Milk and Ice Cream Products Essay Example for Free

Milk and Ice Cream Products Essay Ice-Fili was originated in a Soviet government established company in 1937 and privatised in 1992. Briefly its business areas are purchase raw materials from abroad, manufacturing ice creams, and distribution them through subsidiary distributors for domestic markets. In 2001 Ice-Filis equity amounted to $10,638,000, and with its least liabilities total equity and liabilities was $11,832,000. Over half of the total assets was working capital of $6,338,000. Total sales was $25,147,000, net income was $1,702,000, consequently ROA was 14. 4% and ROE was 16. 0% (see Exhibit 7). Financially Ice-Fili helps itself on business. For the most essential raw material to the ice cream taste, Ice-Fili only uses higher percentages of milk fat of high quality as well as high price imported from abroad, which makes difference Ice-Fili from foreign producers. Cost of ingredients forms as much as 42% of manufacturers price. Ice-Fili invented for modernization of manufacturing equipments which were imported until the 1960s. Total expenses of equipment, maintenance and advertising share only 17% of manufacturers price, but Ice-Fili must pursue up-to-date technology as well as equipment from abroad. Traditionally Ice-Fili had not participated in distribution activities. Ice-Fili contracted with companies such as Eskimo-Fili for kiosks, Service-Fili for minimarts, gastronoms and restaurants, Alter-West for gastronoms, restaurants, supermarkets. Costs of retailers and distributors reach 52% of retail prices (the rest of 48% is manufacturers price), but exposures of Ice-Filis products to customers is behind those of foreign competitor Nestl? Ice-Filis daily production capacity is 200tons and number of ice cream products is 170, in which exceed those of domestic and foreign competitors. However the Swiss food giant Nestl? invades in Russian ice cream markets with its long-term investment and frequent exposure of TV advertising. The boundaries of the business area of Ice-Fili are not defined by its self-helping financial status and uniqueness of raw materials, manufacturing equipment and distribution channel, but also business dispute in the share with Nestl?