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NESTLE: A name of wide range of world class products

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Leads the market with 500 factories in 75 countries around the globe

 By Syed M. Aslam
August 23 - 29, 1999

Nestle is one of the world’s largest food company which is represented on all the five continents. It runs some 500 factories in 75 countries employing over 220,000 workers globally.

In Pakistan Nestle has become a household name which manufactures and markets a wide range of dairy products, baby milk and food, ready to cook items such as noodles, chicken broth, toffee and candies.

Milkpak, tetrapack milk, is the flagship product of the Nestle’s Milkpak range. The company was the pioneer to launch the Milkpak in 1981. The range also includes butter which was launched in 1985 and cream, launched a year later. The same year it also introduced Milkpak pure 'desi ghee', dairy shortening, to cater to local taste.

Today Nestle products range covers a diversified group of food group items as EveryDay powder tea whitener, Nido full cream powder milk, Milo chocolate drink-mix, Nescafe coffee, Cerelac infant cereal, Lactogen infant milk formulae, Maggi 2-minute noodles and Maggi Yakhni (clear chicken broth). It also includes ready to cook custards; imported as well as locally manufactured confectionery such as Toffo Toffee, Polo drops and KitKat chocolate bars and Pure Life bottled water which was introduced last year. In addition, Nestle is the market leader in the fruit juice market.

Milk is the core raw material of Nestle which has factories at Sheikhupura near Lahore and Kabirwala in District Khanewal. Nestle is not only playing an important role to produce and market a range of high quality dairy and fruit products in a country where a huge quantity of the two commodities are wasted each year due to an inefficient farm-to-market infrastructure but is also engaged in a much needed value-added activity to help earn a substantial foreign exchange through exports.

In addition, it has helped thousands of small households in the urban areas which are dependent on Nestle to sell the milk. Nestle has over two dozens milk collection centres in Punjab and Balochistan to depend on poor quality milk available from outside sources.

Nestle has the largest milk collection network in the country which is unmatched in size, productivity and efficiency to meet the self-imposed commitment to quality. The vast network comprises village milk centres, sub-centres and centres which are equipped with chillers to preserve the quality prior to long hauls to the factories served by specially designed tankers.

Nestle also assists dairy farmers in vaccination and treatment of livestock, improved breeding and animal husbandry practices and provision of high yield fodder seed. This has resulted in the creation of a mutually beneficial relationship with the farmers translating into opportunities for the rural population in Pakistan which despite being the seventh top milk producer of the world suffers from low productivity. The assistance makes all the difference in a country where the dairy farming is more a social activity than commercial, particularly in the rural areas where the major source of milk are the households which keep an average of just 3-4 buffaloes.

Helping the farmers to help increase the average milk yield is all the more necessary as milk surpasses all other commodities. About 20 million tonnes of milk is produced in Pakistan whose value comes a stagerring Rs 150 billion annually much higher than Rs 100 billion for cotton and Rs 40 billion for sugarcane.

However, Pakistan has one of the lowest figures for processed liquid milk as the bulk is sold loose which makes it more susceptible for adulteration, a common practice in the country, as well as comprising the hygiene. Less than 15 per cent or 3 billion litres of the total milk production in Pakistan is processed including UHT treated, pasteurized and used in preparation of yogurt, cheese, butter and sweets.

The low milk-yield in Pakistan is evident from the fact that while it has more buffaloes and cows than North America. It produces less than quarter of milk than the latter. Pakistan, with dairy animal population of 18 million, produces just 20 billion litres of milk animal as compared to 86 billion litres produced in North America which has a dairy animal population of 17 million.

The emphasis on providing consistent quality, aggressive marketing and distribution plans in addition to the convenience to enjoy hygienically packed dairy and fruit juice products year round has helped Nestle to reinforce its leadership position throughout the years since it launched its flagship product, Milkpak UHT milk, in 1981 in Pakistan.

Nestle’s success to make inroads in Pakistan is reflected in its strong financial performance. For the six months ended December 31, 1998 sales stood at Rs 2.5 billion and operating profit at Rs 338 million. Nestle earned a post-tax profit of Rs 195 million.