Kausar Ghee Mills

We interviewed “Mr. Malik Abid”, the son of late “Mr. Mubarik Ali”, the Founder of Kausar Group. Basically Mr. Mubarik Ali started the business at very small level by initially supplying cotton seed oil to the whole sellers and retailers in the Badami Bagh Lahore in the year 1952. With the passage of time his sons joined the family business and made efforts to make their business successful. In late 80’s Father’s health suffered badly and he paid the debt of nature in 1989. His sons keep on struggling hard and then a time came when they had enough resources and they came up with their own production plant at Aimanabad near Gujranwala in 1994 and the plant had daily production capacity of 200,000 Metric Tons.  The sons also engaged in other businesses besides Kausar Ghee mills like Feed mills, Rice & general mills, but the person we interviewed, Mr. Malik Abid is mainly engaged in manufacturing and sale of Banaspati Ghee and cooking oil and his company has an annual turnover of approximately PKR 60 Billion.

Following are the questions that we asked:-

1.      First of all we asked that when you started your company, what was the need of the product in the market that you felt you can satisfy?

He answered that the cooking oil and ghee has always been an important utility of every home. At that time the trend was changing towards using Banaspati Ghee and cooking oils which are having lowest cholesterol level and less fat safeguarding the physical health of the people. The market of these cooking oils was becoming mature. We entered in the market having the aim of providing people with 100% pure cooking oil and Ghee at low prices as compare to the competitors. We felt the need of high quality cooking oil with minimum amount of cholesterol and at a lower price by targeting consumers of middle class and lower middle class. We priced the products depending upon the purchasing power of our market.

2.      What is the potential market size of your company?

Yes we have a much bigger market, as we target the people belonging to middle class and we have set the price according which is less than from our competitors. We are providing good quality with low prices and that’s what the customer demands. We have good repute in the market due to good quality and healthy oil.

Increasing population is also increasing the overall demand of the product. Additionally, inflation is also a real issue here in Pakistan but due to inflation people cannot afford high prices so; due to lower prices we have many customers. Right now we are also exporting our cooking oil to Bangladesh and France, so our market is also increasing in other countries.

3.      What is your marketing/sales channel?

When the product is manufactured from the factory, we sell the product to our agents who are basically wholesalers and retailers and then they further sell the product to the end consumer so our agents work like a connector. Secondly, we also use different media campaigns to promote our products. We repetitively advertise on different channels especially we mainly focus on family channels, we also sponsor different TV programs, talk shows and sports matches for our advertisements. Other than that we also use radio channels and printing media like newspapers, magazines etc as a medium of advertisements. We also give our posters, stickers, banners, key chains to our retailers in order to promote our products. Initially, we used person to person promotion method or you can say “personal selling” but it was just initial step to introduce our self.  

4.      What is your business model?

The business of our company is to sell 100% pure, healthy and high quality cooking oil and ghee at lower prices as compared to the competitors. Our company ensures customer satisfaction through honesty and commitment. The company’s main focus is to provide people with quality products and achieve customer satisfaction.

The products are made available for consumers through retailers and whole sellers. The company has made the products accessible for the consumers to buy from almost every retailer.

The company also exports its products to different countries like Bangladesh and France. 

  

5.      What are your major show stoppers?

When we entered in the market, we faced a very tough competition among the industry. The whole market was captured by the big players like Dalda, Sufi and Habib. That was first problem that we faced and still we are facing, that is a tough competition in the oil and ghee market, but we doing are best to compete with them by differentiating our offering with the competitor’s offering i.e. “price”. Also the advertisement has played a key role in making people more aware of our products.

Secondly, the economic conditions of the country are not supportive. Increasing inflation has really affected us, fluctuation in the raw material prices and day to day challenging economic conditions had affected our profitability.

The competition in the market is also increasing with the entry of new domestic players in the food sector and plans to increase the investments by already established companies, thus this factor is also causing a decrease in the business.

The oil industry in Pakistan is also affected by instable political situations. With the change in government policies and regulation, the taxation laws also changes which also strikes the overall performance of our company.


Group Members: Idrees Mehdi, Hamood Ilyas, Nabeel yousaf, M. Ammar Sharif.