Analysis fo the Dairy Industry in Pakistan

Analysis fo the Dairy Industry in PakistanIntroductionThe prospering dairy farm farm pains of the realm seems an embryonic market for mark dairy results, especially in the urban beas, where brand and jammed draw, curd and moreoverter atomic number 18 rapidly capturing the market. In fact, the consternation of adulte proportionalityn, germs, decades-old style of im correct handling of dairy produces, curiously rid draw and curd by drawmen and shopkeepers, are impelling a large number of consumers in the country to bid adieu to the traditional drawman. Consumer preferences break changed in the favor of packaged dairy products, which tick off better hygiene and good value for m matchlessy. In Pakistan when we talk round(predicate) adulteration in loose draw. These kinds of fears and health hazards relating to loose dairy items are steadily changing the mind bent grass of the consumers. Seeing this change and an terrible untapped potential of growth in packaged dai ry products in the country in future, some(prenominal) local and multinational companies perk up introduced their brand dairy items in the repenny past. In Pakistan, when someone negotiation about branded milk and curd, the name of Haleeb and nestle comes to the mind of the people as they have emerged as two strong market leaders, who have swiftly captured the unexplored business of packed milk, curd, butter, margarine, and so on The result of these two brand leaders in the country has also encouraged several others to introduce branded dairy products. At present oer a dozen companies are actively marketing branded dairy items in the country and among them the some famous are CDL Foods Limited, Bhaipheru Idara-e-Kissan, Pattoki Kabirwala Dairy Lahore milk Plant, Lahore Millac Food (Pvt) Ltd., Lahore Monnoo Dairies, Bhowana Nestle Milkpak Ltd., Sheikhupura Noon Pakistan Ltd., Bhalwal Pakistan Milk Food Manufacturers, Jhang Prime Dairies, Manga Royal Dairy Products, Karachi Ravi Dairies, Jaranwala and Unilever Pakistan Ltd., Sheikhupura, Bhaipheru, Karachi. Besides marketing milk and curd nigh of the companies are selling dairy products with innovation such as yogurt (natural and flavored), sweetened milk, UHT and pasteurised puzzle out, butter, ghee, cheese and ice cream. In Pakistan Nestle is a dandy success story for establishing the largest milk collection mesh topology and setting new trends in dairy welkin. On the one hand, it has proved a regular informant of income for farmers through an assured and growing income resulting from the sale of their milk, and on the other, it has enabled Nestle to collect better quality milk in the quantities it needs. The basic unit of Nestle milkmans milk collection agreement is the Village Milk accrual Centre where farmers deliver milk, morning and evening. A trained milk collection agent who tests and records every provision for quality and fat content collects the milk. Over iii thousand such pennyres operate throughout Punjab. This milk is then transported to the besideest sub-centres for mechanical chilling and then to the main(prenominal) centres where it is consolidated and chilled further, before universe transported in specially designed insulated tankers to the factories in Sheikhupura and Kabirwala. According to background, dairy is one of the growing segment of livestock sub-sector and pregnant component of Pakistans economy. Pakistan is the fifth largest producer of milk in the world. The per capita availability of milk at present is 185 litres, which is the highest among the receivable south Asian countries. Milk output signal in Pakistan has seen a constant enlarge during the locomote two decades. The achievement has increased from 8.918 million metric tons in 1981 to 27.031 million metric tons in 2001-02. Milk mathematical product for the year 2002-03 is estimated at 27.811 million metric tons. Investment Prospects There is a large and untapped potential in the dairy industry. With a population of 160 million, a significant motive for dairy products exists in Pakistan. There is a need for establishing modern milk outgrowthing and packaging facilities based on advanced technology to convert abundantly available rude(a) milk into high value totaled dairy products. In addition, with improved conditions for milk pasteurisation, availability of chilled distribution facilities and consumer preference for the low apostrophize pasteurised milk, the sector provides unique opportunity for investment in establishing pasteurised milk doing plants. There is also great scope for establishing related industries in the form of an efficient milk collection system and refrigeration deportee facilities. The sector offers opportunity to foreign investor for establishing a joint venture for the return of dairy products, particularly dried milk and infant formula milk for which great demand exists in the neighboring countries like Iran, UAE an d Saudi Arabia. The dairy industrys main ingredient is milk, which is impact at the dairy plants to produce variety of dairy products. The comely daily production of milk in Pakistan is estimated at approximately 95 million litres. Punjab is the leading land in milk production with a share of around 80%. Out of the total production of 95 million litres of milk per day, about 55% is consumed at source in the countryside while the stay 45% is traded in urban centres. Most of the traded milk is marketed un- graceful and currently however about 2.5 to 3 per cent of the traded milk is neat by the dairy industry in Pakistan. Processed liquid milk in the form of Pasteurized or Ultra Heat Treated (UHT) milk is the main dairy product in Pakistan while other products include run dry Powdered Milk, Cream, Butter, Butter Oil, Yogurt, Cheese and ice cream. Presently, about 13 units in the organised sector are engaged in the production of respective(a) dairy products. Majority of the dair y plants are located in the vicinity of Lahore, which serves as the hub of this industryMilk treatOut of the 28 million tons of milk produced in Pakistan, only 2.5 to 3 per cent reaches the dairy plants for bear upon into variety of dairy products. Pakistans dairy industry produces Ultra Heat Treated (UHT) Milk, Pasteurized Milk, Dry Milk Powder, and Condensed milk. another(prenominal) major milk products produced by the dairy industry include butter, yogurt, ice cream, cheese, cream and some butter oil. Approximately half of the 0.3 million tons of milk available to the industry is processed into UHT milk, 40 percent into powdered milk, and the remaining 10 percent into pasteurised milk, yogurt, cheese and butter etc.Dairy plants in PakistanOf the 38 major dairy plants established in the country with a ceiling investment of Rs. 2.392 meg and having a daily rated message of 2,180,000 litres, only 13 plants are currently in operation. The rated milk processing capacity of the 13 plants in operation is estimated at a atomic over one million litres per day. In addition, two dairy farms of the Pakistan military operating on non-commercial basis have raised Pakistans daily production of processed milk, yogurt and butter. The reasons for failure of large number of dairy plants are several and may differ from plant to plant. The most common reasons include an over estimation of demand for processed milk, too rapid investment in UHT technology, lack of consumer education, high bell of UHT processed milk, non suppuration of sustainable milk collection system, lack of trained man military force and insufficient operational funds. For the same reasons, the capacity utilisation of dairy plants in operation is around 40 per cent. The low capacity utilisation prevents most UHT milk processing plants from recovering much more than their variable tolls. Next to the raw material i.e. raw milk cost available to the plants for Rs. 14 per litre on average, packaging i s the most valuable cost element. Expensive packaging forms part of UHT technology. Despite immense potentials the dairy sector in Pakistan has been victim of abominable neglect by the successive regimens in the country. Even at its present lowest-in-the-world yield per milk cattle, Pakistan is unembellished in milk production but due to lack of proper planning, collection and distribution facilities, a major portion of the total production is consumed, per force, by the producers in the far-flung areas. As against this we are trade 25000 tonnes of powder milk every year to meet the demand of the urban areas at a cost of supra 300 million dollar. Pakistan ranks 7th among milk producing countries, with an estimated 21 billion lamberts of milk produced annually. Although this level of milk production is more than adequate on a per capita basis for todays population, lack of processing and poor distribution system in a long hot weather (milk has a shelf life of only quartette ho urs under moderate temperatures) keeps it from reaching consumers in areas that are either deficient in milk production, particularly the urban centres, or those that are difficult to access. The milk yield per cow in the neighbouring country is about 3000 liters per lactation period as against 1000 liters in Pakistan. In Western Europe the average exceeds 5000 liters, in USA 9000 and Israel exceeds 7000 liters per lactation period. After extensive research Indian Livestock Ministry has introduced a programme to little by little replace buffaloes with kine, which give more milk, by educating their farmers through their well-established cooperatives and successfully carried out the replacement programme during the last decade or so. During this period India has almost doubled its milk production from 38 to 72 billion liters and now ranks at No. 2 after USA with 74-billion liters in milk production. Despite provide its extensive population, India is exporting huge quantity of pow der and processed and packed milk. To increase its yield of milk, India has do full use of Israeli expertise who have been trained by the US. done artificial insemination India had authentic a new breed of cows which yield 3000 liter per lactation period alternatively of antecedent record of 1200 liters. Pakistans tremendous potential to increase its milk production has so far remained unexplored due to the inactivity of the government and the related bodies which were created with much of fanfare. This neglect appears criminal in view of the fact that milk production despite its lowest yield, is even today far ahead of the major cash crops such as wheat, cotton, rice and sugarcaneConclusionThere is huge demand of both powdered and packed milk in the neighbouring countries of Iran, UAE, Saudia Arabia beside Malaysia, and Philippine which Pakistan can successfully harness to its advantage if due attention is give to this sector. By copying Indian plan, Pakistan can also split u p a new breed of cows within a period of about 4/5 years and thereby increase its production by over 100 per cent. Pakistan can become a big exporter of dry and processed milk provided due attention is paid to this sector. Presently in Pakistan only about 22 per cent of milk production is processed, about 57.5 per cent is supplied to urban areas in raw form in most unhygenic conditions create real health hazards. Rest is consumed by the farmers, mostly per force, specially in the far-flung areas for lack of proper facilities to take it to deficient areas. About 75 per cent of the total production of raw milk is produced in Punjab, 14 per cent in Sindh 10 per cent in NWFP and only 1 per cent in Balochistan. In Punjab we have more buffalos than cowl in about 60-40 ratio, in Sindh it is 50-50, in NWFP dead 20 per cent buffalos and 80 per cent cows. In Balochistan there are mostly cows. Unlike other imperfect tense countries where sale of raw milk is disallowed by law and processing i s mandatory due to milk being one of the two major carriers of diseases ( irrigate being the other), Pakistan continues to allow 97-5 per cent milk to be distributed through the traditional gawala system. To the bacteria of tuberculosis and hepatitis that naturally occurs in milk, the gawala adds m all more varieties through the addition of contaminated water for its dilution. The contractors, who collect milk in bulk from villages in Punjab through the dodhis the middlemen, and sell it to the urban consumers, go a step further. They add unhygenically produced ice slabs, caustic soda and sometimes formaline to the milk they collect to prevent it from issue bad due to intense heat in summers. The UHT process, although expensive, has proven to be a success in Pakistan as it increases milks shelf life to 12 weeks. On the other hand, the pasteurization process inspite of its low improvement cost, had not made much of a headway due to the short shelf life of its product and its depend ence on old chain from production to consumption. Taking advantage of this cost factor, some milk marketers have begun marketing loose milk in urban areas which they claim to be pasteurized. The UHT process add heavily to the cost of milk as it requires huge investment to set up the plant, production of wadding material and above all the collection cost of the milk making it beyond the purchasing power of poor and even lower middle circle. Pasteurization process is much cheaper comparatively as the process is much simple and packing material much cheaper. Small pasteurization plants can play an important voice to meet the milk demand of cities and towns provided there is a strong and efficient organization to discipline that all necessary precautions are taken and hygienic requirements for pasteurization process are met before provide milk to the ultimate consumers. Village cooperatives in India have efficiently handled this problem and about 80 per cent of the milk requirement of urban areas are met through pasteurized milk at an average selling rate of Rs. 15 a liter as against Rs. 24 per liter in case UHT processed and packed milk. Nestle Milk Pak. Ltd., a joint venture with the reputed multinational Nestle of Switzerland operating in over 80 countries around the globe, has done the poineer land in the field of milk collection UHT processing on most modern and state of art machines and quality packing. Nestle has almost the monopoly of UHT processed milk in Pakistan. It is a household name in our affluent families. Poor and lower middle class cannot afford the price and for them it is still a luxury which they can enjoy only once a while. The price of Rs. 28 per cent for Nestle UHT processed and packed milk appears high, but if you consider the cost of infra organise manpower and middle men involved in the whole process the selling price is justified. Nestle is concentrating only in Punjab and has true a remarkable set up to collect milk from areas s tretching about 80,000 KMs, and keeping the collected milk chilled in the most hygenic conditions until it reaches the processing factory which may take 8 to 12 hours. They have set up over 2500 milk collection centers from where it is transported to the 520 chilling centres within less than 3/4 hours. Chilled milk is then transferred to the two factories at Sheikhupura near Lahore and Kabirwala near Multan in special trucks with freezing arrangements. It sounds unbelievable but it is a fact that all this organizational structure for collection of milk has been set up by a Swiss expert who arrived in Pakistan only seven years back. To meet J. Moser Head of Milk collection department of Nestle at one of Milk chilling centre at Mandi Bhauddin was one of most exciting experience of my life. By any standard. J. Moser is an authority on milk production and milk cattle. He can talk for hours on various breed of cattle around the world, their milk yield, how they increased the yield and th eir future plants, domestic consumption of milk, name of consumption and capacity to export milk and milk products to deficient countries. In order to keep his cognition up-to-date he frequently goes on tour of different countries. He has organiseed in Sri Lanka, frequently instead India since posted in Pakistan in 1993. In this region he is most impressed by the work done by India to increase their milk production, manage its collection and distribution to its ultimate consumers at an low-priced cost. The cooperative societies in Indian rural areas have played a very significant role in developing the dairy sector in India. Hundreds of thousand milk collection centers have been set up to supply milk in bulk to thousand of pasteurization plants under required unhygienic conditions in the outskirts of almost every city to ensure supply of good milk in abundance. Through artificial insemination programme going on for over a decade with the help of Israel and United States they have developed a special breed of cows with yield of over 3000 liter of Milk per lactation period as against 1000 about 12/13 years back. Mr. Moser told this correspondent that he developed his milk collection and chilling centres on the pattern of Indian cooperatives. A business organization, whatsoever big size it may have cannot meet the national requirements. We are concentrating only on the central separate of Punjab which is densely populated and where more milk is available. For other areas in Punjab, Sindh, N.W.F.P. and Balochistan no such arrangement exists. This huge task cannot be done without the financial assistance, help and cooperation of the government. With proper planning and financial support of the government Pakistan Milk production can be doubled in 10 years time and country can become a big exporter of milk and milk products, Mr. Moser said disclosing that by giving underdrawers of seaman imported from Europe we have successfully carried out artificial inseminat ion programme in Pakistan on experimental basis. Our experiment proved successful as some of the cows conceived and nurtured through this system are giving 18 liter milk a day instead of normal 10 liters. The work has to be done at a large scale for which Nestle is not equipped, he added. It is imperatives, therefore, that the issues of increase in its production, and distribution are tackled on progressive line. The federal government may appoint a task force to study the various aspect of the disarray sector, identify the factors which has hampered growth sofar and recommend measures to develop this sector properly to harness its tremendous potential for the betterment of national economy. Inclusion of a mortal like, J. Moser in the proposed task force can be a real help. With the every passing day, dairy products are becoming costlier because live stock farming has not scientifically grown with the increase in population and also it did not match with the pace of urbanization. R ecently, milk prices in Karachi increased without any reason. In a short time of two years, milk prices have gone up from Rs 20 per liter to Rs 25, press outing a 25 percent increase. Moreover, nerve prices have also risen to about 25 percent in the last six months. In such a situation, the only way to harbour prices is to develop the dairy industry on scientific lines, which will not only provide meat and milk in abundant quantities to the domestic consumers but extra quantities can also be exported. In spite of having a large population of LIVESTOCK, the country is spending some $40 million annually on the import of formula milk only, which is the highest amount spent by any country in the world on this particular commodity. Pollution affecting the Pakistani Dairy industry Seventeen units, including three run by multinational companies, are engaged in the manufacture of dairy products in Pakistan, but environmental contamination, as well as an inadequate supply chain, is hampe ring the growth of the dairy industry. Noise pollution is one of the factors. Pakistan exports meat to Saudi Arabia but is yet to export dairy products to it, although that is a possibility, said Ibad-ur-Rehman, an executive of Cleaner Production Programme, a private-sector company based in Karachi that offers environmental solution packages to the industry in the backdrop of rising local and international competition. The growth necessitates consistent and adequate supply of raw material, and this is feasible in contract production. This is being done by at least one multinational company. Balochistan and Tharparkar regularise in Sindh, which have a sizeable livestock population, are some of the ideal locations for dairy farming, to a fault Punjab, he said. Milk, by and large, is the main ingredient of almost all dairy products. Average daily production of milk in Pakistan is about 130 million litres. Most of the traded milk is marketed unprocessed, and hardly two percent of the traded milk is processed by the dairy industry in Pakistan. Processed liquid milk in the form of pasteurised milk or ultra-heat-treated (UHT) milk is the main dairy product in Pakistan. Other products include dry powdered milk, cream, butter, butter oil, yoghurt, cheese and ice cream. The milk-manufacturing process includes pasteurization, homogenization, UHT treatment and packing. Through little additional work, cream is also produced during the pasteurization cycle. Pasteurized cream is churned to make butter. In order to recover butter oil, butter is heated to 90C degrees in ghee-melters and then liquefied. The milk powder-making process primarily involves evaporation and drying. The main steps around which whole ice cream manufacturing process revolves are pasteurization, homogenization, freezing and packing. But CPP findings render that the major environmental problem of the dairy industry is wastewater, while solid waste, soil pollution and stochasticity pollution are poten tial aspects of environmental pollution. Wastewater generation at a dairy industry is characterized by very large volumes of discharge besides the pollution loading from various dairy processes. Estimates show that the proportion of the waste discharge at a typical dairy industry per unit of processed milk ranges from 121 to 241. This is a very high figure considering the typical ratio of 31 in cleaner factories in the developed countries. In modern plants this ratio gets as low as 11