In every company's life we come across certain milestone years that are etched inmemory. 2016 was one such year for us when we got listed on the bourses; it marked aneventful landmark in our exciting journey which began in 1992.
Parag Milk Foods is not just any dairy company. We are a 100% cow's milk company withan integrated business model and strong R&D capabilities. From a pure-play dairycompany 25 years ago we are now moving towards becoming an FMCG dairy company with afocus on health and nutrition.
The Indian dairy market beyond doubt is promising in both scope and size. Howeverthere are certain country-specific peculiarities that pose a challenge for corporateplayers who want to enter this industry. Unlike its global counterparts the Indian dairyindustry is susceptible to strong socio-cultural undercurrents in the form of milkprocurement from lakhs of farmers. Hence only those companies that are equipped with astrong backend of milk procurement healthy relationships with grassroot level farmers andare armed with innovative value-added products of commendable quality will emerge ahead ofcompetition. We have the right mix of a strong milk procurement backend cutting-edgetechnology and innovative branded products which are high margin accretive. As we expandour geographic presence and product range we are standing at the cusp of an unstoppabledairy product revolution.
At Parag we have always led through innovation and this year was no different. Wehave created products that re-define categories and in many cases we have launchedproducts for the first time in the country. Our emphasis on health and nutrition isreflected through our consistent focus on developing and launching new products that arerelevant and aligned to the healthy lifestyle of new-age consumers.
With the purpose of making India healthier fitter and stronger we have launched asports nutrition protein powder under the brand Avvatar. Avvatar is the first whey proteinproduct manufactured in India. It is fresh 100% vegetarian and a purely milk-basedprotein powder. We are confident that as young India becomes health and nutritionconscious Avvatar and our subsequent products in this category will become an integralpart of their lifestyle.
Slurp is another example of how we have ventured into above ` 6000 crore fast growingmango juice drink segment with a distinct differentiation - a dash of milk. By doing sowe have remained within our core philosophy of being a dairy company but at the same timetried to capture the opportunity in the large juice drink category which has been growingat a 25% CAGR over the last five years (Euromonitor Report).
Besides these two key launches we also launched Spice Up' cheese slices in fivenew flavours Cheese Wedges-herbs and spices Badam milk mix in 20 gram packages and adairy whitener - Milkrich.
Our brand re-engineering has been such that each of our brands has a distinct personaand target group. Branding will play an increasingly critical role as we continue on ourfocussed value-addition journey and ensure that we not only enjoy top shelf-space butalso top mind-space with our consumers.
We are proud to say that our flagship brand Gowardhan has been awarded the distinctionof "Most Trusted Brand" in the ghee category for the 2nd year in a row in 2017by the Brand Trust Report. We also received the Consumer Voice award for our ghee. What isparticularly interesting is that within a year we have moved 132 notches up in theoverall ranking of FMCG brands across categories which is rare.
Till recently one of the key challenges was to ensure that our products reach everycorner of India. Milk being a perishable product with a short shelf life we found itcritical to convert the milk that we procured into value-added products with a highershelf life which can thereby be distributed pan India. By doing so we have created aformidable value-added product portfolio for ourselves. Our next step now is tore-engineer our supply chain and distribution to improve our last-mile connectivity. Thiswill not only ensure that demand for consumer products remains robust but will alsoimprove the availability and freshness of our products.
While on one hand we have increased our milk procurement through our consistent andhealthy relationships with farmers and our investments in bulk milk coolers on the otherhand we have also been building our manufacturing capacity. This year we have deployed aportion of our IPO funds into our cheese paneer and whey processing units. We installedthe first-of-its-kind whey processing plant in the country. We increased our capacity incheese from 40 MT to 60 MT per day. We also expanded our paneer capacity to 20 MT per dayand through our investment in a fully-automated paneer manufacturing we were able todrastically improve the quality hygiene and freshness of our packaged paneer.
We are also driving innovation by converting waste into useful marketable products. Atour Bhagyalaxmi Bioscience Division we have driven the commercialisation of cow manureunder the brand name Microrich and have converted it into a high value product which hasbenefited innumerable farmers through an increase in soil health crop yield and lowercosts. Such initiatives have led to our subsidiary Bhagyalaxmi Dairy Farm turningprofitable for the first time this year.
Today we have one of the largest and most varied product portfolio in the dairy-basedfoods segment. From farm to shelf and now directly to your dining table there is asignificant opportunity at every stage of the dairy value chain. With customersappreciating quality and variety and realising the benefits of dairy products which arenow becoming available to more customers across the country we feel proud to beinstrumental in driving a favourable change in food habits towards a greater consumptionof healthy and nutritious milk and milk derivatives.
At Parag we are here for the long haul. Our journey ahead is a journey of endlesspossibilities and opportunities. As with any business that deals with an agri-commodity astheir major raw material cyclical changes and a few aberrations are part and parcel ofthe business. What matters is that our fundamental focus on the long-term direction andtrajectory of our Company remains intact innovation driven moving up the scale ofvalue addition with an emphasis on health and nutrition with one objective to makethe new India of tomorrow fitter better and stronger.
On a concluding note I take this opportunity to thank all our shareholders for thetrust reposed in the Company. My sincere gratitude to all our stakeholders our businesspartners and bankers for their continued support. Lastly but most importantly I wouldalso like to thank all our employees for their commitment dedication and untiring effortsto execute and achieve the many ambitious plans we are set before ourselves.
Continue tracking us through the year and until then wishing you all a very healthyand happy 12 months ahead.