Project Report On Mitchell's Fruit Farm Ltd. 5l4h4d
This document was ed by and they confirmed that they have the permission to share it. If you are author or own the copyright of this book, please report to us by using this report form. Report 3l3c15
Overview 3z723u
& View Project Report On Mitchell's Fruit Farm Ltd. as PDF for free.
More details 2i4a6q
- Words: 12,931
- Pages: 92
Mitchell’s Fruit Farms Ltd
PROJECT REPORT On MITCHELL’S Presented To: SIR RIAZ HUSSAIN ANSARI
Presented By: MUHAMMAD IRFAN MBA 2 ND
DEPARTMENT OF BUSINESS ISTRATION Bahauddin Zakariya University SAHIWAL CAMPUS
1
Mitchell’s Fruit Farms Ltd
HISTORY OF THE COMPANY A BRIEF BACKGROUND Phase I: BEFORE INDEPENDENCE Francis J. Mitchell arrived in Bombay, from Scotland, at the end of World War I. He had been invited by his brother who was already established in Northwestern India as contractor to the government for construction of the railway network in this part of the Subcontinent. At that time, when Francis was already an old man of over sixty years, an opportunity came his way in the form of the emerging irrigation system being laid out in the canal colony districts of West Punjab. He was successful in obtaining the lease of 720 acres of agricultural land in the then Sahiwal district. The area allotted to him extended over nearly seven miles, from Renala Khurd to KISSAN, sandwiched between the arterial Lower Bari Doab Canal and the Lahore- Karachi railway. He initiated the business of growing grapes, for eventual sale as dried raisins, and sent the younger of his two sons, Richard, to Australia for training at Mildura which was wellknown as a center of specialization in the field of horticulture. The company, with Francis Mitchell as its governing Director and his two sons, Leonard and Richard, as Directors, was incorporated in 1933 and given the name Indian Mildura Fruit Farms Ltd. The Northwestern railway had opened to traffic a few years before the acquisition of the land by the Mitchell family. Francis Mitchell was asked by the railway authorities to propose a name for the ading station. Hence, the word “KISSAN”, which subsequently became a familiar brand name.
2
Mitchell’s Fruit Farms Ltd The trial planting of grapes, which began in 1921 and lasted until 1924, unfortunately, did not prove to be a success. The vines suffered serious damage from pests during the rainy season, just when the grapes needed dry weather for ripening. The entire plantation was replaced by citrus, which fortunately, proved to be profitable. The elder son, Leonard, was sent especially to South Africa to look for good Rootstock, which was the foundation of Valencia Orange Trees; these are well established on the farms today. With the outbreak of World War II, demand for canned fruit and vegetables, for the Allied Troops stationed in India, began to grow rapidly. To cater this growing demand costeffectively, a factory was established in Banglore, South India. A new t-stock company, by the name of KISSAN Products Ltd., was ed. PHASE II: AFTER INDEPENDENCE. As a sequel to independence in 1947, India Mildura Fruit Farms Ltd lost nearly 75% of its Indian market. The company’s name was changed to Mitchell's Fruit Farms (Pvt), and the brand name “Mitchell's “ became the exclusive property of the Pakistani company. Likewise, the Indian company acquired exclusive use of the “KISSAN” brand name. Francis Mitchell died in 1933 and his elder son, Leonard, became Chairman. After his brother’s tragic death in an air accident, Richard took over the Chairmanship, in 1949, and continued in this capacity until his own death in 1987. The family sold their shares gradually, having inducted Pakistani shareholders in 1957, and retired to Eastbourne, U.K., in 1959. Richard’s wife, Betty, retained her links with the company in the capacity of Director, until 1991. She died in 1995.
3
Mitchell’s Fruit Farms Ltd
COMPANY INFORMATION BOARD OF DIRECTORS S.M. Mohsin (Chairman & Managing Director) Mehdi Mohsin (Executive Director) Syed Babar Ali Syed Faisal Imam Sitwat Mohsin Umme Kulsum Imam Anis Wahab Zuberi NIT Nominee
COMPANY SECRETARY Amir Sattar
AUDITORS A.F. Ferguson & Company Chartered ants
BANKERS ABN Amro Bank N.V. Citibank N.A. Emirates Bank International PJSC Muslim Commercial Bank Limited
4
Mitchell’s Fruit Farms Ltd
SHARE REGISTRAR Corplink (Private) Limited, Wings Arcade, 1-K (Commercial) Model Town, Lahore.
.
ED OFFICE, FACTORY & FARMS Renala Khurd, District Okara, Pakistan. Phones: (0443) 622907-8 &635416 Fax: (0443) 621416 E-mail: [email protected]
CORPORATE OFFICE 3-B, LDA flats, Mian Muhammad Shafi Road, Lahore. Phones: (042) 6307410-13 Fax: (042) 6307414-15 E-mail: [email protected]
Website: www.mitchells.com.pk
REGIONAL SALES OFFICE, (NORTH) Block No. 1-A, Sector G-7/4, Street No. 40, Islamabad. Phones: (051) 220961-62 & 2872669 E-mail: [email protected]
5
Mitchell’s Fruit Farms Ltd
REGIONAL SALES OFFICE, (CENTRAL) Syed House, Canal Berg, 13 K.M. Multan Road, Lahore Phones: (042) 5419350, 5423732 & 5425478 E-mail: [email protected]
REGINIOL SALES OFFICE, (SOUTH) Mehran VIP II, Ground Floor, Plot 18/3 Dr. Dawood Pota Road, Karachi Phones: (021) 5212112, 5212732, & 5216975 Fax: (021) 5673588 E-mail: [email protected]
6
Mitchell’s Fruit Farms Ltd
Vision Statement To be a Company which optimally combines its people, technology, management systems, and market opportunities to achieve profitable growth while providing fair returns to its investors.
Mission statement To be a Leader in the markets we serve by providing quality products and efficient services to our consumers while learning from their to set even higher standards for our products.
7
Mitchell’s Fruit Farms Ltd
ANALYSIS OF FOOD INDUSTRY In Global World Globally, in the organized agriculture industry, 2,219 million metric tons of “cereal” grains, including wheat and rice, were projected to be produced in the 2009/2010 growing season. This represents a slight decrease from the previous season. This number is from the UN’s Food and Agriculture Organization, publisher of an annual “Food Outlook.” World meat production was projected to climb 1.3% during calendar year 2009, to 285.6 million tons. Dairy production was projected to climb 1.6% in 2009 to 699.0 million tons of milk equivalents. Aquaculture, or the raising of fish on special farms, has become a massive global industry. According to the U.N., aquaculture would provide 36.6% of the world’s fish production during 2009 (142.0 million tons), with traditional commercial fisheries providing the balance. The global processed food and beverages industry is dominated by a handful of multinational corporations. Among the leaders are Unilever, Cadbury Schweppes, H. J. Heinz, Kraft Foods, General Mills and Nestlé. Unilever, for example, estimates that 150 million people per day purchase its products in 150 nations around the globe, ranging from Knorr soups to SlimFast diet meals. The entire food industry, from growing to processing to retailing, is an extremely competitive field where profit margins are typically so low that it is often challenging to maintain profitability. The processed food industry worldwide has been challenged by low growth rates, high-energy costs and changing consumer tastes. High feed costs have been extremely damaging to poultry and livestock firms, and fertilizer, which is typically manufactured from petrochemical sources, has seen very high costs in recent years.
8
Mitchell’s Fruit Farms Ltd While extremely high prices for many commodities, including foods, brought a cash windfall in much of 2006-2008, commodities in general declined dramatically during the global recession, and the agricultural sector has felt the change. Pilgrim’s Pride, a major U.S. poultry processor, took bankruptcy in 2008. Smithfield Foods, the world’s largest pork producer, in February 2009 announced plans to shut six plants and cut production by 10%. Profit margins have been off and exports have been lower at such firms. The global financial crisis has created vast new challenges to all parts of the food industry. Restaurant sales have been dismal in developed countries, as consumers cut back on discretionary purchases and return to simpler, made-at-home meals. Large numbers of U.S. restaurant firms have taken bankruptcy in recent months, including national chains such as Bennigan’s, Steak & Ale and Buffets Holdings, Inc., owner of the Country Buffet and Ryan’s restaurants. Throughout much of the world, technology and globalization have revolutionized the way that we grow food, as well as the way that we transport, process, package, purchase and cook it. Waste and spoilage are reduced (but still a problem) thanks to innovations like flash freezing, interstate highways and refrigerated trucks. Furthermore, it’s an everyday occurrence for consumers in the U.S., Asia or Europe to pick up strawberries from New Zealand or mangos from Mexico in the fresh produce section of the local supermarket. Globalization has led to the rise of massive multinational food processing companies like Nestlé and Kraft, which often sell their foods under local names in local languages, after producing them in regional factories worldwide.
9
Mitchell’s Fruit Farms Ltd In North America, Asia, Europe and elsewhere, producers and retailers of foods (including restaurants) are now faced with the challenge of positioning their brands to represent consistent quality and safety. Companies that rise to this challenge will have significant competitive advantage. This food “safety” positioning will go hand-in-hand with growing demand to satisfy additional consumer concerns about environmentallysound food production methods, fair trade, fair use of labor and humane treatment of agricultural animals. All food processors, grocery distributors and retailers, including supermarkets and restaurants, would do well to study the practices of the handful of companies that have boosted their brands in this regard with superior results, particularly Whole Foods and Starbucks. Health and convenience were the buzzwords driving the global food industry in 2009, according to an article in April 2009’s Food Technology magazine, published by the Institute of Food Technologists, a non-profit group of food scientists. One of the top 10 food trends for the world was “low fat,” which regained its place as the most influential food label claim. 63% of consumers chose products promoted as low fat, while 55% bought foods labeled low in saturated fat. These compared with 40% purchasing items labeled as low carb. The article also pointed out that 71% of consumers most frequently checked food labels for total fat content, compared with 40% checking for total carbs.
Top 10 trends in the World Quick Fix: People want to eat at home: 77% of all dinners in 2004 were eaten there, but people want less hassle in the kitchen. Easy to prepare and ready to eat are key ingredients for most of us. We should expect to see more ultra-quick foods, bagged salads and side dishes. Drive-and Go: More of us are ordering take-out from full-service restaurants like Applebee’s. Take-out sales from these restaurants for almost 10% of sales. More than half of Americans eat this way during the week.
10
Mitchell’s Fruit Farms Ltd Inherently Healthy: Consumers are increasingly choosing naturally healthy foods such as fruit, vegetables, salads, nuts and yogurt. Fruit is now America’s second-favorite snack. Fancy: People are choosing , gourmet foods. Fish, in particular, is undergoing something of a gourmet makeover. Farm-Friendly: Organic and natural are hot, so is fair trade. Expect cocoa to follow on the heels of coffee and tea. Layering of Flavors: Flavored oils and vinegars, pairings of fruity and tangy flavors, Asian, Central American and Latin American flavors are in vogue. Grazing: Healthier snacks in vending machines, single-serving snacks, nutrition bars, diet bars, energy drinks and mineral waters are “in.” Low, No, and Less: Low fat trumps low carb in what people seek in labels. Trans fats are on their way out. Demand for low calorie and light products will continue to grow. Watch for allergen-free claims on food labels. Doctoring Through Diet: Nearly two-thirds of shoppers tried to manage or treat a condition through diet. 72% of this effort addressed heart health. Next to low fat, whole grains were the most influential food label claim, influencing 62% of shoppers. Dairy products with cholesterol-lowering sterols, antioxidant-rich chocolate are making an appearance. Expect more functional foods to appear. Global Gangbusters: Many of the same issues affecting Americans affect overseas, too. Health and convenience loom just as large. These trends are promising, so long as the food industry remains willing to offer convenience without compromising on the demand for healthier food. Fads will come and go, and the government will continue to scrutinize health claims made by food manufacturers. The ageing of baby boomers is driving the food.
11
Mitchell’s Fruit Farms Ltd
In Asia Region Possessing over half the world's population and some very robust economies, the Asia/Pacific region has become a linchpin for many of the world's top food and beverage companies. Top Asia/Pacific food and beverage companies are imbuing a decidedly Western taste, look and feel onto their respective markets. They're doing so with the people that know the West the best - the leading U.S. and European food and beverage processors. Alliances between the leading Asia/Pacific companies and top U.S. and European food and beverage companies - largely through product licensing agreements - continues to help shape the future of this vast region. The result: A consistent shift in consumption and shopping habits for Asia/Pacific consumers. Western-style foods brought about by changing lifestyles are being woven into the culture, underpinned by the impact of developments in retailing, merchandising, packaging and advertising. According to a report by Data-monitor, the London-based independent management consulting firm, cultural changes taking place in eating habits include the steady growth of breakfast cereal consumption and expansion into dairy manufacturing despite lactose intolerance throughout the region. Beer, wine and spirits has been a prevailing market in the region. In scanning the top 10 companies in Prepared Foods Asia/Pacific Leading 50 food and beverage companies, just about all have forged distribution and/or licensing agreements to market and sell such Western stalwarts as Budweiser, Coors, Early Times, Beefeater, Miller Genuine Draft, Nabisco and Kellogg.
12
Mitchell’s Fruit Farms Ltd 1. Kirin Brewery Co. Tokyo, Japan - Wines and liqueurs, brewing, dairy processing KEY BRANDS: Jive, Nippon Blend, Koiwai Kirin is the largest brewer in Japan with a domestic market share of about 50%, and is the third largest brewer in the world. It sells whiskies through a t venture with KirinSeagram Ltd. 2. Asashi Breweries Ltd. Tokyo, Japan - Beer, whisky, breadcrumbs, fruit drinks KEY BRANDS: Bireley's, Horoniga, Asashi Pure Gold The company is pursuing expansion into the food sector more actively than its beer market rivals. Has begun licensed production of Coors beer (USA) and has strengthened its diversification with a recent alliance with Pedigree Petfoods of the UK. 3. Suntory Ltd. Tokyo, Japan - Beer, whiskey, wine, coffee KEY BRANDS: Boss, Akadama, Pekoe, Ginjo Founded in 1899, Suntory launched Japan's wine and whiskey industries and pioneered a new era in the domestic beer industry, establishing itself as a leading beverage maker in Japan and a prominent participant in the world market. 4. Sapporo Breweries Tokyo, Japan - Soft drink, beer, wine, vodka KEY BRANDS: Black Label, Baisen Draft, Sapporo Magnum, Ginjikomi Sapporo was the first Japanese company to market draft beer for home consumption and is leading other beer producers in this field. It is also diversifying into soft drinks, wine, imported liquors. 13
Mitchell’s Fruit Farms Ltd 5. Taiyo Fishery Co. Tokyo, Japan - Fish, sugar, processed foods Taiyo is Japan's second largest fisheries company with diversified interests in feed stuffs, sugar, farm and livestock products. Like other fisheries in Japan, Taiyo is engaged in producing fish pasta through a U.S. subsidiary. 6. Nippon Heat Packers Osaka, Japan - Ham, sausage, dairy Created in 1963 through the merger of Tokushima Ham and Torise Ham, the company specializes in quality ham and sausages. In addition to meat products, Nippon Meat Packers is strong in fresh meat and processed food such as hamburgers. The company has also formed an alliance with U.S. processor Swift. 7. Yamazaki Baking Co. Tokyo, Japan - Cakes, chocolate confectionery, bread, frozen dough KEY BRANDS: Double Soft, Maragoto Banana, Nabisco (licensed) The largest producer of confectionery and bread products in Japan also has interests in convenience stores and cafeterias. Until 1988, the company had an agreement with Nabisco to manufacture confectionery products, but after a reorganization, it's involved only in the distribution of Nabisco products. 8. Ajinomoto Co. Tokyo, Japan - Meat, poultry, fish, biscuits, soup, seasonings KEY BRANDS: Cook Do, Calpis, Chuka-Aji, Knorr, Maromi The company is one of Japan's largest integrated food processing companies. In Asia, the company has t venture distribution and manufacturing businesses with many major companies, most notably C International. 14
Mitchell’s Fruit Farms Ltd 9. Snow Brand Milk Products Tokyo, Japan - Butter, cheese, ice cream, edible oil KEY BRAND: Snow Brand Japan's largest manufacturer of dairy products (butter and cheese), Snow Brand is advancing into frozen foods and expanding its investment in biochemicals. The company has t ventures with Pillsbury (U.S.) and a technological tie-in with Quaker Oats. 10. Itoham Foods Hyogo, Japan - Ham, sausage, general dairy KEY BRAND: Itoham A major player in the sale of processed meat to department stores and meat shops, the company - Japan's largest and oldest producer of processed meats - is planning a diversification into the dairy products and frozen foods sectors and has recently formed a subsidiary with Carnation and Nestle. The company is noted for sound financial decisionmaking and steady growth.
Food Industry in Pakistan According to the Census of Manufacturing Industries there were 822 units engaged in the manufacture of Food and Beverages. According to the UNIDO it is the largest manufacturing industries of the country. Value of production stood at Rs.46.170 billion and manufacturing value added stood at Rs.12.187 billion. Food processing is a relatively capital intensive industry. The share of food in the manufacturing industry of Pakistan is 22.66 percent approximately.
15
Mitchell’s Fruit Farms Ltd The growth rate in the food industry has been estimated at 7.46 per cent per annum. The most rapidly growing items are dairy products fish processed, bakery items, sugar, biscuits and confectioneries, fruit juices and other soft beverages. Rapid export growth has characterized fish preparation, fruit preserves, dry fruits, some beverages and sugar, and honey preparation. Food products (except rice) do not however, make up a significant proportion of Pakistani exports and there is a considerable potential for expanding such exports, especially to Europe and the Gulf region. As many as 79 food manufacturing companies are on the list of Karachi Stock Exchange out of total 707 companies. The paid-up capital of these companies stood at Rs.6.054 billion. They include, some of the biggest groups in the market such as Bawany, Crescent, Habib, Fecto, Premier, Lakson, Burma Oil (producing vegetable oils), Brooke Bond, Clover Foods, Uniliver, National Foods, Mitchells fruit farms and Shezan. The food manufacturing firms have generally performed well on the stock exchange in with capitalization ing an above average increase. Net profit as percentage of share holder's equity has averaged at about 22 percent during for the sugar and allied group, and about 25 per cent for the vegetable oil groups. The net profit ratio for the tobacco sub-sector has been 30 per cent. This compares well with the overall net profit ratio for KSE companies during this period, and averages to about 19 per cent. Thus, there is a significant scope for investment expansion in the food manufacturing sectors. Domestic demand is buoyant and export prospects are bright - although they are yet to be adequately explored. Several major companies including well known multinationals have substantial investment commitments and there are also a large number of middle sized upward mobile domestic firms. Scope, thus exists both for the establishment of wholly owned subsidiaries. There is also a need for technology transfer agreements which can facilitate the access of Pakistani companies, to modern technology and know-how in the areas of processing, preservation and packaging of food manufactures. Several Pakistani firms have developed ambitious modernization programmes.
16
Mitchell’s Fruit Farms Ltd
MITCHELL’S CORPORATE VISION An Insight Mitchell’s corporate vision, a very vast and strategic topic and all concerned shall have their own viewpoint. My viewpoint on this is as under. Mitchell’s is playing a vital role in the Pakistan’s economy. For the last two years, the company is receiving The Top 25 Companies Award. Mitchell’s has been in the market long before independence and still enjoys a good repute. This is the evidence of the company’s dedication, trust and commitment to provide the best quality products in the market. Despite all the odds, Mitchell’s is still the Market Leader in Squashes, Preserves, Sauces and Countlines.
Current Market Position Mitchell’s products are highly appreciated by the trade and the relevant consumers because of its high quality standards. Mitchell’s is the Market Leader in the abovementioned segments for the last many years. Many Multi-National and National Companies have entered the competition. Therefore, the quantity-wise difference between the Mitchell’s and its close competitor has squeezed. Although, the annual growth rate of grocery product is 9% (approx.), but the quantity wise share of Mitchell’s products has not appreciated much in the last five years.
The Company’s Philosophy The management of the company is highly motivated, dedicated and is investing aggressively to achieve the desired results. The company is keen to invest in the manufacturing of quality products to achieve the desired results. Looking at the local market
conditions,
the
company
keeps
on
adding
new
products
for
the
customers. Addition of different flavors of Preserves, Diet Preserves, Cooking Paste, Kasaundi, Countlines and Molded Chocolate is an evidence of this. In addition to this the company is also eager to upgrade its equipments and the human resources.
17
Mitchell’s Fruit Farms Ltd
The Trends In today’s dynamic and rapidly changing world, the trends and the norms of the business have changed. Local companies are ing hands with the Multi-Nationals for additional , long-term business development, sharing of market benefits, technical assistance, up-gradation of the equipments and the human resources, acquiring the potential foreign markets. In addition to this, the customers have developed more trust in the Multi-Nationals.
An Analysis with the Other Companies Multi-National Companies like P&G, Reckitt Benckizer, Shell, Pepsi, Coke, McDonalds, Nestle, Lever, Sony and several others have developed a strong footing in Pakistan. Apart from their good network, their aggressive marketing is the driving force behind their success.
Success Story Marketing team of any company is its driving force. This team should be dynamic enough to lead the company to achieve its objectives. Most marketing professionals mistakenly think of marketing only as selling and promotion. That is why, when they are asked to undertake a marketing activity they present an advertising expense or talk about advertising as the only marketing tool. Marketing is much more than the advertising. These companies do not just sell the products; they identify the consumer needs and satisfy them better than the competitors. I believe that companies like Coca Cola, Microsoft, Lever and many others have attained this position due to the strong marketing and not sales. Selling is one of the several marketing functions and often not the most important one.
18
Mitchell’s Fruit Farms Ltd If the marketer does a good job of identifying consumer needs, developing good products; and pricing, distributing and promoting them effectively, the products will sell very easily. Thus, marketing is a key factor in the business success. The term marketing mean “satisfying customer needs”. There is a stiff competition in the market and only those companies shall succeed who can best read customer wants and deliver the greatest value to their target consumers.
Quality Policy “We, at MITCHELL’S Fruit Farms Limited, are committed to produce best quality products meeting our customers’ requirements at competitive prices, strengthening our position as a Quality Managed Company. To meet this obligation, the company will continue: • Updating of employee skills by training. • Acquisition of new technology. • Re-evaluation of its quality control and quality assurance systems.”
Social Responsibility Community Service Mitchell's has ed hands with the village communities as well as the British Council, the Department for International Development (UK) and Voluntary Service Overseas (UK) in an effort to promote education in rural areas. Twenty-five girls' schools have been set up in the Okara district in an endeavour to boost the levels of female literacy. Also a Teachers Training Institute has been set up to provide quality teaching staff to the local schools. Mitchell's assures that it will continue to work towards its aim - promoting education amongst future generations.
19
Mitchell’s Fruit Farms Ltd Anjuman Khuddam-e-RASOOL ALLAH (AKRA) Anjuman Khuddam-e-Rasool Allah is a community based Non Governmental Organisation (NGO), established in 1976 in Shergarh, at the heart of District Okara. AKRA has a reputation in the surrounding area for providing high quality education to boys and girls from Nursery to Matric. The Anjuman is also well known for its free dispensary, and its role as a social welfare organization in and around Shergarh. AKRA aims to improve life for the rural community, and to this end it has founded a free dispensary, a coeducational primary school, with class 6 to 10 for girls, a boys secondary school and now 18 village primary schools with adult literacy centres in the surrounding district. Work is continuing to open further village schools and to expand those already running. Aims of AKRA Children in rural areas have little access to schools and girls have less than boys. Women involved in agriculture and family work have often had no chance to learn to read and write. The project aims to help a particularly disadvantaged section of the community rural girls and women - by provinding access to basic literacy, numeracy and health education. We aim to train groups of young women throughout Okara District, so that they can develop teaching skills and set up schools in their own villages to provide this basic primary education for boys and girls as well as adult literacy classes.
ISO Award Mitchell’s is the only major food company in Pakistan today with fully integrated operations having its own growing and processing facilities at one location. Modern highvolume industrial equipment, professional management and a trained workforce all combine to ensure that Mitchell’s continues its dominance as the innovator, market leader and trend setter. In this regard a major step was taken in 1998, when Mitchell’s became the first food company in Pakistan to achieve ISO 9001 accreditation, thus becoming more
competitive
on
the
international
stage
also.
20
Mitchell’s Fruit Farms Ltd
DEPARTMENTS OF MITCHELL’S FRUIT FARMS LIMITED
HUMAN RESOURCE DEPARTMENT
COMMERCIAL DEPARTMENT
SYSTEM DEPARTMENT
FINANCE DEPARTMENT
PRODUCTION DEPARTMENT
PLANNING AND STORES DEPARTMENT
TECHNICAL SERVICES DEPARTMENT
QUALITY CONTROL DEPARTMENT
MARKETING DEPARTMENT
21
Mitchell’s Fruit Farms Ltd
HUMAN RESOURCE DEPARTMENT Objective To provide such human resources that will helpful for run the operations of the company in effective and efficient manner, and look after the benefits and interests of personnel of the company so that they can become more productive for the company.
Scope The whole Factory, Head Office and Regional Sales Offices of the company are included in the scope of human resource department.
Duties and Responsibilities 1. Approve training agencies, which give the training to the personnel of MITCHELL’S Fruit Farms Limited. 2. Ensure hygiene conditions and housekeeping of the factory. 3. Approve job contract contractors. 4. Conducts and arranges training programs. 5. Implement measures that are helpful to motivate the personnel of the company. 6. Operational incharge of the factory. 7. Select candidates for internship in different departments for the period of maximum three month.
22
Mitchell’s Fruit Farms Ltd
COMMERCIAL DEPARTMENT Importance in Mitchell’s Fruit Farms Commercial Department in every organization is very important. The importance of commercial department is increased in the case of manufacturing organization. As we know that MITCHELL’S Fruit Farms Limited is a manufacturing company, so there is much importance of commercial department in the company. Without proper functioning of commercial department, company has to bear huge losses, backlogs, stock out and various unnecessary costs. When company faces many brakes in his production process, this leads company to shortage of supply as well as severe losses in shape of idle time of labor and delay in the production. When the company faces such circumstances, it will be unable to fulfill the demand of the market. The customers of the company will also dissatisfy from the company and may switch to the brands of the competitors. The company has to face not only the shortage of inputs items that are used in the production but also shortage of inventories of finish goods. To avoid such problems and costs, the commercial department has to play vital role in the organization for ensuring the continuous production process in the factory.
Objective As we all know the importance of the commercial department in any organization. The functions of the commercial department are related to the Supply Chain Management.
Scope Whole factory, offices particularly all stores.
23
Mitchell’s Fruit Farms Ltd The commercial department in the company sells out scrap material and any wastage’s. Any contract regarding installation, the commercial department signs construction, repair, maintenance and other services requirements.
Functions of Commercial Department The commercial department in the Mitchell’s is performing the following functions. 1.
Procurement of all raw and packing material of prime quality at competitive prices.
2.
Find out new suppliers having good market repute.
3.
Procurement of all components parts for engineering stores.
4.
Procurement of general items for general.
Duties and Responsibilities Commercial Manager 1.
Selection and continuous assessment of suppliers.
2.
Preparation and approval of purchasing documents.
3.
Maintenance of an approved suppliers listing.
Assistant Manager (Commercial & Farming) 1. Procure services, raw and packing materials, plant, and equipments/spares of high quality, with advice of commercial manager and relevant executives at competitive costs and quality as per the company’s requirements and to ensure that no shortage occurs at any time. 2. Forecast and plan purchases of material with minimum blockage of the company’s funds, in stock, while ensuring uninterrupted supply to the works. 3. To explore and develop new sources of supply for economy. 4. Verification of materials and of clearing bills. 5. Negotiate prices, and conditions with suppliers in consultation with Executive Director, Commercial Manager And Incharge Operations Division. 6. Issuance of purchase orders. 7. Approval of purchase requisitions.
24
Mitchell’s Fruit Farms Ltd
SYSTEM DEPARTMENT Objective Objective of the System Department of the company is to computerize the business operations of the MITCHELL’S Fruit Farms Limited.
Scope of System Department In the scope of system department, all Regional Sales Offices, the Head Office, Factory and Farms of the company are included.
Functions of System Department 1. Following are the major functions of the system department. 2. The control on inventory through computerized system 3. Provision of new computers and other accessories for the company 4. It keeps link between the Regional Sales Offices with Marketing Department of the company. 5. Maintenance of computer networking at MITCHELL’S Fruit Farms Limited 6. 5.
Keep the back up of all confidential and necessary data for future
needs.
Recent Achievement of System Department Following are the recent achievements of system department: Computerized ing System MITCHELL’S Fruit Farms Limited has its own computerized ing system that facilitates the finance department make the company’s procedures more efficient.
25
Mitchell’s Fruit Farms Ltd This ing system is according to the requirement of finance department and is facilitating finance people in a marvelous way. It cause reduction in corruption, delays in payments and make easy the documentation of the ing transactions.
Inventory System The system department of the company recently introduced the inventory system of the company. This system again increases the efficiency of Planning And Stores Department. Sales System To facilitate the Marketing Department and all Regional Sales Offices, the system department introduces a sales system. This system is working very well within the company. Human Resource System Now the system department of the company is working on the preparation of human resource system. It will be a computerized system. It will include the records of attendance, salaries, the retirements, promotions and all other information about personnel matters. All these systems are Oracle based and prepared by the system department of MITCHELL’S Fruit Farms Limited.
26
Mitchell’s Fruit Farms Ltd
FINANCE DEPARTMENT Objective The main objective of the Finance Department in the company is to arrange the finance for the business operations from various sources, control the activities that are related with the finance, maintain and update the company’s s.
Scope In the scope of finance department, all the Regional Sales Offices, the Head Office of the company, factory and farms are included. All firms raise money and control the financial aspects of their business. The assistants deal with the following sections 1.
Wages and payroll system
2.
Production expense system
3.
Ledger section
4.
Variable cost section
5.
Cash and excise section
Functions of Finance Department The following are the main functions of the finance department 1.
To link all departments with each other financially
2.
Arrange monetary resources at proper time
3.
Allocate resources throughout the organization
4.
Deals with banks investment firms, Govt. agencies and tax department.
5.
Carry out final auditing and financial records prepared
27
Mitchell’s Fruit Farms Ltd 6.
Details of calculations of salaries, income tax and funds for loans
7.
Calculate different expenses of the company
PRODUCTION DEPARTMENT Objective The major objective of the Production Department is to produce quality goods at minimum cost by utilizing the company’s resources in an efficient manner.
Labor Force In the production department, there are round about 350 workers are working including females laborers. In the department, there are two types of labor force is working for producing the high quality products. 1.
Permanent work force
2.
Contract work force
1. PERMANENT WORK FORCE This kind of work force is working in the factory on the permanent bases and has pension and other fringe benefits during service and after their service. 2. CONTRACT WORK FORCE This kind of work force is working in the factory on the contract bases. They have less facilities and incentives than the permanent work force. The have not right of any kink of benefits after their retirements. Their pay is also less than that of permanent workers of the factory.
Sections of Production Department
28
Mitchell’s Fruit Farms Ltd The production department of MITCHELL’S Fruit Farms Limited is divided into two sub sections. These sections are 1.
Groceries
2.
Confectionery
1. Groceries In this section of production department, different groceries products are produced. Preserves, Ketchup, Sauces, Squashes, Pickles, Apple Processing, Tomato Processing Juice, Tomato Puree, Kimb Oil Extraction, Strawberry Fruit Processing, Sweet Corn Processing, Garden Peas Processing, Syrups, Fruit Cocktail, Vinegar, Salsa, Lemon Juice bottled, Apricot processing is done in the groceries section of production department. Shifts of Groceries Section Generally, there are two shifts working in the groceries section. But it can be increased or decreased according to the order of the planning and stores department.
2. Confectionary This section of production department is sub divided into further three sections. 1.
Countline Section
2.
Sugar Confectionery Section
3.
Molded Section
A. Countline Section In the Countline section of confectionery, six products is produced that are Jubilee Maxi, Jubilee Mini, Jubilee Junior, Discoveree, Unitee and Twentee-1. B. Sugar Confectionary Section In this section, there are two types of candies are produced. High boiled candy Low boiled candy 29
Mitchell’s Fruit Farms Ltd
1. High Boiled Candy In this type of candy, there are hard candies cookers are used for the production of these candies. The main ingredients of high boiled candy are sugar and glucose. During the processing of high boiled candy, the high temperature is used for cooking. 2. Low Boiled Candy The production of such type of candy is exercise under the much lower temperature as compare to high boiled candies. The major ingredients of low boiled candies are sugar, glucose, and milk. In Sugar Confectionery Section, Milk Toffee, Butterscotch, Éclairs, Mangoman and Fruit Bon Bons are made. C. Molded Section In this section, the products are produced that are based on purely milk chocolate. This milk chocolate is made of sugar, Cocoa Powder, Cocoa Butter, FCMP, SMP, Lecithin and Flavors.
Duties and Responsibilities Management Executives 1.
To plan production for both grocery and confectionery sections.
2.
To keep all the machinery in running order.
3.
To proper material handling.
4.
To formulate requirement of new material
5.
To control all factory overhead costs in the sections.
6.
To plan for maximum efficiency of quality products.
30
Mitchell’s Fruit Farms Ltd 7.
To control labor.
8.
To identify and addressing the training needs of all the personnel.
Production Supervisors 1.
To train the workers.
2.
To ensure machines that they are in working orders.
3.
To execute the daily production as per program.
4.
To control and allocate the responsibilities to workers in their respective sections.
31
Mitchell’s Fruit Farms Ltd
PLANNING AND STORES DEPARTMENT Objective To ensure hygience, and arrangements of all materials in stores and successful execution of orders.
Scope In the scope of planning and stores department, following stores are included. 1.
Juice/peel store
2.
Raw and packing material store (grocery)
3.
Raw and packing material store (confectionery)
4.
Finished goods store
5.
Engineering store
6.
Returns store
Production Planning Production planning is the very major duty and responsibility of the planning and stores department. This department advises to production department about the production planning on the regular bases. Planning and stores department receive monthly indents from the marketing department, head office and in the light of these above mentioned indents and current situation of inventories in the stores, make production plans for the next month. These plans are on monthly as well as daily bases.
32
Mitchell’s Fruit Farms Ltd
Dispatches Other main function of this department is the dispatches of stocks to all regional sales offices. All the RSO’s are communicate their requirements by “order for supplies of stocks”.
Duties and Responsibilities Management 1. Prompt settlement of claims from carriers for any damage. 2. Proper maintenance and care of vehicles. 3. See trade returns at workshop and sorted in time to decrease wastage of raw and packaging materials. 4. Dispatching goods, According to orders of RSO’s and customers promptly and company goods. 5. Ensuring proper receipt, storage and recording of all raw and packing materials, machinery, spares and all other stocks bought by the company. 6. Drawing plans for daily and monthly bases according to indents received from the RSO’s. Dispatch Superintendent Provide assistance to Assistant Manager (planning and stores.)
33
Mitchell’s Fruit Farms Ltd
TECHNICAL SERVICES DEPARTMENT Objective To facilitate the production department and ensure the continuity of production process on regular basis.
Scope All production plants of MITCHELL’S Fruit Farms Limited are included in the scope of technical services department.
Functions of Technical Service Department 1. To keep the plant in running condition by providing efficient and timely maintenance and repair. 2. Do the preventive maintenance for avoiding any damage. 3. To repair the faults if is occurred. 4. To assess and arrange the requirements of materials, equipment, resources and manpower for executing its maintenance activities. 5. To have close liaison with inventory management and commercial department to maintain the necessary level of spares required.
34
Mitchell’s Fruit Farms Ltd
QUALITY CONTROL DEPARTMENT Objective To ensure that all the products, make by MITCHELL’S Fruit Farms Limited are of standard quality by inspection and testing of incoming material, in-process and outgoing products.
Scope Grocery, confectionery, Countline, praline, raw material and packaging material. Samples for supplier evaluation, raw material, and packing material, juice, peel and finish goods stores.
Sub Sections The quality control department in MITCHELL’S Fruit Farms Limited is divided into five sub sections. These are the following. 1.
Main lab.
2.
Line control lab of grocery section
3.
Line control lab of confectionery section
4.
Incubation lab.
5.
Microbiological lab.
1. Main Lab This section of quality control department is used for the lab-scale product development and the testing of incoming raw material; packaging material is done in this section of the department.
35
Mitchell’s Fruit Farms Ltd 2. Line Control Lab. For Grocery This section is used to do in-process inspection and testing of grocery as per quality plans and documented procedures. 3. Line Control Lab. For Confectionery This section is used to do in-process inspection and testing of confectionery as per quality plans and documented procedures. 4. Incubation Lab This lab is very important section of the quality control department. This section keep representative samples as per documented procedures from production for monitoring of shelf life of the products. This section is also responsible for keeping reference samples of products for comparison of colors, flavor, set for comparison as per documented procedures. 5. Microbiological Lab. This section of the department is used for the testing purposes of canned juices, tomato puree, ketchup, and Chilli garlic sauce and for hygiene purpose.
Criteria for Approving the Input Material As MITCHELL’S Fruit Farms Limited deals with the food products and the major input items are several fruits. Although the company uses the farms fresh fruit that are cultivated in the Mitchell’s own farms. But these fruit are not enough for fulfilling the demand of the market. So the commercial department purchases the fruits from the farmers. First of all, the quality control department inspects these fruit. The vegetables and fruit are test by the random sampling methods. In more than 30% defective items, the quality control department rejects the whole supply.
36
Mitchell’s Fruit Farms Ltd
Duties and Responsibilities Quality Control Manager 1. Preparation of quality and design plan. 2. Managing testing in, out and before the manufacturing of the products. 3. Manage segregation, identification and handling of non-conformities as per documented procedures. 4. Identify training needs of the entire Lab. Assistant. 5. Approval of inspection reports and records. 6. Approval of recipes. 7. Implements the statistical techniques to control defects. 8. Evaluate supplier by their products and by the visits of their production facilities. Assistant Manager (QC) 1. Study and understand quality plans, work instructions and maintenance of quality records. Assistant Manager also suggests the recommendations and modifications in quality plans and formats of ISO forms. 2. He is also responsible of doing microbiological testing of various types of materials. 3. Identify all critical control points in the processes and establish hazard analyses of critical points. Lab Assistant 1. Performing tests an inspection of incoming raw and packaging materials as per documented procedures. 2. Filling, maintenance of tests and inspection records. 3. Reporting to quality control manager or Assitt. Manager (QC) in case of nonconformities. 4. Keep maintenance of representative and reference samples as per documented procedures. 5. In the absence of executives, they can approve all tests and inspection reports.
37
Mitchell’s Fruit Farms Ltd
MARKETING DEPARTMENT Objective The Marketing Department is responsible for planning and developing products and executing their sales at an affordable price through promotional activities.
SCOPE The office of marketing department, all the regional sales offices of MITCHELL’S Fruit Farms Limited.
Role of Marketing Department All functions of marketing department are very much important to the MITCHELL’S Fruit Farms Limited. “To create the favorable image of the brands and company in the minds of the customers which results in sales on which company exists”.
Introduction The Marketing Department comprises of the Marketing Office (situated at Head Office) and three regional Sales Offices termed as RSOs. The Marketing Department is responsible for planning and developing products and executing their sales at an affordable price through promotional activities. The Marketing Department is headed by Marketing Manager – MM, who is further assisted by Assistant Brand Managers and Assistant Manager Channel Development- AM (CD).
38
Mitchell’s Fruit Farms Ltd The three Regional Sales Offices situated in Islamabad, Lahore and Karachi - known as RSO (N), RSO(C) and RSO (S), respectively. A Regional Sales Manager termed as RSM supervises each RSO. In RSO (S) and RSO(C), an Assistant Sales Manager termed as ASM assists each RSM. The goods are sold to the consumer in the local market by the RSMs through the following intermediary bodies: •
Distributors
•
Institutional Customers
The
Marketing
Office
and RSOs function
for
procurement
of
orders
and
execution of these within stipulated time. The RSOs directly procure and execute local orders (only from Pakistan). The Marketing office procures and executes export orders besides supervising the RSOs. The Marketing office is responsible for the preparation of annual sales forecasts. The Marketing office to Management Representative for preventive and corrective actions also communicates the quality complaints and observations of the customers. RSMs are responsible for the maintenance of stocks & stores. RSMs check returns of the products from the local market in order to keep these at a lower level.
Duties & Responsibilities Marketing Manager 1. Planning new products and their marketing. 2. Formulating and implementing the marketing plan. 3. Determine suitable prices for the products, which should meet company’s objectives and should be affordable for the consumers. 4. Develop campaigns for promoting sales of the company’s products. 5. Make the products available to the place of consumer’s convenience and preference. 6. Dealing with Export customers determining prices and systems for export. 7. Preparing capital expenditure requirements of the marketing department. 39
Mitchell’s Fruit Farms Ltd Assistant Manager Assist the MM in the following activities: 1. Preparing agenda of Annual sales Conference or other conferences and meetings. 2. Monitoring Sales and taking measures for increase in sales. 3. Forecast sales of the national market. 4. Monitor competitors’ promotional activities in the market. 5. Suggesting new markets and products. 6. Other jobs related to Marketing and Sales Regional Sales Managers 1. Preparation of Annual Sales Forecasts – product-wise and region-wise, of their respective regions. 2. To obtain and execute orders from the local market. 3. To report local quality complaints to AM (M). 4. To maintain stocks and stores within their respective offices. 5. To take care of product returns from the market. Assistant Sales Managers 1. To assist RSMs in all matters related to Sales Management. 2. To make regular visits to the distributors of local and out-station towns of respective regions. 3. Monitor the performance; stock levels, sales & returns etc. of the distributors through Sales Representatives. 4. To monitor performance & activities of sales officers (sales, services, coverage, distribution & merchandising) in the market and identify the week areas and providing them training for improvements. 5. To monitor the reporting system of sales officers & Distributors. 6. To update and maintain their own reporting system. 7. Coordination in marketing activities.
40
Mitchell’s Fruit Farms Ltd
Products of Mitchell’s Fruit Farms Limited It is our aim at Mitchell's to provide you with healthy, innovative and best quality food that will tempt your appetite at all times. Above all, we also promise convenience & variety at affordable prices. With nine categories encoming over 140 products, we are proud to present the Mitchell's family - products to grace your dining table on the breakfast and dinner occasions as well as products to appease your sweet tooth. These products are divided into two sections which are: •
Grocery Products
•
Confectionery Products
41
Mitchell’s Fruit Farms Ltd
GROCERY PRODUCTS Jams & Jellies Mitchell’s produces certain flavors of jams and basically it is used in the breakfast and certain other. These flavors are mango, orange, apple, strawberry, and mixed fruit.
Squashes & Syrups Pure fruit juices and pulp go into the Mitchell's Squashes and Syrups. Extracted from fruits carefully selected from the farm in Renala, these squashes come in a range of rich natural flavors. These are available in different flavors.
42
Mitchell’s Fruit Farms Ltd
Ketchups & Sauces Tomato Ketchup made from ripe of red tomatoes, Mitchell's tomato ketchup add zest to snacks, burgers or sandwiches, kababs or samosas, and in a ready to use foods. Mitchell's Tomato Ketchup, Chilli Garlic Sauce, Chilli Sauce, Chilli Ginger Sauce and Mexican Salsa are rapidly gaining a market abroad.
Canned Food Mitchell’s produced high quality of canned fruits and vegetables that have natural taste and favorite among the customers. These ready-to-use products bring convenience along with taste to every Kitchen.
43
Mitchell’s Fruit Farms Ltd
Fruit drinks Natural drinks have great demand and replace the carbonated soft drinks consumption. So Mitchell’s launched Fruit Drinks (Ready-to-Drink). These Fruit Drinks are available in Mango, Lemon, Orange, Apple and Lychee flavours.
Pickles and vinegar Mitchell's pickles are made in the true traditional way. Fruit and vegetables are processed through natural processes.
Mango, green chilly, mixed pickle and fruit vinegar is
available in this category.
44
Mitchell’s Fruit Farms Ltd
Bottled Water With changing needs of consumers and their shifting towards hygienic products, like bottled drinking water, Mitchell's launched Natural Drinking Water, Balance.
CONFECTIONERY PRODUCTS Sugar Confectionery 1. Milk Toffees 2. Butterscotch 3. Fruit Bon Bons 4. Milk Chocolate Eclairs Toffees, Sweets and Éclairs made from the freshest and purest ingredients are the favorites of young and old alike.
45
Mitchell’s Fruit Farms Ltd
Chocolates Countline Chocolate 1. Jubilee 2. Discoveree 3. Unitee 4. Twentee-1 A variety of count lines made from the most delicious and mouth-watering ingredients are sweet snack for any time.
Molded Chocolate 1. Festival 2. Top Milk 3. Golden Heart Molded chocolates are especially made for special occasions. These products are delightful selection of finest selected chocolate and creamy chocolate.
46
Mitchell’s Fruit Farms Ltd
FINANCIAL ANALYSIS
47
Mitchell’s Fruit Farms Ltd
Mitchell’s Fruit Farms Limited Profit and Loss For the year ended September 30, 2009
48
Mitchell’s Fruit Farms Ltd
2009 Rupees
2008 Rupees
1,278,678,610 (1,043,682,073)
1,038,637,296 (848,823,705)
234,996,537 (49,669,971)
189,813,591 (40,779,924)
(124,290,843)
(108,184,873)
Other operating expenses
(1,947,763)
(1,535,470)
Other operating income
12,962,644
6,123,349
Profit from operations
72,020,604
45,436,673
(53,487,027)
(32,323,268)
Profit before tax
18,533,577
13,133,405
Taxation
(4,481,935)
(4,775,865)
Profit for the year
14,051,642
8,337,540
2.79
1.65
Sales Cost of Sales Gross Profit istration expenses Distribution and marketing expenses
Finance cost
Earning per share
Mitchell’s Fruit Farms Limited 49
Mitchell’s Fruit Farms Ltd
Balance sheet As at September 30, 2009 2009 Rupees
2008 Rupees
100,000,000
100,000,000
50,400,000
50,400,000
9,635,878 209,806,010
9,635,878 200,794,368
269,841,888
260,830,246
0 50,478,690 50,478,690
7,368,418 49,607,813 56,976,231
0 307,671,564 87,816,200 12,099,523
14,736,842 288,711,025 89,805,848 10,311,523
407,587,287
403,565,238
727,907,865
721,371,715
Equity & Liabilities Capital & Reserves Authorized capital 10,000,000 ordinary shares of Rs. 10 each Issued subscribed & paid up capital 5,040,000 Ordinary shares of Rs. 10 each Reserves Inappropriated Profit Non-Current Liabilities Long term loan- secured Deffered liabilities Current Liabilities Current portion of long term loans- secured Short term running finances- secured Trade & other payables Accured finance cost Contigencies & Commitments
2009 Rupees
2008 Rupees
321,687,827
322,282,388
Assets Non-current assets Property,plant & equipment
50
Mitchell’s Fruit Farms Ltd
Intangible assets
1,325,725
1,657,156
Long term loans & deposits
1,110,482
716,334
Biological assets
5,397,600
5,132,000
329,521,634
329,787,878
12,781,281
13,305,761
260,382,527 58,674,183
288,698,972 39,067,739
receivables
53,330,558
39,601,514
Cash & bank balances
13,217,682
10,909,851
398,386,231
391,583,837
727,907,865 Mitchell’s Fruit Farms Limited Cash Flow Statement For the year ended September 30, 2009
721,371,715
Current Assets Stores, spares & loose tools Stock in trade Trade debts Advances, deposits, prepayments& other
51
Mitchell’s Fruit Farms Ltd
2009
2008
Rupees
Rupees
118,255,880
(20,151,348)
Finance cost paid
(49,992,135)
(25,296,527)
Net income tax paid
(23,535723)
(2,120,815)
Retirement benefits paid
(8,054,172)
(3,444,636)
Net cash inflow / (outflow) from operating activities
36,673,850
(51,013,326)
Cash flows from operating activities Cash generated from / (used in) operations
Cash flows from investing activities (36,263,479)
Fixed capital expenditure Sale proceeds of property, plant and equipment Net increase in long term security deposits Proceeds from sale of biological assets Net cash outflow from investing activities
9,375,961 (394,148) 815,999
(84,627,733) 1,421,672 (339,111) 769,300
(26,465,667)
(82,775,872)
(22,105,260)
(14,736,842)
(4,755,631)
(10,080,000)
(26,860,891)
(24,816,842)
(16,652,708) (277,801,174)
(158,606,040) (119,195,134)
(294,453,882)
(277,801,174)
Cash flows from financing activities Repayment of long term loans Dividend paid Net cash outflow from financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year
Mitchell’s Fruit Farms Limited 52
Mitchell’s Fruit Farms Ltd
Statement of changes in equity For the year ended September 30, 2009
Share
Share
General
capital
reserve
Balance as at September 30, 50,400,000 9,335,878
300,000
Accumulated profit
Rupees Total
202,536,828
262,572,706
(10,080,000)
(10,080,000)
8,337,540
8,337,540
200,794,368
260,830,246
(5,040,000)
(5,040,000)
-
14,051,642
14,051,642
300,000
209,806,010
269,841,888
2007 Final dividend for the year ended
-
September 30, 2007 Profit for the year ended
-
-
-
-
September 30, 2008 balance as at September 30, 50,400,000 9,335,878 2008 Final dividend for the year ended
-
September 30, 2008 Profit for the year September 30, 2009 Balance as at September 30, 2009
-
-
300,000
-
-
50,400,000 9,335,878
Horizontal Analysis of Profit and Loss 2009
2008
2007 53
Mitchell’s Fruit Farms Ltd
Sales Cost of sales Gross profit istration expenses Distribution and marketing expense Other operating expenses Other operating income Profit from operations Finance cost Profit before tax Taxation Profit for the year
147.55% 147.77% 146.55% 148.37% 184.96% 73.08% 323.11% 118% 251.47% 46.61% 31.79% 54.75
H oriz ontal analysis 2008
119.85% 120.18% 118.37% 121.81% 160.99% 57.61% 152.63% 74.45% 151.98% 33.03% 33.87% 32.49%
100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
1 2 3 4 5 6 7 8 9 10
1
Horizontal analysis 2009
2 3 4 5 6 7 8 9 10
Vertical Analysis of Profit and Loss 2009
2008
2007 54
Mitchell’s Fruit Farms Ltd
Sales Cost of sales Gross profit istration expenses Distribution and marketing expense Other operating expenses Other operating income Profit from operations Finance cost Profit before tax Taxation Profit for the year Vertical analysis 2008
100% 81.62% 18.38% 3.88% 9.72% 0.15% 1.01% 5.63% 4.18% 1.45% 0.35% 1.1%
100% 81.72% 18.28% 3.93% 10.42% 0.15% 0.59% 4.37% 3.11% 1.26% 0.46% 0.8%
100% 81.5% 18.5% 3.86% 7.75% 0.31% 0.46% 7.04% 2.45% 4.59% 0.16% 2.96%
1 2 3 4 5 6 7 8 9 10
vieriecal analysis 2009
1 2 3 4 5 6 7 8 9 10
55
Mitchell’s Fruit Farms Ltd
Horizontal Analysis of Balance Sheet Equity & Liabilities
2009
2008
2007
100%
100%
100%
100%
100%
100%
Reserves
100%
100%
100%
Unappropriated Profit
103.59% 99.14%
100%
102.77% 99.34%
100%
Long term loan- secured
0
100%
Deffered liabilities
124.07% 121.93%
100%
80.39%
100%
Capital & Reserves Authorised capital 10,000,000 ordinary shares of Rs. 10 each Issued subscribed & paid up capital 5,040,000 Ordinary shares of Rs. 10 each
Non-Current Liabilities 33.33%
90.74%
Current Liabilities
56
Mitchell’s Fruit Farms Ltd
Current portion of long term loans- secured
0
Short term running finances- secured
210.94% 197.94%
100%
Trade & other payables
98.51%
100.74%
100%
Accured finance cost
368.35% 313.92%
100%
161.09% 159.5% 125.85
100%
%
100%
Total Equities
100%
100%
124.72%
Assets
2009
2008
2007
Property, plant & equipment
121.36%
121.6%
100%
Intangible assets
64%
80%
100%
Long term loans & deposits
294.38%
189.9%
100%
Biological assets
102.79% 120.83
97.73%
100%
%
120.92%
100%
Stores, spares & loose tools
117.21%
122.02%
100%
Stock in trade
140.72%
156.02%
100%
Trade debts Advances,
127.74%
85.06%
100%
143.66% 49.57%
106.67% 40.91%
100% 100%
Non-current assets
Current Assets
deposits,
receivables Cash & bank balances
prepayments&
other
57
Mitchell’s Fruit Farms Ltd
130.34%
128.11%
100%
125.85%
125.85%
100%
2009
2008
2007
5,040,000 Ordinary shares of Rs. 10 each
6.92%
6.99%
8.71%
Reserves
1.32%
1.34%
1.67%
Unappropriated Profit
28.82%
27.84%
35.02%
37.07%
36.16%
45.4%
Long term loan- secured
0
1.02%
3.82%
Deffered liabilities
6.93%
6.88%
7.03%
6.93%
7.90%
10.86
Current portion of long term loans- secured
0
2.04%
2.55%
Short term running finances- secured
42.27%
40.02%
25.22%
Total Assets
Vertical Analysis of Balance Sheet Equity & Liabilities Capital & Reserves Issued subscribed & paid up capital
Non-Current Liabilities
Current Liabilities
58
Mitchell’s Fruit Farms Ltd
Trade & other payables
12.06%
2.45%
15.41%
Accured finance cost
1.66%
1.43%
0.57%
55.99%
55.94%
43.75%
Total Equities
100%
100%
100%
Assets
2009
2008
2007
Property, plant & equipment
49.19%
44.68%
45.82%
Intangible assets
0.18%
0.23%
0.36%
Long term loans & deposits
0.15%
0.1%
0.07%
Biological assets
0.74%
0.71%
0.91%
45.27%
45.72%
47.15
Stores, spares & loose tools
1.76%
1.84%
1.89%
Stock in trade
35.77%
40.02%
31.99%
Trade debts Advances,
8.06%
5.42%
7.94%
7.33%
5.49%
6.42%
Non-current assets
Current Assets
receivables
deposits,
prepayments&
other
59
Mitchell’s Fruit Farms Ltd
Cash & bank balances
Total Assets
Verticle analysis of Equities 2008
1.82%
1.51%
4.61%
54.73%
54.28%
52.85%
100%
100%
100%
1 2 3 4 5 6 7 8 9 10
Verticle analysis of Equities 2009
1 2 3 4 5 6 7 8 9 10
60
Mitchell’s Fruit Farms Ltd
Verticle analysis of Assets 2008
1 2 3 4 5 6 7 8 9 10
Verticle analysis of Assets 2009
1 2 3 4 5 6 7 8 9 10
RATIO ANALYSIS Ratio analysis involves methods of calculating and interpreting financial ratios to analyze and monitor the firm’s performance.
Categories of financial ratios Financial ratios can be divided for convenience into five basic categories: 1)
Liquidity
61
Mitchell’s Fruit Farms Ltd 2)
Activity
3)
Debt
4)
Profitability
5)
Market
Liquidity Ratios A firm’s ability to satisfy its short-term obligations as they come due is called liquidity. Liquidity refers to the solvency of the firm’s overall financial position __ the ease with which it can pay its bill. These ratios are viewed as a good indicator of cash flow problems.
Current ratio It measures the ability of firm to meet its short-term obligations. Its formula is Current ratio = Current asset Current liabilities
2009: Current ratio =
398,386,231 407,587,287 = 0.9774 times
2008: Current ratio = 391,538,837 403,565,228 Current ratio = 0.9703 times 62
Mitchell’s Fruit Farms Ltd
Quick (acid–test) ratio It shows the least liquid current asset. Quick ratio = Current assets – inventory Current liabilities
2009: Quick ratio = 398,386,231 - 260,382,527 407,587,287 Quick ratio =
0.34 times
2008: Quick ratio = 391,583,837 – 288,698,972 403,565,238 = 0.25 times
63
Mitchell’s Fruit Farms Ltd
1.4
LIQUIDITY RATIOS
1.2 1 0.8 0.6
RATIOS
CURRENT RATIO: 0.4
CURRENT RATIO:
2009
2008
2007
0.98
0.97
1.21
0.34
0.25
0.47
QUICK(ACID TEST) RATIO :
0.2 0
QUICK(ACID RATIO 2007 : 2009 TEST) 2008
64
Mitchell’s Fruit Farms Ltd
Activity ratios: It measures the speed with which various s are converted into sales or cash--inflows or outflows.
Inventory turnover
It measures the activity, or liquidity, of a firm’s inventory. Inventory turnover =
cost of good sold Inventory
2009: Inventory turnover
=
1043682073 260382527
Inventory turnover
=
Inventory turnover
═
4.01 times
2008: 848823705 288698972 Inventory turnover
=
2.94 times
65
Mitchell’s Fruit Farms Ltd
Average collection period: It is the average amount of time needed to collect s receivable.
receivable Average collection period =
Annual sales 360
2009: 58674183 Average collection period
=
1278678610 360
Average collection period
= 16.52 days
2008: 39067739 Average collection period =
1038637296 360
Average collection period
=
13.54 days
Average age of inventory: It is the average days of inventory that shows how many days inventory takes place. Average age of inventory =
365
66
Mitchell’s Fruit Farms Ltd Inventory turnover
2009: Average age of inventory
=
365 3.62 times
Average age of inventory =
100.83 days
Average age of inventory =
365_____
2008:
4.59 times =
79.52 days
Total asset turnover: It indicates the efficiency with which the firm uses its assets to generate sales.
Total asset turnover =
sales Total asset
2009: Total asset turnover =
1278678610 727907865
Total asset turnover =
1.76 times
67
Mitchell’s Fruit Farms Ltd
2008: Total asset turnover
=
1038637296 721371715
Total asset turnover
=
1.44 times
68
Mitchell’s Fruit Farms Ltd
120
INVENTORY TURNOVER:
ACTIVITY RATIOS
100
AVERAGE COLLECTION PERIOD:
80 60
RATIOS
AVERAGE AGE OF INVENTORY:
2009
2008
2007
4.01
2.94
3.82
AVERAGE COLLECTION PERIOD:
16.52
13.54
19.08
AVERAGE AGE OF INVENTORY:
100.83
79.52
95.55
1.76
1.44
1.50
40 20 0
INVENTORY TURNOVER: 2009 2008 2007
TOTAL ASSETS TURNOVER:
TOTAL ASSETS TURNOVER:
Graphical Representation of Activity Ratios
Debts ratios: It indicates the amount of other people’s money being used to generate profits.
Debt ratio: Measures the proportion of total assets financed by the firm’s creditors.
Debt ratio
=
Total liabilities 69
Mitchell’s Fruit Farms Ltd Total assets
2009: Debt ratio
=
458,065,968
= 0.629
=
62.9%
727,907,865
2008: Debt ratio
=
460,541,469 721,371,715
Debt ratio
=
0.638
Debt ratio
=
63.8%
Debt / Equity Ratio: It measures the ratio of debt to the stockholders equity. Debt / Equity ratio
=
Total Liabilities Stock holders equity
2009: Debt / Equity Ratio = 458,065,977 269,841,888 =
1.70
70
Mitchell’s Fruit Farms Ltd =
170%
2008: Debt / Equity Ratio =
460,541,469 260,830,246 =
1.77
=
177%
Time interest earned ratio: Measures the firm’s ability to make contractual interest payments some times called the interest coverage ratio.
Time interest earned ratio =
earning before interest and taxes Interest
2009: Time interest earned ratio
=
72,020,604 53,487,027
Time interest earned ratio =
1.35 times
2008: Time interest earned ratio
=
45,436,673 32,323,268
Time interest earned ratio
=
1.41 times
71
Mitchell’s Fruit Farms Ltd
72
Mitchell’s Fruit Farms Ltd
Debt Ratios
RATIOS DEBT RATIO: DEBT TO EQUITY RATIO:
2009
2008
2007
62.9%
63.8%
54.6%
170%
177%
120%
1.35
141
2.87
TIME-INTEREST EARNED RATIO:
180.00% 160.00% 140.00% 120.00% DEBT RATIO:
100.00% 80.00%
DEBT TO EQUITY RATIO:
60.00% 40.00% 20.00% 0.00% 2009
2008
2007
73
Mitchell’s Fruit Farms Ltd
Graphical Representation of Debt ratios
Profitability ratios: These ratio measures enable the analyst to evaluate the firm’s profit with respect to given level of sales, a certain level of assets, or the owners` investment.
Gross profit margin: It measures the percentage of each sales dollar remaining after the firm has paid for its goods.
Gross profit margin =
gross profit Sale
2009: Gross profit margin =
234,996,537 1,278,678,610
Gross profit margin
= =
0.184 18.4%
2008:
74
Mitchell’s Fruit Farms Ltd Gross profit margin
=
189,813,591 1,038,637,296
Gross profit margin
=
0.183
=
18.3%
Operating profit margin: It measures the percentage of each sales dollar remaining after all cost and expenses other than interest, taxes, preferred stock dividend are deducted; the “pure profits” earned on each sales dollar.
Operating profit margin =
operating profits Sales
2009: Operating profit margin =
72,020,604 1,278,678,610
Operating profit margin =
0.056
=
5.6%
2008: Operating profit margin = 45,436,673 1,038,637,296 =
0.044 = 4.4%
Net profit margin: 75
Mitchell’s Fruit Farms Ltd
It measures the percentage of each sales dollar remaining after all cost and expenses included interest, taxes, preferred stock dividends have been deducted. If it is higher, the firm is better.
Net profit margin =
Earning available for common stock holders Sales
2009: Net profit margin
=
14,051,642 1,278,678,610
Net profit margin
=
0.011
=
1.1%
=
8,337,540
2008: Net profit margin
1,038637,296 Net profit margin
=
0.0080
=
0.80%
Earning per share: It represents the dollar amount earned on behalf of each share.
Earning per share
=
Earning available for common stock holders No. of shares of common stock outstanding
76
Mitchell’s Fruit Farms Ltd
2009: Earning per share
=
14,051,642 5,040,000 =
Rs. 2.79
2008: Earning per share =
8,337,540 5,040,000
Earning per share =
Rs. 1.654
Return on total assets: It measures the overall effectiveness of management in generating profits with its available assets; also called the return on investment (ROI).
Return on total assets
=
Earning available for common stock holders Total assets
2009: Return on total assets
=
14,051,642 727,907,865
Return on total assets
=
0.0193
Return on total assets
=
1.93% 77
Mitchell’s Fruit Farms Ltd
2008: Return on total assets
= 8,337,540 721,371,715
Return on total assets
=
Return on total assets
=
0.0116 1.16%
Return on common equity: It measures the return earned on the common stockholders’ investment in the firm. Return on common equity = Earning available for common stock holders Common stock equity
2009
:
Return on common equity =
14,051,642 50,400,000
Return on common equity =
0.2788
Return on common equity = 27.88%
2008:
78
Mitchell’s Fruit Farms Ltd Return on common equity
=
8,337,540 50,400,000
Return on common equity =
0.1654
Return on common equity =
16.54%
GROSS PROFIT MARGIN:
60.00% 50.00%
PROFITABILITY RATIOS OPERATING
40.00%
PROFIT MARGIN: NET PROFIT MARGIN:
30.00% 20.00%
RATIOS
2009
2008
2007
18.14%
18.3%
18.5%
5.6%
4.4%
7%
1.1%
0.80%
2.46%
RETURN ON ASSETS
1.93%
1.16%
4.4%
RETURN ON COMMON EQUITY
27.88%
16.54%
50.92%
10.00% 0.00%
2009
2008
RETURN ON ASSETS
2007
GROSS PROFIT MARGIN:
OPERATING PROFIT MARGIN:
NET PROFIT MARGIN:
RETURN ON COMMON EQUITY
5.09 EARNING PER SHARE:
2.79
1.65
79
Mitchell’s Fruit Farms Ltd Graphical Representation of Profitability Ratios
Market ratios: It relates the current market value, as measured by its current share price, to certain ing values.
Price/Earning ratio:
It measures the amount that investors are willing to pay for each dollar (Rs.) of a firm’s earning. If it is higher, investors’ confidents is also higher.
Price/earning ratio
=
Market price per share of common stock Earning per share
2009: Price/earning ratio =
Rs. 73.90 Rs. 2.79
Price/earning ratio
=
26.49
2008: Price/earning ratio
=
Rs.58.75 Rs.1.65
80
Mitchell’s Fruit Farms Ltd Price/earning ratio
=
35.61
Market/ Book ratio: It provides an assessment of how investors view the firm’s performance.
Market/ Book ratio
=
Market price per share of common stock Book value per share of common stock
Book value per share =
Common stock equity No. Of share of common stock outstanding
=
269841888 5040000
=
53.54
2009:
Market/ Book ratio
=
Rs.73.90 Rs. 53.54
Market/ Book ratio
=
1.38
2008: Book value per share =
Common stock equity 81
Mitchell’s Fruit Farms Ltd No. Of share of common stock outstanding =
260830246 5040000
=
Market/ Book ratio
51.75
=
Rs.58.75 Rs.51.75
Market/ Book ratio =
1.14
Dividend Yield: It provides information to stockholders about the dividend yield on their investment.
Dividend yield
=
Dividend Per share Market price per share
2009: Dividend yield
=
Rs. 2 Rs.73.90 82
Mitchell’s Fruit Farms Ltd
Dividend yield
=
0.027
2008: Dividend yield
=
Rs. 1 Rs.58.75
Dividend yield
=
0.017
83
Mitchell’s Fruit Farms Ltd
60 PRICE / MARKET RATIOS
50 40 30
RATIOS
20 10
PRICE / EARNING RATIO: 0
2009
EARNING RATIO: MARKET / BOOK RARIO: DIVIDEND YIELD:
2009
2008
2007
26.49
35.61
-
53.51
51.75
-
0.027
0.017
-
2008
MARKET / BOOK RARIO:
DIVIDEND YIELD:
Graphical Representation of Market Ratios
SWOT ANALYSIS OF MITCHELL’S FRUIT FARM
STRENGTHS 1. Mitchell’s fruit farm limited is the oldest food processing company of Pakistan. The company was incorporated in 1933. This is a distinctive feature of the company because all other food-processing companies start their operations at least after the independence of Pakistan. 2. In 1998, Mitchell’s achieve another destination: ISO 9001 certification, and at no better time than the successful completion of sixty-five years of bringing quality products to the consumers. It is a matter of human pride that the Mitchell’s has become the first food company in Pakistan to achieve this prestigious distinction.
84
Mitchell’s Fruit Farms Ltd 3. Today, in Pakistan, Mitchell’s is the only major company with fully- integrated operations having its own growing and processing facilities at one location. Modern, high-volume industrial equipment, professional management and a trained workforce ensure that Mitchell’s maintained its lead. 4. In 1983, Mitchell’s golden jubilee was celebrated with great funfair. A chocolate bar, appropriately named jubilee, was launched to commemorate the event. Mitchell’s is the pioneer in Pakistan for chocolate production. 5. Molded chocolate (praline) is very popular in all over the world but till 2001 no national company was producing molded chocolate in the country. So Mitchell’s launched molded chocolate with the successful commissioning of a molded line in 2001. 6. The process of toffee making was automated in 2000 with PLC-based machines/systems, to ensure uniform quality of products. Mitchell’s is the first national company that takes this step. Thus, the modernization of operation has always been top priority with Mitchell’s. 7. Mitchell’s is the market leader of chocolate, toffee making and tomato ketchup. 8. Mitchell’s is the single national company that has so large product mix.
WEAKNESSES 1. The management style that has adopted by the company is bureaucratic. Degree of formalization and centralization is high. 2. The promotion mix of the company and ment programs is not very good. It is justifiable to say that company is not so much serious in promoting its brands. The company only enjoying the good repute of the brand name Mitchell’s. 3. There is lack of short term and long-term decision-making regarding production schedules, purchasing decisions and marketing programs. 4. As we know that there is severe competition in the food industry, but still the availability of Mitchell’s products is very poor.
85
Mitchell’s Fruit Farms Ltd 5. Company is offering less discount as compare to other relevant industry’s companies like Shezan, National, Rafhan, Salman’s and Ahmed to retailers and distributors.
OPPORTUNITIES 1. Increasing proportion of working women, school going children and office going men increase the size of target market of the food industry. These factors cause growing demand of jams, jellies, marmalades, sugar free products and caned vegetables and juices open a wide window of opportunities for MITCHELL’S Fruit Farms Limited. 2. As the rural populations of the country tend to migrate to cities for multiple purposes, for this trend enhanced the market size for the food processing companies. It is also an opportunity for the MITCHELL’S Fruit Farms Limited to avail this opportunity and get benefits from this growing market. 3. Now people are much conscious about their health and fitness as before the past. They have tendency to use the foods that are nutritious and best for their health. So this market trend is also create new horizons for the food processing companies. 4. It is fact that the market size of fast foods and snacks remarkably. As the many products are the complimentary for these kinds of fast food and snacks item. This thing is growing the demand of tomato ketchup, sauces and preserves. 5. There is an opportunity for the company to increase the depths of its existing products categories. For example, company may introduce the squashes, sauces and tomato ketchup in more packaging like in buckets as this strategy has adopted by other competitors of the company. The company may introduce the pet bottle of 1.50 ml like Jam-E-Sheeren and Rooh Afza. It will expand the target market of MITCHELL’S Fruit Farms Limited. 6. Other very open opportunity for the company is that the company may invest in new product categories like mineral water, cheese, snakes and other dairy products.
THREATS 1. The competition in the food processing industry is much severe than the past. Now the many national companies are ing hands with multi-national corporations for
86
Mitchell’s Fruit Farms Ltd additional in of marketing activities, production expertise and financial resources. 2. Additional general sales taxes and tough economic conditions of the country are reducing the purchasing power of the people. So in case of food item, this fact is also applicable because GST is also imposed on food items.
FINDINGS AND SUGGESTIONS 1. The display of Mitchell’s squashes was not so good versus its competitors. 2. Mitchell’s products are highly appreciated by the trade and the relevant consumers because of its high quality standards. The customers like to purchase the product labeled Mitchell’s. 3. The company is trendsetter and market leader in the food industry of the country. Other companies’ competing the Mitchell’s very well. This competition among the food companies has increase from last few years because some national companies are ing hands with multi-national companies for additional , but this fact is satisfactory for the 87
Mitchell’s Fruit Farms Ltd
management of Mitchell’s fruit farms that Mitchell’s is still # 1. Although other competitors becoming closer and closer to Mitchell’s fruit farms. 4. The company is the market leader in squashes, countline, preserves, toffees and sauces. And giving tough time in other products categories. 5. The company producing quality products since its incorporation. The company
got ISO 9001 certification in 1998. It is a great honor for the company because Mitchell’s is the first food company that achieved ISO 9001 certification not in food industry but also other industries of Pakistan. The management of the company is highly motivated, dedicated and is investing aggressively to achieve the desired results. The company is keen to invest in the manufacturing of quality products. 6. Mitchell’s is playing a vital role in the Pakistan’s economy. The company is
also receiving the top 25 Companies’s Award from last many years. Mitchell’s has been in the market long before independence and up till now is enjoying a good repute. 7. The new brands of squashes that are pineapple and guava have not get excellent response from the customers just because of poor ment campaign. Proper ment was necessary to create awareness an interest for new brands. 8. In case of molded chocolates, the company has got very good response by the customers. The new brand of molded chocolate golden hearts got positive from customers, whether it is the off-season of the chocolates. Although the company is pioneer in the production of chocolates and has good repute for its production, but seems unable to get desired results from thee launch of top milk. 9. The company can also expand its business in other product ranges like butter, cheese, mineral water, snacks etc. 10. It is the need of the hour to introduce one product of the company in different packages. For example, Mitchell’s can introduce its squashes in other different 88
Mitchell’s Fruit Farms Ltd
weights. Mitchell’s can launch it in 1.5 ml like Rooh Afza and Jam-E-Sheeren. It can be launched in 500ml or 450 ml. These launches shall provide convenience utility, helpful for increasing the brand acceptance and expand the target market 11. In the same way, the company can launch tomato ketchup and jams in bucket like other competitors. This will increase the sale of the company and helpful for competing the food market successfully.
PEST ANALYSIS PEST analysis stands for “Political, Economic, Social and Technological analysis” and describes a framework of macro level environmental factors used in the environmental scanning components of strategic management. It is the part of the external analysis when conducting a strategic analysis or doing market research and gives a certain overview of the different macro environmental factors that the company has to take into consideration. It is useful strategic tool for understanding market growth or decline, business position, potential and direction of operations.
Political Factors •
In Pakistan there is no government stability or political stability this also disturbs the working of Mitchell’s fruit farms because every coming government comes with its own agenda of taxation policies and etc.
89
Mitchell’s Fruit Farms Ltd •
Import and Export policies are changing rapidly in Pakistan this also affects the working on company, because import raw material and export products in all over the world.
•
Now Govt. is democratic but it imposes lot of new taxes and increases the percentages of existing taxes which effects on the company.
•
Pakistan is front line state in ware against terrorism so it has great effect on the political decisions by Govt. which indirectly effect the company.
Economic factors Such as interest rates, exchange rates and inflation rates are also affecting the working of company . •
Interest Rates are at the highest peak now a days as KIBOR is in between 12% to 13%. Company has to obtain finance on higher rat of interest.
•
Exchange rates are changing on daily basis which also causes a major factor for the profits and expenses of the company.
•
Inflation is also a major economic problem of Pakistan. Inflation also affecting the company because it exports product and import raw material, products prices are increased day by day.
Social Factors
Social factors like cultural aspects, health consciousness, population growth rate, career attitudes and emphasis on safety also affect the working of an organization, company also affects from these factors. •
Mitchell’s, has a complete green environment.
•
It is conducting health programs for its employees. 90
Mitchell’s Fruit Farms Ltd •
It is helping the victims of Swat, Balakot and other destroyed areas by giving them food, clothing and such other things with the name of Deutsche Bank Foundation, Pakistan.
•
As its products are famous among clients so it keeps good relations with its customers.
•
It is also give benefits to the retiring workers.
Technological Factors •
Mitchell’s, is adopting the latest technologies to complete its operations.
•
Its offices are equipped with the latest hardwares and softwares to connect worldwide and to its customers and suppliers.
•
It has a IT professionals who are responsible to keep the company up to date in technology.
•
It is spending a huge amount in research & development department.
•
Rate of technological change is very fast.
Legal Factors Legal factors include discrimination laws, consumer laws, antitrust laws, employment laws and health and safety laws. All these factors also can affect how a company operates, its costs and the demand for its products. Mitchell’s is completely following the all Pakistani Laws in this context.
CONCLUSION
91
Mitchell’s Fruit Farms Ltd There is no doubt in this fact that Mitchell’s fruit farms is one of few national companies that playing very important role in the economy of the country. Mitchell’s is known as trendsetter, innovator and progressive company in the food industry of Pakistan. Mitchell’s recent achievements like automation of toffee making process molded chocolate plant, ISO 9001 and launch of several new products reveals the commitment and professionalism of the company management. The company set high standards of quality and has experience of 68 years that help the company to successfully competing even multi-national companies.
References: History, Company information and Departments. From: http://-reports.blogspot.com/2009/10/report-on-mitchells-fruit-farms-page1.html Analysis of world food Industry. From: www.ologopolywatch.com Analysis of food Industry Asia and Pakistan. From: www.bnet.com/foods Products of Mitchell’s From: www.mitchells.com.pk Financial Analysis Done by ourselves SWOT Analysis and Suggestions. From: http://-reports.blogspot.com/2009/10/report-on-mitchells-fruit-farms-page2.html PEST analysis Done by ourselves by using different websites and reports.
92
PROJECT REPORT On MITCHELL’S Presented To: SIR RIAZ HUSSAIN ANSARI
Presented By: MUHAMMAD IRFAN MBA 2 ND
DEPARTMENT OF BUSINESS ISTRATION Bahauddin Zakariya University SAHIWAL CAMPUS
1
Mitchell’s Fruit Farms Ltd
HISTORY OF THE COMPANY A BRIEF BACKGROUND Phase I: BEFORE INDEPENDENCE Francis J. Mitchell arrived in Bombay, from Scotland, at the end of World War I. He had been invited by his brother who was already established in Northwestern India as contractor to the government for construction of the railway network in this part of the Subcontinent. At that time, when Francis was already an old man of over sixty years, an opportunity came his way in the form of the emerging irrigation system being laid out in the canal colony districts of West Punjab. He was successful in obtaining the lease of 720 acres of agricultural land in the then Sahiwal district. The area allotted to him extended over nearly seven miles, from Renala Khurd to KISSAN, sandwiched between the arterial Lower Bari Doab Canal and the Lahore- Karachi railway. He initiated the business of growing grapes, for eventual sale as dried raisins, and sent the younger of his two sons, Richard, to Australia for training at Mildura which was wellknown as a center of specialization in the field of horticulture. The company, with Francis Mitchell as its governing Director and his two sons, Leonard and Richard, as Directors, was incorporated in 1933 and given the name Indian Mildura Fruit Farms Ltd. The Northwestern railway had opened to traffic a few years before the acquisition of the land by the Mitchell family. Francis Mitchell was asked by the railway authorities to propose a name for the ading station. Hence, the word “KISSAN”, which subsequently became a familiar brand name.
2
Mitchell’s Fruit Farms Ltd The trial planting of grapes, which began in 1921 and lasted until 1924, unfortunately, did not prove to be a success. The vines suffered serious damage from pests during the rainy season, just when the grapes needed dry weather for ripening. The entire plantation was replaced by citrus, which fortunately, proved to be profitable. The elder son, Leonard, was sent especially to South Africa to look for good Rootstock, which was the foundation of Valencia Orange Trees; these are well established on the farms today. With the outbreak of World War II, demand for canned fruit and vegetables, for the Allied Troops stationed in India, began to grow rapidly. To cater this growing demand costeffectively, a factory was established in Banglore, South India. A new t-stock company, by the name of KISSAN Products Ltd., was ed. PHASE II: AFTER INDEPENDENCE. As a sequel to independence in 1947, India Mildura Fruit Farms Ltd lost nearly 75% of its Indian market. The company’s name was changed to Mitchell's Fruit Farms (Pvt), and the brand name “Mitchell's “ became the exclusive property of the Pakistani company. Likewise, the Indian company acquired exclusive use of the “KISSAN” brand name. Francis Mitchell died in 1933 and his elder son, Leonard, became Chairman. After his brother’s tragic death in an air accident, Richard took over the Chairmanship, in 1949, and continued in this capacity until his own death in 1987. The family sold their shares gradually, having inducted Pakistani shareholders in 1957, and retired to Eastbourne, U.K., in 1959. Richard’s wife, Betty, retained her links with the company in the capacity of Director, until 1991. She died in 1995.
3
Mitchell’s Fruit Farms Ltd
COMPANY INFORMATION BOARD OF DIRECTORS S.M. Mohsin (Chairman & Managing Director) Mehdi Mohsin (Executive Director) Syed Babar Ali Syed Faisal Imam Sitwat Mohsin Umme Kulsum Imam Anis Wahab Zuberi NIT Nominee
COMPANY SECRETARY Amir Sattar
AUDITORS A.F. Ferguson & Company Chartered ants
BANKERS ABN Amro Bank N.V. Citibank N.A. Emirates Bank International PJSC Muslim Commercial Bank Limited
4
Mitchell’s Fruit Farms Ltd
SHARE REGISTRAR Corplink (Private) Limited, Wings Arcade, 1-K (Commercial) Model Town, Lahore.
.
ED OFFICE, FACTORY & FARMS Renala Khurd, District Okara, Pakistan. Phones: (0443) 622907-8 &635416 Fax: (0443) 621416 E-mail: [email protected]
CORPORATE OFFICE 3-B, LDA flats, Mian Muhammad Shafi Road, Lahore. Phones: (042) 6307410-13 Fax: (042) 6307414-15 E-mail: [email protected]
Website: www.mitchells.com.pk
REGIONAL SALES OFFICE, (NORTH) Block No. 1-A, Sector G-7/4, Street No. 40, Islamabad. Phones: (051) 220961-62 & 2872669 E-mail: [email protected]
5
Mitchell’s Fruit Farms Ltd
REGIONAL SALES OFFICE, (CENTRAL) Syed House, Canal Berg, 13 K.M. Multan Road, Lahore Phones: (042) 5419350, 5423732 & 5425478 E-mail: [email protected]
REGINIOL SALES OFFICE, (SOUTH) Mehran VIP II, Ground Floor, Plot 18/3 Dr. Dawood Pota Road, Karachi Phones: (021) 5212112, 5212732, & 5216975 Fax: (021) 5673588 E-mail: [email protected]
6
Mitchell’s Fruit Farms Ltd
Vision Statement To be a Company which optimally combines its people, technology, management systems, and market opportunities to achieve profitable growth while providing fair returns to its investors.
Mission statement To be a Leader in the markets we serve by providing quality products and efficient services to our consumers while learning from their to set even higher standards for our products.
7
Mitchell’s Fruit Farms Ltd
ANALYSIS OF FOOD INDUSTRY In Global World Globally, in the organized agriculture industry, 2,219 million metric tons of “cereal” grains, including wheat and rice, were projected to be produced in the 2009/2010 growing season. This represents a slight decrease from the previous season. This number is from the UN’s Food and Agriculture Organization, publisher of an annual “Food Outlook.” World meat production was projected to climb 1.3% during calendar year 2009, to 285.6 million tons. Dairy production was projected to climb 1.6% in 2009 to 699.0 million tons of milk equivalents. Aquaculture, or the raising of fish on special farms, has become a massive global industry. According to the U.N., aquaculture would provide 36.6% of the world’s fish production during 2009 (142.0 million tons), with traditional commercial fisheries providing the balance. The global processed food and beverages industry is dominated by a handful of multinational corporations. Among the leaders are Unilever, Cadbury Schweppes, H. J. Heinz, Kraft Foods, General Mills and Nestlé. Unilever, for example, estimates that 150 million people per day purchase its products in 150 nations around the globe, ranging from Knorr soups to SlimFast diet meals. The entire food industry, from growing to processing to retailing, is an extremely competitive field where profit margins are typically so low that it is often challenging to maintain profitability. The processed food industry worldwide has been challenged by low growth rates, high-energy costs and changing consumer tastes. High feed costs have been extremely damaging to poultry and livestock firms, and fertilizer, which is typically manufactured from petrochemical sources, has seen very high costs in recent years.
8
Mitchell’s Fruit Farms Ltd While extremely high prices for many commodities, including foods, brought a cash windfall in much of 2006-2008, commodities in general declined dramatically during the global recession, and the agricultural sector has felt the change. Pilgrim’s Pride, a major U.S. poultry processor, took bankruptcy in 2008. Smithfield Foods, the world’s largest pork producer, in February 2009 announced plans to shut six plants and cut production by 10%. Profit margins have been off and exports have been lower at such firms. The global financial crisis has created vast new challenges to all parts of the food industry. Restaurant sales have been dismal in developed countries, as consumers cut back on discretionary purchases and return to simpler, made-at-home meals. Large numbers of U.S. restaurant firms have taken bankruptcy in recent months, including national chains such as Bennigan’s, Steak & Ale and Buffets Holdings, Inc., owner of the Country Buffet and Ryan’s restaurants. Throughout much of the world, technology and globalization have revolutionized the way that we grow food, as well as the way that we transport, process, package, purchase and cook it. Waste and spoilage are reduced (but still a problem) thanks to innovations like flash freezing, interstate highways and refrigerated trucks. Furthermore, it’s an everyday occurrence for consumers in the U.S., Asia or Europe to pick up strawberries from New Zealand or mangos from Mexico in the fresh produce section of the local supermarket. Globalization has led to the rise of massive multinational food processing companies like Nestlé and Kraft, which often sell their foods under local names in local languages, after producing them in regional factories worldwide.
9
Mitchell’s Fruit Farms Ltd In North America, Asia, Europe and elsewhere, producers and retailers of foods (including restaurants) are now faced with the challenge of positioning their brands to represent consistent quality and safety. Companies that rise to this challenge will have significant competitive advantage. This food “safety” positioning will go hand-in-hand with growing demand to satisfy additional consumer concerns about environmentallysound food production methods, fair trade, fair use of labor and humane treatment of agricultural animals. All food processors, grocery distributors and retailers, including supermarkets and restaurants, would do well to study the practices of the handful of companies that have boosted their brands in this regard with superior results, particularly Whole Foods and Starbucks. Health and convenience were the buzzwords driving the global food industry in 2009, according to an article in April 2009’s Food Technology magazine, published by the Institute of Food Technologists, a non-profit group of food scientists. One of the top 10 food trends for the world was “low fat,” which regained its place as the most influential food label claim. 63% of consumers chose products promoted as low fat, while 55% bought foods labeled low in saturated fat. These compared with 40% purchasing items labeled as low carb. The article also pointed out that 71% of consumers most frequently checked food labels for total fat content, compared with 40% checking for total carbs.
Top 10 trends in the World Quick Fix: People want to eat at home: 77% of all dinners in 2004 were eaten there, but people want less hassle in the kitchen. Easy to prepare and ready to eat are key ingredients for most of us. We should expect to see more ultra-quick foods, bagged salads and side dishes. Drive-and Go: More of us are ordering take-out from full-service restaurants like Applebee’s. Take-out sales from these restaurants for almost 10% of sales. More than half of Americans eat this way during the week.
10
Mitchell’s Fruit Farms Ltd Inherently Healthy: Consumers are increasingly choosing naturally healthy foods such as fruit, vegetables, salads, nuts and yogurt. Fruit is now America’s second-favorite snack. Fancy: People are choosing , gourmet foods. Fish, in particular, is undergoing something of a gourmet makeover. Farm-Friendly: Organic and natural are hot, so is fair trade. Expect cocoa to follow on the heels of coffee and tea. Layering of Flavors: Flavored oils and vinegars, pairings of fruity and tangy flavors, Asian, Central American and Latin American flavors are in vogue. Grazing: Healthier snacks in vending machines, single-serving snacks, nutrition bars, diet bars, energy drinks and mineral waters are “in.” Low, No, and Less: Low fat trumps low carb in what people seek in labels. Trans fats are on their way out. Demand for low calorie and light products will continue to grow. Watch for allergen-free claims on food labels. Doctoring Through Diet: Nearly two-thirds of shoppers tried to manage or treat a condition through diet. 72% of this effort addressed heart health. Next to low fat, whole grains were the most influential food label claim, influencing 62% of shoppers. Dairy products with cholesterol-lowering sterols, antioxidant-rich chocolate are making an appearance. Expect more functional foods to appear. Global Gangbusters: Many of the same issues affecting Americans affect overseas, too. Health and convenience loom just as large. These trends are promising, so long as the food industry remains willing to offer convenience without compromising on the demand for healthier food. Fads will come and go, and the government will continue to scrutinize health claims made by food manufacturers. The ageing of baby boomers is driving the food.
11
Mitchell’s Fruit Farms Ltd
In Asia Region Possessing over half the world's population and some very robust economies, the Asia/Pacific region has become a linchpin for many of the world's top food and beverage companies. Top Asia/Pacific food and beverage companies are imbuing a decidedly Western taste, look and feel onto their respective markets. They're doing so with the people that know the West the best - the leading U.S. and European food and beverage processors. Alliances between the leading Asia/Pacific companies and top U.S. and European food and beverage companies - largely through product licensing agreements - continues to help shape the future of this vast region. The result: A consistent shift in consumption and shopping habits for Asia/Pacific consumers. Western-style foods brought about by changing lifestyles are being woven into the culture, underpinned by the impact of developments in retailing, merchandising, packaging and advertising. According to a report by Data-monitor, the London-based independent management consulting firm, cultural changes taking place in eating habits include the steady growth of breakfast cereal consumption and expansion into dairy manufacturing despite lactose intolerance throughout the region. Beer, wine and spirits has been a prevailing market in the region. In scanning the top 10 companies in Prepared Foods Asia/Pacific Leading 50 food and beverage companies, just about all have forged distribution and/or licensing agreements to market and sell such Western stalwarts as Budweiser, Coors, Early Times, Beefeater, Miller Genuine Draft, Nabisco and Kellogg.
12
Mitchell’s Fruit Farms Ltd 1. Kirin Brewery Co. Tokyo, Japan - Wines and liqueurs, brewing, dairy processing KEY BRANDS: Jive, Nippon Blend, Koiwai Kirin is the largest brewer in Japan with a domestic market share of about 50%, and is the third largest brewer in the world. It sells whiskies through a t venture with KirinSeagram Ltd. 2. Asashi Breweries Ltd. Tokyo, Japan - Beer, whisky, breadcrumbs, fruit drinks KEY BRANDS: Bireley's, Horoniga, Asashi Pure Gold The company is pursuing expansion into the food sector more actively than its beer market rivals. Has begun licensed production of Coors beer (USA) and has strengthened its diversification with a recent alliance with Pedigree Petfoods of the UK. 3. Suntory Ltd. Tokyo, Japan - Beer, whiskey, wine, coffee KEY BRANDS: Boss, Akadama, Pekoe, Ginjo Founded in 1899, Suntory launched Japan's wine and whiskey industries and pioneered a new era in the domestic beer industry, establishing itself as a leading beverage maker in Japan and a prominent participant in the world market. 4. Sapporo Breweries Tokyo, Japan - Soft drink, beer, wine, vodka KEY BRANDS: Black Label, Baisen Draft, Sapporo Magnum, Ginjikomi Sapporo was the first Japanese company to market draft beer for home consumption and is leading other beer producers in this field. It is also diversifying into soft drinks, wine, imported liquors. 13
Mitchell’s Fruit Farms Ltd 5. Taiyo Fishery Co. Tokyo, Japan - Fish, sugar, processed foods Taiyo is Japan's second largest fisheries company with diversified interests in feed stuffs, sugar, farm and livestock products. Like other fisheries in Japan, Taiyo is engaged in producing fish pasta through a U.S. subsidiary. 6. Nippon Heat Packers Osaka, Japan - Ham, sausage, dairy Created in 1963 through the merger of Tokushima Ham and Torise Ham, the company specializes in quality ham and sausages. In addition to meat products, Nippon Meat Packers is strong in fresh meat and processed food such as hamburgers. The company has also formed an alliance with U.S. processor Swift. 7. Yamazaki Baking Co. Tokyo, Japan - Cakes, chocolate confectionery, bread, frozen dough KEY BRANDS: Double Soft, Maragoto Banana, Nabisco (licensed) The largest producer of confectionery and bread products in Japan also has interests in convenience stores and cafeterias. Until 1988, the company had an agreement with Nabisco to manufacture confectionery products, but after a reorganization, it's involved only in the distribution of Nabisco products. 8. Ajinomoto Co. Tokyo, Japan - Meat, poultry, fish, biscuits, soup, seasonings KEY BRANDS: Cook Do, Calpis, Chuka-Aji, Knorr, Maromi The company is one of Japan's largest integrated food processing companies. In Asia, the company has t venture distribution and manufacturing businesses with many major companies, most notably C International. 14
Mitchell’s Fruit Farms Ltd 9. Snow Brand Milk Products Tokyo, Japan - Butter, cheese, ice cream, edible oil KEY BRAND: Snow Brand Japan's largest manufacturer of dairy products (butter and cheese), Snow Brand is advancing into frozen foods and expanding its investment in biochemicals. The company has t ventures with Pillsbury (U.S.) and a technological tie-in with Quaker Oats. 10. Itoham Foods Hyogo, Japan - Ham, sausage, general dairy KEY BRAND: Itoham A major player in the sale of processed meat to department stores and meat shops, the company - Japan's largest and oldest producer of processed meats - is planning a diversification into the dairy products and frozen foods sectors and has recently formed a subsidiary with Carnation and Nestle. The company is noted for sound financial decisionmaking and steady growth.
Food Industry in Pakistan According to the Census of Manufacturing Industries there were 822 units engaged in the manufacture of Food and Beverages. According to the UNIDO it is the largest manufacturing industries of the country. Value of production stood at Rs.46.170 billion and manufacturing value added stood at Rs.12.187 billion. Food processing is a relatively capital intensive industry. The share of food in the manufacturing industry of Pakistan is 22.66 percent approximately.
15
Mitchell’s Fruit Farms Ltd The growth rate in the food industry has been estimated at 7.46 per cent per annum. The most rapidly growing items are dairy products fish processed, bakery items, sugar, biscuits and confectioneries, fruit juices and other soft beverages. Rapid export growth has characterized fish preparation, fruit preserves, dry fruits, some beverages and sugar, and honey preparation. Food products (except rice) do not however, make up a significant proportion of Pakistani exports and there is a considerable potential for expanding such exports, especially to Europe and the Gulf region. As many as 79 food manufacturing companies are on the list of Karachi Stock Exchange out of total 707 companies. The paid-up capital of these companies stood at Rs.6.054 billion. They include, some of the biggest groups in the market such as Bawany, Crescent, Habib, Fecto, Premier, Lakson, Burma Oil (producing vegetable oils), Brooke Bond, Clover Foods, Uniliver, National Foods, Mitchells fruit farms and Shezan. The food manufacturing firms have generally performed well on the stock exchange in with capitalization ing an above average increase. Net profit as percentage of share holder's equity has averaged at about 22 percent during for the sugar and allied group, and about 25 per cent for the vegetable oil groups. The net profit ratio for the tobacco sub-sector has been 30 per cent. This compares well with the overall net profit ratio for KSE companies during this period, and averages to about 19 per cent. Thus, there is a significant scope for investment expansion in the food manufacturing sectors. Domestic demand is buoyant and export prospects are bright - although they are yet to be adequately explored. Several major companies including well known multinationals have substantial investment commitments and there are also a large number of middle sized upward mobile domestic firms. Scope, thus exists both for the establishment of wholly owned subsidiaries. There is also a need for technology transfer agreements which can facilitate the access of Pakistani companies, to modern technology and know-how in the areas of processing, preservation and packaging of food manufactures. Several Pakistani firms have developed ambitious modernization programmes.
16
Mitchell’s Fruit Farms Ltd
MITCHELL’S CORPORATE VISION An Insight Mitchell’s corporate vision, a very vast and strategic topic and all concerned shall have their own viewpoint. My viewpoint on this is as under. Mitchell’s is playing a vital role in the Pakistan’s economy. For the last two years, the company is receiving The Top 25 Companies Award. Mitchell’s has been in the market long before independence and still enjoys a good repute. This is the evidence of the company’s dedication, trust and commitment to provide the best quality products in the market. Despite all the odds, Mitchell’s is still the Market Leader in Squashes, Preserves, Sauces and Countlines.
Current Market Position Mitchell’s products are highly appreciated by the trade and the relevant consumers because of its high quality standards. Mitchell’s is the Market Leader in the abovementioned segments for the last many years. Many Multi-National and National Companies have entered the competition. Therefore, the quantity-wise difference between the Mitchell’s and its close competitor has squeezed. Although, the annual growth rate of grocery product is 9% (approx.), but the quantity wise share of Mitchell’s products has not appreciated much in the last five years.
The Company’s Philosophy The management of the company is highly motivated, dedicated and is investing aggressively to achieve the desired results. The company is keen to invest in the manufacturing of quality products to achieve the desired results. Looking at the local market
conditions,
the
company
keeps
on
adding
new
products
for
the
customers. Addition of different flavors of Preserves, Diet Preserves, Cooking Paste, Kasaundi, Countlines and Molded Chocolate is an evidence of this. In addition to this the company is also eager to upgrade its equipments and the human resources.
17
Mitchell’s Fruit Farms Ltd
The Trends In today’s dynamic and rapidly changing world, the trends and the norms of the business have changed. Local companies are ing hands with the Multi-Nationals for additional , long-term business development, sharing of market benefits, technical assistance, up-gradation of the equipments and the human resources, acquiring the potential foreign markets. In addition to this, the customers have developed more trust in the Multi-Nationals.
An Analysis with the Other Companies Multi-National Companies like P&G, Reckitt Benckizer, Shell, Pepsi, Coke, McDonalds, Nestle, Lever, Sony and several others have developed a strong footing in Pakistan. Apart from their good network, their aggressive marketing is the driving force behind their success.
Success Story Marketing team of any company is its driving force. This team should be dynamic enough to lead the company to achieve its objectives. Most marketing professionals mistakenly think of marketing only as selling and promotion. That is why, when they are asked to undertake a marketing activity they present an advertising expense or talk about advertising as the only marketing tool. Marketing is much more than the advertising. These companies do not just sell the products; they identify the consumer needs and satisfy them better than the competitors. I believe that companies like Coca Cola, Microsoft, Lever and many others have attained this position due to the strong marketing and not sales. Selling is one of the several marketing functions and often not the most important one.
18
Mitchell’s Fruit Farms Ltd If the marketer does a good job of identifying consumer needs, developing good products; and pricing, distributing and promoting them effectively, the products will sell very easily. Thus, marketing is a key factor in the business success. The term marketing mean “satisfying customer needs”. There is a stiff competition in the market and only those companies shall succeed who can best read customer wants and deliver the greatest value to their target consumers.
Quality Policy “We, at MITCHELL’S Fruit Farms Limited, are committed to produce best quality products meeting our customers’ requirements at competitive prices, strengthening our position as a Quality Managed Company. To meet this obligation, the company will continue: • Updating of employee skills by training. • Acquisition of new technology. • Re-evaluation of its quality control and quality assurance systems.”
Social Responsibility Community Service Mitchell's has ed hands with the village communities as well as the British Council, the Department for International Development (UK) and Voluntary Service Overseas (UK) in an effort to promote education in rural areas. Twenty-five girls' schools have been set up in the Okara district in an endeavour to boost the levels of female literacy. Also a Teachers Training Institute has been set up to provide quality teaching staff to the local schools. Mitchell's assures that it will continue to work towards its aim - promoting education amongst future generations.
19
Mitchell’s Fruit Farms Ltd Anjuman Khuddam-e-RASOOL ALLAH (AKRA) Anjuman Khuddam-e-Rasool Allah is a community based Non Governmental Organisation (NGO), established in 1976 in Shergarh, at the heart of District Okara. AKRA has a reputation in the surrounding area for providing high quality education to boys and girls from Nursery to Matric. The Anjuman is also well known for its free dispensary, and its role as a social welfare organization in and around Shergarh. AKRA aims to improve life for the rural community, and to this end it has founded a free dispensary, a coeducational primary school, with class 6 to 10 for girls, a boys secondary school and now 18 village primary schools with adult literacy centres in the surrounding district. Work is continuing to open further village schools and to expand those already running. Aims of AKRA Children in rural areas have little access to schools and girls have less than boys. Women involved in agriculture and family work have often had no chance to learn to read and write. The project aims to help a particularly disadvantaged section of the community rural girls and women - by provinding access to basic literacy, numeracy and health education. We aim to train groups of young women throughout Okara District, so that they can develop teaching skills and set up schools in their own villages to provide this basic primary education for boys and girls as well as adult literacy classes.
ISO Award Mitchell’s is the only major food company in Pakistan today with fully integrated operations having its own growing and processing facilities at one location. Modern highvolume industrial equipment, professional management and a trained workforce all combine to ensure that Mitchell’s continues its dominance as the innovator, market leader and trend setter. In this regard a major step was taken in 1998, when Mitchell’s became the first food company in Pakistan to achieve ISO 9001 accreditation, thus becoming more
competitive
on
the
international
stage
also.
20
Mitchell’s Fruit Farms Ltd
DEPARTMENTS OF MITCHELL’S FRUIT FARMS LIMITED
HUMAN RESOURCE DEPARTMENT
COMMERCIAL DEPARTMENT
SYSTEM DEPARTMENT
FINANCE DEPARTMENT
PRODUCTION DEPARTMENT
PLANNING AND STORES DEPARTMENT
TECHNICAL SERVICES DEPARTMENT
QUALITY CONTROL DEPARTMENT
MARKETING DEPARTMENT
21
Mitchell’s Fruit Farms Ltd
HUMAN RESOURCE DEPARTMENT Objective To provide such human resources that will helpful for run the operations of the company in effective and efficient manner, and look after the benefits and interests of personnel of the company so that they can become more productive for the company.
Scope The whole Factory, Head Office and Regional Sales Offices of the company are included in the scope of human resource department.
Duties and Responsibilities 1. Approve training agencies, which give the training to the personnel of MITCHELL’S Fruit Farms Limited. 2. Ensure hygiene conditions and housekeeping of the factory. 3. Approve job contract contractors. 4. Conducts and arranges training programs. 5. Implement measures that are helpful to motivate the personnel of the company. 6. Operational incharge of the factory. 7. Select candidates for internship in different departments for the period of maximum three month.
22
Mitchell’s Fruit Farms Ltd
COMMERCIAL DEPARTMENT Importance in Mitchell’s Fruit Farms Commercial Department in every organization is very important. The importance of commercial department is increased in the case of manufacturing organization. As we know that MITCHELL’S Fruit Farms Limited is a manufacturing company, so there is much importance of commercial department in the company. Without proper functioning of commercial department, company has to bear huge losses, backlogs, stock out and various unnecessary costs. When company faces many brakes in his production process, this leads company to shortage of supply as well as severe losses in shape of idle time of labor and delay in the production. When the company faces such circumstances, it will be unable to fulfill the demand of the market. The customers of the company will also dissatisfy from the company and may switch to the brands of the competitors. The company has to face not only the shortage of inputs items that are used in the production but also shortage of inventories of finish goods. To avoid such problems and costs, the commercial department has to play vital role in the organization for ensuring the continuous production process in the factory.
Objective As we all know the importance of the commercial department in any organization. The functions of the commercial department are related to the Supply Chain Management.
Scope Whole factory, offices particularly all stores.
23
Mitchell’s Fruit Farms Ltd The commercial department in the company sells out scrap material and any wastage’s. Any contract regarding installation, the commercial department signs construction, repair, maintenance and other services requirements.
Functions of Commercial Department The commercial department in the Mitchell’s is performing the following functions. 1.
Procurement of all raw and packing material of prime quality at competitive prices.
2.
Find out new suppliers having good market repute.
3.
Procurement of all components parts for engineering stores.
4.
Procurement of general items for general.
Duties and Responsibilities Commercial Manager 1.
Selection and continuous assessment of suppliers.
2.
Preparation and approval of purchasing documents.
3.
Maintenance of an approved suppliers listing.
Assistant Manager (Commercial & Farming) 1. Procure services, raw and packing materials, plant, and equipments/spares of high quality, with advice of commercial manager and relevant executives at competitive costs and quality as per the company’s requirements and to ensure that no shortage occurs at any time. 2. Forecast and plan purchases of material with minimum blockage of the company’s funds, in stock, while ensuring uninterrupted supply to the works. 3. To explore and develop new sources of supply for economy. 4. Verification of materials and of clearing bills. 5. Negotiate prices, and conditions with suppliers in consultation with Executive Director, Commercial Manager And Incharge Operations Division. 6. Issuance of purchase orders. 7. Approval of purchase requisitions.
24
Mitchell’s Fruit Farms Ltd
SYSTEM DEPARTMENT Objective Objective of the System Department of the company is to computerize the business operations of the MITCHELL’S Fruit Farms Limited.
Scope of System Department In the scope of system department, all Regional Sales Offices, the Head Office, Factory and Farms of the company are included.
Functions of System Department 1. Following are the major functions of the system department. 2. The control on inventory through computerized system 3. Provision of new computers and other accessories for the company 4. It keeps link between the Regional Sales Offices with Marketing Department of the company. 5. Maintenance of computer networking at MITCHELL’S Fruit Farms Limited 6. 5.
Keep the back up of all confidential and necessary data for future
needs.
Recent Achievement of System Department Following are the recent achievements of system department: Computerized ing System MITCHELL’S Fruit Farms Limited has its own computerized ing system that facilitates the finance department make the company’s procedures more efficient.
25
Mitchell’s Fruit Farms Ltd This ing system is according to the requirement of finance department and is facilitating finance people in a marvelous way. It cause reduction in corruption, delays in payments and make easy the documentation of the ing transactions.
Inventory System The system department of the company recently introduced the inventory system of the company. This system again increases the efficiency of Planning And Stores Department. Sales System To facilitate the Marketing Department and all Regional Sales Offices, the system department introduces a sales system. This system is working very well within the company. Human Resource System Now the system department of the company is working on the preparation of human resource system. It will be a computerized system. It will include the records of attendance, salaries, the retirements, promotions and all other information about personnel matters. All these systems are Oracle based and prepared by the system department of MITCHELL’S Fruit Farms Limited.
26
Mitchell’s Fruit Farms Ltd
FINANCE DEPARTMENT Objective The main objective of the Finance Department in the company is to arrange the finance for the business operations from various sources, control the activities that are related with the finance, maintain and update the company’s s.
Scope In the scope of finance department, all the Regional Sales Offices, the Head Office of the company, factory and farms are included. All firms raise money and control the financial aspects of their business. The assistants deal with the following sections 1.
Wages and payroll system
2.
Production expense system
3.
Ledger section
4.
Variable cost section
5.
Cash and excise section
Functions of Finance Department The following are the main functions of the finance department 1.
To link all departments with each other financially
2.
Arrange monetary resources at proper time
3.
Allocate resources throughout the organization
4.
Deals with banks investment firms, Govt. agencies and tax department.
5.
Carry out final auditing and financial records prepared
27
Mitchell’s Fruit Farms Ltd 6.
Details of calculations of salaries, income tax and funds for loans
7.
Calculate different expenses of the company
PRODUCTION DEPARTMENT Objective The major objective of the Production Department is to produce quality goods at minimum cost by utilizing the company’s resources in an efficient manner.
Labor Force In the production department, there are round about 350 workers are working including females laborers. In the department, there are two types of labor force is working for producing the high quality products. 1.
Permanent work force
2.
Contract work force
1. PERMANENT WORK FORCE This kind of work force is working in the factory on the permanent bases and has pension and other fringe benefits during service and after their service. 2. CONTRACT WORK FORCE This kind of work force is working in the factory on the contract bases. They have less facilities and incentives than the permanent work force. The have not right of any kink of benefits after their retirements. Their pay is also less than that of permanent workers of the factory.
Sections of Production Department
28
Mitchell’s Fruit Farms Ltd The production department of MITCHELL’S Fruit Farms Limited is divided into two sub sections. These sections are 1.
Groceries
2.
Confectionery
1. Groceries In this section of production department, different groceries products are produced. Preserves, Ketchup, Sauces, Squashes, Pickles, Apple Processing, Tomato Processing Juice, Tomato Puree, Kimb Oil Extraction, Strawberry Fruit Processing, Sweet Corn Processing, Garden Peas Processing, Syrups, Fruit Cocktail, Vinegar, Salsa, Lemon Juice bottled, Apricot processing is done in the groceries section of production department. Shifts of Groceries Section Generally, there are two shifts working in the groceries section. But it can be increased or decreased according to the order of the planning and stores department.
2. Confectionary This section of production department is sub divided into further three sections. 1.
Countline Section
2.
Sugar Confectionery Section
3.
Molded Section
A. Countline Section In the Countline section of confectionery, six products is produced that are Jubilee Maxi, Jubilee Mini, Jubilee Junior, Discoveree, Unitee and Twentee-1. B. Sugar Confectionary Section In this section, there are two types of candies are produced. High boiled candy Low boiled candy 29
Mitchell’s Fruit Farms Ltd
1. High Boiled Candy In this type of candy, there are hard candies cookers are used for the production of these candies. The main ingredients of high boiled candy are sugar and glucose. During the processing of high boiled candy, the high temperature is used for cooking. 2. Low Boiled Candy The production of such type of candy is exercise under the much lower temperature as compare to high boiled candies. The major ingredients of low boiled candies are sugar, glucose, and milk. In Sugar Confectionery Section, Milk Toffee, Butterscotch, Éclairs, Mangoman and Fruit Bon Bons are made. C. Molded Section In this section, the products are produced that are based on purely milk chocolate. This milk chocolate is made of sugar, Cocoa Powder, Cocoa Butter, FCMP, SMP, Lecithin and Flavors.
Duties and Responsibilities Management Executives 1.
To plan production for both grocery and confectionery sections.
2.
To keep all the machinery in running order.
3.
To proper material handling.
4.
To formulate requirement of new material
5.
To control all factory overhead costs in the sections.
6.
To plan for maximum efficiency of quality products.
30
Mitchell’s Fruit Farms Ltd 7.
To control labor.
8.
To identify and addressing the training needs of all the personnel.
Production Supervisors 1.
To train the workers.
2.
To ensure machines that they are in working orders.
3.
To execute the daily production as per program.
4.
To control and allocate the responsibilities to workers in their respective sections.
31
Mitchell’s Fruit Farms Ltd
PLANNING AND STORES DEPARTMENT Objective To ensure hygience, and arrangements of all materials in stores and successful execution of orders.
Scope In the scope of planning and stores department, following stores are included. 1.
Juice/peel store
2.
Raw and packing material store (grocery)
3.
Raw and packing material store (confectionery)
4.
Finished goods store
5.
Engineering store
6.
Returns store
Production Planning Production planning is the very major duty and responsibility of the planning and stores department. This department advises to production department about the production planning on the regular bases. Planning and stores department receive monthly indents from the marketing department, head office and in the light of these above mentioned indents and current situation of inventories in the stores, make production plans for the next month. These plans are on monthly as well as daily bases.
32
Mitchell’s Fruit Farms Ltd
Dispatches Other main function of this department is the dispatches of stocks to all regional sales offices. All the RSO’s are communicate their requirements by “order for supplies of stocks”.
Duties and Responsibilities Management 1. Prompt settlement of claims from carriers for any damage. 2. Proper maintenance and care of vehicles. 3. See trade returns at workshop and sorted in time to decrease wastage of raw and packaging materials. 4. Dispatching goods, According to orders of RSO’s and customers promptly and company goods. 5. Ensuring proper receipt, storage and recording of all raw and packing materials, machinery, spares and all other stocks bought by the company. 6. Drawing plans for daily and monthly bases according to indents received from the RSO’s. Dispatch Superintendent Provide assistance to Assistant Manager (planning and stores.)
33
Mitchell’s Fruit Farms Ltd
TECHNICAL SERVICES DEPARTMENT Objective To facilitate the production department and ensure the continuity of production process on regular basis.
Scope All production plants of MITCHELL’S Fruit Farms Limited are included in the scope of technical services department.
Functions of Technical Service Department 1. To keep the plant in running condition by providing efficient and timely maintenance and repair. 2. Do the preventive maintenance for avoiding any damage. 3. To repair the faults if is occurred. 4. To assess and arrange the requirements of materials, equipment, resources and manpower for executing its maintenance activities. 5. To have close liaison with inventory management and commercial department to maintain the necessary level of spares required.
34
Mitchell’s Fruit Farms Ltd
QUALITY CONTROL DEPARTMENT Objective To ensure that all the products, make by MITCHELL’S Fruit Farms Limited are of standard quality by inspection and testing of incoming material, in-process and outgoing products.
Scope Grocery, confectionery, Countline, praline, raw material and packaging material. Samples for supplier evaluation, raw material, and packing material, juice, peel and finish goods stores.
Sub Sections The quality control department in MITCHELL’S Fruit Farms Limited is divided into five sub sections. These are the following. 1.
Main lab.
2.
Line control lab of grocery section
3.
Line control lab of confectionery section
4.
Incubation lab.
5.
Microbiological lab.
1. Main Lab This section of quality control department is used for the lab-scale product development and the testing of incoming raw material; packaging material is done in this section of the department.
35
Mitchell’s Fruit Farms Ltd 2. Line Control Lab. For Grocery This section is used to do in-process inspection and testing of grocery as per quality plans and documented procedures. 3. Line Control Lab. For Confectionery This section is used to do in-process inspection and testing of confectionery as per quality plans and documented procedures. 4. Incubation Lab This lab is very important section of the quality control department. This section keep representative samples as per documented procedures from production for monitoring of shelf life of the products. This section is also responsible for keeping reference samples of products for comparison of colors, flavor, set for comparison as per documented procedures. 5. Microbiological Lab. This section of the department is used for the testing purposes of canned juices, tomato puree, ketchup, and Chilli garlic sauce and for hygiene purpose.
Criteria for Approving the Input Material As MITCHELL’S Fruit Farms Limited deals with the food products and the major input items are several fruits. Although the company uses the farms fresh fruit that are cultivated in the Mitchell’s own farms. But these fruit are not enough for fulfilling the demand of the market. So the commercial department purchases the fruits from the farmers. First of all, the quality control department inspects these fruit. The vegetables and fruit are test by the random sampling methods. In more than 30% defective items, the quality control department rejects the whole supply.
36
Mitchell’s Fruit Farms Ltd
Duties and Responsibilities Quality Control Manager 1. Preparation of quality and design plan. 2. Managing testing in, out and before the manufacturing of the products. 3. Manage segregation, identification and handling of non-conformities as per documented procedures. 4. Identify training needs of the entire Lab. Assistant. 5. Approval of inspection reports and records. 6. Approval of recipes. 7. Implements the statistical techniques to control defects. 8. Evaluate supplier by their products and by the visits of their production facilities. Assistant Manager (QC) 1. Study and understand quality plans, work instructions and maintenance of quality records. Assistant Manager also suggests the recommendations and modifications in quality plans and formats of ISO forms. 2. He is also responsible of doing microbiological testing of various types of materials. 3. Identify all critical control points in the processes and establish hazard analyses of critical points. Lab Assistant 1. Performing tests an inspection of incoming raw and packaging materials as per documented procedures. 2. Filling, maintenance of tests and inspection records. 3. Reporting to quality control manager or Assitt. Manager (QC) in case of nonconformities. 4. Keep maintenance of representative and reference samples as per documented procedures. 5. In the absence of executives, they can approve all tests and inspection reports.
37
Mitchell’s Fruit Farms Ltd
MARKETING DEPARTMENT Objective The Marketing Department is responsible for planning and developing products and executing their sales at an affordable price through promotional activities.
SCOPE The office of marketing department, all the regional sales offices of MITCHELL’S Fruit Farms Limited.
Role of Marketing Department All functions of marketing department are very much important to the MITCHELL’S Fruit Farms Limited. “To create the favorable image of the brands and company in the minds of the customers which results in sales on which company exists”.
Introduction The Marketing Department comprises of the Marketing Office (situated at Head Office) and three regional Sales Offices termed as RSOs. The Marketing Department is responsible for planning and developing products and executing their sales at an affordable price through promotional activities. The Marketing Department is headed by Marketing Manager – MM, who is further assisted by Assistant Brand Managers and Assistant Manager Channel Development- AM (CD).
38
Mitchell’s Fruit Farms Ltd The three Regional Sales Offices situated in Islamabad, Lahore and Karachi - known as RSO (N), RSO(C) and RSO (S), respectively. A Regional Sales Manager termed as RSM supervises each RSO. In RSO (S) and RSO(C), an Assistant Sales Manager termed as ASM assists each RSM. The goods are sold to the consumer in the local market by the RSMs through the following intermediary bodies: •
Distributors
•
Institutional Customers
The
Marketing
Office
and RSOs function
for
procurement
of
orders
and
execution of these within stipulated time. The RSOs directly procure and execute local orders (only from Pakistan). The Marketing office procures and executes export orders besides supervising the RSOs. The Marketing office is responsible for the preparation of annual sales forecasts. The Marketing office to Management Representative for preventive and corrective actions also communicates the quality complaints and observations of the customers. RSMs are responsible for the maintenance of stocks & stores. RSMs check returns of the products from the local market in order to keep these at a lower level.
Duties & Responsibilities Marketing Manager 1. Planning new products and their marketing. 2. Formulating and implementing the marketing plan. 3. Determine suitable prices for the products, which should meet company’s objectives and should be affordable for the consumers. 4. Develop campaigns for promoting sales of the company’s products. 5. Make the products available to the place of consumer’s convenience and preference. 6. Dealing with Export customers determining prices and systems for export. 7. Preparing capital expenditure requirements of the marketing department. 39
Mitchell’s Fruit Farms Ltd Assistant Manager Assist the MM in the following activities: 1. Preparing agenda of Annual sales Conference or other conferences and meetings. 2. Monitoring Sales and taking measures for increase in sales. 3. Forecast sales of the national market. 4. Monitor competitors’ promotional activities in the market. 5. Suggesting new markets and products. 6. Other jobs related to Marketing and Sales Regional Sales Managers 1. Preparation of Annual Sales Forecasts – product-wise and region-wise, of their respective regions. 2. To obtain and execute orders from the local market. 3. To report local quality complaints to AM (M). 4. To maintain stocks and stores within their respective offices. 5. To take care of product returns from the market. Assistant Sales Managers 1. To assist RSMs in all matters related to Sales Management. 2. To make regular visits to the distributors of local and out-station towns of respective regions. 3. Monitor the performance; stock levels, sales & returns etc. of the distributors through Sales Representatives. 4. To monitor performance & activities of sales officers (sales, services, coverage, distribution & merchandising) in the market and identify the week areas and providing them training for improvements. 5. To monitor the reporting system of sales officers & Distributors. 6. To update and maintain their own reporting system. 7. Coordination in marketing activities.
40
Mitchell’s Fruit Farms Ltd
Products of Mitchell’s Fruit Farms Limited It is our aim at Mitchell's to provide you with healthy, innovative and best quality food that will tempt your appetite at all times. Above all, we also promise convenience & variety at affordable prices. With nine categories encoming over 140 products, we are proud to present the Mitchell's family - products to grace your dining table on the breakfast and dinner occasions as well as products to appease your sweet tooth. These products are divided into two sections which are: •
Grocery Products
•
Confectionery Products
41
Mitchell’s Fruit Farms Ltd
GROCERY PRODUCTS Jams & Jellies Mitchell’s produces certain flavors of jams and basically it is used in the breakfast and certain other. These flavors are mango, orange, apple, strawberry, and mixed fruit.
Squashes & Syrups Pure fruit juices and pulp go into the Mitchell's Squashes and Syrups. Extracted from fruits carefully selected from the farm in Renala, these squashes come in a range of rich natural flavors. These are available in different flavors.
42
Mitchell’s Fruit Farms Ltd
Ketchups & Sauces Tomato Ketchup made from ripe of red tomatoes, Mitchell's tomato ketchup add zest to snacks, burgers or sandwiches, kababs or samosas, and in a ready to use foods. Mitchell's Tomato Ketchup, Chilli Garlic Sauce, Chilli Sauce, Chilli Ginger Sauce and Mexican Salsa are rapidly gaining a market abroad.
Canned Food Mitchell’s produced high quality of canned fruits and vegetables that have natural taste and favorite among the customers. These ready-to-use products bring convenience along with taste to every Kitchen.
43
Mitchell’s Fruit Farms Ltd
Fruit drinks Natural drinks have great demand and replace the carbonated soft drinks consumption. So Mitchell’s launched Fruit Drinks (Ready-to-Drink). These Fruit Drinks are available in Mango, Lemon, Orange, Apple and Lychee flavours.
Pickles and vinegar Mitchell's pickles are made in the true traditional way. Fruit and vegetables are processed through natural processes.
Mango, green chilly, mixed pickle and fruit vinegar is
available in this category.
44
Mitchell’s Fruit Farms Ltd
Bottled Water With changing needs of consumers and their shifting towards hygienic products, like bottled drinking water, Mitchell's launched Natural Drinking Water, Balance.
CONFECTIONERY PRODUCTS Sugar Confectionery 1. Milk Toffees 2. Butterscotch 3. Fruit Bon Bons 4. Milk Chocolate Eclairs Toffees, Sweets and Éclairs made from the freshest and purest ingredients are the favorites of young and old alike.
45
Mitchell’s Fruit Farms Ltd
Chocolates Countline Chocolate 1. Jubilee 2. Discoveree 3. Unitee 4. Twentee-1 A variety of count lines made from the most delicious and mouth-watering ingredients are sweet snack for any time.
Molded Chocolate 1. Festival 2. Top Milk 3. Golden Heart Molded chocolates are especially made for special occasions. These products are delightful selection of finest selected chocolate and creamy chocolate.
46
Mitchell’s Fruit Farms Ltd
FINANCIAL ANALYSIS
47
Mitchell’s Fruit Farms Ltd
Mitchell’s Fruit Farms Limited Profit and Loss For the year ended September 30, 2009
48
Mitchell’s Fruit Farms Ltd
2009 Rupees
2008 Rupees
1,278,678,610 (1,043,682,073)
1,038,637,296 (848,823,705)
234,996,537 (49,669,971)
189,813,591 (40,779,924)
(124,290,843)
(108,184,873)
Other operating expenses
(1,947,763)
(1,535,470)
Other operating income
12,962,644
6,123,349
Profit from operations
72,020,604
45,436,673
(53,487,027)
(32,323,268)
Profit before tax
18,533,577
13,133,405
Taxation
(4,481,935)
(4,775,865)
Profit for the year
14,051,642
8,337,540
2.79
1.65
Sales Cost of Sales Gross Profit istration expenses Distribution and marketing expenses
Finance cost
Earning per share
Mitchell’s Fruit Farms Limited 49
Mitchell’s Fruit Farms Ltd
Balance sheet As at September 30, 2009 2009 Rupees
2008 Rupees
100,000,000
100,000,000
50,400,000
50,400,000
9,635,878 209,806,010
9,635,878 200,794,368
269,841,888
260,830,246
0 50,478,690 50,478,690
7,368,418 49,607,813 56,976,231
0 307,671,564 87,816,200 12,099,523
14,736,842 288,711,025 89,805,848 10,311,523
407,587,287
403,565,238
727,907,865
721,371,715
Equity & Liabilities Capital & Reserves Authorized capital 10,000,000 ordinary shares of Rs. 10 each Issued subscribed & paid up capital 5,040,000 Ordinary shares of Rs. 10 each Reserves Inappropriated Profit Non-Current Liabilities Long term loan- secured Deffered liabilities Current Liabilities Current portion of long term loans- secured Short term running finances- secured Trade & other payables Accured finance cost Contigencies & Commitments
2009 Rupees
2008 Rupees
321,687,827
322,282,388
Assets Non-current assets Property,plant & equipment
50
Mitchell’s Fruit Farms Ltd
Intangible assets
1,325,725
1,657,156
Long term loans & deposits
1,110,482
716,334
Biological assets
5,397,600
5,132,000
329,521,634
329,787,878
12,781,281
13,305,761
260,382,527 58,674,183
288,698,972 39,067,739
receivables
53,330,558
39,601,514
Cash & bank balances
13,217,682
10,909,851
398,386,231
391,583,837
727,907,865 Mitchell’s Fruit Farms Limited Cash Flow Statement For the year ended September 30, 2009
721,371,715
Current Assets Stores, spares & loose tools Stock in trade Trade debts Advances, deposits, prepayments& other
51
Mitchell’s Fruit Farms Ltd
2009
2008
Rupees
Rupees
118,255,880
(20,151,348)
Finance cost paid
(49,992,135)
(25,296,527)
Net income tax paid
(23,535723)
(2,120,815)
Retirement benefits paid
(8,054,172)
(3,444,636)
Net cash inflow / (outflow) from operating activities
36,673,850
(51,013,326)
Cash flows from operating activities Cash generated from / (used in) operations
Cash flows from investing activities (36,263,479)
Fixed capital expenditure Sale proceeds of property, plant and equipment Net increase in long term security deposits Proceeds from sale of biological assets Net cash outflow from investing activities
9,375,961 (394,148) 815,999
(84,627,733) 1,421,672 (339,111) 769,300
(26,465,667)
(82,775,872)
(22,105,260)
(14,736,842)
(4,755,631)
(10,080,000)
(26,860,891)
(24,816,842)
(16,652,708) (277,801,174)
(158,606,040) (119,195,134)
(294,453,882)
(277,801,174)
Cash flows from financing activities Repayment of long term loans Dividend paid Net cash outflow from financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year
Mitchell’s Fruit Farms Limited 52
Mitchell’s Fruit Farms Ltd
Statement of changes in equity For the year ended September 30, 2009
Share
Share
General
capital
reserve
Balance as at September 30, 50,400,000 9,335,878
300,000
Accumulated profit
Rupees Total
202,536,828
262,572,706
(10,080,000)
(10,080,000)
8,337,540
8,337,540
200,794,368
260,830,246
(5,040,000)
(5,040,000)
-
14,051,642
14,051,642
300,000
209,806,010
269,841,888
2007 Final dividend for the year ended
-
September 30, 2007 Profit for the year ended
-
-
-
-
September 30, 2008 balance as at September 30, 50,400,000 9,335,878 2008 Final dividend for the year ended
-
September 30, 2008 Profit for the year September 30, 2009 Balance as at September 30, 2009
-
-
300,000
-
-
50,400,000 9,335,878
Horizontal Analysis of Profit and Loss 2009
2008
2007 53
Mitchell’s Fruit Farms Ltd
Sales Cost of sales Gross profit istration expenses Distribution and marketing expense Other operating expenses Other operating income Profit from operations Finance cost Profit before tax Taxation Profit for the year
147.55% 147.77% 146.55% 148.37% 184.96% 73.08% 323.11% 118% 251.47% 46.61% 31.79% 54.75
H oriz ontal analysis 2008
119.85% 120.18% 118.37% 121.81% 160.99% 57.61% 152.63% 74.45% 151.98% 33.03% 33.87% 32.49%
100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
1 2 3 4 5 6 7 8 9 10
1
Horizontal analysis 2009
2 3 4 5 6 7 8 9 10
Vertical Analysis of Profit and Loss 2009
2008
2007 54
Mitchell’s Fruit Farms Ltd
Sales Cost of sales Gross profit istration expenses Distribution and marketing expense Other operating expenses Other operating income Profit from operations Finance cost Profit before tax Taxation Profit for the year Vertical analysis 2008
100% 81.62% 18.38% 3.88% 9.72% 0.15% 1.01% 5.63% 4.18% 1.45% 0.35% 1.1%
100% 81.72% 18.28% 3.93% 10.42% 0.15% 0.59% 4.37% 3.11% 1.26% 0.46% 0.8%
100% 81.5% 18.5% 3.86% 7.75% 0.31% 0.46% 7.04% 2.45% 4.59% 0.16% 2.96%
1 2 3 4 5 6 7 8 9 10
vieriecal analysis 2009
1 2 3 4 5 6 7 8 9 10
55
Mitchell’s Fruit Farms Ltd
Horizontal Analysis of Balance Sheet Equity & Liabilities
2009
2008
2007
100%
100%
100%
100%
100%
100%
Reserves
100%
100%
100%
Unappropriated Profit
103.59% 99.14%
100%
102.77% 99.34%
100%
Long term loan- secured
0
100%
Deffered liabilities
124.07% 121.93%
100%
80.39%
100%
Capital & Reserves Authorised capital 10,000,000 ordinary shares of Rs. 10 each Issued subscribed & paid up capital 5,040,000 Ordinary shares of Rs. 10 each
Non-Current Liabilities 33.33%
90.74%
Current Liabilities
56
Mitchell’s Fruit Farms Ltd
Current portion of long term loans- secured
0
Short term running finances- secured
210.94% 197.94%
100%
Trade & other payables
98.51%
100.74%
100%
Accured finance cost
368.35% 313.92%
100%
161.09% 159.5% 125.85
100%
%
100%
Total Equities
100%
100%
124.72%
Assets
2009
2008
2007
Property, plant & equipment
121.36%
121.6%
100%
Intangible assets
64%
80%
100%
Long term loans & deposits
294.38%
189.9%
100%
Biological assets
102.79% 120.83
97.73%
100%
%
120.92%
100%
Stores, spares & loose tools
117.21%
122.02%
100%
Stock in trade
140.72%
156.02%
100%
Trade debts Advances,
127.74%
85.06%
100%
143.66% 49.57%
106.67% 40.91%
100% 100%
Non-current assets
Current Assets
deposits,
receivables Cash & bank balances
prepayments&
other
57
Mitchell’s Fruit Farms Ltd
130.34%
128.11%
100%
125.85%
125.85%
100%
2009
2008
2007
5,040,000 Ordinary shares of Rs. 10 each
6.92%
6.99%
8.71%
Reserves
1.32%
1.34%
1.67%
Unappropriated Profit
28.82%
27.84%
35.02%
37.07%
36.16%
45.4%
Long term loan- secured
0
1.02%
3.82%
Deffered liabilities
6.93%
6.88%
7.03%
6.93%
7.90%
10.86
Current portion of long term loans- secured
0
2.04%
2.55%
Short term running finances- secured
42.27%
40.02%
25.22%
Total Assets
Vertical Analysis of Balance Sheet Equity & Liabilities Capital & Reserves Issued subscribed & paid up capital
Non-Current Liabilities
Current Liabilities
58
Mitchell’s Fruit Farms Ltd
Trade & other payables
12.06%
2.45%
15.41%
Accured finance cost
1.66%
1.43%
0.57%
55.99%
55.94%
43.75%
Total Equities
100%
100%
100%
Assets
2009
2008
2007
Property, plant & equipment
49.19%
44.68%
45.82%
Intangible assets
0.18%
0.23%
0.36%
Long term loans & deposits
0.15%
0.1%
0.07%
Biological assets
0.74%
0.71%
0.91%
45.27%
45.72%
47.15
Stores, spares & loose tools
1.76%
1.84%
1.89%
Stock in trade
35.77%
40.02%
31.99%
Trade debts Advances,
8.06%
5.42%
7.94%
7.33%
5.49%
6.42%
Non-current assets
Current Assets
receivables
deposits,
prepayments&
other
59
Mitchell’s Fruit Farms Ltd
Cash & bank balances
Total Assets
Verticle analysis of Equities 2008
1.82%
1.51%
4.61%
54.73%
54.28%
52.85%
100%
100%
100%
1 2 3 4 5 6 7 8 9 10
Verticle analysis of Equities 2009
1 2 3 4 5 6 7 8 9 10
60
Mitchell’s Fruit Farms Ltd
Verticle analysis of Assets 2008
1 2 3 4 5 6 7 8 9 10
Verticle analysis of Assets 2009
1 2 3 4 5 6 7 8 9 10
RATIO ANALYSIS Ratio analysis involves methods of calculating and interpreting financial ratios to analyze and monitor the firm’s performance.
Categories of financial ratios Financial ratios can be divided for convenience into five basic categories: 1)
Liquidity
61
Mitchell’s Fruit Farms Ltd 2)
Activity
3)
Debt
4)
Profitability
5)
Market
Liquidity Ratios A firm’s ability to satisfy its short-term obligations as they come due is called liquidity. Liquidity refers to the solvency of the firm’s overall financial position __ the ease with which it can pay its bill. These ratios are viewed as a good indicator of cash flow problems.
Current ratio It measures the ability of firm to meet its short-term obligations. Its formula is Current ratio = Current asset Current liabilities
2009: Current ratio =
398,386,231 407,587,287 = 0.9774 times
2008: Current ratio = 391,538,837 403,565,228 Current ratio = 0.9703 times 62
Mitchell’s Fruit Farms Ltd
Quick (acid–test) ratio It shows the least liquid current asset. Quick ratio = Current assets – inventory Current liabilities
2009: Quick ratio = 398,386,231 - 260,382,527 407,587,287 Quick ratio =
0.34 times
2008: Quick ratio = 391,583,837 – 288,698,972 403,565,238 = 0.25 times
63
Mitchell’s Fruit Farms Ltd
1.4
LIQUIDITY RATIOS
1.2 1 0.8 0.6
RATIOS
CURRENT RATIO: 0.4
CURRENT RATIO:
2009
2008
2007
0.98
0.97
1.21
0.34
0.25
0.47
QUICK(ACID TEST) RATIO :
0.2 0
QUICK(ACID RATIO 2007 : 2009 TEST) 2008
64
Mitchell’s Fruit Farms Ltd
Activity ratios: It measures the speed with which various s are converted into sales or cash--inflows or outflows.
Inventory turnover
It measures the activity, or liquidity, of a firm’s inventory. Inventory turnover =
cost of good sold Inventory
2009: Inventory turnover
=
1043682073 260382527
Inventory turnover
=
Inventory turnover
═
4.01 times
2008: 848823705 288698972 Inventory turnover
=
2.94 times
65
Mitchell’s Fruit Farms Ltd
Average collection period: It is the average amount of time needed to collect s receivable.
receivable Average collection period =
Annual sales 360
2009: 58674183 Average collection period
=
1278678610 360
Average collection period
= 16.52 days
2008: 39067739 Average collection period =
1038637296 360
Average collection period
=
13.54 days
Average age of inventory: It is the average days of inventory that shows how many days inventory takes place. Average age of inventory =
365
66
Mitchell’s Fruit Farms Ltd Inventory turnover
2009: Average age of inventory
=
365 3.62 times
Average age of inventory =
100.83 days
Average age of inventory =
365_____
2008:
4.59 times =
79.52 days
Total asset turnover: It indicates the efficiency with which the firm uses its assets to generate sales.
Total asset turnover =
sales Total asset
2009: Total asset turnover =
1278678610 727907865
Total asset turnover =
1.76 times
67
Mitchell’s Fruit Farms Ltd
2008: Total asset turnover
=
1038637296 721371715
Total asset turnover
=
1.44 times
68
Mitchell’s Fruit Farms Ltd
120
INVENTORY TURNOVER:
ACTIVITY RATIOS
100
AVERAGE COLLECTION PERIOD:
80 60
RATIOS
AVERAGE AGE OF INVENTORY:
2009
2008
2007
4.01
2.94
3.82
AVERAGE COLLECTION PERIOD:
16.52
13.54
19.08
AVERAGE AGE OF INVENTORY:
100.83
79.52
95.55
1.76
1.44
1.50
40 20 0
INVENTORY TURNOVER: 2009 2008 2007
TOTAL ASSETS TURNOVER:
TOTAL ASSETS TURNOVER:
Graphical Representation of Activity Ratios
Debts ratios: It indicates the amount of other people’s money being used to generate profits.
Debt ratio: Measures the proportion of total assets financed by the firm’s creditors.
Debt ratio
=
Total liabilities 69
Mitchell’s Fruit Farms Ltd Total assets
2009: Debt ratio
=
458,065,968
= 0.629
=
62.9%
727,907,865
2008: Debt ratio
=
460,541,469 721,371,715
Debt ratio
=
0.638
Debt ratio
=
63.8%
Debt / Equity Ratio: It measures the ratio of debt to the stockholders equity. Debt / Equity ratio
=
Total Liabilities Stock holders equity
2009: Debt / Equity Ratio = 458,065,977 269,841,888 =
1.70
70
Mitchell’s Fruit Farms Ltd =
170%
2008: Debt / Equity Ratio =
460,541,469 260,830,246 =
1.77
=
177%
Time interest earned ratio: Measures the firm’s ability to make contractual interest payments some times called the interest coverage ratio.
Time interest earned ratio =
earning before interest and taxes Interest
2009: Time interest earned ratio
=
72,020,604 53,487,027
Time interest earned ratio =
1.35 times
2008: Time interest earned ratio
=
45,436,673 32,323,268
Time interest earned ratio
=
1.41 times
71
Mitchell’s Fruit Farms Ltd
72
Mitchell’s Fruit Farms Ltd
Debt Ratios
RATIOS DEBT RATIO: DEBT TO EQUITY RATIO:
2009
2008
2007
62.9%
63.8%
54.6%
170%
177%
120%
1.35
141
2.87
TIME-INTEREST EARNED RATIO:
180.00% 160.00% 140.00% 120.00% DEBT RATIO:
100.00% 80.00%
DEBT TO EQUITY RATIO:
60.00% 40.00% 20.00% 0.00% 2009
2008
2007
73
Mitchell’s Fruit Farms Ltd
Graphical Representation of Debt ratios
Profitability ratios: These ratio measures enable the analyst to evaluate the firm’s profit with respect to given level of sales, a certain level of assets, or the owners` investment.
Gross profit margin: It measures the percentage of each sales dollar remaining after the firm has paid for its goods.
Gross profit margin =
gross profit Sale
2009: Gross profit margin =
234,996,537 1,278,678,610
Gross profit margin
= =
0.184 18.4%
2008:
74
Mitchell’s Fruit Farms Ltd Gross profit margin
=
189,813,591 1,038,637,296
Gross profit margin
=
0.183
=
18.3%
Operating profit margin: It measures the percentage of each sales dollar remaining after all cost and expenses other than interest, taxes, preferred stock dividend are deducted; the “pure profits” earned on each sales dollar.
Operating profit margin =
operating profits Sales
2009: Operating profit margin =
72,020,604 1,278,678,610
Operating profit margin =
0.056
=
5.6%
2008: Operating profit margin = 45,436,673 1,038,637,296 =
0.044 = 4.4%
Net profit margin: 75
Mitchell’s Fruit Farms Ltd
It measures the percentage of each sales dollar remaining after all cost and expenses included interest, taxes, preferred stock dividends have been deducted. If it is higher, the firm is better.
Net profit margin =
Earning available for common stock holders Sales
2009: Net profit margin
=
14,051,642 1,278,678,610
Net profit margin
=
0.011
=
1.1%
=
8,337,540
2008: Net profit margin
1,038637,296 Net profit margin
=
0.0080
=
0.80%
Earning per share: It represents the dollar amount earned on behalf of each share.
Earning per share
=
Earning available for common stock holders No. of shares of common stock outstanding
76
Mitchell’s Fruit Farms Ltd
2009: Earning per share
=
14,051,642 5,040,000 =
Rs. 2.79
2008: Earning per share =
8,337,540 5,040,000
Earning per share =
Rs. 1.654
Return on total assets: It measures the overall effectiveness of management in generating profits with its available assets; also called the return on investment (ROI).
Return on total assets
=
Earning available for common stock holders Total assets
2009: Return on total assets
=
14,051,642 727,907,865
Return on total assets
=
0.0193
Return on total assets
=
1.93% 77
Mitchell’s Fruit Farms Ltd
2008: Return on total assets
= 8,337,540 721,371,715
Return on total assets
=
Return on total assets
=
0.0116 1.16%
Return on common equity: It measures the return earned on the common stockholders’ investment in the firm. Return on common equity = Earning available for common stock holders Common stock equity
2009
:
Return on common equity =
14,051,642 50,400,000
Return on common equity =
0.2788
Return on common equity = 27.88%
2008:
78
Mitchell’s Fruit Farms Ltd Return on common equity
=
8,337,540 50,400,000
Return on common equity =
0.1654
Return on common equity =
16.54%
GROSS PROFIT MARGIN:
60.00% 50.00%
PROFITABILITY RATIOS OPERATING
40.00%
PROFIT MARGIN: NET PROFIT MARGIN:
30.00% 20.00%
RATIOS
2009
2008
2007
18.14%
18.3%
18.5%
5.6%
4.4%
7%
1.1%
0.80%
2.46%
RETURN ON ASSETS
1.93%
1.16%
4.4%
RETURN ON COMMON EQUITY
27.88%
16.54%
50.92%
10.00% 0.00%
2009
2008
RETURN ON ASSETS
2007
GROSS PROFIT MARGIN:
OPERATING PROFIT MARGIN:
NET PROFIT MARGIN:
RETURN ON COMMON EQUITY
5.09 EARNING PER SHARE:
2.79
1.65
79
Mitchell’s Fruit Farms Ltd Graphical Representation of Profitability Ratios
Market ratios: It relates the current market value, as measured by its current share price, to certain ing values.
Price/Earning ratio:
It measures the amount that investors are willing to pay for each dollar (Rs.) of a firm’s earning. If it is higher, investors’ confidents is also higher.
Price/earning ratio
=
Market price per share of common stock Earning per share
2009: Price/earning ratio =
Rs. 73.90 Rs. 2.79
Price/earning ratio
=
26.49
2008: Price/earning ratio
=
Rs.58.75 Rs.1.65
80
Mitchell’s Fruit Farms Ltd Price/earning ratio
=
35.61
Market/ Book ratio: It provides an assessment of how investors view the firm’s performance.
Market/ Book ratio
=
Market price per share of common stock Book value per share of common stock
Book value per share =
Common stock equity No. Of share of common stock outstanding
=
269841888 5040000
=
53.54
2009:
Market/ Book ratio
=
Rs.73.90 Rs. 53.54
Market/ Book ratio
=
1.38
2008: Book value per share =
Common stock equity 81
Mitchell’s Fruit Farms Ltd No. Of share of common stock outstanding =
260830246 5040000
=
Market/ Book ratio
51.75
=
Rs.58.75 Rs.51.75
Market/ Book ratio =
1.14
Dividend Yield: It provides information to stockholders about the dividend yield on their investment.
Dividend yield
=
Dividend Per share Market price per share
2009: Dividend yield
=
Rs. 2 Rs.73.90 82
Mitchell’s Fruit Farms Ltd
Dividend yield
=
0.027
2008: Dividend yield
=
Rs. 1 Rs.58.75
Dividend yield
=
0.017
83
Mitchell’s Fruit Farms Ltd
60 PRICE / MARKET RATIOS
50 40 30
RATIOS
20 10
PRICE / EARNING RATIO: 0
2009
EARNING RATIO: MARKET / BOOK RARIO: DIVIDEND YIELD:
2009
2008
2007
26.49
35.61
-
53.51
51.75
-
0.027
0.017
-
2008
MARKET / BOOK RARIO:
DIVIDEND YIELD:
Graphical Representation of Market Ratios
SWOT ANALYSIS OF MITCHELL’S FRUIT FARM
STRENGTHS 1. Mitchell’s fruit farm limited is the oldest food processing company of Pakistan. The company was incorporated in 1933. This is a distinctive feature of the company because all other food-processing companies start their operations at least after the independence of Pakistan. 2. In 1998, Mitchell’s achieve another destination: ISO 9001 certification, and at no better time than the successful completion of sixty-five years of bringing quality products to the consumers. It is a matter of human pride that the Mitchell’s has become the first food company in Pakistan to achieve this prestigious distinction.
84
Mitchell’s Fruit Farms Ltd 3. Today, in Pakistan, Mitchell’s is the only major company with fully- integrated operations having its own growing and processing facilities at one location. Modern, high-volume industrial equipment, professional management and a trained workforce ensure that Mitchell’s maintained its lead. 4. In 1983, Mitchell’s golden jubilee was celebrated with great funfair. A chocolate bar, appropriately named jubilee, was launched to commemorate the event. Mitchell’s is the pioneer in Pakistan for chocolate production. 5. Molded chocolate (praline) is very popular in all over the world but till 2001 no national company was producing molded chocolate in the country. So Mitchell’s launched molded chocolate with the successful commissioning of a molded line in 2001. 6. The process of toffee making was automated in 2000 with PLC-based machines/systems, to ensure uniform quality of products. Mitchell’s is the first national company that takes this step. Thus, the modernization of operation has always been top priority with Mitchell’s. 7. Mitchell’s is the market leader of chocolate, toffee making and tomato ketchup. 8. Mitchell’s is the single national company that has so large product mix.
WEAKNESSES 1. The management style that has adopted by the company is bureaucratic. Degree of formalization and centralization is high. 2. The promotion mix of the company and ment programs is not very good. It is justifiable to say that company is not so much serious in promoting its brands. The company only enjoying the good repute of the brand name Mitchell’s. 3. There is lack of short term and long-term decision-making regarding production schedules, purchasing decisions and marketing programs. 4. As we know that there is severe competition in the food industry, but still the availability of Mitchell’s products is very poor.
85
Mitchell’s Fruit Farms Ltd 5. Company is offering less discount as compare to other relevant industry’s companies like Shezan, National, Rafhan, Salman’s and Ahmed to retailers and distributors.
OPPORTUNITIES 1. Increasing proportion of working women, school going children and office going men increase the size of target market of the food industry. These factors cause growing demand of jams, jellies, marmalades, sugar free products and caned vegetables and juices open a wide window of opportunities for MITCHELL’S Fruit Farms Limited. 2. As the rural populations of the country tend to migrate to cities for multiple purposes, for this trend enhanced the market size for the food processing companies. It is also an opportunity for the MITCHELL’S Fruit Farms Limited to avail this opportunity and get benefits from this growing market. 3. Now people are much conscious about their health and fitness as before the past. They have tendency to use the foods that are nutritious and best for their health. So this market trend is also create new horizons for the food processing companies. 4. It is fact that the market size of fast foods and snacks remarkably. As the many products are the complimentary for these kinds of fast food and snacks item. This thing is growing the demand of tomato ketchup, sauces and preserves. 5. There is an opportunity for the company to increase the depths of its existing products categories. For example, company may introduce the squashes, sauces and tomato ketchup in more packaging like in buckets as this strategy has adopted by other competitors of the company. The company may introduce the pet bottle of 1.50 ml like Jam-E-Sheeren and Rooh Afza. It will expand the target market of MITCHELL’S Fruit Farms Limited. 6. Other very open opportunity for the company is that the company may invest in new product categories like mineral water, cheese, snakes and other dairy products.
THREATS 1. The competition in the food processing industry is much severe than the past. Now the many national companies are ing hands with multi-national corporations for
86
Mitchell’s Fruit Farms Ltd additional in of marketing activities, production expertise and financial resources. 2. Additional general sales taxes and tough economic conditions of the country are reducing the purchasing power of the people. So in case of food item, this fact is also applicable because GST is also imposed on food items.
FINDINGS AND SUGGESTIONS 1. The display of Mitchell’s squashes was not so good versus its competitors. 2. Mitchell’s products are highly appreciated by the trade and the relevant consumers because of its high quality standards. The customers like to purchase the product labeled Mitchell’s. 3. The company is trendsetter and market leader in the food industry of the country. Other companies’ competing the Mitchell’s very well. This competition among the food companies has increase from last few years because some national companies are ing hands with multi-national companies for additional , but this fact is satisfactory for the 87
Mitchell’s Fruit Farms Ltd
management of Mitchell’s fruit farms that Mitchell’s is still # 1. Although other competitors becoming closer and closer to Mitchell’s fruit farms. 4. The company is the market leader in squashes, countline, preserves, toffees and sauces. And giving tough time in other products categories. 5. The company producing quality products since its incorporation. The company
got ISO 9001 certification in 1998. It is a great honor for the company because Mitchell’s is the first food company that achieved ISO 9001 certification not in food industry but also other industries of Pakistan. The management of the company is highly motivated, dedicated and is investing aggressively to achieve the desired results. The company is keen to invest in the manufacturing of quality products. 6. Mitchell’s is playing a vital role in the Pakistan’s economy. The company is
also receiving the top 25 Companies’s Award from last many years. Mitchell’s has been in the market long before independence and up till now is enjoying a good repute. 7. The new brands of squashes that are pineapple and guava have not get excellent response from the customers just because of poor ment campaign. Proper ment was necessary to create awareness an interest for new brands. 8. In case of molded chocolates, the company has got very good response by the customers. The new brand of molded chocolate golden hearts got positive from customers, whether it is the off-season of the chocolates. Although the company is pioneer in the production of chocolates and has good repute for its production, but seems unable to get desired results from thee launch of top milk. 9. The company can also expand its business in other product ranges like butter, cheese, mineral water, snacks etc. 10. It is the need of the hour to introduce one product of the company in different packages. For example, Mitchell’s can introduce its squashes in other different 88
Mitchell’s Fruit Farms Ltd
weights. Mitchell’s can launch it in 1.5 ml like Rooh Afza and Jam-E-Sheeren. It can be launched in 500ml or 450 ml. These launches shall provide convenience utility, helpful for increasing the brand acceptance and expand the target market 11. In the same way, the company can launch tomato ketchup and jams in bucket like other competitors. This will increase the sale of the company and helpful for competing the food market successfully.
PEST ANALYSIS PEST analysis stands for “Political, Economic, Social and Technological analysis” and describes a framework of macro level environmental factors used in the environmental scanning components of strategic management. It is the part of the external analysis when conducting a strategic analysis or doing market research and gives a certain overview of the different macro environmental factors that the company has to take into consideration. It is useful strategic tool for understanding market growth or decline, business position, potential and direction of operations.
Political Factors •
In Pakistan there is no government stability or political stability this also disturbs the working of Mitchell’s fruit farms because every coming government comes with its own agenda of taxation policies and etc.
89
Mitchell’s Fruit Farms Ltd •
Import and Export policies are changing rapidly in Pakistan this also affects the working on company, because import raw material and export products in all over the world.
•
Now Govt. is democratic but it imposes lot of new taxes and increases the percentages of existing taxes which effects on the company.
•
Pakistan is front line state in ware against terrorism so it has great effect on the political decisions by Govt. which indirectly effect the company.
Economic factors Such as interest rates, exchange rates and inflation rates are also affecting the working of company . •
Interest Rates are at the highest peak now a days as KIBOR is in between 12% to 13%. Company has to obtain finance on higher rat of interest.
•
Exchange rates are changing on daily basis which also causes a major factor for the profits and expenses of the company.
•
Inflation is also a major economic problem of Pakistan. Inflation also affecting the company because it exports product and import raw material, products prices are increased day by day.
Social Factors
Social factors like cultural aspects, health consciousness, population growth rate, career attitudes and emphasis on safety also affect the working of an organization, company also affects from these factors. •
Mitchell’s, has a complete green environment.
•
It is conducting health programs for its employees. 90
Mitchell’s Fruit Farms Ltd •
It is helping the victims of Swat, Balakot and other destroyed areas by giving them food, clothing and such other things with the name of Deutsche Bank Foundation, Pakistan.
•
As its products are famous among clients so it keeps good relations with its customers.
•
It is also give benefits to the retiring workers.
Technological Factors •
Mitchell’s, is adopting the latest technologies to complete its operations.
•
Its offices are equipped with the latest hardwares and softwares to connect worldwide and to its customers and suppliers.
•
It has a IT professionals who are responsible to keep the company up to date in technology.
•
It is spending a huge amount in research & development department.
•
Rate of technological change is very fast.
Legal Factors Legal factors include discrimination laws, consumer laws, antitrust laws, employment laws and health and safety laws. All these factors also can affect how a company operates, its costs and the demand for its products. Mitchell’s is completely following the all Pakistani Laws in this context.
CONCLUSION
91
Mitchell’s Fruit Farms Ltd There is no doubt in this fact that Mitchell’s fruit farms is one of few national companies that playing very important role in the economy of the country. Mitchell’s is known as trendsetter, innovator and progressive company in the food industry of Pakistan. Mitchell’s recent achievements like automation of toffee making process molded chocolate plant, ISO 9001 and launch of several new products reveals the commitment and professionalism of the company management. The company set high standards of quality and has experience of 68 years that help the company to successfully competing even multi-national companies.
References: History, Company information and Departments. From: http://-reports.blogspot.com/2009/10/report-on-mitchells-fruit-farms-page1.html Analysis of world food Industry. From: www.ologopolywatch.com Analysis of food Industry Asia and Pakistan. From: www.bnet.com/foods Products of Mitchell’s From: www.mitchells.com.pk Financial Analysis Done by ourselves SWOT Analysis and Suggestions. From: http://-reports.blogspot.com/2009/10/report-on-mitchells-fruit-farms-page2.html PEST analysis Done by ourselves by using different websites and reports.
92
Related Documents g842
Project Report On Mitchell's Fruit Farm Ltd. 5l4h4d
December 2019 76
Project Report On Dairy Farm 694q5j
December 2019 60
Project Report On Fresh Papaya Fruit 271a40
December 2019 45
Project Report On Hindalco Industries Ltd,renukoot.monika 694k4d
December 2019 80
Annual Report Project On Muthoot Finance Ltd 4s491l
December 2021 0
Project Report On Everest Bank Ltd i71j
December 2021 0More Documents from "Muhammad Irfan" 143q3a
Panduan pt 193i1m
November 2020 0
Communication In Banking Organization 182m31
October 2019 116
Project Report On Mitchell's Fruit Farm Ltd. 5l4h4d
December 2019 76
Asuhan Keperawatan Dengan Kegawat Daruratan Sistem Endokrin Hiperglikemi 1cy36
May 2020 5
G.p.a.-calculator-uaf[2].xlsx u5q1o
December 2021 0