(Updates with investor’s comment in fourth paragraph.)
Oct. 19 (Bloomberg) -- Nishat Group, owner of Pakistan’s largest lender by market value, plans to enter the consumer goods business by starting milk production this year, Chief Financial Officer Inayat Ullah Niazi said.
“We have bought land outside Lahore and after beginning milk production, we will add other products to the line,” Niazi said by telephone from Lahore today. He didn’t provide more details.
Niazi said the group, which owns MCB Bank Ltd. and Nishat Mills Ltd., the nation’s largest textiles exporter, sees growth potential in Pakistan for consumer goods, particularly food products. The government plans to spend 3.5 billion rupees ($40 million) to improve the dairy industry, including expanding infrastructure, in the fiscal year ending June 30, and boost economic growth in the period to 4.2 percent from 2.4 percent.
“Dairy is one of the fastest growing businesses in Pakistan,” said Abdul Aziz Anis, who oversees $35 million in assets including shares of MCB and Nishat Mills, as chief executive officer of Karachi-based Alfalah GHP Investment Management Ltd. “There is huge growth potential in the consumer business, but the only question is the buying power of the population with still-high inflation.”
Nishat Group joins Nestle SA in expanding in dairy in Pakistan. The Vevey, Switzerland-based company said in August that it plans to double dairy output in Pakistan by spending 300 million Swiss francs ($334 million) in the next three to four years. Companies including Unilever and Colgate-Palmolive Co. are also expanding sales of consumer goods in the South Asian nation as demand for products such as Sunsilk shampoo and Colgate toothpaste bolster local units’ revenue.
Inflation in Pakistan rose 11.56 percent in August from a year earlier, the fastest pace in the Asia-Pacific region after Vietnam, according to data compiled by Bloomberg. The State Bank of Pakistan cut the discount rate to 12 percent from 13.5 percent this month to help spur investment in the nation, which has been hit by flooding and terrorism.
--Editors: Lena Lee, Nicholas Wadhams
To contact the reporter on this story: Farhan Sharif in Karachi, Pakistan at firstname.lastname@example.org
To contact the editor responsible for this story: David Merritt at email@example.com