We are pleased to present to you our
28th Annual Report at the conclusion of another busy year. I am happy to state thatthroughout our history despite changing market dynamics we have remained true to ourphilosophy and vision of delighting every home with fresh and healthy products andempowering the farming community through our relationship farming' model.
With this we have evolved into one of the leading players in the Indian dairyindustry. Today we are a premier provider of pure and fresh milk and value-addedproducts.
Now let me give you a brief on the global and domestic dairy industry and impendinggrowth drivers before reflecting upon what the future holds in store for us.
Global dairy segment
The changing lifestyle of consumers is driving the demand for new innovative healthyand on-the-go dairy options.
Convenience time and goodness are some key factors that brands are focusing on in thedairy industry from traditional dairy products to value-added products anddrinkable options. More and more health-conscious consumers are gravitating towards dairyalternatives at a rapid rate because these are healthier and bring variety to their diet.
Indian dairy industry a growing market
India has transformed itself from a country of acute milk shortage to the world'sleading milk producer. In 2019 India produced 188 million tons of milk which was 22% ofthe year's global milk production of 843 million tons. It is the past few decades thathave seen the tide turning for India. In 1970 India produced 20 million tons of milkwhich amounted to only 5% of the global milk production. Since then India has increasedits production becoming one of the world's largest milk producers. With a projected milkproduction of 254.5 million tons by 2021-22 India is expected to become the world'slargest milk producer. India's milk production has grown by 6.4% annually in the 4 yearspreceding 2018 well above the 1.7% growth rate of the global dairy industry.
Growing demand for value-added products
While the demand for liquid milk drives the Indian dairy industry the value-addedproducts hold more potential and promise growth of 15% to 20%.
Growth is driven by value-added products such as UHT milk cheese ice-creamsflavoured milk curd and butter milk among others. This segment is seen expanding to 30%of the dairy industry by 2020.
Over the past few months the growing outbreak of COVID-19 has impacted individuals andbusinesses worldwide completely changing the way we live and work.
Being a processor and manufacturer of essential commodities milk and milkproducts we did not let the nationwide lockdown imposed to control the spread of thevirus get in the way of delivering nutrition for our consumers. Our manufacturing unitsoperated normally to meet the public demand. We ensured that our supplies continuedunhindered by delivering products to the consumers' doorstep. We are proud of ouron-ground staff who constantly put themselves in the line of risk to ensure that ourconsumers are not inconvenienced.
We respected all the directives from the local administration government industrybodies and regulators. As a responsible corporate citizen we joined hands with theGovernment in these tough times. We contributed an amount of Rs. 1 crore to the Governmentto help it battle the COVID crisis across the country.
Rising disposable incomes growing consumer preference for branded and value-added milkand milk products and increased awareness of nutrition is driving the demand for dairyproducts in India. India's per capita milk consumption is increasing at 3% CAGR comparedto 1% CAGR globally and will further increase led by growth in the value-added segment.
Dairy exports are also seen as a huge untapped opportunity for India which currentlyhas only 0.01% share of the global dairy export market.
Initiatives are being taken to improve the productivity of dairy co-operatives alongwith investments by private domestic players to boost the performance of the dairy sector.
Given the attractive sector dynamics and being a key contributor to India's dairyindustry we at Heritage Foods believe that we are at an exciting phase of our growthjourney. To realise our full potential we continue to evolve our business model and allour functions across the value chain. Moving ahead with a sizeable amount of investmentin production and distribution capacities we are confident about increasing our marketshare.
On behalf of the Board I would like to sincerely thank our shareholders customersconsumers employees investors and our business partners for their persistent supportand unshakeable confidence in us. We look forward to your continued trust as we build astronger company.