Introduction to sugar

The word sugar originates from the Sanskrit word sharkara which means sugar. It may also
be traced through all the Aryan languages, as schaker in Persian, sukkar in Arabic, sincer in
Assyrian, zucchero in Italian, Sucre in French, zucher in German, saccharum in Latin and
ozucarin Spanish etc stand as Testimony for its origin from sharkara.
Sugar is a major form of carbohydrates and is found probably in all green plants. It occurs in
significant amounts in most fruits and vegetables. There are three main simple sugars
Sucrose, Fructose and Glucose. Sucrose is in fact a combination of fructose and glucose
and the body quickly breaks down into these separate substances.
All energy stored in food is derived originally from the sun and it is made by green plant life.
The sun's energy acts upon the green chemical "chlorophyll" in the leaves of plants to
produce sugars and starches from the carbon-dioxide in the atmosphere and the water from
the roots by a process known as Photosynthesis. These carbohydrates (starches and sugar)
acts as a plants food and energy supply. The energy need of human body is largely
dependent on the carbohydrates that are derived from plants.
The sugar is one of the essential commodities of the life which plays very important role in
the dietary of human beings as it quickly raises the level of glucose in the blood.
The sugar can be produced by many of the sources, but two are the main sources for
production of sugar in Pakistan i.e. Sugarcane and Sugar Beet. The other sources are
Maple, Palm, Coconut and Apple, but these sources are costly and their production is in

negligible quantities. But, the main crop which is being used for production of Sugar all over
the world is Sugarcane.
In a nut shell, the process for sugarcane refining is carried out in following steps

Pressing of sugarcane to extract the juice.

Boiling the juice until it begins to thicken and sugar begins to crystallize.

Spinning the crystals in a centrifuge to remove the syrup, producing raw sugar.

Refining the raw sugar by washing and filtering to remove remaining non-sugar
ingredients and color.

Crystallizing, drying and packaging the refined sugar

I. Current Situation
JDW Group is the progressive industrial house of the country. Sugar manufacturing is the
core business of the Group and is also renowned for support of innovative farming techniques
which augment the core business. The Group takes immense pride in social responsibility
activities (social mobilization, women enterprise development, support to technical and
primary education, micro credit for the poor, infrastructure development, livestock
development etc.) all aimed at ameliorating social and economic conditions of the poor
people in rural areas.
The Group comprises of three sugar mills Units, JDW Unit-I (20,500 TCD), JDW Unit-II
(8,500 TCD) and JDW Unit-III (11,000 TCD) in the districts of Rahim Yar Khan, Punjab and
Ghotki, Sindh. With its combined crushing capacity of 40,000 TCD, it is one of the largest
group in the sugar sector and contributes approximately 9-10% of countrys sugar
production.
Operating Result

With average combined crushing of 32,324 tons per day, the Mills on the average were
operated for 125 days during the period under review as against 112 days with average
crushing of 28,649 tons per day last year. Average sucrose recovery achieved this time was
114 bps higher and has increased from 9.47 % to 10.61% as the cane crop this season was
pest free whereas last year there was massive pest (Pyrilla) attack on the crop.
JDWSMLUnit III, located in district Ghotki has achieved sucrose recovery of 10.94% which
was the highest achieved by any sugar mills in Pakistan for the crushing season 2010-11.
Owing to comparatively higher sucrose recovery the molasses recovery this time has
decreased from 4.44% to 4.02%.

Current and Pervious Year Profits

The Company has a profit after tax of 1,343,185,766 in 2011 and has a profit of
1,245,983,556 in 2010 which shows an increase in profit.

The Company has a profit before tax of 2280 million in 2011 and has a profit of 1957
million in 2010 which shows an increase in profit.

Earning Per share

Here we can see in 2006 the EPS is 7.75 Rs. And it has increased to 24.42 which
means there is increase in per share up to 3.5 times.

Market Share

JDW is the largest group in the sugar sector and contributes approximately 9-10% of
countrys sugar production.

Strategic Posture
Mission

To be the market leader and a worldclass organization by meeting and proactively

anticipating customer needs.

To maximize the wealth of stakeholders by optimizing the long term returns and
growth of the business.

To be amongst the most efficient and lowest cost producers in the industry.

To ensure a safe, harmonious and challenging working environment for the

employees.

Strategies and Objectives

To grow our base business in sugar and build those related activities where there is
opportunity to smooth the impact of sugar price cycles.

To produce sugar this is of highest international standards.

To make investment in sugarcane crop to ensure regular supply of cane and

profitability of growers.

To offer equal and fair growth opportunities to all employees.

To undertake and support community development and welfare projects in order

to fulfill social commitments.

Corporate Governance
The Board of Governance is the Shareholder of the internal Employees
Board Of director
The Board of Directors comprised of seven (07) Directors. The Company encourages
representation of independent non-executive Directors on its Board of Directors. At present
the Board includes four independent non executive directors. The Board has formed an audit
committee. It comprises three members and all are non-executive directors.
Amount of shares owned by Board of directors
Directors, CEO and their spouses and minor chidren (name wise):
S. No.
AGE

NAME

HOLDING

MR. JAHANGIR KHAN TAREEN (Director/Chief Executive)

17,788,429

30.0092%

SYED AHMAD MEHMUD (Director)

11,513,932

19.4241%

MRS. SAMEERA MAHMUD (Director)

651,864

1.0997%

MR. IJAZ AHMED PHULPOTO (Director)

366,341

0.6180%

MR. MUHAMMAD ISMAIL (Director)

1,421

0.0024%

MR. ASIM NISAR BAJWA (Director)

1,421

0.0024%

MR. ZAFAR IQBAL (Director)

1,360

0.0023%

The Company has different class for the different Shareholders holding ten
percent or more voting interest in the listed Company (Name Wise):
1 MR. JAHANGIR KHAN TAREEN

17,788,429

30.0092%

2 SYED AHMAD MEHMUD

11,513,932

19.4241%

3 MR. ALI KHAN TAREEN

7,178,648
__________
36,481,009
__________
__________

12.1104%
__________
61.5436%
__________
__________

Top Management
SYED AHMAD MEHMUD is the Chairman of the board. MR. JAHANGIR KHAN
TAREEN is the CEO and Managing director of the company. Both of them are involved in
decision making and running the organization efficiently and effectively.
Level Involvement of Board of director in Company Decision making
The Board has developed a vision/mission statement, overall corporate strategy and
significant policies of the Company. A complete record of particulars of significant policies
along with the dates on which they were approved or amended has been maintained. The
Board has formed an audit committee. It comprises three members and all are non-executive
directors. The Board has set-up an effective internal audit function having suitable qualified
and experienced persons who are conversant with the policies and procedures of the
company. The Board of Directors has overall responsibility for the establishment and
oversight of the Companys risk management framework. The Board is also responsible for
developing and monitoring the Companys risk management policies.
This note presents information about the Companys exposure to each of the above risks, the
Companys objectives, policies and processes for measuring and managing risk, and the
Companys management of capital.

The Companys risk management policies are established to identify and analyse the risks
faced by the Company, to set appropriate risk limits and controls, and to monitor risks and
adherence to limits. Risk management policies and systems are reviewed regularly to react
changes in market conditions and the Companys activities.
Corporate Social Responsibility
The Company is trying to fulfill its Corporate Social Responsibility in following Program to
Society
1.

Sugarcane Productivity Enhancement Project (SPEP)

2.

Livestock Development Program (LDP)

3.

Womens Development Program (WDP)

4.

Support to Vocational Training Institutes

5.

Education

6.

Helping Students for Education Continuity

7.

Lodhran Pilot Project (LPP) for Improved Sanitation

8.

Free Eye Camps

9.

CNIC Preparation & Distribution

Community Dairy Development Project

II. Analysis Of Strategic Factor (SWOT)
10.

Strength and Weaknesses (SWOT)

Strengths:

JDW is a market leader.

Have a wide setup farms and the land of linked areas is fruitful for
cane production.

Is in maturity stage in organization life cycle.

JDW has much experienced, qualified and competent employees in

each department.

Weaknesses:

Lack of departmental coordination

Due to price war in sugar mills, the benefits goes toe the grower and
the sugar mills management had to pay extra money to the grower.

Mills colony yet not been constructed and employees forcefully

residing in city away from mills about 40-50 KM and travel on daily
basis who residing in city area.

Opportunities

They can attract growers from district Ghotiki as well as Rajan pur

The land of the vicinity is very fruitful for the sugar Mills.

The area at J.D.W Sugar Mills Limited is shining area of the Punjab

for production of sugarcane.

Threats

May be competition will increase

Changes in policies suffer the growers as well as employees.

Situational analysis

Weig

Ratin

Weight Comments

ht

ed

1
Strength

Score
4

S1. market leader

.20

4.5

0.9

High Market
share

S3. wide setup farm

.05

3.5

0.175

S4. maturity stage

.05

4.5

0.225

S5. qualified and

.05

0.2

Own raw
material
Efficient and
effectively
perform
Better
performance

.05

2.5

0.125

.10

0.4

competent employees
Weaknesses
W2. Lack of departmental
coordination
W3. price war in sugar
mills

Communication
gap
High
Competetion

W5. Away from main cities

.05

3.5

0.175

High Transport
Expense

O4. Attracting growers

.10

0.3

More production

O5. fruitful Land

.10

0.2

More production

T1. competition

.15

4.5

0.675

Cost and quality

T4. Changes in policies

.10

2.5

0.25

Dissatisfaction

Opportunities

Threads

Total Score

3.625