Refresh yourself ! Juices Juices......

Currently in Pakistan, there are 24 fruit juice/pulp processing units and a number of small units in the informal sector are working. The present installed capacity is estimated around 400,000 metric tons per annum with a demand for juices growing at a combined annual growth rate of 27%. The fruit juice industry reported sales of 8.526 billion Rupees in year 2008.
The outlook for the canned food industry - which can exploit rising demand for convenience and consumer fears over food origin and hygiene - and the soft drinks and beverages industry - which can capitalize on the asp rational demands of Pakistan's young population - have both been moderately accelerated. Forecast canned food sales growth to 2012 now stands at 46.7%, while soft drinks sales growth to 2012 is forecast to stand at 36.4%. Both have contributed to a per capita food consumption growth forecast amendment to 15.4%. It is also expected that the average consumption of the single person will be 85.5 hundred litters per years in 2012.
According to statistics, 2500,000 liters juices approx drink by Pakistani people in a month. And per day there is 83330 liters approx juices drink by people. The market of juices is growing because the consumption of juices increases every year and expected it increase continually due people change the life style and more health conscious. They prefer juices on other soft drink. The market share of the nestle juices is 60%. Which mean 1500,000 litters in a month and 50,000 litters in a day.
Nestle is name of pure life so quality is their guarantee. So if they lose their quality then they lose their sale because these don’t operate on the given image. And increase in rates of raw materials also influence the level of demand because due to increase in cost the sale price also increase and due to price war in a market of Pakistan demand level is effected. Or increase in tax there will be increased cost price which also effect in decreased in demand. Increase in inflation rate in Pakistan then this also effect in decrease in demand level. The nestle juices are at growing stage of product life cycle.

Market Trends
Tropical fruits and flavours dominate the market, yet some consumers are still hesitant to try unknown exotic flavours like cherimoya, guanabana and carambola. Companies have found the best way to introduce exotics is in combination with familiar flavours. A flavour combination that began in the new age, 5% to 10% juice category, and has spread to other beverage categories as well as to other products like kiwi, strawberry, etc. stating that it was a small company that took the risk and won.
Smaller companies lead the way, as they are more willing to try exotic flavours even though the larger companies have a larger staff and budget, and can afford to search out the trends. The large companies tend to introduce prototypes that are pretty well-tested. They are always interested in the next flavour trend, but usually are not the first to debut it.
Fortified drinks are also gaining market i.e. the juice is processed and an additional nutritious trait is added to enhance its wholesome value e.g. with additional calcium, vitamin C etc.
One can notice the population in the country mainly in the cities becoming more and more aware with regard to the nutritional aspect of life. This knowledge, coupled with the consumer’s desire for a healthier lifestyle, has greatly impacted the evolution of juice and juice-based drinks over the last few years.

Drink Drink !! Spotlight on Pakistan Beverage Market

The beverage industry in Pakistan, currently having a size of little over 120 million cases per annum with an annual growth of around 10-15 per cent, has the potential to double its size in the next 3-5 years, if the government's taxation policies towards this industry are corrected. The beverage industry at the moment has very low per capita consumption of 20 serves whereas in other countries of our region it varies from120-250 on the basis of single serve of 250 ml.
There are 34 beverage plants in the country and this is one industry, which is very well organized. Job oriented in nature, the beverage industry employees over 500,000 people directly and indirectly and also supports many other up/down stream industries such as crown corks, glass bottles, plastic shells, sugar, transport, advertising and media, P.E.T bottles, concentrates etc. due to this industry a huge number of outlets/shops are supported to generate wide-spread economic activity in the country.
Pakistan remains rooted to the bottom of BMI’s Asia Pacific Food & Drink Business Environment Ratings table for Q409 after a disappointing quarter that reaffirmed the country’s standing as the region’s least attractive investment market by some distance. Our forecast that Pakistan’s GDP will grow by 2.5% in 2009, as opposed to recording a contraction, has more to do with its relative disconnection from the global economy. Despite the immeasurable regulatory challenges facing firms operating in Pakistan, BMI points out that the country’s food processing and soft drinks industries remain promising as discussed in our recently published Pakistan Food & Drink Report for Q409.
Having entered in 1989, Nestlé has steadily developed into one of Pakistan’s largest fast-moving consumer goods companies. It has a particularly strong position in the dairy industry (it owns the domestic dairy company Milkpak). Nestlé is also present across a number of other high-growth segments such as confectionery (Kitkat), bottled water (Pure life) and hot drinks (Nescafe). With per capita food consumption estimated to have been a mere US$140 in 2008, Pakistani consumers remain highly price sensitive. With a turnover of US$410mn in 2008 in the country, Nestlé has barely scratched the surface of Pakistan’s potential with its 164mn population. It will look to capitalise on BMI’s forecast that through to 2013, food consumption in Pakistan will increase by 37.2% and reach PKR1,935bn.

Unilever also has a growing presence in Pakistan, particularly within tea. BMI points out that Pakistan is among the highest per capita tea consumers in the world. We do not see the industry slowing down anytime soon. Between 2009 and 2013, we expect tea value sales to increase by 40.5% and reach PKR59.2bn. Unilever’s main tea-category competitor is the domestic company Tapal Tea Pakistan’s soft drinks industry continues to be dominated by the basic carbonate range of global powerhouses Coca-Cola and PepsiCo. Turkey’s Coca-Cola Icicles has a major stake in Pakistan and sees the market as a key long-term growth engine. Although health consciousness has begun to surface, the meek spending power of consumers means the trends have yet to truly impact the trajectory of the industry. With this in mind, BMI expects the carbonates segment to continue claiming the majority of the industry’s volume growth. Through to 2013, soft drinks value sales are forecast to increase by 39.8% and reach PKR19.5bn.

Coloring all the Way ! Inside Paint Industry

Painting An Introduction

The earliest use of paint can still be seen today in caves of prehistoric men. These crude paints, created some 30,000 years ago by cavemen, were used to document various aspects of life such as hunting. Back then, the colours were limited to black, red and yellow, together with intermediate tints. In the period 3000BC to 600 BC, the Egyptians expanded the colour range with their chemical processing techniques. Some of the pigments they created include green, black and white. Lake pigments, an important paint group even today, were also first developed by the Egyptians. In Asia, Japan was using a totally different sort of coating for its protective value. Lacquer, a clear coating that brings a sheen of sturdy protection to surfaces, was used as early as the Stone Age in Japan. From about 4,000 years ago, lacquer was already used widely for tableware, utensils, weapons and various accessories. Paint, in particular its protective function, was given a big boost during the Industrial Revolution as demand was then high for anti-corrosive coatings that could delay or prevent rust and corrosion in metals. Lead- and zinc-based paints were developed to fulfil these needs. Many other types of paints and coatings were also created to respond to the growing needs of paint to protect and preserve. By mid 1800s, the Western world's paint industry was growing healthily as an increasing number of paint manufacturing companies were founded.

The World War did much to accelerate the development of paint. For example, large quantities of nitrocellulose - a chemical used prior to this in paints - were used for explosives during the war. With the end of the war, this excess nitrocellulose was put to good use as automotive coatings.

The paint industry today is a multi-million dollar industry. Beyond attractive colours, the industry now covers a large number of disciplines including polymer chemistry, rheology and pigment technology. Much investment has been channeled into dedicated research to develop paints and coats that not only look good, but also offer increasingly improved functionalities such as anti-corrosion and heat-resistant properties.
Present day research is focused on developing products that preserve the ecological balance and protect life. The challenge today is to create eco-friendly products such as water-borne coatings and lead-free paints, amongst other products.

Pakistan Paint industry overview

The paint industry in Pakistan operates both in organized as well as unorganized sectors. There are around 22 paint producing units in the organized sector. In the organized sector there are two multinational companies also present. The data regarding number of units and production of unorganized sector is not available; therefore it is difficult to determine the total production and number of units of paint industry. According to an estimate, over 350 units producing paints and varnished are operating in the unorganized sector. Many of them are not covered under the excise net in the someway as the organized and therefore, are in a better position to compete in local market. According to Federal Bureau Statistics, during 2001-2002 around 17,000,000 liters of paint was produced from 87 units. Pakistan Paint Manufacturers Association (PPMA) represents the organized units in paint industry. The paint industry uses about 300 different types of raw material for producing various kinds of paints. About 15 percent raw materials of the industry are petroleum-based. In 1971, between 80 to 90 percent requirement of raw material were met through imports, which currently have been reduced to about 40 % percent due to increased production of indigenous raw materials. The major raw materials produced locally include Mineral, Turpentine, Resins, Vegetable Resins and Gums, whereas raw material such as Pigments, Zinc Oxide, Titanium oxide and Lithopone are imported. Paint is categorized in two broad classes namely water based pain and solvent based paint. The industries produce a wide range of finish and intermediate products which pigments, distempers, plastic emulsion, enamel, undercoat, primers, rubber paint, aircraft paint, marine paint, anticorrosive paint, anti fouling paint, etc. BMA Capital forecast the future of Paint industry in their annual report they suggest that “Paints is another segment which can be adversely impacted by economic slowdown as growth contracts in the construction and auto industries. The company however, stands to benefit from new parent Akzo Nobel whose expertise lies in decorative paints and will allow it to expand its portfolio. ICI plans to export paints to Iran and Afghanistan as well which will help them to sustain profitable in current turmoil. The joint ventures and calibrations with international players are strengthening the industry and providing more varieties of paints to the customers. Last year, the Asian Paints made an indirect entry into Pakistan, through a technical consultancy tie-up between Berger International Singapore – a company it acquired in 2002--and Berger Paints Pakistan. This tie-up will allow Berger Paints Pakistan to access product technologies and products from the Asian Paints group.

Here are some statistics about paint industry;

• There are around 22 units in the organized and over 400 units in the unorganized sector for the manufacturing of paints and varnishes.
• Around 50 percent of the domestic demand for paints and varnishes is met through production in the organized sector while the remaining comes from the unorganized sector.
• The per capita consumption of paints in Pakistan is low at 0.8 kg per annum compared to 4 kgs in the South East Asian nations, 22 kg in the developed world and 15 kg per capita for the world.
• The demand for paints and varnishes is rising due to the resurgence of housing and construction sector.
• During July-March, 2007-08, the production of paints and varnishes both solid and liquid grew by 9.9 percent and 8.2 percent, respectively.
• At a time when the sales volumes of all the paint makers have been booming because of the resurgence of the housing and construction sector, price factors are a major component of a company's competitiveness in the in the market, irrespective of the quality of the paints supplied.
• No doubt the mushrooming growth of paint makers in the informal sector has provided much relief to the lower and middle income group people who could not afford to buy costly paints produced by some multinationals and others.
• However, price-conscious consumers are still bound to compromise on the quality factor despite benefiting from the saving in terms of rupee while buying mediocre quality paints that are not long-lasting.
• Berger Paints, Buxley Paints and ICI Paints all reported improved sales volume. Berger sales volume increased to Rs8.53m from Rs6.87m in the previous fiscal year. Despite increased expenses incurred to increase their market presence, the company achieved 63% higher profits of Rs33m.
• Net sales of Buxly Paints in July-March 2003-04 stood at Rs122m against Rs103m in the corresponding period of previous fiscal, while ICI's turnover in the first quarter of 2004 stood at Rs796 million as against Rs638 million while operating profit rose to Rs102m from Rs90m over the same period last year.
• These companies expect a good level of demand for both decorative and industrial paint in the future but said that margins are coming under pressure from raw material cost increases.

PAINT MARKET STRUCTURE

• Only two major players in the market – ICI and Berger
• The ICI has market share of 22 % while Berger have 15 %. While 65 % is acquired by mushrooms
• Mushrooms are of two types - organized and unorganized.
• Organized mushrooms are small companies who have improved their manufacturing style. These companies are ISO certified and cater to lower socio-economic classes. They tend to spend money on advertising and make their presence felt through the media.
• Unorganized mushrooms are small companies, whose operation is restricted to their respective localities only, they lack quality assurance and quality control measures and do not provide after sales service.
• Only one other major player, a company by the name of JOTUN which is a UAE based company and imports directly from Dubai but only targets architects and interior designers.
• Another big player, Nippon Paints has recently started setting up its operations in Pakistan. It will be a while before Nippon becomes a threat for ICI.

Food Industry of Pakistan

Pakistani Cuisine is famous all around the world for its spices, aroma and flavors. It has earned Pakistan a name in gastronomical delights. All over Pakistan one will find countless restaurants, offering local and international cuisine, ranging from budget to buffet restaurants. The history of restaurant business in Pakistan is very old. Initially there was either truck restaurants of poor quality or hotels used to provide dinning services. Then after some years of freedom the restaurant industry started evolving. Many restaurants then came into existence. These restaurants initially provided variety of Pakistani food. But when tourism increased in Pakistan, to attract tourist, restaurants started offering continental food menu too. As globalization stepped in Pakistan, not only foreign fashion or products were adopted by the people of the country but also the taste especially from the young generation.

Catering this change, restaurants started offering fast food and Chinese food as they used to serve Pakistani food as basic product. Many restaurants then started operating in specific cuisine. Then the trend came of providing hotel services along with dining and banquet services. In Pakistan the pioneer of this sort of services was Avari Towers owned by Avari Family. Along with quality banquet services, Avari also added variety of cuisine focused restaurants. Hushoo Groups Pearl Continental Hotel also followed this trend.
Beside these major visible icons introducing the trend, many other small hotels and restaurants followed the trend. Restaurants started providing banquet services along with banquet services. This business with these significant changes not only started growing but also became very potential business. People started dinning in restaurants at least once a month. The reason of this along with the availability of variety of food was the fascination involved in dinning out from home in a luxury place. People not only then preferred the food taste or variety of menu but they also started preferring brand reputation, on time service, employee attitude etc.
This change in the consumer consumption pattern of this industry increased its potential more. This potential was not ignored by the multinational food chains. Many MNC food chains started their operations in Pakistan. Pizza Hut was the first MNC restaurant to starts its operations in Pakistan in 1993. Then KFC in 1996 and McDonald’s in 1998 started their operations in Pakistan. Beside these renowned restaurants Subway has also spread a network of 29 branches in Pakistan. These MNC’s have been satisfying the customers of Pakistan with their internationally renowned products along with customization with accordance to Pakistani taste. But still the target markets of these restaurants are people of high class and middle class people.

Detergents Market of Pakistan

The household care market experienced another reasonable performance in current value terms in 2005, maintaining the near double-digit increase seen in 2004. The household care environment is dominated by multinationals, with which local companies struggle to compete. A continuous rise in health and hygiene awareness, coupled with consumers' increasingly western lifestyles, had a very positive effect on demand for household care products among a core of more affluent urban consumers. The high number of Pakistanis returned to the country having left to work abroad also contributed to growth in demand for more advanced products.

Laundry care products continue to dominate the household care environment overall in 2005, accounting for 65% of total sales value. This high proportion of total sales is due to the necessity status of these products for Pakistani consumers, the majority of whom live on very low incomes, as well as rapid product development on a regular basis. Standard powder detergents and bar detergents account for the greatest share of laundry detergent sales due to their multiple uses and low prices. However, other more advanced products are gradually emerging due to the slow shift towards western lifestyles among a few urbanites.

Growth over the forecast period will be driven by several factors. These include the continued migration of rural consumers to urban areas in search of work and an improved standard of living. The number of Pakistanis returning to the country having worked abroad will also fuel growth, as these consumers bring with them knowledge of the products available in the west, as well as general lifestyle trends to which they have become accustomed. These factors will be underpinned by the increased penetration of supermarkets and hypermarkets in urban Pakistan, which will be able to offer consumers a wide range of modern, convenient products at highly competitive prices. Throughout the country consumers will continue to demand basic household care products they know to be effective, demonstrating little interest in the short to medium term in highly advanced and expensive products or formats.