Milk production began 6000 years ago, or even earlier and there are Sanskrit records that attest the fact that about that time, Milk was an important article of food. Milk was so valued that ancient Hindus measured their wealth by the number of cattle. Even today milk continues to be an important part of the human diet.

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 (salt). Milk proteins are of exceptionally high quality, minerals - essentially calcium is the building blocks of the human body, 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 role in the Dairy business

The world dairy trade comprises of various products such as milk powders, cheese, fat products, caseins, and whey powders. While Olam participates in all the categories it is primarily focused on the trade in milk and whey powders.

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 markets and also expanded its marketing reach into other countries of Africa as well as into Middle East and Asia.

Olam was able to grow quickly in these markets because of its geographic presence and its strong distribution channels. In many of these countries Olam had been distributing other agro commodities like rice and sugar and the same channels were used 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.

Olam sourcing abilities have also significantly evolved since the inception of this business. While Initially it was sourcing from European traders, it has subsequently set up its own exporting operations in Poland and Netherlands. It has also developed sourcing networks in other countries of Eastern Europe as well as in South America and in Oceania. 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.