Shezan International Limited — a listed company with Rs3.42bn in total assets, produces beverages, juices, pickles, sauces, jams and ketchup. By comparison, the company is a smaller unit on the fast moving consumer goods sector and has to endure gruelling competition from bigger players such as Nestle and Mitchell’s.

Its head office is located in Lahore and it has distribution offices in United Kingdom and Canada. The company exports its food products to more than 40 different countries, including UK, US, Australia.

The company has been expanding its production capacity through the years. Chairman Muneer Nawaz stated in his last review appended with the annual accounts for 2015 that the firm had obtained a long term loan of Rs300m to enhance its production capacity in the shape of new Tetra Pak type A-3 machine.

Despite 14 players already in the market, newer companies continue to jostle for their place

He also mentioned that during the first half of the financial year, 2015, export sales of the company showed a positive growth but this momentum was not sustained in the later part of the financial year in the backdrop of ‘sharp decline in the oil prices’.

The company released its results for the nine-months ending Mar 31 on April 26, showing slight change in net sales at Rs4.41m, from Rs4.42m in the corresponding period of the earlier year.

But due to increase in cost of sales and reduced tax effect, the net profit dropped to Rs79m with earning per share at Rs9.87, from net profit at Rs136m and eps at Rs17.03 same time the previous year.

Market watchers believe that the company has a case to focus on its ketchup and sauces sector as well as to tap the growing export market. Voices were heard at the shareholders meeting urging the management to consider diversification in other food segments.

What are the plans for the future for the company to ramp up its turnover and earnings? The question was put to Faisal Ahmed Nisar, the company secretary by this writer. However, he declined to comment saying it was not the company’s policy to interact with the media.

Shezan International was incorporated in 1964 as a joint venture between Alliance Industrial Development Corporation (AIDC) of the US and Shahnawaz Group of Pakistan. However, AIDC sold all of its shares to the current majority share owners Shahnawaz Group in 1971 and the company became a publicly traded entity.

At the close of financial year 2015, against the paid-up capital of Rs79.9m, reserves stood tall at Rs1.65bn. Directors, CEO and their spouse and minor children hold 2.70m shares or 33.8pc of the company stock.

Other major shareholders include the local general public with 2.91m shares or 36.6pc of the equity. Foreign companies which include Tundra Frontier Opportunities fund and Tundra Pakistan Fund hold 0.347m shares or 4.45pc of total outstanding shares. Owing to the limited number of Shezan shares traded at the stock market, the company’s progress is barely followed by equity analysts at various brokerage houses.

But the FMCG companies are definitely doing a roaring business and those in the food business seem to have an edge over others. The packaged food industry continues to increase its presence in the market.

Economist Fazal Wadood says: “In Pakistan, just as in India, the consumption demand from the vast and growing middle-class is strong. Besides the burgeoning middle class, the health awareness, decreasing family size, improving literacy rate and strong growth in rural income—that for the first time in years has taken a lead over the urban prosperity - are all the reasons for staggering growth in branded packaged food products.”

Packaged milk industry is also a fast growing segment in the food sector on the FMCG. Yet the current rage is the ‘meat business’. Despite 14 players already in the market, newer companies continue to jostle for their place.

Investors last heard of the ‘Fauji Meat’, as Fauji Fertiliser Bin Qasim Limited (FFBL) decided to venture into the field through a subsidiary company. It was closely followed by Al Shaheer Corporation Limited, which analysts at brokerage Foundation Securities place among ‘one of the largest exporters of Halal meat’.

Published in Dawn, Business & Finance weekly, May 2nd, 2016