Universal Overseas (P) Ltd.

Universal Overseas (P) Ltd. (UOL) was promoted by Mr. Rohit Mehta, of the Mehta Group of companies, a Business House with diverse business interests like texti les, chem icals, pharmaceuticals etc. having turnover of over Rs. 250 crores. Promoted in 1980 as a separate company, with a view to promote export of the Group's products, UOL was Mr. Rohit's 'baby', and though there were directors from other group companies on UOL's board of directors, the operational control of the company vested with Mr. Rohit who was the Managing Director of the company. Starting with a modest turnover of Rs. 281akhs in 1980, consisting mainly of export of the Group's products to neighbouring countries & Africa, the company had grown rapidly to reach an export turnover of over Rs. 40 crores. In early 1991, Mr. Rohit had been making one of his periodic performance reviews of the export mix of UOL with the object of adding new items that offered lucrative prospects while dropping those that were no longer profitable. Horticultural products were identified as a thrust area by the Government of India and Mr. Rohit, who was actively considering export of g'rapes, asked Mr. Joshi, VP - Exports to prepare a report. A fter studying the grape market, Mr. Joshi came to the conclusion that grape export has good potential. World demand for grapes (for consumption without processing) is nearly 1.6 million tons, valued at Rs. 6000 crores. Export of grapes from India is however negligible, amounting to about Rs 56 crores or about 0.6% of world imports. This share, he felt, can be easily increased, as India ertjoys advantages, which if fully exploited, can yield handsome dividends. India produces more than 30 types of grapes and enjoys a long season, which can be extended from December to June. Indian grapes have been found suitable in taste in the importing countries. Production of Thomson seedless a variety enjoying wide acceptability abroad, is over 2 lakh tons, of which, only 8% is exported. In respect to the Middle East and Far East markets, India has a locational advantage over South Africa and Chile, the two largest grape exporting countries in the world. Mr: Joshi identified the Middle East And Singapore as promising markets. However as grapes are a perishable commodity, he recommended that no export be undertaken unless the physical distribution .system is properly organised based on the 'Systems Approach'. He detailed the requirement of the physical distribution in Appendix A. Mr. Rohit was excited at the prospects of this new and promising field and wanted to move in quickly before the market became too crowded. He felt everything would fall in place once things started moving, and anyway, systems approach is a fancy word for common -sense.Advise Mr. Rohit on what he should do. Appendix A The Operation - Vineyard to the She{f Vineyards are located in interior areas and are not easily accessible by all forms of transport. Usually, tractor-trailers are the only means of transport that can be used. The grapes are plucked from the vines, after they are fully ripe, as unlike other frIJits, grapes do not ripen after they are harvested. They are put into plastic crates or wicker baskets lined with newspaper and transported by tractor-trailer to the packing sheds. In the packing shed, the grapes are graded on the basis of size and cluster of

International Marketing

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berries. Grapes selected for exports are packed in corrugated paper boxes. Rejected grapes are packed and sent for sale in domestic metro markets. Grapes are climatic fruits and the entire process of ripening takes place on the vine. The fruits are 'living organisms' and metabolic activity continues after harvesting and the fruits start deterioting after forty-eight hours. The shelf life of the fruits is very short and to prolong the shelf life of the grapes, they have to be stores at (-I) to 0 C. At this temperature, grapes can last upto four months. To achieve this shelf life, the field heat has to be removed within minimum possible time, but without freezing the grapes. The packed grapes. are therefore not directly put. into the cold storage as it takes about eighteen to twenty hours to remove the field heat completely. This method is time consuming and can spoil the grapes. The grapes are first put in a pre-cooling station where the temperature of the fruits is brought down from 30 - 35 C to 0 C in 3 - 3Yz hours. The grapes are then transferred to a cold storage where they are stored between (-) 1 to 0 C. High relative humidity of 90 - 95% is maintained in the cold storage using spray humidification system. This ensures that the fruits do not suffer moisture loss as even I - 2% loss of water by weight adversely affects the appearance of the berries and stem. The grapes are now ready for export. After Customs/Excise formalities are completed at the pre-cooling/ station/cold storage, the packed grapes are loaded into 20' or 40' reefer containers, depending on the requirement of the customer. The reefer containers are transported from the cold storage by special trucks/trains having facilities for providing power required by the reefer container, to a port or anICD having power facilities for the container. The grapes are then loaded onto ships that can carry refrigerated cargo. On arrival at the port of discharge, the sequence of activities is reversed. The goods pass through the normal marketing channels to finally reach the consumer.