NESTLE History And Introduction:

Founded in 1866, Nestle is the largest food and beverage company in the world. Initially, the
company sold only infant’s cereal but they quickly diversified to include a variety of products
including chocolate, coffee, soup, yogurt, water and frozen foods in their portfolio.

The organization employs nearly a quarter of a million people from 70 different countries around
the world. Nestlé operates in almost every part of the world. They have reached an impressive
global audience both through their own efforts and through joint ventures with companies like
Coca-Cola. Nestle success has been driven by a combination of product innovation and business
acquisition. Their motivation for growth and diversity has allowed Nestlé to become the key
player in nutrition that it is today.

In 1866, the first condensed milk factory in Europe opened in Cham, Switzerland. The company
was called the Two American men, brothers Charles
and George Page, owned the factory. They had seen the growth of condensed milk in the United
States and wanted to manufacture milk near to a large, quality source. Switzerland produced a
large amount of high-quality fresh milk and had been the center of production for many milk
based products since the early 19th century. The business owners created their milk products in
Switzerland, but it was always intended for the English market. They opened a British factory in
England in 1873.

Henri Nestlé, the company’s founder, worked as an assistant to a local pharmacist early in his
career. He was trained in science and chemistry. Henri was an innovator by nature, and he
experimented with everything from food to cement. In 1867, Henri Nestlé produced a nutritious
combination of milk, wheat, and sugar. This cereal was so nutritious that it saved the life of a
child. He called it Farine lactee. The product took off, and he began producing his baby food on
a large scale. He started out buying the milk he needed to make the Farine lactee fresh each
morning. By 1869, this method was no longer practical, and he began to purchase his milk
supply from a collection center to have it delivered to his factory. Nestles business acumen
combined with his quality products resulted in an impressive growth of his business. By 1875,
only 8 years after his initial launch, Nestlé products could be found across the globe in countries
like Indonesia, Argentina, Egypt and even the United States.

Nestlé’s products include baby food, bottled water, juices and nectars, breakfast cereals, coffee,
confectionery, dairy products, ice cream, pet foods and snacks. 29 of Nestlé’s brands have annual
sales of over 1 billion Swiss francs (about $ 1.1 billion), including
Nespresso, Nescafe, KitKat, Smarties, Nesquik, Stouffer’s, Vittel, and Maggi. Nestle has around
450 factories, operates in 86 countries, and employs around 328,000 people. It is one of the main
shareholders of L’Oréal, the world’s largest cosmetics company.
In 2011, Nestle was listed No. 1 in the Fortune Global 500 as the world’s most gainful business
with a market capitalization of $ 200 billion, Nestle ranked No. 13 in the FT Global 2011.

As nutrition, health and wellness company, Nestle, is committed to the improvement of value of
life by helping community in which it operates to meet basic and necessary human needs. The
competitors are Glaxo smith con, Britannia, rei agro, kwality dairy, Lakshmi energy, heritage
foods etc.

Over the years, Nestle has used its resources, skills and technology to help find solutions to the
many socio-economic challenges facing communities. Many of the communities are confront by
challenges such as poor cleanliness, lack of clean water, poverty, diseases, underfeeding, food
security and many others.

Mission Statement:
“Good food good life”

Build Branded food business to improve quality of life by offering tasty, affordable and highly
nutritional products to our consumers while maximizing stake holders' value”

Vision:
Explore all over the worlds-from baker to babies, parents to pet owners single servings to
catering: providing for all their needs always with the assurance of outstanding quality.

Nestle Milk:
Milk is the most perishable and fast moving customer good. The very first and initial
requirement or feed for any human being is milk. Milk is complete diet as it contains every
nutrient except iron. Fortunately Pakistan is the fourth largest producer of milk in the entire
world and its annual production is surprisingly 45 billion liters which is very high. But
unfortunately only 27 billion liter of milk is available for human consumption. Therefore most of
the milk is lost and Pakistan cannot fulfill its demand. Despites of these facts and figures Diary
Industry is playing a very crucial role in the Pakistan economy and contributing 14% to the
country’s overall GDP. More than 20% of the entire population of Pakistan is involved in this
sector directly or indirectly. If we talk about the Dairy Supply chain management of Pakistan,
we can divide it in to two categories: One is Formal and second is Informal sector. The share of
formal sector is 4% whereas the rest of 96% of share is taken by the informal sector. In the
formal sector Nestle is the market leader in Pakistan and contributing 60% of market share as
per fact and figure of 2008. In formal sector, milk is collected by different milk collection centre.
Then it is taken in to the processing plant where milk is stored in cooling towers. In the
processing plant, milk is processed and packed and then it is distributed to the retailer and
finally milk is reached to the ultimate consumer. In formal sector we can divide it in to two
sectors. In first category farm milk is collected by gawalas (milkmen) who sell the milk directly
to the consumers or the milk collectors. In second case, farm milk is collected by different milk
collectors who sell their milk to the retailers and these retailers provide it to end consumers.
Milk is collected from more than 2000 village milk centers and 500-600 sub centers and then
milk is transported to 25 main centers of milk up to standard. After whole process of milk
collection, it is transported to the Sheikhupura and Kabirwala factories. In the processing stage
milk is passed through different stages i.e standardization, pasteurization UHT treatment and
packaging. After processing, milk is then reached to the factory warehouse which is near the
premises of the factory. Finally milk is transported to the south, north and central regions. Then
finally distributors of MILKPAK carry it and transport it to the super marts and retail shops so
that it’s available to the end consumers. Supply Chain of Nestle MILKPAK guarantees
environmental friendly practices and for this they are continuously making their contributions
in the society for keeping the environment safe and secure. Their ultimate objective is to make
sure that the green supply chain is in practice while keeping their benefits, profits and business
activities intact. Milk pack set up reception centers with cooling facilities where farmers and
dodhies, small-time milk merchants, could bring their wares. It was a simple solution, but
difficult in practice: importing the stainless steel chilled containers required was prohibitively
expensive. By 1988, the company purchased 120 tons of milk a day from 26,000 farmers. After
acquiring a share in Milkpak Ltd in 1988, Nestlé immediately began investing in milk cooling
tanks. Between 1988 and 1992, 100 milk tanks were installed. 1992 onwards, with full support
from the Nestlé headquarters in Switzerland, reorganization of the milk collection operation
and the provision of agricultural technical assistance became top priorities. The investment
paid off. Within a decade, Nestlé's purchase of fresh milk had quadrupled, and the number of
small farmers selling milk to Nestlé tripled. MILK COLLECTION SYSTEM Follow the story of
Nestlé's dairy products, from humble beginnings on tiny farms in Sheikhupura district, all the
way to your table! Step 1 A small farmer in rural Sheikhupura district milks his buffalo twice a
day and takes about 4 liters to one of Nestlé's 500 Village Milk Collection Centers. Step 2 At the
Village Milk Collection Centre the farmer's milk is poured into aluminum churns. The agent
checks the milk's freshness and purity, and enters the quantity into the farmer's logbook. He
takes it to one of Nestlé's 1308 Secondary Reception and Cooling Stations, about 2-4 kilometers
away. Step 3 The Secondary Reception Station has a large electrically powered cooling tank. A
milk inspector measures the fat content, the non-fat solids content, and the milk's acidity. Once
satisfied, he takes the milk to one of 27 Main Reception and Cooling Stations. Step 4 At the
Main Reception and Cooling Stations the milk is poured into huge tanks and is thoroughly
checked for quality. The milk is dispatched to the factories. Step 5 At the Sheikhupura and
Kabirwala factories, the milk is processed and packed into the familiar Nestlé cartons you can
find in your grocery store. It is checked for quality thrice before being released for sale. Some is
processed into yoghurt, powdered milk, or other dairy products. INBOUND LOGISTIC: Inbound
logistics used for milk collection from different milk collection centre is centrally owned by
nestle Pakistan limited. In Pakistan, logistics has always been a problem especially for sensitive
product like milk in the hot weather. Initially the supplier who supplied there milk NESTLE
FACTORIES: Our products are manufactured in five facilities scattered around the country, from
Islamabad in the north, to Karachi in the south. Two state-of-the-art multipurpose factories are
located in the agricultural heartland of the Punjab, and the remaining three are dedicated to
producing our trusted brands of bottled water. As citizens of Pakistan, we consider it our duty
to make sure that our manufacturing processes are clean, hygienic and safe. We are constantly
working to reduce emissions at our factories, reducing and treating wastewater, and making
our packaging environmentally friendly. Regular audits have confirmed that our factories'
environmental management meets the Nestlé international standard.  Sheikhupura Factory
The factory commenced operations as part of Milkpak Ltd in 1981. At the time it produced only
UHT milk, but by 1988 had expanded to produce butter, cream and ghee, as well as fruit drinks.
Milk filling machine TBA-22 (most modern and efficient and high speed equipment available in
dairy industry) National distribution centre was also constructed in 2000 with capacity to store
8300 pallets.  Kabirwala Factory In 1990, Nestlé Milkpak acquired the Kabirwala factory,
located in Khanewal district of the Punjab, as a subsidiary. By 1997 it was a fully owned unit of
Nestlé Pakistan Ltd. 2006 has seen the commencement of Kabirwala Extension Project that
would be completed in April 2007 at a cost of about Rs. 4.0 billion. The project has seen
expansion of milk processing capacity to triple its current size, both for powder and liquid.In
2005 Fresh milk capacity was increased from 676 to 800 tons per day. In 2007 an additional raw
and packing and semi finished product stored and a bigger distribution. Centre, a stick pack
filling machine and 1000 gr. Powder filling machine will be added.  Islamabad factory: AVA
water factory Islamabad was acquired by Nestle Pakistan in 2001 and was subsequently merged
with it. Thereby becoming a fully owned unit of Nestle Pakistan in 2003.The production capacity
of the factory is approximately 8000 bottles per day.