LAHORE - In spite of energy shortages, economic slowdown, security issues and declining investment in Pakistan, consumer driven growth story continued as 2012 witnessed 19 per cent sales and 16 per cent profitability increase for the listed FMCGs like Unilever, Unilever Foods, Nestle and Colgate.
Experts said that with the blessings of small-town boom, higher workers’ remittances, urbanization and changing consumption patterns, 2012 was another good year for leading multi-national Fast Moving Consumer Goods (FMCGs) operating in Pakistan. As a result these listed companies generated a return of 65 per cent for their shareholders in 2012 compared to 49 per cent gain by benchmark index.
Zeeshan Afzal, a financial market expert with Topline Securities, attribute the growth in his report to fast pacing consumer spending in spite of low GDP growth of Pakistan in recent years. Consumer spending had not only remained immune from the downfall but has also served as an engine to the economic growth, thanks to rising share of informal economy in last few years. He said the trend is also evident from the higher import of consumer goods, opening of new malls/restaurant and influx of several global brands into the economy. 
He was of the view that in last 5 year, collective sales of these foreign MNCs grew at 22 per cent CAGR to Rs164b compared to Rs75.4b in 2008. In addition to the sales growth, ability to pass on cost pressures provided further strength to the bottom-line. During the period, gross margins and operating margins improve to 8 per cent and 12.8 per cent in 2012, respectively, as compared to 6.1 per cent and 10.3 per cent in 2008. Resultantly, bottom-line of these companies increased at a CAGR of 25 per cent to Rs13.2b in 2012.
Similarly, compared to Rs138.2 billion in 2011, sales of these companies grew by 19 per cent in 2012. Further, improvement in the gross and operating margins resulted in 23 per cent increase in gross profits to Rs51 billion and 21 per cent rise in operating profits to Rs21 billion in 2012. In the end, profitability of these companies grew by 16 per cent to Rs13.2 billion in 2012. 
In FY12, real consumption in Pakistan has increase by 11 per cent according to government statistics compared to 3.9 per cent in FY11 and was the only positive contributor to the economic growth. Currently, household consumption constitutes 75 per cent of the GDP in Pakistan which is much more than the 47 per cent in Malaysia, 70 per cent in Sri Lanka and 57 per cent in India and Indonesia.