Table of Contents

Executive Summary…………..…………………………………………………………… 2

Section 1: Introduction
Background of the Study……………..………………………...…………………….. 3
Aim and Objectives of the Study…….……………………………………………….. 3
Scope and Limitations…………...…………………………….……………………... 3
Structure of the Study………..………………………..……………………………… 3

Section 2: Literature Review

Rice………..………………………………………………………………………….. 4
Characteristics of Rice………………………………………………………………... 5
Top Rice Producers in the World…………………………………………………….. 6
Top Rice Exporters in the World……………………………………………………... 7
Rice in Pakistan………………………………………………………………………. 7
Pakistan’s Exports of Rice……………………………………………………………. 10

Section 3: Value Addition

Explanation of Value Added…………………………………………………………. 13
Value Addition in Agriculture………………………………………………………... 14
Types of Value Addition……………………………………………………………... 14
Section 4: Organization and Its Competition
Rice Mills in Bahawalnagar………………………………………………………….. 16
History of Bismillah Rice Mills……………………………………………………… 17
Production and Processing of Bismillah Rice Mills………………………………….. 18
History of Rehman Rice Mills………………………………………………………... 20
Problems of Bismillah Rice Mills……………………………………………………. 20
Section 5: Conclusions……………………...……………………………………………... 23
Section 6: Recommendations…..…………………………………………………………. 24
 EXECUTIVE SUMMARY

This project aims to study Bismillah Rice Mills. This study of rice factory tells us “How
Bismillah Rice Mills can do better than its competitors in terms of Customer Satisfaction and
Sales”. There is a large number of rice mills in the district of Bahawalnagar, Bismillah Rice Mills
is one of them. The mill is set up in the Haroonabad region along with its main competitor Rehman
Rice Mills. Bismillah is not up to the level, as Rehman Rice Mills is doing in respect of customer
satisfaction and sales. According to the research, there are some factors missing in Bismillah Rice
Mills which make them lesser than Rehman Rice Mills and many other competitors in the district.
Research also explained the processes, the factory is already operating. The company recently
deciding of installing a plant for the production of Pakki Basmati Rice and also installed a plant
for Kacchi basmati, it may create value for both the customers and company. Customers can get
both varieties at the same place and save the transportation cost, so they get it in low price. As no
other company in the region is providing both varieties, so our company can avail benefits in shape
of sales and profit. Not a single company provides packaging in Bahawalnagar Region, hence it is
an opportunity for Bismillah rice mills to add value for the customers, to differentiate their product
from competitors and get benefit in the shape of more loyal customers. The study has determined
some spots where Bismillah is doing lesser than the Rehman Mill, the study has also suggested
Bismillah Mill some factors where the mill can do better and gain a competitive advantage over
Rehman Rice Mills and other competitors in terms of customers’ satisfaction and sales.

2
Section 1

INTRODUCTION

1.1 Background of the Study

Rice is one of the most widely consumed crop at the globe. It is excellent source of
carbohydrates. Pakistan is famous for & known as agricultural-based country, and also have a good
repute in Rice sector. Pakistan ranked 11th in the production and ranked 4th in the exporting scale
of rice. Pakistan has tremendous potential for value addition in rice sector. Rice is one of the most
popular product in Europe, Saudi Arabia, South Africa and many other regions of the world. Due
to these interesting facts, it is planned to study rice sector deeply and to find business potential and
better services to the society.

1.2 Aims and Objectives of the Study

The aim of this project is to examine potential in rice sector of Pakistan, working of rice
mills and potential to upgradation of local rice firms in Pakistan; especially in Bahawalnagar and
its surroundings. The research objectives of this project are;

1. To determine current scenario of rice mills

2. To determine potential in rice sector
3. To find out potential of local firms
4. To make some recommendations to promote rice sector

1.3 Scope and Limitation

To achieve sustainable policies for rice sector, this project is based on analysis of local
firms, so suggestions and recommendations can be made at micro and macro levels.

1.4 Structure of the Study

1st section addresses the background of study, aims and objectives. Chapter 2 provides
literature, chapter 3 is methodology of the project, chapter 4 is explanation of Bismillah’s history
along with its production, chapter 5 is final chapter and is conclusion of the whole project.

3
Section 2

LITERATURE REVIEW

2.1 Rice

Rice is the kind of grass i.e. Asian rice and African rice, it is used in all of the world as
primary food, especially in Asia and it is the third largest worldwide agricultural production good.
Long ago, about the time of 250 BC, rice has been a source of food for people. Rice production
was started in China, and was spread to other countries in the region, such as Sri Lanka and India.
It is believed that rice was brought to West Asia and Greece in 300 BC by the Greek armies. In
800 AD, trading people was a common thing, that’s how the rice was introduced to East Africans
by the Indians & Indonesians. It is tough to say accurately how rice was brought over to North
America. One story says that a damaged ship was forced to dock in the Carolinas. In return for
repairs, the captain of the ship gave the immigrants a bag of rice. In addition, there are thoughts
that slaves from Africa took rice from their land to North America. In 1700, 300 tons of American
rice was transported to England when the Civil War came to an end, rice was produced all over
the South.

The Americans have implemented new technology and equipment to produce rice. On
average, it takes around 7 man-hours per acre to cultivate rice. In Asia, it can take 300 man-hours
to cultivate an acre of rice. On average, an American eats around 25 pounds of rice a year. In parts
of Asia, a person can consume between 200 and 400 pounds of rice a year. Rice can be grown in
a crowd of conditions. It can be grown in desert lands as well as wetlands. The rice plant can grow
to be among two to six feet tall. It was a collective trust in the Middle Ages that rice fields were a
breeding ground for Malaria. People thought that mosquitos effortlessly laid their eggs in the water
of the rice fields.

Cultivated rice can be divided into two separate classes: Oryza Sativa and Oryza
Glaberrima. Oryza Sativa is usually used to produce rice and is commonly produced in Asia.
Today, rice is grown in four different environments: irrigation, rain fed lowland, upland, and flood-
prone.

4
 In terms of food production value, rice is the most important product in the world. To 3.3
billion people living in Asia, rice provides 35-80% of their total calorie consumption. Although
rice provides some food value, such as proteins, minerals, vitamins, and fiber, but it does not
deliver sufficient diet to be a main basis of food. Brown rice has more nutritious value than white
rice. This is because the external brown cover to the rice has proteins and minerals, the white part
of the rice is mainly carbohydrates. Rice can be kept forever if it is kept in a cool, dry area.

It has been projected that half the world's people exists exclusively or partially on rice.
Ninety percent of the world harvest is grown and spent in Asia. American consumption, even
though increasing, is still only about (11 kg) per person annually, as compared with (90–181 kg)
per person in parts of Asia. Rice is the only major crop that is primarily consumed by people
directly as reaped and only wheat is produced in similar quantity. Plant breeders at the Worldwide
Rice Investigation Organization in the Philippines have been trying to keep pace with demand
from an escalating world population, and have repeatedly developed improved varieties of
"miracle rice" that allow farmers to increase crops greatly. Studies have shown that the rice crops
are badly affected by heater nightly temperatures.

Brown rice has a better food worth than white, since the outer brown coverings contain the
proteins and minerals; the white endosperm is chiefly carbohydrate. As a food rice is low in fat
and (compared with other cereal grains) in protein. The miracle rice has grains comfortable in
protein than the old varieties. In the East, rice is eaten with foods and sauces made from
the soybean, which supply missing elements and stop in sufficiency elements (Foastate, 2012).

2.2 Characteristics of Rice

2.2.1 Rice Color

Mostly, rice is produced only in one color but rice mills can change it into different colors
with color machines, and to the time, they have many machines for this purpose.

2.2.2 Rice Length

The normal rice length is half inch. But Kainat basmati, IRRI 9 and IRRI Fine are long
length rice whereas the kinds of rice like 86 and Phool are of small length. Kainat and IRRI rice
reach up to the length of one inch after cooking.

5
2.2.3 Rice Taste
Rice has different taste in different areas, the rice which is produced in Punjab is very good
taste as compared to the rice in Sindh. While, Kacchi Basmati has very good taste as compare to
Pakki basmati.

2.3 Top Rice Producers in the World

Rice is grown in all over the world; China and India are the main producers of the rice. 143
Million Metric Tons and 99 Million Metric Tons rice is produced by China and India respectively.
Pakistan is the 11th largest producer of rice around the globe. Pakistan produces 6.22 Million
Metric Tons of rice over an area of around 5 million acres. Pakistan mainly exports rice to Saudi
Arabia, UAE, Iran, Afghanistan and Kenya. List of top 11 countries for production of rice are
ranked below;

Table No. 1

Rank Country Name Rice production (1000 Metric Ton)

1 China 143000

2 India 99000

3 Indonesia 36900

4 Bangladesh 33800

5 Vietnam 27100

6 Philippines 11000

7 Myanmar 10750

8 Brazil 7820

9 Thailand 20500

10 Japan 7500

11 Pakistan 6220

Source: United States Department of Agriculture (USDA)

6
2.4 Top Rice Exporters in the World

Thailand and Vietnam are the main exporters of the rice; Pakistan is fourth largest country
in the world for rice production. Rice exports remained the second largest foreign exchange earner
for the country after cotton. Pakistan mainly exports rice to Saudi Arabia, UAE, Iran, Afghanistan
and Kenya. Top ten main exporter’s countries data are given below.

Table No. 2

Country Years
(in thousand metric tons)

2011 2012
Thailand 10,640 6,500
Vietnam 7,000 7,000
India 4,630 8,000
Pakistan 3,200 3,750
Brazil 1,290 900
Cambodia 1,000 1,000
Uruguay 840 850
Myanmar 770 600
Argentine 730 650
China 480 600
Source: United States Department of Agriculture (USDA)

2.5 Rice in Pakistan

Rice production in Pakistan holds an extremely significant location in agriculture and the
national economy. Pakistan is the world’s 11th largest producer of rice, after China, India,
Indonesia, Bangladesh, Vietnam, Thailand, Burma, Philippines, Brazil and Japan. Each year, it
crops a normal of 6 million tons and organized with the rest of the South Asia, the country is
answerable for providing 30% of the world's paddy rice output. Most of these crops are grown in
the productive Sindh and Punjab regions with millions of farmers depend on rice farming as their
major basis of employment. Among the most popular varieties grown in Pakistan include
the Basmati known for its flavor and quality. Pakistan is a major producer of this variety.

7
 Pakistan is an agricultural country; 70% of people in Pakistan are linked with agriculture
sector, mostly people belongs to this profession are carving rice, many districts of Punjab and
Sindh are rice producers, Bahawalpur, Bahawalnagar, Gujranwala (Kamonki, Kala Shah Kako)
Sahiwal, Okara and many other districts are top producer in Punjab. District Bahawalnagar have
great market of rice; more than 115 rice mills are work there.

2.5.1 Types of Rice (Locally)

Locally in Punjab, different types of rice are grown, according to research; super kainat,
IRRI 9 and IRRI Fine are the most popular types which are produced in the Punjab. In Punjab,
mostly people like the super kainat due to which the super kainat is the most expensive item in this
side of Pakistan. The price of super kainat is nearby 100,000 rupees per ton. List of other popular
types of rice are given below,

Table No. 3

Types of Rice in Pakistan

1 IRRI Fine
2 IRRI 6
3 IRRI 9
4 Kainat
5 Pakhraj (hybrid)
6 Super
7 Super Guard
8 Super 515
9 Super 2000
10 86
11 Super Kernel
Source: Federal Bureau of Statistics, Government of Pakistan

2.5.2 Popular Types in Pakistan

Several types of rice are produce in all over the world, only in Pakistan more than 38
verities are being produced. Different types of rice cultivated in different areas, IRRI 9, IRRI Fine
and Kainat are the most producing and most consuming types in Pakistan. The other popular types
of rice in Pakistan are given below:

8
Table No. 4

Types of Rice in Pakistan

12 Basmati 198
13 Basmati 370
14 Basmati 385
15 Basmati 515
16 Basmati 2000
17 Basmati Pak or Kernel Basmati
18 D-98
19 DR 82
20 DR 83 Long Grain
21 Himsha Basmati 67
22 IRRI-6 Non-Basmati Long Grain Rice
23 IRRI-9 Non-Basmati Long Grain Rice
24 Kasha Basmati 167
25 Khushbu
26 KS 282 Non-Basmati Long Grain Rice
27 KSK 133
28 KSK 434
29 PK 386 Long Grain Rice
30 PS 2 Non-Basmati Extra Long Grain Rice
31 PSP 2001
32 SD-D34 Basmati
33 Shadab
34 Shaheen Basmati
35 Shahi Basmati 451
36 Super Basmati
37 Zaiqa HT-1215
38 Phool basmati
Source: Trade Development Authority of Pakistan

9
 Rice is being produced in many areas of Pakistan, in Punjab it is cultivated in Sialkot,
Wazirabad, Gujranwala, Sheikhupora, Gujarat, Sargodha, Faisalabad and Kasoor.

In Sindh, Jacobabad, Larkana, Badin, Thatta, Shikarpur and Dadu Districts are important
in rice cultivation. Baluchistan is also a rice production area but not up to the level of Punjab and
Sindh. The areas, production and yield of rice for the last five years are discussed below.

2.5.3 Production and Yield of Rice in Pakistan

Pakistan is 11th largest country in the world for rice production. Thousand hectors land
cultivated for rice production each year, in 2010-11 2.96 million hectors land cultivate for rice
producing, it is the largest area in 2010-2015 for rice production, production of rice, area and the
amount produce per hector of last five years are given below,

Table No. 5

Year Area (Thousand) Production (Thousand) Yield (Kgs/ Hec)

2010-11 2963 2965 2346

2011-12 2883 6883 2387
2012-13 2365 4823 2039
2013-14 2571 6160 2396
2014-15 2311 5541 2398
Source: Federal Bureau of Statistics, Government of Pakistan

2.6 Pakistan’s Exports of Rice

Pakistan is one of the leading countries in producing rice. UAE, Iran, Saudi Arabia, Kenya,
and Afghanistan are major countries to which Pakistan exports its rice in huge amount. But in last
few years, export of rice is dramatically reduced from 2.18 Billion USD (2010-11) to 1.92 Billion
USD (2013-14).

Afghanistan and UAE are the biggest importers of rice with market share of about 13%
whereas Iran and Saudi Arabia are second and third largest importers of rice with share of 7% and
6% respectively. Exports of rice from Pakistan are given in table below:

10
2.6.1 Exports of Rice from Pakistan
In exporting rice, Pakistan is fourth largest country after Thailand, Vietnam and India.
Pakistan exports basmati and other verities. In year 2010-11, 2.18 million tons of rice were export
from Pakistan. The table of export of rice in last five years from Pakistan is given below:

Table No. 6

Year Basmati Other Verities Total

2009-10 1070 913 1983

2010-11 856 1328 2184
2011-12 963 1197 2160
2012-13 826 1234 2062
2013-14 658 1261 1919
Source: Trade Development Authority of Pakistan

2.6.2 Country-wise Exports of Pakistan

The rice export from Pakistan in year 2012-13 crossed 3.40 million tons. The detail of
Pakistan’s export to other countries is discussed below:

Table No. 7

Export of Rice to Value (in thousands)

Country 2011-12 2010-11

UAE 279,629 299,080

Iran 154,011 355,219
Saudi Arabia 127,872 133,094
Kenya 122,418 74,147
Afghanistan 112,740 224,936
Oman 76,850 106,381
Philippines 83,761 5,621
Qatar 75,436 79,188
Yemen 72,692 44,924

11
 Sri Lanka 69,397 8,013
Malaysia 66,822 20,174
Somalia 62,184 41,068
Bangladesh 56,389 774
United Kingdom 55,707 43,902
Mozambique 50,497 43,383
South Africa 45,402 22,403
All Others 671,995 480,924
Total 2183,865 1983,231
Source: Trade Development Authority of Pakistan

The rice exporters from Pakistan in economic year 2012-13 crossed 3.4 million tons, valued
at 1.19 billion USD at an average price of $936 per ton for basmati rice and $461 per ton for non-
basmati rice which is an breathtaking achievement regardless of hard international competition
with India.

Rice exporters association of Pakistan (REAP) has plans to make a road map to discover
and enter new markets in a proposal to increase exports. REAP will put its efforts on long term
forecasting with short term goals to increase Basmati exports with an initial target to grow exports
from 2.5 billion USD to 3 billion USD.

12
Section 3

VALUE ADDITION

Value-Addition is the procedure of enchanting raw products or services to produce a high

quality end product. Value-Addition is also defined as the accumulation of time, place, and
enhancing the form of the product in order to meet the expectations and preferences of consumers.
In other words, we can say that value-addition is a method to find out what consumers want, when
they want it, and where they want it. After finding the answers of these question companies provide
enhanced product to their customers.

3.1 Explanation of 'Value Added

Businesses add value to goods and services by adapting them in a specific way to generate
a new creation of greater value to customers. Adding Value is a Business Strategy that represents
the difference between the value of goods and services that are used as inputs to a production
process and the value of the outputs of that process. Value added, from a marketing point of view,
means adding to the products so that company can turn goods into exclusive product. Value can
be added to exclusive products and services by enhancing their strategy, appearance or features of
the products.

Commodities are basically unprocessed raw products such as simple oil, meat bodies, fresh
fruit and cotton bolls. To add value to a commodity it needs to be processed in such a way that it
turns it into a branded product for which consumers are willing to pay more. The value people
place on goods and services determine the quantitative value (the money people are willing to pay
in exchange for the product) and the qualitative value (the desirability of the product). A company
add value to its products or services before offering the products to its customers. Value added is
used to describe the instances where a firm takes a product that may be considered a homogeneous
product with few differences (if any) from that of a competitor, and provides potential customers
with a feature or add-on that gives it a greater sense of value.

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3.2 Value-Added in Agriculture

Value-addition in agriculture requires changing a raw cultivated product into something

new through packaging, processing, cooling, drying, removing impurities or any other type of
process that differentiates the product from the original raw commodity. Examples of value added
in agricultural products include garlic braids, bagged salad mix, artisan bread, lavender soaps and
sausages. Adding value to agricultural products is a worthwhile effort because of the higher returns
that come with the investment, the opportunity to open new markets and extend the producer’s
marketing season as well as the ability to create new recognition for the farm.

3.3 Types of value addition

There are several types of value-addition that a business can use to improve their products
and services:

 Quality
 Environmental
 Cause-Related
 Cultural

The different types of value-addition are not mutually exclusive and can be used at any phase
of the production or service cycle.

3.3.1 Quality Added Value

Enhancing the quality of the products is the first and most important step in value-addition.
Enhancing the quality can mean many things and process that you can use to enhance the end
product and meat customer expectations.

3.3.2 Environmental Added Value

In environmental value-addition, the company do its best to minimize the damage

company’s process is doing to its environment. For example, using less electricity, using less fuel
and using recycled material for packaging.

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3.3.3 Cause-related Added Value

Cause-related added value is a public marketing approach where businesses donate part of
the income from a product or service to a cause. For example, a business may donate a percentage
of revenue from each transaction to a cause such as for an educational facility or a wildlife
reservation.

3.3.4 Cultural Added Value

Cultural value-addition is a societal promotion policy that allow employees to understand

other employees from different cultural groups. Bismillah Rice Mills is doing well in maintaining
a better place work for its workers and employees.

15
Section 4

ORGANIZATION & ITS COMPETITION

4.1 Rice Mills in Bahawalnagar

There are thousands of rice mills working in Pakistan, but this research focuses on the rice
mills of district Bahawalnagar. More than 100 rice mills are working in district Bahawalnagar, the
city is one of the largest rice industry in Pakistan. The name and addresses of some of the rice
factories are mentioned below.

Bahawalnagar is one of the city among the top rice industrial areas in Pakistan. Mostly
people grow rice in this area, other than rice, people also grow cotton, wheat and sugarcane, but
rice is the major production in this area. Besides Punjab, Sindh also have a big market for the
production and processing of rice. Most of the suppliers belonged to Sindh & Baluchistan after
Punjab, they purchase rice and export it to different countries. For this purpose, researchers visited
Bismillah Rice Mills for the completion of this project and asked many questions. Bismillah Rice
Mills’ management told that how they give the value to the customers. They also explained us
about the problems they face and how they deal with these challenges. This study explains about
Bismillah Rice Mills’ problems that how they are falling behind the competition and how they can
solve these problems to attain the customers’ satisfactory level and boost their sales.

Table No. 8

Name and Addresses of Rice Mills in District Bahawalnagar

1 Rehman Rice Mills (Bahawalnagar Road) Haroonabad
2 Punjab Rice Mills Bahawalnagar
3 Ittefaq Rice Factory Bahawalnagar
4 Ittihad Rice Factory Haroonabad
5 Pak Rice Factory Haroonabad
6 Bahawalnagar Rice Factory Haroonabad
7 Pioneer Rice Mills Haroonabad Road
8 Qureshi Cotton & Rice Mills Minchinabad Road
9 Shama Rice Factory Chishtian
10 Three-Star Rice Factory Minchinabad Road
(Rice Industory in Pakistan)

16
4.2 History of Bismillah Rice Mills:

Bismillah Rice Mills was established in September, 2010. In the beginning it was a small
industry, with very small piece of land and very small machinery. The mill’s owners faced a very
big problem, for the time, was capital. They borrowed money from banks and started their
business. Bank provided them the loan they asked for, but receive a lot of interest as every bank
does. At that time, it was a big drawback for them, a big part of profit they paid to bank as interest.

The two sons of Noor Muhammad; Riaz Ahmed and Nawaz Ahmed, established Bismillah
Rice Mills with some personal capital and they borrowed some money from bank too. The total
share of Riaz Ahmed was 64% and Nawaz Ahmed was 36% in Bismillah Rice Mills. Both brothers
started Bismillah rice mills and with their efforts and hard work Bismillah rice mills did well in its
early years.

The current situation of the Bismillah Mill in respect of its employees is that there are about
100 employees that are working, which includes both management and labor. The mill is using no
significant marketing strategy, because there isn’t much need for some tremendous marketing in
rice industries. Bismillah Mill supply the finished products to their distributors in the district and
many other distributors in allover Pakistan i.e. Karachi, Quetta, etc. The annual sale of Bismillah
Mill has across 100 million rupees, its annual growth was 30-35% in its starting years but ratio is
declining from the last couple of years. The annual sales return ratio of rice business is kind of low
in the recent time period. The prices are different for different kinds of rice in the market, price for
Super Kernel Basmati ranges from 3600-4000 rupees per bag (50kg).

There are always some pluses and minuses of the processes any company uses. Bismillah
Rice Mill use the waste material; the rice cover (called Phak and Tooh), the mill burns the rice
cover to run the boilers which consumes less fuel & electricity and helps the mill but more
importantly helps the environment. Another plus of the factory is that it purchases the raw material
from Punjab, while many of its competitors import raw material from Sindh. The difference is that
the quality and prices of raw material is low in Sindh, in Punjab the quality and taste of raw material
is better, size of rice is longer and rates are just about lower than the Sindh.

17
 A minus in Bismillah Rice Mill’s strategies is that the mill doesn’t use packaging. In our
opinion, if they use packaging it would help the factory enhancing its brand image and boost its
sales as a result.

4.3 Production and Processing of Bismillah Rice Mills:

The production and processing of Bismillah Rice Mill is discussed in the section below:

4.3.1 Raw Material

The mill purchases the raw material from local suppliers mostly and somewhat from the
outsiders. An important thing for every business is its raw
material, if the raw material is of great quality, the finished
product will of better quality. The raw material that provided
by local supplier have good quality with low cost as compared
to the material of outsiders.

At the very beginning of the processing, raw material

is hurl through one big tower, which processes the rice and
forward it to the next processing machine. This big tower has
many small plates; these plates help to put forward the
controlled amount of rice to the next machine.

4.3.2 Sieving Machine

The next step is the processing of raw material through a sieving machine. This machine
filters all the dust & stones off the rice and send
the filtered material rice to next machine; the
big drums.

In these drums, the filtered material is

steamed, for that purpose a big boiler is
required. This big boiler is very costly and uses a lot of space. It produces the steam and give it to
the big drums. When the rice is soft and the cover lays down off the rice, it goes to the next level.

18
4.3.3 Boiler

Boiler is the major and very costly machine of

rice mills, without this machine all the processing in
not possible. It runs with the waste material; the cover
of rice (Phak). Phak helps the process by burning fire
and operating boiler. Boiler gives the steam to the rice;
if the provided amount of steam is higher or lower than
the required amount, the material gets spoiled and the rice gets broke down. Plus, the investors
have to bear a huge loss. The process is a bit intricate, it can be and it should be done by the
professionals only.

4.3.4 Cooling Tower

After filtering the raw material through the

drums and heating it up in the boilers, now comes the
process of cooling. The boiled material goes to the
cooling tower to decrease the temperature of the rice
and save it from breaking.

The cooling tower put forward the low temperature rice to the next section; called
Chamber. Chamber is a processing machine planted along with another machine; Colum. Both
machines do the drying of the misty rice and send it to next processing machine.

When the rice is dry then it is sieved, for this purpose one sieve machine is used, this machine
sieves all the dust and stones and
send clean and clear rice to next
processing machine.

Pakistan is a developing
country; load shading is a big
problem here. Short fall of
electricity is a common problem, and industries has been facing this problem from many years. To

19
solve this problem many companies have develop their own system.
Bismillah rice mills purchased generator to overcome this problem.

When rice sieving process outside the buildings is completed, it

is sent inside for further process. Machines inside the building process
the rice and colored the rice in different colors. Different people like
different colors rice, in Punjab people like simple white color rice, but
in Sindh and other different centuries like colored rice. Main colors
people likes are yellow and red. The first machine uncovers the rice and
send to the next machine, second machine color the rice and then send
it to the next sieving machine.

The last sieving machine took out the broken rice called (Nakko)
and (Tota) and after that final product is sent to the godam.

4.4 History of Rehman Rice Mills:

Rehman Rice Mills was established in 2008. Mujeeb-ur-Rehman the owner of Rehman
Rice Mills purchased 8 acers land for the factory. Rehman Rice Mills is equipped with all the
Sieving machines, Boilers and Cooling tower. During its early years Rehman Rice Mills used these
methods to process the rice and convert it into final product. In 2013 Rehman Rice Mills purchased
Color Sorter Machine to remove the impurities from rice to provide customer with the best quality
rice. The purchasing of Color Sorter Machine boosted the sales and process of Rehman Rice Mills,
and soon it become threat to its competitors because other competitors were lacking this
technology.

4.5 Problems of Bismillah Rice Mills

The competition in rice industry is very strong in the district of Bahawalnagar. Rehman
Rice Mill is one of the biggest competitor of Bismillah Rice Mills in the same region. From the
start investment of Rehman Rice Mills was much more than the Bismillah Rice Mills. When
starting its operations, Bismillah Mills planted only one Colum Machine while Rehman Mills

20
planted three Colum Machine. One Colum machine processes 200 bags of rice at one time. So
Rehman Rice Mills can produce 600 bags at a time while Bismillah Rice Mills can produce only
200 bags. Other problem for Rehman Rice Mills is the area which is very less as compared to
Rehman Rice Mills. Apart from these the significant problems that Bismillah Rice Mills is facing
are following;

4.5.1 Color Sorter Machine

Color sorter machine is the back bone of any rice industry in these days. All the industrialist
wants to achieve competitive advantages, and the color sorter machine
is the weapon to achieve competitive advantage in rice industry. The
basic purpose of this machine is to separate damaged rice grain and also
separate impurities from rice.

In 2013, Rehman Rice Mills purchased color sorter machine to

enhance the productivity of rice, which was the huge step for Rehman
Rice Mills. At that time other rice mills weren’t using Color Sorter
Machine. Soon Bismillah Rice Mills realize the decline in its sales and
customer satisfaction because Bismillah Rice Mills were lacking most
important Color Sorter machine to remove the impurities and damaged
rice grain from rice.

Color sorter machine create value for customer in form of clean and white rice. By
installing Color Sorter Machine Rice Mills can differentiate their Mills from others.

4.4.2 Lack of Capital

While establishing Bismillah Rice Mills, Riaz Ahmed and Nawaz Ahmed invested 70% of
the total Bismillah Rice Mill’s capital and they borrowed other 30% from the bank. After investing
all of their money in Bismillah Rice Mills, Riaz Ahmed and Nawaz Ahmed faced problem in
purchasing raw material and other things in the following year. To solve the problem, they
borrowed money from bank on high interest rate and the process of borrowing money from bank
on high interest rate started. In the last year Bismillah Rice Mills borrowed 30million from the
bank which is double as compared to Rehman Rice Mill’s loan.

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4.4.3 Conflicts among Partners

In 2015 the conflicts between brothers started and Nawaz Ahmed extracted his investment
without consulting his brother Riaz Ahmed. The timing to lose Nawaz Ahmed’s investment was
bad and it affected Bismillah Rice Mills productivity. After losing Nawaz Ahmed’s share things
started to get worse for Bismillah Rice Mills and they had to shut down Bismillah Rice mills for
one season. Riaz Ahmed wasn’t able to run Bismillah Rice Mills on his own after his brother left
and extracted all his investment.

4.4.4 Packaging of rice

Packaging is not a problem but more of an opportunity for Bismillah Rice Mills to get
competitive edge over its competitors. In Bahawalnagar region Rice Mills are not focusing on rice
packing not even Rehman Rice
Mills. So it’s an opportunity for
Bismillah Rice Mills to get closer to
its customer by start packing rice in
their branded bags. This will create
customer awareness about Bismillah
Rice Mills and it’s a good way to add value with simple procedure.

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Section 5

CONCLUSION
The purpose of this study is how a rice mill can create the value for their customer to attain
the required satisfactory level and also find out the rice mills strength and weakness, opportunities
and threats in our region for completion this project. We viewed the current situations of Bismillah
Rice Mills and Rehman Rice Mill very keenly to make this study weighty. Bismillah mill consider
Rehman Mill its main competitor as the both factories are established in the same area; Mandi
Madrasa Haroonabad. Rehman Rice Mills has more capital, more land and advanced machinery
than Bismillah Mills. We focused on the opportunities which Bismillah can avail to meet the
customers’ satisfactory level and the threats which Bismillah is facing against its main competitor.
The most important problem of the Bismillah Rice Mills is the lacking of capital. The two brothers
started the business about six years ago, they invested every penny they could in the business.
Another problem of the business is the conflicts between the two brothers which ended with the
withdrawal of the younger brother. The personal conflicts effected the business so bad that the
investment problem was just got doubled. A threat to the factory from its competitor Rehman Rice
Mills is the color sorter machine. Rehman Mills planted the machine in 2013 but still after 3 years,
Bismillah hasn’t bought the color sorter machine. The machine makes a big difference between
the quality of two products, because is used for the cleaning and clearing the rice grains, and
separating the broken grains from the full length grains. An opportunity that Bismillah can avail
at the moment is that the factory can use its own tag and sell its finished goods directly to the end
users with their brand name. Against the three Colum machines of Rehman Rice Mills, Bismillah
is using just one Colum machine which produce only 200 bags of rice instead of the 600 bags of
Rehman Rice Mills. Low quality is a result of absence of color sorter machine, low production and
outdated machinery are because of the lack of capital, the shutdown of the plant for a whole season
was led by aggressive conflicts and low sales are due to not availing the opportunity of packaging.
These are the significant problems which are effecting Bismillah a lot in respect of customer
satisfaction and sales.

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Section 6

RECOMMENDATIONS

The study has concluded some factors at which the Bismillah Rice Mills is already doing
good and a lot of factors which need to be done soon, so that the factory, not just can survive but
improve its spot than its competitors. The factory is using the waste rice cover as a fuel to run the
boilers, also that it buys the most of the amount of its raw material from Punjab which is better in
quality, taste and size than the raw material of Sindh. Besides the pluses, there are a lot of minuses
which the company needs to recover. The study recommends the owners of Bismillah Rice Mills
some points, that to attain the customers’ satisfactory level, company must buy a color sorter
machine. The machine will help not just the customers’ satisfaction but also the sales, as the
machine is used to clean and clear the raw material (rice grains) and separate the broken grains
from the full length grains. The company must need to register itself to the International
Organization of Standardization (ISO) – 9001 so that the ISO certificate approve Bismillah a
qualified producer of rice. To attain the value addition of environment, the company must gain the
certificate of ISO-14001 so that its customer would know that the rice they consume are being
produced in a clean and qualified environment. The installment of more Colum machines is an
essential too so that the factory meets the customers’ demand of finished goods and to maintain its
sales. Buying new land and updating the outdated machinery are some other factors to focus.
Bismillah must purchase its raw material from just Punjab but not from Sindh and Baluchistan
because the raw material of Sindh and Baluchistan regions is of low quality, unpleasant taste and
smaller size. One of the most significant problem to Bismillah Rice Mills is the lack of capital and
the conflicts which have raised the capital problem. Bismillah must find a new partner soon so it
could restart the plant until the end of this ‘Yala’ season. Finding new partner should not be
difficult as the Bahawalnagar region is excessive with the rice industry and with the rice crops as
well along with its demand by the consumers. If the remaining owner; Riaz Ahmad, succeeded in
finding new partner, he won’t have to shut down the factory for another season and also not have

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to bear anymore loss. The opportunity that Bismillah must avail to boost its sales and attain
competitive edge over Rehman Mills is that Bismillah can establish a Kacchi Basmati plant, which
expectedly will increase the sales of Bismillah by 200%. Rehman Rice Mills is not using the brand
strategy, but both mills are selling the finished goods to the general whole-sellers and retailers. So
this is another opportunity which needs to be availed is the use of a tag, Bismillah should start their
product as a brand to make a better image in the minds of their end users and target new customers.
Presenting the product with a nice-looking packaging and a brand tag would impact the end-users
certainly, the number of customers will be much better so would the sales and profit. One last
factor that the owner(s) must fulfill is paying the mill’s taxes, it would be a permissible step of the
company towards the betterment of its principles and it, also, would improve the image in the
minds of its consumers.

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