ADVANCED INDUSTRIAL MARKETINGFINAL PROJECTMarketing Plan Cotton Ginning

Presented to:Prof. Basharatullah Malik

Presented By:Ahmed Haral 1199Sarmad Nauman 1146Hamza Iftikhar 1145Sohaib Saeed 1181Abbas hussain

Cotton Ginning

Introduction:

Our MissionOur purpose is to serve the textile operations in Pakistan, by providing the excellent services and high commitment level.We are a ginning organization operating integrated ginning facilities in textile industry and our end products are sold to national textile units.

Our VisionWe are committed to becoming the premier ginning organization in the textile industry maintaining market leadership in the present business and diversifying into value added projects with the object of maximizing returns.

Company ProfileThe Company is operating its business since 2008, We are ginners selling fine cotton to textile units of Pakistan, we buy cotton from Bupari the agents and after the processing sell them in shape of bales to spinning mills the purpose is to serve the textile industry and generate revenues. Our ginning plant is in District Multan, we usually buy cotton from Rahim yar khan and sindh. we have choosen multan becuase it is the middle of Rahimyarkhan/sindh and Faisalabad/Lahore. we only process specific type of cotton. The business is seasonal based. We usually need around Rs.30 Million as running finance for one season, this cash in hand is necessary for buying raw cotton. The cash is arranged from previous profits and sometime we buy on credit basis.

Cotton, produces a natural vegetable fiber that is used in the manufacture of cloth. Cotton produces sweet nectar which attracts a variety of destructive insect pests, including the boll, bollworm, armyworm, and the red spiders. In addition to insect pests, there is also a very destructive fungus, that is called the wilt which attacks the root systemof the cotton plant. Inside the boll, which is shaped like a tiny football, moist fibers grow and push out from the very newly formed seeds beginning when the blossom opens. As the boll ripens, it turns brown and the fibers continue to expand. Finally, they split the boll apart and the fluffy cotton bursts forth.

Cotton Ginning is the process of separating the raw fibers from the seed bolls and dust particles so the cotton could be easily processed into yarn. This is done by machines now a days. These machines after processing the fibers made them in shape of bales at the final stage, a bale press compresses the ginned lint into bales that are normally weigh between 450 and 500 pounds. The bales are then wrapped with a protective cover, ready for delivery to the warehouse there they are sold to various textile mills.

History of Cotton ginning, The cotton gin, invented in 1793 by Eli Whitney, it was designed to separateraw cotton fibers from seed bolls and other foreign materials prior to baling and marketing. The design was so efficient that it remains virtually unchanged till today.

Cotton in Pakistan, Cotton is among the major world fiber crop. It is grown under a very broad range of climates, soilsand diffrent cultural practices. Prior to the introduction of man-made artificial fibers, it was onlythe raw material from which human clothing and other necessary textiles weremanufactured. Cotton is the main cash crop and Pakistan is the fourth largest cottonproducer in the entire world. The largest cotton producer country is China followed by USA,India and Pakistan.

Economy, Pakistan is the fourth largest producer of cotton in the world, the thirdlargest exporter of raw cotton, the fourth largest consumer of cotton, andthe largest exporter of cotton yarn. 1.3 million Farmers (out of a total of 5million) cultivate cotton over 3 million hectares, covering 15 per cent ofthe cultivable area in the country. Cotton and cotton products contributeabout 10 per cent to GDP and 55 per cent to the foreign exchange

earnings of the country. Taken as a whole, between 30 and 40 per cent ofthe cotton ends up as domestic consumption of final products. Theremaining is exported as raw cotton, yarn, cloth, and garments.

The Crop, Pakistan's consumption of cotton for the year 2003-04 was 9.6 million bales (of 480 lbs),whereas the production was 8.2 million bales (of 480 lbs), this indicates that we are stillgetting low yield. The average yield of our country is about 562 kg per hectare, whereasour local varieties have a potential to produce about 910 kg per hectare. So to achievethis target potential yield, the cotton growers should have to come up with modernagricultural practices, especially crop protection and secure storage techniques formaintaining the quantity and quality of yield as well. No doubt the grower's aims toensure the maximum yield with minimal adverse impacts, but there are several factorswhich cause their economically unacceptable damage. Unfortunately in our farmingsystems, uncontrolled insect pests, diseases and weeds reduce yields at harvest by 30-50 per cent and around 20-25 per cent during storage..

Technology, The Saw Gin machines that are being used in theGinning factories in Pakistan are locally made and it is the copy of American brands like

Lummus,Centinial and Continental technology that was used in 1950-60 in United State ofAmerica (U.S.A). The productivity rate of local made single machine is 2 bales/ hourwhile the new American branded continental Eagle machine is producing 7-9 bales/hour. So we are far behind from the developed countries.

The Process, Most ginning factories purchased seed cotton from Bupari the agent and wholesale marketArthi. On avg, the ginners purchased 70% of their required seed cotton which in local language is called Phutti through middle men i.e. through Buparis and arthi (commission agent) where as 25% is being purchased directly through farmers and only 5% was their ownsupply. The ginning factory owners pay to the Bupari or Arthi after the rate for Phuttiagreed upon. The ginning factories also process the seed cotton the Phutti for big farmers on contract bases.Seed cotton Phutti is mostly transported to ginning factories through jute bags or ontractor trolleys fitted with frames wrapped in polypropylene bags sown together with juteyarn to form a big cotton holder. In this specific way more volume can be carried to the factory from the farmer or wholesale market. The frame of polypropylene and the jute thread are among the major source of contamination problems in the process of spinning and weaving.The phutti is not stored under cover shed or in proper storage facilities in our ginning factories. It is left open in the wholesale market yard and ginning factories. In this way dust, toffee wrapper, polyvinyl bag pieces and trash gathers into it. Also overnight dew and rain increase the moisture content level and causes the deterioration of the color quality of cotton fiber.This deterioration of color quality of cotton affects the dying and finishing characteristics.

Our Market, Our market is Textile industry of Pakistan, the Spinning mills. the major areas we are targeting are Faisalabad, Lahore, Multan and Karachi. We will provide fine cotton to them in shape of bales. although our market is very diversified and dense we have to supply our product in diffrent territories of Pakistan. this will cost us huge transportation charges.

SWOT

analysis

SUPPLY AND DISTRIBUTION OF COTTON000 Bales of 375 lbs or 170 kgs

Years

Carry

over Stock

Production Imports TotalMills & Non-Mill Consumption

Fire Loss

ExportEnd Season Stock

Total

1999-00

1,565 11,240 421 13,226 9,943 586 0 2,697 13,226

2000-01

2,595 10,732 670 13,997 8943 709 0 2,907 13,459

2001-02

1,934 10,612 1,080 13,626 11,358 268 0 2,000 13,626

2002-03

2,694 10,211 1,103 14,008 11,952 296 0 1,760 14,008

2003-04

1,760 10,048 2,312 14,120 11,905 218 0 1997 14,120

2004-05

1,997 14,265 2,249 18,511 12,986 704 - 4120 18,511

2005-06

4,120 13,019 1,728 18,867 14,896 352 - 3619 18,867

Source PCCCMill & Non Mill Consumption and End Season Stock figures are Provisional

Strengths Raw material locally available . We have set our plant at the nearest point from where our suppliers can easily access us.

Infrastructure available We have considerably new and advance equipment than our competitors. We are one of among those ginners who are using advance ginning equipment. Excess install capacity We have excess install capacity on which we can install more machinery which would increase our production capacity.

testing laboratory for staple and fiber testing We have a such a advance laboratory which is well equipped with latest machines on which we conduct quality measure test on cotton so we can produce best quality cotton bales . skilled labor We have well trained and experienced labor who helps us in making high quality cotton bales .

Weaknesses Four times less productivity by use of local made old technology

We have local machinery which produces four times less productivity than machines which are being used internationally which has increased our cost of production than foreign ginners and this factor is making us weak to compete at international level.

No technical training institute for Ginning Industry There is no technical training institute for ginning industry which could train work force so they can work more efficiently. High rate of contamination our farmer is unable to decrease contamination in their crop. Farmers don’t have resources to use advance equipments which could decrease contamination in the crop. Lack of online market facility to access international buyers We don’t have online market technology on which we can market our product internationally. No warehouses and cotton lint storage facilities

Opportunities Introduction of latest modern ginning technology being used in developed

CountriesThis is a great opportunity for us through which we can increase our production capacity and decrease down our cost of production. Through latest technology we can also produce export quality product which could help us to compete internationally.

Export of cotton to other countries We are currently operating locally. Export of cotton to other countries is a great opportunity for us. Possibilities to achieve best quality award which government gives on the basis of performanceWe could win best quality award which government gives on the bases of performance by giving best quality product which will increase our good will.

announced on the basis of grade Access to international markets through online market We can access international markets by going online which would help us in generation more revenues.

ThreatsShifting trend from cotton fiber to polyester fiberIncrease in trend of polyester fiber is decreasing down scope of cotton fiber which is not a good sign for us. Government regulations i.e. lot of taxes on the industryTaxes imposed by government is also a big threat for us which could reduce our profits. Fluctuation in international market price Very high rate of fluctuation in international market price is making this business somewhat risky. Global CompetitionTechnology we are using don’t match up with the technology is being used at international level so we are unable to compete internationally. Pest diseases on cotton crop result in low production of cotton lint we are facing different pset attacks on cotton crop so the phutti became damage and results in low productivity. Import of cotton imported cotton is real threat we have seen last year that people exported cotton from india and other countries this is a great threat for local ginners.

Differential advantage analysisA successfull marketing strategy is always having a good diffrentiation sceanrio among

core product. Every firm strives hard to bring differentiation in the characteristics of their products and services from other firms . Any factor in the marketing mix could create differentiation in the product or services of the firm .

We are focusing on the following things very keenily for selling our product with a competitive edge.

- Pure White ginned cottonWe buy White cotton from the farmers so we could produce very fine and pure cotton to spinning mills. Pure white cotton is highly demanded by spinning mills because its reduce their cost of spinning. The white cotton is used for making good yarn counts. Pakistan is known for its good quality white cotton in other countries it is observed that the normally color of cotton is yellowish white or piled . In Pakistan we are having very few areas from where we can get pure white cotton we only buy cotton from these areas and we have very good relations with the suppliers of cotton from that area . We are among the few ginners who have color quality scale in their laboratory.

- Purity (the absence of foreign matter)For fine yarn counts a spinning mill required pure cotton with absence of foreign materials like dust, Jute particles and other impurities. We are among the few ginners of Pakistan who are providing purified cotton. we got real good machinery and infrastructure with having an excellent lab for sample testing .We run several tests before sending out the bales after the ginning process. contamination is a very serious issue which spinners are facing more contaminated cotton produce low quality yarn so we are very much interested in to produce cotton which has minimum impurities through which spinners could produce high quality yarn,

- Quality of the ginning process.After the harvest, a producer wants the optimum yield possible and the spinner wants the highest quality fiber available. The ginner is asked to make both happen. Intelligent ginning through better technology means quality business for everyone involved. Quality ginning involves:

Maximized turnout with more fiber per bale

Preserved fiber quality

Optimized turnout versus grade based on grower‘s price schedules 

Reduced ginning costs through process and warehouse efficiencies

- The length of fibers. We buy cotton which is having good staple length and strength so that give us best quality yarn.

STAPLE-WISE PRODUCTION OF COTTONFig. In '000' Bales

5 YEAR AVERAGE

160 3,183 8,939 1,961 14,242

1997-98 113 1,288 6,608 1,175 9,184

1998-99 102 3,267 5,187 234 8,790

1999-00 - 3,704 7,081 455 11,240

2000-01 - 1,331 8,950 451 10,732

2001-02 53 3,020 7,201 338 10,612

5 YEAR AVERAGE

54 2,462 6,805 531 9,912

2002-03 - - - - 10,211

2003-04 - - - - 10,048

2004-05 - - - - 14,265

2005-06 - - - - 13,019

4 YEAR AVERAGE

- - - - 11,886

Source: PCCC/PCGA

Internal EnvironmentWe are ginners and we are operating in Multan and we buy cotton from Rahim Yar Khan that is the best cotton producing area in Pakistan. We have experienced commission agents (Buparis) and we do not have to go through the hassle of interacting and negotiating directly with the farmer. As I mentioned earlier there is lack of good machinery as machinery is copied from foreign countries, therefore we have bought machinery from abroad

The main area to sell cotton to spinners is Faisalabad, Lahore etc and therefore Multan is almost in the center of Faisalabad and Rahim Yar Khan which will further reduce our

transportation cost and in this way we can further give a tough time to the ginners of Rahim Yar Khan. Then there is excess installing capacity and the infrastructure is also available.We sell cotton that is low in contamination and is of good staple length and is not easily breakable. We are ahead of other companies due to this strength as others mostly sell bad or average quality of cotton due to different reasons mentioned above. We are dealing with one of the best Bupari of Rahim Yar Khan. We have 3 crore cash in hand to pay the farmers.We give on time delivery to our customers. We have proper warehouses wear we can store a large chunk of cotton. There are different forms of cotton and we sell them as per requirement of our customers. As Pakistan is known for textile industry therefore we have a lot of customers especially in Lahore ,Karachi, Faisalabad and other parts of Punjab and Sindh. We will transport cotton to them and charge the delivery charges as well.

At the other hand:We are very new to the business and therefore we lack experience.Currently we buy cotton from the Bupari and we don’t buy it directly from Rahim Yar Khan , and because of that the Bupari charges his commission and we get contaminated cotton from him.We lack the finances to buy our own land where we can grow our own cotton and if that is done then there is no need to have any intermediary. If that is done we will sell cotton to spinners which have almost no contamination as it will be on our own. Like all others we also have illiterate staff who create a lot of problems in handling the machinery.If the price falls then we have not experienced it that much that we can take a good decision.

External EnvironmentPakistan is the biggest cotton producer where the demand for cotton has actually exceeded the supply. So there is a need for new cotton ginning firms. Foreign countries do business with our country in this sector. We can access the foreign companies online and then we can start business with them. The raw material is raw cotton that is locally available and we do not have to buy it from any other country. Although electricity is a big problem in

Pakistan since last 2 years and but the electric power consumption per ton in Pakistan is 141 kwh as compared to modern gins of similar capacity and there it is 100 kwh. So there are fixed charges and seasonal rates on ginning units because of which the cost is Rs.8/kwh for 10,000 bales. But it can be cut down to Rs.6-6.5/kwh/bale of a 15,000 to 20,000 bales. In terms of power conservation is can be 6.97 kwh/bale. This is possible if we make small incremental improvements in the existing technology and improve the settings of the machines.

There is a possibility of achieving premium for best quality that our Government has announced on the basis of grade.

As far as ginners are concerned there is no financial constrain for getting loans. The loans are easily available from private banks to meet the working capital requirement. Normally ginning firms obtain there working capital by borrowing from commercial banks in the form of seasonal short term loans to make seed cotton(Phutti) purchase and these loans can be returned within a period of 5 to 6 months

There is a lack of good ginning machinery in Pakistan as machinery is copied from foreign countries. Some research has been done so hopefully in the future we ca use Eco Gins. Now the Eco Gins can be called a modern and advanced replacement of Conventional Saw Gins used for ginning purpose. Eco gins will be least costly in terms of installation, there parts are available locally, they save manpower, there maintenance is very easy, they give high output and they produce low sound as compared to the Saw Gins.As far as electricity is concerned the Eco Gin will save around Rs.14/- per bale. If

.

Some important results of Eco Gin are shown below:

Description Conventional Eco Gin

Sound Level 100 to 102 87 to 60

Prod. Lint Cotton (Avg. Kg/Saw/Hour 3.19 6.26

Ginning Out Turn(Avg.GOT%) 35.67 35.88

Avg.Power Load (Ampere) 27.5 37.5

Load to Prod. Ratio 8.62 5.99

At the other hand

These days there is a big short fall of electricity so it will cause a problem for us as we have to refine cotton and sell it in bails.

We have a lot of competitors in the market as Pakistan is known for cotton producing and textile industry.Value Added Tax (VAT) is imposed now so it is a big problem for us. The PCGA(Pakistan Cotton Ginners Association) was promised that they would be excluded from VAT but our Government has not fulfilled its promises. Now the price of cottonseed(phutti) will come to increase by Rs.400 per mound which is a bad news.Other than that sales tax, income tax, professional tax are also levied.Then the financial activity tax is also imposed so therefore it will further discourage the foreign investors, from doing business here.Few proper institutes for ginners so therefore we have unskilled labor force who are totally illiterate. They have learned their work by their experience or from their parents who also worked like them. They don’t even know about the material used and its composition. Instead of improving the process they create more problems. They are unable to adjust the saws properly and cannot do pipe adjustment, this leads to low productivity and more consumption of electricity. No education criteria has been set till date and people are hired on the ad-hoc basis or on the basis of their experience Farmers who do early picking of cotton in the morning before dew dry up and addition of water to increase the weight of cotton damages its quality. We don’t have any good ginning manufacturers in Pakistan. Actually here people who copied the technology were semi skilled manufacturers and they have failed to make the exact copy. They have even missed many parts during manufacturing of Saw Gin machines. So there productivity is 2 bales/hour where as that of a foreign machine is 7.5 bales per hour. And other than that the present ginning machinery used in our country is very old and the its parts and components vary in sizes.

The quality of ginned cotton worldwide has improved a lot, and our foreign customers require trash free cotton.The trends are shifting from cotton to polyester fiber because cotton consumption has reduced because its prices have increased. Now if we sell expensive cotton then the textile mills will go for cheap alternatives and therefore polyester fiber is benefiting from it. There has been a lot of import of cotton and something should be done in order to reduce it. The government should import taxes on foreign sellers of cotton and they should encourage the local producers.United States has tried to keep world cotton prices very low whereas it gave its own producers an edge over less developed and less funded rivalsCotton insects are the major reason for yield losses. Cotton insects such as white flies affect lint quality and yield potential. They suck sap from leaves and pose a serious threat. Many times it happens that a ginning unit does not get raw cotton as expected because and the other problem is that there are a lot of increasing number of cotton factories in the local area but the required amount of raw cotton is not increasing. And because of this companies snatch each others share by paying high price whereas the Government is silent on this although they should fix this problem, Infact they should intervene as a second buyer and they should fix the purchasing price of raw cottonThe main source of contamination in cotton is jute, plastic films, leaves, hair, polythene. Now the problem is that when the middlemen(Bupari) brings the cotton to us it is in the form of jute and polythene bags. So it is mixed with the Phutti In this business we do not have any indicators of profit or loss. The only way is that we should buy best quality of raw cotton so that it produces more cotton lint after ginning and it earns more revenue. There have been a lot of cases that the companies realize there financial position at the end of the season.

Local level of prices fluctuates regularly so it is difficult to predict the prices. Therefore if I buy cotton at some price today and the next day the price falls then I will incur a loss and if this happens for the whole season than I will face more loss.

Establishment of company objectivesCompany objectives are clear, we want to sell our fine cotton to good textile units and to maintain healthy relation among well known Spinning mills, through this generating Profit is our primary objective of all time. After 5 years we want to adopt the forward integration strategy by planting our very own spinning mill. this objective will hwlp us in achieving our vision.

The Four P'sProductCotton is a natural fiber used primarily as a raw material for textiles. The current market share of cotton is 56 percent in all fibers. Textile fibers are divided into three basic types according to their sources such as Cotton Fiber, Man Made Fiber and Wool. We are producing cotton fibers only from phutti like ginning the phutti and then selling to spinning mills. We are focusing on quality so the suppliers can buy the quality cotton fibers from us.

PricingGinning is seasonal business so they set a higher ratio of profit.Now a days we get raw cotton (phutti) at the rate of Rs.2300/mound after adding the processing and operational costs we sell the cotton fibers at Rs.6500/mound. This rate is decided by market, we just have to follow the current market rate.In Pakistan average bale weight is 150-165kg. Each bale contains 13%-14% of contaminationn. The following formula is used for costing of a single bale:165/37.324 * current rate (6500)in this case a single bale will cost a spinning mill: Rs.28734The transpiration charges are paid by Spinning mills but in some cases ginner have to pay the charges in this case they have to mention this in the contract. At the other hand we sell out the canola which we get from phutti, this canola play a good role in increasing the profits.

Costthe establishment of a Ginning factory is not a major investment. Rather, it is the

working capital requirement that really matters for its successful operation.The capital cost is Rs 8 million, but the working capital requirement is Rs 35 million per 100-day season. It is assumed that the gin will operate for ten hours a day and will gin 8 bales per hour (4 gin stand). Electricity consumption will be 24 KWH per bale priced at Rs. 16 per KWH. Phutti required to produce one bale of lint is 165 Kg . Phutti rate has been assumed to be Rs 2300/md, the base price announced by the government. The working capital requirement has been calculated while assuming that gin has a level production over the season and needs working capital for a 30-day credit cycle. The ginners have a severe liquidity squeeze in the peak season that banks can assuage through provision of liberal credit.for purchasing phutti for a single bale we need Rs.10167we are processing 10000 bales a season.

PlacementThe Placement of our industrial product involves 3 parties:

1) Ginning Factory2) Commission Agent3) Spinning mills

The ginning factories involve agents for security of the contract secondly it reduces their efforts and save time, these agents have already buyers in their hand so they arrange interaction between ginners and spinning mills and they agree upon the contract.

PromotionWe are promoting ourselves through personal selling, magazines, conference and seminars, sponsoring the seminars and events and broachers.We are using different channels for promotion as for personal selling we have hired skilled sales force who visit spinning mills situated in Faisalabad and Lahore and take orders for us .We also give adds in textile magazines which provide information about us and services to our customers and potential customers. Sponsoring the seminars and events is also a very effective tool which we are using to promote ourselves. We conduct conference and seminars and invite our customers and potential customers to visit our conference and seminars on which we give them complete information about us and our product and ask to do questions and give suggestions which helps us in reading our customers mind what he want from us.We also spread brochures inscribed with information about us.

Value Chain

Step OneSeed Cotton Conditioning and Cleaning Cottonseeds with fiber still attached, usually arrive at the gin in large trailers or modules used for hauling it from the field and for storing it until ready for ginning. From the storage area, conveyor pipes transfer to various stages of the ginning process, using large volumes of air to make the flow of the cotton easier and faster.Typically, seed cotton is first dried in large driers using heated air to reduce its moisture content. A cylinder cleaner then removes the leaves and other small trash from the seed cotton by shaking it with spiked cylinders, while conveying it across a screen with small openings that sift the trash released from the seed cotton by the impact action of the cylinders.Next, a stick machine removes any large sticks or hulls (the dried bolls that form a shell around cotton as it grows) with revolving channel saws. These saws grab the seed cotton and whip it over metal bars to sling off its trash. If the seed cotton requires additional drying and cleaning, gins will often run it through another drier and another cylinder cleaner and stick machine.Mechanical harvesters have made seed cotton drying and cleaning necessary. Although mechanical harvesting is much faster than hand harvesting, but mechanical harvesters also pick more trash with the cotton, which usually contains a high amount of moisture. Trash, as well as moisture, can adversely affect the quality of the fiber and lead to costly operating and processing expenses at the gin and at the textile mill.Excessive moisture is common to cotton grown in the more humid regions of the Cotton Belt, while cotton produced in the Southwest can be too dry because of the region's arid climate. Lack of moisture at ginning can also lower the quality of the fiber and contribute to ginning problems.To prevent fiber damage and to facilitate ginning, gins try to balance the moisture content in the seed cotton during drying, so that it is neither too wet nor too dry. With unusually dry cotton, gins will skip the drying stage and will, at times, add moisture to it with a special humidifier that blows warm, humid air through the gin's conveyor pipes.

Step 2Ginning the Seed CottonThe seed cotton is now ready for ginning. Pima cotton is conveyed to the roller gin, while upland cottons are conveyed to the saw gin for separation of seed and fiber. After being ginned, the cotton fiber is often referred to as lint.

Step 3Lint CleaningLint cleaners remove the small trash from the ginned lint left behind by the cylinder cleaner and stick machines. Saw-lint cleaners grab the lint with a cylinder saw and whip it over metal bars to dislodge its trash. Lint cleaning of roller ginned cotton usually involves a combination of three machines: a cylinder cleaner, an impact cleaner which uses cylinders to agitate and release the trash from the lint, and an air-jet cleaner which removes the trash from the lint using high velocity air.

Step 4Packaging the LintIn the final stage, a bale press compresses the ginned lint into bales that weigh between 150-165kg. The bales are then wrapped with a protective cover, ready for delivery to the warehouse where they are sold to various textile mills.

Marketing Strategies:

With the current situation of market our focus is on

Market Penetration because we are seeking to increase our market share for our product in present markets through greater marketing efforts. We selected this strategy by keeping in view the following points:

• Current markets not saturated

• Usage rate of present customers can be increased significantly

• We can increase our market share by improving our product quality.

• Increased economies of scale provide major competitive advantages

Our target customers (spinning mills) prefer straight re-buy so we maintain close relationship with buyers, and try our best to satisfy the buyers by fulfilling their requirements.On the other hand for attracting our potential customers we convince the firm to Re examine Alternatives.

Profit Impact of Marketing Strategies:

6 Gin StandsWorking Days/season 100bales ginned/hour 13working hours/day 11Bales /season (no. of bales) 13,570Electricity cost (Rs/KWH) 6.5Electricity consumption (KWH/bale) 24Avg. Phutti Price (Rs/40 Kg) 925Standard bale weight (Kg) 170GOT (%) 32%

Cottonseed (kg/bale)51% of Phutti

Cottonseed Price (Rs/40kg) 370Lint Selling Price (Rs/40kg) 2,300Lint Revenue/bale 1,000

Therefore in 1 season in 1 year we generate a revenue up to Rs.13,570,000

Ginning Units Set Up Cost land 5 acres required by the law

Electric ConnectionRs. 0.75 million

Machinery 6 Gins & Bailing Press Rs. 2.5 million

Machinery ErrectionRs. 0.17 million

BuildingsRs. 1.78 million

Working Capital Required Per Season Rs.7 million

There are 1,221 ginning factories in Pakistan out of which in Pakistan. Out of that around 150 operate in Multan out of which most around 100 have a very good and respected name in the market.

Industry Growth Rate has declined especially due to the short fall of electricity and other problems which I have mentioned in the threats,

We plan to do vertical integration by buying lands in Rahim Yar khan where we can grow our own cotton and by transporting it ourselves to our customers but right now we are an infant firm so we are unable to do that.

Technology used is the same as others but at least it is better than others because it is always repaired and we take care of its maintenance and that is why up till now we have not received any complaints from our customers regarding the ginned cotton.