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Milk is a rich source of nutrients and comes close to being nature's perfect food. Milk's principal constituents are Water, Fat, proteins, lactose (milk sugar) and minerals (salts). Milk proteins are of exceptionally high quality, minerals including calcium are the building blocks of the human body and Lactose aids in calcium retention and absorption.
While Dairy production accounts for a large part of the GDP of many countries, the exporting countries with significant surpluses are the European Union, New Zealand, Australia, Argentina and the USA. World trade in dairy products is estimated to be worth USD 30bn or roughly 74 million mts milk equivalents. This accounts for only 11-12% of the total world output.
Olam's Dairy business
Olam's dairy business began in 2003 with the supply of our first consignment of milk powders into Algeria, which is one of the largest importing countries of full cream milk powders. In a short period Olam became one of the key players in the Algerian market and also expanded its marketing reach into other countries in Africa, Middle East and Asia.
Olam was able to rapidly grow in these markets because of its geographic presence and its strong distribution channels. In many of these countries Olam leveraged on existing distribution networks and channels which had been distributing other agro commodities like rice and sugar to distribute Milk Powders. In fact in some countries there is also a commonality of customers with Olam's other commodities as the same buyers import and distribute a whole range of Agro commodities.
While Olam’s Dairy business started off with milk powders, today it participates in the entire gamut of products which comprise the world dairy trade. The bulk of Olam’s business still comprises of powders like Full cream milk powders, skimmed milk powders, Sweet whey powder, Demineralized whey powder etc. However there has been an increasing share of other dairy products in Olam’s business portfolio with significant increases in Fats ( Butter, AMF) and Cheese.
Olam’s sourcing abilities have also significantly evolved since the inception of this business. While we were initially sourcing from European traders, we have now set up our own export operations in Poland ( EU 10), Netherlands ( EU 15), Ukraine and Belarus ( E. Europe), India, North America and South America. Today it is able to offer customers a wide spectrum of choices from high-end applications to the regular commodity grade dairy products.
Besides catering to the industrial and repackaging segment in bulk packs Olam is engaged in the direct marketing of consumer packs in its own brands in several markets in Africa. These consumer packs are available as tins, sachets and bag in boxes of various sizes.
Olam is looking to continue the rapid growth in this nascent business with continuously developing its origination abilities and building on the relationships that it has developed with its customers.
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