Fauji Foods keen on doubling its market share to 8pc in dairy sector says: Bloomberg

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Lahore: A report compiled by Bloomberg says that Fauji Foods, a subsidiary of army-owned Fauji Foundation has shown a keen interest in broadening its market share in the dairy business which would increase competition in the domestic market.

The article cited that its owner Fauji Foundation wants to increase its market share of packaged milk business from 4pc to 8pc within this financial year, said its Chief Financial officer Syed Aamir Ahsan in a statement to Bloomberg.

The dairy sector has attracted the attention of international investors, as Dutch entity Royal FrieslandCampina NV acquired a 51pc majority stake in Engro Foods last year in December. It is counted to be among the largest acquisitions in the consumer sector of the country, said Bloomberg.

Fauji Foods had entered the dairy business by acquiring a majority shareholding in Noon Pakistan’s facilities and spent Rs7b to overhaul its capacity from 100,000 litres a day to 600,000 litres a day. Fauji Foods has already gained a 19pc share of the country’s creamer segment share, said Ahsan to Bloomberg.

Bloomberg also reached out to Exotix Partners LLPs an equity research based in Dubai whose head Hasnain Malik commented “Processed dairy has become much more competitive. There is no doubt that Fauji’s marketing push behind its brands — Dostea and Nurpur Original — has put pressure on the incumbents to respond.”

Ahsan added that due to poorly formulated policies of the present government, the dairy sector had shrunk and Fauji Foods was the only company in the dairy sector to have increased its market share. He said that as a result of government policies, the agriculture sector had also been severely impacted.

The shares of Fauji Foods have declined 3.6pc this year, whereas its competitor Engro Foods shares have registered a fall of 48pc at the KSE-100 index on the Pakistan Stock Exchange, said Bloomberg