Pakistan & Gulf Economist

Supreme rate of growth for Pakistan’s food sector

Interview with Mr Gul Mohammad Lot — Chairman, Mehran Group of Industries

PAGE: Tell me something about yourself, please:

Gul Mohammad Lot: I was born in Pakistan in the Diplo area of Thar District in Sindh. At a very young age, I joined my Father, late Mr. Ghullam Muhammad Lot in his business. As far as education is concerned, I have completed my bachelors in Administration from the London School of Business and obtained master’s degree in political science from the University of Sindh, Hyderabad. I pursued a fulfilling career in politics, ultimately concluding my tenure in the Senate in 2015. My journey as a politician was marked by a deep sense of service and commitment to my nation.

I, the Chairman of M/s. Mehran Spice & Food Industries, became a part of my father’s business during 1980s when I was quite young and within few years the company grew to become one of the leading spice & food industries globally. At the moment, we are exporting products to more than 50 countries worldwide. Mehran is a world leader in quality rice, equipped with the most advanced rice plant from Germany.

We entered in local market in year 2011 and within few years, Mehran has captured major share in local market. From continuous last three years, the local sales growth of Mehran Spice & Food Industries is increasing and the growth of export sales are also increasing many folds.

Mehran Spice & Food Industries is an ISO 9001 & ISO 22000 certified leader in the quality food business. Our mission is to be a consumer-oriented company with a keen insight of food products ensuring quality, consistency and an authentic taste, backup with state-of-the-art technology to obtain optimum result.

Mehran Spice & Food Industries have been honored many national and international awards:

PAGE: Prices have gone through the roof in the wake of global political uncertainty, etc. What about the spike in raw material cost for food sector?

Gul Mohammad Lot: In recent years, the global political landscape has witnessed its fair share of uncertainty, which has had a profound impact on various sectors, including the food industry in Pakistan. A significant challenge facing the food sector in the country is the surge in raw material costs. The depreciation of the Pakistani rupee against major international currencies and due global political instability has made imported raw materials more expensive and even directly affected the cost of production for food companies in Pakistan. Energy and oil prices are also sensitive to geopolitical events, impacting the cost of processing and transporting food products. Fluctuations in energy and oil prices would ripple through the entire supply chain, increasing expenses for food companies.

Pakistan is facing the challenge of soaring prices of essential food items, making it increasingly difficult for the citizen to afford basic necessities such as wheat, rice, and other staple foods. High inflation and economic instability may erode the purchasing power of individuals, making even basic food items more expensive. The cost of production for farmers and manufacturers has also increased due to inflation.

PAGE: The food processing industry is the 2nd largest industry of Pakistan. Could you dilate upon it?

Gul Mohammad Lot: The food processing industry in Pakistan has emerged as a vital sector of the economy and is currently the second-largest industry in the country. The unceasing demand for essential food products, the changing lifestyle of the population, and the growing preference for ready-to-eat foods have all contributed to the industry’s rapid expansion. As lifestyles become increasingly hectic, people are seeking convenient meal solutions. Ready-to-eat foods have gained immense popularity due to their time-saving and hassle-free preparation, making them a preferred choice for many. Consumers today are more conscious of what they eat, leading to a growing demand for high-quality, nutritious, and hygienic food products. The food processing industry has adapted to meet these expectations.

The core purpose of Mehran Spice & Food Industry is to provide best quality products to customers by procurement of pure and natural raw materials around the globe and it is the key of our success. Therefore Mehran’s name is famous globally, we do not compromise on quality. Our purpose is to provide premium food products to meet the best interest of customers. Our spices and mix blends are made from superior quality raw materials and processed untouched by hand ensuring natural flavor and aroma. Our Quality Control department regularly monitors the different phases from purchase of raw material to research and development to packaging and distribution while conforming to national and international regulation and legislation. Adhering to stringent international regulations and upholding high standard presents challenges in meeting quality requirements. Procuring and importing products is a complex process, involving international testing by SGS and various other authorities to ensure the acquisition of specific, high-quality products. This ensures highest quality at each stage of production for our consumers to safely enjoy our food products.

Mehran, products across all categories are manufactured, packed, stored and transported under the most hygienic conditions while maintaining international quality standards. This is made possible through regular quality checks and audits involving rigorous inspection of all products as per international best practices.

The food processing industry in Pakistan stands as a pillar of the nation’s economy, serving essential food items to a growing population. The story of our Mehran’s sales growth is a testament to our dedication, innovation, and the trust of our customers. Year by year, we’ve consistently improved our sales performance and set new records. This journey wouldn’t be possible without the remarkable efforts of our team and the support of our valued customers. We look forward to the future with optimism and excitement, ready to embrace new challenges and opportunities.

PAGE: What is your take on foreign investment in food sector of Pakistan?

Gul Mohammad Lot: Foreign investment in the food sector of Pakistan has emerged as a significant driver of economic growth and transformation. Foreign investors are interested in diverse food products, ranging from processed foods and beverages to agricultural production. This investment contributes to expanding the variety and quality of food options available to Pakistani consumers and world over.

The recent decrease in the dollar rate in Pakistan has generated mixed emotions and discussions across the nation. While my view it as a positive development that may lead to a decrease in inflation, it’s important to consider the impact on various sectors, particularly the exporters. Reduced inflation can boost consumer confidence, encouraging spending and stimulating the domestic economy. A declining dollar rate poses challenges for exporters. It makes their goods less competitive in international markets, potentially impacting export volumes and profitability. The overall economic stability, which includes exchange rates and political stability, is a critical factor in attracting foreign investment. A more stable currency and a predictable economic environment can make Pakistan more appealing to foreign investors. Stable governance and policies can build investor confidence and reduce uncertainty. The food sector in Pakistan holds tremendous potential for both domestic consumption and exports. A strategic focus on this sector, supported by favourable policies, can lead to substantial growth.

The exchange rate of the US dollar to the Pakistani rupee is a critical economic indicator that affects various aspects of Pakistan’s financial landscape. The recent history of the dollar exchange rate in Pakistani rupees has been marked by notable fluctuations. In July 2023, the exchange rate for the US dollar was relatively stable, fluctuating between 282 to 285 Pakistani rupees. At this time, the currency market was holding steady, and businesses and individuals were adapting to these rates. In September 2023, the exchange rate saw a significant rise, climbing to levels between 320 to 324 Pakistani rupees per US dollar. This increase raised concerns, impacting businesses, importers, and the overall economy. Now, as of October 2023, we are witnessing a downward trend, with the exchange rate falling to levels between 275 to 278 Pakistani rupees per US dollar. This decrease indicates a certain degree of stability returning to the market; government must take a comprehensive, long-term approach that includes political stability, economic reforms, infrastructure development, and diversification of exports. In particular, the food sector represents a promising area for investment, and with the right policies in place, it can flourish and contribute to the nation’s economic stability and growth.

PAGE: What is your standpoint on frozen food processing sector in Pakistan?

Gul Mohammad Lot: Frozen products have rapidly gained popularity across the Middle East, the Rest of the World, and Pakistan due to their convenience and time-saving attributes. In a fast-paced world, the demand for frozen products is on the rise. In today’s busy world, women often opt for convenient and easy-to-prepare foods. Their convenience and minimal preparation time make them a popular choice among individuals and families seeking efficient meal solutions. The frozen food industry offers a diverse range of products, this diversity caters to a wide spectrum of consumer tastes and dietary preferences.

Mehran Spice & Food Industries, as it embarks on its journey will produce and export frozen products, we have set up a new facility at Korangi factory, and in the near future, we’ll introduce our frozen food product line to a global audience. Few items which are ready to launch are attached herewith. The future appears promising for the frozen food industry, with companies like Mehran leading the way. Mehran’s strong commitment to maintaining high hygienic standards aligns perfectly with the expectations of consumers seeking safe and wholesome frozen foods and attractive and sustainable packaging contributes to the appeal of frozen products.

Pakistani companies are increasingly exploring international markets. They are exporting frozen products, thus contributing to the growth of the country’s food processing industry and taking the taste of Pakistani cuisine to the global stage. The frozen food processing sector does face challenges, such as maintaining a cold chain infrastructure, ensuring product quality and safety, and dealing with regulatory compliance. Additionally, there is a need for more awareness regarding the proper handling and cooking of frozen foods to ensure food safety.

Mehran Spice & Food Industries has garnered a reputation for producing high-quality, flavourful, and hygienic food products worldwide. Our vision to establish itself as a top international brand of Frozen Food Products, just as it has with its other product ranges like Rice, Spices, Vermicelli, Ketchup, Sauces, and more. Mehran’s commitment to delivering exceptional taste and maintaining stringent hygiene standards has won the trust and loyalty of consumers both in Pakistan and around the world. The delightful flavours and reliable quality have contributed to the increasing demand for Mehran’s frozen products.

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