Professional Documents
Culture Documents
Dairy Industry
Andhra Pradesh, Telangana, Karnataka, Kerala, Fresh milk, curd, butter milk, lassi, ice-cream,
Tamil Nadu, Maharastra, Odisha, NCR
Delhi,Haryana, Rajasthan, Madhya Pradesh, panner, table butter, milk powder, flavored
Heritage ₹ 2,343.70 2.57 million Punjab, Uttar Pradesh, Gujarat and Uttarakhand. milk, UHT milk and dairy whitener
• Vision: "To become one of the largest FMCG dairy organizations with focus on health
and nutrition segments. Click to add text
• It endeavors to boost milk productivity, reduce cost of production and make it affordable
for the masses.
Source:
Source : Parag Foods Investors Presentation
PRODUCT PORTFOLIO
Cost Differentiation
Cost Leadership Differentiation
• Slurp
• NA • NA
http://www.paragmilkfoods.com/about-us.php
STRATEGIC INITIATIVES TAKEN
Source: https://economictimes.indiatimes.com/industry/cons-products/food/parag-milk-foods
STRONG PRESENCE ACROSS VALUE CHAIN
Milk Distribution
Procurement Network of 7 depots,
Relationship with over 140+ Stockiest, 3000+
Distributors –
2 Lakh farmers – Forward Integration
Backward Integration
• Regions with wet climate are favourable for setting up dairy farms and processing unit
• Co-op & Private players already offering skimmed milk and want to increase offering to Value
added Products
• Largely unorganised and untapped market where farmers can be connected to the dairy supply
chain/market
• Scope/strategy – to forge alliances with local players and sell products under existing brand name
• Mother Dairy and ITC already selling dairy whiteners in the region for some time
• Market study by PwC shows that there is immense demand for value added dairy products
(cheese, ice-cream, paneer etc)
SCOPE IN NORTH-EAST INDIA
• Existing local players( don’t have any threat to their business) will turn supportive to set up the logistics
infrastructure for new big entrants and increase production
• Government is positive towards bringing new players by providing subsidies
• Policies have been framed which allow both Indian and Bangladesh currency for business
• Existing small-time players (nearly 5-8 including co-op & private)
• Face issues like low feed supply, lack of infrastructure, low capacity of indigenous animals
• Currently satisfying need through hybrid animals which increased production
DEMAND SUPPLY GAP IN NORTH-EAST
Gap gms
Recommended milk Per capita availability of /day per Gap MT Gap in 1000' MT
State per day (gms) Milk (gms) Population person per day per year
Arunachal Pradesh 220 109 15,28,296 111 169.64 61.92
• Siliguri is the best trading centre for traders in the North East Region as it
connects the entire North East Region with the adjoining countries, such as, Nepal,
Bhutan and Tibet
• Siliguri has highly favourable climate conditions conducive to dairy farming
• Need to develop local entrepreneurs for local and neighbouring markets and adding
value to the products with a touch of glamour like souvenirs for tourists
• National Dairy Development Board (NDDB) encourages private players and helps in
creating logistics infrastructure setup
THE NEW PLANT SETUP AT SILIGURI
• Income tax exemption for five years for the new industrial units set up in the region.
• Providing 90% transport subsidies for raw material procurement and 50% for finished goods marketing
• Capital investment subsidy (CIS) at 15% of investment in plant and machinery, subject to a maximum
ceiling of 30 lakh INR will be given. Eligibility conditions will be same as in case of tax benefits.
• Interest subsidy of 3% on working capital loans will be provided for a period of 10 years. Eligibility
conditions will be same as in case of tax benefit.
• A comprehensive insurance scheme for industrial units to be designed, in consultation with GIC and
100% premium to be borne by the Indian government for 10 years.
• Bangladeshi border - No local tax would be imposed on the trading, and both Indian as well as
Bangladeshi currencies will be accepted
BREAKEVEN ANALYSIS
(Amount in ₹ crores)
Capacity of plant 75000 lpd
Total qty/ yr 75000*365=2,73,75,000 ltr
Rate/ltr 25
Annual Sales 68.4375
Operating cost 47.90625
Investment cost 30
Profit /year 20.53125
Breakeven in years 2.46
STRATEGY MAP/ BALANCED SCORE CARD
NEW ACQUISITIONS
Source : www.theweekendeader.com
ADVANTAGES OF ACQUIRING RED COW
• Ready supply & distribution channel in West Bengal and some parts of Bihar, Jharkhand
and Asam
• Additional processing capacity of 4 Lakh LPD
• Increased procurement base in the Eastern region
• Hub for distributing milk across the Eastern and NE parts of the country
Source : www.theweekendeader.com
FINANCIAL FORECAST
FY18 FY19 FY20 FY21 FY22 FY23 FY24
Sales 1,924 2,116 2,828 3,181 3,579 4,026 4,601
Depreciation 49 49 60 65 67 75
70
EBIT 142 138 343 419 511 458 565
Interest 35 34 55 90 85 80 75
http://www.paragmilkfoods.com/about-us.php
REBBL PRODUCTS
https://rebbl.co/
NEW PRODUCT LINES
Ice Creams
• Ice creams are easy to make and sell in paper cups or plastic containers. They maximize sales as they are
sold through different channels and outlets. But India has many major players in this field like Amul,
Mother Diary, Havmor Vadilal, etc.
• Therefore for Parag to enter into ice creams, it can only look for acquiring stakes in existing ice cream
brands. The prospective brands can be Vadilal or Dinshaw.
• Vadilal is a prospective brand because it’s recent performance and drop in share price gives Parag the
chance to restore this ice cream brand.
• Dinshaw is a prospective brand and is popular in Maharashtra and Central India. Since Parag also has a
strong hold in these regions, they can easily enter into the ice cream field through this acquisition.
NEW PRODUCT
LINES
Yak Milk
• Yak milk is rich in calcium and iron than
cow’s milk. It has high levels of amino, fatty
acids and antioxidant vitamins.
• Yak is predominantly found in the Himalayan
regions of India.
• Based on the plan for expansion to the
North Eastern region, Parag can start its
supply of Yak milk. The milk can be procured
from the local yak breeders, processed,
bottled and sold under its wing.
https://www.thebetterindia.com/173064/milk-cow-camel-almond-coconut-yak-goat-soy-coconut-alternative-india/