KARACHI: Pakistan’s ITT Foods, known for its leading sauces and confectionery under the Dipitt brand, is exploring options to bypass trade barriers and export products to India with a manufacturing facility in Jeddah, the company’s chief executive officer (CEO) said recently.
Dipitt eyes $5 billion Indian market as part of its expansion plans, according ITT Foods CEO Syed Zeeshan Haider. The country, where 37 percent population lives in urban centers, offers $4.73 billion sauces and seasonings and $324 million condiments markets to Pakistan’s largest sauces brand.
Pakistan suspended trade with India in Aug. 2019 after New Delhi revoked special autonomy granted to Indian-administered Kashmir. In April this year, Islamabad announced suspending all trade with India, including to and from any third country, following an attack in Indian-administered Kashmir that New Delhi blamed on Islamabad. Pakistan denied involvement.
In an interview with Arab News, Haider said Dipitt, which has an office in Dubai, gets a lot of queries from India whenever it partakes in the Gulfood exhibition, and the Karachi-based food company is in advanced talks to take over a tomato manufacturing facility in Jeddah Industrial Zone 2 that was shut down in 2023 by a Saudi steel company diversifying into food production.
“So, that’s another bigger market [India] out there which I think we should work with,” Haider said. “And then since Dipitt has a base in Dubai, so that’s another thing that we are exploring from there.”
He said ITT Foods was seeking to set up production facilities outside Pakistan to cut logistics costs and serve the markets faster. Through the facility, it could also navigate trade barriers to India.
“For Pakistan, there is another angle that we are unable to export to India,” he said. “So, that also can be covered from that [Gulf region] market.”
Asked if he would rename his brand, Dipitt, if required for entering the Indian market, Haider said “it will depend on our strategy, various factors, and the regulatory environment at that time.”
‘RIGHT FOOTING, NOT HASTE’
ITT Foods is Pakistan’s largest exporter of sauces and seasonings, which it supplies to 32 countries in five continents across the globe. Exports currently make up about 40 percent of its sales. The company also seeks to expand its business into newer markets such as the US, Germany, France, Russia and Mexico.
Haider said partnering with big-name retailers such as Walmart, Albertsons and others in the US and European regions is the “next milestone” that ITT Foods would set out to achieve this year.
“We want to make sure that when we enter, we enter at the right footing, not in haste,” he said. “It will be very soon that you will find us there.”
Currently, about 20 percent of ITT Foods’ exports go to the North American and European markets.
Haider said these markets were home to a large consumer base where the consumption of sauces is “far more over there as compared to this part of the world.”
ITT Foods plans to expand its business network to 50 countries in the next three years, after which it may look to get listed on the Pakistan Stock Exchange (PSXX), Haider said.
“I think 2030 would be the right time for us to go and seek out if we have to do anything outside,” he said.
‘PROBLEM FOR EVERYBODY’
Asked about the challenges, Haider pointed to increasing taxes that his company was facing in Pakistan. He said the recent increase in the tax on sugar has impacted Dipitt products since sugar is one of the major raw materials needed in manufacturing of ketchups.
“Yes, I think we are taking whatever measure we can take to ensure that the consumer gets the product at the same price,” he said. “Till it becomes to an unbearable point where we cannot take any more.”
Cash-strapped Pakistan has been working with the International Monetary Fund (IMF) to increase its revenues by withdrawing subsidies and increasing taxes in recent years. The move has caused inflation to surge, which peaked to 38 percent in May 2023 before gradually cooling down to 3 percent in August.
According to global accounting firm PricewaterhouseCoopers (PwC), the rate of taxes on Pakistani corporations ranges from 20 to 39 percent.
Financial experts, however, warn the recent floods may spike inflation in the coming days.
“Now taxation is becoming... I think that’s a problem for everybody,” Haider said. “It is becoming difficult and difficult day by day.”
