Pakistan reports steady growth in food industry

The corporate food industry in Pakistan is in a state of growth, with the increase in average revenue being in excess of 25 per cent last year. This growth is based on market penetration of largely urban areas and some export markets. With deeper penetration countrywide, the sector has enormous potential for growth and can contribute more than the current 20 per cent of manufacturing GDP. Emerging trends now point towards investment in value-added processing, albeit on different levels in the various sub sectors of this industry. Major primary production consists of cereal grains (rice, maize, wheat, and barley), sugarcane, various fruits and vegetables, marine and freshwater seafood, meat, and dairy products. However, the value-added food processing industry deals with a narrower range of products. Traditionally, food processing largely consisted of milling units for sugar, rice, and wheat where packaging was basic and for bulk quantities. The food industry operates with the participation of farmers, herders, fishermen, labourers, etc. Most of the participants on the primary level of production are self-employed persons (such as farmers and fishermen), small businesses, and large landholders, along with a few corporations. As the bulk of producers do not engage at the primary level, this increases the role of middlemen and, thus, the supply chain for these products becomes longer, adding a slightly higher cost to retail prices. The bulk of food businesses are either small and medium organisations, or private limited companies. Publicly-listed food companies consist largely of sugar mills. The analysis being presented here is based on the functioning of publicly listed food corporations. The companies chosen for consideration include Clover Pakistan, Engro Foods, National Foods, and Unilever Foods. Clover Pakistan was involved in the manufacture and sale of food products, with its leading product being Tang, a powdered drink formula. However, the company recently sold assets related to the manufacture, marketing, and sale of Tang to Kraft Foods Pakistan Limited, retaining distribution for a transitional period. Clover`s financials have displayed steady growth.