Engro Chemical Pakistan Limited is the second largest producer of Urea fertilizer in Pakistan. The
company was incorporated in 19! and was formerly E""on Chemical Pakistan Limited until 1991#
when E""on decided to di$est their fertilizer %usiness on a glo%al %asis and sold off its e&uity of '!(
shares in e"istent company. The Employees of Engro# in partnership with leading international and local
financial institutions %ought out E""on)s e&uity and the company was renamed as Engro Chemical
Pakistan Limited. Engro is a pu%lic limited company listed on the *tock E"changes of +arachi# Lahore
and ,slama%ad.
The principal acti$ity of the Company is manufacturing# purchasing and marketing of fertilizers. The
Company is also in$ol$ed in the production and marketing of seeds and has in$ested in -oint $entures
engaged in chemical related acti$ities. .s part of its di$ersification strategy# controlling interest was
ac&uired in a company offering industrial solutions in automation and control. . new milk plant has
%een esta%lished at *ukkur the milk is %randed as /lpers.
Engro Corporation Limited today# is the e"tension of a partnership %uilt more than 01 years ago. The
three founding companies 2 each esta%lished and e"perts in their own fields came together and
synergized their strengths to create a %usiness offering compelling solutions to its customers. Today# we
continue to strengthen and harness the power of strategic partnership %uilding# de$eloping partnerships
that are mutually rewarding and lasting. .s a promoter of the green en$ironment# we work constantly
with our partners to dri$e industry adoption of new en$ironmentally2friendly products# thus disco$ering
new possi%ilities.
3/ur $ision is to %ecome a fast e"panding mega foods company. To achie$e our $ision# the
company will initially focus on dairy %y in$esting a su%stantial amount in plant# milk collection
capa%ility and marketing. 4e are making concrete efforts to e"pand in and %eyond Pakistan5
through strategic international alliances# to e$entually %ecome glo%al.3
Fertilizer Business
Engro 6ertilizers Limited# a wholly owned Engro su%sidiary# is a premier fertilizer manufacturing
and marketing company with products that focus on %alanced crop nutrition and increased yield. The
company markets primary and secondary fertilizers like Engro Urea# Engro 7.P# Engro 8orawar#
Engro 8arkhez and 8ingro.
Engro 6ertilizers has successfully de$eloped a loyal customer %ase all across Pakistan# not only %y
pro$iding farmers with &uality fertilizers# %ut also through e"tensi$e market de$elopment acti$ities. .
premier %rand and nationwide presence of the company ensures sellout production. .dditionally# the
company sells phosphate fertilizers for %alanced fertility and impro$ed farm yields. Engro)s share of
Pakistan)s phosphates market mirrors or e"ceeds its urea market share.
,n 9111# the company achie$ed mechanical completion and started trial production of its urea e"pansion
pro-ect at 7aharki which is the world)s largest single train urea2ammonia plant. ,t is the largest pri$ate
sector industrial in$estment in Pakistan.

Engro Foos Limited:
Engro 6oods Limited was officially launched as a fully owned su%sidiary of Engro in 911:. Using dairy
as a stepping stone to enter into the food %usiness# the Company has esta%lished state2of2the2art
processing units in *ukkur and *ahiwal# along with an ice cream production facility in *ahiwal. Top
&uality %rands like /lper)s# /lwell# Tarang# /more and /wsum ha$e %een successfully launched under
the helm of Company)s dairy products. To support these %rands and their highest standards of &uality#
Engro 6oods has in$ested hea$ily in milk processing and milk collection infrastructure.
4ith an ac&uisition of .l *afa ; a fast growing and esta%lished <alal meat %rand ; Engro 6oods is now
$enturing into =orth .merican market starting from <alal 6oods category. The new organization#
Engro 6oods Canada Ltd. with a su%sidiary Engro 6oods U*.# LLC# intends to aggressi$ely grow the
%usiness in this market.
4ith the $ision of Ele$ating Consumer 7elight 4orldwide# Company)s significant focus will %e
towards the glo%al operations in the years to come.
G%s &urt%il'ent
>as shortage in Pakistan is the topmost concern for in$estors with regard to fertilizer sector profita%ility.
7emand for gas is likely to remain a%o$e supply le$el until gas import pro-ects or new disco$eries
come online. .ny delay in ratification of long term gas supply to Engro 6ertilizers %y ECC may increase
risk. <owe$er# in case long term gas supply plan gets delayed# e"isting cash flows from one
plant ?En@enA will %e enough to retire de%ts and can e$entually pay di$idends when de%t goes down
in 911!. Boreo$er# company is acti$ely pursuing litigation against Binistry of Petroleum and
=atural Cesources and *=>PL against curtailment of gas despite *indh <igh Court ?*<CA decision to
supply gas to the company. .ny fa$ora%le decision on this front will ha$e a positi$e impact on Engro
G%s (ri&e in&re%se ris)
Desides gas curtailment# another fear is the e"pected hike in gas price. This risk has emerged in last few
months when go$)t was in process of rationalizing gas price across the %oard and gained further traction
post ,B6 agreement. ,n the Lo, ?Letter of ,ntentA the go$t. earmarked Cs111%n which will %e
collected %y increasing the cessEle$y on gas. /ur discussion with the industry players suggests that the
go$t. is likely to impose additional cessEle$y of Cs11121!1 per mm%tu on feed stock gas of fertilizer
companies# Local F ,nternational Urea Price >ap currently getting gas at Cs090 per mm%tu. Boreo$er#
further increase in fuel gas price cannot %e ruled out.
De&line in intern%tion%l ure% (ri&es
.nother risk to company)s profita%ility comes from decline in international urea prices. ,nternational urea
prices declining significantly pose su%stitution risk. *ince local urea manufacturers cannot sell at a higher
price than international urea# decline in international prices will negati$ely affect the pricing power of
not -ust the company %ut of whole sector. This will make it difficult for the company to maintain its
Foo inustr* in P%)ist%n

The food and its allied products industry is considered Pakistan)s largest industry# and is %elie$ed to
account for 9' percent of its $alue2added production. Trade sources estimate the sectorGs total $alue of
production is o$er Cs.: %illion ?Cs.11!.11 e&ual U*H 1.11 at the current e"change rateA. Pakistan)s food
industry produces cooking oils# hydrogenated $egeta%le oils# sugar# flour# dairy products such as milk#
%utter# yogurt# cheese and ice2cream# %iscuits# %reads and confectionery# fruit -uices and fruit -uice drinks#
car%onated %e$erages# snack foods %ased on rice# potatoes# corn and pulses# processed chicken# -ams#
-ellies# s&uashes# sauces# pickles# and some cereals and canned fruits. The fish# meat# fruit and $egeta%le
sectors are underde$eloped partly for lack of ade&uate infrastructure# including storage and transportation
facilities. >o$ernment policies and plans are e"pected to greatly increase the de$elopment of seafood)s
industry. 7e$elopment and implementation of milk standards is also essential to define milk price %ased
on &uality. 7airy science and technology education uni$ersities also need to support industry in dairy
%reeding# nutrition# industrial management and product &uality.
Presently no under2graduate program is a$aila%le in the country to support this sector. Presently# Pakistan
has only a few scholars in prime principles of dairy science including animal %reeding and genetics# dairy
nutrition# dairy management# and dairy technology to support and de$elop dairy industry. ,t is essential
%ecause the $eterinarian could only pro$ide support to the animal industry de$eloped on the animal
production science principles. .nimal or dairy production science is altogether a different su%-ect than
that of education. ,n conclusion# de$elopment of dairy cooperates# restructuring of E"tension5 research
and educational institutions could perk up rural oriented dairy sector to market oriented dairy industry that
guaranteed food security social and economic growth in Pakistan.
Engro Foo s
Engro 6oods Limited is su%sidiary of Engro Chemical Pakistan Ltd. which is one of the most reputed
enterprises in Pakistan with more than :1 years of di$ersified %usiness operations in the areas of
fertilizer and chemicals. Engro 6oods started its %usiness operations in Barch 911 and with the
successful launch of /lpers Bilk# Tarang# /lwell# and /lpers cream# it has esta%lished itself as a ma-or
player in the foods %usiness. Engro 6oods has already set up two processing plants at *ukkur and
*ahiwal. 4ith the e$er e"panding milk collection network and processing facilities# the *upply Chain
has geared us for the growing sales of our products
M%r)eting Rese%r&+ &onu&te ,* ENGRO Foos
Barketing research is an important step when a new product is to %e launched into the market. There are
many risks associated with that new product and especially when a company decides to di$ersify into a
completely new market that it was not pre$iously catering to. Thus in order to reduce the magnitude of
the risks and to %e successful# large organizations with a research and de$elopment department conducts
the marketing research. E$en those organizations that do not ha$e a CF7 department can conduct
marketing research through other companies that are pro$iding the facility of marketing research.
/ne such company is ..C =ielson that carried out the marketing research for E=>C/ foods when the
idea of di$ersifying into a new market was introduced. Barketing research is the systematic design#
collection# analysis and reporting of data to the rele$ant parties. E=>C/ wanted to setup a new
fertilization plant %ut due to certain constraints from the go$ernment wasn)t a%le to do so. Therefore#
the organization decided to mo$e into a new market. They came up with se$eral options including
telecommunications and power plant %ut they found out that the food industry held the greatest
promise. ,t was an e"ploratory research that is the main goal was to shed light on the real nature of the
pro%lem in this case# di$ersification into a new market# and to select possi%le new solutions and ideas
such as the food industry. They also went through the list of at least 1#911 names %efore they decided to
introduce /lper)s. /lper)s is promoted as the milk for all2purposes. The reason for this is that while

conducting research# they found out that people want milk that could %e used for all purposes such as
drinking# tea whiteners etc.
S!OT An%l*sis$
1. Engro)s Dack
/lper)s is a %rand of E=>C/ foods. This means that consumers can relate their former image of E=>C/
foods to /lper)s. E=>C/ is a well2esta%lished %rand name in 6ertilizer# ,T and infrastructure %usiness.
The %rand is well known so customers will automatically ha$e a %rand association with /lper)s and see it
as a premium &uality product. E=>C/ is world renowned so it can easily attract foreign in$estors in
%acking it against other competitors such as =estle.
E=>C/ foods can easily afford research and de$elopment costs for /lper)s ha$e in order to introduce
new products. ,t can also distri%ute the %rand through %etter channels %ecause of its long term relationship
with distri%utors in the agriculture sector.
9. PC with farmers
E=>C/ has %een interacting with the farmers for fertilizers and has gained &uite a good reputation o$er
the years. ,t has led to a strong %ond and long term relationship with the farmers who are willing to supply
milk to the company. This is an added ad$antage and strength for the company %ecause it will ne$er %e
short of milk production. The farmers also won)t ha$e to look elsewhere to sell their milk.
0. Positi$e response from customers
,n first year# E6L crossed 1.: %illion sales figure which shows customers) satisfaction upon E6L)s
:. ,ts taste# &uality proposition and world2class &uality proposition system.
!. *trong consumer F product research
/lper)s done a strong consumer F product research %efore and after launching the product. This has
pro$ided them the perfect launching pad to e$entually emerge as a glo%al player in the food industry. To
de$elop its future portfolios# E6L has hired $arious glo%al research partners like .C =ielsen# Bindshare#
I4T .siatic and B.C* marketing and ad$ertising agencies.
. Third2>eneration Plant
E6L only# has the third2generation U<T milk plant in the country. E6L plant is the only plant in Pakistan
that uses Dactofuge technology to $irtually eliminate %acteria and ensure premium &uality and hygiene.
Boreo$er# it is also setting up another milk processing plant in Central Pun-a% ?*ahiwalA with an
in$estment of Cs. 9 %illion ?U* H 00 millionA
1. Low Juality Bilk
E6L is not ha$ing its own dairy farms5 it largely collects loose milk from farmers F gwalas through its :1
milk collection centers# which sometimes is of low &uality and impure %ecause they add $egeta%le oil to
milk to get higher prices.
9. Packaging

E6L is dependent upon Tetra Pak for the packaging of its entire dairy products. Tetra Pak is the only
option a$aila%le to /lper)s for packaging %ecause it is ha$ing monopoly in the packaging sector in
Pakistan. 7ue to this reason# Tetra Pak can charge them higher and it could increase the production costs.
0. Bilk collection F distri%ution costs
E6L)s 0: out of :1 milk2collection centres are located in Pun-a%# whereas its only milk processing facility
is situated near *ukkhur ?*indhA. ,t increases the milk collection F distri%ution costs5 and also increases
the chances of milk getting spoiled %ecause of increased tra$elling time.
:. =arrow %rand portfolio
,t has %een more than a year now# when E6L launched its first dairy product# /lper)s Bilk on Barch91#
911. Dut E6L)s %rand portfolio still consists of -ust 0 products i.e. /lper)s Bilk# /lwell Bilk and /lper)s
Cream. 4hereas its competitors like =estle and <alee% 6oods ha$e a much di$ersified line of dairy
1. ,ncreased funding %y >o$ernment
>o$ernment has decided to increase farmers) funding. This is an opportunity for E=>C/ foods %ecause
pre$iously due to weather conditions and other reasons there was lots of wastage of milk %ut now that can
%e reduced as farmers will %e %etter a%le to store milk for longer time periods.
9. ,ncreased consumption of PLB
Competition may create opportunities for the company %ecause each competitor in the milk industry wants
to increase penetration of processed li&uid milk and so they will create awareness for consumers through
different ad$ertising media. This will ensure the increase in the consumption of processed milk instead of
lose milk and so will in turn lead to increase in sales for the company. Therefore there will %e an
opportunity for accelerated growth.
0. .wareness
>rowing dissatisfaction with loose milk and increasing awareness a%out health and hygiene issues ha$e
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 09 %illion litre of milk
a year# whose $alue is more than that of the com%ined $alue of wheat and cotton# from a total herd size of
!1 million milk animals ?%uffaloes and cowsA. Li$estock accounts for :.K percent of agricultural $alue
added and a%out 11.K percent of the >7P. Bilk is the largest commodity from the li$estock sector
accounting for !1 percent of the total $alue of the sector. 7ue to the steps taken %y the go$ernment and
pri$ate sector# country)s annual milk production is e"pected to grow at an additional 0 %illion litres in the
ne"t few years. This is &uite an opportunity for E=>C/ foods as there is lot of growth in this part of the
1. Competition
Competition may pose a threat %ecause the company will ha$e to maintain its leadership in an e"panding
market so that it doesn)t lose its market share to its competitors. 6or /lper)s it might %e difficult to
penetrate in a market where the loyalties e"ist for such %rands as =estle and <alee%. These %rands ha$e
%een in the milk industry far too long and ha$e left a mark in the minds of consumers in terms of &uality.
Competition seems to %e getting tougher as a result of new players entering the dairy market.

9. Perceptions and Price 7ifferentials
Consumers) perceptions and price differentials can cause a threat for the company. ,t is important that
/lper)s comes up to the e"pectations of the customers and fulfills its conformance &uality that is the
company meets its promised specifications.
Consumer)s preferences change with time and prices might create certain %arriers in terms of the profit
margins for /lper)s. 6or e"ample# lose milk is still cheaper than packaged milk and that is also one factor
that people still prefer to %uy lose milk.
Re&o''en%tions- Suggestions
• Engro 6oods should ha$e much di$ersified %i2product line of dairy products like =estle F <alee%.
• They should introduce new promotions to get customers) attention
• E6L should e"pand its dairy farms so that they can get competiti$e ad$antage.
• E6L should focus on Barket Penetration# Barket 7e$elopment and Product 7e$elopment
strategies with more efforts to %e the market leader.
• They should go e"pand its capacity to enter into in international market like =estle.
• Engro 6oods can %e into Co2%randing with other %rands like /lper)s with Lipton tea %ags# /lper)s
with different %iscuits etc. to increase their sales
• They can also mo$e towards other foods products like =estle launch +it +at Chocolate# Beggi
=oodles# *weets Candies etc.
Engro is going to %e a market leader due to different reason like its financial position# product &uality# C F
7# market share# sales growth etc. ,ts price is more or less e&ual to its competitors5 it matches its &uality
with its competitors and capturing its competitor)s share from market. Engro is using its %rand name and
its packaging is good to promote its products and E6L is %ecoming $ery popular as compared to its
Company has planned to make /more world class premier &uality %rand like e"isting %rands of Engro
6oods. Company is also working on cereals in coming years. They has planned to mo$e other dairy
products as are offering %y its competitors =estle like yogurt# fla$oured yogurt ?raitaA# cereal for %a%ies
etc. 6oods competitors =estle and <alee% are %iggest threat. There are opportunities and doors for new
players are open who can %e the future competitors.
Consumer is aware now# there is need to maintain the &uality of products. Consumer)s perceptions and
price differentials can cause threat for the company# Consumer)s preferences changes timely and prices
might create certain %arriers in terms of the profit margins for E=>C/ 6//7*. ,n short Engro 6oods
should grow and maintain its position. That is why E6L is increasing Barket Penetration# Barket
7e$elopment F Product 7e$elopment strategies.