A

Global Country Study Report

On

“A STEEPLED Analysis of Dairy Industry of Bangladesh for Business Opportunities for

Gujarat/India”

Under the Guidance of :-Prof. (Dr.) Mamta Bharmabhatt

(Associate Professor MBA-SJPI)

Prepared By:-Student Of MBA Sem.-III

Group No: - 4

Submitted to :-Institute Code-769

SHRI JAIRAMBHAI PATEL INSTITUTE OF BUSINESS MANAGEMENT & COMPUTER APPLICATIONS

Offered By :-

Gujarat Technological University-Ahmadabad

OVER VIEW OF BANGLADESH

Position of Bangladesh

Demographic profile

Population

Total Area

Growth Rate

Life Expectancy

Fertility rate

GDP per capita

GDP Growth Rate

HDI (2013)

Currency

ImportExport

154.7 million(2012)

147,570 km^2

1.59%

70.36 years

2.6 children born/woman

US $1,044

6.5%

0.515

Taka

$29.27 billion (2013)$30.25 billion (2013)

Basic Information of Bangladesh

• Emerged as independent and sovereign countryin 1971.

• Official Name : The People’s Republic ofBangladesh.

• State language : Bangla, over 98% of the peoplespeak in Bangla, however, English is widely spoken.

• Nationality: Bangladeshi

Nature of government

Bangladesh has a Unitary form of government:

President is the Head of the state .

Prime Minister is the Head of the Government.

National symbols

Bangladesh Anthem Amar Shonar Bangla

Animal Royal Bengal Tiger

Bird Oriental Magpie Robin

Fish Hilsa

Flower White Water Lily

Fruit Jackfruit

Sport Kabbadi

Calendar Bengali calendar

Goals for this discussion

■Provide an overview of project objectives/approach

■Review the expected evolution of the global dairy industry and the implications for Bangladesh dairy

■Discuss strategic options for the Bangladesh

■ Recommendations for developing the appropriate option

Gender Rationale

•Women’s current role and relative ability to engage – low barriers to entry.

• Proximity to HH and relatively low labor requirements .

• Potential to build on cultural legacy that valued women’s engagement in dairy as an economic activity – combating current norms and trend toward male dominance as dairy sector matures.

Why Dairy?..In Bangladesh

Economic Rationale

•Growing demand in urban markets for fresh milk.

•Growing investment in infrastructure and processing capacity across private sector.

• poor households already involved in dairy.

• Potential for doubling income for impact groups.

Other Factors

* Nutritional value * Supportive enabling environment * Potential for Scale

Project Context

Bangladesh has 3rd highest cattle population in Asia

Demand for milk is much greater than supply, therefore the opportunity does exist

5 competing private sector processors. However with a population of 147 million, the competition pressure is not that strong either.

All processors with short-term thinking and not seriously investing in the sector to improve production

All processors have chilling plants that are under-utilized

Low transparency in milk buying process, particularly fat content measurement Project Context

Poor milk production Feed / fodder, Animal Breed and Animal Health are the key reasons

Informal milk collectors act as middlemen and aggregators

Char households and frequent floods present an additional challenge

Main Factor At STEEPLED Analysis

Political

Taxation policy

Trade reg ulations

Government stability

Unemployment policy

Goverrnment legislation

Government policies

Government stance on competition

Relevant laws

International relations

Social- Culturel

Age distribution

Education level

Income level

Population growth

Life expectancies

Economic The general economic situation in the world

International economic organizations

Business cycles

Inflation and exchanges rates

Economic growth and changes in GNP and GDP

Interest rates

Tax rates

Resources of money and credit, insecurity status

The existence of labor force

Energy existence and cost

Unemployment levels

Technological Technological changes

Innovations

Speed of technonogical changes

Research and development expenditures

Improved communication and knowledge transfer

SOCIAL - CULTURAL FACTORS :

The macro social-cultural environment analysis willidentify trends in societies beliefs, behaviors, valuesand norms. Such as the number of workers, attitudestowards global warming, make up of the familystructure. Some of the social – cultural factors are as follows :

Age distribution Education level Income level

Population growth Life expectancies Religion

TECHNOLOGICAL FACTORS :The macro technological environment analysis willidentify changes in the application of technology. A current example is a shift towards online transactionsand in some areas a shift away from online transactions. There are some technological factorsthat affect macro environment analysis are as follows:

Technological changes Innovations New or improved channels Speed of technonogical changes Research and development expenditures Improved communication and knowledge transfer

etc.

ECONOMIC FACTORS :The macro economic environment analysis will identify trends such as changes in personal disposable income, interest rates, inflation andunemployment rates. Typically we encounter the economic factors are as follows :

The general economic situation in the world

International economic organizations

Business cycles

Inflation and exchanges rates

Economic growth and changes in GNP and GDP

Interest rates

Tax rates

Resources of money and credit, insecurity status

The existence of labor force

Energy existence and cost

Unemployment levels

ENVIRONMENTAL FACTORS

Ecological

Climate

Natural resources

Telecommunications

Environmental regulations

Values in the Society

POLITICAL FACTORS :The macro environment analysis will identify changes in theposition politicians take on issues. A current example is a shift towards greener policies in the developed world. Someof political factors are as follows :

Taxation policy

Trade regulations

Government stability

Unemployment policy

Goverrnment legislation

Government policies

Government stance on competition

Relevant laws

International relations

LEGAL ENVIRONMENT

Current legislation in the home market

Future legislation

International legislation

Regulatory bodies and processes

Environmental regulations

Over View Of Dairy – West Bengal

The Directorate of Dairy Development, Govt. West Bengal deals with the collect of raw/chilled

milk from the Co-operative Milk Unions in West Bengal, process the milk in its dairy plants sells,

pasteurize and homogenized milk and other milk products through its own network of booth,

Serves, agents and distributors. With the implementation of Operation Flood Programmed in West

Bengal in the mid-1970s, the extension, procurement and other farmers related activities on dairy

development have been taken by the Cooperative Sector i.e. West Bengal Co-operative Milk

Producers' Federation Ltd which establish in 1983 under Government of West Bengal following

a three-tie structure of Anand pattern of milk cooperatives..

Indian Dairy Industry World largest milk producing nation. contributes about 15 % to the total milk production

of the world Indian dairy industry stands at a size of US$ 70 billion. Gross output of 103 million tons of milk in 2009.

(Growing 5 % per annum) 57 millions of cattle population and 39 millions of

buffaloes. (1997) More than 10 million dairy farmers belong to 96,000

local dairy cooperatives, who sell their products to one of 170 milk producers’ cooperative unions who in turn are supported by 15 state cooperative milk marketing federations.

Indian Dairy Industry has achieved this strength of a producer-owned and professionally-managed cooperative system, despite the facts that a majority of dairy farmers are illiterate and run small, marginal operations and for many farmers, selling milk is their sole source of income.

In India dairy industry has been practiced as a rural cottage industry over the years. Semi commercial dairy industry stated with establishment of military dairy farmers and co-operative milk unions in 19th

century.

The growth of Indian dairy Industry during last three decades has been impressive, at more than 5% per annum; and in late 1990-2001 the country has emerged as the largest producer of milk.

Management Strategies

Management of Indian dairy industry is done by 2 different parties.

Private dairy managementCooperative management –MACS, State

National Policies regard with dairy industry

India’s national policies with regards to economy, Agriculture, rural development and dairy and milk industry are the major secrets for their successfulness in dairy industry.

In India people who are involving with policy making are well educated people and they have both theoretical and practical knowledge about the dairy industry.

When making the policies regard with dairy industry they have taken most suitable decisions before 2, 3 decades.

These policies are clearly defined and they were prepared as suitable for forecasted future needs.

Therefore these policies do not change with time to time when governments change.

Basic thing is politicians could not change them according to their political agendas.

They have linkages among different policies such as economy, Agriculture, rural development and dairy and milk industry policies. Also they make policies as cooperatively each other.

Their policies are well focused on long term goals.

They define most suitable strategies for achievement of them.

POLICIES

•IDDP- Intensive Dairy Development Programme

Development of milk cattle.

Increase milk production by providing technical input services.

Procurement, processing and marketing in cost effective manner.

generate additional employment opportunities.

To increase the social nutritional and economic status of residents of comparatively

more disadvantaged area.

•Assistance to co-operative scheme (ACPS)Revive the sick dairy co-operatives.

•National Programme for cattle and buffalo breeding (NPCBB)Genetic up gradation by organized breeding through Artificial Insemination or

natural service of a high quality bull.

•Dairy venture capital fund scheme: (DVCFS)Aim to promote ventures in the dairy sector.

•National dairy plan: (NDP)To increase the milk production to about 6 mt annually by 2021-22.

SWOT ANALYSIS OF Dairy: West Bengal

Strength

There is a ―readymade‖market for this product.

Relatively low labor costs

Ample available work force.

Well-situated industrial estate with all major facilities available.

Weakness

The requirement of credit and/or delay of payments from customer side mightcause disturbance in the cash cycles.

Very small base of available skilled machinists.

Lack of trained technicians and line / middle management.

Uncertain investment climate

Opportunities

Manufacturers-cum-exporters are allowed to import samples of eachkind or quality having value up to US$ 100 at zero duty rates.

Threat

Skilled operators in the dairy are quite unorganized.

• Cost of doing business may increase as the energy, raw materialprices, wages and mark up rates may rise.

Strength Weakness

Largest milk producer in the world.

A huge base of around 11 million farmers

Traditional emphasis on consumption

Poor feeding practices.

Poor access to institutionalcredit

Lack of cold storage facilities

Opportunity Threat

Elastic demand; economic growth will spurdemand

Increasing preference for branded dairyproducts

Growing focus on health and nutrients inurban market

Nearly 85 per cent of the Indiandairy industry is unorganized

Removal of import duty has ledto the threat of dumping

Swot Analysis

SWOT ANALYSIS – Dairy In India

As Bangladesh what we can learn from India? We can find out several strategies of India which are also applicable to

Bangladesh. The basic strategy is we should have a clear policy for development of dairy

industry in Bangladesh. As Indians policies it should contain long term goal with strong methodologies which cannot be change by time to time.

Formulating of policy should be done with competent persons, not politicians. We should develop and save our indigenous cattle breeds. Even though they

give low yield it is easy to mange them with local conditions. In India cross breeds represent only 10% of cattle population. Still we highly depend on European context and they are not suitable to dry and intermediate zones of Bangladesh.

Also we should pay more attention to develop buffalos raring in Bangladesh. They can adopt easily to our climate. Also their tolerance is high. Indians get more than 50 % of their milk production with buffaloes.

As we think cooperative dairy associations are also Suitable to Bangladesh . We can start them on village level under the guidance of National Livestock Board.

There should be proper system to value adding for milk products and marketing them. We can get the help of private sector on that case.

DAIRY – VALUE CHAIN

SOURCE- USDA

SUMMARYGrowth of Bangladesh in agro industries is because of its rich deltaic fertile land that depends on its manifold harvests & six seasons also on. The country's industrial base remains very positive. The service sector has developed rapidly during last twenty years.

The legislative & regulatory actions to deal with financialirregularities & poor governance of the financial sector aredeveloping over time to gather the increasing protection needs ofthe consumers. The following measures may be considered as part ofon-going efforts to expand financial infrastructure & improve thesecurity & soundless of the financial sector.

References

http://www.aavinmilk.com/dairyprofile.html

http://www.fao.org/docrep/T3080T/t3080T0a.htm

http://www.ijtef.org/papers/92-F502.pdf

http://www.technopak.com/resources/Food/PPP%20in%20Indian%20Dairy%20Industry_Technopak_CII_Background%20Paper_May08,2010%20pdf%20ver.pdf