Shams ul Nisa

The FrieslandCampina Engro Pakistan Limited (FCEPL) is navigating economic and regulatory challenges with a focused growth strategy, emphasizing operational efficiency and tax reform advocacy, reports WealthPK.

The 1QCY25 proved challenging for FCEPL, as the imposition of sales tax on UHT milk from July 2024 disrupted the market, making packaged milk less affordable and prompting a shift in consumer preference toward loose milk. During the review period, FCEPL’s net sales fell 5.3% to Rs26.0 billion, with dairy-based products down 9.1% to Rs23.7 billion. As a result, FCEPL intensified its focus on cost control and operational efficiency.

However, FCEPL increased its operating profit by 12.8% to Rs2.22 billion, while profit after tax rose to Rs1.09 billion, driven by cost control, better working capital management, and lower interest rates. These measures reinforced FCEPL’s self-funded business model and highlighted its ability to drive profitability despite declining sales, reflecting the success of its internal reforms and strategic cost management.

Furthermore, FCEPL plays a crucial role in Pakistan’s economy by supporting farmers and suppliers, promoting food security through the production of safe dairy products, and driving rural development. Its strong financial performance and efficient operations reinforce its impact on employment and socio-economic growth.

Additionally, a key pillar of FCEPL’s strategy is its strong advocacy for tax reform. The company has raised concerns over the sales tax on UHT milk, warning that it disadvantages the formal sector against untaxed loose milk vendors. Therefore, FCEPL is actively engaging with policymakers to promote fair, globally aligned tax policies that support industry growth.

Looking ahead, FCEPL is drawing on FrieslandCampina’s global expertise and 150-year legacy to drive innovation and sustainable growth in Pakistan. The company remains focused on delivering safe, high-quality, and affordable dairy products to millions.

Hence, it is expanding its Dairy Development Programs to support small-scale farmers with training and technical assistance, boosting productivity, rural incomes, and employment. Similarly, FCEPL is also exploring new product lines, including value-added and health-focused dairy items, to meet changing consumer demands.

Despite ongoing challenges, FCEPL’s leadership remains confident in the company’s future, combining operational efficiency with active policy advocacy to drive sustainable growth. The company’s 2025 journey reflects a strategic blend of adaptability, operational efficiency, and purpose-driven leadership, laying a strong foundation for long-term progress in Pakistan’s dairy industry.

Credit: INP-WealthPk