Milk and Juice Industry in Pakistan

The milk and Juice Industry in Pakistan is very large because Pakistan is the fifth largest producer of milk with an industry volume comprising different dairy products reaching US 26 billion in urban and rural areas due to the increasing population and domestic local consumption, a research report said. A dense, growing, and young population and rising income levels in Pakistan have opened the door for companies producing consumer and edible items with growth in business and continuous profits. Engro Foods Limited (EFOODS) is the fastest-growing large company listed on the Karachi Stock Exchange and strong enough to cash in on all opportunities of big markets with big investments. Engro Food’s business encompasses milk and nutrition products, beverages, and ice cream. It operates in three business segments namely Dairy and Juices, Ice cream, and Dairy farms.

Milk and Juice Industry in Pakistan

Engro Foods Limited company is the leader in UHT milk with over 44 percent market share while it is the second largest player in the ice cream segment with a market share of 24 percent. The company’s main brands include Olper’s, Owsum, and Olwell, Olper’s cream, Trang, Olfrute, Dairy Omung, and Omore ice cream. The milk Industry in Pakistan’s choices has been ideal. Engro Foods, of this total, is only 2.8 percent; as 93 percent of the industry is dominated by the unbranded and the open (non-Tetra Pack) milk sector. Hence, the opportunity for Engro Foods is enormous.

The juice industry of Pakistan also tends to look for that all-important growth in Pakistan as the people of Pakistan do have an association with the tetra pack juices and shakes. There are so many companies that have made them directly associated with the juice industry of Pakistan in which Engro foods are also present and with them there are big brand names like Nestle which is considered one of the most popular international brands then there is also Shezan the local Pakistani brand.

Engro Foods plans to invest Rs 8.7 billion in 2012 to enhance its milk collection capability, increase powder plant capacity by 200 percent (from 5,000 tons to 15,000 tons), and increase its footprint in the ice cream business. The company currently has 916 milk collection centers which collect 89 percent of the company’s total milk. With the expansion, which is being financed by Rs 5 billion of debt (57 percent) and Rs 3.7 billion of internal funds (43 percent), the company expects to significantly increase its milk collection infrastructure which will help sustain future growth.