ISLAMABAD, Dec 20: Pakistan has been advised by the European Union, friendly countries and various foreign organizations to force its exporters and growers to adopt "marketing-oriented approach" to compete in the WTO regime beginning from January 2005.

Informed sources told Dawn here on Monday that Pakistan was told that the exporters and growers needed to develop corporate entities that must be undertaken in production and export on a corporate basis in order to enjoy the benefits of vast scope of corporate organization in the new WTO regime.

A joint study, conducted by the Board of Investment (BoI) and Japan International Cooperation Agency (JICA), also recommends that the exporters should try to explore new markets for their products in order to diversify risk associated with the exports. At present the exporters are too reliant on single countries for export of each product and they need to diversify with a view to reducing dependency.

Marketing fruits and vegetables under brand names will bring about consistency in quality and delivery of these products. The exporters will also be able to charge a good price for their offerings if they are branded. Competitors will be forced to adopt other strategies than price competition in order to gain marker share.

In the emerging worldwide export scenario, fruits and vegetable industry in Pakistan is said to be a viable investment option for both local and international investors as it has a great deal of untapped potential for further growth and development.

At present there are few players that offer the basic levels of sophistication in processing fruits and vegetables that leave that market open for a modern investor who is willing to provide high quality processed and value-added products to the discerning international markets.

It was proposed that the most viable location for an investor to set up a processing plant would be in Karachi because of abundance of land, availability of required infrastructure and labour, and from an international export perspective, due to its proximity to the seaport.

It was suggested that the raw material be directly sourced from the growers rather purchased from the wholesale market as it would eliminate unfair dealings of middlemen, who purchase the produce at exorbitant rates from the growers.

In order to purchase the raw material directly from the growers, it was recommended that the investor should hire a commission agent who works for the fixed wages and is trained to procure raw material from the growers that meets the quality standards.

Pakistan was also advised to ensure that the exporters employ modern processing and packaging techniques in order to maintain the quality of produce for a longer period of time.

Since the existing processing techniques are so primitive, it was recommended that marketing use of even slightly more sophisticated processing techniques would give the investor a definite edge over competitors in the industry.

One of the major issues is that the exporters are not able to enter new markets. When an exporter manages to enter a market, he is followed by many others who then compete with him in that market. Also, available export refinance is limited because of weaknesses in documentation.

Many exporters are selling their produce on document advance (DA) that does not qualify for refinance from banks. The export refinance serves as the working capital much needed to ensure liquidity to buy raw materials in sufficiently large volumes.