March 3, 2015
Nestle starts sales of pasteurised milk in Pakistan
As part of a new venture into Pakistan''s US$23 billion dairy market, Nestle Pakistan Ltd has begun sales of pasteurised milk, with deliveries made to 100 homes in Lahore for the past three months.
In a market where 95% of dairy products consist of unprocessed types, Nestle is embarking on "the right direction", said Amreen Soorani, an analyst at Karachi-based JS Global Capital.
He also noted that the upper-middle class is increasingly concerned with hygiene standards. The demography swelled to 84 million people in 2002-2011, close to half of the overall local population, a 2014 study stated.
Currently, sales of processed milk products in the country is expected to reach US$1.99 billion by 2019, according to Euromonitor International.
In five years, the market could expand by 7-8% in five years, said Magdi Batato, the CEO of Nestle Pakistan.
Although there were companies selling milk in ultra-high temperature form, the sector continued to struggle against the frequent power outages in Pakistan.
Because of the power problem, dairy and juice company Engro Foods Ltd terminated sales of pasteurised milk in 2014 after a yearof operations in Karachi.
At present, the Pakistani diary sector is valued at about US$23 billion yearly, saidZoya Ahmed Zaidi, an analyst at AKD Securities in Karachi. In the coming five years, the value could increase by about 10%.