herman milkfoods ltd Management discussions

HERMAN MILKFOODS LIMITED ANNUAL REPORT 2008-2009 MANAGEMENT DISCUSSION AND ANALYSIS 1. Outlook for the Industry: The Dairy Industry in India has the cooperative sector on the one hand which have an excellent milk procurement network. These companies are now becoming more market savvy and are launching new products and expanding their market. On the other hand the role of the private sector is also important and MNCs and large Indian companies co-exist side by side. With the government placing more emphasis on the agriculture sector the domestic dairy industry is keenly waiting for the government policy on this front. 2. Future Prospects: The company has been able to develop a strong marketing and distribution network for selling its products to The Nestle India Ltd., Moga, COMPFED, Patna and under the HERMAN BRAND name consisting of 200 distributors and 1000 retailers in various states. However the profit margin has continued to be squeezed due to competitive market conditions in the domestic dairy industry. Further, the Company has also set up a marketing Controlling office at New Delhi which controls the entire marketing in India and abroad. The Company receiving enormous Orders from abroad. The Company has already applied for the various requisite licenses with the concerned authorities. 3. Operational vis-a-vis Financial Performance: The company manufactures quality dairy products and certified as ISO- 9001:2000 and HACCP certified Company. The intense competition among private manufacturers to procure quality milk at a very high price had an adverse effect on Dairy Industries performance in the last few years. 4. Material Development in Human Resources / Industrial Relations Front: The team of people in the organization has been working with dedication, diligence, devotion, determination, dynamism, discipline and direction. The company believes that motivated employees are its most important resource and asset to the Company. Industrial relations during the year were cordial, cooperative, concerted and peaceful. As a result no labor disputes are pending with the Company in any Court of Law.