and a reduction in those living in poverty. However, we also suffer from high inflation and it is hard to access capital at reasonable rates of interest. We have cheap labor but productivity is low and it is difficult to find people with good managerial capabilities. A particular challenge for our business is the availability of electricity. Since 2007–2008, we have had a huge problem with unplanned electricity outages. Even in major cities today we could have 8 to 10 hours of unplanned electricity cuts. This means that we either lose production or pay for our own back- up power generation, which more than doubles our energy costs. People visiting Pakistan for the first time have asked me whether we are more like Afghanistan or India. The truth is that we have the entrepreneurial spirit and the infrastructure to be economically successful like India. K&N’s was managed on a daily basis by Khalil as chairman and CEO and Adil, who joined the company in 1997 after completing his undergraduate degree in agricultural economics and business management with classes in poultry science at Cornell University, as executive director. Khalil was responsible for strategy development, while Adil was responsible for its effective implementation. They were supported by a large and experienced senior management team. In 2011, the business employed 4,134 people in 64 facilities located
around Pakistan. Although earnings were cyclical, the business was profitable overall, and through careful management of financial commitments, K&N’s had historically self- funded all growth, investments, and acquisitions. While, externally, K&N’s was regarded as a single organization and brand, in 2011 K&N’s categorized its business into two areas for internal management purposes: K&N’s Poultry, which produced parent stock, day-old chicks, feed, and broilers; and K&N’s Foods, which produced processed chicken and ready-to-cook and fully cooked chicken products. K&N’s Poultry: K&N’s Poultry (55% to 60% of K&N’s turnover in 2010) consisted of parent-stock production (using internationally sourced grandparents to ensure the highest-quality genetics), day-old chick production, and broiler growing, as well as a layer-breeding business (K&N’s was the largest producer of day-old layer chicks in Pakistan and had been so since the late 1970s). In 2011, the poultry business produced an average of 1.8 million chicks per week, including 1.55 million broiler chicks, 210,000-layer chicks, and 40,000 broiler parent stock. Around a quarter million of the chicks went into the company’s own farms and another 130,000 were placed with contract growers to be raised for K&N’s Foods. K&N’s advised contract growers on farming and feeding, and regularly monitored the health of contract-grower flocks. The remainder of the poultry division’s broiler-chick production was supplied to Pakistan’s independent broiler growers, where chicks were grown for five to six weeks and then sold by growers through the wet market or to smaller poultry processors.
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