Chairman's Message

I am pleased to present to you the review for the year 2019. This has been a very challenging year for the Country as well as the Company. Sharp economic headwinds, particularly steep increases in commodity costs due to devaluation of rupee and rising interest rates, have put pressure on the overall Company profitability. Despite these economic headwinds, the Company has delivered a topline growth of 20􀀀 backed by a robust volume growth of 17􀀀. This has materialized in an environment where most FMCG companies have struggled to increase volumes.

FrieslandCampina Engro Pakistan will play an extremely important role in the development of dairy sector in Pakistan. Our journey of nourishment helps communities reach their potential. We are committed to providing better nutrition to our consumers. As the population of Pakistan crosses 300 million by 2050, we will be there to serve the nation with affordable, safe and constantly improving dairy products. We have a unique opportunity to create a positive impact on the entire dairy value chain, by working directly with the farmers. This will help to improve their livelihood, maximize their incomes and increase their contribution towards the Country’s GDP.

Our Dairy Development Programs are designed to ensure inclusive growth and increased prosperity for Farmers. Since inception we have empowered 25,000+ women farmers by making them a part of our ecosystem, training them to enhance their yield and promoting socio-economic inclusion. In 2019 alone, we helped train 53000+ farmers on best dairy farming practices. We are proud that our efforts have been recognised nationally and internationally for the impact created through our programs. Our passion is to drive growth and progress through milk to create a positive change in the everyday lives of Pakistanis.

At present more than 90􀀀 of our population consumes milk that is neither processed nor tested for quality. This leads to a high probability of consuming hazardous concentration of bacteria and aflatoxins that may be present in the milk. The focus of the Company is to drive conversion from unsafe loose milk to safe and hygienic products. This is an uphill task especially when one considers that loose milk industry is unregulated. However, the Company believes this to be the right approach for creating a nourishing Pakistan. We are motivated to build awareness and communicate the benefits of safe packaged milk to the consumers, to ensure that the consumers across Pakistan are aware and have access to safe, high quality and nourishing products.

The company steered through the challenges of 2019 with the invaluable input of the visionary business leaders on its board. The Board of Directors played a pivotal role in setting the strategic direction of the company. The members of the Board bring unique insights, both local and international due to their vast business experience. The Company has a unique opportunity to have positive impact in the entire dairy value chain by working side by side with all relevant stakeholders.

We look forward to working with the various Government bodies, to bring about regulatory changes focused on delivering nutrition to the population, through conversion of loose milk to packaged milk.

Last but not the least, I would like to thank you for your continued support, the Management and the wider team of the Company for their commitment and focus on Nourishing Pakistan, FrieslandCampina’s management for bringing their global dairy expertise, our Board of Directors for their strategic guidance and most importantly, our consumers for their continued trust in what we do.

Abdul Samad Dawood

Chairman