Given TO:

SIR SHEHZAD BUTT

Prepared BY:
Ahmad Raza
Osama Rashid
Muhammad Waqar Ali
Arbab Muhammad Haris
Sharjeel Samad Memon

TABLE OF CONTENTS
COMPANY PROFILE................................................................................................................................3
How we do?.............................................................................................................................................4
Achievement.............................................................................................................................................4
NATURE OF COMPANY...........................................................................................................................4
CORE VALUES..........................................................................................................................................5
Our Mission.............................................................................................................................................5
Our Vision................................................................................................................................................5
PRODUCTS................................................................................................................................................6
MANUFACTURING PROCESS................................................................................................................7
Manufacturing process of Fruit juices.....................................................................................................7
Manufacturing process of Ice cream......................................................................................................12
RELEVANT DATA...................................................................................................................................14
Fruit in juices.........................................................................................................................................14
Nurpur Cheese.......................................................................................................................................14
ANALYSIS................................................................................................................................................15
Manufacturing of Fruit in juice..............................................................................................................15
Manufacturing of Nurpur Cheese..........................................................................................................16

COMPANY PROFILE
Company behind Nurpur
Noon group of companies lies behind the Nurpur brand and along with the dairy products and
juices the noon group is developing in cement and sugar industry.

Who We Are
Noon Pakistan Limited was incorporated in Pakistan on 26 September, 1966 as a Public Limited
Company and its shares are quoted on Karachi Stock Exchange and Lahore Stock Exchange,
In the private sector, Noon Pakistan Limited is the first Company in Pakistan to operate a Spray
Dryer for processing of milk powder.
The Company is a member of Noon Group of Companies and is being overseen and managed by
highly qualified, experienced, technical & business professional Directors and Senior
Executives.

What We Do
We at Noon Pakistan Limited are committed to make sustainable efforts towards optimum
utilisation of its resources for the best possible results for not only to safeguard the interests of all
its stakeholders but also to fulfill our obligation to serve the Community and to become a leading
food company in Pakistan maintaining the highest quality standards.
Building an excellent reputation over the last 45 years, Noon Pakistan Limited continues to be at
the forefront of quality products. By the grace of God, it has achieved market leadership in
several food categories with a very strong portfolio consisting of Butter, Cheese, UHT Milk,
HCLF, Pasteurised Milk, Tea whitener, Flavoured Milk, Cream, Desi Ghee, Fruit Juices, Honey
and Jam.

How We Do
Products are made with great area, and marked with our quality seal of recognition. We
undertake various rigorous quality control tests at all stages of procurement / processing to
ensure quality end products. All processes are undertaken by employing state-of-the-art
technology and equipment. Therefore, we take pride in the fact that Noon Pakistan Limited is
recognized and appreciated by the Customers as one of the leading Companies in Pakistan that
are providing pure and quality products.

Achievement
The Company has achieved a growth of 682.73% in turnover in a span of four years i.e. turnover
of the Company has grown from Rs.311.27 million in 2004 to Rs.2,436.41 million in 2014,
through a dedicated and experienced sales team.
It is a matter of great pleasure that our Organisation has won the most prestigious and acclaimed
brand recognition award Brand of The Year 2006-07 in category Butter & Brands of The
Year 2007-08 in categories Butter, Cheese & Flavoured Milk & Brand of The Year 2008-09
in category Butter & Brand of The Year 2010 in category Butter, Cheese & Falvoured
Milk. This is just a beginning and we are confident that our organization will strive
continuously to improve its brands performance to remain in the forefront of the dairy industry in
Pakistan. It is also a matter of great honour that our Organisation is the first Dairy Company in
Pakistan to be certified under ISO 22000:2005.

Nature of Company
A wholesome life is what Nurpur stands for with Health, Energy and Taste, being the vital
ingredients. Our national team of collectors, packers, processors, shippers and employees is
committed to consistently providing safe, high-quality Hygienic Milk, Pure Juices, Healthy
Nectars, Better Butter and other food products, while protecting the environment in which these
products are manufactured and processed.

CORE VALUES

Ideas are constantly challenged to develop next generation solutions.

Business is conducted openly and fairly but we compete fiercely.

Team-work is encouraged with individual flair for the best results.

Tough goals are set and we enjoy the challenge of beating them.

Environment We value preservation of the environment and sustainable organic

agriculture.

Community We value mutually supportive relationships among members of our local

and global communities.
OUR MISSION

Nurpur is committed to supplying the consumer and our customers with the finest, high-quality
products and to leading the industry in healthy and nutritious products.
Nurpur supports these goals with a corporate philosophy of adhering to the highest ethical
conduct in all its business dealings, treatment of its employees, and social and environmental
policies.
OUR VISION
Our vision at Nurpur is to be a transformative force in our community and world at large and to
serve as a model of a sustainable business alternative that nurtures social and economic
well-being in an environmentally sensitive manner.

PRODUCTS

MANUFACTURING PROCESS
Manufacturing process of Fruit juices
Raw Materials
Fruit
The primary ingredient in orange juice is, of course, oranges. Oranges are members of the rue
family (Rutaceae), and citrus trees belong to the genus Citrus. Oranges, along with all citrus
fruits, are a special type of berry botanists refer to as a hesperidium. Popular types of oranges
include navel, Mandarin, and Valencia. A blend of different types of oranges is generally used to
provide a specific flavor and to ensure freedom from bitterness. Selection of oranges for juice is
made on the basis of a number of factors such as variety and maturity of the fruit. The fruit
contains a number of natural materials that contribute to the overall flavor and consistency of the
juice including water, sugars (primarily sucrose, fructose, and glucose), organic acids (primarily
citric, malic, and tartaric), and flavor compounds (including various esters, alcohols, ketones,
lactones, and hydrocarbons.)
Other additives
Preservatives such as sulfur dioxide or sodium benzoate are allowed by federal regulation in
orange juice although the amounts are strictly controlled. Similarly, ascorbic acid, alpha
tocopherol, EDTA, BHA, or BHT are used as antioxidants. Sweeteners may be added in the form
of corn syrup, dextrose, honey, or even artificial sweeteners. More often, though, citric acid is
added to provide tartness.
Manufacturers may also fortify juices with extra vitamins or supplemental nutrients such as
vitamin C, and less commonly, vitamins A and E, and beta carotene. (Beta carotene is naturally
present in oranges, but only to a small degree.) There is some concern about the stability of these
added vitamins because they do not survive the heating process very well. Calcium in the form
of tricalcium phosphate is also frequently added to orange juice.

The Manufacturing Process

Harvesting/collection
Oranges are harvested from large groves. Some citrus growers are members of
cooperative packing and marketing associations, while others are independent growers.
When the mature fruit is ready to pick, a crew of pickers is sent in to pull the fruit off the
trees. The collected fruit is sent to packing centers where it is boxed for sale as whole
fruit, or sent to plants for juice processing. The oranges are generally shipped via truck to
juice extraction facilities, where they are unloaded by a gravity feed onto a conveyor belt
that transports the fruit to a storage bin.
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Cleaning/Grading
The fruit must be inspected and graded before it can be used. An inspector takes a 39.7 lb
(18 kg) sample to analyze in order to make sure the fruit meets maturity requirements for
processing. The certified fruit is then transported along a conveyor belt where it is
washed with a detergent as it passes over roller brushes. This process removes debris and
dirt and reduces the number of microbes. The fruit is rinsed and dried. Graders remove
bad fruit as it passes over the rollers and the remaining quality pieces are automatically
segregated by size prior to extraction. Proper size is critical for the extraction process.
Extraction
Proper juice extraction is important to optimize the efficiency of the juice production
process as well as the quality of the finished drink. The latter is true because oranges have
thick peels, which contain bitter resins that must be carefully separated to avoid tainting
the sweeter juice. There are two automated extraction methods commonly used by the
industry. The first places the fruit between two metal cups with sharpened metal tubes at
their base. The upper cup descends and the fingers on each cup mesh to express the juice
as the tubes cut holes in the top and bottom of the fruit. The fruit solids are compressed
into the bottom tube between the two plugs of peel while the juice is forced out through
perforations in the tube wall. At the same time, a water spray washes away the oil from
the peel. This oil is reclaimed for later use.
The second type of extraction has the oranges cut in half before the juice is removed. The
fruits are sliced as they pass by a stationary knife and the halves are then picked up by
rubber suction cups and moved against plastic serrated reamers. The rotating reamers
express the juice as the orange halves travel around the conveyor line.

When the mature fruit is ready to pick, a crew of pickers pull the fruit off the trees. Once
collected, the fruit is sent to plants for juice processing. Before extraction, the fruit is
cleaned and graded.

Some of the peel oil may be removed prior to extraction by needles which prick the skin,
thereby releasing the oil which is washed away. Modern extraction equipment of this type
can slice, ream, and eject a peel in about 3 seconds.

The extracted juice is filtered through a stainless steel screen before it is ready for the
next stage. At this point, the juice can be chilled or concentrated if it is intended for a
reconstituted beverage. If a NFC type, it may be pasteurized.

Concentration
Concentrated juice extract is approximately five times more concentrated than squeezed
juice. Diluted with water, it is used to make frozen juice and many RTD beverages.
Concentration is useful because it extends the shelf life of the juice and makes storage
and shipping more economical. Juice is commonly concentrated with a piece of
equipment known as a Thermally Accelerated Short-Time Evaporator, or TASTE for
short. TASTE uses steam to heat the juice under vacuum and force water to be
evaporated. Concentrated juice is discharged to a vacuum flash cooler, which reduces the
product temperature to about 55.4 F (13 C). A newer concentration process requires
minimal heat treatment and is used commercially in Japan. The pulp is separated from the
juice by ultra-filtration and pasteurized. The clarified juice containing the volatile
flavorings is concentrated at 50 F (10 C) by reverse osmosis and the concentrate and
the pulp are recombined to produce the appropriate juice concentration. The flavor of this
concentrate has been judged to be superior to what is commercially available in the
United States and is close to fresh juice. Juice concentrate is then stored in refrigerated
stainless steel bulk tanks until is ready to be packaged or reconstituted.
Reconstitution
When the juice processor is ready to prepare a commercial package for retail sale,
concentrate is pulled from several storage batches and blended with water to achieve the
desired sugar to acid ratio, color, and flavor. This step must be carefully controlled
because during the concentration process much of the juice's flavor may be lost. Proper
blending of juice concentrate and other flavor fractions is necessary to ensure the final
juice product achieves a high quality flavor.
Pasteurization
Thanks to its low pH (about 4), orange juice has some natural protection from

In an automated process, the juice is extracted from the orange while the peel is removed
in one step.
bacteria, yeast, and mold growth. However, pasteurization is still required to further
retard spoilage. Pasteurization also inactivates certain enzymes which cause the pulp to
separate from the juice, resulting in an aesthetically undesirably beverage. This enzyme
related clarification is one of the reasons why fresh squeezed juice has a shelf life of only
a few hours. Flash pasteurization minimizes flavor changes from heat treatment and is
recommended for premium quality products. Several pasteurization methods are
commercially used. One common method passes juice through a tube next to a plate heat
exchanger, so the juice is heated without direct contact with the heating surface. Another
method uses hot, pasteurized juice to preheat incoming unpasteurized juice. The
preheated juice is further heated with steam or hot water to the pasteurization
temperature. Typically, reaching a temperature of 185-201.2 F (85-94 C) for about 30
seconds is adequate to reduce the microbe count and prepare the juice for filling.
Packaging/filling
To ensure sterility, the pasteurized juice should be filled while still hot. Where possible,
metal or glass bottles and cans can be preheated. Packaging which cannot withstand high
temperatures (e.g., aseptic, multilayer plastic juice boxes which don't require
refrigeration) must be filled in a sterile environment. Instead of heat, hydrogen peroxide
or another approved sterilizing agent may be used prior to filling. In any case, the empty
packages are fed down a conveyor belt to liquid filling machinery, which is fed juice
from bulk storage tanks. The filling head meters the precise amount of product into the
container, and depending on the design of the package, it may immediately invert to
sterilize the lid. After filling, the containers are cooled as fast as possible. Orange juice
packaged in this manner has a shelf life of 6-8 months at room temperature.
Byproducts/Waste
10

Byproducts from orange juice production come from the rind and pulp that is created as waste.
Products made with these materials include dehydrated feed for livestock, pectin for use in
making jellies, citric acid, essential oils, molasses, and candied peel. Certain fractions of orange
oil (known as d-limonene), have excellent solvent properties and are sold for use in industrial
cleaners.
Quality Control
Quality is checked throughout the production process. Inspectors grade the fruit before the juice
is extracted. After extraction and concentration, the product is checked to ensure it meets a
number of USDA quality control standards. The most important measurement in orange juice
production is the sugar level, which is measured in degrees Brix (percentages by weight of sugar
in a solution). The types of oranges used and the climate in which they were grown affect the
sugar level. Manufacturers blend juices with different sugar levels together to achieve a desired
sugar balance. The final juice product is evaluated for a number of key parameters include
acidity, citrus oil level, pulp level, pulp cell integrity, color, viscosity, microbiological
contamination, mouth feel, and taste. A sensory panel is used to evaluate subjective qualities like
flavor and texture. Lastly during the filling process, units are inspected to make sure they are
filled and sealed appropriately.

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Manufacturing process of Cheese.

Raw Material:
Cheese is made from milk, and that milk comes from animals as diverse as cows, sheep, goats,
horses, camels, water buffalo, and reindeer. Most cheese makers expedite the curdling process
with rennet, lactic acid, or plant extracts, such as the vegetable rennet produced from wild
artichokes, fig leaves, safflower, or melon.
Cheese Processing Steps:
Preparing the milk
In a typical cheese-making operation, the first step is preparing the milk factories
purchase pasteurized milk and must add bacteria culture to produce the lactic acid. The
cheese makers let the milk sit until enough lactic acid has formed to begin producing the
particular type of cheese they're making. duce lactic acid.
Separating the curds from the whey
the curds must be separated from the whey. Animal or vegetable rennet is added, and then
the curds are agitated and cut using large knives. As the whey separates, it is drained. The
curds are then pressed into molds, if necessary, to facilitate further moisture drainage, and
aged for the proper amount of time. Some cheeses are aged for a month, others for
several years

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Pressing the curds

Moisture must then be removed from the curds, although the amount removed depends
on the type of cheese. For some types with high moisture contents, the whey-draining
process removes sufficient moisture. Other types require the curds to be cut, heated,
and/or filtered to get rid of excess moisture. To make cheddar cheese, for example, cheese
makers cheddar, or finely chop, the curd. To make hard, dry cheeses such as parmesan,
cheese makers first cheddar and then cook the curd. Regardless, if the curds are to be
aged, they are then put into molds. Here, they are pressed to give the proper shape and
size. Soft cheeses such as cottage cheese are not aged.

Ageing the cheese

4 At this stage the cheese may be inoculated with a flavoring mold, bathed in brine, or
wrapped in cloth or hay before being deposited in a place of the proper temperature and
humidity to age. Some cheeses are aged for a month, some for up to several years.
Ageing sharpens the flavor of the cheese; for example, cheddar aged more than two years
is appropriately labeled extra sharp.
Wrapping natural cheese
5 Some cheeses may develop a rind naturally, as their surfaces dry. Other rinds may form
from the growth of bacteria that has been sprayed on the surface of the cheese. Still other
cheeses are washed, and this process encourages bacterial growth. In place of or in
addition to rinds, cheeses can be sealed in cloth or wax. For local eating, this may be all
the packaging that is necessary. However, large quantities of cheese are packaged for sale
in distant countries. Such cheeses may be heavily salted for export (such as Roquefort) or
sealed in impermeable plastic or foil.
Making and wrapping processed
cheese
6 Edible yet inferior cheeses can be saved and made into processed cheese. Cheeses such
as Emmental (commonly called Swiss), Gruyere (similar to Swiss), Colby, or cheddar are
cut up and very finely ground. After this powder has been mixed with water to form a
paste, other ingredients such as salt, fillers, emulsifiers, preservatives, and flavorings are
added. The mixture is then heated under controlled conditions. While still warm and soft,
the cheese paste is extruded into long ribbons that are sliced. The small sheets of cheese
are then put onto a plastic or foil sheet and wrapped by a machine.

13

RELEVANT DATA
Fruit In juices
The data has been collected somewhat from the report and we have taken dummy values as the
companies have their own secrets and cost of sales report is not disclosed by the companies,
whereas, few values have been taken from the Directors report which resides in the annual
report of the company.
We opted for Make or Buy decision for Fruit In juices of NURPUR foods.
Number of units = 2,583,165
Direct material = Rs. 1.83/unit
Direct Labor = Rs. 4.8/unit
Variable overhead involves fuel and power, repair and maintenance, freight inwards, travelling,
advertising and sales promotion, utilities for per unit is Rs. 5.32.
Fixed overhead Cost involves depreciation, insurance, salaries and wages, rent, communication
and other operating expenses are Rs. 22,034,397.45/-

Nurpur Cheese
In case of Nurpur Cheese, the company faced a decrease of 16% in the companys profits
because due to its cheese so we decided to do an analysis of its product of cheese to see whether
Nurpur foods should continue with its ice or should drop it.
The data for this was also collected from the Directors report and for the values we consulted
the annual report of the company for the year 2014 and few of them are having dummy values
due to company secrets.

14

ANALYSIS
Manufacturing of Fruit in juice
Make or Buy:
Fruit in Juice
Title

Rs/Unit

Direct Material
Direct Labor
Variable OH
Fixed OH
Total Cost

1.83
4.8
5.32
8.53
20.48

Per Unit
Cost of Buying:
Cost of Making
Direct Material

4,7
42,525
12,399,192
13,742,437.80
22,034,397.45
52,918,552.25

Total

18

46,496,970
RS./Uni
t
1.83

Direct Labor

4.8

Variable OH

5.32

Fixed OH

4.21

Total Cost

Total

16.16

Total
4,742,
525
12,399,
192
13,742,437.
80
10,875,124.
65
41,759,27
9.45

Decision:
We will make the product as the cost of buying is greater than the cost of making (Diff = Rs.
4,737,690.55).
Relevant and Irrelevant costs:

Variable overhead involves fuel and power, repair and maintenance, freight inwards, travelling,
advertising and sales promotion, utilities expenses. All these costs are included as all these costs
are relevant costs and can be avoided.
Fixed overhead cost involves depreciation, insurance, salaries and wages, rent, communication
and other operating expenses from which depreciation is a sunk cost whereas insurance is a
future cost. Both of them are irrelevant costs and cannot be avoided. They will incur whether the
15

product is made or bought. All the other expenses in fixed overhead cost other than depreciation
and insurance are relevant costs and can be avoided if the product is bought so they are included
in the analysis.
Manufacturing of Nurpur Cheese
For Nurpur Cheese:
Retain or Drop:
Sales

386,905

Variable Expense

200,764

Contribution Margin

186,141

Contribution Margin if Lost

Fixed Expense That are avoidable:
Salaries and wages
Rent
Communication or other operating expense

186,141

Total Fxed Expenses

Decrease in net operating income as a
whole

74543
53795
35746
164,084
-22057

Decision:
As there is a decrease in net operatig income as a whole due to the manufacturing of Nurpur
cheese so Nurpur foods should retain the product line of cheese and should continue with its
manufacturing.
Relevant and Irrelevant Costs:
Here depreciation of the assets involved in the manufacturing of cheese is a sunk cost and has to
occur even if the product is dropped or retained so we will not add it in the expenses.
Insurance is a future cost and has to incur as the machinery is insured and the company has to
pay for the insurance even if the product is dropped or retained.
In this scenario, salaries and wages, rent and communication or other operating expenses are
avoidable costs, thus are relevant with the product of cheese Variable overhead costs are not
included in this analysis.
16