Group Members:Akashdeep SinghIshan SrivastavaJaskaran SinghMankirat Singh

Milk Industry

• Worldwide, dairy farms produced about 730 million tones of milk in 2011 from 260 million dairy cows.

• India is the world's largest producer and consumer of milk, yet neither exports nor imports milk.

• New Zealand, the European Union's 28 member states, Australia, and the United States are the world's largest exporters of milk and milk products.

Milk Industry

• China and Russia are the world's largest importers of milk and milk products.

• Throughout the world, there are more than 6 billion consumers of milk and milk products. Over 750 million people live within dairy farming households.

World total milk production in 2009FAO statistics (including cow/buffalo/goat/sheep/camel milk)Rank Country Production (109 kg/y)

World 696,5541 India 110,0402 United States 85,8593 China 40,5534 Pakistan 34,3625 Russia 32,5626 Germany 28,6917 Brazil 27,7168 France 24,2189 New Zealand 15,21710 United Kingdom 13,23711 Italy 12,83612 Turkey 12,54213 Poland 12,46714 Ukraine 11,61015 Netherlands 11,46916 Mexico 10,93117 Argentina 10,50018 Australia 9,38819 Canada 8,21320 Japan 7,909

Demand

Milk Consumption per capita

• World milk consumption per capita increased +1% from 103.5 to 104.7 kg in 2010.

• Milk consumption per region:

• Asia: 39%

• Europe: 29%

• North America: 13%

• South America: 9%

• Africa: 6%

• Central America (incl Mexico): 3%

• Oceania: 1%

*The world dairy situation report 2011

Milk consumption pattern - World

Mother Dairy - Profile

• Parent Company National Dairy Development Board (NDDB)

• Category Milk and Food Processing• Sector Food and Beverages• Tagline/ Slogan Piyo Pure• USP India’s very own producer of milk,

milk products, beverages, foods, etc. at affordable rates and of premium quality

Brands1.Mother Dairy Plain Dahi2.Dhara3.Safal

Strength

1.Awell-recognized brand name2. Popular subsidiary brands like Dhara, Safal, b-Activ, etc.3.A wide variety of products like milk, dairy products, fruits,

vegetables, groceries, edible oil, beverages, frozen food, etc.4. It is an IS/ ISO-9002, IS-15000 HACCP and IS-14001 EMS

certified company5. An employee strength of 3000 people6.Strong and efficient supply chain network7.Procurement of milk from co-operative dairies and vegetables

from farmers, providing them with fair prices8.Technological advancement9.Popular for its quality and affordable price

Weakness

1.Limited number of Mother Dairy and Safal outlets

2.Difficult to maintain competitive pricing

3.Vegetables and milk products are perishable

1.Continuous demand of dairy products and other products by Mother Dairy

2.Open more number of Mother Dairy outlets

3.Market and advertise the products

4.Increase its market share by expansion in untapped markets

Opportunity

Threats

1.Strong marketing muscle by competitors

2.Unstable economic condition in India

3.Other competitor brands

Why SAARC countries?

• Constitutes about 23 % of the world’s population

• One of the fastest growing region

• Transformed through free trade agreements

• Sri Lanka and Nepal highest rank countries in ease of

doing business

• Business model will be same due to:

Similar geographical scenario

Cultural differences are similar

Taste preferences are similar

Similar consumption pattern

Comparison of SAARCS CountriesCountries Starting

a business

Ease of doing business

Getting electricity

PayingTaxes

Trade across border

Afghanistan 24 183 141 79 184

Bangladesh 115 173 118 83 120

Bhutan 92 125 72 86 165

India 158 142 137 156 126

Nepal 104 108 85 126 71

Maldives 50 116 108 134 132

Pakistan 116 128 146 172 108

Sri Lanka 107 99 100 158 69

Product Segmentation

Markets Segmentation

Market Segmentation

• Neighboring countries

• Low cost of Export

• Import friendly Law

• Milk deficit countries

• Good profit margin

Nepal

Market daily requirement – 8.2 million litres

Demand growth rate (milk products) – 4.2% YOY

Supply of milk – 4.26 million litres

Milk deficit (daily) – 4 million litres (approx.)

Milk consumption / person – 56 litres/ year

Recommended consumption (FAO) – 92 litres

Market Potential of NepalChain Ratio Method

Particulars Amount

Population of Nepal 27.8 million (2013)

Milk consumption 58 litres / person / year

% of Milk Consumers 80% i.e. (22 million)

Awareness (Year 1) 10% (approx.)

Adaptiveness of Brand 40%

Avg. price of Milk/litre Rs. 53

Sales forecast (units) = 58*22*0.1*0.4 51 Million Litres

Sales Forecast (Rs.) = 51 * Rs. 53 Rs. 2.7 billion /annum

StrategyMilk plant in Nepal

Particulars Amount (Rs) / litre

Cost of Raw Milk 35.91

Collection Cost 1.92

Processing Cost 4.01

Sales Cost 1.17

Administrative Overhead 8.51

Total 51.52

Particulars Amount (Rs.) / litre

Selling Price 53

Cost 51.52

Margin/Profit 1.48

Total Profit / Year Rs.75.48 Million (51*1.48)

Profits – Other Dairy Products

Net Margin/kg(INR)

22.05

18.27

13.23

2.52

10.08

31.5

18.27

PEST of Nepal

Political Factors:

• Open border with

India

• No harm to

Indian companies

• Reforms to

promote business

Technological Factor:• Obsolete

Technology• Major chunks are

imported

Social Factors:• Consumer buying

pattern• Health conscious• Rising Standard of

living

Economic Factors:• High Potential• Rising Economy• GDP- $21billion• Cheap work force

Competitors

• Sujal Dairy Company

• Chitawon Milk (P) Ltd

• HIMALAYAN DAIRY

• Omkar Dairy Industries Limited

Bangladesh

Market annual requirement – 1.46 crore tonnes

Production of milk- 38 lakh tonnes

Supply of milk – 21700 tonnes

Milk deficit – 98.20 lakh tonnes

Per capita milk availability – 82.9 ml

Recommended consumption – 250 ml

PEST of Bangladesh Political Factors:

Political Factors:

• Challenge to create a real participatory democracy

• Issues of good governance and corruption

• Political instability• government

Economic factors:• Inflation rate• Pursue foreign

investment actively• Reduction in poverty• Foreign trade

regulations and attitude towards foreign companies

Social factors:

• Growing concern over dairy products

• Large no. of people are aging

Technological factors

• Technological advancements

• Heavy reliance on imported tech.

• A National Science and Technology policy adopted by the Government

Market Potential of BangladeshChain Ratio Method

Particulars Amount

Population of Bangladesh 160 million

Milk consumption 30 litres / person / year

% of Milk Consumers 75%

Awareness (Year 1) 10% (approx.)

Adaptiveness of Brand 15%

Avg. price of Milk/litre Rs. 48

Sales forecast (units) =30*160*0.75*0.1*0.15

54 Million Litres

Sales Forecast (Rs.) = 54 * Rs. 48 Rs. 2.59 billion /annum

Competitors

Bangladesh Nutrition & Dairy Food Industry

Mark Dairy & Milk Products Limited

Aftab Milk & Milk Products Ltd.

JAM Group

Shelai Dah Dairy Ltd.

Strategy

• Free trade agreement between countries

• 70 new local markets called “HAAT” will open on common border (therefore easy export)

• Export from Warehouse - Kolkata, West Bengal

Particulars Amount(INR) / Litre

Final cost of milk to mother dairy – India

32.2

Cost of transport toBangladesh Market

1.7

Total 34 (aprox.)

Selling cost to distributors 40

Profit Margin 6

Total profit (6*54) Rs. 324 Million

Future Potential

Questions?