Kashan Hasan is the CEO and Managing Director of FrieslandCampina Engro Pakistan Limited (FCEPL). He has over 22 years of experience across various commercial functions, including sales, customer management, marketing, and trade marketing. His career encompasses various regional and global roles in markets such as Pakistan, South Africa, the UK, the Middle East, and North Africa.

Prior to joining FCEPL, Kashan served as the CEO of Shan Foods, a position he took after a 15-year stint at Reckitt, culminating in his role as General Manager for Pakistan.

Following are the edited excerpts of a recent conversation BR Research:

BR Research: Tell us about yourself and your journey with FrieslandCampina Engro Pakistan Limited.

Kashan Hasan: Prior to joining FCEPL earlier this year, I held various leadership roles in leading multinational companies across different countries, which equipped me with a diverse skill set and a deep understanding of the consumer goods industry. I am curious by nature, love working with people, want to create an impact in their lives, and firmly believe that nothing beats hard work!

Upon joining FCEPL, my vision revolves around the company’s mission to nourish Pakistanis with the goodness of milk, while simultaneously enhancing the lives and livelihoods of local dairy farmers.

BRR: What has been FrieslandCampina Engro’s growth strategy in Pakistan over the past few years, and how do you plan to maintain or accelerate growth in the coming years?

KH: Over the past few years, our strategy at FCEPL has been driven by our purpose of nourishing Pakistanis and the huge opportunity that this country offers. We have grown by driving safe and nutritious dairy sales in Pakistan through category development, brand building, affordable pricing, and distribution expansion, rooting all of this in sustainable farming and operations.

Looking ahead, we will continue to lead category development and market share growth through best-in-class communications, execution, and providing accessibility and affordability to our consumers. We will also continue to build supply chain capabilities and do all of this at the best possible cost and with even more efficient operations.

We are focusing our current and future strategy on educating and empowering our communities, including farmers, women, and children, to promote a healthy Pakistan. We are running multiple programs to improve the livelihood of farmers, supporting the role of women in dairy, and introducing milk programs in schools.

BRR: How does FrieslandCampina’s global expertise influence your operations and strategic decisions in Pakistan?

KH: Leveraging FrieslandCampina’s extensive experience in dairy science and technology, we implement cutting-edge practices in dairy farming and milk processing. This helps enhance the quality and efficiency of our local milk supply chain, from farm to consumer.

Our product portfolio benefits greatly from global R&D insights, allowing us to introduce innovative dairy products tailored to meet the nutritional needs and taste preferences of Pakistani consumers.

We maintain the highest standards of quality and safety by integrating FrieslandCampina’s global policies and protocols into our operations. This ensures consumer trust and compliance with both local and international regulatory requirements.

BRR: As part of a global entity, how do you assess the current business environment in Pakistan for foreign investment, particularly in the dairy and food sector?

KH: The potential and opportunity that Pakistan presents are immense. We have a large population, talent, and resources suitable for global entities. Most formal categories are underdeveloped, which means there is room to invest and grow in this market.

Pakistan has one of the largest populations in the world and the highest dairy consumption per capita as well. Therefore, our company sees Pakistan as a huge potential to make a significant impact in one of the world’s largest milk-producing and consuming countries. Yet much of its dairy sector remains untapped and characterized by informal operations.

The Pakistani government has been supportive of foreign investment, particularly in agriculture and food production, which are considered critical for economic growth and development. However, the industry is currently facing challenges due to high inflation and heavy taxation, which have recently reduced the consumption of safe and packaged milk.

While the potential is significant, investors continue to navigate challenges including political instability, regulatory complexities, fluctuating economic policies, disproportionately heavy taxation, and infrastructure constraints.

BRR: What factors motivated FrieslandCampina to invest in Pakistan through the acquisition of Engro Foods, and how do you see the FDI landscape evolving for the dairy industry?

KH: Several strategic factors drove its success. Pakistan’s dairy market is one of the largest in the world by volume, characterized by high consumption rates of milk and a growing demand for dairy products. However, the market was predominantly unorganized with a vast potential for growth through formal channels. Engro Foods has already established a strong local brand presence and extensive distribution network. FrieslandCampina’s global expertise offered synergistic benefits to enhance Engro Foods’ operations and market reach. Demography was also a key motivator, as Pakistan, home to 250 million people, presents a significant consumer base that is gradually shifting towards branded and packaged food products due to rising health awareness and lifestyle shifts.

BRR: What are the most significant risks that foreign investors in Pakistan face, and how can they mitigate these risks? How does the current economic situation in Pakistan, including inflation, exchange rates, and political stability, influence foreign investor sentiment?

KH: Economic volatility and regulatory complexities are a risk to foreign investors in Pakistan.

High inflation can erode purchasing power and increase the cost of doing business. Fluctuations in the Pakistani rupee can impact margins and profitability and make financial planning challenging.

To counteract these effects and enhance investor confidence, it is essential for both the government and businesses to promote a stable, transparent, and conducive investment environment.

This includes economic reforms, long-term planning with clear goals, and initiatives to stabilize the currency and reduce inflationary pressures.

BRR: Does FCEPL have any plans for further expansion or investment in Pakistan, particularly in terms of infrastructure, innovation, or new product lines?

KH: We see Pakistan as a growth market with potential and purpose for us, and therefore we plan to invest for growth in our facilities, our communications, and in our execution.

Innovation is at the core of our strategy. We are continuously investing in upgrading our existing facilities and expanding our logistical capabilities.

We are committed to leveraging FrieslandCampina’s global R&D capabilities to bring the latest innovations in dairy technology to Pakistan. This will not only enhance product quality but also improve our supply chain and environmental sustainability practices.

BRR: How competitive do you think Pakistan’s dairy products are on the international market, and what actions can we take to increase their export potential?

KH: Pakistan is one of the top milk producers globally, but its presence in the international dairy market is minimal. The primary reasons include the predominance of informal milk production, limited processing infrastructure, and the lack of adherence to international quality and safety standards.

The processing infrastructure requires significant investment to meet international quality standards. Value-added dairy products such as cheese, butter, and specialized milk powders can attract higher margins and cater to diverse markets. Innovation in product offerings will be key to differentiating Pakistani dairy on the global stage. Streamlining the supply chain from farming to export is also essential.

FCEPL is committed to leading the change, leveraging our global expertise and local presence to elevate Pakistan’s standing in the international dairy market. We are working on driving improved yields and better and more efficient management of cattle, which will increase production, bring down costs, and make Pakistan more competitive.

BRR: Is FCEPL looking into opportunities to export its products to new markets, especially with the backing of FrieslandCampina’s global network? Or do you not see potential in using Pakistan as a hub for exporting dairy products to neighboring markets or other regions?

KH: Our long-term vision involves not only expanding into new markets but also contributing to the overall growth of Pakistan’s economy through increased export revenues. The goal is to establish Pakistan as a key player in the global dairy industry.

We have made significant progress in the last two years, with a sizeable and rapidly growing export business to both our own operating companies within the group and other third-party customers.

The article, originally published on November 1, 2024, was updated on November 3, 2024, to rectify an error in the name of FrieslandCampina. The error is regretted, and has been rectified.