Dudhsagar Dairy 1.1 Global Scenario of Industry Europe remains the largest market in the dairy Industry. US Follows Europe as the second largest market. Preference for rich, fortified, fat-specific, and organic variants of various dairy products in the market. India is going to be a major market for international players – Growing population – lot of growth opportunities It is projected to account for over 1/3 of the global milk consumption by 2020 CAGR(2011-2014) drinking milk sector: Global : 1.9 % , APAC: 3.5%, Western Europe: 0.2%, Africa: 2.2%, Eastern Europe:2.4, Latin America: 2.8% Market Value in Asia Pacific Category % Share Japan 37.3% China 31.2% India 9.5% South Korea 8.3% Rest of Asia-Pacific 13.7% Total 100% Source: Data monitor 1 | P a g e S.V. Institute of Management, Kadi. Dudhsagar Dairy % Share Japan 0 37.30% China India South Korea 100% 31.20% Rest of Asia-Pacific 9.50% Total 8.30% 13.70% Source: Data monitor In developed dairying countries such as the U.S.A., the year 1850 is seen as the dividing line between farm and factory-scale production. Various factors contributed to this change in these countries, viz. concentration of population in cities where jobs were plentiful, rapid industrialization, improvement of transportation facilities, development of machines, etc. whereas the rural areas were identified for milk production, the urban centers were selected for the location of milk processing plants and product manufacturing factories. These plants and factories were rapidly expanded and modernized with improved machinery and equipment to secure the various advantages of large-scale production. Nearly all the milk in the U.S.A. before 1900 was delivered as raw (natural) milk. Once pasteurization was introduced, it developed rapidly. Mechanical refrigeration helped in the rapid development of the factory system of market milk distribution. 2 | P a g e S.V. Institute of Management, Kadi. Dudhsagar Dairy Global players Switzerland , started in 1866 with sales turnover Rs 1,471.30 crore New Zealand, started in 2001 with sales turnover US $17 billion. Denmark , started in 1881with annual turnover of Danish krone (DKK) 64 billion Barcelona, Spain started in 1994, 3 | P a g e S.V. Institute of Management, Kadi. Dudhsagar Dairy 1.2 History of the Industry India is the highest milk producer in the entire globe. India is well known as the 'Oyster' of the global dairy industry, with opportunities galore for the entrepreneurs globally. It might be dream for any nation in the world to capitalize on the largest and fastest growing milk and milk products' market. The dairy industry in India has been witnessing rapid growth with liberalization. As the economy provides good opportunities for MNCs and foreign investors to release the full potential of this industry. The main objective of the Indian Dairy Industry is to manage the national resources in a manner to enhance milk production and upgrade milk processing using innovative technologies. The crossbred technology in the Indian Dairy Industry has further augmented with the viability of the dairy units by increasing the milk production per animal. Then subsequently milk production has also increased at an exponential rate while the benefits of an increase in milk production also reached the consumers from a relatively lower increase in the price of milk. The favorable price environment for milk producers for the Dairy Industry in India however appeared to have weakened during the 90's, a decline in the real price of milk being noticed after the year 1992. And then slowly regained it is glory after 1992 to till now. In India dairying from very much earlier is regarded as an instrument for social and economic development. The country's milk supply comes from millions of small producers, who are dispersed throughout the rural areas. All these farmers maintain an average herd of one or two milk animals, comprising cows and/or buffaloes. Mostly ample labor and a small land base encourage farmers to practice dairying as an occupation subsidiary to agriculture. As income from crop production is seasonal instead dairying provides a stable which is a year- round income and also an important economic incentive for the small farmer. 4 | P a g e S.V. Institute of Management, Kadi. Dudhsagar Dairy The co-operative society was stated about 26years ago in indices while in the foreign country (Britain). It was established in 1844. I.e. 146 years ago. In Gujarat the first milk producer union was stated in kheda district were inspire and guided by the Sardar Patel and the kheda district milk producer union ltd. The co-operative based industry was started in 1946 at Anand name ―AMUL DAIRY‖. Following the footstep of ―Amul Dairy‖ the milk producer union was started at Surat in 1951. It is called as Surat in ―Sumal Dairy‖. Then in 1957-58, the other co-operative milk producer union was established in Baroda called ―Baroda dairy‖ in 1960. ―Dhanasura Dairy‖ was started in Mahesana. In Banaskanthadistrict, the ―Banas Dairy‖ was established in 1966. Dr. V.Kurien the General Manager of Amul Dairy talked to Mr. Bhalabhai Patel a prominent of dairy industry is Sabarkantha District and with great task efforts on the Mr.Bhalubhai Patel the foundation Chairman Mr. C.C. Desai,Mr. Gopalbhai Patel and Mr. Ambabhai Patel. The Sabarkantha district Co-operative Milk producers’ union was established on 27th November 1964. It called as ―Sabar Dairy‖. It has got its name as it is situated in the Sabarkantha district first 19 societies registered their names on 20th October 1965. 5100 liters milk was collected and supplied for Ahmedabad. Ahmedabad municipal dairy could not accept more quantity of milk during the seasons. For the first seven years the milk union kept in on supplying raw milk to Ahmedabad municipal dairy and could not expand its activities due lack of financial sources. Therefore, in 1970 the milk union submitted proposal to Indian Dairy Corporation for establishment of multiproduct dairy plant in Sabarkantha district. History of Indian Market Milk Industry Beginning in organized milk handling was made in India with the establishment of Military Dairy Farms. Handling of milk in Co-operative Milk Unions established all over the country on a small scale in the early stages. Long distance refrigerated rail-transport of milk from Anand to Bombay since 1945 Pasteurization and bottling of milk on a large scale for organized distribution was started at Aarey (1950), Calcutta (Haringhata, 1959), Delhi (1959), Worli (1961), Madras (1963) etc. 5 | P a g e S.V. Institute of Management, Kadi. Dudhsagar Dairy Establishment of Milk Plants under the Five-Year Plans for Dairy Development all over India. These were taken up with the dual object of increasing the national level of milk consumption and ensuing better returns to the primary milk producer. Their main aim was to produce more, better and cheaper milk. 1.3 Indian Scenario of Industry Co-operative: A man takes a muster seeds and sows it in his field. It is the smallest of all seeds, but when it grows up, it has the biggest of all plants. It becomes a tree, so that birds comes and make their nest in its shredded branches.‖ This approach of the growing and nesting birds the spirit of co-operation between the natures, the person who shows the seed is the true essence of a co-operative. ―Co-operation amongst competitive‖ is the fundamental principal. One is reminded of the story where the father tells his five sons to break small wood stick individually and then trying to breaks them when they are joining. The sticks do not break. Co-operative movement in dairy industry: Milk is perhaps the only agriculture product that a farmer is required to sell twice a day every day of the year. In view to its extremely limited keeping quality, the farmer has also got to sell it within few hours of production; otherwise it becomes a total loss. In India as farming is carried on very small it is not possible for a farmer himself to market what little milk he produce. The production being small it does not become worthwhile for him to sell the milk to the consumer himself. Inevitably, therefore draying so developed that middle man entrench themselves in the milk producing areas to buy the milk from the farmer transport it to the consuming centers and to sell in to the consumer. We are all aware of the tremendous exploitation that the middle man indulges in when marketing agricultural commodities. Even product like wheat, rice, tobacco, the exploitation of the farmer by middle men is very important but these are products that are needed to be marketed only once a year. 6 | P a g e S.V. Institute of Management, Kadi. Dudhsagar Dairy These are also products, which the farmer can stock for some time in order to obtain a good market. • India is one of the largest milk producers in the world • Market size of Indian Dairy Industry stands at around US$4.4 billion • CAGR (2005-2009): 11.9 % • Domestic Market – 50% in fluid form, 35% in traditional products (cheese, yogurt and milk based sweets), and 15% is consumed for production of butter, ghee, milk powder and other processed dairy products • Forecast 2014: increase by 49.4 % to take market value to US $ 6.5bn Indian Dairy Industry Size of the Industry More than 10 million dairy farmers belong to 96,000 local dairy cooperatives, who sell their product to one of 170 milk producers' cooperative unions who in turn are supported by 15 state cooperative Geographical Delhi, Punjab, Mumbai, Gujarat, Surat, Lucknow, Bihar, distribution Hyderabad Output per annum Growing 5 % per annum Market Capitalization The industry contributes about Rs 1,15,970 crores (US $ 25,771 million) to the national economy.