2. Milk Industry
• Worldwide, dairy farms produced about 730 million tones of
milk in 2011 from 260 million dairy cows.
• India is the world's largest producer and consumer of milk,
yet neither exports nor imports milk.
• New Zealand, the European Union's 28 member states,
Australia, and the United States are the world's largest
exporters of milk and milk products.
3. Milk Industry
• China and Russia are the world's largest importers of milk and
milk products.
• Throughout the world, there are more than 6 billion
consumers of milk and milk products. Over 750 million people
live within dairy farming households.
4. World total milk production in 2009
FAO statistics (including cow/buffalo/goat/sheep/camel milk)
Rank Country Production (109 kg/y)
World 696,554
1 India 110,040
2 United States 85,859
3 China 40,553
4 Pakistan 34,362
5 Russia 32,562
6 Germany 28,691
7 Brazil 27,716
8 France 24,218
9 New Zealand 15,217
10 United Kingdom 13,237
11 Italy 12,836
12 Turkey 12,542
13 Poland 12,467
14 Ukraine 11,610
15 Netherlands 11,469
16 Mexico 10,931
17 Argentina 10,500
18 Australia 9,388
19 Canada 8,213
20 Japan 7,909
7. • World milk consumption per capita increased +1% from 103.5
to 104.7 kg in 2010.
• Milk consumption per region:
• Asia: 39%
• Europe: 29%
• North America: 13%
• South America: 9%
• Africa: 6%
• Central America (incl Mexico): 3%
• Oceania: 1%
*The world dairy situation report 2011
Milk consumption pattern - World
8. Mother Dairy - Profile
• Parent Company National Dairy Development Board
(NDDB)
• Category Milk and Food Processing
• Sector Food and Beverages
• Tagline/ Slogan Piyo Pure
• USP India’s very own producer of milk,
milk products, beverages, foods,
etc. at affordable rates and of
premium quality
Brands
1.Mother Dairy Plain Dahi
2.Dhara
3.Safal
9.
10. Strength
1.Awell-recognized brand name
2. Popular subsidiary brands like Dhara, Safal, b-Activ, etc.
3.A wide variety of products like milk, dairy products, fruits,
vegetables, groceries, edible oil, beverages, frozen food, etc.
4. It is an IS/ ISO-9002, IS-15000 HACCP and IS-14001 EMS
certified company
5. An employee strength of 3000 people
6.Strong and efficient supply chain network
7.Procurement of milk from co-operative dairies and vegetables
from farmers, providing them with fair prices
8.Technological advancement
9.Popular for its quality and affordable price
11. Weakness
1.Limited number of Mother Dairy and Safal outlets
2.Difficult to maintain competitive pricing
3.Vegetables and milk products are perishable
12. 1.Continuous demand of dairy products and other products by
Mother Dairy
2.Open more number of Mother Dairy outlets
3.Market and advertise the products
4.Increase its market share by expansion in untapped markets
Opportunity
14. Why SAARC countries?
• Constitutes about 23 % of the world’s population
• One of the fastest growing region
• Transformed through free trade agreements
• Sri Lanka and Nepal highest rank countries in ease of
doing business
• Business model will be same due to:
Similar geographical scenario
Cultural differences are similar
Taste preferences are similar
Similar consumption pattern
15. Comparison of SAARCS Countries
Countries Starting
a
business
Ease of
doing
business
Getting
electricity
Paying
Taxes
Trade
across
border
Afghanistan 24 183 141 79 184
Bangladesh 115 173 118 83 120
Bhutan 92 125 72 86 165
India 158 142 137 156 126
Nepal 104 108 85 126 71
Maldives 50 116 108 134 132
Pakistan 116 128 146 172 108
Sri Lanka 107 99 100 158 69
18. Market Segmentation
• Neighboring countries
• Low cost of Export
• Import friendly Law
• Milk deficit countries
• Good profit margin
19. Nepal
Market daily requirement – 8.2 million litres
Demand growth rate (milk products) – 4.2% YOY
Supply of milk – 4.26 million litres
Milk deficit (daily) – 4 million litres (approx.)
Milk consumption / person – 56 litres/ year
Recommended consumption (FAO) – 92 litres
20. Market Potential of Nepal
Chain Ratio Method
Particulars Amount
Population of Nepal 27.8 million (2013)
Milk consumption 58 litres / person / year
% of Milk Consumers 80% i.e. (22 million)
Awareness (Year 1) 10% (approx.)
Adaptiveness of Brand 40%
Avg. price of Milk/litre Rs. 53
Sales forecast (units) = 58*22*0.1*0.4 51 Million Litres
Sales Forecast (Rs.) = 51 * Rs. 53 Rs. 2.7 billion /annum
21. Strategy
Milk plant in Nepal
Particulars Amount (Rs) / litre
Cost of Raw Milk 35.91
Collection Cost 1.92
Processing Cost 4.01
Sales Cost 1.17
Administrative Overhead 8.51
Total 51.52
Particulars Amount (Rs.) / litre
Selling Price 53
Cost 51.52
Margin/Profit 1.48
Total Profit / Year Rs.75.48 Million (51*1.48)
22. Profits – Other Dairy Products
Net
Margin/kg
(INR)
22.05
18.27
13.23
2.52
10.08
31.5
18.27
23. PEST of Nepal
Political Factors:
• Open border with
India
• No harm to
Indian companies
• Reforms to
promote business
Technological Factor:
• Obsolete
Technology
• Major chunks are
imported
Social Factors:
• Consumer buying
pattern
• Health conscious
• Rising Standard of
living
Economic Factors:
• High Potential
• Rising Economy
• GDP- $21billion
• Cheap work force
25. Bangladesh
Market annual requirement – 1.46 crore tonnes
Production of milk- 38 lakh tonnes
Supply of milk – 21700 tonnes
Milk deficit – 98.20 lakh tonnes
Per capita milk availability – 82.9 ml
Recommended consumption – 250 ml
26. PEST of Bangladesh
Political Factors:
Political Factors:
• Challenge to create a
real participatory
democracy
• Issues of good
governance and
corruption
• Political instability
• government
Economic factors:
• Inflation rate
• Pursue foreign
investment actively
• Reduction in poverty
• Foreign trade
regulations and
attitude towards
foreign companies
Social factors:
• Growing concern
over dairy products
• Large no. of people
are aging
Technological factors
• Technological
advancements
• Heavy reliance on
imported tech.
• A National Science
and Technology
policy adopted by
the Government
27. Market Potential of Bangladesh
Chain Ratio Method
Particulars Amount
Population of Bangladesh 160 million
Milk consumption 30 litres / person / year
% of Milk Consumers 75%
Awareness (Year 1) 10% (approx.)
Adaptiveness of Brand 15%
Avg. price of Milk/litre Rs. 48
Sales forecast (units) =
30*160*0.75*0.1*0.15
54 Million Litres
Sales Forecast (Rs.) = 54 * Rs. 48 Rs. 2.59 billion /annum
28. Competitors
Bangladesh Nutrition & Dairy Food Industry
Mark Dairy & Milk Products Limited
Aftab Milk & Milk Products Ltd.
JAM Group
Shelai Dah Dairy Ltd.
29. Strategy
• Free trade agreement between countries
• 70 new local markets called “HAAT” will open on common
border (therefore easy export)
• Export from Warehouse - Kolkata, West Bengal
Particulars Amount(INR) / Litre
Final cost of milk to mother
dairy – India
32.2
Cost of transport to
Bangladesh Market
1.7
Total 34 (aprox.)
Selling cost to distributors 40
Profit Margin 6
Total profit (6*54) Rs. 324 Million