global spice trade- indian panorama presented by sibi k thomas avt mccormick ingredients pvt ltd...

Global Spice Trade-Indian Panorama

Presented by Sibi K ThomasPresented by Sibi K ThomasAVT McCormick Ingredients Pvt LtdAVT McCormick Ingredients Pvt Ltd

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Quality is our Signature, Food Safety Our GuaranteeQuality is our Signature, Food Safety Our Guarantee 2

AVT McCormick Factory


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


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


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.’


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


Global Spice Trade - Spice routes


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


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


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. "


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


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


Global Spice Trade - Focus on India


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


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


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


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


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


AVT McCormick Farms


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.


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


Creating a Sustainable Competitive Advantage

DO NOT Pursue too many opportunities With little prioritization Too little resources

Poor execution Low profitability


Creating a Sustainable Competitive Advantage

Successful Value-Added Initiatives

Successful Value-Added Initiatives

Differentiated

Products

Low

Processing

Costs Marketing

Strategy

Low

Production

Costs


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


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


Basis of Competition

The Present

Supply Chain Vs.

Supply Chain

Product Vs.

Product

Product Vs.

Product

The Past


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 $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$ $$$


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


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


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


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


Thank You!!

Sibi K ThomasSibi K ThomasAVT McCormick Ingredients Pvt LtdAVT McCormick Ingredients Pvt LtdKochiKochi

global spice trade- indian panorama presented by sibi k thomas avt mccormick ingredients pvt ltd...

Documents

spice islands

entire trade

spice tradefirst corporate

old trade route

hirams joint trade mission

spice lignum aloe aloes

years old

east indies