Abstract:

Agriculture sector with its integral component of livestock (animal agriculture) is regarded as
most vital part of the national economy since the emergence of Pakistan . Livestock is the most
important sub sector of agriculture in Pakistan that accounts for nearly 37% of agriculture value
added and about 9% of the GDP.

Dairy is a major component of many rural households at least in the High and Medium Potential
Lands (HMPL) in Pakistan. The Pakistani dairy industry is based mostly on smallholder milk
production.

Milk plays a tremendous role in building a healthy society and can be used as vehicle for rural
development, employment and slowing down the migration of the rural population. Pakistan is
the Fourth largest producer of milk in the world with a total production of 33 billion liter of milk
a year, whose value is more than that of the combined value of wheat and cotton, from a total
herd size of 29 million milk animals (buffaloes and cow).

As a result number of national and multinational companies came to Pakistan to invest in this
sector, namely Nestle, Engro foods, Haleeb, Milk, DrMilk, and other local packaged milk
manufactures located in Pakistan. Importantly, Engro foods is a joint subsidiary of Engro
chemicals commonly known as Engro corporation, they came with big idea in this diary of food
business and they retained a tremendous success by focusing on close relationship with small
farmers. Due to increasing competition in this industry the demand of milk is increasing,
growing population, urbanization are the major drivers of this industry quality consciousness,
ease of availabity remained the frontline drivers with some challenges.
Acknowledgement:
We would like to express our sincere appreciation to those persons who have contributed either
directly or indirectly to compose this case study on Engro foods. We are very thankful to Sir
Faisal K.Qureshi who helped and provided us guidelines on how to compose case and its
limitations.

We also very humble to Mr Azeem Abro, sales and distribution manager in Engro and Mr
Tausif-ur-Rahamn Warehousing and supply chain assistant at Engro foods Karachi office, and
moreover Mr Kashif Soomro (Assistant HR officer at Sukkur plant) who helped a lot to
introduce these company personnel at Sukkur plants well as at Karachi head office for their
precious time and co-operation.

We would also like to acknowledge the efforts and help of our entire course instructor Sir Faisal
K. Qureshi to enhance our knowledge, understanding and utility of the subject matter, especially
in this fierce arena of management.
Executive Summary:

Pakistan is the fourth largest milk producer of the milk in the world. Pakistan produces 45
billion liters of milk annually. However, in contrast, only 36.2 billion of liters of milk were
usable, as 20 percent milk go waste owing to inappropriate methods and lack of timely
transportation.

Engro foods is the subsidiary company of Engro Corporation, in 2005 Engro decided to diversify
their business more by venturing into the food business by establishing Engro Foods Limited.
Engro foods offers products namely, Olpers, Tarang, Olwell, Omore, Owsum, Olfrut, etc., with
representative market share of 33% in Pakistan.

The food company, which mainly makes dairy products, recorded a loss of 434 million
rupees ($5 million) in 2009 compared with a loss of 554 million rupees the previous year,
according to the latest annual report of Engro Corp .

Engro foods have its two production plants situated at Sukkur primarily and Sahiwal with
different combination of products manufactured at each plant.

Despite the growth of the company naturally, there is also kind of problem associated with in
bound logistics cost representing milk collection ironically, hence, it creates the also a wider gap
of demand and supply in case of future with respect to increasing demand of milk in Pakistan but
lesser supply.