Pel Aim Final

In the name of Allah, the most beneficent and the

most merciful.

INTRODUCTION

A pioneer electrical goods manufacturer in PakistanRenowned company in home appliances sector Established in 1956 with collaboration of M/S AEG

of GermanySaigol Group of Companies took over the company

in1978Company is doing business in two divisionsMajor share of business is from Power division but

increasing investment in Appliances division also

Vision Statement

“To excel in providing engineering goods and services through continuous improvement”

MISSION STATEMENT

To provide quality products & services to the complete satisfaction of our customers and maximize returns for all stakeholders through optimal use of resources

To focus on personal development of our employees to meet future challenges

To promote good governance, corporate values and a safe working environment with a strong sense of social responsibility

HISTORY

PEL was set up in 1956 Joint venture between two companies In 1962, specialized staff training in USA and West Germany In 1978 majority shares were acquired from Malik Brothers by

Saigol Group Expanded the existing product line in the year 1987 PEL signed an agreement with Messrs HITACHI of Japan for

the manufacture of Vacuum Circuit Breakers in 1990 Company commissioned its plant for the manufacture of

Electricity Meters in Pakistan in June 1994

LOCATION & FACILITIES

Head office is in Gulberg Lahore

Production unit is situated at 14-k.m. Ferozepur Road, Lahore

Spread over an area of 242 kanals

Total covered area comes to 232,883 square feet

NATURE OF ORGANIZATION

BUSINESS DIVISIONS

1- Appliance Division 2- Power Division

APPLIANCE DIVIISION

Home appliances manufacturing Division

In 1981, PEL window type air conditioners were introduced

In 1986-87, the company started manufacturing of refrigerators

In 1987, PEL deep freezers were also introduced

In 2006, the Company has started manufacturing of split type air conditioners

Product has been well received in the market

Encourages the company to increase production

POWER DIVISION

Consists of three plants

Plants are ISO 9001:2000 Certified

Manufactures Energy meters, transformers, switch gears, Kiosks, compact stations, and shunt capacitor banks

Major electrical equipment suppliers to largest power utilities in Pakistan

Privilege of getting its equipment approved and certified from international consultant in France

PEL PRODUCTS

POWER DIVISION

APPLIANCE DIVISION

TRANSFORMERENERGY METER

SWITCH GEARDIESEL

GENERATOR

DEEP FREEZERS

REFRIGERATORS

WASHING MACHINE

AIR CONDITIONERS

MICROWAVE OVEN

PEL PRODUCTS HIERARCHY

PEL ENERGY METERS

• Single Phase Static Energy Meters

• Single Phase Electromechanical Energy Meters

• Poly Phase Static Energy Meters

• Poly Phase Electromechanical Energy Meters

PEL ENERGY METERS

1- Single Phase Static Energy Meters Used for measurement of active (kWh) energy for Domestic &

commercial consumers

Main features: Display of energy (kWh) during power outages. High performance Lithium battery with long storage life for display

of data during power outages. Window based application software for configuration of parameters. Anti-tamper indication on meter LCD

2- Single Phase Electromechanical Energy Meters Used by house hold and small commercial customers

 Design & Construction features: Long term stability and high reliability Low self consumption High impulse level protection Overload and Temperature compensation

PEL ENERGY METERS

PEL ENERGY METERS

3- Poly Phase Static Energy Meters Used for measurement of active (kWh) & reactive (kvarh) energy in

the three phase four wire and three phase three wire network for residential , commercial & industrial consumers.

Main Features: High precision voltage and current measurement. Meter offers features like event recording, anti tempering and

displays the data during power outages. Meter displays error and caution codes to indicate any abnormal

condition.

PEL ENERGY METERS

4- Poly Phase Electromechanical Energy Meters

Designed to address the needs of consumers for low voltage networks with load conditions up to 120 A

Best meters available in electromechanical technology

These meters have excellent response to temperature variations, positioning, voltage, frequency, external magnetic fields, short circuit and load unbalance.

PEL MAJOR COMPETITORS

APPLIANCE DIVISION• Dawlance• Waves• Haier• Mitsubishi• Orient• Singer • Panasonic

POWER DIVISION• Seimens • Climax • Transfab • J&P • AB Ampere• Ahmad & companies• Feco • Areva • Fico • Pempam• Tariq Electric• Syed Bhais • Microtech • Escort • SB Electronic • Creative Electric

INDUSTRIAL ANALYSIS

• PEL TRANSFORMERS

• PEL ENEGRY METERS

• PEL SWITCHGEARS

INDUSTRIAL ANALYSIS CONT….

PEL TRANSFORMERS

• Distribution Transformers

• Auto Transformers

• Furnace Transformers

• Welding Transformers

Market Share of Transformers

INDUSTRIAL ANALYSIS CONT….

PEL ENERGY METERS

Four Types

• Major CustomersWAPDA & KESC

• Major SuppliersZhejiang Holley Imp. & Exp.Co. Ltd of ChinaMitsubishi Corporation of Singapore provides poly Carbonate resins

Market Share of Energy Meters

INDUSTRIAL ANALYSIS CONT….

PEL SWITCH GEARS

• Major CustomersWAPDA

• Major SuppliersHyundai Heavy Industries, South KoreaPelka Elektrik Malzemeleri of Turkey

Market Share of Switch Gears

SWOT ANALYSIS

STRENGHTS

PEL has a Strong Brand Image in the market Strong Dealer Network is one of the core competency of the

PEL It occupies a monopolistic hold in Power market due to its

energy meters PEL also have a strong position in Appliances Market in

Pakistan Few years back it made Strategic Alliance with LG•PEL also

have Contracts with Government of Punjab

During economic crunch PEL faces financial problems

PEL lacks in the area of advertisement

It also lacks in the product range

WEAKNESSES

Exploration of new markets in Pakistan is a big

opportunity for PEL Rising population provides a good opportunity

for the PEL to grow By increase in its product range, PEL can increase its market

share Export Opportunity is also an option to expand the business Increase in production capacity can increase its market share Due to increasing population, Increase in Investment in Power

Sector is another opportunity

OPPORTUNITIES

THREATS

Strong Competition in the market is a big threat to PEL

Invasion of Chinese products is a big to threat to whole industry

Continuous decrease in Pakistani Rupee value reduces the people’s buying power

All the industries in Pakistan are facing

decreasing growth rateInstability of Government is major threat to the

business

BCG MATRIX

AppliancesDivision

Power division

COMPETITIVE ADVANTAGE

PIONEER company of Pakistan

Awarded Super Brands Pakistan 2007-08

Brand Ambassador of PEL is Hadiqa Kayani

MARKETING MIX

Product

Wide range of products

High Quality

Innovative Design

Product cont….

PORTFOLIO OF POWER DIVISION

BREADTHDEPTH

TRANSFORMER: 25 KVA 50 KVA

100 KVA1250 KVA

ENERY METER: VOLTAGE 220-240VCURRENT(NOMINAL) 10, 20,40A

SWITCH GEARS: CURRENT(MAXIMUM) 40, 60,

80,100A

GENERATOR: Model No. Capacity PG5040D 5.2KVA

Price

PEL sets its prices of product line regarding the competition in the market.

Price varies from product to product

Some prices are set according to quality

Company is well aware of the limited buying power of the average population of Pakistan

Focus on this portion of society, while setting the prices

Price Cont….

Internal Cost Include in prices:

Raw Material Labor Charges Factory Overheads Advertisement Cost Governmental Duty Excise Duty Company's Profit Margin

Placement

Concerned with all those activities which are related to move the product or service from seller to buyer

A product reaches customer through distribution channel

PEL uses short channel of distribution

PEL has strong dealer’s network

Consumer products available in the newly opened mega stores like macro, hyper star etc.

Placement Cont….

PEL DISTRIBUTION CHANNEL

Producer Agent Wholesaler Retailer Customer

Promotion

Essential for increasing product demand

Promotion includes advertising, personal selling and sales promotion

PEL advertises Industrial products

through business magazines and personal selling.

PEST ANALYSIS

PoliticalSocialEconomic Technological

• Pakistan is one of the most vulnerable countries in the world

• Very few incentives to manufacture by the government

• The Government also increased the minimum wage rate

• Economy is facing financial crises

• Strong black economy in Pakistan

• Unemployment rate has increased from 5.6% to 7.4%

• GDP growth rate was 2% in 2008-2009

• A Negative 3.3 growth rate in manufacturing

• PCI has increased from $1042 to $1046

• In Pakistan Air conditioners are used by upper and middle class

• People are more price conscious now a days due to financial crises

• Customers have started considering split Air Conditioners as a status symbol

• More demand of split AC due to energy saving

• Technology is rapidly changing

• Companies are in competition to introduce latest technology in its products as the manual energy meters are now being replaced my digital energy meters.

• The use of CFC gases has abolished in refrigerant products.

GROWTH RATE OF PEL

Financial Results (Rs. In Million)

2008-09 2007-08

Gross Sales 13,077 11,042

Profit before tax 707 516

Profit after tax 582 442

Earnings per share (Basic) –

Rupees6.87 5.04

Earnings per share (Diluted) –

Rupees6.65 4.82

GRAPH-Gross Sales

2004 2005 2006 2007 2008 2009

Increase Utilization of capacity

Lack of advertisement

System variations

Lack of Product range

Distribution Network

SUGGESTIONS

RECOMMENDATIONS

• Adopt a true decentralized organization setup which gives all employees to take part in decision making.

• The company should have a strong marketing information system to make proper forecasts.

• The company should announce two holidays (Saturday & Sunday) in a week.

• Make sure proper functioning of HR Department.

RECOMENDATIONS

• More allocate budget to its marketing department

• More focus on the Pull strategy in its promotion mix.

• Shorten its cash conversion cycle.

• PEL should constantly add technology in its products and systems. 

• PEL should speed up its delivery process by establishing expand its stores in areas of high demand. 

The economy is expected to perform well in the year or next however it is exposed to certain challenges like current account deficit, lower exports, increased competition in the international market and lack of technological advancement as compared to competing nations. It is still hoped that national economy will continue to grow and rising prosperity will bring expanding opportunities for the Engineering Industry and for your Company. The company will continue to focus on cost effectiveness, quality standards and best after sales services to our valued customers. We expect to go farther, faster and higher than we have ever been in serving the interests of our customers, shareholders and employees.

FUTURE OUTLOOK

CONCLUSION

• The industrial buyers has great interest in the brand name, quality, and durability of the product.

• A very fine example is that of Siemens.

• WAPDA & KESC gave a lot of preference to Siemens

• Same market share of PEL and Syed Bhais in energy meters

• Aims to become market leader in next five years.

• Industrial Buyers have a strong faith in this brand name

• Less importance of price, advertisement, word of mouth, dealers etc. during buying process.

• PEL is not targeting energy meters through advertising.

• By coordinating their marketing efforts

• Taking advantage of synergy among various communication tools, and develop more efficient and effective marketing communication programs.