Case Report No.

Fauji Foods Pvt. Ltd.

Introduction

Pakistan is the 4th largest milk producer in the world—yet its share in the global milk
market is negligible and only 3% of the total milk production is being processed. Overall, the
contribution of dairy sub-sector to national economy is Rs 540 billion (with 97% as informal
non-documented economic activity) and is expected to grow at 4%. There is potential in the
country for grooming of this industry.

The Fauji Foods is well reputed business group in Pakistan; Fauji Foods has been in
manufacturing and trading business since 1964, and due to its devotion towards serving its
customers, it has emerged as a well-established & widely respected group within the Pakistan
industry.

The company Noon Pakistan Ltd. (Nurpur Milk) was incorporated in 1966, with a paid
up capital of Rs.5 Million and a total investment of Rs.18 Million. In the private sector, Noon
Pakistan Ltd. was the first company in Pakistan to operate a Spray Dryer for milk powder
manufacturing. And its products namely; milk powder, butter and cheese are marketed
throughout Pakistan under the brand name of “Nurpur”.

Nurpur purchase Milk from the milkmen or Dairy farms and use it as raw material, then it
take to the plant and through UHT treatment it becomes hygienic milk and packed the milk into
packets, the bulk production reached to the warehouses where it is stored and from where it is
supplied to the Distributors on both credit and cash base. The account receivables are generated
through credit sales and payment is received after couple of days or months. The payment
received from receivables contain the cost and profit margin of the company, the company pay to
the creditors that circle continue and the business continue.

Being a part of Noon Group, the company has strong relationship with its debtors and
creditors. In 2010 the total receivables was of Rs. 92007.844 Million, that showed the company
is gaining trust of the debtors and increased its credit sales from previous years. In 2010 the total
payables was of Rs.22826.760 Million that showed the creditor have trust on the company.

In 2010 Nurpur is with the average monthly capacity of 0.487 Million liters (2009: 0.487
Million liters) and average monthly production 0.222 Million liters in 2010 (2009: 0.147 Million
liters).Between 2006–09, consumption of LDP in Pakistan steadily increased in line with
population growth, with a CAGR(Compounded Annual Growth Rate) of 2.4% (according to
Tetra Pak data). In 2009, LDP consumption reached 18.9bn litres, maintaining its position as the
fourth largest LDP consumer after India, China and the US. In the same period, packaged LDP
grew at a CAGR of 8.4% compared with unpackaged products, which grew at a CAGR of 2.1%.
Tetra Pak expects packaged LDP to continue growing, with a CAGR of 10.4% from 2009–12. In
our country the dairy industry is not well established, only around 4%-6% milk is processed and
packed by the companies and reaming 96%-94% is directly supplied by the milkmen to
household, if government support, the ratio can b reversed.

In 2008 the company has enough funds available to meet the working capital
requirement, and it didn’t need financing from any bank for working capital requirement, but in
2009 due to economic conditions of the country, company needs Rs. 7730.10 Million for
working capital, In 2010 the net sales of the company is Rs. 2436.416 Million (2009:
Rs.1745.609 Million, 2008: Rs.1615.387 Million) that show a increased in the net sales of the
company, the growth in the sales is 8.1% in 2009 as compare to 2008 and in 2010 is increased to
39.6% as compare to 2009.

The cost of sales in 2010 is Rs. 2170.498 Million (2009: Rs. 1528.572 Million, 2008: Rs.
1404.037 Million) that show increase in the cost of sales. In 2010 the cost of sales is 86.9% of
the sales (2009: 87.6% of the sales, 2008: 89.1% of the sales) the percentage of cost of sales to
sales is decreased from previous years that didn’t mean that the cost is decreased that is because
of increased in the sales.

The operating profit ratio 3.67% in 2010, which decreased from previous year 2009 of
4.45% the minimum ratio is 0.04% in 2006 and after this the company is progressing and goes
up to 4.45% in 2009 and again decreased in 2010.

The net profit in 2010 is Rs.27.286 Million and the ratio to sales is 1.12% which is
decreased from previous years 2009: Rs. 48.581 Million with the ratio of 2.78%,%) and that is
because of large amount of administrative and distribution expenses, the large portion
distribution is the freight and forwarding Expenses, which increased in 2010.

Out of the total financial assets, which are subject to credit risk aggregated Rs.127.586
Million (2009: Rs. 81.499 Million). To manage exposure to credit risk in respect of trade debts,
management performs credit reviews taking into account the customer's financial position, past
experience and other factors. Concentration of credit risk arises when a number of counter
parties are engaged in similar business activities or have similar economic features that would
cause their abilities to meet contractual obligation to be similarly affected by the changes in
economic, political or other conditions. The Company believes that it is not exposed to major
concentration of credit risk.

Liquidity risk is the risk that an entity will encounter difficulties in meeting obligations
associated with financial liabilities. Prudent liquidity risk management implies maintaining
sufficient cash and the availability of funding through an adequate amount of committed credit
facilities.

Vision of Nurpur Foods

“Our vision at Nurpur is to be a transformative force in our community and world at large and
to serve as a model of a sustainable business alternative that nurtures social and economic well-
being in an environmentally sensitive manner.”

Mission Statement

“Nurpur is committed to supplying the consumer and our customers with the finest, high-quality
products and to leading the industry in healthy and nutritious products.

Nurpur supports these goals with a corporate philosophy of adhering to the highest ethical
conduct in all its business dealings, treatment of its employees, and social and environmental
policies.”
 Noon Pakistan Ltd. (Nurpur Milk)

The company was incorporated in 1966, with a paid up capital of Rs.5 Million and a total
investment of Rs.18 Million. In the private sector, Noon Pakistan Ltd., was the first company in
Pakistan to operate a Spray Dryer for milk powder manufacturing. The installed capacity of the
plant is 72,000 liters/2 shifts. The plant commenced its operation in June 1972 and its products
namely; milk powder, butter and cheese are marketed throughout Pakistan under the brand name
of “Nurpur”. Annual sales revenue amounts to Rs.957 Million. The total no. of employees is 200.
The company has recently (2004) put up a UHT Tetrapod milk plant.

Core Values

• Customers are at the forefront of everything we do.

• Ideas are constantly challenged to develop next generation solutions.

• Business is conducted openly and fairly – but we compete fiercely.

• Team-work is encouraged with individual flair for the best results.

• Tough goals are set – and we enjoy the challenge of beating them.

• Environment – We value preservation of the environment and sustainable organic

agriculture.

• Community – We value mutually supportive relationships among members of our local

and global communities.

Products

1. Dairy products

a. UHT Milk

b. Pasteurized Milk

c. Flavored Milk

d. Butter

2. Processed Dairy
a. UHT Cream

b. Cheese

c. Skimmed milk Powder

d. Full Cream milk Powder

3. Fruit Products

a. Apple Nectar

b. Orange Juice

c. Jams

d. Marmalades

e. Whey Powder

4. Others

a. Water

b. Desi Ghee

Fruit In juices

The data has been collected somewhat from the report and we have taken dummy values as the
companies have their own secrets and cost of sales report is not disclosed by the companies,
whereas, few values have been taken from the Director’s report which resides in the annual
report of the company. We opted for Make or Buy decision for Fruit In juices of NURPUR
foods.

Number of units = 2,583,165

Direct material = Rs. 1.83/unit

Direct Labor = Rs. 4.8/unit

Variable overhead involves fuel and power, repair and maintenance, freight inwards,
travelling, advertising and sales promotion, utilities for per unit is Rs. 5.32. Fixed overhead Cost
involves depreciation, insurance, salaries and wages, rent, communication and other operating
expenses are Rs. 22,034,397.45/-

Nurpur Cheese

In case of Nurpur Cheese, the company faced a decrease of 16% in the company’s profits
because due to its cheese so we decided to do an analysis of its product of cheese to see whether
Nurpur foods should continue with its ice or should drop it. The data for this was also collected
from the Director’s report and for the values we consulted the annual report of the company for
the year 2014 and few of them are having dummy values due to company secrets.

Milk suppliers

As Nurpur is a dairy company its basic raw material is milk which is supplied by the
farmers. Bhalwal, located in Sargodha district is the core region for collecting milk supplies.
Bhalwal is an agricultural land enriched with water and pastures. Dairy animals are found in
abundance here. 60,000 to 70,000 litres of milk is collected from this region only.

For the suppliers, it has constructed chillers to keep milk fresh. Maintenance is done by Nurpur
but the profit goes to the chiller owners. It provides Rs 2/- extra to the milk suppliers.

Competitors

There are different competitors of Nurpur in different brands.

1. Dairy pure

2. Candia

3. Milk pak

4. Haleeb

5. Olper’s
 6. Good milk

Testification of Ingredients

Nurpur uses high quality ingredients. They use ISO22000 ingredients that are highly
testified in laboratories.

Research

The company does not have a research and development department. However a single
person is employed for this purpose. He carries out little researches and gives his suggestions for
further improvements in product development. Tetra Pak mostly carries out the researches for
Nurpur but recently Nurpur hired a company Aftab associates for the purposes of research.
Nurpur carries out observational research on large scale. It observes people’s buying patterns,
spending patterns, general trends, influential factors etc to modify and develop its products.

Coding of milk products

The milk product are coded up in a sequence to check their description, their time of
manufacturing, to check out have they reached their destination.

Growth strategy

Market development and product development are a step by step process. Growth cannot
result if any of the steps is missing. Nurpur penetrated the market by introducing butter nad tetra
pack milk. Nurpur is very much quality conscious. Whenever the name of Nurpur is mentioned
the first thing which stuck people’s mind is butter and milk. Gradually with the passage of time
people’s income increased and so did knowledge. They realized that tetra pak milk is far better
than gawala milk so more people started purchasing Nurpur milk even if it cost people more than
the gawala milk. This is how Nurpur developed its market.

Factors that affect the milk product

Economic factors

As Nurpur is a national level company it does not have much budget. It always has a
fixed budget even at times Tetra Pak shares the expenses. On the other hand changes in income
of the people also affect the company. If people’s income will increase their purchasing will
increase.

Natural factors

Natural environment is of key importance to Nurpur Milk comes from dairy

animals; they graze in the fields and meadows. If there is less rain there will obviously be a
shortage of pastures and meadows which in turn will cause less production of milk in the cows.
Collection is the most critical part in the collection of the milk therefore natural environment
affect every dairy company a lot.

Technological factors

Advancements in technology have greatly affected Nurpur. New machinery, use

of computers has been very beneficial. In the past Nurpur had been using TPA9 machine for
packing of 1 liter milk which had an output of 5000 packs per hour. But now with a deal with
Tetra Pak, Nurpur sold TPA9 to Tetra Pak and with the addition of little money bought TPA22
which has an output of 22000 per hour. Nurpur has 4 of such machines now.

Product quality

Nurpur products are excellent in quality. Nurpur makes no compromise on quality. They
are maintaining their standards in milk. They know that if they false product the consumers can
challenge them in court through PDA.

Product Style and Design

Product style and design is usually made by Blitz agency and Tetra Pak packaging. They
style and design all the products.

Labeling

Labeling on packs is done by BLTZ agency and tetra pack. Nurpur is obligated by Health
Department and FDA to print certain things on its packs like fat and calories information, expiry
date and statement standardize UHT milk. Even though the milk does not expire for a year but
it’s a rule to print 6 month expiry date.
Product Age

Flavored Milk

Pasteurized Milk 1998

UHT milk 250 B and 100 pull tab 2004

Current Volume

 UHT Milk 60,000 liters/day

 Pasteurized milk 6000 Kg /month

Milk product development

Product development is done by Nurpur itself, BLITZ agency and sometimes Tetra Pak also
provides some help with suggestions etc.

Determination of price

Prices are decided in comparison with the competitors or by the recommendations of

Tetra Pak, BLITZ DDB or Dairy association. Nurpur UHT milk has almost the same prices
according to the prices of the competitors’ products. The company has a price control
department, so employee of such department daily make survey of market and check the prices
of competitors products and report to their managers. Company these prices the manager make
decision of setting the prices of the products.

Now the prices of Nurpur UHT milk are:

250ml Pack Rs: 15

500ml Pack Rs: 30

1000ml Pack Rs: 54

The NurPur Flavored milk has the monopoly because no other company is providing flavored
milk like Nurpur. So the company has the power to control its prices because there is no any
strong competitor against this product.
Price of Flavored milk is

250ml Pack Rs: 22

Pricing approach

Nurpur uses cost-based approach.

Survey research

Nurpur does not have direct contact with its end users. So it usually surveys the retailers
and shopkeepers to know about people’s preferences, attitude and behavior in buying. They ask
questions like “what category purchases Nurpur products?”

“Why do they prefer Nurpur milk over other milk?”

“Are these people loyal to Nurpur products?”

Other Factors

Social class

Nurpur’s focus is on the upper classes i.e. A and A+ only but as the trends are changing
and purchasing power of people is rising more and more people are now in a position to afford
many of the stuff which was once considered to be only for the luxury lovers. Nurpur is now
thinking about focusing on B and C classes as well.

Groups

Nurpur creates demand for its products by the push factor. Therefore groups play an
important role in creating demand for its products. People see the influential using a particular
Nurpur product they also start buying it.

Family

The main focus of nurpur is on families. Nurpur’s milk focuses on drinking. It involves
children.
 Management Hierarchy

Chairman and Chief Executive

Mr. Manzoor Hayat Noon

Board of Directors

Mr. K. Iqbal Talib

Mr. Javed All Khan

Mr. Safdar M. Hayat Qureshi

Mr. Salman Hayat Noon

Mr. Adnan Hayat Noon

Mr. Zaheer Ahmad Khan

Company Secretary

Syed Anwar Ali

Audit Committee

Mr. Salman Hayat Noon Chairman

Mr. K. Iqbal Talib Member

Mr. Adnan Hayat Noon Member

Auditors

Hameed Chaudhri & Co. Chartered Accountants

Chief Financial Officer

Mr. Nauman Afzal

Legal Advisers

Hamid Law Associates

Business Model:

Supplier

Raw Material
Cash Paid
(Credit)

Cash
Production
Received

Account Inventory
Receivables
Distributors
(Credit)
Advertisement

Products

Product Name: NurPur Milk

Milk – one of nature’s most completed foods … almost a meal in itself. An excellent
source of energy, Protein, Minerals, Vitamins, it is also the best source of Calcium. Milk is a
fundamental element of good diet, particularly for bone development and protection. Milk is a
precious but fragile raw material that requires technical expertise and know-how to process.
Nurpur has over 30 years of experience and has developed state-of-the-art dairy processing

Nurpur’s list of top priority when it comes to milk:

 Protect great taste from dedication to monitoring quality,

 Provide special care
 Pay attention to detail in the processing and packaging steps of production

Through our careful processing and packaging, we have been able to retain great taste, while
preserving fat, protein, important vitamins and minerals.
 Milk Categories

Milk

Pasteurized
UHT Milk Flavored Milk
Milk

UHT Milk

Ultra High Temperature treated milk products will easily keep for more than three
months outside the refrigerator. Standardized at 3.5% fat and 9% SNF, Nurpur has captured
market because of its high quality standards, mainly used for drinking, milk shakes and tea
making.

UHT Packing
Packed in 250ml, 500ml, and 1000ml volumes in Tetra Brik Aseptic Packing.

Pasteurized Milk

Nurpur Whole Pasteurized Milk has 3.5% Butter Fat and 9% SNF, free from additives. Whole
pasteurized Milk has a very creamy and rich flavor and many essential vitamins and minerals.
Nurpur fresh pasteurized milk has been our guarantee quality label for many years

Pasteurized Packing

Packed in 1000ml, 500ml volumes in handy and hygienic packaging.

Flavored Milk

Flavored Milk is made from the highest quality standardized milk (3.5% fat) and is carefully
formulated and processed to produce an unparallel high quality, great tasting flavored milk.
While using different flavored milk, you will enter in world of flavors.
Flavored milk is a cool way to get in your daily intake of important nutrients such as calcium,
vitamins A and D and minerals like phosphorus, magnesium and zinc; it helps build a strong bo

Flavored Packing

Packing in 1000ml volumes in Tetra Aseptic Packing.

Categories of Flavored Milk

Currently Nurpur is producing three types of Flavored Milk:

Milk Suppliers

As Nurpur is a dairy company its basic raw material is milk which is supplied by the
farmers. Bhalwal, located in Sargodha district is the core region for collecting milk supplies.
Bhalwal is an agricultural land enriched with water and pastures. Dairy animals are found in
abundance here. 60,000 to 70,000 litres of milk is collected from this region only.

For the suppliers, it has constructed chillers to keep milk fresh. Maintenance is done by Nurpur
but the profit goes to the chiller owners. It provides Rs 2/- extra to the milk suppliers.

Nurpur purchase Milk from the milkmen or Dairy farms and use it as raw material, then it
take to the plant and through UHT treatment it becomes hygenic milk and packed the milk into
packets, the bulk production reached to the warehouses where it is stored and from where it is
supplied to the Distributors on both credit and cash base. The acocount receivables are generated
through credit sales and payment is received after couple of days or months. The payment
received from receivables contain the cost and profit margin of the company, the company pay to
the creditors . that circle continue and the business continue.
Sector Analysis

Nestle is the largest company in milk industry with the production capacity of 1.3
Millionliters with average monthly capacity of 1.04 Million liters. Haleeb Food limited is the
second largest company in milk industry with the production capacity of 0.9 Million liters with
average monthly capacity of 0.72 Million liters. Nurpur Milk is the 5th largest milk producing
company in Pakistan with the production capacity of 0.15 Million liters with the average
monthly capacity of 0.12 Million liters according to 2005 data.

Now Nestle is remained at the top in this industry with the average monthly capacity of
99.5 Million liters (2009: 80.58 Million liters) and average monthly production 62.5 Million
liters in 2010 (2009: 53.33 Million liters).

2010 Nurpur is with the average monthly capacity of 0.487 Million liters (2009: 0.487 Million
liters) and average monthly production 0.222 Million liters in 2010 (2009: 0.147 Million liters).

Economic Outlook

One of Pakistan’s longstanding traditions is that of the milkman who goes door to door
delivering households their daily supply of milk.As a result, unprocessed, unpackaged milk
represents nearly 94% of all liquid dairy products (LDP) consumed in Pakistan, and has played
an important role as a tea creamer, yogurt and standalone refreshment.

Between 2006–09, consumption of LDP in Pakistan steadily increased in line with

population growth, with a CAGR (Compound annual growth rate) of 2.4% (according to Tetra
Pak data). In 2009, LDP consumption reached 18.9bn litres, maintaining its position as the fourth
largest LDP consumer after India, China and the US.

In the same period, packaged LDP grew at a CAGR of 8.4% compared with unpackaged
products, which grew at a CAGR of 2.1%. Tetra Pak expects packaged LDP to continue
growing, with a CAGR of 10.4% from 2009–12.

Pakistan mirrors demographic drivers around the world. More urban, educated and
sophisticated consumers, an emerging middle class and a large group of younger consumers are
transforming its dairy industry. As elsewhere, they demand new, safer, more convenient
products.
Going Urban

During the past 11 years, Pakistan’s urban population has increased by three percentage
points. By 2009, 35.5% were living in cities (59.9m people, 5m more than in 1998) according to
Tetra Pak Pakistan. Thus, as people have moved further from the rural areas where most of the
dairy farms are found, their access to good quality loose milk has been limited due to the lack of
a cold supply chain. This has provided packaged milk companies with the opportunity to provide
good quality, safe milk in an alternative form.

More Educated, Sophisticated Consumers

 This group values safety, hygiene and convenience. As a result, from 1999 to 2009,
packaged LDP products grew by a CAGR of 19%.
 This has been partly due to dairy industry educational campaigns that have created
awareness of the safety and nutritional benefits of packaged milk.
 Many consumers also appreciate the fact that packaged milk doesn’t need to be boiled
before use, as loose milk does. In addition, it can be stored for up to three months before
opening, so they don’t need to source milk daily.

Households Choose Premium Products

The growing middle class can afford safer, healthier products that cost at least 20% more
than loose milk. The number of Pakistani households in the top three socio-economic groups (as
defined by SEC A-C, a tool used to measure consumers’ prosperity) has grown by 1% annually
in recent years, according to Tetra Pak Pakistan. These consumers, who now make up 42% of the
population, are increasingly able to afford premium packaged products such as skimmed and
RTD flavoured milk.

Youthful Population

Currently, 30% of Pakistan’s population is under 9 years of age, and 53% is under 19.
Producers are promoting RTD flavoured milk to younger consumers who most often choose
chocolate, strawberry, mango and banana. Adults also like flavoured products. One of Pakistan’s
most popular flavoured milk brands also offers traditional flavours such as saffron, pistachio and
cardamom to appeal to adult tastes. Flavoured milk still represents just 2.4% of the RTD LDP
market in Pakistan. However, it grew by a CAGR of 56.3% from 2006 to 2009 and is forecast to
grow at 23.1% CAGR from 2009 to 2012, according to Tetra Pak.

Targeting Consumer Segments

While nearly 72.8% of RTD LDP in Pakistan are still sold as plain 3.5% long-life milk,
dairy producers are increasingly segmenting the market and developing specialised products.
With the exception of white milk and tea creamers, all other products are positioned as
‘premium’ and command higher prices.

Outlook Bright for Packaged Milk

Pakistan’s population is growing by 1.7% a year, and LDP consumption is expected to

grow at a CAGR of 2.8% from 2009 to 2012. Milk has always played a central role in the
Pakistani diet, but with demographic changes driving new preferences for packaged milk, the era
of nothing but plain, white unpacked milk is rapidly changing.

Meeting Needs of Tea-Drinkers

In 2007, dairy producers in Pakistan realised that consumers were buying small packages
(250ml) of plain white milk for use as creamer in the country’s most popular beverage, tea.
Consumers preferred the richer taste of tea made with UHT milk, and smaller packages were
more affordable. So producers began developing and marketing special tea creamer recipes in
200ml packages. In addition to improving the taste profile of tea, the new size also made tea
creamer more affordable than plain white milk.

Today, tea creamers represent more than 25% of the LDP market that will achieve a CAGR of
28% from 2009 to 2012, according to Tetra Pak.

This sector is expected to improve due to availability of fodders and green pastures. Increased
demand for processed food and dairy products is encouraging the private sector to increase
investment in livestock and dairy sectors. Pakistan is the 4th largest milk producer in the world—
yet its share in the global milk market is negligible and only 3% of the total milk production is
being processed. Overall, the contribution of dairy sub-sector to national economy is Rs 540
billion (with 97% as informal non-documented economic activity) and is expected to grow at
4%.
Future Prospects

The management of the company looks forward to the future with confidence and
envisages still better performance in the coming year. We have set clearly defined goals for each
Department and are also in the process of removing bottlenecks in our production facilities and
adding some new equipment to facilitate availability of all the products in line with the growing
demands for our products.

However, we do anticipate very severe competition both in selling our brands and collection of
raw milk, especially after the recent devastating floods, which has resulted in loss of a very large
number of milk producing cattle.

Proposal with credit terms and conditions:

In 2008 the company has enough funds available to meet the working capital
requirement, and it didn’t need financing from any bank to meet working capital requirement,
but in 2009 due to economic conditions of the country, company needs Rs. 7730.10 Million for
working capital, and in 2010 company recover from previous situation of 2009 and not only meet
its requirement but also generate more funds then 2008.

Undifferentiated marketing

Nurpur is practicing undifferentiated marketing because being a national level company it

is not able to cater the needs of individuals. However it is considered the best in the segments it
is serving.

Micromarketing

Local Marketing

Nurpur is doing local marketing by servicing in some cities and areas of the country.

Target Marketing Strategy

Nurpur does not have a formulized sort of target marketing strategy. Most of the work is
done by brain storming. And idea comes into the mind of some manager, he discusses it with the
chairman and it is approved or disapproved. According to the brand manager Mr. Umran the end
users are never the only customers. The distributors, retailers, resellers etc are all customers.
 Thus Nurpur has a vast network of customers all over Pakistan. Furthermore these
customers also include another group called “the contractors”. They purchase Nurpur products
in bulk like PIA, five star hotels or hospitals etc.

Retailers

In the same way it sells its products on fewer amounts to its retailers so that they are
motivated and help in promoting Nurpur products. Furthermore if a retailer purchases 40 packs
of Nurpur UHT milk it provides a few extra packs for free to the retailer

Promotion

Nurpur does not have a separate marketing department which would help the company
promote its products. However marketing takes place in collaboration with the sales department.
When Nurpur launched its milk it had many advertisement banners and many employees were
hired to do the advertisement in big stores. The distributors provide free packs of 1 liter milk
pack to the retailers on purchase of 40 milk packs. In the same way Nurpur has reserved places
in stores like HKB, Al- Fatah and Jalal sons. Furthermore it provides a few incentives to its
retailers and customers in

Ramadan like it sells its products to retailers and customers on lower prices so that they
may earn some profit. But retailers keep the packs to sale them later after Ramadan at normal
rates. Nurpur did several activities in Royal Palm. Activities in such porch clubs help in the
promotion of the products. All A+ and A class is there they see and observe the brands present
there and later adopt them. To promote its products Nurpur is further planning road shows in
future. Nurpur believes in word of mouth for the commercialization of its products. Being a
national level company it cannot afford to spend lacks and lacks of rupees on advertisements
only. However some billboards are seen in certain localities
Advertisement through Media

Nurpur’s advertisements were shown on television for a month. This created a huge
difference in capturing the market. A lot of consumers were attracted by the advertisements.
However showing commercials on televisions is very expensive for Nurpur. Advertising for a
month only cost Nurpur 65 lac rupees. Due to limited budget Nurpur cannot afford such huge
amount on advertisements. Still Nurpur has managed to display billboards in several locations.
 SWOT Analysis

Strengths

• Having Strong Business Name called “NOON Group”

• Provide Best Quality Products

• Hygienic milk

• Long term Storage

• Taste

• Nutritious

• Growing sales & Profits

• Environment Friendly

• Innovative & Constantly growing Product Line

• One of the pioneer of Dairy Products

Weakness

• Low market campaign

• Depend upon their own marketing company

• Lack of research & Development

• Relatively a small company in comparison to its rivals

• Dependence on third party for supply of Milk

• Comparatively weak distribution system

Opportunities

• Target market has big profit margins

• Bright scope of dairy products

• Target Market can easily be located

Threats

• Strong Competitors

There is always a great danger of price war among competitors because all the competitors are
well known in the market and also supported by well-known groups like Nestle, Haleeb, Olpar,
Tetra pack etc.

• Animal diseases

• Availability of natural Milk (alternate sources)

• Price sensitive people

• Uncertainty of Economic Conditions

Market Price

 Risk that changes in market price

 Foreign exchange rates
 Interest rates

Equity prices will affect the Company's income or the value of its holdings of financial
instruments.

Currency Risk

 The Company is exposed to currency risk on import of stores and spares denominated in
Euro and plant & machinery denominated in US Dollar.

 The Company's exposure to foreign currency risk for Euro and US Dollar are
commitments against irrevocable letters of credit outstanding as at 30 June, 2010
amounting Rs.49.350 Million (2009: Rs.0.365 Million).
 PEST Analysis

Political Analysis

 The political conditions are not very stable in the country, but this does not directly
influence the trends and spending patterns of the customers.

 There are no restrictions or barriers on the growth of this industry.

 So the political conditions do not impact of this market because it’s a consumer base
product and has to be purchase by customer in any condition.

Economic Analysis

 The economic conditions are not very favorable and the economy is facing problems, but
it is directly influencing buying power of consumers, but in our product it not that much
that it should be.
 If the country is out of its current problems, it will further boost up growth of this
industry, as people will feel more secure economically and it will further increase the
attractiveness of the market

Social Analysis

 The social patterns are changing in the country, as the world is becoming a global village,
and mutually share and accept patterns.

 People are becoming more attractive towards the branded products.

 It is becoming fashion and young generations as well as the children are getting more
attracted towards this industry.

 People are moving towards branded food / dairy products due to hygienic reason.

Technology Analysis

 High technology is the basic requirement of dairy and food industry.

 The companies that are using latest technology have some cost benefits over the
companies, which are not using high technology.
  The key to survival for companies in this industry is using high technology for quality,
hygienic and cost purposes.

Conclusion

The company has no need of running finance facility for the working capital requirement
but it need for the buy and installation of new plants, and from the company’s detail analysis it is
clearly shown that the company management have capability to increase its production and
market share, and also there is potential in the industry to groom. From the detailed analysis we
come to point that the company needs finance for new machinery, and our bank should give it
the facility.