A-One Starch Company

Marketing – 1: A-One Starch Products Limited

Case analysis and Marketing plan for liquid glucose.

A-one starch products limited was established in the late thirties, initially setup for manufacturing starch used in the textile industry. They marked a strong presence and over time they have broadened their product line to meet demands of other industries like paper, confectionary and chemicals. They have grown in size and by 96 they had other products like corn syrup, dextrose, anhydrous dextrose and sorbitol. The liquid glucose, Gluco-One was an important product in A-one’s product portfolio contributing to around 18~20% of the total sales.

By doing a basic SWOT analysis, it was understood that the market demand has been growing and around 85% demanded by confectionaries and the rest to Pharmaceuticals. The customers mostly  belong to Unorganized sector who are price conscious and the organized sector is quality conscious. Though the production capacity of A-One is 16,ooo tons per year, they are currently producing only  8000-12000 tons per year.

There is a heavy competition in the west where the supply is more than the demand, no players in the east and excess demand in south. Though there is a demand in south, it might not be monetarily beneficial for players in west to provide liquid glucose at a competitive price compared to the companies in south because of two reasons. A) In west the raw material is maize where as in south the raw material is tapioca which is much cheaper and hence low production cost. B) The shelf life is less and some time would be lost in transportation apart from the transport cost. The prices of raw materials, demand requirements determine the price realization and it is projected to increase. With two players in the west leaving, an increasing demand, and price realization, decreasing raw material cost, most of it seems in favor of the companies in the west if the opportunity is tapped properly.