Unity Foods Limited Assignment PDF

STUDENT NAME: XYZ
REGISTERATION NUMBER: 0000
SUBMITTED TO: Sir Khurram Ali
SUBMISSION OF: Final project

INTRODUCTION
Company overview:
Unity Foods Limited operates as an agri-business company in Pakistan. The company imports oil
seeds; extracts, refines, and markets edible oil; and processes ancillary and by-products. It offers
cooking, canola, banaspati, and palm oils under the Dastak, Ehtimam, Zauqeen, Lagan and
Parwan brands. The company also provides specialty fats, such as chocolate, confectionery, and
bakery fats for the industrial bakery, hotel, restaurant, and café applications under the Unity
brand. In addition, it offers wheat atta; and animal feed meal products, including soybean,
canola, and other oilseed meals, as well as soya pellets for poultry and livestock sector. The
company was formerly known as Taha Spinning Mills Limited and changed its name to Unity
Foods Limited in September 2017. Unity Foods Limited was incorporated in 1991 and is based
in Karachi, Pakistan.
Business segments:
1. Edible oil
2. Animal feeds
3. Specialty fats
4. Flour
Company rank:
Unity currently ranking as 2nd largest listed consumer company in term of sales. Unity is one of the top
brands in Pakistan because the company has various certifications that assure customers about the
quality of their products.
Company credit rating:
On April 2021 VIS credit rating Company limited they upgraded entity rating of UFL from A- /
A-2 to A / A-2. The long term rating of A’ signifies good credit quality whereas A-2 signifies
good certainty of timely payment.
Company performance:
The company liquidity factor and fundamentals are sound. Access to capital market is good. Risk
factors are small. Outlook on the assigned rating is stable. The company show a positive demand
prospects for edible oil in the domestic market. High competitive intensity, low barriers to entry,
and volatility in raw material prices and exchange rate continue to remain risk factor affecting
the business risk profile of the company.

 Company profitability:
During the ongoing fiscal year it shows an improvement in company profitability profile and
internal cash flow generation. Volumetric increase in sale is the primary reason for higher
profitability. Earning have grown by 81% per year over past 5 years. They generated revenue
PKR 71.92B and market capitalization by PKR 44.55B. They expect profitability of the company
to grow at 3 year CAGR of 201%.
Economic overview:
On the Macro-economic front, the country is witnessing increase in exports and inward
remittances from overseas Pakistanis. This, coupled with the fact that IMF program stands
resumed and Pakistan has raised as debt, an additional USD 2.5 billion from international
market, has provided much needed stability to Pak Rupee. In the last quarter, Pak Rupee has
appreciated by more than 4% against the US dollar. Interest rates have remained stable in the last
quarter, however, inflation remains a challenge. Government has recently made changes at the
top in the Ministry of Finance that indicate that its focus is now on growth. We, therefore, expect
the interest rates to remain stable and in the best case scenario, the rates may even come down.
Company export and import:
During Fiscal year 2020 the export sale is 1435,000,796 and current year export till March 31
2021 is 310,075,496. While on the other hand UFL is a leading import company in Pakistan.
SWOT analysis:
Strengths: Largest palm oil importer, Large capacity of oil seeds processing sectors like
extraction and refining sector, Conductive climatic condition for the production of oilseeds,
Stable demand, Well-established relationships, large distribution system, outstanding
customer service and multiple variants.
Weakness: High reliance on imports, huge capital need, Lack of required regulations by the
government of Pakistan, Highly fragmented sector, high production cost, and inadequate seed
technology.
Opportunities: Emerging market, reduced interest rate, vast distribution, reduced additional
custom duty, new product categories, changing consumer taste based on health
considerations, allowing new entrants in the market.
Threat: Covid 19, high restrictions to import, economic uncertainties, tight global supplies.

PEST analysis:
Political: industrial law, foreign trade, environmental protection laws, taxation policy,
employment and government stability.
Economical: interest rate, inflation, disposable income.
Social: life style changes, level of education.
Technological: government spending on research, new discoveries and development,
Training and extension services.
Unity market share:
Total Pakistan edible oil consumption for 2020 is 5.42mn tons. Unity is targeting market share of
4% in edible oil. Edible oil market growth is estimated 6% per annum. Unity brand Dastak
placed in popular segment has 40% market share, whereas other unity brand like Moulvi, taaza
etc. placed in discounted segment have 50% market share. Unity Foods Limited approved
in principle acquisition of 31% shares of Sunridge Food at RS. 28 per share. It
may be noted that the company also holds 69% shares of Sunridge Food.