TABLE OF CONTENTS

1. Argentina 1.1. Argentina Milk Market Introduction 1.1.1. Argentina Cow Milk Market Production and Fluid Milk Consumption by Volume, 2007-2015 1.1.2. Argentina Milk Cow Numbers and Milk Production per Cow, 2007-2015 1.2. Argentina Dairy Products Market Introduction 1.2.1. Argentina Dairy Products Market Production by Volume, 2007-2015 1.2.2. Argentina Dairy Product Market Production by Volume, 2007-2015 1.2.2.1. Butter 1.2.2.2. Cheese 1.2.2.3. Skim Milk Powder 1.2.2.4. Whole Milk Powder 1.2.2.5. Milk Drinks & Fermented Products 1.2.2.6. Cream 1.2.2.7. Whey Powder 1.2.3. Argentina Dairy Product Market Consumption by Volume, 2007-2015 1.2.3.1. Butter 1.2.3.2. Cheese 1.2.3.3. Skim Milk Powder 1.2.3.4. Whole Milk Powder 1.2.4. Argentina Dairy Product Market Net Trade by Volume, 2007-2015 1.2.4.1. Butter 1.2.4.2. Cheese 1.2.4.3. Skim Milk Powder 1.2.4.4. Whole Milk Powder 1.3. Trends and Developments in Argentina Milk and Dairy Products Market 1.4. Competitive Landscape 1.5. Argentina Milk and Dairy Products Market Future Outlook

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1.6. Argentina Macro Economic Indicators: Current and Projections 1.6.1. Population, 2007-2015 1.6.2. GDP, 2007-2015 1.6.3. Inflation, 2007-2015 1.6.4. Unemployment Rate as a % of Labour Force, 2007-2015 1.6.5. Demographic Distribution of Population on the basis of Age, 2009-2010 1.6.6. Personal Disposable Income and Number of Households in Argentina, 2009- 2010 1.6.7. Distribution of Income among Households, 2009-2010 2. Appendix 2.1. Market Definition 2.2. Abbreviations 2.3. Research Methodology Data Collection Methods Approach 2.4. Disclaimer

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LIST OF FIGURES

Figure 1: Argentina Cow Milk Production and Fluid Milk Consumption along with Manufacturing Use and Exports by Volume in Thousand Tonnes, 2007-2015 Figure 2: Argentina Milk Cow Numbers in Thousand Head and Milk Production per Cow in Kilograms, 2007-2015 Figure 3: Argentina Total Dairy Products Market Production by Volume in Thousand Tonnes, 2007-2015

Figure 4: Argentina Butter Market Production by Volume in Thousand Tonnes, 2007-2015

Figure 5: Argentina Cheese Market Production by Volume in Thousand Tonnes, 2007-2015 Figure 6: Argentina Skim Milk Powder Market Production by Volume in Thousand Tonnes, 2007-2015 Figure 7: Argentina Whole Milk Powder Market Production by Volume in Thousand Tonnes, 2007-2015 Figure 8: Argentina Milk Drinks & Fermented Products Market Production by Volume in Thousand Tonnes, 2007-2015

Figure 9: Argentina Cream Market Production by Volume in Thousand Tonnes, 2007-2015 Figure 10: Argentina Whey Powder Market Production by Volume in Thousand Tonnes, 2007-2015 Figure 11: Argentina Butter Market Consumption by Volume in Thousand Tonnes, 2007- 2015 Figure 12: Argentina Cheese Market Consumption by Volume in Thousand Tonnes, 2007- 2015 Figure 13: Argentina Skim Milk Powder Market Consumption by Volume in Thousand Tonnes, 2007-2015 Figure 14: Argentina Whole Milk Powder Market Consumption by Volume in Thousand Tonnes, 2007-2015

Figure 15: Argentina Butter Market Net Trade by Volume in Thousand Tonnes, 2007-2015

Figure 16: Argentina Cheese Market Net Trade by Volume in Thousand Tonnes, 2007-2015 Figure 17: Argentina Skim Milk Powder Market Net Trade by Volume in Thousand Tonnes, 2007-2015

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Figure 18: Argentina Whole Milk Powder Market Net Trade by Volume in Thousand Tonnes, 2007-2015

Figure 19: Argentina Population Trend in Million, 2007-2015

Figure 20: Argentina Gross Domestic Product in USD Billion, 2007-2015

Figure 21: Argentina Inflation, Average Consumer Prices in Percentage, 2007-2015

Figure 22: Argentina Unemployment Rate as a Percentage of Labour Force, 2007-2015

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LIST OF TABLES

Table 1: Argentina Cow Milk Production and Fluid Milk Consumption along with Manufacturing Use and Exports by Volume in Thousand Tonnes, 2007-2015 Table 2: Argentina Milk Cow Numbers in Thousand Head and Milk Production per Cow in Kilograms, 2007-2015 Table 3: Competitive Landscape of Major Dairy Products Companies (Mastellone Hermanos, Sancor) in the Argentina Table 4: Demographic Distribution of Population in Argentina on the basis of Age and Gender, in Million, 2009-2010 Table 5: Personal Disposable Income in USD Million and Number of Households in Thousands in Argentina, 2009-2010

Table 6: Income Distribution among Households in thousands in Argentina, 2009-2010

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ARGENTINA

ARGENTINA MILK MARKET INTRODUCTION

ARGENTINA COW MILK MARKET PRODUCTION AND FLUID MILK CONSUMPTION BY VOLUME, 2007-2015

The cow milk production in the country showcased a CAGR of 3.7% during the historical period from 2007-2009. The market volume of cow milk production increased from 9,400 thousand tonnes in 2007 to 10,100 thousand tonnes in 2009. Figure: Argentina Cow Milk Production and Fluid Milk Consumption along with Manufacturing Use and Exports by Volume in Thousand Tonnes, 2007-2015

14,000 12,000 10,000 8,000 6,000 4,000 2,000 0

Milk Market Size Market Size Milk ('000s Tonnes) 2007 2008 2009 2010 2011 2012 2013 2014 2015

Cow Milk Production Fluid Milk Consumption Manufacturing Use

ARGENTINA MILK COW NUMBERS AND MILK PRODUCTION PER COW, 2007-2015

Argentina accounted for 2,100 thousand head cows in 2009 which spread over 12,000 dairy farms. The number of cows in a herd has increased and the number of farms has declined at

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an average rate of nearly 4.5% year on year basis. Almost 98% of the total population of cows belongs to Holando Argnetino. Figure: Argentina Milk Cow Numbers in Thousand Head and Milk Production per Cow in Kilograms, 2007-2015

2,300 5,400 2,250 5,200 5,000 2,200 4,800 2,150 4,600 2,100 4,400 4,200 2,050 4,000 2,000 3,800 Milk Production perMilk Cow(Kg) Milk Cow Number ('000s NumberHead) ('000s Cow Milk 2011 2007 2008 2009 2010 2012 2013 2014 2015

Milk Cow Numbers ('000 Head) Milk Production per Cow (Kg)

ARGENTINA DAIRY PRODUCTS MARKET INTRODUCTION

Pampas is the milk producing hub in the country which includes regions such as Cordoba, Santa Fe and La Pampa. The average milk obtained from a cow is 45,000 kg and on a farm the total herd size is of nearly 200 cows which are increasing every year.

ARGENTINA DAIRY PRODUCTS MARKET PRODUCTION BY VOLUME, 2007-2015

Argentina dairy production consists of various dairy products such as butter, cheese, skim powder, whole milk powder, milk drinks and fermented products, cream, condensed milk and whey powder. The demand for dairy products has registered an increase in the historical period. The market increased at a growth rate of 8.9% in 2008 as compared to in 2007. Even in 2009, the industry registered a growth rate of 4.1% and reached USD 1,534 thousand tonnes. The increase in demand for dairy products is likely to continue in the near future. The industry is expected to grow at a CAGR of 4.4% during 2009-2015.

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Figure: Argentina Total Dairy Products Market Production by Volume in Thousand Tonnes, 2007-2015

2,500

2,000

1,500

1,000 ('000s Tonnes) Tonnes) ('000s 500

Dairy Product Market Size Dairy 0 2007 2008 2009 2010 2011 2012 2013 2014 2015

Total Dairy Products Market Production

ARGENTINA DAIRY PRODUCT MARKET PRODUCTION BY VOLUME, 2007-2015

CHEESE

Cheese is one of the most important dairy products constituting nearly 45% of the total milk production. Soft / Fresh types (Cremoso, Saint Paulin and Mozzarella) dominate the cheese categories constituting 45% of the total cheese market. Semi soft cheese (Gouda, Swiss type) hold 30% of the market share followed by hard cheese (Provolone and Sardo) accounting for 15% of the market. Other types of cheese account for the remaining 10%. Sancor is the biggest player in the cheese industry in Argentina. Other players include 7 co- operatives who supply nearly 40% of the total cheese. The remaining production is distributed among 800 small players who operate domestically.

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Figure: Argentina Cheese Market Production by Volume in Thousand Tonnes, 2007- 2015

700 600 500 400 300 200 100 Production ('000s ('000s Production Tonnes) 0 2007 2008 2009 2010 2011 2012 2013 2014 2015

Cheese Production

ARGENTINA DAIRY PRODUCT MARKET CONSUMPTION BY VOLUME, 2007-2015

WHOLE MILK POWDER

Whole milk powder accounted for nearly 87.5% of the total consumption for milk powder in 2009. The period witnessed a decline in the consumption from 85 thousand tonnes in 2007 to 70 thousand tonnes in 2009. During the mentioned period the consumption decreased at a negative CAGR of 9.3%. The market is however expected to turnaround in the future. It is anticipated that the market will register a CAGR of 3.3% during the period from 2009-2015, whereby the consumption will increase and reach ~ thousand tonnes in 2015.

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Figure: Argentina Whole Milk Powder Market Consumption by Volume in Thousand Tonnes, 2007-2015

100

80

60

40 Consumption Consumption

('000s Tonnes) Tonnes) ('000s 20

0 2007 2008 2009 2010 2011 2012 2013 2014 2015

Whole Milk Powder Consumption

ARGENTINA DAIRY PRODUCT MARKET NET TRADE BY VOLUME, 2007-2015

BUTTER Butter had the minimum trade surplus among all the other dairy products in the country. In 2007, the butter net trade increased from 3 thousand tonnes in 2007 to 4 thousand tonnes in 2008 but declined in 2009 to the same level of 2007. However, in the future, the trade surplus is expected to increase steadily with the demand for butter rising in other regions of the world. The net export surplus is likely to increase and will reach ~ thousand tonnes by 2015. Figure: Argentina Butter Market Net Trade by Volume in Thousand Tonnes, 2007-2015

10 8 6 4 2 0 Net Trade ('000s ('000s Trade Net Tonnes) 2011 2007 2008 2009 2010 2012 2013 2014 2015

Butter

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COMPETITIVE LANDSCAPE

Table: Competitive Landscape of Major Dairy Products Companies (Mastellone Hermanos, Sancor) in the Argentina

Major Key Business Segments Geographical Players Business Overview (Revenue Contribution) Financials Reach

. . .

. . .

. . .

ARGENTINA MILK AND DAIRY PRODUCTS MARKET FUTURE OUTLOOK

Industry Factors Market Impact Comments

Dairy products a major constitute of . Cause: everyday’s food . Effect:

Increasing Awareness . Cause: . Effect:

Increase in exports of dairy products to . Cause: other countries. . Effect:

Low productivity of dairy farms . Cause: . Effect:

Lack of technical knowhow . Cause: . Effect:

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APPENDIX

MARKET DEFINITION

Cow Milk is defined as the raw milk produced by cows in Latin America which are processed in fluid milk and grade B milk for manufacturing use of other dairy products such as Butter, Cheese and others. Dairy products market includes Butter, Cheese, Skim Milk Powder, Milk Drinks and Fermented Products, Condensed Milk, Cream and Whey Powder segments. Milk Drinks and Fermented Products are defined as the dairy products made through microbial fermentation process using lactic acid bacteria such as Buttermilk, Sour cream, Yogurt, Kefir and Koumis.

DISCLAIMER

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