Shamsuddin A. Shaikh
agenda
Challenges
Strategies
Opportunities
Pakistan Dairy Challenges
Quantity, Quality, Price
Demand/ Supply Gap S l G
• Demand continues to outpace supply • Actual production estimated to be between 20-22 bio Vs 36 bio reported. • Non-commercialized scattered farming NOT geared to achieving fast growth. No where in the world this has worked
Pakistan Dairy Challenges
Quantity, Quality, Price
Poor milk quality
Avg. TPC count in Pakistan +3 mio/ml vs. 50,000 in Middle East which is also requirement for export UHT milk shelf life
3 months (Pakistan) vs. 9 months (Middle East)
Role of middle man vis-à-vis adulteration Poor quality is major hurdle for export opportunity Processed milk goes through a number of checks versus gwala milk. Above is due to scattered farming and demand much higher then supply
Pakistan Dairy Challenges
Quantity, Quality, Price
Impact on Price
Lower avails Vs demand, creating price war Current SMP prices of US $ 2500 C&F Khi reflects milk prices cheaper than what is available in Pakistan Highly volatile local market – only savior in shape of i h f import d t t duty. Collection in Pakistan much more expensive than other countries. Lower avails versus a number of buyers.
Pakistan Dairy Challenges
Way Forward
3 pronged approach
Supply side
Infrastructure support
Quality approach
Yield improvement
Economies of Scale
Public/Private participation
Pakistan Dairy Challenges
Supply Side
Barriers
Absence of infrastructure & utilities support in milk shed areas Increased culling trend to erode herd base Dairy still part of informal sector
Recommendations
Prioritize milk shed areas for investment • Utilities access/support • T b welling programmes Tube lli • Electrification • Security issues Encourage dairy breeding farms g y g Set & enforce financing dairy targets/incentives
• Role of financial institutions/ micro-financing
Pakistan Dairy Challenges
Yield / Quality Improvement
Barriers
Genetic Deterioration Poor breeding practices resulting in low yield animal Absence of genetic p g pool records Lack of focus on imported cattle breeds
Recommendations
Establish Independent Agency Funded by Govt.; operated by Industry Govt ; Establish targets & benchmarks Establish bull pool among elite ‘progressive’ farmers Herd Registration establishing ideal type Availability of Bulls nationwide through ‘bull stations’ for AI & Rental Encourage import of cattle through subsidy
Pakistan Dairy Challenges
Yield / Quality Improvements
Barriers
Milk Price
Varying milk procurement standard Adulteration & lack of recognition of premium for hygiene Ad l i l k f ii f i f h i
Recommendations
Govt. to establish regulatory framework for milk procurement standard; policed by industry
Clear & consistent pricing structure Quality parameters policed by authorities at farm gate
Industry to enforce hygiene p y yg premium
Pakistan Dairy Challenges
Yield / Quality Improvements
Barriers
Animal Health
Poor standard of vaccines & medicines Prohibitive cost of import Lack of cold chain handling & administration
Recommendations
Tax free incentive to rural operating businesses i.e. crop i insecticide companies f l i id i for local production of l d i f vaccines & medicine
• Import substitution benefits
Medicines efficacy regulation regulatory regulation, testing/policing
Pakistan Dairy Challenges
Economies of Scale
Barriers
Low presence of Private Sector Dairy Farming
Recommendations R d ti
Give dairy “agricultural industry” t t Gi d i “ i lt l i d t ” status Establish Govt. incentives/policies supporting dairy farming for private sector Provide incentives to rural based businesses to diversify
• Crop management companies
- crop insecticide/ pharma companies - seed companies fodder production vaccines/medicines
Arrange financing incentives (ADBP/micro-financing)
Pakistan Dairy Opportunities
Livestock Population Li t k P l ti
(Million Heads)
80 60 40 20 0 33 29.9 27.4
58.3
Pakistan
1
Cattle
Buffalo
Sheep
Goat
Camel
Pakistan Dairy Opportunities
Total Investment of USD 83 Mio
Consumer Dairy D i Business
Investment USD 57 Mn Expected growth 2011 USD 100 Mn
Consumer Ice I cream Business
Investment USD 17 Mn Expected growth E t d th 2011 USD 34 Mn
Dairy Farm F Business
Investment USD 9 Mn
B2B Rice Ri Project
Expected Investment USD 35 Mn
• • Tarka , butter oil launched • Glorious industrial milk Glorious, powder launched • Tarang – liquid tea whitener introduced • 2nd milk plant at Sahiwal becomes operational • Model dairy farm operational • National distribution attained • 2nd largest milk collection infrastructure deployed
ENGRO Foods Limited formed
• First plant at Sukkur commissioned • Olper’s first brand launched – UHT milk • Olper’s first brand extension – UHT cream launched • Olwell – Fist value added brand launched – UHT HCLF
largest player of UHT industry in Pakistan • Ice – cream project approved • Commercial dairy farm launched
2nd
• Ice cream brand OMORE launched successfully • Flavored milk launched successfully • Tarang 125 ml in process • J & N in process • Tea whitening powder in process
2009 2008
2005
2006
2007
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