In dairy business, you must have your own procurement: Ms. Namita, Director, Param Dairy Limited

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In dairy business, you must have your own procurement: Ms. Namita, Director, Param Dairy Limited

By TPCI | September 17, 2019

Param Dairy, a name synonymous with quality and precision, is a top-notch player in the Indian dairy industry today. While manufacturing and exporting milk and a plethora of processed milk products, Param Dairy Limited has emerged as a trusted name in the industry.

Ms. Namita, Director, Param Dairy Limited, conversed with IndusFood and gave some interesting insights of the industry trends and placement of Indian dairy industry in the global trade. Below are a few excerpts from the interview.

IndusFood: What was the inspiration behind the brand “Param Dairy” when it was founded? How did the business launch and evolve in the initial years?
Ms. Namita: Param Dairy is a thoughtful product of my husband Mr. Rajeev Kumar who in the year 2000 laid its foundation and envisaged a colossal dairy business. He had then launched the brand “Param Premium” under Param Dairy. Since his father was into the dairy business, he knew in and out of the business. He had dairy in his roots, and therefore could very well place the brand in the market and make it to be so renowned and synonyms to quality and fame.

Moreover, we were a very small company with a small turn-over of approx. Rs. 15-20 cr when we had started with Param. And the fact that today we are Rs. 650 cr-company speaks volumes about us. Initially, we had only a few products like poly-pack milk, ghee and milk powder. By God’s grace and with consistent efforts of Mr. Rajeev and team, we gradually grew year-on-year and today have a plethora of products to offer to not only the domestic consumer base but also to serve the global palate.

I would be failing in my duties if I don’t mention my capable team which initially proved to be backbone for us. Everybody worked as if it was their baby, and the result is the present-day Param, leading dairy brand synonymous to quality.

IndusFood: What were the major challenges to growth and expansion and how did you meet them?
Ms. Namita: The initial days were not good. We had to face a lot of struggles, especially a financial crunch. Apart from that, branding and marketing remained another challenge for us. And yes worth quoting, we had to face a lot of competition from other prominent brands of that period.

It was back in 2005, when a couple of brands took the plunge in the core dairy business, spreading its wings beyond Gujarat so that all the private diaries faced strong competition from the brand, since they had an age-old unprecedented history. In fact, it was after these brands came into the picture that the quality of milk manufactured by private dairies was given a second thought. However, eventually with our consistent efforts and persistence we were able to make a trustworthy name for ourselves in the market.

IndusFood: With a number of brands in dairy production and manufacturing, how is Param Dairy unique? What do you do to ensure quality?
Ms. Namita: Param, as I mentioned, is synonymous to quality and thereby we ensure high quality in all our products at any cost. Since we procure milk directly from the dairy farmers, we are extremely sure about our quality. Today, we are associated with more than 5,000 villages across India; stronger and more in numbers in the Northern India, especially in parts of Uttar Pradesh.

Now let me explain it to you with an example. If you have ever heard of Danone, the brand that is a major stakeholder in the global dairy business, you would be surprised to know that in spite of being of international fame, it failed in India. Why? It could not create links directly with the farmers. There always was a middle man from whom it used to source milk. Resultantly, the produce cost them more and also the quality was not at par. Thus, Danone drastically failed because they did not focus on the roots of the dairy industry. The thumb rule in dairy business remains that if you have your own procurement you are a success.

Moreover, we at Param are today connected directly to the farmers through a web of villages from where we source our milk so that we can keep a check on the quality. We have systems and mini labs in each nodal village wherein a group of team members, selected both among the farmers and our Param team, sit there and ensure quality check from the very initial stage. Furthermore, we have high-precision labs at our mammoth manufacturing unit near Khurja. So, we have double checks on the produces, thereby ensuring minimum possibility of adulteration. This generates a level of trust among the consumers and thus we are surviving well.

IndusFood: The brand is a leading dairy player today. What transformational changes has the business undergone since its inception in terms of product portfolio/innovations, reach, brand equity, etc. (also please talk about your products and USPs)
Ms. Namita: We manufacture a plethora of dairy products today, ranging from fresh milk, poly-pack milk, buttermilk, curd and fresh paneer, which we export by air. We also produce ghee, milk powders (skimmed milk powder and whole milk powder), dairy whiteners, and dairy mix.

Also, we are slated to launch another premium product of ours which is “Almond Milk” and will be there on the domestic as well as international shelves shortly. Everything ranging from colors and flavours, each and every ingredient in this product is natural and this qualifies as the product’s biggest USP.

IndusFood: After four years of slowing down, India’s dairy exports have revived to achieve the second best show ever in financial year 2018-19. What is your view?
Ms. Namita: Before 2015, dairy exports from India were impressive. I believe that approx. 1.25 lakh tonnes of milk powder were exported to the globe every year. However, post-2015, the numbers drastically came down to just 25,000 tonnes.

Another major challenge for us in the export market is the price drop in the European dairy market. The milk quota system, which was introduced by the EU in 1984 to address the issue of overproduction, was uplifted in April 2015 owing to which European countries had accentuated their milk production drastically.

Meanwhile, Russia, which happened to be a very good market for European milk was banned from any trade following disputes between the two countries. Now, as the production increased and demand decreased, the entire European milk market crashed following the ban, resulting in a drastic drop in the European milk prices.

This eventually has rendered Indian milk to be uncompetitive in price terms at the global platform. Say if earlier, before 2015, where the European rates were US$ 4,200-4,300 per metric ton for SMP (Skimmed Milk Products) it came down to US$ 1,700-1,800 per metric ton. On the other hand, the prices of Indian dairy product prices were unaltered, i.e. US$ 3,300-3,400 per metric ton; making Indian milk irrelevant to the global platform as far as price was concerned.

However, over the years we have found that daily demands are burgeoning in Middle East and Asia as they are majorly buffalo milk powder consumers and in Northern India, we mostly manufacture products out of buffalo milk. Other major countries where we find our presence are Oman, Singapore, Qatar, Yamen, Japan and South Korea.

Pakistan was also a huge market for our buffalo milk powder as they used to make curd out of it. And such curds made in Pakistan used to come out very well in taste, flavor and texture exclusively with Indian buffalo milk powder. Furthermore, after 2015, around 80% of the demand for our SMP was coming from Pakistan. But after Pakistan has banned trade with India, Indian dairy exports have faced another big loss.

IndusFood: Based on estimates by the National Dairy Development Board (NDDB), the demand for milk is likely to reach 180 million tons by 2022. How do you plan to tap this opportunity?
Ms. Namita: Uttar Pradesh followed by Haryana and Punjab stand as the largest producers of milk in India. It is a strange fact that we are the largest producer of milk and dairy on one hand and on the other, we are also the world’s largest consumers of dairy products. Moreover, we don’t import any dairy product. All our domestic demand is fed by our own internal production.

Last year the milk production was in buffer, so we could match the demand. But, this year, the milk production has dropped. However, this situation is common in the dairy industry, and we have to cope with it by shrinking our supply to areas which foster less demand and focus more on the regions with demands on the higher end.

IndusFood: Can you please name product that needs shelf space and marketing attention? It can be any product, ingredient, grain, or health oriented stuff, which needs attention and can be used in the industry.
Ms. Namita: Whey water, a residue in the process of making paneer out of fermented milk can gain a great and huge market. The only thing is that it needs marketing and branding to a great extent.

IndusFood: Have you participated in IndusFood earlier? Please share your experience. Is there any product to be launched in its upcoming fixture in 2020?
Ms. Namita: I always looked for such exhibitions and platforms in India wherein players like us can present ourselves well and spread our words across the world that we also produce products, good quality products and also deal in exports.

I am really happy that TPCI has come with such a brilliant idea of IndusFood. I have participated in the event for two times now. The 2018 fixture was great and 2019 was dramatically awesome and better. And I am very hopeful about the show’s better results in 2020.