Indian dairy industry

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Indian dairy industry

  1. 1. Doodh Ka Doodh Pani Ka Pani
  2. 2. An Interesting Fact 50% of all Buffaloes and 20% of all Cows reside in our India.
  3. 3. Flash Back! Why we stopped raising cattle at home?  Cost  Sanitation  Space
  4. 4. What is Dairy Industry? Is it Handling of Cows?
  5. 5. Dairy Industry  Handling of Milk  Handling of Milk Products  Marketing of Milk and Milk Products  Dairy Technology
  6. 6. Dairy Technology It’s a Science of :  Milk processing  Manufacture
  7. 7. Operation Flood  Launched in 1970  Flood of Milk  Augment Rural Income  Ensuring Fair Prices  Three Phases
  8. 8. First Phase (1970 – 1980)  Supportfrom Europe through World Food Programme  NDDB’s Role  Connecting Milk sheds with consumers
  9. 9. Second Phase (1981 to 1985)  Milksheds increased to 136  290 Urban Markets  43000 Village Co-operatives  4.25 Million Milk Producers
  10. 10. Third Phase  Co-operatives Expanded  Infrastructure  CattleHealth Care  Education  30,000 New Dairies  Women Participation
  11. 11. Indian Dairy Industry  One of the fastest growing sectors in India, with a total size of about INR1160 billion (INR 1,16,000 crore) OR US$ 26.5 billion.  In Dairying, 75 million women are engaged as against 15 million men.
  12. 12. Indian Dairy Scenario
  13. 13. Position Of Milk Production By 45  Farm Level 40 35 -45% 30  Unorganised 25 20 -42% 15  Organised 10 -13% 5 0 Farm Level Unorganised Organised Sector
  14. 14. Position Of Milk Utilization 50 45  Consumed 40 35 as Milk 30 - 46% 25 20  Traditional 15 - 47% 10 5  Western 0 - 7% Consumed Traditional Products Western Products
  15. 15. Milk Supply Chain, in the traditionaland unorganized dairy system  (i) Milk producers  Producer--Consumer directly supply milk  Producer—Market--- to the consumer or Consumer through a marketing  Producer—Middleware— channel. Market—Consumer  (ii) Milk producers supply milk to the consumers through the intermediaries like middlemen
  16. 16. Unorganized Dairy System  Retailingof Milk in India is thoroughly unorganized.  There is no supply chain management perspective.  An overwhelming proportion of the Rs. 400,000 crore retail market is UNORGANISED. In fact, only a Rs. 20,000 crore segment of the market is organised.
  17. 17. Unorganized Dairy System  As much as 96 per cent of the 5 million- plus outlets are smaller than 500 square feet in area.  India per capita retailing space is about 2 square feet thus the lowest in the world .  Just over 8 per cent of Indias population is engaged in retailing.
  18. 18. Milk Supply Chain, in the traditionaland Organized dairy system  (i) Producers’ milk reaches private processors directly and After Processing it reaches Consumer.  (ii) Milk producers supply their milk to primary cooperative society, which inter alia supplies to secondary cooperative. The milk, after processing , reaches consumers via marketing channel, either directly or through apex cooperative.
  19. 19. Milk Supply Chain, in the traditionaland Organized dairy system  Producer—Private Processor— Consumer  Producer—Middlemen—Market— Consumer  Producer—Primary/Secondary Cooperative Society—Apex Society— Market—Consumer
  20. 20. Major Player in organized sector
  21. 21. Organized Dairy System  From a size of only Rs.80,000 crore, the ORGANISED retail industry will grow to Rs. 2,40,000 crore by 2007.
  22. 22. Challenge for Organized Sector  Competition from the unorganised sector.  Organised sector have big expenses to meet.  Organised retailing also has to cope with the middle class psychology that the bigger and brighter a sales outlet is, the more expensive it will be.
  23. 23. Challenge for Organized Sector  While India as a country became the world’s largest milk producer in 2001, not a single Indian dairy company featured in the list of global top 20 dairy companies
  24. 24. Opportunity for Organized Sector  Economic and demographic changes including rising disposable incomes.  A growing proportion of working women becoming a part of the urban population.  Greater awareness due to exposure to global trends
  25. 25. Turning Point for Organised Sector  The dairy industry was de-licensed in 1991.  No license is required for setting up of large-scale production facilities for manufacture of ice cream.  The exemption limit is increased for compulsory registration of dairy plants, from the present 10,000 litres a day to 20,000 litres.
  26. 26. Position Of Organized Sector  There are 678 manufacturing units registered with the Central and State Governments.  The combined capacity of these units is 73 million litres per day while they process about 29 million litres per day.  Significant excess capacity.
  27. 27. New Activities  Launching of Venture Capital Fund for Dairy ----scheme is being implemented through NABARD to provide loans to entrepreneurs in dairy and poultry sectors at a lower rate of interest. -----The objectives are to encourage clean milk production, promote use of modern technology in dairy farms and to bring the milk produced in the unorganised sector to organised sector.
  28. 28. Doodh Doodh DoodhWonderful Doodh!  Vitamins  Iodine  Calcium  Proteins  Nutrients  Short Shelf Life
  29. 29. Doodh Ke Parivarwale 55% of Milk produced converted to various Milk Products
  30. 30. Sabse Bada KhiladiAMUL  Origin from the Sanskrit word ‘Amoolya’.  Amul is a brand under which GCMMF markets its products.  Birth of GCMMF is closely linked to India’s freedom struggle.
  31. 31. The Birth of Amul  FirstCo-operative formed on 4th Jan 1946.  Kaira District Co-operative Milk Producers Union Ltd. formed 14th Dec 1946.  Gujarat Co-operative Milk Marketing Federation (GCMMF) was formed in 1973.  Dr. Verghese Kurien was the architect of Amul’s success.
  32. 32. Dr.Kurian’s Mantra for Amul  Quality  Economy  Availability  Service
  33. 33. Aaj Ka Amul  GCMMF is India’s largest food products marketing organisation.  12 district co-operative milk producers’ union.  2.5 million producer members.  2.28 billion litres milk collected in 2005- 2006.  Sales turnover stands at Rs.37736 million in 2005-06 (Rs.13790 million in 1995-96)
  34. 34. Amul Products Market Market Share Position  Amul Butter 85% 1  Milk 60% 1 powder 65% 1  Toned Milk 60% 1  Dahi
  35. 35. Amul Products Market Market Share Position  Flavoured Milk 55% 2  Ice 75% 1 Creams 90% 1  Cheese 8% 2  Ghee
  36. 36. Mother Dairy No.1 Regional Player in India. It was set up in 1974 under the Operation Flood Program. It is now a subsidiary company of a wholly owned company of the National Dairy Development Board (NDDB).
  37. 37. Products  Mother Dairy markets & sells dairy products under the Mother Dairy brand (like Liquid Milk, Dahi, Ice Creams, Dairy Whitener and Butter)  Mother Dairy sources its entire requirement of liquid milk from dairy cooperatives
  38. 38. Strengths
  39. 39. Strengths  Demand profile: Absolutely optimistic.  Margins: Quite reasonable, even on packed liquid milk.  Flexibility of product mix: Tremendous. With balancing equipment, you can keep on adding to your product line.  Availability of raw material: Abundant. Presently, more than 80 per cent of milk produced is flowing into the unorganized sector, which requires proper channelization.  Technical manpower: Professionally-trained, technical human resource pool, built over last 30 years.
  40. 40. Weakness  Perishability  Lack of control over yield  Logistics of procurement  Problematic distribution  Competition
  41. 41. Opportunity  Valueaddition Areas of Value addition  Value added products like Shrikhand,paneer,khoa,flavored milk, dairy sweets etc  Addition of cultured products like yoghurt and cheese lend further strength in utilization of recourses and presence in the market place  Export potential Amul is exporting to Bangladesh, Sri-Lanka, Nigiria and the Middle East
  42. 42. Threats  Milk Vendors, the un-organized sector.  Today milk vendors are occupying the pride of the place in the industry.  Organized dissemination of the information about the harm that they are doing to producers and consumers should see a steady decline in the importance  Operation Flood.

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