PAKISTAN TRADE WITH INDIA

Group Members
KAINAT MEHDI MSBA-S19-001
AYESHA ABDUL QADIR MSBA-S17-008
SHANZA RASHEED MSBA-S19-008
DUA AZMAT MSBA-F18-048
SUMERA SHEZADI MSBA-S19-009
Contents
Executive Summary............................................................................................................................................... 3
Importance of SALT............................................................................................................................................... 4
Salt in Pakistan ...................................................................................................................................................... 5
Khewra salt mine .............................................................................................................................................. 5
Importance of Pakistani salt in India..................................................................................................................... 6
Why India need salt? ............................................................................................................................................ 7
National Foods Limited ......................................................................................................................................... 7
Vision statement ............................................................................................................................................... 8
CODE OF BUSINESS PRINCIPLES ........................................................................................................................ 8
OUR GLOBAL PRESENCE.................................................................................................................................... 9
Experience Flavorsome Moments with National.......................................................................................... 9
OUR BRANDS..................................................................................................................................................... 9
Complete Kitchen Solution ........................................................................................................................... 9
HEALTH & NUTRITION..................................................................................................................................... 10
Public Awareness – Consumption of Iodized Salt ....................................................................................... 10
TECHNOLOGY CONSIDERATIONS .................................................................................................................... 10
Production Process ..................................................................................................................................... 10
Trade with India .................................................................................................................................................. 11
Benefits to start export with India .................................................................................................................. 11
Transportation method to export salt from Pakistan to India........................................................................ 11
Challenges at the border............................................................................................................................. 11
Tariff and Non-tariff Barriers in India ............................................................................................................. 12
Competitors in India ....................................................................................................................................... 13
SWOT analysis ..................................................................................................................................................... 13
STRENGTHS ..................................................................................................................................................... 13
WEAKNESSES .................................................................................................................................................. 14
Opportunities .................................................................................................................................................. 14
THREATS.......................................................................................................................................................... 14
[DATE]
Current marketing strategy ................................................................................................................................
[COMPANY NAME] 14
[Company address]

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MARKETING STRATEGY ....................................................................................................................................... 15
Expected future strategy ................................................................................................................................ 15
Market potential ............................................................................................................................................. 15
Marketing Mix..................................................................................................................................................... 15
Price ................................................................................................................................................................ 15
Promotion ....................................................................................................................................................... 16
Place ................................................................................................................................................................ 16
Product............................................................................................................................................................ 16
Adaptation .................................................................................................................................................. 16
Market segmentation, targeting and positioning decisions ....................................................................... 17
Channels...................................................................................................................................................... 17
Brand positioning ................................................................................................................................................ 18
Product differentiation ................................................................................................................................... 18
Conclusion........................................................................................................................................................... 18

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Executive Summary

The executive summary provides an overview of the content contained in this

report.
Pakistani Salt is known, as the world’s finest salt and also known for their
distinctive composition. As discussed later Pakistan holds one of the largest salt
reserves in the world. Availability of cheap labor allows us to manufacture
abundant salt to fulfil local and international demand of salt.
National Foods Limited (NFL) began its journey in 1970 as a Spice company, with
revolutionary products that popularized the concept of having clean, healthy
food. These products fall into the categories of plain spices, salt, recipe masala,
Chinese salt and vinegar, pickles, ketchups, jams jellies, snacks, desserts and much
more. Its marketing tactics have been discussed in depth. The marketing mix i.e.
Product, Price, Promotion and place have been elaborated along with various
promotional techniques. SWOT analysis of the company also defines its strengths,
weakness, opportunities and threats in the market.

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In this report we will also discuss the need of salt and also its health benefit and
the ways to enter into the Indian market to target the huge market and get the
market share. In this ways we will also face tariff and non-tariff barriers. We also
see competitors in India in salt industry.

Importance of SALT
Salt is a mineral composed primarily of sodium chloride (NaCl), a chemical
compound belonging to the larger class of salts. Salt in its natural form as a
crystalline mineral is known as rock salt. Salt is essential for life in general and
saltiness is one of the basic human tastes. The scarcity and universal need for salt
have led nations to go to war over it and use it to raise tax revenues.
Salt is processed from salt mines, and by the evaporation of seawater (sea salt)
and mineral-rich spring water in shallow pools. Salt is used in many industrial
processes including the manufacture of plastics, paper pulp and many other
products. Of the annual global production of around two hundred million tons of
salt, about 6% is used for human consumption. Other uses include water
conditioning processes, deicing highways, and agricultural use. Edible salt is sold
in forms such as sea salt and table salt which usually may be iodized to prevent
iodine deficiency. As well as its use in cooking and at the table, salt is present in
many processed foods.
Sodium is an essential nutrient for human health. Excessive salt consumption may
increase the risk of cardiovascular diseases, such as hypertension, in children and
adults. Accordingly, numerous world health associations and experts in developed
countries recommend reducing consumption of popular salty foods. The world
Health Organization recommends that adults should consume less than 2,000 mg
of sodium, equivalent to 5 grams of salt per day.

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Salt in Pakistan
Khewra salt mine

The Khewra Salt Mine (or Mayo Salt Mine) is located in Khewra, north of Pind
Dadan Khan, an administrative subdivision of Jehlum District, Punjab region,
Pakistan. The mine is located in the Salt range, an outer range of the Himalaya
Mountains. Salt from khewra also known as Himalayan salt is red, pink, off-white
or transparent. Estimates of the total reserves of salt in the mines range from 82
million tons to 600 million tons. Himalayan salt is Pakistan's best known rock salt.
It is used for cooking, as bath salt, as brine and as a raw material for many
industries, including a Soda ash plant set up by Akzo Nobel in 1940. Salt from
Khewra mine is also used to make decorative items like lamps, vases, ashtrays and
statues which are exported to many of the countries.
Khewra Salt Mine is a major tourist attraction, with around 250,000 visitors a
year, earning it considerable revenue. Visitors are taken into the mine on the
Khewra Salt Mines Railway. There are numerous pools of salty water inside. The
Badshahi Masjid was built in the mining tunnels with multi-coloured salt
bricks about fifty years ago.

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Importance of Pakistani salt in India
India made all efforts to defame Pakistan but could not succeed.
Few months back India stopped the import of tomatoes to Pakistan however an
institution in Faisalabad has developed a hybrid seed, which will be able to
produce tomatoes all year.
India failed at this attempt as Indian farmers are now upset over their tomatoes
not being sold.
India imposed taxes on all the products imported from Pakistan except salt.
Salt is the main requirement in India and is more expensive there as compared to
Pakistan. Pakistani salt is an important ingredient in the food prepared in India.
Salt prices are much higher in India as it does not have any salt mine. India
depends on Pakistan to meet its salt needs.
Interestingly, India sells the same salt of Khewra mine with its own name to other
countries.
The Pakistan salt goes from India to Israel, where it is packed and sold in the
whole world. India is earning billions by selling this salt while Pakistan only earns a
few crores.
India sells this salt by branding it as "Himalayan salt".

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Why India need salt?
Globally two billion people are at risk of iodine deficiency disorders due to
insufficient iodine take. Globally India has the largest number of children born
with iodine-deficiency. Iodine deficiency disorder constitute the single largest
cause of preventable brain damage worldwide. Children living in iodine-deficiency
areas on an average have lower intelligence quotient (IQ).

National Foods Limited

National Foods Limited is a Pakistani food products company founded in 1970,
which started out as a spice company and now is a major food products company
in Pakistan.
In 1988, National Foods became the certified vendor of McCormick, United
States. In the same year, National Foods, then a Private Limited company was
converted into a Public Limited company, traded on all the three stock exchanges
of Pakistan. On 11 January 2016, all three former city stock exchanges in Pakistan
merged to form Pakistan Stock Exchange.
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With a range of over 250 food products in over 10 major categories, National
Foods is one of the prominent food companies in Pakistan.
The company was incorporated in Pakistan on 19 February 1970 as a private
limited company under the Companies Act, 1913 and subsequently converted
into a public limited company under the Companies Ordinance, 1984 by a special
resolution passed in the extraordinary general meeting held on March 30, 1988.
The company is principally engaged in the manufacture and sale of convenience-
based food products. It is listed on Karachi, Lahore and Islamabad Stock
Exchanges. The registered office of the company is situated at Karachi

Vision statement
“To be a Rs.50 billion company in the convenience food segment by launching
products and services in the domestic and international markets that enhance
lifestyle and create value for our customers through management excellence at
all levels.”

CODE OF BUSINESS PRINCIPLES

“NFL believes in conducting its operations with strong ethical and moral
standards. NFLs statement of code of conduct & business practices aims to
provide guidance on carrying out its business related decisions and activities. We
wish to achieve excellence in all spheres of our operations for which code of
conduct form the basis. Any party entering any form of contract with NFL is bound
to comply with the given guidelines.”

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OUR GLOBAL PRESENCE
Experience Flavorsome Moments with National

Winning the hearts of millions of consumers worldwide, National Foods strives to

deliver excellence in food taste and quality. The company has successfully
expanded its global footprint across 40 countries in 5 continents. National Foods
continues to spread happiness by offering authentic flavors, thereby re-uniting
individuals with their longstanding Pakistani heritage.

OUR BRANDS
Complete Kitchen Solution

In a history that now spans over four decades, National Foods success is
attributed to its ability to respond to changing needs of the consumers, the
technological advancements and its innovative product development. With its

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wide array of brands, National Food’s focus on innovation has altered the kitchen
habits of millions of consumers who now have the advantage of preparing healthy
and delicious food with a lot of convenience.

HEALTH & NUTRITION

Public Awareness – Consumption of Iodized Salt
Iron Deficiency Anemia (IDA) is a major nutritional problem in Pakistan, affecting
up to 2 billion people worldwide. The disorders arising from the deficiency of
Iodine in the body range from cretinism, goiter to mild mental and physical

retardation.
NFL launched Iodized Salt as a company initiative in line with its Corporate
Philosophy of nutritious and healthy foods. NFL is not only a brand leader in this
category but as a socially responsible company, it has successfully created 61.6%
public awareness regarding the benefits of consuming and maintaining adequate
Iodine levels for a healthy body and mind.

TECHNOLOGY CONSIDERATIONS
Production Process
Blocks of salt are cut into small pieces by cutters. Machines are used to shape and
size salt pieces into lamps and candle stands etc. Finishing operations are carried
out on a grinder and drill machine. Natural profile products (natural shape) are
made on grinders and hand drills.

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Trade with India
Starting trade with India gives aggregate benefits for both India and Pakistan.
Relatively given larger economic size, it would have positive impact on Pakistan’s
economic growth

Benefits to start export with India

1. In regards of Pakistan if we will start trade with India, it will provide an
opportunity to target and get sales benefit from big Indian market. It will
increase revenue for the country.
2. Trade relations lessen the problems of tariffs. It restrict both the trading
countries to take unfair advantage.
3. Trade expansion also enhance the benefits from economies of scale. It also
advance and improve the quality of research and development in country.
4. Starting trade with India would allow specialization in production and
exports this will enhance competitiveness.
5. Trade is itself most important and beneficial for both the countries in
regard of political and economic relations.
6. Luckily, Pakistan has abundantly natural resources and for manufacturing
firm’s raw material is available at low cost. If we make better policies so we
can produce goods in our country at competitive rates, it will also give us a
competitive advantage.

Transportation method to export salt from Pakistan to India

We use operational land route across the Attari Wagah border in Punjab for
transportation of our goods from Pakistan to India. Because of sharing same
border we can transport our product at low transport cost. But there is only one
issue that is long delays in clearing customs.

Challenges at the border

There are certain procedural issues in India to restrict trade or market entry.
The challenges at Border includes:

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• Shipping documents, Custom valuation, sampling and inspection
requirements; Customs clearance charges, fees, and payment (mechanisms)
facilities;
• Complying with SPS, TBT and regulatory requirements (like labelling,
packaging, storage and handling)
• Customs clearing and facilitation agents (who can help to comprehend the
Custom Regulations, duties and procedures and facilitate the clearing of
shipments well in time)
• Banking and insurance facilities
• Cargo storage, handling and movement of cargo for inland transportation
• Bill or Instruments for Payment for exports (letter of credit, Bill of lading)
As we are talking about documents required for exporter to trade with India are:
1. Bill of Entry
2. Import License
3. Bill of Lading / Airway bill
4. Insurance certificate
5. Purchase order/Letter of Credit
6. Industrial License if any
7. Central excise document if any
8. Any other specific documents other than the above mentioned
All the documents must be documented in detail to overcome the delays and
speedy delivery.

Tariff and Non-tariff Barriers in India

In India, a number of tariff and non-tariff barriers are in place. India apply tariff
rate quotas on different products. Efficiency of custom operation can act as a
barrier to trade. As delays in clearance of goods effectively create an extra cost
for products lack of coordination between the railway authorities of both
countries and on border continue to hamper land transportation. Barriers in

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political and security clearance, standard certification, packaging, labeling, and
custom inspection are also in place.

Competitors in India

 Iodized salt producers

 Tata salt
 Captain cook
 i-shakthi
 aashirvadh
 Annapurna
 Surya salt
 Sambhar salt

SWOT analysis
STRENGTHS
• Salt is an essential commodity
• Salt constitutes a cheap product available to a wide market
• Salt is a time-resistant product
• Manufacturing competence
• Brand name reputation
• Appropriate organizational structure
• Broad market coverage

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WEAKNESSES
• Currently NFL is operating with its full capabilities and the company’s
sales manager does not think that there is any internal weakness in the
organization.
• Competitors offering cheaper products

Opportunities
• Expanding into foreign market
• Expansion of core business

THREATS
• Cheaper substitutes in the market
• fixed quota system
• Barriers on entry

Current marketing strategy

National Foods has been a leading spice manufacturing company since 1970 and
has witnessed unprecedented growth since then. The company brought a
revolution in the spice category as prior to the launch of National Food’s in the
70s, spices which were available in the market, unbranded and unknown
companies sold them without proper packing. National Foods has changed the
production, packaging, and the branding business of spices in Pakistan.
During the first quarter of 2013, National Foods performed exceptionally well.
Moreover, its high quality standards in the convenience food segment resulted in
the expansion of its customer base. National Food’s product categories have given
a beyond par performance during the quarter includes pickles, desserts, recipe
mix, and sauces. In addition, the companies marketing efforts increased its sales
by 17 percent whereas their brand strategy helped the company to emphasize its
brand image and awareness in local and international markets.
Furthermore, National Foods is continuously monitoring its advertising,
marketing, and promotional activities. In-store displays, television commercials,

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outdoor activities and the “Hamaray Khanay, Hamaray Tehwar” campaign to
create a bond between the company and its customers.
In addition, National Foods’ traveling cooking show, “National Ka Pakistan” helped
the company gain access to untapped markets in Pakistan and the televise show’s
unique feature of highlighting Pakistani cuisine did support the company’s brand
building process.

MARKETING STRATEGY
We will go through the market development strategy. Market development is a
growth strategy that identifies and develops new market segments for current
products. A market development strategy targets non-buying customers in
current targeted segments. It also targets new customers in new segments.

Expected future strategy

Our aim is broaden the base users like in future we will adopt market penetration
strategy.

Market potential
Only 17% of Indians having the consumption of branded salt and the rest of the
market consume non-branded salt. So there is a huge market to target.

Marketing Mix
Price
On average salt brands in India sell their brand for Rs. 25/-kg.
In terms of price, the brand is currently packaged price of was Rs. 28 for 800g in
Pakistan and if we convert this figure into Indian rupees that is Rs. 12 for iodized
salt. Price of this product will be finalized after financial projections.
Our main objective is to provide quality product in low price. Also we will focus on
capturing a large market share.
Changes in export strategies thus may increase prices.

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Promotion
Our attention being focused on iodine deficiency and iodization of salt, we
promoted our product as iodized salt which promised to benefit people in terms
of health. Salt can also been marketed as the whitest, cleanest and most evenly
sized salt in the market.
Initially we will use push strategy like distributors and retailers are advised to
introduce our product to consumers. For this purpose we will give them
incentives and good profit margins. We will also use promotions like free
“sampling” “Buy one Get one free”, to get the attention of the customers.
After that we will go towards pull strategy through social media.

Place
In India salt is demanded domestically for both home usage as well as industrial
purposes. In India about 5-5.9 million tons of salt is demanded and supply is only
4.92 million tons for human consumption.
Our product is not such kind of a product in which we directly contact with the
end users. So, we will need a middle man a proper distribution channel.
We first place our product in Delhi, Delhi has 18.98 population. Daily consumption
of salt in Delhi is 9.46g per person. We will sell our product through distribution
channels, we place our product in super store of Delhi like Green super Mart,
Super store, Mirza super market, and Super value store.

Product
With increasing awareness about iodized salt leading to health benefits to the
consumer. Indian salt market is knowing the importance of iodized salt to the
country.

Adaptation
We will start exporting our brand with slight changes in labeling, i.e. the
instructions written on packaging will be in English and Hindi and the material
used in packaging should be recyclable.

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We will also introduce small sachet for 200g packaging. Packaging available in two
sizes 800g packet and 200g sachet.

Market segmentation, targeting and positioning decisions

Although salt as a product is broadly used for various purposes. Even this market
has to be specified and further explored. Not all salt consumers with the same
needs seek the same products or services to satisfy those needs. Their purchase
decisions may be influenced by different circumstances and variables. Consumers
of salt represent a market segment consisting of people with similar values and
life styles. It is necessary for every brand to categorize and define market
segments. The next step is to decide which segments represent attractive and
viable opportunities for the salt industry.
Some of the more commonly used demographic descriptors are:

Age
Consumers of all ages consume salt in their daily diet. Some of them might have
dietary restrictions.
The actual consumers deciding for the purchase belong to the over- 16 age group

Gender
Both male and female might purchase salt, however female buyers are more
likely to be influenced by attractive packaging and new innovative products.

Income
This product however could be sold at a lower price that can be affordable for low
income consumers.

Channels
Our product will be distributed through different channels that are placed in
Delhi. There will be a distributor who receives our container and then distribute
to retailers of different stores.

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Brand positioning
Brand positioning is conceptual place you want to own in target consumer’s mind.
As Tata salt use tag line “ Desh ka Namak” for brand positioning. We will also use
changed punch line “Hamara namak, taraki ki zamanat”

Product differentiation
We will differentiate our product in a market through these ways:
 Freshness
 Purity
 Quality
 Convenience

Conclusion
Increased trade can be a significant driver of a peace between India and Pakistan.
Despite the all benefits of trade, it will not be easy to reduce political, regulatory
and logical constraints. If both countries reduce tariffs and non-tariff barriers
trading would be more beneficial for economic growth of both countries. It is
necessary for both countries leader to promote trade initiatives. Trade will
introduce competition in Pakistani industries as well as Indian industries. Official
trade will reduce smuggling and third country trade will become direct trade.
As our company has a competitive advantage and already known as international
brand, so we do not need to focus as much as sales are concerned. Our only focus
is to enter and target Indian market and take position in customer’s mind.
National foods always strive to deliver the quality product to its consumers. By
exporting the product in India national foods enter into the huge market that will
increase market share and expand its market coverage

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