Project Repot on Packages Limited

INTRODUCTION

Packages Limited was established in 1957 as a joint venture between the Ali Group of Pakistan and Akerlund & Rausing of Sweden, to convert paper and board into packaging for consumer industry.

Over the years, the Company continued to enhance its facilities to meet the growing demand of packaging products. Additional capital was raised from sponsors, International Finance Corporation and from the public in 1965.

Packages commissioned its own paper mill in 1968 having production capacity of 24,000 tonnes of paper & paper board based on waste paper and agricultural by-products i.e. wheat straw and river grass. With growing demand the capacity was increased periodically and by 1996 it reached 65,000 tonnes per year.

Since 1982, Packages Limited has a joint venture with Tetra Pak International in Tetra Pak Pakistan Limited to manufacture paper for liquid food packaging and to market Tetra Pak packaging equipment.

In 1993, a joint venture agreement was signed with Mitsubishi Corporation of Japan for the manufacture of Polypropylene films at the Industrial Estate in Hattar, NWFP. This project, Tri-Pack Films Limited, commenced production in June, 1995 with equity participation by Packages Limited, Mitsubishi Corporation, Altawfeek Company for Investment Funds, Saudi Arabia, and General Public. Packages Limited owns 33% of Tri-Pack Films Limited's equity.

In July 1994, Coates Lorilleux Pakistan Limited, in which Packages Limited has 55% ownership, commenced production and sale of printing inks.

In 1996, a joint venture agreement was signed with Printcare (Ceylon) Limited for the production of flexible packing materials in Sri Lanka. This project packages Lanka (Private) Limited commenced production in 1998. Packages Limited owns 62% of this Company.

In 1999-2000 Packages Limited has successfully completed the expansion of the flexible packaging line by installation of new rotogravure printing machine and the expansion of the carton line by a new Lemanic rotogravure inline printing and cutting creasing machine. The machines are in production since December 1999.  

MISSION STATEMENT

To be a leader in the markets we serve by providing quality products and superior service to our customers, while learning from their feed back to set even higher standards for our products.

To be a company that continuously enhances its superior.

Technological competence to provide innovative solutions to customer needs.

To be a Company that attracts and retains outstanding people by creating a culture that fosters openness and innovation promotes individual growth, and rewards initiative and performance.

To be a Company which combines its people, technology, management systems, and market opportunities to achieve profitable growth while providing fair returns to its investors.

To be a company that endeavours to set the highest standards in corporate ethics in serving the society.

COMPANY INFORMATION

BOARD OF DIRECTORS

Asadullah Khawaja

Istaqbal Mehdi

Khalid Yacob

Kirsten Rausing

Rafi Iqbal Ahmed

Samee-ul-Hasan

Saulat Said

Seppo Hietane

Syed Hyder Ali

Syed Wajid Ali

(Chairman & Chief Executive)

ADVISOR

Syed Babar Ali

Company Secretary

Adi J. Cawasji

AUDITORS

A. F. Ferguson & Co.

Chartered Accountants

LEGAL ADVISORS

Hassan & Hassan-Lahore

Orr,Dignam & Co. –Karachi

BANKERS

ABN Amro Bank

American Express Bank Limited

Citibank N.A.

Credit Agricole Indosuez

The Global French Bank

Deutsche Bank A.G.

Emirates Bank International P.J.S.C

Faysal Bank Limited

Habib Bank Limited

Mashreq Bank

Muslim Commercial Bank Limited

Societe Generale

The French & International Bank

Standard Chartered Bank

Standard Chartered Grindlays Bank Limited

Union Bank Limited

United Bank Limited

HEAD OFFICE & WORKS 

Shahrah-e-Roomi

P.O. Amer Sidhu

Lahore-54760, Pakistan

PABX : 5811541-46, 5811191-94

Cable  : PACKAGES LAHORE

Telex  : 44866 PKGS PK

Fax     : (042) 5811195, 5820147

Registered Office & Regional

MAIN OPERATIONS

Main operations of Packages Ltd. Lahore include:

                    Manufacturing paper and board.

                    Preparing packaging for hundreds of industrial and consumer goods.

                    Production of its own consumer goods e.g. Rose Petal and Tulip tissues, napkins, paper cups etc.

DEPARTMENTS

Some other main departments of Packages Ltd. are:

                    Finance division

                    Commercial and Purchase department

                    Industrial Marketing & Sales department.

                    Research, Development & Control department.

                    Art Department

                    MIS-Department

                    Reproduction Department

                    Planning departments

                    Personel & Industrial Relations department.

ORGANIZATION'S CULTURE

Here are some key elements of Packages culture:

                    Openness and speech freedom.

                    Fostering innovation.

                    Promoting individual growth.

                    Rewarding initiative and performance.

                    Technological advancement

                    Updating learning and skills

                    Teamwork

                    Mannerism and punctuality.

QUALITY POLICY

We at Packages Limited are committed to producing quality products which conform to our customers, requirements and strengthen our position as a quality-managed Company. Our pledge is to provide the market with the best quality products at competitive prices through a customer-driven and service-oriented, dynamic management team. To meet this obligation, the Company will continue updating of employee skills by training, acquisition of new technology, and regular re-evaluation of its quality control and assurance systems. Appropriate resources of the Company will be directed towards achieving the quality goals through employees, participation.

ENVIRONMENT HEALTH & SAFETY (EH&S) POLICY STATEMENT

Packages Limited shall:

                    Minimise its environmental impact, as is economically and practically possible.

                    Save raw materials including energy and water, and avoid waste.

                    Ensure that all its present and future activities are conducted safely, without endangering the health of its employees, its customers and the public.

                    Develop plans and procedures and provide resources to successfully implement this policy and for dealing effectively with any emergency.

                    Provide environmental, health and safety training to all employees and other relevant persons to enable them to carry out their duties safely without causing harm to themselves, to other individuals and to the environment.

                    Ensure that all its activities comply with national environmental, health and safety regulations.

This policy shall be reviewed as and when required for the betterment of the same.

PRODUCT DEVELOPMENT

Two way process:

1.            Internees

2.            Employees

MARKET RESEARCH

They go to the market-check the packaging of different products which are not made by packages then they come with new ideas or modification in the existing packaging.

REVERSE CYCLE

Their existing or new customer come to them and tell them about their needs for modification or packaging of new products.

RESEARCH & DEVELOPMENT

Their research and development department work for the modification of packaging

PRE COSTING

Get the price of different material and tell to the customer about the rough estimate

QUALITY

Quality check (acceptable to customer)

SAMPLES

Then they make the sample of the product

TRIAL

Take the trial first on their own machine and then give trial to customer

PRODUCTION

If the customer will satisfy and place the order then they start the production of the product

PRODUCT MIX

Basis of segmentation

1.            Industrial product

2.            Consumer product

INDUSTRIAL MARKETING AND SALES DEPARTMENT

HIERARCHY OF INDUSTRIAL MARKETING

For industrial products Packages has four main sections:

1.            Corrugated Department

2.            Carton Department

3.            Flexible Department

4.            Poly & Paper Conversion

CORRUGATED DEPARTMENT

In this department the CWCs (Corruwall Cartons) are made for the industrial products like textile products, little machinery, and sugar etc. Packages has been producing CWCs since 1974, which are manufactured in a variety of sizes. These CWCs provide a great value for the in-country distribution and export of fresh fruits, garments, shoes and textiles etc.

MAJOR CONSUMER AREAS

1.            Textile Industry

2.            Food & Beverages

3.            Yarn & Poly Products

4.            Sports Industry

5.            Fruit Cartons

MAJOR CUSTOMERS

Some major customers for CWCs include:

1.            Gulistan Group of Industries

2.            Nishat Group of Industries

3.            Saphire Textile Mills

4.            Nestle Milk Pak Limited

5.            Lever Brothers

6.            Rupali group

7.            Crescent Greenwood (Mills).

CARTON LINE

MAJOR CONSUMER AREAS

1.            Cigarette Industry

2.            Biscuit Industry

3.            Sweets

4.            Tea Cartons

5.            Detergents

6.            Shoe Cartons

7.            Match Industry

MAJOR CLIENTS

1.            Nestle Milkpak Limited

2.            Pakistan Tobacco Company

3.            Lakson Tobacco Company

4.            Lever Brothers

5.            Dane Foods Limited

6.            Continental Biscuits Limited

7.            English Biscuits Manufacturers

8.            Rafhan Best Foods Limited

9.            Union Match Manufacturers

10.         Procter & Gamble.

11.         BATA

12.         Service Shoes

FLEXIBLE LINE

MAJOR CONSUMER AREAS

1.            Soap industry

2.            Sweets

3.            Detergents

4.            Cooking Oils

5.            Biscuit Manufacturers

6.            Shampoos

7.            Snacks Industry

8.            Different food items like salt rice ketchup, custard powder etc.

MAJOR CUSTOMERS

1.            Lever Brothers

2.            Procter & Gamble

3.            Colgate Palmolive

4.            Rafhan Best Foods (Pvt.) Limited

5.            Continental Biscuits

6.            English Biscuits Manufacturers

7.            Nestle Milkpak Limited.

8.            Tripple-em snacks

9.            Dane Foods

10.         Sufi products

11.         National Foods Limited

POLY & PAPER CONVERSION

PRODUCTS

In this department the following main packaging is prepared:

1.            Paper cups

2.            Paper plates

3.            Gum tapes

4.            Poly bags

IMPORTANT FEATURES

1.            Flexographic is the printing method used here.

2.            Paper cup machine has capacity to make 4000-5000 cups per hour.

3.            For printing on Poly Bags, 6-color machine is

4.            Fisher & Krecke of Germany, with the capacity to print 150-meters per minute.

MAJOR CUSTOMERS

1.            McDonalds for paper cups.

2.            Pepsi for paper cups.

3.            Coca-Cola for paper cups.

4.            KFC for paper cups.

5.            Packages itself for paper cups and plates.

6.            Lever Brothers for poly bags (e.g. wheel ploy bag).

INDUSTRIAL PRODUCTS

PAPER CUPS

TARGET MARKET

Air lines, ice cream manufacturers, soft drink manufacturers.

SEGMENTATION

PIA, Aero Asia, Bhoja,

Walls, Igloo,

Coca-Cola, Pepsi Cola.

PAPER PLATES

TARGET MARKET

Bakers, airlines, food chains.

SEGMENTATION

Gourmet, Rahat Bakers,

PIA, Aero Asia, Bhoja,

KFC, McDonald's, Pizza Hut.

PRICING

Pricing is based on long term relationship building, it means that for the first time if they have to sell at breakeven, they go for that so that next time the customer come to them. So prices are reasonable. Markup pricing technique is used they are believing 2^nd school of thought, that they do not cover all cost from innovators rather they slowly cover their cost.

PROMOTION

They are using personal selling for promotion of their products. Employees and internees go the customers, they communicate about their product and in this way they create utility of their product.

PLACEMENT

If the customer demands that product is placed at their godowns, they place and get placement charges, and if customer want to take himself from the company, they also allow this.

CONSUMER PRODUCT

1.            Rose Petal

2.            Tulip

It was 1981 when 'Packages' smell opportunity and felt the demand for disposable convenient and hygienic tissues in Pakistan .so in 1981, 'Packages' modified one of its paper machine to produce tissue paper-production was started and 'ROSE PETAL brand was launched for the facial tissue.

COMPETITORS AND MARKET SHARE

For tissues 'PACKAGES' has 80% of market share that's simply a giant share. So there is not very intense competition.            

ROSE PETAL

TARGET MARKET

Their target market is upper class middle class & educated people 

BASES FOR SEGMENTATION

Age (above 18 years)

Income group (upper upper, upper middle class)

Females  (House wives )

PRICING

As you know it is for upper upper & upper middle class so quality is good and prices are high

TULIP

TARGET MARKET

Their target market is lower and middle class

BASES FOR SEGMENTATION

Age (above 18 years)

Income group (middle & lower class)

PRICING

The target market for tulip is middle & lower class so the price of tulip is less as compare to rose petal

PROMOTION

For the promotion of tissue papers advertising is the largest promotion tool attracting about 70-80% of total promotional budget and in fact advertising is the most powerful & effective media for consumer sales.

They specially target the house wives and their add is showing specially during the news.

REASON

Hose wives also see news.

Why not during the drama because there are lot of adds and during the interval they simply go to kitchen to prepare tea or to complete the food which they are cooking.

For the promotion of tissue papers specially, advertising is the largest promotional tool, attracting about 78-80% of total promotional budget and in fact advertising is the most effective media for consumer sales.

PLACEMENT

Packages have 172 professional distributors.

They get the lots from their godowns & then distribute it in all over.

Pakistan to the retailers and whole sellers.

SWOT ANALYSIS

STRENGTHS

Skilled Workforce

Packages enjoys an educated and skilled work force to perform its operations e.g. in Industrial Marketing Department all new hired sales executives are MBAs. On technical side Packages has 2-Ph. Ds., 99- engineers and 314-diploma engineers.

ISO 9001

In compliance with worldwide standards, the ISO-9001 certificate has been awarded to "Flexible line" and "Carton line" of Packaging division.

Large-Scale Economies

Since Packages is a giant setup, so it enjoys the economies of large-scale as well e.g. its fixed cost is reduced as it is spread over more number of units.

Goodwill

No doubt, Packages occupies a respectable and trustable image and market reputation, serving as a valuable asset for the Packages.

 

Advanced Technology

To meet the quality requirements of its customers Packages contains the latest paper producing and packaging technology and most of machinery is imported from different countries like Germany, USA, Switzerland, etc.

Advance Payments

In most of the cases and especially from new customers, Packages deals with the payments in advance. So it has to put less efforts to recover the payments.

Training

In Packages employees are given necessary and comprehensive orientation before starting the job. Moreover other training programs are also arranged to kept the skills of employees up-to-date.

WEAKNESSES

Slow Information Flow

Information flow between regional offices (of Karachi, Islamabad) and production lines (Lahore) is not very quick, improper and manual i.e. by post normally.

 

 

Just Large Orders

Packages' production facility is inflexible, in a sense that it is unable to operate for small orders due to increased fixed cost. In this way, a lot of small orders are rejected.

High Prices

Packages deserve to charge high prices for its quality products but in this way, the companies who are not financially sound or in development stage can't have access to the Packages.

Longer Lead Time

Due to a lot of work load, the lead times are mostly longer so creating frustration in customers and causing dissatisfaction.

OPPORTUNITIES

There is a gradual increase in the awareness about Packaging importance among the industrialists and they are really considering the packaging as the final sales person for the products. So this awareness will brings more customers to the door of Packages.

Business activity and investment flow in also increasing day by day, so causing new business opportunities for whole packaging industry.

Consumers and companies are becoming more conscious about the quality of the products and Packages is quality leader in Pakistan's packaging industry and having continuous development plans for quality. So in near future it can bring huge revenues in the Packages.

Trend of sachets is also increasing day by day. Or in other words demand for flexible packaging is increasing day by day.

THREATS

Packaging (especially flexible or poly packing) negatively influences the environment by increasing the wastes. So this is a real threat for Packages.

Due to latest printing technology, the demand for offset printing is decreasing day by day which is a traditional printing mode used in Packages.

Packages is facing a strong competition from the Cottage Industry in Karachi producing corrugated cartons.

 

TABLE OF CONTENTS

Introduction....................................................................................................................... 1

Mission Statement........................................................................................................... 3

Company Information...................................................................................................... 4

Main Operations............................................................................................................... 7

Departments...................................................................................................................... 7

Organization's Culture.................................................................................................... 8

Quality Policy.................................................................................................................... 9

Environment Health & Safety (Eh&S) Policy Statement........................................ 10

Product Development................................................................................................... 11

Product Mix..................................................................................................................... 13

Corrugated Department................................................................................................ 14

Carton Line..................................................................................................................... 15

Flexible Line................................................................................................................... 16

Poly & Paper Conversion............................................................................................. 17

Industrial Products......................................................................................................... 19

Paper Cups..................................................................................................................... 19

Paper Plates................................................................................................................... 19

Consumer Product........................................................................................................ 21

Rose Petal....................................................................................................................... 21

Tulip................................................................................................................................. 22

Swot Analysis................................................................................................................. 24