Professional Documents
Culture Documents
Nestlé Pakistan Ltd is a subsidiary of Nestlé S.A. - a company of Swiss origin headquartered in Vevey,
Switzerland. It is a food processing company, listed on the Karachi and Lahore stock exchanges and
operating in Pakistan since 1988 started as a joint venture with Milk Pak Ltd. Nestle took over the
management in 1992. For ten years in a row, the company has won a place among the top 25 companies
of the Karachi Stock Exchange.
Nestle Pakistan Limited has its head office in Lahore, the Company operates four production facilities.
Two of it’s factories in Sheikhupura and Kabirwala are multi product factories. Factories in Islamabad
and Karachi are only producing bottled water. The main products of multi product plants include
processed milk, yogurt, juices, infant formula cereals and bottled water.
The company has a vast sales and distribution network throughout the country to ensure that it’s products
are made available to consumers throughout the country. Distribution is spread in 600 cities and small
towns. Nestle Pakistan has dirtibution force of 6000 people and 1500 vehicles to meet the demand.
Nestlé Pakistan brands are the main flag bearers of the company’s image. Nestlé Pakistan now operates
the biggest milk collection operation in Pakistan, Currently; Nestlé Pakistan collects milk from an
estimated 190,000 farmers spread over 146,000 sq Km’s in the province of Punjab and Sindh.
“ Milk Pak” and “ Every Day” are the leading brands of Nestle in processed milk category
“Nestlé Pure Life”, was initially launched for the first time by Nestle in Pakistan in 1998 after market
research. This product was immediate success and made Nestle the most dominant and strong player in
Pakistani bottled water market. It was decided by Nestle top management (SBU) that Nestle pure life
brand developed in Pakistan should be introduced in other countries using the Pakistani successful
experience to their advantage. Nestle pure life (bottled water brand) is now sold in 21 countries from
North America, Asia and the Middle East to Africa and Latin America. Nestlé Pure Life is now number 1
brand in the world in bottled water brand category.
Nestlé Pakistan today is the leading Food & Beverage Company in Pakistan with a key focus on
Nutrition, Health and Wellness and reaching the remotest of locations throughout Pakistan to serve the
consumers.
Despite energy crises, very tense security situation, devastating floods and high inflation in the country,
Nestle Pakistan achieved a strong growth of 25% in the previous year 2010 and net profit increased by
37%. Market is expecting even better results in 2011 as the indicators are all very positive
About 60 per cent ingredients in beverages and cereals are acquired from local sources while dairy
products are processed from 100 per cent locally available raw milk. There are 190,000 small farmers
associated with Nestle Pakistan across the Punjab and Sindh, providing quality milk through an integrated
network.
The biggest challenge for the company is the increase in prices of commodities and how to absorb the
Nestle Pakistan has announced in the current year that they will by spending 300 million Swiss francs
($413 million) over the next three to four years in Pakistan as it looks to fend off local rival Engro Foods
Ltd. The investment will be used to build new milk factories, Ian Donald, managing director at Nestle
Pakistan Ltd. (NESTLE), said in an interview in Lahore. The money will also help boost the juice, yogurt
and noodle businesses of Nestle Pakistan, whose market value has doubled in the past year.
“A lot of companies are coming up to tap Pakistan’s” food market where 95 percent of the products are
sold unpackaged, said Misbah Iqbal, an analyst at AKD Securities Ltd. in Karachi. “That is certainly
creating some challenges for established names. But I don’t see a big threat for Nestle in the next two
years as the size of the cake is still big enough.”
He further added that now we have so may brands in the bottled water category. Coco- Cola with Kinley
brand and Pepsi with Aquafina will create lot of problems for Nestle leading brand “ Pure Life” in couple
of years time as the price of Nestle is almost 40 to 50% higher than the other brands in 19 Litre category.
The biggest weakness of Nestle Pakistan is that they have allowed their competitors to settle and become
strong as they do not decrease their margins according to one chief executive of a leading company.
Nestle which makes Kit Kat chocolate and Nido powdered milk is facing growing competition from
Karachi-based Engro Foods in the dairy segment and Coca-Cola Co. (KO) and PepsiCo Inc. in the bottled
water and fruit juices businesses, according to data provided by London-based Euromonitor International.
Engro Foods just established in 2005, was the second-largest seller of drinking-milk products in Pakistan
in 2010, according to Euromonitor.