Britannia looks at JVs to milk dairy business

Britannia looks at JVs to milk dairy business
The Financial Express ,Wednesday, August 20, 2014
Britannia Industries is looking at joint ventures and strategic alliances with domestic and
international companies to boost its dairy business which contributed only 5% of the company’s
overall revenues. After the implementation of the strategic growth plans for the dairy business, it
will also look for JVs with international players and original equipment manufacturers to process
its dairy products better.
Varun Berry, CEO of Britannia which registered sales of R6,829 crore for FY14, said: “The
business is doing alright but it’s growing incrementally on a small base. If we want exponential
growth, we will have to recraft the strategy and that’s what we are in the process of doing”.
Betting big on innovations, it plans to increase investments in R&D for its entire business by 25
% in FY15.
“R&D will be a big driver of growth. We are looking at innovations in terms of people and
equipment and studying different products in different formats within the biscuit category,” said
Berry.
To fight competition in the R23,000-crore branded biscuit category, BIL is sharpening its focus
on the top end. Britannia, which faces stiff competition from ITC, Parle Products and Mondelez
in the premium biscuit category, plans to launch more premium biscuit brands this year.
The company is introducing ‘innovations’ in its distribution system in the urban and
rural markets. To start with, it has increased the depth of its distribution in urban markets. “We
have cut the number of our stock-keeping units to reduce the workload of our salesmen. We have
also split the coverage by our salesmen. Instead of one salesman going to an outlet, we send two
salesmen with different sets of stock-keeping units,’’ explained Berry. In rural markets, it is
focusing on the width of its distribution by running a ‘hub & spoke’ model. “We are increasing
our rural distribution by 12% in 2014-15,” said Berry.
Last year, Britannia witnessed the exit of many senior professionals. '' When times are tough,
attrition levels rise. We have taken measures to retain employees, including giving staff the right
opportunities and communicating regularly with them, ”added Berry.
Progressive Dairy Solutions to set up milk processing plan
Business Standard Wednesday, August 20, 2014 | 09:47 AM IST
Punjab-based Progressive Dairy Solutions (PDS), incorporated by progressive dairy farmers of
the state, is planning to set up a state-of-the-art milk plant at Ludhiana. The unit would cost Rs 6
crore.With a capacity to process 100,000 litres a day, the proposed company is planning to retail
milk in cities such as Chandigharh, Ludhiana and Jalandhar.
Dairy farmers have been complaining of not being paid adequately by the milk plants in the
state. Speaking to Business Standard, Munish Sharma, general-manager, Progressive Dairy
Solutions, said, "Dairy farmers in the state were not getting appropriate price from the milk
plants, so we started operations last year through a leased plant to assist the farmers. We are
processing around 20,000 litres a day and marketing our milk under the brand la Pure in
Ludhiana and Jalandhar. In addition to milk, we are processing curd, buttermilk, ghee and
flavoured milk. Buoyed by the response, we decided to set up our own plant with a project cost
of Rs 6 crore and installed capacity of 100,000 litres a day. With around 700 progressive farmers
as our stakeholders, there would be no dearth of milk for our plant. We expects more farmers to
join once the plant is operational."
He said the new milk plant would be operational within a year.
The farmers' association has around 6,000 progressive dairy farmers in Punjab.
The success of commercial dairy farming in the state can be gauged from the fact that seven
years ago it had only about 600 commercial dairy farms, while today it has over 6,000 dairy
farms. Further, as these remunerative ventures are spreading, more and more progressive and
enterprising farmers are entering this business. The company promises unadulterated and pure
milk, which it ensures by using the latest technology to milk its cattle, to process and store it.
Hatsun Agro to strengthen operations in Andhra
The Hindu Business Line ,August 19,2014
CHENNAI, AUG 19: Dairy products maker Hatsun Agro plans to strengthen its operations in
Andhra Pradesh and the cattle feed business during the current financial year, a top official has
said.
“The year 2013-14 has been a good year for your company, which has resulted in increase in
both topline and bottomline of the company,” Hatsun Agro Ltd Chairman and Managing
Director R G Chandramogan said at the company’s annual general meeting held here recently.
“The major thrust area in the current financial year will be to strengthen the operations and
increase in presence in Andhra Pradesh and also cattle feed business in domestic market,” he
said.
This would help the company to strengthen its presence and enable it to maintain leadership
position, he said.
The company acquired a cattle feed plant in Karur in Tamil Nadu and Jyothi Dairy Pvt Ltd in
Andhra Pradesh during the last financial year.
The company reported a total income of 2,502.03 crore for the year ending March 31, 2014 up
by 15 per cent over previous year, while net profit grew to 81.68 crore up by 83 per cent, he
said.
“The increase in profitability is due to strengthening of our brands with higher market share and
also favourable export market conditions, the availability of milk and the effective cost control
measures taken by the company,” he said.
The city—based company has nine plants in Karnataka and Tamil Nadu. It sells liquid milk
under “Arokya” brand and a range of milk—based products under the brand Hatsun in south
India. It also sells ice—creams under Arun and IBACO brand.
MP dairy owners use hair bleach chemical to prolong life of milk
Shruti Tomar, Hindustan Times Bhopal, August 11, 2014
Officials have discovered that to prolong life of milk and milk products, many dairy owners had
been using a cocktail of chemicals whose consumption can damage kidney and liver.
Food and drug officials detected Hydrogen peroxide (a common paper and hair bleaching agent),
potassium hydroxide (used in soap preparation) and hypo (a bleaching agent) in milk at some
dairies during raids in Madhya Pradesh recently.
This is the first time when the department noticed use of these chemicals whose short term
consumption can cause gastroenteritis but damage liver and kidneys if ingested for a longer
period.
Of these, hydrogen peroxide in particular is almost impossible to detect in laboratory tests,
leading the officials to suspect the dairies could have been using these in plenty.
Usually, food security officer Bhopal BS Dhakad said, dairy owners mixed argemone oil, a
poisonous substance, and starch in milk during preparations of products like paneer and mawa.
In fact, food security officer Avinash Gupta said, it was the presence of a tin containing huge
quantity of hydrogen peroxide at a dairy in Morena which alerted them about the misuse of these
chemicals.
An official, wishing anonymity, sarcastically remarked that unscrupulous dairy owners "have
their own research and development wings".
While dairy manufacturers are experimenting with chemicals to prolong life of milk products,
risking people's health in the process, old methods of adulteration continue to flourish, especially
in Chambal region.
According to an official, who wished anonymity because he is not authorised to speak to the
media, 10 litres of 'synthetic' milk contain only 200 mililitres of genuine milk.
The 'synthetic' milk, a proven health hazard, is a mixture of washing powder used for woolens,
vegetable oil, water, glucose powder and a chemical substance called RM.
"Like illegal mining, the adulteration business is growing by the day in most regions of the state.
Government should take stringent steps to curb adulteration as raids are not the only way to stop
them," the official said.
He said the government must not only increase the staff for checking adulteration but also
provide them security because they face threats during raids.
Sabar Dairy's Rohtak plant to start operation by month-end
Prashant Rupera, The Times of India TNN | Aug 5, 2014, 04.46 AM IST
VADODARA: Himmatnagar-based Sabarkantha District Co-operative Milk Producers Union
Limited (SDCMPUL), popularly known as Sabar Dairy, is setting its foot outside Gujarat for the
first time.
The dairy's Rohtak plant in Haryana set up with capacity to process 10 lakh litres milk per day
will commence its operations by end of this month. The plant has been set up with an investment
of Rs 170 crore by Sabar Dairy, a member union of the Gujarat Co-operative Milk Marketing
Federation (GCMMF) that markets brand Amul.
The North Gujarat-based dairy union is planning to start procuring milk locally from farmers of
Haryana through co-operatives formed on Amul pattern.
"The Rohtak plant is fully automatic with totally imported machineries. In addition, to the milk
processing and packaging capacity, the plant will also have capacity to package 50 tonnes curd,
one lakh litres buttermilk and 10,000 litres lassi per day," Sabar Dairy's managing director B M
Patel told TOI.
The plant set up at Haryana State Industrial Corporation estate is strategically located three km
from Rohtak - the heart of Haryana.
Further, the dairy union, which had clocked Rs 2,424 crore annual turnover in 2013-14, will
expand the plant by setting up an ice-cream plant with one lakh litres per day capacity.
"Rohtak plant will help us cater to the Delhi-National Capital Region (NCR) market better where
we already supply seven lakh litres milk per day under Amul brand," said Sabar Dairy's
chairman Jetha Patel, who now also heads GCMMF.
The dairy union presently caters to the Delhi-NCR market through three plants near Delhi hired
for processing milk.
The dairy union, which procures 12.25 lakh litres milk daily from 3.5 lakh farmers registered as
milk producers with nearly 1,874 registered village level milk societies in Sabarkantha district,
has already started procuring two lakh litres milk per day from three districts of Rajasthan.
"We are presently procuring two lakh litres milk per day from nearly 500 village level milk
societies that have been formed on Amul pattern at Jaipur, Sikar and Alwar districts of
Rajasthan. Our target is to procure five lakh litres milk per day from Rajasthan and Haryana
within the next two years," said Dr B M Patel.
Sabar Dairy presently pays Rs 560 per kilo fat as procurement price to its registered members
who pour milk at the village societies.
Milk price up by 14.50% in last one year
The Times of India PTI | Aug 5, 2014, 02.57PM IST
NEW DELHI: Making it clear that milk price is not regulated by it, government on Tuesday said
milk price in the country has risen by 14.50 per cent in last one year.
"Between May 2013 and May 2014, the average procurement price of milk has risen by 17.68
per cent while the consumer price (sale price) of milk has risen by 14.50 per cent in the
cooperative sector," agriculture minister Radha Mohan Singh told Lok Sabha.
Singh said price of milk is not regulated by the government and on average, milk prices are
determined by the cooperatives and private dairies two to three times in a year.
"The last increase in price of milk and milk product was reported in May 2014. This increase is
reportedly on account of increase in milk procurement price," he said.
The minister said the government has withdrawn five per cent incentive on skimmed milk
powder exports under the Vishesh Krishi and Gram Udyog Yojana on July 15.
Government to make adulteration of milk a serious crime
The Economic Times PTI Aug 5, 2014, 04.18PM IST
NEW DELHI: The government will amend the Food Safety and Standards Act to make
adulteration of milk and food items a serious crime punishable with a harsh penalty.
Pointing to a Supreme Court observation which had sought "appropriate amendments" in the Act
so that "such type of crimes could be curbed", Health Minister Harsh Vardhan today told Rajya
Sabha that his ministry had decided to amend it in the light of these observations.
Dairy sector opposes free market access to New Zealand products
The Hindu Business Line ,July 31, 2014
BANGALORE JULY 31: New Zealand’s renewed effort to secure a preferential trade access to the
Indian market has drawn the ire of the domestic dairy industry.
Dairy co-operatives and private sector players are against granting any preferential access in the
Indian market through a free trade agreement (FTA) to New Zealand, the world’s largest exporter of
milk products.
“We are resisting granting any free market access to New Zealand,” said Rs. Sodhi, Managing
Director of Gujarat Co-operative Milk Marketing Federation (GCMMF), which owns the Amul brand.
“Today, India is the only country in Asia that's self sufficient in milk production. Granting any free
market access to New Zealand will not only hit our farmers hard, but will also expose the consumers
to volatility of world ,” Sodhi said.
Fonterra scare
New Zealand is in search of a large market for its dairy products, especially after the Fonterra
contamination scare last year that led to slowdown in dairy exports to China, its largest buyer.
At the India-New Zealand Dairy Dialogue, organised by the Agriculture Ministry early this week, the
Indian players made it clear that the country was self sufficient in milk production and does not need
any imports now. Some players were also surprised at the Ministry’s haste in arranging the dialogue
without taking the domestic industry into confidence.
Chinese example
“We can take their help to enhance and boost productivity and skill development, but are against
giving them a free market access,” Sodhi said. He further said that India could go the Chinese way,
where growth in dairy sector has come down significantly after granting FTA to New Zealand some
six years ago. China’s dairy sector growth has now been reduced to a mere 2 per cent against 25 per
cent before granting FTA in 2008, Sodhi said.
“India’s dairy sector has grown at 4.2 per cent over the last decade, at twice the growth rate of world
average. We have self-sufficiency. As a country, we don’t require imports,” said RG Chandramogan,
Chairman and Managing Director, Hatsun Agro Product Ltd.
“If they see a market in India, let them export after paying the prevailing duties,” said Kuldeep
Saluja, Managing Director of Sterling Agro. The skimmed milk powder imports attract a duty of 60
per cent. Imports of other products are levied 30 per cent duty.
Indian output, exports
India is among the fastest growing dairy markets and the rapid rise in milk prices – by 15-17 per cent
over the past one year has been a concern. Milk production was estimated at 132.43 million tonnes in
2012-13 and was targeted to reach 139.67 mt in 2013-14.
India turned a net exporter of dairy products in 2013-14 with skimmed milk powder shipments of
over 1.22 lakh tonnes. Total value of dairy products shipments were estimated at over 3,318 crore.
But with the decline in global price on improved supplies, the exports of SMP from India are
currently seen unviable as domestic prices are high.
Children on dairy farms run one-tenth the risk of developing
allergies; Dairy farm exposure also beneficial during pregnancy BWN Today July 9, 2014,University of Gothenburg
Children who live on farms that produce milk run one-tenth the risk of developing allergies as
other rural children. According to researchers at The University of Gothenburg in Sweden,
pregnant women may benefit from spending time on dairy farms to promote maturation of the
fetal and neonatal immune system.
The occurrence of allergic diseases has risen dramatically in Western societies. One frequently
cited reason is that children are less exposed to microorganisms and have fewer infections than
previous generations, thereby delaying maturation of the immune system.
A study by researchers at Sahlgrenska Academy, University of Gothenburg, monitored children
until the age of three to examine maturation of the immune system in relation to allergic disease.
All of the children lived in rural areas of the Västra Götaland Region, half of them on farms that
produced milk.
Lower risk of allergy
The study found that children on dairy farms ran a much lower risk of developing allergies than
the other children.
"Our study also demonstrated for the first time that delayed maturation of the immune system,
specifically B-cells, is a risk factor for development of allergies," says Anna-Carin Lundell, one
of the researchers.
Need for additional studies
Children with an allergic disease at the age of 18 and 36 months had a higher percentage of
immature B-cells in their blood circulation at birth and during the first month of life. Additional
studies are needed to corroborate the correlation between delayed B-cell maturation during the
neonatal period and the risk for subsequent development of allergies.
The Gothenburg researchers will start off by examining children as they turn eight.
"We need to identify the specific factors on dairy farms that strengthen protection against
allergies and appear to promote maturation of the immune system as early as the fetal stage," Ms.
Lundell says.
Story Source:
The above story is based on materials provided by University of Gothenburg. The original
article was written by Krister Svahn. Note: Materials may be edited for content and length.
Journal Reference:
A.-C. Lundell, S. Johansen, I. Adlerberth, A. E. Wold, B. Hesselmar, A. Rudin.High Proportion
of CD5 B Cells in Infants Predicts Development of Allergic Disease. The Journal of
Immunology, 2014; 193 (2): 510 DOI:10.4049/%u200Bjimmunol.1302990
Milk price up by 60% in 5 years
The Times of India TNN | Jul 7, 2014, 12.46AM IST
PONDA: With small hikes on different occasions, the price of Goa Dairy's two major milk
variants has gone up by almost 60 per cent over the last five years. Irked with the regular price
hike, several consumers have demanded that the government take over Goa Dairy to stabilize
prices.
"We understand if large companies like Mother Dairy, Kwality or other private companies raise
milk prices as they look for profitability. However, Goa Dairy is a cooperative union and it must
think about the consumers' needs. They can even seek help from government for sustainability,"
said Madan Borkar, a resident of Borim.
Goa Dairy has hiked prices of two major milk variants milk supplied by it by Rs 2-3 a litre from
Tuesday. With the new tariff, the rates of Goa Dairy's full cream milk is Rs 48 per litre and
standardized milk is Rs 40 per litre.
Rates of the full cream and standardized milk variants used to be Rs 28 and Rs 23 per litre
respectively five years ago on July 1, 2009.
Consumers claim that the rise is unnecessary and Goa Dairy simply follows milk majors like
Amul, Mother Dairy, Kwality, etc. Alleging that Goa Dairy has surplus staff, Pramod Naik, a
resident of Marcela said the dairy raises milk prices to meet such unnecessary expenses. Naik
added that the dairy should reduce the number of employees instead of hiking prices at regular
intervals.
Goa Dairy's managing director N C Sawant has admitted that the recent price hike was due to
declining profitability. He attributed the hike in prices to many factors. Transportation costs and
diesel prices have gone up. There has been an increase of 15% in the price of cattle feed since
September 2012, he said. Sawant said that benefits from the recent price hike will be passed on
to farmers.
Endorsing the claims of Sawant, cooperation minister Pandurang 'Deepak' Dhavalikar said that
the dairy is an autonomous body and the government cannot interfere in its business unless the
dairy is involved in some wrong doings.
He also recalled the state government's statements about reducing milk price. "Chief
MinisterManohar Parrikar had appealed to the dairy to reduce milk prices, but the dairy has
turned a Nelson's eye to the appeal and on the contrary has raised prices," Naik said. During an
assembly session in October 9, 2013, while responding to a starred question on the Kamdhenu
scheme posed by Bicholim independent MLA Naresh Sawal, chief minister Manohar Parrikar
had said that the Goa Dairy should lower the price of milk by a rupee or two to attract higher
sales and thereby aim at a higher turnover.
Goa Dairy used to sell milk to neighbouring states. Though the dairy had claimed that they were
selling milk to avoid wastage as the dairy has no much storage capacity, the practice was
criticized and Parrikar had warned them that the government would take over Goa Dairy if it
fails to reduce the price of milk to generate higher sales by the next legislative assembly.
Parrikar, who is also the minister for agriculture hinted at replacing Goa Dairy with another dairy
in the state if it fails to provide better quality milk at a cheaper rate. "The government is ready to
take over the dairy and improve the quality. We can also replace it, if required. There are various
options available," he had said.
The government can also set up chilling units in the towns from which fresh and better quality
milk at lower price can be made available to people, Parrikar added.
Amul Dairy to increase procurement price for farmers
The Times of India TNN | Jun 14, 2014, 01.15 PM IST
VADODARA/ANAND: The Kaira District Co-operative Milk Producers Union Limited
(KDCMPUL), popularly known as Amul Dairy, is all set to increase procurement price paid to
its registered milk producers (farmers).
The dairy will make an announcement regarding this on Saturday after a board meeting that will
be held ahead of its annual general meeting. Presently, the dairy pays Rs 525 per kilo fat to its
farmers.
On Friday, in a massive show of strength against the recent violence, Amul Dairy chairman
Ramsinh Parmar declared this in front of thousands of farmers from across Anand and Kheda
districts, who had gathered in large numbers amid heavy police bandobast.
It was on June 10 that a group of farmers under the umbrella of Kheda-Anand Jilla Sabhasad
Jagruti Manch (KAJSJM) had gatecrashed and resorted to violence on the dairy premises
demanding higher remuneration price. Police resorted to lathi-charge to control the mob.
Parmar said Tuesday's incident had left a black spot on Amul's global image.
"Some elements are trying to break Amul. They were not our registered milk producers but antisocial elements who think they can harm the interests of our milk producers by resorting to such
acts. They will have to face the consequences of the damage they have done to Amul," Parmar,
said in a veiled attack on KAJSJM.
In an indirect attack on BJP, Parmar, the Congress MLA from Thasra, said such acts of violence
do not ensure victory in elections. "Amul is not the place where such political maneuvering will
be tolerated. Livelihoods of lakhs of families, who have sweated for the dairy's development, are
dependent on Amul. If they are interested in power, they should prove themselves in elections,"
he said.
Clarifying on the annual remuneration paid to milk producers, Parmar said groups like KAJSJM
are spreading misinformation among farmers that they will get only 7 per cent as bonus. "The
fact is that 7 per cent differential amount is regarding the business that Amul transacts with
Gujarat Co-operative Milk marketing Federation. Apart from this, the village level mandalis and
the dairy union also pay price difference and bonus which in total comes to around 20 per cent,"
he said.
Dairy breakfast to highlight farming evolution
Cassandra Colson Reporter ,Jackson county chronicle, June 04, 2014 ,3:21 pm
The Pfaff farm outside Melrose underwent changes five years ago that took it into a new
agricultural era.
Now area residents will have a chance to see robotic milking in action – and more – at this
weekend’s Jackson County On the farm Breakfast at the Pfaff farm.
“Ever since Pfaffs have built the robotic milking system, they’ve been on (the breakfast
committee’s) radar, and they’re a very well known and very well-respected family that has a lot
of history in Jackson County,” said Megan Stuessel, a member of the breakfast’s organizing
committee.
“It’s great – it really gives a whole spectrum of the evolution of the dairy industry, which is everchanging.”
The Pfaffs will host the 33rd annual county dairy breakfast Saturday at their N1497 Highway
108 operation one mile south of Melrose. The event, which runs from 6-11 a.m., will feature its
traditional menu of pancakes, sausage, juice, milk, cheese and apple sauce in addition to ice
cream .
The event also will have a variety of events for children and adults, like horse drawn rides, kids
games, cheese making demonstrations, an animal hospitality area and music.
Sara Pfaff, who farms with husband Tom Pfaff Jr., said she and the family are excited to
welcome guests to this year’s event.
“Everybody’s excited about it,” she said. “The (entire family) plans on being there.”
Last year’s event drew about 1,300 guests and Stuessel said she hopes the regular lineup and
some new activities will help draw in a good crowd. The breakfast also will feature question and
answer sessions with local farmers to help guests get a feel for what it’s like to live a day in the
life of a farmer.
“There’s a lot of hot topics in the agriculture field right now, and we have a pretty captive
audience,” she said. “If people have questions, that’s the time to ask – to ask people who are
experts in their fields.”
The breakfast also will feature a video screen in the tent that will project images of Pfaffs’ cows
using the robotic milking system in real time, so people can enjoy learning while eating their
food, Stuessel said.
There also may be rides available to take tours of farm fields and other local residents will be on
hand with presentations related to agriculture, she said.
“It’s pretty impressive to be able to have a farm in our county that has a lot of the latest
technology out there for the dairy industry,” she said. “For (the family) to be willing to open
their farm for the community and the county to come see is really great and appreciated.”
Sara said she hopes visitors will take in knowledge of the robotic milking but also farm life in
general.
“It’s nice to get people to know about farming in general, too – about raising cattle and knowing
where your milk and food actually comes from,” she said.
Cost for the breakfast is $6 for adults and $3 for children 5 to 12 years old. Children 4 years old
and younger are free.

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