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Dairy Industry

The highest milk producer in the entire globe India boasts of that status. India is otherwise known as the Oyster of the global dairy industry, with opportunities galore to the entrepreneurs globally. Anyone might want to capitalize on the largest and fastest growing milk and mil products' market. The dairy industry in India has been witnessing rapid growth. The liberalized economy provides more opportunities for MNCs and foreign investors to release the full potential of this industry. The main aim of the Indian dairy industry is only to better manage the national resources to enhance milk production and upgrade milk processing using innovative technologies. Potential for investment in the dairy industry Some areas of Indian dairy industry can be toned up by the evocation of differentiated technologies and equipment from overseas. These include: 1. Raw milk handling: The raw milk handling needs to be elevated in terms of physicochemical and microbiological properties of the milk in a combined manner. The use of clarification and bactofugation in raw milk processing can aid better the quality of the milk products. 2. Milk processing: Better operational ratios are required to amend the yields and abridge wastage, lessen fat/protein losses during processing, control production costs, save energy and broaden shelf life. The adoption of GMP (Good Manufacturing Practices) and HACCP (Hazard Analysis Critical Control Points) would help produce milk products adapting to the international standards. 3. Packaging: Another area that can be improved is the range of packing machines for the manufacture of butter, cheese and alike. Better packaging can assist in retaining the nutritive value of products packed and thus broaden the shelf life. A cold chain distribution system is required for proper storage and transfer of dairy products. 4. Value-added products: There's vast scope for value-added products like desserts, puddings, custards, sauces, mousse, stirred yoghurt, nectars and sherbets to capture the dairy market in India. The Indian dairy industry has aimed at better mananamegemt of the national resources to enhance milk production and upgrade milk processing involving new innovative technologies. Multinational dairy giants can also make their foray in the Indian dairy market in this challenging scenario and create a winwin situation for both. India's Milk Product Mix Fluid Milk Ghee Butter 46.0% 27.5% 6.5%

Curd Khoa (Partially Dehydrated Condensed Milk) Milk Powders, including IMF Paneer & Chhana (Cottage Cheese) Others, including Cream, Ice Cream

7.0% 6.5% 3.5% 2.0% 1.0%

Overview of the Indian Dairy Sector


The country is the largest milk producer all over the world, around 100 million MT Value of output amounted to Rs. 1179 billion (in 2004-05) (Approximately equals combined output of paddy and wheat!!) 1/5thof the world bovine population Milch animals (45% indigenous cattle, 55 % buffaloes, and 10% cross bred cows) Immensely low productivity, around 1000 kg/year (world average 2038 kg/year) Large no. of unproductive animals, low genetic potency, poor nutrition and lack of services are the main factors for the low productivity There are different regions developed, average, below average (eastern states of Orissa, Bihar and NE region) in the dairy industry.

Dairy Products India now has indisputably the world's biggest dairy industryat least in terms of milk production; last year India produced close to 100 million tonnes of milk, 15% more than the US and three times as much as the much-heralded new growth champ, China. Appropriately, India also produces the biggest directory or encyclopaedia of any world dairy industry. The dairy sector in the India has shown remarkable development in the past decade and India has now become one of the largest producers of milk and value-added milk products in the world.

The individual products under this sub-head are as below: Butter Fresh Butter MilK Butter Oil Fresh Cheese Milk & Cream in Milk for Babies Powder Other Fat Skimmed milk powder Other milk power Whole Milk Ghee Areas of Production: Maharashtra , Himachal Pradesh , Madhya Pradesh , Punjab , Rajasthan , Tamil Nadu are the major production area of Dairy Products in India . India Facts and Figures : Concentrated Dairy products such as skimmed milk continues to be the largest item of export, which together accounts for nearly 78% of net milk and milk products exports during the year 2007-08. The exports of Dairy Products reached. 69415.44 MT from 45371.84 MT . Indias export of Dairy products has increased from Rs. 434.58 Crores in 2006-07 to Rs 866.56 Crores in 2007-08 . Major Export Destinations (2007-08) : Bangladesh, UAE, Egypt, China, Algeria.
Although India is a world leader in the production of Dairy Animal Products. India's exports of Animal products has increased from 1266333.38 MT with the value of Rs. 4109.93 Crores in 2006-07 to 2101759.49 MTwith the value of Rs. 5104.63 Crores in 2007-08 . Indias exports of poultry products has increased from Rs. 318.17 Crores in 2006-07 to Rs 441.09 Crores in 2007-08 . Birds, eggs, in shell, fresh, preserved or cooked constitute the largest segment with about 50% share. Processed egg products accounted for about 48% of the exports. India's export of Buffalo meat and sheep/goat meat products reached 483478.29 MT and 8908.72 MT with the value of Rs. 3549.78 Crores and Rs. 134.10 Crores during 2007-08. Frozen bovine meat dominated the exports with a contribution of over 97%. The demand for bovine meat in international market has sparked a sudden increase in the meat exports from India. The main markets for Indian bovine meat are Malaysia, Philippines, Mauritius, and Gulf countries. Concentrated Dairy products such as skimmed milk continues to be the largest item of export, which together accounts for nearly 78% of net milk and milk products exports during the year 2006-07. The exports of Dairy Products reached. 69415.44 MT with the value of Rs.866.58 Crores in 2007-08 as against Rs. 434.58 Crores in 2006-07. On the other hand butter, butter oil, ghee and other milk fat together accounted for just over 10% of the net milk and milk product exports from India during 200607. Indias exports of Processed Meat and Natural honey attained 1245.47 MT and 12231.19 MT with the value of Rs. 12.96 Crores and Rs. 93.30 Crores in 2007-08.

Processed Foods

India can become one of the largest fruit and vegetable exporters in the world and can equally be a large importer given its demographic diversity. This strong footing in agriculture provides a large and varied raw material base for food processing. There should be technology upgradation, quality management, firm adherence to export commitments and acquisition of appropriate negotiation skills. Many non-traditional vegetables mainly processed & gherkins and others like asparagus, celery, bell pepper, sweet corn, green and lime beans and organically grown vegetables are also being increasingly exported. Indias exports of Processed Food was Rs. 8975 Crores in 2007-08, which including the share of products like Mango Pulp (Rs. 509.69 Crores), Dried and Preserved Vegetable (Rs. 429.94 Crores), Pickles and Chutneys (Rs. 250.62 Crores), Other Processed Fruit and Vegetable (Rs. 712.20 Crores), Pulses (Rs. 549.01 Crores), Groundnuts (Rs. 1054.08 Crores), Guargum (Rs. 1125.75 Crores), Jaggery & Confectionary (Rs. 2810.68 Crores), Cocoa Products (Rs. 42.26 Crores), Cereal Preparations (Rs. 677.35 Crores), Alcoholic and Non-Alcoholic Beverages (Rs. 338.56 Crores) and Miscellaneous Preparations (Rs. 474.47 Crores). The Indian food processing industry is primarily export oriented. Indias geographical situation gives it the unique advantage of connectivity to Europe, the Middle East, Japan, Singapore, Thailand, Malaysia and Korea. One such example indicating Indias location advantage is the value of trade in agriculture and processed food between India and Gulf region.

Ice-cream
Introduction The ice cream market growth picked up after de-reservation of the sector

in 1997. Of the total size of Rs 15-16bn, around 30-32% is in the hands of organized sector valued at Rs 4.9bn, rest all is with the unorganized sector. Among the major players in this industry Hindustan Lever has a market share of around 50%, represented mainly by Kwality Walls brand. Amul with an estimated market share of 35% is rapidly gaining market share and lastly Vadilal is the player in the national market with 8-9% of the market share. Production area In rural areas, kulfis / ice creams made by small / cottage industry are popular. The market for organized sector is restricted to large metropolitan cities. In small towns and villages, there are thousands of small players who produce ice- creams / kulfis in their home backyard and cater to the local market. Almost 40% of the ice creams sold in the country are consumed in the western region with Mumbai being the main market, followed by 30% in the north and 20% in the south. Growth promotional activities The Indian government adopted the policy of liberalization regarding the ice cream industry also and it is since then that this sector has shown an annual growth ranging from 15- 20% per annum for last 1- 2 year. Presently in 1999- 00 it is estimated at worth of Rs15- 16bn. This growth rate is expected to continue for another next 2- 3 years because of lower base. Types Indian Ice Cream market can be segmented in three different ways, namely on the basis of flavors; on the basis of stock keeping units / packaging and on the basis of consumer segments. On the basis of flavors the market today has a number of flavors like vanilla, strawberry, chocolate, mango, butterscotch a number of fruit flavors, dry fruit flavors traditional flavors like Kesar- Pista, Kaju- Draksh etc. The market is totally dominated by Vanilla, Strawberry and chocolate, which together account for more than 70% of the market followed by butterscotch and other fruit flavors.

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