III.1.AMUL DAIRY

III.2 INDUSTRIAL PROFILE:

Name Kaira District Cooperative Milk Producers' Union Ltd. Amul Dairy, Anand

Date of Establishment 14TH December 1946

Type Cooperative

Industry DAIRY/FMCG

Product Range Dairy products like Milk,Butter,Ghee,Paneer etc.

Number of Producer Members 6,80,962

Number of Employees 750 employees of marketing arm. However, real pool consists of 3 million milk producing members.

Number of Village Dairy Cooperative Societies

1206

Total Milk Handling Capacity 4.5 Million liters per day

Milk Collection (Daily Average) 1.8 Million liters

Milk Drying Capacity 100 Mts per day

Whey Drying Capacity 60 Mts per day

Cattle Feed Manufacturing Capacity 1200 Mts per day

Sales Turnover (2013-2014) Rs. 34410 million

Slogan The Taste Of India and A toast to the world.

Website http://www.amuldairy.com/

III.I.2.About the Industry:

• It all began when milk became a symbol of protest

• Founded in 1946 to stop the exploitation by middlemen

• Inspired by the freedom movement.

The Kaira District Co-operative Milk Producers’ Union (Amul) is headquartered at Anand. Amul is an Indian dairy cooperative, based at Anand in the state of Gujarat, India. The word amul (अमू�ल) is derived from the Sanskrit word amulya (अमू�ल्य), meaning rare, valuable. The co-operative was initially referred to as Anand Milk Federation Union Limited hence the name AMUL.Formed in 1946, it is a brand managed by a cooperative body, the Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF), which today is jointly owned by 3 million milk producers in Gujarat. Amul spurred India's White Revolution, which made the country the world's largest producer of milk and milk products. In the process Amul became the largest food brand in India and has ventured into markets overseas.Dr Verghese Kurien, founder-chairman of the GCMMF for more than 30 years (1973–2006), is credited with the success of Amul. The seeds of this unusual saga were sown more than 65 years back in Anand, a small town in the state of Gujarat in western India. The exploitative trade practices followed by the local trade cartel triggered off the cooperative movement. Angered by unfair and manipulative practices followed by the trade, the farmers of the district approached the great Indian patriot Sardar Vallabhbhai Patel for a solution. He advised them to get rid of middlemen and form their own co-operative, which would have procurement, processing and marketing under their control. In 1946, the farmers of this area went on a milk strike refusing to be cowed down by the cartel. Under the inspiration of Sardar Patel, and the guidance of leaders like Morarji Desai and Tribhuvandas Patel, they formed their own cooperative in 1946.This co-operative, the Kaira District Co-operative Milk Producers Union Ltd. began with just two village dairy co-operative societies and 247 litres of milk and is today better known as Amul Dairy. Amul grew from strength to strength thanks to the inspired leadership of Tribhuvandas Patel, the founder Chairman and the committed professionalism of Dr Verghese Kurien, who was entrusted the task of running the dairy from 1950.The then Prime Minister of India, Lal Bahadur Shastri decided that the same approach should become the basis of a National Dairy Development policy. He understood that the success of Amul could be attributed to four important factors. The farmers owned the dairy, their elected representatives managed the village societies and the district union, they employed professionals to operate the dairy and manage its business. Most importantly, the co-operatives were sensitive to the needs of farmers and responsive to their demands. At his instance in 1965 the National Dairy Development Board was set up with the basic objective of replicating the Amul model. Dr. Kurien was chosen to head the institution as its Chairman and asked to replicate this model throughout the country.

The Amul Model

The Amul Model of dairy development is a three-tiered structure with the dairy cooperative societies at the village level federated under a milk union at the district level and a federation of member unions at the state level.

DISTRIBUTION CHANNEL

Amul has a fast and efficient supply channel. The Amul dairy vans provide the products to the retailers daily morning. It has a huge supply network.

III.I.3. History

Over six decades ago the life of a farmer in Kaira was very much like that of farmers anywhere else in India. His income was derived almost entirely from seasonal crops. Many poor farmers faced starvation during off-seasons. Their income from milch buffaloes was undependable. The milk marketing system was controlled by contractors and middlemen. As milk is perishable, farmers were compelled to sell their milk for whatever they were offered. Often they had to sell cream and ghee at a throwaway price. They were in general illiterate. But they could see that the system under which contractors could buy their produce at a low price and arrange to sell it at huge profits was just not fair. This became more noticeable when the Government of Bombay started the Bombay Milk Scheme in 1945. Milk had to be transported 427 kilometers, from Anand to Bombay. This could be done only if milk was pasteurized in Anand.After preliminary trials, the Government of Bombay entered into an agreement with Polsons Limited to supply milk from Anand to Bombay on a regular basis. The arrangement was highly satisfactory to all concerned – except the farmers. The Government found it profitable; Polsons kept a good margin. Milk contractors took the biggest cut. No one had taken the trouble to fix the price of milk to be paid to the producers. Thus under the Bombay Milk Scheme the farmers of Kaira District were no better off ever before. They were still at the mercy of milk contractors. They had to sell their milk at a price the contractors fixed. The discontent of the farmers grew. They went in deputation to Sardar Patel, who had advocated farmers’ co-operatives as early as 1942.Sardar Patel reiterated his advice that they should market their milk through a co-operative society of their own. This co-operative should have its own pasteurization plant. His advice was that the farmers should demand permission to set up such a co-operative. If their demand was rejected, they should refuse to sell their milk to middlemen. Sardar Patel pointed out that in undertaking such a strike there should be some losses to the farmers as they would not be able to sell their milk for some time. If they were prepared to put up with the loss, he was prepared to lead them. The farmers’ deputation readily accepted his proposal. Sardar then sent his trusted deputy, Mr. Morarjibhai Desai, to Kaira District to organize milk co-operative – and a milk strike if necessary. Mr. Desai held a meeting in Samarkha village on January 4, 1946. It was resolved that milk producers’ co-operative societies should be organized in each village of Kaira District to collect milk from their member-farmers. All the milk societies would federate into a Union which would own milk processing facilities. The Government should undertake to buy milk from the Union. If this wasn’t done, the farmers would refuse to sell milk to any milk contractor in Kaira District. The Government turned down the demand. The farmers called a ‘milk strike’. It lasted 15 days. Not a drop of milk was sold to the milk merchants. No milk reached Bombay from Anand, and the Bombay Milk Scheme almost collapsed. After 15 days the milk commissioner of Bombay, an Englishman, and his deputy visited Anand, assessed the situation and accepted the farmers’ demand. This marked the beginning of the Kaira District Co-operative Milk Producers’ Union Limited, Anand. It was formally registered on December 14, 1946. Its objective was to provide proper marketing facilities for the milk producers of the district. The Union began pasteurizing milk in June 1948, for the Bombay Milk Scheme – just a handful of farmers in two village co-operative societies producing about 250 liters a day. An assured market proved a great incentive to the milk producers in the district. By the end of 1948, 432 farmers had joined village societies, and the quantity of milk handled by the Union had increased to 5000 liters a day. In the early stages,

rapid growth brought in its wake serious problems. Their solution provided the stimulus for further growth. For example, as the co-operative movement spread in the district, it was found that the Bombay Milk Scheme could not absorb the extra milk collected by the Union in winter, when buffaloes yielded an average of 2.5 times their summer yield. Thus by 1953, the farmer-members had no regular market for the extra milk produced in winter. They were again forced to sell a large surplus at low rate to middlemen.

The only remedy was to set up a plant to process the extra milk into products like butter and milk powder. The logic of this step was readily accepted by the Government of Bombay and the Government of India, except for a few doubting Thomases. The government of India helped the Union to get financial help from UNICEF and assistance from the Government of New Zealand under the Colombo Plan. Technical aid was provided by F.A.O. A Rs.50 – lakh factory to process milk powder and butter was blueprinted. Its foundation stone was laid by the then President of India the late Dr. Rajendra Prasad on November 15, 1954. The project was completed by October 31, 1955, on which day the late Pandit Jawaharlal Nehru, the then Prime Minister of India, declared it open. The new dairy provided a further fillip to the co-operative movement among milk producers. The union was thus enabled to organize more village co-operative societies and to handle more and more milk each year. This event also brought a breakthrough in dairy technology as the products were made processing buffalo milk for the first time in the world. Kaira Union introduced the brand “Amul” for marketing its product range. The word “Amul” is derived from Sanskrit word ‘Amulya’ which means ‘priceless’ or precious’. In the subsequent years Amul made cheese and baby food on a large commercial scale again processing buffalo milk creating a history in the world.1964 was the turning point in the history of dairy development programme in India. Late Shri Lal Bahadur Shastri, the then Prime Minister of India who visited Anand on 31s October for inauguration of Amul’s Cattle Feed Plant, having spent a night with farmers of Kaira and experiencing the success wished and expressed to Mr. Kurien, then the General Manager of Amul that replicating Amul model through out our country will bring a great change in the socio-economic conditions of the people. In order to bring this dream into reality, 1965 The National Dairy Development Board (NDDB) was established at Anand and by 1969-70 NDDB came out with the dairy development programme for India popularly known as “Operation Flood” or “White Revolution”. The Operation Flood programme, even today, stands to be the largest dairy development programme ever drawn in the world. This saw Amul as model and this model is often referred in the history of White Revolution as “Anand Pattern”. Replication of “Anand Pattern” has helped India to emerge as the largest milk producing nation in the world.

Amul meant different things to different people:

To a Milk Producer … A life enriching experience

To a Consumer … Assurance of having wholesome milk

To a Mother … A reliable source of nourishment for her child

To the Country … Rural Development and Self Reliance

III.I.4. Vision and Mission statement:

Mission:

GCMMF endeavors to satisfy the taste and nutrition requirements of the customers of the world through excellence in marketing by their committed team. Through cooperative networking they are committed to offer quality products that provide best value for money.

Vision:

Amul’s vision is to provide more and more satisfaction to farmers, their customers, employees and distributors.

III.I.5. Board of Directors:

The following are the 17 union members of GCMMF which form the board of directors of AMUL.

1. Kaira District Cooperative Milk Producers' Union Ltd., Anand2. Mehsana District Cooperative Milk Producers' Union Ltd, Mehsana3. Sabarkantha District Cooperative Milk Producers' Union Ltd., Himatnagar4. Banaskantha District Cooperative Milk Producers' Union Ltd., Palanpur5. Surat District Cooperative Milk Producers' Union Ltd., Surat6. Baroda District Cooperative Milk Producers' Union Ltd., Vadodara7. Panchmahal District Cooperative Milk Producers' Union Ltd., Godhra8. Valsad District Cooperative Milk Producers' Union Ltd., Valsad9. Bharuch District Cooperative Milk Producers' Union Ltd., Bharuch10.Ahmedabad District Cooperative Milk Producers' Union Ltd.,Ahmedabad11. Rajkot District Cooperative Milk Producers' Union Ltd., Rajkot12. Gandhinagar District Cooperative Milk Producers'Union Ltd., Gandhinagar13. Surendranagar District Cooperative Milk Producers' Union Ltd., Surendranagar14. Amreli District Cooperative Milk Producers Union Ltd., Amreli 15. Bhavnagar District Cooperative Milk Producers Union Ltd., Bhavnagar 16.Kutch District Cooperative Milk Producers' Union Ltd., Anjar17. Junagadh District Cooperative Milk Producers' Union Limited,Junagadh

III.I.6. Product Range

Name Images

Amulspray

Amul Malai Paneer

Amul Pizza Mozarella Cheese

Amul Butter

Amul Taaza

Amul Bun

AMUL whole wheat bread

Amul pizza base

Amul avasar kesar peda

Amul Cheese Spreads

Amul Kool Cafe

Amul Ice Cream

III.I.7. Manufacturing Process:

III.I.7.1 AMULSPRAY:

Standardized liquid milk

Vitamins, sugar and necessary ingredients added

Passed through pre-heaters

Passed through evaporators

Spray Drying through nozzle

Packing

Process:

Liquid milk is standardized according to product specification and sent for conversion to amul spray. Firstly, Milk is converted into concentrate and concentrate to spray dried product. Then, vitamins, sugar and other ingredients are added according to product specification. Now the milk passes through pre-heaters where it is heated at different temperatures, then the milk passes to the evaporator where we get a concentrate from the milk and the water level in it is brought down by 50%. Then the concentrate is taken for spray drying through nozzle by applying high pressure in the smallest droplet and make a fusion and send hot air. Now, by this hot air moisture is evaporated and AMULSPRAY is ready to be packed now. The packaging takes place through automated machines and nitrogen is flushed in the pouches and tins carrying amulspray so as to maintain freshness for longer period.

III.I.7.2 Amul Butter:

Cream is taken

Beating

White butter formed

Butter Blender

Add a grin of Anetone

Production line

Packing

Process: Take the cream (after storage) then beating of the cream takes place.

After beating butter milk is separated and the 1st product formed is known as white butter. Now, the butter goes to the butter blender then a grin of anetone salt is added to give the golden yellow color to butter (known as utterly butterly delicious). Then the butter moves to the production line from where according to various segments and sizes it will be going to packaging line.

100g butter has 2 lines for packaging, 500g one line and butter tub etc.

III.I.8. SWOT analysis:

Strengths:

1. Amul has well-built image of excellence and innovation2. Biggest souring base for milk and milk products in India

3. High brand image of AMUL in the market4. Offerings new products to customers continuously5. It has well logistic and distribution channel network

Weaknesses:

1. Unable to meet the market demand during peak season time2. No training schedules for training to Distributor sales man3. All the system is automated if one system fails the entire factory gets affected.4. The workers are not trained properly and due to this wastage is possible to some

extent.

Opportunities:

1. There is a phenomenal scope for value addition in innovations in product development, packaging and presentation

2. By increasing the production capacity, it can fulfill the demand during the peak season3. They can diversify into non-dairy products even further as bakery products (few) have

already been started by AMUL there is further more scope for diversification.4. Milk and milk products can be exported to European countries as well.

Threats:

1. Cut throat competition in the marketplace.2. Customers are not brand loyal in Ice cream industry.3. The major competition is from push carts business of Mother dairy and Kwality walls.

III.I.9. Observation:

We observed how the taste of India is manufactured and how the utterly butterly delicious butter is manufactured.

Everything is manufactured with the help of machines except sending of white butter for manufacturing of ghee and butter. This is done manually by workers.

The company uses state of art technology present in the dairy industry for almost all processes.

The company is not able to meet the demands of customers in peak season.

III.I.10.Recommendations:

The sending of white butter for manufacturing of ghee and butter from the cream buffer must be done by the use of machines and not manually.

The least number of hands must be used in the process of manufacturing everything possible must be done by robotic machines.

AMUL can diversify into other sectors also such as recently done (bakery items). AMUL must export in more European countries where currently it has not entered.

AMUL can collaborate with any major dairy in the Middle East and set up its manufacturing unit abroad in the Middle East countries.

III.I.11.Conclusions

The demand for dairy products is never going to fall hence this industry is ever-growing in nature.

AMUL has wide scope for diversification in future. AMUL has a good supply chain management across different countries. AMUL is India’s leading dairy products manufacturer.