HISTORY:

PACKAGES Ltd is the among the most prestigious, versatile and advanced companies of Pakistan. It is surely the market leader when it comes to providing packaging solutions. With the best business practices and most modern systems deployed, Packages Ltd is on top of the market. Packages Ltd. is an industrial organization manufacturing packaging material which provides services for other industries. Its business is to provide packaging materials for the products of different industries. It also produces all types of tissues available in the local market as well as for export purposes. There are more than 3000 employees working in the company.

Packages Limited has had a joint venture with Tetra Pak International in Tetra Pak Pakistan Limited to manufacture paperboard for liquid food packaging and to market Tetra Pak packaging equipment.

Packages commissioned its own paper mill with a production capacity of 24,000 tonnes in 1968. The mill produces paper and paperboard based on waste paper and agricultural by-products like wheat straw and river grass. With growing demand the capacity was increased periodically and in 2003 was nearly 100,000 tonnes per year.

In the beginning 22 Swedish Experts came to Pakistan to run the factory and to train the Pakistani staff. Packages Limited was established in 1957 as a joint venture between the Ali Group of Pakistan and Akerlund & Rausing of Sweden, to convert paper and Paperboard into packaging for consumer industry in 1958 production of packaging cartons for different industries started packaging. Cartons include soaps, biscuits, cigarettes, tea, and pharmaceutical products and many others. a joint venture agreement was signed with Mitsubishi Corporation of Japan for the manufacture of Polypropylene films at the Industrial Estate in Hattar, NWFP. This project, called Tri-Pack Films Limited, commenced production in 1995 with equity participation by Packages Limited,

SYED BABAR ALI

RUBEN RAUSING

Mitsubishi Corporation, Altawfeek Company for Investment Funds, Saudi Arabia and the public. Packages Limited owns 33% of Tri-Pack Films Limited's equity.

Over the years company enhanced its facilities to meet the growing demand of packaging product. Additional capital was raised from sponsors, financial corporations and from public in making the total paid up capital to Rs 3.1 million in 1965.

At first Packages commissioned its own paper mill in 1968 with production capacity of 24000 tons paper and paperboard based on waste paper, wheat straw and kahi grass.
Since 1982, Packages limited has a joint venture in Tetra Pak Pakistan Limited with Tetra Pak International to manufacture paper for liquid food packaging and to sell Tetra Pak Packaging equipment. The main industries covered by Packages:

• Soap Industry • Shoe Industry • Tissue Industry • Tea Industry • Tobacco Industry • Food Industry • Sweets & Confectioneries

In Tetra Pak Pakistan Limited Packages Limited has 45% shares, 6% shares owned by Syed Baber Ali Shah and 49 % owned by Tetra Pak International.

Since 1957, Packages has been producing ink for its own consumption. In 1993, the Company agreed to joint venture with equity participation from Coates Lorilleux, world’s largest ink manufacturer. Packages have transferred its ink manufacturing facilities to another company by the name of “Coates Lorilleux Pakistan Limited”.

In 1963 a joint venture was signed with “Mitsubishi Corporation of Japan” for the manufacturing of polypropylene films at the industrial estate in Hatter, NWFP. This project, Tri-Packs Films Limited commenced production in June 1995.
In 1996, a joint venture agreement was signed with Print care (Ceylon) Limited for the production of flexible packaging in Sri Lanka. This project Packages Limited Lanka (private) Limited commenced production in 1998.Packaged owned 62% of this company.
In 1999-2000 Packages Limited has successfully completed the expansion of flexible packaging line by installation of new rotogravure printing machine and the expansion of the carton line by a new Leman tic rotogravure inline printing and cutting creasing machine. The machine is in production since December 1999.

The Company is at advanced stage of implementing SAP, an Enterprise Resource Planning System, which through common database allows the company to fully integrated and be live in respect of all at business information. This will enable the Company to serve its customers better.

The Rubber Division working under the Research Development & Control Department is also selling its products in the local market as well as selling to the Defense Authorities apart from providing services to its own department.
Another important service department of the Packages Limited is its “Power Plant”. In 1967 they set up 6 MW power plants, but to ensure a continuous and dependable supply of power for its production lines. It has also established its own power plant with 10 MW power in 1991, the cost of which was 180 million rupees.
.In the field of consumer product, Packages Limited has shown tremendous potential and commendable talent. Consumer Product Division provides 12% share of the Packages total sales. The consumer product of the company is “Rose Petal” Tissues. The production of Rose Petal was the first introduction to tissues paper industry in Pakistan. Through Packages has introduced various brands of tissues. Rose petal is now the market leader in tissue paper industry in Pakistan. Its has more then 75% share of tissue paper industry. Other consumer products includes paper cups, paper plates, paper napkins, paper hot cups, wet tissues of Rose Petal have been introduced in their market in 1992.
Basically Packages Ltd offers five SBUs (Strategic Business Units) to its customers:

The market share of Packages Ltd is almost 30% (overall) in the packaging industry of Pakistan. Now Packages Limited is also exporting its managerial & technical expertise to the third world countries like:

o Indonesia o Tanzania o Kuwait o Saudi Arabia o Nigeria o Zambia o Somalia o Russia

The following countries are being exported tissue:

o Iran o Bangladesh o Srilanka o Indonesia o UAE o Maldives

Packages have a large workshop for repairing and replacing the damaged parts. R& D control department was established to ensure quality and standard of product.
Started with only 500 workers, now it has more then 3000 employees working in different departments.

Today Packages is considered as one of the leading packaging firm in Asia.

GLOBAL PARTENERS:

Packages Limited has extended its expertise to a number of Third World countries in the 1970s. Management and Technology was exported to Tanzania, Zambia, Indonesia, Kuwait, Saudi Arabia, Somalia and Nigeria where packaging companies required assistance in running and managing their operations. Packages Limited has also provided technical assistance to Tetra Pak for general packaging in Kuban, Russia. Packages looks forward to expanding its horizons for more multi-cultural experiences.

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|The Packages Group is proud of its long standing network of friends and family, with key business partners as |
|diverse as Print Care, Coca-Cola, Tetra Pak and Mitsubishi Corporation. |
| Nestle Milkpak Ltd (NML) |
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|Milkpak was established in 1981. It collects milk from the rural areas, processes it by the UHT method, and |
|sells it in Tetra Pak containers. In 1988, Nestle of Switzerland bought into Milkpak and expanded its scope and|
|activities - Nestle now owns 58% of the enlarged company. NML sales in year 2004 were Rs. 12.8 billion with |
|1,560 employees. |
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| Tetra Pak Pakistan Ltd. |
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|Tetra Pak Pakistan Limited is a joint venture between Packages Limited and Tetra Pak International, the world's|
|leading liquid food packaging company. It was established in 1982. |
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| Tri-pack Films Ltd. |
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|Tri-pack manufactures BOPP film with an annual capacity of 11,000 tonnes. Tri-Pack sales in 2004 were Rs.2.05 |
|billion. The number of employees of the company is 220. Packages Limited has 33.3% ownership while Mitsubishi |
|Corporation of Japan holds 25% shares in the company. The Company has increased its capacity to 26,000 tonnes |
|with a new plant in Port Qasim, Karachi, which started production in 2004. |
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| DIC Ltd. |
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|A joint venture between Packages Limited (55%) and Dainippon Ink and Chemicals Singapore Pte. Limited (45%). |
|DIC Limited has an annual capacity of 3,075 tonnes of printing ink. Sales for 2004 were Rs. 640 million. Number|
|of employees: 131. Dainippon Ink and Chemicals is one of the largest printing ink manufacturing groups |
|worldwide. |
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| Packages Lanka Pvt. Ltd. |
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|A joint venture between Packages Limited and Printcare (Ceylon) Limited of Sri Lanka. This project was set up |
|for the manufacture of flexible packaging material. Packages Limited owns 79% of this company. Packages Lanka |
|Private Limited has an annual capacity of producing 54 million meters flexible packaging. Packages Lanka |
|Private Limited had sales of Pak Rs. 265 million in the year 2004. The number of employees of the company is |
|122. |
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| International General Insurance Company of Pakistan Ltd. (IGI) |
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|IGI, the insurance company of the Group, was established in 1953. It had a gross premium of Rs. 423 million in |
|the year 2004. Number of employees: 81. Recently IGI has acquired the insurance business of Pakistan branch of |
|Royal & Sun Alliance Insurance Plc. |
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| First International Investment Bank Ltd. (Interbank) |
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|Established in 1990, a joint venture between American Express Bank, International Finance Corporation, and the |
|Packages Group with an issued share capital of Rs. 404 million. In the year 2003-2004 the Bank had an after-tax|
|profit of Rs.42 million. The number of employees is 83. |
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| Coca-Cola Beverages Pakistan Ltd. |
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|Packages Group is a minor shareholder in Coca-Cola Beverages Pakistan Limited (CCBPL) of which The Coca-Cola |
|Company, Atlanta, U.S.A. holds 92% shares. |
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TECHNICAL COLLABORATION:

AMCOR Flexibles, Australia
Stora Enso, Sweden
JOINT VENTURE PARTENERS:

|Name of Joint Venture |Joint Venture with |
|Tetra Pak Pakistan Limited |Tetra Pak International |
|Coates Lorilluex Pakistan Limited |DIC Asia Pacific Pte Limited |
|Tri-Pack Films Limited |Mitsubishi Corporation of Japan |
|Packages Lanka (Private) Limited |Print Care Group of Sri Lanka |

OBJECTIVES OF PACKAGES LIMITED:

Objectives are the ends towards which activity is aimed. They represent not only the end point of planning but also the end towards which organizing, staffing, leading and controlling are aimed. It works with objective of increased sales, profit and expansion programs.

The objectives for which the company is established:

1. To carry on business of manufacturing and printing of cartons, packages, special containers for various commodities, utensils, and other articles, printers, lithographers, type founders, stereotype, engravers, die sinkers book binders, designers, paper and ink manufacturer and dealers in or manufacturers of any other articles or things of a character similar or analogous to the foregoing or any or any of them or connected therewith; manufacturer importers, exporters, and dealers in raw material, articles and things required for purpose of manufacture and printing of cartons, packages, specialized containers for various commodities, and to establish and maintain showrooms for this purpose; and of distributors, suppliers and sellers of the said articles and contractors for supplying them.

2. To carry on all or any of the business of the manufacturer of and dealers in paper and board of all kinds and Tetra Paper for making Tetra Pak of any type, description and dimensions, straw board, plain and corrugated duplex board, chip board, card board, box board, veener board, mill board, wall and ceiling paper, and articles made of paper, pulp, paper board specialists and board in all their branches.

3. To carry on business of stationers, printers, publishers, fancy good dealers, bill posters and advertising contractors.

4. To carry on business as producers and processors of and dealers in poultry, dairy produce of all kinds and other liquids of every description.

5. To carry on business of manufacturers and dealers in chemical of all kinds, paints, varnishes, printing inks and all other things which can be conveniently manufactured or dealt in either wholesale or retail and either as principles or agents.

6. To purchase and provide machinery and equipment for the purpose here in before as well as here in after set out and to manufacture or assemble such machinery.

7. To establish laboratories R & D center perform such research and development, as the company may deem advisable.

8. To train workers and personnel both in Pakistan and abroad to obtain technical proficiency various fields.

9. To enter in to an arrangement with any government, state or authority, central or provisional, railway, municipal, local or otherwise, that may seem conductive to the company’s object, or any of them and to obtain from any such government, state or authority any rights, privileges and concessions.

10. To sell and dispose of the undertaking of the company or any part thereof or such consideration as the company think fit, and in particular for shares, debentures, or Securities of any other company having objects altogether or in part similar to those of this company.

11. To invest and deal with the money of the company not immediately required in such manner as may from time to time be determined.

12. To develop and build local skills and competence in a sophisticated industry order to make the country self sufficient in its need for packaging.

MISSION STATEMENT:

To be leader in the market Packages serves by providing quality products and superior services to their customers while leaning from their feedback to set even higher standards for our products.

To be company that continuously enhances its technological competence to provide innovative solutions to customer needs.
To be leader in the market Packages serves by providing quality products and
To be a company that attracts and retain outstanding people by creating a culture that fosters openness and innovation promotes individual growth and rewards initiate and performance.

To be a company which combines its people, technology, management system and market opportunities to achieve profitable while providing fair return to its investors.

To be a company that endeavors to set the highest standards in corporate ethics in serving the society.

Vision

Position ourselves to be a regional player of quality packaging, paper & paperboard and consumer products. To improve on contemporary measures including cost, quality, service, speed of delivery and mobilization. Keep investing in technology, systems and human resource to effectively meet the challenges every new dawn brings. Develop relationships with all our stakeholders based on sustainable cooperation, upholding ethical values, which the shareholders, management and employees represent and continuously strive for.

MARKET STATUS AND COMPETITION:

Few major competitors of Packages are:

o Flying Paper o Century Paper and Board Mill Limited o Saima Printer o Matatex o Fine Packages Pvt Ltd o Packaging Solutions Pvt Ltd

FLYING PAPER;

Flying Paper is situated in Sheikhupura Road and its plant and machinery have originated from Korea and Japan, the plant uses wheat straw for the production of writing paper, tissues/toilet paper. Flying focused on its paper and Kraft paper for industrial use and tissue for consumer selling.

CENTURY PAPER AND BOARD MILL LIMITED:

Century Paper and Board Mill is situated at Bhaipheru, Multan Road, its machinery and plant has originated from Germany, France, Scandinaria and Italy. The plant use wheat straw, grass waste paper and wood pulp for the production of duplex board, white paper and fine paper and poster paper.

Century specializes in the production of writing paper and paperboard for industrial selling. Its capacity is much greater than any other to include any threat from the small is strategic groups, strategic groups is based on capacity of production versus variety of production has been formed. Century is the only one which has the most variety of production and produces the most quantity supplied to market and having more than 40% market share, though Packaging capacity is comparably less since it converts its production of paper and board into Packaging for all sort of purposes. Century is the second largest supplier of Paper and Board in Pakistani market.

Century paper and board mill emphasizes in Industrial paper and board and supplies its products to various local companies for the use of packaging and used as printing material

MATATEX:

In flexible packaging, Matatex also Karachi based has advanced technology and good quality product.

Fine Packages and Packaging Solutions Pvt Ltd have acquired their own market segments that consist of buyers who are price conscious rather than quality. Both of the companies manufacture corrugated products only.

VULNERABILITY:

Packages Ltd has a minor threat from thermopore drinking cups to its paper cups. Except this there is no such currently known threat from any other substitute. Usually Packages Ltd focuses on creating an innovated alternative to any known substitute found in packaging industry.

The threat of bargaining power of the buyer is prevailing as other small companies are marketing their products on comparatively low rates then Packages. But the big customers will remain with Packages as small companies (apart from their low cost) are not in a position to fulfill so large projects as Packages can do. As Packages has backward vertical integration, but a small amount of raw material has to be bought from suppliers too. Normally there is no such threat from these suppliers as well but there always is a chance for bargain

But there is no any competitor, who has more than 10% market share. The Packages Limited has an edge over competitors in different factors:

[pic] Packages has own Paper & Board Mill [pic] Modern Machines & equipment [pic] Printing quality of products [pic] Provides help in designing

Almost 91% of the sales of Packages Limited comprise of Industrial Products. Packages Limited is the marketing leader of the packaging industry of Pakistan. Packages Limited produces the wide range of packaging material in the country. It manufactures materials, which cover paper & board, corrugated board, plastic packing. The major industries whose packaging requirements are being fulfilled by Packages limited are as follows:

[pic] Cigarette Industry [pic] Tea Industry [pic] Shoe Industry [pic] Match Boxes Industry [pic] Toffee and Candy Industry [pic] Food Industry [pic] Soaps & Detergents Industry [pic] Biscuit Industry [pic] Pharmaceutical Industry [pic] Chemical Industry [pic] Tooth Paste Industry [pic] Garments Industry

ORGANIZATIONAL CHART:

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MANAGERIAL HEIRACHY (MARKETING & SALES):

[pic]

[pic]

THE POLICIES:

The managerial policies as adopted by Packages limited are as follows:

• The price of company’s product is same in all areas pf Pakistan.

• In case of consumer Product Company pays freight.

• Priced can be changed by the company without any prior notice.

• The Company accepts only large orders of high monetary value.

• An order, which has been once confirmed by the customer, can only be cancelled

• at the will of company and not the customer.

• In case of consumer product, agreement with customer is made once and for all.

• No discounts are offered to customers.

• Goods are sold against 100% advance payment.

• The company doesn’t pay freight when its industrial products are shipped to the customer.

• Punctuality is strongly emphasized.

[pic] All the designed and original work done in preparing the package of any product will remain the property of the company.

[pic] Procurement is made directly with producers so that the middleman’s profit is eliminated.

[pic] Once the goods are in transit, they become the property of customers.

[pic] For routine matters multiple suppliers are maintained to reduce dependency on any one particular supplier.

[pic] An alteration in the approved sample shall be charged extra.

[pic] Workers are encouraged to produce more through well-organized incentive system.

[pic] Selection of executive s is done strictly on merit bases and no approach is entertained in this regard.

[pic] Investment is made in that project which is outside the line of company but is expected to improve the sales of the company.

[pic] In all production processes both quality and quantity are taken emphasized.

[pic] Workers are encouraged to reduce waste and costs.

[pic] Only those workers are recruited who have some relationship with the current employs of the company.

[pic] Smooth relationship between supervisors and the subordinates is emphasized.

[pic] Company makes capital investment equal to the depreciation every year.

[pic] Swiftness in the performance of duties is encouraged. ACTIVITIES

Activities contribute to the physical creation of the product, its sale and transfer to the buyers and after sales service.

❖ INBOUND ACTIVITIES:

Raw material for the production of paper and board is obtained locally through regular purchasing from the agricultural sector and to maintain the quality the ingredients are mixed with imported wood pulp. About 9000 tons of wood pulp and 1500 tons of chemicals (sulphur and raisin) are imported annually.

❖ OPERATIONS:

Continuous flow is followed in the paper and board mill and assembly in the packaging division as paperboard is cut in the appropriate sizes, printed and then modified to be folded into the desired shape.

❖ OUTBOUND LOGISTICS:

The packaging division uses all the paper produced by the paper and board mill, which are stored from time to time to accumulate in the warehouse and prevent from stock outs. Final products are transported from the production dept and the warehouse via trucks.

❖ MARKETING AND SALES:

Packages provide packaging solutions to major consumer industries in Pakistan through cost effective packaging. They do not have to extensively practice aggressive marketing or sales, as their position is strong being the only one capable of providing high quality paper and board. ❖ SERVICES:

There does not exist any dealer network and they do not operate in the consumer market for the production of paper and board except for providing tissue paper and toilet paper.

DEPARTMENTS AND PERSONNEL:

Packages Limited is divided into ten departments. Which are:

A. HR Department & personal Department

B. Pre-press planning Department

C. Research and Development Department

D. Production and Planning Department

E. CPD Marketing

F. Technical Department

G. Quality Control Dept (Covering packaging Div and Consumer product division)

H. Marketing department

I. Finance Department

PRE PRESS PLANNING DEPARTMENT

All efficiency of Production Department depends on the working of Planning Department. The Planning Department has the following functions:

COORDINATION BETWEEN MARKETING AND PRODUCTION DEPT:

First of all, it coordinates between Marketing Department and Production Department. It means they calculate the capacity and the availability of machines and gives this information to Marketing Department so that they can accept orders from customers. Similarly it informs the Production Department about the requirements of the Marketing Department. The availability of the machines is notified through “Loading Charts”.
For the maximum utilization of the machines and the time, the Planning Department prepares Loading Charts. The Marketing Department is informed about the time when the job will be completed and the goods will be delivered. The time to be spent on printing, cutting, folding, gluing and packing is summed up.

MAKING A BALANCE BETWEEN PRODUCTION & SALES:

Planning Department makes a balance between sales & production. It gives targets to both the departments to achieve neither more nor less. If production is more and sales are less then Marketing Department is pressurized to increase the sales.

CREATING LINK WITH PAPER & BOARD MILL:

Planning Department has also a link with the Paper & Board Mill. What kind of paper the customer requires, is known by the Marketing Department and what type of paper they can use in printing, only Planning Department knows both the things. So it orders the required things and if it is not possible to produce such type of paper in their own mill then Planning Department has two options. They can import such type of paper, as the customer needs. Second option is that they can propose to the Marketing Department to use any alternative. In this way, Planning Department works as a nervous system from order placement to sales.

LOADING SHEET:

Planning Department also prepare Loading Sheets. Loading Sheets are prepared for each job and are sent to the computer. The computer gives all necessary data about the quality of paper to be used, the weight-age, other materials required etc., so that the Production Department may make all necessary arrangements in advance.

MAKING SHORT-TERM & LONG-TERM PLANS:

Planning Department makes short-term as well as long-term Plans. They project the state of the company in local and international market after five years. They also plan for the “Diversification” and “Close Down” stages. Planning Department plans for the future development.

OPTIMUM UTILIZATION OF AVAILABLE RESOURCES:

This department makes the optimum utilization of available resources, i.e. (5 Ms)

• Material • Machines • Measurement • Methods • Manpower

PRODUCTION DEPARTMENT

Planning and Production are the most important departments in Packages Limited. Production department controls all the operations under the factory. Planning department is responsible to plan and organize the allocation of jobs to various lines or divisions in a way that their maximum capacity is utilized and that the delivery is given to the customer by the given date.
Production Manager is the head of Production department and is responsible for the production function. There is also one Planning Manager, which is under the Production manager. The Production Manager looks after the production while the Planning Manager supervises the Planning Section. The heads of the following departments are directly answerable to Production Manager and they have to present their special problems to him for advice and help:

• Carton Line • Corrugated Division. • Flexible Packaging Division • Poly & Paper Conversion Department. • Art Department. • Camera Department. • Coating Department. • Cutting & Creasing Department. • Lamination Department. • Folding and Gluing Department. • Dispatch Department. • Quality Control Department. • Coates Lorilleux (Ink Factory).

The Production Planning and Control unit is also directly under the Production Manager and acts as the brain cell for him. Production Department prepares internal planning of the whole Paper & Board division. It takes into account the total capacity of the machinery, and the manpower. It also arranges the resources to attain maximum utilization. The other goal is to reduce the wastage of resources. The Planning Department acts as a coordinator between the Marketing and Production Departments. This is very important in the sense that if there is no communication between the Marketing and Production Departments, a lot of confusion will be created.

ART DEPARTMENT

When there is a blank development, the department develops the design according to demands of the Customers then it is sent to art department in the digital form. The blank samples are designed Different softwares are used in this department e.g. Adobe Photoshop, Adobe illustration, Freehand etc. in the digital form as well as the printouts are sent to customers to customize it. So the preparation of design is the basic purpose of this department.

HUMAN RESOURCE DEPARTMENT:

Regardless of the size or type of the business, any organization’s most important asset is its Human Resources. Human Resources management strives to achieve organizational goals and goals of the employees through effective personnel programs, policies and procedures. Personnel management program varies from organization to organization. If there is good performance of personnel department, then the employees of the company will be motivated and satisfied. The department manages and mobilized the human resources. There are several personnel functions, such as:

[pic] Job Analysis & Design
[pic] Recruitment & Selection
[pic] Performance Appraisal
[pic] Training & Development
[pic] Compensation & Health
[pic] Employee Relations
[pic] Negotiation with Union
[pic] Maintaining Discipline
[pic] Welfare Programs for Employees
[pic] Grievance Handling

Packages Limited possesses a well-organized and systematically operated Personnel Department. The success and effectiveness of this department’s policy and programs can be judged from the fact that no major problem has come to surface in the recent years.

There are 2782 workers at Packages Limited at present. In 1957, when it came into production there were no more than 500 workers employed. The retirement age is 58 years for employees. Personnel (Industrial Relations) Manager heads the Personnel
Department. Under his supervision five sections or wings of the Personnel Department work:

[pic] Legal Wing
[pic] Personnel Staff Wing
[pic] Personnel Wing
[pic] Welfare Wing
[pic] Establishment Wing

EMPLOYEE GRADES:

There are different grades for workers. These are:

Grade-1 G-1
Grade-2 G-2
Grade-3 G-3
Grade-4 G-4
Grade-5 G-5

Grade G-5 is for supervisors and G-1 is lowest grade in the organization. Packages Limited has four different executive grades. These are:

Executive-1 E-1
Executive-2 E-2
Executive-3 E-3
Junior Executive J.E

E-1 is the most senior in executive group and J.E is the most junior in this group. There are three Managers grade in Packages. These are:

Manager-1 M-1
Manager-2 M-2
Manager-3 M-3

In this group M-3 is most senior and M-1 is joiner. The retirement age is 58 years and extension is not granted. If the employee is needed he or she is hired on contract basis.

PERSONNEL WING:

The personnel wing performs two main functions:

1) It looks after all the sports activities at Packages Limited.
2) It looks after the disputes between the management and the workers if they arise.

There is a sports hall, cricket ground, a football ground, a hockey ground and a volleyball court at Packages Limited. The Sports Complex comprises of two courts for Squash and Two Badminton courts. In sports complex there are two table tennis tables, Carom Board and Chess. Annual sports are held every year and prizes are distributed to the winners. The Personnel Wing holds all these activities.

WELFARE WING:

The function of Welfare Wing is to look after all the welfare activities and facilities on the factory premises. This wing controls the Fair price shop, the Canteen and all the Messes. The evolution of this wing was the result of the management’s thought that it is a big deal to feed and clean a big factory. It is directly under the Personnel Manager.

ESTABLISHMENT WING:

The Establishment Wing performs the following functions:

Maintaining Personnel Records

Recruitment

Maintaining Personnel Strength

Maintaining Leave Record of All Workers

Keep Check on all the Staff

✓

This wing consists of one senior personnel officer, two assistant personnel officers and, section in charge and 13 timekeepers.

TIME OFFICE:

The most important section of the Establishment Wing is the “Time Office”. All employees and workers of the Packages Limited are enrolled here. In the Time Office, employees’ records from appointments till retirement are kept, like transfer, promotion, leaves etc. All appointments are made only when there is a new vacancy or need for replacement. There is an “Appointment Register” in which details like name, father’s name, and appointment date, address, department etc. are entered. This register also tells about the appointments made in a year and strength of all the departments.
Along with the Appointment Register, there is another register known as “Strength Register”. It shows the number of workers employed. All entries regarding the wages, allowances etc. are kept in it. All new workers are appointed on probation for one year. Three probation reports are given during this period.

This wing also maintains the personnel records. The record is being used to, calculate wages and salaries, make work plans for employees and evaluate their performance.
There are two types of employees in the organization:

• Employees who are paid on monthly basis. • Employees who are paid on hourly basis.

Now in Packages Limited computers make all the records of employees. A card exists, for noting the time spent on job by workers, which are paid on hourly basis.
The card notes time of starting and finishing by punching machines. These cards are collected by Production Department, and then they come to Time Office, where they are kept in record. Then the Time Office calculates the wages of hourly workers. In Packages there are three shifts

First Shift 06.30 a.m. To 03.00 p.m.
Second Shift 02.55 p.m. To 11.25 p.m.
Third Shift 11.20 p.m. To 06.25 a.m.

This Wing also supervises the activities of Gate. For making their employees punctual, the employees who come late are stopped at the gate and they are allowed to enter after the approval of the related divisional manager. There is a gate pass system in Packages Limited. People who want to go out-side the organization in duty hours; they have to submit a "Gate Pass" signed by their head of department. The time of leaving the organization and coming back to the organization is written at gate pass. The record goes to Time Office.
There is a casual leave of 10 days and medical leave of 16 days on the basis of medical certificate issued by the company's medical officer. The hourly staff is allowed 14 days of annual leave. However, for one-day medical leave no medical certificate is required. Strict disciplinary action is taken if an employee remains absent without prior notification.

An advisory note is issued for more than three absents. Packages Limited also gives bonuses for extra work. For each hour of overtime, the hourly wage is doubled. For monthly paid workers there is an attendance register. They can get leaves also. If an employee is absent for more than ten days without leave then he is issued a "Charge Sheet".

RECRUITMENT AND SELECTION CRITERIA:

Packages Limited has designed a sound but easy method of recruitment. When any department needs an employee, it sends its requirement to the Human Resource Department, which in turn advertises the vacancy in the leading newspapers and asks for the qualified people. In case of the posts requiring some years of experience, only interview method is used to select the best candidate.

RECRUITMENT OF WORKERS:

Minimum qualification for the post of the workers is Matriculation 2nd Division with science subjects. The workers should not be more than 21 years old and must be medically fit. These are employed as "Apprentice Trainee". If the performance of the worker is satisfactory during the probation period, he is hired. Normally workers get promotion after two years on the recommendation of their supervisors. This post is not advertised.

RECRUITMENT OF DIPLOMA HOLDERS:

Diploma holders in Electrical, Mechanical and Instrument Engineering are also employed. They are given a training of six months. They are employed for supervisory jobs.

RECRUITMENT OF EXECUTIVES:

1) Job Identification: When any department needs an employee, it sends its requirement to the Human Resource Department.

2) Recruiting & Hiring: For recruiting and hiring some factors are taken into consideration. These factors are :

• Nature of the job. • Time required filling the vacancy.

If there is time to fill the vacancy, advertisements are given in the newspapers.
If the vacancy has to fill immediately, the Human Resource Department contacts the authorized institutions, universities etc.

PROCESS:

The recruiting and hiring process starts from the applications submitted by the degree holders. They provide their CVs along with the applications. These applications and CVs are screened out on the basis of:

• Merit • Institute • Experience etc.

After this, approximately 50% of the applicants are selected for the further process. Then the H.R Department lists out the salient features of the CVs (only the accepted CVs).
Then the H.R. Manager takes a test. This test is based on:

• English comprehension • Basic mathematics • Data sufficiency • IQ

Some questions about the particular job, for which the applicants have applied.
After taking the test, the top 10, 20 or 30 applicants (according to the job requirement) are chosen for the first interview. At this stage the selection of applicants also depends on the H.R. Manager and the departmental head. Normally 30% of the applicants, who have given the test, are selected for interview.
Through telephone calls or letters, the selected applicants are informed about the date and time of the interview. Normally two interviews are taken
H.R. Manager and the departmental head take first interview. In this interview they observe,

• Alertness • Confidence • Leadership skills • Relevant knowledge • Social acceptance • Interests • Communication skills • First impression • Maturity

According to these observational factors rating or grading is made. Normally 5% rating in each factor is acceptable. Then successful candidates are called for final interview.
Final interview is taken by:

• General Manager • Deputy General Manager • Human Resource Manager • Departmental Head (sometimes)

Previous traits or factors are once again examined. After the final interview, the selected applicants are sent for medical test and then the Industrial Relations Manager issues them the appointment letters.

TRAINING & DEVELOPMENT:

Appointed persons are trained for one year, the are given the title “Management Trainee”
In the Industrial Marketing, the trainees are called “Sales Executives” and after one they are given the designation of “Assistant Manager Sales”.
The trainee is given a brief view (orientation) of the company, various processes, rules & regulations etc. this orientation may be from two weeks to two months.
After the orientation program, the participants may ask to submit short report or presentation.
After the 6 months training, the trainee goes to H.R. Manager and tells him what he has learnt in this program.
Some external courses may be offered not only to the existing employees but also to the new trainees. These courses are held in,

• LUMS • PIM

Recently Packages has jointly entered into a diploma program with LUMS. It is 18 weeks program called Diploma in Business Administration. Two sessions of this program has passed out till now.

BENEFITS AND FACILITIES:

1) HEALTH & SAFETY:

To safeguard the health and safety of the employees Welfare Wing takes care to the medical facilities provided to employees. In this regard, periodic check ups, inoculations, and family planning programs are arranged. A dispensary with qualified doctors is working for this purpose in the factory premises.
The health of the employee at the time of recruitment has to be sound and fit persons are employed who are medically examined at the time of appointment.

2) BONUS:

All the employees get handsome bonus every year, which varies from grade to grade.
Employees Old Age Benefit:
Packages Limited has two different types of pension schemes. One is for management staff and other is for workers. In management staff pension scheme, Packages contributes
13% and the employee contributes 4.5% of wages. Investment is made in Government securities by this amount. Retirement age is 58 years. The employee gets 100% pension up to his life. In workers pension scheme the Packages contributes 5% of the wages, which ensures a reasonable pension on retirement. After employee’s death, his widow gets 50% of pension amount. After wife death the children can take 20% of pension until they are less than 21 years.

3) HOUSE RENT:

Employees can get house rent at the rate of 30% of their basic salary. More than 50% of the employees own their own house.

4) ADULT EDUCATION:

All illiterate workers have the facility of adult education. Qualified teachers teach adult education classes. Workers are paid for the time they spent in the classes as these studies are during the working hours. Books and other educational materials are provided free.
Ali Industrial Technical Institute:
For solving the problems of technical staff for Packages Limited, there is an independent training institute established by the “Ali Group” with the cost of Rs 5 million. The institution's annual output is 230 students in different fields. In this school preference is given to the children of employees of Packages at the time of admission. Scholarship of Rs 150 per month is given to all students.

5) HAJJ SCHEME:

The Packages Limited sends every year three employees from Grade V and one person from J.E and the above categories for Haj Pilgrimage on its own expenses. Draws are taken out for this purpose. Any worker who wants to go on Haj on his own expanses is given one month paid leave.

6) PERSONAL CLEANLINESS:

Every worker is provided with a cake of soap each month for personal hygiene. All the workers are given uniforms. The factory provides the washing facilities and maintenance. Lockers, change rooms and showers are available to all the employees. Each worker gets two free uniforms and one pair of shoes annually and also has the locker facility.

7) OVERTIME:

Over time facility is available for all the workers.

8) SERVICE AWARDS:

The Company gives a wall clock to an employee who completes his 20 years of service in Packages Limited. Company also gives a valuable wristwatch to employee who completes 25 years service.

9) RECREATIONAL FACILITY:

The management also encourages recreational activities. Employees in groups are encouraged to go on excursion trips and the Company pays the transportation and other miscellaneous expenses. Employees can also use the rest house owned by Packages Limited in Murree

10) GROUP INSURANCE:

Company’s policy is to have its employees safe and sound financially. So Group Insurance facility is available to all employees. The amount paid to employees on account of group insurance differs as follows:

WORKERS Rs. 30,000
J.E Rs. 45,000
E-3 Rs. 55,000
E-2 Rs. 65,000
E-1 Rs. 75,000
Above E – 1 Rs. 85,000

11) ATTENDANCE AWARD:

Among the workers up to Grade V, the one who shows a good record of attendance throughout the year is provided monetary rewards and certificates.

12) CONVEYANCE ALLOWANCE:

Conveyance facility is given to the workers in the form of the Conveyance Allowance. Employees are provided adequate allowance for the maintenance of their vehicles. Some employees are enjoying the company's transport facilities. For the outdoor activities employees are provided enough funds to bear their expenses. A beautiful parking facility is also available.

13) MOSQUE:

One beautiful mosque is in the factory premises so that everybody can offer his prayers, and I observed that, considerably large number of employees uses this facility.

14) ON JOB TRAINING:

Packages Limited attached a great deal of importance to the training programs of the employees to help them to increase their skills and expertise. This helps to increase the efficiency of the employees.

15) LIBRARY:

There is a library of moderate size in Packages Limited. This library works under the Research, Development & Control Department. Many employees during the lunch break spent their time in it. All Newspapers are available here.

16) SOCIAL SECURITY:

Social Security Scheme is applicable to all the workers of the company who are drawing up to Rs. 1800. In case of injured employees, the company ensures full payment to the worker by paying the balance, in advance in addition to benefits given by the social security

RESEARCH, DEVELOPMENT & CONTROL DEPARTMENT:

To keep up with new demands Packages Limited has a Research, Development and Control Department. This Department is considered as one of the most important department. The Research, Development & Control Department works in close collaboration with the Production Department. It helps the Production Department to maintain a standard of the products being produced. All the new materials are tested according to the certain specifications. It also has a lot of interaction with the Marketing Department. Research, Development and Control Department has well equipped laboratories and pilot machines, which are used to test various chemicals, raw materials and machines. It enables Packages Limited to provide better quality and latest packaging to the consumer industry enabling it to introduce new product lines and develop new materials.

FUNCTIONS:

• testing and suggestion of sample • product development • suggestion of tentative parameter for pre bulk to production • optimization • quality and productivity of improvement • cost reducing projects

LABS:

• Pulp lab – wheat to paper. • Chemical lab – quality control research. • Physical lab – strength surface. Optical properties • Micro labs – flexible.

Response time = 48 hrs Max

The Research development and Control Department has three major areas for his research:

[pic] RESEARCH [pic] DEVELOPMENT [pic] CONTROL

1. research:

This section is directly answerable to the Production Manager. In Research, work is done with the new ideas, the experiment is divided into parts and on each part attention is focused and conclusions or suggestions are given. Packages Limited, tries to get as many information and technology which is possible and beneficial to the organization. All such information is collected for research.

2. Development:

Development is a continuous process in any organization. A lot of development is the result of feasibility studies, study of new production methods and new products. Packages Limited has a paper & Board Mill, so it uses largest number of chemicals. The "Environment Protection Agency" has set some standards for reducing pollution. The Research Development & Control Department developed new way of reducing pollution and always tries to meet EPA standards.

3. Control:

Packages Limited Research, Development and Control Department ensure the quality standards off all the products produced in the factory.

Quality is synonymous with Packages Limited. Every package made by Packages Limited guarantees the use of quality materials and processing. This is all due to the strict Quality Control standards, observed at every stage of the production, from raw materials to dispatch Department. The Research Development and Control Department makes stringent requirements on quality control, which help in working consistently towards attaining better results for customers. The incoming raw materials and end products leaving the factory are constantly checked to make sure the items produced meet the expected standards. To ensure constant quality and improvement this department managed by qualified scientists.

THE MARKETING DEPARTMENT

We are living in an age of Marketing. It’s a famous adage; “You don't sell what you make rather you make what you can sell”. Today in any organization, Marketing Department is of paramount importance because it plays a link between the consumer and the manufacturer. The function of the Marketing Department is to ensure that consumers receive what they need. If marketing department works effectively and efficiently, the whole organization is on a smooth run. The Marketing Department plays a key role in the operations of the organization. The Marketing Department of the Packages Limited is headed by the Marketing Manager who is responsible for all the marketing operations in all three offices in Lahore, Karachi & Islamabad. Packages Limited has a very effective Marketing Department, which is acting a vital role in the working of the company. This department is responsible for the sale of industrial & consumer products. Planning Division of the Production Department works closely with the Marketing Department to ensure the meeting of established targets. Packages Limited has divided into the four regions i.e. Lahore, Karachi, Multan and Islamabad. Area Marketing Managers, who are third in the line of authority, direct under the Deputy Marketing Manager, are the heads of these regions. Marketing Manager also looks after the Consumer Products Division. Each region is responsible for the sales of its area. A team assists all Area Marketing Managers, consisting of Regional Sales Managers, Assistant Sales Manger and Sales executives. There are two Regional Sales Managers under the Area Marketing Manager. One works for industrial sales and one for the consumer products. Then there are Regional Sales Managers and Sales Executives. The Deputy General Manager who is also among the Board of Directors of Packages Limited is often consulted by the Marketing Manager for important managerial decisions concerning Marketing Department. The job of Area Marketing Manager is just like a Supervisor. He checks the performance of each officer. He, some times, visits the customers and asks them whether they are satisfied with the services of the officer concerned. The Regional Sales Manager acts as a coordinator between the Sales Executives and the Area Manager. Each Sales Executive is allocated a certain number of customers. The respective Executive will deal with these customers and solve their problems. In case of some trouble, the Area Manager does involve and tries to settle things. His advice is especially taken while developing, launching and pricing of new products or amending the prices of existing products and so on.

SRUCTURE OF MARKETING DEPARTMENT:

NUMBER OF EMPLOYEES:

Packages Limited has almost 40 employees in their Marketing Department. Out of these some are performing sales activities and others are in different direct marketing activities.

MARKETING OPERATIONS:

Packages Ltd. has been departmentalized on functional basis. The major functions of Marketing department is discussed as below.

Marketing department is responsible for carrying out all the activities necessary to market the company products, this includes sales promotion coordination and evaluation of the performance of its sales force and formulating marketing policies and strategies. They also carry out market surveys for new as well as existing products.

The Marketing Department is becoming more and more powerful in modern organizations. Because it acts as a link between the consumer and the producer. The function of the Marketing Department is to ensure that consumers receive what they need. The Marketing Department is also responsible for the promotion of the products. Packages Limited has a very effective Marketing Department which is playing a vital role in the over all working of the company. The Marketing Department of Packages Limited, also known as the Sales Department is believed to be the bread earner of the company. This department is responsible for the sale of industrial as well as consumer products. The Marketing Department of Packages limited is headed by the Marketing Manager, Mr. Sulat Said. Packages Limited has divided the country into three regions that is Lahore, Karachi and Rawalpindi. Lahore region is responsible for the sale in Lahore and its civility. Rawalpindi region covers Rawalpindi, Islamabad, NWFP, and Azad Kashmir. While the Karachi Region covers Karachi, Sind and Baluchistan. Every regional office is headed by a Area Marketing Manager. There are two Regional Sales Managers in Lahore

under the Area Marketing Manager. One for industrial sales and one is for the consumer products. Then there are Senior Sales Officers and Sales Officers. Every year, fresh graduates are hired as management trainees. After the selection they have to under take extensive training. After one year of probationary period they are confirmed as Sales Officers.

MARKETING PHILOSOPHY:

The marketing philosophy of Packages Limited in general and Industrial products in particular, moves around the policy to provide strength in:

• Service • Quality • Dependability

In simple words, providing good services to the customers along with good quality and services, dependability means, the customers should have trust in Packages. By making strength in quality, goods and services and being trustworthy, gaining the market share is the philosophy of Packages Limited.
Another marketing philosophy is not only to satisfy the existing customers but also by doing this to attract new customers.
METHODS OF MARKETING:

• Face-to-face meetings • Telemarketing • Through E-mail • Through Fax • Group meetings

PROSPECTING FOR NEW CUSTOMER:

According to my discussion with the Assistant Sales Manager, Mr. Farraz Alam that how they do prospecting for new customers. She told that first we see our production lines i.e.

• Carton Line • Flexible Line • Corrugated division

In which division or line we need new customers and the existing customers are not fulfilling our requirements of that particular line. Then we select our target market. The selection of target market may be through market surveys. From that target market we select the potential customers i.e. the customers with which we can do business. Then these prospected customers are sent free counter samples. The customers use these samples and if the samples are matched with their standards. They contact with the Industrial Marketing Department for further negotiations. For their standards and satisfaction, the strength in quality, services and trustworthy are the base.

FUNCTIONS OF SALES EXECUTIVE:

• Customers’ identification • Customers’ services • Customers’ satisfaction • Development of new jobs • Having an eye on competitors’ activities • Market knowledge • Collection of payments • Maintenance of time • Training development of trainees and internees.

TOP THREE CUSTOMERS OF INDUSTRIAL MARKETING DIVISION:

• Pakistan Tobacco company PTC • Lever Brothers (Pvt) Limited • Nestle Milkpak Limited

There are two divisions of marketing department in Packages Limited:

[pic] The Industrial Marketing Division [pic] The Consumer Product Division

The performance of marketing activities of the Company has increased due to this segmentation of division. Following are the important factors that differ between these two divisions:

• Distribution channels are different. • Target market is different. • They both have their own competitors. • Marketing policies are different for each division.

INDUSTRIAL PRODUCTS DIVISION:

WORKING OF INDUSTRIAL MARKETING DEPARTMENT:

The basic job of Marketing Department is to make sales and to satisfy the customer's needs.

ALLOCATION OF CUSTOMERS:

At Packages Limited every Sales Executive and Sales Managers are allocated customers and they are held responsible for dealing with them. Every Sales Executive has a complete record of his customers and pays regular visits thus remaining in regular contact with them. On average a Sales Executive has to deal with more than 10 customers.

DAILY MEETING:

In the Marketing Department, a meeting of all the Sales Managers and Executives is held every morning. The Area Marketing Manager heads this meeting. Each Sales Officer explains the current situation of his customers and the development in the new prospects, if any. The Sales Officers also inform the Area Marketing Manager about what they did the previous day. They are then guided as to what should do, and are assigned certain duties regarding the mode of action they are to adopt. Sales people also provide current information about market. The sales people are also responsible for getting the payment from the customers. In the daily morning meeting, they have to show that how much payment they have got from their customers and how much amount is still outstanding with their customers. The Area Marketing Manager sees that which sales person is lagging behind in receiving the payments and then guides him to speed up his efforts for getting the payments from the customers.

In this morning meeting, the daily dispatch report is also discussed. The Area Marketing Manager discusses with each Sales person, the status of the order delivery of his customers. If the orders are not executing according to the schedule given by the planning department, then the Area Marketing Manager, himself contacts with the planning department and asks them to speed up the delivery process of the late orders.

DEVELOPING NEW CUSTOMERS:

Every organization aims to satisfy its present customer and at the same time tries to increase the number of its current customers. But with Packages Limited the task is slightly easier, since it is the largest packaging concern in Pakistan and off course the most reputed one. In order to find out the potential customers, it is the duty of every Sales person to remain well informed about the market and grab every opportunity as and when it arises if it seems profitable. Hence, the sales persons are required to carry out an active search for potential customers and have to make sure that they miss no opportunity to strike a deal that can be profitable to the organization. As a matter of fact, it is the job of sales force to track new opportunities for the organization. Although it is not an easy task, but the good repute of Packages Limited about its quality oriented production serves as a promotional tool and helps the Sales staff. Sometimes, some prospective customers directly contact the organization. The reason is the highly strong market position of Packages Limited.

PROCEDURE FOR GETTING A NEW ORDER FROM THE CUSTOMER:

Like any marketing department, the marketing people here too are supposed to attract the new customers and get the business from them. Fortunately, the Packages Limited has very loyal customers, who have been purchasing from them for a long time. So we can say that, more or less, the Packages Limited has fixed number of customers. That’s why, except Area Marketing Manager, every sales person has assigned certain number of customers. The sales Executive has to make all the dealings with his allotted customers. But this does not mean that in Packages Limited, attention is not given to the new customers. The point is that the old and loyal customers have become the permanent customers of the company. The other thing is that the company is operating at full capacity in case of carton and corrugated divisions. Only in flexible line they are below their capacity. So, mostly, they focus their attention to attract the customers in the flexible line. If a new customer comes, then he may be assigned to any sales Executive.
Now there is a certain procedure through which the new order from either a new customer or the old customer is executed and final product is dispatched to the customer. The flow chart of this process is given below:
PROCEDURE:

DESCRIPTION:

Process flow in Industrial Marketing Department is as follows:
First of all there is contact between the customer and the sales department. The contact may be in two ways:

Customer contacts the marketing department

Sales executive contacts the customer.
Now if the customer has any idea, he gives “specification” about the required product i.e. size, material, design etc. and also tells about the approximate order.
The marketing department sends the specification to the Art Department to convert the idea into a shape. If the customer has no idea then it is the work of Art Department to make a design.
The Art Department makes blank sample to the concerned sales executive. The sales executive also gets pre-costing report and then sends the blank sample along with quotation to the customer.
The blank sample is sent to the customer to get approval of four things:

• Size • Material used • Structure of packaging • Construction

At the same time, the quotation is also given to the customer. On quotation, the following information is given:

• The price of the product according to the size and quantity • Terms of payment • The expected lead time • The material to be used to manufacture the product • The printing mode • Then the customer approves the blank sample and also agrees to the quotation. • Then the marketing department sends a color print to the customer for approval of: • Text on the packaging • Space coverage • Color combinations • Color usage
After the approval of color print, a sample proof is sent to the customer. This sample proof is an original product according to the requirement of customer. Till now the main work was done by Art Department.

After the approval of sample proof, the marketing department issues Internal Sale Order (ISO), one copy of ISO is sent to Planning Department for the confirmation of:

• ISO number • Product quality • Product quantity • Date of issuance • Time duration • Printing mode • Dispatch date

The planning department confirms the ISO, and bulk Production starts. After getting the confirmation from planning department, the marketing department sends order confirmation to the customer and by the process between the customer and the marketing department completes.

DOCUMENTATION FLOW IN INDUSTRIAL PRODUCTS DIVISION:

From Document to

DESCRIPTION:

Before the documentation flow, the customer has made the contact with the Industrial Marketing Department.

• The sales manager/executive gets information from the customer and decides whether the order can be done or not. • If it can be done, then the pre-costing department prepares the pre-costing report and sends to executive. • From this pre-costing report the sales executive fills a quotation form and sends to the customers. • From this quotation, the customer gives, the purchase order, if he is agreed with the quotation. • Now if the purchase order is according to the standards and requirements of Packages, the sales executive sends the order confirmation to the customer. • Now the sales/industrial marketing department issues an Internal Sale Order (ISO). One copy is sent to the planning department. • The planning department issues the ISO confirmation slip to the Industrial Marketing Department. • Then the planning department issues Job Card. One copy is sent to the production department and the other one is sent to marketing department. • Now if there is any amendment in the purchase order, required by the customer, the IM.Department makes an amendment form and sends to the planning department so as before production this amendment can be made. • After the completion of job, a transfer note is made by the production, which is sent to Dispatch section. • The Dispatch Section issues the dispatch note to the marketing department to confirm the completion of job. • The Account Department issues invoices, means debit and credit notes to the customer. • The receipt of payments from the customer is the duty of marketing department.
Packages Limited produces good quality packaging material. Packages Limited has 25% market share in packaging industry; as a result they are the single largest packaging unit of Pakistan. There are lots of small manufacturers, which are much cheaper, but their quality is not of that par but due to low prices they are there. Major competitors are:

• Almas (Pvt.) Limited Karachi • Pak Paper Products • Pap Board Printers Rawalpindi • Metatax Press Karachi • Security Paper • Industrial Packaging Karachi • National Packages Karachi • Friends Packages Karachi • Uni Flex Printing Services Karachi • Rainbow Packages Limited Lahore • Orient Board (Pvt.) Limited • Toufique printers Lahore

SHORTFALLS AND WEAKNESSES OF MARKETING DEPARTMENT:

PACKAGES, at present is functioning without any Marketing Manager, because Marketing Manager. For the last three months Deputy General Manager is looking after the affairs of marketing department.

Marketing department is over conscious about the exercise of rules. It accepts only big orders and don’t entertain small orders. This behavior creates an environment of dis-satisfaction among small or medium size customers and the feeling of, as if Packages Limited looks down upon low income people.

The products of Packages Limited are perceived as highly expensive which motivate small clients to buy the products from the companies with fewer prices.
Marketing personnel of Packages Limited very rightly claim that they have implemented the marketing plans very effectively resulting in getting 80% market share for the consumer products. However to maintain their market share they especially to advertise the paper products using the services of media.

Another important factor which can be considered as a shortfall is, that in Consumer Products Division (CPD) only one Product Manager and two Asst. Product Managers have been appointed. Generally organization which produces consumer products requires a big supporting marketing team. That is why; being market leaders in tissue and other consumer products they should have more marketing personnel.
Despite achieving the predetermined targets, Packages Limited rarely offers incentives to the employees, which may adversely effect their commitment and motivation.

PACKAGES MAIN CUSTOMERS:

• Unilever Pakistan

• Nestle Pakistan

• Pakistan Tobacco Company.

• Lakson Tobacco Company

• Reckit & Benkesier

• Procter and Gamble

• Colgate Palmolive

• Tapal

• National Foods

• Rupali Group

• Murree Brewery

• Coca Cola

• KFC

• FFC

• PIA

• CAA

• Pizza Hut

Packages Public limited is engaged in the following major activities.

▪ Paper and Board Mill (PBD) ▪ Packaging Division ▪ Carton Line ▪ Flexible Line ▪ Corrugated Container Line ▪ Consumer Products

Basic agricultural raw materials such as wheat straw and river grasses are used together with imported wood pulp in the paper mill, which was established in 1968.

FLOWCHART:

PULP MILL:

Paper and board mill constitute 50 % of the investment. The other 50 % investment includes carton, corrugated, flexible and tissue line.

TYPE OF PULPS:

• Straw pulp • Wood pulp- imported • Waste pulp

TYPE OF BOARDS:

• Tetra – 150/200 - gsm • Duplex (White) - 200 / 280 gsm • White bleach board (Cigarette) - • Tea board (WLCB) – 225 – 250 gsm • Bleach straw board 315 gsm • Core Board 450 - KVP gsm

TYPE OF PAPERS:

• Offset paper • White paper • Photo copy paper • White card paper

PRODUCTION:

25000-60000 Tons.
Paper Section:

In the Paper Section, we deal with the Paper machines used to make paper and board from the pulp produced by the Pulp Section. Paper & Board Mill has four machines:

PM-1 PM-2 PM-3 PM-4

MACHINE DESCRIPTIONS:

• PM- 1 board M/C 3 layers 130 tons / day

• PM –2 liner fluting 2 layers 75 tons/day

• PM- 3 Single layer straw bleach pulp 10 tons/ day

• PM –5 Paper M/C single layer 55-60 tons/ day for white jobs

CARTON LINE

Carton line planning starts right from the receiving of ISO till the execution of the job. Carton Line division is the largest printing division in Packages. The sales of carton line accumulate to 55% of the total annual sales of the company. It has a vast printing mode as this division has 12 machines, on which the orders are being printed currently. Carton line use the Duplex Board for printing that gives the extra effect, which satisfy the customer greatly. There are two Varnishing machines and one laminator machine. This printing facility is available from two to six colors. These machines use oil-based ink. The customers who demand of carton line printing are the makers of tea, detergents, soaps, shoes, food, cigarettes, biscuits, matches etc.

FLOW CHART:

DESCRIPTION:

In Carton Lime the sheets for printing, come from Paper & Board Mill. These sheets are first coated so as printing can be done.
In Carton Line, Offset printing is done. As I have earlier discussed there are twelve machines for the purpose of printing. If the requirement of job is six colored, it is sent to the six-colored printing machine.
When the sheets have printed, these are sent to another section where cutting & creasing is done. After the cutting and creasing, the flaps or unit cartons are separated from the main sheet
After this if the customer wants these flaps to be folded & glued. Then these flaps are sent to folding & gluing section. Otherwise bundles are made and sent to the dispatch section.

TYPES OF CARTONS

[pic] Straight cartons [pic] Crach lock cartons [pic] Tapper corners cartons [pic] 4 corners cartons [pic] 6corner cartons [pic] Top and bottom cartons [pic] Shell

This is the largest printing section of Packages Ltd. This department has the largest share in the total sales, which is about 55%. There are 12 printing machines in this section, which are used for printing on duplex board. There are 2 varnishing machines and 1 laminator machine. This printing facility is available from two to six colors. These machines use oil-based ink.
.Carton line produces paper-board cartons for its customers for various needs like: o Cigarette cartons o Tea cartons o Food cartons o Medicine cartons o Detergent cartons etc.

Major raw materials used are coated/uncoated board, offset inks and roto inks.
Carton Line consists of following departments & activities/processes:

i. Coating : o Clay Coating. o Poly Coating o Slitting

ii. Paper Store : o Sheeting o Guillotine o Slitting

iii. Reproduction : o Cylinder Engraving o Photopolymer Making o Offset Plate Making

iv. Art & Camera :
v. Offset Printing vi. Cutting Creasing vii. Breaking viii. Folding Gluing ix. Packing
x. Paper cup making xi. Lemanic xii. Inline Roto printing, embossing & cutting & creasing

Machines

• Heidel Berg: one 1-color printing machine • Planeta Ultra Man V six 2-color printing machines • Roland 800 Ultra Man VGS three 5-color printing machines • Ultra Man VII-G Two Lacquer One 6-color printing machine • Lemanic 82H Machine: This machine can work equal to five departments. This is the latest machine, not only in Packages Ltd. but also in Pakistan for the finest printing. Printing mode used in Lemanic is rotogravure. This machine comes under the carton line but the difference is that the printing method is rotogravure and instead of sheets, complete reel is used.

MAJOR CUSTOMERS:

• PTC

• NESTLE

• UNILEVER PAKISTAN LIMITED

• NATIONAL FOODS

• CPD

• COLGATE PALMOLIVE PAKISTAN LIMITED

• QARSHI

• TREET
FLEXIBLE LINE

No quality, No life.

INTRODUCTION:

With improved barrier properties and lower cost compared to rigid packaging, flexible packaging is steadily gaining importance in the packaging industry. Our flexible line makes high quality packaging films and laminates, and offers other specialized services such as rotogravure printing and sleeve making.

Flexible packaging combines different plastic films, aluminum foil and paper to produce laminates of two or more layers for providing layered protection against moisture, gases and odors. used where colorful package design and preserving product quality are important, such as in the food and pharmaceutical industries, flexographic printing offers economy with quality.
The BU (business unit) flexible has 3 major areas

[pic] FP (flexible packaging)
[pic] PC (paper conversion)
[pic] Planning

FLEXIBLE PACKAGING:

Flexible Packaging was introduced in 1986. The flexible packaging is basically made from the poly grains, which gives the silvery effect to the packaging. It includes the plastic films, aluminum foils and paper or the combination of these. In flex graphic printing two major things are used, stereo and sleeves. The stereos are the designs of the required job, that the customer demands, that are to be made on it. It is pasted over cylinder. The sleeves are almost the same as stereo, but it is pasted over a plastic roll. Flexible Packaging is used for the shopping bags, food products, garments, cigarettes, biscuits, pharmaceutical goods, tooth pastes, cosmetics, toilet soaps etc.

POLYETHYLENE SECTION:

Packages Limited manufactures and prints high density Polyethylene from 12 grams to 60 grams. And in case of low density Polyethylene it is 20 to 150 grams. In the Poly Section Polythene is made.

Poly and Paper Converting Department (PC)

Poly and paper converting department was established in 1971. This department is second major department in Packages Ltd. It converts poly and paper into packing material. By Flexo Graphic and rotogravure printing we can get paper or bags in reel forms. It only uses paper and other poly materials. No brand is used in this department.

Capacity

There are four flexographic machines: • 1 six-color printing • 2 four-color printing machines
Hence, in flexographic printing, Packages Ltd. has the facility to print from two to six colors. In PC department there per shift production is thirty thousand meters.
There are 6 slitting machines, which are used for several kinds for slitting. In flexographic printing, water-based ink is used. The machine gets ink from one side and prints it on the other side. All printing machines are imported from Sweden and Germany. The production of six-color machines while using polythene is from 1500 to 1700 meters of polythene per hour. Four-color printing machine prints about 2400 meters of paper per hour. Total production of these machines per shift is thirty thousand meters.
In the poly lamination section, poly lamination is done on paper’s surface to make the surface seasonable and shiny.

TECHNICAL EXPERTISE:

• Flexographic printing • Rotogravure printing • Lamination • Extrusion • Bag and sleeve making

FLOWCHART OF POLYETHYLENE

TOP 20 CUSTOMERS:

|Unilever Pakistan Ltd |
|Nestle Milkpak Ltd |
|Colgate Palmolive |
|Procter & Gamble |
|Asian Food |
|Mitchell's Fruit Farms |
|Continental Biscuits |
|Standard Foods |
|Tapal Tea (Pvt.) Limited |
|Habib Oil Mills |
|PTC |
|EBML |
|Plastobag Ltd. |
|National Foods |
|ZIL |
|ICI Pakistan |
|Kings Food (Pvt.) Limited |
|Reckitt Benckiser Pakistan Ltd. |
|K.S.Sulemanji & Son |

CURRENT JOBS OF FLEXIBLE BUSINESS UNIT:

• BONUS FILMS • SURFEXCEL FILMS • NESTLE NECK SLEEVES • AKS SOAP • SABA BEAUTY SOAP • BITES MAYFAIR • FIZZY FRIENDS MAYFAIR • COW SOAP • MAGGI NOODLES • CORNETTO • SUPREME • PADAAN • RIVIANA • NATIONAL TOMATO KETCHUP • BAKE PARLOR TOMATO KETCHUP • RAJ MASALA MANGO CURRY PASTE • ROGAN JOSH CURRY PASTE • DULUX ICI SLEEVES • NATIONAL FOOD SQUEEEZY • ROSE PETAL(CPD) • DIAMOND WELDING FOODS • MINI PAMPER • TRUST POLY BAG • SUFI SOAP • SUFI DURJA AWAL • ALBARKAT SOAP • FAIR & LOVELY SLEEVES • MAX • LAZIZA • GOLD FLAKE • PHOTOCOPY PAPER

CORRUGATED LINE

INTRODUCTION:

For large-scale packaging, Packages Limited has been manufacturing “Corrugated Cartons” since 1971. These cartons are produced in different sizes and are used for transporting consumer products from manufacturer to retail outlets. The share of Corrugated Department in Packages Limited total sales is almost 20%, which is second after the Carton Line. Corrugated cartons are of great value for the export of fresh fruits, garments and shoes. A wide variety of gums tapes for sealing corrugated cartons are also manufactured. Corrugated cartons vary according to customer demand, size; raw materials used, color and rate.

The production process was completed in two halls. Paper needed for this purpose was also prepared within the factory premises at the Paper & Board Mill. Then this paper was first processed through the corrugated machine, which transforms the paper into single wall and double wall as required and mentioned earlier. Afterwards, the corrugated are processed through the Flexo machine where they are shaped according to the requirement of the customer, for example, into a rectangular or square shape. A gluing unit is also attached with the Flexo machine, which sticks the cartons on specific places. Some time stitching is required which is done at another machine.
The corrugated dept is divided into sections.

• SHEETING • CONVERSION

WASTAGE DURING PRODUCTION:

Almost 2 to 3 percent of the total material used for sheeting goes into wastage. Many parties are involved in producing wastage. The most important of them are:

• Paper & board mill • Coating department • Internal operations of machine • Interest of employees working on machine

TYPES OF CORRUGATED SHEETS:

[pic]

• KLP (Kraft line board)

• CMP (Corrugated medium board)

• WDB (white duplex board)

PROCESS FLOW OF MAKING CORRUWALL (CWCS) SHEETS:

TYPES OF CORRUWALL SHEETS

• Single Wall

C – flute B – flute

[pic] Double Wall B+C flute

[pic] Single Facer E – flute

MACHINES FOR PRINTING:

There are four machines for the purpose of printing.

• one 3-color machines (EMBA )

• Two 2-color machines (ISOWA )

[pic] One 3-color machine (SRINKO)

CAPACITY OF PRINTING MACHINES:

The printing machines used in Corrugated Division have the capacity of printing, folding and glueing 440 Corruwall cartons per minute.

MAJOR CONSUMER AREAS:

[pic] Sports Product [pic] Textile Industry [pic] Food & Beverages [pic] Yarn and Poly Products [pic] Match Industry • Fruit Cartons

MAJOR CLIENTS:

[pic] Pepsi Cola, Pakistan Mineral Water [pic] Pakistan Tobacco Company [pic] Lever Brothers [pic] Nestle [pic] Rupali Group [pic] Murree Brewery

PROCESS FLOW CHART FOR CORRUGATOR:

BSPM (Bullay Shah Paper Mill Kasur):

On 3rd August, 2010, I visited BSPM along with Mr. Umair Saeed. He provided us with a brief introduction of the processes of the paper mill. From the start till the end (Pulp to Dispatch), BSPM is as follows in our own words:

1. Pulping: This is the initial process for the paper formation. For pulping certain raw materials are used which are: • Imported OCC (Old Corrugated Cartons) • Local OCC • Second Quality material • Tetra packs • Wood pulp • News Print • Wheat Straw Pulp is formed by crushing and purifying of the impurities (such as sand, dirt and polythene and metallic foils etc) of the above stated raw materials with water with the help of ‘screens’. There are two screens in the pulping section. Silos are there for storage.

2. DIP (De-Inking Plant): Also known as bleaching plant, DIP has all the equipment for bleaching or de-coloring of the pulp, moreover, additional colors may also be added to get the required color of the pulp which would be the raw material for the paper.

3. CTMP (Chemically Treated Mechanical Processing): CTMP deploys a ’dry end’, a ‘wet end’ and a chemical treating section to separate and process the wheat straw from the other materials in the pulp.

4. ETP (Effluent Treatment Plant): It is a state of the art bio-technological process in which water is oxidized with the help of bacteria. Its by-product is a poor quality pulp which is used in the making of products like shoe boxes and book bindings.

5. Paper Mill: There are two paper mills in BSPM i.e. PM6 and PM7, out of which, we visited the former with a kind reference of Mr. Umair Saeed to Mr. Irfan in Production Planning, who gave us a detailed briefing of the process.

Paper formation at PM6 Paper for the making of Liner, Fluting and white test liner etc is formed here at the mill. Its production is 300 ton per day, out of which 60% share of production is consumed by the corrugators at Kasur and Karachi, while the remaining 40 % is exported or sold to local market. Liner is produced as 40% of the production. Material which is most commonly used at PM6 is Old corrugated Carton (OCC), second quality and imported cartons. CTMP wheat straw is also used for the production of paper sheet. • OCC 1 Tetra waste • OCC2 Raw material • Liner is made from imported OCC • Fluting is made from second quality and CTMP contribution Paper is made in the form of reel which is also called as master reel and its length is 4.5 meter. It is a two layer machine producing paper with pulp containing 90% of water which is reduced to the minimum level by passing the paper through steam 3 times for different processes. The process of PM6 is as follow • Wet-end pulp form • Dry form end paper • Pope part (stool form of paper is made) • Winder machine for sizing of deckles (1.9m to 2.5m) The mill is fully able to process pulp into paper ranging from 110-200gms. The wet end uses drainers which apply downward suction to the water for drying as a result of which, the water content of it is reduced from 97% to around 20%. The wet end then progresses the paper to the ‘press part’ where further water content is reduced to decrease the ‘cobb value’ (penetration of water). The paper then passes through the dry end where steam is applied through steam rollers for drying. Higher temperature is required for high grammage of paper.

There is a ‘size press’ section in between two dry end sections. Starch is embedded to the paper through pressing for the stiffness of the paper in this section after which it again passes through steam rollers. After which the ‘pope part’ of the mill forms the master reel of the paper. The water content of the paper at this stage is reduced to 8-9%.

6. BUCP (Business Unit Corruwall Product): a) Corrugator: The corrugator is a giant machine which produces single and double walled corrugated sheets out of paper reels according to the job requirement in an enormous quantity.

The ‘mill roll stand’ loads the paper reels onto the machine along with which, is a ‘splicer’. Splicer is responsible for removing the lag time between the finishing of one reel and loading of the other. The paper then passes through a pre-heating section consisting of steam rollers. The temperature here is maintained at 200-250 degree Celsius to remove the water. The paper is then transferred to the corrugating section. One set of rollers transport the liner and the fluting rollers form the corrugated pattern of the paper. A glue roll applies adhesive to the fluted paper and the liner and the fluting are then bonded. The top liner is attached in the next section which is finer in quality and sharper in look. The same is repeated if the job requirement is of double walled sheets inclusive of the three plys. The sheets are then conveyed to the heating section for drying of the glue. The temperature here is 60-70 degrees. The conveyor belt then passes the sheets through the creasing section. The creasing plates make creases in the sheets for folding according to the job requirement after which, the sheets are trimmed and slit. This cutting is length wise while after this process, the cutting section cuts it into sheets. The sheets are then piled onto the stacker/conveyor which transports the piles to the FFG. This whole process is fully automated and digitally controlled through a HMI (Human Machine Interface).

7. FFG (Flexo Folding Glueing) After corrugated sheets are made they are transferred to printing and folding section in which there are 5 machines. The most recent which was installed in 2003, is named as EMBA. It is the fastest in BSPM that prints and ties 440 sheets per minute. It has 8 sections which have their separate functions such as: • Feeder (for feeding the corruwall sheets) • Printing: Sheets are printed in this section with the help of three rollers one of which has the stereo embedded on it. Ink is applied on the passing sheets according to the pattern of the stereo. A separate stereo is used for each color. • Slotting: Slots are made to make the flaps of the sheets to make it possible for box formation. This is done with blades on each side of this section which cut the flaps. • Dye Cutting: If the job requirement is such, this section removes pieces out of the sheets according to the dye shape.

• Glueing (application of glue on the flaps with the help of sensors for closing the box) • Folding Bar (Folds the box flaps for stacking) • Counter/Ejector (counts the boxes, assures the correct number and pushes them forward to the conveyor). • Tying Machine: As the name indicates, this machine uses sensors to tie the bundles of folded boxes with a polyester string.

The corruwalls are then ready for dispatch at the end of the assembly line after checking for the defective pieces.

PAPER & BOARD:

We are producing high quality paper and board since 1965 using environment friendly manufacturing processes. We specialize in making a variety of duplex boards and paper. Our products are tested for high performance in terms of strength, stiffness and gloss.

From coffee cups to the books we read, from Tetra Pak juice containers to huge shipping containers, paper and board products touch our lives in a thousand ways every day.

PAPER:

We produce: high gloss writing paper machine glazed / special poster paper fluting paper liner for shipping cartons corrugating medium paper wood-free writing/printing paper

Paper quality and weight is determined by the client's specific requirements and Packages ensures this is carried out to the exact specifications provided.

Paper is available in the following weights:

|Type of paper |Weight (g/m2) |
|Test liner |125-220 |
|Corrugated medium Paper/Fluting |120-170 |
|Wrapping Paper |70-90 |
|High gloss writing paper |58-68 |
|Poster Paper |40-90 |

BOARD:

We manufacture several types of board. Food Board, a basic raw material in liquid food packaging, is being manufactured since 1979 for Tetra Pak Pakistan Limited. This material is used in making aseptic packaging for milk, cream, oil, fruit juices and other perishable food items.

Some of our board products are: liquid packaging board food grade board duplex board / chipboard bleached board tobacco board and cardboard liner board

Board is available in the following weights:

|Type of white board |Weight (g/m2) |
|Bleached Board |195-205 |
|Duplex Board |150-450 |
|Cardboard |160-250 |
|Liquid Packaging Board |150-290 |
|Poster Paper |40-90 |

TECHNICAL EXPERTISE:

Our production capacities exceed 100,000 tonnes per annum, from four main paper machines of different capabilities. These paper machines are supported by two pulp mills and a chemical recovery and effluent treatment plant alongwith allied support services.

Packages Limited is among the first companies in the world to manufacture paper & paper board using a pulp mixture of wheat straw, kahi grass, cotton linter, recycled pulp and wood pulp. These environment-friendly processes use fewer chemicals, resulting in improved strength properties and increased stacking strength of containers.

PORTFOLIO ANALYSIS

Portfolio Analysis is a tool by which management identifies and evaluates various businesses making up the company.

BCG MATRIX:

.PRODUCT

PRODUCT LINES:

Packages are producing the following industrial and consumer products.

INDUSTRIAL PRODUCTS:

The main industries where packaging needs are being fulfilled by the company's products are as follows:

1. Cigarette Industry 2. Tea 3. Soap and detergent industry 4. Tooth paste industry 5. Garments industry 6. Shoe industry 7. Food industry 8. Match industry 9. Pharmaceutical industry

The following different categories of packaging material are being produced by Packages.

1. Cartons 2. Printed wrappers and labels 3. Corrugated Board Containers

The number of industries as a shipping packaging uses them. Detail of the above lines is given in the section 6.

MAJOR CONSUMER PRODUCTS:

The product line of consumer products of Packages Limited consists of:

i) TISSUES:

[pic]
[pic]

[pic] Multi colored [pic] Rose Petal Classic Perfumed [pic] Rose Petal Perfumed [pic] Sweet Memories [pic] All Fresh [pic] Cool Breeze [pic] Rose Petal Luxury Size • Rose Petal Pocket Size

[pic] Tulip Tissues [pic] Tulip Viva Tissues • Rose Petal Paper Towel [pic] Rose Petal Napkins [pic] Rose Petal Toilet Rolls [pic] Perfumed Wet Tissues

ii) PAPER PLATES:

[pic] Full Paper Plates [pic] Medium Paper Plates [pic] Snack Plates • Paper Bowls

iii) PAPER CUPS:

[pic] [pic] 80cc [pic] 125cc [pic] 160cc [pic] 200cc • 300cc

iv) MISCELLANEOUS:

Feminex

[pic] With loops [pic] Stickon

[pic]

CRITICAL ANALYSIS:

SUCCESS AND FAILURE OF DIFFERENT PRODUCTS:

Packages Limited is actually serving other industries and provide them packaging material. Thus the possibility of failure of any product is out of question. Sometimes it does happen that certain design or material is rejected by the customer, but it is redesigned or corrected according to the demand. Basically they produce according to the orders therefore never met any failure. Packages Limited is such a big organization that it introduces everything new which needs huge investment, and being not introduced by anyone else in the market. For example, Rotogravior printing is only introduced by Packages and no anyother company in Pakistan as well as in Asia using this printing. In tissue and other consumer products also there is no major failure of any product. Every product met success except a tissue named COTTONELLE which was printed tissue; it could not get required response. The reason for its failure was the tissue was imported and cost was high, so at the higher price people were not willing to buy.

MAJORS COMPETITORS:

One cannot imagine about a business without competition. Packages Limited has also some competitors for its consumer products. So far as facial tissues are concerned, there used to be no competitor in early 80s except the foreign brands. Then companies like FAY, MOVITA competed for some time but Packages Limited superseded them very soon and started enjoying their monopoly. Then it was FLYING Tissues which came, and placed itself at a good position in market. Flying gave some tough time to Packages
Limited. But it was good, because after introduction of Flying Tissues, Packages Ltd improved the quality of their products.
PRICE

PRICING POLICIES:

Everything has a price. it is very much obvious when you buy something to satisfy your need, you have to pay some price for it. But on occasions prices are decreased in the larger interests of the company. The basic objective is to reap long term gains.

PRICE DETERMINATION:

The basic formula for price determination is:

[pic] The first aim is to cover the cost. After this a reasonable amount is charged in the name of profit. There are certain factors which affect this profit margin. these are:

a) Quantity of the order b) Number of color to be used in printing c) Time of completion d) Future prospects

AREA PRICING:

The company has the policy to charge ex-factory prices. They are not concerned with the freight charges. All such costs are borne by buyer.

PRICING POLICIES FOR CONSUMER PRODUCTS:

The basic objective behind the price determination of consumer products is to maximize the market share. The company actually wants a higher turnover. Prices are set by the marketing people by considering the following factors.

i) COST OF PRODUCTION: Every organization strives to sell its goods on maximum profit. But the first objective is that to cover the cost of production or to sell at the break-even. Packages Limited also first seeks to cover the cost of production while the profit margin is set in order to maximize the market share.

ii) CONSUMER PURCHASING FACTOR: This is also very significant while determining the final price. Marketing manager has to pay attention on the purchasing power of the target customers. Again the objective or philosophy behind the whole pricing concept is the maximization of market share.

iii) PRICING POLICIES OF COMPETITORS: The price charged by the competitor is very important particular in case of consumer products. Since price is the basic factor, Marketing department always keep an eye on the track and move made by competitors. If the company starts charging high price as compared with the competitors, then definitely it is going to loose its market share.

iv) GOVERNMENT TAXES: Another factor which affects the pricing policy is the taxes imposed by the government. Packages Limited has a policy to increase the prices with the increase in the taxes.

v) AREA PRICING:

Packages Limited has the policy to charge a homogeneous price for all of its consumers products throughout the country. In this regard, enough margins are kept to cover the freight, octroi and other district taxes.

PLACEMENT

DISTRIBUTION STRATEGIES

We know that channel of distribution means:

"The sequential linkage of the organization and relationship through which a product flows from the producer to consumer"

DISTRIBUTION POLICY FOR INDUSTRIAL PRODUCTS:

In case of industrial goods no middleman is involved. Company's sales force directly goes to the final customer and gets order form them. In this regard, Packages Limited has a direct marketing approach. Packages people believe that direct marketing is quite cheap for industrial goods. The reason which they quote is that we have enough sales force all over the country and which can cover the industry more economically. Mainly it consists of personal selling. Nominally new orders are obtained by the sales force. In case of repeated order or routine job the customer can acknowledge his order through phone, fax etc.

DISTRIBUTION POLICY FOR CONSUMER PRODUCTS:

So far as the consumer products are concerned, Packages Limited uses dealer or distributors. The company believes that the use of middleman is much more economical for the consumer products. Packages Limited has a net work of distributors, which covers the whole country. At present Packages Limited has more than 100 distributors, in more than 100 cities. Only in Lahore, there are two distributors. Company has a policy to sell its products to all those cities having population more than 200000 through its distribution system. Packages Limited supplies its consumer products to the distributors against cash.The distributor then, supplies these products to the whole seller, who in turn supplies the stuff to the retailer. And finally, the retailer sells the product to the final consumer.

PROMOTION

PROMOTIONAL STRATEGIES:

It is the job of Marketing Department to promote the business of the organization. In Packages Limited, marketing people have different promotion plans for industrial and consumer products.

PROMOTIONAL POLICIES FOR INDUSTRIAL PRODUCTS:

So far the promotion of the industrial goods are concerned, Packages Limited has not assigned any budget for it. And in a way they don't promote the industrial sales. But no organization can survive without promotion. The only promotion which they undertake is that of personal selling. For this purpose, company need not to fix any promotional budget because it is the job of sales officers. Moreover, The Industrial Sales Division is successful enough to keep the production process always working, so the management thinks that there is no need for any other promotional activity.

PROMOTIONAL POLICIES FOR CONSUMER PRODUCTS:

Without promotion, no consumer product can be successful. Promotional activities are an integral part for marketing consumer products.
The objectives behind the promotional activities are:

• Increase the sales • Outpace the competitor • Increase the market share • Higher turnover • Informing the consumer • Building of good will

The management fixes the promotional budget. The basic premise is that whether the organization can afford the budget or not. Apart from this fact, there are a lot a of other factors which the marketing people have to consider, these are:

• Cost of media • The number of products already in the market • The number of new products the company is going to launch

ALLOCATION OF THE PROMOTIONAL BUDGET:

There are number of tools that are used to promote a business. These include:

• ADVERTISING • PERSONAL SELLING

SALES PROMOTION

• PUBLIC RELATIONS

i) ADVERTISING:

Advertising accounts for about 80% of the total promotional budget. This is because of the fact that all the products are of CONVENIENCE TYPE and hence, require frequent advertisement. In fact, advertising is the most popular and effective media to the advertising campaign of Packages Limited and which includes the following

a) Broad cast media
b) Print media
c) Out door media

a) BROADCAST MEDIA:

The largest share of advertising budget is allocated to the media because it is the most interesting media with far reaching effects. Although, it is the most expensive media, but the nature of the products requires its use. It includes:

• TV • movies • Radio

Packages Limited extensively uses the TV while radio is not used very much. The ad about the facial tissues (Rose Petal) consists of 15 seconds and it runs on both TV and movies. The budget for TV is about 65% of the advertising budget.

b) PRINT MEDIA:

Print media is also an important part of promotional technique. It includes: • Newspapers • Magazines • Direct mail etc.

Packages Limited only places its advertisement in the magazines. Normally, newspapers are not used. It accounts for about 20% of the total advertising budget.

c) OUTDOOR MEDIA:

Marketing people normally don't prefer its use because they think that it is not very effective. it has a very nominal share in the budget. it includes billboard, road side signs etc.

ii) PERSONAL SELLING:

Personal selling is also included in the promotional mix of Packages Limited. It basically aims at the distributors. It constitutes about 10%. It includes;

* Sampling
* Gifts
* Cent off schemes

iii) PUBLIC RELATIONS:

Public Relations has become an integral part of any promotional mix. Every company tries to build its image. Packages Limited also undertakes some activities in the name of public relations but its share is very nominal.

Financial Analysis

FRAME WORK FOR FINANCIAL ANALYSIS OF PACKAGES LTD. :

Following figure summarizes the whole frame work for financial analysis of Packages Ltd.

Financial Analysis
Most practiced types of financial analysis include the following: ✓ Common Size Analysis (Vertical Analysis)

✓ Index Analysis (Horizontal Analysis)

✓ Ratio Analysis

1- Common Size Analysis (Vertical Analysis)
Vertical analysis is also called common size analysis. It is a technique for evaluating financial statement data that expresses each item within a financial statement as a percent of a base amount.

Vertical analysis includes the analysis of the: Balance sheet Income statement

In balance sheet the base amount is the total assets, while in income statement the base amount is the net sales.

2- Index Analysis (Horizontal Analysis)
Horizontal analysis is also called index analysis. It is a technique for evaluating a series of financial statement data over a period of time. Its purpose is to determine the increase or decrease that has taken place. This change may be expressed as either an amount or percentage.

Horizontal analysis includes the analysis of the: Balance sheet Income statement

3- Ratio Analysis

"A ratio-is an index that relates two accounting numbers and is obtained by dividing one number by another."

Use of ratio analysis

The use of ratios allows us to scale the figures in the accounts. By expressing the performance of a firm as a ratio, the size of the firm is taken out of the analysis.

From an investors standpoint Predicting the future is the purpose of financial statements analysis

From the management’s standpoint
Financial statement analysis is useful both as a way to anticipate future conditions and, more important, as a starting point for planning actions that will influence the future course of events.
The first step in a financial statement analysis typically includes an evaluation of the firm’s ratios. The ratios are designed to show relationships between financial statement accounts within firms and between firms. Translating accounting numbers into relative values or ratios allow us to compare the financial position of one firm with the financial position of another firm, even if their sizes are significantly different.

Ratio analysis includes:

1. Liquidity Ratios 2. Profitability Ratios 3. Solvency Ratios 4. Activity Ratios 5. Market Ratios

Six Years Financial Statements of Packages Ltd
IN MY INTERNSHIP REPORT I AM GOING TO ANALYZE FINANCIAL STATEMENTS FOR LAST SIX YEARS. BEFORE GETTING INTO THE ANALYSIS HERE ARE THE STATEMENTS OF PACKAGES LTD. WHICH I WILL BE ANALYZING.

Packages Ltd.
Balance Sheet
As at December 31st, 2003 – 2008

| |2003 |2004 |2005 |2006 |2008 |2007 |
| Fixed Capital Assets |
|Property, Plant & equipment |2,782,007 |2937656 |2996821 |3,071,115 |11,285,293 |10,361,253 |
|Intangible |28,071 |6385 |5300 |2,532 |241 |363 |
|Investment property |14,842 |14865 |15381 |14,423 |25,294 |26,055 |
|Assets subject to finance lease |129,082 |12,155 |8,581 |1,901 |_ |_ |
|Capital work-in-progress |344,747 |329,867 |3,265,517 |10,143,195 |8,155,239 |7,800,683 |
| |3,298,749 |3,300,928 |6,291,600 |13,233,166 |19,466,067 |18,188,354 |
|Other Long-Term Assets |
|Long-term investments |643,461 |691,176 |693,576 |5,775,665 |8,362,485 |10,080,259 |
|Long-term loans, deposits |3,981 |5,840 |16,200 |180,618 |155,102 |244,166 |
|&receivables | | | | | | |
|Retirement benefits |37,336 |51,725 |60,291 |69,805 |127,518 |88,262 |
| |684,778 |748,741 |770,067 |6,026,088 |8,645,105 |10,412,687 |
|Current Assets |
|Stores and spares |318,880 |380,556 |407,439 |485,665 |841,487 |715,840 |
|Stock-in-trade |844,120 |1,094,329 |1,144,043 |1,647,173 |3,652,261 |2,206,191 |
|Trade debts |577,548 |640,537 |784,638 |821,160 |1,523,049 |1,288,928 |
|Investment |_ |9,067 |_ |_ |15,400 |_ |
|Loans, advances, deposits, |332,043 |155,442 |202,667 |353,521 |692,076 |525,421 |
|prepayments and other receivables | | | | | | |
|Cash and bank balances |98,166 |144,886 |2,019,950 |106,703 |199,188 |101,022 |
| |2,170,757 |2,424,817 |4,558,737 |3,414,222 |6,908,061 |4,837,402 |
|Total Assets |6,154,284 |6,474,486 |11,620,404 |22,673,476 |35,034,633 |33,438,443 |
|Share Capital and Reserves |
|Authorized capital |600,000 |600,000 |1,000,000 |1,000,000 |1,500,000 |1,500,000 |
|Issued, subscribed and paid up |475,371 |475,371 |698,795 |698,795 |843,795 |733,735 |
|capital | | | | | | |
|Reserves |2,752,625 |3,311,625 |6,021,297 |6,872,336 |15,624,602 |13,110,240 |
|Un appropriated loss/ profit |404727 |404864 |1016163 |6,101,666 |(195,825) |4,326,797 |
| |3,632,723 |4,191,860 |7,736,255 |13,672,797 |16,272,572 |18,170,772 |
|Non Current Liabilities |
|Long-Term Finances |854870 | |1,000,000 |6,000,000 |12,304,400 |12,346,500 |
|Liabilities against assets subject |1,702 |6,351 |851 |_ |_ |_ |
|to finance lease | | | | | | |
|Deferred Liabilities |566,681 |527,390 |547468 |688,455 |840,788 |955,790 |
| |1,423,253 |533,741 |1,548,319 |6,688,455 |13,145,188 |13,302,290 |
|Current Liabilities |
|Current portion of long term |96224 |859330 |5159 |851 |550,000 |_ |
|liabilities | | | | | | |
|Finances under mark up |499,115 |234,197 |1,602,720 |1,280,857 |2,587,819 |401,019 |
|arrangements- secured | | | | | | |
|Derivatives foreign currency |_ |_ |90,959 |_ |1,017,150 |_ |
|forward option | | | | | | |
|Creditors, accrued and other |498,108 |595,213 |619,215 |1,030,516 |1,461,904 |1,564,362 |
|liabilities | | | | | | |
|Provision for tax |_ |54,185 |17,777 |_ |_ |_ |
|Proposed dividend |4,861 |5,960 |_ |_ |_ |_ |
| |1,098,308 |1,748,885 |2,335,830 |2,312,224 |5,616,873 |1,965,381 |
|Contingencies and Commitments |_ |
|Total Equity and Liabilities |6,154,284 |6,474,486 |11,620,404 |22,673,476 |35,034,633 |33,438,443 |

Packages Ltd.
Profit and Loss Account
For the period ended December 31st, 2003 – 2008
| |2003 |2004 |2005 |2006 |2007 |2008 |
|Sales |
|Local sales |6,243,603 |6,804,861 |8,061,945 |8,869,087 |10,365,224 |13,697,837 |
|Export Sales |49,616 |88,124 |101,139 |158,820 |174,771 |603,086 |
| |6,293,219 |6,892,985 |8,163,084 |9,027,907 |10,539,995 |14,300,923 |
|Less: Sales tax and excise duty |848,992 |898,166 |1,054,748 |1,172,430 |1,501,230 |2,056,475 |
|Commission |8,038 |7,842 |9,571 |8,878 |10,130 |19,669 |
| |857,030 |906,008 |1,064,319 |1,181,308 |1,511,360 |2,076,144 |
| |5,436,189 |5,986,977 |7,098,765 |7,846,599 |9,028,635 |12,224,779 |
|Less: Cost of goods sold |4,242,476 |4,678,375 |5,745,786 |6,551,995 |7,829,362 |11,281,480 |
|Gross profit |1,193,713 |1,308,602 |1,352,979 |1,294,604 |1,199,273 |943,299 |
|admin Expense |344,155 |347,030 |346,565 |349,934 |348,064 |512,189 |
|Distribution & Mkt Expenses |165,629 |172,561 |195,313 |225,587 |240,357 |362,425 |
|Other operating expenses |70,164 |84,699 |93,375 |213,475 |145,439 |324 |
|Other income |104,541 |84,398 |184,681 |252,005 |122,185 |336,965 |
|EBIT |718,306 |788,710 |902,407 |757,613 |587,598 |405,326 |
|Financial Cost |151,308 |139,008 |185,529 |78,909 |367,378 |1,662,094 |
|Investment Income |469,907 |542,619 |613,047 |5,669,136 |4,412,728 |948,879 |
|Profit before taxation |1,036,905 |1,192,321 |1,329,925 |6,347,840 |4,632,948 |307,889 |
|Provision for taxation |223,392 |229,119 |314,561 |247,060 |307,000 |112,064 |
|Net Profit |813,513 |963,202 |1,015,364 |6,100,780 |4,325,948 |195,825 |

HORIZONTAL ANALYSIS

Horizontal analysis is a technique for evaluating a series of financial data over a period of time to determine the amount and percentage increase OR decrease that has taken place. Actually this analysis shows the trend in performance and position of the company over the number of years which makes it easy to understand and compare the performance of the concern.
I have used the Six years financial statement data years ending 2003-2008 and compared the each item of the financial statements and showed the Bank’s trend from one year to another.

Six Years Horizontal Analysis of Packages Ltd
Packages Ltd.
Indexed Balance Sheet
2003 – 2008

| |2003 |2004 |2005 |2006 |2008 |2007 |
|Indexed (%) |
| Fixed Capital Assets | | | | | | |
|Property, Plant & equipment |100 |105.5948 |102.014 |102.48 |405.6529 |372.4380 |
|Intangible |100 |22.74589 |83.00705 |47.78 |0.8585 |1.2931 |
|Investment property |100 |100.155 |103.4712 |93.78 |170.4217 |175.5491 |
|Assets subject to finance lease |100 |9.416495 |70.59646 |22.15 |_ |_ |
|Capital work-in-progress |100 |95.68379 |989.9496 |310.62 |2365.5721 |2262.7268 |
| |100 |100.0661 |190.6009 |210.33 |590.1045 |551.3712 |
|Other Long-Term Assets |
|Long-term investments |100 |107.4154 |100.3472 |832.74 |1299.6102 |1566.5687 |
|Long-term loans, deposits &receivables |100 |146.6968 |277.3973 |1114.93 |3896.0562 |6133.2830 |
|Retirement benefits |100 |138.5392 |116.5607 |115.78 |341.5416 |236.3991 |
| |100 |109.3407 |102.8482 |782.54 |1262.4682 |1520.5930 |
|Current Assets |
|Stores and spares |100 |119.3414 |107.0641 |119.20 |263.8882 |224.4856 |
|Stock-in-trade |100 |129.6414 |104.5429 |143.98 |432.6708 |261.3598 |
|Trade debts |100 |110.9063 |122.4969 |104.65 |263.7095 |223.1724 |
|Investment |_ |_ |_ |_ |_ |_ |
|Loans, advances, deposits, prepayments and|100 |46.81382 |130.3811 |174.43 |208.4296 |158.2388 |
|other receivables | | | | | | |
|Cash and bank balances |100 |147.5929 |1394.165 |5.28 |202.9093 |102.9093 |
| |100 |111.7038 |188.0033 |74.89 |318.2328 |222.8440 |
|Total Assets |100 |105.2029 |179.4799 |195.12 |569.2722 |543.3360 |
|Share Capital and Reserves |
|Authorized capital |100 |100 |166.6667 |100 |250 |250 |
|Issued, subscribed and paid up capital |100 |100 |146.9999 |100 |177.5024 |154.3499 |
|Reserves |100 |120.3079 |181.823 |114.13 |567.6255 |476.2813 |
|Un appropriated profit |100 |100.0338 |250.9887 |600.46 |48.3844 |1069.0655 |
| |100 |115.3917 |184.5542 |176.74 |447.9442 |500.1970 |
|Non Current Liabilities |
|Long-Term Finances |100 | _ | _ |600 |1439.3299 |1444.2546 |
|Liabilities against assets subject to | | | | | | |
|finance lease |100 |373.1492 |13.39946 |_ |_ |_ |
|Deferred Liabilities |100 |93.06647 |103.807 |125.75 |148.3706 |168.6645 |
| |100 |37.50148 |290.0881 |431.98 |923.6016 |934.6398 |
|Current Liabilities |
|Current portion of long term liabilities |_ |893.0516 |0.600351 |16.50 |571.5829 |_ |
|Finances under mark up arrangements- |100 |46.92245 |684.3469 |79.92 |518.4815 |80.3460 |
|secured | | | | | | |
|Derivatives foreign currency forward | | | | | | |
|option |100 |_ |_ |_ |_ |_ |
|Creditors, accrued and other liabilities | | | | | | |
| |100 |_ |104.0325 |166.42 |293.4913 |314.0608 |
|Provision for tax |100 |_ |32.80797 |_ |_ |_ |
|Proposed dividend |100 |122.6085 |_ |_ |_ |_ |
| |100 |159.2345 |133.5611 |98.99 |511.4114 |178.9462 |
|Contingencies & Commitments |_ |
|Total Equity and Liabilities |100 |105.2029 |179.4799 |195.12 |569.2722 |543.3360 |

Packages Ltd.
Indexed Profit and Loss Account
2003 – 2008

| |2003 |2004 |2005 |2006 |2007 |2008 |
|Sales |Percentage |
|Local sales |100 |108.9893 |118.4733 |110.01 |166.0135 |219.3899 |
|Export Sales |100 |177.6121 |114.769 |157.03 |352.2472 |1215.5070 |
| |100 |109.5304 |118.426 |110.59 |167.4817 |227.2433 |
|Less: Sales tax and excise duty |100 |105.792 |117.4335 |111.16 |176.8249 |242.2254 |
|Commission |100 |97.56158 |122.0479 |92.76 |126.0263 |244.7001 |
| |100 |105.7149 |117.4735 |110.99 |176.3485 |242.2486 |
| |100 |110.1319 |118.5701 |110.54 |166.0839 |224.8777 |
|Less: Cost of goods sold |100 |110.2746 |122.8158 |114.03 |184.5469 |265.9173 |
|Gross profit |100 |109.6245 |103.3912 |95.69 |100.4657 |79.0222 |
|Admin Expense |100 |100.8354 |99.86601 |100.97 |101.1358 |148.8250 |
|Distribution & Market Expenses |100 |104.1853 |113.1849 |115.50 |145.1177 |218.8173 |
|Other operating expenses |100 |120.7158 |110.2433 |228.62 |207.2843 |0.4617 |
|Other income |100 |80.73196 |218.8215 |136.45 |116.8775 |322.3280 |
|EBIT |100 |109.8014 |114.4156 |83.95 |81.8032 |56.4280 |
|Financial Cost |100 |91.87089 |133.4664 |42.53 |242.8014 |1098.4838 |
|Investment Income |100 |115.4737 |112.9793 |924.75 |939.0641 |201.9291 |
|Profit before taxation |100 |114.9885 |111.5409 |477.31 |446.8054 |29.6930 |
|Provision for taxation |100 |102.5637 |137.2915 |78.54 |137.4265 |50.1647 |
|Net Profit |100 |117.6996 |124.8122 |749.9302 |53.1703 |24.0715 |

Interpretation ▪ Total Assets over the year 2008 have increased by 543% whereas the current assets have increased by 223%. ▪ Total Sales have increased by 227% over the year 2008 but the CGS has increased by 266%. ▪ The Gross profit increased by 79% while the Net Profit has increased by 24% which is mainly due to the gain from the company investments.

VERTICAL ANALYSIS

Vertical analysis is that analysis in which each items within the financial statement is expressed in terms of a percentage of a base amount. This helps in analyzing whether each of those particular items of the company has how much percentage of their total value in continuous years.

For the purpose of analysis and comparison current year data shown in percentage is compared with the data in percentage of the last year. One can easily judge the favorable and unfavorable changes in two year’s financial statements.

I have used the six years financial statement data, i.e. years ending 2004-2008 and compared the each item of the financial statements and showed the Bank’s trend from one year to another.

Five Year Vertical Analysis of Packages Ltd
Packages Ltd.
Common Size Balance Sheet
2004 – 2008
|Common Size Analysis |
| |2004 |2005 |2006 |2004 |2005 |2006 |
| Fixed Capital Assets | | | | | | |
|Proprietory, Plant & equipment |2937656 |2996821 |3,071,115 |45.37280643 |25.7893013 |13.544968 |
|Intangible |6385 |5300 |2,532 |0.098617867 |0.04560943 |0.0111672 |
|Investment property |14865 |15381 |14,423 |0.229593515 |0.132362007 |0.0636118 |
|Assets subject to finance lease |12,155 |8,581 |1,901 |0.187736911 |0.073844248 |0.0083842 |
|Capital work-in-progress |329,867 |3,265,517 |10,143,195 |5.094875485 |28.10157891 |44.735951 |
| |3,300,928 |6,291,600 |13,233,166 |50.98363021 |54.1426959 |58.364081 |
|Other Long-Term Assets | | | | | | |
|Long-term investments |691,176 |693,576 |5,775,665 |10.67538025 |5.968604878 |25.473223 |
|Long-term loans, deposits &receivables | | | |0.09020021 |0.139409955 |0.7966048 |
| |5,840 |16,200 |180,618 | | | |
|Retirement benefits |51,725 |60,291 |69,805 |0.798905118 |0.518837383 |0.3078707 |
| |748,741 |770,067 |6,026,088 |11.56448558 |6.626852216 |26.577698 |
|Current Assets | | | | | | |
|Stores and spares |380,556 |407,439 |485,665 |5.877779333 |3.506237821 |2.1419962 |
|Stock-in-trade |1,094,329 |1,144,043 |1,647,173 |16.90217571 |9.845122424 |7.2647573 |
|Trade debts |640,537 |784,638 |821,160 |9.893248669 |6.752243726 |3.6216767 |
|Investment |9,067 |_ |_ |0.140042005 |_ |_ |
|Loans, advances, deposits, |155,442 |202,667 |353,521 |2.400839233 |1.744061566 |1.5591831 |
|Prepayments and other receivables | | | | | | |
|Cash and bank balances |144,886 |2,019,950 |106,703 |2.237799263 |17.38278635 |0.4706072 |
| |2,424,817 |4,558,737 |3,414,222 |37.45188421 |39.23045188 |15.05822 |
|Total Assets |6,474,486 |11,620,404 |22,673,476 |100 |100 |100 |
|Share Capital and Reserves | | | | | | |
|Authorized capital |600,000 |1,000,000 |1,000,000 |9.267144913 |8.605552785 |4.4104398 |
|Issued, subscribed and paid up capital |475,371 |698,795 |698,795 |7.342219907 |6.013517258 |3.0819933 |
|Reserves |3,311,625 |6,021,297 |6,872,336 |51.14884795 |51.81658917 |30.310024 |
|Un appropriated profit |404864 |1016163 |6,101,666 |6.253222264 |8.744644334 |26.91103 |
| |4,191,860 |7,736,255 |13,672,797 |64.74429013 |66.57475076 |60.303047 |
|Non Current Liabilities | | | | | | |
|Long-Term Finances |_ |1,000,000 |6,000,000 |_ |8.605552785 |26.462639 |
|Liabilities against assets subject to | | | |0.098092729 |0.007323325 |_ |
|finance lease |6,351 |851 |_ | | | |
|Deferred Liabilities |527,390 |547468 |688,455 |8.145665926 |4.711264772 |3.0363893 |
| |533,741 |1,548,319 |6,688,455 |8.243758655 |13.32414088 |29.499028 |
|Current Liabilities | | | | | | |
|Current portion of long term liabilities | | | |13.2725594 |0.044396047 |0.0037533 |
| |859330 |5159 |851 | | | |
|Finances under mark up arrangements- | | | |3.617229229 |13.79229156 |5.6491426 |
|secured |234,197 |1,602,720 |1,280,857 | | | |
|Derivatives foreign currency forward option| | | |_ |0.782752476 |_ |
| |_ |90,959 |_ | | | |
|Creditors, accrued and other liabilities | | | |9.193208542 |5.328687367 |4.5450287 |
| |595,213 |619,215 |1,030,516 | | | |
| | | | | | | |
|Provision for tax |54,185 |17,777 |_ |0.836900412 |0.152980912 |_ |
|Proposed dividend |5,960 |_ |_ |0.092053639 |_ |_ |
| |1,748,885 |2,335,830 |2,312,224 |27.01195122 |20.10110836 |10.197925 |
|Contingencies and Commitments | _ | _ | _ | _ | _ | _ |
|Total Equity and Liabilities |6,474,486 |11,620,404 |22,673,476 |100 |100 |100 |

| |2008 |2007 |2008 |2007 |
|Property, Plant & equipment |11,285,293 |10,361,253 |32.2118 |30.9860 |
|Intangible |241 |363 |0.0006879 |0.1085 |
|Investment property |25,294 |26,055 |0.0721 |0.0779 |
|Assets subject to finance lease |_ |_ |_ |_ |
|Capital work-in-progress |8,155,239 |7,800,683 |23.2776 |23.3284 |
| |19,466,067 |18,188,354 |55.5623 |54.3935 |
|Long-term investments |8,362,485 |10,080,259 |23.8691 |30.1457 |
|Long-term loans, deposits &receivables | | | | |
| |155,102 |244,166 |0.4427 |0.7301 |
|Retirement benefits |127,518 |88,262 |0.3639 |0.2639 |
| |8,645,105 |10,412,687 |24.6758 |31.1398 |
|Stores and spares |841,487 |715,840 |2.4018 |2.1407 |
|Stock-in-trade |3,652,261 |2,206,191 |10.4247 |6.5977 |
|Trade debts |1,523,049 |1,288,928 |4.3472 |3.8546 |
|Investment |15,400 |_ |0.043 |_ |
|Loans, advances, deposits, prepayments and other receivables| | | | |
| |692,076 |525,421 |1.9754 |1.5713 |
|Cash and bank balances |199,188 |101,022 |0.5685 |0.3021 |
| |6,908,061 |4,837,402 |19.7178 |14.4665 |
|Total Assets |35,034,633 |33,438,443 |100 |100 |
|Authorized capital |1,500,000 |1,500,000 |4.2814 |4.4858 |
|Issued, subscribed and paid up capital |843,795 |733,735 |2.4084 |2.1942 |
|Reserves |15,624,602 |13,110,240 |44.5975 |39.2070 |
|Un appropriated loss/ profit |(195,825) |4,326,797 |0.5589 |12.9395 |
| |16,272,572 |18,170,772 |46.4471 |54.3409 |
|Long-Term Finances |12,304,400 |12,346,500 |35.1206 |36.9230 |
|Liabilities against assets subject to finance lease |_ |_ |_ |_ |
|Deferred Liabilities |840,788 |955,790 |2.3998 |2.8583 |
| |13,145,188 |13,302,290 |37.5205 |39.7814 |
|Current portion of long term liabilities | | | | |
| |550,000 |_ |1.5698 |_ |
|Finances under mark up arrangements- secured | | | | |
| |2,587,819 |401,019 |7.3864 |1.1992 |
|Derivatives foreign currency forward option | | | |_ |
| |1,017,150 |_ |2.9032 | |
|Creditors, accrued and other liabilities | | | | |
| |1,461,904 |1,564,362 |4.1727 |4.6783 |
|Provision for tax |_ |_ |_ |_ |
|Proposed dividend |_ |_ |_ |_ |
| |5,616,873 |1,965,381 |16.0323 |5.8776 |
|Total Equity & Liabilities |35,034,633 |33,438,443 |100 |100 |

Packages Ltd.
Common Size Profit and Loss Account
2004- 2008

| | | | |Common Size Analysis |
| |2004 |2005 |2006 |2004 |2005 |2006 |
|Sales | | | | | | |
|Local sales |6,804,861 |8,061,945 |8,869,087 |98.72154081 |98.76101973 |98.24079 |
|Export Sales |88,124 |101,139 |158,820 |1.278459187 |1.238980268 |1.759212 |
| |6,892,985 |8,163,084 |9,027,907 |100 |100 |100 |
|Less: Sales tax and excise duty | | | |13.03014587 |12.92094997 |12.98673 |
| |898,166 |1,054,748 |1,172,430 | | | |
|Commission |7,842 |9,571 |8,878 |0.113767838 |0.117247354 |0.09834 |
| |906,008 |1,064,319 |1,181,308 |13.1439137 |13.03819733 |13.08507 |
| |5,986,977 |7,098,765 |7,846,599 |86.8560863 |86.96180267 |86.91493 |
|Less: Cost of goods sold |4,678,375 |5,745,786 |6,551,995 |67.87153896 |70.38744181 |72.57491 |
|Gross profit |1,308,602 |1,352,979 |1,294,604 |18.98454733 |16.57436087 |14.34002 |
|Admin Expense |347,030 |346,565 |349,934 |5.034538738 |4.245515543 |3.876137 |
|Distribution & Market Expenses | | | |2.503429211 |2.39263739 |2.498774 |
| |172,561 |195,313 |225,587 | | | |
|Other operating expenses |84,699 |93,375 |213,475 |1.22877099 |1.143869155 |2.364612 |
|Other income |84,398 |184,681 |252,005 |1.224404231 |2.262392498 |2.7914 |
|EBIT |788,710 |902,407 |757,613 |11.44221263 |11.05473128 |8.391901 |
|Financial Cost |139,008 |185,529 |78,909 |2.016658966 |2.272780728 |0.874056 |
|Investment Income |542,619 |613,047 |5,669,136 |7.872046726 |7.509992547 |62.79568 |
|Profit before taxation |1,192,321 |1,329,925 |6,347,840 |17.29760039 |16.29194309 |70.31353 |
|Provision for taxation |229,119 |314,561 |247,060 |3.323944561 |3.853457835 |2.736625 |
|Net Profit |963,202 |1,015,364 |6,100,780 |13.97365583 |12.43848526 |67.5769 |

| |2007 |2008 |2007 |2008 |
|Local sales |10,365,224 |13,697,837 |98.3418 |95.7828 |
|Export Sales |174,771 |603,086 |1.6581 |4.2171 |
| |10,539,995 |14,300,923 |100 |100 |
|Less: Sales tax and excise duty |1,501,230 |2,056,475 |14.243 |14.3800 |
|Commission |10,130 |19,669 |0.0961 |0.1375 |
| |1,511,360 |2,076,144 |14.3392 |14.5175 |
| |9,028,635 |12,224,779 |85.6607 |85.4824 |
|Less: Cost of goods sold |7,829,362 |11,281,480 |74.2824 |78.8863 |
|Gross profit |1,199,273 |943,299 |11.3783 |6.5960 |
|admin Expense |348,064 |512,189 |3.3023 |3.5815 |
|Distribution & Market Expenses |240,357 |362,425 |2.2804 |2.5342 |
|Other operating expenses |145,439 |324 |1.3798 |0.002265 |
|Other income |122,185 |336,965 |1.1592 |2.3562 |
|EBIT |587,598 |405,326 |5.5749 |2.8342 |
|Financial Cost |367,378 |1,662,094 |3.4855 |11.6222 |
|Investment Income |4,412,728 |948,879 |41.8665 |6.6350 |
|Profit before taxation |4,632,948 |307,889 |43.9558 |2.1529 |
|Provision for taxation |307,000 |112,064 |2.9127 |0.7836 |
|Net Profit |4,325,948 |195,825 |41.0431 |1.3693 |

RATIO ANALYSIS

Ratio analysis is a widely used tool of financial analysis. It is defined as the systematic use of ratios to interpret the financial statements so that the strengths and weaknesses of a firm, as well as its historical performance and current financial condition, can be determined.

A single ratio in itself is meaningless because it does not furnish a complete picture. A ratio becomes meaningful when compared with other standard and the ratio of the other years. So the ratios of Packages limited have been calculated by me and I compared it with the standards and the ratio of other years.

Purpose
The purpose of ratio analysis depends upon the event for which the analysis is made. The following paragraph briefly explains the purpose of ratio analysis:

‘Management’ would like to know the operational efficiency and would think of such ratios as return on investment, turnover of fixed assets, net profit to sales etc. While ‘Creditors’ would like to know the ability of the company to meet it current obligations and, therefore, would think of current and liquid ratios, turnover of receivables, coverage of interest by the level of earnings, etc. and on the other side, ‘Investors’ will be interested in such ratios as earnings per share, book value per share and dividends per share etc.

CLASSIFICATION OF RATIOS:

Ratios may be classified in a number of ways keeping in view the particular purpose. To achieve the above purposes effectively, ratios may be classified as; □ Liquidity ratio. □ Solvency ratio □ Activity ratio. □ Profitability ratio.

Liquidity Ratios

Current Ratio:
The current ratio is the ratio of total current assets to total current liabilities. The current ratio of a firm measures its short-term solvency, i.e. its ability to meet short-term obligations. As a measure of short term/current financial liquidity, it indicates the rupees of current assets available for each rupee of current liability / obligation. Higher the current ratio, larger will be the amount of rupees available per rupee of current liability, the more the firm’s ability to meet current obligations and the greater the safety of funds of short term creditors. Thus, current ratio, in a way, is a measure of margin of safety to the creditors.

Current Ratio = Current Assets / Current Liabilities

| |2002 |2003 |2004 |2005 |2006 |2007 |2008 |
| Current Assets | 2,187,037 | 2,170,757 | 2,424,817 | | | | |
| | | | |4,558,737 |3,414,222 |4,837,402 |6,923,461 |
| Current Liabilities | 1,367,151 | 1,098,308 | 1,748,885 | | | | |
| | | | |2,335,830 |2,312,224 |1,965,381 |5,616,873 |
|Current Ratio |1.60 |1.98 |1.39 |1.95 |1.48 |2.46 |1.23 |

[pic]
Interpretation

Current ratio is general and quick measure of liquidity of a firm. It represents a margin of safety or cushion available to the creditors. It is an index of the firm’s financial stability. It is also an index of technical solvency and an index of the strength of working capital. The current ratio in the year 2008 is 1.23 which is less than the previous year’s ratio. This tells us that the liquidity of the firm is less in the current year than the previous year.

Liquid / Acid Test / Quick Ratio: The acid - test ratio is the ratio between quick current assets and current liabilities. The term quick assets refers to current assets which can be converted into cash immediately or at a short notice without dimension of value and will include cash balances, bills receivable, sundry debtors and short-term investments. Thus, the current assets that are excluded are: prepaid expenses and inventory.

| |2002 |2003 |2004 |2005 |2006 |2007 |2008 |
|Net Profit |655,372 |813,513 |957,502 |1,015,364 |6,100,780 |4,325,948 |(195,825) |
|Sales |5,360,884 |6,293,219 |6,892,985 |8,163,084 |9,027,907 |10,539,995 |14,300,923 |
|Net Profit Margin |12.23 |12.93 |13.89 |12.44 |67.58 |41.04 |(1.36) |

[pic]
Interpretation
The net profit ratio of company remained at around 12-13% from years 2002 to 2005. But it increased extensively in 2006 and 2007. The increase is due to gain from company investments. But it is negative in 2008 and decrease is due to loss from company investments.

Return on Total Assets/ Return on Investment (ROI)

Return on Total Assets = Net Profit after tax/ Total Asset*100

| |2002 |2003 |2004 |2005 |2006 |2007 |2008 |
|Net Income | 655,372 | 813,513 | 957,502| 1,015,364 | | | |
| | | | | |6,100,780 |4,325,948 |(195,825) |
|Total Assets | 2,187,037 | 6,154,284 | 6,474,486 | 11,620,404 | 22,673,476 | | |
| | | | | | |4,837,402 |6,923,461 |
|ROA |29.97 |13.22 |14.79 |8.74 |26.91 |89.43 |(2.83) |

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Interpretation

This ratio shows the management effectiveness in generating profits with its available assets. The company’s last year ROA was 89.43% against (2.83) % of the year 2008. This shows that the company has generated less profit this year with its available assets.

Operating Profit Ratio:

The operating profit margin represents what are often called the pure profits earned on each sales rupee.

Operating Profit Margin = Operating Profit / Net Sales *100

| |2002 |2003 |2004 |2005 |2006 |2007 |2008 |
|Operating |456,748 |718,306 |788,710 |902,407 |757,613 |587,598 |405,326 |
|Profit | | | | | | | |
|Net Sales |5,360,884 |6,293.219 |6,892,985 |8,163,084 |9,027,907 |10,539,995 |14,300,923 |
|Operating |8.52 |11.41 |11.44 |11.05 |8.39 |5.57 |2.83 |
|Profit Margin | | | | | | | |

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Interpretation:

The operating profit ratio of the company increased from 8.52% to 11.44% in 2004 But it decreased from 11.05% in 2005 to 2.83% in 2008.

Return on Equity:

The return on equity (ROE) measures the return earned on the owner's investment. This ratio is a measure of the percentage of net profit to shareholder's funds.

Return on Equity = Net Profit/Total Equity

| |2002 |2003 |2004 |2005 |2006 |2007 |2008 |
|Net Profit |655,372 |813,513 |963.202 |1,015,364 |6,100,780 |4,325,948 |(195,825) |
|Total Equity |475,371 | 475,371 |475,371 |698,795 |698,795 |733,735 |843,795 |
|Return on | 137.87 |171.13 |202.62 |1.45 |8.73 |5.89 |(0.23) |
|Equity | | | | | | | |

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Interpretation:

This ratio means a lot to the equity shareholders who are interested to know the profit earned by .the company and that profit which can be sufficient to pay dividend to them, higher the ratio better it is. In 2002 it was 137.9%, and it decreased to 0.23% in 2008.

Operating Expense Ratio

Operating Expense Ratio= (Operating Expenses ÷ Total Revenue)

| |2002 |2003 |2004 |2005 |2006 |2007 |2008 |
|Operating Expenses | 489,885 | 509,784 |84,699 |93,375 |213,475 |145,439 |324 |
|Sales |5,360,884 |6,293,219 |6,892,985 |8,163,084 |9,027,907 |10,539,995 |14,300,923 |
|Operating Expenses Ratio |9.14% |8.10% |1.23% |1.14% |2.36% |1.37% |0.002% |

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Interpretation:

In the year 2002 the operating expenses ratio was 9.14% and in the year 2008 shows the success of management in cutting down the operating expenses i.e. the ratio was approximately equal to 0%.
This indicates that the company has reduced a significant portion of its operating expenses and non-operating expenses which is a positive sign.

Return on Capital Employed

Return on Capital Employed= (Earning before interest and tax ÷ Net assets)
|2002 |2003 |2004 |2005 |2006 |2007 |2008 |
| | | | | | | |
|1,037,954 |1,258,377 |788,710 |902,407 |757,613 |587,598 |405,326 |
| | | | | | | |
|4,250,566 |4,651,911 |6,474,486 |11,620,404 |22,673,476 |4,837,402 |6,923,461 |
|24.42% |27.05% |12.18% |7.76% |3.34% |12.15% |5.85% |

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Interpretation:

The return on capital employed for Packages Limited is decreasing which is not an encouraging sign, a very low pre tax profit and an infected inherited portfolio kept this return to low.
Moreover the interest expenses are not under control and increasing which is an indication of non repayment of the debt so the company is following a bad policy in respect of its debt structuring repayment thereof..

Market Ratios

Earning per share

Earning per share means earning on one share of the company . The earning per share is calculated the by following formula:

Earning per Share = Net profit / No. of Common Share Outstanding

| |2002 |2003 |2004 |2005 |2006 |2007 |2008 |
| | | | | | | | |
|Net Income |655372000 |813,513,000 |957,502,000 |1,015,364,000 |6,100,780,000 |4,325,948,000 |(195,825,000) |
| No. of C.S O/S | | | | | | | |
| |47,537,080 |47,537,080 |48,654,730 |62,503,899 |69,879,507 |73,373482 |84,379,504 |
|EPS |13.79 |17.11 |19.68 |16.24 |87.30 |58.96 |(2.32) |

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Interpretation

Earning per share calculated for a number of years indicate whether or not the earning power of the company has increased. The earning per share simply show the profitability of the firm on a per share basis .It does not reflect how much is paid as dividend and how much is retained in the business. But as a profitability index, it is a valuable and widely used ratio. In 2002 earning per share was Rs. 13.79, in 2008, it decreased to 2.32.
Which is very remarkable decrease in the last six years, this is discouraging the investors.

Price Earning Ratio

Price Earning Ratio = Price per Share/ EPS

| |2002 |2003 |2004 |2005 |2006 |2007 |2008 |
|Price Per Share |88.50 |167.90 |198.85 |202.00 |210 |363.78 |81.15 |
|EPS |13.79 |17.11 |19.68 |16.24 |87.30 |58.96 |(2.32) |
|P/E Ratio |6.42 |9.81 |10.10 |12.44 |2.41 |6.17 |(34.98) |

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Interpretation
This ratio shows that what the amount investors are willing to pay for each dollar of a firm’s earnings. The price earning ratio for this year is less than the previous year which tells us that the investors are reluctant to invest in the company.

Dividend per Share
Dividend per Share = Dividend/ No. of C.S O/S

| |2002 |2003 |2004 |2005 |2006 |2007 |2008 |
|Total Liabilities |2798507 |2521561 |2282626 |3,884,149 |9,000,679 |15,267,671 |18762 061 |
|Total Assets |5950477 |6154284 |6474486 |11,620404 |22,673,476 |33,438,443 |35,034,633 |
|Debt Ratio |47 |41 |35 |33 |40 |46 |53 |

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Interpretation:

The debt ratio shows that more liabilities are against of the total assets of the company. In the years 2002 to 2005 there is a decreasing trend in the debt ratio of the company and than from 2006-2008 there is an increasing trend.

Debt equity ratio:

The debt equity ratio indicates the relationship between the long-term funds provided by creditors and those provided by the firm's owners. The standard debt equity ratio is 60:40. The lower debt equity ratio is preferable.

Debit Equity Ratio = Total Liabilities / shareholder’s equity *100

| |2002 |2003 |2004 |2005 |2006 |2007 |2008 |
|Total Liabilities |1,431,356 |1,423,253 |2,282,626 |3,884,149 |9,000,679 |18,762,061 |15,267,671 |
|Shareholder's Equity |1,906,727 |1,898,624 |1,009,112 |698,795 |698,795 |733,735 |843,795 |
|Debt Equity Ratio |25:75 |19:81 |00:100 |11:89 |30:70 |40:60 |44:56 |

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Interpretation:

If we analyze the debt equity ratio of the Packages is less than 60:40 in all the seven years so the performance efficiency of the company is remarkable .Because the debt equity ratio is less than 60:40 so the company changes their policy of taking loan. And in order to improve their current ratio they are trying to get loan in the form of long-term loan.

Time Interest earned ratio

This ratio measures the firm's ability to make contractual payments.

Time Interest Earned Ratios = EB1T / Interest Expense

| |2002 |2003 |2004 |2005 |2006 |2007 |2008 |
|EBIT |456,748 |788,710 |788,710 |902,407 |757,613 |587,598 |405,326 |
|Interest Expense |176,800 |151,308 |139,008 |185,529 |78,909 |367,378 |1,662,094 |
|Time Interest Ratio |2.58 |5.21 |5.17 |4.86 |9.60 |1.60 |0.24 |

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Interpretation:

This ratio is very good for the company. This depicts a strong position of paying its interest expenses within due time. Packages can obtain more loans very easily.

Activity Ratios

Inventory turnover and age of inventory

This ratio creates relationship between cost of goods sold during a given period and the average amount of inventory held during that period. This ratio shows the number of times finished stock is turned over during a given accounting period. In general, a high inventory-turnover ratio is better than a low ratio. A high ratio shows good inventory management.

Inventory Turnover = C.G.S / Average Closing Inventory

| |2002 |2003 |2004 |2005 |2006 |2007 |2008 |
|Cost of good |3,672,114 |4,242,476 |4,678,357 |5,745,786 |6,551,995 |7,829,362 |11,281,480 |
|sold | | | | | | | |
|Average closing|876,207 |844,120 |1,094,329 |1,144,043 |1,647,173 |2,206,191 |3,652,261 |
|inventory | | | | | | | |
|Inventory |4.19 |5.03 |4.28 |5.02 |3.98 |3.55 |3.09 |
|Turnover | | | | | | | |

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Interpretation:

This ratio shows red alert for the company .Inventory turnover was 4.19 in the year 2002 which has decreased from 4.19 to 3.09 in the year 2008. The sale of inventory is very low. The company should analyze to improve its inventory management. Age of Inventory:

Age of Inventory

Age of Inventory = 360 / Inventory Turnover

| |2002 |2003 |2004 |2005 |2006 |2007 |2008 |
|Days |360 |360 |360 |360 |360 |360 |360 |
|Inventory Turnover |4.19 |5.03 |4.28 |5.02 |3.98 |3.55 |3.90 |
|Age of Inventory |85.92 |71.57 |84.11 |71.71 |90.45 |101.41 |92.31 |

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Interpretation:

Age of inventory is 92 days in the year 2008 which has increased from 85 days in the year 2002. The sale of inventory is very low. The company should examine its strategies to improve its inventory management.

Account receivable turnover and age of A/R:

This ratio measures the accounts receivables (trade debtors and bills receivables) in terms of number of days of credit sales during a particular period. Briefly we can say that it shows how quickly receivables or debtors are converted into cash.

Age Of account Receivable = 360/A/R Turn Over

| |2002 |2003 |2004 |2005 |2006 |2007 |2008 |
|Days |360 |360 |360 |360 |360 |360 |360 |
|A/R Turnover |9.87 |10.9 |10.76 |10.40 |10.99 |8.17 |9.39 |
|Age of A/R |36.47 |33.03 |33.46 |34.61 |32.76 |44.06 |38.34 |

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A/R Turnover = Sales/A/R

| |2002 |2003 |2004 |2005 |2006 |2007 |2008 |
|Sales |5,360,884 |6,293,219 |6,892,985 |8,163,084 |9,027,907 |10,539,995 |14,300,923 |
|Account Receivable|543,218 |577,548 |640,537 |784,638 |821,160 |1,288,928 |1,523,049 |
|A/R Turnover |9.87 |10.90 |10.76 |10.40 |10.99 |8.17 |9.39 |

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Interpretation:

If the account receivable turnover ratio is increasing and the average collection period is decreasing this is-in favor of the company. In the case of Packages there is a increasing trend in the average collection period ratio and decreasing trend in the account receivable inventory turnover ratio .The above table shows that the company is efficient for collecting their account receivable Packages average collection period is also less than average payment period. It means that the company performance is excellent.

Account payable turnover and Age of A/P:

It is calculated to indicate the speed with which payments for credit purchases are made to creditors.

Accounts Payable Turn Over = Purchase / Account Payable

| |2002 |2003 |2004 |2005 |2006 |2007 |2008 |
|Purchase |1,925,656 |2,263,462 |2,710,306 |3,520,643 |4,246,956 |5,108,396 |7,639,296 |
|Average Account |545,910 |499,443 |546,660 |619,215 |1,030,516 |1,564,362 |1,461,904 |
|Payable | | | | | | | |
|A/P Turnover |3.53 |4.53 |4.96 |5.68 |4.12 |3.26 |5.22 |

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age of Accounts payable = 360 / Accounts Payable Turn Over

| |2002 |2003 |2004 |2005 |2006 |2007 |2008 |
|Days |360 |360 |360 |360 |360 |360 |360 |
|Account Payable |3.53 |4.53 |4.96 |5.68 |4.12 |3.26 |5.22 |
|Turnover | | | | | | | |
|Age of A/P |101.98 |79.47 |72.58 |63.38 |87.38 |110.43 |68.96 |

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Interpretation:
The average payment ratio of the Packages is greater than average collection period. It means that
The Packages firstly receives it accounts receivable and after that it pay to its creditors. So the average
Payment period and account payable turnover ratio of the Packages is marvelous.

ACTIVITIES:

I was assigned the INDUSTRIAL SALES & MARKETING DEPARTMENT of Packages Limited, Lahore.

I was assigned to do a project of collecting samples of different categories like carton line, flexible line and poly. Therefore I visited several related departments for the fulfillment of my project. On the very first day I visited the biggest line in packages “the carton line”. There I saw the working of different machines, how they print. We saw two machines for printing. One is old and the other is new. The new one is known as Lemanic and only PTC jobs are running over there. How cutting and creasing is done manually and automatically through different machines, then how folding and gluing is being done on the cartons according to the customer requirements. I noted all the working there and noted all the important points. Then at the end of the day I report to my manager, asked related questions. I did all the work on excel and word

Then after completed carton line I visited flexible line. Flexible packaging was introduced in 1986 .the flexible packaging is basically made from the poly grains which gives the salivary effect of packaging. Flexible packaging is used for the shopping bags, food products, garments, cigarettes, biscuits, pharmaceutical goods, tooth paste. Cosmetics, toilet soaps etc. I collected different samples of flexible line and note down their material combinations. I made a complete round of the production house and saw the procedure of the production of flexible line.

I visited Art dept and saw the designing of the wrappers of different products of all the three lines from the chewing gum to the surf. Then I saw the making of mechanicals of different new designs which is the sample design of any new product which has to approve by the respective customer and the packages as well.

During my internship, I visited Reproduction dept, where new orders are reproduced after approval, pre press planning where the record of production is maintained, CPD production house and saw the making of tissues their printing, packing, rolling, creasing and finally dispatch.

Finally I made a complete survey of paper and board mill. There I saw its four main sections that are NFL (New Fiber Line), CRP (Chemical Recovery Plant), SLP (Straw and Linter Preparation) AND BLEACHING HOUSE .I collected all the related information and finally reported to my manager at the end of the day.

A trip to BSPM (Bullay Shah Paper Mill Kasur)

Out of all the Strategic Business Units (SBUs) of Packages Ltd, corruwall products are of key importance. The company has always been the market leader in quality and service when it comes to corrugated products. These include corrugated sheets and corruwalls (shipping cartons/Master cartons). As we are assigned a project on tapping potential customers of corruwall products, we deemed it necessary to have general information about the corruwall features and its production process. For this purpose we arranged a visit to BSPM with the help of Mr. Ali Murtaza and Mr. Umair Saeed.

PROJECT: Tapping the potential offered by the textile sector of Pakistan for Packages Ltd

The textile industry in Pakistan: Pakistan is the fourth largest cotton producer in the world. Because of its plentiful cotton supply, the textile industry is central to the Pakistani economy and is both a source of employment and a source of exports. Pakistan's industrialization began in the 1950s with the textile industry at its center. Today, textiles account for 38 percent of total manufacturing and 8 percent of GDP. The textile industry employs almost 40 percent of the industrial workforce. Despite the critical role textiles play in the economy, most textile manufacturers are cottage or small-scale industries. Pakistan relies on outside engineering and manufacturing expertise and must purchase most of its equipment abroad.

Established Capacity: The industry can be subdivided into: • Ginning • Spinning • Weaving • Knitting • Dyeing • Synthetic • Apparel & manufacturing etc

The textile industry of Pakistan has a total established spinning capacity of 1550 million kgs of yarn, weaving capacity of 4368 million square metres of fabric and finishing capacity of 4000 million square metres. The industry has a production capacity of 670 million units of garments, 400 million units of knitwear and 53 million kgs of towels.

The industry has a total of 1221 units engaged in ginning and 442 units engaged in spinning. There are around 124 large units that undertake weaving and 425 small units. There are around 20600 power looms in operation in the industry. The industry also houses around 10 large finishing units and 625 small units.

Pakistan's textile industry has about 50 large and 2500 small garment manufacturing units. Moreover, it also houses around 600 knitwear-producing units and 400 towel-producing units.

Opportunities

The textile sector offers a large market for the corrugated product or corruwalls/shipping cartons. The services provided by Packages Ltd to the textile sector are in terms of corrugated cartons mainly.

Volume:

As the textile sector is playing the role of the backbone in the economy of Pakistan, it also offers handsome volumes in terms of shipping cases to the packaging companies. Since, the textile industry of Pakistan is a much diversified one; there are variable requirements for corruwalls according to the product i.e. number of cones, spindles or garments in a box. The volumes required by textile mills and factories generally range from 1000-25000 boxes a month according to the scale and the production capacity of the factory. Hence, the sector offers profitability to the company if tactfully handled.

Quality constraints:

In this age of specialization and standardization, there has always been a need for quality and this applies to the packaging industry also. Textile manufacturers are therefore very concerned about the quality of their packaging material especially the ones involved in export. Packages Ltd is having state of the art ‘tools’ deployed for the purpose. The paper mills and the corrugators at BSPM and Karachi are the most advance of their kind. Packages Ltd therefore, has been able to provide the best available quality in the country when it comes to the corrugated packaging products. The printing requirements of the clients are also very well catered for.

Packages Ltd manufactures single (3-ply) and doubled walled (5-ply) corruwalls for the industry. These products are offered in different strengths of layers i.e. 110, 111, 151, 165 and 200 GSM (Grams per Square Meter) according to the need of the customer. Furthermore, different varieties of liner i.e. WTL (White Test Liner), T2 liner, hard sized liner and craft liner are also available. To assure the quality of its product, Packages Ltd ensures that corruwalls undergo certain quality tests like ‘edge crush test’, ‘bursting’, ‘cobb’, ‘flat crush test’, BCT (Box Compression Test) etc.

Brand Equity:

Packages Ltd is the market leader in providing customized packaging solutions to its customers for almost 50 years. Therefore, the brand of Packages Ltd is quite established in the market and needs no introduction. Greater brand equity definitely provides a benefit to the company and adds up to its profitability.

Service:

Service quality is something which is deemed the most crucial in these days. Packages Ltd has an edge of always been compliant in servicing its customers. The standards set out by the policies are strictly followed regarding each and every aspect. Commitment with the client is considered on top of the priority and for this, production planning and dispatch work closely with the sales department. In this way timely delivery to the customer is ensured.

To facilitate its clients, Packages Ltd also provides different options regarding freight charges i.e. either the freight is incorporated within the cost of the box itself (Free on Travel), or the company pays the freight charges and claims at the time of payment, or the client company itself pays the freight.

‘Bottlenecks’

Price:

As Packages Ltd has deployed the most modern production equipment and efficient business practices, it definitely incurs cost more than its competitors in the market. Due to this reason the price offered is sometimes higher especially for lower volumes of the product. Companies which are more concerned about price than quality, especially small units, have a reason to turn away from Packages Ltd towards smaller carton providers.

Lead times:

The production capacity of Packages Ltd especially at BSPM is enormous and deploys highly systematic process throughout the production and planning processes. In a new development, samples along with the quoted price are delivered to the customer according to the requirement is provided to the customer firstly. If the customer approves the material and the price, a printed ‘mechanical’ sample is approved by the customer (if the requirement is of printed boxes). Finally, a proof of the mechanical is approved by the customer after which the job is ‘moved for bulk’. The job is prepared against a unique ISO (Internal Sales Order) for the purpose of keeping record and utilizing order specific information.

The whole process requires time and it takes a minimum of 10-12 days after the final approval till the delivery. Due to complete or partial absence of organized and systematic process, smaller market players try to capture market share on the basis of ‘urgent deliveries’ which definitely result in lesser product and service quality.

Credit terms:

Smaller market players try to capture market share by offering attractive credit terms to the customer i.e. 60 days, 90 days etc. Packages Ltd has strict policies regarding credit terms i.e. no customer (what so ever the contribution to the revenue is) would get a credit limit of more than 30 days; moreover, the payment has to be cent percent in advance for a new development.

Due to this reason, new customers sometimes feel discouraged to do business with Packages Ltd and may turn towards other suppliers.

Textile sector portfolio of Lahore Sales Packages Ltd:

• Rupali Textiles Ltd. • Al-Nasar Textiles Ltd. • Gulistan Group. • Riaz Textiles Ltd. • Quality Textiles Ltd. • Shahzad Textiles Ltd. • Saif Textiles Ltd. • Comfort Textiles Ltd. • Mayfair Textiles Ltd. • Sapphire Group. • Hira Textiles Ltd. • Styler International Ltd. • Sadar Ali Textiles Ltd. • Esgard 9. • Nishat Group. • Fazal Group. • Hussain Textiles Ltd. • Colony Textiles Ltd.

Potential customers visited:

|Company |Address |Contact person |Designation |Contact no. |
|Master Textile mills Ltd |3km off:Raiwind, Manga |Rana Muzaffar Ali |Sr. Procurement Manager |042-5394870-9, |
| |Mandi Road, Distt Kasur | | |0300-8405730 |
|Kohinoor Mills Ltd |8km Manga Raiwind Road, |Imran Mazhar |Manager Purchase |042-35391941, |
| |Distt Kasur | | |0334-4333206 |
|US Apparel and Textiles |26-M, Gulberg III, |Zaheer-Ud-Din |Manager Procurement |042-35869721, |
|Ltd |Lahore. | | |0300-8488928 |
|M.N Textiles Ltd | |Saqib Saeed |Manager Purchase |0322-4599990 |
|ShafiTexcel | |Azam Ilyas |Manager Purchase |042-5393612 |
|Ambition Apparel | |Mubashar |Manager Purchase |0300-4642258 |
|Umar Group of Companies |9th floor, City Towers, |Qamar Siddique |Manager Procurement |042-3570001 |
| |Gulberg II, Lahore | | |042-3570004 |

New Developments:

We contacted a number of companies in the textile sector by carefully analyzing the prospects like volumes, credit worthiness and market standing of the companies. The overall response of the company representatives was good and favorable. We proceeded through the sampling and costing phases for almost all of the companies visited. But two of them made it through towards development.

US Apparel & Textiles Ltd:

We visited US Apparel on 27th July and several times later and finally things went through. Our correspondent there is Mr. Zaheer-ud Din (Procurement Manager). We acquired customer samples and provided them with samples of required features along with the quotation to which he agreed upon after some negotiations. We acquired their purchase order but it is not proceeded yet since things are being discussed regarding credit terms as US Apparel is currently having a credit limit of 60 days with their current supplier.

Sampling of specimen provided by US Apparel II have also been done since Mr. Zaheer-ud-Din reffered us to his counterpart in US Apparel II, Mr. Saeed Khwaja.

Ambition Apparel:

We visited Ambition Apparel along with Mr. Fahad Ali (Sales Executive) twice. Quality issues were quite agitating for Ambition Apparel regarding their previous supplier. Development has been accomplished after proceeding with sampling and costing phases. First order of Ambition Apparel is through for production.

Master Textile mills Ltd:

Sampling and costing phases are underway and the prospects of development are quite hopeful and encouraging.

Umar Group of Companies:

Bright potential is there due to large possible order quantities as Umar Group consists of four textile mills i.e. Bhanero Textile Mills, Blessed Textile Mills, Faisal Spinning Mills Ltd and Blessed Textiles Ltd (weaving unit). Samples are ready to be presented along with the quotation.

FINDINGS AND ANALYSIS:

• Packages Limited, Lahore is a good organization in terms of discipline, cleanliness and infrastructure. • It has a well-established structure. • Delegation of authority is not a common practice. Centralized decision making is there. • Line of authority is followed throughout the organization. • There are various employees benefit programs such as Worker’s Participation Fund, Social Security, Employee’s Old Age Benefits Schemes, Group Insurance, Provident Fund, Worker’s Children Education and Federal Education Fee Scheme. • There is low accident rate because safety of environment is maintained at every step of production. • Various entertainment facilities are provided to the employees such as Basant, Rose Festival, Library facility, gymnasium arrangement etc. • A well-managed mess is there in the company’s premises providing clean, and hygienic food to all the employees and internees as well. • Continuos improvements of employees skills and knowledge through Management Training programs conducted in association with LUMS and through In House training. • Packages have highly motivated employees. • It has well-developed system of distribution. • It is an environmentally conscious company • Packages has strong financial backing • It is market leader in Packaging industry • It has strong relationship with suppliers • It has huge production capacity • It is having its own power generation plant • Advanced technology is a big strength of the company • Fully integrated operations • Opening up of the Asian economies is a big opportunity for Packages Limited

Packages Limited is an ISO certified company.

CONCLUSION

Packages Limited is a leading packaging manufacturing company of Pakistan. One has to put in a lot of efforts to understand the complete working of this great organization as an internee. One needs a lot more time to study such a multidimensional organization.
The fascinating experience of internship provided the internee the opportunity to learn about the functions of Packages Limited. The most informative part of the training was the application of theory. It gave a sense of satisfaction and achievement to learn about the policies and practices of the firm, and especially to observe the theoretical concepts being implemented practically.

Packages is engaged in different activities that is, manufacturing of paper & board, converting it into packaging, printing, consumer products, marketing, distribution, financial activities, personnel management etc. It was very difficult to manipulate all sort of information, but the cooperation of the employees of the organizaion made possible the preparation of this report.

Packages Limited is working in a highly professional manner, adhering to fair trade policies and following rules of the game. It also has one of the largest Paper & Board Mill of Pakistan. The daily operations and working of the organization is running very smoothly. The management is practicing good policies which is evident from the fact that shareholders as well as the workers are very much satisfied with the performance of company.

RECOMMENDATIONS

DURING INTERNSHIP IN PACKAGES LIMITED, I CONCLUDE THAT IT IS AN EXCELLENT ORGANIZATION. BOTH THE PACKAGING AND CONSUMER PRODUCTS ARE THE MARKET LEADERS. APART FROM ITS EXCELLENT OPERATIONS, IT DOES NOT TEND TO BE STATIONARY AT ONE POINT. ALTHOUGH IT IS QUITE DIFFICULT TO SUGGEST SOMETHING TO SUCH AN ESTABLISHED ORGANIZATION YET IN THE FOLLOWING LINES, I MAKE A HUMBLE EFFORT TO GIVE SOME RECOMMENDATIONS TO THIS WELL PERFORMING ORGANIZATION.

✓ The Paper & Board Industry is presenting many new opportunities in the future, in domestic and foreign markets. There is a need to exploit these opportunities before the competitors use them up. The production capacity of this industry should increase.

✓ They should realize its constant market share, which is not exceeding from 25-30%, in the packaging division. So measures should be taken in order to expand the target market and increase market share.

✓ The Industrial Marketing Department should tap the pharmaceutical sector, because there are many more potential customers for Packages Limited in the above-mentioned sector.

✓ They can enhance the image of their company by entering into the field of public relations. If they let the public know their plans and operations, say, in electronic media, it is hopeful that the people will consider the organization with a sense of still greater esteem and this can add to the growth of their consumer products.

✓ In Packages Limited, some departments are decentralized but still there is a need of more decentralization in some departments.

✓ Although the management has given many attractive incentives to its employees, but there is a need of workers' colony in Packages Limited.

✓ The Packages Limited follows an unsound advertising strategy. The advertising budget should be increased, and it would be better if an advertising department is opened, instead of paying big amounts to the advertising agency.

✓ Consumer Product Department is producing disposable cups and plates, but they are not promoting these products. They should educate consumers about these products with an effective promotional program.

✓ As the training procedures are also very important to have qualified people on their jobs, special emphasis should be laid on to the management development part of the training programs.

✓ Packages Limited does not offer the credit base sales which effect the sales and as well as losing the more other opportunities.

✓ There is lack of information literature about the Packages Limited. There is no informative book or material in the Packages library for new comers or internees and it is very difficult for internees to get accurate and complete information. ✓ In Packages Limited, some departments are decentralized but still there is a need of more decentralization in some departments. ✓ There is lack of motivation in to Industrial marketing Department. The Sales Officers are not as motivated as it should be. In fact, they have little interest in getting new customers. For this, I think some sort of benefits should be given to the Sales officers. ✓ I found during my internship program that there is no person in Packages Limited to give the orientation to the new employees and internees. ✓ As the training procedures are also very important to have qualitative people on their job, special emphasis should be laid on to the management development part of the training programs.

✓ They can excel in the market locally and globally by acting on the rule that the customer is the king and they have to serve him / her in the best of their abilities. ✓ The other important thing that will help them in excelling is that the consistency of the policies should be implemented.-In this way every employee and worker is well aware of the policies and rules and regulation. ✓ They should use that software which is user friendly and there is no problem in learning it for the employees who are working for long period of time. The management should revise the salary package of the employee so that they can work with full dedication and concentration the working is still going but the dedication of the employees is not there. ✓ They should delicate the duties and power to the managerial staff so that they can take immediate action towards any problem or to gain any going opportunity which can be lost due to centralized working environment. ✓ They should give the recognition to the workers and the managerial staff such as: employee or worker of the month, give incentive in terms of cash, vacations and the activities of such type. This will help in motivating the workers and the employees. ✓ Recruit new and fresh graduates to the company so that through their new ideas the management of the packages can increase there working capability and capture new markets and clients.

Packages Limited is leading packaging manufacturing company of Pakistan. It was not an easy job for internees to study the complete working of this organization within six weeks. I think one need allot more time to study such a versatile type organization. It was very difficult for the internees to manipulate all sort of information about Packages Limited. This internship program was very fascinating experience for me and during my stay at Packages Limited, I learned so many things. So it was the best time for me to see the application of the theoretical frame work studied by me in practical fields.

Also I would like to appreciate the way the Packages employees gave us the ‘employee-like’ treatment and the confidence they put in us. The atmosphere is encouraging and motivating for anyone willing to work.

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Executive Board

Managing Director

Advisor

Board of Directors

HRD Manager

General Manager

Deputy GM

Production Manager

EH&S Manager

Admin Manager

Finance Manager

Cost & Tax Manager

MIS Manager

Store Manager

R&D Manager

Mechanical Manager

Commercial Manager

Mill Manager

Marketing Manager

IR Manager

Assistant
Manager
Sales

Assistant
Manager
Sales

Key Account Manager

Key Account Manager

AMM
Lahore

AMM
Islamabad

AMM
Karachi

Faisalabad Zone

Sukkar Zone

Multan Zone

Central Zone

North Zone

South Zone

Consumer
Product

Industrial
Marketing

Deputy
MM

Marketing
Manager

Deputy GM

Sales Executive

Customer

Industrial Marketing dept.

Order Confirmation

Art Department

Confirmation of ISO

Planning dept. for confirmation

Black & white mechanical

Approval

ISO Issuance

Customer’s order

Color Print

Approval

Approval

Sample Proof

Production

Information

Sales

Sales executive

Pre costing

Pre costing report

Customer

Quotation

Sales

Sales

Purchase Order

Customer

Customer

Order confirmation

Sales

Planning

ISO

Sales

Sales

ISO Confirmation

Planning

Sales & production

Job Card

Planning

Planning

ISO amendment

Sales

Customer

Customer

Sales

Dispatch

Transfer note

Dispatch note

Debit note

Credit note

Accounts

Accounts

Dispatch

Production

Consumer Products

Packaging Division

Paper & Board Mill

Flexible Line

Carton Line

Corrugated Container Line

Paper & Board mill /PBD

Provides board in two forms

Uncoated

Coated

Coating Dept

Paper store

COST + PROFIT = PRICE

Lemanic printing

Offset printing

Melting

Extruders

Polygrains

Cutting

Oxidizing

Air pressure

Poly

Reels/ liners

Flute Plant

B Flute

C Flute

Double Baker

Heating & Gluing

Cutting & Creasing

Corruwall Sheets

STITCHING

ISSUEE REQUESTION

STOCK BFIN

ISSUE REQUESTION

TRIM PLAN FOR SHEETIG

PRODUCTION ORDER

STOCK OF INKS

DESPATCH

RELEASE
BY Q.C.

SHEETING

PRINTING

INK FROM
DIC (COATES)

CONFIRMATION SLIP

INTERNAL SALE ORDER

BFIN MATERIL FROM P & B MILL

PURCHASE ORDER TO P&B MILL

PURCHASE ORDER TO DIC (COATES)

QUESTION MARK

STAR

Cartons

Flexible

CASH COW

DOG

Corrugated Cartons & Cartons

Flexible &
Corrugated Cartons

Market Growth Rate

Market Share