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INDUSTRY BACKGROUND:

Surging demand for fast moving consumer goods (FMCG) in Pakistan is


attracting hundreds of millions of dollars of new investments. Expanding
middle class, particularly millennials with rising disposable incomes, is
demanding branded and packaged consumer goods ranging from personal and
baby care items to food and beverage products. (Rapid growth in sales of
consumer products and services is driving other sectors, including retail, e-
commerce, paper and packaging, advertising, media, sports and
entertainment.) Planet Retail estimates Pakistan's current retail market size at
$152 billion. It is forecast to expand 8.2% a year through 2016-2021 as
average disposable income has doubled since 2010, according to research group
Euromonitor International as reported by Bloomberg News.

New FMCG Investments:

Dutch consumer giant Unilever has announced plans to invest $120 million to
expand its operations in Pakistan. Turkish multinational Hayat Kimya has said it
will invest $150 millionto manufacture consumer products in the country.
Earlier in 2016, Dutch dairy giant FrieslandCampina acquired 51 % of Karachi-
based Engro Foods Limited for $220 million.

Downsides of Consumer Boom:

There are a couple of downsides of the consumer boom. First, a dramatic


increase in solid waste. Second, rising consumption could further depress
Pakistan's already low private savings rate.

FMCG products come with a significant amount of plastic and paper packaging
that contribute to larger volume of trash. This will necessitate a more modern
approach to solid waste disposal and recycling in Pakistani towns and cities. An
absence of these systems will make the garbage situation much worse. It will
pose increased environmental hazards.

Pakistan's savings rate is already in teens, making it among the lowest in the
world. Further decline could hurt investments necessary for faster economic
growth.

Summary:

Pakistan's $152 billion retail market is the fastest growing in the world,
according to Euromonitor. Expanding middle class, particularly millennials
with rising disposable incomes, is demanding branded and packaged consumer
goods ranging from personal and baby care items to food and beverage
products. Strong demand for fast moving consumer goods is drawing large new
investments of hundreds of millions of dollars. Rapid growth in sales of consumer
products and services is driving other sectors, including retail, e-commerce, paper
and packaging, advertising, media, sports and entertainment. Potential
downsides of soaring consumption include increased amount of solid waste and
decline in domestic savings and investment rates.

According to a report by analysts at Pakistan's Topline Securities that examined 25


consumer firms in various sectors, the 2012 sales of the FMCG firms increased by
17% to Rs. 334 billion while profits grew by 40% to Rs. 24 billion. In the five years
between 2008 and 2012, sales of these companies showed a compounded average
growth rate (CAGR) of 18%, while profits grew at a CAGR of 20%.

Company Background
Acquistions:
 RB has acquired Mead Johnson Nutrition Company in Feb 2017 $17.9B
 Reckitt Benckiser Inc……….. Nov 2012……. $1.4B

PESTEL ANALYSIS:

Social/Political:
RB has collaborated with government on a joint venture known as SAAF HOGA
PAKISTAN”

 Reckitt Benckiser, a multinational company known world wide, for its brand,
Dettol, has joined Prime Minister Imran Khan’s campaign of Clean & Green
Pakistan pledging to support it with Rs. one billion to begin with. Amin Aslam,
Minister for Climate Change and Fahad Ashraf, CEO Reckitt Benckiser, joined
prominent TV Anchor, Moeed Pirzada in his program in an interesting discussion,
explaining their goals, on Thursday.

Earlier tthis year, Reckitt Benckiser (RB) had announced its decision to invest Rupees 1
billion to support Prime Minister Imran Khan’s Clean & Green Pakistan Campaign. RB
has been promoting its own cleanliness campaign, “Hoga Saaf Pakistan”, since last
year, and now, it has joined forces with Ministry of Climate Change that is tasked by
Prime Minister to implement the campaign. PM Imran Khan had kick started the
campaign on Oct 13, 2018, by tree planation in a local girl’s college in Islamabad. He
helped with cleaning trash and later washed his hands to emphasize both aspects:
Green & Clean.

On 24th, we will carry out a plantation drive in KPK, followed by AJK and other provinces.” The
other indicators include solid waste management, liquid waste management, sanitation, and clean
drinking water.

 Every year the company usually gets a tender from the government to provide
one of their brand cherry Blossom (Shoe Polish) to Arm forces so this give them
chance to increase the sales of their product but sometime due to change of
government they don’t get this tender.

Economy:
 RB imported its mian product mortien from Malaysia and Indonesia for
which payment is made in dollars so if there is a fluctuation in exchange
rate or the currency gets devalue, company has to pay more for the
imported product
 Another challenge faced by the company is when it has to report their
revenue to head office at year end. Everyone report its revenue in dollars
but RB Pakistan has to report in pounds so at year end if there is any
devaluation of currency then the amount of revenue which needs to e
reported is reduced due to fluctuation in exchange rate

Technology:

SALES & MARKETING OBJECTIVES:

Short term:

RB has specific section who deal with government contract and has 2 CSR
managers…..

RB is came up with an idea to built and maintain toilets at every gas station in
Pakistan in which their product HARPIC and Dettol will be used for cleaning
purposes so as to contribute in increasing sales and is also a great marketing
strategy.