A PROJECT OF WTO Agreements & Its Biz

Concerns

ON

RAFHAN

Prepared by

Umer ZiaMaria AshrafQurat-ul-Ain LiaqatEngr. Ali Imran

Presented to

Sir Yawar Abbass

UNIVERSITY OF AGRICULTURE FAISALABAD

Table of Contents

Acknowledgements..........................................................................................................Abstract .............................................................................................................................Introduction of Rafhan.....................................................................................................Vision ..................................................................................................................................Mission Statement…………...............................................................................................Core Values .......................................................................................................................Financial Highlights ………………………………………….................................................SWOT Analysis.....................................................................................................................Exports…………………………………………………………….………………………………..Exporting Products & Countries........................................................................................Export Financial Highlights………………...........................................................................Importing Products & Countries……................................................................................Reasons for increasing Exports………………………………………………………………..Recommendation……………………………………………………………………………….

Acknowledgements

Firstly we would thank to Allah for giving us the opportunity and the resources to be able to do something productive with our lives. Without His blessings we would not have been able to come as far as we have. Then our sincere thanks to sir Yawar Abbass for helping us throughout this report. His guidelines have been very useful for us in preparing this report. He helped us find new ways of being innovative and creative. This report would not have been possible without his cooperation and continuous direction.

Abstract

This report is about the WTO impacts on Rafhan as an organization. We discuss the introduction of Rafhan, EXPORTS & IMORTS ,pre 2005 era & post 2005 era, current situation, differential analysis. We discuss the SWOT analysis in which we talk about the strengths, weaknesses, opportunities, and threats the organization is facing s. Then the PEST analysis is generally about how the external factors affect the growth and stability of the product. We move further to talk about Recommendations.

Introduction of Rafhan:

Rafhan Maize Products Co. Ltd. started its operation as a pioneer corn refining industry in Pakistan. From the relatively modest start, the operations of Rafhan Maize have grown into one of the largest agro-based industries in Pakistan over the last 47 years.

Rafhan Maize , No.1 producer of corn refining products, is an affiliate of Corn Products International Inc. who are one of the world’s largest corn refiner.It produces;High-quality food ingredients & industrial products derived from wet milling of corn & other starch based products.Sweetener line includes various types of Rafhan liquid glucose , globe glucose syrup, Cerelose dextrose mono-hydrate, Mor-sweet & Nu-Bru high maltose syrups & Enzose Hydrol, Rafhan caramel color & Karo golden syrup.

PRODUCER OF HIGH QUALITY PRODUCTS:Rafhan maize is a pioneer in application of starch , including unique modified starches for basic industries such as:

Textile Paper making Corrugation

Rafhan Maize produces high quality food ingredient & industrial products. All these products have leading market position & are being used in more than 50 different types of industries, as essential raw material from local resources.

Major consuming industries include:

Textile Paper Corrugation Confectionary Pharmaceuticals Chemicals Baking Beverages Ice cream Processed food Tobacco Foundry Syrups & squashes Tanning Poultry, cattle & fish feeds, & so many other food & non-food industries

The company has expanded & modernized starch plant to produce wide range of products branded as: Rafhan, Coragum, Globe, Snowflake, Penetrese, Amisol, Tex-o-film, Q-tac & Coratex for multiple applications.

Sweeteners line includes various types of Rafhan liquid glucose , globe glucose syrup, Cerelose dextrose mono-hydrate, Mor-sweet & Nu-Bru high maltose syrups & Enzose Hydrol, Rafhan caramel color & Karo golden syrup.

Vision

To be premier provider of refined agricultural based ingredients & products in region.

Mission Statement

To grow business consistently through positive relationship with customers to attain full customer satisfaction and to bring continuous improvement by adopting those business practices which add values to our customers, employees & share holders.

Core Values 1. Integrity2. Excellence3. Respect4. Financial Success

Financial Highlights:

SWOT Analysis

Strengths 1. An Affiliation with Corn Product International.Rafhan is an affiliate of CPI Inc. USA , so it always enjoy the status & respect of leading MNC during exports & imports or any transaction. 2. Monopolistic Organization.In Pakistan, Rafhan Enjoys monopolistic status as there is no big rival & no cut throat competition .3. Positive response from customers.According to our research Rafhan always gets positive response from its customers because the innovative & customer focused approach of its management.4. Highly Professional Team.In Rafhan ,mostly people are very high caliber, potential, profile that makes it in always Top 25 companies of Pakistan. 5. Strong believers of Kaizen.Rafhan’s management philosophy is kaizen i.e continuous improvement.

Weaknesses1. Focus on industrial Products not on FMCG.Their focus is Marjory on industrial products & Rafhan mostly involves in Business to Business transactions. Due to this reason they are not enjoying bulk of profit, they should go for consumer goods Marketing.2. Packaging.As a monopolistic organization, some time they neglect the importance of good packing material to save cost, but it is very harmful during exports.3. Lack of diversification.Rafhan’s major focus on corn & its derivatives , they never plan to diversify their business although they have greater brand equity.4. Non Availability of its own Energy Unit.A lot of generic firms like Sitara ,Kohinoor & Ibrahim ,established their own energy /power plants but Rafhan won’t. They should focus on it.5. Lack of Production Capacity to meet Export Demands.Rafhan is not fulfilling demand of PAKISTAN properly due to lack of production capacities, that’s why they won’t go for intensive export marketing.

Opportunities1.Increased demand of highly standardized quality products.Due to ISO , WTO ,demand of high standard products is increased and Rafhan is meeting all standards , so they can get peaks.2. Increased consumption of Starches in Middle East.In middle east due to some adoption of western life style , consumption of starches has been increased , so Rafhan can get benefit from it.3. AwarenessGrowing dissatisfaction with competitors and increasing awareness about health and hygiene issues have led to increased Rafhan’s product consumption.4. Reduction in Import Tariffs & Duties in Mid East & Asian Countries.

Before WTO , Mid East & some Asian countries had applied high duties on import of starches & glucose in their countries ,but now they have reduced up to certain level.

Threats1. Competition.After solely implementation of WTO, Rafhan have to face strong competition with Indian & Chinese companies which are producing low cost & high quality products.2. Shortage & high price of single raw material Maize.Rafhan’s focus is only Maize for its production, but due to one or another reason growers are not growing maize in bulk which yields shortage and high prices.

3. Energy Crunch of country.Due to present energy crises its Herculean task to meet demands of exports in time.

EXPORTSRafhan has made extra efforts to increase export volumes by enhancing its presence in the global markets to earn valuable foreign exchange. Major contribution in export came from starches. The Middle Eastern market continued to remain the major buyer of our products due to geographical proximity and traditional business relations. There is a big potential and growing demand in these markets particularly in food business which your Company plans to exploit further. Rafhan Maize has also explored new opportunities in other countries in the region which resulted in significant increase in export business of Company in the year 2007 as compared to last year. We believe that Rafhan Maize is well positioned to take advantage of its experience, knowledge and innovative product line to further expand export business in the region.

Exporting Products:1. Liquid Glucose2. Cerelose3. Dextrine4. Starches

Exporting Countries: Dubai Afghanistan Uzbekistan Turkmenistan Lebanon Philippines Egypt Yemen Abu-Dhabi Ecuador Colombia Malaysia Middle East African countries

Export Associates:1. Corn Products International Kenya.2. Stanford Food Industry, Malaysia.3. Indumaiz Del Ecuador S.A ,Ecuador.4. Industriaz Del Maiz S.A, Colombia

Export Financial Highlights:

2007 2006 2005 2004 2003Net SalesRs. Million 7578 6127 5194 4534 4031ExportRs. Million 856 625 478 367 326%Age

11.3 10.2 9.2 8.1 8.1

Importing products:1. Activated Carbon2. Filter aid3. Resins4. Electrical & Electronics Equipments5. Mechanical Equipments

Importing Countries: China US EU

Reasons for increasing Exports in terms of quantity & percentage:

1. WTO Agreement on Standards.Export of Rafhan is increased gradually, due to certain standards which are implemented by WTO globally, its competitors are relatively facing difficulties to adopt such standards.

- Standards about Environmental pollution control - Standards about Sanitary & phytosanitary issues- Standards about Food safety like HACCP , GMP

2. WTO Focus on Tariff reduction.For exporting Starches , Glucose before 2005 , there was high tariff duties approx. 22.5% in middle east but after 2005 they have voluntarily decreased duties up to 14.2% although WTO is not implemented yet,That’s why Export of Rafhan have been increased.

3. RESEARCH AND DEVELOPMENTDriving continuous improvement is not new at Rafhan with the passion to provide best value of money to its customers. There is a constant endeavor at all levels of the organization to better the Company’s performance by offering best quality and ser vices. Research and Development is an integral part of Company’s operations to keep pace with the technological advancement and maintain the competitiveness. That is why, we have further expanded our research and development activities, focusing on market-driven innovations, value-added ingredients and new fields of knowledge. Rafhan production facilities are supported by R & D Team who can simulate manufacturing processes and tests to meet the particular requirements of valuable customers. Rafhan’s Customer Application Technological Support Team truly differentiates Rafhan Maize in the market. Focusing on optimizing productivity, running trials to improve performance and trouble shooting to provide solutions have earned Company the reputation of being the provider of customized products and solutions.

4. Change before Change Changes youINTEGRATED QUALITY ANDENVIRONMENTAL MANAGEMENTSYSTEMSQuality has always been an integral part of Company’s operations. Rafhan recognize that our strength lies in the strength of our customers and is committed to provide them with quality and services which exceed their expectations. Rafhan is constantly striving to achieve excellence in our Quality Assurance and Environmental Management Systems as defined under ISO-9001:2000 and ISO- 14001:2004. Furthermore, in accordance with Corn Products International and Company policy, Rafhan is adopting possible measures for the protection of surroundings by constantly monitoring emissions and other discharges from manufacturing facilities. The Company has already implemented ISO-9001:2000 standards at all departments and facilities. Quality circles are formed to highlight issues, study them and come up with workable solutions to continuously improve the operations in the Company. Rafhan next strategic plan is to integrate ISO-18001:1999 OHSAS along with ISO-9001:2000 QMS and ISO- 14001:2004 EMS. Implementation of ISO- 14001:2004 EMS and ISO-18001:1999 Occupational Health, Safety & Series (OHSAS) are in progress. Implementation of all these standards set by Internal Organization for Standardization will further boost your Company’s image in the national and global markets after implementation of WTO, as Quality, Environment, Health and Safety conscious supplier of world class products and ingredients.

Recommendations:1. To meet export demands, Rafhan should install

power plant otherwise they will loose their identity in export competition.

2. To meet export demands they should expedite work on 3rd plant in interior Sindh to lower down transportation costs too.

3. Rafhan should improve its Packaging , which is relatively weak point.