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Global Spice Trade- Indian Panorama. Presented by Sibi K Thomas AVT McCormick Ingredients Pvt Ltd Cochin. 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

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global spice trade indian panorama

Global Spice Trade-Indian Panorama

Presented by Sibi K Thomas

AVT McCormick Ingredients Pvt Ltd

Cochin

avt mccormick factory
AVT McCormick Factory

Quality is our Signature, Food Safety Our Guarantee

avt mccormick
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

Quality is our Signature, Food Safety Our Guarantee

contents
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
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
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
Global Spice Trade- Spice routes

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global spice trade 1st century medieval
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
Global Spice TradeDiscovery 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 ad1
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
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
Global Spice Trade20-21 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
Global Spice Trade- Focus on India

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global spice trade focus on india1
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
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
What is Value Addition?
  • Value addition is any step taken to increase the value of raw product any time between harvesting and sale of the final product.
  • Adding value means that the consumers are willing to pay more than they would for a raw product

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keys to success
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
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
AVT McCormick Farms

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causes of failure of bpo value addition projects
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.

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the planning process implementing a value added venture
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

Business Plan

Strategic Plan

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creating a sustainable competitive advantage
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 advantage1
Creating a Sustainable Competitive Advantage

Successful Value-Added Initiatives

Low

Processing

Costs

Low

Production

Costs

Marketing

Strategy

Differentiated

Products

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creating a sustainable competitive advantage2
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 advantage3
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
Basis of Competition

The Past

The Present

Product

Vs.

Product

Supply Chain

Vs.

Supply Chain

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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

$$$

$$$

$$$

$$$

$$$

$$$

$$$

$$$

$$$

$$$

$$$

A Traditional cost chain comparison

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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

$$$

$$$

$$$

A cost chain comparison: Value added Product

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
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
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
3 keys to success
  • Quality Products
  • Good Marketing
    • Food safety & Total Liability
  • Sufficient capital

Have Vision, take Risks and Believe in Yourself

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thank you
Thank You!!

Sibi K Thomas

AVT McCormick Ingredients Pvt Ltd

Kochi

Quality is our Signature, Food Safety Our Guarantee