Pakistan Tobacco Company Limited was incorporated in 1947 immediately after

independence, when it took over the business of the Imperial Tobacco Company of
British India which had been operational in the South Asia since [Link] Tobacco
Company is part of the British American Tobacco Group, one of the world's most
international business groups, with brands sold in 180 markets around the world. It is
located in Jhelum, Pakistan.

From being just a single factory operation to a company which is involved in every
aspect of cigarette production, from tobacco cultivation to packaging we have evolved
and grown with Pakistan. However, what is significant about these sixty-two years is
the effort that PTC has demonstrated in the development of the country. By being
instrumental in the campaign for modern agricultural and industrial practices, we have
helped in the development and progress of the agricultural & industrial sector in the
[Link] is the largest excise tax generator in the private sector in the country. In
2004 alone, PTC paid the government close to Rs.16 billion in excise and sales taxes.
This amounts to over Rs. 50 million per working day. Over one million people are
economically dependent on the industry in Pakistan.
The manager imraan said that our top managers are responsible for controlling and
overseeing the entire organization . They develop organizational goals ,strategic plans
,companies policies ,and make decisions on the direction of the business.

They are accountable to the top management for their departments function. Further
more he said the duties of middle manager involves to inspire and provide guidance to
low level managers towards better performance. They define and discuss the
information and policies from the top management to the lower management that are
most important

In PTC their low level managers assigning task to employees, guiding and supervising
employees on day to day activities, ensure the quality and quantity of production,
making recommendations and suggestions.

He said that we require the skills for the fixation of our goals and to plan for every
situation and he also said that these skills help us to identify the causes of different
problems that are occur in our organization and help us to solve that problems.

He said human skills requires for all kind of managers in any organization because
each manager have to understand ,communicate and work with other. And he said
our technical staff or low level requires the technical skills because these skills help
them to use different machines and tools which are used for cigarette making.
  He said specially the stress regarding to beat the competitors
 Time stress means to do the tasks in a given time
 Increase sales
 To meet out the dead lines.
 To give the new results.
 Working over time on holidays.
 Excessive work pressure.

He said jobs turnover and job related dissatisfaction and any other personal factor.

 He said to reduce or manage the stress

 Improvements in the physical environment.
 Changes in work load and dead line.
 Changes in work schedules ,flexible working hours.
 Job redesign to remove stressors.

The Guiding Principles describe the organization we are and the organization we want
to be. They represent the common values at the heart of our success. Our Employment
Principles build on our commitment to good employment practices and workplace
related human rights.

reflects our cultural mix and a working environment that

respects employees’ individual differences. It also reflects our vision of harnessing
diversity - of people, cultures, viewpoints, brands, markets and ideas - to create
opportunities and strengthen performance. We are interested in what makes you
unique.
 reflects our openness to change, opportunities and new ideas,
including ways of addressing regulatory issues and changing social expectations. We
seek to listen without prejudice, actively and genuinely considering other viewpoints.

describes how we make decisions - as close to

the consumer as possible – and affirms our belief that decision-makers should accept
responsibility for their own decisions.

has been a characteristic of our business since its very inception.

It is reflected in our ability to grow our business and its value within challenging
environments, with the confidence to seek out opportunities for success, to strive for
innovation, and to accept considered risk-taking as part of doing business.

Pakistan Tobacco Company has been departmentalization with a functional approach,

into Human Resources, production, finances department and marketing departments.
HRD is responsible for hiring competent people, developing them too efficiently,
motivating employees to do their best, maintaining a loyal and committed workforce
and cordial relations with collaborative agent (CBA).

The Human Resources department bears primary responsibility for creating and
sustaining a winning environment in Pakistan Tobacco Company. They do this by
providing opportunities for talented employees to feel the satisfaction and fulfilment
gained by being members of a responsible, winning team; where they are rewarded and
recognized; where their efforts are encouraged; their careers are developed; where
they understand the vision and strategy of the company; and they know where they fit
into the bigger picture.

1Managing performance.2Managing organizational learning and development

Resourcing.3Managing careers and [Link] employment relations.

In a competitive business environment, a commercially astute finance function is
critical in making good business decisions - for example, about which brands or markets
to invest in, in evaluating and improving returns, and of course, in managing the
delivery of consistent profit growth to the shareholder.

 Setting and delivering against financial objectives.

 Acting as a value-adding business partner in operations.
 Acting as a value-adding business partner in marketing.

At Pakistan Tobacco Company, the consumer is at the center of our business.

Marketing in the tobacco industry requires skills beyond the demands of other
products. The ability to differentiate our marketing initiatives, manage productive and
profitable relationships with our key accounts, integrate strategies above and below
the line, and ovate while always marketing responsibly are the fundamentals of the
marketing challenge.

1. Consumer [Link] [Link] Business [Link]

Availability and [Link] Development.

Production department is planning and controlling process to make it efficient for

quality induced product.

Production capacity in Pakistan Tobacco Company is measured in terms of number of

sticks produced per annum. Pakistan Tobacco Company has two plants which meets the
demandrequirements of the country. Total production capacity of both plants is 45
billion sticks per annum this year and is continuously on an increasing trend per
[Link] Khatak plant produces 23 billion sticks per annum whereas Jhelum plant
produces 22 billion sticks per annum approximately. This production is carried under
effective productioncapacity. The latest production machine “Protos” at Jhelum plant
produces approximately 8,500sticks per minute under effective capacity. But whenever
the company required increased production, under the peak capacity, the machine
“Protos” can produce 10,000 sticks per minute approximately.

The efficiency of PTC is calculated by Efficiency=Actual output/Effective capacity.

Efficiency=450,000,000/450,000,000 *100%=100%

The most successful tobacco company will be decided by the consumer. To win, we
must win the consumer. We are consumer led.

Our ‘battlefields’ are national. This is where our consumers, trade partners,
stakeholders and people are. This is where we sell cigarettes, generate cash and develop
talent. This is where our brands live or die. This is PTC.

We are a global business with a global vision. We have global strategies and hard-won
global scale. We must use and leverage these in order to win against global competition.
To do so, requires global cohesion and discipline. A matrix organisation is the best
means to ensure this. We recognise that there is a ‘tension’ in a matrix organisation.
This is as it should be: business needs different viewpoints to build conviction and
purpose We believe in the value of teams and diversity within those teams. We cherish
individuality in the pursuit of the team goal. We believe individual creativity and
contribution can and must flourish for us to succeed.
People remember their leaders. The ones who had time for them, listened to them,
coached them, developed them, trusted them. The leaders who helped make them the
success that they are. We like good leaders. They tend to be very successful themselves.
Our leaders bring our beliefs to life. We must all be leaders.

We like working with our colleagues and we trust them to deliver. They’re smart, keen to
make a good contribution and fun to be with. They are what makes PTC so special. We
are a welcoming and hospitable organization. We want people to enjoy their experience
with us. People feel at home here.

Our competitors are powerful and determined. We value our organisational intimacy and
family-feel, yet recognise we must be no less determined or demanding of ourselves. To
head the industry will take more than thought-leadership and scale,we must be fiT for
the fight ahead, we must be quick and agile. We must each take
ownership for our actions.

We act responsibly and transparently. Not because we have to, but because we want to.
We take comfort and pride in knowing that we will do the right thing and behave in the
right way. We accept the costs this will incur.

We believe in the value of teams and diversity within those teams. We cherish
individuality in the pursuit of the team goal. We believe individual creativity and
contribution can and must flourish for us to succeed.

If we talk about the culture than both the business

principles and core beliefs and the way they have been developed are consistent with
our 4 guiding principles and core values which collectively express the culture of group
and PTC as part of it.

The principle of Mutual Benefit is the basis on which we build our relationships with our
stakeholders. We are primarily in business to build long term shareholder value and we
believe the best way to do this is to seek to understand and take account of the needs of
all our stakeholders.

 We believe in creating long term shareholder value.

 We believe in engaging constructively with our stakeholders.
 We believe in creating inspiring working environments for our people.
 We believe in adding value to the communities in which we operate.
 We believe that suppliers and other business partners should have the opportunity
to benefit from their relationship with us.

The principle of Responsible Product Stewardship is the basis on which we meet

consumer demand for a legal product that is a cause of serious diseases. Therefore, our
products and brands should be developed, manufactured and marketed in a responsible
manner. We also aspire to develop tobacco products with critical mass appeal that will,
over time, be recognized by scientific and regulatory authorities as posing substantially
reduced risks to health.

 We believe in the provision of accurate, clear health messages about the risks of
tobacco consumption.
 We believe the health impact of tobacco consumption should be reduced whilst
respecting the right of informed adults to choose the products they prefer.
  We believe that relevant and meaningful information about our products should
continue to be available.
 We believe that underage people should not consume tobacco products.
 We believe that our brands and products should be marketed responsibly and
directed at adult consumers.
 We believe in the appropriate taxation of tobacco products and the elimination of
illicit trade.
 We believe in regulation that balances the interests of all sections of society,
including tobacco consumers and the tobacco industry.
 We believe that public smoking should be approached in a way that balances the
interests of smokers and non-smokers.

The principle of Good Corporate Conduct is the basis on which our business is managed.
Business success brings with it an obligation for high standards of behaviour and integrity
in everything we do and wherever we operate. These standards should not be
compromised for the sake of results.

 We believe our businesses should uphold high standards of behaviour and

integrity.
 We believe that high standards of corporate social responsibility should be
promoted within the tobacco industry.
We believe that universally recognised fundamental human rights should be
respected.
 We believe the tobacco industry should have a voice in the formation of
government policies affecting it.
 We believe in achieving world class standards of environmental performance.

Process and deliver quality tobacco

satisfying customer demands at minimum supply chain cost.” Although tobacco is grown
throughout the country, the primary source of this integral rawmaterial is the NWFP
where soil and climatic conditions suit tobacco cultivation the most. The province has
been the focal point tobacco-related activities and produces around three-fourths of the
tobacco leaf grown in the country. The province grows the three most widely used types
of tobacco namely, Flue Cured Virginia (FCV), Burley and Nicotiana Rustica (White Patta).
Flue Cured Virginia tobacco is now the most widely grown and widely used type of
cigarette tobacco in Pakistan and the total production of this high value commodity has
increased from23.8 million kgs in 1967-68 to 66 million kgs in 2007. Pakistan is now the
7th largest producer of FCV in the world. The current tobacco production in the country
exceeds 100 million kilograms per year, although what is perhaps more important is the
types of tobacco grown in the country .Once tobacco is planted, it undergoes a myriad of
processes as it moves through the supply chain which converts it into a consumable
product worthy of pride.

There are two departments lie under process department.

 Primary Manufacturing Department.

 Secondary Manufacturing Department.

This department is generally known as PMD. The main function of this department is
to producethe blend of tobacco that is required for the manufacturing of a cigarette
stick. Different blendsare created for each brand, the tobacco is processed and at the
end of this stage the dust from thetobacco is separated. Different blends (recipe of
brand) for each different brand like Gold Leaf,Gold Flake, and Capstan etc. are mixed
with their flavors. Blend of Tobacco is processed inshifts; in each shift 5000 kilogram of
Tobacco blend is [Link] receives stem and Leaf (Lamina) separately from Leaf
Department and process themseparately. During the process steam and different
flavors added for different blends of [Link] the end Stem and Leaf are mixed with
a specific ratio of 80:[Link] this the blend of Tobacco that is ‘Cut Tobacco’, is stored
in Cut Tobacco Store.
This department is commonly known as SMD. SMD is further divided into three sub-de

CMD receives blend of Tobacco from Cut Tobacco Store and processed it to form a
cigarette stick. The process of cigarette making is done through fully automated
machines. “Protos” is the highest capacity machine that is installed in PTC Jhelum
Factory. It has capacity of producing 10000 sticks per minute. It has ability of checking
the filter, leakage, tobacco, length, level of humidity etc. The machine rejects if it finds
any error in length, width, etc. When a cigarette stick is produced it is transferred to
Cigarette Packing Department for further processing.

CPD receives cigarette sticks from CMD and packs them in flats. This process of cigarette
packing is also done through fully automated machines. GDX-3 is the highest capacity
machine that is installed in Jhelum Factory which has the capacity of packing 500
packets per minute. Firstly cigarettes are packed in packets (flats) then ten flats are
transformed into an outer. These outers are further packed into a CBC, each CBC
contains 10000 sticks. Then these CBCs are transferred to shipping god owns from where
they are transferred to Marketing warehouses on demand.

Filter rod department works as a subsidiary department to the SMD. The filter rod
department prepares the filter rod. The Material Management Department supplies the
raw materials, which are mainly acetate Tow, plug warp, till box, hot melt and adhesives.
The filter rod is manufactured in two sizes, one is a 54mm and other is66mm. The filter
rod hence produced, is sent to the SMD through filter rod treys. There is machine that
adds the filter rod to cigarettes.
He said we have to perform the roles includes provide guidence to the team members
on technical issues such as selecting suitable strategies and [Link] he said
roles like coaching,supporter,negoiator,visionary and subject matter expert.

He said it’s a very simple concept that we [Link] said planning is the backbone of every
[Link] planning we cant achieve our [Link] order to do or attain our
organizational tasks and goal first we [Link] gave an example that one of our goal or
task is to provide the better quality tobacco products to win the customer success,so, for
this purpose we have to plan firstly and than develop a specific actions in order to reach
that goals.

Appreciating the importance to change the status quo for continuous improvement and
deliver strong business results in a sustainable way, PTC has always been on the lookout
for opportunities to enhance the speed, efficiency and reliability of PTC’sProcess. Several
BPR projects were undertaken during 2006 and 2007 including thesetting up of the
Enterprise Programme Office (EPO), project slender at Akora KhattakFactory and the
supply chain Operations References (SCOR) Model [Link] puts in Place a
new way working, which keeps corporate strategy at the forefrontand ensure that all the
initiatives are aligned to support the strategy though effectiveprogramme management
and allocates resources to the best fit priority areas. Projectslender entails relocation of
the machinery and resources, changing the layout of production floor in a way to boost
process efficiencies and achieve higher productivity without employing additional
resources.

For the capacity planning according todemand (which is ever increasing) and previous
sales trends, Supply chain managementdepartment, Production department, Marketing
department, Finance department etc. coordinatewith each other to forecast the demand
and devise the capacity planning and capacity [Link] depends on the
availability of buffer stock and things in the pipe line of the supplychain. Pakistan
Tobacco Company has its 9-11 days buffer stock available in the warehouses.

The operation strategy of PTC is linked with their corporate strategy which is to maintain
their company with speed and flexibility to become the number one cigarette
manufacturer therefore in terms of operations they believe in producing with the least
possible cost and are continuously working on findings ways to further reduce it
without compromising on their quality in order to gain a competitive edge over its
competitors. The strategies of PTC are driven from Central Headquarters. PTC is fully
integrated. Following are the departments in operations which are inter-linked with
corporate strategy: Security Department, Material Management Department,
Engineering Department, IT department, Green Leaf Threshing Department, Primary
Manufacturing Department, Secondary Manufacturing Department, Filter Rod
Department, and Quality Control Department.

PTC’s corporate strategy is to gain market leadership in terms of the following three
aspects:

The focus on competing in terms of their volume share that is the amount of cigarettes
being manufactured.

In terms of productivity they believe and focus on effective utilization of

the given resources and reducing their waste.
PTC believes that it is their prime duty to carry out their businessactivities ethically and
morally keeping in mind the interests of all. They give high priority to community
services and health and safety issues.

PTC is in backward integration as it has grown its own tobacco cultivation fields, hence
procuring the raw material from its own resources. But still it is in a limited scope, as
thecultivation place also changes the taste and color of tobacco. Therefore, they have
also donesome contracts with farmers on standing field basis i.e. the whole field is
purchased fromfarmers the before it is harvested by estimating the yield of field.

 continuous learning and improvement.

 Sustainable growth.
 Environmental standards achievement.
 Market leadership in the world.
 Being beneficial to the community (Corporate Social Responsibility)
 Diversified workforce and environment.
 Technologically advanced machinery and equipments.
 Good salaries packages.
 Focus on health and safety on the company premises.
 Training and development of its employees.

 Some of its competitors are also producing high quality brands like Marlboro by
Lackson
  Internationally some countries are continuously promoting anti-smoking slogans
like the ban of smoking in Bhutan in 2002.
 Better marketing campaigns by rivals.
 their well-established brands are highly copied by some local manufacturer.
 The political, economic situation is not stable in Pakistan.
 Limitation of their product,
 Decline in tobacco growth

 Greater opportunity of promoting lower brands in rural region.

 PTC has the potential to further improve the cost reduction method.
 Create a better work environment in GLT department because of more hazards
inthis department.
 Lowering the downsizing will create a good image in the eye of regulatory
authoritiesand government.
 Focus on its key brands i.e. high growth like Gold Flack this year’s growth
wasaround 27%.
 Export of premium brands OT ANALYSIS

 Some of its competitors are also producing high quality brands like Marlboro
byLackson.
 Internationally some countries are continuously promoting anti-smoking slogans
likethe ban of smoking in Bhutan in 2002.
 Better marketing campaigns by rivals.
 Their well-established brands are highly copied by some local manufacturer.
 The political, economic situation is not stable in Pakistan.
 Limitation of their product,
 Decline in tobacco growth reads
Mr. imraan pick up one goal “to provide finest and better quality Tobacco products to
win our customers .So, for this purpose we develop specific actions to reach our goal.

In the organizing process our mangers figure out how many people we are needed to
get the job task done .Generally we talk about what kind of structure will be put in
place to get these tasks.

For leading purpose our managers must supervise ,lead ,motivate ,train ,coach ,guide
,hire and access employees.
Managers must monitor whats going on in their area,to make sure that the goals or
objectives are going to be [Link] the goals are not going to met then corrective
actions,then corrective actions can be taken.

LTC is PTC’s largest competitor and the second legal cigarette manufacturer in
thePakistan besides [Link] and Red & White are a few of its brands. LTC used
tobe affiliated with Phillip Morris, the giant in the global cigarette market; however,
thisassociation was dissolved few years ago. Its market share is actually greater than
PTC,around 46.2%. The main goal of LTC is money making and it believes in short-
termgains rather than long-term benefits. Surprisingly, LTC uses quite unethical
marketingstrategies – for example – a number of “under-the-table” deals are made
with theretailers to convince them to take off PTC’s merchandize from their store, and
to acceptLTC’s merchandize. This obviously results in a huge loss to PTC as it costs
around Rs.100 000 to fully merchandize a small shop.

The company prepare short term and long term plans ,these plans are yearly ,monthly
,weekly and daily basis.

The marketing manager [Link] said when our decision making tends to
concentrated then centralization is present and when our decision making tends to
dispersed decentralization is [Link] said our organization is both because our
business also adopts a policy of placing major decision making authority and control in
the hands of top level executives and decentralized in some cases we stressors
delegation of decision making and lightens the load of top level managers.
 To regain volume and value leadership by positioning viable brands in all
consumer related segments of the market.
 To drive world class standards in products process and services through
passionateskilled and confident people
 To meet stake holders expectations
 To be seen as a responsible company in a controversial industry.

 Create a winning cooperate culture which focus on vision, mission and values.
 Restructure PTC cost bases to become competitive locally and globally.