126 32ND ANNUAL REPORT 2023-24 | HERITAGE FOODS LTD MDA STRATEGIC REVIEW STATUTORY REPORT FINANCIAL STATEMENTS Indian economy The Indian economy, one of the fastest-growing in the world, is projected to grow at 6.7% annually from 2024 to 2031, surpassing the pre-pandemic average of 6.6%. This growth is attributed to the government’s investment-driven approach and key policy support, increased capital expenditure, revival of the private sector capex cycle, and accelerated infrastructure development. For FY2024, the economy is expected to grow by 7.3%, reflecting optimism on the back of pick up in manufacturing activity and infrastructure and capex spending. Despite challenges, the Indian economy remained resilient in 2023, growing at its fastest pace in one-and-half years, particularly in the last quarter of the fiscal year with a growth of 8.4%. The government’s monitoring of the Middle East conflict’s impact on energy and logistics costs also contributed to this resilience. Indian economic growth projection on a quarterly basis (Source: https://tradingeconomics.com/india/gdp-growth-annual) [*Projected] Year-on-year growth (%) in GDP (Source: Ministry of Statistics and Programme Implementation) [*First revised estimate; **Second advance estimate] The strong growth in manufacturing was driven mainly by the easing of global commodity prices across energy, metal and food categories, which boosted profitability of manufacturing firms. The construction sector gained from higher government capex and demand sustenance for commercial and residential real estate, especially in urban areas due to return-to-office call by most major organisations. Additionally, financial, real estate and professional services are expected to witness robust growth, likely due to buoyant bank credit growth, strong demand for real estate, and growth in professional services, especially global capability centres (GCCs) in India. Global dairy industry The global dairy industry walked on a tightrope in 2023, owing to the softening of commodity prices, sluggish demand, and weaker underlying fundamentals. However, in 2024, the global dairy industry is expected to undergo a period of transformation led by expansion and consolidation, especially with major dairy players exploring efficiency-led profitability enhancement while focusing on widening their presence in the premium value-added dairy categories. Valued at around US$ 620 billion in 2024, the global dairy industry is expected to reach a size of US$ 768.80 billion by 2029 after growing at a CAGR of 4.40%. Rapid urbanization, increasing awareness about health and nutrition, significant technological advancements, rising popularity of dairy-based snacking, shifting dietary preferences, and favourable government policies and regulations are some of the major underlying factors supporting growth of the market. The global dairy food market spans across diverse categories, such as milk, butter, cheese, dry and evaporated products, as well as ice cream and frozen desserts that are household staples with high consumption frequency. Variable distribution channels, from supermarkets to online platforms, offer consumers access to a wide array of food options, thus enabling dairy companies to create multiple customer outreach points. The Asia-Pacific, with its large, growing and aspirational population with disposable income currently stands as the largest region in the dairy world, with Western Europe following closely. The latest industry estimates suggest that there will be a modest increase of 0.25% in the global milk production across key producing regions of the world in 2024. This is slightly higher than the 0.05% increase recorded in 2023. Although production is likely to increase, there is expected to be variability and non-homogeneity across regions due to uneven demand and supply situation. Few major trends that are likely to shape the global dairy market in 2024 are discussed below: Technological innovations spearheading market transformation Technological advancements, specifically comprising the seamless integration of IoT and automation, are poised to transform the dairy food industry. These innovations enable enhanced product tracking, ensuring the safety and quality of dairy goods across the entire supply chain. By leveraging IoT technologies, companies gain precise monitoring capabilities, resulting in increased efficiency and consumer confidence in the handling and safety of dairy products.
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