MITCOE CMSR

REPORT ON

“AMUL”

BY

GROUP TWO

Under the guidance of

Asst. Prof. MRS.VIJASHRI GURME

In the fulfillment of

ENTERPRISE ANALYSIS-DESK RESEARCH SUBJECT

UNIVERSITY OF PUNE

YEAR 2015-2016

DEPARTMENT OF MBA

MIT COLLEGE OF ENGINEERING

PUNE – 411038

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MAEER’S

MIT COLLEGE OF ENGINEEERING ‘S

Centre for Management Studies and Research

CertificateThis is to certify that the work entitled a project report on an Enterprise “AMUL” has been successfully completed by the Group Members of Group Two of MBA I Shift I of MITCOE CMSR during the year 2015-16.This report has thus been approved as it satisfies the academic requirements.

Mrs.Vijashri Gurme Dr.Prof .A.R.Mancharkar

(Associate Professor) (Head of the Department) MITCOE CMSR MITCOE CMSR

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ACKNOWLEDGEMENT

With immense pleasure, I would like to present this project report for” Enterprise Analysis-Desk

Research”

As a student of “MITCOE CMSR”,Pune,,I would like to express my gratitude to all those who

gave me the encouragement to complete this project report.

I also thank Mrs.Vijayashri Gurme Mam for her guidance.

My heartfelt gratitude to the Head Of Department Dr.Prof.A.R.Mancharkar Sir for his

continuous support and guidance.

However, I accept the sole responsibility for any possible error of omission and would be

extremely grateful to the readers of this project report if they bring such mistakes to my notice.

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LIST OF STUDENTS IN GROUP TWO

SUBGROUP NO. MEMBERS ROLL NOS. TOPIC1 Pritam Gandhi

Bhagwat DingareTejashree DhiwarRuchira YadavYogesh PadmawarPratik Ghatge

M3156014M3156012M3156011M3156058M3156060M3156015

Enterprise History & Background

2 Pratik SawantPiyush GogateKavita SangmaDevyani BhoirSiddesh KultheKrishna Khatod

M3156049 M3156016 M3156043 M3156009 M3156025M3156041

Organization

3 Aniket ChavanAkshay ShettyHrishikesh PrabhuHussian BaluwalaPratik SathawaneAishwarya Talnikar

M3156010M3156050M3156038M3156007M3156047M3156053

Markets

4 Ashwini ZanwarAniket SinghRamesh JangidPromita Ahuja

M3156059M3156051M3156021M3156003

Financial

5 Virendra BhiseShreyas SankhAkshay AhireSumit MeshramAbhaysingh Patil

M3156008M3156045M3156002M3156028M3156035

Governance

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TABLE OF CONTENTS

Sr.No Subject PageNo.

1 Introduction 5-62 Enterprise History & Background 7-18

2.1History2.2Key-People2.3Vision-Mission2.4 Members Of Board Of Directors2.7CSR Initiatives

3 Organization 19-343.1Organization Structure3.2 Production Function3.3 Distribution Network:3.4Growth And Challenges3.5 Certifications3.6Quality Management System Initiatives

4 Markets 35-394.1 Market segmentation4.2Products4.3Product Lines4.4 Market share4.5 Advertising Strategy

5 Financials 40-415.1 Sales Turnover5.2 Balance Sheet

6 Governance 42-456.11.Philosophy6.2.Action taken by SEBI if any6.3.Insider trading issues6.4 CRISIL Rating6.5 Awards Won

7 Conclusion 468 Bibliography 47

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CHAPTER 1

INTRODUCTION

Amul means "priceless" in Sanskrit. The brand name "Amul" from the Sanskrit "Amoolya" was

suggested by a quality expert in Anand. Variants, all meaning priceless are found in several

Indian language. Amul products have been in use in millions of homes since 1946. Amul Butter,

Amul Milk Powder, Amul Ghee, Amul Spray, Amul Cheese, Amul chocolates, Amul Shrikhand,

Amul Ice cream, Nutranmul, Amul Milk and Amulya have made Amul a leading food brand in

India. Turnover Rs. 25 billion in 2002. Today Amul is a symbol of many things of high quality

products sold at reasonable prices of the genesis of a vast co-operative network of the triumph of

indigenous technology of the marketing savvy of a farmer's organization, and of a proven model

for dairy development.

The revaluation started as awareness may the farmers that grew and matured into a protest

movement and determination to liberate them. Over four decades ago the life of a farmer in

Kaira district was like that of his counterpart anywhere also in India. Income from dairy was

under pendable. Private trades and middleman controlled the marketing and distribution of milk.

As milk is perishable, farmers were compelled to sell it for what every they were offered. In this

situation, the one who gained was the private traders. Gradually the realization downed on the

farmers that the exploitation by the readers could be checked do only if they if they marketed

their product themselves. To do this they need some sort of organization this realization this

realization is what led to the establishment of Kaira District Cooperative Milk producer Union

Limited (Popularly known as Amul), which was formally registered on December 14, 1946.

Private traders and middleman controlled the marketing and distribution of milk. As milk is

perishable, farmers were compelled to sell it for what every they were offered. In this situation,

the one who gained was the private traders. Gradually the realization downed on the farmers that

the exploitation by the traders could be checker do only if they marketed their product

themselves. To do this they need some sort of organization this realization is what led to the

establishment of Kaira District Cooperative Milk producer Union Limited (Popularly known as

Amul), which was formally registered on December 14, 1946.

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The Kaira Union started Pasteurizing milk for the Bombay milk scheme in June 1948. An

assured market proved a great incentive to milk producers of the district by the end of 1948,

more than 400 farmers joined in more village societies and the quantity of milk handled by union

increase from 250 to 5000 liters per day.

As the movement spread in the district, it was found that the BombayMilk Scheme could not

absorb the extra milk collected by the Kairaunion in summer when the production on an average

was 2.5 times more than summer. Even by 1953, the farmer's embers have no assured market for

the extra milk produced summer. The remedy was to setup a plant to process milk into products

like butter and milk powder. A five Million Rupees Plant to manufacture milk powder and butter

was competed in1955. In 1958 the factory was expanded to manufacture sweetened condensed

milk. Two year later a new wing was added for manufacture of 25000 tons of roller derived baby

food and 600 tons of cheese per year. This cheese was based on the formula developed with the

assistance of Central Food Technology Research Institute (CFTRI),Mysore. It was the first time

in world that baby food and cheese where made by buffalo milk on a large commercial scale.

Another r milestone was the completion as a project to manufacture balanced cattle food. The

plant was donated by OXFAM under the freedom from hunger campaign of the FAO.

To meet the requirement for defense the Kaira Union was asked by the Government of India in

1963 to setup additional drying capacity. A new dairy capable of producing 40 tons of milk

powder and 20 tons of butter a day was speedily completed. It was declared open in 1965. Since

then Amul has covered any miles on the road of success. Its members success of the federation

can be estimated from the fact the income of the rural household of the Kaira district is being

derived from dairying.

Now federation is India's largest food products marketing organization. It is a state level apex

body of milk cooperative Gujarat. More that 12districts cooperative milk producers union are its

members, which include 11,132 villages societies. Federation has helped for the products they

produce. More that 2.28 million producer members are beneficent of the unions.

 

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CHAPTER 2

ENTERPRISE HISTORY AND BACKGROUND

2.1 HISTORY OF AMUL

In the 1940s, in the district of Kaira of the State of Gujarat, India, a unique experiment was

conducted that become one of the most celebrated success stories of India. At that time, in

Gujarat, milk was obtained from farmers by private milk contractors and by a private company,

Polson's Dairy in Anand, the headquarters of the district. The company had a virtual stranglehold

on the farmers, deciding the prices both of the procured as well as the sold milk. The company

arranged to collect, chill and supply milk to the Bombay Milk Scheme, which supplied milk to

the metropolis of Bombay, and to cities in Gujarat, Polson's Dairy also extracted dairy products

such as cheese and butter. Polson's Dairy exploited its monopoly fully; the farmers were forced

to accept very low prices for their products, and the decisions of the company regarding the

quality and even the quantity of the milk supplied by the farmers were final.

In 1946, inspired by Sardar Vallabhbhai Patel, a local farmer, freedom and social worker, named

Tribhuvandas Patel, organized the farmers into co-operatives, which could procure milk from the

farmers, process the milk and sell it in Bombay to customers including the Bombay Milk

Scheme, Purely by chance, in 1949, a mechanical engineer named Verghese Kurien, who had

just completed his studies in engineering in the USA, came to India and was posted by the

Government of India to a job at the Dairy Research Institute at Anand.

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Settling down in Anand was hardly a part of his career plans; however, a meeting with

Tribhuvandas Patel changed his life and changed India's dairy industry. What Mr. Patel

requested of Dr. Kurien was hardly to bring about such a revolution. All the wanted was help in

solving various problems with bringing into working order some of the equipment just purchased

by his co-operative, especially the chilling and pasteurizing equipment. These items of

equipment malfunctioned, leading to the rejection of large quantities of milk by the Bombay

Milk Scheme.

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Dr. Kurien's involvement with the Kaira District Co-operative Milk Producers' Union Limited

(KDCMPUL; the registered name of the co-operative) grew rapidly. Initially he merely provided

technical assistance in repairing, maintaining and ordering new equipment but subsequently he

became involved with the larger sociological issues involved in organizing the farmers into co-

operatives and running these co-operatives effectively. He observed the exploitation of farmers

by the private milk contractors and Poison's Dairy, and noted how the co-operatives could

transform the lives of the members. The most important feature of these co-operatives is that

they run purely as farmer's co-operatives, with all the major decisions being taken by the farmers

themselves. The co-operatives are not 'run' by a separate bureaucracy with vested interests of its

own; the farmers are truly in charge of their own decisions. Any farmer can become a member

by committing to supply a certain quantity of milk for a certain number of days in a year and

shall continue to be a member only if he keeps up this commitment.

Each day, the farmers (or actually, in most cases, their wives and daughters) bring their  milk to

the village collection centers where quantity of milk is checked in full view of all and quality

(milk fat content) is checked using a simple device, again in full view of all. The farmers are paid

in evening for the milk they supplied in the morning, and in the morning for the evening's milk.

This prompt settlement in cash is a great attraction to the farmers who are usually cash starved.

Thanks to the above system, there are no disputes regarding quantity or quality of the milk

supplied by each farmer. It was soon realized that it was not enough to merely act as the

collection and selling for the farmers. A variety of support services were also required to enable

the farmers continue selling milk of adequate quality and to avoid disasters such as the death of

their cattle(of a family owning just one or two cattle and depending on its/their milk for

their income, death of cow could indeed be a disaster). The farmers were progressively given

new services such as veterinary care for their cattle, supply of good quality cattle feed, education

on better feeding of cattle and facilities for artificial insemination of their cattle. All these were

strictly on payment basis; none of services were free. This experiment of organizing farmers into

co-operatives was one of the most successful interventions of India. A very loyal clientele was

built up who experienced prosperity on a scale they could not have dreamt of 10 years earlier.

With good prices paid for their milk, raising milch cattle could become a good supplementary

source of revenue to many households.

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The co-operatives were expanded to cover more and more areas of Gujarat and in each area, a

network of local village level co-operatives and district level co-operatives were formed on a

pattern similar to that at Anand (the so called Anand Pattern). In 1955,KDCMPUL changed its

name to Anand Milk Union Limited, which lent itself to a catchy abbreviation, Amul, which

meant priceless in Sanskrit. The word was also easy to pronounce, easy to remember and carried

a wholly positive connotation. It became the flagship brand name for the entire dairy products

made by this union.

In 1954, Amul built a plant to convert surplus milk produced in the cold seasons into milk

powder and butter. In 1958, a plant to manufacture cheese and one to produce baby food were

added-for the first time in the world, these products were made from buffalo milk. Subsequent

years saw the addition of more plants to produce different products. Starting from a daily

procurement of 250litres in 1946, Amul had become a milk giant with a large procurement base

and a product mix that had evolved by challenging the conventional technology.

In his visit to Anand in 1965, the then Prime Minister of India, Lal Bhadur Shastri, was

impressed by what he saw-a system that procured, processed and delivered high quality milk to

distant markets cost efficiently. Shastri could also see the difference that the income from milk

had made to the standard of living of farmers in the area.

What impressed him the most was that Amul had done all this without Government assistance in

market contrast to number of Government sponsored dairy programs that were doing poorly in

terms of procuring and marketing good quality milk and boosting farmer's incomes. Shastri

asked Dr. Kurien to replicate Anand's success allover India.

A pattern similar to the Anand Pattern was to be built in other states of India. This was carried

out under a program launched by the Government of India, entitled "Operation Flood". The

operation was a body formed by the Government of India with this specific objective coordinated

by the National Dairy Development Board (NDDB),a body formed by the Government of India

with this specific objective.

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GUJARAT COOPERATIVE MILK MARKETING FEDERATION GCMMF: AN

OVERVIEW

The GCMMF is the largest food products marketing organization of India. It is the apex

organization of the dairy cooperatives of Gujarat. It is the exclusive marketing organization for

products under the brand name of Amul and Sager.[15] Over the last five and a half decades, dairy

cooperatives in Gujarat have created an economic network that links more than 3.1 million

village milk products with millions of consumers in India. Gujarat Cooperative Milk Marketing

Federation Ltd. (GCMMF) is India's largest food product marketing organization with annual

turnover (2014-15) US$ 3.4 billion. Its daily milk procurement is approx 14.85 million lit per

day from 18,536 village milk cooperative societies, 17 member unions covering 31 districts, and

3.37 million milk producer members. More than 70% of the members are small or marginal

farmers and landless laborers including a sizeable population of tribal folk and people belonging

to the scheduled castes.

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2.2 KEY PEOPLE OF AMUL

FOUNDER – DR. VERGHESE KURIEN

Dr. Verghese Kurien was born on November 26, 1921 to an affluent Syrian Christian family in

Calicut (now Kozhikode), Kerala. His father Puthenparakkal Kurien was a civil surgeon in

British Cochin and his mother was a highly educated woman as well an exceptional piano player.

He was named after his uncle Rao Sahib P.K Verghese. Dr Kurien joined Loyola College in

Madras and attained his degree in B.Sc in Physics. He was also very active in sports and

represented the college in cricket, badminton, boxing and tennis. He went to the United States of

America on government scholarship where he pursued his degree in Master of Science in

Mechanical Engineering (Distinction). He returned to India after completion of his studies and

on May 13, 1949 he headed for Anand, a place in Kaira district of Gujarat where he was

supposed to spend five years as an officer of the Dairy division in return for the scholarship paid

by the government. On arriving at Anand, he found that the farmers were being exploited by the

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distributors of milk and the entire region was controlled by a shrewd but clever businessman

called as "Pestonjee Edulji" who marketed Polson butter.

Looking at the struggle of these people to survive and mesmerized by the personality of their

leader Tribhuvandas Patel who was trying to unite the farmers and form a cooperative movement

against the exploitation, Dr. Kurien left his government job and joined forces with Tribhuvandas

Patel and the farmers to start the Milk Cooperative movement in the region registered under the

name of Kaira District Cooperative Milk Producers Union Ltd (KDCMPUL), which was later

renamed to now popular "Amul". He worked towards bringing a White Revolution in India and

executed the much needed program of "Operation Flood". Dr. Verghese Kurien married Susan

Molly Peter on June 15, 1953 and they had one daughter Nirmala Kurien and a grandson,

Siddharth. Dr. Kurien was the man responsible for turning India from a milk deficient country to

the largest producer of milk in the world today. Under his inspiring leadership many important

institutions were established namely the GCMMF (Gujarat Cooperative Milk Marketing

Federation Ltd) and NDDB (National Dairy Development board which played a significant role

in shaping the Dairy Cooperative movement across the country and led the replication of Anand

model of cooperative dairy practiced all over the country.

Dr. Kurien always regarded himself as an employee of the farmers who would do anything to

bring prosperity in their favor. In his service of over fifty years he attained 15 honorary degrees

from different institutions of the world as he believed that learning should never stop. His

enduring personality, spirit, undying charisma and conviction of turning the impossible into

possible won him many accolades such as the Ramon Magsaysay Award for Community

Leadership (1963), Padma Shri (1965), Padma Bhushan (1966), Krishi Ratna Award (1986),

World Food prize (1989), Padma Vibhushan (1999), Economic Times award for Corporate

Excellence (2001) and several other awards, but the best award that the people of the country

gave him was the title "Milkman of India". After a lifetime of struggle and conviction towards

serving the nation Dr. Verghese Kurien breathe his last on 9 September 2012 due to brief illness

at Anand. Dr. Verghese Kurien will always be remembered as the person who redefined the

meaning of milk as a powerful tool for economic development.

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2.3 MEMBERS OF THE BOARD

CHAIRMAN JETHA PATEL

Jetha Patel, chairman of the Himmatnagar-based Sabarkantha District Co-operative Milk

Producers Union Limited popularly known as Sabar Dairy was elected as chairman of Gujarat

Co-operative Milk Marketing Federation (GCMMF) that markets brand Amul.

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CEO AND MD

R.S. SODHI

Mr. R. S. Sodhi has been the Managing Director at Gujarat Cooperative Milk Marketing

Federation since January 4, 2011. Mr. Sodhi served as In charge Managing Director of Gujarat

Cooperative Milk Marketing Federation from June 2010 to January 4, 2011 and also served as its

Chief General Manager. He serves as a Director of Gujarat Cooperative Milk Marketing

Federation. He has been a Non-Executive Director at Kaira Can Company Limited since

February 2011 to December 20, 2014.

2.4 VISION

Amul’s vision is to provide more and more satisfaction to the farmers, employees and

distributers

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MISSION

We at GCMMF (Gujarat Co-operative milk Marketing Federation) endeavor to satisfy the taste

and nutritional requirements of the customers of the world, through excellence in marketing by

our committed team. Through co-operative networking, we are committed to offering quality

products that provide best value for money.”

2.5 CORPORATE SOCIAL RESPONSIBILITY (CSR)

Corporate social responsibility (CSR) has been defined as the commitment of business to

contribute to sustainable economic development working with employees, their families, the

local community, and society at large to improve their quality of life, in ways that are both good

for business and good for development.

To meet with the CSR it is expected that a business in its entire procurement-production-

processing-marketing chain should focus on human development involving the producer,

the worker, the supplier, the consumer, the civil society, and the environment.

CSR INITIATIVES BY AMUL

Amul Relief Trust

Tree Plantation

a) Amul Relief Trust:

A devastating earthquake (Richter scale – 7.9) hit Gujarat on 26th January 2001. The epicentre

of the quake was located in Kutch district. It caused death of thousands of people, tens of

thousands were injured, hundreds of thousands were rendered homeless and damage of billions

of Rupees was done.

GCMMF formed a specific organization named "Amul Relief Trust" (ART) under the

Chairmanship of Dr. V. Kurien in 2001 with a donation of Rs. 50 Millions for reconstruction of

the school buildings damaged in the 2001 earthquake in the Kutch area.

The Trust reconstructed 6 schools damaged by the above earthquake at a cost of Rs. 41.1

millions in Kutch area. Four of these schools started re-functioning from the last two academic

sessions and the other two schools from the current session.

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A school reconstructed by Amul Relief Trust in the earthquake affected Ratadia Village in

Mundra Taluka of Gujarat.

A school reconstructed by Amul Relief Trust in the earthquake affected Devpar Village

inMandvi Taluka of Gujarat.

b) Green Gujarat tree plantation campaign :-

The milk producer of Gujarat dairy cooperatives are conducting mass tree plantation drive every

year on independence day for last three years. The idea is “one member five tree (2009). The

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entire plantation activity is coordinated at all the three tiers of Anand pattern – at village, district

and state level dairy cooperatives. Amul Coops plant more than 311.98 lakhs trees.

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CHAPTER 3

ORGANIZATION

3.1 THE THREE-TIER "AMUL MODEL"

The Amul Model is a three-tier cooperative structure. This structure consists of a dairy

cooperative society at the village level affiliated to a milk union at the district level which in turn

is federated into a milk federation at the state level. Milk collection is done at the village dairy

society, milk procurement and processing at the District Milk Union and milk products

marketing at the state milk federation. The structure was evolved at Amul in Gujarat and

thereafter replicated all over the country under the Operation Flood programmed. It is known as

the 'Amul Model' or 'Anand Pattern' of dairy cooperatives.

The main functions of the VDCS are:

Collection of surplus milk from the producers of the village and payment based on quality and

quantity,

Providing support services to the members like veterinary first aid, artificial insemination

services, cattle-feed sales, mineral mixture sales, fodder and fodder seed sales, conducting

training on animal husbandry and dairying,

Selling liquid milk for local consumers of the village,

SUPPLYING MILK TO THE DISTRICT MILK UNION.

Marketing of milk and milk products processed/manufactured by Milk Unions,

Establish a distribution network for marketing of milk and milk products,

Arranging transportation of milk and milk products from the Milk Unions to the market,

Creating and maintaining a brand for marketing of milk & milk products,

Providing support services to the Milk Unions and members like technical inputs, management

support and advisory services,

Pooling surplus milk from the Milk Unions and supplying it to deficit Milk Unions,

Establish feeder-balancing dairy plants for processing the surplus milk of the Milk Unions,

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Arranging for common purchase of raw materials used in manufacture/packaging of milk

products,

Conduct long-term milk production, procurement and processing as well as marketing planning.

Arranging finance for the Milk Unions and providing them technical know-how.

Designing and providing training in cooperative development and technical and marketing

functions.

Conflict resolution and keeping the entire structure intact.

STATE COOPERATIVE MILK FEDERATION

The main functions of the federation are as follows:

Marketing of milk and milk products processed/manufactured by Milk Unions,

Establish a distribution network for marketing of milk and milk products,

Arranging transportation of milk and milk products from the Milk Unions to the market,

Creating and maintaining a brand for marketing of milk & milk products,

Providing support services to the Milk Unions and members like technical inputs,

management support and advisory services,

Pooling surplus milk from the Milk Unions and supplying it to deficit Milk Unions,

Establish feeder-balancing dairy plants for processing the surplus milk of the Milk Unions,

Arranging for common purchase of raw materials used in manufacture/packaging of milk

products,

Decide on the prices of milk and milk products to be paid to Milk Unions,

Decide on the products to be manufactured at Milk Unions and capacity required for the

same.

Conduct long-term milk production, procurement and processing as well as marketing

planning.

Arranging finance for the Milk Unions and providing them technical know-how.

Designing and providing training in cooperative development and technical and marketing

functions.

Conflict resolution and keeping the entire structure intact.

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3.2 ORGANIZATION STRUCTURE OF AMUL

Building an organizational network that would represent the farmers and the customers waste

most complicated task. A loose confederation was developed with GCMMF representing the

voice of the customers, the Unions representing the milk processors and the village societies

representing the farmers. Competition in the markets ensured that the entire network was

responding to the requirements of the customers at prices that were very competitive. The task of

ensuring that returns to the farmers was commensurate with the objectives with which the

cooperatives were setup was achieved through representation of farmers at different levels of

decision making throughout the network – the board of directors of societies, Unions and the

Federation comprised farmers themselves. In order to ensure that most returns from sales went

tithe producers, the intermediaries had to operate very effectively and on razor thin margins. This

turned out to be a blessing in disguise – the operations remained very “lean” and started to

provide cost based advantage to the entire network. AMUL established a group to standardize

the process of organizing farmers into village societies. In addition to establishing the criteria for

selecting members, the group had to train the Veto run the cooperative democratically, profitably

and with concern for its members. This included establishing procedures for milk collection,

testing, payment for milk purchased from member farmers and its subsequent sale to the union,

accounting, ensuring timely collection and dispatch of milk on milk routes established by the

union, etc. The Village Societies Division at AMUL acts as the internal representative of village

societies in their dealings with the Union. Cooperative development programmers at the village

level for educating & training its members have become an important part of the strategy to build

this extensive network. Milk procurement activity at AMUL comprises development and

servicing of village societies, increasing milk collection, procurement of milk from societies &

its transport to the chilling locations, and resolving problems of farmers and village societies.

Their stated objective into ensure that producers get maximum benefits. The Village Societies

Division coordinates these activities. Milk collection takes place over a large number of pre-

defined routes according to precise timetable. The field staff of this division also helps village

societies interface with the Union on various issues ranging from improvement of collection,

resolving disputes, repair of equipments to obtaining financing for purchase of equipment etc. In

addition, they are also responsible for the formation of new societies, which is an important

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activity at AMUL. In essence, the organization structure of AMUL allows effective utilization of

resources without losing the democratic aspiration of individual members. It is obvious that such

a system needs charismatic leadership to achieve consensus across issues – a process that has

long-term benefits for any organization. Marketing GCMMF is the marketing arm of the network

and manages the physical delivery and distribution of milk and dairy products from all the

Unions to customers. GCMMF is also responsible for all decisions related to market

development and customer management. These activities, which range from long-term planning

to medium-term and short-term operational decisions are described below. As mentioned earlier,

introduction of new products and choice of product mix and markets should be consistent with

the growth strategy, and synchronous with growth in milk supply.GCMMF’s demand growth

strategy may be characterized by two key elements: (I) developing markets for its high value

products by graduating customer segments from low value products, and (ii) maintaining a

healthy level of customer base for its base products (low value segment). This strategy often

requires GCMMF to allocate sufficient quantity of milk supply to low value products, thereby

sacrificing additional profits that could be generated by converting the same to high value

products. Interestingly, advertisement & promotion (a la FMCG) was not considered to be

enough of value addition and hence the budget was kept relatively small. Instead, GCMMF

preferred a lower price with emphasis on efficiency in advertising. In this context, GCMMF

provides umbrella branding to all the products of the network. For example, liquid milk as well

as various milk products produced by different Unions is sold under the same brand name of

AMUL. Interestingly, the advertising has centered on building a common identity (e.g., a happy

& healthy “cartoon” AMUL girl) and evoking national emotion (e.g., the key advertising slogan

says “AMUL- the Taste of India”). GCMMF also plays a key role in working with the Unions to

coordinate the supply of milk and dairy products. In essence, it procures from multiple

production plants (the thirteen Unions), which in turn procure from the Village Societies

registered with each Union. GCMMF distributes its products through third party distribution

depots that are managed by distributors who are exclusive to GCMMF. These distributors are

also responsible for servicing retail outlets all over the country. GCMMF sales staff manages this

process. Retailing of GCMMF’s products takes place through the FMCG retail network in India

most of whom are small retailers. Liquid milk is distributed by vendors who deliver milk at

homes. Since 1999, GCMMF has started web based ordering facilities for its customers. A well-

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defined supply chain has been developed to service customers who order in this manner.

Operations & Supply Chain Managements mentioned earlier, the strategy, design and practices

in AMUL’s network are strongly driven byte objective of establishing and operating an efficient

supply chain from milk production and procurement to product delivery to customers.

Management of this network is built around two key elements – (a) coordination of the diverse

elements of the network and (b) use of appropriate technology that includes product, process and

information technology and managerial practices and systems. In what follows, we describe

various features of these elements that have contributed tithe evolution of an efficient supply

chain. Coordination for Competitiveness Robust coordination is one of the key reasons for the

success of operations involving such an extensive network of producers and distributors at

GCMMF. Some interesting mechanisms exist for coordinating the supply chain at GCMMF.

These range from ensuring fair share allocation of benefits to various stakeholders in the chain to

coordinated planning of production and distribution. More importantly, the reason for setting up

of this cooperative is not amiss to anyone in this large network organization. Employees, third

part service providers, and distributors are constantly reminded that they work for the farmers

and the entire network strives to provide the best returns tithe farmers, the real owners of the

cooperative. It may be remembered that coordination mechanisms have to link the lives and

activities of 2.12 million small suppliers and 0.5 million retailers! There appear to be two critical

mechanisms of coordination that ensure that decision makings coherent and that the farmers gain

the most from this effort.

These mechanisms are:

• Inter-locking Control

• Coordination Agency: Unique Role of Federation Inter-locking Control Each Village Society

elects a chairperson and a secretary from amongst its member farmers of good standing to

manage the administration of the VS. Nine of these chairpersons (from amongst theses affiliated

to a Union) are elected to form the Board of Directors of the Union. The Chairperson of the

Union Board is elected from amongst these members. The managing director of the Union, who

is a professional manager, reports to the chairperson and the board. All chairpersons of all the

Unions form the Board of Directors of GCMMF. The managing director of GCMMF reports to

its Board of Directors. Each individual organization, the Union or GCMMF, is run by

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professional managers and highly trained staff. It must be pointed that all members of all the

boards in the chain are farmers who pour milk each day in their respective Village Societies. A

key reason for developing such an inter-locking control mechanism is to ensure that the interest

of the farmer is always kept at the top of the agenda through its representatives who constitute

the Boards of different entities that comprise the supply chain. This form of direct representation

also ensures that professional managers and farmers work together as a team to strengthen the

cooperative. This helps in coordinating decisions across different entities as well as speeding

both the flow of information to the respective constituents and decisions. Coordination Agency:

Unique Role of the Federation In addition to being the marketing and distribution arm of the

Unions, GCMMF plays the role of coordinator to the entire network within the State –

coordinating procurement requirements with other Federations (in other states), determining the

best production allocation for its product mix from amongst its Unions, managing inter-dairy

movements, etc. It works with two very clear objectives: to ensure that all milk that the farmers

produce gets sold in the market either as milk oars value added products and to ensure that milk

is made available to an increasingly large sections of the society at affordable prices. In addition,

it has to plan its production at different Unions in such a way that market requirement matches

with unique strengths of each Union and that each of them also gets a fair return on its capacity.

In this regard, GCMMF follows an interesting strategy. GCMMF, in consultation with all the

Unions, decides on the product mix at each Union location. Some considerations that govern this

choice are the strengths of each Union, the demand for various products in its region as well as

the country, long term strategy of each Union, procurement volumes at different Unions,

distribution costs from various locations etc. Demand for daily products and supply of milk vary

with the season. Further, demand and supply seasons run countertop each other making the

planning problem more complex. In making allocations to Unions, GCMMF are guided by two

main objectives – (I) maximize the network surplus, and (ii) maintaining equity among unions

for the surplus realized. In this regard, very often GCMMF is willing to sacrifice realizable

surplus and allocate products to “less efficient” Unions in order to achieve better balance in

surpluses accruing to the Unions.

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3.3 Production Function:

Explosion of the production technology and changes in technical field is going to bring out

revolution in the industry sector which eventually gives stand to study and favors the come

backing subject i.e. production and management.

Production and operation management is planning, organizing, staffing, directing and controlling

of all the production system those portion of organization that convert inputs into products and

services. In general production system takes raw material, personnel, machines, buildings and

other resources and produce products and services.

The core of production system is its conversion subsystem where in workers; raw materials are

used to convert inputs into products and services. This production department is at heart of the

firm, as it is able to produce low cost products and superior quality in timely manners.

Thus, there arises enormous need of giving due importance to this department as a whole and a

strong concrete base being foundation pillars of a manufacturing organization, if the intention is

to succeed domestically and globally.

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• Operating Analysis-

Amul‟s only source of raw material is Village Milk societies. Milk is brought from such village Milk

societies every morning and evening. This Milk is then sent to the dairy plant. In the dairy plant the

Milk is processed i.e. it is made free from germs.

· Milk Processing

The entire process of Milk can be divided into following steps:

Steps:

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3.4 Distribution Network

Most producers work with marketing intermediaries to bring their products to market. The

marketing intermediaries make up a marketing channel also called distribution channel. Distribution

channels are sets of interdependent organizations involved in the process of making a product or

service available for use or consumption.

The Head Office of GCMMF is located at Anand. The entire market is divided in 5 zones. The zonal

offices are located at Ahmedabad, Mumbai, New Delhi, Kolkata and Chennai. Moreover there are 49

Depots located across the country and GCMMF caters to 37 Export markets.

A zero level of channel also called a direct marketing channel consists of a manufacturer selling

directly to the final customers. A one level channel; contains one selling intermediary such as retailer

to the final customers. A two level channel two intermediaries are typically wholesaler and retailer. A

three level channel are typically wholesaler, retailer and jobber in between.

GCMMF has an excellent distribution. It is its distribution channel, which has made it so popular.

GCMMF‟s products like Milk and Milk products are perishable. It becomes that much important for

them to have a good distribution.

3.5 GROWTH AND CHALLENGES

From its inception with the formation of its first milk cooperative, AMUL network has sustained

unimpressive growth rate for more than 50 years culminating in the emergence of Indian dairy

industry as the world’s leading milk producer. However, it is unclear whether AMUL’s strategy

and practices that have worked well for long can maintain this growth trajectory in a changing

environment with globalization and increased competition. In this section we describe some of

AMUL’s initiatives and discuss briefly opportunities for growth and challenges that need to be

overcome. AMUL’s growth during the past five decades has been fuelled primarily by growth in

milk supply with corresponding pricing strategy to generate demand. This growth has been

sustained bay two-pronged strategy – (a) growth in the number of member farmers by widening

its coverage with more village societies and increasing the membership in each society, and (b)

growth in precipitate milk supply from its members. This growth is achieved by increasing milk

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yields and by helping members raise their investments in cattle. It is worth noting that AMUL

has funded these support activities from its earnings (instead of repatriating them to the members

either as dividends or with a higher procurement price). It is expected that AMUL’s growth in

the immediate future will continue to rely on this strategy. However, in the new emerging

environment, several challenges have become apparent and AMUL network needs to evolve

proactive mechanisms to counter these threats. First, competitors are cutting into milk supply by

offering marginally higher procurement prices thereby challenging the practice of provision of

services for long-term growth in lieu of higher prices in the short-term. Second, for a section of

its membership, dairy activity is stepping-stone for upward mobility in the society. Typically,

such members move on to other occupations after raising their economic position through milk

production. As a result, AMUL is unable to realize the full benefits of its long-term strategy, and

finds new members (mostly marginal farmers) to replace those who have higher potential and

capacity. While this is a welcome development for the society as a whole, it is unclear whether

AMUL would be able to sustain it in the light of increased competition. By progressively

increasing the share of higher value products AMUL has been able to grow at a faster rate than

the growth in milk supply. AMUL has been rather cautious in implementing this strategy and has

always ensured retention of its customer base for liquid milk and low value products. With

slowdown in the growth of milk supply this strategy is likely to come under pressure and AMUL

will be forced to make some hard choices. More important, it is fairly clear that its low price,

cost efficient strategy may not be appropriate for the high value segment. Thus, AMUL may

have to adopt a dual strategy specific to its target markets, which in turn may lead to dilution in

focus. A part of AMUL’s growth has come from diversification into other agric-products such as

vegetable oils, instant foods etc. In some of these initiatives AMUL adapted its successful

cooperative organization structure, but the experience to date has been somewhat mixed. More

recently, the network is exploring conventional joint venture arrangements with suitable partners

for diversification into areas such as fast food and specialty chocolates. While it is too early to

assess the success of these ventures, challenges involved are becoming quite visible. For

example, diversification has resulted in expansion of the network with disparate elements, each

motivated by their own objectives. This in turn has led to a lack of focus within the network and

dilution in the commonality of purpose. These developments are likely to have serious

implications for coordination and control in the network. More important, shared vision and

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common goal was one of the main planks of AMUL’s growth during the past 50 years, and its

dilution is likely to adversely impact the network performance. Conclusion it is well recognized

that markets that are fragmented or producers that are too small to build competitive

infrastructures or those who are unable to manage technological changes in their operational

processes would benefit the most through a cooperative organization. Consequently large

number of cooperatives has taken roots amongst producers of food (especially those that are

perishable). However, there are interesting cooperative formations in India and China that are

starting to emerge amongst small producers in auto-components (especially those serving the

replacement markets), amongst small scale dyeing communities and the power-loom operators in

the textile industry. In these cases, the producers are coming together to develop a common

brand that is based on stringent quality certifications that would distinguish them from other

small producers and for usage of common property resources. The example of AMUL provides a

number of lessons for such organizations to compete successfully in the face of increasing

globalization and competition. More generally, the AMUL case presents a successful model for

operating in emerging economies characterized by either large under-developed suppliers and/or

markets with high potential. The largest segment of the market in emerging economies desires

value for money from its purchases. Development of such markets requires careful nurturing and

a long-term approach. Initial success in these markets is typically based on a low price strategy

(providing value for money) supported by cost leadership. This strategy helps to grow the market

exponentially by focusing on the largest segment of the population, the middle and the lower

middle class. In this context, it is important for global players to note that the value proposition

perceived by consumers is influenced to a large extent by the state of markets and the economy

and cultural factors. Development of an appropriate value proposition suitable for large mass

markets in India requires thorough understanding of the environment and a focus on costs. This

in turn, requires designing the organization structure and practices in a manner that it delivers

continued market share through cost leadership. AMUL is a good example of this strategy. Firms

that are able to develop control processes through better use of operational practices and supply

chain coordination are the ones that are able to serve large volumes and enjoy top line growth in

revenues. Development of suppliers likewise requires nurturing with a long-term perspective. It

is interesting to note that this was achieved by AMUL through a process of education and social

development activities - activities that are not usually considered to be standard business

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practices. This type of ‘out of the box’ vision is essential for developing innovative mechanism

in new, unfamiliar environments where building of relationship with consumers goes much

beyond marketing messages and useful product offerings. Environments with underdeveloped

markets and suppliers (as in the case of AMUL) add one more dimension of complexity relating

to the relative pace of growth of these two areas. Through its pricing strategy, AMUL has been

able balance the growth in markets and suppliers and has achieved some degree of

synchronization. Otherwise, gaps between demand and supply would require complementary

strategies. The AMUL example is also instructive for multinational companies and others

contemplating operations in emerging markets by taking advantage of the local small and

medium enterprises. In such cases large businesses are built by forging linkages with these

enterprises thereby changing the boundaries of the entering firm. Such a partnership reduces the

operational risk while providing a credible source of understanding the behavior of the consumer

through the experience of partners. It also provides operational flexibility and makes the network

responsive to changes within and outside. To be effective it is important that decision-making be

decentralized tithe extent possible, with appropriate coordination mechanisms to ensure

consistency in the system. The leadership of such organizations has always been larger than life

and has been seen to playa important role in the building of the society even today. Firms that is

able to overcome the hesitation of deploying IT for achieving operational excellence in emerging

economies gain considerably from its network effect. Most firms either automate decision

making to such an extent that it eliminates local initiatives (as many SAP implementations in

India are finding out that it has added more rigidity in decision making as opposed to using it in

conjunction with a more flexible “telephone” mode of communicating) or use manual systems

that lead to inaccurate data based decision-making. What works best is IT for information

sharing and evaluating complex tradeoffs while making decisions locally. Yet another strong

trend in these economies is to use IT for managing the interface between the market and the

supplier of goods and services. In this article, using the example of AMUL, we have presented a

robust business model for operating in large emerging economies characterized by

underdeveloped markets, infrastructure and suppliers. Cooperative network with interlocking

arrangement as in GCMMF is one example of success in managing such complex supply chain.

Of course, the long-term challenges in such cases into bring more members into the network and

increase their capabilities

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3.6 CERTIFICATIONS

We - The motivated and devoted work-force of AMUL- are committed to produce wholesome

and safe foods of excellent quality to remain market leader through deployment of quality

management systems, state-of-art-technology, and innovation and eco-friendly operations to

achieve delightment of customers and betterment of milk producers.

3.7 QUALITY MANAGEMENT SYSTEM INITIATIVES

The initiation of Total Quality Management (TQM) way back in 1994 was to work with the well-

known quality management initiatives which have proven to be effective elsewhere to create a

culture of transparency, openness and leadership in the organization. Realizing that with

emerging competition, doing business would become more exciting yet extremely competitive

which would require at time not only a whole set of new skills and competencies but quick

adaptability to change without much stress or turbulence. As a very unique measure Amul

extended all the TQM initiatives to its business partners whether it was the farmer producer in

the village or a wholesale distributor in a metro town or it’s most sophisticated production unit.

From the strength of Total Quality Management initiative Amul went on to implement Quality

Management System of International Standard. Amul has been the first dairy in India to get

accredited with certification of ISO 2200:2005 & ISO 9001 for its operations and plants. Further

Amul has set an example that village Dairy Co-operative Societies could also achieve this

milestone as these societies are accredited with ISO 9001:2000 – a remarkable achievement in

the history of India

Amul Plants are certified by Agricultural and Processed Food Exports Development Authority

(APEDA) for export of dairy products to international markets. Gujarat Co-operative Milk

Marketing Federation (GCMMF) which markets and exports dairy products under the brand of

“Amul” has bagged award 11th time for excellent performance in exports of dairy products from

APEDA - 2008-09, IMC Ramakrishna Bajaj National Quality Award – 2003, "Best Best of All"

Rajiv Gandhi National Quality Award - 1999, The International Dairy Federation Marketing

Award (2007) for Amul pro-biotic ice-cream launch.

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The plants are also periodically audited for Hygiene and Quality Management Systems

by various agencies like Export Inspection Agency (EIA), Armed Forces, various Indian

Statutory Bodies, International statutory Bodies and Quality Management Agencies.

Amul Dairy has been recipient of countless awards for its outstanding efforts in processing and

providing quality products to consumers thereby enhanced income in to the hands of dairy

farmers. Some of these awards are the Best Productivity Performance Awards for three

consecutive years from 1985 and Sustained productivity Performance Award in 1988-89 from

National Productivity Council, Government of India, Indian Merchants’ Chamber Award - for

Outstanding Performance in the field of R&D of Food Processing Industries Based on

Agricultural Products -1988, again Best Productivity Performance Awards 1994-99 from

National productivity Council, G. D. Birla International Award - Outstanding Contribution to

Rural Upliftment , Sahkari Vikas Ratna Award – awarded on the occasion of Indian Co-

operative Centenary Celebration for the outstanding contributions in the field of Dairy Co-

operative movement in Asia – 2005, National Energy Conservation Award – 2009 from Ministry

of Power, Government of India.

We at AMUL are committed to produce safe and wholesome food to continually remain as the

market leader by providing food products delighting customer expectations and bestow safety.

We strive to achieve this by, Improving raw milk quality, Applying innovative technology for

manufacturing food products, Employing quality and food safety management practices to,

manufacture food products in a eco-friendly environment, Meeting applicable statutory and

regulatory requirements, Effectively communicate and constantly improve professional skills of

employees emphasizing continuous improvement of quality and food safety issues. Amul has

implemented the Quality Management System of international standard to offer ‘invaluable’

products to national and international customers. Its plants are certified for ISO 22000:2005 for

excellence in food safety management system.

Amul’s primary village cooperative societies are the first ‘grass root level’ organizations

in the rural sector to achieve ISO 9001 : 2000 certification in India, perhaps in the world. This

has been possible because of Amul’s continued commitment to offer consumers excellent

products from the house of Amul.

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The focus on health and hygiene, housekeeping, village chilling units, management of village co-

operative societies, rapid transportation of raw milk to dairy plant, accelerated milk handling at

the dairy reception dock has retained the freshness of milk being received at dairy plant. To

sustain and rebuild on this effort, training programs are organized for all the stakeholder groups

involved in the ‘milk procurement chain’, namely, milk producers, village society personnel and

dairy plant personnel. Laboratories are equipped with state of the art equipment and well trained

professionals.

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CHAPTER 4

MARKETS

4.1 MARKETING SEGMENTS

Market segmentation is a process of identifying groups of buyers with different desires or requirements. - PHILIP KOTHLER

Marketing segmentation is a process in marketing of grouping a market( i.e. customers) into smaller sub groups. these markets are termed as niche market or specialty markets.

The purpose of segmentation for Amul is to identify and target prime customers group

(e.g - 20% that accounts for 80% of your sales ) so that they get max returns from a LTD marketing budget.

Different Marketing segments of Amul as per major customers.

KIDS :- Ice cream , chocolate, milk, sweets, Safal fruit drinks. HOUSE WIVES :- Dhara edible oil, milk, Safal tomato ketchup mix fruit jams, Amul

cheese, Amul spray. CALORIE CONSCIOUS :- Amul lite, Dhara health, Sagar skimmed milk powder. YOUTHS :- sweets, ice-cream, milk, cheese, chocolates.

4.2 PRODUCTS OF AMUL

MAIN PRODUCTS

Bread spread pure ghee milk powder sweetened condensed milk sweets fresh milk curd products Amul ice cream chocolates and confectionary

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brown beverage milk drinks health beverage

4.3 PRODUCT LINE OF AMUL

Bread spreads Pure ghee

Amul butter Amul pure ghee

Amul lite Sagar pure

Low fat bread Ghee

Spread Amul cow ghee

Amul cooking

Bread spreads Pure ghee

Amul butter Amul pure ghee

Amul lite Sagar pure

Low fat bread Ghee

Spread Amul cow ghee

Amul cooking

Category Market share Market position

Butter 85% 1

Milk powder 40% 1

Cheese 50% 1

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Icecream 24.75% 2

Sweets 50% 1

Chocolate drink 90% 1

Chocolate 10% 3

4.5 MARKET SHARE

Product wise market share

Product wise market share of Amul company is categorized above in the table which has product wise category and its markt share and percentage

Amul butter is sold at very high rate in India mainly in north side of India consumption of amul butter is greater because the parathas and various dishes are served with butter, its market share is greatest in india

milk powder is also consider as the substitute of amul where the rate of the share is slight less than butter.

icecream is loved by kids and adults as well so the consumption is higher and is sold at great rate everywhere.

chocolate drinks and chocolate is loved and consumed at very high rate.

Region wise market share

The gujrat cooperative milk marketing federation (GCMMF) which owns the Amul

brand is eyeing a larger slice in rapidly growing package milk market of national

capital region.

Amul has setup its largest dairy with a processing capacity of 30 lakhs liter a day at

Dehradun at Haryana to serve the NCR market.

Delhi and NCR are largest milk market in country where Amul has double its milk

sales to around 24 LLPD(lakh liters per day) in past 3 years.

Amul entered Delhi market in 2003 with sales of 1 lakh liters a day. Delhi accounts

for 27% of Amul dairy cell of 90 lakh liters across country.

Amul will be investing another 250 crores in 2 dairy of 10 LLPD in next 2,3 years.

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Amul is also increasing its procurement through farmer co in Haryana Rajesthan and

Uttarpradesh, presently Amul procures about 12 lakh liters a day from farmers in 3

northern state.

4.6 ADVERSTISING BY AMUL

Amul has two agencies that look after its entire range of products namely FCB Ulka and Da cunha.FCB Ulka looks after a broad range of products namely, Amul Lite Breadspread, Amul Shrikhand, Amul Chocolates, Amul Paneer, Amul SnowCap Softy Mix Ice cream, Amul/Sagar Ghee, Amul Infant Milk Formula 1 & 2, Sagar Tea and Coffee whitener,Amul Spray Infant Milk Food, Amul Mithaee, Amul Gulab Jamun, Amulya Dairy Whitener, Mithaimate Sweetened Condensed Milk, Amul Ice cream, Sagar Skimmed Milk Powder and Amul Whole Milk Powder. Da Cunha looks after the Amul butter. Da Cunha also prepares the very popular Amul butter billboard campaigns, which we see at various locations. Over and above the Amul butter, Da Cunha also looks after the Amul Cheese, Cheese spread, Gouda Cheese, Emmental Cheese, Masti Dahi and Butter, Amul Slim-n-Trim, Amul Taaza and Amul Gold (all different brands of Milk), Amul Fresh Cream, Amul Chocolate Milk, Amul Fresh Milk and Nutramul. FCB Ulka also looks after the corporate campaign.

AMUL SLOGANS

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CHAPTER 5 40

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FINANCIALS

5.1 Sales Turnover:

Sales turnover of GCMMF from 1994 to 2012 :-

Balance Sheet of Nestle India ------------------- in Rs. Cr. -------------------

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Dec '14 Dec '13 Dec '12 Dec '11 Dec '10

12 mths 12 mths 12 mths 12 mths 12 mths

Sources Of Funds

Total Share Capital 96.42 96.42 96.42 96.42 96.42

Equity Share Capital 96.42 96.42 96.42 96.42 96.42

Share Application Money 0.00 0.00 0.00 0.00 0.00

Preference Share Capital 0.00 0.00 0.00 0.00 0.00

Reserves 2,740.79 2,272.33 1,701.99 1,177.54 759.00

Networth 2,837.21 2,368.75 1,798.41 1,273.96 855.42

Secured Loans 4.11 0.01 0.24 0.84 0.00

Unsecured Loans 15.46 1,189.48 1,049.95 970.03 0.00

Total Debt 19.57 1,189.49 1,050.19 970.87 0.00

Total Liabilities 2,856.78 3,558.24 2,848.60 2,244.83 855.42

Dec '14 Dec '13 Dec '12 Dec '11 Dec '10

12 mths 12 mths 12 mths 12 mths 12 mths

Application Of Funds

Gross Block 4,950.10 4,844.28 4,368.68 2,493.33 1,854.70

Less: Revaluation Reserves 0.00 0.00 0.00 0.00 0.00

Less: Accum. Depreciation 1,773.46 1,474.97 1,164.41 917.58 841.96

Net Block 3,176.64 3,369.31 3,204.27 1,575.75 1,012.74

Capital Work in Progress 244.78 294.71 344.08 1,371.78 348.91

Investments 811.82 851.08 364.86 134.37 150.68

Inventories 844.10 735.93 745.58 734.04 575.95

Sundry Debtors 99.10 84.27 87.57 115.42 63.29

Cash and Bank Balance 445.82 749.36 236.96 227.21 19.45

Total Current Assets 1,389.02 1,569.56 1,070.11 1,076.67 658.69

Loans and Advances 197.24 229.61 180.60 243.21 200.17

Fixed Deposits 0.00 0.00 0.00 0.00 235.84

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Total CA, Loans & Advances 1,586.26 1,799.17 1,250.71 1,319.88 1,094.70

Deferred Credit 0.00 0.00 0.00 0.00 0.00

Current Liabilities 1,361.00 1,348.76 1,259.51 1,059.75 843.68

Provisions 1,601.72 1,407.27 1,055.81 1,097.20 907.94

Total CL & Provisions 2,962.72 2,756.03 2,315.32 2,156.95 1,751.62

Net Current Assets -1,376.46

-956.86 -1,064.61 -837.07 -656.92

Miscellaneous Expenses 0.00 0.00 0.00 0.00 0.00

Total Assets 2,856.78 3,558.24 2,848.60 2,244.83 855.41

Contingent Liabilities 43.53 72.68 103.86 461.87 0.00

Book Value (Rs) 294.27 245.68 186.53 132.13 88.72

CHAPTER 6

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GOVERNANCE6.1 PHILOSOPHY

Matching demand and supply. Vast & strong supply chain network. Developing demand. Introducing higher value products. Umbrella branding strategy.

e-initiative strategy.

6.2 ACTION TAKEN BY SEBI IF ANY:-

The Amul Company is always loyal to their customers, they never involved in any scam or controversy, and also all their transactions are clean and up to date.

So SEBI never took any action towards them.

INVOLVEMENT IN SCAMS

The Amul India company had never involved in any scam.

6.3 INSIDER TRADING ISSUES:-

This post regarding to facebook

On 10th October, NehaTomar, a regular Amul Gold Milk consumer, posted the pictures of a foam-like substance that came out of the tumbler when her mother-in-law tried to make cheese out of the spoilt milk. She appealed to everyone not to consume the "deadly milk" and that strict, stringent action be taken against Amul.

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6.4 CRISIL RATING

Rating Rationale

Gujarat Co-operative Milk Marketing Federation Ltd

Total Bank Loan Facilities Rated Rs.5689 Million

Long Term Rating CRISIL:- AAA/Stable(Reaffirmed)

Short Term Rating CRISIL:- A1+(Reaffirmed)

6.5 AWARDS

Amul a co-operative society and its co-operation has led many different awards in its favour.

Magsaysay award for community leadership presented in manila.

Philippines to Shri Tribhuvandas Patel, Shri D N Khurody and Shri V. Kurien

1964: “Padmabhusan” award given to Shri T.K. Patel 1965: “Padmshri” awarded was given

to V. Kurien, general manager, by the president of India.

1987: “Best Productivity” awarded by national productivity council for the year 1985-86

awarded to Amul dairy.

1988: “Best Productivity” awarded for the second successive year 1986-87 by the president

of India, Mr. R. Venkatrao to kaira union.

1993: “ICA” Memenoto towards genuine and self-sustaining cooperative worldwide ICA

regional office for Asia and pacific, New Delhi, 1996.

1999: G.B.Birla award. Moreover the Amul union has achieved the prestigious ISO 9001-

2000 and HACCP Certificate and effects are got to obtain ISO 14000.

1999: Best of All" Rajiv Gandhi National Quality Award for the year,

2003: The Gujarat Co-operative Milk Marketing Federation Ltd. has emerged as the top

scorer in the service category of the prestigious IMC Ramkrishna Bajaj National Quality

Award.

2006-07: GCMMF has bagged award for excellent performance in exports of dairy products

from

Agricultural and Processed Food Exports Development Authority (APEDA).

2007: Amul Pro-Biotic Ice-cream Gets No. 1 Award At World Dairy Summit.

2008: Amul Pro-Biotic Ice-cream Gets No. 1 Award At World Dairy Summit.

2009: Amul Bags Srishti G-cube Award For Good Green Governance.

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2010: GCMMF receives Srishti's G-Cube Award.

Dr. V.Kurien honoured with Life Time Achievement Award.

Amul receives Green Globe Foundation Award.

2011-12: ET-Corporate Citizen Award of the Year 2010-11 to GCMMF 2013: GCMMF wins

the SAP Award for Customer Excellence (SAPACE) 2013 under the category of "Best Run

Award in Finance"

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CHAPTER 7

CONCLUSION

THE SECRET OF AMUL’S SUCCESS The system succeeded mainly because it provides an assured market at remunerative prices for

producers' milk besides acting as a channel to market the production enhancement package.

What's more, it does not disturb the agro-system of the farmers. It also enables the consumer an

access to high quality milk and milk products. Contrary to the traditional system, when the profit

of the business was cornered by the middlemen, the system ensured that the profit goes to the

participants for their socio-economic upliftment and common good.

Looking back on the path traversed by Amul, the following features make it a pattern and model

for emulation elsewhere.

Amul has been able to:

Produce an appropriate blend of the policy makers farmers board of management and the

professionals: each group appreciating its rotes and limitations.

Bring at the command of the rural Milk producers the best of the technology and harness its fruit

for betterment.

Provide a support system to the Milk producers without disturbing their agro-economic systems.

Plough back the profits, by prudent use of men, material and machines, in the rural sector for the

common good and betterment of the member producers. Even though, growing with time and on

scale, it has remained with the smallest producer members. In that sense, Amul is an example par

excellence, of an

intervention for rural change.

The Union looks after policy formulation, processing and marketing of Milk, provision of

technical inputs to enhance Milk yield of animals, the artificial insemination service, veterinary

care, better feeds and the like - all through the village societies. Basically the union and

cooperation of people brought Amul into fame i.e. AMUL (ANAND MILK UNION LIMITED),

a name which suggest THE TASTE OF INDIA.

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Amul (Anand Milk union ltd.) is based on four hands, which are coordinated with each other.

The actual meaning of this symbol is co-ordination of four hands of different people by whom

this union is at the top position in Asia.

First hand is of farmers, without whom the organization would not have existed.

Second hand is of processors, who process the row material (Milk) into finished goods.

Third hand is of marketer, without whom the product would have not reached the customers.

Fourth hand is of customers, without whom the products would have not carried on.

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CHAPTER 8

BIBLIOGRPAPHY

Books:

i Marketing Management (12th Edition) – Philip Kotlar ii. Research Methodology – C. R. Kothari

Websites:

i. www.google.co.in ii. www.wikipedia.com iii. www.amul.com. iv. www.marketresearch.com

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