- Counterfeit DAP is a major problem in Pakistan, estimated at around 45,000 tons annually, with around 50% being counterfeit Engro DAP. This hurts Engro's sales and brand image. - Engro conducted research and developed a unique security sticker mechanism for DAP packaging to provide customers confidence in the genuine product and address the counterfeiting issue. - An initial pilot program involving 6,000 tons of stickered DAP in Jhang was highly successful, with all DAP being sold at a premium price. Customer research found high acceptance of and satisfaction with the stickered packaging solution.

1. NIQ, NS, SAG/MHN, ADI, AM, AAA,
SMM, MIQ, ANAP, HA, RN
DISCOURAGING
COUNTERFEITING
THROUGH PACKAGING
CONTROLS

2. Background
Issue Raised
• Security 2000 deployed
Internal Survey Conducted (AMMs & ZMMs)
• Survey Results show that industry is about 40 kt per annum
• Most affected area is Jhang at ~ 20 kt per annum
External Research Conducted (Dealers)
• Survey Results show that 50 – 55% product that is counterfeit
is Engro DAP
• Industry size of counterfeit product is estimated to be ~ 45 –
50 kt

3. Problem Statement:
Selling of counterfeit DAP is a major problem. On annual basis it is observed that about ~45 kt
volume sold is counterfeit (fake or kalti palti). The major chunk of this (~50%) is Engro DAP.
Which not only hurts sales but also impacts brand image and equity. Research shows that 50%
of the people who face this issue are likely to switch to other product(s) if this issue is not
resolved. By addressing this issue we would like to retain at least half of these people.
Business Case:
Higher sales could lead to profit of Rs. ~45 million and having a better equity
and customer trust can lead to even higher profitability.
CTQs:
Unique security mechanism, low cost
Goal:
Develop a unique security mechanism in packaging which helps provide
customer the confidence that he is purchasing genuine Engro Product
Team:
NIQ, NS, SAG/MHN, ADI, AM, AAA, SMM,
MIQ, ANAP, HA, RN
Timeline:
Define: 26th March
Measure: 20th June
Analyze: 15th July
Improve: 30th November
Control: 15th December
Scope:
Phosphates
Product Packaging
Customers:
Internal: EXIMP,
Brands Team
External: Customer,
Field Team
Projected Benefits:
Retention sales leading to more profit
Higher MS estimated to be around 1%.

4. Tools Applied
Define
•SIPOC
Measure
•Brainstorming
Analyze
•QFD
Improve
•DOE
•PILOT

5. Solution Selection
Vendor Selection
Local option
International option
Zarkhez Plant support
Requirement Definition
Issue breakdown
Requirement sharing
Solution Options
Visit to Local Warehouse for pre-testing with vendor
Sticker testing
Rough handling test
Random placement
test
Development of Sample as per requirement
Sticker revamp
Working Sample
Sticker
Testing procedure
developed
Testing of requirement
at port
Visit to port to test
sticker
Bagged about 433
bags
21 bags in 1 minute in
first go vs 18 - 22 is
normal operation

6. SAMPLE STICKER
Tamper
Evident
Sticker
Colour shift
technology
(green to
brown)
Micro text
printing
Laser die
cut mark
3M colour
shift film
SMS Scratch
Code with
Serial
Number

7. PILOT AND WAY FORWARD

8. PILOT
Research
Observation Study Interview
Purchase Behaviour and
Likeability Assessment
Communication Support
Banners Flyers Posters
Dealer
Session
Agriculture
Dept Session
RAHBAR
cold calls
Local Cable
Tickers
Objective
Assess market response to
ENGRO Bharosa seal
Assess price premium capability Assess operational capability
Scope
Area: Jhang Duration: 4Q
Volume: 5 kt (increased to 6 kt
upon demand)

9. RESEARCH SUMMARY

10. Research Design
•Silent observation followed by Face-
to-face exit interviews by intercepting
the farmer / purchaser of DAP.
•15 minute Exit interview.
•Using pre-structured questionnaire
•Team deployment of 2 interviewer
per dealer (1 for observer & 1 for exit
interview) & 6 working days each
dealer (Saturday to Thursday)
What
•Malik Traders (Jhang)
•Mahr Traders (Jhang)
•Chaudhary Traders (Jhang)
•Mehmood Traders (Jhang)
•Mehraj Sadiq (Jhang)
•Muhammad Ashraf & CO (Gojra
More)
•Ali Spray Centre (Mandi Shah Jeona)
•Al Hamd Traders (Mandi Shah Jeona)
•Athar Brothers (Pir Mahal)
•Mian & CO (T T Singh)
Where
•10th ~ 15nd Nov. (Jhang)
•17th ~ 22nd Nov. (T .T
Singh)
When

11. Research Findings
Acceptability
•60% of DAP
purchasers opted
for stickered DAP
bag
•Assurance + SMS
main reason
•Dealer played
important role in
convincing (85%
people followed
dealer
recommendation)
Awareness
•76% awareness of
stickered DAP
•Sources:
•Dealers (80%)
•Fellow farmers
(48%)
•Leaflets (22%)
•Banners (19%)
Price
•Stickered Engro
DAP purchased at a
delta of Rs. 30 –
50/bag vs regular
Engro DAP
•Availability was
good
Likes/Dislikes
•Likes:
•Assurance of
genuineness (77%)
•SMS verification
(37%)
•Dislikes:
•Sticker size is small
(10%)
•Difficulty in SMS
verification (7%)

12. PILOT & Research - Learning
Jhang (Oct – Dec) Sales MS
2007 8,537 32%
2008 2,199 12%
2009 1,387 6%
2010 1,708 7%
2011 4,459 25%
Avg 3,658 16%
2012 (Oct+Nov) 8,600
Sticker (Oct+Nov) 6,000
All 6 kt stickered DAP has
been sold.
Dealer is selling at a premium
of Rs. 20 – 40/bag over Engro
non-sticker DAP. *
There is still strong demand in
the area for sticker DAP
product and we have sent
some leftover stickers to meet
the same.
Dealer is especially asking for
stickered DAP and is not lifting
the non-stickered one already
available in the area.
Compared historical sales this
is the best performance with
December still to come. This
can be seen in the table below
comparing historical Oct to
Nov sales for previous years:

13. Project Summary and Way Forward
Concept
Testing
Successful
Operational
Testing Successful
on PILOT volume
and KPT
Market
response
Evaluated as
positive
Project presented to Divisional
Council and closed, will be
handed over to Process Owner
with SOPs for implementation

14. Full Scale Roll out – Facts & Suggestions
Machinery
acquisition
• Full Vessel means 12 machines (10
base + 2 backup)
• Machine availability (short lead
time)
• Possible issues with the new
machine
FAP
operation
will be first
as
previous
vessel was
on KPT
• Learning of team
• Cooperation of FAP
• Higher humidity at PQ
A&SP
spend
• Success of feature is linked to
farmer knowledge
Fixed
Costs
• Machinery Rental/Acquisition
• Vendor Agreement
• SMS System Development
Target Full Scale Operations
•Take it to all areas
•But take it one step at a time
•Commit long term volumes (300 kt)
•Pro: Divide expense on more volume to minimize cost
•Pro: Engage vendor
Step One: Apply similar process on the next vessel
•QTY of next vessel 35 kt
•Conduct sticker activity on partial vessel
•Pro: limited exposure in machinery and communication
•Select specific areas
•Pro: Manage field exposure
Step Two: Full Scale
•Increase volume to full vessel
•Increase spread to all areas
Facts Suggestions

15. Thank You