Assessment of a Project of Local Sourcing Milk: A Case Study of ARLA Foods Bangladesh Ltd

Abstract

This report is prepared on the basis of my 5 months working and practical experience at Arla Foods Bangladesh. This internship program helped me to learn about the practical scenario of dairy market in Bangladesh and Arla’s position in this market. The demand of milk products for the large domestic market of Bangladesh was met through importation of subsidized milk, powder milk and milk products from developed countries. During the period of 1989-90, the total worth of milk and milk products that Bangladesh imported was 400 million taka just to meet a short fall of 40 percent of domestic demand. The milk sector of Bangladesh has failed to provide sufficient supply for liquid milk. Government took some initiatives like importing powder milk and developing dairy farms to the to the private entrepreneurs’ levels just to fulfill the shortage of milk products. Local dairy farms alone were unable to provide sufficient supply of liquid milk and milk products according to demand of the consumers. Just to fulfill this scarcity of milk products, a large number of companies established themselves in Bangladesh to sell milk product. DANO is one of those companies which has become familiar in almost every household in rural and urban areas of Bangladesh. Mutual Group- A Toll Manufacturing & Distribution Company, established two global brands, known as “Horlicks and Dano”, in Bangladesh. DANO in 2011 separated from Mutual Group and created its own brand as a joint venture with Arla Foods AMBA in Denmark. On the basis of all information, this project was developed and this document will give a brief of their new project. This project will focuses on the needs and wants of the consumer and organization and will create an alignment among every party’s needs and wants related with this projects. Through this project Arla Bangladesh wants to grow their business by ensuring that the dairy products are consumable by every Bangladeshi and people easily can reach their desired high quality products within easy reach. Through quality assurance scheme, Arla Foods Bangladesh will be backing farmers to ensure high animal welfare standards. Farmers and Arla will work together to secure high quality standards throughout the production of raw milk. And for a new project it is important to check the project viability. By using some financial parameters (Like- NPV, Payback, ROI) it has been showed that the project has positive return on investments and good to be undertaken the project. So this project will benefit the Arla in near future and also the related factors of this project.