INDUSTRY PROFILE

JDW sugar mills (Jamal Din Wali) company was incorporated in 1990. As a private limited

company under the Companies Ordinance, 1984 and was subsequently converted into a public

limited Company on 24 August 1991. Shares of the Company are listed on the Karachi and

Lahore Stock Exchanges. JDW sugar mills have 3 units and 2 diversifications. The Number of

Employees is 942. The revenue of JDW is 28.50bn and the Net income is 835.87mn.

Unit 1

On 31st May 1990 first unit was

formed. Crushing capacity of this

unit is 2.46 million tons of sugar or

20,500 TCD (tonne sugar cane

crushing per day). This Unit is

located in District Rahim Yar Khan.

The principal activity of the

Company is production and sale of

crystalline sugar with an annual report of 2011.

Unit 2

JDW Unit-II (formerly United Sugar

Mills Limited) was acquired by

JDWSML in November 2005 and

after four years successful

operations this was merged into

JDWSML on October 1, 2008.

Annual Crushing capacity of this

Unit is 1.02 million tons of sugar or

8500 TCD (tonne sugar cane

crushing per day) and is located near Sadiqabad at distance of 45 Kms from JDW Unit-I in

District Rahim Yar Khan.

Unit 3

JDW Unit-III (formerly Ghotki

Sugar Mills (pvt) Limited) was

incorporated on 02 June 2006 as a

Private Limited Company under the

Companies Ordinance, 1984. JDW

Unit-III started crushing in year

2007-2008. The crushing capacity

of this unit is 1.32 million tons of

sugar or 11000 TCD (tonne sugar cane crushing per day) and is located in District Ghotki, Sindh

Province. It was setup in the record time of 11 months between ground breaking and production

and in the first year of production it reached 90,918 Tons with a recovery of 10.55 % which was

the highest in the country. 

 

JDW sugar mills have 2 diversifications also Faruki Pulp Mills Ltd and JK Dairies (Pvt) Ltd.

Management Profile

Board of Directors  

Mr. Jahangir Khan Tareen Director/Chief Executive

Syed Ahmed Mahmud Director/Chairman

Mrs. Sameera Mahmud

Mr. Ijaz Ahmed Phulpoto

Mr. Asim Nisar Bajwa

Maj. ® Raheal Masud

Mr. Zafar Iqbal

 

Chief Operating officer

Rana NasimAhmed 

Group Director Finance 

Mr. Muhammad Rafique

Auditors

KPMG Taseer Hadi & Co.

Chartered Accountants

Audit Committee

Mr. Asim Nisar Bajwa

Mr. Zafar Iqbal

Mrs. Sameera Mahmud

Banks

Faysal Bank Ltd.

Habib Bank Ltd.

MCB Bank Ltd.

United Bank Ltd.

Standard Chartered Bank (Pakistan) Ltd.

National Bank of Pakistan

Allied Bank Ltd.

The Bank of Punjab

Habib Metropolitan Bank Ltd.

Bank Islami (Pakistan) Ltd.

Silk Bank Ltd.

Location

JDW Sugar Mills Ltd

17-Abid Majeed Road, Lahore Cantt,

Lahore Pakistan

Phone +92 4 236664891-2, +92 42

36602573-4

Fax +92 4 236654490

Web http://www.jdw-group.com/

Email jdwho@jdw-group.com

Registrar

Corplink (Pvt.) Ltd. 

Wings Arcade, I-K Commercial,

Model Town, Lahore.

Legal Advisor

Cornelius, Lane & Mufti

JDW Sugar Mills Limited

History

JDW Sugar Mills Limited was incorporated in Pakistan on 31 May 1990 as a private limited

company under the Companies Ordinance, 1984 and was subsequently converted into a public

limited Company on 24 August 1991. Shares of the Company are listed on the Karachi and

Lahore Stock Exchanges.

United Sugar Mills Limited

USML was incorporated in Pakistan on February 5, 1970. United Sugar Mills Limited was

acquired by JDWSML in November 2005 and after four years successful operations this was

merged into JDWSML on October 1, 2008.

Gohtki Sugar Mills (Pvt) Limited

Ghotki Sugar Mills (pvt) Limited) was incorporated on 02 June 2006 as a Private Limited

Company. After that GSM was merged into JDWSML.

JDW is involved in various businesses including:

Faruki Pulp mills Ltd

Dairy

Power Generation

Faruki Pulp Mills Ltd  

Faruki Pulp Mills Limited was incorporated as a public limited company on October 20, 1991.

The Company is engaged in the manufacturing of wood pulp from Eucalyptus for consumption

in local and foreign paper industry. This project was started in early 1990 but due to various

reasons could not be completed on time. This will be first of its kind project in Pakistan based on

100% supply of all raw materials locally. Due to its technical and professional viability, JDW

Group has chosen this business for strategic investment with an objective of diversification. This

is an agro based industry using local raw materials. The company has commenced its

commercial production on October 1, 2011.

JK Dairies (Pvt) Ltd 

This Company was incorporated in Pakistan on 26 February 2007 as a Private Limited Company

under the Companies Ordinance, 1984. It is the first modern Dairy Farm in the private sector. At

present the herd consists of 1500 Friesian, Jersey & AFS imported cows. It is principally

engaged in production and supply of milk. 

Company Profile

JDW sugar mills (Jamal Din Wali) company was incorporated in 1990. As a private limited

company under the Companies Ordinance, 1984 and was subsequently converted into a public

limited Company on 24 August 1991. The number of employees is approximately 942 people in

all units.

Before bringing life to a vision we have to see it first. And for that we need people who

specialize in seeing the impossible. Here at JDW, we are proud of the visionary men we have

who take up the responsibility of creating opportunities for the future, not only for our company

but for the whole community we operate in. We believe life is about the betterment of the human

condition; it’s about social awareness, and random acts of kindness that weave the soul of

humanity. Together, we all participate in weaving the social fabric; we should all therefore be

patching the fabric when it develops holes.

The mission of JDW is to be the market leader and a world-class organization by meeting and

proactively anticipating customer needs, to maximize the wealth of stakeholders by optimizing

the long term returns and growth of the business, to be amongst the most efficient and lowest

cost producers in the industry, to ensure a safe, harmonious and challenging working

environment for the employees.

HEAD OFFICE

Its head office is situated in 17-Abid Majeed Road, Lahore Cantt, Lahore Pakistan

Market Share:

JDW is one of the largest groups in the sugar sector and contributes approximately 9-10% of

country sugar production. The current price of per share is 112.06.

Organizational Structure:

The JDW is simple structure that each employee can easily understand it very easily and is has

centralized structure and on department level is has decentralized structure.

Departments of JDW Mills limited:

JDW Sugar Mills Limited has following departments

Finance

Administration

Cane

Chemical/Production

Electrical

Management Information System

Store

Mechanical

Policies:

The company has the proper policies and rules to fulfill the vision, mission, objectives and

strategies requirement.

LEASING

Definition:

Leasing is a financial instrument in which the ownership of the leased asset remains with the

leasing company while the lessee obtains the right to use the asset by paying lease rentals for the

life time of the leasing contract. At the maturity of the leasing contract the ownership of the

leased asset is transferred to the lessee at a symbolic cost. In short leasing provides you with

alternative business funding.

Leasing Process:

General Benefits Can Be Obtained Through Leasing:

100% financing

Quick approval process

Budgeting is made easy with fixed payments throughout the lease term.

Finance the equipment you need today, without having to wait for the total cash amount

to be budgeted.

As a lease is considered a direct expense to your business, there may be advantageous tax

benefits.

Help plan equipment acquisitions.

Allows you to upgrade as your needs change.

Monthly, Quarterly, Semi-annual and Annual payments are available.

Lease Proposal of JDW Sugar Mills

Statement

A company named JDW Sugar Mills LTD approached us for a 5 year lease facility against

caterpillar generator for unit 1. After evaluating the data of our customer, we came to know that

our customer’s credit history is good and our customer has the potential to repay credit. Our

customer is A rated. So, after discussing the terms and conditions with our customer, we have

developed the following lease proposal to be presented to our management.

LEASE STRUCTURE

Name of Organization: JDW Sugar Mills Limited

Nature of Organization: Sugar Mill

Status of Organization: Public Limited Company

Register Office: JDW Sugar Mills Ltd, 17-Abid Majeed Road, Lahore Cantt,

Lahore.

Phone +92 4 236664891-2, +92 42 36602573-4

Fax +92 4 236654490

Web http://www.jdw-group.com/

Email jdwho@jdw-group.com

Site Offices: Mauza Sharin, Jamal Din Wali, Distt. Rahim Yar Khan. (Unit 1)

Machi Goth, Sadiqabad. (Unit 2)

Mauza Laluwali, Near Village Islamabad, Distt. Ghotki. (Unit 3)

Date of Incorporation: 31 May 1990

NTN of Company: 0711003-7 

Terms and condition of Lease

Type of Lease: Direct Lease

Description of Asset: Sugar cane crushing Machinery (4 sets 1 set = 2,500,000)

Lease Amount: 10,000,000 (10 Million)

Security Deposit [35%]: 3,500,000

Residual Value [35%]: 3,500,000

Net lease: 6,500,000

IRR: 12.74% [9.24% 1 month KIBOR (average asks Side) + 350 basis

points

Lease Rental Monthly: ($171,718.03)

Lease Term: 4 Year

Payment Term: Monthly in Advance

Processing fee @ 1%: Rs-100,000

Documentation charges: Rs-6,500

Security: a. personal guarantees of directors.

b. 47 postdated Cheques

KIBOR difference will be recovered before disbursement.

KIBOR published on 4th January 2013 was 9.74%

REFERENCES

CIB Report: CIB report is clear from overdue. No overdue payments have been occur

previously means they have good credit history. So a good credit history has been seen so the co

is (A rated).

Creditors: Financial Institutions

Suppliers: The statement which is as stated by the supplier that JDW Pay their credit payments

on time and we never have a feeling to chances of default.

Directors Information:  

Mr. Jahangir Khan Tareen Director/Chief Executive 

Syed Ahmed Mahmud Director/Chairman 

RanaNasim Ahmed Chief Operating Officer

Mr. Muhammad Rafique Group Director Finance 

Mrs. Sameera Mahmud

Mr. Ijaz Ahmed Phulpoto

Mr. AsimNisarBajwa

Maj. ® RahealMasud

Mr. ZafarIqbal

FINANCIAL INFORMATION

Following information is extracted from the financial statements of prospect audited by.

External Auditors

KPMG Taseer Hadi & Co.,

Chartered Accountants

PEST ANALYSIS

Political Factors:

Since the independence in 1947, Pakistan has continuously faced political instability. The

political instability has led to uncertain environment in the country, which is a threat for

any business including JDW Mills Limited.

Government regulations regarding hygiene, health and food regulations, food standards,

etc.

The rules and regulations are changed quite frequently due to changes in the government

that affects the business flow for any company.

Economic Factors:

Economic conditions are not very sound. The rising political instability has led to

economic instability as well.

Inflation remains the biggest threat to the economy. The surge in global petrol prices and

thus local petrol prices hurt the buying power of consumers that reduced the demand for

products. Due to inflation the cost of doing business has also gone higher. If Pakistan

keeps on getting better grants and loan waivers or if any other economy boosting factors

such as controlled inflation rate and economic growth take place, it will benefit the entire

industry of Pakistan.

Rate of inflation determines the rate of remuneration of employees and directly affects

the price of the sugar's products. Again, the proportion between the inflation rate and

wages prices is direct.

Unemployment rate is going up and up which has increase the level of poverty thus

further reducing the buying power of the people.

Social Factors:

Eating habits of the people in your chosen business environment may, and certainly will,

affect your marketing decisions.

Peoples are becoming health curious, they want to avoid sugar’s product.

Technological Factors:

Companies have technology with which they can have a competitive advantage in the

Pakistani market. Companies are investing in their infrastructure to not only expand but

also to upgrade their existing structure.

A good technical infrastructure would lead to better production, procurement and

distribution logistics, resulting in reduced wastage and lower costs.

Sound technology may be a decisive factor for food technology innovation, better

presentation, more effective business marketing, etc.

SWOT-ANALYSIS

STRENGTH:

JDW is the market leader.

There is no union labor in the organization.

JDW have wide set up of farms.

JDW has experienced qualified and competent employees in each department.

They are using latest technology. Latest techniques. Latest fertilizers to increase the

capacity of production

Most of population lives in rural areas that are why labor is cheap.

Cultivatable land is available for the production.

Large domestic market is available.

WEAKNESS:

JDW is using man power on large scale so expenses are high.

Salary package of lower staff is low as compared to other sugar mills.

JDW have no proper transportation system for their employees..

JDW sugar Mills limited does not have proper recycling system which results in high

water.

OPPOURTUNITIES:

JDW Sugar mills limited can increase per yield production by using further new

technologies and fertilizers.

The land of vicinity is very fruitful for sugar mills.

JDW can shift towards beet production as it is cheaper.

JDW can earn foreign exchange by exporting surplus sugar.

THREATS:

The production of sugar cane decreases the productivity of land.

Competition will increase

The advertising campaign may be needed in future.

No provision of proper transport to the field staff.

As sugar cane crop requires a lot of water, increase in production may create shortage of

water for other crops.

Requirement of the regularity bodies

Long-term Debt/Equity ratio is within the prescribed limit of 60/40.

Current ratio is within the prescribed limit.

Borrower’s total facilities are within the limit of 10 times of capital & reserves free of losses.

The prescribed exposure limit is within 20% of equity.

Lease Justification

Profitability of the prospect is improving.

Existing relationship with one of its group company with satisfactory repayment behavior.

Profitability of the prospect is good enough.

Their sales are increasing because of new technology.

Although current ratio is less than one but this company is cleared from the CIB report and their

suppliers and creditors as well.

They are taking more Assets and raw material on credit so that is the reason that their Current

ratio is less.

JDW group has a good name in the market so that is the reason we facilitate them.

Their debt to equity ratio is also good

Ratios

Debt to Equity

A company's debt to equity ratio or its gearing ratio is a measure of the level of borrowings a

company has used in proportion to stockholders' equity to finance it's assets. It's often used as an

indicator of the amount of risk inherent in the shares of a particular corporation.

Debt to Equity = Total Liabilities / Stockholders' Equity

2011 2010

=6,106,431+8,320,707/4,816,905

= 2.99 times

= 4,396,216+4,365,876/3,417,492

= 2.56 times

The company has more debt as compared to previous year. This could be due to the

reason that JDW sugar mills issue Rs.500 million loans.

Debt to Assets

2011 2010

= 6,106,431+8,320,707/19,244,044

= 74%

=4,396,216+4,365,876 / 12,179,586

= 72%

The ratio has increase from 72% to 74% because of increase in non-current liabilities whereas

fixed assets did not increased. The company has not invested loans to enhance its assets

Current ratio

An indication of a company's ability to meet debt obligations; the higher the ratio, the

more liquid the company is. Current ratio is equal to current assets divided by current liabilities.

Current ratio = Current Assets/ Current Liabilities

2011 2010

= 6,505,191/8,320,707

= 0.78:1

=3,322,546/4,365,876

= 0.76:1