Milk Products Essay Example for Free

Milk Products Essay There has been an increase in income of milk and gradually development have broadened the knowledge of consumers. They have now became choosy resulting in monitoring needs, identifying opportunities and create value. It is the market place not the factory that ultimately determines which company will succeed. Marketing is practiced not only by manufacturing concern their channel members but all kinds of individuals and organization. No politician can get the required votes to win and no â€Å"resort† the needed tourist to flourish without developing and carrying out the sound marketing plans. Authentic market practice is not the art of selling what you make so much as knowing what to make. It is the art of identifying and understanding customer’s needs and coming up with solution that satisfy them and produces riches for firm’s profitability. As we all know, future is always uncertain. More precisely when there is volley of brilliant competitors and each wants to be the market leader. So in the light of intense competition satisfaction through product innovation maintaining the standard quality therein, failing which no amount or deal of promotional measure or scheme can compensate at length. Competitive forces have compelled the companies to focus on specific segment of the market with frequent product innovation and rather new products and launching thereof with greater confidence. The present study gives special emphasis on the Financial Trend Analysis Of Parag Dairy. The entire study has been divided into chapters and further subdivided into segments from each dealing with a separate aspect in a simple and lucid style and clarification has been given top priority throughout the project. CHAPTER 1 ABOUT LUCKNOW PRODUCER’S CO OPERATIVE MILK UNION LTD. Sections-1. 1: INTRODUCTION. Lucknow is the capital city of Uttar Pradesh . Total area of district is 2528 square km 91588 hactare is cultivated land . Lucknow producer’s cooperative milk union ltd. (Parag dairy lucknow) was established in 1938. Lucknow milk is the first cooperative dairy established in India . Very few people know the fact the process developed by Lucknow Milk Union was later used in spirit in Gujrat co operative milk movement and is now famous as â€Å"anand pattern† . Lucknow milk union was then chosen as one of the model dairy to Implement operation flood programme started by national dairy development board (NDDB)in 1970. The aim of Lucknow milk union is to provide reasonable price to farmer thereby defending them from exploitation of milk vendors and earn supplementary income part from agriculture . On the other hand the milk union supplies high quality pure milk and milk products at reasonable prices to urban consumer under the brand name â€Å"parag†. The milk union has been running â€Å"clean milk mand breed conservation programmes† UPDASP where milk producer have been educated in producing and supplying milk under clean and hygienic condition and provided the producer with semen of pure Indian breed for the improvement of the present breed of animal. Lucknow milk union is established Auto milk collection unit (AMCU) in societies for giving transparent payment system for milk given by farmer. By the established of these machine farmer are getting full price and actual detail of fat and snf of their milk . presently AMCU are running successfully in 259 societies 27 bulk milk coolers are established in various rural area of lucknow for keeping high quality of milk procured in those area by milk societies Lucknow milk union has set up of teams for quality check and health awareness programme for the urban consumer of milk. The team visit different localities in city, test their milk and provide on the spot results to the consumer . the milk union also organize school children’s visit to its dairy plant to create awareness on milk procrssing and other related system amongst them. The milk union has obtained ISO and HACCP certification in year 2007. For coming months lucknow milk union has commited itself to provide a minimum of 160000 liters of high qualities â€Å"parag† milk per day to the urban consumers. Apart from selling milk in pouches, the milk union is also gearing itself to provide fresh loose milk to the city consumers. Towards this end, the milk supply vehicles insulated with Japanese eco- friendly standards have already been introduced in various area of the city. 87 all time milk booth(ATM) are established for supply of high quality milk to the consumers round the clock. Lucknow milk union is able to maintain high quality standards in its milk and milk products through close monitoring of processes in all its stages of production, processing and packaging. The constant increase in the sales figure of the milk union are a reflection of their sincere efforts and the growing confidence of the consumers in parag milk products. The organization has a chain of around 2000 agent providing employment to the unemployed youths door to door milk delivery system through mini insulated tanker thru commission agent with attractive commission rates has been started in the city . the requirement for this system is to have a mini insulated tanker for which one has to arrange finance upto rs 50000/- himself and rest amount comes through bank finance. The new milk products launched by the milk union such as chhena kheer, besan laddoo, and chhachh, gulabjamun etc have begin tickling the taste buds of the consumers giving them great pleasure and value for money. INDIAN DAIRY INDUSTRY World’s largest food factory, in celebration India Dairy. com invites you to world’s highest milk producers. And all set to find out more about their achievements. Here you can find about answer to every question about dairy. Be it investors, researchers, entrepreneurs or the merely curious Indian dairy. It has something for everyone. Today India is ‘The Oyster’ of the Global dairy industry. It offers opportunities galore to entrepreneurs Worldwide, who wish to capitalize on one of the world’s largest and fastest growing market for milk and milk products. A bagful of â€Å"pearls† awaits the international dairy processor in India . The Indian dairy industry is rapidly growing , trying to keep pace with the galloping progress around the world .As he expands his overseas operations to India , many profitable options awaits him. He may transfer technology, sign joint ventures or use India as a sourcing center for regional exports. The liberalization of Indian economy beckons to MNC’s and foreign investors alike . India has one of the largest livestock population in the world. Fifty percent of the buffaloes and twenty percent of the cattle in the world are found in India, most of which are milk cows and buffaloes. Dairy development in India has been acknowledged the world over as one of modern India’s most successful developmental programme. Today, India is the largest milk producing country in the world. Milk and milk products is rated as one of the most promising sectors which deserves appreciation in a big way. When the world milk production registered a negative growth of 2 percent, India performed much better with 4 percent growth. The total milk production is over 72 million tones and the demand for milk is estimated at around 80 million tonnes. By 2005, the value of Indian dairy produce is expected to be Rs. 1,000,000 million. In the last six years foreign investment in this sector stood at Rs. 3600 million which is about oneforth of the total investment made in this sector. Manufacture of casein and lactose, largely being imported presently, has good scope. Exports of milk products have been decanalised. The milk surplus states in India are Uttar Pradesh, Punjab, Haryana, Rajasthan, Gujarat, Maharashtra, Andhra Pradesh,Karnataka and Tamil Nadu. The manufacturing of milk products is concentrated in these milk surplus States. Technology Export Potential of Milk and Dairy Sector The production of milk products i. e. milk products including infant milk food, malted food, condensed milk cheese stood at 3. 07 lakh tonnes in 1999-2000. Production of milk-powder including infant milk-food had risen to 2. 25 lakh tons in 1999-2000, whereas that of malted food is at 65000 tons. The trends in production of milk products in India is given in Annexure 1. Cheese and condensed milk production stands at 5000 and 11000 tonnes respectively. Some plants are coming-up for producing lactose, casein and improved cheese varieties. Livestock Population India is rich in its livestock wealth. It accounts for nearly 15. 8% of the world cattle population, more than half of the world buffalo population. As per FAO production year book 1998, the population of cattle, buffaloes, sheep and goats in the world and in India is given in Annexure 2. As per the 1992 livestock census of Ministry of Agriculture, highest cattle population was reported in Madhya Pradesh(28. 68 million nos. ) followed by Uttar Pradesh (25. 63 million nos. ) Bihar (22. 15 million nos. ) Maharashtra (17. 44 million nos. ) and West Bengal (17. 45 million nos. ). According to livestock census the highest population of buffaloes is reported in U. P. (20. 08 million nos. ) followed by A. P. (9. 15 million nos. ), M. P. (7. 97 million nos. ) and Rajasthan (7. 74 million nos). Production of Milk and Milk Products. The milk production was almost stagnant between 1947 to 1970 with an annual growth rate of merely one percent Livestock accounts for nearly 15. 8% of the world cattle population, more than half of the world buffalo population. Technology Export Potential of Milk and Dairy Sector which has since registered a vigorous growth of over 4. 5% per annum after the year 1970. The production of milk in India has been increasing steadily as shown in Annexure 3. The major milk producing states are UP, Punjab, Rajasthan, M. P, Maharashtra and Gujarat. Number of milk products manufacturing Plants have come up in these states for Processing of milk. Present Status The Five Year Plan, achieving an annual output of over 60 million tonnes of milk. This not only places our industry second in the world after the United States, but represents sustained growth in real availability of milk and milk products for our burgeoning population. Most important, dairying has become an important secondary source of income for millions of rural families. Improved genetic material achieved primarily through cross breeding of cattle and upgrading of the national buffalo herd has played a significant role in increasing the productivity. Gradual extension of improved husbandry practices; increase in consumption of balanced concentrates made possible, in part, through innovations in the field of nutrition; expanded area under fodder; greater access to veterinary care; and advances in the fight against endemic and epidemic cattle diseases have also contributed to increased production and productivity. About three quarters of the milk produced is consumed at the household level. Of the milk supplied to the market, about 9-11 percent is processed in over 275 dairy plants and Dairying has become an important secondary source of millions of rural families. 6 Technology Export Potential of Milk and Dairy Sector 83 milk product factories operated by cooperative, private dairy processors, and government milk schemes in the oroganized sector. Milk channeled through Operation Flood cooperatives is generally processed in dairy plants located in the rural areas and then transported into cities and towns. Operation Flood Milk productions account for about 1 0% of total milk production or 40% of the marketed output. The balance (about 90% of total production) is handled by the private traders and processors. About 45% of milk production is consumed as fluid milk. About 35% is processed into butter or ghee; about 7% is processed into Paneer (cottage cheese) and other cheeses, about 4% is converted into milk powder; and the balance is used for other products such as Dahi (yoghurt) and sweet meats. In recent years, there has been an increasing ice cream production as foreign companies have invested in India. Industry Segments: 1. Cheese The organised cheese market including its variants like processed cheese, cheese spreads, mozzarella, flavoured and spiced cheese, is placed at around Rs 3 bn. Processed cheese at 50% of the overall market is Rs. 1. 5 bn strong. The next most popular variant is cheese spread claiming a share of around 30% of the total cheese market. The market is primarily an urban phenomenon and is know to be growing at around 15%. The market for cheese cubes slices and tins is growing. The flavoured cheese segment has been declining. About 45% of milk production is consumed as fluid milk. About 35% is processed into butter o r or ghee is processed into paneer(cottage cheese) and other cheeses, about 4% is converted into milk powder; and the balance is used for other products such as Dahi (yoghurt) and sweet meats. Technology Export Potential of Milk and Dairy Sector 7 operator in the branded cheese market in India with about 60% market share in the branded market. It pioneered the market for processed, branded cheese. What GCMMF did was to develop the technology to make cheese from buffalo milk. World over it is made from cow milk. Annexure 4 gives the market size of cheese in India. Other cheese manufacturers are : Britannia Industries, Dynamix Dairy Industries (DDI), Hiranandani, ETA and Metro. 2. Ice Cream The ice cream market in India is estimated to have reached the level of Rs. 10 bn per annum, of which the organized sector is about Rs. 6 bn. The unorganised market has been shrinking. The per capita ice cream consumption in the country is extremely low at 250 ml per year compared with that of the US, which is about 22 litre. The organised market for ice creams of about 60 mn litres,has been growing at around 15% per annum. The ice cream industry has, in a short span of time, undergone a structural transformation. Annexure 5 (a) and 5 (b) shows the growth of market size of Ice Cream in India and the market structure of this segment respectively. 3. Chocolates The Chocolates market is estimated at 35,000 tonnes valued at approximately Rs. 8. 0 bn. The chocolate counter market is worth nearly Rs. 2. 5 to 3. 5 bn and the rest is made up of chocolate bars. Chocolates in fact make up less than a fourth of the sweet-tooth products including sugar boiled confectionery mints and chewing gums. Sugar confectionery is by far the largest segment with a share market growth rates indicate that the cheese market in India is growing steadily. The organised market for ice creams of about 60 mn litres has been growing at around 15% per annum. Technology Export Potential of Milk and Dairy Sector exceeding 60%. Annexure 6 (a) and 6 (b) gives the market size are structure of chocolate market in India. 4. Dairy Whiteners The organised dairy industry processes an estimated 15% of the total milk output in India. The industry has maintained a high growth profile, especially in the wake of the Operation Flood, colloquially also termed as White Revolution, initiated in early 1980s. Today India produces over 80 mn tonnes of milk annually. In terms of value, the total milk economy is estimated at Rs. 1200 bn. The market for dairy whiteners (commercially know as beverage milk powders and condensed milk) and creamers is around Rs. 2,750 mn. The growth of market size of dairy whiteners in the last 10 years is given in Annexure 7 (a) and 7 (b). Apart from MNCs like Nestle and companies like Britannia, the Indian enterprises have also made perceptible progress. Names like Amul, Sapan, Vijaya, Mohan, Parag and several others have been seen in the marketplace with their whiteners. Aseptically packed creamer in miniportions is widely used in the west, but has yet to enter the Indian market. Aseptically packed creamer involves techniques to impart a longer shelf life to the product. It is packed in small cups ready to be poured into a cup of tea or coffee. Creamer is fresh milk with increased fat content (upto 12%) and is aseptically packed after undergoing Ultra Heat Treatment (UHT) at 140oC. Its introduction will affect the existing whitener market as a natural milk product with a longer shelf life. The organised dairy industry processes an estimated 15 % of the total milk output in India. The industry has maintained a high growth profile, especially in the wake of the Operation Flood, col loquial ly also termed as White Revolution , initiated nearly 1980s. Technology Export Potential of Milk and Dairy Sector The potential for exports; especially to neighbouring countries and the countries in the Middle east, the Gulf and Africa, also exist and could be exploited. 5. Baby Foods Conventionally, foods (solids, semi-solids and liquids)badministered to babies of upto two years of age are classified as baby foods. In some cases, however, baby foods are continued to be given to children older than of two years depending on socio-economic, health-related and geosocietal conventions. The concept of packaged baby foods is relatively recent in India. The traditional homemade foods have dominated this sector until the induction of packaged foods mostly from multinational companies. Baby foods have assumed special significance in the recent years because of greater awareness of hygiene and health and constraints on time of busy mothers. A reliable, healthy, convenient and readyto-use baby food is the requirement of the day. India is catching up with the rest of the developed world in this area rater fast. A comparison of growth rates over the last 10 years shows that these has been a steady rise of market size. Annexure 8 (a) and 8 (b) gives the market size and the market structure of baby foods in India. The packaged food products for babies are broadly classified into a) cereal-based such as Nestum; b) cereal-based with milk such as Farex, Cerelax, c) milk-based such as Lactogen, d) ready-to-feed liquids, and e) rusks and biscuits. Infant milk foods constitute the most significant segment. The potential for exports;especially to neighbouring countries and the countries in the Middle east, the Gulf and Africa, exist and could be exploited. Technology Export Potential of Milk and Dairy Sector. 6. Biscuits and Bakery Products The Indian bakery industry is dominated by the small-scale sector with an estimated 50,000 small and medium-size producers, besides the 15 units in the organised sector. Apart from the nature of the industry which gravitates to the markets and caters to the local tastes, the industry is widely dispersed. The two major bakery products, biscuits and bread, account for 82% of all bakery production. The unorganised sector accounts for about two-thirds of the total biscuits production estimated at 1. 3 mn tonnes. It also accounts for 80% of the total bread production which is estimated at 1. 5 mn tonnes and around 90% of the other bakery products estimated at 0. 6 mn tonnes. The last includes pastries, cakes, buns, rusks and others. Annexure 9 (a) and 9 (b) gives the growth of market size of biscuits over the last ten years. Biscuit is estimated to enjoy around 37% share by volume and 75% by value of the bakery industry. The organized sector caters to the medium and premium segments, which are relatively less price-sensitive. The organised sector is unable to compete at the lower price range due to the excise advantage enjoyed by the informal sector. The organised segment in biscuits has witnessed a steady growth of about 6%, conforming broadly to the growth rate of GDP. The production crossed the one-million tone mark in 1995-96 which has now grown by estimated 30%. The size of the bread market is estimated at Rs. 13 bn. There are a number of producers in both sectors, organised and unorganised. From a low priced commodity, bread has The two major bakery products , biscuits and bread, account for 82% of all bakery production. Biscuit is estimated to enjoy around 37% share by volume and 75% by value of the bakery industry. Technology Export Potential of Milk and Dairy Sector graduated into a branded product with discriminating prices. 7. Confectionery The Indian confectionery market includes sugar boiled confectionery, hard-boiled candies, toffees and other sugarbased candies. In 2000, sugar boiled confectionery had penetrated an estimated 15% of the households only, suggesting a large potential for growth. There are about 5,000 units catering to the local markets. The total volume of the sugar boiled confectionery market in the organised sector (comprising plain / hard-boiled candies, toffees, eclairs and gums) is around 125,000 tonnes. Add to this the unorganized sector and the market for all types of confectionery is of the order of 250,000 tpa. That translates into 66% market share of the unorganized sector by volume. In value terms it is less than 50%. The sector’s expansion at a rate of 25% in 1998 had dropped to 17% in 1999 and registered a negative growth of 2% in 2000. In the long run it is slated to grow at 8 to 10% annually. The growth in the size of the confectionery market is gives as Annexure 10 (a). The total volume of the sugar boiled confectionery market in the organised sector is around 125,000 tonnes. Add to this the norganized sector and the market for all types of confectionery is of the order of 250,000 tpa. Exports: Export of certain milk products like milk powder, ghee and butter was canalised uptil 1993. With the objective of promoting exports of milk products, the Govt. have dechannelised the export of these milk products with effect from mid 1993. According to the EXIM Policy for 1997- 2002, the policy for export of these milk products is as under: Powder milk (skimmed or full Cream) whole and infant milk food, pure milk Ghee and Butter, except when exported as branded products in consumer packs, not exceeding 5 kgs in weight, will be exempted from the following conditions : 1) Quantitative i ceiling as may be notified by the DGFT from time to time. 2) registration-cum-allocation certificate issued by agricultural and processed Food Products Export Development Authority (APEDA). The Director General of Foreign Trade, Ministry of Commerce vide Public Notice No. 48/RE-98/1997-2002 dated 13th October, 1998 have removed the quantitative ceiling for export of powder milk and ghee and their export is now freely allowed. However, butter, if exported in packaging exceeding 5 kg. in weight, continues to be under the quantitative ceilings. Products for exports Skimmed Milk Powder, Whole Milk Powder, Ghee, Butter, Cheese, Condensed Milk, Casein etc. are some of the milk products being exported from India. With the objective of promoting exports of milk products, the Govt. have dechannelised the export of these milk products with effect from mid 1993. The export figures of dairy products during the last five years are given in Annexure 11. Major Destinations- UAE (43%), Nepal (19%), Bangladesh(12%) Future Markets South East Asia, Russia and Africa will be the emerging market for Indian dairy products. In the immediate future, there is prospect of an additional demand of over 3 million tonnes of milk products in the ASEAN region alone. The EU dairy exports will become limited by GATT agreements, while Australia-New Zealand do not have adequate production capacity. Equally significant is the rise of Russia as the world’s biggest dairy importer. Although by far the biggest milk producer in Europe, the Russian output has declined by more than 25 percent in the past five years. The shortfall in milk production is estimated to be 13 million tonnes a year. These major deficits in milk availability offer an opportunity for India to fill this vacuum and to become leading dairy exporting nations. Potential for value added products Ethnic Indian dairy products like Sweets Shreekhand, Rusgulla, Khoya and Ready-to-Eat-Kheer, Haluwa, etc. have good demand in the countries where ethnic Indian population is settled. For promotion of these products, we require export worthy consumer packing, which also improves the shelf-life of the product. South East Asia, Russia and Africa will be the emerging market for Indian dairy products. Technology Export Potential of Milk and Dairy Sector APEDA has initiated following steps to increase export of dairy products: Standards have been laid down for export of dairy products APEDA is offering subsidies for implementation of HACCP and ISO 9000, installation and upgradation of laboratories and market promotion through sending of samples, printing of catalogue brochures and brand publicity through advertisement etc. under it’s plan scheme. Export market development will depend on ensuring the quality. This will require that exporters ensure quality from the milk animals to the port and beyond. To build the quality, mechanized dairy fanning requires encouragement with export oriented processing facilities. Manufacturing units linked by contract with large scale producers, can ensure of quality raw material necessary to enter and maintain the position in the international market. It is the cow milk which is recognized in the international market. Since India is producing more of buffaloe milk, there is a need for generic promotion of buffaloe milk. Many countries in the world do not import milk products from India since India is reporting many livestock diseases particularly FMD. Efforts are, therefore, needed to control and eradicate FMD at least in major milk producing States. Creation of chilling facilities at block level village level and transportation of liquid milk to processing units in reefer units . NATIONAL DAIRY DEVELOPMENT BOARD (NDDB) The National Dairy Development Board was created to promote, finance and support to the following: 1- Producer owned and controlled organizations. NDDB’s programmes and activities. 2- Seek to strengthen farmer to support national policies that are favorable. 3- To the growth of such institutions. Fundamental to NDDB’s efforts are co-operative principles and the Anand Pattern Co-operatives of Cooperation. The National Dairy Development Board (NDDB) was founded to replace exploitation with empowerment, tradition with modernity, stagnation with growth, transforming dairying into an instrument for the development of India’s rural people. Policies in Milk Milk Products Milk and Milk Products Order (MMPO) regulates milk and milk products production in the country. The order requires no permission for units handling less than 10,000 litres of liquid milk per day or milk solids upto 500 tpa. Mi lk and Milk Products Order (MMPO) regulates mi lk and mi lk products production in the country. A l l t h e m i l k p r o d u c t s except malted foods are covered in the category o f i n d u s t r i e s f o r wh i c h f o r e i g n e q u i t y participation upto 51% is automatically allowed. 1 8 Technology Export Potential of Milk and Dairy Sector All the milk products except malted foods are covered in the category of industries for which foreign equity participation upto 51% is automatically allowed. Icecream, which was earlier reserved for manufacturing in the small scale sector, has now been dereserved. As such, no license is required for setting up of large scale production facilities for manufacture of ice cream. Subsequent to dechannelisation exports of some milk based products are freely allowed provided these units comply with the compulsory inspection requirements of concerned agencies like: National Dairy Development Board, Export Inspection Council etc. Bureau of Indian standards has prescribed the necessary standards for almost all milk based products, which are to be adhered to by the industry. Regulatory Environment in the Dairy Processing Sector in India The Indian processed dairy industry has grown and diversified enormously in the last few years. To ensure the proper development and growth of this industrial sector, the Government of India has instituted various laws and regulations. The various regulations that govern the dairy processing industry can broadly be classified into: Compulsory Legislation Prevention of Food Adulteration Act, 1954 This Act is the basic statute that is intended to protect the common consumer against the supply of adulterated food. This specifies different standards for various food articles. The standards are in terms of minimum quality levelsTechnology Export Potential of Milk and Dairy Sector 1 9 intended for ensuring safety in the consumption of these food items and for safeguarding against harmful impurities and adulteration. The Central Committee for Food Standards, under the Directorate General of Health Services, Ministry of Health and Family Welfare, is responsible for the operation of this Act. The provisions of the Act are mandatory and contravention of the rules can lead to both fines and imprisonment. Milk and Milk Product Order (MMPO). 1992 The Milk and Milk Product Order (MMPO), 1992, issued on June 9, 1992 seeks to ensure the supply of liquid milk, an essential commodity, to consumers by regulating its processing and distribution. Within eight years of its operation, the Central/State Registering Authorities have till December 2000 registered 666 units with a total processing capacity of 65. 8 million litres per day (mlpd). Salient Features of the MMPO Order include the following: – Registrations for units handling up to 75,000 litres of milk per day are granted by the State Governments and units with more than 75,000 litres per day capacity are registered by the Central Registering Authority. – The Certificate also specifies the milkshed area, which, under the order is defined as a geographical area demarcated by the Registering Authority for the collection of milk by the registered unit. – Maintenance of specified hygienic conditions in the premises where milk and milk products are handled, processed, manufactured or stored. 2 0 Technology Export Potential of Milk and Dairy Sector The collection, transportation and processing of milk normally centres around the operations of a processing plant. The region from which the marketable surplus of milk production finds its way to a processing plant is called.