A Comprehensive Report on the Rice Export Business

Exporters: HAROON ABDUL SATTAR. , Est. 1972 | Leading Exporter of Basmati & Coarse Rice from Pakistan

SSSUBMITTED

TO

SIR Khurram Shahzad

In fulfillment of Final Project of

INTERNATIONAL MARKETING

BY

Hameed Ullah Khan

Muhammad Umar

Pakistan Institute of Development Economics

Islamabad

Executive Summary

The purpose of this report is to analyze the export related intricacies and legal requirements for export of rice from Pakistan. Pakistan is finds it place among the largest exporters of rice and has been exporting rice since its inception. The exporter that focus on, is HASRice, Leading Exporter of Basmati & Coarse Rice from Pakistan

They have been exporting rice since 1972 and gained place among top-notch exporters in Pakistan. We collected data and subsequelty interviewed their JM over telephone so that we may be apprised of information we sought.

A brief Introduction

When you want to work with the finest coarse white rice exporters and basmati rice exporters in Pakistan, HAS Rice Pakistan answers the call. Not only will you benefit from using experienced rice exporters from Pakistan, your requirements & shipments of Pakistan rice is backed by consistent quality and regular supply round the year. That gives you the competitive edge and dominance over other rice importers & competitors in your region.

HAS Rice Pakistan places itself as a leading bulk volume supplier of all varieties of Pakistani Rice, with major distribution points at major sea-

ports world-wide. We are known as quality rice suppliers with competitive prices. To give maximum benefits to our esteemed customers, we have adopted a policy of high volume business on low profit.Relying on years of experience, HAS Rice Pakistan as your rice exporter makes importing quality rice process quite simple, guiding you through every step. Review our current prices for all varieties of Pakistan rice and contact us for a free sample today

OUR VISION“The vision of Has Rice Pakistan is to become a global rice company which seeks to take lead in providing the finest and high quality of Pakistan rice to its customers worldwide. For centuries, the quality and purity of the rice has been questionable. HAS Rice Pakistan aims to take lead in exporting high volumes of finest basmati rice and white rice from Pakistan to satisfy an increasing demand of rice consumers worldwide."

M/S Haroon Abdul Sattar (HAS) was founded by Mr. Haroon Abdul Sattar in 1969. The name of the firm was based on the goodwill and reputation Mr. Haroon had earned initially dealing as a commodity trader and speculator.Initially, HAS had a swift start with imports of commodities such as spices, cloves, cardamom, beetle nuts, cashew nuts, cassia and rubber to cater local market. Since 1980s, HAS owns major stakes in the local industry and is considered highly renowned and reputed for its quality products and commitments, HAS has now turned into one of the leading commodity trading houses of Pakistan.In early 2001, utilizing the experience spread over four decades, HAS decided to discover new horizons by expanding its operations in commodity trading and exports to major International Markets.The year 2004 saw the evolutionary inception of quality Basmati Rice exports by HAS to its consumers worldwide. During its first year, HAS accounted for trade of more than 195000 number of bagged rice. Coming years saw phenomenal multi-fold rise in this number. With increased demand, the

consumption curve for HAS products is on an upward incline with major importing countries belonging from Middle East and Europe.As time ambled away, HAS has not only matured but also grown stronger with changing group dynamics and traditional values to become a benchmark for quality products it deals in.

HAS Rice Processing Unit is situated in Karachi with state of the art technology and machinery used to process cargoes from initial stages of procurement till the final stages of packing and loading. Rice delivered by HAS is top quality, well-cleaned, textured, graded and inspected by our highly experienced Quality Assurance unit to make sure that quality is not compromised at any stage of the process.HAS believes in staunch emphasis for investment in Research & Development in regards to technology and process development that are similar to standards followed anywhere in the world.Today, HAS is proudly supported by its world wide customer base and is growing everyday by the sheer power of experience it holds. With a promise to deliver only premium quality products, we offer a host of different quality rice brands and packs ranging from 1kg to 100kg.WHY USAs market places get increasingly competitive, it is natural for companies to look at more value-added, more cost-effective product offerings. HASRice is able to leverage its following strengths to offer an unmatched value proposition to the Private Label business:

HASRice has globally-benchmarked quality assurance. HASRice has its own backward-integrated contract farming for coarse and basmati rice to ensure they meet all regulatory & food safety issues on pesticides, aflatoxins, etc.

HASRice has acquired enormous processing/quality/packaging assurance capabilities and an extremely competitive product & range over the years.

Costs of Packaging in Pakistan are much lower than in developed markets. With a reduced, more cost-effective supply chain, HASRice is able to offer even higher cost savings to private label customers.

Pakistan already has a well developed pouch & PET packaging as well as canning industry and it is easy for HASRice to locally source/develop cost-effective packaging, tailor-made to the Private Label customers' requirements.

HASRice's Commodity Risk Management capabilities enable it to insulate Private Label customers from the price fluctuation risks inherent to rice.

In Sweden & Germany (Europe), Cameroon (CEMAC Region) and South Africa, HASRice can make co-ordination points available through its own offices & distributors in these countries.

HASRice's lower cost chain enables supermarket chains to pass on a discount to end consumers and still enjoy better margins compared to what they would get from other suppliers of Private label Rice. The supermarket chains can use lower retail price to discount competition and still enjoy better margins.

HASRice, on a continuous basis, keeps updated on regulatory requirements to make sure that HASRice is meeting the regulatory requirements of importing countries.

Rice Mill

At HAS Rice Pakistan, rice processing is an art: everything complies with a high standard of quality, unique to the sector. The company has managed to combine the great respect for its rice-growing origins with the innovative spirit demanded by today’s market.

HAS Rice Processing Unit is equipped with state-of-the-art technology and high-tech machinery. The plant is based on production line equipped with Satake machinery including Color Sortex by Satake Japan, evidently making us distinctive from the rest of the units in Pakistan. Our processing unit has a milling capacity of 5 Metric tons per hour and stocking capacity of up to 10,000 Metric tons. The atmosphere in the premises is hygienic and conducive for the food products. The premise is dust and bacteria-free and hygienically treated on monthly basis. All the machines, conveyers, bins and hoppers are equipped with a generously sized aspiration system; keeping the entire building dust-free. The system is highly automated to prevent human interaction at any stage of the process. The only time rice is touched by human hands is the samples mechanically drawn every hour by the Quality Assurance Dept to verify the milling degree, quality & specification of the rice at various stages of processing.

Products of HAS Rice Pakistan

Long Grain White Rice Super Basmati Rice

Long Grain Basmati Non-basmati Fragrant Rice 100% Broken Rice

HAS RICE production process is a large state of the art high tech plant which concentrates the most modern and efficient solutions in the industry. The real breakthrough is not just technological, although HAS RICE uses the most advanced machines, but HAS RICE encompasses revolutionary approach to rice processing. Through a strict quality and efficiency control of every production phase and a totally new production lay out, HAS RICE is able to run a "zero waste" operation. The rice waste which is generated at every stage of the process is reused for maximum efficiency and total environment preservation.

CERTIFIEDQUALITYHAS RICE offers its customers carefully selected rice, obtained thanks to a precise working process, always respecting high quality, ISO 9002 certified standards.

Packaging

Logistics

HAS RICE Pakistan owns & manages warehouse spread over 20,000 yards within the premises of busiest port of Pakistan, namely Port Qasim. This strategic warehousing location enables us to ship out goods at an hour’s notice and ensures priority loading as soon as the vessel destined for shipment docks at the bay.HAS RICE ensures proper transportation, logistics through cargo vessels and containers, irrespective of seasons, throughout the year. First class shipping lines are used (SAF Marine, Maersk, APL, PIL) to ensure timely and accurate delivery of goods at destination ports.

Over the period of two decades, HAS RICE has established a strong & reliable network of acquaintances with several reliable shipping carriers operating from Pakistan due to exports of rice in very large volumes which is not very common. This enables us to offer cost effective freight solutions to our buyers by overcoming the different predicaments occurring in the growing container freight industry.Private Labeling

If you're looking for a high quality Rice exporter, then we have been for 17 years successfully exporting to countries such as US, EU, Mexico, Canada, Korea, Japan, Australia, New Zealand and the Middle East. Our clients include Fast Food companies, wholesalers, packers, distributors, restaurants, large importers, and other supermarket chains.At HASRice, we enforce strict quality control measures throughout all of our processes and packaging procedures; we look forward to providing our customers with the highest quality products that are competitively priced with the very best customer service in the industry.Pakistan accounts for 21% of the total rice traded in the world market and we have our procurement centres strategically positioned right next to the growing areas of all the major rice crop.HASRice has invested in creating global standards in processing, quality control and R&D in its operations in Pakistan. Pakistan has a well developed packaging industry also and is one of the major suppliers of PET and glass packaging materials to world market. HASRice is positioned as a truly world class, origin based processor and 'ready to retail' rice from HASRice will provide you with the strategic advantage to improve your market share.

Distributors

HAS Rice has exclusive distributors & representatives in the major world markets. The international rice market is highly competitive and increasingly demanding, these esteemed organizations form an integral part of our organization in actively establishing our products in the market and raising confidence amongst the commercial importers for a company with a neat exporter profile as is the case.Our professional distributors and representatives work on the daily monitoring of reports from different importing markets.For us, an organization that directs its greatest efforts in catering to the export market, the relationship with our prestigious customers and the buying markets is one of the key factors that we take special care of.This way, we have not only developed superior rice products with consistent quality and supply chain but also a first class commitment towards customer service, through-out the world.

Procedure for exports adopted by “Has Rice Limited”

Procedure for the Export of Rice consists on the following steps:

1. Receipt of Production order.2. Confirmation of order.3. Production4. Export Documents.

Export Form Certificate of Export (TDAP) Commercial Invoice Packing List

5. Payment conformation.6. Shipments of goods.

Receipt of Production order:

The first step in the process of Export is the receipt of order for the Export of rice from the foreigners or importers .The foreign customer’s order is called Production order which usually given by Performa invoice (Quotation). When an order is received at the same time “Has Rice” starts preparation for the Export of rice. Two ways are adopted at HAS Rice to obtain the order from the importers.

Has Rice’s own Marketing Department Personals search the importers and then according to the requirement of the people rice exports are made to meet to foreign demand.

The other way of the receipt of the order is the direct order from the importer, who searches for our firm. This is the cheapest way for the receipt of order. Because here is less requirements of the staff for checking mails.

Confirmation of order:

In this step the importer sends the Performa invoice or invoice showing the specification of the goods for export. e.g.

Product Specification i.e.

Quantity ,Quality Unit price (from export point of view) etc. Terms and Conditions relating to the Payments Mode of the Shipment

Has Rice, upon receiving the order, critically analyses the terms and specifications of the order e.g. unit price, quality, quantity etc and make further arrangements.

L/C Advising Bank preferred

Has Rice limited always prefers the Letter of credit to be advised through their own bank, this off course gives them a convenience, over a bank that the company never dealt with.

L/C negotiable in (name of exporter's city and/or country)

This requirement on the sales confirmation insures that the Has Rice will have the convenience of presenting the documents for negotiation in the exporter's own city and country, instead of in another city and worse in another country.

Confirmed by Buyer

Has Rice, requires the importer to confirm the the sales confirmation, so issued to ensure that the buyer’s Purchase Order is correct and that details of the order are what the buyer wants. The buyer will sign and return the sales confirmation sent to show acceptance

Production:

Upon receiving the Sales confirmation from the buyer that he really want to import the goods, Has Rice starts production and arrangement of rice in desired quality and quantity,

Export Documents

Generally following are the Exports Documents which are required for the Export of the goods from Pakistan.

1. Export Form2. Certificate of Export (TDAP)3. Commercial Invoice 4. Packing List

Form

Form stands for Export form. In Pakistan it is issued by the State Bank of Pakistan. It includes the following things:

Name and Addresses of the Exporter Quantity of commodity, per Unit price and total amount of exported goods

Certificate of Export (TDAP)

Certificate of Export is issued by the “Trade Development Authority of Pakistan” the purpose of this requirement is to give information to the country government about the exported goods. This document is issued against a specified fee that is calculated on the basis of exported goods amount.

Commercial Invoice:

The commercial invoice is a record or evidence of transaction between the exporter and the importer. It is similar to an ordinary sales invoice, except some entries specific to the export-import trade are added.

Certification and/or Legalization of Commercial Invoice

The letter of credit (L/C) from certain importing countries, in particular from the Middle East, requires the certification and/or legalization of the commercial invoice. The legalization, which is done by The Consulate or The Commercial Section of the Embassy of the importing country, is to verify that the invoice is correct.

The certification and legalization are most often satisfied with a stamp or a seal on the invoice and payment of a fee. The processing time may take one week

Signature and/or stamp

The commercial invoice and packing list is signed by the authorities of Has Rice.

Letter of credit

The description of the goods in the commercial invoice must correspond with the description in the letter of credit

Quantity

Quantity is specified in the letter of credit e.g. 20000 bags rice of containing 2 kg in each. A tolerance of 5% more or 5% less quantity is permitted by Has Rice provided the total amount does not exceed the amount of the L/C.

Unit Price

Has Rice has a mechanism that the unit price in the invoice cannot exceed 10% more or 10% less than the unit price indicated in the L/C. For example, if the L/C unit price is "about US$250", the unit price in the invoice can be any unit price between US$225 and US$275, provided the total amount does not exceed the amount of the L/C.

Amount

Has rice arranges to clearly mention in the L/C that the amount must not exceed the amount permitted by the L/C. with the exemption that the amount of the invoice cannot exceed 10% more or 10% less than the amount indicated in the L/C. For example, if the L/C amount is "approximately US$10,000", the amount of invoice can be any amount between US$9,000 and US$11,000.

Packing List:

The packing list is an extension of the commercial invoice. Pack list is prepared very carfully at the Has Rice limited, because the freight forwarder---reserves the shipping space based on the gross weight or the measurement shown in the packing list.

Packing mode adopted by Has Rice Mills

Each set is in an inner box and there are two boxes in an export master carton, or a total of 50 cartons for the 100 sets

Each master carton:

Net Weight (N.W.) .....   20 kgs.  (44.1 lbs.)

Gross Weight (G.W.) ..... 23 kgs.  (50.7 lbs.)

Measurement (Meas.) ..... 0.113 CBM  (4 cft.)

   61 cms. x 61 cms. x 30.5 cms.(2' x 2' x 1')

Shipments of goods

Before the shipments of the rice lots, a comprehensive marine insurance policy is obtained by the Has Rice limited to cover the unforeseen risks associated with the delivery of the goods. Proof of insurance coverage is contained in a document known as policy or insurance policy, which is attached with the original documents

Bills of Lading

Has Rice arranges with the carrier to devise a “ bill of lading” which is complete and concrete in all terms and should include the following

Name of the shipping company;

Flag of nationality;

Shipper's name;

Order and notify party;

Description of goods;

Gross/net/tare weight