You are on page 1of 63

Internship Report On

SHAMA Ghee & cooking oil HGGM


Office of the Sales & Marketing Manager

Internship report submitted to the department of Management science, National


University of Modern Languages to full fill the requirements of MBA Degree
By:

Muhammad Asim
MBA (Evening)
Roll no 10595
Session: 2009-2010

DEPARTEMENT OF MANAGEMENT SCIENCE

33
Preface

This report is on Marketing of Hafeez Ghee & General Mill Limited and focused on its
Marketing strategies. We have tried our best to make this report as much reliable and valid as
possible. This report is conclusion of great effort. We have worked hard with devotion an order
to present a high caliber report.

Many of our friends helped us in collecting information also in preparation of report. Our best
teacher Sir. Mohsin Ali, who is having honor of specialization in marketing, provided us very
precious knowledge about market research and marketing strategies.

We hope that this is a high caliber authentic work. We also hope that this is a simple, updated
and purely focused on marketing strategies of Hafeez Ghee & General Mill Limited. We have
tried our best to fulfill all ethical requirements an order to present an unbiased report.

We are extremely thankful of all our friends and officials of Hafeez Ghee & General Mill
Limited who provide us very forceful information related to their marketing strategies.
Particularly Mr. Atif (sales and marketing manager). He made us able of doing such a high level
work in a very short time. We hope that every one can get benefit of the report specially
organizations who are in search of customer satisfaction. We welcome the suggestions for the
improvement of the report. Thanks to all the readers.

33
ACKNOWLEDGEMENT

All prays goes to Allah Almighty who has given me, courage and confidence to complete this
gigantic task. But with the noble passion of hard work, nothing remains difficult. To write an
acknowledgement, after the completion of an enormous task has always been very enthusiastic
for me because it’s the best source to thank all those whose support enable me to complete this
project. After thanking GOD I will thank to my parents & teachers who prayed for me and
without their support I might not be able to complete this internship.

I want to thank for all those personalities, who have been a continuous source of guidance during
the report. I want to say thanks to all the employees of S Hafeez Ghee & General Mill limited.
Their attitude towards me was really very positive and appreciable. I want to acknowledge them
with thanks for their help and guidance on each and every step. I made many mistakes as I had
never been confronted with the business world but they never minded and instead of minding
they behaved like my brother. They treated me as their younger brother and forgave all my
inaccuracies. But In this regard, I particularly want to thank those personalities who have been
the continuous source of guidance throughout my internship

Table of Contents

Internship Report On............................................................................................................1

33
SHAMA Ghee & cooking oil HGGM.............................................................................................1
By: .......................................................................................................................................1
Muhammad Asim.........................................................................................................................1
DEPARTEMENT OF MANAGEMENT SCIENCE.........................................................................1
Hafeez Ghee and General Mills.................................................................................................16
Products:................................................................................................................................17
...............................................................................................................................................17
Figures:..................................................................................................................................17
Balance Sheet HGGM...............................................................................................................35
Financial Statements Analysis...................................................................................................39
Quick/Acid Ratio.....................................................................................................................42
Inventory Turnover.................................................................................................................43
Average Collection Period......................................................................................................44
Debt Ratio..............................................................................................................................45
Time Interest Earned Ratio.....................................................................................................46
Gross Profit Margin Ratio.......................................................................................................47
Operating Profit Margin Ratio.................................................................................................48
Net Profit Margin....................................................................................................................49
Total Assets Turnover............................................................................................................50
Return on Total Assets...........................................................................................................51
Return on Common Equity.....................................................................................................52
Earnings per Share................................................................................................................53
Common Size Analysis..........................................................................................................54

Executive summary

I judge my time spent at Hafeez Ghee & General Mill ltd in Multan regional office as being the
most productive and exhilarating experience of my corporate life. Before the details description
of the report, started with the summary of work I done. The basic purpose of this summary is to
given an idea about the contents and efforts made behind the completion of the report to the
reader. It was assigned me to visit the HGGM to view the working environment, function,
marketing procedures and behavior of doing work. Internship was started from 24-06-2010 and
end on 04-08-2010, this period was the real experience e of my life and I saw the setup, working
process and formal documentation of the HGGM.

The HGGM is a FMCG organization with several departments in working in the head office
Nowshera. The department administration which deals with the internees has assigned me
HGGM Multan. HGGM gives me the opportunity to view, how the marketing strategies and plan

33
are prepared, how to fill the different forms, how to behave wit customers and about the record
keeping. Here staff gives me opportunity to do practical work. It was a really nice and fruitful
experience for my upcoming practical life. I would like to conclude by saying that even though
every person will have a different story to tell, the common factor that binds us all is the good
work done by our predecessors in the NUML. I have given more than 100% of my efforts to
keep up that good work and I am sure that my colleagues have done the same. I am hopeful that
as we pass through the corridors of this great institution into the real world, this legacy will be
kept and upheld by the future generation of NUMLians.

The office of HGGM is located in the city of MULTAN BHAWALPUR ROAD, NEAR
BYPASS CHOWK; HGGM is producing a food products both for consumers and industrial
users. HGGM get ISO 9001 22000 14001 Certification - a Quality, food safety and environment
Management System. While adhering to this Management System, the company is committed to
strict quality standards in all its operations.

HGGM annual turnover of Rs. 2 Billion; HGGM is producing number of products, both for
consumers and industrial users. HGGM Products are sold to the consumers through local areas.

Mission

We believe in “stepping forward” into the future, striving to offer quality of product within the
food industry that will change the status quality. Our expertise in manufacturing ghee & cooking
oil, have been proven in all Pakistan. You know that, when you are using our brand, you will get
the best of everything; (taste, quality, and nice packing)”

33
Vision
We want to make a chain from producer to consumer and make our product of highest
quality and affordable to our customers. For us our customers take precedence & we
take no chances with their health & satisfaction. We ensure safe, high quality products
for our customers by being quality conscious and consistently improving our quality
systems of distributors, retailers, outlets & direct sales.

Board of Director

Sheikh Amjad Rasheed


Chairman
International Multi Group of Companies IMGC

33
Sheikh Ahsan Rasheed Sheikh Atif Rasheed
Vice Chairman
Director / CEO International Multi Group of

Hafeez Ghee & General Mills PVT, LTD companies IMGC

Sheikh Ahmer Rasheed Sheikh Aizaz


Rasheed
Director Director
International Multi Group of CO
Hafeez Ghee & General Mills PVT, LTD
Mrs. Ayesha
Rasheed
Director
Hafeez Ghee & General Mills PVT, LTD

33
Management of HGGM

33
Sheikh Ahsan
Rasheed
Director / CEO
Hafeez Ghee & General
Mills PVT, LTD

Sheikh
Mugeeb-ur-
Rehman
Manager Sales
Hafeez Ghee &
General Mills PVT,
LTD

Mohammad
Naveed
Hashmi
Manager I.T
Hafeez Ghee &
General Mills
(Pvt.) Ltd

Atif Qureshi
ManagerMarketing

Hafeez Ghee &


General Mills
(Pvt.) Ltd

Shiekh Umair
Manager
Purchase
Hafeez Ghee &
General Mills
(Pvt.) Ltd

33
Nawaz Feroz
Manager Sales Oil
Hafeez Ghee &
General Mills
(Pvt.) Ltd

Riaz Ahmed
Manager Sales
Tax
Hafeez Ghee &
General Mills
(Pvt.) Ltd

IMGC Global (Pvt.) Ltd. has been involved in Relief, Rehabilitation & Reconstruction
Programmed since I 986. During last 3 years in Afghanistan and in earthquake disaster in
Pakistan, IMGC have executed exceeding 1700 contracts valuing over 110 million USD
on behalf of United Nations organizations, international NGOs, US Govt., USAID and
Multilateral international organizations. IMGC is registered with all these organizations
and has had an excellent performance record. IMGC has a reputation for rapid response,
ex-stock position and offers services including construction and logistics besides relief
and shelter items.
Our buyers includes United Nations organizations and international NGOS such as ICRC,
IFRC, UNICEF,WFP, WORLD VISION, Regional Red Crosses including American Red
Cross, Swiss Red Cross, Finish Red cross, Belgium Red Cross, CRS, GOAL, IMC,
SAVETHE CHILDREN, OXFAM,JEN etc.

Associated Industries Ltd., a ghee-manufacturing unit, was established in 1960 in


Nowshera in an area of 65 acres with an adjoining residential colony. The building is
designed by the famous firm of John Tarry & Block in consultation with Fried Krupp Heb
of Germany who are the main suppliers of machinery as well. It produces ghee, cooking
oil and soaps. Right from its inception in I 960, the Ghee brand SHAMA became an
instant hit and market leader. The subsequent period witnessed the continuous lead with
phenomenal growth in production from 10,000 tons to 65,000 tons.
The reason for its success was its high standard of quality, guaranteed by its stringent
quality assurance procedures. In view of the ever growing demand of SHAMA Brand, a
number of imitators have entered the market with copied design, color and monogram of
its pack. Nevertheless, our loyal consumers have always been able to identify the real

33
brand.

The Ghee Manufacturing Unit was established in Multan in I 994 based on designs
prepared by architects of repute and installation was carried out by qualified professionals.

Hafeez Ghee & General Mills (Pvt.) Limited was incorporated in August I 994. Necessary
additions to the building, plant, machinery and equipment have been made on regular
basis. Under an agreement with Associated Industries Ltd., Nowshera, their brand
SHAMA is manufactured and packed in this unit. As part of its expansion and
modernization plans a Solvent Extraction Plant is already in production while margarine
and water building plants are being set up thus providing a one window operation through
HGGM.

Alliance Textile Mills Ltd., one of the largest textile manufacturing units in Pakistan, was
established in 1952 as Fauji (Army) Textile Mills Ltd. Disinvested in 1985 it came under
the present professional management in 1992. The new management launched an
aggressive and forward-looking marketing approach, an initiative greatly helped by the
modern and tested management techniques and equipment. With 33000 spindles and 118
looms operated by a workforce of 800 strong the facility is already reaching amazing
heights finding itself in competition with the very best. Simultaneously the dynamism of
the management is reflected in a programmed of sustained progress and improvement
moving from spinning to stitching.

33
The name International Multi Foods Limited is synonymous with food processing in
Pakistan. In a relatively short period of time, IMF has leapt to the forefront of the national
food processing and packaging industry. A testimony of the company’s leading position is
the large number of orders it continues to receive.IMF is one of the country’s largest
exporters of food commodities to overseas market. Its major export brand is packaged
food products are Desert Delight, winning export trophies for many years.
IMF also imports large quantities of food products for local markets. It has its own
packaging and warehousing facilities in Karachi, Nairobi, Singapore, Angoon and Dubai.
The IMF processing factory in Sukkur is spread over an area of 3.63 acres and has an
annual production capacity of 3500 metric tons.

33
ADDRESSES
IMGC GLOBAL (PVT) LTD.
Head Office
1106-1110, 11th Floor, Kashif Center, Shahrah - e - Faisal, Karachi, Pakistan
Phone: (92 -21) 3566 2054 -3566 2098, Fax: (92-21) 3568 3010
Email: imgcglobal@yahoo.com chairman@irngcglobal.com

IMGC GLOBAL (PVT) LTD.


Islamabad Office
Apartment No 2 Block 23, Ground Floor, Pakistan Housing Authority. 0 711,
ISLAMABAD. Phone: 051 -2890265. 051 -289 0408, Fax: 051 -2891370 Email:
abfrasheed1968@yahoo.com

IMGC GLOBAL (PVT) LTD.


Lahore Office
T-02(B) 3RD FLOOR, REHMAN BUSSINESS CENTRE. 32: B-3 GULBERG
- III LAHORE. Phone: 042- 35877331-35877332, Fax: 042-35873350 Email:
imgcglobal@ymail.com

ASSOCIATED INDUSTRIES LIMITED.


AMANGARH INDUSTRIAL AREA. NOWSHERA Phone: 0923 - 610489
- 610598 - 610863, Fax: 0923-610830 Email:shamaghee2003@yahoo.com

HAFEEZ GHEE & GENERAL MILLS (PVT) LIMITED.

BHAWALPUR ROAD, NEAR BYPASS CHOWK, MULTAN.


Phone: 061-6526513 - 6526589 - 6529877, Fax 061 -6526167 Email:sharna_mul@yahoo.com

ALLIANCE TEXTILE MILLS LIMITED.

G T. ROAD, JEHLUM
Phone: 0544-649048-9, Fax: 0544 – 649047

33
History Associated Industries Limited
AIL is the single largest edible oil (Ghee and Cooking Oil) unit in Pakistan. It has an annual
capacity of 125,000 MT per annum for edible oil as well as 2000 MT of Soap and Detergent
products.

AIL was formed in 1960 by a visionary industrialist named Gul Muhammad. He named AIL as
such because he wanted to integrate other manufacturing facilities associated with the Ghee
Industry in this unit. Spanning 75 acres it is located in Nowshera, 25 miles south of Peshawar. It
was nationalized by the Government of Pakistan in 1974 and became the single most profitable
unit under the Ghee Corporation of Pakistan. IMGC took over control of the unit in 1992 by
paying Rs. 400 per share as against the face value of Rs. 10 per share. Since taking over, IMGC
has tripled the manufacturing capacity by investing continuously in Balancing, Modernization
and Replacement (BMR) of the unit.

Its brand SHAMA has been the single largest selling brand not only in the NWFP
province of Pakistan but also in Afghanistan. AIL has one of the largest network of
distributors for edible oil in Pakistan and Afghanistan. Despite the current turmoil
in the NWFO province, AIL had a record production year last year with sales of
over 75,000 MT and a turnover of over Rs. 4 billion in 2008-2009.

33
Products:
Ghee – Available in Assorted Tin and Plastic Pouch Packaging

Cooking Oil – Available in Assorted Tin and Plastic Pouch Packaging

Washing Soap and Detergent

Figures:
Annual Production (2008-2009): 75,000 MT

Annual Sales (2008-2009): Rs. 4 billi

33
Hafeez Ghee and General Mills
HGGM is one of the most progressive Ghee and Cooking Oil units located in the key region of
Southern Punjab in Pakistan. It is situated on the outskirts of Multan which is the heart of the
Agricultural belt in Pakistan. HGGM was a very small unit when IMGC bought it in 1994 with a
then capacity of a mere 800 MT per month. Since then IMGC has heavily invested in upgrading
this unit to become one of the elite Ghee units of the country. The Annual Capacity of the unit is
now 36,000 MT with recorded sales of Rs. 2 billion in 2008-2009.

HGGM added a Solvent Extraction unit in 2008 and it is now fully functional and operational. It
has a crushing capacity of 200MT per day with production of 40 MT of crude edible oil and 150
MT of Oil cakes per day. This facility gives HGGM the opportunity to produce up to 20 percent
of the raw material requirement in house and become an important player in the oil cake market.
Future plans include an addition of a Feed Factory to add value to the oilcakes and produce high
quality feed for the cattle and poultry industry in Pakistan.

HGGM has a large marketing network in all the key regions in Northern and Southern Punjab.
The network has over 60 distributors in all big and small town spanning 1000 miles. HGGM has
its own sales and marketing wing that services the very important Multan city. HGGM is
considered to be the marketing leaders in the Southern Punjab region with its innovative
campaigns and publicity outlets.

33
Products:
Ghee – Available in Assorted Tin and Plastic Pouch Packaging

Cooking Oil – Available in Assorted Tin and Plastic Pouch Packaging

Washing Soap and Detergent

Crude Oil – Canola – Cottonseed - Soybean

Figures:
Annual Production (2008-2009): 36,000 MT

Annual Sales (2008-2009): Rs. 2 billion

33
Our Principles
Strong businesses are built on the principles of Trust, Accountability and an Environment that
allows their people to reach their full potential. At HGGM live by the following principles when
conducting our day to day work.

• Integrity
we act with honesty, integrity and highest ethical standards. We adhere to the laws and
regulations pertaining to our work and with HGGM principles and policies.

• Fairness
we work with people in a way which is fair and appropriate. We treat fairly our customers,
suppliers, shareholders and the communities in which we live and work.

• Trust
People can trust us to fulfill our commitments. At the same time we also trust others to be true to
their commitments to us.

• Accountability
Along with trust comes accountability we believe all of us are uniquely created with the ability
to reason, make decisions and be held accountable for our commitments and actions. We hold
ourselves accountable for fulfilling our responsibilities and commitments.

• People reaching their full potential


Each one of us is creative, thoughtful, trustworthy, fair, capable of making important decisions
and responsible for our actions; however we believe each one of us is also different and has
unique potential and talents to make positive contribution to the organization and the world. We
strive to work together in a manner so that each one of us can develop in the organization and
reach to our full potential.

33
Production Department
Health is a serious issue and HGGM taking seriously this matter their products are manufactured
under quality control & food safety standard guidelines and always ensures the food safety
through hygiene and safety measures.

We at HGGM have the ghee & cooking oil manufacturing facility with advance technology and
using by latest techniques.

Our Processes
Neutralization
Removal of free fatty acids, gums, color pigments and oxidizing particles via centrifugal
separation, after reaction with lye, followed by water washing and separation of residual
soap.

Bleaching
Removal of color pigments, oxidized components and residual gums via absorption in
bleaching clay or other absorbents, followed by separation of the spent absorbent.

Deodorization
Removal and recovery of residual free fatty acids and other volatile impurities via vacuum
steam distillation. The heat treatment also produces a bleaching effect.

Hydrogenation
In case of ghee manufacturing, soft oil is converted to hard oil, to obtain semi sold texture. In
this process, hydrogen gas is passed through the oil, till required melting point ( 36 ± 2).

33
ISO Department
Mr. Shair Zaman Manager ISO. ISO mean International Standard Organization who set the
standard about product quality, environment, food safety etc. HGGM five times awarded with
ISO standard includes Quality, Environmental, and Food Safety. HGGM have three types’
certificates of ISO.

 ISO 9001: 2000


 ISO 14001:2004
 ISO 22000:2005

ISO 9001: 2000

Quality Management System focuses on quality improvements in products, services and process
by meeting the customer’s requirements with the aim of continual improvement

ISO 14001:2004

This International Standard covering environmental management are intended to provide


organization with the elements of an effective environmental management system (EMS) that
can be integrated with other management requirements and help organization achieve
environmental and economic goals.

ISO 22000:2005

HGGM is the first ISO 22000 certified ghee & cooking oil manufacturing unit in Pakistan. ISO
22000 provides the food safety guidelines at overall stages of goods manufacturing, handling,
and storage.

33
Marketing Department

 Marketing Department hierarchy


 Number of employee work in marketing department
 Function of Marketing Department
 Marketing strategy
 Market segmentation
 Marketing Mix

Number of employee work in marketing department

In marketing department of HGGM numbers of employee are three. His marketing manager is
Atif Qureshi who deal and perform marketing function.

Function of Marketing Department


These are some important function of marketing department of HGGM

Focus on the Customer


Monitor the Competition
Find & Direct Outside Vendors.
Create New Ideas.
Communicate Internally.
Manage a Budget.
Understand the ROI.
Set the Strategy, Plan the Attack, and Execute.
Customer Relationship Management
Marketing Research
Sales Forecasting
Price Analysis

Marketing Strategy

Ever company or organization has some vision through which the organization
sees itself in some future time. This can be a desire of each organization. This is

33
the future plan and it should be very clear and SMART (Specific, Measurable,
Achievable, Realistic and Time Framed). The more it is SMART the more it is
better. This is made by top management, who always fight in the market for the
survival of the organization. They made different strategies to achieve their vision.
Marketing is the most important one among these strategies. In today’s
competitive market every organization needs a good marketing strategy. Marketers
use different tools for marketing.

Following are Marketing Tools which HGGM Limited uses:

(1) ATL (above the line):

They use different advertising and promotions on T.V

and Cable.

(2) BTL (below the line):

They use Posters, Boarding, Banners, Stringers, Hangers, Wall Clocks, Key Chains, Diaries,
Calendars, Pump flits, Brushers, and Sticker.

Our competitors

QADIR banaspati & cooking oil, HOOR banaspati & cooking oil, SUFI banaspati & cooking oil,
SOYA supreme cooking oil, DALDA banaspati & cooking oil, SULTAN banaspati & cooking
oil

Advertising Objectives
To make Shama as a National Brand in all over the Pakistan. To popularize and aware the public
through effective and efficient marketing strategy.

Market share Ranking:

1. Sultan ghee & cooking oil


2. Dalda ghee & cooking oil

33
3. Shama ghee & cooking oil
4. Qadir ghee & cooking oil
5. Hoor ghee & cooking oil

Budgeting
HGGM spare 2 ½ karore annually for Shama Brand promotion. 1 karore/annum can also be
approved from head office Karachi if they need for promotion purposes only.

For Distributors

2 rupees/kg is given to the distributors when they achieve the target. These are the incentives
only if any distributor fails to achieve the target then these incentives are not given. They also
have some trade schemes for example 16 kg bulk pack is given to the distributor on 1500 if its
market price is 1610. They offer different types of trade schemes time to time to keep the
distributor motivated.

For Consumers:

They also offer different types of schemes for attracting consumers. Product +add product For
example

Shama Ghee + Jame Shereen


Shama Ghee + soap
Shama Ghee + Tapal Tea etc

Market Segmentation
• Premium
• Mothers playing an influence role in the decision making.
• Female (age 25-35 yrs)

33
• Low income segment (mid price)

Percentage of sale
TINS 75%

POUCHE 10%

BOTTLE 15%

What they (customer) want:


• High quality refined banaspati.
• Taste of ASLI ghee and demand fat less banaspati.
• Heart diseases & other chronic diseases are increasing day by day; a large segment has
shifted to cholesterol free oil. Consumers have a similar demand from banaspati.
• Same quality but affordable price
• In premium segment, consumer are not price sensitive but are health conscious, so its
demand differ from other segment who want quality at low price. Therefore consumer
price sensitivity also is of vital important.

How they use product


Customer can use this by following ways
• Cooking in house
• In restaurant
• Food factories
• Catering

How to reach them


• Grocery store
• General store
• Whole seller outlet

33
Marketing Mix

Price

(1)Pricing Objectives:
Their main strategy is Market Penetration means they keep affordable prices and keep good
quality standards.

(2) Demand:
Their current demand is almost 3000 MT per month which covers the Northern and Southern
demand.

(3) Total Cost:

This aspect is not mentioned. It is kept secret due to some reasons


but they charge on bases of market demand so they normally get very high profit
than their cost.

(4) Competitor Prices and offerings HGGM:

b 1 P
Brand Names weight Prices

Shama ghee/cooking oil 5kg/5kg 845/850

Hoor ghee/cooking oil 5kg/5kg 840/840

Qadir ghee/cooking oil 5kg/5kg 840/840

Dalda ghee/cooking oil 5kg/5kg 940/930

Sultan ghee/cooking oil 5kg/5kg 850/845

33
(5) Pricing Method:

They look to market trends, for example the price of 1kg plastic pouch was Rs: 70 before the
political crises of Jan 27. But soon after the sad demise of Benazir Bhutto the prices rises to
Rs.130 and they are expected to raise more in coming few days.

F.C + V.C + Market Trend and Situation

(6) Final Price:


They usually sell it to their distributors and these distributors further sell it to retailers and these
retailers.

List price of every product

Tins 16kg Rs:2690

Pouche 5kg 845

Bottle 5kg 850

Place
Distribution channel:
Like whole seller and retailer etc. involve in supply chain management.

Target Market:

33
Shama covers the Northern and Southern areas, means his target markets.

Consumer Distribution Channel:

Distribution Channel is the most important task for every company. They create the image of
your products also they present your product to the final consumer. Every company wants to
establish an efficient and effective distribution channel. Following is the distribution channel of
Hafeez Ghee & General Mill Limited. They sell their product to Distributor and give target to
him. He is responsible for achieving the target. They give incentives on achievement of the
target. The Distributors further sell the product to Whole Sellers. Then the Whole Sellers further
sell it to Retailers. These retailers then sell this product to consumers.

Promotion
Advertising plan:

Latest terms ATL and BTL use in promotional programs. In these terms all types of
advertisement include like T.V. Radio, billboards etc.

General publicity:
They use two types of tools for general publicity.

(1)Items:
Different types of items are used for general publicity for example writing pad, key chain, walk
clock, wrest watch, cups, pens, wallets etc.

33
(2)Activities:

Sponsorship:

They sponsor different types of events for example cricket, festivals, Islamic events and social
etc.

• NGO’s SPONSORSHIP
• DISTRICT GOVERNMENT SPONSORSHIP
• BIN QASIM BLIND CENTRE
• FATMID FOUNDATION
• HERITAGE COLLEGE FOR HIGHER EDUCATION
• AL NOOR TRUST
• SOS CHILDREN VILLAGE

Shama Ghee Display Competition:

In this competition retailers are informed about the


defined time of competition i.e. one month. In which the
retailers keep Shama Bulk Packs in front of his shop. The
RSMs (regional sales managers) visit to these retailers and
give prizes to winner.

Give away:

33
When some special personality visits to HGGM, he is given Shama Ghee as a gift or other items
as a gift. Similarly when HGGM Officials visit to some special personality they take Shama
Ghee as a gift. There are many more such kinds of activities which are used for publicity

Others:

Road barriers, complaint boxes, and display board on stores and other areas use for publicity.

Product
Product names:
Shama Banaspati, Shama cooking oil two major brand of HGGM. Shama soap detergent, soya
bean, canola oil, crude oil, and cotton seed are the part of HGGM.

Quality:
Vitamin A & D low cholesterol, these types of quality ingredients involve in shama product. So
its quality is better than others, because customers are health conscious so he preferred low
cholesterol ghee.

Scope of product:
Two type of segment involve in this field, one I s household and other is industries customers
involves, our huge demand are industrial segment because shama is popular brand in industrial
sector through quality vise.

33
Shama Pure Cooking Oil with Vitamin A & D Low Cholesterol
Available in Pet Bottle (1, 3 & 5 Liters)

Shama Pure Cooking Oil with Vitamin A & D Low Cholesterol


Available in Pet Bottle (1, 3 & 5 Liters)

Shama Pure Cooking Oil with Vitamin A & D Low Cholesterol


Available in dispenser 1 Liter Each (Pack of 5)

Shama Pure Cooking Oil with Vitamin A & D Low Cholesterol


Available in Poly Pack 1 X 5 Liters.

33
Shama Pure Cooking Oil with Vitamin A & D Low Cholesterol
Available in Tin (2.5, 5, 10) Lit.

Shama Banaspati With Vitamins A & D


Available in 1 KG X 5 KG pouch in dispenser Pack.)

Shama Banaspati With Vitamins A & D


Avaiable in small pack 5 KG & 2.5 KG Bucket.

Shama Banaspati With Vitamins A & D


Available in 1 KG & 1/2 KG Pouch Pack.

Shama Banaspati With Vitamins A & D


Small Pack. Available in 5 KG. Tin & 2.5 KG. Tin

33
SWOT Analysis

Strength

• Brand SHAMA has been the single largest selling brand in the NWFP and Afghanistan
• ISO 9001:2000 Certified: The Company has a well-defined quality policy and
has successfully obtained the ISO-9001:2000 quality system certification in the
year 1997.
• HGGM five times awarded with ISO standard includes Quality, Environmental, and Food
Safety.
• HGGM is the first ISO 22000 certified ghee & cooking oil manufacturing unit in Pakistan
• In govt. Utility stores utility ghee also provided HGGM.

Weakness

• SHAMA is a very old brand there has been no change in packaging since ages,
people feel that the new better packaged brands have better products. The brand
suffers with an image problem. It is perceived as an old brand and the consumers are
bored with it. There has been no innovative packaging change since 1994.

33
Opportunity

• The company can cash on Shama to introduce new products; they have a large
market share in the central and northern areas of Pakistan.
• People in the metropolitan areas are inclined towards branded products.
• The fat free banaspati is still popular and can be advertised to gain the market in
health conscious people.

• People are becoming health conscious and are switching to brands offering vitamin and
cholesterol free attributes.
• There is a growing segment of working women in search of modern and convenient
methods of cooking. Therefore, the flavored oils stand a very good chance.
• Shows emotional attachment as well as health Benefits

Threat

• The market is now being entered by Soya bean canola and sunflower oils, these
are being bought by health conscience people this will lead to Shama decline in
market share.

• The overall market of oil and banaspati is declining due to the Fluctuations in the
world oil prices.

• Banaspati is perceived to be old fashioned and unhealthy by the upper income/urban


consumers.

33
• Lately sunflower and Canola based single oils have aggressively entered the market.

• The unbranded segment comprises an enormous 50 % of the edible oil and Banaspati
market. This is sold loose to the rural/lower income consumers.

• Indirect Competition is a threat and a chance that may grow in future. Due to
Price factor and Quality standard competitors are giving high task.
• Different types of competitor are entered in the market with the passage of
time.

PEST Analysis
Political analysis
Democracies are under pressure to show they can protect the health of their population. Global
society is under pressure to demonstrate it can mobilize resources to effectively tackle global
social problems. Tackling health problems requires long term thinking, complex partnership &
innovative forms of organization. Health suffers severs consequences in wars & other complex
emergencies.

Economic Analysis
Wealth creates health, & health creates wealth – virtuous & vicious spirals are possible.
However, this is an area where market failures are common & pervasive. The value of a healthy,
well educated population is increasing as the technological sophisticated of the world economy
grows. Rising prices of palm oil, many chronic health problems (new infection disease or drug
resistant strains) have the potential to impose enormous costs in a short period of time.

Social Analysis
Health is important to people and is consistently regarded as a high priority by rich & poor. The
ability to mobilize in the face of health threat is a test of a society, while the act of mobilizing
creates social cohesion & powerful social structures. There is a complex interaction between the
rights of an individual to good health; his or her responsibility to protect his or her own health;
the rights of a community to protect itself against health threat; & its responsibility to provide for
the health of its member. Health protection requires action across society, professions;

33
organization etc. public health also relies on public support for its license to operate & its ability
to change behavior.

Technological
Health problems are always dynamic & sometimes this change is unpredictable. Health
intervention can themselves lead to new health problem. Without knowledge about health, there
can be no response to health threats. Technology is poorly distributed in areas where people are
unable to create demand for it effectively. New technologies are the result of increasingly
sophisticated processes & currently seem to be of decreasing cost effectiveness. New
technologies pose poorly understood risks, as well as offering hard to quantify benefits.
Information technology has the potential to revolutionize the dissemination of knowledge about
health.

Balance Sheet HGGM

ASSETS 2009
2008

NON- CURRENT ASSETS

Property, plant and equipment 5, 137, 619, 0


5, 675, 577, 1
Investment property 2, 705, 804
2,724,587
Long-term investments
Long-term loans and advances 77, 035, 9
85, 509, 3
Long-term deposits 38, 965, 4
38, 965, 4

CURRENT ASSETS

Stores, spare parts and loose tools 290, 379, 0


265, 575, 9
Stock-in-trade 502, 292, 2
773, 761, 5
Trade debts 433, 457, 1
663, 921, 1

33
Loans and advances 58, 937, 5
56, 556, 6
Trade deposits and short-term prepayments 15, 415, 9
22, 492, 5
Other receivables 12, 154, 0
12, 147, 8
Other financial assets 201, 856, 8
54, 708, 0
Cash and bank balances 142, 969, 5
294, 164, 5

10,310,457, 101134112
9

NON-CURRENT LIABILITIES 2009


2008

Long-term financing 2, 735, 239, 9


2, 785, 751, 9
Long-term deposits 8, 805, 6
12, 315, 7
Deferred liabilities 1, 132, 937, 8
1, 003, 595, 7

CURRENT LIABILITIES

Trade and other payables 591, 685, 0


1, 645, 840, 9

33
Profit / financial charges payable 89, 010, 1
106, 663, 3
Short-term borrowings 662, 000, 0
125, 000, 0
Current portion of long term financing 785,808,3
415,091,2
Taxation - income tax - net of advance tax
46, 848, 6
Sales tax
3,766,4

10,310,457, 10,113,411,22
937 5

Profit Loss Account

2009
2008

33
Sales-net 5,735,795,493
6,178,399,033
Cost of sales 4,197,070,746
4,216,643,662
Gross profit 1,538,724 1,961,755,
,747 371
Other operating income
27,392,429 27,419,688
1,566,117, 1,989,175,
176 059

Distribution cost 62,951,958


68,292,101
Administrative expenses 231,781,301
240,361,887
Other operating expenses 51,310,878
78,900,914
Finance cost 600,871,299
604,981,196
Share of loss of associates - net of tax 9,239,805
8,744,825

956,155,24 1,001,280,9
1 23

Profit before taxation 609,961,935


987,894,136
Provision for taxation 147,244,514
357,439,095
Profit after taxation

462,717,42 630,455,04
1 1

33
Financial Statements Analysis
Financial statements are prepared to meet external reporting obligations and also for decision
making purposes. They play a dominant role in setting the framework of managerial decisions.
But the information provided in the financial statements is not an end in itself as no meaningful
conclusions can be drawn from these statements alone. However, the information provided in the
financial statement is of immense use in making decisions through analysis and interpretation of
financial statements.
Financial statement analysis is defined as
The process of identifying financial strengths and weaknesses of the firm, by properly
establishing relationship between the items of the balance sheet and the profit and loss account.
There are various methods or techniques used in analyzing financial statements, such as
• Vertical analysis

• Horizontal analysis

• Ratios analysis.

To analyze the performance of HGGM Limited, these analysis and interpretation is given in the
following pages.

33
Current Ratio
It measures the ability to meet current Debts with current Assets. It determines short term Debt
paying ability of a Company. Normally firms are considered in better position.

Current Ratio
Years 2008 2009

Findings 0.79 0.91

33
33
Quick/Acid Ratio

It measures the ability to meet current Debts with most liquid current Assets. Normally firms are
considered in better position, when their Quick/Acid test ratio is 1.0 or higher.

Quick/Acid Test Ratio


Years 2009 2008

Findings 0.338 0.466

33
Inventory Turnover

It measures how many times the inventory has been turned over (sold) during the year; provides
insight into liquidity of inventory and tendency to overstock. Normally firms are considered at a
better position when they have Inventory Turnover 6 or higher.

Inventory Turnover
Years 2009 2008

Findings 14 times 18 times

33
Average Collection Period

It measures the number of days in which on account sales can be recovered. It basically shows
the performance of recovery/collection process of a company.

Average Collection Period


Years 2009 2008

Findings 45 55

33
Debt Ratio

It shows the relative extent to which the firm is using borrowed money. Normally firms are
considered at better position when this ratio is not more than 0.7, but when the firm’s profit are
more and is investing in more new projects or extending the existing then it might be more than
0.7.

Debt Ratio
Years 2009 2008

Findings 48 45

33
Time Interest Earned Ratio

It indicates the ability to cover interest charges; tells number of times interest is earned.

Time Interest Earned Ratio


Years 2009 2008

Findings 1.858 times 2.488 times

33
Gross Profit Margin Ratio

Gross profit equals the difference between net sales revenue and the cost of goods sold.
Comparing gross profit to net sales is termed as the gross profit margin.

Gross Profit Margin Ratio


Years 2009 2008

Findings 31.75% 28.38%

33
Operating Profit Margin Ratio

Operating Profit Margin ratio gives the measure of Operating income dollars generated by each
dollar of Sales. While it is described for this ratio to be high for a firm as compare to its
competitors within the industry.

Operating Profit Margin Ratio


Years 2009 2008

Findings 25.92% 23.53%

33
Net Profit Margin

This ratio gives the measure of net income dollars generated by each dollar of Sales. While it is
described for this ratio to be high for a firm as compare to its competitors within the industry.

Net Profit Margin Ratio


Years 2009 2008

Findings 1.25% 1.889%

33
Total Assets Turnover

It measures relative efficiency of total assets to generate sales; it is also called Capital Turnover.
Greater Total Assets Turnover reflects the better position of the Company.

Total Asset Turnover


Years 2009 2008

Findings 0.958 times 1.858 times

33
Return on Total Assets

This ratio measures the firm’s ability to utilize its assets to create profits by comparing profits
with the assets that generate profits.

Return on Total Assets


Years 2009 2008

Findings 1.2% 3.5%

33
Return on Common Equity

This ratio measures the returns to the common shareholders.

Return on Common Equity


Years 2009 2008

Findings 0.198 0.236

33
Earnings per Share

The amount of income earned on a share of common stock during an accounting period is termed
as Earning per Share.

Earnings Per Share


Years 2009 2008

Findings 30.89 30.49

33
Common Size Analysis

33
Vertical Analysis
Income Statement

Years 2009 2008

Sales – Net 100% 100%

Cost of Sales 92.46% 93.92%

Gross Profit 7.54% 6.08%

Operating Exp. (Administrative) 1.37% 1.34%

Operating Profit 6.17% 4.74%

Other Income – Net 0.08% 0.32%

6.25% 5.06%

Financial & Other Charges 3.56% 2.24%

Profit for the Year before Tax. 2.69% 2.82%

Taxation 1.44% 0.93%

Profit for the Year after Tax. 1.25% 1.89%

Vertical Analysis
Balance Sheet

33
Years 2009 2008
NON CURRENT ASSETS:

Fixed Assets:

- Operating 41.2% 39.37%

- Non-operating 0.06% 0.09%

Capital Work in Progress 0.42% 1.52%

Investment Properties 0.01% 0.04%

Stores held for Capital Expenditure 0.01% 0.01%

Investment 1.6% 0.09%

Loan, Deposits & Prepayments 0.53% 0.61%

43.83% 41.73%

Current Assets:

Stores, Spares & Loose Tools 1.54% 1.38%

Stock in Trade 36.35% 31.05%

Trade Debtors 7.73% 8.53%

Advances, Deposits, Prepayments & 8.55% 16.39%


other Receivables
Cash & Bank Balances 2.0% 0.92%

56.17% 58.27%

100% 100%

Years 2009 2008

33
EQUITY & LIABILITIES:

Share Capital 3.89% 5.25%

Capital Reserves 0.51% 0.69%

Unappropriated Profit 7.83% 8.96%

Share Holders’ Equity 12.23% 14.9%

Surplus on Revaluation of Fixed 10.32% 0.0%


Assets
Non Current Liabilities:

Long Term Finances 11.37% 17.17%

Long Term Loans 5.9% 7.03%

Liabilities against assets subject to 0.04% 0.38%


Finance Lease
Deferred Liabilities 1.58% 2.16%

Current Liabilities:

Current Portion of Long Term 3.39% 4.02%


Liabilities
Short Term Finances 46.43% 43.34%

Creditors, Accruals & other Liabilities 6.06% 6.19%

Provision for Taxation 2.47% 4.61%

Index Analysis

Horizontal Analysis
Income Statement
Years 2009 2008

33
Sales - Net 76.51% 109.88%

Cost of Sales 74.98% 109.38%

Gross Profit 102.06% 118.24%

Operating Exp. (Administrative) 81.22% 114.2%

Operating Profit 108.23% 119.43%

Other Income – Net 22.69% 133.18%

103.29% 120.22%

Financial & Other Charges 93.03% 84.17%

Profit for the Year before Tax. 120.97% 182.36%

Taxation 69.22% 64.46%

Profit for the Year after Tax. 870.67% 1890.16%

33
Horizontal Analysis
Balance Sheet
Years 2009 2008
NON CURRENT ASSETS:
Fixed Assets:
- Operating 186.82% 132.12%
- Non-operating 90.90% 100%
Capital Work in Progress 5.95% 15.9%
Investment Properties 30.32% 70.53%
Stores held for Capital Expenditure 100% 100%
Investment 2421.45% 100%
Loan, Deposits & Prepayments 220.12% 189.8%
148.41% 104.59%
Current Assets:
Stores, Spares & Loose Tools 148.81% 98.73%
Stock in Trade 203.30% 128.59%
Trade Debtors 146.94% 120.16%
Advances, Deposits, Prepayments 103.73% 147.23%
& other Receivables
Cash & Bank Balances 147.35% 49.96%
166.31% 127.76%
157.96% 116.95%
Years 2009 2008
EQUITY & LIABILITIES:
Share Capital 100% 100%
Capital Reserves 100% 100%
Unappropriated Profit 190.51% 161.4%
Share Holders’ Equity 143.74% 129.67%
Non Current Liabilities:
Long Term Finances 106.88% 119.52%

33
Long Term Loans 165.9% 146.4%
Liabilities against assets subject to 4.7% 30.29%
Finance Lease
Deferred Liabilities 99.25% 100.41%
Current Liabilities:
Current Portion of Long Term 104.35% 91.64%
Liabilities
Short Term Finances 226.48% 156.48%
Creditors, Accruals & other 49.97% 37.78%
Liabilities
Provision for Taxation 116.54% 160.47%
Workers’ Welfare Fund 318.83% 231.56%
Unclaimed Dividend 100% 100%
150.81% 113.46%
157.96% 116.95%

Conclusion

To conclude all three process (SWOT, PEST and 4 P's) have


affected our strategy and marketing decisions. The SWOT analysis has
help us to acknowledge and comprehend our weaknesses, which will be a
benefit because now we know our weaknesses all we need now is search for
a way to eliminate them. The PEST analysis has drawn our awareness to

33
the external forces that may have an influence on the products.
Therefore, when making marketing decisions the factors found will be
taking into consideration. The competitive Audit has showed us where
HGGM Limited competitors are (what level they are on) which is also a
benefit because we can see what we are up against, what we have to do to
get ahead and whether we are disadvantaged in anyway. This is very
important in the competitive environment because as a competitor, you
cannot allow rivals to gain advantages in any form or way This internship proved to be very
helpful for me. I got a lot of knowledge and also the practical aspect of life. It was my first
experience, which was obviously very tough, but it will be very beneficial for me in the future.
As a whole HGGM Limited is a good organization to work in but there are certain departments
that need improvements. It is surviving in the FMCG sector with some strengths and weaknesses.
I am of the view that if HGGM Limited management wants to show the same results in the future
than it should have to take some decisions before time, because in 21st century only those
organizations can survive which are using their human resources and material resources with
popper planning and wisdom.

HGGM Limited has a very good image in the Northern and Southern market. They are using
different types of marketing tools. They are quite successful in achieving their targets just
because efficient and effective marketing strategies.

In spite of all these their promotion on T.V is not very good. There message and
appealing factor is seen weak. So they need to focus on this as soon as possible.
Their vision is also quite impressive if they succeed to achieve their brand will be
a national brand.

Recommendation

Kiosk Activities:

Stalls are hired in bazaars like Itwar Bazaar. Wall clock, cooking spoons, cup
etc are given on purchase of small packs of Shama Ghee in these stalls.

33
Special Events Activities:

Special events like free pakowra stall in populated bazaars during Ramadan. These stalls are
publicities in congested bazaars.

Shama Cooking Competition:

They go to female schools, colleges and universities and


motivate the student to cook different types of dishes.
These students are provided the necessary ingredients for
cooking including Shama Ghee. Then prizes to good
cooker is given.

Introducing scratch scheme

Introduce discount

Introducing gold scheme

Introduce hajj scheme

Associate with other brand

Create awareness our soap with shama ghee

Introduce VTF technology

Reposition our brand

Cooking programs on T.V

References

www.shamaghee.com
www.imgc.com.pk
www.google.com

33
33