AGRICULTURAL SECTOR OF PAKISTAN

AGRICULTURAL SECTOR OF PAKISTAN 

 

(1) IMPORTANCE OF AGRICULTURAL SECTOR OF PAKISTAN

Agriculture sector is considered as the most important sector of Pakistan

As:

·         population depend               70%

·         labor force employed           50%

·         Share in GDP                        25%

(2)MECHANIZATION-KEY DETERMINANT FOR GROWTH OF

AGRICULTURAL SECTOR

Mechanization is considered as the key determinant for the growth of agricultural sector as growth in agricultural sector can be taken by the following two ways.

a)      By increasing total farm area

b)      By increasing per acre yield

For both ways we are dependent upon mechanization.

(3)CURRENT SITUATION OF AGRICULTURAL SECTOR OF PAKISTAN

Current situation of agricultural sector of Pakistan is as follows:

                                                                                                      Approximated

• Total Area…………………………………………………………… 75 million hectors
• Total Farm Area……………………………………………………. 30 million hectors
• Total Cultivated Area……………………………………………… 22 million hectors
• Total No of Tractors (50 HP)needed for total cultivated area....... 1,092,720
• Current no of tractors……………………………………………...  500,000
• No of tractors still needed………………………………………….. 592720
• No of tractors destroyed each year………………………………… 25,0000
• No of tractors inducted each year…………………………..……... 25000-30000
• Maximum no of tractors  can be inducted  each year……………. 60,000
• Untapped market as % of total market……………………...……. 50%

(1)   SWOT ANALYSIS

(A)STRENGTHS

     

        MTL

•         Head office and plant are at same location                 

      (so effective communication and close control)

•         Highly differentiated, strongly established and

      Accepted product

•         Strong company image (as first in market)

•         Liked by drivers ( as they feel comfortable and

      More efficient)

•         AGCO distributor for Afghanistan

                     AGTL

• Emphasize on strategic programming ( that is fit for stable tractor industry)
• Differentiated, strongly established and accepted product
• Low product cost
• Plant location at D G Khan( as reduces material costs due to centralized location and offers labor force at lowest cost due to backward area)
• Centralization (fit for stable tractor industry)
• Strongly developed informal networks
• Engine design fir for local market ( as does not heat up)
• Unique benefits allocation to employees ( that makes available the motivated workforce at low cost)
• 94% shares held by two giants; Al-Futtaim group and CNH
• Establishment of committees for succession planning, remuneration, cost cutting etc
• Outsourcing of all 85% local components (as cost decreases)
• New agreement with principal CNH for introduction of new models of tractors

(D) MTL OBJECTIVES

present

•         Not available                                      

proposed

•         To increase the market share up to 55% FY 2004-3005

•         To decrease the cost of raw material by 5% in FY 20004-2005

•         To increase no of MTL tractor dealers, spare parts dealers and workshops by 5% in FY 2004-2005

(2)   MTL strategies

present

•         Maintain marketing effectiveness

•         Improve product development efforts

proposed

•         Improve marketing effectiveness

•         Improve cost structure

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