dairy in north east india
TRANSCRIPT
Presentation
on
Pre- Investment Feasibility Study
in the context
of
Development of Dairy Industry
in the
North Eastern Region24/10/01
Presentation
on
Pre- Investment Feasibility Study
in the context
of
Development of Dairy Industry
in the
North Eastern Region24/10/01
Genesis Fintec Limited
Genesis Fintec Limited Consulting & Advisory Services
GFL is a multi discipline as well as cross discipline consulting organisation rendering services in following principal functional areas :
Slide 1/2
Financial & Management Consulting
Project Consulting
Environment & Safety Management
Studies & Research
Position Name
Team Leader cum Dairy Expert
Dr. J. V. Parekh
Animal Husbandry
Dairy Market Expert
Environmental Expert
Field Investigator
Social Study Expert
Dr. R. M. Singh
Mr. Arun Bhargava
Dr. Ardhendu Mitra
Mr. Santosh Mondal
Ms. Madhumita Das Gupta
Survey Specialist & Statistician
Mr. Sukhendra Kr. Gupta
Genesis Fintec Limited
Slide 1/3
Finance & Project Specialists Mr. C.R. Sengupta
Project Engineer Mr. Avinash Singh
Finance & Project Specialists Mr. Abhay Mishra
Legal Expert Mr. Naresh Balodia
KEY PERSONNELExperience
Implementing Dairy Projects World Wide, World Bank Consultant
Ex UP State Animal Husbandry Department.Presently Practicing Consultant
15 Yrs. Exp. In Milk Product Marketing, Ex Consultant to Indo Swiss Project , Sikkim
EIA & Formulating EMP for World Bank, NHAI, Infrastructure Projects in India
Collection of Primary Data & Assistance Consultants with Data Collection from various Depts.
Social Sector Evaluation, Baseline Studies in various World Bank & ADB Projects in India
Qualitative & Quantitative Analysis of Primary Data and collation with secondary Data. Senior Consultant, World Bank, Ex Chief Technical Advisor Ex Director NSSFinancial Specialist, Expert in Bankable Projects Ex Executive Director IDBI, Ex Chairman UBI,
Project Planning, Plant Lay out, Design, Erection & Commissioning of Process Plants
Financial Analyst and preparation of DPR, CA.for 20 Yrs.
Company Law & Corporate Affairs Expert
Present Scenario-A Brief Over view Statewise Production
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Source : Basic Animal Husbandry Statistics 1999, Min. of Agriculture, GoI.
Arunachal Pradesh
Assam
Manipur
Meghalaya
States
Mizoram
Nagaland
Tripura
Sikkim
44
Production1997-98 (‘000MT)
775
62
59
20
46
47
35
118
Per Capita Availability of Milk 1997-98
(gms/day)
82
79
78
64
84
40
191
Slide 2/6 Genesis Fintec Limited
Low genetic potential of local breeds
Non-availability of feed which is imported from other States.
Poor collection & distribution network
Lack of micro-credit availability
Monpa & Tibeto Mongolian tribes in West Kameng & Tawang districts depend primarily on local Yaks
Veterinary Institutions are not functioning properly.
Present Scenario-A Brief Over view
ARUNACHAL PRADESH
Low cross-breed Cattle population.
Shortage of quality Feed & Fodder.
3 Milk unions (capacity 53000 litres per day ) -Guwahati >only active Union -Jorhat -Silchar - Others are Defunct / Underutilised.
Central Dairies (25000 LPD capacity) -2. One central dairy (Capacity 60000 LPD) under coop. sector.
Cooperative milk societies-297
Very low Milk Procurement & Lack of Organized Marketing.
Kamrup, Sibsagar, Nagaon, Jorhat, Morigaon, Barpeta, and Sonitpur are some of the potential districts for dairy development.
Urban pockets have good demand and farm- gate prices are attractive.
Present Scenario-A Brief Over view
ASSAM
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Animal Husbandry sector is underdeveloped
Department of Animal Husbandry and the state livestock federation are the only developmental agency working
There is one milk collection and marketing centre in Manipur.
Small operational holdings.
Low productivity of animals.
Although Cross breeds are available there is inadequate coverage for repeat breeding.
No feed Plants. Fed is brought from WB & Bihar resulting in high cost.
Taboos regarding milk consumption amongst some tribal groups.
Present Scenario-A Brief Over view
MANIPUR
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The Animal Husbandry sector is underdeveloped.
Poultry and Piggery are the major activities followed by the Dairy
Average milk yield of animals is too low.
Cross breeds are available and the State policy encourages cross breeding particularly with Jersey cows.
Cattle feed deficit state - shortage estimated at 40%.
High cost of feed
Lack of marketing infrastructure.
Present Scenario-A Brief Over view
MEGHALAYA
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The animal husbandry sector is relatively underdeveloped
Piggery and Goatery are the major activities followed by the poultry and dairy
Low productivity of animals & Non availability of improved / purebred animals.
Vet Institutions network is not working effectively.
Shortage of feed and fodders and high cost of feed.
Lack of marketing infrastructure.
Poor Intra state connectivity.
Scarcity of water & steep mountainous terrain.
Taboos regarding milk consumption amongst some tribal groups.
Present Scenario-A Brief Over view
MIZORAM
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Animal Husbandry sector is relatively underdeveloped. Piggery & Goatery are major activities.
Vet Institutions are not properly equipped.
Huge deficit in Feed & fodder - resulting in regular imports.
Milk consumption has gained ground in last decade
KOMUL the only organised Milk procurement & marketing organisation has a milk processing plant of 10000 litres per day capacity. However, procurement is only 1800 lpd.
About 46 dairy cooperatives are in operation
About 2000 ltrs of Milk is distributed in Dimapur and Kohima.
Mountainous territory.
Present Scenario-A Brief Over view
NAGALAND
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Livestock rearing is major household allied activity. About 80-90% households keep cattle.
Cross breeding has been quite successful with 50% of the Cattle population being crossbred.
Dept. of Animal Husbandry & Sikkim Milk Union are the development agencies working for Dairy development.
Two Schemes under Integrated Dairy Development Program are in operation.
5 Milk Processing Units with a combined capacity of around 23000 LPD are in place.
Feed & fodder shortage is estimated at 50% and is made up by imports from other States.
Present Scenario-A Brief Over view
SIKKIM
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Animal Husbandry sector is underdeveloped
Non availability of improved / purebred animals.
The state has one milk processing plant and chilling centre with a capacity of 10000 litres per day capacity .
A milk union has started functioning with jersey cows and upgrading of Reang tribal buffalo with Murrah breed.
Regular import of feed ingredients as well as compounded feed from West Bengal and Bihar.
Present Scenario-A Brief Over view
TRIPURA
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Scene-I Keeping 2/3 Cattle of local breed is a regular domestic activity in NE
region. Inconsistent Quality of Milk Low Productivity of animals Limited presence of Organised Milk Production Very limited presence of Organised Milk Collection & Distribution Activity Very few Dairy Processing Plants Very high ratio of non-descript animals
Scene-II Climate is congenial for Animal Husbandry Demand of Milk & Milk product > Supply Demand is growing day by day Pasteurs offering natural feed resources About 61 species of grass and 160 species of fodder trees are
available in the region Transformation of local type in to high yielding stock is possible by
cross breeding
Both the scenes are contradictory but present in NE
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BACKGROUND OF THE STUDY
Immediate Objectives leading to Wider Objectives
To Examine the Techno Economic Viability of Dairy Project in NE
To provide basic information on Business Opportunity in Dairy Sector
to:
• Economic development of NE through Direct & indirect Employment
Opportunity
• Attracting Investors
Genesis Fintec LimitedSlide3/1
Immediate Objectives Wider Objectives
Government Agencies
Banks & Financial Institutions
Entrepreneurs & Investors
OBJECTIVES OF STUDY
.
.
.
Genesis Fintec LimitedSlide 4/1
Field Investigation + Input of Consulting Organisation
Out put to Clients i.e NEDFi
Field & Market related information
Pre - Investment Feasibility Report
Technical/ Technological Input.
Project Profiles
Legal, Financial & Commercial Input
Report on Model Dairy Farms
Measurement of production & productivity level of animals
Status of organised Dairy farming
Identification of different marketing channels and price spreadAnalysis and projection of demand & supply of milk and milk products
Assessment of HRD needs
Suggestion on regulatory requirements
Estimation of Cost & Means of Finance ( Suggested)
Assessment of required Infrastructure
Assessment of financial viability
Socio - Environmental factors
Identification of the number & suitable locations for Dairy farming& Milk Processing
Suggestions on Model Farming
Status of milk processing units
CONCEPT OF STUDY
Slide5/1
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Analysis of Demand & Supply of Milk and Milk Products
Identification of no. and location of:• Dairy Farms• Milk Processing Units
Assessment of requirements & Suggestions on Support Facilities
The whole of North Eastern Region
GEOGRAPHIC SCOPE
Arunachal Pradesh
Assam Manipur Meghalaya
Mizoram Nagaland
Sikkim Tripura
SCOPE OF STUDY
SUBJECTIVE SCOPE
District Level
Data to be collected on following parameters
Present Status of Organised Dairy Farming Projects
Analysis of Data of last
5 years
Analysis of Demand Supply Gap
Using Statistical Methods
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SCOPE OF STUDYAnalysis of Demand & Supply Position
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Milk Production & Productivity of animals
Present status of Milk Processing Units
Projection for next 10 years
• Identification of different marketing channels
Farmer’s share in Consumer’s Rupee
This would help us in assessing what measures be taken to ensure an increase in the Rural farmer’s share.
Marketing Channels
Farmer'sshare
Other share
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SCOPE OF STUDYAnalysis of Demand & Supply Position
Slide 5/3
Rural Farmer IM
1IM 2
IM 3
Consumer
+ %
+ %
+ %
Data Collected from various sources
Data related to District level
To assess present situation & future development of
Milk pocket areas
To consider :• Hinterland for fodder• Feeding,
Breeding & Management • Availability of
other facilities
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SCOPE OF STUDY Identification of Farms & Milk Processing Units
Slide 5/4
To assess No. & location of viable
Dairy Farms
Include information on:Requirement of Food
Regulations & Standards
Requirement of Clearances
Identify no., location & Capacity of
Milk Processing Plants
5 Project Profiles
To consider :• Scale of
operation • Suitability of
animal Breed• Market & Marketing Channel• Investment
required• Man power
needed• Model of Dairy Farm
SCOPE OF STUDY Assessment of Requirements of Support Facilities
Unorganized
Small Rural Farmers
Organized Dairy Farms
Procurement through Middlemen or Co-operatives
Processing Unit
T T T T T T T T
Livestock
Market
Veterinary Inputs
Breeding/Artificial Insemination
Animal Feed
Transportation
Storage & Preservatio
n
Grazing land
H R D & BASIC INFRASTRUCTURE
T T T T T T T T
Assess the need
With Inputs on• Costs & viability• Mode of financing• Policies &
programs to be framed
A report on Model Dairy Farm
Suggest solutions in tune with ground situation in the Pre Investment Feasibility Report
+
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Consumer
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Past Studies
Interaction with NEDFi
Final Report
Proposed Study
Draft Report
Pre - Investment Feasibility
Project Profile
Project Report of Model Farm
Assessment
Findings
APPROACH
Methodology for Preparation of Reports
METHODOLOGYMethodology an overview
Methodology for Field Investigation & Desk Research
Methodology for Consultant's Input
Slide 6/2
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Collection of data
Published Data
Plan the Survey
Authentic secondary
sourcesCase Studies
• Scrutiny• Validation• Processing • AnalysisTo emerge with
Projections
Dairy Unions & Federations
To be supplemented
by sample surveys at
Producer level(Primary Data)
Formulate Data Set
Taking into account - Type of Breed
- Production- Productivity level- Type of Milk- Size - Marketing System- Profitability Level - Availability of surplus milk- Seasonality Factors
Key Persons : Dairy Expert Survey Specialist & Statistician
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METHODOLOGY Methodology for Field Investigation & Desk Research
Slide 6/3
METHODOLOGY
Methodology for Field Investigation & Desk Research
Slide 6/4
The Proposed Guideline for Study & Survey in NE Region :-
Primarily based on Secondary Data to be collected from various Agricultural Statistics Authorities (ASAs) including :-
Directorate of Economics & Statistics of various State Governments Directorate of Economics & Statistics, Ministry of Agriculture, Govt. of India Department of Animal Husbandry & Dairy of various States National Sample Survey Organisation District Industrial Centres Veterinary Centres & Sub Centres Frozen Semen Banks State Milk Federation & Milk Unions Office of the Registrar of Co-operatives of each State National Dairy Development Board Indian Council for Agricultural research NABARD
This would be supplemented by collection of Primary Data through Sample Surveys
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Following would be considered in course of the study
Recommendations of National Statistical Commission (NSC) for “Livestock Number”
Scheme of Animal Integrated Sample Survey for estimation of Major Livestock Products, Govt. of India
Findings of NSSO on Periodic household enquires by the NSSO relating to Livestock
Key Persons : Entire Team
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METHODOLOGYMethodology for Consultant's Input
Slide6/5
Assess Supply
position of Milk & make
future projections
Assess present availability of
& future development of Support Facilities
Assess viable no. & locations of
Dairy Farms
Identify no. and location
of viable Milk Processing
Units
With application of statistical
tools
After considering grazing requirements, suitability of breeds, marketing channels
& other facilities
Consider requirement of
• Food regulations &
Standards• Clearances
from authorities
To consider model of Dairy Farming
( Cooperative , Private, Corporate)
Assess Demand
Supply Gap & make future
projections
Consider • Suitability &
Adaptability of Technology
• Product Mix
Market related information
Measurement of production and productivity of milk
Analysis of demand and Supply gap
Marketing Channels and Price spread
Technological / Technical Input (Social & Environmental factors)
Regulatory requirements
Pre- investment Feasibility study
Report
Project Profiles
Report on Model Dairy Farm
Own Inputs
Field Investigation
Desk Research
Key Persons : Entire Team
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METHODOLOGY Methodology for Preparation of Reports
Slide 6/6
Financial Input
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Dairy Development in
NE Region
Dairy Development in
NE Region
Constraints and Road Map towards Solutions
Slide 7/1
Dairy Development in NE Constraints
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• Poor Cattle Population• Very high ratio of non -descript animals• Mostly indigenous stock - few
cross breeds• Low Productivity• Limited presence of Organized
milk production • Inconsistent Quality
Production
• Lack of grazing pastures • Poor Feeding, Breeding & Management• Inadequate manpower &
Training facilities• Lack feed & fodder
Support Facilities
• Lack of Organized Milk Distribution
network• Absence of organized markets• Inadequate packing & Storage• Poor TransportationProcurement
• Very limited presence of organized
milk collection system• Taboos amongst some Tribal
groups• Non availability of Storage & Preservation Facilities• Inaccessibility in some places
Distribution
• Limited presence of Organized Milk Processing activity
• Lack of Basic Infrastructure
Processing
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The Possible Road Map
Dairy Development in NE
Through activation & augmentation of:
1) Collection system 2) Breeding, Feeding & Management facilities 3) Captive/satellite Dairy Farms which would act as Catalysts
To be set up by:• Processing Units• Cooperative Society Movement • Private Enterprise
Through Market Force to be created by :
• Private & cooperative sector sector Milk Processing Units
• Marketing Networks
set up by Private Sector / Cooperative
Push Mechanism Pull Mechanism
To galvanize Dairy Industry
The Possible Road Map
Dairy Development in NE
Pull & Push mechanism to operate simultaneously from that point.
Integration of Government Support, Private Investment and Community Participation
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Attract Private sector Investment in identified Processing units to create the initial pull.
The key areas to be dealt with :-
Dairy farming
Milk Processing & Marketing
Support Facilities for Dairying
Genesis Fintec LimitedSlide 7/1/2
Key Areas
Dairy Development in NE
Collection & Bulk cooling
Dairy Development in NE Key Areas
Genesis Fintec LimitedSlide 7/ 1/ 1
•Setting up of satellite Dairy Farms by Milk Processing Units to galvanize dairy farming•Setting up of Organized Dairy farms•Veterinary Inputs•Availability of Cattle
Dairy Farming
Feeding, Breeding & Management facilities set up /aided by :-•Processing units through Satellite Dairy Farms
•Cooperatives•Local groups of entrepreneurs aided
by Micro Credit of Banks•Govt. agencies
Support Facilities
•Setting up of viable Milk Processing Units at locations thrown up by the Study•Setting up of Marketing Networks organized on a Private / Co-operative level
Collection & Bulk Cooling
•Collection system / Network initiated or set up by Processing Unit i.e. Backward Linkage by Processing Units•Attempt to activate co-operative movements considering the relevant socio-environmental factors•Setting up of chilling centres based on study results
Milk Processing & Marketing
Measures which may be taken under each area
Dairy Development in NE
Market Analysis
Projects & Locations Identification
Infrastructure & Support Facilities
Socio- Environmental Factors
Investment Analysis
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Genesis Fintec LimitedSlide 7/2/2
Dairy Development in NE Market Analysis
STATES Demand (Recommen
ded per capital
consumptio
*Estimated population in the year
1997
Per capita availiblity of Milk in
gm/day (1997-98)
Gap in MT/day
Gap in the State
'000MT
Arunachal Pradesh 220 969861 118 98,92 36Assam 220 25144386 82 3470 1267Manipur 220 2060913 79 291 106Meghalaya 220 1990945 78 283 103Mizoram 220 773546 64 121 44Nagaland 220 1356868 84 185 67Tripura 220 3093032 40 557 203Sikkim 220 455450 191 13 4,8
Total NE 5018,92 1830,8
* Population Estmation on base year of 1991 Census and Growth @ 2.03/annum
220 gms recommended by the Nutritional Advisory Committee of the Indian Council of Medical Research
Demand Supply Assessment
Extent of Business Opportunity
Dairy Development in NE
Market Analysis
Present opportunity in the NE region is primarily in Fluid Milk segment
The demand for fluid milk is constantly growing.
On demand supply equilibrium of fluid milk, demand for value added products to rise
Nature of Market Opportunity
Genesis Fintec LimitedSlide 7/2/3
Dairy Development in NE Projects & Location Identification
AProjected Supply
from Rural Farmer ( Next 10 Yrs
Projection)
BProjected Supply from Organised
Dairy Farm ( Next 10 Yrs
Projection)
Processing Unit
CDemand Supply Gap Forecast for
10 Yrs. ( In a defined
Area)
Capacity of Viable Processing Unit to be determined by way of match making between A + B and C . The balance need would be fulfilled by D if required.
DCaptive/
Satellite Dairy farms to provide
the balance Supply
Genesis Fintec LimitedSlide 7/2/4
Dairy Development in NE Projects & Location Identification
Project Opportunities lie in the areas of :-1. Organized dairy Farming2. Milk ProcessingLocation identification made through the study would hold the key to success.
Factors to be considered for Identification & Location of Projects:- Geographical, Topographical & Climatic Parameters Milk Production & Availability Milk Transportation & Collection Milk Utilisation Status Packaging Distribution Methods Utilities availability Social & Environment Impact Plant Organisation
Other Considerations Milk & Milk Product Order Recommended Standard of Bureau of Indian Standards Norms of NDDB Prevention of Food Adulteration Act Standards of Weight & Measures (Packaged Commodity) Rules 1977 Agreement on Agriculture, WTO DMI Norms, GoI Industrial Policy of respective States
Genesis Fintec LimitedSlide 7/3/1
Dairy Development in NE Infrastructure & Support Facilities
VETERINARY INSTITUTIONSArunachal
PradeshAssam
ManipurMeghalaya
Mizoram Nagaland
TripuraSikkim
Vet Hospitals 8 25 5 7 2 4 9 12Vet DisPensary 134 137 136 107 126 87 44 23Key Village Centers 30 25 3 5 3 2 3A.I Centers/ Regional/Sub centres 120 415 99 78 104 68 156 34
ICDP 11 1 1 1 1
Frozen Semen Bank 3 1
DAIRY FARMSFEEDING & BREEDING FARMSBreeding Farms 9 8 2 5 5 6 2 2Fodder Production /Demo Farms 5 4 3 5 6 1 9Bull Rearing Farm 2
DAIRY DEVELOPMENTCOLLECTION & MARKETINGMilk Collection & Maktg. Centres 2 1 105Chilling Centers 18 6 1Milk Union 3 1 1MILK PROCESSING UNIT NA 3 1 1 1 1 1 5
Present Scenario
• Cattle Feed Plants• Veterinary & Animal Husbandry Centres• Distribution of Fodder seeds• Breeding farms & Insemination Centres • Supply of Crossbreed Animals• Supply of equipment
Dairy Development in NE Infrastructure & Support Facilities
Opportunities for Private Entrepreneurs & Cooperatives may lie in :-
Support facilities
Collection & Bulk Cooling
• Setting up Cooling centres• Collection / Procurement agents network• Transportation business (tankers)
To examine the possibilities of activating this push mechanism by encouraging Micro Credit from Banks.
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Marketing of Milk
• Distributors & Agents network
Study would include :Assessment of Present status of Infrastructure & Support facilities Indications of requirements of Support facilities & Infrastructure to activate and augment the Dairy activity.
Dairy Development in NE Infrastructure & Support Facilities
Genesis Fintec LimitedSlide 7/3/3
Dairy Development in NE Socio-Environmental Factors
Environmental Impact Assessment & related action Plan
Social Impact Assessment & Action Plan
Study to undertake
These studies are crucial to :-• Determine the ideal model for Dairy farms • To identify the best ways to activate the Co-operative movement
keeping in view the cultural & environmental factors.
Genesis Fintec Limited.Slide 7/3/4
Dairy Development in NE Investment Analysis
Investments in identified Viable Units :-
o Dairy Farmso Milk Processing units
Investment Requirement for Support Facilities
Investment required for Milk Producers’ participation in the integrated Dairy Development Programme
Investment for Marketing & distribution network
Considerations for Assessment of Investment over a period of 10 years :
Slide 8/1
Major Market Pull must come from the investment by Private sector/ Cooperatives in the areas of Milk Processing as well as Marketing .
Major Push must come from the activation of collection network byPrivate sector and Cooperatives.
Push to Local Entrepreneurship in the area of support facilities tocome from encouragement of Micro Credit.
Dairy Development has to be done through integration of pull &push mechanism.
Identified Projects & Business Opportunitiesto show strong businesssense to Entrepreneurs.
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Concluding Remarks