Organization Development: Engro Foods Limited
Organization Development: Engro Foods Limited
Development
Engro Foods Limited
Submitted by:
Jawad Abdul Khaliq
L1F07MBAM0103
MubashraArif
L1F07MBAM2111
Bilal Ahmad L1F07MBAM2101
Ayesha Raffique L1F07MBAM0060
Tahseena Abdul Aziz L1F07MBAM2180
Fatima Khalid
L1F07MBAM0156
Section: A 1
PREFACE
All praise is to Almighty Allah for bestowing us with the wisdom to accomplish our
task.
Themain purpose of the project is the fulfilment of the requirements of the
Organization Development, which is the part of our study work.
Engro Foods is the diversified business of Engro. The information has been gathered
from different sources including the web site, web pages related to the Engro Food
Limited (EFL), personal discussion with employees, E-mails and visit to the branch
office situated in EDEN TOWER, Lahore. We have included all the information
obtained from the mentioned sources and no part of this project has been added from
own.
As regards the preparation of this project, all the topics are added in a proper
sequence, starting with the table of contents, including the history, overall view,
company information, everything that was required for the completion of the project.
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ACKNOWLEDGEMENT
We would like to offer our humble gratitude to Allah Almighty, the most Gracious
and the most Merciful, who gave us strength and enabled us to achieve our goals.
The topic of our project was the organization development analysis of Engro to
Engro Foods. During our Project, we had to face some difficulties as data was not
readily available; we had to go to EFL office to collect data after having some solid
reference and then sort out relevant data for our project.
We would like to thank our kind Prof. Raffat Iqbal for his pre-emptive and
continuous support. Without his help we would not have been able to complete our
project on timely manner. We are grateful to employees of various departments of
Engro that helped us during our work in making our project successful.
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TABLE OF CONTENTS
TOPICS Page No.
Background........................................................................ 7
Engro’sBusinesses................................................................... 8
• Engro Energy............................................................... 8
History................................................................................. 11
Aim...................................................................................... 11
Brands................................................................................. 11
Core Values………………………………………………………….... 12
Culture of Engro………………………….…………………………… 14
SWOT Analysis.................................................................... 17
Resistance To Change.......................................................... 19
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Analysis Of Change Efforts................................................... 20
Further Improvement........................................................... 21
Recommendations……………………..................................... 21
References……………………………….................................... 22
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VISION
"To be the premier Pakistani enterprise with a global reach, passionately pursuing value
creation for all stakeholders.”
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BACKGROUND
Search for oil by Pak Stanvac, an Esso/Mobil joint venture in 1957, led to the discovery of
Mari gas field situated near Daharki -- a small town in upper Sindh province. Esso was the
first to study this development in detail and propose the establishment of a urea plant in that
area.
The proposal was approved by the government in 1964, which led to a fertilizer plant
agreement signed in December that year. Subsequently in 1965, the Esso Pakistan Fertilizer
Company Limited was incorporated, with 75% of the shares owned by Esso and 25% by the
general public. The construction of a urea plant commenced at Daharki the following year
with the annual capacity of 173,000 tons and production commenced in 1968. At US $ 43
million, it was the single largest foreign investment by a Multinational Company in the
country. A full-fledged marketing organization was established which undertook agronomic
programs to educate the farmers of Pakistan. As the nation’s first fertilizer brand, Engro
(then Esso) helped modernize traditional farming practices to boost farm yields, directly
impacting the quality of life not only for farmers and their families, but for the community at
large. As a result of these efforts, consumption of fertilizers increased in Pakistan, paving
the way for the Company’s branded urea called "Engro", an acronym for "Energy for
Growth".
As part of an international name change program, Esso became Exxon in 1978 and the
company was renamed Exxon Chemical Pakistan Limited. The company continued to
prosper as it relentlessly pursued productivity gains and strived to attain professional
excellence.
In 1991, Exxon decided to divest its fertilizer business on a global basis. The employees of
Exxon Chemical Pakistan Limited, in partnership with leading international and local
financial institutions bought out Exxon’s 75 percent equity. This was at the time and perhaps
still is the most successful employee buy-out in the corporate history of Pakistan. Renamed
as Engro Chemical Pakistan Limited, the Company has gone from strength to strength,
reflected in its consistent financial performance, growth of the core fertilizer business and
diversification into other fields.
Investment in people, process solutions and resource conservation initiatives have reduced
energy use per ton of urea by a third, whilst increasing urea production nearly six-fold since
1968. Not only does this save money, it stretches non-renewable energy sources and
mitigates the impact of waste. Along the way, a major milestone in plant capacity upgrade
coincided with the employee led buy-out; innovatively optimizing our resources, Engro re-
located fertilizer manufacturing plants from the UK and US to its Daharki plant site – an
international first. Our pioneering spirit continues in our social investments, exemplified by
the only snake-bite treatment facility in the Ghotki region and the first telemedicine
intervention in the country.
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ENGRO’S BUSINESSES
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The company is showing increasingly high numbers in its bottom line and it's a great source
of dividend revenue for ECPL. The company paid a dividend of Rs. 229
million in CY07.
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ENGRO FOODSVISION
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ENGRO FOOD HISTORY
The growth strategy which was adopted by ENGRO Chemical Pakistan limited was
diversification they diversify chemicals to food business Engro’s 40 year old relationship
with the farmer also gives Engro food another edge over the competitors
Engro Foods (Pvt.) Limited (EFL) has been established in 2005 as part of a diversification
process at the Engro Group. The plant located at Sukkur on 23 acre land, has the raw milk
reception capability of 300,000 litres per day and UHT milk capacity of 200,000 litres per
day. The plant has been established at a cost of Rs. 1 billion which provides direct
employment to 750 people. Engro Foods has entered the Food business through milk
processing and sale with the company’s vision to pursue growth opportunities based on
country fundamentals and own strength. It also positions the company to leverage its
corporate social responsibility initiatives and work closely with rural communities to
promote integrated farming and livestock development. This effort is expected to play a
pivotal role in poverty alleviation and improving livelihoods of the poor in the milk
collection areas.
Engro Foods will work with the Pakistan Poverty Alleviation Fund and its three partner
organizations to help implement sustainable business models that increase farmer’s
profitability and develop a positive social and business climate for growth and expansion of
live stock and other forms of value added agriculture.
Engro Food’sBrands
Olper’s milk
Olper’s cream
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Olwell
Tarang
Omore’
CORE VALUES
Engro’semployees performance can only flourish in a sound work environment. That is why
Engro Foods Limited is committed to supporting its leadership culture through systems and
policies that foster open communication, maintain employee and partner privacy, and assure
employee health and safety.
1. Safety, Health & Environment
Engro manage and utilize resources and operations in such a way that the safety and health
of their people, their neighbors, their customers and their visitors is ensured. They believe
their safety, health and environmental responsibilities extend beyond protection and
enhancement of their own facilities, and they are concerned about the distribution, use and
after use disposal of their products.
2. Ethics And Integrity
They care how results are achieved and express honest and ethical behavior in all their
activities. Choosing the course of highest integrity is their intent and they establish and
maintain the highest professional and personal standards. A well-founded reputation for
scrupulous dealing is itself a priceless asset.
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3. Leadership
Engro have leaders of high integrity, energy and enthusiasm who have the necessary
managerial, professional and people skills to inspire a group or an organization to set high
goals and achieve them willingly. They believe that leadership skills need to be strengthened
at all levels within their organization and that managerial and professional competence is a
necessary foundation.
4. Quality & Continuous Improvement
Engro believe that quality and a relentless commitment to continuous improvement are
essential to their ongoing success. To this end, they define quality as understanding the
customer's expectations, agreeing on performance and value, and providing products and
services that meet expectations 100 percent of the time. Their motto is, "Quality in all we
do”.
5. Enthusiastic Pursuit Of Profit
Successfully discharging their responsibilities to their shareholders to enhance the long-term
profitability of Engro provides the best basis for their career security and meaningful
personal growth. They can best accomplish this by constantly meeting the need of their
customers and providing them with value.
6. External & Community Involvement
Engro believe that society must have industrial organizations that it can trust. Trust and
confidence are earned by their performance, by open and direct communication, and by
active involvement in the communities in which they live and conduct their business.
7. Candid & Open Communications
Engro value communications that are courteous, candid and open and that enable each of
them to do their jobs more effectively by providing information that contributes to the
quality of their judgments and decision making. Effective communications should also
provide the means for gaining understanding of the company's overall objectives and plans
and of the thinking behind them.
8. Enjoyment & Fun
Engro believe that excitement, satisfaction and recognition are essential elements of a
healthy, creative and high-performing work environment. Having fun in their work should
be a normal experience for everyone.
9. Innovation
Success requires them to continually strive to produce break through ideas that result in
improved solutions and services to customers. They encourage challenges to the status quo
and seek organizational environments in which ideas are generated, nurtured and developed.
10.Individual Growth & Development
They strongly believe in the dignity and value of people. They must consistently treat each
other with respect and strive to create an organizational environment in which individuals
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are encouraged and empowered to contribute, grow and develop themselves and help to
develop each other.
11.Teamwork & Partnership
They believe that high-performing teams containing appropriate diversity can achieve what
individuals alone cannot. Consciously using the diversity of style, approach and skills
afforded by teams is strength they must continue building into their organization.
12.Diversity & International Focus
They value differences in gender, race, nationality, culture, personality and style because
diverse solutions, approaches and structures are more likely to meet the needs of customers
and achieve their business goals
CULTURE OF ORGANIZATION
• Engro is Japanese culture organization
• Low power distance and open culture.
• Engro Foodsis working on open door policy
• In Engro Foods suggestions are always welcomed from the employees
• Engro has always got the award of highest paying company since many years
Our People
• People at ENGRO FOOD LIMITED are very dynamic and vibrant with an attitude
of challenging the norms, at the same time these people are highlyprofessional,
ethical and resultoriented.
• These are people who want to shine, make a name for themselves and for that they
are willing to gotheextramile.
• People at ENGRO FOODS are driven to achieve greater success they look for new
and exciting ways to return value to their customers and shareholders.
• There are more than 700 experienced employees and in ENGRO input of every
employee is encouraged.
• ENGRO is striving to become employer of choice by providing a work place where
people feel confident, valued and provided with training.
Our Dreams
• ENGRO FOODS LIMITED dreams to be BIG. They want to be a major player in
the food industry which is also evident in their vision.
• ENGRO FOODS LIMITED wants to challenge the industry norms and surprise
whoever has eyes on it.
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ANTICIPATE NEED FOR CHANGE
New Plants Requirement
Engro identify that their demand has been increased in fertilizer products and to fulfil that
demand they have to install new plant in Punjab region. Punjab government imposed
restriction on Engro to install a fertilizer plant in Punjab and the restriction limit has not
been identified.
Diversification
• ENGRO finds that their chemical industry is not sufficient for them, and they found
an opportunity in milk industry because they were providing fertilizer to the farmers
and these farmers were selling milk to the local people. From there ENGRO got an
idea to provide the UHT treated milk in the country. Pakistan is the world’s fourth
largest milk producing country. Total annual milk production in Pakistan is
estimated 32 billion litres. Out of which only 4 % is being processed.
• In summer time in Pakistan the temperature rises and the requirement of ice cream in
the season is at its peak. ENGRO wanted to capture those customers by introducing a
new ice cream in the market.
• Being the agricultural land the major crops of Pakistan are wheat, cotton, rice, etc.
and Engro finds that they should go in any of these businesses.
Raw Milk Quality
Firstly Engro used to depend on suppliers who used to collect raw milk form the small dairy
farmers. That raw milk did not meet the quality standards of company.
Unbranded Products
There are many companies in market who are selling unhygienic milk (khula dodh) and ice
cream (kulfi waley). They wanted to capture those customers consuming unbranded milk
related products.
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• Engro have now planned to start rice plant in Pakistan. In industrial area outside
Lahore near Mureed-kay Engro is also installing a rice plant.
Related Diversification
Engro was playing well in milk industry and they wanted to expand their business. For this
they did related diversification and started an ice cream with a brand name of Omore’.
Quality Improvement
Engro Foods Limited only has the third-generation UHT milk plant in the country. Engro
Foods Limited plant is the only plant in Pakistan that uses Bactofuge technology to virtually
eliminate bacteria and ensure premium quality and hygiene.
Engro Foods are using TETRA PAK for its milk packing. This is best way to deliver quality
milk to the consumers.
Backward Integration
Engro started their own collection centres in different town and villages around the country.
At these collection centres they test raw milk from every small supplier to meet the quality
standards.
Market Penetration
To capture consumers of unbranded product producers Engro Foods are creating awareness
among customers through different marketing campaigns. For this they use print media and
television ads. They promoted their products as a part of our culture.
Penetration Pricing
ENGRO FOODS had to compete with the giant player in UHT milk industry. They had to
provide best quality milk at a competitive price. They use promotions and comparatively
low price to capture high market share.
Forward Integration
In order to build confidence and provide the best quality products to the customer in time
Engro Foods is not relying on third parties for sale and distribution and has its own sale and
distributing network.
Attractive Packing
In order to attract the eyes of its customer, Engro Foods is using very attractive colours. For
example in Olper’s red and white, Olwell white and purple, in Tarang many attractive
colours are being used.
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SWOT ANALYSIS
Strengths
Engro Foods is a well-established brand name, customers automatically have a brand
association
They can easily afford research and development costs in order to introduce new
products
They have strong supply chain (good PR with farmers provides world class supply
chain management)
The increasing sale figures form years to years showing customer satisfaction upon
Engro Foods Limited products
Engro Foods involve in consumer and product research before and after launching a
product
Engro Foods is having strong relationship with global research partners like AC
Nielsen, JWT Asiatic
Company is not relying on third parties for sale and distribution and has its own sale
and distributing network
Engro Foods Limited only has the third-generation UHT milk plant in the country.
Engro Foods Limited plant is the only plant in Pakistan that uses Bactofuge
technology to virtually eliminate bacteria and ensure premium quality and hygiene
Weaknesses
One major weakness of Engro Foods in dairy products, which is that 85% of its milk
collection centres are in Punjab, while processing unit is in Sindh
Higher transportation cost
Dependency on TETRA PAK for the entire packing of its dairy products
Paying higher cost of packing of products results in higher overall products cost
The product range of Engro Foods narrows as compared to its competitors
Opportunities
Pakistan is the fourth largest milk producing country. So, it’s an opportunity for
company to grow in this sector
Engro Foods can increase awareness though different media, by showing ads those
are according to cultural requirements of Pakistan
By increasing the milk related products company can go globally
Engro can launch products like dry milk, cereal and Yogurts etc.
Growing dissatisfaction with milkmen’s milk and increasing awareness about health
and hygiene issues have led to increased processed milk consumption
Threats
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Engro Foods competitors Nestle and Haleeb are biggest threat
There are opportunities and doors for new players are open who can be the future
competitors
Consumer is aware now, there is need to maintain the quality of products. If Engro
Foods will not do so it loses its business in foods. There is threat from the customer
side
Consumers perceptions and price differentials can cause a threat for the company
Consumer’s preferences change with time and prices might create certain barriers in
terms of the profit margins for ENGRO FOODS
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Communicate the Message
In Engro Foods, there is an environment of sharing information among all levels of
hierarchy. When Engro was deciding to diversify to milk business they shared this
information among the employees and aware them about the attractive feasibility of the milk
market. The employees were ready for this change. At first they projected that they will
capture market with 5% share. But the employees were so committed that they attain 7%
market share in 1st year.
Sense of Ownership
It’s not wrong when we say that Engro have leaders. These are the people who had played
there role based on the idea that it’s the time for Engro to diversify and they created a sense
of ownership among employees to make them a part of this process and finally they receive
a 2% higher share form there projected one and they rewarded these people with incentives.
(Attractive salaries, bonus on achieving target)
Engro is one of the highest paying groups in Pakistan whereby salaries/incentives are market
competitive. Further, this is pertinent to highlight that Engro Food’s HR policies are
benchmark for other similar industry players.
RESISTANCE TO CHANGE
Whenever an organization is going towards change it has to face resistance. In some
organization there are huge obstacles where people got fierce form the change, they might
think they lose their jobs or lose their comfort level. This change is not liked by very
employee in the organization. Some employee can resist while the change is implemented.
The organization need to figure out these kinds of resistance. Engro Foods is providing a
friendly environment where every employee is sharing his information or any new idea
which comes to his mind.
There is no resistance at all whereby company’s plan to start food business gave strength to
Engro existing employees. Amazingly when Engro announced that they are diversifying to
food business, their employees instead of resisting, felt encouraged and happy because their
organization was going to be big.
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When ENGRO diverted from chemical business to food, they have taken the initiative and
prepared their employees for this new business line. ENGRO has the strong leadership skills
entrenched in their culture. They offer different incentive plans including increase salary,
bonus, along with that non cash benefits. Their employees were very active and energetic
with an attitude of meeting their challenges. At the same time these people are highly
professional, ethical and results oriented and are always ready for any challenging task.
These are people who want to shine, make a name for themselves and for that they are
willing to achieve the target.
People at Engro Foods are driven to achieve greater success. They look for new and exciting
ways to return value to their customers and shareholders. Engro Foods Limited dreams to be
BIG. They want to be a major player in the food industry which is also evident in their
vision. Engro Foods Limited wants to challenge the industry norms and surprise whoever
has eyes on Engro Foods Limited.
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They future plans of own farms are also on board. It’s a way to improve quality by
removing all doubts in consumer minds about old milk collection ways form govala
Engro Foods is working with different NGOs to meet the Corporate Social
Responsibility in country. They are working with UNDP to initiate women’s
veterinary workers programme
They also signing a micro financing model for dairy farming with Pakistan Poverty
Alleviation Fund (PPAF)
RECOMMENDATIONS
Engro Foods is targeting just Punjab with Omore’.There is need to expand it to other
provinces as soon as possible. Because its advertisement is on all media across
country
Engro Foods can be into Co-branding with other brands like Olper’s with Liption tea
bags, Olper’s with different biscuits etc. to increase their sales
They can enter the business of juices
They can also move towards flavoured milk.
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REFERENCES
• www.engro.com
• www.engrofoods.com.pk
• www.dawoodgroup.com
• www.microsoft.com/CaseStudies
• Engro Project Of Previous Session
• Engro Sales & Distribution Manual
• Questionnaire
• E-mails
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