NESTLE PAKISTAN'S PLANS TO INVEST $371 MILLION UP TO THE YEAR 2014

KANWAL SALEEM, LAHORE:
July 23 - 29, 2007

Nestle Pakistan, a subsidiary of Nestle S.A. Switzerland, has recently made an investment of US $ 70 million for the establishment of Asia's largest plant with a processing capacity of 2 million liters of milk per day.

The establishment of Kabirwala Milk plant is a part of Nestle Pakistan's plans to invest $371 million up to the year 2014 under a long term investment plan.

Nestle Pakistan Limited formerly known as Nestle Milkpak Limited is engaged in manufacturing, processing and selling of food products and ancillary equipment. The food products include diary, confectionery and culinary products, coffee and beverage and drinking water. The major brands include MILKPAK UHT, NESTLE EVERYDAY, LACTOGEN and NESCAFE. Nestle Pakistan's state-of-the-art milk processing plant was functioning in Kabirwala (Khanewal) and the company plans to cross the processing capacity to the level of 3 million liters per day over the next few years.

Sources in Nestle Pakistan told PAGE that Nestle Pakistan which was established in 1988, is presently running 5 factories - one each in Sheikhupura and Kabirwala for dairy and other products, two in Karachi and one water factory in Islamabad. ''Continued investment combined with Nestle's marketing and technical skill over the last 18 years has allowed the company to reach the point where it is now the largest consumer goods company in the country, with sales of Rs 22 billion last year'', they pointed out. After great efforts, the sources added, Nestle succeeded in establishing Pakistan's largest milk collection network. Today, Nestle collects milk from 140,000 farmers over an area of 100,000 square kilometers in Punjab who, as a result, receive Rs 6 billion per year directly from the company. This is in addition to the 10,000 direct and indirect jobs Nestle has already created in the country, the sources said, adding, Nestle Pakistan was very active in the field of agricultural services, providing technical assistance to farmers for livestock and farm management. According to company sources, Nestle has recently helped a number of farmers to import 2,200 cows from Australia to contribute to breed improvement and increased milk yields in Pakistan.

It may be mentioned that Nestle was established in Switzerland some 140 years ago by Henri Nestle, a German Pharmacist, and now it is the world's largest food and beverages company. Its Chairman and CEO is Peter Bradbeck Letmathe. According to Mumtaz Muhammad Khan Manais, a livestock farmer and a member of the University of Veterinary and Animal Sciences (UVAS), Lahore, Syndicate, Pakistan, despite having maximum number of animals, production per animal in Pakistan is dismally low and there is a need for adopting embryo transfer technique in animal reproduction.

FOOD PROCESSING

According to market sources, there are more than 200 Food Processing units producing confectionary and biscuits, jam jellies and squashes, extruded snacks and potato chips, poultry and dairy products, beverages, cereal products, dehydrated fruits and vegetables., meat and meat products for local consumption and export.

They told that Mitchell's and Shezan are role models of profitable companies. Shezan is exporting over 25% of its products. Mitchels has its own farms from where fresh fruit and vegetables are utilized. The company produces jams, squashes, juices, drinks, canned vegetables and confectionary products.

On the other hand, country's food Industry faces problems at pre-establishment and post-production stage. Investment climate, political changes, market, labour, documentation, high cost of doing business and guidance problems does not attracts potential investors. Fuel, water, electricity, raw material, credit facilities, import of machinery, low capacity utilization, export restrictions, production cost, defective market system, transport and Government policies are major problems after production.

According to a food technologist, Mr. Abdul Hameed, freezing preserves food by preventing microorganisms from multiplying. Because the process does not kill all types of bacteria, however, those that survive reanimate in thawing food and often grow more rapidly than before freezing. Enzymes in the frozen state remain active, although at a reduced rate. Frozen foods have the advantage of resembling the fresh product more closely than the same food preserved by other techniques. Frozen foods also undergo some changes, however. Freezing causes the water in food to expand and tends to disrupt the cell structure by forming ice crystals. In quick-freezing the ice crystals are smaller, producing less cell damage than in the slowly frozen product. The quality of the product, however, may depend more on the rapidity with which the food is prepared and stored in the freezer than on the rate at which it is frozen, he added.

According to him, vegetables, fruits, meat, fish, and some other foods, the moisture content of which averages as high as 80 percent, may be dried to one-fifth of the original weight and about one-half of the original volume.

The disadvantages of this method of preservation include the time and labor involved in dehydrating the food before eating. Further because it absorbs only about two-thirds of its original water content, the dried product tends to have a texture that is tough and chewy.

Fermented fruits and vegetables are traditionally consumed in Pakistan and neighboring countries. Raw mangoes, ripe limes, olives, turnips, carrots, onions, cauliflower, reddish, pepper and others are pickled with the help of mainly lactic acid bacteria, he added. Pakistan has huge potential to fetch precious forex through increasing exports of food items provided some incentives are provided.