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Mission Statement

Engro is progressing day by day because they have a vision and mission the keeps the motivated and keeps them going. Their mission as they describe as: Our mission is twofold, to help farmers maximize their farm produce by providing quality plant nutrients and technical services upon which they can depend. To create wealth by building new businesses based on company and country strengths in petrochemicals, information technology, infrastructure, food and other agriculture sectors. And further describing the adoption fashion they say, In pursuing the mission we shall at all times be guided in our conduct and decision making by our core values.

Vision Statement
To be the premier Pakistani enterprise with a global reach, passionately pursuing value creation or all stakeholders

The value delivery process:

Value chain

Olpers integrated logistics:

Engro Foods Pakistan makes sure that their product namely Olpers is available, no matter where you are in Pakistan. We integrate processes from the farm to markets, and ensure products are delivered to you at the right time, at the right place and in the right quantity. Logistics network is thus completely outsourced i.e. they are relying on 3PLS as according to Mr. Salman Goheer, EFL head of supply chain: We have outsourced all non core processes of our business like transportation to minimize system wide cost. EFL do have their own distribution network but transportation services are all outsourced.

In-bound logistics:
For inbound logistics dedicated long vehicles are used. Inbound logistics concerns raw milk transportation to the plant. Raw milk comes from the dairy farms to the milk collections centers which are 40 in total & are located in different villages where some quality checks are conducted to ensure the milk quality, if its up to the mark than it is stored, till it reaches the 9,000 liter capacity which is than collected by dedicated specialized vehicles to transport it to the plant for production. Once the vehicle reaches the plant premises, once again a quality check is repeated before emptying the container.

Out-bound logistics
On average, every alternate day Olpers Milk truck arrives at each ware house from Sukkur and Sahiwaal factories, and is distributed in the same amount to the distributors all over the Pakistan. For outbound logistics trucks are used. They have 80% dedicated fleets & 20% open trucking especially for the northern areas of Pakistan.

Outbound logistics concerns finished milk movement from manufacturing plant to the warehouse & to distributors. There are 3 warehouses of olpers: A Sukkur (Mother Ware house) A Sahiwaal (Mother Ware house) A Rawalpindi (Central ware house)

The Engro plant also contributes to the local economy by employing some 200 people throughout the factory. The GEA TDS project was to supply equipment and engineering services throughout the process. This included milk reception; milk processing; UHT processing; powder mixing; cream handling and processing; Clean in Place (CIP) equipment such as trucks, process and filling machines; detailed engineering and project management; automation for both the process and CIP equipment; and commissioning.

Raw milk reception handles up to 40,000 lit/hr of both cow (20%) and buffalo (80%) milk from the surrounding regions farmers cooling it from approximately 15C to 4C for storage in the two 125m3 storage tanks. The process can pasteurize milk to 85C at the rate of 25,000 lit/hr and includes milk clarification and skimming; standardization for milk, cream, SNF and butter oil; butter oil dosing; a refurbished homogenizer; and degassing. Pasteurized milk is stored in 5 tanks each holding up to 75m3. Cream is pasteurized separately at a temperature of 95C at a rate of up to 3,500 lit/hr. UHT equipment, with indirect heating and cooling via heat exchangers, can handle up to 21,000 lit/hr. The CIP system covers the whole process from the delivery trucks through to the filling machines. Acid and caustic concentrates are stored on site in two tanks each with a capacity of 15m3. The whole process is controlled using PLCs supplied by Allen Bradley. PLCs are located in cooled cabinets installed on the base-frame unit of each module. All were delivered wired and I/O tested. Although Engro has only been in the food and dairy sector since 2006 the company has already Carved out a significant market share and is growing quickly. In such a short time its already well on the way to achieving its goal to be one of the biggest players in Pakistans food industry.

Milk procurement department

As all of our food products are milk based, the entire Milk Procurement department plays a critical role in defining the quality of the end product that reaches our customers. Ensuring regular collection of fresh and pure milk right from the farmer to the factory and ascertaining the freshness of milk all across the milk procurement process, is the responsibility of Milk Procurement department, consisting of food technologists working at the collection centers and veterinary doctors providing service to the farmers.

Why did Engro enter in food business

Big opportunity due to population growth and indigenous sourcing. There is a huge population. One seventy million is a very big market. There are only a few countries with such a huge population in the world. Besides, our people spend a lot on food. Our economy is agro-based. We get raw material at the local level. Engro Foods CEO Sarfaraz A. Rehman

ELF aim:
Dominate the food business and to achieve this we will settle for nothing less than the cream

ELF vision:
To become fast growing mega Food Company & also to elevate Consumer Delight Worldwide. The Company aims to generate a significant portion of its revenue from foreign operations.

Mission of ELF:
Our mission is to provide satisfaction at a competitive cost, growth in diversity, and continue to contribute to the growth of industrialization in Pakistan by being the market leader". We believe our success depends on our customers. Thus, our primary value is fulfillment of our customer's needs. Our manner of achieving this success is to include value for money.

Core values:
1. Leadership 2. Innovation 3. Diversity and International focus 4. Quality and continuous Improvement 5. Candid and open communications 6. Individual growth and development 7. Enthusiastic pursuit of profit 8. Ethics and integrity 9. Safety, Health and Environment.

Core competencies:
Aggressive style of business: launching more products in short time.

Diversified Portfolios of Engro Pakistan

Fertilizer Business

Agriculture accounts for 25% of GDP and 45% of employment in Pakistan Second largest Urea producer of Pakistan .Capacity975 KT/A Market share20% Second highest phosphates sales (~400KT/A) Market Share 23% ECPLs Margins are by far the best in the industry. Zarkhez (NPK) Market leader -Capacity 160 KT/A Market Share 95% Urea shortage expected to grow to 1.2 million tons/annum by 2010. Worlds largest single-train Urea plant of 1.3 million tons being setup at a cost of US $ 950 million. On commencement of operations in mid 2010, cash fixed costs of the new plant will be a third of the existing plant; scale & brown field synergies Gas consumption

at the new plant will be 15% less than the existing plant. Engros Daharki complex will become the worlds fifth largest Urea production site; 2.28 million tons, 3 plants.
Engro Energy Limited

Established in 2006-100% owned subsidiary Pakistan is facing growing energy deficit Energy consumption has been growing at 7% per annum Setting up a 220 MW gas based power plant at a cost of $220 million with commercial operation in 2009 Short-listed along with 3 other companies for privatization of Jamshoro Power Company.
Engro Innovative Automation Limited

Acquired majority stake (51%) in a knowledge based company Innovative Engineering & Automation Ltd in 2003 Market Leader in domestic Industrial Automation Honeywell distributor in Pakistan Expanding internationally to synergize, and benefit from lower costs at home and higher demand abroad Now operating in Dubai, UAE which contributes 25% of revenue and half of the profit Companys first IP product iboiler launched internationally in 2006 Acquired an automation company in the US in Dec. 2006; mandated to develop outsourcing opportunities.
Engro Vopak Terminal Limited

A 50-50 JV with Royal Vopak of Holland; established 1997 Royal Vopak is the worlds largest independent tank terminal operator Engro Vopak handles 70% of liquid chemical imports in Pakistan .Setting up our countrys first Cryogenic facility for ethylene imports Well positioned for setting up proposed LNG terminal under active consideration of the government; Cost US$ 350 400 million.
Engro Asahi Polymer & Chemicals Limited

Established in 1999 80-20 JV with Mitsubishi Corp. Pakistans only PVC manufacturing plant; facing buoyant domestic demand since 2006 Successfully placed 22% of sales in diverse export markets from Australia to East Africa in prior years (2004 2005) Expansion and back integration underway imported ethylene + new caustic soda plant; EDC/VCM/PVC.
Engro Food Limited

Established in 2005, a 100% owned subsidiary First investment of dairy plant Processed milk market is growing at approx. 20% per annum Olpers achieved peak market shares of 12.3% within 6 months of launch Other products launched -Olpers Cream, Olwell High Calcium Low Fat Milk (Premium Brand) Plans to expand product portfolio Milk processing capacity to increase by 200% to 200 million liters annually Will become the only company in Pakistan covering the entire milk catchments area Already has the second largest chilled milk collection system in the country. Distribution network to double from 58 towns to 119 towns by the end of 2007JV with global food major in advanced stage of negotiation.


SWOT Analysis
Engros Back

Olpers is a brand of ENGRO foods. This means that consumers can relate their former image of engro foods to Olpers. Engro is a well established brand name in Fertilizer, IT and infrastructure business. The brand is well known so customers will automatically have a brand association with Olpers and see it as a premium quality product. ENGRO is world renowned so it can easily attract foreign investors in backing it against other competitors such as Nestle. Engro foods can easily afford research and development costs for Olpers have in order to introduce new products. It can also distribute the brand through better channels because of its long term relationship with distributors in the agriculture sector.
PR witk Farmers

Engro has been interacting with the farmers for fertilizers and has gained quite a good reputation over the years. It has led to a strong bond and long term relationship with the farmers who are willing to supply milk to the company. This is an added advantage and strength for the company because it will never be short of milk production. The farmers also wont have to look elsewhere to sell their milk.
Positive Response from ustomers

In first year, EFL crossed 1.4 billion sales figure which shows customers satisfaction upon EFLs products. 4. Its taste, quality proposition and world-class quality proposition system.
Strong consumer & product research

Olpers done a strong consumer & product research before and after launching the product. This has provided them the perfect launching pad to eventually emerge as a global player in the food industry. To develop its future portfolios, EFL has hired various global research partners like AC Nielsen, Mindshare, JWT Asiatic and MARS marketing and advertising agencies.
Third-Generation Plant

EFL only, has the third-generation UHT milk plant in the country. EFL plant is the only plant in Pakistan that uses Bactofuge technology to virtually eliminate bacteria and ensure premium quality and hygiene. Moreover, it is also setting up another milk processing plant in Central Punjab (Sahiwal) with an investment of Rs. 2 billion (US $ 33 million). Worldwide fame of Engro. Efficient milk collection system. Keeping high quality standards. Integrated distribution and warehousing facilities. Successful related diversification. Generic brand name of Olpers Large market share of Engro innovative and chemicals. Having Good reputation in the market by strong brand name i.e. Engro

Olwell TV

Olwell ad which is based on Western life style, ENGRO foods brand management showed a man who put off his clothes & remain just in his undergarments, or half nude lady in a cat walk or men admiring the figures of a lady in mix gender health club. In this ad they are creating associations with the brand through the stripes, which is a highlight of Olwell packaging. Half naked people have been shown with tattoos of the same stripes in order to show that they are loyal consumers of Olwell. Also, the talent, situations and locations connects well with the ad to give Olwell a premium positioning. The brilliant marketing people at ENGRO Foods failed to analyze is that the market they are targeted the ad on, is Pakistan, where practicing Muslims reside, who have strong religious beliefs. When making the ad, the brand managers were focused on, making an ad that should give the brand the most premium look and feel amongst the target consumers but on the other hand they were least bothered about the ethics, religious beliefs and cultural values.
Owning Red olor

The company has not owned the color red like Nestle has a green Milkpak; Haleeb has a blue carton etc. This may create problems because when a consumer enters a grocery shop, then he/she might have problems in recalling the brand because there is no color association attached to Olpers. The company may need to find a suitable color in which to focus its upcoming marketing strategies.
Low Quality Milk

EFL is not having its own dairy farms; it largely collects loose milk from farmers & gwalas through its 40 milk collection centers, which sometimes is of low quality and impure because they add vegetable oil to milk to get higher prices.


EFL is dependent upon Tetra Pak for the packaging of its entire dairy products. Tetra Pak is the only option available to Olpers for packaging because it is having monopoly in the packaging sector in Pakistan. Due to this reason, Tetra Pak can charge them higher and it could increase the production costs.
Milk collection & distribution costs

EFLs 34 out of 40 milk-collection centers are located in Punjab, where as its only milk processing facility is situated near Sukkur (Sindh). It increases the milk collection & distribution costs; and also increases the chances of milk getting spoiled because of increased traveling time.
Narrow brand portfolio

It has been more than a year now, when EFL launched its first dairy product, Olpers Milk on March 20, 2006. But EFLs brand portfolio still consists of just 3 products i.e. Olpers Milk, Olwell Milk and Olpers Cream. Whereas its competitors like Nestle and Haleeb Foods have a much diversified line of dairy products. Unable to compete in price sensitive segment of UHT milk market. Under-utilization of the capacity. Unable to fulfill the demand of local powder milk market. Not yet ISO certified

Increased funding by Government

Government has decided to increase farmers funding. This is an opportunity for ENGRO foods because previously due to weather conditions and other reasons there was lots of wastage of milk but now that can be reduced as farmers will be better able to store milk for longer time periods.
Increased consumption of PLM

Competition may create opportunities for the company because each competitor in the milk industry wants to increase penetration of processed liquid milk and so they will create awareness for consumers through different advertising media. This will ensure the increase in the consumption of processed milk instead of lose milk and so will in turn lead to increase in sales for the company. Therefore there will be an opportunity for accelerated growth.

Growing dissatisfaction with loose milk and increasing awareness about health and hygiene issues have led to increased processed milk consumption.

Third largest producer of milk

Pakistan is the Third largest producer of milk in the world with a total production of 32 billion liter of milk a year, whose value is more than that of the combined value of wheat and cotton, from a total herd size of 50 million milch animals (buffaloes and cows). Livestock accounts for 46.8 percent of agricultural value added and about 10.8 percent of the GDP. Milk is the largest commodity from the livestock sector accounting for 51 percent of the total value of the sector. Due to the steps taken by the government and private sector, countrys annual milk production is expected to grow at an additional 3 billion liters in the next few years. This is quite an opportunity for Engro foods as there is lot of growth in this part of the sector. Improving Economy Population growth rate. High urbanization rate. High literacy rate. Flexible government policies for food industry. Have significant growth opportunities Has sufficient capital to expand. Has the potential to innovate and differentiate the company's products to sustain a competitive advantage May merge with other global businesses to eliminate competitors. Having Capable of expanding into other markets of the world


Competition may pose a threat because the company will have to maintain its leadership in an expanding market so that it doesnt lose its market share to its competitors. For Olpers it might be difficult to penetrate in a market where the loyalties exist for such brands as Nestle and Haleeb. These brands have been in the milk industry far too long and have left a mark in the minds of consumers in terms of quality. Competition seems to be getting tougher as a result of new players entering the dairy market.
Perceptions and Price Differentials

Consumers perceptions and price differentials can cause a threat for the company. It is important that Olpers comes up to the expectations of the customers and fulfills its conformance quality that is the company meets its promised specifications. Consumers preferences change with time and prices might create certain barriers in terms of the profit margins for Olpers. For example, lose milk is still cheaper than packaged milk and that is also one factor that people still prefer to buy lose milk. Has many major global competitors with its main one being Nestle Pakistan, Haleebfoods can be substituted by other milk producer made by its competitors. These competitors may develop marketing strategies to eliminate The Engrofoods Olpers. There may be an economic downturn in the business cycle. High inflation rate. Low purchasing power. Decrease in GDP growth rate. Increasing interest rates. Decreasing investment. Recessionary period in business cycle Competition with Nestle, Engro Foods and the new entrants.

BCG Matrix Model

The BCG matrix or also called BCG model relates to marketing. The BCG model is a well- known portfolio management tool used in product life cycle theory. BCG matrix is often used to prioritize which products within company product mix get more funding and attention. The BCG matrix model is a portolio planning model developed by Bruce Henderson of the Boston Consulting Group in the early 1970's.

The BCG model is based on classification of products (and implicitly also company business units) into four categories based on combinations of market growth and market share relative to the largest competitor. Division wise data for Engro foods BCG Matrix

Vision and Mission Statement of Engro Foods

Aims at transforming the company within the next five years into first a national food industry giant, then into a regional force and finally into a global player.

Build Branded ood business to improve quality o lie by oering tasty, aordable and highly nutritional products to our consumers while maximizing stake holders' value.

Objectives and Goals

Engro foods main objectives are to supply everyone their favorite olpers Milk and to satisfy the consumer needs and wants. Engro foods second main objectives are to provide profit to the shareholders and increase the market share. EFL dreams to be BIG. We want to be a major player in the food industry which is also evident in our vision, "Elevating Consumer Delight Worldwide". EFL wants to challenge the industry norms and surprise whoever has eyes on EFL.

Engro do planning on short term and long term basis simultaneously. Engro is mostly having long term plans and for achieving these long term plans it gains support of short term plans. Words of Mr Salman Goheer, Head Of Supply Chain, EFL.

Future plans of ELF

o brands of Engro Foods. Company has planned to make Omore world class premier quality brand like existing

Company is also working on dry milk (KhushkDoodh) like cereals in coming years.

o They have planned to move other dairy products as are being offered by its competitors like yogurt, flavored yogurt (raita), cereal for babies etc o They future plans of own farms are also on board. Its a way to improve quality by removing all doubts in consumer minds about old milk collection ways form govala o Engro Foods is working with different NGOs to meet the Corporate Social Responsibility in country. They are working with UNDP to initiate womens veterinary workers program

o They also signing a micro financing model for dairy farming with Pakistan Poverty Alleviation Fund (PPAF)


Our commitment to continuous improvement in the performance management systems for employees at all levels was reflected in adoption of the 360 Degree Feedback System. This system ensures better employees accountability, at the same time providing the employees with chances to make use of their competencies. The 360 Degree mechanism became fully operational for senior management in 2006. Said by Mr. Hassan, HR Assistant Manger, EFL.