Rice Assignment

Name:Gulrukh Hina Submitted To: Brukflied Rice MBA-2014

Understanding of Rice Industry

Global Scenario of Rice Industry

Introduction

Rice is the most extensively distributed dietary staple worldwide. It contributes larger percentage of

global farm land that 160 million hectares of land each year, just after corn which is mostly consumed as

animal feed at about 175 million hectares, and wheat farmed on 220 million hectares. With the highest

extraction rate in comparison to other cereal (fraction of each grain utilized as food), it produces more

energy per hectares than any other cereal.

Considering rice entire food protein production hectare is secondly only to wheat. Although, superior

quality of rice yield per hectare of useable protein is higher for rice than for wheat.

Commonly, each hectare of rice farmed yields about 4.4 tons of un-milled rice. Figures can vary as it

entirely depends over local farming methods, climate, and seeds. In recent years, global un-milled rice

manufacturing has been about 700 million tons, corresponding to about 470 million tones the rice

milled.

As each year 470 million tons of milled rice produced, only 8% (38 million tons) of global production

traded each year. (Oryza)

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Name:Gulrukh Hina Submitted To: Brukflied Rice MBA-2014

Rice Trade and Production

Mostly rice produced and consumed in Asia. It is not only used in variety of ways to make food but also

an ingredient in medicines and cosmetics and has a role in crafts and religious ceremonies.

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Name:Gulrukh Hina Submitted To: Brukflied Rice MBA-2014

As per USDA 2013-2014 Crop year, the major exporters of rice are India, Vietnam, Thailand and Pakistan while one of the major importers is

China after ‘Other’.

Rice Quality Grading System

There are quality standards of Rice and it varies from rice producing nation to nation. In general, rice is inspected to measure a particular grain

sample’s grading standard, which will determine its price on the market price. Rice quality examination factors could be on the basis of rice grain

size, chalkiness, color, odor, moisture, milling yields, integrity, milling yield, environmental conditions (temperature, humidity, rainfall) and

management practices such as use of healthy seed; optimum sowing time; balanced and timely application of fertilizers; proper harvest and

post-harvest operations, use of modern milling and polishing machinery etc.

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Name:Gulrukh Hina Submitted To: Brukflied Rice MBA-2014

Rice Industry of Pakistan

Being an agro-based economy, Pakistan has natural plenty of all agricultural products that includes food

items. According to Rice Exporters Association of Pakistan (REAP), rice is the third largest crop after

wheat and cotton.

Moreover, Pakistan is the world’s fourth largest producer of rice, after China, India and Indonesia. The

country is responsible for 30% of the world’s paddy (un-milled) rice output. Most of these crops are

from Sindh and Punjab region with millions of farmers depending over rice cultivation as their major

source of employment. Rice farming in Pakistan is over 10% of the total cropped area. It is the major

cash crop and one of the major export items. It accounts for 6.7% in value added in agriculture and 1.6%

in GDP.

General Process of Rice Production

- Rice Plantation: Rice plantation takes place in unique climatic conditions. The first prerequisite

is the torrential rains that mask the land under a layer of water. After that a long period of

scorching dry climatic conditions are required. These conditions if present help grow the perfect

quality of rice which is then harvested by hand with delicate care and then aged to perfection

and finally processed.

- Rice Processing: Rice processing takes place after the rice arrives from the fields. The rice is in

shape of paddy on arrival and it is first dehusked by a rubber roll sheller to produce brown rice.

During this process the outer tough protective coating is removed. This process has no effect on

the nutritional composition of rice within the husk. After this, the brown rice is milled further by

removing the outer bran layers which are darker in color but they are rich in nutrients such as B

vitamins. This process results in production of white rice which is commonly used.

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Name:Gulrukh Hina Submitted To: Brukflied Rice MBA-2014

Milling Process

1. Pre cleaner: Cleaning the rice from any foreign materials

2. Destoner: Separating any stones from the rice, which may be picked up in the rice fields

3. Paddy Separator: To separate all Paddy from the white-hulled rice grains

4. Width Graders: To separate all different widths of the rice grains. Differing from both basmati and

non-basmati varieties.

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Name:Gulrukh Hina Submitted To: Brukflied Rice MBA-2014

5. Single / Double Polish: Rice cleaner for making it look brighter and free from dust.

6. Silky Polish: Polish of rice by using a touch of water giving the rice grains a silky/pearl look.

7. Rotary Shifter: To separate all broken grains from the milled/re-processed rices.

8. Length Graders: To differentiate/separate all different lengths of the rice grains. Especially used to

grade Basmati varieties.

9. Color Sorting: All discolored grains are separated from the white rice grains to give the rice an

excellent retail marketable look.

10. Packing: Packing is done on automatic packing machines, enabling accurate weight and automatic

seal of quality before dispatching through world renowned shipping lines.

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Name:Gulrukh Hina Submitted To: Brukflied Rice MBA-2014

Rice as a Commodity

Varieties of Rice Grown in Pakistan

There are over 4000 varieties of rice that grows each year, most famous varieties of Basmati and Non-

Basmati Rice in Pakistan are

Pakistani Basmati Rice

- Super Kernel Basmati

- PK-385 Basmati

- PK-198 or D98 Basmati

Pakistani Non-Basmati Rice

- Long Grain Rice PK-386

- Long Grain IRRI-9

- Long Grain Rice IRRI-6

Following are the popular export varieties.

Basmati

- Basmati 2000

- Basmati –385

- Basmat—198

- Super Basmati

- Basmati 370

- Kernal

- Shaheen (Basmati)

Rice Other Varieties

- IRRI-6

- IRRI-9

- PG(IRRI)

- KS 282

- DR

- Japonica

(Source: www.reap.com.pk)

1) Cargo Rice: (BROWN RICE, HUSKED RICE)

means rice obtained from paddy of which only

the husk has been removed. This includes its

whole grain, head rice, big broken, broken, and

small broken.

2) Plain or White Rice: means rice obtained from

paddy which has been husked and milled while

by removing its bran layers. This includes its

B) GRAIN CLASSIFICATION: means the

proportional mixture of rice of difference classes

to form a grade

Rice Kernal is divided into four classes namely:

1) Extra Long Grain: shall be the head rice/whole

grain having the average grain length of 6.90 mm

or more.

2) Long Grain: shall be the head rice/whole grain

having the average grain length of more than 6.0

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Name:Gulrukh Hina Submitted To: Brukflied Rice MBA-2014

whole grain, head rice, big broken, broken, and

small broken.

3) Parboiled Rice: may be husked or milled rice

processed from paddy or husked rice that has

been soaked in water and subjected to a heat

treatment so that the starch is fully gelatinized,

followed by a drying process.

mm but not more than 6.90 mm.

3) Medium Grain: shall be the head rice/whole

grain having the average grain length of more

than 5.0 mm but not more than 5.9 mm.

4) Short Grain: shall be the head rice/whole grain

having the average grain length of 5.00 mm or

less.

C) YELLOW KERNEL: means the kernel of which

25% or more of the surface area has turned

yellow in color.

D) CHALKY KERNEL: means the kernel of which

50% or more of the surface area is white like the

color of chalk.

E) GREEN RICE: means the kernel of green color in

Cargo (Brown) rice which when broken is also

green in color from inside or in the endosperm.

F) BROKEN RICE: Broken of size ¾ length of grain

and above shall count as head rice.

(Source: www.reap.com.pk)

Rice Commodity Trading in Pakistan

Rice Consumption in Pakistan (Demand)

Pakistan is not only a major exporter but also a major consumer in the world. Almost every household of

Pakistan has been using rice as sidelines or main dish. Following is the consumption per year trend

graph.

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Name:Gulrukh Hina Submitted To: Brukflied Rice MBA-2014

(Source: http://www.indexmundi.com/agriculture)

Increasing trend shows that there is still lot of potential in the market. Through proper marketing tools

we can penetrate in the market.

Sindh Commodity Prices Punjab Commodity Prices

Date Stations CommoditiesSindh

Min.

Sindh

Max.Date Stations Commodities

Punjab

Min.

Punjab

Max.

29-Apr-

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Ghotki,

Sindh

Rice Basmati 1800

(40kg.)

1900

(40kg.)

29-Apr-

14

Faisalabad,

Punjab

Rice Basmati 2100

(40kg.)

2200

(40kg.)

29-Apr-

14

Ghotki,

Sindh

Rice Irri 800

(40kg.)

900

(40kg.)

29-Apr-

14

Faisalabad,

Punjab

Rice Irri 950

(40kg.)

1000

(40kg.)

Source: http://par.com.pk/pakistan-commodity-rates/

Value Chain AnalysisA general value chain of Rice is given below. ‘Reverse Logistics’ is an important element of supply chain.

Corporate or Food Services usually purchase bulk quantities while individual consumer buys relatively

less quantity. Return claims usually happens at corporate or food service side due to large quantities.

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2005 2006 2007 2008 2009 2010 2011 2012 20130

5001000150020002500300035004000

Pakistan Milled Rice Domestic Consumption by Year (Quantity wise)

Market

Year

Domestic

Consumption

Unit of

Measure

Growth

Rate

2005 1896

(1000

MT)

-

25.65%

2006 2207

(1000

MT) 16.40%

2007 2718

(1000

MT) 23.15%

2008 3490

(1000

MT) 28.40%

2009 2916

(1000

MT)

-

16.45%

2010 2447

(1000

MT)

-

16.08%

2011 2548

(1000

MT) 4.13%

2012 2295

(1000

MT) -9.93%

2013 2600

(1000

MT) 13.29%

CustomerRetailerDistributorManufacturerFarmer

Name:Gulrukh Hina Submitted To: Brukflied Rice MBA-2014

Rice as a commodity competes over price so it is essential for Brukflied to make value chain more

efficient instead of responsive.

Cycle View of Supply Chain

There are five stages in a supply chain (Supplier Manufacturer Distributor Retailer Customer) and four

supply chain process cycles (customer order, replenishment, manufacturing, procurement cycle).

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Name:Gulrukh Hina Submitted To: Brukflied Rice MBA-2014

Proposed Management Structure

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Brukflied Rice (Pakistan) Limited

Admin / Controller Information Systems Operations Trade Mkting

(Sales) FinanceMarketing

Marketing Planning

Production order planning Rice Crops B2B Buyers B2C Clients/ Retail

North Region

Centeral Region

South Region

Marketing Services

ATL/BTL Execution

Social Media

Customer Relation

Claim /queriesHandling

Retailer and Supplier Development (Key Partners) Development

Human Resource Compliance Business Development

Corporate Affairs & LAW

CEO

Name:Gulrukh Hina Submitted To: Brukflied Rice MBA-2014

Proposed Marketing Strategies

SWOT Analysis of Rice Industry

Strengths

- As rice is a staple food for worldwide population, it creates long term demand for the products

that are associated with rice or rice as a main dish. High demand will increase the price of the

commodity over time. This is strength for the commodity as suppliers need to be quickly and

accurately compensated for demand of the product.

- There are so many rice suppliers internationally that are producing in large quantities but the

prices are high as compare to Pakistani suppliers so there is also a potential to compete it on

price as well.

- Reasonable road infrastructure and communications

- Availability of few rice research centers within Pakistan

- Easily availability of labors at Cost effective rates

- Better water supply in rice growing region of the province

- Reasonable network of banks available within Pakistan

Weakness

- Electricity failures affect efficiency and performance.

- High transportation cost up to Port Qasim to supply the product for export markets /

- Railway Stations are in active

- Outdated Research institutes need new equipments and resources.

- Lack of skilled labors / No vocational institutes imparting training for machine operation

- / boiler handling

- Low level of modernization and up gradation technology

- Unawareness about export markets trend limited interaction between growers and research

centers.

- Limited level of capacity as association of growers as well processors have not teamed of

professionals.

- Growers have low level of influence in fixing of paddy support price.

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Name:Gulrukh Hina Submitted To: Brukflied Rice MBA-2014

- Rice processors have also limited say in policy initiatives.

- Non availability of quality paddy.

- Ignorance in Trade Policy to support direct exporters.

- No testing lab available in Pakistan.

Opportunities

- Banned on Non Basmati Rice export from some world player.

- Demands are growing & Prices are stable in international market

- Huge potential for Parboiled rice as some major player are not active.

- Possible production of organic Rice

Threats

- World price volatility

- EU legislation and regulations on health, environment, safety, labeling.

- Interrupted electric supply / higher oil/ gas prices

- Law & order situation with in the cluster.

- Delay in supply of fertilizers

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Name:Gulrukh Hina Submitted To: Brukflied Rice MBA-2014

Marketing Strategy of Rice Product

Following is the marketing strategy elements that we have to follow in order to capture our target

market on national as well as international level.

Social Media

As social media is gaining popularity because of high reach and cost efficiency, it is recommended that

company should market product through this medium. Facebook pages like SWOT Guide, Instagram and

Twitter are becoming part of daily routine so through this we can generate positive word of mouth.

Brukflied rice is already established but they need to add sufficient data in order to answer common

queries of customer especially foreign buyers.

Packaging

Packaging is one the most aspects of marketing strategy as this differentiates your product from

competitor’s product. Packaging should be user friendly and attractive.

Corporate Social Responsibility (CSR)

CSR activities will facilitate in earning social capital for Brukflied Rice. Like Starbucks is educating coffee

growers for their CSR activity, we can also educate, develop and train farmers. This will help in

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Social Media

Public Relation

CSR

PACKAGING

ADVERTISING

Sales Promotion

MARKETING STRATEGY FOR RICE PRODUCT

Name:Gulrukh Hina Submitted To: Brukflied Rice MBA-2014

improving society and quality of work. It will strengthen relationship with farmers and build positive

image in corporate world as well as individual consumer.

Other Factors will be covered in following section of Marketing Mix

Target Market:

For females aged 20-45 looking for healthy standard of life for their families at affordable prices,

‘Brukflied Rice’ is internationally recognized brand that promises you high quality and healthy diet. This

is also it’s USP, that it delivers multiple benefits at a cost effective price.

This target market is SEC A and uses branded rice. This segment is mainly catered by FALAK rice and

foreign Brands. The following are its attributes:

Brand Loyalty in this segment account to 35%

Consumers do not switch to other brands due to strong positioning

Consumers are quality conscious

Health conscious people

Consumers are willing to pay a high price for a product if it is credible.

Marketing Mix:

Product:

We are considering this marketing mix for both Basmati and Non-Basmati Rice. Rice is of premium

quality as Brukflied rice is associated with international company through joint venture. Packaged

Product depicts high quality and ensures healthy diet.

Price:

As a general observation, we can say that the consumers are ready to switch if a better product comes

to market which is priced below branded rice. In this case we must compete with other premium brands

on the basis of price point. Depending on distributor, we consider margins of 4% and 8% in pricing.

Promotion:

A one month sponsorship campaign would be run on GEO TV’s morning show. This would help us in

getting awareness for the product. Two week product placement in Chef Zakir’s episode will be done to

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Name:Gulrukh Hina Submitted To: Brukflied Rice MBA-2014

reinforce the awareness plan. Advertisements would be run on both GEO TV and ARY for 10 seconds

only for a month with complete message to increase frequency watched. Radio advertisement would be

done on FM 89 and FM 91 for 30 seconds each and 15 slots on each channel. Banners and hoardings

would be done in Clifton and Defence for one month that would help in keeping the product in the

consumer eyes. Also participation in Dawn-lifestyle and Apna Karachi expo would be done to get better

consumer engagement and awareness.

Mall activation campaign would focus on Millennium mall in Gulshan and Forum in Clifton. Both of these

malls would be targeted for weekend traffic for a total of fourteen weekends. This would help the

product in getting maximum traffic for awareness. Two dedicated staff members would setup a kiosk in

these malls and tell people about the product and its benefits for health.

Store intercept activities would focus on Dolmen Mall(Clifton), Ocean Mall, Imtiaz (KPT and

Bahadurabad), Naheed (Bahadurabad) and Chase (Seaview and Bahadurabad). All of these stores would

be targeted for one month awareness campaign along with free sampling. Dedicated staff would be

present here that would setup a kiosk and make Chinese rice for taste trial. Banners and store hoardings

would also be place and consumers would be handed out informational pamphlets.

Place:

The product would be introduced in major IMT (International modern trade) stores such as Chase,

Imtiaz, Naheed, Dolmen Mall and Ocean Mall. Those branches of these stores which are in Clifton,

Defence, Gulshan-e-Iqbal and Bahadurabad will be targeted. The marketing efforts and sales

coordination required in managing distribution at retail level will be very difficult and expensive.

Marketing Budget

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Name:Gulrukh Hina Submitted To: Brukflied Rice MBA-2014

One month sponsorship campaign morning show on GEO 1600000

Commercial Production advertisement 6000000

Two weeks Chef Zakir episodes (100000 per episode) 600000

Advertisement on Geo and ARY 4500000

Radio on FM89 and FM91 150000

Banner and hoardings (Clifton and Defence) 1500000

BTL Activities

Mall Activation

Millennium Mall (2 staff each 18000 per month, rent 500 per day) 14 days 43000

Forum (2 staff each 18000 per month, Rent 900 per day) 14 days 48600

Store Intercept Activities with Sampling

Dolmen Mall (40,000 per day, 18000 for each 2 staff) 120000

Ocean Mall (15,000 per day, 18000 for each 2 staff) 500000

Imtiaz-KPT (300 per day + 18000 monthly salary of staff) 27000

Imtiaz-Bahadurabad 60000

Naheed-Bahadurabad 60000

Chase-Seaview 60000

Chase-Bahadurabad 60000

Expo Participation

Dawn Lifestyle (3 days) 300000

KCCI-Apna Karachi (3 days) 300000

Total Amount 15928600

Locations for Billboards

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Size : 60ftx20ft Location : Shafiq Mor

Name:Gulrukh Hina Submitted To: Brukflied Rice MBA-2014

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Name:Gulrukh Hina Submitted To: Brukflied Rice MBA-2014

Size : 45ftx15ft Location : Site Area

Size : 60ftx20ft Location : Sohrab Goth

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Size : 45ft x 15ft Location : KPT Flyover

Name:Gulrukh Hina Submitted To: Brukflied Rice MBA-2014

Size : 60ftx20ft Location : Shaheen Complex

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Name:Gulrukh Hina Submitted To: Brukflied Rice MBA-2014

Size : 20ftx10ft Location : Keemari R/A

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