PRESENTED BY:

Ayaz Rawjani Bilal Ahmed Khurram Abbas Murtaza Mushtaq

Engro Corporation Ltd. Engro Foods Engro Foods Brand Portfolio Omore Distribution Management of Omore Services to Retailers Northern Region Services to Retailers Karachi Distributors in Karachi Direct/Indirect Model for Omore Distribution Policies Distribution Management Challenges

It operates in various sectors Fertilizer Food Energy Chemical Business Automation Solutions
Engro Foods is a wholly-owned subsidiary of Engro Corporation ltd. Engro Foods Limited was incorporated in May 2004 Dairy was used as a stepping stone to enter into the food business

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Olpers milk Olpers cream Tarang

OMORE
Olfrute Olwell hi-cal lo-fat (HCFL) milk Olpers Owsum

Launched in March 2009 Launched primarily in Lahore with a mission To become a major player within the industry Nationwide campaign in 2009 April 2011, Omore launched in Karachi

Hire third-party logistics company to establish cold storage point in Lahore and Islamabad Cold storage points are used to stock ice cream from the factory These points are also used for reloading smaller vehicles for distribution to retail outlets

Only 5 distributors in the Northern Region (Multan to Peshawar)

Only two distributors in Karachi (PTN and Agility) Industry norm of providing the retailers with complementary freezers, but did not give in to other demands of the retailers Nationwide trikes generation about 18 percent of business

Ice cream production facility in Sahiwal, and then shipped to Karachi Sahiwal larger throughput, higher buying power of consumers in Punjab and outlets drop size is bigger

Freezers and maintenance to retailers Engro Foods has deployed 20,000 freezers across the nation for Omore in just 2.5 years

Refrigerators reach stores before the ice cream

Commission for carrying stocks

Provided the retailers with outlet related tools i.e. signage, gondolas and window graphics etc

Beside distributors, Omore has established Sales Point Orders (SPD) Lahore has 30 SPDs independent of distributors

Different model for Karachi Vehicles, loaders and warehouse are owned by third party logistics (3PL) company

Sales team and order takers are distributors employees

Beside distributors, Omore has Sales Point Depot (SPD) Freezers are provided to SPD Owners along with a route

Only 2 distributor in Karachi (i.e. PTN and Agility) Agility is a logistic company but acted as a distribution company for Omore Security situation in Karachi

Engro Foods is reaching out to more distributors as Omore isnt distributed effectively in Karachi. Looking for forward integration in upcoming years.

Direct model vehicles and drivers are of third party, but the order booker and delivery person are employees of Engro Foods Order booker takes order from retail outlets and feeds the data into the SC system Load sheet generation according to the routes and vehicles are loaded by third party Physical checking to ensure proper and correct loading Engro salesperson Sales person is also responsible for the collection of money from retail stores

Direct model is more complicated in terms of cash handling, human resource management hassles, vehicle repair or maintenance hassles Cost-efficient and total control over the distribution
High service standards High information flow from customers/retailers

Quicker response time Effectiveness in handling POS materials Established sales region 90 percent of distribution is through indirect model

Islamabad and Rawalpindi are covered by direct model

Exclusive distribution system Party that handles Walls distribution cannot become part of Omores distribution network New distributors Sales are already established in regions reduced risk for distributors

Ability to find right distributors with money for investment, and Skills and core competencies for the management of cold chain Distributors are liable to invest in cold stores and vehicles, and Engro invests heavily in freezers

Remarkable investment (i.e. 10 percent YoY increase) still struggling to fix distribution network. The bottom-line of company is in negative zone due to heavy distribution expenses i.e. Rs. 2.6 billion from January to September.

Distribution infrastructure Omore is produced in Sahiwal and shipped to Karachi

DEMAND is much quicker than SUPPLY which leads to frequent stock-out at grocery stores.