Research on Dalda Cooking Oil Analysis

Edible oils and fats are an essential part of the daily needs of a Pakistani family. It is also a significant part of household expenditure of an average family – almost 6% of the household budget is spent on it. Branded as well as non-branded products compete in the market. Branded products are mostly at the high end of the market and non-branded towards the lower end of the market and mostly selling in loose form.

Edible oils and fats are marketed in variety of packaging formats – tin cans, plastic bottles, plastic pouches, plastic buckets and in loose form. Ghee and cooking oil industry in Pakistan relies heavily on the imported edible oil and spends a hefty foreign exchange on the payment of edible oil imports. Currently, Pakistan spends about $1. 0 billion per annum on the import of edible oil. At present the capacity utilization of ghee or edible oil is about 55 percent. A probable reason for this under utilization is the existence of unregistered ghee and cooking oil-processing units in the country. Edible oils market is a highly fragmented market with many brands and non branded players.

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The Cooking Fats and Oils market in Pakistan is about 1. 2 million tones of which Vanaspati market accounts for 0. 875 million tones and edible oils for about 0. 325 million tones. Of the total market of 1. 2 million tones, the branded market is about 51. 65% and the remaining 48. 35% is un-branded. An analysis of the major players in the branded market reveals that most of this market is non-premium segment taken by a large number of very small regional brands. Companies with national presence dominate the premium segment. On the basis of its market, it is divided into three categories; national, regional and local.

National brands are those popular in the whole country and marketable in the whole cities of Pakistan. Some examples are Dalda, Habib and Sufi. Local brands are those, which are present in a particular province like Punjab. Some examples are Kisan, Meezan, Kashmir or Shan. Regional brands are those which are present in a particular city like Rawalpindi. Some examples are Latif, Shahbaz etc.

Dalda brand was first launched in British India in 1938. However, the Company launched the brand in Pakistan in 1952. The brand was successfully re-launched in 1997 when the Trans level in formulation was reduced to below 1% making it the healthiest Vanaspati available in Pakistan. The brand was again re-launched in 2001 with a new flavor “Irresistible taste with nutrition.

Dalda cooking oil was first launched in 1981 and re-launched in 1997 with the addition of Vitamin-E to create functional differentiation. The brand was again re-launched in 2001 on the platform of “Good Health, Great Taste…” Dalda is an all-purpose Vanaspati used in the preparation of all types of meals and is branded as a high quality grade in the retail market. Dalda is the most established branded vanaspati and holds a significant market share of the premium branded vanaspati market (Excluding Industrial Vanaspati Market). Dalda Melange is a recently developed cooking medium that is typically used in the preparation of all types of meals.

It has been developed as a middle product between Vanaspati and edible oil primarily to appeal to the health conscious customers Dalda Cooking Oil is a well-established name in the Edible Oils Market having significant share of premium branded cooking oil. Launched in 1981, the brand is on top of the recalled foods brands of Pakistan. It has seen a continuous volume growth over the years and is one of the most trusted household names. Planta was launched in 1989 specifically to attract the customers who wanted the health benefits of oil and taste of Vanaspati. The brand was transferred to the house of Dalda in June 2000 and the name was reformatted as Dalda Planta.

Our Purpose ”At the heart of the corporate purpose, which guides us in our approach to doing business, is the drive to serve consumers in a unique and effective way. This purpose has been communicated to all employees worldwide”.

Our purpose in Dalda is to meet the everyday needs of people everywhere – to anticipate the aspirations of our consumers and customers and to respond creatively and competitively with branded products and services which raise the quality of life. Our deep roots in local cultures and markets around the world are our unparalleled inheritance and the foundation for our future growth. We will bring our wealth of knowledge and international expertise to the service of local consumers – a truly multi-local, multinational. Our long-term success requires a total commitment to exceptional standards of performance and productivity, to working together effectively and to a willingness to embrace new ideas and learn continuously.

We believe that to succeed requires the highest standards of corporate behavior towards our employees, consumers and the societies and world in which we live. This is Dalda’s road to sustainable, profitable growth for our business and long-term value creation for our shareholders and employees. ”

MAIN COMPONENTS OF MISSION STATEMENT

  1. CUSTOMERS: The purpose of Dalda is to serve consumers in a unique and effective way.
  2. PRODUCTS OR SERVICES: It caters the requirement of everyday namely soap and detergents for washing and cleaning, tea for drinking and margarine for daily breakfast.
  3. CONCERN FOR SURVIVAL: The Economic objectives of Dalda are deep rooted in local cultures and markets around the world.
  4. PHILOSOPHY: The philosophy of the company is to provide highest standard of corporate behavior towards the employees, consumers and the societies.
  5. SELF CONCEPT: Total commitment to exceptional standards of performance and productivity.
  6. CONCERN FOR PUBLIC IMAGE: Profitable growth for the business and long term value creation for shareholders and employees.
  7. CONCERN FOR EMPLOYEES: The Company also focus to look after the employees and to motivate them to look after the interest of consumers.

Production facilities are situated at a strategic location at Sindh Industrial & Trading Estate (S. I. T. E. , Karachi near to the Karachi Sea Port to enable easy access to imported raw material. The factory has an area of about 9. 27 acres. The oil refinery is highly automated and utilizes advanced technological processes. The Refinery includes all buildings, land, electrical and mechanical installations, furniture, fittings, machinery and equipment utilized by the business, including the margarine plant but excluding the third party packing facilities, which are located within the same vicinity.

Sufi Group of Industries are one of the most dynamic and quality conscious companies with customer oriented approach towards their products. Sufi has a long-standing commitment to the community and to giving back to society.

The top management of Sufi has believed that the Company has a responsibility to use its money, its people, its energies and resources for the long-term benefit of society. Over the last decade, Sufi Group of Industries has emerged as one of the fastest growing, forward-looking and most innovative consumer goods company in Pakistan. Right from recruiting and training top talent to setting new standards of product quality and promotional excellence. Sufi provides products and services of superior quality and value their customers. Their customer oriented policy has given them a proper identity in the market. Their slogan is that customer is the lifeline of business and they need to be satisfied at any cost.

Serving the country since 1952, the company has diversified into the field of Soap chemical products, detergent and edible oil business. Products are Sufi Mini, Sufi Darja Awwal, Sufi Glycerine, Sufi Brown, Sufi Special Quality, Sufi Super, Sufi Nirol and Sufi Ploy Bag 1 kg; 1/2 kg.

Established in 1992 with state of the art facilities to produce quality guaranteed cooking oils. The company defined its goals as producing the best edible oil for quality conscious consumers with the local market in mind and proper influx of quality management. The Sufi oils have become a household name. The company is currently producing oil under the following brand names.  The Strong market presence with its marketing team and customer support has built a solid reputation of being committed to their quality. This has led Hamza Vegetable oil to become a leading manufacture of quality oils.

Habib Oil Mills (Pvt. ) Ltd. “HOM” is the largest FMCG Company exclusively in the vegetable oil & fats sector in Pakistan. The company produces premium brand cooking oils and hydrogenated cooking mediums, and markets the products through its own distribution network, which covers almost all commercially viable markets nation wide. Habib Oil Mills (Pvt. ) Ltd. is one of the leading processors and marketer of vegetable oil and its products.

The company sells 52,000 tons of branded consumer packs of cooking oil and banaspati nationally through a well-established network of 350 distributors. The total turnover of Habib Oil Mills is Rs. 2 billion. It has grown at the rate of 9-10% per annum for the last 5 years. It has an 8. 8% share of the total branded consumer pack market. The company covers all major segments of the market. It enjoys an excellent marketing reputation and is viewed as a professionally managed, ethical company marketing quality product. There is a growing concern with environmental issues in the organization.

PEST (Overall Industry) Political Political factors play an insignificant role. Even if the government changes the import duty or tax structure, the increase in cost can be transferred to the consumer; an increase in price would not result in decrease in sales due to the fact that edible oil has an in-elastic demand. Also, any changes in the government regulation would affect the entire industry; therefore the effect is on all firms. Recently, the government has introduced sales tax on items that are imported, directly on the port. This reduced the chances of small producers from tax evasion, however they start smuggling raw materials. Geo-political factors influence greatly (as it does all other industries), factors such as strike, riots are increasing in this country and they are greatly affecting the profitability of all industries. Economic

Economic factors greatly influence the edible oil industry, due to consistent increase in inflation; the purchasing power of the end consumer is decreasing. The PKR Rs is also devaluating, on top of that countries from which we import oil raw material (e. g. Malaysia) have improved economically, their currencies have appreciated, and causing problem for our local producers as the cost of imports has increased substantially. So companies have found it difficult to purchase raw materials at high costs and not to increase prices. This has greatly reduced the profit margin for the industry. Social Social factors play very insignificant role in this industry, existing oil producers have not been able to create that “premium brand” image (one in which snob value cannot be created).

Also, as mentioned before although brands do influence purchasing decision making however it is not that significant as consumers are becoming more and more price sensitive. Technological Technology doesn’t impact highly on this industry, even if firms are able to reduce production cost, but the main expense comes from purchases of raw material and that cannot be reduced. Technology has helped (as in the case of Dalda, who has tried to differentiate themselves but introducing VTF technology) firms create core competencies but that doesn’t greatly influence the firms profitability as consumers are becoming more and more price sensitive.

The average total weighted score of EFE Matrix is 2. 83 which is above industry average. It appears that Dalda is responding in a good way to existing opportunities and threats in the industry. The average weighted score shows that Company’s performance is good but not outstanding in the industry. When we analyze the EFE Matrix by separating the opportunities and threats, we found that Setting up Refineries and emerging modern trade departmental chains like Macro and Metro carry more weights and Dalda’s rating to these factors is also very good means Dalda is taking full advantage to these opportunities. After that, Local production of Raw Material, Untapped rural Market and Export potential carry . 06 weights each and company’s rating to each factor is 3. These are the areas where Dalda needs improvement to take advantage of the market opportunities.

When we analyzed the threats we found that the biggest threat in the industry is intense competition and company’s rating is 3. It shows that competition is the biggest threat for Dalda (competition from the local as well as from unbranded/ loose edible oil) after that Deteriorating law and order situation and Non-availability of basic utilities power are also severe threats face by the whole industry.

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Research on Dalda Cooking Oil Analysis. (2019, May 02). Retrieved from https://graduateway.com/research-on-dalda-cooking-oil-174/