Pakistan: Meaty Affairs

Business Recorder

Pakistan FlagInteresting things are happening in Pakistans meat industry, and if things go well, Pakistani meat industry could establish itself as a serious player in the local and global meat market.

A BR genie says that Al-Shaheer – arguably one of the largest meat exporter from Pakistan to Middle East which also runs Meat One retail business – is mulling over to go public (IPO) with Meat One this year. Should that happen, it could start a whole new chapter for this industry.

Also, on the export front, Fauji Fertilizer Bin Qasim Limited (FFBL) last month announced establishing Fauji Meat Limited (FML) in Karachi for export-oriented meat processing facility. FML will be situated at the area of 20 acres and it will have state of the art European equipment. The entry of an established player in the industry is indeed a welcome move.

Global meat consumption has increased over the years. From 2008 to 2013, the total global expenditure on meat has risen to $1.3 trillion, according to a UN report. This consumption pattern has affected Halal meat industry as well.

According to some estimates, the global Halal meat market stood at $300 billion in 2014. Part of the demand for Halal meat comes from the 12 percent Muslims living in the Europe and Americas. However, Middle Eastern and other Muslim countries are also big importers of Halal meat due to the high quality of this packaged meat.

Halal meat should be an important industry in Muslim countries, but none finds a place in the top ten Halal meat exporting countries. For instance, in Pakistan the share of livestock stands at 11.8 percent of GDP, yet Pakistans global share in Halal meat exports is less than 3 percent according to Halal Research Council (HRC).

During the last fiscal year, Pakistans meat exports grew to $230 million. This was a significant increase over meat exports of $81 million in 2009. But it was only pittance compared to the potential, as industry observers say Pakistan only exports 1.95 percent of its total meat production.

The potential for Pakistans meat exports is excellent due to its favourable weather condition to raise livestock. The country has around 700 million of livestock out of which even if 5 percent are used for exporting meat, it can have a huge impact on the exports.

However, there are several issues that the industry faces. The biggest of these is the smuggling of livestock to Iran and Afghanistan, which according to one estimate is about $550 million per annum. Lack of training and unhygienic conditions among domestic producers does not help the cause either; most of the exporters are also slow to adopt the international standards.

Pakistani meat industry has come a long way from its early days. It has expanded and now it is showing sign of maturity. But the formalization of meat industry – and indeed the livestock industry – is still a long way to go before Pakistan stands up on its four legs and moos big-time in global livestock and meat bazaar.