A tree growing with its head in the burning sun and feet almost in water is largely native to Southern Asia, Middle East and North Africa. It is also grown in other parts of the world but in very limited numbers. Its fruit, “date” is consumed all over the world as high nutrition food. In some parts of the world, especially Middle East, it is part of the staple food chain. Major producers of dates are Egypt, Saudi Arabia, Iran, Pakistan, United Arab Emirates, Algeria, Sudan, Oman, Libya, etc. Dates are an important cash fruit crop in Pakistan cultivated over an estimated area of 85,000 hectors with an annual production fluctuating between 500,000 to 600,000 MT. Almost half of the crop comes from Baluchistan with major producing areas in the districts of Turbat, Panjgur, Kharan, Mashkhel and Gawadar. The Province of Sindh contributes approximately 40% to the crop with major production contributed out of Khairpur district. The Province of Punjab contributes approximately 10% to the national date production from its districts of Dera Ghazi Khan and Rajanpur. The province of Khyber Pakhtoonkhawa has a minor contribution of around 3% from Dera Ismail Khan area.
Although Pakistan currently stands at fourth position in dates producing countries, it can easily improve its position and production by improving farm management, pre-harvesting, harvesting and post harvesting practices. A study conducted in Khairpur district in 2008 indicated that almost 20% of the fruit is wasted due to poor management and ancient practices.
The Date Research Centre at Khairpur, all the Agriculture Extension Departments of Provincial Governments and National Agriculture Research Centre (NARC) need to work with the farmers in this regard. Proper training of farmers in farm management techniques would improve the quality as well as quantity of the crop. Even at current levels, the availability of the crop does provide for an opportunity for investment in the value added processing of dates, packaging, branding, marketing and export.
Uptil now, this opportunity has been utilized only marginally. Lipton invested in a date processing plant in Khairpur which operated for above 10 years. However, it was closed down due to management problems and low level of focus on this activity. However, this intervention did act as change agent at least in the province of Sindh. Now, there are few processing plants in Thedi and Rohri which process and package dates for marketing in Pakistan. A few further value addition efforts are also on ground, producing date based confectionary, syrups, etc. However, these are minor efforts with negligible impact. The age old practice of processing and drying dates has also continued. Pakistan produces over 100,000 MT of dried dates for local consumption and export to India. This leaves a large landscape of value added activities domestically as well as exports open for an organized sector investment. Major international buyers include India, Canada, USA, Germany, UK, Denmark, Australia, Bangladesh, Sri Lanka, Japan, China, etc with India importing approximately 80% of total Pakistani exports mainly in dried date category. These exports are in the lowest category and unit value is only a fraction of the upper category dates sold in the world market. It is only through management and processing (value addition) that a higher unit value can be achieved by Pakistani exporters. The imports by EU-27 in the year 2010 were 75,000 MT. This demand is slowly growing. The demand in East Asia is lead by China which imported approximately 50,000 MT of dates in 2010. The East Asian demand growth is expected to be more robust. Pakistan also imports dates mainly from Iran and other Middle Eastern Countries. In the year 2010 the total imports were 4,600 MT of processed high value dates to meet the demands of high end consumers. Substituting this high end demand is by itself an opportunity in the domestic market.
In the given circumstances, investment in a date fruit processing, packaging, branding and marketing business makes a compelling case. The main features of investment are as follow:
(i) Economic Size: A SMEDA study has proposed a plant with 200 Kg per hour processing capacity. Even this proposed processing capacity is considered low when compared with similar plants in the Arabian Peninsula. Therefore, a plant capacity of 500 Kg per hour is proposed.
(ii) Location: The location of the proposed processing plant would be ideal at the commercial centers within date growing areas with a view to availability of utilities and other services needed. The proposed locations are Turbat, Gawadar, Khairpur, Gambat, Multan and Rajanpur.
(iii) Plant and Machinery: The date processing is not a complicated process. Local plant and machinery can easily be fabricated. A semi-automatic plant with an automated packaging unit is recommended.
(iv) Packaging: Packaging has to be designed very carefully keeping in mind the international industry benchmarks and preferences of high end domestic as well as international consumer.
(v) Branding and Merchandizing: Uptil now, Pakistan has operated only in the low-end of market. To enter the high-end value added market, well planned branding and merchandizing efforts would be needed.
(vi) Certification: Certification of the documentary controls, good manufacturing practices, sanitary and phytosanitary practices and compliance with food laws is always considered essential for an entry in the high-end value added market. All necessary certifications would be needed in this regard.
(vii) Project Cost: Total project cost for setting up of date processing, packaging and marketing business is estimated to be Rs. 60 million at current costs.
(viii) Pay Back Period: The pay back period for the proposed project is 5 years with 30% internal rate of return.
(ix) Key Success Factors: Key success factors are availability of domestic raw materials and packaging materials at low prices, little or no competition in high-end domestic market and a strong export potential.
(x) Risk Factors: Risk factors are in the supply chain having ancient farm management and harvesting practices.