Pakistan

Requirements for Starting Bread Production in Pakistan

The Pakistani economy is becoming increasingly service-oriented, and over the past several decades, the food service industries that offer the highest levels of convenience have been rewarded with strong sales growth. In the face of rising population, incomes and increasingly hectic work schedules, a nearly insatiable demand for convenience will continue to drive bread and bakery product sales. General store, milk shop and super markets have made bread accessible to masses.

The value of consumer time, as well as the demand for consistent, high-quality products, will continue to shape the bread industry. The role of convenience in this dietary shift cannot be over emphasized, and the future growth of the rest of the food service industry will be driven in large part by its ability to find new ways to save consumers’ time.

Pakistan, currently ranked as 6th in terms of total population, is characterized by a growth rate of 1.92% (Pakistan Economic Survey 2014-15) and is set to take 5th position in world in 2050 in terms of total population with already 191.71 Million people registered in 2014-15.1 With this, the per capita income has increased to US$ 1368 while the productive age group (15 to 59) years is said to take the major chunk of population (67% of total population) by 2020.

The proposed project envisages the setup of a bread manufacturing plant. Bread is a staple food that is generally prepared by the baking of dough, although steaming or frying are alternative techniques. It consists, minimally, of flour and water; salt is used in most cases, as well as a leavening agent such as yeast. There are many varieties of bread, with preferred types varying from region to region. Different kinds may contain sugar, dairy products, spices, fruit, vegetables, nuts, and seeds, some of which, however, are used primarily for decorative or flavoring purposes Determination of level of demand for bread in any particular area and degree of competition from other brands are important factors having a significant bearing on the project’s viability.

In the face of rising population, incomes and increasingly hectic work schedules, a nearly insatiable demand for convenience will continue to drive bread and bakery product sales. The value of consumer time, as well as the demand for consistent, high-quality products, will continue to shape the bread industry Therefore; a bread manufacturing unit could be established at any time of the year.

Initial Production capacity of the plant for the proposed bread manufacturing unit would be 15,000 packed breads of different sizes per day. It is estimated that Karachi alone has a daily demand of 1.5 million branded and unbranded breads. Changing life style, high growth in population, convenience product; all these factors encourage a persistent high growth and mass demand of bread consumption.

Ingredients to be used for the production of breads are available in the local market at reasonable price. Main ingredient components include: white flour, sugar, salt, yeast, ghee and preservatives. Volatility in flour prices is the biggest threat while working in food industry. This risk can be minimized by making long term supply contracts with the flour mills/suppliers which is a common practice of large scale industrial consumers of flour.

Proposed location for setting up a baking plant unit largely depends on the availability of labor and transportation of finished goods to the retailers at low cost; however, factors like availability of raw material, utilities and easy access to the target markets should also be carefully examined. For this feasibility, processing Unit can be set-up in any major city with significant population such as Karachi, Hyderabad, Lahore, Rawalpindi, Islamabad, Multan, Peshawar and Quetta.

Bread Making (Baking) Process

Bread has been baked for hundreds of years, and the same basic process is still used by the baking industry today. The main ingredients are:

  • flour
  • yeast (to make the bread rise)
  • salt (to add taste and aid proving),
  • vinegar / food enzymes
  • vegetable fat (to make the loaf lighter and airier and extend its shelf life)
  • Water

All white bread sold in Pakistan is made with white flour which has been fortified with calcium, iron and B vitamins. The flour is delivered daily to the bakeries. The bakery also needs stores of salt (to add taste and aid proving), vinegar (a preservative), yeast (to make the bread rise) and vegetable fat (to make the loaf lighter and airier and extend its shelf life).

Mixing, dividing and first proving

All the ingredients are mixed at high speed. The process takes under 5 minutes. The dough mixture is removed and divided into individual pieces by machine. It passes along a conveyor belt and is left to ‘prove’ (when the yeast fills the dough with gas, causing it to rise and aerate).

Kneading and preparation

The dough is continuously kneaded for about two minutes, as it circles through a spiral shaped machine. The kneaded dough passes along a conveyor belt until it is above the baking tins. The dough is dropped into the pre-greased tins.

Second proving

The tins pass along the conveyor belt into a warm area. Here the second proving stage takes place, lasting around 50 minutes.

Baking

The loaves pass into a huge oven on a conveyor belt. The trays move slowly through the oven for about 20 minutes. Basic bread dough are usually baked at 230°C (450°F, gas mark 8).

De-panning and cooling

The baked loaves come out of the oven into the cooling area. The bread is sucked out of the tins. The bread is left to cool for up to 1 ½ hours. Once cooled, it passes down the conveyor belt to be sliced (if needed) and bagged. ICT is an important part of the process. Large bakeries use PLC (Program Logic Controllers) to control a number of the steps during baking. For example, the press of a button can regulate the amount and type of flour to be used, the temperature of ovens and the cooling times.

Key Success Factors

Bread like other low priced consumer products largely depends on the effectiveness of distribution network and intensive marketing efforts; however, during the discussions with the industry stake holders, following factors were found to be of significant importance for the success of business.

  • Distribution Network
  • Advertising /Promotional Activities and Demand Creation
  • Product Mix and Innovation parameters
  • Product Life Cycle Management and Revitalization.
  • Existing Competition

Investment Required for Bread Production in Pakistan

The total project cost for setting up a plant is estimated at Rs. 28.57 million out of which Rs. 22.36 million is capital cost and Rs. 6.21 million is working capital. The project is proposed to be financed through 100% equity. The NPV is projected around Rs. 24.67 million, with an IRR of 42% and a Payback Period of 3.19 years. Details of these financials can be studied in the business plan of bread production in Pakistan by SMEDA.

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