Karachi: Engro Foods Limited (EFOODS) has planned to invest Rs8.7 billion in 2012 mainly for expansion of its various production units and sales channels in different portfolios, analysts said.
The expansion plan comprises of investing Rs2 billion in the powdered milk business, whereas the rest of Rs6.7 billion will be invested to acquire more livestock, expand dairy capacity and cold chain infrastructure development.
EFOODS is a growth story at our local bourse which has outperformed the market by 93% year to date.
Dairy and juices segment reported hefty earnings of Rs1.4 billion in 2011, a growth of 100%YoY with Net Profit margins improving by 1ppt to 5%. UHT sales grew mainly because of higher sales of its tea whitener (Tarang) and a new variant Dairy Omung (catering to budget conscious society of the country).
It is forecast that these two products are likely to be major contributors towards the growth of the company in the coming years.
The ice cream business (Omore) witnessed an increase of 62%YoY in its revenues to Rs2.6 billion and gained 7ppt in market share to 24% from last year. However, the segment reported a loss of Rs0.4 billion in 2011 as the segment is still in its growing stage and much is being spent on the marketing of the product so as to create the brand name.
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