Why is Amul 🐄 a principal sponsor of the Afghanistan Cricket 🏏 Team?

The madness of the Cricket World Cup 🏆 came to an end yesterday and we all are 💔 by the results. During the tournament, I observed something interesting, Amul being on the center of the Afghanistan Cricket jersey and that peaked my interest!

In FY2023, Amul (A dairy giant of India) renewed their association with Afghanistan Cricket team to become the title sponsor of the Afghanistan Cricket Team for the 2023 Cricket World Cup! (Amul also sponsored Afghan cricket team in 2019 where they got into top 10 T-20 teams!)

Afghanistan is a small country with 4 Cr population Vs India has 140 Cr population, still instead of sponsoring Indian Cricket Team why is Amul taking interest in Sponsoring Afghan Cricket Team?

Let’s Decode!

Before we jump into the story let’s understand the Afghanistan and Amul connection, it links to Khan Abdul Ghaffar Khan, who was born in British India in 1890 and fought against British rule in India alongside Mahatma Gandhi, visited the Amul factory in 1969 and also met Dr Verghese Kurien to study the white revolution.

After India’s independence, Khan Abdul Ghaffar Khan chose to stay with Pakistan and thus became a Pakistani citizen but he was from the Pashtun ethnic group which has a majority of its population in Pakistan and Afghanistan and since he worked actively to improve the livelihood of Pashtuns he is greatly regarded in Afghanistan and its population.

After he visited the Amul factory in 1969, several delegations of milk producers from Afghanistan have visited Amul which started the association of Amul and Afghanistan.

1/Start of the India-Afghanistan Trade 💼 and export growth rate 📈

The trade between the 2 countries started after signing trade agreements back in 2003 and since then India’s export to Afghanistan has increased by a CAGR of 14.5% and has reached $1.5 Bn in value. Interestingly India ranks 2nd for Afghanistan in their exports thus making ties with India important.

2/Milk 🐄 Production landscape in Afghanistan 🇦🇫 and opportunity

Even though Afghanistan is an agrarian economy a limited portion of their land is fertile (1/8th of the total land) and that makes them depend on other food items for nutrition and income sources. Milk production has been a popular side business for Afghans which contributes 3-4% to their GDP.

However, the growth of milk production has remained flat over the period and there’s a shortage of 300k MT of Milk every year which is an INR 1000+ Cr opportunity to export to Afghanistan. This is an opportunity only for Milk the opportunity for other milk products like yogurt, butter, cheese, etc. is even more.

3/Amul’s current business 💰 with Afghanistan

Pretty much since Afghanistan opened its door to Indian exporters Amul has been selling in Afghanistan and their business of Milk and Baby food products with Afghanistan today is INR 240 Cr in size! That’s ~3% of India’s total exports to Afghanistan owned just by Amul!

4/Why is Cricket 🏏 the right opportunity for Amul in Afghanistan

Just like in India, cricket is a popular sport in Afghanistan and is watched together by many Afghans on Television. Though the Afghanistan Nation Cricket Board was formed only in 2001, the Afghan team qualified for the ICC Cricket World Cup of 2010 which is incredible progress. Over the years team kept doing better and reached the semis in the 2019 ICC Cricket World Cup. Cricket is the fastest-growing and most-watched sport in Afghanistan.

Here are some of the benefits that Amul is likely to gain from sponsoring the Afghanistan cricket team:

• Increased brand awareness

• Improved brand image

• Increased sales

• Access to new markets

5/Amul’s Steal Deal 🔥 of becoming principal sponsor of the Afghanistan Cricket Team

This is where things get interesting, since Afghanistan is a young cricket team with a lot of potential, and seeing their track record and Amul’s Afghanistan business and potential Amul decided to bet on them. Amul first sponsored the Afghanistan Cricket Team in the 2019 ICC Cricket World Cup where Afghanistan reached the semis!

Since Afghanistan is not an open economy and still finding its way with its political stability there aren’t many businesses selling in Afghanistan thus the title sponsorship to the Afghanistan cricket team comes at an affordable cost. Guess how much it might be

Amul would be paying anywhere between ₹5 crore (US$625,000) and ₹10 crore (US$1.25 million), according to industry estimates.

For Ref Indian team’s principal sponsor Dream 11 paid INR 358 Cr for the 150 matches the Indian team will play including the cricket world cup which comes out to be INR 2.4 Cr per match! This means that Amul has only paid 2-4 matches worth of money to get the sponsorship for the entire Afghanistan Cricket Team for this World Cup, that’s cheap!

Also since the 2023 ICC World Cup is being played in India and watched heavily in India the free publicity in the Indian market is a plus for Amul! Now that’s a super smart deal!!

Amul has previously associated with the New Zealand and Netherlands teams in earlier World Cup tournaments and continued its brilliant strategy to get affordable sponsorship and maximize ROI in other markets.

6/Amul’s export opportunity with Afghanistan beyond Milk products 🗻

Within the $1.5Bn exports to Afghanistan 🇦🇫 the top exported product from India 🇮🇳 is Sugar with $161Mn (INR 1300+ Cr) in value which is more than 10% of the overall export. Amul has openly talked about its plans to get into the sugar business and this might be an opportunity to capture more export market share with Afghanistan 🇦🇫

Even though Afghanistan is an agrarian economy apart from Sugar they import many food items due to the shortage of fertile land (1/8th of the total land) and that can be a further export opportunity for Amul considering their close ties with the country and its people.

Fun Facts: (Did you know?)

1. Since Khan Abdul Ghaffar Khan parted with Pakistan after India’s Independence he became a Pakistani citizen and he’s the only Pakistani recipient of India's highest civilian award, Bharat Ratna. 🏅

2. In June 1947, Khan Abdul Ghaffar Khan and other Khudai Khidmatgar leaders formally issued the Bannu Resolution to the British authorities, demanding that the ethnic Pashtuns be given a choice to have an independent state of Pashtunistan, which was to comprise all of the Pashtun territories of British India and not be included (as almost all other Muslim-majority provinces were) within the state of Pakistan—the creation of which was still underway at the time.