A CONGLOMERATE of nine industrial units, the Pakistan Fruit Juice Company (Pvt) Ltd is engaged in manufacturing various food and beverage items, including juices, ice cream, rice, and agricultural and dairy products.

Incorporated in 1962, the group has grown into a major player in its market segment. Its operating divisions and industrial set-ups are located in major cities like Karachi, Multan, Lahore, Faisalabad and Islamabad. Being responsive to opportunities, the PFJ group manufactures products under licence from companies like RC Cola, Cott Beverages, Cadbury and Schweppes Corp., Canada Dry and Casco International.

The company has invested around Rs5bn in its plants and equipment from its own resources, and has not taken bank loans. “Once our expansions are in place and we end up requiring more funds, we may go for listing as a public limited company,” Ikram Elahi, CEO of PFJ, told this writer over telephone from Lahore.

The group’s annual carbonated beverage capacity exceeds 12m litres. And it also operates its own PET bottle manufacturing plant to cater to its own requirements. It meets the need for carbon dioxide from a self-owned plant in Multan.

Elahi said his group was the first to enter the ice cream business in the country, and its Hico brand has been well established since 1978. With a fully automatic state-of-the-art manufacturing facility, it has an annual production capacity of more than 6m litres of ice cream.

Pakistan has entered the organised dairy farming segment only recently; the outside world knows little about its capacity to produce quality dairy products

In 1990, in order to eliminate competition from the market, a multinational firm (MNC) took over a well established brand of ice cream to virtually monopolise this product segment. “We were a small player in this segment, but concentrated on maintaining quality, standard and ingredients, and still managed to sell it at prices that were 10-20pc lower than that of the MNC,” Elahi recalled.

In order to promote its ice cream, the MNC launched a massive marketing campaign in print and electronic media, which helped to increase its overall market share, he said. “But this turned out to be a boon for our ice cream as well because our market share also increased proportionately.”

About five years back, the company imported 550 milking cows from Australia for the Elahi dairy farm, which is spread over 300 acres and where milking is done through a fully automated plant. These cows, he said, are not used to hot climate like Pakistan’s, but they still produce more milk than local cows and also consume comparatively lesser quantities of fodder.

The company cultivates animal fodder on its own farm, where quality rice is also being grown and then exported. Standardising fodder and animal feed helps maintain the quality and taste of the ice cream.

As a result, the company’s ice cream enjoys a market share of 30-35pc in take-home segment, and PFJ is a leader in the upcountry market as well, said Elahi. Our market share is also fairly good in products like ice cream sticks, cones and cups.

However, the CEO said “power outages badly hurt our business, inhibiting growth, because ice cream needs cold storage facility at every stage of distribution. And many retailers are unable to save our products from damage.”

He added that the company’s boilers now mostly run by burning woods or coal. These issues divert manufacturers’ attention from the real issues like quality, renovation and marketing.

Organised dairy farming has just started and there are a lot of teething problems. The foremost, says the CEO, is the non-availability of skilled workers. It would take some time before investors in this sector start getting skilled human resource.

Giving brief details about the fruit juice division, Elahi said it has an annual production capacity of 10m litres, and the products are distributed all over the country from plants in Lahore and Multan.

Similarly, he said, the company has modern fruit crushing and processing facilities, with crushing capacity of 150 tonnes of fruits and vegetables per day. Mango pulp is one of its main products. The company also has a dehydration unit for fruits, vegetables and spices.

The agriculture and seed division, located about 10km from Lahore on 300 acres of prime fertile land, is one of the major sources of fruits, vegetables and high quality rice for the company. Seedlings are maintained in green houses under a climate-controlled atmosphere for early sowing, which, in turn, leads to an early harvest of the crop. The group also manufactures food grade cans on the latest technology.

Established in 1977, the industrial gases division has a complete line for producing carbon dioxide gas mainly for the beverage industry. Besides fulfilling the company’s own needs, the plant also supplies the gas to other soft drink manufacturers.

Responding to a question, Elahi said 90pc of the rice produced is exported, whereas a small quantity of ice cream, particularly of mango flavour, is exported to Europe, where expatriate Pakistanis are its main consumers.

Talking about dairy exports, he said since Pakistan has entered the organised dairy farming segment only recently, the outside world knows little about its capacity to produce quality dairy products.

Elahi was also critical about the working of commercial counsels in the country’s foreign missions, and stressed upon the need to create awareness about dairy products manufactured by Pakistan in the global market by using the Export Development Fund.

Published in Dawn, Economic & Business, November 24th, 2014