Indian Dairy Association | Indian Dairyman

Dairy Farming Sweeping Across the Punjab

Dairy farming has become a lucrative business in Punjab as milk marketing turns intensely savvy and includes processing units and cold storage chain. To encourage the business dairy farmers are now hired to increase their livestock of cows and buffaloes. They are all set to emulate the Anand experiment of Gujarat and herald another White Revolution. Under the Anand model, Gujarat’s rural hinterland became a rich source of milk. So a milk revolution is sweeping across Punjab’s rural landscape. The Government has started training programmes in artificial insemination and other area so that young farmers can take advantage and turn into entrepreneurs.

The Government also finalized a plan to encourage commercial dairy farming by extensively using crossbreed cows to make dairying a financially-viable proposition for the farmers. Keeping in view the keenness of farmers in running commercial dairy farms a large scale, the state would provide loans at cheaper rates from cooperative banks and give technical guidance. The emphasis has been on the latest trends in dairy farming technology, cleanliness and quality products. All these activities are integrated under the cooperative system of milk marketing cooperative federation, Milkfed. These include setting of dairy farms to rear livestock of milch cattle, milk production, collection, preservation and marketing. Milk collection centres have been set up for farmers who want to supply milk to the cooperatives.

Cold storage chain management and safety standards area top priority for the white revolution in Punjab. They are provided several facilities such as cooling transportation and marketing. The farmers are also planning to export milk products to countries in the West and West Asian countries. This drive will get an impetus because of the trend of young milk farmers who are establishing bigger dairy farms.
Hatsun in Process of Doubling its Production Capacity

Hatsun Agro Product Ltd. is in the process of doubling its milk powder and ingredients production capacity with an investment of over Rs. 90 crore, which would also enhance milk procurement capacity significantly, according to Mr. R.G. Chandramogan, Chairman and Managing Director.

Milk ingredients business including the skimmed milk powder and milk-fat products accounts for nearly a fifth of the business for the Rs. 600 crore company. With the ongoing expansion plan, the business would grow as a share of its turnover, and make it a significant leader in the export business.

Hatsun’s 60-tonnes-a-days milk powder plant is set to commence production by the year-end. Work on the plant has started at Krishnagiri, in addition to its existing plant, at Kanchipuram, where it has another 60-tonne plant. It would double its milk powder production capacity. Also, these facilities each add another 30 tonnes a day of other milk ingredients milk fat such as ghee and butter. This would mean the company's total milk ingredients capacity.

Hatsun Agro, subject to statutory approvals and clearance by the shareholders, plans to raise about Rs. 12 crore through a preferential allotment to individuals and financial institutions. This would be to fund the milk powder plant investment, with the rest coming from internal accruals and debt.
Vadilal to Go for Its Frozen Food Business

Ahmedabad-based Vadilal Industries, which has an ice-cream manufacturing capacity of around 2,30,000 litres per day also has plans for its core business.

It is all set to ramp up its frozen food business. The company plans to launch frozen naan and tandoori paratha under the Quick Treat brand name within three months. South Indian foods items like dosa, idli and uttapam are also on the cards.

Mr. Devanshu Gandhi, Managing Director, Vadilal Industries says, “In the first phase, we will launch the items in export markets like US and European countries like UK. Subsequently, we will explore the domestic market. In the second phase, we will tie-up with domestic retail players to market the frozen food.”

Vadilal Industries enjoys big market share in Haryana, Uttar Pradesh and Uttaranchal. The company posted Rs. 170 crore-turnover last fiscal and as a target of a turnover of Rs. 90 crore this year.
Nabard to Open Liquidity Assistance to Cooperatives

National Bank for Agriculture and Rural Development (NABARD) will open a special liquidity assistance window for cooperative credit institutions, including State Cooperative Banks (SCBs), to tide over any tight resource conditions arising out of implementation of the farm debt waiver and relief scheme.

NABARD, Executive Director, Mr. S.K. Mitra said, "NABARD is the refinancing agency for rural cooperative organizations. If the cooperative banks face resource constraints in the course of implementing the scheme, we will make finance arrangement to ensure that working is not affected."

The refinancer could borrow from the market to provide assistance to cooperative entities. It has already raised over Rs. 100 crore through one year paper that carries a 9.3 per cent coupon rate. These bodies have already availed credit and have repayment obligations. In case they find it difficult to pay the installment, the repayment time table could be rescheduled.
Ida Kerala Chapter Organised Seminar

Indian Dairy Association, Kerala Chater in Association with College of Dairy Science and Technology, Mannuthy, Thrissur organized a workshop on “Role of Livestock in Rural Development” on May 3, 2008 at Mannuthy. Dr. N.S.R. Sastry, Professor Emeritus, Dr. C.K.Thomas, Retd. Director of Academic & PG Studies, Kerala Agricultural University, Dr. R. Rajendrakumar, Associate Dean, College of Dairy Science & Technology and Dr. P.C. Saseendran, Professor & Head, Dept. of Livestock Production Management presented papers and led the discussions in the workshop.
SSP Bags Order for Milk Powder Plants from Pakistan

SSP (Pvt) Limited, has received order for two Milk Powder plant of 20 TPD each, worth 3 Million USD from Dairy majors of Lahore & Karachi. SSP will supply entire milk powder plant, which includes five effect evaporator, two stage dryer & lacithination system for production of instant WMP. This will be SSP’s fourth export of Milk Processing Plant to Pakistan. SSP has supplied to its credit more than 70 milk processing & powder plants, across the globe.
Vedram & Sons Pvt. Ltd. Organised a One-day Seminar at Sahibabad

Paras group organised a one day seminar at their Sahibabad dairy plant in Ghaziabad on 4th June 2008 as a management development programme for development of new probiotic drinks with technology, with the close involvement and technical presentation by Ms. Nandi Kandarajah, technical services manger-Asia Pacific, DSM Food Specialties, Mr. K.V. Subheesh, Food Specialist of Duke Thomson and Mr. Joseph Thomas, CEO Duke Thomson's India Pvt. Ltd. The three subject specialists including a total number of 25 management staff/ participant from all the three Paras Dairy Plants gave technical presentations on the application of various cultures; Mother Culture and how to keep them safe from phase contamination, fermentation and enzymes technology, Probiotic drinks; Probiotic Yoghurt drink, Yoghurt with fruits and sweetened lassi and curd etc.

Paras Group is prepared to have a separate R&D section so as to use new technology which stimulates growth of other microorganisms like Lactobacillus Casei and Lacto - acidophilus and different strains of bacteria which increase the immunity against infection. Amul, Mother Dairy, Danone, Nestle and Yakalt are the major global market drives for Probiotic Dairy products, digestive health, weight control formulation. Paras Group also aim to become part of this market drives. Thus, Probiotic can play a major role in combating health ailments like gastro, intestinal disorders, diarrhea, Constipation, Antibiotics Pre/Post treatment, allergies and anti cancer effect etc.
Danisco to Open New Units in India

With an investment of USD 6 million, Danisco is opening up two new separate manufacturing units for functional systems and for enzymes to serve South-Asian customers.

The investment consists of manufacturing plants, laboratories and offices and will enjoy additional 20 people in India. The laboratories will provide dedicated and tailor-made support to the local customers and deliver products specific to the needs of the Indian industries. India, being the largest milk producer in the world with an annual production of more than 100 million tones and a growth rate of 3.8%. has a huge potential for value-added dairy products; the functional systems plant will initially produce blends for the ice-cream market and will then move on to other dairy products.

Mr. Anders Wilhjelm, Executive Vice President, Gums & Systems says, “India is an important growth market to Gums & Systems. It’s exciting to witness a market of 1 billion consumers experiencing good economic growth. As an ingredient leader we want to be at the forefront of this development and assist the Indian food industry in this growth story.”

The plant will primarily produce enzyme blends to service the markets of animal nutrition, food and beverages, fuel ethanol, grain processing, laundry detergents and textiles.

Mr. Wilhjelm says, “We also consider it a first step in a series of developments that will enhance our commitment to the various industries we serve in India by adding more of our industrial biotechnology capabilities and enzyme manufacturing capacity, our goal is to expand significantly in this emerging market.”
Inflation Adds to Woes to Dairy Farmers

Inflation has helped the already high fodder prices shoot up, leaving milk farmers gasping. The earning of the farmers is next to nothing given the high cost of production. The recent inflationary trends have only added to their woes. The molasses used by the cattle-feed industry attracts central excise duty at the rate of Rs. 500 per million tonne since 1998. The levy has increased the animal feed cost by 60-75%. The farmers are unable to bear this burden. Hence, many of them have discontinued using compounded feed. This ultimately results in low milk production and affects the poor and marginal farmers.

Agriculture Scientist, Prof. M.S. Swaminathan says, “Today, a bottle of mineral water costs as much as milk. The rise in prices affects all consumers, two-thirds of whom are producers. So, unless their incomes grow, anti-inflationary measures make no sense.”

In Karnataka and Andhra Pradesh, the government has intervened to cushion the dairy producers against inflation by raising the support prices marginally by Rs. 2.50 and Rs. 1.50 respectively. Rajasthan too has taken similar incentives. The milk producers are turning to the private sector as well as to the-user for better prices, wherever it is possible.
Dairy Industry Seeks Export Tax in Cattle-feed Ingredients

Domestic dairies have sought the imposition of a 20 per cent duty on export of oil-meal. In this concern, Mr. B.M. Vyas, Managing Director, Gujarat cooperative Milk Marketing Federation Ltd. (GCMMF) says, “If the Government is really keen to keep milk prices under check, it should discourage export of ingredients and extractions used in the manufacture of cattle feed. We are not asking for an outright ban, but only a 20 per cent export tax so that our dairy farmers get cattle feed at affordable rates.” Mr. Vyas added, “We are supplying compounded cattle feed to our farmers last year at about Rs. 5,500 a tonne. But with ingredient costs going up considerably, the price of cattle feed today is over Rs. 7,000 a tonne.” On the other hand, the WPI for milk has gone up by 9.32 per cent, which is much below the increase recorded for cattle feed and oil meals.

The Centre, on April 17, withdrew the nine per cent Duty Entitlement Pass Book (DEPB) benefit on casein exports, along with the five per cent concession given on the free-on-board price for export of SMP and other milk products under the Vishesh Krishi Upaj Yojana (VKUY) scheme. Simultaneously, on April 29, if also announced a reduction in the basic customs duty on SMP from 15 per cent to 5 per cent (on import of up of 10,000 tonnes under the tariff rate quote regime) and on butter oil from 40 per cent to 30 per cent.

The dairy industry is of the opinion that the latest moves were an over-reaction on the part of the Centre. Unlike rice or edible oils, there is hardly any domestic shortage in milk, it claims, citing the fact that GCMMF’s average milk procurement had increased from 67 lakh kg per day (LKPD) in 2006-07 to over 75 LKPD in the fiscal just ended. Similarly, companies such as the Chennai-based Hatsun Agro Product Ltd. Have seen their procurement go up by 3.5 LKPD.
States Seek Centre Nod to Levy 4% VAT on Imports

State governments have asked the Centre to take necessary legislative action in the monsoon session of Parliament to give them power of levy 4 per cent value added tax VAT on imports.

They have also suggested that VAT on imports be collected by Customs authorities at the entry point and the revenue transferred to destination states for efficient administration of the tax.

Under the Constitution, only the Centre has the power to tax imports and exports. Therefore, a Constitutional amendment is required to give this power to states. The Empowered Committee of State Finance Minister recently discussed the matter relating to empowerment of states to levy tax on imports and recommended necessary action.
“VAT on imports will be part of a larger package to compensate states for central sales tax (CST) revenue loss,” said a source.

By the time the Constitution is amended, the details of which imported items will attract VAT will be finalized. Sources said items which have a bearing on the local market are likely to attract VAT. CST is a central tax, but collected and appropriated by states. The centre and states have agreed to phase out CST before 2010 by reducing the rate by 1 per cent annually. Accordingly, CST was cut to 3 per cent from 4 per cent in 2007-2008, and was to be slashed to 2 per cent from 3 per cent on April 1, 2008.