ENGRO FOODS by linashuja

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									     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
     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.
           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.”
     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)
      Diversified Portfolio of Engro
                 Pakistan
 
 Elengy Terminal Pakistan Limited
    (LNG Storage and Marketing Company)


 Engro EXIMP (Pvt.) Limited
    (Exporter & Importer of Micro-Nutrients and Fertilizer)
Products Portfolio
              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
           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
                 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.
             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
                     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.
                 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 
                             EFE MATRIX
        KEY STRATEGIC FACTORS              Weights     Rating   Weight Score
                                    Opportunities
Raw Material Availability                       0.06     3          0.18
Market Capitalization                           0.05     3          0.15
Diversification                                 0.07     4          0.28
Awareness                                       0.05     3          0.15
Expansion                                       0.05     3          0.15
Flexible Govt. Policy                           0.04     2          0.08
Innovation & Technology                         0.04     2          0.08
Exports                                         0.06     3          0.18
Joint Ventures                                  0.05     2          0.10
                                      Threats
High Taxes                                      0.06     3          0.18
New Entrants                                    0.07     4          0.28
Seasonal Factors                                0.04     2          0.08
Low Purchasing Power of consumers               0.05     2          0.10
Change in prices might loss sales               0.05     2           0.1
Suppliers Behaviors                             0.05     3          0.15
Economic Conditions                             0.05     3          0.15
Price Consciousness of consumers                0.05     2          0.10
Mature Market                                   0.06     3          0.18
International Market Standards                  0.05     3          0.15
      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.

 EFL’s major Threat is New Entrants.
                                CP MATRIX
                              COMPETITIVE PROFILE MATRIX
                                         ENGRO FOODS     NESTLE       HALEEB
   Critical Success Factors     Weight
                                          Rate   Score Rate Score   Rate   Score
Research and Development         0.08     3     0.24    3    0.24    3     0.24
Advertisement                    0.08     3     0.24    4    0.32    2     0.16
Financial Position               0.09     4     0.36    4    0.36    3     0.27
Market share                     0.07     3     0.21    3    0.21    2     0.14
Product Quality                  0.08     3     0.24    3    0.24    3     0.24
Price Competitiveness            0.08     3     0.24    3    0.24    3     0.24
Management                       0.08     4     0.32    4    0.32    3     0.24
Global Expansion                 0.08     2     0.16    4    0.32    2     0.16
Certifications                   0.06     2     0.12    3    0.18    2     0.12
Diversification                  0.05     4     0.20    3    0.15    2     0.10
Customer Services                0.06     3     0.18    3    0.18    3     0.18
Sales  & Distribution Network    0.06     3     0.18    3    0.18    2     0.12
Production Capacity              0.07     3     0.21    3    0.21    3     0.21
Alliances                        0.06     3     0.18    3    0.18    2     0.12
TOTAL                             1       -    3.08     -   3.33     -     2.54
       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.
        Strategies in Action
 Market Penetration
 Market Development
 Product Development
 Backward Integration
 Forward Integration
 Diversification
        Financial Evaluation of EFL
Strategy Evaluation stage includes measuring
organizational performance and taking corrective actions.
We can measures EFL performance through following key
facts.

S.NO.          Key Factors           2011       2010
   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%
FINANCIAL AUDIT
           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.
                             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.
THANK YOU
Questions & Answers

								
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