Dairy Times June - July 2016

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A Bi-Monthly Newspaper Devoted to Milk, Milk-Products & Allied Sectors

dairy

www.agronfoodprocessing.com

Times

A Group Publication of Advance Info Media & Events

Vol. 01, Issue 03, June - July, 2016

World Milk Day Celebrated at IDA house New Delhi with Discussion on Burning Issues

A

round thirty prominent dairymen gathered on 1st June 2016 in New Delhi to celebrate The World Milk Day under the aegis of IDA. The first World Milk Day was celebrated in 2001 all over the world by participation of many countries. The number of participating countries in the celebration is increasing year by year. Since then, it is celebrated every year focusing to publicize the activities related to the milk and milk industries all through the world.

This celebration has been nationalized by organizing related activities on national and international level.

It is celebrated to increase the public awareness about the importance of milk and milk products for everyone throughout the whole life.

Dr A K Srivastava chaired the meeting in which importance of milk was discussed along with other related issues faced by the milk industry. Dr Srivastava informed that there is a shortage of 6070 million loses of germplasm to breed Indian dairy herds.

Aiming to control animal diseases and boost milk output, the Agriculture Ministry has sought

20/-

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measures like a new scheme on animal health card, e-market platform for bovine germplasm and increase in allocation for Rashtriya Gokul Mission in Budget 2016.

Gautam Kumar Dev, AC (DD) of department of animal husbandry & fisheries was also present in the meeting. Dev reviewed the national dairy plan of Government of India along with the dignitaries in the meeting.

In 2012, the UPA government had approved the National Dairy Plan Phase-I for a period of six years from 2011-12 to 2016-17 as a Central Sector Scheme. This plan was launched to cover 14 major milk producing States viz. Andhra Pradesh, Bihar, Gujarat, Haryana, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Odisha, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh and West Bengal which account for over 90 per cent of the country’s milk production, having 87 per cent of breedable cattle and buffalo population and 98 per cent of the fodder resources.

World Milk Day celebration has impacted large population to make them understand the realvelue of milk. Milk is great source of all the healthy nutrients required by the body (calcium, magnesium, zinc, phosphorus, iodine, iron, potassium, folates, vitamin A, vitamin D, riboflavin, vitamin B12, protein, healthy fat etc. It is very energetic diet providing (Contd. on Pg. 5)

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Vol. 1, Issue 03 - June - July - 2016

SHRUTI ICEMAC ENGINEERS A DEDICATION TO ICE CREAM INDUSTRY MANUFACTURES OF ICE CREAM PLANT AND MACHNIERY WITH HIGH FLEXIBILITY & EFFECIENCY

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Vol. 1, Issue 03 - June - July - 2016

Dairy Times

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Vol. 1, Issue 03 - June - July - 2016

PRICE LIST

Pricing Trends in Dairy Products: 2016 Domestic milk and milk Products Price:

International milk and milk Products Price:

Butter Brand

Pack Size

MRP (Rs.)

Amul

500 gms

192.00

DMS

500

175.00

Gokul

500 gms

182.00

Mother Dairy

500 gms

204.00

Vita

500 gms

187.00

Verka

500 gms

187.00

Brand

Pack Size

MRP (Rs.)

Amul

905 gm (rell)

400.00

Anik

898 gm (rell)

415.00

Gokul

1 Ltr (Poly Pack)

380.00

DMS

1 Ltr (Poly Pack)

400.00

Milkfood

898 gm (rell)

400.00

Mother Dairy

902 gm (rell)

390.00

Verka

1 ltr (Mono Pack)

.370.00

Vita

1 ltr (Mono Pack)

393.00

Source: USDA

Source: Market Watch

Ghee

Source: USDA

Source: Market Watch

Wholesale Prices

Source: USDA

Skimmed Milk Powder Brand

Price (per Kg)

Gopaljee

205.00

Gokul

213.00

Krishna

195.00

Madhsudan

210.00

Nova

195.00

Param

210.00

Paras

205.00

Sagar

201.00

Sourabh

226.00

Source: USDA

www.agronfoodprocessing.com Source: Market Watch

Dairy Times

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Vol. 1, Issue 03 - June - July - 2016

A Bi-Monthly Newspaper Devoted to Milk, Milk-Products & Allied Sectors

dairy

www.agronfoodprocessing.com (Contd. from Pg. 1)

instant energy to the body as it contains high quality proteins including both essential and non-essential amino acids and fatty acids.

As milk is an important food for everyone and a must to add in the balanced diet on daily basis, world milk day celebration has brought an effective revolution among the common public about the importance of milk. World milk day celebration brings a perfect opportunity every year for each one all through the word to get the new messages about adding milk in the balanced diet. It is celebrated by the association members on national and international level by working together to convey the message among public through lots of promotional activities.

In India adulteration of milk is the major issue said Dr G S Rajoria, Vice President IDA. Dr Rajoria has been working hard to find the ways for adulteration free milk in the country. Dr J V Parekh, Consultant and Chief Editor of Dairy Times stated that the anti -propoganda in the media media and social media and milk quality is harming the dairy industry. There fore, the IDA Milk Federations and Dairies has to come togather to counter the false impression created about milk quality and increase awarness about benefit of processed milk and quality of dairy products.

Times

A Group Publication of Advance Info Media & Events

Vol. 01, Issue 03, June - July, 2016

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Haryana Govt to set up Centre of

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Excellence for Dairy at Hisar

aryana government said it will set up a centre of excellence for animal husbandry and dairy at Hisar with the help of Israel, as part of its efforts to raise per capita availability of milk.

An official spokesman said the centre of excellence will be established at a cost of Rs 15 crore under the Rashtriya Krishi Vikas Yojna.

It would be established in the already existing State Cattle Breeding Project at Government Livestock Farm, Hisar and would extensively use the Total Mixed Ration (TMR) Technology of Israel.

The major objective of the proposed centre is to establish a model dairy farm with Israel's costeffective and innovative dairy technologies accustomed to local conditions for achieving an intensive dairy production system of global standards.

Also, this centre of excellence is aimed at training the farmers of Haryana about Israel's technology on raising productivity of dairy sector in India, he

added.

Initially customized modern dairy sheds for 110 cows with a potential of expanding it to 300 cows, heifer sheds, feed centre, milking parlour, mini dairy plant, class room, visitors' gallery and waste water treatment plant would be established under the project.

He said the centre would import best Holstein Friesian germplasm in the form of frozen semen, directly from Israel.

There would be a nuclear herd to serve as a base for genetic improvement and source of quality germplasm for potential breeders and entrepreneurs.

The centre would use Israeli technology for cooling of animals and providing controlled environment to mitigate the adverse effects of heat stress on production performance of animals, he added.

He said the state government is taking effective steps to increase milk production in the state.

Under 'Mukhya Mantri Dugdh Utpadak Protsahan

Dairy Times

Yojna', the state government has increased subsidy from Rs four per litre to Rs five per litre of milk to be paid to dairy farmers.

With a view to provide social security to stockmen, financial assistance of Rs 20,000 to Rs 50,000 was being provided to the stockmen under 'Mukhyamantri Dudharu Pashu Suraksha Yojna' in case of death of milch cattle, he added.

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Vol. 1, Issue 03 - June - July - 2016

CAMEL MILK

Camel milk and its importance in diet

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he two different species of camel (Genus Camelus) i.e, Camelus dromedarius, (one humped) and Camelus bactrianus (two humped) live in vast Pastrol area of Dr. Raghvendar Singh Asia and Africa.

World Camel population is estimated to be around 25.89 m and about 85% of the camel population inhabits mainly eastern and northern Africa and rest in Indian subcontinent and Middle East counties.

Indian camel population is 0.4 m mainly confined to north-western states with highest density (70%) in arid districts of Rajasthan. The camel (Camelus dromedarius, one humped camel,) constitutes an important component of the desert ecosystem, have the capability to produce more milk than any other species and having longer lactation period, while their feed requirements are modest.

Camel milk is opaque white in colour, normal milky odour and salty sweet in taste. The pH of fresh camel milk ranges from 6.4 to 6.7. The average density and viscosity of camel milk are 1.029 g cm-3 and 1.72 mPa s at 20oC respectively whereas calorific value is 665Kcal/L. Total protein

content of camel milk ranges from 2.15 to 4.90% whereas as the fat content ranges between 1.2 to 4.5%. The lactose, total solids and solid-not-fat (SNF) content are between 3.5 -4.5,10-8 and 7-6% respectively. The total mineral content of camel milk varies from 0.60 to 0.90%. Camel milk is rich in Zn, Fe, Cu,Mn and Cl while the concentration of other major mineral Ca, Mg, P, Na, and K in camel milk is almost similar to those of cow milk.

Among water-soluble vitamins, camel milk is richer in niacin and vitamin C than cow milk.

Fresh and fermented camel milks have been used in different regions in the world including India,however various products produced from Dromedary camel milk include soft cheese,

fermented milk,yoghurt, ice cream butter, kulfee, tea, coffee, flavored milk, paneer, cheese, khoa/ mawa, gulabjamun, barfi / chocolate barfi, peda, lyophilized whole and skim milk powder, chocolates and human skin cream etc.In order to popularize and promote the camel milk and milk products viz., Kulfee, flavored milk, lassi, tea and coffee are being prepared and sold in the camel milk parlour since 2006 started by National ReseachCenter on Camel, Bikaner, India. Camel milk and milk products were sold for more than twenty five lakhs of rupees during the period from.

Comparative low percentages of total solids and fat in camel milk have definite positive benefits of

camel milk over cow milk in our diet. The major reason so as camel milk has been considered important in our diet in terms of having low fat, low protein, higher ratio of b-casein to k-casein and longer shelf life. Higher concentration of insulin, long chain fatty acids (C14-C18),trace minerals viz. Zn, Fe, Mn and Cu and lower content of short chain fatty acids (C4-C12) are present in camel milk compared to cow milk. Camel milk contains a number of protective proteins which may have possible role for enhancing immune defence mechanism viz., lysozyme, lactoferrin, lactoperoxidase, peptidoglycan recognition protein (PGRP) and whey acidic proteins whereas lysozyme C and b-lactoglobulin are absent.

Camels' milk is considered as one of the most

valuable food in arid and semiarid areas as it contains all essential nutrients similar to that of cows' milk having unique functional properties.

Camel milk is used for treating dropsy, jaundice, spleen ailments, tuberculosis, asthma, anemia and piles, gastric ulcer, renal, hepatic dysfunction and improving chronic hepatitis. Camel milk has insulin like activity and exhibits hypoglycemic effect when given as an adjunctive therapy. Camel milk has been used for the treatment of food allergies, autism and having medicinal properties to treat different ailments such as multiple sclerosis, psoriasis, lupus, allergies-asthma.

Camel milk drinking has shown good effect for treating crohn’s disease. The antiulcerogenic effect of camel milk is attributed to its content of vitamins C, A, B2 and E as well as to its content of magnesium and zinc which have an antioxidant effects for reducing the oxidative stress.

Camel’s milk immunoglobulins are smaller in size and camel milk consumption may provide a tool for combating autoimmune diseases.Camel milk purified immunoglobulin (IgG) and secretory immunoglobulin A (sIgA) are reported effective against rotavirus from bovineor form human.This indicates that raw camel milk is considered a strong viral inhibitor to human rotavirus and a remedy to treat diarrhea.The virucidal and virus-inhibiting properties against ortho- and paramyxo viruses is reported a fermented camel milk drink‘Shubat’ used in Kazakhstan.The hepatitis C virus (HCV) entry and replication inside the cell is inhibited by the camel camellactoferrin.The concentration of lysozyme, lactoferrin and immunoglobulins in camel milk is higher than in bovine or buffalo milk lead to inhibit both gram-positive and gramnegative bacteria.

ACE-inhibitory peptides are present in fermented camel milk using Lactobacillus helveticus and Lactobacillus rhamnosusand, also reported in camel milk protein hydrolysates prepared after

(Contd. on Pg. 7)

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Vol. 1, Issue 03 - June - July - 2016

NEWS

(Contd. from Pg. 6)

of different types of human tuberculosis viz. empyema, fresh, chronic pulmonary and multiple drug resistant (MDR) patients. It can be concluded from the studies conducted that raw camel milk along with normal therapy helps in fast recovery of tuberculosis and camel milk can act as an adjuvant nutritional supplement in tuberculosis patients.

hydrolys is with pepsin alone and after pepsinolys is followed by trypsinolysis and chymotrypsinolysis.

Dromedary camel milk is suggested as an alternative food to children with allergenicity to bovine milk due to lack of b-lactoglobulin, high percentage of β-CN, low percentage of α-CN. The camel milk could be a new protein source for children allergic to bovine milk.

Camel milk has been used for the treatment

S

The hypoglycaemic effect in type-1 diabetes in human is reported may due to presence of high concentration of insulin/insulin like substances in camel milk such as half-cystine , the effect of small size immuno-globulins of camel milk on βcell and the lack of coagulation of camel milk in the human stomach.Fermented camel milk Bifidobacterium lactis administration have been reported to possess a hypocholesterolaemic effect in-vivo in rats though the hypocholesterolaemic mechanism of camel milk is still unclear, but

may be due to bioactive peptides derived from camel milk proteins is thought to be responsible for lowering cholesterol level.

In the past recent years camel milk was found to be unique in some aspects from milks of other animal species, such as bovine milk. Various dairy products are reported to be produced successfully

from camel milk and it can be an important supplementary source to augment, the milk deficiency in interior rural sector of arid and semiarid regions of the country. In global dairy market, the awareness and utilization of camel milk as an aid to human health gradually increasing in urban society. It is now generally accepted that one of the areas of growth for Indian dairy industry is a traditional milk product in order to meet the changing demands of market as functional food.

Therefore, there is perceived need for generating technology know how of long- life value added camel milk functional products with the sole aim of benefiting the camel milk producer as well as quality conscious consumers.

Dr. Raghvendar Singh and Devendar Kumar, National Research Centre on Camel, P.B. No. 07, Bikaner, Rajasthan

Skimmed milk powder prices to rise this year

kimmed milk powder (SMP) prices are thought likely to rise by 25 per cent this year on less output during the lean production season of April–October and higher seasonal demand. From Rs 125-130 a kg a couple of weeks earlier, the price is now Rs 140-150 a kg, still about half of the Rs 290 a kg peak of around 18 months earlier. However, prices are expected to be Rs 175-180 a kg by the end of the peak demand season of Diwali.

instance, realisation declined to Rs 19 a litre from the peak of Rs 26-27 a litre. That had prompted the government to order state co-operatives to start processing of liquid milk into SMP. The dairy department here estimates total SMP production at 5,000 tonnes in 2015-16.

“SMP prices have bottomed out and would see a turnaround from the current level,” said P G Ganesh, head, food &agri research, Rabo India Finance.

Rabo Bank says medium-size dairy units, with

The price rise would raise farmers’ income proportionately, as cooperative milk processors pass on the income from the commodity without delay. “SMP prices have been under pressure for 18 months due to falling export demand. These would rebound on the sharp decline in pipeline inventory and lean season production slump in April– October period,” said Shirish Upadhyay, senior vice-president at Parag Milk Foods, producer of the Gowardhan brand milk and cheese.

During the peak arrival season of liquid milk, between November and March, the demand for SMP dips in the domestic markets.

Many dairy farmers had started focusing on animal health and supply of quality feed, to obtain more milk. That has started yielding results. A recent PhillipCapital report estimates milk production in India at a record 147 million tonnes in 201415, a rise of five per cent from the previous year.

Consumption also rose, by six per cent, to 138 mt in FY15.

The jump increased pressure on farmers as processors didn't want more milk, a perishable commodity. So, farmers had to settle for a lower price. Over the past 18 months in Maharashtra, for

Dairy Times

50-300 cattle each, would be the future of this industry in India. In the coming years, milk procurement will become the critical link in the dairy supply chain as procurement from small and marginal dairy farmers will increasingly become a challenge, it said.

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Vol. 1, Issue 03 - June - July - 2016

SHELF LIFE

Microbiology and shelf life of Milk in India a reality check

T

he Upside We are on the cusp of producing 150 million tons of milk per year, highest in the world, with US a distant second with about 90 Mt a year.

This has ensured at

Dr. Shaam Chaudhry Consultant Milk Quality least 320g milk (prescribed almost as basic minimum by the World Health authorities)for every Indian, although there are wide variations of its availability across the nation with eastern regions not fortunate to get even half that amount.

Due to the efforts of Operation Flood by NDDB, several Cooperative Federations have been producing good volumes of milk. Since about 15 years the private enterprises have also become active and are supporting the industry healthily.

With a growth rate of about 4.5% our country is well on its way to self-sufficiency and more.

Milk processing equipment and automation have made rapid progress. State of the art technology has become available in Milk Drying Plants, UHT Milk, Cheese and Packing Machines.

Bulk Milk Coolers for Raw Milk Since over 15 years the first step to improve milk's bacterial quality was taken by way of installing Bulk Milk Coolers (BMC) at the milk collection points in villages. Several thousand such units dot the country side although much of the country still waits for such self-cooled tanks. Bacterial counts of pooled raw milk reaching the dairies have come down from 10 crore bacteria/ml of milk to 1-2 crores/ml.

Incentive payment for better microbial quality milk Many progressive dairies have started paying for better quality milk received from different routes. Some 5-20% tankers qualify for incentive payment, notably in winter months.

Larger dairy animal holdings Buoyed by good returns on milk, many dairy farmers have added one to three or four cows or buffaloes to their herd. China is far ahead of us in going for larger animal holdings.

The Down Side Unfortunately the progress made in milk sufficiency provided through the White Revolution championed by late Dr V. Kurien and his very capable lieutenants, has not been

matched by the QUALITY of milk produced and vended in the country. In spite of a good number of exceptions, both in Coop and Private sector, milk quality is a far cry from desirable, let alone it being world class.

• There is no compulsion to produce quality milk.

Whatever the traffic can bear is the norm. Only two factors can force our Dairy Managers to move.

Fear of FSSAI and the accompanying threat of punishment and loss of face. And Competition.

Competition stimulates quality but in our situation where demand (5-6% growth) outstrips supply, quality improvement does not kick in.

• Our milk has poor shelf life-2-3 days when kept suitably under refrigeration. In summer months many smaller town/city dairies struggle to ensure one to two days. The developed countries stamp 10 days' shelf life on their milk packs.

• India has managed to produce only Processed Cheddar Cheese and lately, Mozzarella Cheese for the Food Service Industry. There may be just a few more varieties produced here and there.

Europe and USA have hundreds of varieties. We can't produce anymore varieties because of poor quality raw milk.

• Bulk Milk Coolers have not been a game changer. In many of the country's dairies, raw milk contains 1-2crore bacteria/ml. In order to make their pasteurised milk conform to legal requirement, they have jacked up the processing time-temperature combination- from 78 C to 82 C and from 16 seconds to 21 second holding time.

• Measurements. The Quality Guru, Dr W E Deming says "What cannot be measured cannot be controlled".

I found that • One large city dairy does not do any measurement of bacterial counts of their incoming raw milk supplies.

• Another large city dairy gave up such counting since they were getting TNTC counts (Too numerous to count). What is the use, they pointed out,and “We already know what the counts are”.

•On a hot summer day, an officer was counting the number of hours he has to ensure for his milk before the consumer will boil it … he counted 18 difficult hours.

• Observation of Hygiene and sanitary practices followed by the dairies.As a part of the MMPO team I got to visit many dairy factories and their

chilling centers. I paid routine visits to their Toilet Blocks and found them wanting. Much of the plumbing needed repair. Worse, in many rest rooms SOAP was missing on the sinks! How can one expect the workers to go back to their packing lines after a bowel movement and resume work?

• It is true that many of our villages do not have much water and that many people go outdoors for the morning ablutions. Having said that, one expects a certain level of effort on the part of Dairy Managers in extension work towards Clean Milk Production. I have seen good results from at least one large dairy handling 6 lakh litres of milk daily. It needed the DESIRE and commitment of that Dairy's management to stick to this activity till date.

• Many seminars and conferences take up subjects of product development. Innovation,

Automation etc but have not dealt with (barring a few exceptions) matters of rampant adulteration, neutralization and additives to milk, let alone its microbiological quality. The Indian Dairyman, our premier dairy magazine since over 60 years is gasping for articles. I have seen just a couple of articles on quality in the last two or three years.

The next 40 kilometers • Assign PRIORITY to milk Quality if world class is our goal. If not, we can sail along for another 20 years with our sights on processing larger milk volumes, howsoever desirable that naturally is, as we have done for the past 20 years. But do not claim at the conferences that we have world class products. We do not.

• Leadership. Federations under leaders with domain knowledge have done better than those headed by Administrators. Dr Deming's first requirements are Constancy of Purpose and Continuous Improvement.

• About 80% work of a Dairy is done by workers,generally contract workers. Institute on the job training and retraining of this segment by diverting funds from the top layers of supervisors and managers who regularly attend seminars and conferences. It is the Workers that Handle the packing of products.

Lessons on elementary hygiene and housekeeping

are sorely required for this workforce.

• There is dire need for developing a smaller and more rugged version of the Bactoscan. It will be like the ubiquitous Electronic Milk Analyser that has been deployed in villages to measure milkfat and SNF. •While we wait for country wide improvement of milk quality, we should recognise the efforts of Maharashtra in supplying better milk. There are several smaller players who have been providing premium quality milk (at a slightly higher price ) to selected pockets in Bengaluru, Chennai, Hyderabad, Mumbai and a few more cities. There is a big market for better milk for which the customers are happy to pay higher price.

THE ULTIMATE TEST Proof of pudding is in eating. I leave a question for my fellow Dairy Managers: Will you drink milk straight out of a pouch?

I believe that we Dairymen would have arrived if we can CONSISTENTLY produce Coliform free Market Milk, Ice Cream and Paneer.

Important note: Views expressed are strictly personal and do not reflect upon the performance of any particular dairy that the author may have visited. Quality of market milk vended in India

presents a mixed picture-you say anything and it may be right. It is necessary to understand how the dairy industry has been shaping, warts and all May God hasten the arrival of that day!

Sham Chaudhry, Consultant Milk Quality Management Anand, 388001 Gujarat

KKR India will invest Rs 600 crore in Kwality

K

KR India is set to invest about Rs.600 crore in Kwality Ltd, the largest dairy firm in India outside government control, according to two people close to the development.

KKR India, the local arm of the New York-based buyout firm, will invest through a structured debt transaction, one of the two people said, declining to be identified.

The funds will help the Delhi-based Kwality, which gets more than 70% of its revenue by selling its products to companies such as Hindustan Unilever Ltd, ITC Ltd and Britannia Industries Ltd, strengthen its own brand and expand its more profitable retail business.

“The company will refinance its existing loans and use it as a growth capital for future expansion, especially for the transformation to a B2C (business to consumer) company,” said the second person.

To bolster its brand, Kwality had hired actor Akshay Kumar as its brand ambassador.

Emails sent to a KKR India spokesperson and several text messages and emails sent to a Kwality spokesperson remained unanswered.

Investors have backed several dairy firms in India, the world’s biggest consumer of milk and milk products, because of rising demand. Demand for milk in the country is expected to grow at an annual average rate of 5% to 200 million tonnes in 2022, according to National Dairy Development Board.

“Strong demand prospects in this segment will keep up investor interest in the coming years,” said Shiva Mudgil, a dairy analyst and vice-president at Food & Agribusiness Research & Advisory, Rabobank. “Besides large companies, PE (private equity) investors will be interested in small regional companies with a focus on value-added products. These firms will also be seeking capital to fuel their aggressive expansion plans.”

Kwality, formerly Kwality Dairy Ltd, produces a range of products, including ghee, flavoured

milk, yogurts, butter, cheese and curd. In 1994, the former owners of Kwality sold the ice-cream brand to Hindustan Unilever.

The company that was set up to supply milk to Kwality Ice Creams India Ltd was acquired by the Dhingra family in 2002.

Sanjay Dhingra, the managing director of Kwality, owned 65% in the company as of 9 April, according to BSE data.

Kwality reported consolidated net sales of Rs.6,416crore in the year ended 31 March. The company is in the process of introducing flavoured milk, tetra pack milk, cheese in numerous variants and table butter, the company had said after announcing its latest earnings.

Kwality owns six milk processing units in Uttar Pradesh, Haryana and Rajasthan, and retails products under its Dairy Best brand. Kwality also supplies to Mother Dairy, Cadbury’s and ice -cream makers Vadilal Enterprises Ltd and Cream Bell.

Dairy Times

Attracted by growth opportunities in India, KKR so far has disbursed more than $3 billion to about 60 companies, including GMR Holdings Pvt.Ltd, Avantha Group and Apollo Hospitals Enterprise Ltd. The buyout firm is in the processof raising its second credit fund worth Rs.1,500crore. The alternative investment fund will raise money from wealthy individuals and family offices in India, Mint reported in September.

In August last year, KKR India invested$150 million in JBF Industries Ltd, a manufacturer of polyester value-chain products.

In April 2015, KKR fundedthe promoters’ buyback of 27% stake held by private equity firm Warburg PincusLlc in Metropolis Healthcare Ltd.

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Vol. 1, Issue 03 - June - July - 2016

Dairy Times

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Vol. 1, Issue 03 - June - July - 2016

TECH NEWS

Nanotechnology in Food and Dairy Industry

Dr. Rutu Parekh Asst. Professor, VLSI & Embedded system group Dhirubhai Ambani Institute of Information & Communication Technology, Gandhinagar, Gujarat.

N

anotechnology is the technology of 21st century. It is a science, engineering and technology conducted at the nanoscale, which is about 1 to 100 nanometers. A nanometer is one billionth of a meter; a human hair is roughly 100,000 nanometers wide. The potential of nanotechnology in the future of food and dairy is unprecedented and its applications are expected to revolutionize the food and dairy industry. But yes, there is a long way to go. Till date dairy products made with nanoengineered materials are in market and still entering. When a particle size is reduced in a nanometer range, the resulting material exhibits physical, chemical and optical properties that are significantly different from the properties at macro scale of the same substance which enables novel applications. The advantage of nanotech in food and dairy industry is not just limited to basic food and nutrition science but also in things that surrounds food like food packaging, processing and sensory systems. Application of food nanotechnology is in improved delivery of micro nutrients and bioactive food components, controlled release of bioactive compounds, product traceability, food safety and bio security (nano sensors).

Nano materials with application in food and dairy industry can be classified into (a) Nanoparticles, (b) Nanofibers / fibrils, (c) Nanoemulsions and (d) Nanoclays. Nanoparticles can further be divided into organic and inorganic nanoparticles based on their ability to carry different ingredient and react to different environmental conditions.

Inorganic nanoparticles like silver is used in cutlery, storage containers, fridges and worktops, whereas titanium dioxide, a food colorant, can be used as a UV protection barrier in food. Organic nanoparticles (sometimes referred to as nano capsules when used as vehicles for delivery) are likely to be used to enhance the nutrient value of food systems through improvement or alteration of food functionality. They are designed to deliver vitamins or other nutrients in food and beverages without affecting the taste and appearance. These nanoparticles encapsulate the nutrients and carry them via the gastrointestinal tract into the bloodstream, increasing their bioavailability. Example include liposomes and micelles. Nanofibers like globular proteins are used for thermal stability, increased shelf-life, formation of transparent gel network for use as thickening agent. Nanoemulsions are emulsions which are thermodynamically stable compared to conventional emulsions under a range of different conditions. The applications of nanoemulsions are delivery of active compounds in the body, stabilization of biologically active ingredients, extended shelf-life due to increased stability, increased viscosity at lower concentrations of oil phase.Nanoclay particles dispersed throughout the plastic are used to provide an impermeable barrier to gases such as oxygen or carbon dioxide in plastic bottles, cartons and packaging films.

It blocks oxygen, carbon dioxide and moisture from reaching fresh meats or other foods and also enables the plastic to be made thinner, lighter, stronger and more heat resistant.

Development of new age dairy products include

production of milk with low fat and more calcium, milk for lactose intolerant people, low fat icecream by decreasing the size of emulsion particles that give ice-cream its texture, betterment of frozen yogurt quality by preventing creaming or sedimentation occurring during storage. In addition, today’s nanotech food products include a new variety of canola oil containing tiny materials that can block cholesterol from entering the bloodstream, and a chocolate milkshake that tastes better and is more nutritious than conventional shakes because of the unusual properties of nanoparticles. The idea of “on-demand” interactive food is to allow consumers to modify food depending on their own nutritional needs or tastes by adding nano capsules containing flavor or color enhancers, or added nutritional elements (such as vitamins), would remain dormant in the food and only be released when triggered by the consumer.

Edible biopolymers based nanoparticles are used to encapsulate and deliver micronutrients like iron, vitamin, proteins and other bioactive compounds like curcumin. This will lead to better delivery of plant or herb based bioactive compounds through milk and milk products without affecting the organoleptic properties.

Furthermore, Diagnostic kits to detect animal health and adulteration kits for milk are developed using nanoparticles. Nano-sensors and nanocantilevers are used to detect food spoilages.

Nano sensors can be placed into the packaging material where they serve as electronic tongue or noses by detecting chemicals released during food spoilage. Nanocantilevers are a class of biosensors that can detect biological-binding interactions, such as antigen and antibody, enzyme and substrate through physical and/or electromechanical signaling.

Novel food packaging technologies are extending the life of food and drinks and improving food safety. When it comes to packaged food it is nearly impossible to distinguish between fresh foods and their inedible counterparts. It is now possible to integrate a sensor film into the package itself, where it takes over the role of quality control.

And if the food has spoiled, it changes color to inform the fact. Smart packaging materials will absorb oxygen, detect food pathogens such as salmonella and e. coli, and alert consumers of spoiled food. Scientists in Netherlands are taking smart packaging a step further by not only being able to sense when food is beginning to spoil, but will release a preservative to extend the life of that food.

According to the latest study, in next 20 years food production and consumption will change dramatically due to population increase, water problems, energy use and climate change. Millions of people today strive for food and it will be worse in the future. The possibility to shape food on a molecular level will make it locally available around the world. Nano produced food shall no longer be affected by limited reasons, bad crop weather, water problem, etc. it will have correct nutritional composition, taste and texture of organically produced food.

The government of India has established the

Nanoscience and Technology Initiative in 2001 involving the Department of Science and Technology (DST). It has granted approval for the Nano mission worth Rs. 650 crores in its second phase in the 12th Plan Period 2012-17.

Owing to increased surface area of nano materials, they are more reactive, mobile and likely to be toxic.

The risk may vary depending on the particles size and chemical composition of he engineered nanoparticle. There is a need to understand whether enhancing the bioavailability of some nutrients or food additives might affect human health. Nano particles can enter through inhalation, ingestion and dermal exposure leading to DNA mutation, cancer and possible fatality. A detailed study about potential risk in regard to nanoparticles entering the human body, penetration sites, accumulation and translocation needs to be conducted. The issue needs to be addressed before the commercial exploitation of nanoparticles. There is an urgent need of an international regulatory system capable of managing risks associated with nanofoods and the use of nanotechnology in food and dairy industry.

Food Packaging (Nano Outside) Customers today demand a lot more from packaging in terms of protecting the quality, freshness and safety of foods and the nanotechnology, which uses microscopic particles, is effective and affordable and will bring out suitable food and dairy packaging in the near future (El Amin, 2006).

Food packaging is considered to be one of the earliest commercial applications of nanotechnology in the food sector. Many scientist have reported that about 400-500 nano-packaging products are estimated to be in commercial use, while nanotechnology is predicted to be used in the manufacture of 25% of all food packaging within the next decade.

The significant purpose of nano-packaging is to set longer shelf life by improving the barrier properties of food packaging to reduce gas and moisture exchange and UV light exposure. For example, Du Pont has announced the release of a nano-titanium dioxide plastic additive namely "DuPont light stabilizer210", which could reduce UV damage of foods in transparent packaging.

Nano-packaging can also be designed to release antimicrobials, antioxidants, enzymes, flavours and nutraceuticals to extend shelf life. Further more, nano materials are being developed with enhanced mechanical and thermal properties to ensure better protection of foods from external

mechanical, thermal, chemical or microbiological effects with an addition level of safety and functionality.

A scientific group at the Norwegian Institute of Technology is using nanotechnology to create tiny particles in the film, to improve the transportation of some gases through the plastic films to pump out unwanted carbon dioxide that would shorten the shelf life of the foods. They are also looking at whether the film could also provide barrier protection and prevent gases such as oxygen and ethylene from deteriorating foods.

Nano-capsules: Casein micelles (CM) plays a role as natural nanocapsular vehicle for neutraceuticals. They are very stable to processing. A novel approach is to harness CM for nano-encapsulation and stabilization of hydrophobic neutraceutical substances for enrichment of low-fat food products. Such nano – capsules may be incorporated in dairy products without modifying their sensory properties.

Conclusion The prediction is that nanotechnology will transform the entire food and dairy industry in near future. Nanotechnology has already entered into food and dairy industries, research facilities are established, potential applications are under study. Although only a handful of nano food products are now available in the market, the tremendous potential will attract more and more competitors in this field. However, there are few issues, particularly regarding the accidental or deliberate use of nanoparticles in food, or food-contact materials, that consumers are concerned about the potential negative effects of nanotechnology-based delivery systems on human health and also regulatory stands. Several critical challenges, including discovering of beneficial compounds, establishing optimal intake levels, developing adequate food delivering matrix, product formulations and safety of the products need to be addressed.

Conveyors for dairy industry

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Types of conveyors: Icline conveyors Flat belt conveyors Assembly line conveyors Slat belt conveyors for bottling line In-process transfer conveyors Z shaped Bucket Elevators Roller Conveyor (Power & Gravity) Spiral Conveyors & Over-head Conveyors Screw Conveyors Aero-mechanical conveyors Vibratory feeders

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Take-away conveyors for packing a wide range of Powder/Granules Food products.

For further details, please contact: ACE Technologies

223, Blue Rose Industrial Premises, Western Express Highway, Borivali (East), Mumbai – 400066.

Tel/Fax : +91-22-28700281 / 42089211 Email: acetechnologies@vsnl.net Website: www.acetechnologiesgroup.com; www.ace-technologiesgroup.com

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Vol. 1, Issue 03 - June - July - 2016

NEWS

Dairy sector to milk Rs 10k-cr investments in 5 years farmers and claims that it ensures that the milk collected reaches the processing plant in the shortest possible time.

Sharma said, “We have forayed with liquid polypouch milk. We did a lot of market research and understood that the consumer in Indore demands fresh, thick milk.”

A

s the Rs 4 lakh-crore Indian dairy industry catches the fancy of corporate giants, the sector is estimated to see investments worth Rs 9,000-10,000 crore over the next five years.

Analysts feel the major share of investments would be for creating infrastructure at farm for collection and storage of milk.

Read more from our special coverage on "DAIRY" • Dairy companies: Focus on premium products to boost earnings

The company has thus taken care to differentiate its products from what is already available in the market. The milk is fortified with Vitamin A and D. In Sharma’s words, “One of our variants, cream rich, is the thickest milk available in the market with 44 per cent higher cream content than standardised milk. Also, our protein-rich variant is specially fortified with extra protein. Thus, our products stand out in terms of quality and nutritional value.”

Mahindra’s poly-pack milk will be followed by value-added products like ghee, curd, lassi and butter milk.

FMCG major ITC, on the other hand, has forayed into dairy with AashirvaadSvasti pure cow ghee.

“The ghee was launched in select southern markets and we will look at expanding our footprint across the country. We are taking a regional approach and the ghee is customised to cater to local preferences,” explained Sanjiv Puri, executive director, ITC Limited.

ITC has set up a dairy plant in Munger. “As we expand our portfolio and footprint, we will explore the possibility of setting up such facilities,” Puri added.

According to the National Dairy Development Board and Crisil research estimates, India produces around 3.80 million litres per day (LPD) of milk, accounting for a fifth of global output.

About 40 per cent of this is retained by producers (farmers) for household consumption. Another 41 per cent share is with the unorganised segment.

The remaining 19 per cent is procured, processed and sold through organised dairies.

Given the rising demand for branded products and investments being made by organised sector players, Crisil believes the share of organised segment will increase to about 25 per cent by

Ashok Sharma, president and chief executive, agri and allied services, Mahindra and Mahindra, which has recently forayed into dairying with its Saboro brand, explained, “The value of dairy industry at the retail level is Rs 4 lakh crore. The share of the organised industry is approximately 30 per cent and is growing at a robust rate of 15 per cent per annum. The value added segment is the major driver of this growth with around 18-20 per cent growth. Curd, lassi and butter milk are growing at around 18 per cent while the smaller categories like flavoured milk, yoghurt and cheese are growing upwards of 20 per cent per annum.”

This high rate of growth and increasing preference for branded products is what is drawing players like Mahindra and Mahindra. A Crisil ratings report said the share of value-added products in fiscal 2015 is estimated at 43 per cent, up from 35 per cent in fiscal 2010. Rising purchasing power and increasing health consciousness have spurred lifestyle changes in recent years because of which consumers have gravitated towards value-added products, Crisil felt.

Shiva Mudgil, vice-president, senior dairy analyst, food and agribusiness research and advisory at Rabobank, explained, “Increasing organised activity in Indian dairy and direct processor-farmer engagement will entail significant investments in creating capacities for milk procurement, milk handling and product manufacturing. Investments in the dairy business will broadly range between Rs 9,000 crore and Rs 10,000 crore in the next five years.” The major share of the investment will be for creating infrastructure at farm for collection and storage of milk.

Mudgil further added that a bulk of the investments would be made by private dairy companies, but sourcing quality milk could be a challenge.

“This segment will comprise domestic dairy, food-FMCG companies and international dairy companies. For them, sourcing quality milk will be the most critical challenge and this will force them to invest in milk procurement to increase direct farm engagement,” he said.

Analysts thus feel that these companies will also look to expand beyond their regional base.

Innovation and technology focus will be important for them to cater to emerging consumer trends, either by developing new products or creating a unique positioning in existing product categories.

“This will help them differentiate from the competition in the market with positive impact on the margins,” Mudgil added.

Mahindra, for example, has started with 2,000

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fiscal 2018. In volume terms, the dairy industry grew four per cent annually in the five years ended fiscal 2015, while the organised sector grew twice as fast. The volume of milk processed from the organised sector is expected to grow 13 per cent annually by FY2018, way ahead of a five per cent annual growth for the industry at large.

Cooperatives, however, have a strong presence and hold over the Indian dairy market, and can pose a challenge for the growing corporate dairies when it comes to milk procurement.

While the Gujarat Cooperative Milk Marketing Federation (GCMMF), which markets the Amul brand of dairy products, took its turnover of Rs 8,000-23,000 crore (provisional figure of FY16) just about six years, its procurement too grew by 91 per cent in the last six years. GCMMF would invest Rs 5,000 crore to set up 10 processing plants that would take its processing capacity to 3.2 million LPD from 2.3 million LPD.

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Vol. 1, Issue 03 - June - July - 2016

GOOD PRACTICE

Training– the catalyst for change in Dairies!

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n this competitive environment a Dairy has many tools for productivity improvement like Kaizen, 5S, ISO, TQM, TPS etc. The problem is, how does one get people to kailash ashar know and understand these tools ? Training need not be restricted to the job functions. There are several other areas such as soft skills, personality development and team-building, which are equally useful and should be explored.

For e.g. trainings like 5S, Kaizen, Problem solving, Pre-requisite programs, Team building, Goal setting, Identification & Traceability, Stess management etc.

Present scenario of training in the Dairy industry is more of technical nature. There are many reputed institutes like NDRI, NDDB, Vidya Dairy, KVKs, Mansing Institute of Technology etc. which are providing training. What is required to be emphasised is the Non-technical trainings in the form of Soft skills. Trainings in areas of communication skills, delegation skills, team building, time management, decision making skills, change management skills etc.

Training is the only tool which can bring about improvements because the improvements happen only after people have understood what is to be done. Dairy performance is affected by a number of factors. The larger the Dairy, the greater the number of potential variables that can influence Dairy performance. These include the level of competition in the market, the level of investment in new technology, the demand for the products and services of the Dairy, the skills of the management team and so on.

Industry training is essentially an investment in human capital, the economic benefits of which can be thought of as being shared between: • The individual trainee, through higher wages (a proxy for labour productivity) • The firm, through enhanced profitability (a proxy for capital productivity) • Society as a whole, through “externalities” (returns over and above the private returns to the individual trainee or firm who pays for the training).

These benefits are difficult to measure. However, there is a weight of evidence from the literature relating to the positive wage effects of training.

From the literature, we can infer that an industry training qualification isl ikely to increase the earnings of an individual by between 5% and 20%.

Operating in an open economy environment, having a competitive edge becomes imperative.

Dairy strategies focus on gaining and sustaining the competitive edge. Often that translates into investments, efficiency of operations, deployment of resources, hard-sell, and so on. But, at some point of time it becomes apparent that competence of the staff is the key differentiator, and the focus shifts to competence development.

And therein lies the dilemma. Should the Dairy find competent persons and then expect them to perform or should they look for appropriately qualified persons and put them through a competence development program. It's the classic case of `fitting the job to the man', versus `fitting the man to the job'.

Experience will bear testimony to the fact that competence is not easily assessed when recruiting new personnel. Also, qualifications do not necessarily equate to high level of competence.

Therefore, going the `competence development' way would make more sense in the long-term.

However, there could be a number of constraints: some purely physical. For example, No time/Can't spare the people for training activity/Not enough budget for training etc.

Other reasons are more notional: They're doing okay as it is/We'll train and then he will quit and join elsewhere/Can't see the returns on investment in training, etc.

It has been my experience that best of dairies are

not able to capitalise on training. This is because there is no periodicity defined. Despite there being training, a large amount of variation remains e.g. different batches of employees give different time/ temp. combinations for CIP cleaning, people going to collect samples of milk are not able to give one procedure, there is no idea as regards developing a sampling plan etc.

As we go higher up the hierarchy in the organisation, we find that the thinking process changes from `what-to-do' and `how-to-do' towards `why-to-do'.

Internalisation of the Dairy's training policies and acceptance of training programmes as a means for self-development are quite dependent on the attitude of the employees. They are the ones to reap the direct benefits of training, which is passed onto the organisation.

The growth of the individual and the organisation is in tandem — a potentially win-win situation.

Training Defined It is a learning process that involves the acquisition of knowledge, sharpening of skills, concepts, rules, or changing of attitudes and behaviours to enhance the performance of employees.

Training is activity leading to skilled behavior.

• It’s not what you want in life, but it’s knowing how to reach it.

• It’s not where you want to go, but it’s knowing how to get there.

• It’s not how high you want to rise, but it’s knowing how to take off.

• It may not be quite the outcome you were aiming for, but it will be an outcome.

• It’s not what you dream of doing, but it’s having the knowledge to do it.

• It's not a set of goals, but it’s more like a vision • It’s not the goal you set, but it’s what you need to achieve it.

Training is about knowing where you stand (no matter how good or bad the current situation looks) at present, and where you will be after some point of time.

Training is about the acquisition of knowledge, skills, and abilities (KSA) through professional development.

Benefits Of Training Some of the benefits, but not limited to, that can accrue to organizations conducting regular trainings are: 1. Optimum Utilization of Human Resources – Training and Development helps in optimizing the utilization of human resource that further helps the employee to achieve the organizational goals as well as their individual goals.

2. Development of Human Resources – Training and Development helps to provide an opportunity and broad structure for the development of human resources’ technical and behavioral skills in an organization. It also helps the employees in attaining personal growth.

3. Development of skills of employees – Training and Development helps in increasing the job knowledge and skills of employees at each level.

It helps to expand the horizons of human intellect and an overall personality of the employees.

4. Productivity – Training and Development helps in increasing the productivity of the employees that helps the organization further to achieve its long-term goal.

5. Team spirit – Training and Development helps in inculcating the sense of team work, team spirit, and inter-team collaborations. It helps in inculcating the zeal to learn within the employees.

6. Organization Culture – Training and Development helps to develop and improve the organizational health culture and effectiveness.

It helps in creating the learning culture within the

organization.

7. Organization Climate – Training and Development helps building the positive perception and feeling about the organization. The employees get these feelings from leaders, subordinates, and peers.

8.Quality – Training and Development helps in improving upon the quality of work and worklife.

9.Healthy work environment – Training and Development helps in creating the healthy working environment. It helps to build good employee, relationship so that individual goals aligns with organizational goal.

10. Health and Safety – Training and Development helps in improving the health and safety of the organization thus preventing obsolescence.

11. Morale – Training and Development helps in improving the morale of the work force.

12. Image – Training and Development helps in creating a better corporate image.

13.

Profitability – Training and Development leads to improved profitability and more positive attitudes towards profit orientation.

14.Training and Development aids in organizational development i.e. Organization gets more effective decision making and problem solving. It helps in understanding and carrying out organisational policies 15. Training and Development helps in developing leadership skills, motivation, loyalty, better attitudes, and other aspects that successful workers and managers usually display.

Training Objectives : Training objectives tell the trainee that what is expected out of him at the end of the training program. Training objectives are of great significance from a number of stakeholders perspectives : 1. Trainer 2. Trainee 3. Designer 4. Evaluator Training objectives must be connected to the organizational vision and mission.

1.Trainer – The training objective is beneficial to trainer because it helps the trainer to measure the progress of trainees and make the required adjustments. Also, trainer comes in a position to establish a relationship between objectives and particular segments of training.

2. Trainee – The training objective is beneficial to the trainee because it helps in reducing the anxiety of the trainee up to some extent. Not knowing anything or going to a place which is unknown creates anxiety that can negatively affect learning.

Therefore, it is important to keep the participants aware of the happenings, rather than keeping it surprise.

Secondly, it helps in increase in concentration, which is the crucial factor to make the training successful. The objectives create an image of the training program in trainee’s mind that actually helps in gaining attention.

Thirdly, if the goal is set to be challenging and motivating, then the likelihood of achieving those goals is much higher than the situation in which no goal is set. Therefore, training objectives helps in increasing the probability that the participants will be successful in training.

3. Designer – The training objective is beneficial to the training designer if the designer is aware what is to be achieved in the end then he will be buy the training package according to that only.

Dairy Times

The training designer would then look for the training methods, training equipments and training content accordingly to achieve those objectives.

Furthermore, planning always helps in dealing effectively in an unexpected situation.

For example, the objective of one training program is to deal with Workplace Organization through ‘5S’. Since the objective is known, the designer will design a training program that will include ways to improve attitude, discipline, communication leading to better coordination.

Therefore, without training objective, the training may not be designed appropriately.

4.Evaluator – It becomes easy for the training evaluator to measure the progress of the trainees because the objectives define the expected performance of trainees. Thus, training objective is an important tool to judge the performance of participants.

Instructional System Development (ISD) model : 1. ANALYSIS – This phase consists of training need assessment, job analysis and target audience analysis.

2. PLANNING – This phase consists of setting goal of the learning outcome, instructional objectives that measures behaviour of a participant after the training, types of training material, media selection, methods of evaluating the trainee, trainer and the training program, strategies to impart knowledge i.e. selection of content, sequencing of content etc.

3. DEVELOPMENT – This phase translates design decisions into training material. It consists of developing course material for the trainer including handouts, workbooks, visual aids, demonstration props etc, course material for the trainee including handouts of summary.

4. EXECUTION – This phase focuses on logistical arrangements, such as arranging speakers, equipments, benches, podium, food facilities, cooling, lighting, parking and other training accessories.

5. EVALUATION – The purpose of this phase is to make sure that the training program has achieved its aim in terms of subsequent work performance.

This phase consists of identifying strengths and weaknesses and making necessary amendments to any of the previous stage in order to remedy or improve failure practices.

The ISD model is a continuous process that lasts throughout the training program. It also highlights that feedback is an important phase throughout the entire training program. In this model, the output of one phase is an input to the next phase.

Learning is a continuous process and those who think that there is nothing more to know are as good as deadwood.To bring about upgradation of human capital, improvement, sustainability, consistency in productivity the only tool to enable it is TRAINING !!!

DEEP TRAINING & CONSULTANCY kailash ashar principal thought leader Email : dtckba@gmail.com

13

Vol. 1, Issue 03 - June - July - 2016

NEWS

Rs 1,250-crore Indian cheese market expected to grow 20% annually

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EW DELHI: An American wit had once described cheese as milk's leap towards immortality. For a lot of entrepreneurs in India now cheese is milk's leap towards prosperity - the market for cheese is Rs1,250crore currently and forecasted to grow at an impressive 20% annually.

And it's going to get cheesier. There are 3,000 cheese varieties globally, experts say. India's stores and delis offer about 40 varieties. The scope for growth is huge. Europe and even the US, those in the cheese business say, are saturated markets.

India could be the next big thing.

India's long affair with tinned processed cheese is getting over. The current brisk growth is being driven by metropolitan Indians discovering 'real cheese' - both mass market and premium, and both foreign and local brands.

A lot of that cheese is going on top of the pizzas that sell here. India is Domino's Pizza's third larget market, after the US and the UK. Domino's sources all its mozzarella locally. "We are working with multiple companies... regional cheese processors have invested in additional factories and growing along with us," CEO Ajay Kaul said.

Direct cheese consumption is growing as briskly.

Global firms and brands like Kraft Cheese, French cheese maker FromageriesBel and Arla Cheese have found India as appetising as Indians have found their cheese. Flander, one of the oldest regional players in India, has shifted from a 6,000 sqft farm on the outskirts of Delhi to a 25,000 sqft factory at the Bahdurgarh industrial zone.

The most exciting story, though, is that of relatively new local cheese-makers.

Puneet Gupta, 40, set up Exito Gourmet three years ago to sell "Impero" brand of cheese to highend retail stores such as Food Hall, Le Marche, Sugar and Spice and Hyco.

A private-equity firm - Gupta won't name the PE - has acquired 20% equity in his company. "From manufacturing 10 tonne cheese in a month we are now doing 30 tonnes and expect it to grow steadily by 20%," said Gupta. And he's getting adventurous.

His new product is a flavoured ricotta made from sheep milk whey, gouda and cheddar cheese.

Mohit Khattar, CEO, Godrej Nature Basket, which runs 29 stores across six cities, says that 7%-10% of daily sales came from cheese and sales grew 55% in the past four to five years "We are catering to a market ready to pay money for good quality product" he said. Godrej Nature Basket offers not just the relatively familiar varieties like gouda, parmesan and edam. Brie and goat cheese -chevere - are also going to be on offer.

Cheese is a hit in Future Group's gourmet-format Foodhall stores. Avni Biyani, concept head of

Here's a small but telling example of how far the cheese business has travelled. Pune-based Parag Milk Foods used to sell milk, butter, ghee etc under the brand Gowardhan. From 2008 onwards, it's a player in the cheese business, with the brand name Go, selling cheddar and mozzarella, and planning to introduce emmental.

The 'Gowardhan to Go' story tells us that urban

‘Medium-scale farms could emerge as key growth driver in dairy sector’

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trong growth in India’s organised dairy industry, due to the formalisation of perishable milk products and the growth of value-added dairy products, brought the focus on to raw milk sourcing. In the coming years, milk procurement could become the single most critical link in the dairy supply chain. Medium scale dairy farms (with 50 to 300 cattle) could emerge as one of the key growth drivers in the Indian dairy sector, reports Rabobank in its recent report, ‘Emerging Dairy Farm Trends in India’.

The report estimates that to keep pace with the strong growth in branded milk and dairy products, direct milk sourcing will gradually replace agentbased sourcing as a dominant model. This will help them secure consistent supply of superiorquality raw milk. The share of milk procured from small and marginal farmers will decline; however, this segment will still stay relevant. Currently, 75%-80% of milk is procured from these farmers.

Large-scale-dairy farming (where the cattle herd is less than 1,000) has proved difficult to establish in India due to factors such as land unavailability and paucity of professional labour, among others.

Rabobank expects this segment to remain an initiative of a select few.

Dairy Times

Foodhall, said cheese sales were growing at 3040% in her stores. And even premium stores like Foodhall don't depend on imports. Not just Exito Gourmet but Pondicherry-based Mango Hill also gets shelf space.

Not that premium imported cheese has no takers.

Anoop Chopra, marketing head at Dairy Craft India Ltd, says Parmiggiano Reggiano, which sells for Rs1,700 per kg, gets plenty of customers.

So, what's Amul, whose processed cheese was once pretty much the only cheese in India, doing to cater to the new market? First, Amul says its processed cheese is still a winner. It's doubling its processed cheese capacity to 100 tonnes. Second, it says it's no slouch when it comes to 'real cheese' - Amul is selling gouda and emmental.

Lack of enough good quality milk and uneven quality of storage and processing facilities are holding back a bigger boom in the cheese business.

Cheese entrepreneurs hope these constraints will lessen over time. So should urban Indians. There are 2,000-plus cheese varieties we still don't get in this country.

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Vol. 1, Issue 03 - June - July - 2016

ARTICLE

Initiatives of NABARD for Indian Dairy Development

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ntroduction: India remains world’s top milk producer for last several years with its annual milk production of 137 million tonnes (2013-14). It has attained self-sufficiency in milk production. The per-capita availability of milk in our country is about 307 gm per day, which is more than world average of 294 gm (2013-14).India’s share in world milk production increased from 7.26% in 1982 to 17.90% by 2012. In our country,milk production is largely from the hinterlands of milk sheds that too from small and marginal dairy farmers. Small rural dairy units are dependent on locally available feed and fodder resources. Thus, sustainability has become an integral part of rural dairy farms. Therefore, NABARD since its inception focussed on the development of decentralized small scale rural dairy units. Further, such farms are potential source for employment generation.

In the context of productivity based dairy farming transferring of scientific knowledge is important.

Further, credit has also emerged as most important tool and attracted the policy makers’ attention. NABARD as an apex development financial institution adopted concept of “lab to land through lending” and focused not only on facilitation of ground level credit flow through refinance support but also on extending related services through promotional interventions, pilots and innovations having immense catalytic role. The significant efforts of NABARD for dairy development are presented in the following paragraphs.

Credit Facilitation: Refinance support remained main task of NABARD to supplement the resources of Rural Financial Institutions (RFIs) and very often in many states, dairy sector occupied prime position among allied activities in terms of refinance flow.During last five years there is a considerable increase in refinance flow to dairy sector from Rs.889.88 crore (2011-12) to Rs.2833.98 crore(2015-16) leading to significant increase in ground level credit flow.The share of dairy sector to GDP ranges between 3-4%. During 2011-2016, the share of dairy sector refinance was 4.35% to 5.9% of total refinance flow. The GDP and refinance figures together amply indicate the significant role played by NABARD refinance in dairy sector development.

In early eighties, the biggest challenge before the credit institutions,was purveying credit to dairy farmers on scientific lines. NABARD could lead this responsibility successfully by way of framing financing guidelines like unit cost fixation, formulation of area based schemes, techno-financial appraisal, implementation and monitoring. These efforts were further streamlined and strengthened by way of mapping district wise potentials through PLPs, capacity building of the bank officials, preparation of model schemes and allocation

of adequate refinance.

Even today, all banking institutions are looking at NABARD for fixation of unit costs in view of the abundant expertise available with it in this area. On realising the importance of area based schemes, in early nineties, the Govt. of Uttar Pradesh implemented credit focused Saghan Mini Dairy Development Programme, the biggest area based scheme in the country. It had resulted in phenomenal growth in credit flow to dairy sector and optimal utilization of state’s human resources while improving the operational capacities of milk processing plants. In recent past, implementation of area based schemes like Kamadhenu and Dudh Ganga in the states of Andhra Pradesh and Haryana respectively reiterates the relevance of area based approach. In the context of poor capital formation in dairy sector, NABARD has been promoting Area Based Schemes in potential districts of every state.

As a part of building knowledge bank and knowledge dissemination,state specific model schemes on dairy were prepared and circulated widely among RFIs in early nineties.These efforts have led to enhancement of skill sets of staff concerned and created an enabling environment for accessing the credit by rural dairy farmers. In the light of liberalization and unification of markets, in late nineties,booklets on dairy farming, milk processing, bulk milk cooling units, automatic milk collection stations, feed plants, layman inseminators, etc., were published at national level and circulated among RFIs. In the beginning of the 10thFive Year Plan period, in the light increased accessibility of the dairy entrepreneurs to internet in rural areas and to take advantage of communication technology, the model schemes were uploaded on NABARD website. These model schemes are updated from time to time.

Increased milk production costs made dairy farming least remunerative. In order to encourage the dairy farming, GoI introduced Dairy Venture Capital Fundscheme (interest free loan cum interest subsidy). Subsequently, it was converted into capital subsidy scheme known as Dairy Entrepreneurship Development Scheme (DEDS) in 2010-11 and the Govt. entrusted its implementation to NABARD. The scheme encourages modern dairy farming, clean milk production, heifer rearing, conservation of genetic resources and modernization of milk procurement, transportation, storage, processing and marketing with an objective to bring in structural changes in milk production scenario. Thus, DEDS can be seen as the first ever design towards the value chain financing which has been recognised as holistic approach for development of any sector and for which host of modern financial institutions are looking. During 201516, subsidy amount of Rs.89.76 crore was released to

18177 units under the scheme. Since inception of the scheme, Rs.932.68 crore subsidy was released for 246523 dairy entrepreneurs across the value chain.

Promotional Intervention: Under Self Help Groups (SHGs) credit linkage, after meeting the consumption needs, lion share of credit was given to dairy entrepreneurs indicating importance of dairy among rural livelihood. Such women entrepreneurs earned income not only from milk but also from conversion of cow dung into vermi compost in a group activity. The group activity is instrumental in overcoming the operational and marketing risks. It would not be out of place to quote here the success story of Jayalaxmi SHG promoted by NABARD assisted Women Development Cell of Kolhapur DCCB. The group has chosen dairy enterprise as first livelihood option and its successful implementation gave them immense confidence leading to cultivation of sugarcane on leased land. The group activity did not stop there and itfurther went on to establishan agro service centre.

Umbrella Programme on Natural Resource Management (UPNRM) is a credit programme wherein minor grant is bundled into major credit to address comprehensively the requirements of capacity building and other support services for establishing successful enterprises with focus on sustainable natural resource use and management.UPNRM facilitates replication and upscaling of best practices and models of holistic, participatory and financially sustainable livelihood activities among rural poor. The credit programme also aims at innovative delivery channels.

Under this programme also dairy sector commanded substantial loan amount with an innovative combinations like milk production-cum-bio-gas generation, milk production-cum-organic manure production and milk production-cum-market linkages.

As on 31 March 2016, NABARD has sanctioned 50 dairy and integrated livestock management projects with a loan and grant component of Rs.60.91 crore and Rs.6.95 crore respectively. Disbursement of loan and grant component as on 31.03 2016 stands at Rs.45.76 crore and Rs.3.18 crore respectively, which indicates demand for such innovative credit cum promotional assistance.

Support for Dairy Infrastructure and credit Innovation: Globalization of economy has ushered in several opportunities in the form of niche markets having potential for paying higher prices. However, penetration into niche markets has been associated with challenges like demand for quality products, aggregation and supply chain management. Efficient milk cooperatives like AMUL and MILKFED could overcome these problems but these remained a daunting task for vast majority of small dairy farmers, who are not part of successful cooperatives. In order to tackle the problems on quality front,modernization of milk procurement and storage infrastructure, establishment of modern processing facilities and strengthening of veterinary infrastructure are the key areas which have to be promoted. Accordingly, NABARD proactively dovetails incentives available under DEDS and Agriculture Marketing Infrastructure Scheme into select milk unions’ modernization plan for

milk procurement and milk cooling at the village level.

For enabling the collective action on the part of milk producers to address the problem of aggregation and marketing, NABARD’sProducer Organization window offers excellent opportunities especially in the areas where cooperatives are weak or non-functional. Success stories of Mahi and Paayas milk producer organizations of Gujarat and Rajasthan respectively needs to be replicated. NABKISAN, a wholly owned subsidiary of NABARD, is specially created for supporting the producer organizations including those of dairy farmers.

In order to facilitate the creation of modern breeding and veterinary infrastructure, which is a pre requisite for quality produce and to penetrate into niche / global markets, under the Rural Infrastructure Development Fund (RIDF), loan assistance was given to state governments. It is an excellent opportunity for state governments as loan is made available at an attractive interest rate of 5.50% at present. NABARD has sanctioned RIDF loan for 13352 projects under Animal Husbandry (AH) sector involving loan amount of Rs.3405.48 crore. Uttar Pradesh, Tamilnadu and Andhra Pradesh are front runners among the 16 states in availing the RIDF loans for AH sector.

In order to facilitate creation of additional processing infrastructure or modernization of existing processing facilities of financially strong milk unions and milk marketing federations, loan assistance is made available underthe NABARD Infrastructure Development Assistance (NIDA) scheme. Further, a specially designed credit product known as Credit Facility for Federations (CFF)fulfils short term credit requirement of marketing federations including dairy marketing federations. NABARD has extended short term credit facility to Gujarat Cooperative Milk Marketing Federation and Solapur Cooperative Milk Union under the CFF scheme.

Thus, NABARD’s refinance and finance products along with innovative promotional interventions address credit needs of the entire value chain of milk viz., breeding facilities, veterinary care, production, procurement, cooling, storage, transportation, processing and marketing. The needy institutions can avail any of these facilities for building the vibrant dairy sector.

Dr D Rabindra DGM Maharashtra RO, NABARD BKC Mumbai

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Vol. 1, Issue 03 - June - July - 2016

NEWS

Indian Dairies Need to Amul eyes Rs 50,000-crore Focus on Value Added Dairy turnover by 2020 Sodhi added.

GCMMF’s milk procurement for the year 2015-16 stands at 186 lakh litres per day as against 148.50 lakh litres per day in the preceding fiscal.

Fifty per cent of the Amul’s turnover comes from milk sale, commodity business contributes only 5-7 per cent and the rest comes from valueadded products segment.

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airy major GCMMF, which sells products under the Amul brand, is looking to more than double its turnover to Rs 50,000 crore in the next four years on account of rising demand for milk and value-added items, a top company official said.

The turnover of Gujarat Cooperative Milk Marketing Federation (GCMMF) rose 11 per cent to Rs 23,005 crore during 2015-16 fiscal.

“After taking into consideration the continuous rise in demand for Amul products, we are anticipating at least 20 per cent growth in our turnover for next 4 years,” GCMMF Managing Director R S Sodhi told PTI. In the last six years, the dairy cooperative’s turnover has jumped nearly three-fold to Rs 23,000 crore.

“So now, we have set a target of Rs 50,000-crore turnover by 2020 on the back of expected growth in sale of both value added products and milk,”

“Value-added products sale has been showing tremendous growth.

The sale of beverage product like Amulkool, fermented products like curd and butter milk has risen sharply. So all these are pushing our growth rate,” Sodhi said.

The cooperative has raised its cheese producing capacity three times to 120 tonnes per day from 40 tonnes per day in last six months, as it was unable to meet the rising demand, he added.

Sodhi also informed that Amul is planning to substantially raise its milk processing capacity from the current level of 281 lakh litres per day.

The cooperative has about 60 various processing plants, of which 40 are in Gujarat only. There are 17 member unions of GCMMF associated with more than 36 lakh farmers across 18,600 villages of Gujarat. The member unions of GCMMF have also established their own milk processing plants in the states of Haryana, Uttar Pradesh, Maharashtra, Madhya Pradesh, West Bengal and Rajasthan.

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he share of VADP in milk and milk derivatives is growing at around 25% annually.

To increase profits, Indian dairy producers need to focus on value added dairy products (VAPDs), CARE (Credit Analysis & Research Limited) Ratings, a Mumbai based research and ratings agency said in a report.

According to the agency, the share of VADP in the milk and milk derivatives segment is currently growing at around 25 per cent every year and is expected to grow at the same rate until 2019-20.

“Time has arrived for dairy players to skim the cream out of the milk business. Rising consumption coupled with better margins in the VADPs are driving the dairy players to get into the growth and higher profitable trajectory. Change in demographics and rapid urbanisation have resulted into manifold surge in the demand for VADPs,” the report said.

Due to convenience, health benefits and increased consumerism, milk derivatives like buttermilk, low fat yogurt and flavored milk are nowadays part of regular consumption.

The report said, “Profitability in liquid milk space ranges from four to five per cent, whereas the profitability in VADPs ranges from 12 per cent to 18 per cent.”

As per the National Dairy Development Board (NDDB) and Indian ministry of animal husbandry figures, liquid milk has a market share of 73 per

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cent, followed by eight per cent milk powder, eight per cent ghee, four per cent ice cream, three per cent butter, one per cent for curd, cheese, flavored milk and paneer each.

Product innovations are likely to accelerate India’s dairy market which is anticipated to improve industry margins by attaining greater scale, higher capacity use and an increasing contribution from new milk variants, the report adds. As per NDDB, the Indian dairy industry is all set to experience high growth rates in the next eight years with demand likely to reach 200 million tonnes by 2022 from 132 million tonnes in 2013.

Presently, only 20 per cent of the milk production comes from the organised sector comprising cooperatives and private dairies.

The paramount factors driving the growth in the dairy sector include rising disposable incomes, advent of nuclear families and fast/instant food gaining ground in India. Other factors such as structural changes in food habits, expansion of fast food chains and popularity of pizzas and pastas aided the usage of milk variants of mozzarella cheese, processed cheese and flavored milk etc.

Consumer preference towards VADPs is taking forward the dairy sector. Besides brown-field/ green-field expansion, global dairy companies too are venturing into milk derivatives business in this part of the world. The most recent one is the 100 per cent acquisition of Tirumala Milk Products Pvt Ltd by GroupeLactalis SA, France and French dairy major Danone increasing its presence in the Indian dairy sector with slew of product launches such as flavored curd, yoghurt etc.

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Vol. 1, Issue 03 - June - July - 2016

ARTICLE

YES BANK: Catalyzing business and financial transformation of Indian Dairy Sector

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he Indian dairy industry has grown consistently ever since the White Revolution of 1970s, making India, the world’s largest producer of milk with 17% global share. With an annual production of over 146 million tonnes of milk, India generates approximately USD 70 billion of revenues. The Indian dairy market is expected to double within the next decade, primarily driven by over 15-20% growth in value added dairy segment.

Dairy sector has received special attention by YES BANK on advisory, research and credit fronts.

Increased organized private sector participation in dairy production and processing is likely to occur due to high profitability of the value added dairy products, increased consumer awareness towards safe, consistent and good quality products and increase in demand of value added dairy products with functional properties. .

In line with YES BANK’s approach towards being a knowledge driven organization, Food & Agribusiness Strategic Advisory & Research group (FASAR) is a specialized team comprising industry specialists with immense sector specific knowledge and relevant experience and expertise in the conceptualization and implementation of food and agri initiatives. FASAR works with a broad range of stakeholders, including local, state and national governments, corporate sector, MSME sector, MNCs, Government departments and multilateral agencies in sectors, such as dairy, agri-inputs, food processing, SEZs, food parks and skill development, rural retail and various aspects of rural infrastructure and supply chain.

Advisory Services in Dairy Sector Some of the key mandates undertaken by FASAR in the dairy sector include: • Advised a leading corporate on market entry strategy for juice/dairy manufacturing in India.

• Advised a leading Indian conglomerate on assessment of markets for Dairy products and preparation of business plans for the shortlisted products.

• Mandated by the Embassy of the Kingdom of the Netherlands to study the cold chain sector in India including dairy in identified states and dairy value chain studies in the States of Maharashtra, Uttar Pradesh and Andhra Pradesh with potential opportunities in cheese and UHT milk market in India.

• Advised UNIDO on charting out the dairy development strategy for Ethiopia.

• Advised a leading multinational Dairy company for assessment of key supportive metrics for setting up a large scale Dairy plant in India.

• Mandated by a global corporation for profiling of the Indian Dairy sector and its key players for enabling India entry strategy of the company.

• Advised a leading Indian conglomerate on preparation of detailed project report for development of Integrated Dairy Farm in the states of Haryana and Uttar Pradesh.

• Advised a North East based Dairy player in valuation of their business and assisted them

P

in finding prospective buyers.

Knowledge Initiatives in Dairy Sector Knowledge Reports FASAR also conducts in-depth research on various sub-sectors of Food and Agriculture domains and has published insightful knowledge reports on key topics such as biotechnology, food processing, and on specific sectors of the rural economy such as sugar, dairy and skill development. Some of the key knowledge reports apart from various thought leadership articles in this sector include • Dairy Farming in India: A Global Comparison in association with IFCN launched during 4th IFCN Regional Workshop India 2015.

• Making Indian Dairy Farming Competitive: The Small Farmer Perspective released during 43rd Dairy Industry Conference of Indian Dairy Association (IDA) • Actualizing The Second White Revolution launched during 2nd YES Bank-HBL Food and Agribusiness Conclave.

Delegations YES BANK-Austrade Dairy Delegation to Australia: YES Bank in association with the Australian Trade Commission (Austrade) had organized a dairy delegation to Australia during June 2014. The visit was aimed to facilitate cooperation between the two countries in the areas of Agri-Dairy business services, including dairy technology & automation, pasture & grazing management, crop soil & water management, modern dairy farm management, as well as milk processing, dairy products, and education and training.

YES Bank believes that there is an imminent need to adopt an innovative approach to dairy farming models in India so that they are sustainable, inclusive and scalable in nature. Indian agriculture and dairy sectors offer several lucrative synergies and joint development opportunities between Indian and Australia, which is a global leader in the Dairy sector. The delegation strived to foster avenues for technology transfer and increased investment and cooperation with Australia. The delegation comprised key people from cooperative and private dairy sector companies in India. Austrade had organized interactions with leading Australian dairy farming, processing technology, waste management, breeding and genetics companies, as well as research institutions in Melbourne and Brisbane.

YES BANK-UBI Banca Dairy Delegation to Italy: YES Bank in association with UBI Banca, Italy’s third largest commercial Bank, had organized a dairy delegation to Italy during November 2015. The visit was aimed to facilitate cooperation between India and Italy in the areas of processing, technology, equipment, cold chain and value added products. UBI Banca had organized interactions with leading Italian dairy processing, technology, infrastructure & equipment companies, in and around Bergamo, Brescia and

Milan.

Strategic Partnerships Strategic Partnership with NAFTC: In a major boost to the development of multifocal, multi sector agribusiness in India, YES BANK entered into a strategic partnership with the Netherlands Agro, Food and Technology Centre (NAFTC) – India, a nodal Dutch agency which facilitates business development for its members in India, to leverage the value that globally competitive technologies, systems and processes can contribute to furthering of development of Food and Agri sector in India. The partnership shall leverage the complementary strengths of the two organizations to bring in dynamic changes in the agri-business association between the two countries. As part of the agreement, the two parties will be working towards the development of farming communities, agri-infrastructure, agro-based industries and skill development initiatives across sectors including agriculture, dairy, horticulture, animal husbandry and food processing.

Credit to Dairy Sector Given the importance of dairy sector in rural employment and revenue generation, easy access to credit and instant payments for sale of milk and milk products are critical for making production system remunerative and sustainable. Bank’s continued focus on agri supply chain has enabled it to be well poised to take advantage of the emerging opportunities in the area of agri supply chain including dairy.

Agribusiness Product Management (ABPM) team has experienced Banking and Industry professionals with in-depth knowledge of Priority Sector so that the Bank can deliver efficient and customized banking solutions to the core sectors, such as agriculture, dairy, sugar, agri MSMEs among others, thereby playing a significant part in driving the economic growth of rural India.

For developing the evolving segment of Farmer Producer Companies (FPC), the Bank engaged with regulatory agencies such as NABARD and SFAC (Small Farmers’ Agribusiness Consortium) to identify FPCs with sustainable business model and create a robust profitable portfolio. The Bank adopts various dairy financing models on case to case basis.

YES Kisan Dairy Plus YES Kisan Dairy Plus represented a comprehensive suite of financial products, tailor-made for dairy

in the state. Bihar is a huge market for milk production and consumption."

NABARD is the nodal agency that prepares the activity-based Annual Credit Plan (ACP) for the state, and loans are given through various commercial banks and regional rural banks, while the loans given are reimbursed by NABARD. NABARD's assistant general manager M M Ashraf said around 6,000 applications are received annually by various branch offices of the bank for dairy-related activities. "Over 95% applications are cleared by the Mumbai headquarters for loan, and only a minuscule of them is returned for

proper filing," he added.

In January this year, NABARD had prepared State Focus Paper on ACP for the 2016-17 fiscal year based on the potential linked credit plan of all the 38 districts. It has allotted Rs 4,010.89 crore for dairy-related loans, against the allotment of Rs 2,872.31 crore in 2015-16. Asked if most of the allotment is absorbed, Ashraf replied in the affirmative, adding the demand for more loans is increasing.

The Focus Paper had said, "Traditionally, animal husbandry in the state was being practised as a part of subsistence economy. However, it has

farmers. The Bank could immediately credit the milk payment in the farmer’s account (wherever a dairy processor installed an advanced automated milk testing machinery), based on the data provided. Through YES Kisan Dairy Plus, farmers experienced the services of a formal financial institution firsthand, a first-of-its-kind experience for many. This generated curiosity to know more, leading to enhanced financial literacy. The single most important contribution of this product was in providing instant credit to a farmer for milk produce, which otherwise would take an entire day, guaranteeing timely payment.

YES Kisan Dairy Plus was implemented as a pilot project in collaboration with one of the largest dairies in South India, based in the Villupuram district of Tamil Nadu. As crop and livestock farming are quintessential characteristics of the Indian agriculture production system, a muchneeded intervention in the form of YES Kisan Dairy Plus enabled the Bank to reach out to rural communities, especially farmer households, that were conventionally unbanked or under-banked, offering them zero or low-cost financial products and services.

Conclusion Use of modern information technology, universal access to financial services along with innovative models for reaching the last mile farmers, development of human resources through knowledge and skill development as well as increased participation will enable strategic development of the dairy sector. YES BANK is committed to catalyze the business and financial transformation of the Indian dairy sector through its cutting edge products and services developed for all the stakeholders in the dairy value chain.

Mr. Nitin Puri Senior President- Food & Agri Business Strategic Advisory & Research (FASAR), Yes Bank LTD

Dairy sector likely to get a push in Bihar

atna: Banking circles believe that dairy sector could emerge as an alternative source of income for people concerned after the state government banned the trade and consumption of liquor in April.

Incidentally, after the ban on liquor, CM Nitish Kumar had appealed to people of the state to engage themselves in dairy activities to increase their income.

Ranjit K Das, chief general manager of National Bank for Agriculture and Rural Development (NABARD), Bihar said, "It (the ban) is a godsend to give push to milk production and consumption

Dairy Times

emerged as an independent, commercially viable activity and is being viewed as an industry having immense potential for increasing the income of the rural households as well as meeting the increasing nutritional and taste requirements of people."

The per capita daily availability of milk in the state is 188 gm/day against the national availability of 299 gm/day, while the annual total milk production is around 75.91 lakh tonnes, 5.21% of the national milk production, which points to the huge potential for milk production and even vast untapped market for consumption.

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Vol. 1, Issue 03 - June - July - 2016

NEWS

Dairy provides livelihood to 60 million farmers in India: Radha Mohan Singh

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hri Radha Mohan Singh, Union Agriculture and Farmers Welfare Minister has mentioned that livelihood of 60 million rural households depend upon dairy sector. Out of this, two third are small, marginal farmers and landless labourers.

Agriculture and farmers Welfare Minister mentioned that India is a global leader amongst dairying nations and produced 160.35 million tonnes of milk during 2015-16. The dairy cooperatives of the country have the singular distinction of providing seventy five percent of their sales, on an average, to the farmers.

Shri Singh informed that as many as 75 million women are engaged in the sector as against 15 million men. There is an increasing trend towards participation of women in livestock development

activities. This has led to empowerment of women-headed households in the rural communities.

Indigenous breeds will be least effected by global warming. In order to develop heat tolerant and disease resistant stock countries including United States of America, Brazil and Australia have imported our indigenous breeds.

Agriculture and farmers Welfare Minister has mentioned that India with 30 crore bovines has 18% of the world's bovine population.

Cattle Genetic Resources have been evolved by the farmers/cattle rearers/breeders using traditional and scientific knowledge, and today we have 39 breeds of cattle.

Shri Singh also stated that the indigenous breeds of cows are known to produce A2 type protein rich milk which protects us from various chronic health problems such as Cardio Vascular Diseases, Diabetes and neurological disorders besides providing several other health benefits. Earlier Hon'ble Minister has spoken with scientists and people engaged in marketing of Milk were of opinion the A2A2 rich milk should be separately marketed in the country. Hon'ble Minister informed the house that Department of Animal Husbandry, Dairying and Fisheries has sanctioned Rs. 2 cr each to Odisha and Karnataka for marketing of A2A2 rich Milk of our indigenous breeds.

Shri Singh informed that indigenous breeds are robust and resilient and are particularly suited to the climate and environment of their respective breeding tracts. They are endowed with qualities of heat tolerance, resistance to diseases and the ability to thrive under extreme climates and low plane of nutrition.

Agriculture and farmers Welfare Minister stated that studies of impact of Climate Change and effect of temperature rise on milk production of dairy animals indicates that temperature rise due to global warming will negatively impact milk production. The decline in milk production and reproductive efficiency will be highest in exotic and crossbred cattle followed by buffaloes.

Amul sees prices of liquid milk, skimmed Milk Powder going up in 2 months cooperative dairies, the peak milk procurement was 215 lakh litres per day (LLPD) in end of January. But now it has come down by about 35 LLPD to about 180 LLPD. Also, the input costs for farmers have gone up. We expect milk and milk products prices to go up in the next two months,” said Rs. Sodhi, Managing Director, GCMMF, which markets milk and milk products under Amul brand.

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ilk and milk products prices are likely to go up as several parts of milk producing regions of Western and Central India are facing severe drought situation.

India’s largest milk cooperative, Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF) expressed the possibility of price rise in milk products – skimmed milk powder (SMP) in the range of about 15-20 per cent in the next two months.

While a revision in liquid milk prices will also happen in a month’s time.

Dip in output Saurashtra in Gujarat, parts of Maharashtra including Marathwada, northern Andhra Pradesh and northern Karnataka are witnessing one of the worst water crisis in recent years. In Maharashtra, milk production has dropped suddenly. Summer season coupled with drought escalated costs of fodder and animal feed leading to lower production.

Procurement down “There is a downfall in milk procurement in past couple of months. At GCMMF-affiliated

Normally, summer season has lower milk procurement, but drought puts additional pressure on the milk producers.

Liquid milk “For liquid milk, there is no immediate plan to hike the prices. But we will look at the situation for the next one month and after that, possibly there will be a price revision,” Sodhi added.

Milk powder up For the SMP, Sodhi maintained that prices have already increased by about Rs. 10-15 per kg, which is likely to increase up to Rs. 30-40 in coming months.

Sodhi, however, declined to share the inventory quantity of SMP citing price sensitivity issue, but he assured that there was sufficient SMP inventory to meet demand.

Global prices In the international market, SMP prices hovered lower at around $1,700 per tonne, which is lower by about $500 from $2,267 in October 2015.

GCMMF has 17 member unions in Gujarat with over 36 lakh farmers spread across 18,600 villages of Gujarat as its member.

Agriculture and farmers Welfare Minister informed that the potential to enhance the productivity of the indigenous bovine breeds of India through professional farm management and superior nutrition is immense. For the first time in the country, Rastriya Gokul Mission has been initiated under National Programme for Bovine Breeding and Dairy Development to take up development and conservation of indigenous breeds in a focused and scientific manner. Under the Scheme 35 projects with an allocation of Rs. 582.09 cr has been sanctioned.

Shri Singh informed the august gathering that funds have been sanctioned for establishment of 14 Gokul Grams under Rastriya Gokul Mission.

For this first instalment has already been released

to the States. Minister further informed that funds have been sanctioned for strengthening of 35 bull mother farms of indigenous breeds including Yak and Mithun. First instalment for strengthening Bull Mother Farms has already been disbursed to the States.

Agriculture and farmers Welfare Minister further informed the House that funds have been sanctioned for field performance recording of 1,50,000 animals of indigenous bovine breeds and first instalment has also been disbursed to the States. Hon'ble Minister informed for pure breeding in the breeding tracts. For upgrading, the non-descript cattle population, 3,629 bulls have been inducted for natural service. Hon'ble Minister informed that for production of frozen semen, 65 high genetic merit disease free bulls have been inducted at semen stations. Bull production programme of indigenous breeds for natural service have been inducted by the States of Madhya Pradesh, Kerala, Uttar Pradesh, Punjab, Haryana and Gujarat.

Shri Singh further added that most of the countries have National Breeding Centre at the National level.

For the first time in the country to take up holistic and scientific development and conservation of indigenous breeds two National Kamadhenu Breeding Centres are being established: one in southern region- in Andhra Pradesh and second one in northern region in Madhya Pradesh.

Nucleus herd of all 39 indigenous breeds of cattle and 13 breeds of buffaloes is being established at National Kamadhenu Breeding Centre with the aim of development and conversation of these breeds.

18

Vol. 1, Issue 03 - June - July - 2016

SPECIAL FEATURE

The Rs 80,000

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he Indian dairy market is on a tear. Amul is the big daddy, but dozens of new players want a slice of the cheese.

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et another event full quarter for the dairy industry of India.

Being the largest producer and leading consumer India is being watched by one and all across the globe. This will be the third issue of your newspaper ‘Dairy Times’ (DT) and response has been tremendous from the Indian dairy industry. Response has been very encouraging from the global dairy industry as well and we have a number of article and write-ups shared by the writers or the experts sitting in different parts of the world Dr. Jv Parekh in this issue. Wherever we write and inform them about your newspaper and its reach people always send us encouraging response.

Recently on June 1 we all came together to celebrate ‘World Milk Day’ at IDA House in New Delhi. Leading personalities gathered there and shared their concerns for the betterment of the industry. A detailed news item we have published on the front page of DT. In the last quarter once again the investment in the Indian dairy sector is pouring in. There has been a lot of movement in Stock exchange listing as well. Kwality, India's one of the largest privately owned dairy firm, is about to raise Rs.600 crore from the American private equity giant Kohlberg Kravis Roberts & Co. (KKR).

The investment will be in the form of a structured debt deal and will help Qwality expand its retail presence and refinance its loans, according to the report. KKR's ownership stake in the company is unclear; the firm also invests in companies through debt.

ABT Foods is looking to boost its dairy production, to serve states in the south of the country.The company, part of the Indian conglomerate The Sakhti Group, plans to invest INR1.8bn (US$27m) over the next three years. Company want to increase production from 600,000 litres of milk per day to 1,500,000 litres by 2025. They have plans to expand the capacity of existing Pollachi plant near Coimbatore in Tamil Nadu to 1,000,000 litres per day and also set up a greenfield plant at Krishnagiri, near Bangalore.

As Rs 4 lakh-crore Indian dairy industry catches the fancy of corporate giants, the sector is estimated to see investments worth Rs 9,000-10,000 crore over the next five years, according to experts. They also feel the major share of investments would be for creating infrastructure at farm for collection and storage of milk.

The value of dairy industry at the retail level is Rs 4 lakh crore. The share of the organised industry is approximately 30 per cent and is growing at a robust rate of 15 per cent per annum. The value added segment is the major driver of this growth with around 18-20 per cent growth. Curd, lassi and butter milk are growing at around 18 per cent while the smaller categories like flavoured milk, yoghurt and cheese are growing upwards of 20 per cent per annum.

A few weeks back the IPO of one of the fastest growing private dairy in Indian Parag Milk Foods was oversubscribed by 1.4 times on the fifth day of the issue.

The Rs 760-crore IPO has received bids for 2,73,19,045 shares against the total issue size of 1,95,06,590, data available with the NSE till 1700 hours showed.

The portion set aside for qualified institutional buyers (QIBs) was subscribed 67 percent while that of non-institutional investors was oversubscribed 2.64 times.

The retail investor category was also oversubscribed 1.83 times. This shows the potential of the dairy industry and stong fundamentals of the companies in business.

Earlier IPO of Prabhat Dairy had also received cheering response from the investors.

The importance of dairy industry in India can be best judged by the fact that it provides livelihood to 150 million rural households and of these two third households are of small, marginal farmers and landless labourers. India is a global leader amongst dairying nations and produced 147.00 million tonnes of milk during 2015-16.

I hope the trend of growth will continue for decades to come!

Email: jvparekh72@yahoo.com

If you thought that all the action in business was concentrated around the e-commerce sector, you could not be more wrong. The unlikely category of milk and dairy products has been seeing some of the most frenetic activity over the past couple of years. Multinational and Indian corporate giants have jumped into the market. Start-ups have cropped up. Fund raising is taking place at a frenzied pace, both from the equity markets and via private equity funding. And new products and innovations are being launched fast and furious.

Meanwhile, the 800 pound gorilla in the market - the Rs 31,000 crore Amul (2015/16), managed by the Gujarat Cooperative Milk Marketing Federation (GCMMF) - is aggressively throwing resources to protect its turf. It wants to hit Rs 65,000 crore in revenues by 2020.

But Amul is facing unprecedented challenge from all sorts of players. GroupeLactalis SA, the world's largest dairy products company, picked up Hyderabad-based Tirumala Milk from private equity player Carlyle. A few months ago, ITC had jumped into the fray with its Aashirvaad brand of ghee and a promise to add a lot more products.

Last week, Parag Milk Foods, a Maharashtrabased milk company, raised about Rs 750 crore in an initial public offering (IPO) to beef up its operation. A year ago, Maharashtra based Prabhat Dairy had raised Rs 473.89 crore in an IPO for the same reason. Godrej Agrovet raised its stake from 10 per cent to 25 per cent in Creamline Dairy for

Rs 150 crore. Private equity players have pumped in Rs 900 crore already in the past couple of years.

Meanwhile, Danone, Nestle and other existing private sector players are adding to their product line-ups and pushing in big money into the market while home-grown dairy cooperatives such as

The next level of from beverages,

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nly 18 per cent of the Rs 1,440 crore revenue of Prabhat comes from fresh milk, while the rest is from value-added products such as cheese, milk beverages and yogurts under the GO brand. The company has as many as 67 varieties of cheese, which it sells at retail outlets as well as in institutes Avani Davda, Managing Director of the supermarket chain Godrej Nature's Basket points out that the varieties of milk products she needs to stock has doubled in the

R.S. Sodhi, (Managing Director, Amul)

past year or so. "We have more than 1,200 SKUs (stock-keeping units) in the dairy category. It used to be 700-800 SKUs two or three years ago," says Davda. The retailer's fastest moving dairy product from her shelves is probiotic milk, but other fast growing segments include greek yogurts, fresh paneer, farm fresh milk and nut-based milk.

One big change, says Jochen Ebert, Managing Director, Danone Foods and Beverages India, the company that introduced a few new sub-categories, such as flavoured yogurt and ready-to-eat custard, is that many things that were earlier made at home are now bought by urban couples and single

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working women. "Young females who are working find it a good idea to get the yogurt or dahi from outside instead of setting it at home. That means there is an opportunity for commercially produced yogurt and we are focusing on that opportunity," says Ebert. Danone was among the first to introduce a series of yogurts, but its innovations were quickly copied by his rivals, including Amul.

Danone India entered the market with its array of yogurts and the conventional dahi in 2009.

Its products did get accepted but only in niche stores and among a certain class of consumers. But Danone, says Ebert, entered India with a mindset of creating a market for yogurts and focus on increasing the per capita consumption. Yogurt in India, he says, has a per capita consumption of just 3-4 litre, as opposed to France, Holland and Germany, which are at 30-40 litre. "The first intention is to share with the Indian population that yogurt or dahi is a fantastic contribution to their diet."

Since cold food supply chain is a challenge in India, Danone innovated and created products with greater shelf lives. In the past year, it has introduced ambient yogurt and milk-based products with six months of shelf life. It has innovated products, such as smoothies, chaas and lassi, which are packaged in ultra-high temperature (UHT) packs.

The most recent launch from the Danone stable has been ready-to-eat-custard. Meanwhile, more stores have started accepting these products now.

From being available in just 10,000-odd stores

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SPECIAL FEATURE

crore milk business India in the next two years.

It is an extremely attractive market, both because of its size and its potential. It is also, however, a marketplace fraught with danger that can sink even big players because of its sheer complexity. Over the next few years, the dairy market will see the mother of all market battles as the newcomers try to take away share from Amul, Mother Dairy and the other cooperatives, which have largely ruled the roost so far. But it could also prove a graveyard for many a players, Indian and global.

India has always been the largest producer (an estimated 400 million litre per day currently) and consumer of milk in the world. But it remained a boring market largely because the per capita consumption was low, and most of the milk was consumed in its basic, liquid form, or at best as ghee and some butter.

Mother Dairy and Nandini, among others, are also expanding their operations rapidly. And other big global dairy companies are all eyeing the market.

Crisil Ratings estimates that investments worth Rs 15,000 crore will flow into the milk business in

Over the past few years, though, a couple of things have changed to make the market vastly more attractive to new players. One, as global dairy consumption stagnates or even dips, Indian consumption is going up. India's per capita consumption of milk at 97 litres a year is way below that of western countries like the US, which boasts per capita consumption of 285 litres per year, or the EU, which consumes 281 litres per capita per year. But while Indian per capita demand is going up 4.5 per cent year-on-year, global per capita consumption is growing at an anaemic 1.5 per cent, and in some countries in the West it may actually be falling, points out T. Nandakumar, Chairman, National Dairy Development Board

(NDDB).

The second reason is that the Indian consumer -especially the affluent urban consumer - is consuming more value-added products, which bring in bigger profits for dairy companies than raw milk. The fact that the Indian cooperatives had largely stuck to basic milk, butter, processed cheese slices and ice cream for many decades, had left a gap in the market that allowed some of the new players to come in with new product offerings.

And the phenomenon of working couples, single men and women with high disposable income also provided the impetus to look at the category with fresh eyes. Finally, global prices of milk are dipping because of overcapacity, while the Indian market is still growing, both for basic milk as well as for value-added products.

"India is strategically a great place to be in, especially for international players. With milk available in surplus and consumption of milk products on the rise, they can not only tap the Indian market, but also use India as a base to serve other global markets," says Rajesh Srivastav, Chairman, Rabo Equity, which has taken a stake in Prabhat Dairy.

Milk Market Dynamics Out of the 400 million litres of milk that India produces per day, 160 million litres per day (48 per cent) is retained by the producers for their own consumption. The surplus milk that is available for sale is around 240 million litres per day (52 per cent) and out of that only 70 million litres per day is being used by the organised sector - consisting of co-operatives such as Amul, Mother Dairy

(wholly-owned subsidiary of NDDB) and Nandini (a brand owned by the Karnataka Cooperative Milk Producers Federation (KMF), as well as private sector players such as Nestle and Danone. Over 170 million litres of the surplus milk continues to be with the unorganised sector, comprising traditional doodhwalas. In value terms, the Indian milk economy is worth Rs 5 lakh crore, growing at a CAGR of 15-16 per cent, out of which the organised milk economy is worth Rs 80,000 crore.

Over 80 per cent of milk consumption in India is that of liquid milk and over 55 per cent of the revenue of large co-operatives, such as Amul and Nandini, comes from selling liquid milk. There are still limited takers for value-added dairy products such as cheese, yogurts or flavoured milk, but this is where much of the action is taking place today simply because of its higher margins, and the ability to differentiate and introduce new products.

Equally, the fact that the milk cooperatives did not tap this market until the multinationals came in made it an area where the competition was relatively equal.

Betting on Value Addition The new players are carving out their place in the segments that include cheese, ice creams, varieties of yogurt and milk-based beverages. "Our strategy is to differentiate. It doesn't make sense to take Nandini and Amul head on. They are too big and well entrenched in the liquid milk category since the past five to six decades. Therefore, we decided to move up the value ladder and grab the upper layer of that category," points out Devendra Shah, Chairman, Parag Milk Foods.

value growth (for Amul) will come paneer, cheese and Ice Creams In fact, it is value-added dairy products that sell more in modern retail stores, says Devendra Chawla, President (Foods), Future Group. "Cheese is our biggest category today and growing over 35 per cent currently. Milk is mostly UHT and flavoured. The consumer is looking at discovering new products and formats. Our newer stores have a strong range of cheese and other premium products and the response to it has been extremely good."

an enormous role."

Value-added, in fact, is the place where the bulk of the innovations and new product launches are taking place. Both Prabhat Dairy and Parag Milk Foods have set up cheese production units and facilities to produce UHT milk and milk-based beverages. Since they are already into production of cheese, they have also tapped into whey protein (a cheese by-product) - much sought after by bodybuilders and fitness freaks around the globe, says Shah of Parag.

Chawla sees a clear movement from homemade dahi to packaged dahi, yogurt or lassi as an onthe-go snack substitute, and from plain butter as a sandwich spread to cheese spreads and cheese slices.

Nestle, the largest and oldest private milk player in India, has recently launched Greek yogurt, Nestle-a+ GREKYO. Greek yogurt, which is a super concentrated yogurt, is a fledgling category in India and is stocked by premium retailers. It is priced considerably higher than other yogurts, but Arvind Bhandari, General Manager (Dairy), Nestle India, is confident that it will pick up.

Nestle is present in the entire array of dairy product categories, especially in the value-added space. "Nestle is keen to establish its leadership position in the value-added segment where we are working on propositions that are both consumer relevant and differentiated."

about a year ago, Danone is today available in over 50,000 stores.

Though the company is yet to be profitable in India, Ebert is confident that this market will not remain at this very nascent stage forever. "Our experience is that the per capita consumption of yogurt grows slowly for a very long time and then it grows steeply. It may take 10 years, but I am quite sure that the value-added segment will play

Similarly, ITC Foods' much talked about entry into the dairy segment finally happened late last year, and that also in the value-added dairy segment, with the launch of Aashirvaad Svasti Pure Cow Ghee. ITC, in the last few years, has invested significantly in setting up a robust milk procurement network. Sanjiv Puri, Executive Director (FMCG Business), ITC, says that the coming months will see the roll-out of newer value-added dairy products. "The intention is to craft differentiated and value-added products that would be the hallmark of quality."

According to Angshuman Bhattacharya, Consumer Lead and Managing Director of consulting company, Alva-rez and Marsal, while liquid milk generates an EBITDA of 6-7 per cent, a product like curd generates margins as high as 25-30 per cent, ice-creams 30-35 per cent, and cheese 35-40 per cent. Therefore, investors are excited in the new milk players, he says.

Dairy Times

Incumbents Fight Back But even as private companies are betting on the value-added dairy products, big milk cooperatives have also matched them step for step. The country's largest dairy products company, Amul, has been investing Rs 800 crore-1,000 crore year-on-year in setting up new milk processing facilities, as well as building its value-added products infrastructure.

"Nearly 55 per cent of our revenue comes from milk and 45 per cent from the rest. The next level of value growth will come from beverages, paneer, cheese and ice creams," says R.S. Sodhi, Managing Director, Amul. In order to be able to support its value-added dairy play, the co-operative in the past few years also expanded its procurement network to states such as Rajasthan, Haryana, West Bengal and Maharashtra.

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SUCCESS STORY

Turn around of ALWAR Dairy plant to understand the statis of each Milk Union.

Alwar Feeder Balancing Dairy a unit of Rajasthan Cooperative Dairy Federation, (RCDF) Jaipur. was commissioned some time in the year 1980. The plant had a capacity of 1 lakh P.N Wali

liters per day. Mainly the Consultant plant used to get 80% milk as 'returned' milk from National Milk Grid of Delhi and to meet the local demand rest was being collected from village dairy societies in and around Alwar district.

On an average 50 to 70 TLPD was being processed, converted to Dry milk and Ghee for Bulk retail sale in the state of Rajasthan. Of late sachet packing too was started for local sale.

The procurement purchase price, selling price of raw material,packaging,retail margins and all the input and output costs were fixed at the Federation level.

All along the period till 1997 the Business plan of the dairy plant was Negative with a net cash loss.

Incidentally I was posted as sometime in the year 1996-97 since M D of the Milk union was transferred, with direction to hand over the charge

I on behalf of Alwar milk union was asked to give brief for the poor position of the milk union. After having given the short understanding I was finally told to suggest the points which could revive the bad financial status of the union.

to me.

On resuming the duty as Managing Director of Alwar milk union I was able to know the financial status of the milk union in a very bad position --Milk payment to producers was unpaid, inter unit payment too was not paid, suppliers were not paid for their supplies, etc. The net position was that the milk union was on the path of closure.

Head quarter too was not so eager to help and release the funds, thus the position was beyond the measures. During this phase a newly appointed Managing Director of RCDF, along with State Minister for Dairy Development, held a general review meeting of all the Milk Unions

Incidentally our elected Chairman too was in the review meeting so it became little easy to give the brief by which, we could help to improve the status of the union. We suggested that we may be given three considerations:

reorganized at the plant and acted as decided.

Added to this we approached to Mother Dairy for getting their liquid milk supplies packed from Alwar milk plant. with great persuasions and cosmetic touches, Mother Dairy agreed to our humble submission. Giving us a net profit of Rs 1 per ltr of milk, after meeting allover Heads, processing, packaging and transport charges.

We started with dispatch of one truck load say 13000 ltr per day which soon went to two truck loads and subsequently we went upto despatch of 150000 ltr daily. We started getting net profit of Rs. 1.5 lakh per day. This way Alwar Dairy's future got turn around.

1. All our milk supplies to go to NMG. 2. We may not be asked to manufacture products for some time.

3. We need to be provided by working capital to meet out the payment of milk producers.

All our demands were agreed to Immediately within a week we

MilmaPeda: From Bitterness to Sweet Success

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anjirakolly (means ravine of bitter-wood) is a remote western ghat village in Kerala. The farmers there had a miserable life. Wild elephants and boars often damaged their crops.

K.T Thomas But the cool climate and abundance of green grass favored milk production.

The farmers initiated a milk cooperative 25 years back. Milk had to be head loaded 10 kilometers down through the rough hill tracks to the nearest transport point. It took five to six hours for this milk to reach the processing plant 55 kilometers away at Kannur. On most days the milk would get curdled. Burdened by the losses, finally, the milk society closed down.

As part of the revival plan, the women of the area were trained by the Malabar Milk Union to convert milk into Peda. Not only that it also solved the milk spoilage problem, and gave value addition advantage too. The society survived. Milk peda, an unknown North Indian delicacy to Kerala markets soon gained popularity.

lakhs to automate the Peda packing line. The Peda dough that comes out of the desiccation vats will be shaped, flow wrapped and carton packed without any hand touch. The output will be up to 60 pieces per minute and the unit will enable to achieve the target of 30 MT sales per month. The operations will happen in fully air-conditioned packing hall in regulated environment. That will further enhance the keeping quality from current 20 days to 60 days, enabling Malabar Milk Union to introduce the product in the Super Markets of the Gulf countries.

Thus, an experiment that started in the remote MilmaPeda now is the most popular item in the product range of the Malabar Milk Union. The Union has shifted the production of Peda to its most modern Milk Products Dairy in Kozhikode which produces an average 200 metric ton peda worth over Rs 700 lakhs a year. The Milk Union is now supported by the Intesive Dairy Development Project ( IDDP) for the expansion of the plant. The earlier operations done at Kanjirakolly are now entrusted to 53 local housewives under the Kutumbasree women livelihood mission of Kerala Government. The annual wage bill of these ladies come to Rs. 54 lakhs inclusive of ESI and PF. The Union has now initiated a project of over Rs. 1500

Kanjirakolly could be made a sweet success through application of technology and innovative marketing.

This is an example how dairy technology when combined with a business vision and brand marketing can ultimately come to the help of dairy farmers through value-addition.

Managing Director, Malabar Regional Cooperative Milk Producers Union, Kozhikode.

Low prices make dairy export to Russia unviable international markets, including Russia. Hard cheese is being quoted in Indian markets at around Rs 400 a kg and Rs 200 a kg abroad. Butter is $5,000 a tonne here and less than $3,000 elsewhere.

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ndia is unlikely to gain from the opening of Russian markets for hard cheese export due to price fall in international markets. As against the current Rs 350 a kg in Indian markets, skimmed milk powder (SMP) is quoted at Rs 180 a kg in

This slump in global prices, by about 50 per cent, has taken place in the 16 months since Russian president Vladimir Putin announced the opening of his country's market for Indian dairy products. However, global dairy markets seem to have begun a recovery and Indian dairy exporters could see an opportunity in the future, says R S Sodhi, Managing Director, Gujarat Co-operative Milk Marketing Federation, producer of the Amul brand of dairy products.

Amul has, sensing a coming opportunity in

Russia, trebled its cheese production capacity to 120 tonnes a day from the earlier 40 tonnes per day, for an investment of Rs 600 crore. With its aggressive pricing, it has 96 per cent of the Indian butter market.

The Union commerce ministry had signed the protocol, mandatory procedural requirement to commence exports to Russia, on April 28.

GCMMF has initiated talks with a couple of Russian cheese importers for future deals.

However, despite the reports of unviable prices, Govardhan brand dairy products producer Parag Milk Foods aims to dispatch a first consignment of hard cheese to Russia by the end of June.

“We have lined up a number of Russian buyers for hard cheese export. We were waiting for the government to sign the protocol to finalise the terms of trade with Russian buyers.

Since the protocol has been signed by India, we expect the Russian government to reciprocate in

Dairy Times

two weeks. We would start negotiating terms of trade after that,” said Devendra Shah, managing director at Parag.

Rosselkhoznadzor, the Russain regulatory agency, had initially approved only those Indian farms with at least 1,000 cattle underownership.

Only Parag and Schreiber Dynamix met these norms. Most large dairy farms in India, including GCMMF, operate under the co-operative model in which farmers remain the owner of cattle.

The government sought relaxation in this norm and Russia eventually agreed. According to Shirish Upadhyay, senior vice-president at Parag, the new Russian rules focus on sourcing of milk instead of number of cattle, to accommodate more exporters from India.

Russia’s annual cheese consumption is estimated at 230,000 tonnes and is being met largely through import from the Americas and its neighbours.

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NEWS

Heritage Foods to acquire properties of Teja Dairy yderabad-based Heritage Foods Ltd has agreed to acquire assets of Teja Dairy in Raichur district of Karnataka, it said in a stock market disclosure.

H

The firm, owned by family members of Andhra Pradesh chief minister N Chandrababu Naidu, has five business verticals—dairy, retail, agriculture, bakery and renewable energy.

The company will invest Rs 60 lakh ($89,000) to acquire the assets that include a dairy plant which has a processing capacity of 20,000 litres per day, it said.

In the dairy segment, it has a capacity of 1.4 million litres per day and produces milk and dairy products, including fresh milk, curd, buttermilk, lassi, ice cream, paneer, table butter, milk powder,

flavoured milk, ultra high temperature (UHT) milk and dairy whitener.

The company, founded in 1992, has also started dairy operations in the National Capital Region (NCR), Mumbai and Pune markets, away from its stronghold in the South.

Earlier, it had acquired a dairy plant at Sangvi

in Maharashtra, which supplies to customers in Mumbai and Pune.

India’s fragmented dairy market, which is dominated by local milkmen, regional brands and milk cooperative Amul, has been seeing signs of consolidation.

French giant GroupeLactalis SA recently bought the milk products business of Mumbai-listed Anik Industries Ltd for Rs 470 crore ($70 million) in its second acquisition in India in as many years that would help it go neck and neck with India's top private dairy Hatsun Agro Product Ltd in terms of revenues.

India’s milk production grew 4.3 per cent to nearly 134 billion litres in 2013-14 and was projected at 140 billion litres in 2014-15, according to rating and research firm CRISIL. Output in India has been growing faster than in other large milk-producing nations such as the US and China. On the flip side, consumption in the country has been growing at 5 per cent, leaving a gap between demand and supply.

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NEWS

Paytm enables cashless payments at Mother Dairy booths

Mother Dairy eyes Rs 10,000 crore turnover in three years The pulp and concentrate line will have a capacity of 20,000 tonnes per annum of finished products and this will largely include tomato processing, mango and other fruits.

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eading milk supplier Mother Dairy is eyeing to cross Rs 10,000 crore turnover mark in next three years on rising demand for dairy products as well as fresh and processed fruits and vegetables.

Mother Dairy, which supplies about 30 lakh litres of milk in the national capital region has posted a turnover of Rs 7,186 crore during last fiscal, out of which about 75% is from its dairy business.

"We are aiming for more than Rs 10,000 croreturnover by the end of FY19 with expected rise in sales across all the segments," Mother Dairy MD S Nagarajan told.

Besides this, the company is also exploring new markets for its dairy and other milk products and at the same time also expanding its product portfolio with new launches.

Mother Dairy, a wholly-owned subsidiary of the National Dairy Development Board (NDDB), has diversified portfolio with presence in dairy products, edible oil, fruits and vegetables (fresh as well as frozen) and pulses.

The firm sells processed food products like juices and ready to cook products under the brand name Safal and also has presence in edible oil segment under the brand name Dhara.

The company also sells fruits and vegetables and other processed food products on its more than 400 Safal stores in the national capital region and Bangalore.

In a bid to expand its market, Mother Dairy is in process of establishing a 25,000 tonnes per year integrated food and vegetable processing plant in Ranchi at an estimated cost of Rs 75 crore.

Safal outlets are being operated on the franchise model, where the company provides basic infrastructure.

The freezing line will have the capacity to produce 5,000 tonnes per year of finished product and which will mainly include peas produced in the state.

During the time of spike in prices of pulses and onions, the Safal outlets had sold these two food items below market prices following the government's instruction.

India International Dairy Expo (IIDE), Feb, 2017 Most important dairy event in the country

C

ome this February 2017, India International Dairy Expo (IIDE) will be organised concurrent to the Dairy Industry conference (DIC) with an aim to bring together, all stake holders in the dairy industry including dairy farmers, veterinary, processing, packaging, quality management, distribution, dairy products and dairy cooperatives, on a single platform. This exhibition will be organised by Koelnmesse YA Tradefair Pvt Ltd – Indian subsidiary of Koelnmesse GmbH along with Indian Dairy Association(IDA) –West Zone.

The current edition of India International Dairy Expo (IIDE) concurrent to 45th Dairy Industry Conference is scheduled to be organised during February 16-18, 2017 at Bombay Convention & Exhibition Centre (BCEC), Mumbai,India. This platform will create an opportunity to understand the latest trends, technological upgradations and explore new business opportunities in the dairy industry. The

exhibition is expected to attract over 8000 visitors & delegates including over 1000 dairy farmers apart from dairy professionals, seniors from milk co-operatives, government agencies, scientists & policy makers from all over India. The 45th Dairy Industry Conference, an annual gathering platform for the complete dairy industry in India. It will be well represented by industry leaders & stalwarts as speakers not only from India but from across the globe. The conference deliberation will bring new momentum & dynamics, discussing the various dairy technologies, government policies for the dairy sector, problems of dairy farmers, financial support, etc. in the dairy industry.

All the stake holders of the dairy industry – dairy farmers, suppliers of dairy farm equipment, veterinary, processing and packaging technology, refrigeration and cold chain solutions and manufacturers of milk and milk products are welcome to be part of this special event for dairy industry in India.

dairy, we would be able to bring a seamless payment experience to millions. We are very proud that mother dairy has taken a step towards consumer experience and we will be creating an incredible payment solution for their consumers," said Founder and CEO - Paytm, Vijay Shekhar Sharma.

P

aytm, India's leading payments company, has partnered with Mother Dairy, a whollyowned subsidiary of the National Dairy Development Board (NDDB) to enable customers to make cashless payments through their Paytm wallets across 100+ Mother Dairy Milk Booths.

Paytm wallet has become a default mode of payment for customers for a wide variety of services in the country including taxi rides, food ordering and money transfers etc. The association with Mother Dairy will further help the digital wallet to cement its position as the preferred way to transact across offline and online platforms.

"Paytm is focused on creating solutions for everyday payment use cases for Indians. Starting from the morning milk supply to all other everyday necessities, it is our mission to make everyday payments extremely simple. Working with mother

Speaking on the association, Managing Director, Mother Dairy Fruit and Vegetable Pvt. Ltd., S. Nagarajan said, "Being a consumer centric organization, Mother Dairy has always been in tune with the evolving lifestyle of our consumers and has strived to offer solutions accordingly. In line with the same strategy, we are now partnering with Paytm to offer modern payment solutions at our retail network."

"This is in addition to our SmartChange Cards, which exist today. We believe, with more and more smartphones being used, such initiatives will help the consumers greatly. This will also help our booth concessionaires in bringing down the physical cash handling," added S. Nagarajan.

In the first month itself, this service will be made available at 100 Mother Dairy milk booths in Delhi NCR and will be extended to all 750+ milk booths in another month. In subsequent phases, 350+ Safal outlets will also be able to accept payment through Paytm.

ITC comes into dairy whitener market

I

TC has stepped into the dairy whitener market with its Sunfresh brand, its second offering in dairy business, after it opened its innings in this space last October with packaged ghee.

With this, the Kolkata-based company intensified its rivalry with Nestle and Amul, the two largest companies in the dairy whitener segment, which together account for more than 85% of the market.

The company has launched Sunfresh in the NorthEast, the largest market for dairy whiteners valued at over Rs 380 crore due to milk deficit in the region. Next on cards are West Bengal and Kerala, before the company takes the brand national.

More than 60% of the dairy whitener business is generated in the North-East, West Bengal and Kerala, according to Nielsen data.

The dairy whitener market is valued at over Rs 1,370 crore, and is growing at 6% per annum.

"We would soon enter few more categories in the dairy business," said B Sumant, president-FMCG business, ITC.

"Our focus is on crafting value-added products in the dairy segment which would be superior and differentiated," he said. The dairy whiteners are manufactured at Munger in Bihar, which is the hub for ITC's dairy business.

ITC had earlier said that it is exploring areas such as ice-cream, butter, cheese, curd, milkbased drinks and ready-to-mix products similar to Complan and Horlicks as part of its dairy business.

An analyst tracking ITC said the company has been entering the crowded and polarised categories in the food business and has achieved success. "ITC may give good competition to Nestle and Amul in dairy whiteners, the way it has done in instant noodles and packaged snacks," he said, requesting anonymity.

As per Nielsen data sourced from the industry, Nestle's Everyday has around 48% share and Amul's Amulya 38% in the dairy whitener segment.

Special dairy for ‘desi’ cows in Karnal

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nion Agriculture Minister Radha Mohan Singh said, his ministry had recently approved a proposal to set up exclusive dairy farms for “desi” cows, also called A-2, in Odisha and Karnataka while plans were afoot to create the same facility in Haryana’s Karnal.

government, in the last two years of it being in power, had allocated Rs 582 crore for the National Gokul Mission as compared to the Rs 45 crore allocated for cow wealth conservation and development by the previous governments in their tenures.

He along with Forest Minister Prakash Javadekar was addressing a national seminar on “gauvansh” (cow clan) and “gaushalas” (cow shed) in Karnal.

Two Union Ministers, whose departments deal with subjects of the bovine, sought help of various state governments, farmers and cow owners to help protect the animal who they said is the “backbone” of the economy.

Forest Minister Javadekar, while addressing participants from across the country, said, “My ministry is working on a plan to ensure that the “gauchar bhoomi” (grazing land for cows) is protected and government programmes such as the National Rural Employment Guarantee Scheme be utilised to produce healthy grass for cows which can be subsequently given free to farmers and people who have such livestock.”

He said the agenda for calling the seminar was three-pronged. “We have to see how can we meet the challenge of increasing cow’s productivity (in terms of giving more milk and post that), how can one take better care of cows and how can their security be ensured against smugglers and other cruel incidents (slaughtering),” he said.

A slew of measures, including creation of exclusive dairy plants for “desi” cows, producing cow fodder under MGNREGA and empowering animal welfare boards to act against illegal smugglers and slaughters, are being planned by the Centre in order to conserve “gauvansh” and “gaushalas”.

The Agriculture Minister said the Modi

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NEWS

"Danone is creating a market for yogurts and focusing on increasing the per capita onsumption"

I

n fact, be it ghee, cheese, butter or yogurt, Amul is the clear market leader in most value-added dairy categories, having quickly copied every new product launched by any competitor.

The branded ghee market, Jochen Ebert, for instance, is Rs Managing Director, Danone 5,275 crore and Amul and Sagar (Amul's second ghee brand) together command a 30 per cent market share. Amul has a 65 per cent market share in the Rs 1,000 crore branded retail cheese market (followed by Britannia and Go), and a 40 per cent share in the Rs 2,500-crore ice-cream market.

Apart from cheese, yogurt and smoothies, many of the state-run co-operatives are also looking at traditional Indian mithais. "There is a good opportunity to push healthy Indian sweets into the market that has the promise of being unadulterated.

Nandini, for instance, is pushing healthy sweets," says Nandakumar.

However, Sodhi of Amul has a word of caution for the new-age dairy companies. He says while India does have surplus milk for dairy companies to build a robust business, to be successful in India and get the much-needed volume growth, one has to have a presence in liquid milk. After all, 80 per cent of Indians consume only liquid milk. "The bread and butter has to be milk, else, the business model will not work," insists Sodhi.

Strategic investors, says Bhattacharya, understand the constraints and realise that they need to develop the market. "In the long term they want to

have a stronghold in terms of being able to supply global demand products such as whey proteins."

Private players as well as private equity players are also aware that profitability will shy away for a while. Says Srivastav: "They are prepared to be in the investment mode and that is because India has the largest pool of cow milk, which is known to be the best form of protein and is in huge demand world over."

Tricky Business While the market is immensely attractive, the one thing that could trip up private players is the fact that the milk business in India follows very different dynamics from what happens around the globe. The dairy industry worldwide is like any other profit-focused business, unlike India, where the dairy sector has a clear socio-economic development agenda. The evolution of the industry dates back to the early 1950s when the iconic Varghese Kurien laid the foundation of Amul, a co-operative model, which enabled the farmers in the Anand district of Gujarat to sell their milk at the highest possible price without interference from middlemen. This model, which empowered the farmers and converted Anand from a milkdeficient region to a milk-surplus region, became a national rage, with other states replicating it.

More than half a century later, the Indian milk industry continues to work on the same dynamics of offering a source of livelihood to millions of farmers. Over 55 per cent of the organised milk industry continues to be dominated by the cooperatives. While Amul collects over 18 million litres of milk per day (during winter the collection could go up to 23 million litres per day) and has

a network of 3.6 million farmers, Karnataka Milk Federation (Nandini), which is the second largest milk cooperative collects 6.6 million litres per day and has a network of 2.3 million farmers.

Multinationals on the other hand are used to operating in a very different way around the globe.

In western markets, dairy companies depend on an ecosystem of large corporate dairy farms and bulk of the procurement is done from a single farm. The game here is to aggregate milk from many smallsized farmers, which could lead to inconsistencies in both supply volume as well as supply quality.

"To be able to organise a supply chain for consistent supply of high quality milk, it requires deep investments and long-term commitment that start at the grass-root level," says Bhandari of Nestle.

But setting up corporate farms is not feasible in India under the current circumstances. Kuriens farmer-owned milk aggregation model is not only unique to India, but continues to be the only workable model. It enables farmers even with a herd of two or three cows to deliver milk at the nearest collection centre twice a day and get paid much more than the prevalent market rates.

The fact that the value-added products volume is still picking up and the supply chain is so complex has often frustrated multinationals. Sodhi feels that it was these factors that led to the exit of Fonterra (in a JV with Britannia) that had entered the market with great fanfare in 2001. While Fonterra is almost four times the size of Amul in terms of turnover, its strategy was just to procure milk and convert it into commodities such as milk powder or unsalted butter and sell it to dairy

companies across the globe, which in turn would convert them into value-added products. This made it a high-margin business. But collecting milk in India was perhaps too much of a logistic issue for the company, says Sodhi. Fonterra exited the market in 2004, though there are rumours that it may again come back. Sodhi feels that it exited because it was reluctant to set up its own supply chain involving multiple farmers.

Varun Berry, Managing Director, Britannia Industries, agrees that dairy business in India cannot be viable unless a company invests in a collection model. "The dairy business of Britannia is aRs 400-crore business and we are going back to the drawing board. We have ambitious growth plans in the dairy sector, but we will invest in a collection model."

Now that it is clear that it is an absolute necessity to own a procurement network, almost all private players, including new entrants ITC, have their own along the lines of the co-operatives. Even French yogurt maker, Danone, which for the first five years of its operations in India was procuring milk for its yogurts from Hyderabadbased SchrieberDynamix Dairy, has set up its own network in Punjab one year ago.

"The key criteria is to control the quality, the quantity and the price of the milk and having a procurement model is an asset. It helps if you develop strength in critical areas of your business and, I think, getting good quality milk at competitive prices is an element that is crucial," says Ebert.

Source: Business Today

Serac’s awarded Agami technology allows bottle production from pre-printed plastic sheet reels

S

erac’s groundbreaking Agami technology, which received the World Dairy Innovation Award 2015 in the Manufacturing Process Innovation category, continues to extend bottle thermoforming possibilities by enabling manufacturers to produce their bottles out of preprinted plastic sheet reels.

are very successful in the drinking yogurt market with Agami thermoforming machines that allow bottle production bottles from PS or PP reels, Serac has recently gone a step further by adapting its simple, efficient and reliable solution to the thermoforming of bottles out of pre-printed PP reels.

These decorated bottles using pre-printed PP reels

The technical challenges of this new development

were to define precisely the features required for the PP sheet as well as for the printing inks and to provide perfect positioning of the printed reel together with precise advance rate control.

For this particular application, Serac has equipped its Agami machines with sensors and sets of cameras that ensure fast initial machine setting with minimum waste, and systematically check that the PP sheet is at the right place for the next stroke during production.

With this new development Serac probably offers the smallest footprint ever for on-site bottle manufacturing, using a vertical thermoforming process and requiring no labeler or sleeve applicator.

Picture 1: Dairy drink recently launched in Turkey.

The bottle is produced out of pre-printed polypropylene sheet reels thanks to Agami technology Agami technology: machines

Dairy Times

This latest development illustrates Serac’s ability to offer innovative packaging solutions and global support to customers. For all Agami projects, Serac provides technical assistance on plastic sheet machinability as well as tests under real manufacturing conditions (pilot molds, preprinted PP). Serac also proposes a full range of services around packaging design that include bottle creation, 3D printed samples for design testing and closing system optimization.

Main benefits: • Cost efficient : economical on-site manufacturing equipment with low energy consumption ; low plastic weight per bottle ; possibility of producing bottles out of pre-printed plastic sheets (no sleeve required) • Space saving : vertical process ; bottles go directly to the filling machine (no storage tanks and unscramblers needed) • Easy to operate : easy to shut down and restart ; requires very few plastic processing skills • Versatile : PP or PS as raw material ; various design possibilities, shapes and appearances ; standard or calibrated necks Main applications : • Standard, squeezable or microwavable bottles • From 100 ml up to 500 ml • For pasteurized milks, drinking yogurts, probiotics, ESL dairy drinks, sterilized milks, UHT flavored milks...

With 3 new Agami machines recently sold in the U.S.A and Europe for PP thermoforming, Serac confirms the benefits and reliability of its innovative technology as well as a real interest from the dairy market for on-site bottles production.

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Vol. 1, Issue 03 - June - July - 2016

TECH NEWS

More than just milk: whey Swami Sundaram, product manager – membrane filtration at GEA North America molecules, making them easier to digest.

Each protein requires the addition of a different enzyme to perform the function.

The process requires the WPC to be carefully heated with the enzymes for a specified period – up to 24 hours. This breaks down the long-chain molecules, in practice predigesting the proteins. The WPH can then be spraydried for transport, storage and handling.Hydrolysis may also reduce the allergic effect of proteins for people who might beallergic to dairy products in whole form.

D

rinking milk can be processed in a variety of ways, both at the farm and at processing plants, to reduce the cost of transportation and to design arange of milk-derived products that have multiple uses throughout the dairy industry.

At its most basic, milk processing can be as simple as removing water in are verse osmosis plant located at the farm or processing plant. Whole milk can be concentrated to well under half its initial volume, reducing the cost of transportation,preparing the product for further processing and providing a potentially valuable water supply. This allows much more flexible use of downstream technology and provides a concentrated product without any of the compromises in taste associated with the application of heat during evaporation. Due to differences inregulations around the globe, processing techniques may be applied quite differently from region to region.

Microfiltration, by contrast, can be used as an alternative to centrifugation for the removal of bacteria from skim milk to create the Extended Shelf Life (ESL) milk with which we have all become familiar.These techniques have become routine in the industry. However, there are others that can be used by processors to create whole product families that have specific uses throughout the dairy industry.

Concentration Using reverse osmosis techniques, it is possible to concentrate whey, a by-product of the cheese making process. Whey can be concentrated to around 30 per cent total solids to aid efficient transport and to increase through put of fixed evaporator assets. It is often more cost effective, both in terms of capital and operational expenditure, than evaporation when lower levels of concentration are sufficient.

Carbohydrate reduction Ultrafiltration is used to reduce the carbohydrate levels in drinking milk for people who are lactose intolerant and for the production of calcium and protein-fortified drinks with reduced carbohydrates.The same process can reduce the lactose content of ice creams for a smoother mouth feel and less crystallisation during long-term storage.

If milk is ultimately intended for cheesemaking, farmers can extract excess carbohydrates, not required for making cheese,which can then be used as food for calves.

Whey protein concentrate Whey protein concentrate (WPC) is now considered to be a vital food ingredient, with applications in

food processing and specialist heath products. The proteins in whey can be isolated to create specialty products. WPC 35, for example, with a protein on solids level of 35 per cent, has the same level of protein as skim milk but is much lower cost.

This allows food processors to reduce the costs of their recipes without adversely affecting the final product.

Through further concentration of the proteins using ultrafiltration, additional products such as WPC 50, 75 and 80 have become common and perform important functions as food ingredients. Whey protein contains branch chain amino acids that are rapidly absorbed by the body to replace muscle mass. They are routinely used as a vital ingredient in infant formula,and for patients suffering from degenerative muscle wastage (sarcopenia).

Even greater purification produces whey protein isolates WPI 90, a clear product used widely in isotonic beverages consumed by athletes to both replace body fluids lost and to promote rapid recovery from muscle fatigue experienced during exercise.

To allow the isolation of whey proteins to 90 per cent purity, an additional microfiltration step is required to remov ethe lipids ahead of final ultrafiltration.Ultrafiltration, without diafiltration (with the addition of water), is used to concentrate the bulk whey feed to a purity of 35-55 per cent. Microfiltration is then used to remove the phospholipids from the concentrated feed but allow the proteins and lactose to pass through unimpeded.Permeate from the microfiltration phase is fed directly to the diafiltration plant which, as the lipids are no longerpresent, isolates the protein to 90 per centpurity and simultaneously improves the microbiological quality of the stream.

Isolating proteins Individual proteins, such as lactoferrin that can help guard against bacterial infectionand boost the body’s immune system,can be isolated from milk or whey using a combination of membrane filtration and chromatography. Ultrafiltration can be used to concentrate the whey stream a head of chromatographic separation; orchromatography can be used on the bulkfeed stream prior to ultrafiltration.

Hydrolyzed whey proteins Whey protein hydrolysates (WPH) are a family of speciality food ingredients designed primarily for people whose digestive systems are compromised, eg. premature babies whose stomachs are not fully formed. These people are often unable to effectively digest whey proteins in their raw form.

Hydrolysed whey proteins are created through the addition of enzymes to breakdown protein

Milk mineral recovery Vital minerals, mainly calcium and phosphorous, can be harvested either directly from whey or, more commonly, from the UF permeate following the concentration of the whey protein to produce WPC. The minerals recovered from milk in this way are in great demand as a high-quality, natural mineral substitute that benefits froma high bio-availability. The process requires the UF permeate, that contains carbohydrate (lactose) and minerals, to be concentrated with reverse osmosis or nanofiltration until it reaches the saturation point of the minerals: the point at which the minerals can no longer remain in solution. The concentrated permeate is then heated under carefully controlled conditions and the pH adjusted to just above neutral (pH 7.0) which causes the minerals in the saturate solution to flocculate (precipitate). The minerals can then be recovered from the carbohydrate using a centrifuge or ultrafiltration. The recovered minerals can be purified further using diafiltration and dried to create a valuable source of vital minerals obtained purely from milk.

70, MPC 80 and MPC 85 all have differentuses and progressively higher values.MPI 90 is the highest level and termed amilk protein isolate.

Milk protein concentrates are also very high in calcium as the majority of calciumin milk is carried within the casein micelles and remains in place.

As a further extension to this, microfiltration can be used to selectively concentrate casein micelles up to MCC 95 from milk and capturing native serumproteins.

These native serum proteins are free from bacteria, enzymes and colours that might be present in whey proteins originating from cheese production and exhibit a cleaner, more neutral dairy flavour profile. The concentrated casein has the property of being slow to digest,thereby extending satiety (the sensation of feeling full).

Carbohydrate separation The carbohydrate fraction, left from the ultrafiltration separation of the milkproteins, is a further milk derivative stream that has many uses. This carbohydratebased milk permeate containssoluble calcium and minerals and can beused, for example, to standardise skimmilk to give the minimum level of proteinon solids required (as an example, milkpowder standardisation). This permeate can also be further processed into pure lactose for pharmaceutical applications or as a component of infant formula.

Water recovery The process of fractionating milk creates a residual water stream that can be reused within the plant which, in some cases, can make the plant virtually self-sufficient in water. This reduces the cost of buying water from the local authority, avoids the need for drilling deep wells, virtually eliminates any effluent waste stream into aquifers, and provides demineralised water, ideal for reuse within the factory without further treatment.

Demineralised whey powder Once the whey has been demineralised(deashing with some combination of nanofiltration, Source : www.dairyindustries.com electrodialysis, and/or ionexchange) it can be used to create a range of demineralised whey powders – D 25,D50, D70, D90, etc – depending on the degree of demineralisation. These are used, for 37, Nagdevi Street, Ground Floor, Mumbai 400003 India example, in the production of infant Phone: +91-22-66312022, 23470740 Fax: +91-22-23430740, Mob: 9321096352 formula where manufacturers wish to Email: parichem@gmail.com Web: www.parichem.com control precisely the composition of minerals in the final product.

Further purification of the NF-retentateo INDENTOR/ IMPORTER / DISTRIBUTOR FOR ADITYA BIRLA CHEMICALS ( THILAND) LTD. btained from the UF-permeate in whey processing is possible to create edibleor pharmaceutical grade lactose. This Phosphate Division requires the retentate to be concentrated further through evaporation until the Pharma / Food Grade Phosphates Mono Sodium Phosphate(MSP) level of lactose becomes insoluble Di Sodium Phosphate(DSP) (super-saturated). This concentrate is Tri Sodium Phosphate(TSP) then cooled,under precisely controlled Di Potassium Phosphate(DKP) Sodium Tri Poly Phosphate(STPP) conditions,until the lactose crystallises.

Tetrasodium Pyrophosphate(TSPP) The crystals are allowed to grow until Sodium Hexa Meta Phosphate(SHMP) the density difference between them Sodium Acid Pyro Phosphate(SAPP) and the ‘mother liquor’ is sufficient to HALAL Phosphoric Acid – Food Grade KOSHER permit centrifugal separation. Mother FDA SULPHITE DIVISION liquor might be used for ethanol Pharma / Food / Photo / Tech. production by converting there maining sugars.

Sodium Sulphite

Pari Chemicals

Milk protein concentrates Milk protein concentrates (MPC) are produced by using ultrafiltration to concentrate milk proteins while simultaneously reducing the carbohydrate and soluble mineral content.

MPCs form a family of products for different purposes. MPC 40, for example,with 40 per cent protein on solids, is widely used in bakeries and for the making of confectionary. MPC 56, MPC

Dairy Times

Sodium Metabisulphite Sodium Bisulphite Potassium Metabisulphite

FOOD FUNCTIONAL BLENDS Pearl - For Sea Food Corino - For Cheese Gusto - For Meat Noodlephos - For Noodles Flour P - For Atta

PEROXIDE DIVISION Hydrogen Peroxide (Food / Tech) Per Acetic Acid (Food / Tech)

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Vol. 1, Issue 03 - June - July - 2016

OPEN FORUM

Some light on SMP pricing and trends

M

ilk

powder prices linked BM Vyas

world Ex MD Amul Anand SMP prices and domestic procurement prices estimated to be Rs.650/ kgfat at current MRP. Since January 2014 SMP prices have started dropping month after month and now it has reached lowest level since its peak in 2013.

It was expected, once EU remove quota and world dairy prices running high, production will increase in EU and that could lead to drop in prices. China, who was the biggest importer, did not lift stocks as much it did in 2013-14 and in fact Chinese demand turned out to be low due to higher

closing stocks and sluggish economy.

No one expected Russia to ban import of cheese from OECD countries. Ban forced EU dairies to divert milk from cheese to milk powder further putting pressure on prices.Even in USA due to lower grain prices and better returns on dairy production of milk, milk powder prises remained high. This put further pressure on milk powder prices.

In India, meanwhile milk and milk powder production continue to soar, as higher milk prices were paid to farmers with steep increase in consumer prices. As the flush season progressed at such high prices largely linked to pouch milk prices, and world prices lower exports was no more feasible unlike 2012-13. So inventories piled up. No one requested for support for export to government and inventories were carried forward leading to near expiry and reprocessing.

On top of it world milk powder prices continue to slide down and exports was just not viable.Russia was ready to import cheese from India as per their regulation and approved two plants but exports were blocked and protocol signing was delayed for almost two years. This prevented exports and damaged industry and farmers adversely.

Russia is one of the largest importer of cheese in the world and will continue for long time to come

due to fast growth in consumption. It was in the national interest and particularly farmers interest that opportunity was seized in time instead of almost two years of delay and dragging for vested interest of few.

Today we are at the cross road. Country is carrying 150,000 MT or more SMP in stocks. Substantial part of this is near expiry. Monsoon is imminent and is forecast at 106%. Just as I am writing this note it is raining outside just now!

There is drought in some part but worst is almost over. Rains will lead to better cow milk production followed by buffalo milk based flush.Milk powder will be consumed in place of fresh milk as long as it's prices are lower than milk.Ideally at MRP of Rs.48/=. Cooperatives should be paying 80% of its price to farmers, hence procurement price should go to Rs.630-650 per kg fat. If they do this as they say in press time and again, SMP prices can rise to Rs. 200 and above even for 33% protein powder.

As per current scene SMP prices are likely to remain steady and may rise marginally in sympathy of increase in milk procurement prices. At current MRP of milk prices procurement prices of cooperative should cross Rs.600-650 per kg fat.

Dairy Farms Will Gain In Size Rabobank

R

abobank expects sourcing of milk from dairy farmers is going to be the key challenge for processors in the coming days. Milk processors are strengthening their ties with farmers and encouraging them to grow their farm size to 50-300 cattle from the current level of 30-50 cattle.

With the strong growth in branded milk and dairy products, direct milk sourcing will gradually replace the agent-based sourcing and this will help them secure consistent supply of superior quality raw milk, said Rabobank’s recent report on Emerging Dairy Farm Trends in India.

Though share of milk procured from small and marginal farmers will decline, this segment will still stay relevant as currently 75-80 per cent of milk is procured from these farmers.

Large-scale-dairy farming with over 1,000 cattle has proved difficult to establish due to factors such as land availability, paucity of professional labour, fodder availability, ban on import of cattle, it said. Shiva Mudgil, Senior Dairy Analyst, Rabobank’s Food and Agribusiness Research, said procurement from small and marginal dairy farmers would increasingly become a challenge for milk processors and the industry will see the emergence of farmer owned dairy farms with herd sizes ranging from 50-300 cattle.

Rabobank believes that this farming trend will be driven by existing farmers upgrading to medium scale and fresh investment from private equity investors who will help the farmers in getting modern services and technologies to manage dairy farms efficiently.

Dairy Times

27

Vol. 1, Issue 03 - June - July - 2016

INTERNATIONAL NEWS

The next step for WHEY makes whey permeate outstanding is its ability to replace other, more expensive milk solids without altering the taste and texture of food products or requiring changes to processing parameters. Used as an alternative to whey powder, demineralised whey powder or lactose, whey permeate can optimise a variety of food applications.”

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lobal regulators look set to approve a global standard for whey permeate powders, which should bring new opportunities for the product. Suzanne Christiansen reports One hears a lot about whey products in the dairy industry, and as processors get more sophisticated about separating out the different products into fractions, new markets are opening up. One example of this is whey permeate, which is the byproduct of the by-product in cheese manufacturing.

After cheese production, the resultant whey is predominantly lactose but also contains any protein not retained in the cheese.

The drawbacks However, there is currently no international standard for permeate powder setting out composition and quality levels. As a result, authorities in a number of countries, including China, do not permit its use in foodstuffs. The international standards setting agency, the United Nations FAO Codex, is currently considering the position for permeate, including whey permeate powder.

Although whey and milk permeat powders were developed back in the 1980s with the advent of membrane filtration, the powders formerly lost out to lactose powders, as they suffered from an excess of amorphous lactose (sticky lactose).

However, as the drying technology has advanced, the crystallisation has been controlled and this has resulted in a powder that is now easily blendable into products.

A proposal by Denmark to develop an international standard for whey permeate was accepted and the Codex Alimentarius Commission agreed to establish a working group to revise the proposal at its 2015 annual meeting. The group is being led by Denmark and co-chaired by New Zealand. A final document is expected to possible adoption by July 2017, but some in the industry are hopeful it could be fast tracked for adoption as early as July 2016.

Dan Meyer, the technical director for Global regulators look set to approve a global standard for whey permeate powders, which should bring new opportunities for the product. Suzanne Christiansen reports the American Dairy Products Institute (ADPI), says that the Codex standard for whey permeate is currently at step three, where a draft text has been prepared, and is being sent to all member countries for comment. After this, the draft and comments will be reviewed at committee level, which is step four. Step five is where the commission reviews the progress made and agrees that the draft should go to finalization. The standard is also endorsed by the relevant general subject committees so that it is consistent with the Codex general standards. It can then go back to the governments and interested parties for a final check.

Whey permeate can be used as a fatfree carbohydrate ingredient, including as a bulk sweetener in chocolate, confectionery and bakery products. Arla Food Ingredients notes, “What

The ADPI, for its part has already prepared a US whey permeate standard, which was developed with input from Danish industry counterparts.

This may be due to the fact that North America is

Cheese manufacturers separate the protein from the whey and turn it into high protein powders such as WPC80 and whey protein isolate. The product can be dried into whey permeate powder, but the cost of drying may often outweigh the value of the product, according to research organisation, the UK Agriculture and Horticulture Development Board (AHDB).

currently the top producer of both whey and milk permeate, as it produced 470,335 metric tonnes of whey permeate powder in 2014, along with 24,993 metric tonnes of milk permeate powder, according to the International Dairy Federation.

Globally, around 733,000 metric tonnes per year of the products are produced. The majority of the whey permeate in North America is used in animal feed, however.

International value If the international markets are opened up, the value of whey permeate powder would be expected to rise considerably, making the drying process much more worthwhile. As a result, UK cheese makers that produce whey permeate as a by-product should see an increase in income, notes AHDB. Meanwhile, producers are gearing up.

Arla Foods Ingredients for example, has invested in the manufacturing of foodgrade permeate as a free-flowing powder with a pleasant and stable taste profile. It has a permeate production facility in Denmark, which manufactures kosher and halal certified whey permeate — demand for which is expected to increase in 2016. It also has joint venture facilities in Argentina (with Sancor) and in Norway (with Tine).

Morten Kaas, director general foods at Arla Foods Ingredients, says, “Permeate is a relatively new ingredient that has only been used in the food industry for the past 10 to 15 years. When the Codex standard for dairy permeate is agreed, the market will explode into life. Most significantly, we hope China will authorise its use – and if that happens it is possible that other markets in Asia will follow.”

What is milk permeate?

Milk permeate is a by-product of the milk protein concentrate (MPC) production process, formed after the ultrafiltration of milk to extract protein and fat. The product is then dried using advanced spray drying techniques. Milk permeate powder is characterised by a clean, slightly salty taste and uniform particle size. It consists of lactose, water, vitamins and minerals, according to the ADPI. Milk permeate powder is typically 80 per cent lactose (minimum 75 per cent), three per cent protein, 8.5 per cent ash plus a trace amount of fat. The total moisture level averages five per cent with free moisture at 1.5 per cent or below. It can be used

to standardise skim milk powder (SMP) and is a natural food ingredient with excellent functional and nutritional characteristics. It may be used as a direct replacement of other dairy solids in many food applications, including: bakery products and pizza crust dough; confectionery products; as a replacement for sucrose or corn syrups; to reduce the level of salt in formulated products; and for fermentation. Milk permeate can also be used for standardising skim milk or whole milk powders. Permeate can also be a source of lactose and minerals required for the development of nutritional products for the feed sector, especially for baby animals.

Make more of your milk – with Hydrosol.

You too can enjoy fast success with delicious milk drinks.Our all-incompound Hydrobest comes invarious flavours and contains all essential components for a balanc edtexture and delicious mouth feel. Fromidea to initial product, our stabilisation experts help you with the technical implementation, right at your location.

Source: www.dairyindustries.com

The fast cooling system: a major step to improve milk products’ quality

i

nternational leader in the cooling of fresh milk products. The French company assists industrial milk producers worldwide and shares its expertise.

Within the yogurt’s manufacturing process, the products’ fast cooling is the step that follows the incubation phase and which precedes the products’ +4°C storage phase.

Often unknown, this step is essential due to its impact on the product’s quality, its homogeneity and its lifetime. Today, most of india's co-op and arivate factories achieve this cooling procedure in a natural manner, which may last from 10 to 24 hours.An integrated fast cooling process will

allow for the yogurt’s cooling from 45°C to 4°C, within 4 to 6 hours.

Industrial, with home made taste & longer shelf life The benefits associated with a fast cooling system are easily measurable and regard the intrinsic quality of the dairy products.

1. The control of the yogurt’s acidity The fast cooling process, namely the decrease in temperature, from 45°C to 20°C in less than 30 minutes, will stop the ferment’s development and will fix the pH value.Stopping the fermentation process guarantees the same taste for an entire batch of yogurt and for the whole production of a single factory.When associated with a control device, a fast cooling system offers the possibility to guarantee a very precised ph level of approximately 4.4, all year.

2. A firmer yogurt’s texture A fast cooling system will also limit losses of yogurt’s water, conferring them greater firmness and thus a more homogeneous consistency.

3. An extended product’s lifetime We estimate that an Indian dairy product should be consumed within 1 to 10 days. European dairy

products can be consumed within up to 40 days. Such product’s lifetime difference is principally due to the fast cooling process adopted.

Optimisation of Quality Production and Cost The fast cooling process offers advantages for the factory’s quality.

1 A fast cooling system limits the product’s storage in cold rooms In times of high production and considering the fact that the yogurts’ temperature when leaving the factory is of 4°C, the storage of the yogurt is unnecessary. The products are ready to be sent immediately.

2. Homogeneous products of equal quality, all year round The control of the fast cooling process allows to improve the reliability of the factory’s production over time and guarantees the manufacturing of high quality products throughout the year.

Technically, the fast cooling process can be used through different technologies, for instance; cooling tunnels for a dynamic cooling process or fast cooling cells for a static cooling process.

The choice of the technology to be used will

Dairy Times

depend on the criterion established according to the current manufacturing process used at the factory and the type of product.

Technically, the fast cooling system process can be used for: -Cooling products installed on pallets -Cooling one product at a time -Displacing pallets manually -Automated pallet’s displacement etc.

These technologies are adapted for packaging weighting less than 750 grams, enabling an interesting heat exchange.Industrial equipments, the cooling tunnels and cooling cells are particularly designed for factories with production capacities of approximately 20 tons per day at minimum, hence approximately 40 pallets per day.

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Vol. 1, Issue 03 - June - July - 2016

INTERNATIONAL NEWS

SIMON SASCompany Profile

round 4,000 years ago, butter became a basic and important food. It all started, so the story goes, one hot day when a Nomad tied a pouch of milk to his horse's neck and later found out that the heat and shaking had transformed the milk into a tasty yellow product.

Interestingly, modern butter, manufactured and processed by scientific methods, has not changed very much from the earliest product and still plays a pivotal role in our daily lives. Today, France has the highest butter consumption in Europe, with SIMON SAS in Cherbourg as a leading manufacturer of butter machinery.

SIMON's history dates back to 1856 and is closely connected to Normandy, a region with a predominantly agricultural character.When Mr.

SIMON founded the company, it first concentrated on welding processes and the production of boilers. Many machines were used by farmers, and as the region was rich in dairy farms, SIMON started working on innovative machinery to make butter. Due to constant machine improvement,

Berlin wants to come to dairy farmers' aid

G

SIMON soon had an excellent reputation at home and abroad.

In 1880, it sold its first machine to Great Britain and was honored with an exportation award on the occasion of the Paris world’s fair of 1900.

ermany is planning to come to the aid of its struggling milk producers, whose livelihoods are being threatened by falling prices, with Chancellor Angela Merkel's conservative party proposing more than 200 million euros ($228 million) in public funds.

An exceptional pioneering spirit has always been a mainc haracteristic of SIMON. ln 1950, the company acquired apatent allowing the continuous production of butter, which ,back then, was an important in novation.SIMON named the machine CONIMAB. CONTIMAB symbolized a real market breakthrough.

Today, SIMON is part of the Bretèche Group. Contimab machinery remains the core of its portfolio. Besides, completing systems are offered. “Our machines are developed to satisfy different needs of the food industry,"explains Daniel SCHMIT, Sales Director. “Our aim has always been to offer more than sophisticated machines.

We want to support customers with complete solution including out standing services such as modernization,tele assistanc eorremote maintenance."80% of all product are sold abroad.lndia and Asiain general represent strong markets for SIMON with huge future potential.SIMON' latest innovation PROFLEX will again improve the butter processand further strengthen the company's leading market position

"The government is working intensively on measures that could help ease the situation on the market," Agriculture Minister Christian Schmidt told media in an interview, without specifying further.

Schmidt is calling a "milk summit" for May 30, bringing together all of the sector's players, from farmers to dairies and distributors.

Hundreds of milk farmers are seeing their livelihoods threatened by slumping prices as supply outstrips demand all across Europe.

Led by discount chains, many German distributors have cut the retail price of milk to 0.46 euros ($0.52) per litre, which producers argue is simply not profitable for them.

"It's important that we achieve a fair sharing of the burden all along the value added chain," Schmidt said.

"At the moment, it's only the farmers who are footing the bill. Dairies and distributors are still earning money."

While the minister remained vague about the

possible mechanisms that could be used, members of his conservative CDU party were making more concrete proposals.

In the mass circulation daily Bild, CDU parliamentarian Gitta Connemann suggested a possible 80 million euros in subsidies for farmers' accident insurance, plus a further 150 million euros in public guarantees for loans to farmers.

Schmidt ruled out reintroducing production quotas, which had been the norm in Europe for 30 years until they were abolished last year.

Their abolition led some farmers to expand production and a fall in prices.

To anyone eyeing a possible return to state production quotas to look back at the past, Schmidt said. "In 2009, before the quotas were abolished, we already had prices at current levels."

The market should be allowed to regulate supply and demand, the minister argued, suggesting that farmers could voluntarily cap production for periods of six months.

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Dairy Times

29

Vol. 1, Issue 03 - June - July - 2016

INTERNATIONAL NEWS

The Serap India Challenge To “Make In India” In 2004, I had my first discussion with SERAP Founder Michel Boittin & his son Chairman, Eric Boittin.Son & Grand son of French family farmers, both were engineers and Michele Janezic very concerned for developing technology to facilitate the farmer’s life and revenues.

In 1963, when Michel Boittin created Serap in France, like in India today, milk was collected in cans and ladies at the farm boiled most of it for their personal consumption, rest of it was spoiled.

In 2016, SERAP is the 3rd Manufacturing leader of Bulk Milk Cooler (BMC) in the world.

technology at the grass root level for adapting technology to improve the much needed milk collection without any compromise on quality and standard.

I convinced them that India is a business friendly country to invest in and that I would do my best to help them succeed in the implementation.

India is a challenging country to do business with.

Every step of the implementation was a challenge to overcome and also a learning experience.

Our first thought was a tie up with a local company;Serap was at ease in India, they found India very much like France was in the 60s’.

Farmers Shifting from can to cooling system.

We started importing at the time when the custom duties were so high that we had to sacrifice our margins. It was a major step to understand and then adapt to the Indian market in order to be productive. We even discovered that most of the dairies weren’t so keen to cool the Milk at 4°. We very quickly decided to assemble in India. We tested the Indian Condensing Unit in our laboratory in France; we discovered that the standard IIA2 did not exist in India, so we worked with an Indian subcontractor to upgrade the CU.

During our field survey, we realized that we had to go for a green field realization to provide India a similar quality produce by SERAP France confirming with International standards.

Their aim being to transfer to India their knowhow & technology mainly in manufacturing of stainless steel boilers for the food industry, thermal exchangers, washing systems for the tanks, and maintaining world’s best quality and environment processes, in conformity with specified international ISO 5708 standards.

The major factor in succeeding is of course the will power of Serap chairman, Eric Boittin that helped it to establish in India. Eric with his pioneering spirit that he inherited from his father validated the investment with Serap boardand mobilized a team in France to structure the project.

I started residing in India to be close and to put in place a turnkey project.

There were two serious competitors in the country; the demand for Bulk Milk Cooler was very low.

The government of India had put in place “The clean milk production” scheme, providing incentives for BMC to develop the sector, giving confidence that the Market will grow in 2007. The scheme would help in boosting the market.

The integration of Technology at the village level was achieved by active training of farmers by SERAP which included in parting knowledge about ISO 5708 for cooling performance best suited for the Indian environment.

such unprofessional and unethical competing environment adopted by some of the competitors.

India ratified the trade facilitation agreement with WTO last April, which will help in reducing trade costs and boosting its economic growth while supporting its integration into the global economy.

As a representative of ADEPTA in India and with the valuable practical knowledge gained by

We gradually recruited an Indian team for technical & commercial purposes. We were confident and we started working on the implementation of the plant.I was alone in the beginning but now SERAP India is nearly 100 people strong.

To our surprise even after we introduced the standard IIA2 in India, many of our competitors were simply not interested to adopt to the new standard in absolute contravention of the Government scheme of “The Clean Milk Production” Scheme. This situation was helping the competitors to reduce their prices and at the same time providing nothing of value to the farmers and the end user. We have tried to increase the standard of India’s milk procurement by introducing the world’s standard by working with the Government, however, our challenges remain as many of our competitors are in connivance of their friends sitting at some decision taking level often tweak the standards to suit their capabilities.

We recently discovered that few of them were even paying much lesser taxes/ excise duties, which helped them, keep their costs low.

The Indian Government’s effort “Make In India” is a noble scheme but does not take into account

On the other hand, GCMMF Management was very supportive and played a substantial role. They immediately adopted the International Technology Standard.They shared with us a lot on Procurement at the village level, to help us understand.

Also they facilitated the integration of our

www.agronfoodprocessing.com

Dairy Times

the SERAP project, I am now introducing other French Manufacturers in cold chain and FSS Packaging and sterilization for mutual benefit of these manufacturers as well as the ever growing Indian Market.

Michele Janezic SERAP India Resident Director

30

Vol. 1, Issue 03 - June - July - 2016

INTERVIEW

The drive to 2030 Q What is driving the focus on packaging sustainability?

The underlying driver is the fact that we need to find sustainable ways

of meetinga demand that is growing. Forecasts of an increase in world population to between eight and 11 billion, means that by 2030 there will be a requirement for 50 per cent more food, 30 per cent more water and 50 per cent more energy.

Finding ways to optimise the planet’s resources in meeting those demands will therefore only

Nicholas Bloch

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(September ‐7th‐9th) Venue: Nantes, France www.idfmas��s2016.com

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Interna�onal Food Tech (September 22nd‐24th 2016) Venue: Bombay E�hibi�on Center, Mumbai, India www.foodtecindia.com

Interna�onal �heese A�ards (July 26th‐ 27th, 2016) Venue: Nantwich,UK www.interna�onalcheeseawards.co.uk Indo Live Stock Expo & Forum (July 27 th‐29th 2016) Venue : Jakarta Conven�on Center, Jakarta Indonesia www.indolivestoc.com Dairy Tech India 2016 (August 26th‐ 28th 2016) Venue: BIEC, Bangalore, India www.dairytecindia.com 12th AfDa (August 31st September 2nd 2016 Venue : Kigali Mice Center , Kigali Rwanda www.dairyafrica.com Foodtech Asia (Dairy+Food) Sep 1st‐4th 2016) Venue: Lucknow India www.tofairs.com IDF Mas��s �onferance 2016

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intensify the need to ensure the packaging we use can contribute to the sustainability agenda. What is sustainable on a planet of seven billion people today is unlikely to be sustainable on the planet of 2030.

Sustainability is being driven by consumers,by businesses and by governments alike. For consumers, packaging is often high in their environmental concerns, with the excessive use of packaging a recurring theme. Businesses are faced with the need to balance new and innovative developments in renewable, durable and recyclable PET bottles while maintaining low production costs. Governments are promoting new recycling initiatives and, on occasion, backing this with legislation designed to increase the use of recycled PET (R-PET).

Q. What are the things to look at in developing sustainable packaging solutions?

It is about taking a holistic view of the whole supply chain and how the packaging contributes in sustainability terms throughout its journey from raw material to consumer and recycling. As a packaging material PET is light, safe, strong, requires much less energy to manufacture than some other packaging materials such as glass, and is also recyclable. In discussing what is meant by a sustainable package, it is important to understand that its primary function must be to protect the food or beverage it contains, and deliver it safely to the consumer and surviving all the challenges of the supply chain. Beyond that, sustainability considerations include a number of factors: • Minimising the environmental footprint of the package through reducing the use of raw materials and other resources.

• Reducing energy use or adopting renewable energy sources, especially during production and transportation.

Dairy Times

• Building recycling principles into the design stage.

• Incorporating recycled content in the packaging.

• Adopting end-of-life options, including recycli ng.

Nicholas Bloch Transportation of the product, particularly if it involves long journeys, is an important issue.

The focus on light weighting in the beverage packaging industry is about reducing the amount of raw materials used and therefore also the cost.

The issue of light weighting is also about lowering the costs and the environment alimpact of transportation.

Q. Do sustainability credentials of a product have an effect on consumer behaviour?

Awareness of packaging is at an alltime high, with a common concern for consumers being the amount of packaging used. Consumers, along with the retailers, want to know where their beverage products are coming from and how they are produced – they want recycling, recycledmaterial and like the idea of declared recycled material.

David Beardmore, category buying manager at Tesco, identified how the company categorises its customers by the environmental influence in their purchasing decisions: • Casual Greens – a group of consumers that really want to be seen to be supporting recycling. Within the Tesco universe, they make up 40 per cent of the audience.

• Passionates – a sub group of consumers who are passionate “diehards” that will go out of their way to recycle.

• Don’t cares – the outliers in the group where environmental impact does not(Contd. affect their on Pg. 31) decision making process.

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Vol. 1, Issue 03 - June - July - 2016

INTERVIEW

(Contd. from Pg. 30)

Q. What about light weighting in bottle performance?

Light weighting continues to be a focus for the beverage packaging industry, whereweignt of a PET bottle is reduced through the bottle design process. A two-litre PET water bottle that weighed 68g in 1980 now weighs as little as 42g, with the average weight of a single-serve 0.5 litre PET water bottle down to 9.9g – nearly half of what it weighed in 2000. Such a reduction in packaging content offers environmental advantages on two fronts: firstly, the savings achieved in the PET resin raw material itself and, secondly, further reducing the impact of transporting the bottles throughout the supply chain.

However, light weighting needs to recognise the need to maintain or even increase bottle performance, with taking weight out of the bottle not having an adverse effect by compromising on product quality, therefore still maintaining a great consumer experience. There have been issues with ‘over squeeze’ resulting in the spilling of contents unintentionally when using ultra-light bottles.

Q. Is there enough of a focus on recycling for PET? The short answer is no. While global recycling rates continue to improve, there is still much work to be done in post-consumer PET packaging. In Europe more than 65 billion bottles were recycled in 2013, representing an overall collection rate of more than 56 per cent (4 per cent up on 2012).

In the United States, the gross recycling rate for 2013 was 31.2 per cent, (0.4 per cent up on 2012). Recycling rates in Asia are significantly higher, although it is important to qualify this and recognise that in many developing countries a discarded PET bottle has a greater intrinsic value. For those living in poverty, the collection of discarded bottles from households or open landfill sites provides a revenue stream and this is one contributory factor in the high recycling rates of certain regions.

better re-heating characteristics in comparison with virgin PET resin, although exposure to several heat-history loops can result in discolouration.

This is due in part to the traditional mechanical methods of recycling PET bottles in which it was previously difficult to efficiently separate the contaminants, particularly dyes, from the plastic.

Food grade R-PET re-processors can improve the colour of R-PET by adopting certain measures, including screening flakes to remove particles smaller than 2mm and through optical brighteners that can be used to improve the colour of bottles.

Collection rates of recycled bottles are certainly the biggest issue. The lack of sufficient supply of R-PET means that production of bottles from 100 per cent R-PET is not yet commercially realistic.

Q. When PET is recycled, is it just used to make new bottles?

Varying percentages of R-PET are certainly used in bottle production, although this is only one of many uses for R-PET. Consumers are increasingly appreciating the recycling potential of PET. One of the most common uses of the R-PET flakes is for polyester fibre used as insulating filling for duvets, clothing and similar fabric items. Lighting, seating, desks and tables, protective mats, partitioning and screens, carpeting, blinds and window coverings – all can be created using R-PET.

Manufacturers are looking to develop new products to utilise recycled material,as the focus on reusing our resources becomes ever more important. In addition to using the PET flakes produced through the recycling process, the bottles themselves are being used in new and interesting applications, from the production of eco-bricks to construct new buildings(including schools) to a project in the Philippines in which plastic bottles filled with water, some salt and a few drops of bleach are placed in a hole in a shelter’s ceiling, with the light refracted through the bottle producing illumination equivalent to a 50-watt electric bulb.

Such environmental projects have a contribution beyond the use of recycled bottles: they add to the educational infrastructure of countries, which is fundamental to being able to develop into sustainable economies.

Q. What is next for PET? A lot of research and development is being focused on how PET bottles can be created from reuse of organic agricultural by-products. The fact that they are by-products and do not incur any food wastage or the additional use of farmland is an important factor, given the increased pressures that the growing global population is already bringing on food production. The resulting material is known

A Stanford University research programme calculated that one ton of recycled plastic saves 5,774 kWh (kilowatt- hours) of energy, 16.3 barrels of oil, 98 million BTU (British ThermalUnits) of energy, and approximately 23 cubic meters of landfill space. These figures demonstrate that the emphasis on collecting PET bottles needs to continue. The technological advances being made to optimise the use of those bottles also needs to be encouraged, building on the new recycling filtration processes being adopted to generate PET flakes in a way that is both more eco-friendly and more cost effective.

This will enable the production of more new bottles from R-PET,and also allow the R-PET flakes to be used in other applications.

Q. Does PET have any limitations in recycling capabilities?

The chemical composition of virgin PET and recycled PET is not significantly different.

Both result in bottles with similar technical characteristics. R-PET has been found to have

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Dairy Times

as Bio-PET, which can also be mixed with PET and R-PET to produce mixed PET, further extending the recycling opportunities.

Nicholas Bloch, executive VP, group communications at Sidel, www.dairyindustries.com

32

Vol. 1, Issue 03 - June - July - 2016

ARTICLE

Milk from happy cows

T

he day couldn’t be better for launching a new milk. At the Quina do Monte Inglês farm on São Miguel island in the volcanic archipelago of the Azores, local dignitaries and the press gathered to hear Ana Cláudia, general manager, Bel Portugal, discuss the French

company’s plans for this very local milk, along with several other speakers. The cows outside chewed their 20cm grass and looked generally pleased with themselves, except when visitors came to take photos – then they came over to see what was happening.

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“We are starting a new era in the milk sector and dairy in Portugal,” Claudia said. “The cows here produce the best milk in the world and today we will let you know about this wonderful milk.

However, it was all not good news from her. “World dairy production is not at a good stage and is going through a difficult phase. In the EU, the end of the milk quota has seen a surplus of milk on various continents. It is the case around the world and in Europe in particular.

Milk and dairy products have been in a deflationary cycle since 2014, and prices have been down since 2015. The current cycle is the longest one we’ve had historically. The average cost of a litre of milk in Portugal has dropped from €0.60 to €0.50, and farmgate prices have seen huge deflation, from €0.35 to €0.27- €0.28 today. This puts

farmers on the threshold of sustainability. That is why it is of paramount importance to add value.

So Bel Portugal started asking questions' she noted “We asked ourselves, where can we start creating value?”

Status now In Portugal, around 80 per cent of the market is low-value, conventional milk, with low prices, she noted. “For enriched milk, the market is so different

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and there is a great opportunity. Consumers are tending towards organic on a European level. It’s not just a plan, it’s reality. Consumers are worried about health and pay attention to protein levels in foods, which is an essential nutrient for growth,” she stated.

Additionally, consumers are looking for other things, such as flavour, a focus on animal welfare, and organic with no additives. “So the question is, is there an opportunity for these trends? These are not the low priced products, they are value added products,” she said. “What do we really want from our future? For our dairy farms, for our children, our industry?”

The solution The Terra Nostra brand is over 60 years old. “It is a real ambassador for the Azores,” she said.

“Around 46 per cent of Portuguese households buy Terra Nostra and it is well known.” Using the brand, the company started a programme two years ago to research improvements. “We studied best milking practices worldwide,” Claudia noted.

“It was very demanding and very difficult to implement, with all that it entails – sustainability and fair return for producers.” However, Bel Portugal had a significant upside, she said. “We have fresh pasture, volcanic land, and these are great conditions for high quality. We can produce milk in a very sustainable way all year round.”

New green logo The packaging has also changed, with the evolution of the brand’s identity – the logo is now 100 per cent green “like our milk,” she noted.

This will be applied across the Terra Nostra brand, which includes cheese and butter along with the new UHT milk. “The milk is more expensive than our usual milk, but it is a fair price and accessible to all. It is the biggest investment for us ever in any brand (€7 million approximately), and we’ve been working day and night. We all have a great deal of passion for this project. The key message is, the first free grazing milk has arrived and we want to raise awareness of this.”

The company is supporting the new milk with television, digital channels, and a musical, which is called musical des vacas felizes (musical of the happy cows). The firm also invited retailers from the mainland to visit dairy farmers to understand where the milk comes from, and the milk has been now been listed in all Portugal’s retailers.

The one-litre Tetra Pak package comes in whole and semi-skimmed versions. Bel is currently running about 65,000 litres per day, but the line can produce up to 120,000 litres per day.

Happy cow programme Jorge Rita, president of the Federação Agrícola Açores, spoke about the need to look at quality.

“The Azores Terra Nostra brand is associated with green land. We keep investing in this sector in this region, and government support is an obligation. It represents jobs and retains the island's population.

(Contd. on Pg. 33)

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Vol. 1, Issue 03 - June - July - 2016

ARTICLE

(Contd. from Pg. 32)

We want to attract people to the rural environment with value added products. I believe these are the right projects for the future, with returns for all the sector. I love the happy cows and I am passionate about what we have: the best milk in the world!”

Eduardo Vasconcelos is in charge of implementing the happy cow progamme at Bel Portugal. He noted, “This product emphasises the Azores. It is very well known on the current landscape and is very important to the island of São Miguel Bel Portugal collects 74.6 per cent of its milk volume from this island. We developed tools to better manage all aspects of farming, from energy efficiency to grazing, and all producers are subject to good practice audits.” The company is also investing in the archipelago’sfuture, he said. “We plan more certified products to nurture pasture grazing. We are also introducing three annual scholarships for children of farmers, to invest in the future of farming on the islands.”

Results are already showing. The firm has won an award for its practices from Compassion in World Farming, a UK-based NGO, which it will collect this month in Berlin.

Fernando Moniz Sousa, regional manager of Agricultura dos Azores, is also confident about the island’s future, even though, he says, “We have no crystal ball about the economy. We need to make a balance between the economy, environment and the social component. The dairy sector is the biggest in our economy on the islands,” he notes. “Our farmers enjoy challenges and are quite efficient in managing farms. There are many opportunities but if we are not ready, they will all escape.”

Helena Real, president of the Associação Portuguesa dos Nutricionistas, said, “It is very important to include dairy products, and the diet should be enhanced with dairy products. Milk is an extraordinary source of protein, which is fundamental to body health. It also includes lipids,vitamins and minerals, including iodine.

Milk is affordable and easy to transport and to consume." ”However, she noted there are problems with getting the message across. “Information is not passed onto consumers in the right way, and it’s important that they know that milk improves nutrition at every stage of the life cycle. It should reach professionals, nurses andother health care professionals. It has to be communicated.”

Professor José António Teixeira of the University of Minho, points out the very composition of grassfed animals is different to other cows.

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“Studies have shown that grazing milk is higher in polyunsaturated fatty acids in composition than other milks. The animal’s diet is critical to the output, and access to green grass is reflected in product quality. The presence of omega-3, omega-6 and CLP fatty acids in the milk is more favourable versus conventional milk. In Ireland and New Zealand, the grass fed cows have a nutrient composition identical to Azores milk.

Happy cows clearly produce better milk.”

Héléne Simonin-Rosenheimer, director of food, environment and health, European Dairy Association, notes that other multinational companies are moving towards certifying farmers for sustainability and environmental footprinting.

“It is very important the whole supply chain stays together – consumers look for the whole product,” she states.

Luis Vieira, Portugal’s state secretary of food and agriculture, reminded the audience of what the industry faces. “The Portugese dairy has gone from 80,000 producers down to 5,700 now.

Attrition has gone through the milk sector, and this is repeated all over the EU. We have to find the best solution in response to challenges such as the Russian embargo, and the slowdown of Chinese imports. The milk sector is one that has to be kept alive, optimistic and very determined.”

Finally, Vasco Cordeiro, president of the regional government of the Azores spoke about how

important the dairy industry is to the local economy. “These are difficult times, and it is very good that Bel Portugal is investing in Azorean milk. If we work together, it is the only way to overcome difficulties. We are Azoreans and we are very privileged living in the land we live in.

What we are doing here can’t stay in the Azores, it should reach Europe and Brussels to demonstrate that the current situation is not because of dairy farmers – Europe should be more attentive to the dairy sector. We, on ourside, are doing our best.”

Source: www.dairyindustries .com

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Vol. 1, Issue 03 - June - July - 2016

TRADE NEWS

US Fund Proterra Investment in talks to sell Dodla Dairy stake

U

S-based investment firm Proterra Investment Partners (formerly Black River Asset Management) has started discussions with private equity (PE) firms to sell its 23% stake in Hyderabad-based Dodla Dairy Ltd, two people with knowledge of the matter said.

The `1,000 crore company sells milk products across south India and Maharashtra, Madhya Pradesh, Rajasthan, Gujarat and West Bengal.

Proterra is looking for a valuation of `250-300 crore for its stake in Dodla Dairy, said one of the two people cited above. Black River Capital Partners

(Food) Fund acquired the 23% stake in Dodla Dairy for `110 crore in 2012.

Proterra has hired Edelweiss Financial Services to run the sale process, the person said. If a strategic buyer offers a better valuation, promoters of the company, too, could dilute their controlling stake in Dodla, the second person said.

Mails sent to D. Sunil Reddy, managing director of Dodla Dairy, and spokespersons for Proterra and Edelweiss had not elicited any response as of press time.

Established in 1998, Dodla Dairy procures, processes

and sells milk and milk products, including butter, ghee, paneer, curd, flavoured milk, doodhpeda, ice cream and skimmed milk powder, according to the company website.

Founded by first-generation entrepreneur Sunil Reddy of the Dodla family of Nellore in Andhra Pradesh, Dodla Dairy now sells more than 900,000 litres of milk and six tonnes of milk products per day.

In 2014-15, Dodla Dairy posted revenue of `1,024 crore, up 20.75% from `848 crore the previous year.

Dodla Dairy has also expanded to foreign markets. In 2014, it entered Africa by acquiring a milk processing asset in Uganda, which presently sells around 15,000 litres of milk daily.

“We are exploring entering Sri Lanka, Singapore, and the US in the next two-three years. We will look at the US as a production base and South-East Asia as a consumption market,” said the company’s 2014-15 annual report.

Private equity and strategic investment firms are keen to invest in Indian dairy companies to tap rising demand for milk and milk products in the country.

Demand for milk in India is expected to grow at a compound annual growth rate of 5% from 138 million tonnes (MT) in 2014 to 200 MT in 2022, according to the National Dairy Development Board.

Milk Mantra Dairy Pvt. Ltd, an Odisha-based company, is in talks with private equity firm Samara Capital to raise `200 crore to fund its expansion, Mint reported in March.

Also in March, GroupeLactalis SA, the world’s

largest dairy player, made its second buyout in India by acquiring the dairy division of Indore-based Anik Industries Ltd for `470 crore.

In 2014, Lactalis had acquired PE firm Carlyle Group-backed Tirumala Milk Products Pvt. Ltd for $270 million, the largest inbound acquisition in the Indian dairy segment.

Since 2013, the Indian dairy sector has seen 10 merger and acquisition deals worth $423 million and 16 private equity-venture capital deals worth $54 million, according to VCCedge, which tracks investment activity.

“Dairy continues to be a sought after business both for private equity investors as well as strategic investors.

The traditional dairies have been operating with several inefficiencies so there is a lot of opportunity to streamline and scale up operations, resulting in good profits,” said Dhanraj Bhagat, partner at Grant Thornton India Llp. Several private equity investors in the dairy sector have taken the initial public offering (IPO) route to exit their investments.

Last week, IDFC Alternatives and Motilal Oswal Private Equity (MOPE)-backed Parag Milk Foods raised around `750 crore through an IPO that was subscribed 1.82 times. IDFC and MOPE sold shares worth around `307 crore through the IPO. Last year, Rabo Equity Advisors-backed Prabhat Dairy Ltd went public in an IPO that saw the dairy company raise `362 crore.

International skimmed milk powder prices show signs of recovery

S

kimmed milk powder (SMP) prices, which grew by 12.1 per cent in GlobalDairyTrade (GDT) auctions last week, touching $1,867 per tonne, showed signs of recovery after a long period of dull prices owing to flush supplies. Indian industry players who are keeping a close watch on the situation as exports have become unviable from India owing to high domestic prices, feel that international prices are expected to improve from here on, which might open export opportunities in the medium-term.

Some like R G Chandramogan, managing director of Hatsun Agro, a Tamil Nadu-based private dairy player felt that the prices would continue to rise hereafter and hence post three to four months, the international prices would support exports from India. While others like R S Sodhi, managing director of Gujarat Cooperative Milk Marketing Federation (GCMMF) are more cautious and feel that while this is definitely a sign of recovery, one has to keep a close watch on domestic SMP prices as well.

In the June 1 auction at GDT, which is an auction platform for internationally traded commodity dairy products, the prices of SMP have gone up by 12.1 per cent to $1,867 per tonne. Prices from New Zealand were around $1,7452,155 per tonne range, while prices from EU participants were at $1,855-1,910 per tonne range. Indian and US dairies did not participate in the auction.

The reason behind the rise is increasing demand from China, and production drop in Australia and New Zealand where low procurement prices have made dairying unviable for farmers.

Milk production in Australia this year is expected to be to 9.55 billion litres, two per cent less than in 2014-15, and way down from the 2000 peak of nearly 11 billion litres. China is a major importer of SMP, accounting for nearly 30 per cent of the total exports from Australia and New

Zealand.

India has hardly exported any SMP this year owing to the low international prices. However, firming up of international prices might open up opportunities for Indian exporters in the coming quarters.

Currently, Indian SMP prices are ruling at Rs 165 -180 per kg for good quality powder, and as Sodhi said that the 12.1 per cent increase in GDT auction prices means that the landed cost of SMP in India would go up by Rs 20 per kg.

He also added that prices of fat have started going up in the domestic market, and lower prices have induced more consumption of SMP off late. "As such prices in the domestic market would also go up," he felt. Therefore, it would be a wait-and-watch situation for exporters who would keep a close watch on international prices before they start exports.

Auctions for dairy products including SMP, wholemilk powder (WMP), butter, butter milk powder, anhydrous milk fat etc are held twice a month.

India exports around 80,000 tonnes to 1 lakh tonne of SMP every year after meeting its domestic requirements. Last fiscal it exported next to nothing and the excess inventory helped keep consumer prices of milk in check for a long period. GCMMF (owner of Amul brand) announced a rise in milk prices from June 3 in Delhi, to be followed subsequently across the country.

GCMMF had exported around 20,000 tonnes of SMP in 2013-14 when the prices in the international circuit were high.

Analysts, however, caution that one has to keep a close watch on how the supply picks up during monsoons, which might again push prices under pressure.

35

Vol. 1, Issue 03 - June - July - 2016

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Vol. 1, Issue 03 - June - July - 2016

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Advisory Board - 'Dairy Times'

Mr. R.P. banerjee, SSP Pvt. Ltd. Faridabad

Mr. B.M Vyas Former M.D Amul Anand

Mr. Devendra Bhai Shah Chairman, Parag Milk Food Pvt. Ltd. Mumbai Dr. J.B. Prajapati Principal & Dean, SMC College of dairy Science,

Mr. H R Dave Deputy M.D Nabard, Mumbai

Dr. B.N. Mathur Former Director, NDRI, Karnal

Dr. G.S Rajorhia Former Principal Scientist, NDRI, Karnal

Mr. Vivek Nirmal M.D Prabbhat Dairy Ltd. Mumbai

Mr. V.K Ghoda Sr. Consultant, perfect solution, Vadodaar

Dr. K.R Rao Former CGM, Nabard, Hydrabad

Mr. Dileep. Dravid M.D Agro dairy & food consultancy services Anand

Dr. Ashok Patel Former Principal Scientist & Head, Dairy Technology, NDRI, Karnal EDITOR IN CHIEF Dr. J.V.Parekh

Dr. Harsev Singh Chief Exceutive Officer,

Ms. Racheline Levi Team Expert, Adepta, France

Mr. Subhash Vaidya CEO Dairy tech consultancy services Mumbai

Mr, Vijay Jailkhani Team Leader, Schreiber dynamix Dairies Pvt. Ltd. Baramati Dr. Trevor Tomkins President.Venture Dairy U.S.A

Dr. Satish Kulkarni Consultant, Bangalore

Dr. Mukund Naware Consulant, Mumbai

Dr. Suresh B Gokhale Director (Research) BAIF Uruli Kanchan, Pune Mr. Nitin Jain Aurum Equity Partners Gudgaon.

EDITOR MARKETING EXECUTIVE PRODUCTION MANAGER GENERAL MANAGER CIRCULATION MANAGER GRAPHIC DESIGNER Firoz H. Naqvi S.H.Hasni Syed Shahnawaz Gyanandra Trivedi Seema Shaikh Naved H.Kazmi 121, 1st Floor, Rassaz, Multiplex, Mira Road (E), Thane -401107. Mob: + 91-09324218405, Tel: +91-22-28115068 /28555069. Email:info@agronfoodprocessing .com, Website :www.agronfoodprocessing.com Printed, Published By -Firoz Haider Naqvi, Printed at: Roller Act Press Services, A-83 Ground Floor, Naraina Industrial Area, Phase -1, New Delhi -110028, Reg Office :103, Amar Jyot Apts, Pooja Nagar, Mira Rd (E) Thane-401107, Delhi Office: F-14/1, Shahin Baugh, Kalandi Kunj Rd, New Delhi -110025 The views expressed in this issue are those of the contributors and not necessarily those of the news paper though every care has been taken to ensure the accuracy and authenticity of information, "Dairy Times" is however not responsible for damages caused by misinterpretation of information expressed and implied with in the pages of this issue. All disputes are to be referred to Mumbai jurisdiction