SUMMARY STRATEGIC BUYING AT NATIONAL FOODS, PAKISTAN a recipe for success FROM SYEDA SAKINA TUR REHMAN AREEBA FATIMA MAHNOOR DUHA MAHAD RASHID AREEB ABID ANEEZA ARSHAD TO MISS AFIFA SARDAR Supply Chain Head at National Foods Iqbal arrived with 24 years of experience and an MBA in supply chain management. Ten of his 17 years at National Foods were spent in the sales and marketing division until he joined the newly established supply chain department in 2005. He was given more authority in 2006 when he was elevated to Head of Supply Chain. He has previously sat through meetings when decisions about the purchase of tomato paste were being made. He had to lead these meetings himself and make the ultimate decision now that he was the Head of the Supply Chain. National foods and National ketchup It was founded in 1970 and three decades later diversified with 250 different products in 12 categories and over 100 different products for the international markets It had both ISO 9001 and ISO 22,000 certifications national retained traditional values although it made existing modern lifestyle products. As the food trend in Pakistan was changing People started to try chutneys and homemade sauces but yet ketchup was still enjoyed by younger children, leaving immense opportunity for national foods to grow their market. Coming towards the competitive positioning, there was huge competition from companies like Mitchell's, Youngs, Shangri La, and Ahmed food ketchup. As there were a lot of companies it was quite difficult for national food to compete with them, this situation made national foods adopt aggressive marketing strategies to combat. The company has been placing much importance to onality to which Muhammad Iqbal says “We want to give our customers the best quality and for that consumers are willing to pay more for our products than those of our competitors.” Purchase of tomato paste at National Foods History of buying tomato paste National Foods started buying tomato paste from Turkey in 1997 when its requirement was high. As the increased with the growth of ketchup sales the company thinks that it is more profitable to buy from China. While Pakistan was an option as suppliers for paste were available there but their quantity quality and percentage of total solids in paste are important. But the paste available in Pakistan ranged between 12 and 24 on the other hand National Foods required 36 Brix tomato paste for its ketchup. The comparison of price to china was also not important. China offered comparatively better prices for the desired quality of paste. The company made its first fresh agreement with Uranqi, Xiangtan China in 2003. The buying cost from China has shown average 10% increase from the previous year. But it’s hard to predict that the exact pattern of prices were same to the next year. The buying process The yearly budget got announced in May to June. So, planning for tomato paste started in July. Then in August, the company got samples of tomato paste and estimated price from its qualified suppliers. Based on the quality of the sample and the estimated prices than the discussed price with the suppliers that met the minimum start of quality. Then Order was placed on the following regulations of import. The paste was imported in 20 feet containers by way of the sea. Shipment started arriving in early November but sometimes could get late as last of November. It depends on the harvesting of Tomatoes. The tomato harvesting season began in August and, in some years, lasted until January. As a result, the order placed in August received its final deliveries as late as January. To produce tomato paste, the manufacturers had to purchase the tomatoes during the growing season. Supplies for manufacturing of ketchup Ten to fifteen ingredients were used to make ketchup. Tomato paste was one of the main components used in ketchup production. For the consumer market, it was offered in tin cans. For the industrial market, it was offered in steel drums and wooden bins with aseptic packaging. Steel drums held around 240 kg, whereas wooden drums could hold about 1.3 MT. The shelf life of these goods was 18 months. Tomato paste, sweeteners, vinegar, salt, spices, flavourings, onion, and/or garlic were also included in the list of ketchup's ingredients. Typically, beet sugar or granulated cane sugar were the sweeteners of choice. Dextrose or liquid sugar in the form of maize syrup or glucose syrup were some additional sweeteners. Preservatives, sugar, and tomato paste were imported. The business imported paste in 240 kg steel drums. Local suppliers in Lahore and Karachi were contacted for the purchase of additional raw materials. Packages Limited provided the flexible packaging materials, Ghani Glass provided the glass bottles, and Hills Side provided the twist caps. Suppliers 20–25 kilometres away from the National Foods facility in Karachi provided the master cartons. Political conditions in Pakistan In Year 2007 Many see Pakistani President General Pervez Musharraf as currently facing the most serious challenges to his authority since he wrested control of Pakistan’s government in a 1999 coup. Set off by the March 9, 2007, suspension of the chief justice, Pakistan’s citizenry has grown vocal in its objections to Musharraf. Subsequent restrictions on the media increased the outrage, and journalists have joined thousands of lawyers and social activists in the streets to demonstrate against the president and demand his resignation. Pro-government groups have countered, resulting in factional fighting and bloodshed. In addition, long hours without electricity and safe water, historically high temperatures, and natural disasters, have much of Pakistan’s population of 165 million on edge. On top of this, “Talibanization” has spread throughout the tribal areas and into major cities. Militant mosques make demands on the government, while village groups blow up shops that sell such agents of Westernization as music CDs and movie videos. Many reporters and analysts believe the federal government has lost its command of much of the country and speculate on a post-Musharraf government. Conflicts with neighboring countries include cross-border fighting, infiltration by militants, and territorial disputes. Gunfights with foreign militants and border patrols plague Pakistan’s border with Afghanistan. Spring thaws have heightened tensions with India along the Line of Control.
