Faiza Zafar-Mariam Shamim- Anum Ashrafi

HRM: Engro Foods[Submitted to :Nadir Ali Kolachi]

INTRODUCTION –ENGRO FOODS:

Engro Foods Limited is subsidiary of Engro Chemical Pakistan Ltd. which is one of the most reputed enterprises in Pakistan with more than 40 years of diversified business operations in the areas of fertilizer and chemicals. Engro Foods started its business operations in March 2006 and with the successful launch of Olpers Milk, Tarang, Olwell, and Olpers cream, it has established itself as a major player in the foods business. Engro Foods has already set up two processing plants at Sukkur and Sahiwal.

The plant located at Sukkur on 23 acre land, the plant has been established at a cost of Rs. 1 billion which provides direct employment to 750 people. Engro Foods has entered the Food business through milk processing and sale with the company’s vision to pursue growth opportunities based on country fundamentals and own strength. It also positions the company to leverage its corporate social responsibility initiatives and work closely with rural communities to promote integrated farming and livestock development. This effort is expected to play a pivotal role in poverty alleviation and improving livelihoods of the poor in the milk collection areas.

Engro Food’s vision:

"To become a fast expanding mega foods company”,

Engro Food’s Aim: “Dominate the food business, and to achieve this we will settle for nothing less than the Cream”

In a nutshell, Engro Foods Limited defines its dreams: EFL dreams to be BIG. Engro wants to be a major player in the food industry which is also evident in their vision, "Elevating Consumer Delight Worldwide". EFL wants to challenge the industry norms and surprise whom ever has eyes on EFL.

DEPARTMENTS:

1. Administration: Efficient management of all administrative affairs of Engro Foods (Pvt.) Limited is the job of the Administration department. From legal matters to general day-to-day operations of the office, the Administration department ensures that all affairs run smoothly.

2. Finance and Accounts:The Finance and Accounting departments at Engro Foods are responsible for the total financial management of the different businesses of the company. From the usual accounting statements and sheets to risk and portfolio management, the team ensures that every rupee coming into and out of the Companies' pockets is properly documented and audited.

3. Marketing:

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Consisting of leading marketing professionals of the industry, who are graduates of top business schools of Pakistan, the Marketing Department ensures that from product need identification to product development, launch and post-launch, all strategic decisions are made based on authentic information and research. Identifying the target markets, effectively communicating to them and building the image of the brands as well as the Companies, is the job of the professionals running the marketing at Engro Foods.

4. Milk Procurement: As all of Engro food products are milk based, the entire Milk Procurement department plays a critical role in defining the quality of the end product that reaches its customers. Ensuring regular collection of fresh and pure milk right from the farmer to the factory and ascertaining the freshness of milk all across the milk procurement process, is the responsibility of Milk Procurement department, consisting of food technologists working at the collection centers and veterinary doctors providing service to the farmers.

5. MIS: The MIS department at Engro Foods ensures that all automation is running error-free at all times. Regularly modifying and updating the Company's accounting software is also the MIS team's responsibility.

6. Production: Modern technology is part and parcel of Production at Engro Foods. The state-of-the-art plant set up near Sukkhar has a processing capacity of more than 300,000 litres of milk per day, making it one of the largest in the country. Professionally qualified human resource efficiently works night and day to maintain highest hygiene standards.

7. Quality Assurance: Quality Assurance is strictly followed in Engro Foods. Qualified food technologists at this department ensure that highest quality parameters are adhered to through all steps of production and that the products reach the consumers as per promise.

8. Supply and Distribution: This department ensures timely and effective distribution of the products to different shops and stores spread all across Pakistan. From transportation management to obtaining route permits and approvals, is done by this department.

9. Human Resource: The Human Resource department at Engro Foods (Pvt.) Limited spearheads the recruitment process to ensure that the finest human resource is taken on board at Engro Foods. Resumes of candidates are carefully filed and documented for current or future reference. The department, besides carrying out succession planning, maintains and implements HR policies pertaining to employment, retention and superannuation. Assessing training needs of employees and ensuring adequate training is also carried out by the professional HR team at Engro Foods.

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The company believes that the best way to become integrated into their organization is to start contributing to it and to become accepted as part of its working community. For this reason the company concentrates on:

• Placing an employee in an initial job which starts to use strengths and matches stated interests.

• Providing an orientation program which helps understand the Company and its environment.

• Introducing an employee early in the career to the people development system and giving him/ her feedback on own performance from the first year.

• In cases where traineeships are provided, these are designed to bring employee up to the standard of skill and knowledge required in the shortest practicable time.

• The principle of early job responsibility is followed wherever the company can.

HR PERSONNEL:

CEO: Mr. Sarfaraz Rehman

REGIONAL MANAGERS

HYDERABAD Wajid Hussain Junejo 6Th Floor State Life Building Thandi Sarak - HyderabadEmail : rohyderabad@engro.comPhone : (022) -2781275, 2785875

MULTAN Nauman Shaikh2Nd Floor, Jalil Centre, Abdali Road, MultanEmail : rmmultan@engro.comPhone : ( 061) 584117 - 118

SAHIWAL Nadeem Ahmad79 - G, Canal Colony, Farid Town Road, SahiwalEmail : rosahiwal@engro.comPhone : (040) - 4464504, 7221630

BAHAWALPUR Khusrau Nadir Gilani3 - Umer Road, Model Town ‘A’, Bahawalpur Email : robahawalpur@engro.comPhone : (0621) 874354, 876354,885154 & 883541

LAHORE Eqan Ali KhanF-5 Ground Floor, Rb-2 Awami Complex 1-4 Usman Block, New Garden Town LahoreEmail : rolahore@engro.comPhone : 042-5864428

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TRAINING AND DEVELOPMENT MODEL: The HR department, besides carrying out succession planning, maintains and implements HR policies pertaining to employees training, retention and superannuation. Assessing training needs of employees and ensuring adequate training is also carried out by the professional HR team at Engro Foods. In year 2005, the Ministry of Industries and Production also established Olpers (Dairy Pakistan Company) on the lines and the main objectives of the company is to promote training and skills development of human resources associated with the dairy sector.

On-the-Job Development at Olpers: The Engro foods company believes strongly that people grow and learn most effectively through experience. Therefore, every opportunity is sought to try to develop an employee through work related experience. Such development implies an expansion or stretching of abilities or aptitudes. It has to be based on the knowledge, skills, and aspirations within oneself. This form of development needs to be understood and actively supported by the employee and the supervisor. Candid discussion in all employee interactions is encouraged and serves as an effective communication tool. Relative to other dairy companies, Engro places a lot of emphasis on development of its technical resources also. This has resulted in Engro being able to efficiently develop and implement large technological projects successfully.

Training and Education at Olpers:

The Engro Foods Company has a range of training programs, both core management and technical, which are used on a regular basis to develop skill and knowledge. In addition ENGRO FOODS COMPANY do need assesment of training programs and leads to inputs into the overall training plans of the company to help them work towards realizing their full potential and then after that they do formulative evaluation of those programs and also uses different Training methods for their employees which are as follows:

Continuous learning.

Cross training

Distance learning

Multimedia training

Near transfer training

On-the-job training (OJT)

Team leader training, etc

Alternatively, individuals may attend externally run programs and there may be cases where learning by planned job experience is the best answer according to different circumstances within the company. Employees contribution to assessing own training needs are welcomed as are the suggestions for suitable programs. To address future manpower needs of the

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company, employee career, training and succession planning activities are undertaken on an annual basis.

Training and Resource Centre at Olpers: Training and Resource Centre is the only teachers training facility in Ghotki district. Since its inception in 1999, more than 2500 teachers of Ghotki district have been trained at the centre. A team of 4 full time PDTs carryout general and subject specific training sessions.

Sahara Welfare Society: The reach of vocational training program was increased with co-funding of USAID and (International Youth Foundation’s) program – (Education and Employment Alliance). Sahara Welfare Society, a non-profit voluntary organization managed by company employees at Daharki, runs a primary school, vocational training school and a free clinic.

HR MODEL:

Engro Foods Company uses this HR Organizational model which basically describes the difference between main HR actors in their company to makes sure, on the one hand, that the company acts in the interests of employees by giving them opportunities to advance their careers; and on the other hand, that employees bring as much value-added as possible during their stay in the company. There are two different roles within the HR department of Engro Foods Company: the organizational ones and the operational ones. The organizational roles of hr department of Engro Foods Company includes: Human Resources management, including HR support to business and HR design & delivery and Legal obligations including employee relations and well-being programs. The operational roles of hr department of Engro Foods Company includes: People management, including company manager and Personnel management, including industrial relations managers (HR local specialists) who maintain relationships with other dairy’s HR specialist in order to remain competitive in this global world and to sustain long-term growth

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for the company. Both roles are in fact involved in the HR process as far as they are responsible for the day-to-day HR management in the Engro Foods Company.

COMPENSATION AND BENEFITS/ PERFORMANCE APPRAISALS:

The Company's Total Remuneration package is competitively aligned to the best in the industry and is appropriately balanced between providing cash compensation and benefits, including, medical and retirement benefits. The annual salary rewards are linked to employee performance. An Employee Share Option Scheme operated by the Employees Trust offers new employees the opportunity to acquire ownership in the Company.

Highest Salaries:

The salary packages Engro foods offer its employees the highest remuneration package that's far above the industry average. And that's a major part of its compensation philosophy - to always keep employees above their profile's market value. So be you an experienced professional or a fresher, at Engro foods, you'll get the highest salaries ever.

Gain Sharing:

On top of their highest salaries and outstanding benefits are their performance based bonuses. And its performance gauge is very different. They don't base employee’s performance on defined targets - they base it on a certain percentage of the top performers among you. So every quarter, the top 50% performers qualify for bonuses.

Benefits:

At Engro Foods, they value quality human resource. Their employees lend the creativity and passion to meet business challenges with bold new ideas. It offers unparalleled employee benefits, ranging from medical, to financial and recreational. They want to keep their most important asset - their people - healthy and happy.

The package includes the following elements:

Travelling and Subsistence Expenses: All employees will be reimbursed for any travel and subsistence expenses incurred in the course of their duties.

Holiday: Each employee is entitled to a basic 23 days holiday per year. However, for some people this amount is either too much or not enough. For this reason, all their employees have the flexibility to trade salary and holiday. Employees can choose between 15 days and 30 days holiday per year, with the maximum rising to 40 days per year after two years' service.

Car Allowance: For consulting positions a car allowance is included in the package.

Pension and Life Assurance :

After three months' service, every employee has the option to join the company's group personal pension scheme, or to take a cash alternative. All employees are covered under Life Assurance

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from their first day with Engro foods. The company contributes to the scheme and reviews its contributions on a periodic basis, to ensure that these remain suitable, attractive and fair.

Permanent Health Insurance: Engro Foods provides Permanent Health Insurance to all employees from their first day.

Health Scheme:

After six months' service, an employee can elect to join the company's VIP private health scheme. To ensure employee participation and commitment to the system, the format draws heavily on the employees own assessment of his job performance, training and developmental needs, career aspirations and any other employee related item that needs to be addressed. Candid discussion in all employee interactions is encouraged and serves as an effective communication tool. The system also focuses on the employee's training needs and leads to inputs into the overall training plans of the company to help them work towards realizing their full potential. Relative to other chemical companies, Engro places a lot of emphasis on development of its technical resources. This has resulted in Engro being able to efficiently develop and implement large technological projects successfully. To address future manpower needs of the company, employee career and succession planning activities are undertaken on an annual basis. Engro values people with passion, creativity, leadership, strong communication skills and the drive to deliver and compensates them according to their relative performances.

Engro Foods Limited carried out certain compensation and performance

APPRAISAL PROJECTS:

REWARD MANAGEMENT :

The reward management however is strictly performance driven and every opportunity is used to reinforce the culture of reward for performance. To promote and strengthen a keenly competitive environment within the organization for enhanced quality and productivity, en elaborate performance assessment and employee development system has been institutionalized which by design forces objectivity in employee appraisal against given dimensions of performance evaluation.

PROJECT HOPE TELEMEDICINE INITIATIVE :

The Project Hope Telemedicine initiative by Engro makes available doctors in no less than fifteen medical specialties ranging from neonatology to cardiology on a daily basis - and free of cost, to the communities. The project has provided online consultation by specialist doctors to about 1400 patients to date.

COMPETITION:

Competition is also increasing with the entrance of new domestic players in the dairy and food sector and plans to increase investments by the already established companies. Nirala, good milk, Pakola are the few names which have recently introduced their dairy product lines in the market.

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Major textile groups are also diversifying into dairy and livestock business and some of them have even acquired lands to start their business. Leading industrial groups such as Jamal Din Wali Sugar Mills, Dewan Group of Industries and Shakar Ganj Sugar Mills have already made substantial investments in dairy & livestock sectors. In March this year, Nestle Pakistan opened a state-of-the-art milk processing facility in Kabirwala, Punjab. The plant, Nestlé’s largest milk reception facility in the world has a processing capacity of 2 million litres of milk per day. Brands like Milk Pak (owned by Nestle) and Haleeb Milk (from Haleeb Foods) had led the dairy market in the world’s fourth largest milk producing country for nearly two decades—without any real sustained competition. Engro Foods, in contrast, had only recently been established by Engro—a traditional giant in Pakistan's chemical and fertilizer (yes, chemical and fertilizer) industry.

Branding experts could not imagine how Olper’s could distance itself from its parent company’s incredibly unappetizing, chemical-laden, and non-edible roots. Yet, by the end of 2006, sales for Olper’s Milk had reached Rs.1 billion (approximately US$ 15 million) and in 2008, the brand has a market share of close to 22 percent—second only to Milk Pak (estimated at 40 percent). The critics had to grudgingly accept that the new entrant to the multi-billion rupee packaged milk category meant business. Olper’s, however, stepped into the foray by launching a massive campaign that started off with an introductory slice-of-life television commercial. Billboards went up at key locations in the major cities, and soon the brand had become a voice above the media clutter—a voice that differentiated Olper's brand from the others.

Rafey Nisar Zuberi, the marketing manager for Engro Foods, says, “From the onset, we wanted to introduce a true paradigm, bringing the dairy brand to the fore.”The name itself made it sound like a foreign brand, giving the perception of quality, and was unlike anything previously experienced by Pakistani consumers. Today, Engro Foods aims to become the only company to utilize all of the milk collecting areas in Pakistan and also plans on developing the biggest dairy farm in the country. The company’s reputation as a local giant actively involved with community welfare in remote areas has also been a positive add-on for Engro Foods.

Evidently, Olper’s has woken up the competition. Milk Pak responded with campaigns of its own to reaffirm the positive equity of its brand and has largely focused on a message of health, vitality, and strength through quality milk. Haleeb implemented a response as well. Despite dwindling market share, Haleeb increased its marketing in the media and commitment to promoting its brand. Also, newcomers such as the generically-named Good Milk and Pakola Milk have tried penetrate the market, but without much success. Rafey comments on the increasingly competitive landscape, “Olper’s is very strong in terms of consumer quality perception… our monthly blind taste tests show that consumers rate Olper’s significantly higher than Milk Pak and Haleeb.”

Competition may create opportunities for the company because each competitor in the milk industry wants to increase penetration of processed liquid milk and so they will create awareness for consumers through different advertising media. This will ensure the increase in the consumption of processed milk instead of lose milk and so will in turn lead to increase in sales for the company. Therefore there will be an opportunity for accelerated growth.

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CONCLUSION:

This report gives us a deep insight into Engro Food performance as a classic example of how sound, efficient, and employee friendly employee policies can help an organization not only to grow, expand but also to perform on competitive lines with the best in that field.

Engro foods has non-discriminatory policy for hiring and treatment of personnel in the workplace and it has no operations in an area that is home to distinct indigenous people.

While there is no specific policy statement forbidding child labor, their hiring practices are clear on complying with the minimum employment age mandated in Pakistan’s Labor Law.

Engro foods is an equal opportunity employer. It has not separately identified affirmative action initiatives. Its human resource policies support diversity and forbid harassment.

Engro foods inform employees of changes in the workplace through employee meetings and direct correspondence. It uses e-mail intranet, and printed communication to provide key information and to foster a dialogue about changes in operations. All non-management employees, other than marketing, are represented by trade unions who are their collective bargaining agents.

The journey of this very organization from Engro Chemicals to Engro Food provides us an opportunity to see how success may be achieved in the business world. It was a time full of market challenges, an entry in a diverse field with very little or no on hands experience was a high risk. Still, the risk was undertaken with a firm belief on the part of the management that management is all about playing your cards at the right time.

Developing marketing strategies that help you create space for your new product. All the marketing tactics come into play and an organization full of new talent with skills refined and polished at the very best business schools of Pakistan and abroad at work nothing is beyond reach. Some others who had entered the field failed to make any impact or inroads into the already established market players like Haleeb and Milk Pak. These new entrants to the market were not successful to niche a place for themselves in the market ( e.g. Nirala and Pakola). There may be faults in their marketing strategies or the quality assurance may be lagging behind somehow they could not create space for their new product in a market full of established players.

However, Engro Food did not enter the market without contemplating, reflecting, planning with some of the most talented staff. Market surveys were conducted along the most scientific lines and data collected was interpreted by experts in the field.

Innovative and updated technology was used to analyses the findings and gaps were identified. This enabled the staff to plan as how, when and where to enter the market. Plans were made with the help of advertising agencies as how to launch the product where people may give up existing milk and opt for the new entry in the market. All the homework was properly done before the launch. The launch itself was meticulously planned to get maximum mileage against the market

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with a bang and made a place for itself against some of the food giants of the world ( Nestle ) in Pakistan.

This major achievement had a lot to do with HR policies in terms of hiring, training; rewarding, benefits and making the employee feel his/her worth in achieving specified goals of the organization against the strategic planning done by HR. The excellent way in which marketing was done for Olper Milk for the point of naming the product to the point of making a household name in the major cities of Pakistan. This transition was a superb act of HR in action. This HR that hires the best in the market, embellishes them with the best training, gives them a sense of ownership and a shared vision on what is to be achieved. The innovative idea of giving it a name that sounded more foreign than local caught the attention of the common man.

Human Resource at Engro believes in learning by doing. Therefore adequate arrangements are made at the organization to impart training to the staff. It can take the shape of internal (in-house training) or external training depending on the specific need of the target audience. Staff is made to do things so that they get a firsthand experience.

Engro Food is one of the few organizations that have through training contributed not only to the employees but to the community at large. Social investment projects were organized and more than 1,30,000 people from a cross-section of society benefitted from it. The concept of a big organization involved not only in producing excellent products like Olper but also involved in community welfare has had a very positive impact on the image of Engro Food. All these factors helped Engro Food not only to enter the market but capture 22% of the market is a very big achievement against any local or international benchmark. It had to fight against an image of chemicals, fertilizers to that of quality milk, not an easy transition, still they belief where there is a will there is a way.

The result of effectively managing human resources is an enhanced ability to attract and retain qualified employees who are motivated to perform, and the results of having the right employees motivated to perform are numerous. They include greater profitability, low employee turnover, high product quality, lower production costs, and more rapid acceptance and implementation of corporate strategy. These results, particularly if coupled with competitors who do not have the right people motivated to perform, can create a number of competitive advantages through human resource management practices.

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