salary of Rs5.7 million.

In addition to his salary, Umar, 50, was also paid in stock and currently owns about 2 million shares of the company, with options to buy another 924,000, according to Engro’s latest available financial statements. At Monday’s closing price of Rs102.47 per share, that puts the value of Umar’s stocks and options at over Rs300 million.

Umar represents the growing class of executives trained by the country’s business schools who made it big by working their way up the corporate ladder rather than being born into privilege. Umar graduated from the Institute of Business Administration in Karachi in 1984, working for a short stint at HSBC Pakistan before moving to what was then Exxon Chemical Pakistan as a business analyst.

He was the only Pakistani employee of Exxon working abroad (in Canada) when the famous management buyout of Engro took place in 1991. Umar came back to Pakistan and in 1997 was appointed the first CEO of Engro Polymer & Chemicals, the group’s petrochemical arm.

When became president of the company in 2004, he immediately made the company take a global perspective, becoming the first Pakistani private sector firm to hire the top (and expensive) US consulting firm McKinsey & Company to help create the Engro’s strategy. Engro changed its corporate structure as a result of that engagement and is now on a global expansion kick, buying out a US-based food company and considering expanding into the fertiliser business in North Africa to supply the European market.


http://tribune.com.pk/story/365621/corporate-titan-after-27-years-at-engro-asad-umar-calls-it-a-day/

Riaz Haq said...

Here's a Business Recorder summary of packaged food giant Nestle Pakistan:

Nestlé Pakistan seems to be doing well in 2012.

The Companys financials for the first quarter ended March 31, 2012 show that the foods giant posted a profit after tax of Rs1.664 billion.

Nestlés product portfolio in Pakistan is truly diverse, which includes dairy products such as Milk Pak, Nido, Everyday and yogurts; beverages like Fruita Vitals, Milo and Nescafe; and food products like Maggi noodles, Cerelac, breakfast cereals, and confectionaries.

The Companys net sales crossed the milestone of Rs20 billion in 1QCY12, as the milk and nutrient businesses seem to be growing.

The competitive landscape has drastically changed for Nestlé Pakistan in recent years following the arrival of Engro Foods and strong performance of Unilever Foods.

Nestlé has had to deal with multiple competitors across various product lines; however, its consistent revenue growth shows that the size of the pie is expanding as the competition is penetrating deeply into the addressable markets.

Nestlés topline grew by a strong 24 percent during 1QCY12, but somewhat diluted by a larger, 25.4 percent increase in cost of goods sold.

Resultantly, these costs consumed 72.7 percent of net sales, and brought down the gross margin by 78bps compared to same period last year.

The spiraling prices of key commodity inputs (wheat and milk) along with the energy crisis continue to weigh heavy on the margins.

Nearly 15 percent increase is seen in the distribution & selling expenses, whereas the administrative expenses rose by a whopping 31 percent.

Nestle spent Rs12.53 on these two expense heads for every 100 bucks it earned in the quarter under review.

However, compared to the competition, Nestlés distribution & administrative expenses are controlled due to its vast network and economies of scale.

Nestlés non-operating performance is clearly an area that needs to complement the decent operating performance.

For instance, the finance cost jumped by a whopping 125.7 percent; the other operating expenses increased by 52.2 percent; and the other operating income decreased by 52.17 percent.

Healthy topline growth, coupled with somewhat controlled operating expenditures, ensured that Nestlé posted a double-digit profitability growth during 1QCY12.

Yet the net margin dropped by 93bps to come down to 8.24 percent, owing to the slippages mentioned earlier.

However, the profit of over 1,600 million rupees is sweeter still, especially for shareholders who earned Rs36.71 on each share during the period.

Despite the rising input costs and energy issues, Nestlé is well-placed to capture a bigger slice of Pakistans food market which is forecasted by various estimates to grow in double-digit in the coming years.

Services like Nestlé Professional - which markets food and beverage solutions for out-of-home establishments like restaurants, offices, airports, universities and hospitals - can also boost revenues.

Nestlé may be leading in many of the product lines it operates in.

However, the packaged goods share is still a fraction of the total market, and that is where the promise for sustained future growth lays.


http://www.brecorder.com/br-research/42:foods/2438:nestle-pakistan-limited/?date=2012-04-18

Riaz Haq said...

Here's an APP report on Pakistan's dairy industry:

Pakistan can easily triple its milk production by employing simple methods while latest measures can further milk output by 900 per cent.

Pakistan has impressive dairy industry which can be exploited to its real potential, said Economic Councilor Embassy of Netherlands, Ian Van Ranselaar here on Thursday.

He said a developed environment can help revolutionize Pakistan's dairy industry.

"A Dutch cow produces nine times more milk a Pakistani cow or buffalo can produce", he said and added that some measures are needed to bring per cow production of both friendly countries at par.

The Dutch diplomat was talking to Vice President Federation of Pakistan Chamber of Commerce and Industry (FPCCI) Mirza Abdul Rehman, Chairman Coordination Atif Akram Sheikh and Chairman Media Malik Sohail.

Ian Ranselaar further said that 16 Pakistani major dairy stakeholders are due to leave for Netherlands to know the latest trends and techniques.

He said currently balance of trade is in favour of Pakistan and they are working on various projects to boost Pakistan economy.

The diplomat said various Pakistani products including rice, textiles, surgical goods, sports hardware, leather products and fruits are of superior quality but local entrepreneurs lag behind in branding which has been identified as a major obstacle.

"Security situation in Pakistan is not as bad as perceived in many countries which is shying away investors. Pakistan should improve its perception", the diplomat remarked.

The Dutch diplomats were all praise for the tireless efforts of Pakistan Commercial Councillor in Hague.

On the occasion, Mirza Abdul Rehman said with 180 million population, Pakistan has great potential for investment, vast space for business activities and there is no issue of law and order.

Atif Akram Sheikh said both the countries have good political ties which should supplement our trade relations.

Pakistan has three times the animals that Germany has, but yields are one-fifth of Germany's and one-third of New Zealand, representing a significant loss, he added.

Business community is satisfied with the efforts of the Ambassador Hugo Gajus Scheltema, said Sheikh, adding that issuance of visa should be made easier.

Malik Sohail said being the fourth largest producer of milk in the world, Pakistan produces 35 billion liters of milk from around five million animals which is worth Rs.177 billion.

"Our dairy sector is growing by five per cent per annum while demand is increasing by fifteen per cent which calls for urgent measures to address issues effecting production", he underlined.

Pakistan is processing only two per cent of milk production which if increased will help boost living standard of rural population and economy.


http://www.brecorder.com/top-news/1-front-top-news/56904-pakistan-has-potential-to-enhance-milk-production-by-900pc-.html

Riaz Haq said...

Major market research firm Ipsos comes to Pakistan, according to The News:

The launching ceremony of Ipsos, Pakistan was held at a local hotel of the city on Tuesday, hosting over 200 representatives of leading companies in Pakistan. The participants included CEOs, marketing and research heads of national and multinational companies from the FMCG and services sectors.



The chief guest of the event was the global founder and co-president of Ispos, Didier Truchot. He was accompanied by the chairman and CEO of Ipsos MENA, Edouard Monin and Global Group CFO Laurence Stoclet. While foreign investors are usually reluctant about investing in Pakistan, the launch of Ipsos in the country denotes the trust of the group’s stakeholders in the potential of marketing research business in Pakistan.



Didier Truchot said that he had high hopes for tapping the tremendous potential of the research industry in Pakistan owing to immense demographic dividends of the resource-rich country. “Ipsos believes in imparting knowledge and expertise across various countries it is working in. Our global presence gels in with the locally intelligent need gap assessment and deliverance of services accordingly. I am happy that Ipsos has already been well-received in Pakistan and is a critically acclaimed research company in terms of its futuristic and client-driven approach.” Ipsos co-president said that the success story narrated by Ipsos across the globe is the result of a vision held by sound intellectual deeds of professional researchers. “Ipsos is owned and run by researchers and this fact speaks volumes for its intellectual and professional supremacy over other competitors in Pakistan.”



Ipsos Pakistan is headed by Abdul Sattar Babar, a researcher. During his inaugural speech, he said: “This is a moment of pride for us that Ipsos is formally announcing its anchoring in Pakistan. I am happy that our global co-president made it to Pakistan to attend this event and his presence ensures transfer of knowledge and technology in a wide range of marketing research services that are not fully developed in Pakistan. Ipsos Pakistan is all geared up to make a headway in the industry based on trust, which certain clients had already conferred on us even prior to this formal launch.”


http://www.thenews.com.pk/Todays-News-3-114091-World%20s-3rd-largest-marketing-company-anchors-in-Pakistan

Riaz Haq said...

Here's Daily Times on mango export processing in Pakistan:

Pakistan is considered as a country, lagging behind the developed world regarding science and technology, but the situation was not as much worst as seen, because Pakistan has an edge in treatment of mangoes and its shelving.

Mango is a well-regarded fruit and is known as ‘King of fruits’. Mango appears in local markets as the summer season commences.

Globally, it is one of the most eaten fruits. As many as 11 countries, including Pakistan export mangoes. To meet the global standards, mangoes are treated before export. There are four ways of treatment, out of which three are recognised across the world: hot water treatment (HWT), vapor heat treatment (VHT) and radiation.

There are nine types of bacteria that prevail in mangoes. To kill all of those, in most common way of hot water treatment, mangoes are treated with hot water for one hour, during which the temperature is managed at 75 degree centigrade. Resultantly, the pores at mangoes surface get rupture and its shelving become difficult.

Pakistan has a double edge in regard with treatment and shelving of mangoes. The country has a capacity to treat 15 tonnes of mangoes per hour. Besides this, Pakistani private sector has ability of shelving mangoes for 35 days after treatment, however, the rest of exporter countries could shelve mangoes for maximum seven days.

Recently, Pakistan has achieved another significant achievement in export of mangoes sector. Pakistani has recently initiated to export mangoes to China, which itself is the second largest producer and one among the largest consumers of mangoes.

Though China itself produce mangoes in massive quantity, it still is a vast market for Pakistani mangoes as locally produced mango is small in size and less sweet, however, Chinese people like larger in size and sweeter mangoes and Pakistani types of mangoes all their desired qualities.

AQ Khan Durrani, the owner of treatment plants in Pakistan and exporter of mangoes to China, said while talking to the Daily Times that China is biggest country in term of population and is 2nd largest producer of mango in the world with production of 4.5 million tonnes of mangoes annually. Chinese people like mangoes a lot and while exploring this big market of ‘mango lovers’, Pakistan can earn millions of dollar in fruit sector.

“China can be the biggest market of Pakistan mangoes and within three years Pakistani export can be doubled,” he added.

It is pertinent to mention here that the Pakistan produces 1.6 to two million tons of mangoes annually and was ranked fourth to fifth among producer countries of mango. The dire need of hour is that the government should follow and respond to the achievements and strive of private sector, which is going to explore even largest producer countries of mango as consumer market.

Pakistan would become the largest producer and exporter of mangoes due to the quality of local mango, if the government supports the sector. This also would result in very positive impacts on local economy and the position of the country as well.


http://www.dailytimes.com.pk/default.asp?page=2012\07\09\story_9-7-2012_pg7_16

Riaz Haq said...

Here's a BR report on PM Raja talking about PPP's pro-farmer policies:

Prime Minister Raja Pervez Ashraf Tuesday said prudent and farmers-friendly policies of the PPP led government has helped injection of Rs500 billion in the rural economy ultimately benefiting the farming community in the country.

"Due to our pro-farming policies and due payments of agriculture produce of the farmers specially in wheat production, Pakistan once an wheat importing country has now become an exporting country and we are self sufficient in wheat production", the Prime Minister said while addressing APP regularization certificate distribution ceremony to distribute letters among the contract and daily wages employees of Associated Press of Pakistan (APP), here at the Prime Minister Secretariat today.


http://www.brecorder.com/top-news/1-front-top-news/66940-pro-farmers-policies-of-government-helped-inject-rs500-billion-in-rural-economy-pm-.html

Riaz Haq said...

Here's a BR report on Pakistan's rising private consumption:

The real private consumption in Pakistan is expected to grow during the fiscal year 2012 by a significantly higher rate than in 2011, a report compiled by the Asian Development Bank (ADB) said.

ADB in its recent report titled ' Asian Development Outlook Supplement July 2012' notes: "Based on the government's latest survey, real private consumption in Pakistan is expected to grow in the fiscal year 2012 by a significantly higher rate than in fiscal year 2011, supported by inward remittances."

The report argues that foreign investment is declining in the both India and Pakistan while the inflation in South Asian region is projected to be 7.8 percent of GDP in 2012 while for the FY 2013, it is projected at 6.9 percent of GDP.

According to the ADB report, South Asia is expected to grow by 6.2 percent in 2012 and 6.9 percent in 2013. South Asia economic growth will moderate as the weaker global environment reduces exports and investment inflows. Although somewhat offset by stable inward remittances, widening trade deficits have led to the depreciation of most currencies in the sub-region and have helped drive inflation up since

early 2012. While manufacturing growth is slowing in most countries, domestic conditions vary among major economies.

The report says that weak global demand has also affected trends in international commodity prices. In general, they are projected to decline throughout 2012 and 2013. The trend in the international price for oil and food suggests prices for 2012 and 2013 to fall below 2011 levels.

Economic growth in developing Asia moderated during the first half of 2012 as slower growth in the US and euro area reduced the demand for the region's exports. Worries over the economic strength of important developing economies have also emerged recently. Growth in developing economies will be slow in the second half of 2012. Unwinding policy stimulus in some countries has also contributed to the region's weaker first half performance.


http://www.brecorder.com/business-a-economy/189/1218815/

http://www.adb.org/sites/default/files/pub/2012/ado-2012-supplement.pdf

Riaz Haq said...

Here's a Dawn story on Pakistani retail boom:

Isn’t it great that we in Pakistan finally have a mall which houses international brands such as Next, Nine West, Splash, Monsoon, Accessorize among other names? The retail boom is in full swing no matter what the economists say. Proof: Mango’s launch which brought out top models, stylists as well as your everyday shoppers.

Though its doors have been open to the public since June, its media launch (managed by Catalyst P.R. aka Frieha Altaf) was just held recently. Okay, so coming back to the basics, I love LOVE loveeeee shopping BUT I am an even bigger lover of a good bargain. IMAGINE my disappointment when a pair of heels (hideous ones by the way) at Nine West were for Rs.13,000! I had convinced myself that Mango will fair no better. I was pleasantly surprised…to an extent.

The thing is that these brands are RETAIL brands, NOT designer brands, as some may think. The price points cannot be “unaffordable” as they have to appeal to the general public. Right? Where Mango had their summer clothes (which I loved!!!) there was winter wear as well! Hmm, isn’t it still summer and isn’t winter like MONTHS away? Winter in Karachi won’t be until end of November (if we are lucky), so what is the point of having SWEATERS smack in the start of one of the hottest summers we have had? What is that? Yes, that’s a puzzle even I couldn’t figure out! There were cute tops and accessories, bags and shoes, scarves, fun summer maxis and jeans – all the good stuff. What Nine West or Monsoon lack in affordability, Mango makes up for it. Comparatively, Mango is much more affordable than the rest of the retail counterparts which have come to town. Next, though was one of the first retail brands to open its doors in Karachi and Lahore, has the inventory which can easily be classified as, say it with me “ANCIENTT!!!” They should just pack up or change their management. Note to Management of Next, WAKE UP!!

Coming back to Mango, jeans were ranged between Rs.4,000 and under Rs.6,000 – Gold Star for Mango! The summer maxis however, were above 13,000! Five thumbs down! Over all, the accessories were relatively affordable as well as current. Noted fashion designer Sadaf Maletarre said and I quote “It’s great to have Mango in Pakistan.”

Top model Fayezah Asad Ansari said, “It is brilliant that Mango has opened up in Karachi, though for a retail brand I wish the clothes were more affordable.” This concern was also shared by stylist Beenish Pervez. “The clothes are fantastic, that being said they are not as affordable for everyone.”

I have to agree and disagree with my fellow fashionistas. It’s excellent for these brands to open their door here which is perfect for people who cannot travel abroad and shop. They finally have an avenue to have what people who travel abroad have had for years… however, people who travel do know what is in the stores in London, New York, Toronto, Dubai etc. and can quickly asses what is new and what was in stock last season. For them, it is pointless to shop here anyways.


http://dawn.com/2012/07/09/retail-boom-in-full-swing/

Riaz Haq said...

Here's a Dawn story on Pakistani retail boom:

Isn’t it great that we in Pakistan finally have a mall which houses international brands such as Next, Nine West, Splash, Monsoon, Accessorize among other names? The retail boom is in full swing no matter what the economists say. Proof: Mango’s launch which brought out top models, stylists as well as your everyday shoppers.

Though its doors have been open to the public since June, its media launch (managed by Catalyst P.R. aka Frieha Altaf) was just held recently. Okay, so coming back to the basics, I love LOVE loveeeee shopping BUT I am an even bigger lover of a good bargain. IMAGINE my disappointment when a pair of heels (hideous ones by the way) at Nine West were for Rs.13,000! I had convinced myself that Mango will fair no better. I was pleasantly surprised…to an extent.

The thing is that these brands are RETAIL brands, NOT designer brands, as some may think. The price points cannot be “unaffordable” as they have to appeal to the general public. Right? Where Mango had their summer clothes (which I loved!!!) there was winter wear as well! Hmm, isn’t it still summer and isn’t winter like MONTHS away? Winter in Karachi won’t be until end of November (if we are lucky), so what is the point of having SWEATERS smack in the start of one of the hottest summers we have had? What is that? Yes, that’s a puzzle even I couldn’t figure out! There were cute tops and accessories, bags and shoes, scarves, fun summer maxis and jeans – all the good stuff. What Nine West or Monsoon lack in affordability, Mango makes up for it. Comparatively, Mango is much more affordable than the rest of the retail counterparts which have come to town. Next, though was one of the first retail brands to open its doors in Karachi and Lahore, has the inventory which can easily be classified as, say it with me “ANCIENTT!!!” They should just pack up or change their management. Note to Management of Next, WAKE UP!!

Coming back to Mango, jeans were ranged between Rs.4,000 and under Rs.6,000 – Gold Star for Mango! The summer maxis however, were above 13,000! Five thumbs down! Over all, the accessories were relatively affordable as well as current. Noted fashion designer Sadaf Maletarre said and I quote “It’s great to have Mango in Pakistan.”

Top model Fayezah Asad Ansari said, “It is brilliant that Mango has opened up in Karachi, though for a retail brand I wish the clothes were more affordable.” This concern was also shared by stylist Beenish Pervez. “The clothes are fantastic, that being said they are not as affordable for everyone.”

I have to agree and disagree with my fellow fashionistas. It’s excellent for these brands to open their door here which is perfect for people who cannot travel abroad and shop. They finally have an avenue to have what people who travel abroad have had for years… however, people who travel do know what is in the stores in London, New York, Toronto, Dubai etc. and can quickly asses what is new and what was in stock last season. For them, it is pointless to shop here anyways.


http://dawn.com/2012/07/09/retail-boom-in-full-swing/

Riaz Haq said...

Here's Business Recorder on Pakistan's rising wheat exports:

Following the rising demand and better price in the world market, Pakistan''s wheat exports has again picked up, witnessing some 200 percent growth during the first month of the current fiscal year. Exporters told Business Recorder on Wednesday that after posting some decline in the second half of FY12, wheat exports surged, on the back of demand from Sri Lanka and some other regional countries.

"Pakistan''s wheat exports was declining a few months ago because of low prices. However, better wheat prices and rising demand in the world market have opened up new venues for the export of the commodity," exporters said. Wheat price in the international market was rising because of reports regarding bad wheat crop in Russia, they said.

According to them, wheat prices had crossed $300 per ton after a gap of 6-8 months. Month-on-Month basis, export statistics for the first month (July) of this fiscal year were very encouraging, as wheat export witnessed a massive growth of 198 percent.

Keeping in line with the current trend, wheat exports amounted to $4.652 million in July 2012 against $1.562 million in June this year, depicting an increase of $3.09 million in a single month. In term of quantity, some 15,521 tons of wheat was exported during July against 5,592 tons in June this year.

Export figures for August will be higher than July, as huge export orders have been placed by foreign buyers and several shipments are in the pipeline. However, in the longer run, exports were linked with price stability in the world market, they added. "We are exporting wheat without any government subsidy, disposing off excess stocks, earning millions of dollars in foreign exchange. Wheat price below $300 per ton is not visible for us," exporters said.

The quality of Pakistan''s wheat is best and as per international standard it has 11 to 11.5 percent protein content and is considered perfect for markets in Sri Lanka, Bangladesh, the Gulf states, Far East and Myanmar, they informed. Traders also confirmed that commodity exporters were quickly procuring wheat from domestic market for export as attractive prices are being offered by importers from around the world.

Expressing some reservations regarding wheat exports, they said that hasty buying of wheat from domestic market could create panic in the commodity market, resulting in a massive increase in wheat pries. Wheat prices have witnessed a surge of Rs 2,000 per ton over the past month because of huge buying by exporters. With the current rise, the price of wheat grains rose to Rs 28,000 per ton from Rs 26,500 per tone. Although, the country harvested a bumper wheat crop this year and there is an ample stock in government and private warehouses, extraordinary jump in the quantum of exports could hit domestic prices and wheat availability in the domestic market, traders said.


http://www.brecorder.com/agriculture-a-allied/183/1229620/

Riaz Haq said...

Pakistanis consume over 170 Kg of milk per capita and it's growing, according to FAO.

http://www.fao.org/ag/againfo/programmes/en/pplpi/docarc/wp44_3.pdf

Growing milk consumption can help reduce malnutrition in Pakistan.

Here's a story illustrating the value of milk in reducing malnutrition in Africa:

WFP Executive Director Josette Sheeran kept a promise she made to WFP-supported Rilima health centre last July by giving two cows worth 1,360,000 Frw to help reduce malnutrition among poor communities in the area.

WFP Executive Director Josette Sheeran kept a promise she made to WFP-supported Rilima health centre last July by giving two cows worth 1,360,000 Frw to help reduce malnutrition among poor communities in the area.

The milk produced by the cows will be used to feed severely malnourished children and breast feeding mothers. “The health centre expects to get 50 litres of milk to feed over 200 malnourished children per day,” says Pascal Habyarimana assistant director of the health centre.
Rilima nutrition centre assists more than 37,000 people in the area. WFP provides monthly fortified supplementary food to malnourished children under the age of five years and malnourished pregnant or nursing women.

“Since 2009, more than 20,000 malnourished children have been supported and recovered from malnutrition", says WFP Rwanda Country Director Abdoulaye Balde. "WFP will continue to provide relevant suport to reduce malnutrition among poor communities in Rilima sector”.
Parents and nursing women come to the centre not only to collect fortified food provided by WFP but also to be trained on good nutrition practices. Training is focused mainly on balanced meals, hygiene, disease prevention and family planning.
The idea is that, after receiving assistance from nutritoon centres, parents can become agents for change in their communities with the help of a a trained community health worker.

Local mothers are currently learning how to organize vegetable gardens at home. A garden can be established on a small plot and maintained with waste water from the kitchen. The nutrition centre itself has a model garden and vegetables from it are used for cooking demonstrations.
In partnership with World Vision and Rilima health centre, beneficiaries are encouraged to develop good cooking practice at home and share them with their neighbours.


http://www.wfp.org/stories/wfp-executive-director-donates-cows-reduce-malnutrition-rwanda

Riaz Haq said...

Here's BMI's Q3/2012 report on rising food consumption in Pakistan:

Our near-term domestic demand outlook for Pakistan is looking brighter than before. Declining costs of credit and disinflationary pressures should prove supportive of domestic demand. However, we acknowledge a near-term risk to our domestic demand outlook, which is the impact of deteriorating macroeconomic conditions on remittance inflows. Should a slowdown in global demand weigh on remittance growth, this could dampen domestic consumption in the near term. Longer term, the business environment challenges of a destabilising insurgency, chronic lack of electricity generation capacity and an unskilled labour force will continue to hold back the consumer sector from realising its full potential. We therefore expect the liberalisation of the Pakistani consumer sector to occur at a glacial pace going forward.

Headline Industry Data

2012 food consumption growth = +12.1%, compound annual growth rate (CAGR) forecast to 2016 = +9.3%

2012 alcoholic drinks value sales growth = +19.0%, CAGR forecast to 2016 = +10.4%

2012 soft drinks value sales growth = +15.2%, CAGR forecast to 2016 = +8.8%

2012 mass grocery retail sales growth = +20.9%, CAGR forecast to 2016 = +12.2% Key Company Trends Pakistan A Fledgling But Growing Force On Global Halal Scene: Pakistan has not been able to gain much from its US$2trn halal brand market, and has a small share in the global halal industry. The country’s exports have improved from zero-level during the past two years; however, it is still insignificant. However, with the Pakistani government now putting its weight behind the development of the domestic halal industry, there is certainly a cause for optimism in the sector’s future prospects.

The Sindh Board of Investment has entered an agreement with the Halal Department of Malaysia to provide training of certification to its staff. The government also announced that it will be engaging in a project to ensure the credibility of the country’s halal certifications in a bid to tap into the global halal market, which is valued at over US$1trn.

BMI Bullish Coca-Cola’s Prospects In Pakistan: US soft drinks giant The Coca-Cola Company is planning to invest another US$280mn by 2013 in Pakistan. According to Coca-Cola, it plans to channel the bulk of its capital expenditures towards increasing the production of its existing brands as well as expanding its overall beverages portfolio. Coca-Cola plans to introduce more juices and mineral water in the Pakistani market over the coming years. This strategy could diversify Coca- Cola’s presence beyond the carbonates sector and help it secure early footholds in the higher-value bottled water and fruit juice segments, which boast tremendous long-term promise.


http://www.marketresearch.com/Business-Monitor-International-v304/Pakistan-Food-Drink-Q3-7011717/

Hopewins said...

^^^^^Pakistan continues to face major problems as it deals with the violent Taliban insurgency and multiple internal and external threats and crises of stagnant economy, scarcity of energy and the lack of sense of security.

However, it is clear from the consumer spending data that Pakistanis are a resilient people, and they continue to defy the persistent prophecies of doom and gloom.

Pakistan is just too big to fail. I fully expect Pakistan to survive the current crises, and then begin to thrive again in the near future.

--------------------------------

1) Big or small, why do you fear that Pakistan could even fail at all? What is failure? Do you mean political or economic or financial failure? What would be the mechanism by which it would fail? What makes you think Pakistan could fail? Do you have any "potential failure ahead" data? Could you elaborate on these issues a little further?

2) You say "stagnant economy" and then you talk of "rising consumer spending". The only way these two things can simultaneously be true is if savings/investment is falling.

Economy = Consumption + Investment

IF Economy = Stagnant, AND
Consumption = Growing, THEN,
Investment = Falling

Falling investment, by definition, bodes ill for future growth. And yet in the next paragraph you say, "..and thrive again in the near future".

Where is this "thriving" going to come from? What will drive it, given than investments are falling? Are we discussing Economics or Messianic Hope?
Can we move beyond the superficial slogans and do a more rigorous analysis of this issue?

Riaz Haq said...

HWJ: "Where is this "thriving" going to come from? What will drive it, given than investments are falling? Are we discussing Economics or Messianic Hope?
Can we move beyond the superficial slogans and do a more rigorous analysis of this iss"

Consumption precedes investment.

Economic history of the world tells us that when investors and entrepreneurs see a large enough market, they bring in the capital.

The key inhibitor right now is the security situation in Pakistan which I expect will improve with the war in Afghanistan winding down in the next couple of years.

Riaz Haq said...

Here's Economic Times' report on Pakistan sugar exports:

NEW DELHI/MUMBAI: Pakistan has allowed the export of an extra 200,000 tonnes of sugar, on top of the 300,000 tonnes already allowed, as the government aims to trim surplus stocks and bolster local prices.

Higher stocks and expectations of robust output next year encouraged the Islamabad government to allow the export of the additional sugar, Ali Raza Bashir, spokesman for the Finance Ministry, said, though the permission was for less than had been sought.

"There was a request to allow (extra) exports of 400,000 tonnes but the cabinet gave its permission for 200,000," Shunaid Qureshi, chairman of the Pakistan Sugar Mills Association, said by telephone.

The move came as neighbour India sealed deals to import about 5,000 tonnes of white sugar, despite expectations of a domestic surplus, as some traders seek to capitalise on lower prices in Pakistan and higher prices in India.

In Pakistan, sugar output in the crop year starting Oct. 1 is likely to remain steady at last year's level of around 4.7 million tonnes, Qureshi said.

The country's sugar consumption is between 4 million tonnes and 4.2 million and it started the 2012/13 year with around 400,000 tonnes of stock, said a dealer in Karachi who declined to be named.

Most sugar so far has gone to Afghanistan, Saudi Arabia and east Africa.

"These countries will again show interest due to lower prices. Millers in Pakistan want cash to start the crushing season ... They can give discounts to world prices," the dealer said.

INDIA BUYS WHITES

A New Delhi-based trader, who did not wish to be named, said: "The (Indian) traders who have contracted imports from Pakistan perhaps found the FOB price of $545 per tonne attractive enough to buy.

"They stand to gain $15 to $20 a tonne after paying a duty of 10 percent," the trader added.

The sugar price in western India is around $680 per tonne, while in northern and eastern parts of the country it is as high as $720.

India, the world's top consumer and the biggest producer behind Brazil, has been an exporter for the past two years. Exports in the year to September 2012 totalled 3.3 million tonnes.

Traders in India, which levies a 10 percent tax on sugar imports, have booked whites from Pakistan for delivery at the eastern Haldia port, a second Indian trader said.

India is expected to have a small exportable surplus in 2012/13, though higher production costs could make it difficult to find buyers at prices acceptable to mills.

Last month, Indian mills signed deals to buy up to 450,000 tonnes of Brazilian raw sugar because of the attractive gap between domestic and overseas prices.

The strengthening Indian rupee and a wide gap between Indian and Pakistani prices made these deals attractive, said a Mumbai-based trader with a global trading firm.

India could buy more for delivery in October and November to meet higher festival demand, traders said.


http://economictimes.indiatimes.com/news/economy/foreign-trade/pakistan-allows-more-sugar-exports-india-to-import-5000-tonnes/articleshow/16673077.cms

Riaz Haq said...

International frozen yogurt franchises Tutti Frutti and Fruz are coming to Pakistan, according to news reports:

Business Recorder on Tutti Frutti:

Tutti Frutti is a specialty brand available in various world markets, including the USA, Canada, Brazil, Malaysia, Thailand, Hong Kong, China, France, Pakistan and the United Kingdom. Work is in progress to open up outlets in countries like India, Bangladesh, Russia, Romania, Spain and various Middle Eastern countries.
-------------
17 outlets already opened in Pakistan. There are five outlets in Karachi, three each in Lahore and Islamabad, two in Rawalpindi, two at Bhera Motorway rest area and one each in Abbottabad and Faisalabad. Another 19 are under-construction in different cities. We are targeting about 100 branches by the end of the year 2013, reaching customers in nearly every city of Pakistan.


http://www.brecorder.com/brief-recordings/0/1257571/

The Nation on Yogen Fruz:

LAHORE (PR) – Yogen Fruz, the world’s leading frozen yogurt chain opened its first outlet in DHA amidst much fanfare on Sunday. The master franchise of the Canadian desserts chain has been acquired by MFK Foods in Pakistan, and the local business group is already working on a plan to open outlets and franchises all across Pakistan.“When we received a query for bringing Yogen Fruz to Pakistan, we all were very excited. Pakistan is a huge consumer market and if the conditions are right, this country can attract a lot of foreign investments. We all flew in from Canada to be a part of this launch”, said Carlos Campo who is the Director Operations for Yogen Fruz worldwide, and is in Pakistan with his team to assist in the launch of this giant food and desserts chain.“Frozen yogurt is freshly prepared, is rich in probiotics, and is available in endless flavours,” added Basir Syed, CEO MFK Foods and master franchisor for Yogen Fruz Pakistan. “Yogen Fruz is here, and soon it will be available in all parts of Pakistan. We have an aggressive business development plan and we have received numerous franchise requests and sold many as well. We will also be opening outlets in other parts of Lahore as well.”

http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/business/12-Nov-2012/yogen-fruz-launched-in-pakistan

Hopewins said...

"..franchises Tutti Frutti and Fruz"

Dr. Haq,

I love to play the Devil's Advocate, so here goes:

A franchise is mostly a "brand value" play.

All these western franchise-owners do is provide local pakistani franchise-members with a list of approved vendors and marketers.

The Pakistani franchise-member then has to raise the capital to purchase, setup & operate everything.

So what will Pakistan gain from this?
1) No real major foreign investment has come in, as Pakistani franchise-members will have to raise the money locally for every branch.
2) No real technology has been transferred, as pakistanis already knew how to make dahi/lassi/kulfi etcetera.
3) All that is happening is that foreign vendors will sell approved equipment into Pakistan and Pakistan will then have to pay annual franchise fees & comissions year after year for eternity.

So, in light of all this, how is this "franchise arrival" a matter for celebration for our country?

The people who should be celebrating are the foreign suppliers of the approved-equipment and the foreign branded-franchise owners.

Please comment.

Thank you.

Riaz Haq said...

Franchisers are attracted to Pakistan because they see an opportunity to profit from a growing consumer base in an emerging economy with rising DISPOSABLE INCOMES, a sign of increasing prosperity of a rising number of people.

Franchisers offer training in operations ad quality control, bring know-how in brand retailing, help raise capital or provide capital themselves, create local supply chains and create lots of local jobs.

Franchisees are part of the SME sector which is usually the BIGGEST employer in most countries.

The learning from the franchising process spawns local expertise in value addition through branding and marketing of all sorts of products ranging from food to apparel and accessories and various services.

Already, a number of local retail brands are popping up...names such as K&N chicken, Shezan juices, Junaid Jamshed, Bareeze, Chinyere, Working Woman, Kayseria, Leisure Club, Shahnameh and Urban Culture, etc.

Riaz Haq said...

Here's some interesting tidbits from a Dutch website about Pak middle class:

Over 80% buy no more than a single pair of shoes a year
A survey conducted by Gallup Pakistan during May 2012 found that 62% of respondents purchased just one pair of shoes for personal use during the previous 12 months. An additional 21% did not purchase any shoes at all during this period. According to Euromonitor International estimates, unit sales of shoes in Pakistan rose by 75.4% between 2006 and 2011, with real value sales increasing by 27.1%, to US$805 million.
Just how big is the middle class?
Writing on Dawn.com, Saki Sherani argues that “two parallel universes existing side by side in Pakistan: an expanding middle class with a voracious appetite for consumption, and a [larger] swathe of population that is increasingly food-insecure.” The consensus estimate is that around 40 million people fall into the former category, but taking the black economy into account, he estimates that the true figure is actually 70 million. He adds that “In absolute terms, it is the fourth largest middle class cohort in Asia, behind China, India and Indonesia. Affluent, educated, urbanised, and increasingly 'globalised,' Pakistan's middle class is not only growing, but is already a voracious consumer.” He also cites an e-mail he received from a friend who recently visited the country: “This place is rocking. The pizza parlours, coffee houses, swank new malls are all packed, brimming with consumers. It took us nearly a month to get a reservation in Karachi's top restaurant!” According to Euromonitor International data, the proportion of Pakistanis with an annual disposable income of at least US$10,000 (at purchasing power parity) increased from 29.2% to 52.3% between 2006 and 2011.
M-commerce: huge potential but many obstacles remain
Speaking to The News Pakistan, against the backdrop of the 5th International Conference on Mobile Banking in Pakistan, which took place in Karachi during mid March, Lito Villanueva of Visa International said that there was huge potential for m-commerce in Pakistan because most people are still unbanked and the rate of mobile penetration is relatively high. However, Amer Pasha, country manager of Visa Pakistan cautioned that levels of financial literacy were still low, even among literate people. He added that most shopkeepers and traders “prefer cash so that they can remain in the undocumented economy.”
Skin creams popular during winter
A survey conducted by Gallup Pakistan during January 2012 has found that 91% of Pakistanis use some method to protect their skin during the dry winter months. 57% said they used cream or lotion to protect their skin, while 24% claimed to use oil, and 8% soap or facewash, while 2% utilised homemade remedies. According to Euromonitor International data, value sales of skin care products in Pakistan were worth US$92.9 million during 2010....


http://www.agentschapnl.nl/onderwerp/pakistan-marktkenmerken

Riaz Haq said...

Here's an ET story on Unilever targeting Pakistan market as a priority:

It is a global food and consumer goods giant that serves over 2 billion consumers every day in more than 180 countries around the world, but Unilever’s global management team is convinced that the key to their future success lies in 16 emerging markets, of which Pakistan is one.

Paul Polman, the CEO of Unilever, and Harish Manwani, the chief operating officer, visited Pakistan on Tuesday in what appears to be part of their global push to gear the company’s growth strategy towards emerging markets. “We want to be in every market with more than 100 million consumers,” said Manwani. “And we want to be in every market where the purchasing power of the consumer is growing. Pakistan meets both of those criteria, the first one by quite a lot.”

About 56% of Unilever’s revenues come from emerging markets, a number that Manwani says could rise to as high as 75% over the next few years. In Pakistan, the company operates two subsidiaries, Unilever Pakistan and Unilever Pakistan Foods, both of which are publicly listed on the Karachi Stock Exchange. For the year 2011, the company’s Pakistani subsidiaries earned combined gross revenue of over Rs73 billion, or about 1.3% of the global total for Unilever.

Growth in Pakistan is significantly higher. While Unilever’s global revenues grew by around 5%, revenues in Pakistan grew by a much stronger 9.9%, even when taking into account the rupee’s depreciation against the euro, the company’s global reporting currency. In Pakistani rupees, gross revenues of both companies grew by nearly 17%.

But it is not just the current growth figures that appear to be attracting Unilever’s attention to Pakistan, but rather what is clearly a rapid expansion of the Pakistani middle class, which is causing purchasing power – and thus the propensity to buy branded products – to rise among a wide and diverse array of Pakistani consumers. Unilever is increasingly finding that it is selling its products to everyone from the bank CEO who works on Karachi’s II Chundrigar Road to the small shop owner in rural Sanghar to the grain merchant in a small town outside Sialkot.
------------
Malik said that the company is actively trying to reach consumers in small towns and rural areas, well beyond the larger cities in the country. The company reaches 50,000 retailers in rural areas, said Malik, a number that keeps on expanding rapidly.

That focus on rural consumers appears to be part of the global strategy: Paul Polman said that Unilever’s connection to farmers and rural communities is part of its efforts to integrate its business strategy with social responsibility. “Over 40% of the world’s population is in agriculture. We want to integrate over 500,000 of them into our global supply chain. They tend to be more reliable suppliers and help us reduce our volatility. In turn, we provide them with a better livelihood,” said Polman.

Unilever’s global CEO was effusive in his praise of the team in Pakistan. “The water conservation techniques pioneered in Pakistan will now be replicated in Unilever factories around the world,” he said. “Pakistan has always provided us with talent, and is in fact exporting talent. Over 55 Pakistanis are now working in senior positions in Unilever all over the world.”...


http://tribune.com.pk/story/469350/food-consumer-goods-unilever-targets-pakistan-among-top-priority-markets/

Riaz Haq said...

Here's a Dawn story on growing retail sector in Pakistan:

Karachi’s Dolmen City Mall is a large, plush building that would not be out of place in Dubai. Heavily fortified with security guards, the interior is impressive, with its cavernous corridors and gleaming marble floor – a far cry from the hustle and bustle of the city’s other shopping areas.

Newly arrived from London earlier this year, Karachi residents were insistent that I must see this wonderful new addition to the city. When I did, it was something of a home from home. In addition to high end local clothing brands were a whole plethora of foreign stores, from Mango, to Next, to the Body Shop. Many (though not all) of these are British imports.

The latest to open its doors was Debenhams, stalwart of the British high street, which this year became the first international department store in Pakistan with its branch in Dolmen. It joins other UK brands such as Next, Early Learning Centre, Accessorize and Monsoon.

So what is behind the influx of foreign stores to Karachi’s high streets? Internationally, Pakistan is not viewed as an obvious market for retail brands due to security concerns – both real and perceived – and the attendant difficulties of doing business.

However, the numbers tell a different story. The retail sector is one of the fastest-growing in Pakistan, and is expected to grow at a rate of 7 per cent per year until 2015. To give some indication of the growth it has already seen in recent years, compare the market value in 2006 – £19124.1 million – with 2010, when it had increased to £26541.2 million.

Yasin Paracha runs Team A Ventures, the company which holds the franchises for UK brands Debenhams, Next, Early Learning Centre, Accessorize, and Mothercare. He explains that the historic ties between the two countries means that British brands have instant recognition in Pakistan.

“People in our target market are used to travelling to London frequently,” he says – many people will have visited the UK as tourists, students, or on family or business visits.

Indeed, the growth of this target market – young, urban, and with significant disposable income – is crucial to increased retail operations in Pakistan. The urbanized middle classes are a steadily growing group.

Of Pakistan’s 180-million strong population, around 55 million live in cities such as Karachi, Lahore, and Faisalabad. Consumerism is on the up, fuelled by a recent boom in consumer banking and the media industry, and encouraged by ever-increasing investment from both local and foreign chains. Traditionally, many people in this target market have preferred to do much of their shopping abroad, meaning that they are already predisposed to foreign brands.

But what about the security risks for new businesses? Karachi, in particular, is home to outbreaks of sectarian and ethnic violence, terrorist attacks, and a high instance of crime including extortion rackets.

“Of course it’s a concern for new investors,” says Paracha. “On the surface of it, a lot of brands are hesitant, but when they first make the trip to Pakistan, they are reassured because they realise that the things on the ground are very different from what they see in the media.”

However, the situation cannot be ignored. “One has to be cautious,” Paracha continues. “You can’t go into a very aggressive expansion because you can’t deny the security issue, especially in some cities. But so far we have not had a major negative impact on our operations.”

The visible success of household names like Debenhams and Next in Pakistan is likely t encourage other British brands to see the country as a potentially viable market. In addition to this, there is a concerted drive from the UK government to encourage British investment in Pakistan, due to a bilateral trade agreement between the two countries....


http://dawn.com/2012/12/05/banking-on-history-british-brands-thrive-in-pakistan/

Riaz Haq said...

Here's bloomberg on fast food craze in Pakistan:

...Local and overseas business groups are queuing up to buy franchise rights in Pakistan for an array of popular food sold from Los Angeles to Kuala Lumpur, driven by rising demand from a booming middle class in South Asia’s second-biggest economy after India. Pakistanis increasingly flock to American food outlets even as ties between the two nations are strained by U.S. drone missile strikes in the northwest of the country.

Johnny Rockets Group Inc., another American fast-food group based in Aliso Viejo, California, that operates or franchises 68 hamburger restaurants in 16 countries, Second Cup Ltd., a coffee shop chain based in Missisauga, Canada, with over 360 cafes and Malaysia’s MammaRoti and PappaRoti are set to open their first stores in Pakistan this year.

----

Fatburger joins Hardee’s Food Systems Inc., headquartered in St. Louis, Atlanta-based cinnamon roll maker Cinnabon International Inc., The Noodle House of the United Arab Emirates, and five foreign frozen yoghurt chains that opened their first outlets in the world’s sixth-most populous nation since 2011. Consumer spending in Pakistan has increased at a 26 percent average pace the past three years, compared with 7.7 percent for Asia, according to data compiled by Euromonitor International, a consumer research firm.

...Pakistan’s middle class has doubled to 70 million people in the past decade as booms in agriculture and residential property, as well as jobs in telecom and media have helped people prosper, according to Sakib Sherani, chief executive officer at Macroeconomic Insights in Islamabad.

---
Franchising is also booming as businesses battling Pakistan’s record energy outages seek alternatives to factories that can’t run without adequate power, said Samiullah Mohabbat, chief executive officer of Fatburger Pakistan and the country representative for the World Franchise Association. Mohabbat received over 100 queries this year from entrepreneurs wanting to buy franchise rights for international food chains.
---

The number of foreign food franchises in Pakistan will “easily double” in the next two years as more coffee houses and casual dining outlets enter the country, Mohabbat said. About two dozen foreign food franchises operate in Pakistan since Louisville, Kentucky-based Yum! Brands Inc.’s Pizza Hut opened two decades ago, followed by the same company’s KFC in 1997 and Oak Brook, Illinois-based McDonald’s Corp., the world’s largest restaurant chain, the following year.

KFC plans to open 40 more stores in Pakistan over the next five years to expand its network of 64 outlets in 18 cities, said Rafiq Rangoonwala, chief executive officer of Cupola, the company with the franchise rights for KFC, the biggest fast-food chain by outlets in Pakistan.
--
Salt Lake City-based Mrs Field’s Original Cookies Inc., that opened an outlet in Lahore in 2011, plans to start 15 more this year, said Rashed Siddiqui, franchise owner.

---
Second Cup will open its first outlet in Islamabad within the next six months and Red Mango Inc., a Dallas-based frozen yoghurt retailer, will enter Pakistan this year, Mohabbat said.

Fullerton, California-based Tutti Frutti Frozen Yoghurt, that has 20 outlets in Pakistan since opening in late 2011, plans to start 100 more this year, said Naeem Niazi, director for international business development at Wellspring Industry Inc., owner of Tutti Frutti.

Pakistanis spend 90 billion rupees ($924 million) a year on eating out at the 20,000 restaurants nationwide because of a paucity of other entertainment facilities, said Nauman Mirza, founder and chief executive officer of Food Connection Pakistan, an online restaurant guide.


http://mobile.bloomberg.com/news/2013-01-07/pakistan-loving-fatburger-as-fast-food-boom-ignores-u-s-drones.html

Zak said...

Good job Riaz Sahib!

Anonymous said...

Franchises currently in Pakistan:

1. Baskin Robbins

2. Dunkin Donuts

3. Subway

4. McDonalds

5. Hardees

6. Expo Center

7. GNC

8. Google (Still Blocked)

9. IMAX (Approved)

10. MSN (Still Blocked)

11. Vonage (Currently Blocked)

12. MSNBC

13. CNN

14. Gloria Jean's

15. Tesco

16. Debanham's

17. Makro

18. Carrefour

19. Metro

20. Fatburger

21. Sheraton

22. Holiday Inn

23. Days Inn

24. Fedex

25. Marriot

26. Ramada

27. KFC

28. Nando's

29. Papa John's

30. Pizza Hut

31. Dominos

32. Ebay




Franchises Expected:

1. Starbucks

2. Planet Hollywood

3. Burger King

4. Hard Rock Cafe

5. Hilton

6. Kumon

7. Taco Bell

8. Yahoo

9. Walmart

10. Little Caesars

11. Chillis

Riaz Haq said...

Here's Daily Times on rising rice exports:

KARACHI: The total rice exports from Pakistan including basmati and non-basmati rice have risen above the $1 billion mark during seven months of this fiscal year (July 2012 to February 24, 2013), which in terms of weight stands at 2.142 million tonnes.

The full fiscal year’s export target of $2 billion seems achievable as up till now more than $1 billion exports have been met.

“Efforts of the Rice Exports Corporation of Pakistan to boost export of Pakistani rice has started yielding positive results as Tanzania has emerged as a potential market for Pakistan’s non-basmati rice,” said Rice Export Corporation of Pakistan (REAP) Acting Chairman Rafique Suleman. During the last seven months of the current fiscal year a total quantity of 95,349 metric tonnes has been exported to Tanzania, whereas last year during the same period the export was 25,484 metric tonnes.

It may be recalled that recently Pakistan’s rice export to China has marked an increase as record volume of non-basmati rice 72,623 metric tonnes to China worth $30 million in just one month (January 2013) was exported during the current fiscal year.

“China has become a major market for Pakistani non-basmati rice over the period of time, which
has greatly encouraged exporters of the commodity to accomplish further success in that territory.”

Similarly Pakistani rice export to countries like Sri Lanka and Kenya has also showed marked improvement.

Basmati rice is in great demand in Sri Lanka and Sri Lankan exporters are willing to import more basmati rice from Pakistan.

Suleman said that efforts are underway to push export of Pakistani rice to substantial level as it is fast gaining popularity across the globe, which is evident from the fact that it is currently exported to more than 100 countries.

Furthermore, exporters are also endeavouring to explore many new markets to enhance and increase the export and in this regard REAP chairman and vice chairman, and leading rice exporters visited Gulfood, Dubai (February 25 to 28, 2013) to explore new business opportunities and promotion of Pakistani basmati rice.

He thanked the commercial sections of Pakistan in East African Countries and especially High Commissioner for Pakistan in Tanzania Tajammul Altaf for his efforts for the promotion of Pakistani rice exports into East African countries. As per the official statement of Tanzania Ministry, they will be able to cover the consumption by local production up to 2018. Altaf informed on phone that last year the total imports from Pakistan were worth $50 million and this year we have achieved $100 million.


http://www.dailytimes.com.pk/default.asp?page=2013\03\02\story_2-3-2013_pg5_13

Riaz Haq said...

Here's a BR story on Pakistan becoming the second largest food donor to WFP:

Pakistan has emerged to be the second largest donor to the United Nations World Food Programme (WFP) consequent to its donation of 75,000 metric tons of wheat to it.



WFP Coordinator for the programme, Amjad Jamal giving details of the country's support said the contribution valued at approximately US$25 million, has placed Pakistan as WFP's second largest donor country so far this year.



The assistance, he said has been announced at a time when critical funding shortages threatened the provision of emergency food assistance to almost one million displaced people in the country's north-west.



The wheat will be milled, fortified and then provided to families displaced by security operations or only recently able to return to their homes in the Federally Administered Tribal Areas (FATA).



Combined with much-needed contributions from other donors, it will allow WFP to distribute a full cereal ration to these groups until the end of the year.



Jamal mentioned that a shortage of resources had forced WFP to reduce rations from January.



This latest contribution follows sizeable in-kind donations from the federal government and provincial governments of Sindh and Balochistan last year.



More than 70,000 metric tons of wheat was successfully delivered to both displaced and flood-affected communities in 2012, following a highly positive response from other donors to WFP's appeal for complementary "twinning" funds.



WFP's emergency response to the needs of displaced communities in the north-west is implemented under a new relief and recovery operation for Pakistan, launched on January 1, 2013.



Aiming to assist about 8 million people at a total cost of US$540 million over the next three years, the operation also seeks to improve economic opportunities and promote social inclusion in FATA, boost community resilience in disaster-prone locations, and prevent and treat moderate acute malnutrition among young children and women in the country's most food-insecure districts.



WFP's partnership with the Government of Pakistan contributes to the National Zero Hunger Programme, drawing on the successes of other countries in the fight to eradicate hunger and undernutrition.



"This very timely contribution is greatly welcomed and demonstrates the Government's ownership of the development process and commitment to helping its people," WFP Country Director and Representative in Pakistan Jean-Luc Siblot, was quoted to have said.



The last thing, he said WFP want to do is to cut assistance for the poorest and most vulnerable, and this wheat will help us to restore the food basket to a level that fully meets basic needs.



International donor community is also expected to provide some US$23 million needed for WFP to mill, fortify, transport and distribute the wheat.



Additional funds will also be required to purchase other commodities in the food basket, including specialised nutritious products for young children.



WFP is the world's largest humanitarian agency fighting against hunger worldwide. Each year, on average, WFP feeds more than 90 million people in more than 70 countries.


http://www.brecorder.com/pakistan/general-news/108397-pakistan-turns-second-largest-donor-to-wfp.html

Riaz Haq said...

Here's a Nation report on Nestle's $104 million investment in Pakistan:

AHORE – SALMAN ABDUHU - The Nestle Pakistan has announced the completion of its new milk powder drying facility plant with additional investment of $104 million at Nestle Sheikhupura factory.

Nestlé Executive Vice President and Operations and Globe System In-charge Joze Lopez, who is on three three-day visit to Pakistan, inaugurated the $104 million Egron Project and visited the whole plant.

Lopez, addressing the opening ceremony, said that the existing Milk Powder Plant has now been modified with new technology and has an additional yearly capacity of 30,000 tons. The power generation capacity and waste water management system have also been upgraded and additional filling lines have been set up, he added.

He stated the Nestlé is the largest food and beverage company in the world and the Sheikhupura dairy, juice and water factory embodies Nestlé’s increased investment in Pakistan. As part of its three-year plan to expand the production capacity in the country, Nestlé has invested a total of $148 million over the past two years in various factory expansion projects to meet rising consumer demands.

He added that wherever Nestlé is present, the company works and invests in the long term. We are convinced that in order to be successful in the long-term we have to create value for our shareholders, as well as for society. This Creating Shared Value approach encourages businesses to create economic and social value simultaneously by focusing on the social issues that they are uniquely capable of addressing. He observed that Nestlé Pakistan is committed to creating shared value for the communities it works and lives with. The company has made many contributions in this regard, by providing free technical and veterinary advisory and training support to thousands of dairy farmers in the milk districts who now have more sustainable opportunities to gain their living.

Lopez said, “Pakistan is an important growth market for us and we are dedicated to meet the growing demands of our consumers. Major capacity increases, such as the one just inaugurated in Sheikhupura, allow us to constantly upgrade our facilities to the latest standards in global technology.”

MD Magdi Batato, on this occasion said that Nestlé Pakistan is the leading food and beverage company in Pakistan and meets international standards in the manufacturing of its products. In 2012, the company grew by 22 per cent to reach an annual turnover of Rs79 billion (Approximately $800million). Nestlé Pakistan is serving the Pakistani consumers since 1988 and it also associates itself with 200,000 farmers in collecting milk and engages in a number of rural development programme for community development.

“Our reality is ‘Har Dam Pakistani’, (Every Moment Pakistani) and we are delighted to provide our consumers with products manufactured in Pakistan. More than one million Pakistanis, mostly dairy farmers, participate in our value chain and this investment is a further commitment to Pakistan and its people, and to our vision of providing Behtar Kal Hamara, (A Better Tomorrow For Us) to all,” said Magdi Batato, Managing Director, Nestlé Pakistan.


http://www.nation.com.pk/pakistan-news-newspaper-daily-english-online/business/23-Mar-2013/nestle-brings-104m-additional-investment-to-pakistan

Riaz Haq said...

Here's an ET report on global consumer products' giant P&G's expansion plans in Pakistan:

KARACHI: Procter and Gamble (P&G) has identified Pakistan as one of its top 10 emerging markets – that include emerging economies like Brazil and India – and the country will be the focus of it attention for further investments, P&G Pakistan Communications Manager Omeir Dawoodji told a group of journalists during a visit to the company’s state-of-the-art manufacturing facility at Port Qasim on Thursday.
Dawoodji was tight-lipped regarding the amount P&G plans to invest. He, however, confirmed that the Cincinnati, Ohio-based consumer goods giant wants to expand its manufacturing footprint in the country.

Dawoodji did not disclose the cost of setting up the Port Qasim plant, currently manufacturing the Ariel brand, but emphasised that P&G intends to make it a mega-manufacturing facility and utilise it for manufacturing other brands as well. The company markets over 300 brands globally, but its Pakistani subsidiary only deals in eight brands.
P&G Pakistan had acquired a huge piece of land for the manufacturing facility, which was inaugurated in 2010, but it utilised about 20% of the acquired land only, leaving enough space for further expansion.
It has been 185 years of growth for the now $85-billion company and further growth has to come through emerging markets, Dawoodji said, explaining why Pakistan is important for the company’s global parent.
The manufacturer of some of the leading brands like Pampers, Always and Safeguard has had tremendous growth during the past three years. P&G’s revenue for the year ended June 2012 was Rs22 billion, about 50% increase over the previous year.
The fiscal year 2012-13, too, will be a high growth year for P&G Pakistan, the company’s country head Faisal Sabzwari told The Express Tribune in a recent interview.
In a sign of its long-term commitment to the country, the Pakistani arm of the consumer goods giant has replicated its global strategy of incorporating the use of renewable energy sources for energy conservation, reducing water consumption and recycling the waste as demonstrated during the plant’s tour.
The facility at Port Qasim has been designed to use skylight during the day with a lot of windows built both in the office and the factory areas. They have been able to reduce their energy consumption by 12% during the last two years, the officials at the site told the media.
The reduction in water usage was about 46% as they have planted palm trees and used gravel instead of grass for the landscape to conserve water. “We put less than 2% of our waste to landfill,” an official said. About 97% of the waste generated is put to beneficial reuse, he said.
“The Port Qasim plant is our pride among the 75-plus plants P&G operates all over the world,” Dawoodji said while highlighting state-of-the-art features of the plant. “Goods manufactured at this facility can be exported to countries with rigorous quality standards.”


http://tribune.com.pk/story/566034/procter-and-gamble-lists-pakistan-among-top-10-emerging-markets/

Riaz Haq said...

Nestle Pakistan Ltd., a unit of the world’s biggest food company, has started selling pasteurized fresh milk in a pilot project as it seeks to develop a new segment in the South Asian country’s $23 billion dairy market.
The company has been delivering plastic pouches of milk to 100 homes in Lahore for the past three months on motorbikes and three-wheeler taxis.
“It’s like when we started with our water gallons 20 years ago, which started with delivery to offices and households, it starts small and then spreads,” Nestle Pakistan Chief Executive Officer Magdi Batato, 56, said in an interview at the company’s headquarters in Lahore. “There is a potential, but it’s still niche in my view.”
Nestle wants to diversify in the world’s fifth-largest milk market, where 95 percent of dairy products sold are unprocessed with people buying the liquid raw and then boiling it. Companies already sell milk in ultra-high temperature form that has a longer shelf amid long hours of energy outages in the blackout-prone nation.
Pakistan’s dairy industry has a value of about 2.3 trillion rupees ($23 billion) a year, according to Zoya Ahmed Zaidi, an analyst at AKD Securities in Karachi. She projects the sector will increase in value by about 10 percent over the next five years.
‘Right Direction’
Engro Foods Ltd., a Pakistani dairy and juice company, discontinued branded shop sales of fresh, pasteurized milk after about a year in the southern city of Karachi in December. The company was hampered by the city’s frequent power outages, said Nauman Khan, research head at Foundation Securities.
Nestle is “going in the right direction as demand is rising for branded products with the upper-middle class becoming more hygiene-conscious.” Amreen Soorani, an analyst at Karachi-based JS Global Capital, said by phone. Home delivery “is more convenient and makes it more accessible.”
Pakistan’s sale of processed drinking milk products are projected to have more than double in the past five years to 134.6 billion rupees in 2014, and are forecast to reach 203 billion rupees by 2019, according to Euromonitor International.
Batato said he expects the Pakistani processed milk market to grow to 7 percent or 8 percent in five years. “It won’t be a step change like Turkey.''
Turkey gave farmers incentives to sell milk to documented processing companies as part of its efforts to join the European Union, which boosted the share of the pasteurized-milk sector to 70 percent from 10 percent, according to Batato.
Pakistan’s middle class more than doubled to 84 million in 2002-2011, bringing almost half the nation into that segment for the first time, according to a study by Dr. Jawaid Abdul Ghani, a professor at the Karachi School for Business and Leadership, published last year.
Full Capacity
Nestle started its Pakistani operations in 1988 in a joint venture with Milk Pak Ltd. before taking over management of that company four years later, according to company’s website. About 80 percent of revenue is generated from milk and nutrition products including baby formula and cerelac, while the rest comes from water and beverages, according to data compiled by Bloomberg.
The company’s powdered milk plants in Pakistan are running at ‘‘full capacity,” Batato said. “We are taking every single drop. There is an opportunity to import tactically a bit, but this is not our business model.”

http://www.bloomberg.com/news/articles/2015-02-26/nestle-pakistan-sells-pasteurized-milk-in-23-billion-market

Riaz Haq said...

“#Pakistan is all set to become one of the top global markets of #motorcycles" #Yamaha President Hiroyuki Yanagi http://tribune.com.pk/story/876873/investment-yamaha-resumes-assembly-in-pakistan/ … Yamaha Motor Pakistan (Pvt) Ltd, a newly formed company with 100% equity from Yamaha Motor Company, Japan, is expected to produce 30,000 units in year 2015.

The factory has been established with an initial investment of Rs5.3 billion and its current production capacity is 40,000 units per year. It has hired 200 employees in the first phase.

In its initial phase, the company has introduced the “YBR125” model, a 125cc engine motorcycle, with a network of 140 dealerships in different parts of the country. Equipped with new technology, industry analysts say the initial price of YBR125 (Rs129,400) is competitive enough for its rival models in the market. Pak Suzuki’s GS150 is available in Rs128,500 while Atlas Honda’s CG125 and CG125 Deluxe is available in Rs102,900 and Rs124,000, respectively.

Japanese Ambassador to Pakistan Hiroshi Inomata said that the presence of the top leadership of Pakistan in the inauguration ceremony signifies the importance of the investment Yamaha has brought into Pakistan.

“We appreciate the efforts of the government of Pakistan in bringing FDI in the country. We believe this is a win-win situation for both Japan and Pakistan,” Inomata added.

Board of Investment Chairman Dr Miftah Ismail said the middle class of Pakistan was growing at a rapid pace. From the current level of 70 million, it will touch 100 million by 2025, making Pakistan one of the top six countries with the largest middle class in the world, he added.

Riaz Haq said...

Int'l #consumer giant #ProctorGamble CEO expresses strong commitment to #Pakistan #economy http://pakobserver.net/pg-ceo-expresses-strong-commitment-to-pakistan-economy/ … via @Pakistan Observer

P&G Chairman of the Board, President and Chief Executive Officer, David Taylor met the Prime Minister of Pakistan, Mr. Mohammad Nawaz Sharif in Davos on the sidelines of the recent World Economic Forum confirming P&G’s commitment to serve Pakistani consumers and expressing optimism about the potential and business climate of Pakistan. David Taylor shared with the Prime Minister facts about P&G’s operations in Pakistan which has enabled P&G to celebrate 25 years of its presence in the country with great success.
He said P&G’s presence in Pakistan is strong and getting stronger. Since its first shipment in Pakistan in August 1991, P&G has grown to be amongst the top fast moving consumer goods companies in Pakistan and has launched premium quality brands which are amongst leading household names in their categories. “For the past 25 years, we have improved Pakistani lives through P&G’s iconic and consumer-preferred brands, our investment in local manufacturing facilities, the creation of direct and indirect employment, and our contributions to help communities in need.
With the potential Pakistan has to offer as well as the strong partnership we enjoy with the both the Government of Pakistan and local retailers, we remain committed to serving Pakistani consumers in the years ahead.”

Riaz Haq said...

Auto sales rise 41pc YoY in July

https://www.thenews.com.pk/print/222765-Auto-sales-rise-41pc-YoY-in-July

KARACHI: Sales of locally assembled cars, including vans, jeeps, and light commercial vehicle (LCVs), reached 19,577 units in July 2017, registering an increase of 41 percent year-on-year (YoY) basis, the latest industry figures showed on Thursday.

“These numbers are in-line with our estimates. We attribute this apparently large increase to low-base effect due to lower number of working days last year (eid holidays fell in July 2016),” said Rai Omar Basharat, an analyst at Topline Securities, in an auto sector research report.

The figures showed that sales of Pak Suzuki Motor Company (PSMC) increased by 37 percent YoY in the period under review driven by the strong demand for Wagon-R as its sales shot up 77 percent YoY.

“With the launch of its new model, sales of Cultus increased by 66 percent YoY, whereas Ravi, which witnessed a jump of 41 percent YoY, also contributed to the growth of the company sales,” Basharat said.

He added that sales of Honda (HCAR) outperformed its peers, posting 113 percent YoY growth drawing strength from the success of the new Civic and a new SUV variant BR-V.

The report said that Indus Motors (INDU) sold 4,618 units in the outgoing month, up 11 percent YoY. “The company’s focus remained on production of higher margin Fortuner, which showed stellar growth of 543 percent YoY,” Basharat added.

Also, according to the Topline analyst, buyers were postponing their purchase of Toyota corolla, waiting for the face-lift model, which has just arrived. According to the figures released by automakers, tractor sales continued to exhibit upward trajectory with sales growing by 125 percent YoY in period under review.

“We expect the lower GST, improving crop yield due to Punjab government Kissan Package and continuation of fertiliser subsidy to improve farmers’ purchasing
power, thus improving the overall tractor sales going forward,” the analysts said in the report.

It must be noted that in the budget FY18, the Sindh government had set aside Rs2 billion in subsidy for farmers on tractor purchase. Moreover, truck and bus sales of Pakistan Automotive Manufacturers Association (PAMA) member companies in July 2017 remained strong, growing by 13 percent YoY.

“We foresee this trend to continue, fueled by China-Pakistan Economic Corridor (CPEC) led growth, higher road connectivity, lower financing rate and change & enforcement of axle load limit per truck on highways by National Highway Authority (NHS),” the Topline analyst said.

Finally, the sales of two and three wheeled vehicles grew strongly in July, up 42 percent YoY, owing to a rise in disposable income of lower middle class. “Sazgar Engineering Works Limited (SAZEW) outperformed broader 3-wheeler industry during the outgoing month, exhibiting 58 percent growth in sales YoY,” the report added.

Riaz Haq said...

135 Million Millennials Drive World's Fastest Retail Market

Middle class expected to surpass U.K., Italy over 2016-21
By 
Faseeh Mangi
September 28, 2017, 1:00 PM PDT
From 

Nearly two-thirds of Pakistan population under 30 years old
Pakistan’s retail stores forecast to grow by 50% in 5 years
Pakistan’s burgeoning youth and their freewheeling attitude toward rising incomes have turned the nation into the world's fastest growing retail market.




The market is predicted to expand 8.2 percent per annum through 2016-2021 as disposable income has doubled since 2010, according to research group Euromonitor International. The size of the middle class is estimated to surpass that of the U.K. and Italy in the forecast period, it said.





Pakistan's improving security environment, economic expansion at near 5 percent and cheap consumer prices are driving shoppers to spend up big. Almost two-thirds of the nation's 207.8 million people are aged under 30, according to the Jinnah Institute, an Islamabad-based think tank.




“We have a new millennial shopper at hand. They don’t mind spending to have the kind of lifestyle they would like,” said Shabori Das, senior research analyst at Euromonitor. “It’s not like the Baby Boomer generation where savings for the future generation was important.”





Pakistan is bucking the trend in the U.S. -- where stores are closing at a record pace as e-commerce undermines bricks-and-mortar. It's also attracting foreign operators: Turkish home appliance maker Arcelik AS and Dutch dairy giant Royal FrieslandCampina NV entered the market last year via acquisitions. Meanwhile, Hyundai Motor Co., Kia Motors Corp. and Renault SA are all building plants in the South Asian nation.

Pakistan’s retail stores are expected to increase by 50 percent to 1 million outlets in the five years through 2021, Euromonitor said. Its three biggest malls, Lucky One in Karachi and Packages Mall and Emporium Mall in Lahore, opened in the past two years.


Pakistan is mirroring what India went through about four years ago. Both countries have young populations with more income and less inclination toward saving which is a distinct difference to what retailers elsewhere are dealing with, said Das.



https://www.bloomberg.com/news/articles/2017-09-28/135-million-millennials-drive-world-s-fastest-retail-market

Riaz Haq said...

#American #agribusiness giant Cargill to grow #Pakistan business with US$200 million investment for expansion across its #agriculture trading and supply chain, edible #oils, #dairy, #meat and animal feed businesses while ensuring safety, food traceability. https://www.thenews.com.pk/latest/420270-cargill-to-grow-pakistan-business-with-us200-million-investment

Cargill renewed its long standing commitment to Pakistan by announcing plans to invest more than US$200 million in the next three-to-five years.

The announcement was made soon after Cargill’s global executive team, led by Marcel Smits, head of Global Strategy and Chairman, Cargill Asia Pacific region, and Gert-Jan van den Akker, president, Cargill Agricultural Supply Chain, met with the Prime Minister Imran Khan and other senior government officials to discuss the company’s future investment plans.

Being a global food and agriculture producer with a strong focus on Asia, Cargill aims to partner on Pakistan’s growth by bringing its global expertise and investment into the country.


The company’s strategy includes expansion across its agricultural trading and supply chain, edible oils, dairy, meat and animal feed businesses while ensuring safety and food traceability.

Cargill will bring world class innovations to support the flourishing dairy industry in Pakistan, which is already moving toward modernization, as well as the rising demand for edible oils backed by evolving consumption patterns and a growing market for animal feed driven by sustained progress made by the poultry industry in Pakistan.

Cargill’s proposed investments will support Pakistan’s overall economic development and contribute to local employment.

The visiting delegation informed the Prime Minister that M/s Cargill intended to invest in Pakistan as back as 2012 but were discouraged by mismanagement, corruption and non-availability of level playing field during the previous governments. However, investor’s confidence has restored after the incumbent Government and the policies being pursued by it.

The prime minister welcomed investment plans of M/s Cargill in the area of agriculture development, import substitution and enhancement of agricultural products.

He highlighted the efforts of the government towards ensuring transparency, providing the business community with level playing field and improving ease of doing business in the country.

The PM assured the delegation full support from the government.

Riaz Haq said...

#Pakistan's Rural Transformation With #Education, #Remittances, #Healthcare & #Communications: Motorized Vehicles replacing horses & bulls, sturdy brick/cement replacing mud houses, TVs & Mobile Phones everywhere, Migrant workers bringing money & ideas. https://www.thenews.com.pk/print/685889-changing-landscape-of-village-life-in-pakistan

Islamabad:The countryside life in far-flung areas of Pakistan, once considered totally isolated and secluded from the rest of the world and devoid of modern-day facilities, has undergone a massive transformation during the last two decades or so by changing the entire landscape of village life.

The rural life is often considered backward, fixed and hostage to tribal culture and traditions. Similarly, the popular social discourse that nothing has changed in Pakistan contradicts with historical facts.

Looking at the national picture of rural life in Pakistan rapid changes have occurred in almost all spheres of life from communication to education, socialization to healthcare, transportation to banking, governance to farming and cultivation to harvesting due to technological advancement, developmental works, penetration of information technology, remittances and domestic tourism.

Among others, the two factors of economic and technological developments as the agent of change had proved instrumental in shaping the process of change not only in the urban areas but also in suburbs of the country. Not more than twenty years ago when mobility was considered difficult in the remote areas not only due to missing road infrastructure but also due to poor transportation facilities.

‘Tonga,’ a carriage pulled by a horse, was the only facility for public transport while bullock-cart was commonplace phenomena for weight transportation in almost all small villages. The houses made of mud have also slowly been replaced by cemented buildings while the social structure was also changed due to disintegration of combined family structure to separate family system.

Likewise, only a few professions of handicrafts have survived due innovation to capture the pace of time and demand of the market while others have totally faded away. Similarly, the obsolete tools, techniques and methods are no more used in farming, cultivation and harvesting due to low production. Therefore, it could not survive at all in the face of modern technologies.

The media revolution in the country with more than 100 private TV channels has brought the whole world at the doorstep of the villagers while the mobile phone companies and 3G/4G technologies have brought it further closer to the palms of people. Hardly there is anyone left without having a smartphone even in the remotest parts of the country.

Almost everybody has got access to the unbridled flow of information on social media in every nook and corner of the country. Thus the electronic media and communication technologies have brought together the collective experiences of the whole world into rural households. The occupation and profession in rural areas once used to be farming and handicraft only. Now it has also transformed into government services, urban migration, overseas workers and businesses. The migrant workers are not only bringing money to the rural economy, but also ideas and experiences about how people in urban areas and the world outside live.

The villages, the basic components of civilization, where a large segment of society is living, have either transformed into model villages/towns or merged with nearby cities having urbanized lifestyle and lots of hustle and bustle. But in developed parts of the globe, the difference between village and city life is still quite visible due to well-planned construction, proper waste disposal mechanism, sewerage system, cleanliness and greenery.

Riaz Haq said...

#Pakistan To Invest $400 Million #WorldBank Loan to Deal With #locustattack & Promote #DistanceLearning. LEAFS & ASPIRE programs will help millions of farmers hit by #locust & accelerate #onlineeducation for children amid #COVID19 #lockdown https://reliefweb.int/report/pakistan/pakistan-invests-400-million-manage-locust-outbreak-and-respond-school-disruptions?utm_medium=social&utm_campaign=shared&utm_source=twitter.com via @reliefweb



“The compounded impact of the locust outbreak and COVID-19 pandemic calls for urgent, coordinated and targeted actions to secure Pakistan’s agricultural economy and improve educational systems to protect human capital,” said Illango Patchamuthu, World Bank Country Director for Pakistan. ”Together, these projects will contribute to short- and long-term goals to increase Pakistan’s food security and achieve greater equity for students across the country.”

The Locust Emergency and Food Security Project (LEAFS) will support emergency actions to control the locust outbreak and prevent further spread across Pakistan and the South Asia region. In the short-term, it will benefit at least six million farmers and agricultural laborers, of which approximately 30 percent are women, by addressing the negative impacts on the livelihoods of farmers and laborers living in areas where crop damage and losses are most severe. The project will further support the medium- and long-term sustainability of the agricultural sector by promoting climate-smart solutions to increase resilience to weather-related hazards such as floods and droughts. LEAFS will improve early warning systems by strengthening the Food Security and Nutrition Information System (FSNIS), which is a critical decision-making tool to prevent pest outbreaks and improve national food security. The project will also improve coordination among provincial, national and regional authorities to reduce climate and disaster risk.

“This project responds to the crisis with immediate actions to protect Pakistan’s national food security and ensure sustainability of the agriculture sector,” said Guo Li, Task Team Leader for the project. “It will also strengthen the capacity of the Ministry of National Food Security and Research in policy making and managing disaster risk.”

The Actions to Strengthen Performance for Inclusive and Responsive Education Program (ASPIRE) will address school disruptions due to COVID-19 by accelerating virtual and distance learning opportunities for students. ASPIRE supports Pakistan’s efforts to safely reopen schools by establishing protocols and leveraging technology to expand access to online learning programs and training for teachers and administrators. Increased connectivity will help bridge the gap to provide education services for Pakistan’s youth, particularly among disadvantaged communities. The program will provide training to teachers on distance-learning and expand digital access through free, public Wi-Fi hotspots. ASPIRE also strengthens coordination among federal and provincial governments to generate new investments in traditional and alternative education programs to accelerate the recovery phase and build back better.

“School disruptions from the COVID-19 pandemic disproportionately affect disadvantaged and hard-to-reach children, especially girls and young women,” said Manal Quota and Juan Baron, Task Team Leaders for the program. “The program addresses immediate and medium-term response efforts to increase education services for out-of-school students by combining traditional and innovative learning approaches through new technology and alternative teaching methods.”

Riaz Haq said...

Annual milk production during 2021/2022 was estimated approximately 65.7 million tonnes, giving Pakistan a place in the list of world's top 5 milk producing countries. Dairy farming in Pakistan is fragmented and practiced on various scales both in rural and peri-urban areas mainly by private sector.

https://sdgs.un.org/sites/default/files/2023-05/B65%20-%20Tariq%20-%20Sustainable%20Dairy%20Production%20in%20Pakistan.pdf

Dairy sector in Pakistan plays a pivotal role in the national economy and its value is more than the
combined value of major cash-crops i.e. wheat and cotton. Annual milk production during 2021/2022 was
estimated approximately 65.7 million tonnes, giving Pakistan a place in the list of world’s top 5 milk
producing countries. Dairy farming in Pakistan is fragmented and practiced on various scales both in rural
and peri-urban areas mainly by private sector. However, this industry is facing challenges (nutrition,
healthcare, breeding, government support and public health) that threaten its sustainability and
livelihoods of millions of people involved in the sector