1) Business Idea 1
a. Olive Growing Environment 2
b. Pakistan Government Actions 2
2) Need 3
a. Current market consumption World Wide 3
b. Current market consumption Pakistan 3
3) Features 4
a. Forms 4
b. Usage 4
c. Plant benefits 4
4) Benefits 5
a. Health/ Nutritional Importance of Olive 5
b. Islamic values 6
5) Financial Costing 7
a. Capital cost 7
b. Running cost 8
c. Return 8
6) Product options 9
a. Preparation of Table Olive 9
b. Extraction of Oil 9
7) Current market situation 9
8) Marketing and management Aspects 10
a. Preparation of Table Olive 10
b. Preparation of Oil 11
9) Projected Cash Flow Analysis Table Olives 12
10) Projected Cash Flow Analysis Olive Oil 13
11) SWOT Analysis 14
12) Conclusion 15
13) Interviewed By 16
14) References 16
(1) Business Idea:
Plantation of Olive Trees in Pakistan
880,000 hectare suitable for olive cultivation. We must know that mainly farmer having land with slopes above
10% would be interested in introducing this crop in their farming system. By considering about 30% of the entire
suitable area will reduce the total potential area at around 264,000 hectares. This area would be put under olive
cultivation, and by adopting an average plant density of 250 trees per hectare a production of olive oil in the region
will be of 72,000 ton per year. [1]
Providing consultancies
Providing the consultancy to the entrepreneurs about the business.
Soils that have a depth of cultivation of at least 0.4/0.5 m and pH ranging from 6 to 7.5. Olive trees are adaptable to a
wide range of soil types and can be grown in siliceous and calcareous soil. Medium fertility soils (having 1-2 % of
organic matter) receiving an average rainfall of at least 500- 550 mm per year may guarantee good productions. Olive
tree can withstand as low as temperature of -8 or -9 °C as long as it is not subjected to them for many hour provided
that trees are not at the active growing period.
Pakistan demand of edible oil is increasing at the rate of 6 to 8 % per annum greatly switching over from ghee to edible
oil. Pakistan edible oil imports are likely to go up by five percent in 2011/12 to a record 2.16 million tons it must be
known Pakistan is world's 4th largest importer of edible oil. [3]
50Mn naturally grown wild olive trees in marginal areas through them 7Mn grafted with European olive species with
the support of Pakistan Oilseed Development Board (PODB) and Italian Ministry of Foreign Affair. 900 acre Olive
orchards establish in different region of KPK, Balochistan and Potohar. [4]
(2) Need
a. Current market consumption World Wide:
The International Olive Oil Council (IOC) is an intergovernmental organization based in Madrid, Spain, with 23
member states. It promotes olive oil around the world by tracking production, defining quality standards, and
monitoring authenticity.
In the future, the world olive oil market will probably be more and more segmented on the basis of product quality
differentiation, with price playing a relatively less important role than in the past. This is already obvious in the
relatively richer countries where olive oil is part of the traditional diet and it can be seen as a mature food.
The International Olive Oil Council figures on olive oil consumption show a worldwide increase from 1,666.5 tones in
1990 to 2,839 tons in 2009. Consumption went up in the olive’s traditional base in the Mediterranean and Middle East
from 1,427.5 tons in 1990 to 2,242.5 tons in 2009. [5]
Olive oil consumer in Pakistan is not yet used to this as basic commodity. In the edible oils business agree that a
substantial growth is possible.
According to USDA reports, Pakistan edible oil imports can touch a record 2.16 million tons up by 5% in 2011-12.
Pakistan mainly imports low-priced palm oil that meets 81% of total edible oil imports. [6]
(3) Features
a. Forms:
Generally olives are being use in three forms:
Olive Oil
Table Olive
Olive Cake (waste after olive extraction use for fertilizer)
b. Usage
Olive oil has four grades:
Extra virgin olive oil
Olive Pomace oil
Sulphonated oil
Technical oil
c. Plant benefits
Olives are now being looked at for use as a renewable energy source, using waste produced from the olive plants as an
energy source that produces 2.5 times the energy generated by burning the same amount of wood. The same reference
claims that the smoke released has no negative impact on neighbor or the environment, and the ash left in the stove can
be used for fertilizing gardens and plants. The wood is of high value because it is finally graded and used for making
handicrafts.
(4) Benefits
a. Health
The Olives and its oil, leaves, residue, and wood all have different nutrition, health, herbal and natural values and uses.
Different products can be made like Edible products, cosmetics, health and beauty products, Personal Care, Herbal
Medicine and several other uses. Research on olives & its leaves, olive oil, and prepared different pickles, jams, sauces,
extract vinegar, and breads, confectionary, and traditional Pakistani Sweets.
a. Capital Cost
We have taken the costing of 5 acre area for the plantation of Olive plants.
Fertilization expenses:
Trolley 1500 PKR and 500 PKR rent (1500+500= 2000 PKR.)
c. Return
Estimated Production:
We have estimated the production of olives by 95% of successive trees.
Table 7 – Production of Olives per Tree
Extraction of Oil:
Fruits are harvested during October when these are purplish. Later on these are mechanically crushed to get oil. Olive
contains 15-40% oil.
Year Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Olive kg 0 0 0 0 2,133 3,081 3,792 5,214 5,688 6,162 7,110
Manufacturing Cost 0 0 0 0 184,181 261,594 319,655 435,775 474,482 513,189 590,603
Total Cost 164,930 115,500 115,500 115,500 549,681 377,094 435,155 551,275 589,982 628,689 706,103
Revenue 0 0 0 0 799,875 1,155,375 1,422,000 1,955,250 2,133,000 2,310,750 2,666,250
Net Profit -164,930 -115,500 -115,500 -115,500 250,194 778,281 986,845 1,403,975 1,543,018 1,682,061 1,960,147
Income -164,930 -280,430 -395,930 -511,430 -261,236 517,045 1,503,890 2,907,865 4,450,883 6,132,944 8,093,091
Cumulative Cost 164,930 280,430 395,930 511,430 1,061,111 1,438,205 1,873,360 2,424,635 3,014,617 3,643,306 4,349,409
Cumulative Revenue 0 0 0 0 799,875 1,955,250 3,377,250 5,332,500 7,465,500 9,776,250 12,442,500
Projected Cash Flow Analysis Olive Oil
Year Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Olive ltr 0 0 0 0 444 642 790 1,086 1,185 1,284 1,481
Manufacturing Cost 0 0 0 0 18,579 26,837 33,030 45,416 49,545 53,674 61,931
Total Cost 164,930 115,500 115,500 115,500 134,079 142,337 148,530 160,916 165,045 169,174 177,431
Revenue 0 0 0 0 166,641 240,703 296,250 407,344 444,375 481,406 555,469
Net Profit -164,930 -115,500 -115,500 -115,500 32,561 98,366 147,720 246,428 279,330 312,233 378,038
Income -164,930 -280,430 -395,930 -511,430 -478,869 -380,502 -232,782 13,645 292,976 605,208 983,246
Cumulative Cost 164,930 280,430 395,930 511,430 645,509 787,846 936,376 1,097,292 1,262,337 1,431,511 1,608,942
Cumulative Revenue 0 0 0 0 166,641 407,344 703,594 1,110,938 1,555,313 2,036,719 2,592,188
SWOT Analysis
Strengths: Opportunities:
High profit margin Growing tastes and preferences
Suitable with Pakistani climate Can be exported to neighboring countries
Barren / marginal land can be utilized Huge free barren land
It can be cultivated on the fertile land along with Can develop a strong national and
other crops as well international brand.
Whole plant right from the seed to fruit is
beneficial and useful
Religious importance
Weakness: Threats:
Lack of Awareness (both producers and Big players response
consumers/ customers) Strong brands loyalty
Government level subsidy not availed Government policies
Low entry barriers
(9) Conclusion
Olive Oil Demand Increased:
With growing needs and market potential there is a huge demand for food and other household products. Growing
health consciousness and increased incomes have caused a shift in eating habits of people which are still evolving.
Historically, the demand for edible oils has gone through different stages which are mainly marked by consumer due to
healthy properties of the oils. Pakistani has shifted in their diet habits from animal saturated fats (butter) to healthier
products like vegetable saturated fats (ghee) and finally to even healthier products such as vegetable unsaturated fats
(canola, sunflower oils). Nowadays a further substitution of ghee and vegetable oils with olive oil can be envisaged. In
rural areas and amongst the poorest parts of Pakistan the consumption of ghee is relatively higher than in urban areas,
indicating that the people who are shifting to healthier oils are mainly living in urban areas and have a higher level of
education and income.
(10) Interviewed By
Mr. Hakm Dad, Havelian; Grafting and have sapling
Mr. Iqbal, Khanpur; grafting on wild olive trees
Mr. Mukhtar NARC Islamabad; research centre for olives
Dr. Hafiz Ishfaq, University of Arid Agriculture - Rawalpindi; Researcher
Mr. Azmat Ali Awan, PODB Tarnab; SCIENTIFIC OFFICER
SHAJARPAK PVT LTD, Pakistan; Lahore
(11) References
1). Olive Oil Pakistan (2010), Official website available from http://www.oliveoilpakistan.com/; Accessed on April 02,
2011.
2). gain.fas.usda.gov/.../Oilseeds%20and%20Products%20Annual_Islamabad_Pakistan_4-4-2011.pdf
3). Edible Oil Report (2010), Official website http://www.edibleoilreport.com; Accessed on April 13, 2011.
4). http://www.olives101.com/2007/11/02/pakistani-government-to-develop-olive-oil-production/; Accessed on March
20, 2011.
5). http://www.buzzle.com/articles/increasing-olive-oil-consumption.html; Accessed on April 12, 2011.
6). http://www.commodityonline.com/news/Pakistan-edible-oil-imports-may-touch-216-Mn-tons-USDA-38300-3-
1.html; Accessed on April 19, 2011.
7). http://www.tradingeconomics.com/pakistan/inflation-cpi; Accessed on April 23, 2011.
8). Moon emporium store, local retail store; Visited April 22,2011