Pakistan Agribusiness Investments in Dairy & Livestock

by Riaz Haq

Sep 11, 2012

US venture investor Tim Draper, Swiss food giant Nestle, and American beverage titan Coca Cola are investing heavily in Pakistan's agribusiness.

Silicon Valley private equity investor Tim Draper, a well-known international venture capitalist, is quietly investing in Pakistan's agribusiness, the largest provider of food commodities in the Middle East, according to San Francisco Examiner.

The share of livestock in Pakistan's agriculture output nearly doubled from 25.3 percent in 1996 to 49.6 percent in 2006, according to FAO. As part of the continuing livestock revolution, Nestle is investing $334 million to double its dairy output in Pakistan, according to Businessweek. Reuters is reporting that the company has already installed 3,200 industrial-size milk refrigerators
at collection points across the country to start the
kind of cold storage chain essential for a modern dairy industry, and
give farmers a steady market for their milk. In another development on the infrastructure front, Express Tribune has reported that  Pakistan Horti Fresh Processing (Pvt)
Limited has invested in the world's largest hot treatment plant to process 15 tons of mangoes per hour for exports.  Hot water treatment  will also help reduce waste of fruits and vegetables by increasing shelf-life for domestic consumption.
 



The Coca-Cola Company is planning to invest another US$280 million by 2013 in
Pakistan, according to BMI's Q3 2012 Food & Beverage Report for Pakistan.  Coke plans to channel the bulk of its
capital expenditures towards increasing the production of its existing
brands as well as expanding its overall beverages portfolio. Coca-Cola
plans to introduce more juices and mineral water in the Pakistani market
over the coming years. This strategy could diversify Coca- Cola’s
presence beyond the carbonates sector and help it secure early footholds
in the higher-value bottled water and fruit juice segments, which boast
tremendous long-term promise.



In addition to foreign investors, big name Pakistani companies like Dawood Group's Engro, billionaire industrialist Mian Mansha's Nishat Group and former minister Jahangir Khan Tareen's JK Dairies are placing big bets on food and beverage market in the country. Annual milk consumption in Pakistan reached 230 kg per capita in 2005, more than twice India's per capita consumption, according to FAO.

Business Monitor International expects "Pakistani agriculture sector to reap record harvests for key crops
such as rice, sugar and cotton owing to favorable weather in 2011 and the year-on-year increase in
crop area following floods in 2010". "We expect the dairy, poultry and
wheat industries to be the biggest beneficiaries of increased investment in the agriculture sector", adds BMI's report.

 Pakistan is world’s eighth
largest consumer of food and food is
the second biggest industry in the country, providing 16 per cent
employment in production, according to report published in Express Tribune.  In addition to rising domestic demand, growth in agribusiness is supplemented by
increased exports as Pakistan expands trade with new partners. BMI expects basmati rice to take
up a greater share of the trade as production increases. Cotton production to 2015/16: 45.5% to 12.8 million bales. Increased demand from Europe and
emerging markets will drive output. BMI also expect an increase in domestic farmers switching
from rice and sugar to cotton cultivation. Sugar production to 2015/16: 22.1% to 4.8 million tons. Large-scale consumers such as
confectioners, candy makers and soft drink manufacturers account for about 60% of the total
sugar demand and will be the main drivers of growth.

Pakistan witnessed a livestock revolution follow Green Revolution. Here's how International Livestock Research Institute puts the dramatic changes in Pakistan's agriculture sector since the mid 1960s: 

 Since the mid 1960s, investment in Green Revolution technologies – high-yielding varieties of cereals, chemical fertilizers, pesticides, irrigation and mechanization of farm operations – significantly increased cereal crop productivity and output. Success in the crop sector created a platform for diversification of farm and non-farm activities in the rural areas including the livestock sector, especially the dairy sector. Some of the Green Revolution technologies had a direct impact on the dairy sector while others had an indirect impact. Increased cereal productivity and output helped to reduce prices of cereals relative to other commodities in both rural and urban areas. This, along with increased income from high crop-sector growth, created  demand for better-quality foods including livestock products. This created market opportunities and incentives for crop producers to diversify into higher-value products, such as milk, meat, vegetables and fruits.

Pakistan has made significant progress in agriculture and livestock sectors showing that it has the potential to feed its people well and produce huge surpluses to fuel exports boom. The continuation of this progress will depend largely on success in making needed public and private investments in energy and water infrastructure and education and health care.

Related Links:

Haq's Musings

FMCG Consumption Boom in Pakistan 

Music Drives Coke Sales in Pakistan

World Bank Report on Pakistan Agribusiness

Pakistan's Sugar Crisis

FAO Livestock Sector Brief 2002 

Recurring Floods and Droughts

Poll Finds Pakistanis Happier Than Neighbors

Pakistan's Rural Economy Booming

Pakistan Car Sales Up 61%

Resilient Pakistan Defies Doomsayers

Land For Landless Women in Pakistan

Growing Water Scarcity in Pakistan

Political Patronage in Pakistan

Corrupt and Incompetent Politicians

Pakistan's Energy Crisis

Culture of Tax Evasion and Aid Dependence

Climate Change in South Asia

US Senate Report on Avoiding Water Wars in Central and South Asia
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  • Riaz Haq

    . [1]
    This major agricultural and food tech expansion operates through its dairy subsidiaries and a prominent international partnership. [1, 2]
    🤝 The Joint Venture: IRC Dairy Products
    Interloop executes its cheese production via IRC Dairy Products Ltd., a dynamic joint venture combining three specialized entities: [1, 2]
    • Interloop: The corporate backing and strategic powerhouse.
    • Rella Gıda: A prominent Turkish dairy company providing the specialized cheese-making expertise.
    • Crystal: The logistics specialists managing the cold chain and timely delivery. [1, 2]
    🥛 The Supply Chain & Production Capacity
    • The Source: The milk is directly sourced from its sister concern, Interloop Dairies Ltd., which is Pakistan’s largest corporate dairy farm. The 160-acre facility houses over 10,000 Holstein Friesian livestock and yields over 50 million liters of raw milk annually. [1, 2]
    • The Scale: The venture processes 120,000 liters of milk daily. In late 2025, Interloop announced a massive $55 million investment alongside Rella Gıda to build a new advanced plant in Faisalabad. This expansion aims to push their combined milk processing capacity to 180 million liters annually, shooting for a production target of 21,000 tons of cheese by 2028. [1, 2, 3]
    🧪 Technology & Products
    • IQF Technology: The plant utilizes Individual Quick Freezing (IQF) technology. This rapid-freezing method is crucial for mozzarella because it locks in the exact moisture, flavor, and stretching texture required by commercial food sectors. [1]
    • Product Line: While Turkish-style mozzarella blocks and shreds for pizzas are their flagship offerings, the facility also manufactures butter, whey protein concentrate (WPC80), and has expanded into innovative lines like string cheese. [1, 2, 3]
    • Major Clients: Locally and regionally, they supply massive fast-food chains including Domino's, Pizza Hut, Papa John's, and California Pizza. [1]
    🌍 Target Markets
    The overarching goal of the project is to shift Pakistan's export reliance away from traditional textiles toward high-value food sectors. Interloop is specifically targeting the $2.3 billion Gulf Cooperation Council (GCC) cheese market, aggressively exporting Turkish-style mozzarella to Saudi Arabia and the wider UAE region with a goal to capture up to 8% of the Gulf’s cheese market share. [1, 2, 3]

    Nov 1

  • Riaz Haq

    . The livestock and dairy sectors play a massive role in the national economy, contributing roughly 11.7% to 14.5% of the GDP and over 60% of agricultural value-added. [1, 2, 3]
    Key Industry Statistics
    • Production Share: Water buffaloes provide about 62% of total milk volume, while cattle provide around 34% (alongside small contributions from goats and sheep). [1]
    • Provincial Lead: Punjab leads production with roughly 63%, followed by Sindh (23%), Khyber Pakhtunkhwa (12%), and Balochistan (2%). [1]
    • Smallholder Dominance: Over 90% to 97% of milk flows through informal channels via small-scale landless farmers and traditional milkmen (doddhis). [1, 2]
    • Formal Processing: Only about 3% to 5% of the country's milk undergoes formal industrial processing (such as UHT or pasteurization). [1, 2]
    • Major Enterprises: Leading corporate players include FrieslandCampina Engro Pakistan, Nestlé Pakistan, and Haleeb Foods, alongside commercial farms like Nishat Dairy. [1]
    Structure of the Supply Chain
    • Informal Chain (Doddhis): The vast majority of consumers buy raw, loose milk delivered directly by local collectors. This network is prone to handling gaps, lack of cold-chain infrastructure, and 15–20% post-harvest losses. [1]
    • Formal Chain: Urban centers rely on packaged UHT milk, butter, cheese, and milk powder. The formal sector has faced pricing and cost pressures due to federal tax policies on packaged dairy. [1, 2, 3]
    • Exports & Imports: Pakistan exports dairy items and fat-filled milk powder (FFMP) primarily to Afghanistan, the Middle East (Saudi Arabia, UAE), and regional partners, while importing specialized whey, skimmed milk powder (SMP), and cheese. [1, 2]
    Main Challenges & Growth Areas
    • Low Yields: Average animal milk yields per day trail significantly behind developed dairy economies.
    • Seasonality & Fodder: Seasonal weather swings and fodder shortages frequently disrupt consistent milk output.
    • Modernization: The sector is gradually adopting precision breeding, total mixed ration (TMR) feeding, artificial insemination, and digital farm management software (such as HerdManager). [1, 2, 3, 4, 5]

    Nov 1

  • Riaz Haq

    Pakistan's livestock sector is a foundational pillar of its national economy, engaging over 30 to 35 million rural laborers and supporting more than 8 million rural families.

    Key Sector Overview

    • Economic Contribution: Accounts for over 60% of agricultural value-added and a major share of national GDP.
    • Animal Population: According to recent agricultural data, the country's livestock counts roughly 56 million cattle, 48 million buffaloes (including prized breeds like the Nili-Ravi and Kundi), 96 million goats, and 45 million sheep.
    • Primary Breeds: Renowned dairy and dual-purpose breeds include Sahiwal and Red Sindhi cattle, alongside the Nili-Ravi buffalo.
    • Export & Trade: Pakistan exports significant amounts of meat and live animals—particularly to Gulf countries (UAE, Saudi Arabia, Kuwait, and Qatar)—and recently introduced duty- and tax-free import schemes to expand commercial feedlots and export-oriented processing.
    • Current Initiatives: The government has launched programs like duty-free fattening and export tracks under Dawn Business News, alongside bilateral disease-control partnerships with Turkiye to tackle Foot-and-Mouth Disease (FMD).

    ———-

    Pakistan has an estimated total chicken and poultry population of 1.5 billion to over 1.57 billion birds, ranking it among the top poultry-producing countries globally (often cited around 3rd to 8th largest depending on whether total livestock inventory or commercial broiler/layer metrics are used).
    Key facts about Pakistan's poultry and chicken numbers:
    • Total Chicken Population: Roughly 1.58 billion according to recent livestock estimates.
    • Annual Production: The country produces about 2.8 million tonnes of chicken meat and 28.2 billion eggs annually.
    • Industry Scale: The poultry sector is a major pillar of Pakistan's agricultural economy, supporting over 1.5 million families.

    12 minutes ago