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THE ORGANIZATION TODAY

Nestl Milkpak Limited is a food processing company currently producing 28 products,excluding the variants. Headquartered in Lahore, the company operates two productionfacilities at Sheikhupura and Kabirwala and has recently acquired three bottle water

companies in Karachi and Islamabad. Through its effective marketing and a vast sales anddistribution network throughout the country, it ensures that its products are made availableto consumers whenever, wherever and however.The company meets its raw milk requirements through its raw milk requirements throughdirect purchases from the farmers under its self collection programmed from over 3000villages, spread over an area of about 8000 Sq. Km. in Punjab.

Nestl took a major participation in Milkpak Ltd in 1988. After it assumed themanagement of the company in 1992, Milkpak ltd. was renamed Nestl Milkpak Ltd

CONTRIBUTION TO OTHER SECTOR

Economic

Nestl Milkpak Ltd makes a significant contribution to the economic sector ofPakistan. Through generation of tax revenue, import substitution of milk powder, exportand infusion of over 2.3 billion rupees in the rural economy through milk purchases, thecompany plays an active role in promoting economic growth.

Nestl Milkpak Ltd continues to make investments in expanding its production linesas well as bringing in new technologies, affirming its faith and confidence in the countrysfuture.

Social In the social sector, the company has created over 1200 permanent jobopportunities for the skilled, unskilled and professional manpower, apart from hundreds ofcontractual jobs. It has also played a remarkable role in expansion and vitalization of thedairy and livestock sector.

Environment

Another key area where the company is proud to have made a contribution in theenvironment. By making available the processed and packaged dairy. Nstl Milkpak hasswitched over its fuel supply from heavy fuel oil to gas, as gas burns cleaner than heavy

fuel oils. This drastically reduces gases such as carbon di oxide and carbon monoxide frombeing emitted into the atmosphere and keeps the emissions well below the legal limits.

Steps have also been taken to reduce raw water consumption for cleaning and otherpurposes.This positively impacts on the efficiency of our waste water treatment plant, ofwhich BOD & COD is continually monitored by the engineering department.

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All waste packaging material is weighted and this information is sent to the management tochallenge all departments and suppliers to improve the operations. For example,engineering & production is encouraged to improve the performance of the packagingmachines and the supplier to improve the quality of their material supply. Efforts to reducethe quantity of packaging material used for our products, without compromising their

quality of their quality, have yielded remarkable results over the years.Investments has also been made in a new waste incinerator in Sheikhupura factory, whichis environmental friendly and fitted with a gas burner that gives off very low gas emissionsinto the atmosphere. This way tons of material is converted into ash which is safer andeasier to dispose off.

THE FUTURE

Nestl Milkpak has experienced excellent growth. For the year ending December 2002 its

turnover is expected to exceed over RS. 7.7 billion. Given the underdeveloped nature of thefood industry in Pakistan and its entry into new food categories, Nestl Milkpak Ltd isconfident to achieve sustained growth in the years ahead.

Include MILKPAK UHT Milk, MILKPAK Cream and Frost fruit drinks, in addition toexport of infant Cereal to Bangladesh.The independence of central Asian Republics offered new business potential enabling thecompany to export infant cereals, LACTOGEN 1 & 2 and MAGGI NOODLES andconfectionery to Uzbekistan, Turkmenistan, Kyrgyzstan, Tajikistan and Azerbaijan.Confectionery was also exported to Bangladesh and Sri Lanka. With the launch inDecember 1998 of the strategic water brand, NESTL PURE LIFE, this premium qualitywater quickly found a market in the Central Asian Republics and Nigeria in 1999. In 2000our exports stood at Rs.231 million.

In 2001, Nestl Milkpak Ltd became the first Pakistani producer of the milk products toexport milk powder to African markets. This not only adds a new product to the countrysexport list but also holds a great promise as a foreign exchange earner for the future.

This year we have exported Milkpak Cream, UHT milk, infant Cereals, Lactogen, Nido,Everyday, Gloria, Nestl Pure Life, Maggi Noodles and Ketchup and RTD Juices. By theend of the year we expect our export to reach over Rs. 275 million

MARKET POSITIONUHT milk grew at faster pace than the industry, mainly due to price stability andaggressive media and non-media activities. NESTLE Plain Yogurt was launched onNovember 1, 2000 in the biggest branded yogurt market - Lahore, supported by a fullyintegrated marketing campaign. The product was very well received by the consumers.

We continued to expand our water business. While NESTLE PURE LIFEretained its significant market share in the retail sector, we launched the Jumbo Service (5-

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gallon bottles for home and office consumption) in July 2000 in Lahore, thereby entering avery promising market segment. The results are very positive and the market is developingfast.

Research & Development

Nestle, the world's biggest food Group, is also the global leader in the industry with regardto Research and Development (R&D), No other food company matches the R&D presenceof Nestle, with a worldwide network of centres in 17 locations on four continents. No otherfood company dedicates so many human and financial resources to R&D: an internationalstaff of 3500 engaged in the search for innovative new products and the renovation ofexisting ones. Year after year, Nestle invests some 800 million Swiss francs into R&D as amajor driving force of its double strategy: to strengthen the Company's brands worldwideand to continue to support future long-term growth and competitiveness through innovationand renovation.

At the threshold of this new millennium, Nestls objective is to consolidate and strengthenits leading position at the cutting edge of innovation in the food area, in order to meet theneeds and desires of consumers around the world, for pleasure, convenience, health andwell being. In addition, significant progress was achieved across the broad range of ourbusiness activities such as Information systems, logistics, sales and distribution structurewhere strong distribution and effective merchandising made a major contribution inachieving the high rate of growth as mentioned above

Major Competitors in Pakistan:

Engro foods Haleeb foodsare the main competitors of Nestle in Pakistan

Future Of Nestle

Nestle is today the worlds largest food and beverage company with its mission to providehealthier lifestyle. It has launched many products in Pakistan the majority of which arepopular and among the market leaders. Nestle is installing new plants and importing latesttechnologies to improve. Moreover, innovation is one of its greatest strengths so it has abright future in Pakistan.