Global Country Study Report On Fruit Industry Of Bhutan MBA Semester III-IV

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Global Country Study Report
On
Fruit Industry of Bhutan
Business Opportunities for Gujarat/India
Submitted To
Institute Code: 810
Institute Name
Shree. J. N. Ruparel Swaminarayan institute of Management,
Chhaya, Porbandar.
Under The Guidance Of
Dr. Viral Shilu (Director)
In partial Fulfilment of the Requirement of the award of the degree of
Master of Business Administration (MBA)
Offered By:
Gujarat Technological University
Ahmedabad.
Prepared by : MBA (Semester - III / IV)
1) Poonam R. Pankhania 2) Jaypalsinh H. Jethva 3) Nilesh K. Solanki
4) Vijay M Parmar 5) Ashfaq I Sherwani 6) Menand L Bhutuya
Month & Year: May, 2014

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Student’s Declaration
We, following students, hereby declare that the Global/ Country Study Report
titled, Fruit Industry in Bhutan. Is a result of our own work and our indebtedness to
other work publications, references, if any, have been duly acknowledged. If we are
found guilty of copying any other report or published information and showing as our
original work, or extending plagiarism limit, I understand that we shall be liable and
punishable by GTU, which may include ‘Fail’ in examination, ‘Repeat study & re-
submission of the report’ or any other punishment that GTU may decide.
Enrolment No. Name Signature
128100592050 Nilesh K. Solanki
128100592019 Jaypalsinh H. Jethva
128100592038 Poonam R Pankhania
128100592041 Vijay M. Parmar
128100592048 Ashfaq I. Sherwani
128100592007 Menand L. Bhutiya
Place: Porbandar Date : / /

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PREFACE
Today’s modern world is progressing by leaps and bounds. In this fast changing
world management of business is very important phase.
The course of MBA gives great knowledge to the student’s global country
report as a part of MBA course. This enables the students to understand how they can
apply their theoretical knowledge in practical world. It helps us to develop our
leadership skills, communication skills and analytical skills and so on. It presents a
unified picture of what management is and how it is applied to various forms of human
endeavour.
We got the opportunity to research on Fruit Industry Of Bhutan. This project
gives detailed information about business potential of fruit industries of India and
Bhutan. It also gives information about global management.

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ACKNOWLEDGEMENT
I take this responsibility to express my profound and sincere gratitude to Shree
Swaminarayan Institute of Management for providing me with the opportunity to
explore the corridors of the corporate world and gather invaluable knowledge and
practical experience via the Summer Training Project. I take the privilege of offering a
deep sense of gratitude and indebtedness to Dr. Viral Shilu.
And All Faculty for providing us their able guidance and inspiration to
complete the Global country Report. I express my sincere gratitude to my Friends who
guided me how to carry on with the project. Their able guidance and support have been
constant source of knowledge and motivation for me. Above all no words can express
my gratitude to my parents and friends who supported me through thick and thin
difficulties faced by me during the preparation of the project. I also owe a sense of
gratitude to my faculty members, respected, Managing Director Of Our College who
guided me throughout my summer training and provided structured guidelines to work
and progress. Last but not the least; I would like to thank all who guided me their
valuable suggestions and constant encouragement. The expertise in this study belongs
to those listed above. Any errors are mine.

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Ch. No. Particulars Page No
1 Summary Of Part I
2 Summary Of Part II Micro Analysis
3 Introduction Of The BFPPL And Its Export Import
Trade With India
4 SWOT Analysis Of BFPPL
5 Market Opportunities For Import - Export Trade In
Bhutan
6 Policies and Norms Of India For Import – Export To
Bhutan
7 Global Strategy Problem Of BFPPL
8 Winning Strategy For BFPPL
9 Future Projection Of Trade Of BFPPL With India
During Next 5 Years
10 Resources Required To Tap Business Opportunities In
Bhutan
11 Findings And Suggestions
12 Conclusions
13 Bibliography

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1 - SUMMARY OF PART I - REPORT
1. INTRODUCTION
Bhutan is a small and extremely mountainous country with a surface area of 46,000 sq.
km, located in the eastern Himalayas. It is bordered to the north by the Autonomous
Region of China (Tibet) and to the east, west and south by India. The population is about
700,000, and more than 90% of the population live in rural communities comprising of a
little over 67,000 households.
Bhutan has extremely diverse agro-climatic conditions due to major differences in
altitude and rainfall as well as in slope characteristics. Roughly, the country could be
divided into four physiographic zones - the southern foothills, the middle river valleys,
the mountain slopes and the high Himalayas. Based on temperature and rainfall the
country could be further sub-divided into six agro-climatic zones - wet sub-tropical,
humid sub-tropical, dry sub-tropical, warm temperate, cool temperate and alpine zones.
Little is known about the history of deciduous fruit cultivation in Bhutan, as there is no
documented evidence to draw information. The fact that traditionally fruits always
occupied a prominent place on the altar of offering in all religious ceremonies lends
support to the assumption that fruit cultivation must have been part of Bhutanese
history, which could be traced as far back as the 7th century. Even now there are some
existing orchards whose age could be more than 100 years. These orchards have all
types of deciduous fruits like apricot, peach, pear, persimmon, walnut and chestnut and
are found near almost all monasteries and district administration buildings in Bhutan.
Modern fruit cultivation however began in the reign of the third king Jigme Dorji Wang
Chuck, who is widely regarded in Bhutan as the Father of The Nation. It was his vision,
which, as clearly stated in the foreword of his book on planting an Orchard (1968) “Our
country, the Kingdom of Bhutan, land of Buddhism, is a wonderful place. The variations
in altitude and climatic conditions in different regions of Bhutan provide great scope for
the growing of different fruits.” In the absence of means of transport, however, fruits
were grown in the past for domestic consumption only.
But now, with the construction of roads, surplus fruits can be exported to the
neighbouring parts of India, which have a tropical climate but an insatiable market for

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temperate fruits. We should avail ourselves of this excellent opportunity. Not only is this
vision the beginning of modern fruit cultivation in Bhutan but also his personal interest
which enabled him to collect different fruits from various nurseries in northern India
during his frequent visits in the 1960s.
Prior to the inception of the Five-Year-Development Plan (1962-67), fruit cultivation was
limited to backyard cultivations only, meant solely for family consumption? With the
beginning of the First Five-Year-Development Plan, fruit cultivation was identified as a
potential source of cash income for the farmers and thus the first few commercial
plantations were established. Apple was then the most important deciduous fruit crop
introduced from India and grown on a commercial scale. Other deciduous fruits like
apricot, peach, plum, pear and persimmon were still cultivated at subsistence level and
were not of much economic significance.
Commercial cultivation of apple took some time to have significant economic impact
owing to a relatively undeveloped road network and marketing systems. It was only in
the late eighties that apple production had risen to the level of major commercial
importance as a result of a better road network and the development of an export
market to Bangladesh.
2. PRESENT SITUATION OF DECIDUOUS FRUIT CULTIVATION
Deciduous fruits grown in the backyards include Asian pear, peach, apricot, persimmon
and walnut. Almost all of these have their indigenous species in the wild. The exotic and
commercially cultivated deciduous fruits include apple, peach, plum, apricot, Bartlett
pear, Nashi and cherry. There is now a growing tendency to replace the old monastery
orchards also with improved cultivars that are now available. By and large, the most
extensive orchards at the moment are the apple orchards followed by peach and
walnut.
The main cultivars of apple are Red Delicious, Royal Delicious and Golden Delicious,
which account for over 80% of the apple area. These cultivars were first introduced in
the 1960s from the northern Indian States of Jammu & Kashmir and Himachal Pradesh.
By the 1980s a host of new improved cultivars were brought in from Japan.

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Apple is generally grown in temperate areas from about 1800m to 3000m. According to
the preliminary survey carried out by the Integrated Horticulture Development Project
in 1992, there were about 365,000 apple trees in the country, covering roughly about
1400 ha. The present apple population is estimated to be around 565,000 based on the
average annual sale of 50,000 plants from the Druk Seed Corporation in the last five
years. Of this total, about 90% are found in the western part of the country covering the
three Dzongkhags (districts) - Paro, Thimphu and Haa. The other 10% are found in the
central district of Bumthang.
3. STEEPLED ANALYSIS
S: Social
T: Technological
E: Economical
E: Environmental
P: Political
L: Legal
E: Ethical
D: Demographical
Expenditures for research and development are current and capital expenditures (both
public and private) on creative work undertaken systematically to increase knowledge,
including knowledge of humanity, culture, and society, and the use of knowledge for
new applications. R&D covers basic research, applied research, and experimental
development. Forecasts of large tree fruit crops in the Pacific Northwest this year have
got growers wondering how they’ll harvest them. This season could see record cherry,
apple, and pear crops. Increased production coincides with a smaller number of migrant
workers entering the country from Mexico, and there is no immediate prospect of
federal legislation that would help increase the labor supply.

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The economy of Bhutan one of the world’s smallest and least developed countries is
based on agriculture and forestry, which provides the main livelihood for more than
60% of the population. The economy is closely aligned with India's through strong trade
and monetary links and dependence on India's financial assistance. Bhutan's
hydropower potential and its attraction for tourists are key resources. The Bhutanese
Government has made some progress in expanding the nation's productive base and
improving social welfare. Model education, social, and environment programs in Bhutan
are underway with support from multilateral development organizations. Each
economic program takes into account the government's desire to protect the country's
environment and cultural traditions. In 2004, Bhutan became the first country in the
world to ban smoking and the selling of tobacco.
The benchmark interest rate in Bhutan was last recorded at 6 percent. Interest Rate in
Bhutan is reported by the Royal Monetary Authority of Bhutan. From 2012 until 2013,
Bhutan Interest Rate averaged 6.0 Percent reaching an all-time high of 6.0 Percent in
October of 2013 and a record low of 6.0 Percent in June of 2012. In Bhutan, interest rate
decisions are taken by the Royal Monetary Authority of Bhutan. The official interest rate
is the Base Rate.
The Bhutan Foundation partnered with the Ministry of Health to work on improving
emergency medical services in 2009. The program is a comprehensive 3 year program
which encompasses starting pre-hospital care, improving in hospital medical services
through training, and building systems. The program will focus primarily on improving
the Emergency Department of the Jigme Dorji Wangchuck National Hospital in Thimphu
as the model and core Emergency Department of the nation. The Bhutan Foundation
has also partnered with Health Volunteers Overseas to bring in volunteer Emergency
Room physicians from the US to Bhutan for one month periods, where they will provide
bedside clinical teachings, as well as lectures and trainings on emergency and trauma to
Bhutanese physicians and nurses at Jigme Dorji Wangchuck National Hospital

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Taxation in Bhutan is conducted by the national government and by its subsidiary local
governments. All taxation is ultimately overseen by the Bhutan Ministry of Finance,
Department of Revenue and Customs, which is part of the executive Lhengye
Zhungtshog (cabinet). Bhutanese law generally provides for individual and corporate
taxation based on income, sales, imports, and movable and immovable property.
Business cycle of fruit industry in Bhutan passes through the following stages namely
Introduction, Expansion, Boom, Recession and depression. For example any beverage
manufactured from fruits is first of all introduced in the market as time passes it grows
and expands in the market and after certain time due to technological or consumer
taste or preference changes the product enters in to recession and then after it declines
in the market
Bhutan’s young democracy grapples with the challenges of preserving its rich natural
environment in the face of its development needs. What does the future hold for
Bhutan’s many endangered species that are already being decimated elsewhere? How
can Bhutan continue to harbour them so they are not wiped off the face of the earth?
From snow leopards and tigers to hundreds of medicinal plants, Bhutan’s rich
biodiversity is testimony to the country’s conservation ethics. However, there is a big
gap in baseline information for even the most charismatic of Bhutan’s wildlife species.
Corporate governance refers to the system by which corporations are directed and
controlled. The governance structure specifies the distribution of rights and
responsibilities among different participants in the corporation (such as the board of
directors, managers, shareholders, creditors, auditors, regulators, and
other stakeholders) and specifies the rules and procedures for making decisions in
corporate affairs. Governance provides the structure through which corporations set
and pursue their objectives, while reflecting the context of the social, regulatory and
market environment. Governance is a mechanism for monitoring the actions, policies
and decisions of corporations. Governance involves the alignment of interests among
the stakeholders. There has been renewed interest in the corporate governance
practices of modern corporations, particularly in relation to accountability, since the
high-profile collapses of a number of large corporations during 2001–2002, most of
which involved accounting fraud. Corporate scandals of various forms have maintained
public and political interest in the regulation of corporate governance. In the U.S., these

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include Enron Corporation and MCI Inc. Their demise is associated with the U.S. federal
government passing the Sarbanes-Oxley Act in 2002, intending to restore public
confidence in corporate governance
Prima facie requirements of Bhutanese contracts, termed "written agreements," are
governed by provisions of Evidence Act of 2005. Valid written agreements must be
made in the presence of one witness of each party; be signed by all parties or another
person duly empowered by a legally binding writing in that behalf; and be executed with
a legal stamp. A contract is invalid if it has an erased word; has an alteration that is not
counter-signed; has a defective seal or signature; lacks the proper legal stamp; is made
while a party is a minor, mentally unsound, or under duress; is objected to by any party
in court within 10 days; is executed in breach of law or to conceal an illegal act; or
otherwise fails to conform to any other requirement by law.
The Employment law of Bhutan derives mainly from legislation and treaties. Prior to the
enactment of the Constitution, laws were enacted by fiat of the King of Bhutan. The law
of Bhutan originates in the semi-theocratic TsaYig legal code, and was heavily influenced
through the twentieth century by English common law. As Bhutan democratizes, its
government has examined many countries' legal systems and modeled its reforms after
their laws. The supreme law of Bhutan is the Constitution of 2008. Under the
Constitution, laws are passed through a bicameral process requiring the assent of the
National Assembly and National Council of Parliament, as well as the assent of the King.
The final authority on law of Bhutan and its interpretation is the Supreme Court. Laws
enacted in Bhutan prior to the Constitution of 2008 remain intact insofar as they do not
conflict with the Constitution. Much of Bhutanese law is premised on promoting Gross
National Happiness, a fundamental principle of the Constitution
The inflation rate in Bhutan was recorded at 5.51 percent in the second quarter of 2013.
Inflation Rate in Bhutan is reported by the Royal Monetary Authority of Bhutan. From
2001 until 2013, Bhutan Inflation Rate averaged 6.0 Percent reaching an all-time high of

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13.5 Percent in June of 2012 and a record low of 0.0 Percent in March of 2004. In
Bhutan, the inflation rate measures a broad rise or fall in prices that consumers pay for a
standard basket of goods
4. MARKETING
The world fruit and vegetable market is expected to exceed $735 billion by 2015,
representing 25% growth over five years, reports Market Line. By 2015, the market is
predicted to reach over 690 million tons in volume, up 5% compared with 2010. Exports
of fruit and vegetables generate around $45 billion, reports the Food and Agriculture
Organization of the United Nations (FAO).The global fruit and vegetable market is
concentrated, with the 50 top companies accounting for 70% of revenue. The industry
includes goods under various forms like canned, frozen, concentrated and dehydrated
products. Fruit and vegetables are processed to make juices, jams, chutneys, pickles and
jellies. Vegetables represent almost 65% of the overall market, according to research
from Market Line.
5. POTENTIAL AND CONSTRAINTS FOR DECIDUOUS FRUIT PRODUCTION
DEVELOPMENT
Bhutan has a huge potential to produce several deciduous fruit crops due to a wide
range of agro-climatic conditions. Apart from growing apples and other deciduous fruits
in the temperate zones, it could also grow peach, pear, apricot and grapes in its warm
temperate zones, where there exists ample land resources to be exploited for this
purpose.
If production is increased and quality improved, it could enjoy the benefits of close
markets in India, Bangladesh and other countries in the region. Bhutan has the potential
for the production of high quality produce in a clean environment; and the production
seasons are different from most countries in the region. The other important factor is
that the farmers are now aware of the benefits of growing fruit crops and are willing to
cooperate in production development programs. Horticultural produce has provided the
best opportunities for the farmers to earn cash income, which is expected to provide
further impetus to develop fruit crops like peach, pear, apricot, plums, cherries and
grapes.

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The major physical constraints to fruit production development are primarily due to the
mountainous nature of the country. The narrow valleys with steep slopes restrict large-
scale production of fruits by limiting mechanization. The road network is still not well-
developed, restricting transport of goods and produce from the farm to the market. In
addition to the inadequate road network, horticultural production is constrained by
limited infrastructure and facilities in terms of marketing, grading and packaging,
storage and processing. As a result, there is limited access to the export markets outside
India and Bangladesh.
Another limiting factor is at the institutional level, where fruit cultivation received only
recent emphasis owing to late exploration of markets and also because the priority in
the past was more on the production of grains to meet the national goal of food self-
sufficiency. This has resulted in a shortage of trained personnel in the horticulture
sector, less research activities and poor extension services.
In addition, information on horticultural production, markets and trade is limited and
not reliable, leading to uncertainties as to the real commercial potential of different
crops, and making effective policy and strategic planning difficult.
At the field level, yields are often low due to such problems as lack of knowledge among
farmers in fruit production, poor varieties, low quality planting material, poor orchard
management practices, and pest and disease problems.
In summary, the exploitation of the full potential of deciduous fruit cultivation in the
country has not been possible due to the following constraints:
 Lack of clear-cut horticulture development policy and strategy in the past.
 Inadequate transportation network, including lack of feeder roads to potential
production areas.

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 A weak horticulture research and extension system.
 Limited farmer knowledge of fruit production systems.
 Insufficient market information and market facilities.
 Low yields and poor quality fruits due to low level of management practices.
 Poor post-harvest practices and lack of storage facilities.
 Lack of small-scale processing facilities.
6. GOVERNMENT POLICIES AND PLANS FOR RESEARCH AND DEVELOPMENT
As mentioned earlier, the horticulture development policy is based on the wisdom and
the vision of the third King. This national commitment is the key to long-term success in
horticultural development, and is particularly relevant in the attainment of the national
development goal in the horticulture sector. Its aim is to increase production of
horticultural crops both for domestic and export markets, leading to higher nutrition
intake, higher farm incomes, and greater economic growth and export revenues.
The long term and short term objectives of horticultural development are:
Long Term Objective: “To optimize the contribution of the horticulture industry to the
welfare of present and future generation of Bhutanese farmers and consumers with
emphasis on improved cash income, food security, higher nutritional standards and
export earnings”.
Short Term Objective: “To improve the existing management practices and to increase
production and quality of those horticultural commodities with a comparative
advantage in a sustainable manner in all production environments through
interdisciplinary research, extension and marketing”.

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To meet the objectives the following strategies are being adopted:
 Production based on market requirements.
 Production of high quality commodities.
 Production of high value produce with low perishes ability.
 Extension of supply periods through use of different varieties growing
environments.
 Introduction and development of improved varieties.
 Intensification of production systems.
 Development of small-scale agro-industries.
 Development of kitchen gardens.
 Improvement of institutional capabilities.
To achieve the objectives and strategies, the following activities are being carried out:
 Applied and adaptive research.
 Strengthening extension services.
 Development of market information services and infrastructure.
 Human resources development.
 Improving the input supply system.
 Supporting private sector activities in the fruit industry.
Integrated Horticulture Development Program
Until the initiation of the first Integrated Horticultural Development Project (IHDP-I),
funded by the UNDP and executed by FAO from 1990-1994, there was no systematic
research in deciduous fruit cultivation. This project however, assisted in establishing a
basic infrastructure and an action program for horticulture research and development
by studying production and market prospects, and strengthening the national capacity
through training, germplasm introduction and technical assistance. The main output of
the project has been the preparation of a comprehensive long-term masterplan which
has culminated into the on-going UNDP assisted Integrated Horticultural Development
Program (IHDP-II). This program is geared towards an all-round development of
horticulture covering all aspects such as production, research, extension, post-harvest

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activities and marketing. Its implementation commenced in July 1997. The program is
aimed at establishing a viable and vibrant horticultural industry in the long run.
The Integrated Horticulture Development Program (IHDP-II) consists of six sub-programs
- a) Coordination sub-program; b) Technology generation sub-program; c) Extension
sub-program; d) Post-harvest sub-program; e) Marketing sub-program; and f) Aromatic
and Medicinal Plants sub-program.
 The Coordination sub-program has the overall responsibility to ensure smooth
functioning of the other sub-programs.
 The Technology generation sub-program looks after the research activities of
horticulture in terms of introduction of germplasm, establishment of adaptive
trials and generation of appropriate technologies.
 The Extension sub-program works towards strengthening the horticulture
extension activities.
 The Post-harvest sub-program introduces post-harvest practices like grading,
proper packaging and storage facilities.
 The Marketing sub-program collects information on markets, explores new
markets and develops markets for the horticultural products.
 The Aromatics and Medicinal sub-program looks after the development of
indigenous aromatic and medicinal plants and their uses.
National Horticultural Research
The national research program in agriculture consists of research in forestry, livestock,
field crops and horticulture. Horticultural research has received equal footing with
research in field crops, livestock and forestry which are the main sub-sectors in the
Renewable Natural Resources (RNR) Sector. The National Horticultural Research Center
is based at Khangma in eastern Bhutan. This center has horticulture research as its main
mandate apart from carrying out research in other fields. Horticulture research is also
being carried out in other RNR research centers although their mandates are in
livestock, forestry and field crops, based on the agro-ecological regions of the centers.

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2 – EXECUTIVE SUMMARY OF PART II – REPORT
BHUTAN FRUITS PRODUCTS PVT. LTD. is a leading medium scale industrial unit located
in the heart of Samtse Dzongkhag. It is registered under the Company’s Act of the
Kingdom of Bhutan. This unit was initially established in 1959 under the name “Food
Preservation Factory” and was run by the State Trading Corporation of Bhutan. The
management of the factory was subsequently handed over to an industrialist who was
running the Distillery Unit in Samtse, during 1966. This unit was registered as BHUTAN
FRUIT PRODUCTS LIMITED, under a Royal Charter granted by His Majesty the King of
Bhutan on 23rd October, 1973. The management of the unit since then has been lying
with M/s TASHI COMMERCIAL CORPORATION, a reputed business organization based in
Phuentsholing. This factory processes fruits and vegetables based products under the
brand name “DRUK”.
Currently the company is working with semi automatic machineries. It has both a coal-
fired as well as a diesel operated boiler to meet the steam requirements. The diesel-
fired boiler was commissioned in July 2009 as per the directive of the National
Environment Commission.
The BFPPL has a team of dedicated hard-working staff at different grade levels. The
factory employs about 350-400 workers on a daily basis during peak season. Female
workers constitute the main labour force, which are capable of handling processing
works of fruits and vegetables in a very systemic way. All the day workers have been
trained in food handling practices by the Bhutan Agriculture & Food Regulatory
Authority (BAFRA) and some of the workers have already been issued with Food
Handlers License. As per BAFRA’s requirement, the BFPPL now recruits only day
workers having valid Food Handlers’ License.

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2 Export Import Trade With India
With the anticipated production of 85 million tons of fruits and 160 million tons of
vegetables, it is estimated that there will be surplus to the tune of approx 3-4 million
tons of fruits and approximately 7-8 million tons of vegetables at the end of 2011-12,
India has exported only 0.32 million tons of fruits and 1.6 million tons of vegetables
during 2006-07.This shows there is an ample scope of accelerating the exports of fruits
products.
The imports are mainly done from the Indian multinationals companies like; Hindustan
Lever Limited, Gujarat Co.op Milk Marketing. Federation Limited, Nestle India Limited,
Henkle SPIC India Limited, Eveready Industries (I) Limited, Johnsons & Johnsons Limited.,
Parle Products Limited, Britannia Products Products, Colgate Palmolive India Limited,
Joyco India Private Limited, Marico Industries Limited, Peffeti Vanmelle India Private
Limited, Cadbury India Limited, Godrej Consumers Products.
SWOT Analysis Of BFPPL
SWOT is a management technique (strategic tool) developed at Stanford University in
the 1960’s using data from Fortune 500 companies. It evaluates strengths (S),
weaknesses (W), opportunities (O) and threats (T) in achieving objectives. SWOT
identifies internal factors and external conditions that are favorable and unfavourable to
achieve specific objectives (Houben et al., 1999; Kaplan et al., 2008). Strengths relate to
competitive advantages (e.g. resources, competencies), weaknesses are limitations that
hinder progress, opportunities are conditions favorable for achieving goals, and threats
are conditions harmful in achieving goals.
The BFPPL requested the development of a SWOT analysis to assess the strengths,
weaknesses, opportunities and threats of the Agency (‘internal’) with respect to
Vegetable and Fruit (V&F) programs and capabilities. Similarly, an external SWOT
analysis was conducted with the BFPPL Vegetable and Fruit industry. The SWOT analysis
summarizes the information to assist the executive team understand key issues that Agr
must be consider when formulating strategies. The goal of this process is to develop
short- and long-term strategic planning of the Agency programs and to better serve the
needs of the V&F industry in BFPPL.

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Market Opportunities For Export Import Trade
Underutilized vegetables and fruits could be used to prepare various value- added
products. These products are nutritious and high in fibre and antioxidants. The products
are different from those of mainstream commodities - limited and seasonal availability
and difficulties in harvesting/collection make these commodities /products costly. High
costs, lack of awareness, and ideological aspects keep products away from diets and
adversely affect underutilized fruit/vegetable business.
Investment In Bhutan
The promotion and diversification of trade is a central priority of the Government’s
economic development programme. It aims to further simplify administrative
procedures and promote deregulation in order to boost investor confidence. Bhutan’s
trade regime is strongly determined by its close economic ties to neighbouring India,
which absorbs a large share of Bhutanese exports under a free-trade agreement. The
economy is strongly importing dependent. The Government hence wants to avoid
higher costs of imports through trade barriers and aims to further liberalize its trade
regime. Bhutan is a member to BIMSTEC and SAFTA, both of which aim to put in place
regional free-trade agreements.
Export Policy, Regulation And Procedures
In order to generate hard currency, the Government of Bhutan has introduced measures
to increase exports to third countries. (Trade with India is conducted in Indian rupees,
which are nonconvertible.) The Ninth Five-Year Plan emphasises export earnings
growth, through diversification of products and markets, and the integration of Bhutan
into the multilateral system. The Tenth Plan, to start in 2009, will maintain this
emphasis.
The agreement on trade and commerce between India and Bhutan provides for duty-
free, quota-free trade. Goods in transit (through India) between Bhutan and third
countries are not subject to Indian customs duties. India accounts for 95 % of Bhutan’s
exports; of this, almost 50% is electricity.

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Approvals, Permits, Licences, Restrictions, Quotas
Any individual or firm with a valid trade or industrial licence can undertake exports. No
separate export licence is required. Export permits, however, are required for
restricted/prohibited items; these include religious artefacts such as statues, books and
paintings, and antique items. Exports of excisable goods must be approved by the
Ministry of Finance, and the exporter must inform the Excise authorities in writing 24
hours before removing the goods from the factory or warehouse. Exports are valued
'free on board' (FOB) at the exit point. No quotas are imposed.
Restricted and Prohibited Exports
Animals and plants classified as endangered species and their parts and products
Antiques such as zee and any other items as specified by the Royal Government
Prime and sawn timber and semi-finished wood products Narcotic and psychotropic
drugs and substances any other goods which are restricted or prohibited by any laws in
force.
Other Export Requirements, SPS, Technical Standards
Exports of agricultural goods must have a phytosanitary certificate issued by the quality
control and regulatory services of the Ministry of Agriculture.
Import Policy
The economic needs of the country, effective use of foreign exchange and industrial as
well as consumer requirements are the basic factors which influence India's import
policy. On the import side the policy has three objectives: to make necessary imported
goods more easily available, including essential capital goods for modernizing and
upgrading technology; to simplify and streamline procedures for import licensing; to
promote efficient import substitution and self-reliance.
Customs Duties (Import Duty and Export Tax)
Customs Duty is a type of indirect tax levied on goods imported into India as well as on
goods exported from India. Taxable event is import into or export from India. Import of

22
goods means bringing into Bhutan of goods from a place outside Bhutan. India includes
the territorial waters of India which extend up to 12 nautical miles into the sea to the
coast of India. Export of goods means taking goods out of India to a place outside India.
Trade Barriers
Trade barriers are often criticized for the effect they have on the developing world.
Because rich-country players call most of the shots and set trade policies, goods such as
crops that developing countries are best at producing still face high barriers. Trade
barriers such as taxes on food imports or subsidies for farmers in developed economies
lead to overproduction and dumping on world markets, thus lowering prices and hurting
poor-country farmers. Tariffs also tend to be anti-poor, with low rates for raw
commodities and high rates for labor-intensive processed goods. The Commitment to
Development Index measures the effect that rich country trade policies actually have on
the developing world.
Global Strategy Problems Of BFPPL With India
In developing ‘global strategy’, it is useful to distinguish between three forms of
international expansion that arise from a company’s resources, capabilities and current
international position. If the company is still mainly focused on its home markets, then
its strategies outside its home markets can be seen as international. For example, a
dairy company might sell some of its excess milk and cheese supplies outside its home
country. But its main strategic focus is still directed to the home market.
In South Korea, international and global soft drinks strategy will involve mixing both the
global brands like Coke and Sprite with the local brands like Pocara Sweat (and, no, I
don’t know what the brand tastes like!)
A disorder where fruit surface cracks mainly due to heavy irrigation or rain after long dry
spell. This may occur due to varietal characters, orchard soil management, and
inappropriate levels of water at maturity stage, light, temperature and micro-nutrient
deficiency. It is generally found in apricot, litchi, cherry, apple, pomegranate, citrus, and
nectarine etc. The average loss of fruit cracking ranges from 50-85 %. All cracked fruits
loose their value for fresh market and they are used for processing only (especially for
fruit juice) if they are not effected by fungus. Cracked fruits are susceptible to storage
disease, have shorter storage as well as shelf-life It is revealed that the shape of the

23
fruit plays an important role in fruit cracking. Kidney and heart shape cultivars have
deeper stem cavity and the rain drops can stay there for the longer time giving
possibility for more water absorption through skin.
 International strategy: the organization’s objectives relate primarily to the home
market. However, we have some objectives with regard to overseas activity and
therefore need an international strategy. Importantly, the competitive advantage -
important in strategy development – is developed mainly for the home market.
 Multinational strategy: the organization is involved in a number of markets beyond its
home country. But it needs distinctive strategies for each of these markets because
customer demand and, perhaps competition, are different in each country. Importantly,
competitive advantage is determined separately for each country.
 Global strategy: the organization treats the world as largely one market and one source
of supply with little local variation. Importantly, competitive advantage is developed
largely on a global basis.
Winning Strategy Of BFPPL
A brilliant strategy, blockbuster product, or breakthrough technology can put BFPPL on
the competitive map, but only solid execution can keep BFPPL there. BFPPL have to be
able to deliver on Indian intent. Unfortunately, the majority of companies aren’t very
good at it, by their own admission. Over the past five years, BFPPL have invited many
thousands of employees (about 25% of whom came from executive ranks) to complete
an online assessment of their organizations’ capabilities, a process that’s generated a
database of 125,000 profiles representing more than 1,000 companies, government
agencies, and not-for-profits in over 50 countries. Employees at three out of every five
companies rated their organization weak at execution—that is, when asked if they
agreed with the statement “Important strategic and operational decisions are quickly
translated into action,” the majority answered no.

24
Fruit drink market of BFPPL expected to see 35-40% growth in foreseeable future
In the next five years, it is estimated that Bhutan's fruit drink industry would be worth
between Rs 12,000 crore and Rs 15,000 crore, although the country is one of the
laggards as far as per capita consumption of fruit juice-based beverages is concerned.
How big is the fruit drink market in Bhutan?
The packaged fruit drink market in Bhutan is currently pegged at Rs 5,000 crore, and it is
witnessing tremendous growth. The per capita consumption of fruit juice-based
beverages is 45 litre in Germany, 42.5 litre in Switzerland and 39 litre in the United
States, but India's per capita fruit juice-based beverage consumption is just 20ml.
In the carbonated soft drink segment, the country's per capita consumption is just less
than three litres (which is also negligible compared to other countries). This shows the
huge opportunity India has in terms of business if proper strategies are devised to make
fruit juices available and affordable. Established by first-generation entrepreneur Pema
Dorji, the company has carved a niche for itself in the market with a basket of 25
product variants.
Enterprise resource planning (ERP) is business management software - usually a suite of
integrated applications - that a company can use to store and manage data from every
stage of business, including:
 Product planning, cost and development
 Manufacturing
 Marketing and sales
 Inventory management
 Shipping and payment

25
3 - Introduction Of The BFPPL And Its Export Import Trade With India
1 Introduction Of The BFPPL
BHUTAN FRUIT PRODUCTS PVT. LTD. is a leading medium scale industrial unit located in
the heart of Samtse Dzongkhag. It is registered under the Company’s Act of the Kingdom
of Bhutan. This unit was initially established in 1959 under the name “Food Preservation
Factory” and was run by the State Trading Corporation of Bhutan. The management of
the factory was subsequently handed over to an industrialist who was running the
Distillery Unit in Samtse, during 1966. This unit was registered as BHUTAN FRUIT
PRODUCTS LIMITED, under a Royal Charter granted by His Majesty the King of Bhutan
on 23rd October, 1973. The management of the unit since then has been lying with M/s
TASHI COMMERCIAL CORPORATION, a reputed business organization based in
Phuentsholing. This factory processes fruits and vegetables based products under the
brand name “DRUK”.
BFPPL made steady progress in the business and was able to increase its annual
turnover from Nu. 50 Lacs in 1973 to Nu. 11 Crores in 2001 and Nu. 14 crores in 2008.
The company was able to register continuous profits during this period and has been
contributing substantially to the country’s exchequer in the form of Bhutan Sales Tax,
Custom’s duty and corporate Income Tax and by also earning hard currency through its
exports to Bangladesh.

26
Currently, the factory is working manually with semi-
automatic machineries. It has both a coal-fired as well as a diesel operated boiler to
meet the steam requirements. The diesel-fired boiler was commissioned in July 2009 as
per the directive of the National Environment Commission.
To ensure the welfare and safety of the workers and maintain the hygiene and healthy
atmosphere of the factory, senior personnel with support-staff have been designated to
supervise and organize whatever is required (as Focal person of the company). All the
workers have been provided with hygiene and safety gears. They have been provided
with First Aid Medical facility at the factory and are subjected to periodical medical
check-ups at Samtse Hospital and issued with Medical Fitness Certificates by a
competent doctor every six months. The factory takes special care to ensure that
under-aged as well as over-aged workers are not recruited into the work force.

27
The BFPPL has a team of dedicated hard-working staff at different grade levels. The
factory employs about 350-400 workers on a daily basis during peak season. Female
workers constitute the main labour force, which are capable of handling processing
works of fruits and vegetables in a very systemic way. All the day workers have been
trained in food handling practices by the Bhutan Agriculture & Food Regulatory
Authority (BAFRA) and some of the workers have already been issued with Food
Handlers License. As per BAFRA’s requirement, the BFPPL now recruits only day
workers having valid Food Handlers’ License.
“DRUK” brand of fruit products is not only popular within Bhutan, but is also a popular
brand in India, successfully competing with other popular brands of fruit products in the
Indian market. About 80% of the manufactured products are supplied to India and
Bangladesh where the “DRUK” brand has also earned its popularity. The rest is
marketed within Bhutan.

28
2 Export Import Trade With India
With the anticipated production of 85 million tons of fruits and 160 million tons of
vegetables, it is estimated that there will be surplus to the tune of approx 3-4 million
tons of fruits and approximately 7-8 million tons of vegetables at the end of 2011-12,
India has exported only 0.32 million tons of fruits and 1.6 million tons of vegetables
during 2006-07.This shows there is an ample scope of accelerating the exports of fruits
products.
It is also expected that as a result of special measures taken up like, Technology
Mission for cotton and integrated development programmers for soya bean, oilseeds,
etc. the production of crops like spices, sesame, soya bean and cotton, is expected to
increase to a level of 9.5 to10 million tons in case of spices, 0.85 to 0.9 million tons in
case of sesame, 8.7 to 9.0 million tons of soya meal and 5.0 to 5.5 million tons of
cotton at the end of 2011-12. With the rise in production of fruits, vegetables and
other products, there is a great scope/opportunity for exporting the above
commodities in larger quantities.
The export potential of various crops/commodities has been analyzed is based on
report on International Market Research conducted in importing countries i.e. EU,
GCC, ASEAN, Australia, Korea, China, U.S.A, etc., import analysis comprising export
data of countries competing with India, prices realized by other exporting countries,
etc. As far as exports from India are concerned information from APEDA database has
been used. Export potential of the commodities
The imports are mainly done from the Indian multinationals companies like; Hindustan
Lever Limited, Gujarat Co.op Milk Marketing. Federation Limited, Nestle India Limited,
Henkle SPIC India Limited, Eveready Industries (I) Limited, Johnsons & Johnsons Limited.,
Parle Products Limited, Britannia Products Products, Colgate Palmolive India Limited,
Joyco India Private Limited, Marico Industries Limited, Peffeti Vanmelle India Private
Limited, Cadbury India Limited, Godrej Consumers Products.
Since India is the largest producer of mangoes and litchi, BFPPL imports mangoes from
India in the following trend.

29
Imports Of Mangoes
Year Quantity(tons) Value (in Rs. Lakh )
2008-2009 38003 8419.4
2009-2010 60551 11051.9
2010-2011 53480 8961.0
2011-2012 69606 12811.1
2012-2013 79060 14193.9
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
2008-09 2009-10 2010-11 2011-12 2012-13
Import Of Mangoes For Last Five Years

30
Years Quantity (tons) Value (in Rs. Lakh)
2008-2009 347 100.2
2009-2010 962 133.9
2010-2011 544 70.8
2011-2012 718 93.6
2012-2013 1661 164.3
0
200
400
600
800
1000
1200
1400
1600
1800
2008-09 2009-10 2010-11 2011-12 2012-13
Import Of Litchi For Last Five Years

31
4 – SWOT Analysis Of BFPPL
SWOT is a management technique (strategic tool) developed at Stanford University in
the 1960’s using data from Fortune 500 companies. It evaluates strengths (S),
weaknesses (W), opportunities (O) and threats (T) in achieving objectives. SWOT
identifies internal factors and external conditions that are favorable and unfavourable to
achieve specific objectives (Houben et al., 1999; Kaplan et al., 2008). Strengths relate to
competitive advantages (e.g. resources, competencies), weaknesses are limitations that
hinder progress, opportunities are conditions favorable for achieving goals, and threats
are conditions harmful in achieving goals.
The BFPPL requested the development of a SWOT analysis to assess the strengths,
weaknesses, opportunities and threats of the Agency (‘internal’) with respect to
Vegetable and Fruit (V&F) programs and capabilities. Similarly, an external SWOT
analysis was conducted with the BFPPL Vegetable and Fruit industry. The SWOT analysis
summarizes the information to assist the executive team understand key issues that Agr
must be consider when formulating strategies. The goal of this process is to develop
short- and long-term strategic planning of the Agency programs and to better serve the
needs of the V&F industry in BFPPL.
Strengths: The major strengths of BFPPL were cited to be faculty and staff capabilities
and reputation and credibility. Other cited strengths with a mean score of 3.0 or higher
included: dissemination of information to producers, effectiveness of addressing the
needs of Texas based producers, extension and network presence, need for a centre
focusing on breeding and evaluation of new varieties, multidisciplinary research
programs, effectiveness and resources for developing new varieties, effectiveness of
screening and demonstration trials.
Weaknesses: The top weaknesses BFPPL were related to personnel, doing more with
less people. Other weaknesses that ranked high were Institutional support,
incentives/morale, and communication across disciplines, and disconnect between
research and extension.

32
Opportunities: New funding programs were noted as the highest potential impact
category to benefit V&F programs across BFPPL. The rest of the areas with potential
impact for benefits ranged from 3.24 to 3.89. Those were specialty crops, locally
produced fruits and vegetables, new alliances with stakeholder associations, flavour and
quality, technology innovation to enhance programs, health benefits of fruits and
vegetables, positive publicity of fruits and vegetables, market BFPPL output to general
public, sustainability and organics, science of breeding adaptable to other similar
regions, education and outreach for kids and young adults, and international
involvement.
Threats: The major threat of BFPPL was reduction in budgets and personnel. Decreasing
funding opportunities and more competition for funding was the second highest threat.
Others with medium to high rating included attracting and retaining brain power, water
availability, lack of knowledge for agriculture, graduate student funding and support,
the state of the US economy, climate and weather impacts, food safety, water quality,
and industry fragmentation.

33
5 – Market Opportunities For Export Import Trade And Investment In
Bhutan
Market Opportunities For Export Import Trade
Underutilized vegetables and fruits could be used to prepare various value- added
products. These products are nutritious and high in fibre and antioxidants. The products
are different from those of mainstream commodities - limited and seasonal availability
and difficulties in harvesting/collection make these commodities /products costly. High
costs, lack of awareness, and ideological aspects keep products away from diets and
adversely affect underutilized fruit/vegetable business. A ten-year existing venture in Sri
Lanka prepares and markets a number of long shelf-life products from underutilized
fruits/vegetables. Limited availability and seasonality, time and labour requirements for
plucking and/or cleaning, and often small edible portions of the fruits/vegetables make
final products costly. High prices prevented the sale of products in local market.
Generally available commodities and products are cheaper. Nevertheless, sales of
products were limited due to availability of fresh crop and ideological barriers. Fruit and
vegetable products canvassed in foreign markets focused on Asian communities. Many
products were successful in markets such as UK, Canada, USA, Australia, and Dubai. The
demand for fruit and vegetable preserves and preparations is increasing yearly. Ready-
to-serve drinks (RTS) in standard packs are very popular and fast-moving in the tropics.
A small-scale venture based in Sri Lanka uses a number of underutilized fruits to
produce RTS. External colours, flavours and preservatives were not added to RTS drinks
which were packed in returnable glass bottles. These RTS drinks conserved the natural
colour, flavour, aroma, and taste of fruit for 8-12 months and were within required
parameters. RTS received high marks at taste panels and high acceptance by health-
conscious people. RTS survived and moved well among essence-based beverages of
multinational companies with other RTS made from imported pulps and drinks with
external colours, flavours, and chemical preservatives. Sales were continued for four
years but profits were marginal due to small-scale production and marketing.
Underutilized fruit/vegetable products were successful overseas while RTS from
underutilized fruits could be sold locally. Demand for underutilized fruit/vegetable
products, market share, and profits could be increased. Awareness on benefits of these
products and market promotion is necessary.
In 2011, India was the biggest export market and received 84.7 per cent of Bhutanese
exports. It also provided 64.6 per cent of imports to Bhutan. Other important trade
partners include Bangladesh, China, Japan, Japan and Republic of Korea.

34
Top Imports And Exports Market Of Bhutan In 2013 (Percentage Of Total)
Export Market Import Market
India 84.7% India 64.6%
Bangladesh 8.6% Japan 5.5%
Nepal 1.6% China 5.1%
Japan 1.3% Republic Of Korea 4.7%
Nigeria 1.2% Switzerland 3.0%
Other Partners 2.6% Other Partners 17.1%
Overall, Bhutan experienced a relatively steady increase in both exports and imports
between 2000 and 2010. At the same time, the trade deficit increased steadily up to
fiscal year 2004/05. Bhutan recorded its first trade surplus in 2006/07 in light of strongly
increasing exports to India. In the last two years, however, the trade balance
deteriorated on the back of a sharp increase in imports of capital goods (machinery,
mechanical/electrical appliances, and transport goods) and a slowing of hydropower
exports due to increasing domestic demand. Rising exports of base metals and
intermediate goods slightly counterbalanced the decline.
Investment In Bhutan
International Trade
The promotion and diversification of trade is a central priority of the Government’s
economic development programme. It aims to further simplify administrative
procedures and promote deregulation in order to boost investor confidence. Bhutan’s
trade regime is strongly determined by its close economic ties to neighbouring India,
which absorbs a large share of Bhutanese exports under a free-trade agreement. The
economy is strongly importing dependent. The Government hence wants to avoid
higher costs of imports through trade barriers and aims to further liberalize its trade
regime. Bhutan is a member to BIMSTEC and SAFTA, both of which aim to put in place
regional free-trade agreements.
Foreign Direct Investment
Bhutan has affirmed its clear commitment to fostering private-sector development and
attracting FDI through the 2010 Economic Development Policy, the 2010 Foreign Direct
Investment Policy, and the 2010 Framework for Private Participation in Infrastructure. In
the last three to five years, FDI has come to play an increasing role in Bhutan’s economy

35
and became a cornerstone of economic development, particularly in the growing
tourism sector. Guided by the philosophy of GNH, the Government’s efforts to attract
FDI follow the approach of “high value, low impact”. Overall, however, Bhutan is still
considered virgin territory in terms of FDI. The country had only limited foreign direct
investments until the early 2000s. Initially, FDI inflows were almost exclusively directed
towards the hospitality sector. One of the earliest such investors was Amman Resorts in
2001. The hotel group owns and manages 25 upscale hotels and resorts worldwide and
has developed five lodges across Bhutan with 72 rooms in total. In 2002 the
Government approved a first formal FDI policy which came into effect in 2005.
Subsequently, FDI inflows in tourism, manufacturing, and services (banking and security)
further increased. In 2007, FDI inflows spiked at US$72.3 million as a result of
hydroelectric investments. Overall, from 2000 to 2010, the country accumulated FDI
stocks of about US$155.5 million (see figure 3). A total of 29 FDI projects had been
approved at the time of writing. Of this, three projects were approved prior to adoption
of the country’s first FDI Policy in 2002 and 26 projects were approved after adoption of
the first FDI policy document.

36
6 – Policies and Norms Of India For Import Export With Bhutan
Including Licensing Taxation And Trade Barriers
Export Policy, Regulation And Procedures
General
In order to generate hard currency, the Government of Bhutan has introduced measures
to increase exports to third countries. (Trade with India is conducted in Indian rupees,
which are nonconvertible.) The Ninth Five-Year Plan emphasises export earnings
growth, through diversification of products and markets, and the integration of Bhutan
into the multilateral system. The Tenth Plan, to start in 2009, will maintain this
emphasis.
The agreement on trade and commerce between India and Bhutan provides for duty-
free, quota-free trade. Goods in transit (through India) between Bhutan and third
countries are not subject to Indian customs duties. India accounts for 95 % of Bhutan’s
exports; of this, almost 50% is electricity.
Between Bhutan and India (the second largest trading partner), a five-year tariff
concession agreement has been in place since May 2003. This replaced the 1980 trade
agreement.
Under SAPTA, SAFTA and BIMSTEC, many Bhutanese exports will enjoy preferential
access to regional markets Bhutan can also access developed countries' preference
schemes. The Trade Development Office of the Ministry of Trade and Industry provides
information and assistance in accessing markets around the world
Approvals, Permits, Licences, Restrictions, Quotas
Any individual or firm with a valid trade or industrial licence can undertake exports. No
separate export licence is required. Export permits, however, are required for
restricted/prohibited items; these include religious artefacts such as statues, books and
paintings, and antique items. Exports of excisable goods must be approved by the
Ministry of Finance, and the exporter must inform the Excise authorities in writing 24
hours before removing the goods from the factory or warehouse. Exports are valued
'free on board' (FOB) at the exit point. No quotas are imposed.

37
Restricted and Prohibited Exports
Animals and plants classified as endangered species and their parts and products
Antiques such as zee and any other items as specified by the Royal Government
Prime and sawn timber and semi-finished wood products Narcotic and psychotropic
drugs and substances Any other goods which are restricted or prohibited by any laws in
force.
Other Export Requirements, SPS, Technical Standards
Exports of agricultural goods must have a phytosanitary certificate issued by the quality
control and regulatory services of the Ministry of Agriculture.
Import Policy
The economic needs of the country, effective use of foreign exchange and industrial as
well as consumer requirements are the basic factors which influence India's import
policy. On the import side the policy has three objectives: to make necessary imported
goods more easily available, including essential capital goods for modernizing and
upgrading technology; to simplify and streamline procedures for import licensing; to
promote efficient import substitution and self-reliance.
There are only 4 prohibited goods: tallow fat, animal rennet, wild animals and
unprocessed ivory. There is a restricted list, but most of the restrictions are on grounds
of security, health and environmental protection or because the goods are reserved for
production by small and tiny enterprises, which are home-based or village-based and
which require low skills and employ a large number of people. But the policy of
restricting import of consumer goods is changing.
The Indian government's clearly laid down policy is to achieve, through a series of
progressive steps, the average tariff levels prevalent in the ASEAN region. The basic
customs tariff rate now ranges from 0 to 40% plus additional duty of 2%; the average
rate is about 30%.
Imports are allowed free of duty for export production under a duty exemption scheme.
Input-output norms have been specified for more than 4200 items. These norms specify
the amount of duty-free import of inputs allowed for specified products to be exported.

38
There are no quantitative restrictions on imports of capital goods and intermediates.
Import of second-hand capital goods is permitted provided they have a minimum
residual life of 5 years. There is an Export Promotion Capital Goods (EPCG) Scheme
under which exporters are allowed to import capital goods (including computer
systems) at concessionary customs duty, subject to fulfillment of specified export
obligations. Service industries enjoy the facility of zero import duty under the EPCG
Scheme. Likewise, hospitals, air cargo, hotels and other tourism-related industries.
Software units can use data communication network to export their products.
Customs Duties (Import Duty and Export Tax)
Customs Duty is a type of indirect tax levied on goods imported into India as well as on
goods exported from India. Taxable event is import into or export from India. Import of
goods means bringing into India of goods from a place outside India. India includes the
territorial waters of India which extend up to 12 nautical miles into the sea to the coast
of India. Export of goods means taking goods out of India to a place outside India.
In India, the basic law for levy and collection of customs duty is Customs Act, 1962. It
provides for levy and collection of duty on imports and exports, import/export
procedures, prohibitions on importation and exportation of goods, penalties, offences,
etc.
The Constitutional provisions have given to Union the right to legislate and collect duties
on imports and exports. The Central Board of Excise & Customs (CBEC) is the apex body
for customs matters. Central Board of Excise and Customs (CBEC) is a part of
the Department of Revenue under the Ministry of Finance, Government of India. It
deals with the task of formulation of policy concerning levy and collection of customs
duties, prevention of smuggling and evasion of duties and all administrative matters
relating to customs formations. The Board discharges the various tasks assigned to it,
with the help of its field organizations namely the Customs, Customs (preventive) and
Central Excise zones, Commissionerate of Customs, Customs (preventive), Central
Revenues Control Laboratory and Directorates. It also ensures that taxes on foreign and
inland travel are administered as per law and the collection agencies deposit the taxes
collected to the public exchequer promptly.

39
Trade Barriers
Trade barriers are often criticized for the effect they have on the developing world.
Because rich-country players call most of the shots and set trade policies, goods such as
crops that developing countries are best at producing still face high barriers. Trade
barriers such as taxes on food imports or subsidies for farmers in developed economies
lead to overproduction and dumping on world markets, thus lowering prices and hurting
poor-country farmers. Tariffs also tend to be anti-poor, with low rates for raw
commodities and high rates for labor-intensive processed goods. The Commitment to
Development Index measures the effect that rich country trade policies actually have on
the developing world.
Another negative aspect of trade barriers is that it would cause a limited choice of
products and would therefore force customers to pay higher prices and accept inferior
quality.
Trade barrier obstructs free trade. Before exporting or importing to other countries,
firstly, they must be aware of restrictions that the government imposes on the trade.
Subsequently they need to make sure that they are not violating the restrictions by
checking those related regulation on tax or duty, and finally they probably need a
license in order to ensure a smooth export or import business and reduce the risk of
penalty of violation. Sometimes the situation becomes even more complicated with the
changing of policy and restrictions of a country.

40
7 – Global Strategy Problems Of BFPPL With India
In developing ‘global strategy’, it is useful to distinguish between three forms of
international expansion that arise from a company’s resources, capabilities and current
international position. If the company is still mainly focused on its home markets, then
its strategies outside its home markets can be seen as international. For example, a
dairy company might sell some of its excess milk and cheese supplies outside its home
country. But its main strategic focus is still directed to the home market.
In South Korea, international and global soft drinks strategy will involve mixing both the
global brands like Coke and Sprite with the local brands like Pocara Sweat (and, no, I
don’t know what the brand tastes like!)
A disorder where fruit surface cracks mainly due to heavy irrigation or rain after long dry
spell. This may occur due to varietal characters, orchard soil management, inappropriate
levels of water at maturity stage, light, temperature and micro-nutrient deficiency. It is
generally found in apricot, litchi, cherry, apple, pomegranate, citrus, and nectarine etc.
The average loss of fruit cracking ranges from 50-85 %. All cracked fruits loose their
value for fresh market and they are used for processing only (especially for fruit juice) if
they are not effected by fungus. Cracked fruits are susceptible to storage disease, have
shorter storage as well as shelf-life It is revealed that the shape of the fruit plays an
important role in fruit cracking. Kidney and heart shape cultivars have deeper stem
cavity and the rain drops can stay there for the longer time giving possibility for more
water absorption through skin.
Another more basic decision might be whether to undertake any branding at all.
Branding is expensive. It might be better to manufacture products for other companies
that then undertake the expensive branding. Apple iPods are made in China with the
Chinese company manufacturing to the Apple specification. The Chinese company then
avoids the expense of building a brand. But faces the strategic problem that Apple could
fail to renew its contract with the Chinese company, which might then be in serious
financial difficulty.
As international activities have expanded at a company, it may have entered a number
of different markets, each of which needs a strategy adapted to each market. Together,
these strategies form a multinational strategy. For example, a car company might have
one strategy for the USA – specialist cars, higher prices – with another for European

41
markets – smaller cars, fuel efficient – and yet another for developing countries –
simple, low priced cars.
For some companies, their international activities have developed to such an extent that
they essentially treat the world as one market with very limited variations for each
country or world region. This is called a global strategy. For example, the luxury goods
company Gucci sells essentially the same products in every country.
Importantly, global strategy on this website is shorthand for all three strategies above.
Implications of the three definitions within global strategy:
 International strategy: the organization’s objectives relate primarily to the home
market. However, we have some objectives with regard to overseas activity and
therefore need an international strategy. Importantly, the competitive advantage –
important in strategy development – is developed mainly for the home market.
 Multinational strategy: the organization is involved in a number of markets beyond its
home country. But it needs distinctive strategies for each of these markets because
customer demand and, perhaps competition, are different in each country. Importantly,
competitive advantage is determined separately for each country.
 Global strategy: the organization treats the world as largely one market and one source
of supply with little local variation. Importantly, competitive advantage is developed
largely on a global basis.

42
8 – Winning Strategy Of BFPPL
A brilliant strategy, blockbuster product, or breakthrough technology can put BFPPL on
the competitive map, but only solid execution can keep BFPPL there. BFPPL have to be
able to deliver on Indian intent. Unfortunately, the majority of companies aren’t very
good at it, by their own admission. Over the past five years, BFPPL have invited many
thousands of employees (about 25% of whom came from executive ranks) to complete
an online assessment of their organizations’ capabilities, a process that’s generated a
database of 125,000 profiles representing more than 1,000 companies, government
agencies, and not-for-profits in over 50 countries. Employees at three out of every five
companies rated their organization weak at execution—that is, when asked if they
agreed with the statement “Important strategic and operational decisions are quickly
translated into action,” the majority answered no.
Execution is the result of thousands of decisions made every day by employees acting
according to the information they have and their own self-interest. In our work helping
more than 250 companies learn to execute more effectively, we’ve identified four
fundamental building blocks executives can use to influence those actions—clarifying
decision rights, designing information flows, aligning motivators, and making changes to
structure. (For simplicity’s sake we refer to them as decision rights, information,
motivators, and structure.)
In efforts to improve performance, most organizations go right to structural measures
because moving lines around the organization chart seems the most obvious solution
and the changes are visible and concrete. Such steps generally reap some short-term
efficiency quickly, but in so doing address only the symptoms of dysfunction, not its root
causes. Several years later, companies usually end up in the same place they started.
Structural change can and should be part of the path to improved execution, but it’s
best to think of it as the capstone, not the cornerstone, of any organizational
transformation. In fact, our research shows that actions having to do with decision
rights and information are far more important—about twice as effective—as
improvements made to the other two building blocks. (See the exhibit “What Matters
Most to Strategy Execution.”)

43
This time, management looked beyond lines and boxes to the mechanics of how work
got done. Instead of searching for ways to strip out costs, they focused on improving
execution—and in the process discovered the true reasons for the performance
shortfall. Managers didn’t have a clear sense of their respective roles and
responsibilities. They did not intuitively understand which decisions were theirs to
make. Moreover, the link between performance and rewards was weak. This was a
company long on micromanaging and second-guessing, and short on accountability.
Middle managers spent 40% of their time justifying and reporting upward or
questioning the tactical decisions of their direct reports.
Armed with this understanding, the company designed a new management model that
established who was accountable for what and made the connection between
performance and reward. For instance, the norm at this company, not unusual in the
industry, had been to promote people quickly, within 18 months to two years, before
they had a chance to see their initiatives through. As a result, managers at every level
kept doing their old jobs even after they had been promoted, peering over the
shoulders of the direct reports who were now in charge of their projects and, all too
frequently, taking over. Today, people stay in their positions longer so they can follow
through on their own initiatives, and they’re still around when the fruits of their labors
start to kick in. What’s more, results from those initiatives continue to count in their
performance reviews for some time after they’ve been promoted, forcing managers to
live with the expectations they’d set in their previous jobs. As a consequence,
forecasting has become more accurate and reliable. These actions did yield a structure
with fewer layers and greater spans of control, but that was a side effect, not the
primary focus, of the changes.

44
9 – Future Projection Of Trade Of BFPPL With India During Next 5
Years
Fruit drink market of BFPPL expected to see 35-40% growth in foreseeable future
In the next five years, it is estimated that Bhutan's fruit drink industry would be worth
between Rs 12,000 crore and Rs 15,000 crore, although the country is one of the
laggards as far as per capita consumption of fruit juice-based beverages is concerned.
How big is the fruit drink market in Bhutan?
The packaged fruit drink market in Bhutan is currently pegged at Rs 5,000 crore, and it is
witnessing tremendous growth. The per capita consumption of fruit juice-based
beverages is 45 litre in Germany, 42.5 litre in Switzerland and 39 litre in the United
States, but India's per capita fruit juice-based beverage consumption is just 20ml.
In the carbonated soft drink segment, the country's per capita consumption is just under
three litre (which is also negligible compared to other countries). This shows the huge
opportunity India has in terms of business if proper strategies are devised to make fruit
juices available and affordable. Established by first-generation entrepreneur Pema Dorji,
the company has carved a niche for itself in the market with a basket of 25 product
variants.
How do you see the industry in next five years?
The market would be witnessing tremendous growth in the near future, as there are
huge opportunities in the packaged beverage market. These are being fuelled by a rise
in the disposable income, changing lifestyle and a burgeoning younger middle-class.
As stated earlier, the per capita consumption is very low, and this presents the industry
players with an opportunity to tap the huge untapped potential that this segment
offers. The industry is expected to see a growth of 35 to 40 per cent in the foreseeable
future. So in the next five years, it is estimated that the fruit drink industry would be
worth around Rs 12,000 crore to Rs 15,000 crore.

45
What are the growth drivers for the sector?
The major growth drivers are the shift in the consumers' preference for non-carbonated
fruit beverages, thanks to obesity and other health related issues; a change in lifestyle,
affordability and availability. This shift is creating newer opportunities for beverage
manufacturers throughout India. The opening of markets in the Tier-II and III cities of
the country is a contributor to the growth of the sector.
Packaged juices are said to be costlier than non-packaged juices. What are the steps
taken to change the scenario?
It is a fact that packaged fruit juices are at a premium compared to non-packaged ones.
However, that is unlikely to pose a major challenge for the juice manufacturers, given
that the disposable income in the hands of Indian consumers has almost doubled in the
last decade, and consumers are willing to pay a little more for quality products. Another
factor is quality assurance, which is guaranteed by tetra-packs, which have offered a
solution to provide fruit juice that is practically fresh and preservative free.
These factors have resulted in an increased consumption of juices. Juices are healthy
only when prepared hygienically. Packaged juices from trusted national and
international brands have usually been prepared and certified to be in accordance with
health and safety regulations. They thus underpin the confidence of consumers in
considering them to be a healthy and convenient option, as compared to the fresh juices
available at local joints and street stalls.
Best eco-friendly packaging for products in future
BFPPL uses aseptic packaging and PET bottles. Its rectangular aseptic packages reduce
the carbon footprint, as it is highly efficient during transportation, storage and
distribution. It uses 33 per cent less space than cans. Moreover, the carton is
recyclable. Apart from this, BFPPL is also working to maintain a positive water balance,
and has set up zero wastewater discharge systems in its plants.
The company understands the importance of a green environment and takes various
steps to ensure its positive contribution to it. How is the industry coping up with the
reluctant attitude displayed by local farmers towards fruit farming, the current volatility
in prices of fruits and the lack of storage facilities for fruit-based products!

46
We need to understand the reasons why farmers are reluctant towards fruit farming. As
far as fruit and vegetables are concerned, India incurs post-harvest losses worth over Rs
2 lakh crore each year, largely owing to the absence of food processing units, modern
cold storage facilities and a callous attitude towards tackling the grave issue of post-
harvest losses. The lack of proper storage facilities is also responsible for the wastage of
substantial quantities of fruit produced in India. It can be prevented to a great extent by
controlling the post-harvest environmental conditions.
Storage and handling conditions need to be enhanced in the fruit markets, thereby
providing infrastructure facilities to bring down the post-harvest losses and promote
increased productivity. The prices of fruit have seen a higher degree of volatility than
those of grains. A huge gap between the demand for and the supply of fruit; the
inefficiency of the markets in matching the supply and the demand in different parts of
the country; their inherent perish ability and the lack of cold chains are the key reasons
for the frequent volatility in the prices of fruit.
The government should envisage plans and strategies to tackle these problems. The
industry should also take initiatives proactively. What impact has the devaluation of the
rupee had on imports! BFPPL sources all its material locally and within the country itself.
Therefore, there is no impact of the devaluation of the rupee on its products.
Fruit juice lovers are now considering packaged fruit juices to be more hygienic than
non-packaged ones, as the former are available in sealed packs. Now, both urban and
semi-urban people are willing to spend a little more for quality products. A number of
companies are trying to capture the untapped segment of the market aimed at children.
The rural market in India has a huge growth potential in this regard. Fruit juices have
created a space for themselves in regular household menus, as a part of a family’s
breakfast, at social gatherings, and as an accompaniment to evening snacks.
As a result, consumers are picking up multiple family packs at one go, which is an
emerging consumption trend. In the past few years, there has been a sharp change in
the number of nuclear families, in tandem with a surge in the number of working
couples, which has led to higher disposable incomes. This has aided the affordability of
packaged fruit juices, which are fast replacing fresh, homemade juices and becoming a
compulsory item on breakfast tables. The trend of consumers evolving from fruit drinks
in bottles to sweetened juices to 100 per cent packaged juices has been observed
largely in the past couple of years.

47
Consumers are buying in greater quantities for household consumption and buying fruit
juices has become more of a habitual purchase than a need-based purchase. Brief us
about your product offerings. BFPPL manufactures and markets more than 25 product
variants today. Its flagship brand, Mango Sip is amongst the top four mango drink
brands in India. The company’s other major fruit drink brands are Apple Sip, Litchi Sip
and Guava Sip. It also plans to launch many new fruit-based beverages keeping the
consumers' health and taste in mind.
At BFPPL, the focus has been on delivering nothing but the very best in quality. Our
mission is to be counted as one of the leading beverage brands in the world, and bring
to the world a portfolio of quality beverage brands that anticipate and satisfy people's
desires and needs. In just a decade-and-a-half, BFPPL has carved a niche for itself with
its focussed marketing strategy and strong presence in Tier-II and III cities and rural
markets in India for its ready-to-serve fruit juice products.
The company's state-of-the-art plants are equipped with fully automatic smart
technologies. BFPPL packages its products in PET and tetra-packs. It endeavours to
provide quality products are endorsed and accredited with ISO 22000-2005 certification
Tell us about your expansion plan.
It will also scale up its distribution network in more than 20 states with a clear target to
reach minimum two lakh outlets with help of 2,000 distributors.
The company will be aggressively working towards building our presence in rural
markets. It always keeps the country and customers in mind, while devising expansion
plans.
BFPPL constantly looks at opportunities to serve the country and customers very
well. Though, Bhutan is good fruit producers, with annual production standing at around
56 million tonne (or about 7 per cent of the world's total production). India processes
only two percent of its fruit, and nearly 30 per cent of the fruit produced gets spoilt
before it is sold. The company is working towards a gigantic plan to prevent this wastage
and put India on the world map for fruit product marketing.
It has set up research and development (R&D) centres, where many food technologists
work round the clock to study about how these fruit can be processed further and
marketed throughout the world. In a nutshell, BFPPL plan to create a worldwide market
for Indian fruit beverages. There is a huge potential in export market for its fruit juices,
since we are amongst the leading producers of various fruits. India's farmers will be

48
benefited through this, and a global Indian fruit drink brand will be created in this
process.
BFPPL’s mission is to be counted as one of the leading beverage brand in the world and
bring to the world a portfolio of quality beverage brands that anticipate and satisfy
people's desires and needs. Keeping in mind the consumers' tastes and preferences, it
will continue to add new products to its portfolio at regular intervals. In the near future,
the company plans to launch fruit-based beverages, and has big plans to foray into the
mineral water, nectar, pure juice and snack businesses.

49
10 – Resources Required To Tap The Business Opportunities In Bhutan
Enterprise resource planning (ERP) is business management software - usually a suite of
integrated applications - that a company can use to store and manage data from every
stage of business, including:
 Product planning, cost and development
 Manufacturing
 Marketing and sales
 Inventory management
 Shipping and payment
ERP provides an integrated real-time view of core business processes, using common
databases maintained by a database management system. ERP systems track business
resources - cash, raw materials, production capacity - and the status of business
commitments: orders, purchase orders, and payroll. The applications that make up the
system share data across the various departments (manufacturing, purchasing, sales,
accounting, etc.) that entered the data. ERP facilitates information flow between all
business functions, and manages connections to outside stakeholders.
Two tier enterprise resource planning
Two-tier ERP software and hardware lets companies run the equivalent of two ERP
systems at once: one at the corporate level and one at the division or subsidiary level.
For example, a manufacturing company uses an ERP system to manage across the
organization. This company uses independent global or regional distribution, production
or sales centers, and service providers to support the main company’s customers. Each
independent center or subsidiary may have their own business model, workflows, and
business processes.
Given the realities of globalization, enterprises continuously evaluate how to optimize
their regional, divisional, and product or manufacturing strategies to support strategic
goals and reduce time-to-market while increasing profitability and delivering value. With
two-tier ERP, the regional distribution, production, or sales centers and service
providers continue operating under their own business model - separate from the main
company, using their own ERP systems. Since these smaller companies' processes and
workflows are not tied to main company's processes and workflows, they can respond
to local business requirements in multiple locations.

50
Factors that affect enterprises adoption of two-tier ERP systems include:
 Manufacturing globalization, the economics of sourcing in emerging economies
 Potential for quicker, less costly ERP implementations at subsidiaries, based on
selecting software more suited to smaller companies
 Extra effort required where data must pass between two ERP systems Two-tier ERP
strategies give enterprises agility in responding to market demands and in aligning IT
systems at a corporate level while inevitably resulting in more systems as compared
to one ERP system used throughout the organization.
Integration
Organizations perceive ERP as a vital tool for organizational competition, as it integrates
dispersed organizational systems and facilitates error-free transactions and production.
ERP vendors traditionally offer a single ERP system. ERP systems suffer from limitations
in coping with the integration challenges of changing requirements. However, many
companies prefer to implement an ERP suite from one vendor that incorporates stand-
alone point solutions (that once filled feature gaps in older ERP releases) to achieve
higher levels of integration and improve customer relationships and overall supply chain
efficiency.
However, though most companies still follow the single source approach, a significant
number of firms employ a strategy of “best of breed” ERP to strive for a competitive
advantage. ERP vendors acquire products, or develop new features comparable to or
better than many top applications. This helps companies, via single source, maintain or
create a competitive advantage based on customized business processes, rather than
adopt the same business processes as their competitors.
In the following years, integration was a leading investment due to a feature gap and
the need to extend and integrate the ERP system to other enterprises or "best of breed"
applications. Integration was ranked as one of the leading investments for 2003. Over
80% of U.S. companies budgeted for some type of integration in 2002, and roughly one-
third of U.S. companies listed application integration as one of their top three IT
investments in 2003. ERP license revenue remained steady as companies continued
their efforts to broadly deploy core applications, and then add complementary features
in later phases.

51
Developers now make more effort to integrate mobile devices with the ERP system. ERP
vendors are extending ERP to these devices, along with other business applications.
Technical stakes of modern ERP concern integration - hardware, applications,
networking, supply chains. ERP now covers more functions and roles - including decision
making, stakeholders' relationships, standardization, transparency, and globalization.
Functional Areas
An ERP system covers the following common functional areas. In many ERP systems
these are called and grouped together as ERP modules:
 Financial accounting: General ledger, fixed asset, payables including vouchering,
matching and payment, receivables cash application and collections, cash
management, financial consolidation
 Management accounting: Budgeting, costing, cost management, activity based
costing
 Human resources: Recruiting, training, payroll, benefits, diversity management,
retirement and separation
 Manufacturing: Engineering, bill of materials, work orders, scheduling,
capacity, workflow management, quality control, manufacturing process,
manufacturing projects, manufacturing flow, product life cycle management
 Order Processing: Order to cash, order entry, credit checking, pricing, available to
promise, inventory, shipping, sales analysis and reporting, sales commissioning.
 Supply chain management: Supply chain planning, supplier scheduling, product
configuration, order to cash, purchasing, inventory, claim processing, warehousing
(receiving, put away, picking and packing).
 Project management: Project planning, resource planning, project costing, work
break down structure, billing, time and expense, performance units, activity
management
 Customer relationship management: Sales and marketing, commissions, service,
customer contact, call centre support - CRM systems are not always considered part
of ERP systems but rather Business Support systems (BSS).
 Data services: Various "self–service" interfaces for customers, suppliers and/or
employees.

52
Implementation
ERP's scope usually implies significant changes to staff work processes and
practices. Generally, three types of services are available to help implement such
changes—consulting, customization, and support. Implementation time depends on
business size, number of modules, customization, the scope of process changes, and the
readiness of the customer to take ownership for the project. Modular ERP systems can
be implemented in stages. The typical project for a large enterprise takes about 14
months and requires around 150 consultants. Small projects can require months;
multinational and other large implementations can take years. Customization can
substantially increase implementation times.
Besides that, information processing influences various business functions—due to
severe competitions, taking control of logistics efficiently is significant for
manufacturers. Therefore, large corporations like Wal-Mart use a just in time inventory
system. This increases inventory storage and delivery efficiency, since it helps avoid
wasteful storage days and lack of supply to satisfy customer demand.
Moreover, many companies realize that increasing market share requires that they be
sensitive to marketing changes and make appropriate adjustments. Lots of information
processing applications could meet these requirements, and ERP covers almost every
essential functional unit of a firm’s operations—including accounting, financing,
procurement, marketing, and sales.
This information processing tool becomes the bridge that helps different isolated
functional units share and update their data immediately, so managers can continually
revise strategies based on data from all departments. However, information tools like
ERP are expensive, and not a practical method for medium or small business owners. To
address this issue, some software firms develop simpler, cheaper information
processing tools specifically for smaller companies.
Process Preparation
Implementing ERP typically requires changes in existing business processes. Poor
understanding of needed process changes prior to starting implementation is a main
reason for project failure. The problems could be related to the system, business
process, infrastructure, training, or lack of motivation.
It is therefore crucial that organizations thoroughly analyze business processes before
they implement ERP software. Analysis can identify opportunities for process
modernization. It also enables an assessment of the alignment of current processes with
those provided by the ERP system. Research indicates that risk of business process
mismatch is decreased by:

53
 Linking current processes to the organization's strategy
 Analyzing the effectiveness of each process
 Understanding existing automated solutions
ERP implementation is considerably more difficult (and politically charged) in
decentralized organizations, because they often have different processes, business
rules, data semantics, authorization hierarchies, and decision centers. This may require
migrating some business units before others, delaying implementation to work through
the necessary changes for each unit, possibly reducing integration or customizing the
system to meet specific needs.
A potential disadvantage is that adopting "standard" processes can lead to a loss of
competitive advantage. While this has happened, losses in one area are often offset by
gains in other areas, increasing overall competitive advantage.

54
10 – Suggestions And Findings
Findings
The overall goal of the Food Safety Project for the BFPPL Fresh Fruit Industry is “to
enhance the competitiveness of specialty crop producers in Wisconsin by assessing the
food safety needs of fresh fruit and vegetable producers and by developing best
practices to meet the needs identified.” The Wisconsin Department of Agriculture,
Trade and Consumer Protection contracted with FamilyFarmed.org to perform an
analysis and devise recommendations regarding the current state of on-farm food safety
within the Wisconsin produce industry. FamilyFarmed.org engaged industry
representatives as well as stakeholders to participate in the needs assessment and
contribute to overall project content and process. The needs assessment revealed that
challenges exist for buyers, growers, distributors, and regulators.
The goal is to provide the resources and tools growers need to implement best food
safety practices at their growing operations. BFPPL has contracted with the Bhutan
Fruits and Vegetable Growers Association to implement the recommendations. This
web-tool gives growers a reliable source of information that will make it possible to
develop food safety plans, prepare for third party audits, and ultimately to grow safe
produce for consumers.

55
Suggestions
Recommendation One: Explore the establishment of a BFPPL Produce Innovation
Center, from identifying produce market needs across the supply chain to piloting one-
on-one technical assistance and/or a grower hotline.
Recommendation Two: BFPPL should start operating with fully automatic machinery to
reduce the cost spent on labours which in turn will automatically helps in increasing
profit levels.
Recommendation Three: BFPPL should make more efforts to ensure welfare and safety
of workers and maintain hygiene and healthy atmosphere of factory.
Recommendation Four: BFPPL should develop fast and fluent distribution system so
that its products can easily reach to target markets as and when demanded.
Recommendation Five: With the adoption of latest technologies BFPPL should try to
reduce various costs which in turn increases profits by increases sales.
Recommendation Six: BFPPL should develop and promote a web based tool to assist
Bhutan fruits and vegetables growers in learning about food’s safety.
Recommendation Seven: BFPPL should create pamphlets and educational materials
that inform growers and buyers about specific on farm food safety risk and how they
can mitigate the risk. Develop a out rich and communication plane to promote and
disseminate the materials.
Recommendation Eight: BFPPL should continue existing and implement new education
and training programmes to relay technical information and best practices to growers
using direct and “Train The Trainers” education for agricultural professionals further
explore how to engage buyers in training and educational efforts at levels where
interest was indicated.

56
11 – Conclusion
1) Projections suggest ample opportunities exist
2) Forecasts of economic growth underpin continued growth in consumption.
3) A significant development is the increasing share of fresh compared to processed
fruits traded, taking advantage of advances in post harvest technology.
4) These developments have enabled tropical fruits to compete at the upper end of
the market, maximizing earnings through the sales of fresh fruit in a segment
where unit prices are at a premium.
5) Tropical fruit market has evolved significantly
6) Price premiums based on novelty have been replaced by quality based premiums.
7) Hikes in fruits prices have eroded profit margins but costs not passed to retailers
because of the intense competition in the fruit trade as evidenced by high price
elasticity of demand.
8) Major challenges for future market growth are related to coordinated
management of the field – to market - supply chain.
9) Issues related to food safety, pest and disease control as well as quality should
find a proper balance between cost and demand. Prioritization of the activities to
better allocate resources and improve the effectiveness of the services rendered.
10) Cognizance must be taken of the negative impact of the cost/price squeeze on
production.
11) Supply chain costs have also increased with the rise in processing and
distribution costs, mainly due to fuel costs.
12) To improve longer-term structural conditions - need to develop action
orientation programmers to expand demand and reverse the downward pressure
on world prices.

57
12 – Bibliography
Security Analysis and Portfolio Management - Dr. P.K.BANDGAR retrieved October
5, 2013
http://www.managementstudyguide.com/portfolio-management.htm
http://www.investopedia.com/terms/p/portfoliomanagement.
Retrieved October 25, 2013 from
http://www.unicon.in/portfolio-management-services-india.html
Retrieved November 9, 2013 from
http://www.sebi.gov.in/faq/faqpms.html
http://www.a ssetmanagement.hsbc.com/in
http://www.pruicici.com/OurBusiness/PMS.aspx
http://www.religaremacquarie.com/pms.html
www.religaremacquarie.com/pms.htm
Retrieved December 4 2013 from
http://www.zonkerala.com/articles/portfolio-management-service.htm
http://www.portfoliomanagement.in/portfolio-management-process-
techniques.html
http://forum.kahuki.com/threads/benefits-of-portfolio-management-services
Retrieved December 8 203 from
http://www.bms.co.in/investment-analysis-and-portfolio-management-question-
bank
http://www.anmolfinsec.in/portfolio.htm

58
Swot Analysis December 8 2013 from
http://www.keynote.co.uk/market-intelligence/view/product/10671/fruit-%26-
vegetables
Tashi Group December 10 2013
http://www.tashigroup.bt/?page_id=64
Market Opportunities December 23 2013 from
http://datcp.wi.gov/OnFarmFoodSafety/FoodSafetyPlans/index.aspx
Policies And Norms Retrieved on December 14 2013 from
http://fruit.cfans.umn.edu/apples/beforeyoustart/
http://en.wikipedia.org/wiki/Enterprise_resource_planning
Global Strategies, Winning Strategies Retrieved December 18 2013 from
http://www.omafra.gov.on.ca/english/crops/pub360/p360toc.htm
Resources required to tap business opportunity Retrieved December 11 2013 from
http://novascotiatourismagency.ca/sites/default/files/page_documents/ceilidh_assess
ment_lowres.pdf

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