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Food Processing Industry

Index

Introduction.

Pakistan food industry over view.Linkages.Food Industry Survey.Food Manufacturing Industries on KSE.Pakistan's Food Potentials.Scope of Frozen Food in Pakistan.alue of Fast Food Industry in Pakistan.

Introduction

!"e food industry can #ake a variety of di$erent products fro# a given

co##odity. !"ese food products "ave di$erent e%piration dates and di$erentecono#ic value as a result of food processing.P"ysical &"eat( )"e#ical &preservatives and *iological &fer#entations are usedto preserve food.!"e food industry adds value to co##odities( creates a varied year+round foodsupply and does so at very low consu#er cost.

Pakistan Food Industry Overview:

Pakistan is considered in top ten food and *everages #anufacturing countries in t"e

world( attracting foreign direct invest#ent of ,S - /0.10 #illion in t"e last twoyears.

2griculture contri3utes 456 of t"e country7s 89P and is t"e 4ndlargest source of

foreign e%c"ange earnings of t"e country. It e#ploys ::6 of t"e total work force

and is t"e #ain source of liveli"ood for t"e ;;6 of t"e country7s population.

#illion tons. ?ice also "olds a strong position I agriculture sector and its

production increased 3y 4.0 6 to ; #illion tons I 4@@>+@1. Sugarcane w"ic" is also

a #a=or crop of Pakistan recorded "ig"est production level of ;0./ #illion tons.

Products like dairy( As"eries( fruits and vegeta3les also play a vital role in t"e

country7s econo#y. Pakistan ranks as t"e 0rdlargest producer f #ilk in t"e world(

producing :4.5/ #illion liters per day annu#. !"e As"eries sector registered a

growt" rate of 556 t"is year( wit" t"e e%port of As" and As"ery products reac"ing

over 5@@(@@@ tons.

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!"e 3everage industry in Pakistan also possess tre#endous potential and currently

t"ere a a3out 5>@ units operating in Pakistan t"at produce water( syrups and

sBuas"es.

Linkages

Backward linkages:2griculture sectorFertilizers*utc"ersFar#ers

Forward linkages:Cotel D ?estaurants2uto Industry &!ransportationS#all ,nits &Couse Cold ,nitsPlastic Industry

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Food Industry Survey:

I =an(5//> 3y iB3al "aidari.2ccording to t"e )ensus of Manufacturing Industries t"ere were /4: unitsengaged in t"e #anufacture of Food and *everages. 2ccording to t"e ,I9 it ist"e largest #anufacturing industry of t"e country. alue of production stood at?s.>:.@/: 3illion and #anufacturing value added &M2 stood at ?s.4:.41> 3illion.Food processing is a relatively capital intensive industry. !"e s"are of food in t"e#anufacturing industry "as declined fro# 44.;; per cent in 5/15+14 to 5/.>; percent in 5//@+/5. Figures for 5//+/; are not availa3le.!"e growt" rate in t"e food industry "as 3een esti#ated at 5@.@@ per cent perannu#. !"e #ost rapidly growing ite#s are dairy products As" processed( 3akeryite#s( sugar( 3iscuits and confectioneries( fruit =uices and ot"er soft 3everages.?apid e%port growt" "as c"aracterized As" preparation( fruit preserves( dry fruits(so#e 3everages and sugar( and "oney preparation. Food products &e%cept rice do

not "owever( #ake up a signiAcant proportion of Pakistani e%ports and t"ere is aconsidera3le potential for e%panding suc" e%ports( specially to Europe and t"e 8ulfregion.2s #any as 1; food #anufacturing co#panies are on t"e list of Karac"i StockE%c"ange out of total >10 co#panies &end Ganuary 5//>. !"e paid+up capital offood co#panies stood at ?s.>.5/ 3illion as end 9ece#3er 5//;. !"ey include(so#e of t"e 3iggest groups in t"e #arket suc" as *awany( )rescent( Ca3i3( Fecto(Pre#ier( Lakson( *ur#a il &producing vegeta3le oils *rooke *ond( )lover Foods(Lever *rot"ers and ational Foods. !"e food #anufacturing Ar#s "ave generallyperfor#ed well on t"e stock e%c"ange in 5//:+/ wit" capitalization registering ana3ove average increase. et proAt as percentage of s"are"older7s eBuity "asaveraged at a3out 44 per cent during 5//@+/0 for t"e sugar and allied group( and

a3out 4 per cent for t"e vegeta3le oil groups. !"e net proAt ratio for t"e to3accosu3sector "as 3een 0@ per cent. !"is co#pares well wit" t"e overall net proAt ratiofor KSE co#panies during t"is period( and averages to a3out 5/ per cent.!"us( t"ere is a signiAcant scope for invest#ent e%pansion in t"e food#anufacturing sectors. 9o#estic de#and is 3uoyant and e%port prospects are3rig"t+alt"oug" t"ey are yet to 3e adeBuatelye%plored. Several #a=or co#panies including well known #ultinationals "avesu3stantial invest#entco##it#ents and t"ere are also a large nu#3er of #iddle sized upward #o3iledo#estic Ar#s. Scope(t"us e%ists 3ot" for t"e esta3lis"#ent of w"olly owned su3sidiaries. !"ere is also aneed for tec"nology transfer agree#ents w"ic" can facilitate t"e access of Pakistani

co#panies( to #odern tec"nology and know+"ow in t"e areas of processing(preservation and packaging of food #anufactures. Several Pakistani Ar#s "avedeveloped a#3itious #odernization progra#s.

Food manufacturing Industries listed on KSE

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Industry o of )o#panies Paid+up )apital Market value

Sugar and allied 01 :;;./: ::0@.5/:!o3acco > :5.@55 5140.:5Edi3le il 5/ 0/.>@4 4>.54

Food and allied 44 5/45.4:: 5:0/.@>/

Pakistans Food !otential

2ccording to an e#inent agriculture e%pert( Pakistan t"roug" intensive cultivationcan increase its cereal grain production #ore t"an t"ree ti#es t"e a#ount currentlyproduced in t"e country!"e present cereal production is around 4;.0 #illion tones.2 production target of : #illion tons of cereal production would 3e suHcient to#eet Pakistan's entire food needs and also to ena3le it to 3e t"e #a=or e%porter ofgrains to Sout" 2sia and t"e Middle East.

!"us Pakistan "as i##ense potential to turn into t"e food granary for t"ecountries of 2sia and 2frica in view of its vast potential of water resources and its3iggest canal syste# in t"e world.Pakistan's soil and cli#ate are conducive to year round crop production.Ma=or sources of dietary proteins are cereals( pulses( fruits( vegeta3les andani#als. In t"e case of rice Pakistan already e%ports #ore t"an a #illion tons of riceto Middle Eastern and Sout" 2sia countries.2gainst t"e reBuire#ent of 4@ #illion tons t"e production of w"eat would 3e lesst"an 51 #illion tons t"is year.

"#eat

!arget for w"eat crop for t"e year 5//;+/> "as 3een A%ed at 51.@ #illion toness"owing an increase of .0 per cent over last year. f t"e target 51.@ #illion tons(Pun=a3 would produce 50. #illion tons( Sind 4.:> #illion tons(

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$ice

?ice is t"e #ost i#portant cas" crop in Pakistan and it "as assu#ed t"e Arstposition in regard to foreign e%c"ange earnings. Pakistan "as #oreover( adistinction of 3eing one of t"e only two producers of *as#ati rice in t"e worldt"oug" wit" so#e =ustiAcation to 3e t"e world's Anest( of delicatelong grain and e%otic. 2 uniBue co#3ination of soil and cli#atic conditions conAnet"is distinctive rice to Pakistan. 1@(@/@ tons in 5//4+/0 to /@@(@@@ tons in 5//>+/1.

Sugarcane

Pakistan is ranked fourt" after India( )u3a and *razil in t"e world as area undersugarcane cultivation is concerned. Cowever( cane per "ectare yield is low. !"e

5//;+/> production target "as 3een A%ed at :/.4@ #illion for#ers. !"is is >.; percent #ore co#pared to t"e crop of :.:> #illion tons produced in 5//+/;. Lastyear growers failed to ac"ieve t"e target of :;.4@ #illion tons as esti#atedproduction fell s"ort of t"e target 3y one per cent. It was also 0.@6 less co#paredto a crop of :>.5> #illion tons produced in 5//:+/.

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Pakistan "ad to #ake arrange#ent to i#port sugar. !otal sugar i#ports in 5//;+/>&Guly+Gune including 0>(@@@ tons ordered 3y cto3er are likely to 3e around>@(@@@ tons.

Edi*le Oil

)onsu#ption of edi3le oil in Pakistan "as increased rapidly. !"e de#and "as 3eenrising 3y #ore t"an @(@@@ tons annually over t"e past Ave years. In 5//+/; t"ereBuire#ent reac"ed t"e level of 5.1@0 #illion tons and it is esti#ated t"at t"ede#and for edi3le oil will 3e around 4.@ #illion tons in 5//>+/1. Pakistan's i#portsof edi3le oil stood at 5.4@ #illion tons in 5//+/; wort" ->@; #illion. I#ports "aves"own declining trends. !"e decline was attri3uted to s#uggling fro# t"e 3orders ofIran and 2fg"anistan. !"ey are easy routes to s#uggle vegeta3le oil into Pakistan.Mostly 2fg"an traders are involved in s#uggling. Edi3le oil i#ports "ave declined

fro# -50/: #illion in 5//:/ to -54@@ #illion in 5//+/;. Per capita consu#ptionof edi3le oil "as increased fro# 55.10 kg. in 5//@+/5 to 54.;@ kg. in 5//+/;.2ccording to PM2 annual edi3le oil and fats consu#ption is little over two #illiontons. 2l#ost @ per cent of it is #et 3y local sources including sunJower oil(rapeseed oil( and cottonseed oil. !"ere re#ains a need to i#port a3out one #illiontons of di$erent edi3le oils to #eet t"e total reBuire#ent. 2t present 4@@(@@@ tonsoil is i#ported a3ove reBuire#ent w"ic" is s#uggled to 2fg"anistan( or ot"ercountries.

Fruits and vegeta*les

Pakistan is ranked Aft" a#ongst t"e world citrus growing countries. 2t present

Pakistan produces .@ #illion tons of fruits and vegeta3les annually. Since i#proved#et"ods of cultivation are now in use 3ot" t"e production and acreage continue torise. Cowever( it is o3served t"at @ per cent of fruits and vegeta3les "arvested int"e country go waste during "arvesting( transportation( preservation and storage. Ifonly 4 per cent of t"e wastage could so#e"ow 3e avoided Pakistan could earn-5@@ #illion wort" of foreign e%c"ange annually t"roug" t"e e%ports of fruits andvegeta3les. Pakistan is e%pected to "ave enoug" surplus of vegeta3les &onion andpotato and fruits( w"ic" will "elp in sustaining t"e growt" and #o#entu# ofe%ports ac"ieved so far. E%ports of fruits and vegeta3les during 5//;+/> stood at-;4.@44 #illion as co#pared to -:.>@ #illion in t"e preceding year. !"ei#porters were #ainly 8ull countries including Kuwait and Singapore and Malaysia

in t"e Far East. !"roug" #ec"anized grading( Buality of fruits "as also 3eeni#proved. I#prove#ent in packing "ad also 3een #ade.

+nimal Protein

It is esti#ated t"at t"e 3eef production in 5//+/; was around /0>(@@@ tons(#utton at ::(@@@ tons. Poultry sector grew 3y 4.> per cent over t"e last year.Cowever( #odern poultry production in Pakistan is constrained 3y "ig" #orality of

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Jocks( "ig" incidence of disease( poor Buality of day old c"icks and "ig" cost of feedco#3ined wit" i#proper #arketing syste#. 9espite various( concessions andincentiveprovided 3y t"e govern#ent( t"e poultry industry "as yet to #ake a rapid progress.Pakistan "as population of 5: #illion of layers and 5/@ #illion of 3roilers. Productionof poultry #eat was esti#ated at 0@1(@@@ tons in 5//:+/. Eggs production stood at

/4> #illion - during t"e sa#e year. !"eproduction of As"eries for t"e year 5//+/; is esti#ated to 3e /(@@@ tons ofw"ic" :5/(@@@ for#s is #arine and 5:@(@@@ #etric tons inland.

,ilk

Pakistan produces 4@ #illion tons of #ilk annually w"ic" is "alf of #ilk produced3y rest of t"e :/ countries of t"e Musli# world. Pun=a3 alone produces #ore #ilkt"an all t"e 54 PE) countries put toget"er. Pakistan is also i#porting #ilk and #ilkproducts. In 5//+/; i#port of #ilk products stood at -0@.; #illion. !"e interest ofdairy industry re#ained grossly neglected. Milk is availa3le in a3undance.

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#illion in t"e corresponding period of5//:+/( s"owing a decline of 5.1> per centand @/.1 per cent in ter#s of Buantity and value respectively. !"ese Agures don'ts"ow #illions kg. of tea s#uggled into t"e country via 3order areas of