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    Internship Report on Milkvita

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    ` INTRODUCTION Bangladesh Business investment in is seen to be encompassing around a what-to-do, or what not to do paradox towards hunting sectors to be ventilated by entrepreneurs. Moreover new investment the existing entrepreneurs are in a deep ocean of thoughts in deciding appropriate factors in their business. Neither the new entrepreneur fell safe in putting money for new businesses, nor did the existing business houses fall encouraged to expand their business in diversified ways just at the juncture of period to the new global market pattern.

    This is because of apprehended competition from the world marketers or entrepreneurs like multinationals to be encountered by the national business arena. In addition, it has also been experienced in Bangladesh that there exist the abundance of queue in selecting same avenues, which are apparently believed to be profitable business. As a result of this rush, very few prospects are believed to be attaining anticipated goals and investment on non-orthodox and challenging fields are not being unfolded.

    In this context, since Bangladesh can not afford to go for heavy industrial invest for obvious economic reason, studies for non-traditional and agro-based areas are needed to be focused to cater the need of the time. Academicians, professionals and practitioners evaluate, interpret of predict the goals of objectives of a business organization in terms of profitability with simultaneous achievement in sustainable social and economic benefits. There exists hardly any doubt about it.

    Human beings are social animals and as such any activity created, initiated, and/or practiced, touches the social periphery significant. Precisely, any business endeavor serves social causes in addition to economical return what-so-ever. In the present context with the experience of milk vita, organizational entity as Bangladesh Milk Producers’ Co-operative Union Limited, a successful and the largest dairy organization of the country, dairy business is being stressed upon for its merit and contribution in financial return long with additional social achievements. In fact, modest efforts have been made in the present study titled “Strategic Brand Management- A Case study of Milk Vita” to portray probabilities and possibilities of the organization in business spectrum during market economy. In doing so, it has taken into care about the pertinent factors to be analyzed, both at the home conditions as well as for the effects that might be generated from the international arena.

    It has been designed to study the position of the international entrepreneur and the marketers of the selected dairy fields; those are at present in the market of Bangladesh as well as anticipated their future stress. The Dairy Co-operative: Bangladesh Milk Producers’ Co-operative Union Ltd. is very popular and known by its trade name ‘Milk Vita’ is the largest dairy organization of the country. It is regarded as the successful endeavor in the country in dairy field under the co-operative management.

    A detail study of the organization would, help to analyze prevailing dairy approaches of the country. Early History: During the undivided Indo-Pak-Bangla period, In 1946, a small Dairy Plant having the capacity of handling 2000 liters of milk per day was planned to be established at Lahirimohhanpur, Pabna (present at Sirajganj District) by a the-then all-Indian organization namely ‘National Nutrients Company Limited’. But the idea could not be materialized due to the partition of India and Pakistan in 1947.

    Mr. Mukhlesur Rahaman (late) after 1949, a young businessman showed his keen interest for completion of the project and he exchanged his Calcutta (India) property with all the assets of the original entrepreneur lying idle in this part of the country. The new entrepreneur with the name of ‘Eastern Milk Process and market their products viz. milk, butter and ghee with the brand name first introduced in the country-‘Milk Vita’ in the year 1952.

    The business field to attain success since in one hand the targeted Calcutta market being a different country was not reachable and on the other hand the existing market of Dhaka was located at a comparatively distance place from the plant area. Therefore, Mr. Mukhlesur Rahaman (late) initiated the co-operative management pattern for the plant. In the process, in 1965, the first ‘Milk Producers’ co-operative society was formed in the area with the apex organization ‘Eastern Milk Producers’ Co-operative Union Ltd. hrough the Government patronization. The economic condition of th handed over to the ‘Co-operative Marketing Society’ in 1968. During the period, there was another dairy plant engaged in processing milk in bottles at Tejgaon, Dhaka namely “ASTO Dairy” which was also financially sick and was run by Co-operative Marketing Society. Due to lack of fund and moreover dearth of efficient professionals, performance of both the enterprises did never improved. Origin of the Study

    Strategic Brand Management- A Case study of Milk Vita” The present study has been originated as an academic requirement for the Masters of Science in Business Administration (MBA) degree from the Stamford University, Bangladesh. A number topics were discussed on selecting the study field and in every case it was deeply thought to make something that can be really portray the academic achievement benefiting the student in one hand and on the other the company or the business house for which the study would be done is also simultaneously rewarded by the outcomes of the study.

    The present assignment was offered to the student of this study considering the factors of his specialization in marketing discipline. Moreover, since the incumbent is related to a business house, exclusively with the present chosen one, it was felt by the guide as well as by the student that the designed study would be useful in terms of both on academic vision and practical mission and understanding. Though it was further believed that the data would be very difficult to be collected, even it was assumed, once it is collected, it would be obviously of great use by the organization milk vita through appropriate analysis.

    Objectives Objective of the study is evaluating the products manufactured by Milk Vita, the largest dairy organization of the country and also to assess the present status of Milk Vita as a brand in diary product category in Bangladesh. The study is aimed at the line objectives: Compare the same to the situation in Bangladesh. Based on main objectives, following few objectives are also set for the present study: • To enlighten the studying individual or groups about the practical work environment of a industry and its management practices related to the management of a established brand in the product portfolio. To know about the marketing operations exclusively and the research activities in the application area. • To inculcate confidence on assessing dispersed data for analysis and there by dig out appropriate notion. • To face future challenges in designing and operating research activities SCOPE The scope of the study though outlines a limited vision for one organization but it is absolutes useful to have the required data from diversified sources nationally . In the study, the scope is further widely opened not only to know the factors on milk products but also design measures to overcome those. Limitations of the Study

    In the process of conducting the study a number of problems cropped-up right from the decision on the topic and down to final writing of this study. With a number of discussions and final interaction with the guide, efforts were exerted to overcome the problems and limitations as far as was possible. In collecting primary data, problems cropped up in ventilating the samples that used to be located at a different scattered place. There were some other minor problems like availability of all the respondents duly (completion and incidence rate), time constraints and financial limitations etc, were evoked too.

    However, finally instead of all the eventualities, the study could be made possible with the active supervision of the guide. Hypothesis The statistical testing of hypothesis is the most important technique in statistical inference. Hypothesis tests are widely used in business and industry for making decisions. The hypothesis is made about the value of some parameter but the only facts available to estimate the true parameter are those provide by a sample. If the sample statistic differs from the hypothesis meet about the population parameter, a decision must be made as to whether of not this difference is significant.

    If it is, the hypothesis is rejected. If not, the hypothesis must be accepted. Hypothesis for the Present Study: On to materialization of the objectives effectively and efficiently, the present study has the following hypothesis to test: 1. Production in the home country will be not increasing; 2. Cost of production in the country will be significantly increased; 3. Government is considering the milk sector as a vital one; 4. The consumers will have no effect through ethnocentrism; 5. There will be no integrated marketing promotion for the local brands; 6.

    Foreign country will cut down export prices for dairy produces; 7. There will be no inflation in the milk exporting countries; 8. Foreign milk producing farmers will not have competitively lower price of milk than the home country; 9. Cattle wealth will be significantly in the foreign milk exporting countries; 10. Technology transfer for milk production increase from the exporting countries will not be practiced. 11. There is a variability in the level of awareness among the competing brands in diary industry in Bangladesh

    Definitions: The hypothesis as well the total study require interpretation of some the definitions which are to be used in analysis, Item-wise definitions and discussions are placed to ventilate the appropriate issues. Market Economy Adam Smith (1723-1790), the ‘father of modern economics’ and author of the famous book ‘An inquiry into the Nature and causes of the wealth of Nations’ spawned the discipline of economics by trying to understand why some nations prospered while other lagged behind in poverty.

    Others after him also explored how a nation’s allocation of resources affects its wealth. The definition set out at the turn of twentieth century by Alfred Marshall, author of ‘The principles of Economics’ reflects the complexity underlying economics ‘Thus it is on one side, the study of wealth; and on the other, and more important side, a part of the study of man’ W must reckoned that we have unlimited wants and very limited resources.

    Before further discussion, let us understand first; the two branches of study within economics; microeconomics’ and macroeconomics. Microeconomics: Looks at the similar issues but on the level of the individual people and firms within the economy; it tends to be more scientific in its approach, and studies the parts that make up the whole economy. The market economy’ advocates forces within a competitive market, which constitute the invisible hand’, to determine how resources should be allocated. Example- USA. The command economic’ system relies on the government to decide how the country’s resources would best allocate. Example – North Korea Globalization The term refers to the free movement of goods, services, capital and ideas across national boundaries due to reduction to a tariff and other barriers. It will free up markets, encourage multinational corporation business which operate in a number of countries at once and often drew on global capita, improve and advance information technology and telecommunication etc.

    The process will govern the philosophy ‘compete or perish’ As such consumers can be benefited from globalization process, but will have also some negative effects like: loss of local control over enterprises, reduced government control over the economy, widening income gap from employing skilled labor to unskilled ,and company’s benefit from choosing the low-cost labors. Global Open Market Economy Through different Agreement initiated by the World Trade Organization, liberalization in trade was significantly sponsored.

    Sponsored the agreement are Agreement on Technical barriers to Trade (TBT), Agreement on Trade Related Intellectual property Rights (TRIPs), Agreement on Agriculture (AOB) etc, In signing WTO agreements, it was well visualized that tariff and non-tariff barriers will decline in a liberalized trading environment and fair trading opportunities will make a gate way for all countries. In fact, it was predicted that due to substantial reduction in tariff and non-tariff barriers, enormous gain would be resulted for the Developing and the Least Developing Countries (LDCs).

    The major drive to this was that with reduction in domestic and export subsidies in the developed countries, their cost of production would raise and subsequently their agricultural production would come down and international prices would rise. Ensuring lower tariffs in the developed countries, developing countries and LDCs would be able to export a lot more to take advantage of increased international prices. All the countries who are the signatories to WTO are definitely to abide by the rules and regulation of open market economy.

    SWOT Analysis: The overall evaluation of a company’s strengths, weaknesses, opportunities, and threat is called SWOT Analysis. External Environment Analysis (Opportunity and threat Analysis): A business unit has to monitor key microenvironment forces (demographic, technological, political-legal, and socio-cultural) that affect its ability to earn profits. The company further applies Marketing Opportunity Analysis (MOA) to determine the attractiveness and success probability of any opportunity. An ideal business is high in major opportunities and low in major threats; ? A speculative business is high in both major opportunities and threats; ? A mature business is low in opportunities and low in threats; and ? A troubled business is low in opportunities and high in threats. Internal Environment Analysis (Strengths and Weaknesses Analysis): Each business needs to evaluate its internal strengths and weaknesses. The business dos not have to correct all its weaknesses, nor it gloat about its strengths.

    The big question is whether the business should limit itself to those opportunities where it possesses the required strengths or whether it should consider better opportunities where it might have to acquire or develop certain strengths. PEST Analysis Business activities are also significantly dependent on prevailing environmental status. It is equally important for home and international business. To ventilate environment condition, PEST which stands for political, economical, social and technological analysis is a formidable task.

    Political Environment: Business decisions are strongly affected by developments in the political and environment. This environment is composed of laws, government agencies, and pressure groups that influence and limit various organizations and individuals, sometimes these laws also create new opportunities for business. Economical Environment: Markets require purchasing power as well as people. The available purchasing power in an economy depends on current income, prices, savings, debt, and credit availability.

    Social Environment: Society shapes our beliefs, values, and norms, people absorb, almost unconsciously, a world-view that defines their relationships to themselves, to others, to organizations, to society to nature, and to the universe, People are adopting more conservative behaviors and ambitions. Technological Environment: One of the most dramatic forces shaping people’s liver is technology. Technology has released such wonders as penicillin, open-heart surgery, and the birth control pill.

    It has released such horrors as the hydrogen bomb, nerve gas, and the submachine gun. Marketing, Promotion and Integrated Marketing Communication Marketing: The American Marketing Association (AMA), which represents marketing professionals in the United States and Canada, defines: “Marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas goods and services to create exchanges that satisfy individual and organizational objectives. ” The AMA definition recognizes that “exchange” is a central concept in marketing.

    For exchange to occur there must be two or more parties with something of value to one another a desire and ability to give up that something to the o9rher party, and a way to communicate with each other. Promotion: It plays an important role in the exchange process by informing consumers of an organization’s product or service and convincing them of its ability to satisfy their needs or wants. It has been defined as: “Promotion is any form of communication used by a firm to inform, persuade, or remind people about its product services or impact on society. ” Promotion planning:

    It is a systematic decision making pertaining to all aspects of the development and managerial of a firm’s management efforts. Promotion strategy consists of a group of interrelated communication activities. It combines advertising, personal selling, sales promotion, direct marketing, interactive/internet marketing and public relations into an integrated program for communicating with buyers and others who influence purchase. Promotion strategy covers the planning implementation, and controlling an organization/s communications to its customers and other target audience.

    The purpose of promotion in the marketing program is to achieve management’s desired communications objectives with each audience. Integrated Marketing Communication: During the 1980s, many companies came to see the need for more of a strategic integration of their promotional tools. These firms began moving toward the process of integrated marketing communication (IMC), which involves coordinating the various promotional elements and other marketing activities that communicate with a firm’s customers.

    A task force from the American association of advertising Agencies (the 4As) developed one of the first definitions of integrated marketing communication: ‘Integrated Marketing Communication concept of marketing communications planning that recognizes the added value of a comprehensive plan that evaluate the strategic roles of a variety of communication disciplines – for example, general advertising, direct response, sales promotion, and public relations – and combine these discipline to provide clarity, consistency, and maximum communication impact’.

    An important marketing responsibility is planning and coordinating the integrated communication i. e. , promotion strategy and selecting the specific strategies for the promotion components viz: Advertising, Personal ‘’selling, Sales Promotion, Direct Marketing, Interactive/ Internet Marketing, and Public Relations. Advertising: Advertising consists of any form of non-personal communication concerning an organization, product, or idea that is paid for by a specific sponsor. The sponsor makes the payment for the communication via one or more forms of audio, video, and audio- visual Medias (e. . radio, magazines/newspapers, television, etc. ). Among the advantages of using advertising to communicate with buyers of the low cost per exposure, the variety of media (newspaper, magazines, television, radio, internet, direct mail, and outdoor advertising), control of exposure, consistent message content and the opportunity for creative message design. In addition, the appeal and message can be adjusted when communications to specific buyers with more focus than is possible with the large networks. Personal Selling:

    Personal selling consists of verbal communication between a salesperson or selling team, and one or more prospective purchasers with the objective of making or influencing a sale. Annual expenditures on personal selling are much larger than these for advertising, perhaps twice as high. However, both promotion components share some common features, including creating awareness of the product, transmitting information and persuading people to buy. Sales Promotion: Sales promotion consists of various promotional activities, including trade shows, contests, samples, point-of-purchase displays, trade incentives, and, coupons.

    This array of special communications techniques and incentives offers several advantages. Promotion can be used to buyers, respond to special occasions, and create an incentive for purchase. One of the more successful sales promotion initiatives is the frequent flier incentive program. Direct marketing: Direct marketing includes the various communications channels that enable companies to make direct contact with individual buyers. Examples are selling, electronic shopping, and kiosk shopping (e. g. urchase of flight insurance in airports). The distinguishing feature of direct marketing is the opportunity for the marketer to gain direct access to the buyer. Direct marketing expenditures account for a large proportion of promotion expenditures. Interactive/Internet marketing: Included in this promotion component are the internets, CD-ROMs and Interactive television. Interactive media enable buyers and sellers to interact. The internet performs an important and rapidly escalating role in promotion strategy. Public Relations: PR is a planned effort by an organization to influence some groups without an opinion towards that organization”- Public relations for a company and its products consists of communications placed in the commercial media but not paid for directly by the sponsor. The basic model of Integrated Marketing Communication Planning is shown below: Integrated marketing communication planning model Methodology and Sources of Data: Research/study is the process of gathering and interpreting relevant evidence that will either support a behavioral theory or help change it.

    Research hypotheses are testable statements connecting the variables in a theory, and they guide the process of data collection. Data are generated through various research methods, such as the case study, field and laboratory experiments, and surveys. Methodology of the study: The methodology that had been followed for the present case is the survey on interview to concern organization for primary data. However, secondary data were collected from publication sources which were gathered during the time of survey in the organization from the organization from the authoritative respondents.

    Sources of Data: Most important part for any study data collection is a difficult task. Many obvious reasons like non-availability of appropriate data at ready-to-use form, lack of willingness by the approached organizations, non-cognition on the importance of the issue, time-constraint by the involved group etc. Secondary Sources: The secondary sources of data collections were utilized on issues to the background, functions, activities and other relevant information regarding the organization and those have been incorporated in the present study paper with due editing.

    Some of the secondary data were collected from the internet, website & communicating different enterprise. Primary Sources: Primary source is the process of respondent to the interview through questionnaires. The questioners were sent through the data collector as well the present research to above100 shops of Dhaka city. Through strata sampling, 5(five) areas were chosen. Questionnaire was presented to 20 shops randomly chosen each area and responses were collected from the owner of the shops. Wherever a chosen shop was found to be reluctant to response, the immediate next shop was interviewed.

    Of course it was found that a very little portion pf the sample s had shone their unwillingness to co-operate to the study. Historical Background & Present Status of the organization Farmer’s condition: Most of the farmer-families of Bangladesh used to possess cow to receive drafting power required for agro-activities, traditionally. However, some cows were specially maintained by the affluent class to produce milk but only for their own consumption. The concept of milk selling or milk business was completely un-known by them and ass a cultural heritage and traditional beliefs.

    Poverty-stricken farmers were gradually involved in milk-selling. But, since there was no ready market available at rural areas, they had to depend on the middlemen, the traditional ghoses. These middle-men groups used to deprive farmers in milk price as well as cheat them in weight, sometimes, used to deprive loan to the farmers with exorbitantly high interest rate and compelled them repayment through sale of milk in full, leaving behind not a single drop for the calves. Moreover, they were completely helpless since there was no other organized channel for milk selling available to assist them choose alternatives.

    The present era however, experiencing a further rapid change in milk sectors globally. Cattle position in the country: The modern world has adopted technologically advanced methods in agricultural production. But in Bangladesh, 90% of the agro-activities are still performed with the draft-power received from cattle-heads. Not only that in the process of harvesting, carrying. Oil producing and many other activities are done by cattle. Statistical surveys interpret that there are about 240. 00 Million cows, 0. 90 million buffaloes, 35 million goats and 1. 5 million lambs in Bangladesh. |Sl. No |Live stocks |Yearly Increment % |1999-00 |2000-01 |2001-02 | |01 |1991-92 |55000. 00 |132. 00 |38. 15 |503. 58 | |02 |2001-02 |20000. 00 |59. 00 |57. 43 |338. 84 | |03 |2002-03 |18600. 00 |61. 00 |57. 90 |353. 9 | |04 |2003-04 |20100. 00 |60. 00 |60. 85 |362. 00 | About 0. 16 million metric tons of liquid milk is received from this import powder milk from the developed countries; the consumers used to prefer imported powder milk which is comparatively cheaper due to subsidized price, lower taxation revenue and so far easy-to-use than milk. Besides, it is also reported that a significant quantities of powder milk is being poured-in the country through un-authorized sources. Items |Price/kg of Milk powder |Liquid milk equivalent |Price of liquid milk |Price of liquid milk | | |(taka) |(liter) |(taka/liter) |(US/liter) | |Imported milk powder |210. 00 |8. 00 |26. 25 |0. 44 | |Local liquid milk |- |- |23. 50 |0. 39 | Comparison imported milk powder

    Moreover, the colorful packages and intensified promotional campaign in the Medias attract more attention for the purchaser. As a result, the local processing sector faces unfair competition and thereby frustrated due to continuous economical deprivation, which is needed to be repaired and reconciled. In terms on consumption rate of milk in the country, only 08-15% is supplemented from the import source. |Product |Domestic production (Million |Imported milk converted Equivalent |Total Milk Use (Million |Total Deficit | | |Tons). |(Million Tons). |Tons). % | |Liquid milk |1. 79 |0. 16 |1. 95 |8. 33 | Nutritional Demand of Milk: Considering nutritional demand e. g. by way of providing 240 grams of milk per day per person depicts a monumental deficit in the country as can be seen from the below table. However, meeting the nutritional demand is a huge national task. Moreover, it depends on many factors like purchasing capacity of the consumers, milk drinking habits, availability, competitiveness for supplementary products etc.

    However, the condition is partly in ascending track at present and it is expected that though intensification of the activities in dairy sector, the situation will have rapid improvement resulting in self-sufficiency in the milk sector of the country with in a shortest possible time. The Co-operative Sector The international Co-operative Alliance (ICA) at its Manchester Congress in September 1995 adopted a Statement on Co-operative Identity (ISCI) according to which Co-operate is defined as: An autonomous association of person united to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratic controlled enterprise’. By the definition 7(seven) principles of co-operatives were agreed by which Co-operatives put their values into practice: Principle 1- Voluntary and Open membership: Principle 2- Democratic member control: Principle 3- Member economic participation Principle 4- Autonomy and independence: Principle 5- Education, Training and Information: Principle 6- Co-operation among co-operatives: Principle 7- Concern for community:

    These principles are the useful tools for economic emancipation of poor and less fortune class of the society, who suffer miserably from the financial greed of the vested group and also by the merciless exploitation of the profit-monger middlemen. Moreover, the group that are financially handicapped for the capital to invest in commercial venture whatever type and pattern are brought under the fold of co-operative for their economic emancipation and poverty alleviation. Presently; their numbers of co-operative societies, below table. This cane is a base for backward linkages. |Sl. No. Administrative Agency |Co-operative Status |Number of Societies |Number of Members | |01 |Co-operative directorate |National |9 |1341 | | | |National status |10 |4828 | | | |Central |418 |41102 | | | |Primary |44862 |4161575 | |02 |Bangladesh rural development |National |01 |440 | | |board (BRDB) | | | | | | |Central |694 |101079 | | | |Primary |100923 |3395412 | |03 |Milk vita |primary |1053 |1,25,000 | | | |Milk collection |67819302 Ltr. (Yearly) | Based on the co-operative principles Bangladesh initiated the first dairy venture of the country, which turned to the largest dairy organization. The Dairy Co-operative: Bangladesh Milk Producers’ Co-operative Union Ltd. is very popular and known by its trade name ‘Milk Vita’ is the largest dairy organization of the country. It is regarded as the successful endeavor in the country in dairy field under the co-operative management. A detail study of the organization would, help to analyze prevailing dairy approaches of the country. Present activities:

    In the year 1972, soon after the independence, the Government of the People’s Republic of Bangladesh initiated 2(tow) major surveys for the rehabilitation of the-then existing 2(two) financially sick dairy plant viz. Eastern Milk Producers’ Co-operative Union Ltd. Lahirimohanpur, Pabna and ASTO dairy, Trjgaon, Dhaka. Under the financial sponsorship by the Danish International Development Agency (DANIDA) and United Nations Development Program (UNDP), Team Leaders for both the surveys Mr. Per Nielsion and Kastrup respectively studied the situation for a couple of months. Evaluating overall situation, the surveyors put up their recommendations to the Government following which a development project titled ‘Co-operative Dairy Complex’ in pattern of AMUL (Anand Milk Union Ltd. ), India was launched in Bangladesh.

    Based on the philosophy of AMUL Pattern, the initial project of Bangladesh envisaged on the purchase of milk from the individual poor, marginal and landless milk producing farmers under the fold of Primary Milk Producers’ Co-operative Societies, twice a day. In the process, to the farmers were assured were assured regular guaranteed market. The milk collected in the societies is then transported to the rural plants for preliminary processing at the initial stage. Dairy Co-operatives Diagram in Bangladesh: Objectives and Activities of the organization: The objectives of the Co-operative Dairy Complex project were outlined as: (The income of the poor, landless, and farmers; living in relatively remote rural areas raising subsidiary of the country. Ensuring the regular supply of safe, hygienic and nutritious milk, and milk products to city dwellers at a fair price. Under the project, milk producing farmers were created in 4 (four) milk-shed areas of the country are Tangail, Tekerhat, Baghabarighat (sirajganj) and Manikganj. During the project period (1973-78) with the following 5(five) dairy plants were established |Place |Nature of Plant |Capacity per day (Liter) | |Mirpur,Dhaka |Milk& Milk Products processing |160,000 | | | |(Initial-50. 00) | |Tangail,Tangail |Milk Chilling |14. 000 | |Manikgonj,Manikgonj |Milk Chilling |13. 000 | |Takerhat,Madaripur |Milk Pasteurization |25,000 | |Baghabarighat,Sirajganj |Milk Products processing |175,000 | | | |(Initial- 60. 00) | Thereafter with BMPCUL’s own resources, 07 (Seven) more plants were added in the line at the following places: The activities on erection of new plants in different areas of the country are further underway with 8 (eight) more at shibpur, Moulobibazar , Sylhet, Feni, Shajadpur East, Snathia and ramganj. |Place |Nature of Place |Capacity per day (Ltr’s) |Date of erection | |Srinagar, Munshigonj |Milk Chilling |7. 000 |May, 1994 | |Rangpur, Rangpur |Milk Chilling |14. 00 |Dec,1995 | |Bhangura, Pabna |Milk Chilling |6. 000 |October,1999 | |Lahiri Mohanpur,Srirajganj |Milk Chilling |16. 000 |Nov,2000 | |Bhairab,Kishoreganj |Milk Chilling |6. 000 |April,2001 | |Raipur,Luxmipur |Milk Chilling |10. 000 |February, 2002 | |Basudebpur, Natore |Milk Chilling |8. 00 |January, 2003 | |Islampur,Jamalpur |Milk Chilling |5. 000 |May,2003 | |Gabtoly,Bogra |Milk Chilling |5. 000 |January, 2004 | |Domar,Nilphamari |Milk Chilling |5. 000 |October, 2004 | Plants of the Co-operative Dairy Complex (On Expansion stage) After implementation of the, the organization has so far been succeeded in bringing together over 80. 000 farmer members into the fold 750 village milk producers cooperative societies, who deliver milk to this organization regularly.

    Thus, around 400,000 farmer members are being benefited. Moreover, the activities of Milk Vita has created about 4000 job opportunities in the rural areas with further 1000 in the plants. In addition, the organization extends the following services to the farmers: (Free medication (preventive and curative) for all cattle of the society members by qualified veterinarians for 24-hrs; (Free vaccination against common epidemic diseases; (Free artificial insemination services for with deep-frozen semen for upgrading local breed; (Fodder extension services for high yield of raw milk; (Balance cattle feed at no-profit-no –loss basis; Bathan (pasture land) for milk farmer’s cattle grazing; (Training for batter animal husbandry practices by the farmers; (National and International study tours for co-operative farmers; (Display of audio-visual shows; regarding improved cattle keeping practices, and co-operative management. (Loan for cattle purchase interest free etc. Milk vita is not only adding benefit to fulfill the demands for poverty alleviation programmed by way of socio-economic development of the poor, marginal and landless milk producing co-operative farmers, but also helping in increasing supply of quality milk and milk products to city dwellers, thereby complimenting the nutritional demand of the country. Micro-credit facilities of Milk Vita: Milk Vita plays a very important role in the economic development of milk producing farmers through purchase of milk from them and assuring timely payment.

    To facilitate purchase of cattle by poor farmer members of the organization, loans are being sanctioned on easy terms. BMPCUL has invested so far invested so far about; 15. 00 million Taka since 1994. The loan is interest-free and repayment of the installments is made through the weekly deductions from the milk bill to ease the financial pressure on the farmers. This has assured 100% recovery of loans without any default. This credit facility has made a commendable impact in the process of milk production increase. The demands for the loans are increasing every year from the poor farmers and milk vita as the government is trying to increase it. Marketing Activities

    Milk Vita products are mainly marketed in major cities of the country through established marketing network which includes Rickshaw van Co-operative societies in addition to the retail agencies and wholesaling distributors. Gradually the marketing activities have been increased and expansion has been made to big city areas like Chittagong, Comilla, Feni, Rangpur, Brahaman Baria,Sreemangal, Moulvi Bazar and Sylhet etc. The major products of Milk Vita include : <> <> <> <> <> Milk Vita authority pays due attention in maintaining overall quality and hygienic conditions. Most of the ‘milk vita’ products are duly certified by the Bangladesh Standard and Testing Institute (BSTI), the government authority for maintaining the standards and quality of products in Bangladesh. Financial Status: Milk Vita could not attain financial success till 1990-91.

    However in 1990-91 based on a study recommendations the government initiated some appropriate activities like-reshuffling the top management level of the organization by establishing leadership of the democratically elected co-operative members, and further at the executive level due professionals were assigned to routine management and development affairs in place of running the organization by the deputation-based Government officials. Simultaneously a financial restructuring for the government investment through waive of outstanding interest and conversion of the 50% loans to equity rewarded in positive. These resulted in a magical change and for the first time in the history the organization emerged as a profitable one after 18 years of its operation i. e. in 1991-92. Since then, the organization has earning net profit consecutively for the last 11(eleven) years till to date.

    This net profit earning by BMPCUL is a shining example in the co-operative movement of the country through which the farmers have been encouraged in cattle keeping practices resulted in increase of the milk collection for BMPCUL. FAO in a recent report has earmarked views like: Milk Vita continues to be flourishing concern, which can be seen not only from its recent imitators who financial performance and plans for growth, but also from its recent imitators who have set up similar dairy enterprises to process and market 50 million liters of milk annually. Not only is the private imitator, the government also initiating activities based on the experience of milk vita for poverty alleviation programmers of the country. BMRE and Other Projects of the Organization

    The organization launched a project titled ‘Balancing, Rehabilitation and Expansion of the Co-operative Dairy Complex project’ in 1994-97 with the project cost of total TK. 263. 68 million. Implementation of the project ahs so far made a tremendous impact on the overall activities of the organization (BMPCUL) 18. Milk Vita has very recently undertaken the following projects to increase asnd diverse its products range and also to expand its operational network: 1. Milk Vita Sweet-end Fresh Milk Condensed Milk; 2. Milk Vita UHT(Ultra High Temperature) Treated Milk Plants at Dhaka and Baghabarighat; 3. Milk Vita condensed Milk Can Production Plant; 4. Milk Vita Mineral Water Plant; 5. Milk Vita Dairy and Milk Chilling Plants at Different Parts of the County; and 6. Milk Vita Chocolate plant.

    In the process of Expansion, the government has extended significant financial support to milk vita on recognition of its contribution to the poverty alleviation process. The Management Affair: In regards to the co-operative philosophy milk vita management is guided by the co- operative Acts, Rules and by-laws of the organization. It has got a Managing Committee comparing of 12(twelve) members, 9(nine) of which including the Chairman and the Vice-Chairman are directly elected from the rural milk producing primary societies and the rest of 4(four) are nominated from the Government, this honorary body handles the action plans and policy issues of the organization in their meeting and implements those with the assistance of executive line.

    The executive head of the organization is the General Manager (proposed Managing Director) adhere the responsibility of materializing the decisions of the managing Committee with other routine management functions through the en-rolled professional personnel and workforce. The professional level includes personnel from different discipline like Mechanical Engineering, Electrical Engineering, Electronics, Animal Husbandry, Veterinary Science, Bio-chemistry, Accounting, Marketing, Finance, and other services. Beneficiaries of Milk vita: Bangladesh Milk producers Co-operative Union Limited (BMPCUL) dedicated towards the rural socio-economic development has emerged as a pioneering co-operative organization in the country.

    Its areas of operation in the rural sector are spread over to 12 milk-shed areas covering about 20 districts with 48 police stations and 1005 village. Through its activities for the last 3 decades, BMPCUL has made a significant impact on the national economy & especially in the milk production sector benefiting the farmers. The direct beneficiaries from the activities of the organization market 12: • 80,000 poor, landless and marginal milk producing farmers who were earlier exploited by the traditional middlemen (ghoses), but at present receiving fair price through sale of milk in a guaranteed market; • 4,00,000 farmers family members who are directly dependent on the income of the cooperative members for their livelihood; More than 500 Rickshaw pullers cooperative members engaged in the distribution process receiving the daily cash income for maintaining their livelihood along with their dependent family members; • A Large number of city dwellers receiving continuous supply of pure, safe, hygienic and nutritious milk and milk products at a reasonable price; • Enormous numbers of vendors and shop-keepers engaged in the business process of the organization having supplementing income; • More than 4000people who are employed out of the direct and indirect job opportunities created both in rural and urban areas in milk production and transportation process; • Nearly 1,000 people are engaged in the different plants and officer of the organization who earn livelihood for them and their families; 100 new co-operative farmers every year receive interest free cattle purchase credit; • Enormous numbers of women are being engaged in the cattle keeping practices and thereby ensuring extra-income for the family. These have further been encouraged the farmers living at different parts of the country to be associated with Milk Vita for their economic growth. Future Plan Milk vita: The success of Milk Vita with further scope for expansion in the processing sector includes: • Expansion of the current handling capacity; • Establishment of a number of chilling plants; • Acquisition of bath an (Pasture) land from the government for permanent use as grazing land by the milk producer farmers; Completion of the Establishment of fresh Milk condensed Milk Plant; • Completion of the Establishment of UHT Treated milk plants; • Establishment of the Mineral Water Plants; • Establishment of a cattle feed Plant; These Plans are expected to allow Milk Vita to contribute further for the development of the dairy sector in Bangladesh. The activities of milk vita have constituted bondage between the rural and urban areas by way of bringing and marketing the rural produce to city dwellers and on the other hand plough-back the money received against milk product sells, to rural areas for re-investment as well as assuring livelihood of the inhabitants there.

    Ultimately, this is contributing to the national economy. Flow chart-rural produce to urban areas, urban cash to rural farmers: Processed Liquid Milk Sale: It is also worth mentioning here that most of the milk in about 95% is consumed in Bangladesh and received from the indigenous i. e. farmers and middlemen source. The dairy plant processing sector supplies only the rest 05%. In the recent years some new ventures in milk and milk product processing and marketing have been initiated in the country. Though most of the organization caters a very little quantity of milk but the market for the processed milk in the country is being increased. Liquid Milk Sale Per Day |Sl.

    No |Name of the Enterprise |Milk Sales |Market Share | | | |Ltr’s/Day (Average) |% | |1 |Milk Vita |1,55,000 |76. 00 | |2 |Aarong |35. 000 |14. 58 | |3 |Amo Milk |5. 000 |2. 10 | |4 |Ultra Milk |4. 000 |2. 11 | |5 |Bikrampur |5. 000 |1. 63 | |6 |Aftab Dairy |7000 |2. 0 | |7 |Pran Milk |3. 000 |1. 58 | Condensed Milk Scenario: Liquid Milk and some other dairy products there exists venture for the production of condensed milk in the country. The organization engaged in the process does not have any source for fresh milk collection and as such they maintain their production through the imported powder milk. Since the condensed milk production activities at present are targeted com completely for commercial interest, negligence in product quality largely in sight. This has recently been identified by the Bangladesh Standard and Testing Institute.

    As a result, the government has taken a strict view for the interest of the general mass. The players in the condensed milk production team are: Condensed Milk in the Country |Sl. |Brand |Plant Capacity |Average Price Take | |No | |Tons/day | | |1. |Danish |120 |37 | |2. |Star Ship |160 |37 | |3. |Goalini |120 |37 | |4. |Kwality |120 |37 | |6. Milk Vita* |50 |30 | * To be started soon Some Constraints Outline: Through analyzing its overall activities, milk vita summarizes the following major constraints: • Lack of an appropriate and detailed dairy policy containing issues like product standardization, taxation, infrastructure development, price, import rationalization and product safety measures to aid the dairy development process of Bangladesh; • Competition from imported milk powder and milk products along with threats from the domestic production. • Non-congenial taxation and custom duties for its routine imported items; • Acquisition of bathan land for farmers’ cattle grazing; Replication of the Milk Vita model in other parts of Bangladesh through government initiatives and funding for the benefit of both farmers and consumers; • Shortage of quality cattle feed at a reasonable price; • Lack of funds for the timely materialization of its planned activities; • Lack of adequate support from the government, and national and international donor agencies in the undertaking of a massive dairy development programmed for the country, similar to Operation Milk Flood I, II, and III in India. • Milk Vita visualizes that rapid removal of these constraints will aid attaining self-sufficiency in milk production sector of the country, within the shortest Milk possible time. Overall Products Sale Data of Milk Vita: Year |Liquid |Butter |Ice Cream |Ghee |Other |Total Sales | | | | | | |Products |Revenue | | | | | | |Tk. | | | |Mil. |Mil. |Mil kg | | |Ltr. |Tk. | | | |2 kg |I kg | | |tin |Pouch | | | |2002-03 |2003-04 |2004-05 |2004-05 | |1 |Pasteurized Liquid Milk (per liter) |26. 00 |26. 00 |28. 00 |30. 0 | |2 |Butter (KG) |210. 00 |210. 00 |210. 00 |250. 00 | |3 |Ghee (KG) |290. 00 |300. 00 |300. 00 |350. 00 | |4 |Full Cream Milk Powder (per KG) |200. 00 |200. 00 |235. 00 |245. 00 | The Taxation Policies: The Government of the People’s Republic of Bangladesh imposed tax on foreign powder milk and milk product to producers’ interest in competitive price factors. This had a mixed reaction in the society.

    The producing farmers were happy to have a better price for their product, but on the hand the business people were disheartened seeing the effect on consumer’s choice to competitive local producers who use the powder milk, were reactive to government decision on tax sector. Through maintaining a lobby and impressing the government in the plea of the consumers negative reaction for price rise of the commodity due to production price increase, they were further succeeded not only to refrain government from further increase but also reduced the levy in some of the tax sectors. A comparative tax structure is shown in the below table: Taxes on Import of Powder Milk an Milk Product |Sl.

    No| |% | | |Tax Heads |of Taxes | | | |2001-2002 |2002-2003 |2003-2004 |2004-2005 | |1. |Custom duty |25% |32. 5% |30% |30% | |2. |Regularity Duty |10% |0 |0 |0 | |3. |Complimentary Tax |0. 5% |10% |15% |0 | |4. Value Added Tax |15% |15% |15% |15% | |5. |Development Surcharge |2. 5% |3. 5% |4% |4% | |6. |Advance income Tax |3% |3% |3% |0 | |7. |License Fee |2. 5% |0 |0 |0 | |Total Effect |71. 01% |74. 11% |78. 92% |56. 0% | |(* Calculated on duty paid vale As shown below) | | | | | |Increase from the previous year |71. 01% |3. 10% |4. 81% |-22. 42% | Calculation of Taxes on Import of Powder Milk and Milk Product |2001-02 | | |Base: Tk. 100 |Base: Tk. 100 | |Duty Paid Value = 100 +35 |Duty Paid Value = 100 +32. 50 | |= 135. 0 |= 132. 0 | |Complimentary Tax: + 6. 75 |Complimentary Tax: + 13. 25 | |= 141. 75 |= 145. 75 | |15% VAT + 21. 26 |15% VAT + 21. 86 | |= 163. 01 |= 167. 61 | |Others(Item 5+6+7) = 8. 00 |Others (Item 4+5) = 6. 50 | |Total = 171. 1 |Total = 174. 11 | |- 100. 00 |- 100. 00 | | | | |Total Tax = 71. 01% |Total Tax = 74. 11% | | | | |Base: Tk. 100 |Base: Tk. 00 | |Duty Paid Value = 100 +30 |Duty Paid Value = 100 +30 | |= 130. 00 |= 130. 00 | |Complimentary Tax: + 19. 50 |Complimentary Tax: + 0 | |= 149. 50 |= 130. 00 | |15% VAT + 22. 42 |15% VAT + 19. 50 | |= 171. 92 |= 149. 0 | |Others(Item 5+6+7) = 7. 00 |Others(Item 5+6+7) = 7. 00 | |Total = 178. 92 |Total = 156. 50 | |- 100. 00 |- 100. 00 | | | | |Total Tax = 78. 92% |Total Tax = 71. 01% | Government’s Concern over Dairy Development:

    At one stage, during the first and second decades of independence, the government had very little interest in the cattle interest in the cattle and dairy development process of the country. This resulted in the import of milk at a great extent. Moreover, the flow of surplus milk powder from European Union (EU) nations to Bangladesh was a regular phenomenon. The 5th five year plan of the country (1990-1995) and perspective plan (1995-1997) contributed in reversing the situation. These plans were basically aimed at the objective of increasing the income and thereby the purchasing power of the poor people through eradication of poverty and creation of job opportunities. The approach ventilated the cattle development activities in th3 rural areas.

    A number of projects were initiated and implemented in the process. Cattle rearing farmers were encouraged through having the incentives from the government for maintaining cattle wealth. The goal was to create job opportunities in overall process of cattle keeping to milk yielding and transportation in one hand and on the other, gradual decrease of powder milk import and attain self sufficiency in milk production and thereby contribute in the national economy. The government for the period 2001 onward have further intensified the concern over milk production of the tune milk vita materializing the following projects through government supports and financial assistance: Condensed Milk Plant; • Ultra High temperature (UHT) Treated Plants • Candy and chocolate Plant; • Dairy Plant • A number of milk Chilling Center throughout the country; • Condensed Milk Can Making Plant; • Water treatment and Bottling Plant; • And many others. It is to be mentioned here that the present government while in power during the period 1991-1992, approved a project titled ‘Balancing, Modernization, rehabilitation, and Expansion of the co-operative Dairy Complex’ for milk vita. Through implementation of the project, the ever-first Super Instant Powder Milk Plant of the country was established along with a modern ice cream plant.

    The government not only contributed in major financing to the project but also restructured the organization’s financial status by way of waiving out the accumulated interest on the previously invested money during inception of the project and transfers the capital into equity. The overall concern of the present government on dairy field is not only positive but also participative too. Dairy World Cow milk production in selected countries for 1997 was 381. 30 million tons, with a increase of 2% from the previous year, Maintaining the tendency the production in 2003 is estimated to 437. 99 million tons During the period, the significant production declines in Russia and Ukraine. But continued rapid growth was experienced in Oceania and in the United States, Brazil, Argentina, India Australia and china. Milk cow numbers continued tending downward in most countries, and now with total about 132. million heads in 1997 and maintaining the same static in average during the period 2003. But there was significant rise per cow milk yielding. For the major dairy products, butter production at 5. 10 million tons, cheese, nonfat dairy milk, whole milk powder is 11. 80. 310 and 2. 50 tons respectively. World dairy scene interprets at the present status that most of the countries are in the planning of keeping less number of cattle with high milk yielding. It is because of the fact that gradual population growth especially in Asian nations and increased energy on cattle head management system made it costly to maintain bigger numbers of cattle. Therefore efforts are concentrated for per head milk yield.

    Bangladesh imports different types power milk and other milk products form the world market, the highest quantity is however the powder milk and baby foods. Butter Cheese, butter Oil and some UHT milk are also imported the developed countries. In case of present study, some countries were selected from which most of the milk and milk products are exported to Bangladesh to receive the relevant dairy data. Most of those were personally visited and also follow up and new contacts were made through internet. The data so collected has been duly tabulated and finally analyzed for the purpose of the study. To compare the situation some of the data on economic status has the impact of the factor on dairy field. Data on Global Dairy Situation Country Profile: 01 1.

    Area: 2. Population: 3. Per Capita GNP: (sq. km) (million) (US $) 4. World GNP Ranking: 5. Exchange Rate: 6. Inflation: Dairy Sector: 1. Total Cattle-heads: 2. Total milking Cattle: (Millions) (Millions) 3. Average milk Production per cattle (Liter/day): 4. Milk Price per liter at Growers level: 5. Processed Milk Price per liter at market level: a. UHT Pasteurized: 6. Powder Milk Price per KG: 7.

    Name of Some major Brands: a. Sunshine b. Dutch jug 8. Do the country exports Milk ? Yes No If yes, Please Mention: i. Quantity ii. Countries iii. There is export benefit – Yes No 9. Mention some of the popular dairy products: Milk, Butter, Cheese, Yogurt,

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