1.

INTRODUCTION

Unibic Foods Pvt. Ltd.was started in 2004 and its headquarter is situated in Bengaluru. It is a joint
venture of cookie maker Unibic Australia and Dhruv Deepak Saxena who is a Melbourne-based
serial entrepreneur. Hence, it is a subsidiary of Unibic Australia Pvt. Ltd. Initially, they set up their
business by importing cookies from Australia and by the end of 2005 they set up their
manufacturing unit in India. There are a wide variety of cookies ranging from the sense of chocolate
to the dry fruit embedded crunchy and delighted cookies to sugar-free cookies to oatmeal cookies.
By going through the history of Unibic, we can see that it is witnessing success from 2004. It has
owned a brand name in the world of cookies and is growing rapidly by beating other brands. Its
business strategy to introduce varieties of cookies to the market and its concern towards health
aspects of people prove it to be a leading cookies manufacturer. It also sells the cookies at a
reasonable price which makes it a preferable brand among people.

2. SOURCING

UNIBIC follows a global sourcing strategy where raw materials are procured from producers
located in different parts of the world. This is done in a bid to procure best quality material at the
most feasible costs.
2.1 Raw Materials
Wheat Flour:
Locally produced wheat flour is sourced from different approved mills of the country. A quality
control procedure is in place to check the quality of every lot of flour received. Safety stock of
flour is maintained in company operated warehouse to meet sudden increase in demand and other
contingencies.
Sugar:
Sugar is used as the major sweetener. It is sourced locally as India is one of the largest producer of
sugarcane and it is cheaper than other sweetners like corn syrup.
Chocolate:
The Ivory Coast and Ghana are by far the two largest producers of cocoa, accounting for more than
50 percent of the world's cocoa. Most of the chocolate used in confectionary items are made from
cocoa beans whose origin can be traced from these countries.
Dry fruits:
Dry fruits like cashew and almonds are sourced from local farms located in Goa and Himachal
Pradesh respectively. Pistachio and raisins are bought from local merchants

2.2 Final Product

After the product is manufactured, it is stored in warehouses until it is let out to customers. Local
customers include 1) traders who hold stock for further sales, 2) retailers who sell directly to the
final consumer and 3) private labelling partners. Foreign customers and exporters can purchase the
final product directly from the company or from the traders who hold stock of the company’s
products.

Supply Chain model

Raw materials

Traders (wholesalers) Private-labelling partners

Large Retailers

Small retailers
Exports
 3. DESTINATION COUNTRY: United Arab Emirates

The United Arab Emirates is a sovereign state in Western Asia at the northeast end of the Arabian
Peninsula, in the south of the Persian Gulf, bordering Oman to the east, and Saudi Arabia to the
south and west, as well as sharing maritime borders with Qatar to the west and Iran to the north. In
2013, the UAE's population was 9.2 million, of which 1.4 million were Emirati citizens and 7.8
million were expatriates (mainly from India and Pakistan). The estimated population of the UAE in
2020 was 9.89 million.

Reasons for choosing UAE:

1) UAE is mostly dependent on imports from South Asian Countries to meet its food requirements
and local agriculture is absent.
2) Majority of the population living in UAE are expatriates and of Indian origin and have taste and
preferences similar to that of ordinary Indians.
3) Consumerism is growing at a very fast rate in the UAE and the standard of living is very high.
Hence, all these points make UAE a favorable market for Indian Food Processing companies like
UNIBIC.

4. CLIENTS

4.1 Merchant
Traders Merchant
Importers
A merchant importer may be a person or an organization based in the destination country who
brings goods or services into the country from abroad for sale. They may further sell the product to
other traders or to the final consumer. UNIBIC can take the help of such importers who will act as
the intermediary between them and the retailers in UAE. They may or may not be responsible for
carrying out marketing activities.

Merchant exporters
A merchant exporter may be a person or an organization based in the origin country who sells
goods or services in a foreign country. They have network of clients in different parts of the world
and can help UNIBIC to sell their products overseas.

4.2 Major Retailers

Other important clients include major retailers in UAE like Supermarkets, departmental stores and
E-grocery companies. Supermarket are large retail store operated on a self-service basis, selling
groceries, fresh produce, meat, bakery and dairy products, and sometimes an assortment of nonfood
goods. A department store is a retail establishment offering a wide range of consumer goods in
different areas of the store, each area specializing in a product category. E-commerce service that
delivers grocery items and usually a delivery charge for this service is an online grocer.
These retailers play a major role in entering the new market as they provide easy access to the final
consumer. They also share vital information about the local consumers which helps to adapt the
product as per the requirements of the market. Major retailers of UAE are Lulu Mart, Spinneys,
Carrefour and Waitrose.

4.3 Contractual Partners

These include other independent companies who want private labelled product that has their own
company name and use it for either marketing or for further sale. There are a lot of companies in
India that follow the same arrangement with UNIBIC. The same contracts can be made with
organizations in UAE. Some of the prominent Indian companies that have partnered with UNIBIC
are shown in the figure.
5. POLITICAL ENVIRONMENT
The United Arab Emirates is a constitutional federation. It consists of seven emirates i.e. Abu
Dhabi, Ajman, Dubai, Fujairah, Ras Al Khaimah, Sharjah, and Umm Al Quwain. Each emirate is
governed by a ruler, while the Federal Supreme Council, highest constitutional authority of the
Emirates, consists of all the seven rulers. Each of these federations have a common trade policy.
The UAE is considered a big power in the Middle East and has considerable influences at global
stage as well. It maintains very good diplomatic and trading relations with the United States, Saudi
Arabia, India, China, and many other countries in the region and beyond.
Many analysts argue that the political freedom in the UAE is very limited. Though limited elections
are held for federal advisory bodies, political parties are banned, and all electoral candidates must
run as independents. The civil liberties for both nationals and foreigners are restricted as well
(Freedom House, 2019). The ultimate power rests with the seven hereditary rulers.
Conclusion: Politically, UAE is one of the most stable countries in the middle-east. It has a
stable government and politics is not mixed with the corporates affairs which helps many MNCs to
thrive despite the limited political freedom. Many foreign companies have smoothly operated in the
past couple of decade without facing any political problems. Hence, the political environment is not
a threat for businesses in the UAE.

6. ECONOMIC ENVIRONMENT

The UAE is a member of a number of international economic and political forums e.g. the UN,
World Bank, IMF, Arab League, OIC, OPEC, and GCC. It is the 27th largest economy in the world.
Its GDP in 2018 was 414.18 billion US dollars. The GDP growth rate averaged 4.34% from 2000
until 2018 with a big increase in 2006, and a big slump in 2009. Crude petroleum, refined
petroleum, gold, diamonds, and petroleum gas are the top exports of the UAE. Its top export
destinations are India, Japan, China, Oman, and Switzerland. Gold, jewellery, cars, diamonds, and
refined petroleum are the top imports which the country imports mostly from China, India,
Germany, the United Kingdom, and Turkey.
The UAE is one of the richest countries in the world in terms of per capita income. It has made
remarkable economic progress over the years and the factors that have mostly contributed to it are
abundant natural resources, economic diversification, innovation and inflow of foreign direct
investment (FDI). According to the World Investment Report 2019, the total FDI received by the
country from 2016 to 2018 was 30.4 billion US dollars. However, the UAE’s over reliance on the
petroleum sector is a weakness. Generally, companies and individuals in the UAE do not pay any
taxes on income or wealth.
Conclusion: It can be observed that UAE is a “rich” country where people have a very high
standard of living. But, the agriculture sector is absent from the economy which has made the
country rely on South Asian allies for their food. Most of the unprocessed and processed food
comes from other countries. This makes UAE a very big opportunity for Indian food processing
companies to grab hold of such a big market with huge growth prospects.

7. LEGAL/REGULATORY ENVIRONMENT

The UAE is a federal constitutional monarchy which is very serious about its law and order. The
UAE is one of the safest countries in the world with low crime rates. It shows that rules and
regulations are applied very strictly in the country.
7.1 Laws pertaining to import of food items:
Before any food item can be imported into UAE, the food item AND its label needs to be registered
with the Food Import and Re-export System (FIRS). Food item and label registration can only be
done online, by the UAE importing company. Different packaging of the same food item (for
example, one 100gm package and one 200gm package) are considered different food items and
should be registered in FIRS separately.
The following information is MANDATORY on the food label:
1. Brand name
2. Product name: a summarized description of the food product.
3. Food ingredients: arranged in a descending order according to the weight or volume. All
ingredients should be listed.
4. Production & expiration dates of all products, except those which are exempted from displaying
the validity or expiration dates, such as fresh produce.
5. Name of the food manufacturer, packer, distributor or importer
6. Net weight or volume
7. Country of origin should be declared clearly and should be specific. 8. Product’s barcode
9. Lot number
10. The language of the label should be Arabic. Any stickers used should not be easily removable.
11. Storage conditions (if the validity of the product depends on such conditions)
12. Mentioning the ingredients which may cause hypersensitivity
13. Instructions for using the product (if needed)
14. Nutritional information is optional (catering only - and products for special use such as for
babies and patients, etc.)
The following additives and ingredients are completely banned in the UAE:
Food additives:
• E104 Quinoline yellow (yellow no.1)
• E105 fast yellow A B
• E107 Yellow G 2 (Food Yellow 5)
• E123 Amaranth (C.1. 16185 FD and C Red 2)
• E124 Ponceau 4 R (Red 2) (Cl.16255)
• E127 Erythrosine (FD & C Red 3) (C.I.45430)
• E131 Patent Blue V (C.I.42051)
• E142 Green S (Acid Brilliant Green, Food Green S, Lissamine Green, C.44090)
• E924 Potassium Bromate (Bread products)
• E952 Cyclamate
• E1510 Ethanol (alcohol)
Note: adding alcohol is not allowed in any food product. However, if alcohol occurs naturally in
some products such as juices, it is subjected to the limits as indicated in the respective UAE
standards.
Conclusion: It can be observed that UAE has strict rules pertaining to import of food items in the
country. Rules and regulations need to be strictly adhered to while supplying products to the
country.

8. LOGISTICS
Logistics is one of the most important functions that influence cost and efficiency. Hence, there are
many companies who specialize at different levels of integration of the supply chain whose services
can be used for optimum benefit.
8.1 Transportation
Factory to Port
For this, the company can use 2PL logistics partners. A second-party logistics provider is an asset-
based carrier, which actually owns the means of transportation.
Port to Destination
A 3PL partner can be used for the further shipment of goods to the port of the destination country.
Third-party logistics providers include freight forwarders, courier companies, and other companies
integrating & offering subcontracted logistics and transportation. These partners also take care of
documentation related to the export transaction.

8.2 INCOTERMS
Cost and freight (port)
The CFR Incoterm or “Cost and Freight” is an Incoterm that is exclusive to ocean freight shipping.
It states that the seller is not only responsible for delivering the goods to the port specified by the
buyer, but also bears the transportation costs of the goods to the destination port. UNIBIC can use
this to transfer most of the legal obligation in the UAE to the buyer who can better handle them.
Seller’s obligations under the CFR Incoterm
• Delivery of goods and documents required
• Packaging and wrapping
• Inland transport in the country of origin
• Customs handling fees at origin
• Origin charges
• International freight
Buyer’s obligations under the CFR Incoterm
• Payment of goods
• Destination charges
• Customs handling fees at destination
• Inland transport at the destination country
• Payment of duties and taxes

8.3 Documents needed

1. Bill of entry/ airway bill
2. Delivery order in case of containers only
3. An ORIGINAL health certificate approved by the government health authority at the country of
origin. A copy of the health certificate will not be accepted and shall result in detaining of the
consignment at the port of entry.
4. Consignment packing list
5. An ORIGINAL halal certificate issued by an Islamic Organization which is approved by UAE
authorities (for meat and poultry and products thereof). Failure to deliver an original Halal
Certificate shall result in detaining or re-exporting of the consignment.
6. Any other certificates which might be required in case of any international epidemics or any
certificates required based on local decisions (such as GMO-Free Certificates, Avian Flu-free
certificates, Dioxin-free certificates, etc).

8.4 Warehousing
Raw materials as well the final product are stored in “1PL” or company owned warehouse from
where they are packed and shipped to their final destination. This is done so that the company has
the flexibility and privacy in its warehouses. Inventory management is driven by realized demand.
This makes it possible to maintain the “right” amount of stock and reduce costs.

*Note: 5PL or fifth party logistics providers, also known as logistics aggregators, are becoming an
integral part of supply chain management. They aggregate the demands of the 3PL and 2PL into
bulk volume for getting better rates with different types of airlines and shipping companies. This
type of logistics is not asset based. It usually works seamlessly across all disciplines. UNIBIC can
use such partners to further optimize its supply chain.

10. CHALLENGES

10.1 Bull whip effect

The bullwhip effect is a distribution channel phenomenon in which demand forecasts yield supply
chain inefficiencies. It refers to increasing swings in inventory in response to shifts in consumer
demand as one moves further up the supply chain. This inaccuracy can lead to unnecessary
manufacturing and additional inventory on the part of UNIBIC which can increase costs. To
minimize this, UNIBIC must ensure streamlined communication through out its supply chain.

10.2 Cross-border Coordination

Suppliers, manufacturers, logistics, clients and customers are spread across multiple countries, time
zones and continents, requiring careful coordination and management. UNIBIC must strive to
ensure this coordination.

10.3 Supply Chain Complexity

Consumers buy products across multiple channels, and as routes to market increase, the underlying
supply chain must adapt. Supply chain managers at UNIBIC need to develop variations on supply
chain processes to address each of the channels:
Supply chain managers must manage multiple supply chains, third parties and other organizations to
ensure a good end customer experience, regardless of how they order and receive products.

10.4 Supply Chain Volatility

Volatility and complexity don’t just create problems at a specific point in the supply chain, instead
the impact can ripple throughout the entire infrastructure. UNIBIC’s Supply chain managers must
deal with these issues promptly before they create delays, backlogs, bottlenecks and other issues.

CONCLUSION
We can conclude that UNIBIC is a perfect example of an international company that had its roots in
Australia, came to India and can use its India operations to cater to near by markets like the UAE.
This is possible only due to the integration of modern supply chain management that empowers
companies to access foreign markets with ease. Use of emerging players in supply chain
management like 4pl and 5pl partners is a growing trend to optimize reach. All these trends have
accelerated the pace at which companies are going global.
REFERENCES
1. https://www.flandersinvestmentandtrade.com/export/sites/trade/files/market_studies/2018%20-
%20UAE%20Import%20Regulations%20Food.pdf
2. https://www.unibicfoods.com
3. https://redstagfulfillment.com/3pl-4pl-5pl-explained/
 10/2/ 20, 07 56

Originality report
CO U RS E N AME
FIB A-ISM 5350

ST U D E NT N AM E
YASH JAIN 1823551

FI L E N AM E
YASH JAIN 1823551 - CIA 3 - Model SCM for a New Market

R E P O RT C REAT E D
Oct 2, 2020

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ted in 2004 and its headquarter is situated in Bengaluru. It is a joint venture of cookie maker Unibic Australia and Dhruv Deepak Saxena who is a Melbourne-based serial entreprene

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