global spice trade- indian panorama presented by sibi k thomas avt mccormick ingredients pvt ltd...
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Global Spice Trade-Indian Panorama
Presented by Sibi K ThomasPresented by Sibi K ThomasAVT McCormick Ingredients Pvt LtdAVT McCormick Ingredients Pvt Ltd
CochinCochin
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AVT McCormick Factory
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AVT McCormick
Certified Vendor of McCormick USA since 2000 Certified Vendor of 8 MNCs with minimum of 15
customer visits to our plant per year A.I.B, USA audited food safety systems since
1999; “Superior “ rating 2003 -06 AIBI, USA & Guelph Food Technology Center
HACCP Certified “Kosher” certification from Circle U, USA “Halal” Certification from Islamic Services of
America, USA ISO9001:2000 new standards certification
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Contents
Global Spice trade- A Historic Overview Ancient History
Arab/Chinese Spice routes European Colonial Invasion British /Dutch Corporate Companies Cast/Creed/Community Trade Post Colonial -
Communist blocks Broker / MNC traders
20th Century Consumerism Globalisation Information/Communication Explosion Focus on India New Era Future
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Global Spice Trade - Historic Overview
“He who controls the spice, controls the universe.”
Frank Herbert in his science fiction "Dune".
In the story, the spice was the lifeblood of a vast empire.
For the leaders of this empire, it was essential that at all times ‘the spice must flow.’
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Global Spice Trade - Ancient
Known Historic reference dates back to Pharaohs (Egyptian hieroglyphic inscriptions during the New Kingdom period about 3,600 years ago)
Biblical story of Solomon and Hiram’s joint trade mission to the distant land of Ophir.
Antiquities of the Jews - according to the Old Testament account , 3 Year voyage from the Red Sea port of Ezion-geber ( Israel ) to island of Chryse , far to the east in the Indian Ocean - Suvarnadvipa. mean “Gold Island.” - The East Indies” .
First Historic reference of a Spice - Lignum aloe “Aloes wood.” or Ud from Suvarnadiva or Sumatra Island
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Global Spice Trade - Spice routes
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Global Spice Trade 1st Century- Medieval
Nomadic spice traders The route from Gilead to Egypt -"golden road to Samarqand" - thousands of
years old, bringing pepper, cloves from India, cinnamon, nutmeg from the Spice Islands , ginger from China
Roman Trade fleets Discovered monsoon trade winds
Arabs, Chinese traders Arabs introduced Spices to Europe
Caliphate trade dominance - Destroyed the old trade route and Blocked the European
trade routes Invasion of Ghengis Khan opened up Europe trade
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Global Spice Trade Discovery of Continents 1450-1550 AD
Voyages of Portuguese( Vasco da gama) Discovery of India
Voyages of Spanish ( Magellan, Columbus) Discovery of South Americas, Australia Discovery of North America
Voyages of Dutch, English and French
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Global Spice Trade - Discovery of Continents 1450-1550 AD
15th century saying: “No man should die who can afford cinnamon""Pope Alexander VI. had bestowed one-half of the undiscovered world upon the Spanish, and the other upon the Portuguese, charging each nation with the conversion of the heathen within its prospective domains. "
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Global Spice Trade - Colonisation 1600-1800AD
Spice Wars- Between Spanish forces ,Dutch Forces Dutch Monopoly in Spice trade
First Corporate in Spice Trade - Dutch East India Company The Dutch ruled the market with a rod of iron , If the price
of cinnamon fell too low in Amsterdam, they burned the spice.
English Invasion and Colonisation English East India Company - Monopolised the entire trade
in Spice First Backward Integration project- Plantations in Malacca,
India Emergence of India as a major Spice force
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Global Spice Trade 20-21 st Century
Emergence of Cast and Creed or Community based traders , Brokers
US dominance , Communist block European US trade behemoths- Man/Cargill Emergence of US as a the biggest spice importer - 40
Spices- 200000 Mt Imports Consumerism, Super markets , Globalisation , Information explosion, Communication revolution Closed trade net works to Open trade networks
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Global Spice Trade - Focus on India
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Global Spice Trade - Focus on India
Trade of Queen and King of Spice - Cardamom and Black pepper since the pre historic times
Introduction of new Exotic Spices by various invading Forces - Chilly from Mexico by Portuguese
Plantations build by British - First Back ward Integration Projects
Organised trade through brokers , Corporate companies Raw Material trade Trading Communities and trading skill.
50-60 years of Futures Trading in Spices IPSTA Kochi Raw Material trade
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Global Spice Trade - Focus on India - New Era
India Emerged as the Spice Hub with 2 Mio Mt production! 1.8 Mio Mt consumption! and 200000 Mt Exports
Future Raw Material to Value added Products Food Safety Back ward integration projects ,Post harvest control BPO Operation in Food Segment
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What is Value Addition?
Value addition is any step taken to increase Value addition is any step taken to increase the value of raw product any time between the value of raw product any time between harvesting and sale of the final productharvesting and sale of the final product..
Adding value means that the consumers are Adding value means that the consumers are willing to pay more than they would for a raw willing to pay more than they would for a raw productproduct
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Keys to success
Quality Products Consider whether your product is
unique enough to survive in market Market research & test marketing at
a small level Get assistance with product
development from local resources Be consistent in quality, supply,
delivery and service
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Qualities for Success of BPO In Food Segment
Unique product Strong agricultural knowledge Ability to cater to customers The right kind of labeling &
packaging An enthusiastic promoter of product Aggressive marketing
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AVT McCormick Farms
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Causes of Failure of BPO/Value Addition projects
Undercapitalization
Inadequate homework
Lack of a project champion
Mediocre management
Short Term Focus
These factors account for 90%+of business failures.
These factors account for 90%+of business failures.
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The Planning Process: Implementing a Value-Added Venture
A series of plans, with increasing detail and complexity, documents the beginnings of a new value-added business
Feasibility Study
Feasibility Study
Business Plan
Business Plan
Strategic Plan
Strategic Plan
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Creating a Sustainable Competitive Advantage
DO NOT Pursue too many opportunities With little prioritization Too little resources
Poor execution Low profitability
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Creating a Sustainable Competitive Advantage
Successful Value-Added Initiatives
Successful Value-Added Initiatives
Differentiated
Products
Low
Processing
Costs Marketing
Strategy
Low
Production
Costs
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Creating a Sustainable Competitive advantage Quality control at source to offer Quality from
Source Global Quality requirements differ
How can we achieve quality needs? Thru processing using state of the art equipment
to clean test & certify Thru control of quality of raw material
Lot selection Backward integration
Quality Mind Set
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Creating a Sustainable Competitive advantage
Understand the customer quality requirements
Study the current agricultural practices Identify agri practices that lead to quality
issues Develop a agricultural practices to balance
quality issues and farmers’ concerns
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Basis of Competition
The Present
Supply Chain Vs.
Supply Chain
Product Vs.
Product
Product Vs.
Product
The Past
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A Traditional cost chain comparison
Activities Delivery at port Receiving & Palletizing QC Check + Rejections Warehousing Processing
Cleaning & Process loss Treating & Process Loss In Process Storing QC Checks + Rejections Rework Further processing Final Release Distribution
Associated costs Included in Price $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$
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A cost chain comparison: Value added Product
Activities Delivery at port, ready to use,
Palletized With QC Analysis & counter
sample Warehousing Processing
Packing into small jars Blending into final product
Associated costs Included in Price
$$$
$$$ $$$
The product is ready to use and the cost of rejections, rework and wastages and the wait for product releases at each stage is reduced
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Facts we need to Internalize:Category A
Do What You Promised You Would Do Planning & Detail Orientation is a must
Every body is in business to make a profit.
All people we deal with are equally or more intelligent than us
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Facts we need to Internalize:Category B
Speed of response is a must. the very survival of the company depends on
moving fast Bad news travels fast
All individuals in the supply chain should work with the same information.
Ability to Confront Reality: of changes in the external world of markets,
customers & competitors
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3 keys to success
Quality Products Good Marketing
Food safety & Total Liability Sufficient capital
Have Vision, take Risks and Have Vision, take Risks and Believe in YourselfBelieve in Yourself
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Thank You!!
Sibi K ThomasSibi K ThomasAVT McCormick Ingredients Pvt LtdAVT McCormick Ingredients Pvt LtdKochiKochi
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