2. Introduction of Engro Foods
Engro Foods Limited is subsidiary of Engro Corporation 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 was formerly Exxon Chemical Pakistan Limited until 1991, when
Exxon decided to divest their fertilizer business on a global basis and sold
off its equity of 75% shares in existent company.
The Employees of Engro, in partnership with leading international and
local financial institutions bought out Exxon’s equity and the company
was renamed as Engro Chemical Pakistan Limited.
Engro Foods started its business operations in 2005-06.
Top quality brands like Olper’s, Olper’s Lite, Tarang, Omore, Olfrute, Dairy
Omung, Al Safa, Tarraka and Omung Lassi have been successfully
launched
3. Introduction of Engro Foods
Engro Foods has already set up two processing plants at Sukkur and
Sahiwal and a Dairy Farm at Nara.
Engro Foods is now venturing into North American market starting from
Halal Foods category and acquired a company launched Meat products
with name of AL SAFA.
4. Vision & Mission Statement
Vision Statement
“To be the premier Pakistani enterprise with a global reach,
passionately pursuing value creation for all stakeholders”
Mission Statement
“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.”
5. Core values
Ethics and Integrity
Health, Safety & Environment
Innovation & Risk Taking
Our People
Community & Society
6. Diversified Portfolio of Engro
Pakistan
Engro Fertilizers Limited
(Fertilizer Manufacturing and Marketing Company)
Engro Polymer & Chemicals Limited
(Manufacturer and Marketer of PVC Chemicals)
Engro Vopak Terminal Limited
(Chemicals and Petrochemical Storage Company)
Engro Foods Limited
(Foods Company)
Engro Powergen Limited
(Power Generation Company)
8. Quick Facts & Figures
12 Brands
1,243 Employees
45% Market Share of Dairy Products
Market Share in
310 Cities in Pakistan
18 states in USA
4 Provinces in Canada
18th Largest Customer of Tetra Pak World Wide
2nd Largest Company of Chilled Milk Collection of Pakistan
900 Milk Collection Centers
35,000 farmers directly linked with EFL
9. Quick Facts & Figures
2 Milk Processing Plants
One Production Farm having 2,615 cattles (16% Milk Produce of Total
Production)
Milk Production Capacity is 700 Thousand Liters per Day.
Profit Growth 406% in 2011
Revenue Growth 42.6% 2011
30 Billions Revenue for 2011
EPS Rs.1.22 for 2011
Total Assets Rs.16,639 Millions
10. SWOT ANALYSIS
Strengths
Efficient milk collection system.
Keeping high quality standards.
Successful diversification.
Product Innovation
Strong Financial Position
Huge Capacity for Production
Growing Sales
Worldwide fame of Engro.
Qualified Work Force
Market Share
Better Integrated distribution and warehousing facilities.
Engro food has the third-generation UHT milk plants in the
country.
11. SWOT ANALYSIS
Weakness
Engro Foods is having only one its own dairy farms.
Centralize Decisions
High Price
Less Promotion Activities
Selective Target Market
High milk collection & distribution costs.
The competitors like Nestle and Haleeb Foods have a much
diversified line of dairy products then Engro Foods
Unable to fulfill the demand of local powder milk market.
Local Company
12. SWOT ANALYSIS
Opportunities
Flexible government policies for food industry.
Expansion of Food Business
Awareness of Packed Milk
Availability of Raw Material
Market Capitalization
Diversification
Export Opportunities
May merge with other global businesses to eliminate competitors.
Having Capable of expanding into other markets of the world
Has the potential to innovate and differentiate the company's products to
sustain a Competitive advantage
Increase in the consumption of processed milk will lead to increase in sales for
the company.
13. SWOT ANALYSIS
Threats
Competition with Nestle, Haleeb, Walls. and the new entrants,
Mature Market
High inflation rate.
International Marketing Standards
Change in prices might create certain barriers in terms of the
profit margins
Low purchasing power.
Recessionary period in business cycle.
High Taxes
Seasonal Factors
Economic Condition
Price Consciousness of consumers
Suppliers Behavior
15. EFE MATRIX RESULT
According to above EFE Matrix the
EFL average score is 2.82, which
seems to be good from the minimum
average score 2.50, but Engro should
more work hard to be the market
leader in food industry.
EFL’s major opportunity is
Diversification.
17. CP MATRIX RESULT
According to above CPM Matrix, EFL’ s
Average Score is 3.08
EFL’s strong competitor is NESTLE which
Average score is 3.33.
EFL has high average score than HALEEB
FOODS.
Nestle is better than EFL in Advertisement
and Global Expansion.
While EFL has strong Diversification
strength than Nestle.
18. Strategies in Action
Market Penetration
Market Development
Product Development
Backward Integration
Forward Integration
19. Financial Evaluation of EFL
S.NO. Key Factors 2013 2014
1 Return on Investment (ROI) 5.70% 1.41%
2 Return on Equity (ROE) 12.31% 3.43%
3 Profit Margin 2.92% 0.84%
4 Market Share 45% 31%
5 Debt to Equity 51% 51%
6 Earnings Per Share (EPS) 1.22 0.31
7 Sales Growth 42.6% 25.8%
8 Asset Growth 33.53% 27.23%
Strategy Evaluation stage includes measuring
organizational performance and taking corrective actions.
We can measures EFL performance through following key
facts.
20. Recommendations/ Suggestions
Engro Foods should have much diversified bi-product line of dairy products like Nestle &
Haleeb.
They should introduce new promotions to get customers’ attention
EFL should expand its dairy farms so that they can get competitive advantage.
EFL should focus on Market Penetration, Market Development and Product Development
strategies with more efforts to be the market leader.
They should go expand its capacity to enter into in international market like Nestle.
Engro Foods can be into Co-branding with other brands like Olper’s with Lipton tea bags,
Olper’s with different biscuits etc. to increase their sales
They can also move towards other foods products like Nestle launch Kit Kat Chocolate,
Meggi Noodles, Sweets Candies etc.
21. Conclusion
Engro is going to be a market leader due to different reason like its financial
position, product quality, R & D, market share, sales growth etc. Its price is
more or less equal to its competitors, it matches its quality with its competitors
and capturing its competitor’s share from market. Engro is using its brand
name and its packaging is good to promote its products and EFL is becoming
very popular as compared to its competitors.
Company has planned to make Omore world class premier quality brand like
existing brands of Engro Foods. Company is also working on cereals in coming
years. They has planned to move other dairy products as are offering by its
competitors Nestle like yogurt, flavoured yogurt (raita), cereal for babies etc.
Foods competitors Nestle and Haleeb are biggest threat. There are
opportunities and doors for new players are open who can be the future
competitors.
Consumer is aware now, there is need to maintain the quality of products.
Consumers perceptions and price differentials can cause threat for the
company, Consumer’s preferences changes timely and prices might create
certain barriers in terms of the profit margins for ENGRO FOODS.
In short Engro Foods should grow and maintain its position. That is why EFL is
increasing Market Penetration, Market Development & Product Development
strategies.
