Engro foods

Presentation by:M.Talha
I.D:9130
 About

Engro Foods Limited is subsidiary of Engro Chemical Pvt. Ltd. which is one of the most reputed

enterprises in Pakistan with more than 40 years of diversified business operations in the areas of

fertilizer and chemicals. Engro Chemicals, formerly known as Exxon, was taken oven by the

employees and reamed Engro. Since then, it has diversified into many fields owning and

operating subsidiaries like Engro Asahi, Engro Vopak, Engro Pak tank, Engro Chemicals and

Engro Foods. Engro Foods started its business operations in March 2006 and it hasn’t looked

back ever since its inception.Within a very short span of 2 years, it has become the house of four

quality dairy milk brands: Olpers Milk, Tarang, Olwell, and Olpers cream. Engro Foods has

already set up two processing plants at Sukkur and Sahiwal.

 Logistics

These activities can be divided into three all encompassing categories

· Inbound Logistics: the receiving and warehousing of raw materials,

and their distribution to manufacturing as they are required.
· Operations: the processes of transforming inputs into finished products
and services.
· Outbound Logistics: the warehousing and distribution of finished
goods..
 Raw material Transportation

Raw material procurement plays the most integral part in the

success of any Logistics. The reason being, that it is the
elementary level activity and if there are flaws in it, the
effectiveness emphasis on the quality of the raw materials
obtained and at the same time establishing and maintaining long
term relationship with their suppliers. This way Engro Foods is
playing an important role to produce and market a range of high
quality dairy in a country where a huge quantity of this commodity
is wasted each year due to an inefficient farm-to-market
infrastructure.
 Raw Material Transportation

The various kinds of raw materials required for the milk and
cream production at Engro food include:
• Raw Milk
• Other ingredients like SNF and fats
• Packaging material
 Raw milk

• The raw milk which is further processed in the manufacturing

plants at Sahiwal and Sukkur is the core raw material at Engro
Foods because their product portfolio encompasses all dairy
based products. The raw milk which is mainly the buffalo milk
is obtained from the various dairy farms across the country
with most of these dairy farms being located in Sindh and
Punjab region.
 Other Ingredients

• There are several other ingredients that are added at the

various stages of the production process at Engro Foods and
their respective quantities depend on the recipes of the
products being manufactured. These include SNF that are
solids not fats and fats which are adjusted to achieve the
desired levels. For instance, the Olpers milk consists of 3.5%
fat whereas, Tarang milk which is the tea whitener and more
creamy in nature has 7% fat, therefore, during the production
process, more fat is added to the milk to produce Tarang.
 Packaging material

• The packaging material used by Engro Foods is supplied from

Tetra Pak Ltd. It is in the form of rolled sheets of aseptic
packaging arriving at the manufacturing plant directly from the
supplier.The aseptic packages are sterilised prior to filling of
UHT (Ultra Heat Treated) milk, resulting in a 6-layered Tetra
Pak Brick Aseptic packaging, with a 3 months shelf life.
 Sources of milk supply

• At Engro Foods the supply of raw milk, that is the way milk
collection is done can be divided into:
• Direct Sources
• Contactor based collection
 Direct sources

• The method of milk collection through direct sources can be

defined as milk collection done through various dairy farmers
residing in different villages. A villager called “Dhoti” is
responsible for collecting milk from his respective area and
delivers milk every morning and evening to the Milk Collection
Centre. The volume of milk supplied by the dairy farmers
varies immensely depending on both the size of the are
covered by the dairy farmer and the availability of milk and at
times could be as low as two litres a day.
 Direct sources

• The method of milk collection from direct sources is the most

preferred one by Engro Foods mainly because of the low
probability of adulteration of the milk by dairy farmers. The
reason accounting for this is that it is easier to identify
adulteration in low volumes of milk as opposed to high volume
provided by the other method. However, the overall quantity of
milk collected through this method is very limited.
 Milk collection centers

• Engro Foods maintains a full fledged Milk Collection

Department to manage milk collection through direct sources.
It started off with hundred Milk Collection Centres in March
2006 and now in 2008 has over five hundred and fifty Milk
Collection Centres operating across the country. Today, Engro
Foods can be regarded as having one of the largest milk
collection networks in the country which is unmatched in size,
productivity and efficiency to meet the selfimposed
commitment to quality. The vast network comprises of village
milk centres which are equipped with chillers to preserve the
quality prior to long hauls to the factories served by specially
designed tankers.
 Milk collection centers

• The main objective of Milk Collection Centre is to deal with

small quantities of milk provided by the village dairy farmers.
On one hand, it has proved a regular source of income for
farmers through an assured and growing income resulting from
the sale of their milk, and on the other, it has enabled Engro
Foods to collect better quality milk in the quantities it needs. At
the Milk Collection Centre a trained milk collection agent who
tests and records every supply for quality and fat content
collects the milk and rejects the milk that does not conform to
their quality standards or is adulterated.
 Contractor based milk collection

The contractor based milk collection involves collecting milk from

approved suppliers who are aware of the quality standards
adopted by the firm. The contractors are responsible for milk
collection from a large area and can bring about ten thousand
litres of milk a day from dairy farmers. This method of contractor
based collection contributes the most to the overall quantity of
milk collection. However, the company fears adulteration on part
of contractors because it is harder to investigate when the
volume is high. Once this milk is tested for the protein, lactose
and butterfat content it is sent to the chiller containers which
protect milk from air, light and heat. This milk is then transported
to the plant. These chiller containers are aseptically cleaned
before milk is stored in them.
 Transportation of raw milk

• The raw milk is transported from the milk collection centre to

the manufacturing plants via insulated tankers. The insulated
tankers maintain the temperature of milk around four degrees
Celsius. The reason why the tankers are insulated is to prevent
the milk from getting hot in the summer or freeze in the winter.
The reflecting surface of the trucks also provides protection
against infrared rays and reduces the degree of heat on the
tank. Also the cool temperature stops the production of
bacteria while the milk is transported over long hauls to the
manufacturing site. Normally the capacity of the regular
tankers used for the transportation of milk from the milk
collection centre to the plant varies between 10,000 and
35,000 litres.
 Finished Goods

• Storage of finished goods

• Now that the Engro foods’ products have been produced and
have assumed the form of finished goods, the next step
involves the immediate transfer of the products to the
warehousing facility maintained right next to each of the
production plants.
Transportation
 Logistics
• For the sake of transportation of the finished goods right from the
Engro Foods maintained warehouses that are situated right next to
the facility uptil the distributors, a fleet of trucks is maintained by
Engro Foods themselves while part of the transportation has also
been outsourced, employing a tactic known as third party logistics.
A third-party logistics provider is a firm that provides outsourced or
"third party" logistics services to companies for part, or sometimes
all of their supply chain management function. Third party logistics
providers typically specialize in integrated warehousing and
transportation services that can be scaled and customized to
customer’s needs based on market conditions and the demands and
delivery service requirements for their products and materials
 Logistics
• As far as the responsibility for distributing the goods is concerned,
the outreach of the Engro Foods’ and the third party logistics is
limited to the distributors only. Engro Foods has almost 200
distrbutors all over Pakistan. Some of the distributors deal with
larger areas and larger orders while others are the smaller ones. For
the larger orders, the finished goods are transported directly to the
distributors’ agreed upon point of delivery while for the smaller
distributors, goods are also being delivered and deposited in
warehousing facilities maintained by Engro Foods in some important
locations all over Pakistan, and it is from there that the smaller
orders for the distributors are processed and either delivered or
picked by the distributors themselves. The network of distributors is
very extensive and extends all the way to Afghanistan.
 Issue in distribution channel

• The distribution of goods to the retailer who then sells it to the

final consumer is a responsibility that is not directly under
Engro Foods but rather being handled by the approximately
200 distributors Engro Foods supplies to. This leads to a
difficulty in exercising control and supervision of the overall
distribution activities. Accurate information with regard to sales,
proper storage, timely delivery, and appropriate marketing
procedures cannot be obtained easily.
 Conclusion
• Through all this information we can say that Engro had
achieved its goal as by words of Mr.Umair Nagi,SCM
development manager that,

“Fulfilling our customer’s demands in the optimum way”

Thank you!