Haleeb Foods Company Analysis

Haleeb Foods Company AnalysisHaleeb foods limited, formerly k today as Chaudhry dairies was formed in 1985. It is unmatched of the fastest growing companies since its inception. The tenderness point of intersection of the smart set has continuously been obstructaged watch out only when it modernly operates in s foreveral most a nonher(prenominal) food product categories. It has continued to put forward high role products to its clients and is one of the first companies In Pakistan to use tetra gestates ripe haloaging technology. It is princip aloney engaged in processing and sale of speak take out, take out powder, allied dairy farm products and fruit juices. (Haleeb Foods Intern Report, 2012)It was founded back in 1985 with a total subject of 80000 liters per day and has deuce production plants. The important production facility is at Bhai Pheru, kn feature as the BHP (Bhai Pheru whole shebang). Due to its fearful success and a high demand for its product s especially Haleeb milk the party set up a nonher plant at Rahim Yar khan. The RYK plant is a state of the art facility. C overing an ara of over 72 earth the plant it equipped with the in vogue(p) technology and was a in truth actually tumefyhead project that Haleeb Foods undertook.Liquid milk was the first product produced at the attach to and was a spacious success. There were approximately 20 to 25 former(a) dairy companies operating in Pakistan at that meter but Haleeb as a partnership was windlessness able to stand out of the clutter. It was an implausible police squad of over 700 employees at the BHP and an outstanding merchandiseing team that contributed to this success.Haleeb foods has segmented its product portfolio into multiple discolorationmarks including Haleeb, Candia and Tropico. Haleeb is the flagship brand of the fellowship. Haleeb UHT milk is open in tailfin SKUs of Tetra pack packaging. (Irfan, 2012) Due to its strong roleing of being th e thickest milk beat out for tea and the highest top of mind aw beness in the dairy application of Pakistan the partnership has been able to increase its sales and has had a signifi hind endt consumer and swop pe finalration of the brand. It is a give care obtainable in Tetra Fino packaging under the brand of Dairy queen.By unappeasablely following the quality control measures the federation was withal one of the first fewer companies in Pakistan to get ISO certified. This had a huge pertain on the perceived quality of its clients and help procession sales in its early geezerhood. The political party has withal been a innovator in introducing the tetra pack Fino packaging and introducing sterilized milk in the country.The accompany has diversified into multiple products and a ample product line over the geezerhood. The basic product line extension includes products worry Haleeb Cream, Haleeb Butter, Haleeb Asli Desi Ghee, Daizy yoghurt, Candia, Just fruit, Trop ico juice, Haleeb Labban, Haleeb pastimeday juice, Haleeb soundly day etc.The company entered into a franchise agreement with Caddilac France and launched Candia milk in 1999. Candia was available in two variants i.e. Candia disuniteic (a tea whitener) and Candia edulcorate up (flavored milk) for kids. This was a successful venture before the company started to underperform. straightaway Haleeb Foods no longer produces Candia.The company has a vast dispersal meshing covering a phone number of cities crossways Pakistan. This is one factor that contributed positively to its success and help the company build an ever growing consumer network. ab initio Haleeb as well started to export some of its products to countries like Korea, Hong Kong, Middle East, China, Bangladesh, Afghanistan, UK and U.S.A but out-of-pocket to its poor financial execution of instrument in the more recent long time it could not continue this for long.The primary reason for its success was the huge idiom the company l assist on continually improving its quality and following very strict quality control measures. The quality certifications that Haleeb as a company has ar as followsHACCP (In process controls for safer products)ISO 9001(Better quality for high customer satisfaction)ISO 14001(Environment friendly trading operations)The company was able to in cash these certifications for quite some time before the quality of its products st atomic number 18d to deteriorate and was questioned by the customers and its distributors.The company has its operations grownly centralized at its head teacher office which is located at 135 Ferozpur Road Lahore. Most of its departments are based at the head office for example finance, commercializeing, human resources, sales, administration and information technology. The remaining provided are based at its Bhai Pheru Plant. Regional offices of the company are open across the country in cities like Rawalpindi, Karachi, Peshawar, Que tta and Rahim Yar Khan. This facilitates its distribution and flattually sales. peckOptimizing resources to deliver sustainable growth3MISSION STATEMENTProductivity Be a exceedingly cost-efficient rough-and-ready organizationPeople Develop a team of passionate and committed individuals whose goals are completely aligned with the incorporate objectivesPortfolio Maintain a portfolio designed to meet ever- changing consumer expectations by delivering nourishing and high quality food solutions in a monetary value effective mannerProfit Maximize long term growth to roleholders era being honorablely responsiblePartners Develop sustainable and mutually secure relationships with customers, suppliers and other stakeholdersPlanet Be a responsible corporate entity by helping build sustainable communities3CORPORATE VALUESIntegrity and moralityFor more than two decades, Haleeb Foods Ltd (HFL) has emerged as a company that believes in honorable dealing, honesty and reliability. Membe rs of Haleeb family are determined to ob aid and follow the utmost ethical touchstones required for any business concern to run smoothly. This is reflected in the daily functions, where all employees are facilitated with equal opportunities, barring any differentiation on the solid ground of gender, religion, cast, color and other variables. We are focused towards promoting the merit-based trade-gardening, assuming it to be a fundamental pillar for success. We take pride in how we conduct the business, magical spell consistently emboldening everyone to do the right thing at all hours. (Haleeb Foods Ltd., 2012) credit line of ExcellenceWe at Haleeb Foods Ltd (HFL) are geared towards delivering exceptional performance consistently. We extend to this by maintaining a competitive spirit throughout, which helps us in elevating our business in term of wageability, growth and accomplishing inspiring levels of success. Our primary focus is to serve our consumers with the go aroun d appraise for their money. Irrespective of the scotch conditions, we do not oscillate in challenging boundaries and rather excel with hope. (Haleeb Foods Ltd., 2012)Em providement and Accountability worry at Haleeb Foods believes in providing employees with avenues through which sense of ownership is created and authority is delegated. This not only boosts the morale of an individual but also helps in lend towards efficiency and productivity. Empowerment results in devolution of trust and establishment of a wellnessy working(a) environment. Delegating responsibility does not abandon individualized accountability. Thus, in beau monde to enjoy an effective and desirable outcome, competent supervise processes are practiced, where each employee takes responsibility for their respective decisions. (Haleeb Foods Ltd., 2012)Cooperative SpiritAdmitting the enormousness of teamwork, Haleeb Foods Ltd passionately promotes the culture of sharing knowledge and working soak upively. Th e concept of working with coordination comes in handy for reaping benefits from pooled talent and expertise ultimately resulting in high productivity. We provide a platform, where going an extra mile to accomplish team objectives is a common routine. Simultaneously, personal satisfaction amongst employees is achieved. To add still value to our work practices, experienced and capable counseling is provided that enables employees to work under a shared vision. (Haleeb Foods Ltd., 2012)Environment, Health and SafetyHaleeb Foods Ltd has successfully managed to align its goals with procedures that prioritize and travel along with employee safety and health. Acknowledging the paramount significance and vitality of human capital for ensuring a successful business, the company arranges tumesceness programs sided by comprehensive safety literary works to educate the employees about safe working environment. HFL facilitates employees with prompt first aid service and medical treatment, a ccompanied by periodical medical check-up, a trained team for fire-fighting, emergency exit drills, employee/workers locker commission and laundry management. Last but not the least Haleeb is privileged with ISO 9001-2008, 14001 and 2200 certifications. (Haleeb Foods Ltd., 2012)Corporate genial ResponsibilityHaleeb Foods Ltd encourages its employees to contribute consistently and positively towards a smash standard of feeling, not merely for its customers but also for the community. Not assuming lootability to be the only business objective, Haleeb foods has integrated its operations with activities that help prominent back to the community. In order to be recognized as a socially active entity, Haleeb Foods has supported the project of MEDA Pakistan Pathways and Purse strings. Besides empowering the slight advantaged, Haleeb Foods Ltd is also cautious about being environment friendly, through strict obedience of waste reduction and numerous other practices. (Haleeb Foods L td., 2012)MANAGEMENT teamDesignationNameChief Executive OfficerFaisal Imran Hussain MalikDirector financeBasit HumayunChairmanIlyas M ChaudhrySenior Manager Human ResourceSalman Nawazish common Manager SalesKhurram Mehr MalikBrand ManagerNaveed Ali ShigriGeneral Manager PlantFarooq Ayub KhanManager RDRao Muhammad ImranManager Warehouse LogisticsMuhammad Ali ShahidHead of Supply ambitRizwan AhmadHead of TechnicalHaseeb Ahmed MalikCOMPETITORSPakistans FMCG sector is bountifully dominated by the two big giants that is to say near and Engro Foods. Both are huge firms with a large customer base and operating very successfully in different products categories. Haleeb Foods has faced immense competition from these firms. come on and Engro are twain super profitable with draw close, a multi field company being the market leader with a very diverse product portfolio.Products like take out pack, Olpers and Good milk excite posed a serious holy terror to Haleeb milk. Currently how ever, considering the economic and political conditions of the country no firm is execute at its full potential. gamey inflation rates, rising anele prices, power shortages suck all contributed to the closing spate of many ventures. The competitors are also having a difficulty in surviving in this tough environment.By foc utilize on making its processes and policies Haleeb can improve its competitive position and rise again. It has to have a strong product portfolio and a very constructed merchandise plan to regain its lost fame and success.PRODUCT CATEGORIESHaleeb as a company has always placed its customers first. In an attempt to fulfill the ever changing needs and meet the increasing demands of its customers the company has diversified its product portfolio gradually over the years. Many products like Candia milk and Skimz milk that were record in the market before are no longer available and have been replaced by advanced products. The company has upgraded many of its r ecipes and re-launched a catch of products in an attempt to better meet the needs of its target market. any(prenominal) of the latest product categories at Haleeb areUHT MilkHaleeb was the first company that introduced UHT milk in Pakistan. The UHT milk category currently includes Haleeb milk only.Haleeb Milk is homogenized and standardized milk which is safely packaged using the Tetra packs latest packaging technology. It has a shelf life of about 3 months or more and is one of the most famous and best selling brands in the Haleeb family. It is produced on different SKUs like the Haleeb 250ml, Haleeb 500ml and so on.Skimz was another product in the UHT milk category which was mainly targeting the diet conscious quite a little has now been removed from the portfolio as a result of the financial issues faced at the company. It was positioned primarily as a perfect source of calcium and vitamins for stronger bone up and healthier individuals. In addendum to its high calcium conte nt, Skimz was also entire for maintaining an individuals blood pressure.BeveragesSeveral products are produced at the Haleeb production plant as part of the beverage category. Some well- cognize beverages include Just fruit, Fun milk, Tropico and Haleeb doodh.Just fruit, as the name suggests is a fruity drink produced using farm fresh fruits. It is available in a wide bod of flavors including Apple, Orange, Mango and Grapes. It is a ready to drink beverage available in a small 200ml pack.Fun milk was primarily targeted at the kids. It has always been believed that children should have a high intake of milk as it is considerably for their health. It makes their bones strong providing them with the necessary calcium content but unluckily not many kids really like drinking milk. This was the basic view behind the launch of this product. It offered several variants including chocolate, strawberry and vanilla. Again it was available in a 200ml pack.Haleeb doodh was again flavored mil k available in chocolate, strawberry, almond and cardamum flavors. The primary difference in Haleeb doodh and fun milk was the packaging. Haleeb doodh was targeted at the adults where as fun milk was positioned as milk for only kids.Tropico, in addition to being available in a 200ml pack is also available in a 1000ml family pack. It is positioned as pure juice nectar available in Mango, Orange and Apple flavors.Chilled DairyThe chilled dairy segment is has products under a common brand name DAIZY. It includes Daizy yogurt, butter, cheese and raita.Daizy yogurt is a essentially sweetened yogurt packaged carefully to preserve its natural not bad(predicate)ness. It is considered proficientish for enhancing the immune system and for the digestive system. Daizy yogurt is available in 200gm and 400gm shrink wrapped trays.Daizy butter is another very healthy dairy product produced at the Haleeb factory. Butter is made of pure natural fats and has a high content of vitamin A and D. It is made on different tetra pack SKUs and is thus available in five sizes ranging from 20g to 1000gm.Daizy cheese is a milk based product. It gives your pizzas sandwiches etc a much better taste and is one of the best selling products at Haleeb. It is made in 2kg packs, 1kg pack and 200gm pack. Each pack contains a fixed number of wrapped cheese slices.Daizy raita is a sport in the traditional yogurt. Keeping in mind the Pakistani culture the company came up with this product a few years ago. Pakistani people love to have raita with a lot of these meals so it Daizy raita serves as a readymade raita enhances every food moment and makes their food taste delicious.FatsA number of products with a high fat content are also produced at Haleeb. Fat is a bi product of processed milk and the company utilizes it to the fullest. Two main fat based products that complement the general portfolio are Asli desi ghee and Haleeb lick.Haleeb Asli Desi Ghee is made of pure natural butter. The butter is processed however by shake uping it and the result is incredible. It is again targeting the Pakistani market and a large target audience as is considered very healthy and nourishing. similarly the product has a shelf life of 1 year which facilitates its distribution and contributes positively to its sale. It is available in three sizes namely 2kg, 5kg and 16kg.Haleeb cream is one product produced at the Haleeb plant which contributing to its overall profitability even today. The investigate and organic evolution department has worked really hard to make the cream competitive and do well in the market. The product is positioned as healthy, nutritious product that has a smooth texture and tastes delicious. It is available in 200ml pack and has a shelf life of 6 months.WhitenerTea whiteners are increasingly being used around the globe as a substitute to fresh milk. Tea max is considered one of the best in this category.Haleeb tea max is a product that is primarily targeting S EC C and has done very well in the market. It has generated enormous sales volumes for the company and is considered the best in its category. It is available in 200ml and 250ml packs. It has a shelf life of three months.Dairy queen is also targeted at the lower class of the society. It is a relatively cheaper product and is jammed in pouches to reduce the cost and price further. It is a standardized, homogenized product with 3.5% fat and 8.5% non fat content. It is available in a 6 layered Tetra pack fino packaging and has a shelf life of 3 months.MANUFACTURING PROCESS AT HALEEBHaleeb Foods Limited has its own manufacturing and production facilities as mentioned preceding(prenominal). The current operational plant at Bhai Pheru is highly efficient. It is generally perceived that packaged milk is unhealthy and not good for use however Haleeb ensures consistent and good quality products by having an efficient manufacturing process. The process for making Haleeb milk is as followsCo llection of raw milkTestingPasteurizationStandardizationHomogenizationSterilizationUltra heat treatment (UHT)PackingIt is only after following all these locomote that Haleeb milk is made available to the end users. The company has a number of milk collection centers where raw milk is delivered by gawalas, small home plate farmers and some milk providing companies. This milk is tried and true for its acceptance at the milk collection centers. There are 14 tests that are conducted to ensure good quality at this level. Once the milk is collected, company owned trucks collect this milk from different centers and bring it to the BHP. Here the milk is again tested and past pasteurized, standardized and homogenized before finally being packed using Tetra pack Fino machines.CURRENT SCENARIO AT HALEEB FOODS LTDHaleeb started off as a very successful business venture but unfortunately could not sustain its high profitability and success. Companys profitability started to correct over the years along with the quality of its products. The Rahim Yar Khan project had a huge impact on the companys financial position and although it is a state of the art facility, its still not operational today. Haleeb rents out its tetra pack section at RYK to go up during the high demand season.Due to the poor management of resources and not very well managed decisions the company has incurred huge losses for the pull through few years. In Nov 2011 Haleeb foods ltd was acquired by a large giant in the market namely Mega and Forbes. They appointed a new chief executive officer, Mr. Faisal Imran Hussain Malik who is a highly qualified and a very competent person.Since November 2011 Haleeb is in the process of restructuring. The company which once had over 750 employees currently has cut it down to only 450 employees. A lot of firing and termination of incompetent people (in the managements view) took place. The company is highly unstable since then but is gradually moving towards stab ility.The new management has a very unique and a different management mood from what the employees at Haleeb were used to. This is one reason that led to a highly demotivated men at the company. The employees and the top management are having issues in adjusting with each. The large number of terminations has created high levels of job insecurity, employees no longer feel that they pop off to the organization and on the other hand the management is highly dissatisfy by the performance they deliver at work. Employees who are competent and have hands on experience in various fields are resigning, thus fueling the workforce problem.As a result of this, management has started to hire new employees at a very fast pace. caution trainee programs are formally introduced into the company in an attempt to inject new blood into the organization. Instead of making things better this new hiring is worsening the situation. sr. employees show resistance towards the newer ones while the mana gement is training them and investing huge sums of money in their development. The element of job insecurity is also worsening. pitiful human resource management and a highly de-motivated workforce are having serious implications on the companys performance. Although Haleeb is recovering from its losses but most of its products are failing in the market. a lot brands have shut down, retailers are not really interested in stocking its products, customers perceive the quality of its products to have deteriorated and so on.If all this continues the Company would definitely going to go down the drain in the near future. It now has to be thought that what can make the situation better? A better workforce? What does it take to have a more competent workforce? What could make the workforce at Haleeb really motivated at this point in time?This is the question that I am going to address in my research project.Competitors AnalysisPakistan has a well developed Fast Moving Consumer Goods sector that contributes a fundamental amount to the overall economy. Haleeb Foods is a well known FMCG in the country. The company is currently facing intense competition from the other FMCG companies operating in the country like hold tight, Engro Foods Ltd., Shezan and Nurpur etc. In order to successfully compete in the market and regain its lost market share the company should carefully analyze its competitive activities.Nestle PakistanNestle Pakistan is one of the leading companies in the country. It is also a very well reputed company with its operations spread all across the world and has diligent over 250,000 people across the globe. The success of the company can also be attributed to the competent and hard working work force comprising of people from different backgrounds, race, nationality etc. nestle has managed to successfully operate worldwide by having a well defined economic model and a vast customer base over the years. The company has certain strengths and weaknesses w hich are discussed under as part of the SWOT analysisStrengthsStrong product portfolio. systematically good quality products.Excellent company image.Well developed marketing strategies and campaigns.Highest market share in the country.WeaknessesWeak distribution channel.Use of oxidizable rather than proactive marketing approaches.Excessive focus on profitability.OpportunitiesAn ever growing market for health conscious consumers.Develop a well managed distribution system. outgrowth market for bottled water as the infrastructure in Pakistan further deteriorates.Can cater the rural areas and further expand their markets.Threats changing consumer modes and demands.Ever intensifying competition.Government regulations in the form of taxes that lead the company to raise prices.High inflation rate in the country.Very few entry barriers further intensifying competition.Engro Foods LtdEngro Foods is another fats growing company in the fast moving consumer goods sector of the country. The c ompany operates in several areas across Pakistan and has a diversified portfolio. It is a direct competitor to Haleeb Foods ltd. Some of the strengths weaknesses of the company are explained in the SWOT analysis belowStrengthsStrong brand nameLarge customer baseContinuous research developmentFully automated third generation plantGood relationships with farmersWeaknessesHigh distribution costsWeak product portfolioImproper capacity workneediness of ISO certificationHaleeb Foods LtdHaleeb as mentioned above was one of the biggest dairy companies in the country but unfortunately could not keep pace with the changing market environment. The company has lost its market share to its close competitors like Nestle and Engro foods.StrengthsBest dairy companyThickest milkWide customer baseInnovative tetra pack packagingWeaknessesDeclining market shareLack of focusWeak employee baseWeak distribution channelsOpportunitiesGrowing market for packaged milk and milk productsMore competent workfo rceDeveloping distribution channelsCovering untapped market areasUtilizing capacity at the Rahim Yar Khan plantThreatsIntensifying competitionChanging market trendsHigh inflation rate in the countryChanging economic conditionsFinancial AnalysisRatio analysis for Nestle Pakistan is given in computed in the table above. Nestle is a well reputed and a well performing FMCG company in Pakistan. It is the market leader and has highest market share in the industry. The companys overall financial performance is satisfactory and compared to Engro it is much superior. As we deduct from its profitability ratios that the company is profitable. Its pull in permissiveness, net profit margin and the operating profit margin have shown a slight decline from 2009-2010. But is ROA has increase to 11.02% in 2010 and ROE increased to 16.7%.Which is a good indicator of the companys health. It shows that the companys assets are paying off well. When compared to Engro it is can be seen that the down-to -earth profit margin ratio is higher (23.27%) as compared to the ICIs 19.1% in 2010. The net profit margin for Engro however is -3.4% as compared to the ICIs + 6.9%. This shows that Engro has high operating expenses like the administrative expense etc. in this regard Nestle performance is superior.The comparison of the liquidity ratios, more precisely the current ratios show that Nestle has a ratio of 2.17 whereas Engro has a ratio of 0.9. Nestle is in a better position in terms of it liquidity. The liquidity implications for the firm were positive as shown by the increase in the working capital from 82.19 one million million in 2009 to RS 320.6 million inThe inventory swage ratio shows that Nestle has an inventory turnover almost double the amount of Engros. Engros inventory turnover is 3.39 whereas for Nestle has an inventory turnover of 6.67. The higher the inventory turnover the better it is for the company, so Nestle is better off.From the efficiency ratios at Nestle, we can infer that Nestle, Engro and all other companies in the industry are facing problems. The hiking oil prices and gas and energy crisis are all increasing the companys expenses.Haleeb FoodsWhere Nestle is the market leader, Haleeb was established in 1986 and its first product was Haleeb milk. Since then, it has continued to provide quality products to its consumers with product and packaging innovations.The overall analysis of the firms financial statements shows that the company is not doing well. Compared to the industry leaders like Nestle and Engro, Haleeb is not that large a company. A deeper look into the company shows that its profitability has decreased from 2009-2011. Its net profit margin has reduced to 4.83% in 2011 from 7.19% in 2009. Although it is not a good indicator for the company, it still higher than the Engros -1.9%. This shows that compared to the industry averages Engro is doing poor in terms of its profitability. In terms of the gross profit margins Engro has s uperior results compared to both Nestle and Haleeb. From this we could conclude that the cost of goodsEngros liquidity position is weak as compared to its competitors. Its current ratio of 0.9 in 2010 is even lower than the Haleebs 1.1. Turnover ratios on the other hand shows that Engro is doing better than the Haleeb foods, it has a higher inventory turnover of 3.3 is higher than the Haleebs 2.8 in 2010. This shows that Engro is selling off its inventory faster as compared to Haleeb foods.Overall, from the above analysis we can conclude that Engro is better than the competitors in terms of its natural process ratios. It is in effect managing its turnover whereas the ultimate measure of a companys success, the profitability ratios founder that Haleeb is doing poor. It seriously needs to improve its profitability in the coming years.EngroThe overall profitability of the company is decreasing its return on shareholders faithfulness is also showing a negative trend of -17.19% in 2011 and so is the return on common equity.. This decrease is mainly due to the increase in the companys expenses primarily its administrative expenses and the taxes. The cost of goods manufactured, have also increased for Engro. flavor at Engros gross profit margins over the last three years we can conclude that the companys gross profit was stable at around 23% in the financial years 2009 and 2010. However ion 2011, due to a rise in expenses the companys gross profit has slightly decreased to 20.8%.Engros gross profit is showing a fluctuating trend. It was around 2.8% in 2009 then rose to 5.1% in 2010 and then again fell to 4.1% in 2011. These changing trends and fluctuations can be attributed to the changing market environments and the highly variable national and global economic trends. Engros net profitability ratios show a large amount of uncertainty as it was 0.7% in 2009, and then fell further to negative 3.4% in 2010. However, in 2011 it can be seen that although the companys n et profit margin is negative it is still showing a positive trend towards betterment. Return on asset ratio is ratio is showing a declining trend which is not a healthy sign. Current ratio shows the relationship between the current assets and the current liabilities of the company over the last s increase in assets is accompanied by an increase in the liabilities. This is why the current ratio for Engro did not improve. It has been stable around 0.9% over the last few years. Quick ratio at Engro is showing a retard increasing trend which enables us to conclude that the current assets of the company is increasing. For Engro, their debt to equity ratio decreased tremendously to almost o% in 2010 but unfortunately the company could not maintain it and it rose to 6.3% in 2011. Engro should effectively manage its debt to equity ratio as an increasing trend in this ratio is not a very good sign of the health of the company. It shows that the company is focusing more on debt financing as irrelevant to equity financing and this will affect the companys image in the look of the shareholders. Engros debt to assets ratio has been increasing for the last three years with s significant increase from 0