the meat. Most customers in Pakistan could not understand how a bird produced in a factory could be Halal compliant. Technological Previously, a lot of research and development has taken place in the feed and poultry industry. Modified feeds that contain balanced diets have now been introduced to the local producers at large. This medium protein diet has helped the industry in producing healthier chickens. Furthermore, Automatic Batch Controller and computerized manufacturing program has minimized human involvement and reduced chances of impurity. As a result, the Feed Conversion Ratio (FCR) dropped below 2kg of feed per 1kg of live weight.
13 Task Environment Threat of New Entry The biggest threat to the industry of processed and value-added meat is the wet market; local producers virtually have a cost of no more than Rs. 2/kg against the cost of processing, excluding the cost of the chicken, which was somewhere between Rs. 45-55/kg. This cost is only to the extent of slaughtering and meat processing. However, the cost of adding value to the chicken includes a number of taxes and levies, which includes sales tax on sanitizers, detergents, gases for freezing, equipment /machinery, Social Security, WPPF, Workers Welfare Fund, EOBI, education, compulsory employment to handicaps, etc. Furthermore, after the FTA Pakistan started importing from Malaysia and China. Thereafter, international quality auditors of international and local food chains, subsequently started importing from Malaysia and China. Hence, entrants who import low-cost products from China and Malaysia and entrants of the wet market pose a high threat. Bargaining Power of Buyers The bargaining power of buyers in the B2B sector has seen a noteworthy increase over the years. Previously, when giants like Hyperstar and Metro entered the Pakistani market, they tried to imitate their global practices in the Pakistani retail market. After significant resistance, it was observed that local retailers also started to adopt the international standards brought in by the foreign players; retailers like Al-Fatah and Jalal Sons have now also started mandating a share from the company in the shelf cost and costs of in-store advertisements. However, the dynamics are quite opposite on the B2C side where the end buyer does not have much say in the pricing matters.
14 Threat of Substitutes Poultry and value-added processed meat are highly threatened by other sources of proteins such as vegetables, mutton, beef and pulses etc. Competitors Pakistan’s small ready-to-cook food market has welcomed more than 10 new entrants in the segment in last five years such as Al-Shaheer, Big Bird, Frozen Fresh, Sufi, Menu, Dawn and PK Foods to name a few. Perhaps the strongest competitor for K&N’s is Dawn Foods, which is better known to most Pakistani households for its brand of bread. In 2001, Dawn launched its brand of frozen parathas, which are currently the leading brand in that category. The company also makes frozen samosas and has more recently made its foray into the frozen meat products business, and already has a 6% share in the market. That is far behind K&N’s, but still in second place in Pakistan.
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- Winter '16
- Poultry farming