ACKNOWLEDGEMENT Every work accomplished is a pleasure – a sense of satisfaction. However a number of people always motivate, criticize and appreciate a work with their objective ideas and opinions, hence We would like to use his opportunity to thank all, who have directly or indirectly helped us to accomplish this project. Firstly I would like to thank R.K. Pandey sir without whose support this project could not be completed. Next we would like to thank all the people, who gave their valuable time and feedback to this project. We would also like to thank my college for supporting us with resources, which beyond any doubt have helped me. Let me also use this opportunity to thank our team members who have contributed to this project with their invaluable opinions and suggestions, which has gone a long way in soothing our rough edges as a teammate. Introduction AMUL means "priceless" in Sanskrit. The brand name "Amul," from the Sanskrit "Amoolya," was suggested by a quality control expert in Anand. Variants, all meaning "priceless", are found in several Indian languages. Amul (Anand Milk Union Limited), formed in 1946, is a dairy cooperative movement in India. It is a brand name managed by an apex cooperative organisation, Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF), which today is jointly owned by some 2.6 million milk producers in Gujarat, India. AMUL is based in Anand town of Gujarat and has been a sterling example of a co-operative organization's success in the long term. It is one of the best examples of co-operative achievement in the developing world. "Anyone who has seen ... the dairy cooperatives in the state of Gujarat, especially the highly successful one known as AMUL, will naturally wonder what combination of influences and incentives is needed to multiply such a model a thousand times over in developing regions everywhere. The Amul Pattern has established itself as a uniquely appropriate model for rural development. Amul has spurred the White Revolution of India, which has made India the largest producer of milk and milk products in the world. It is also the world's biggest vegetarian cheese brand. Amul is the largest food brand in India and world's Largest Pouched Milk Brand with an annual turnover of US $1050 million (2006-07). Currently Amul has 2.6 million producer members with milk collection average of 10.16 million litres per day. Besides India, Amul has entered overseas markets such as Mauritius, UAE, USA, Bangladesh, Australia, China, Singapore, Hong Kong and a few South African countries. Its bid to enter Japanese market in 1994 had not succeeded, but now it has fresh plans of flooding the Japanese markets. Other potential markets being considered include Sri Lanka. Dr Verghese Kurien, former chairman of the GCMMF, is recognised as the man behind the success of Amul. On 10 Aug 2006 Parthi Bhatol, chairman of the Banaskantha Union, was elected chairman of GCMMF. Amul Type Cooperative Founded 1946 Headquarters Anand, India Chairman, Gujarat Co-operative Milk Marketing Key people Federation Ltd. (GCMMF) Industry Dairy Products Listing of product is given below Revenue Template:Revenue$1 billion USD (in 2006-07) Employees 2.41 million milk producers Website www.amul.com Amul products have been in use in millions of homes since 1946. Amul Butter, Amul Milk Powder, Amul Ghee, Amulspray, Amul Cheese, Amul Chocolates, Amul Shrikhand, Amul Ice cream, Nutramul, Amul Milk and Amulya have made Amul a leading food brand in India. (Turnover: Rs. 52.55 billion in 2007-08). 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 farmers' organisation. And of a proven model for dairy development. Sales Turnover Rs (million) US $ (in million) 1994-95 11140 355 1995-96 13790 400 1996-97 15540 450 1997-98 18840 455 1998-99 22192 493 1999-00 22185 493 2000-01 22588 500 2001-02 23365 500 2002-03 27457 575 2003-04 28941 616 2004-05 29225 672 2005-06 37736 850 2006-07 42778 1050 2007-08 52554 1325 GCMMF LTD Gujarat Cooperative Milk Marketing Federation GCMMF: An Overview Gujarat Cooperative Milk Marketing Federation (GCMMF) is India's largest food products marketing organisation. It is a state level apex body of milk cooperatives in Gujarat which aims to provide remunerative returns to the farmers and also serve the interest of consumers by providing quality products which are good value for money Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF) is the largest Organisation in FMCG industry engaged in marketing of milk & milk products under the brand names of AMUL and SAGAR with an annual turnover exceeding Rs 5000 crores. GCMMF is a unique organisation. It's a body created by Farmers, managed by competent professionals serving a very competitive and challenging consumer market. It is a true testimony of synergistic national development through the practice of modern management methods. We in GCMMF stand for integrity, excellence and quality through innovation. Our roots are embedded in the phrase " Work is worship ". Those who share these values will find themselves at home with us. At GCMMF Ltd, while in pursuit of excellence, we offer a unique career opportunity to unlock your own potential. If you are looking for a challenging opportunity, you can explore your options with us. We firmly believe that you will never look back in your career again. Members: 13 district cooperative milk producers' Union No. of Producer Members: 2.7 million No. of Village Societies: 13,141 Total Milk handling 10.21 million litres per day capacity: Milk collection (Total - 2007- 2.69 billion litres 08): Milk collection (Daily 7.4 million litres Average 2007-08): Milk Drying Capacity: 626 Mts. per day Cattlefeed manufacturing 3090 Mts per day Capacity: History Amul: The origin The mighty Ganges at it's origin is but a tiny stream in the Gangotri ranges of the Himalayas. Similar is the story of Amul which inspired 'Operation Flood' and heralded the 'White Revolution' in India. It began with two village cooperatives and 250 liters of milk per day, nothing but a trickle compared to the flood it has become today. Today Amul collects, processes and distributes over a million liters of milk and milk products per day, during the peak, on behalf of more than a thousand village cooperatives owned by half a million farmer members. Further, as Ganga-ma carries the aspirations of generations for moksha, Amul too has become a symbol of the aspirations of millions of farmers.Creating a pattern of liberation and self-reliance for every farmer to follow. The start of a revolution The revolution started as an awareness among the farmers that grew and matured into a protest movement and the determination to liberate themselves. Over four decades ago, the life of a farmer in Kaira District was very much like that of his counterpart anywhere else in India. His income was derived almost entirely from seasonal crops. The income from milch buffaloes was undependable. The marketing and distribution system for the milk was controlled by private traders and middlemen. As milk is perishable, farmers were compelled to sell it for whatever they were offered. Often, they had to sell cream and ghee at throwaway prices. In this situation, the one who gained was the private trader. Gradually, the realization dawned on the farmers that the exploitation by the trader could be checked only if marketed their milk themselves. In order to do that they needed to form some sort of an organization. This realization is what led to the establishment of the Kaira District Cooperative Milk Producers' Union Limited (popularly known as Amul) which was formally registered on December 14, 1946.The Kaira Union began pasteurizing milk for the Bombay Milk Scheme in June 1948. An assured market proved a great incentive to the 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 one Union increased from 250 to 5,000 liters a day. Obstacles: Springboards for success. Each failure, each obstacle, each stumbling block can be turned into a success story. In the early years, Amul had to face a number of problems. With every problem came opportunity. A chance to turn a negative into a positive. Milk by products and supplementary yield which suffered from the same lack of marketing and distribution facilities became encumbrances. Instead of being bogged down by their fate they were used as stepping stones for expansion. Backward integration of the process led the cooperatives to advances in animal husbandry and veterinary practice. Milk by products: An excuse to expand. The response to these provided stimulus for further growth. For example, as the movement spread in the district, it was found that the Bombay Milk Scheme could not absorb the extra milk collected by the Kaira Union in winter, when the production on an average was 2.5 times more than in summer. Thus, even by 1953, the farmer- members had no assured market for the extra milk produced in winter. They were again forced to sell a large surplus at low rates to the middlemen. The remedy was to set up a plant to process milk into products like butter and milk powder. A Rs 5 million plant to manufacture milk powder and butter was completed in 1955. In 1958, the factory was expanded to manufacture sweetened condensed milk. Two years later, a new wing was added for the manufacture of 2500 tons of roller-dried baby food and 600 tons of cheese per year, the former based on a formula developed with the assistance of Central Food Technological Research Institute (CFTRI), Mysore. It was the first time anywhere in the world that cheese or baby food was made from buffalo milk on a large, commercial scale. Another milestone was the completion of a project to manufacture balanced cattle feed. The plant was donated by OXFAM under the Freedom From Hunger Campaign of the FAO. To meet the requirement of milk powder for the Defense, the Kaira Union was asked by the Government of India in 1963 to setup additional milk 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. The Mogar Complex where high protein weaning food, chocolate and malted food are being made was another initiative by Amul to ensure that while it fulfilled the social responsibility to meet the demand for liquid milk, its members were not deprived of the benefits to be had from the sale of high value-added products. Cattle: From stumbling blocks to building blocks. Traditionally dairying was a subsidairy occupation of the farmers of Kaira. However, the contribution to the farmer's income was not as prominent as his attachment to dairying as a tradition handed down from one generation to the next. The milk yield from animals, which were maintained mainly on the by products of the farm, was decidedly low. That together with the lack of facilities to market even the little produced rendered the scientific practice of animal husbandry irrational as well as unaffordable. The return on the investment as well as the prospects of being able to market the product looked very bleak. It was a vicious cycle reinforced by generations of beliefs. The Kaira Union broke the cycle by not only taking upon themselves the responsibility of collecting the marketable surplus of milk but also provided the members with every provision needed to enhance production. Thus the Kaira Union has full-fledged machinery geared to provide animal health care and breeding facilities. As early as late fifties, the Union started making high quality buffalo semen. Through village society workers artificial insemination service was made available to the rural animal population. The Union started its mobile veterinary services to render animal health care at the farmers' doorstep. Probably for the first time in the country, veterinary first aid services, by trained personnel, were made available in the villages.The Union's 16 mobile veterinary dispensaries are manned by fully qualified staff. All the villages are visited bi-monthly, on a predetermined day, to provide animal health care. A 24-hour Emergency Service is also available at a fee (Rs. 35 for members and Rs. 100 for non-members). All the mobile veterinary vans are equipped with Radio Telephones. The Union runs a semen production center where it maintains high pedigreed Surti buffalo bulls, Holstein Friesian bulls, Jersey bulls and 50 per cent crossbred bulls. The semen obtained from these bulls is used for artificial breeding of buffaloes and cows belonging to the farmer members of the district. The artificial insemination service has become very popular because it regulates the frequency of calving in cows and buffaloes thus reducing their dry period. Not only that, a balanced feed concentrate is manufactured in the Union's Cattle Feed Plant and sold to the members through the societies at cost price.Impressive though its growth, the unique feature of the Amul sagas did not lie in the extensive use of modern technology, nor the range of its products, not even the rapid inroads it made into the market for dairy products. The essence of the Amul story lies in the breakthrough it achieved in modernizing the subsistence economy of a sector by organizing the rural producers in the areas. The Kaira experiment: A new beginning in more ways than one. A system which involves participation of people on such a large magnitude does not confine itself to an isolated sector. The ripples of its turbulence affect other areas of the society as well. The cooperatives in the villages of Kaira are contributing to various desirable social changes such as: The yearly elections of the management committee and its chairman, by the members, are making the participants aware of their rights and educating them about the democratic process. Perpetuating the voluntary mix of the various ethnic and social groups twice-a-day for common causes and mutual betterment has resulted in eroding many social inequilibria. The rich and the poor, the elite and the ordinary come together to cooperate for a common cause. Live exposure to various modern technologies and their application in day-to-day life has not only made them aware of these developments but also made it easier for them to adopt these very processes for their own betterment. One might wonder whether the farmer who knows almost everything about impregnating a cow or buffalo, is also equally aware of the process in the humans and works towards planning it. More than 900 village cooperatives have created jobs for nearly 5000 people in their own villages -- without disturbing the socio-agro- system -- and thereby the exodus from the rural areas has been arrested to a great extent.The income from milk has contributed to their household economy. Besides, women, who are the major participants, now have a say in the home economy. Independent studies by various individuals and institutions have shown that as high as 48 per cent of the income of the rural household in Kaira District is being derived from dairying. Since dairying is a subsidairy occupation for the majority of the rural population, this income is helping these people not only to liberate themselves from the stronghold of poverty but also to elevate their social status. About the Company Organisation structure It all started in December 1946 with a group of farmers keen to free themselves from intermediaries, gain access to markets and thereby ensure maximum returns for their efforts. Based in the village of Anand, the Kaira District Milk Cooperative Union (better known as Amul) expanded exponentially. It joined hands with other milk cooperatives, and the Gujarat network now covers 2.12 million farmers, 10,411 village level milk collection centers and fourteen district level plants (unions) under the overall supervision of GCMMF. There are similar federations in other states. Right from the beginning, there was recognition that this initiative would directly benefit and transform small farmers and contribute to the development of society. Markets, then and even today, are primitive and poor in infrastructure. Amul and GCMMF acknowledged that development and growth could not be left to market forces and that proactive intervention was required. Two key requirements were identified. The first, that sustained growth for the long term would depend on matching supply and demand. It would need heavy investment in the simultaneous development of suppliers and consumers. Second, that effective management of the network and commercial viability would require professional managers and technocrats. To implement their vision while retaining their focus on farmers, a hierarchical network of cooperatives was developed, which today forms the robust supply chain behind GCMMF's endeavors. The vast and complex supply chain stretches from small suppliers to large fragmented markets. Management of this network is made more complex by the fact that GCMMF is directly responsible only for a small part of the chain, with a number of third party players (distributors, retailers and logistics support providers) playing large roles.Managing this supply chain efficiently is critical as GCMMF's competitive position is driven by low consumer prices supported by a low cost system. Developing demand At the time Amul was formed, consumers had limited purchasing power, and modest consumption levels of milk and other dairy products. Thus Amul adopted a low-cost price strategy to make its products affordable and attractive to consumers by guaranteeing them value for money. Introducing higher value products Beginning with liquid milk, GCMMF enhanced the product mix through the progressive addition of higher value products while maintaining the desired growth in existing products. Despite competition in the high value dairy product segments from firms such as Hindustan Lever [Get Quote], Nestle [Get Quote] and Britannia [Get Quote], GCMMF ensures that the product mix and the sequence in which Amul introduces its products is consistent with the core philosophy of providing milk at a basic, affordable price. The distribution network Amul products are available in over 500,000 retail outlets across India through its network of over 3,500 distributors. There are 47 depots with dry and cold warehouses to buffer inventory of the entire range of products. GCMMF transacts on an advance demand draft basis from its wholesale dealers instead of the cheque system adopted by other major FMCG companies. This practice is consistent with GCMMF's philosophy of maintaining cash transactions throughout the supply chain and it also minimizes dumping. Wholesale dealers carry inventory that is just adequate to take care of the transit time from the branch warehouse to their premises. This just-in-time inventory strategy improves dealers' return on investment (ROI). All GCMMF branches engage in route scheduling and have dedicated vehicle operations. Umbrella brand The network follows an umbrella branding strategy. Amul is the common brand for most product categories produced by various unions: liquid milk, milk powders, butter, ghee, cheese, cocoa products, sweets, ice-cream and condensed milk.Amul's sub-brands include variants such as Amulspray, Amulspree, Amulya and Nutramul. The edible oil products are grouped around Dhara and Lokdhara, mineral water is sold under the Jal Dhara brand while fruit drinks bear the Safal name. By insisting on an umbrella brand, GCMMF not only skillfully avoided inter-union conflicts but also created an opportunity for the union members to cooperate in developing products. Managing the supply chain Even though the cooperative was formed to bring together farmers, it was recognised that professional managers and technocrats would be required to manage the network effectively and make it commercially viable. Coordination Given the large number of organisations and entities in the supply chain and decentralised responsibility for various activities, effective coordination is critical for efficiency and cost control. GCMMF and the unions play a major role in this process and jointly achieve the desired degree of control. Buy-in from the unions is assured as the plans are approved by GCMMF's board. The board is drawn from the heads of all the unions, and the boards of the unions comprise of farmers elected through village societies, thereby creating a situation of interlocking control. The federation handles the distribution of end products and coordination with retailers and the dealers. The unions coordinate the supply side activities. These include monitoring milk collection contractors, the supply of animal feed and other supplies, provision of veterinary services, and educational activities. Managing third party service providers From the beginning, it was recognised that the unions' core activity lay in milk processing and the production of dairy products. Accordingly, marketing efforts (including brand development) were assumed by GCMMF. All other activities were entrusted to third parties. These include logistics of milk collection, distribution of dairy products, sale of products through dealers and retail stores, provision of animal feed, and veterinary services. It is worth noting that a number of these third parties are not in the organized sector, and many are not professionally managed with little regard for quality and service. This is a particularly critical issue in the logistics and transport of a perishable commodity where there are already weaknesses in the basic Infrastructure. Establishing best practices A key source of competitive advantage has been the enterprise's ability to continuously implement best practices across all elements of the network: the federation, the unions, the village societies and the distribution channel. In developing these practices, the federation and the unions have adapted successful models from around the world. It could be the implementation of small group activities or quality circles at the federation. Or a TQM program at the unions. Or housekeeping and good accounting practices at the village society level. More important, the network has been able to regularly roll out improvement programs across to a large number of members and the implementation rate is consistently high. For example, every Friday, without fail, between 10.00 a.m. and 11.00 a.m., all employees of GCMMF meet at the closest office, be it a department or a branch or a depot to discuss their various quality concerns. Each meeting has its pre-set format in terms of Purpose, Agenda and Limit (PAL) with a process check at the end to record how the meeting was conducted. Similar processes are in place at the village societies, the unions and even at the wholesaler and C&F agent levels as well. Examples of benefits from recent initiatives include reduction in transportation time from the depots to the wholesale dealers, improvement in ROI of wholesale dealers, implementation of Zero Stock Out through improved availability of products at depots and also the implementation of Just-in-Time in finance to reduce the float. Kaizens at the unions have helped improve the quality of milk in terms of acidity and sour milk. (Undertaken by multi-disciplined teams, Kaizens are highly focussed projects, reliant on a structured approach based on data gathering and analysis.) For example, Sabar Union's records show a reduction from 2.0% to 0.5% in the amount of sour milk/curd received at the union. The most impressive aspect of this large-scale roll out is that improvement processes are turning the village societies into individual improvement centers. Technology and e-initiatives GCMMF's technology strategy is characterized by four distinct components: new products, process technology, and complementary assets to enhance milk production and e-commerce. Few dairies of the world have the wide variety of products produced by the GCMMF network. Village societies are encouraged through subsidies to install chilling units. Automation in processing and packaging areas is common, as is HACCP certification. Amul actively pursues developments in embryo transfer and cattle breeding in order to improve cattle quality and increases in milk yields. GCMMF was one of the first FMCG (fast-moving consumer goods) firms in India to employ Internet technologies to implement B2C commerce. Today customers can order a variety of products through the Internet and be assured of timely delivery with cash payment upon receipt. Another e-initiative underway is to provide farmers access to information relating to markets, technology and best practices in the dairy industry through net enabled kiosks in the villages. GCMMF has also implemented a Geographical Information System (GIS) at both ends of the supply chain, i.e. milk collection as well as the marketing process. Farmers now have better access to information on the output as well as support services while providing a better planning tool to marketing personnel. List of Products Marketed: Breadspreads: Amul Butter Amul Lite Low Fat Breadspread Amul Cooking Butter Cheese Range: Amul Pasteurized Processed Cheddar Cheese Amul Processed Cheese Spread Amul Pizza (Mozarella) Cheese Amul Shredded Pizza Cheese Amul Emmental Cheese Amul Gouda Cheese Amul Malai Paneer (cottage cheese) Utterly Delicious Pizza Mithaee Range (Ethnic sweets): Amul Shrikhand (Mango, Saffron, Almond Pistachio, Cardamom) Amul Amrakhand Amul Mithaee Gulabjamuns Amul Mithaee Gulabjamun Mix Amul Mithaee Kulfi Mix Avsar Ladoos UHT Milk Range: Amul Shakti 3% fat Milk Amul Taaza 1.5% fat Milk Amul Gold 4.5% fat Milk Amul Lite Slim-n-Trim Milk 0% fat milk Amul Shakti Toned Milk Amul Fresh Cream Amul Snowcap Softy Mix Pure Ghee: Amul Pure Ghee Sagar Pure Ghee Amul Cow Ghee Infant Milk Range: Amul Infant Milk Formula 1 (0-6 months) Amul Infant Milk Formula 2 ( 6 months above) Amulspray Infant Milk Food Milk Powders: Amul Full Cream Milk Powder Amulya Dairy Whitener Sagar Skimmed Milk Powder Sagar Tea and Coffee Whitener Sweetened Condensed Milk: Amul Mithaimate Sweetened Condensed Milk Fresh Milk: Amul Taaza Toned Milk 3% fat Amul Gold Full Cream Milk 6% fat Amul Shakti Standardised Milk 4.5% fat Amul Slim & Trim Double Toned Milk 1.5% fat Amul Saathi Skimmed Milk 0% fat Amul Cow Milk Curd Products: Yogi Sweetened Flavoured Dahi (Dessert) Amul Masti Dahi (fresh curd) Amul Masti Spiced Butter Milk Amul Lassee Amul Icecreams: Royal Treat Range (Butterscotch, Rajbhog, Malai Kulfi) Nut-o-Mania Range (Kaju Draksh, Kesar Pista Royale, Fruit Bonanza, Roasted Almond) Nature's Treat (Alphanso Mango, Fresh Litchi, Shahi Anjir, Fresh Strawberry, Black Currant, Santra Mantra, Fresh Pineapple) Sundae Range (Mango, Black Currant, Sundae Magic, Double Sundae) Assorted Treat (Chocobar, Dollies, Frostik, Ice Candies, Tricone, Chococrunch, Megabite, Cassatta) Utterly Delicious (Vanila, Strawberry, Chocolate, Chocochips, Cake Magic) Chocolate & Confectionery: Amul Milk Chocolate Amul Fruit & Nut Chocolate Brown Beverage: Nutramul Malted Milk Food Milk Drink: Amul Kool Flavoured Milk (Mango, Strawberry, Saffron, Cardamom, Rose, Chocolate) Amul Kool Cafe Health Beverage: Amul Shakti White Milk Food Current Scenario Federation‟s Annual Report and the Audited Accounts for the year 2007-2008. MILK PROCUREMENT Total milk procurement by our Member Unions during the year 2007-08 averaged 75.90 lakh kilograms (7.6 million kg) per day, representing a quantum growth of 12.9 per cent over 67.25 lakh kilograms (6.7 million kg) per day achieved during 2006-07. The highest procurement as usual was recorded during January 2008 at 98.81 lakh kilogram (9.9 million kg) per day. This increase in milk procurement is very impressive, against the backdrop of 4.5 per cent growth registered during the previous year. During the peak procurement period, we have successfully demonstrated our ability to process almost 10 million liters of milk per day. SALES During the year, sales of our Federation registered a quantum growth of 22.9 per cent to reach Rs. 5255.41 crores (Rs. 52.55 billion). This is an extremely impressive growth, when viewed from the perspective of 13.4 per cent growth that we had achieved in 2006-07 and 29 per cent growth achieved in 2005-06. Our sales performance has been consistent in recent years and we are confident of maintaining these excellent results in the coming years, as well. In global terms, our turnover is $ 1.3 billion, at the existing currency exchange rate. We are also pleased to note that our Federation has done remarkably well in most of the value-added consumer packs. Sales of Amul Milk in pouches have grown by 48% in value terms. In 2007, Amul Milk was launched in Jaipur and was received enthusiastically by consumers. Pouch milk is the largest contributor to the turnover of the Federation. UHT Milk has also shown an impressive growth of 60%. We have expanded our range in UHT milk category; through the recent launch our innovative calcium enriched variant, Amul Calci+. Following the successful launch of Amul Kool Café last year, we launched Amul Kool Koko in 2007, because of which our sales in the Flavored Milk segment has seen an exponential increase of 39%. Our policy of continuous product innovation was accorded global recognition, when we received the prestigious International Dairy Federation Marketing Award 2007 for the launch of Amul Probiotic Ice- cream. Our sales in Amul Processed Cheese have shown consistent and very impressive growth, year after year. In 2007-2008, we recorded 27% growth in sales for Amul Processed Cheese, yet again. At the same time, we also managed to achieve quantum growth of 39% in the sales of Amul Cheese Spread. In the Infant Milk Food category, our brand Amulspray registered a growth of 19%. In the dairy whitener segment, Amulya recorded a growth of almost 20%. We managed to register double-digit value growth in Butter, despite intense competition in this category. In our effort to ensure that all sections of our society are able to afford Amul Butter, we have given special emphasis to low unit value packs, in our marketing effort. In line with the prevailing trend of wellness and health-consciousness, we have recently launched Amul Reduced Salt Butter. Extending our policy of innovative product launches, we have introduced Amul Probiotic Dahi which has helped to increase our sales in the curd category by 35%. Since there is a growing demand for pure and natural products in India, we have introduced pure natural vanilla ice-cream in a wide range of pack sizes. RETAILING The strategic thrust placed on opening Amul Parlors since 2002 has now started yielding the desired results. We had anticipated the paradigm shift in macro economic scenario and the burgeoning threat of organized retailers. Amul Parlors will enable us to counter the potential threat from competitors. They will also increase the visibility of the Amul brand in the retail market. Our own outlets enable us to interface directly with consumers and provide an ideal platform to showcase our entire range of products. Through a concerted team effort, we have managed to create 2300 Amul Parlors in 2007-08, from which a sales turnover of Rs.107 crores was generated. Our outlets have not only helped brand Amul to become ubiquitous but also have managed to provide a very rewarding employment opportunity to hundreds of entrepreneurs across India. During the new financial year, we have taken a goal of setting up 10,000 outlets by March 2009. To achieve this challenging goal, we have identified certain potential locations such as Railways, Airports, Universities and Shopping Malls. EXPORT As you are aware, there was a ban on exports of milk powder during initial six months of the year and hence our export of bulk milk powder was adversely affected. However, it is my pleasure to inform you that our export turnover has more than doubled during the year. We have recorded turnover of Rs 125 crores this year against the last year’s turnover of Rs 60 crore. However, we have been able to perform extremely well in exports of consumer packs with very encouraging growth in ethnic Indian products like Paneer. We are planning to focus more on consumer products and brand building during the coming years in the global market so that brand “Amul” can truly become “The Taste of India” to the entire world. DISTRIBUTION NETWORK Consumers expect marketers to deliver products in the locations and forms they require. To meet expectations of such demanding consumers, alignments of our four Distribution Highways of Fresh, Chilled, Frozen and Ambient products were already made by introducing Project DIL. Subsequently, a major initiative was taken to enhance distribution network to smaller towns. About 1200 distributors in small towns across India were added during this initiative. Today about 3000 Distributors ensure availability of our products across India, whether it is in Leh or Lakshadweep, in Kutch or Arunachal. Simultaneously, to augment fresh milk distribution in various markets of India, approximately 1400 exclusive Milk Distributors have been inducted. Last year, we divided the retail market into 14 specific segments to achieve further distribution efficiency. This year our focus was on inducting distributors having expertise in servicing such specific market segments. This initiative is yielding results by way of ensuring wider availability of our product range. The role of distributors in our business process has never been more diverse or more important, as it is today. As a matter of fact, we consider our Distributor to be the real “Marketing Manager” of our organization. To enhance business performance of our Distributors, a workshop on Marketing and Sales Management was designed in collaboration with a premier business school. The objective of the entire initiative was to upgrade the knowledge of our Distributors in terms of contemporary Business Management Practices, so that they can perform well not only as our business partner but also as Marketing Managers. During the year, 659 Distributors have undergone this programme in 39 locations. Cold Storage is an extremely essential component in the Federation’s distribution process. Unfortunately, availability of efficient cold storage facilities is grossly inadequate in our country. To cope up with the increasing need of suitable cold stores closer to our markets, we have continued our endeavour of creating the Federation’s own cold stores this year in various locations across the country. We now own 24 state-of- the art cold rooms of different sizes. To get an exposure to our cooperative structure, our culture as well as operational systems and processes, every year we invite our distributors, major retailers and other business partners to Anand, for Amul Yatra. So far, about 7000 Distributors and other business partners have participated in this Amul Yatra. COOPERATIVE DEVELOPMENT PROGRAMME During the last eight years, our Member Unions are implementing Internal Consultant Development Programme for developing self leadership among member producers and thereby enabling them to manage their dairy business efficiently, leading to their overall development. During the year, Member Unions conducted workshops on Vision Mission Strategy for primary milk producer members and Village Dairy Cooperatives. Facilitated by specially trained consultants, 894 Village Dairy Cooperative Societies have conducted their Vision Mission Strategy Workshops, prepared their Mission Statements and Business Plans for the next five years. Till today total 5,322 village dairy societies have prepared their five year Business plans. The programme has prompted milk producers to initiate activities at villages such as Clean Milk Production, Water Management, Planned Animal Breeding, Animal Feed management, Improved Member Services Management, Information Technology, Integration and Networking, which has very far-reaching and long- term effects on the milk business. As a part of the Breeding Services Improvement Programme, during the year Member Unions have continued implementation of the module of Improvement in Artificial Insemination Services and imparted training to 226 Core groups at the village level. In order to increase an awareness about the dairy industry scenario and impart leadership skills to the Chairmen and Secretaries of the Village Dairy Cooperatives, Member Unions in collaboration with Federation, are conducting Chairmen and Secretaries‟ Orientation Programme at Mother Dairy, Gandhinagar. During the year 924 Village Dairy Cooperative Societies have been covered under this programme involving 1,796 Chairmen and Secretaries of the Village Dairy Cooperatives. During the year, our Member Unions continued to encourage increased participation of women milk producers in the Dairy Cooperative Societies. To develop their skills and enhance leadership qualities, Member Unions organized Self Managing Leadership Programme at Prajapita Brahmakumaris, Mount Abu for 1,100 women resource persons along with Chairmen and Secretaries of 250 village dairy societies. In order to strengthen the knowledge and skill base of young girls and women of the villages about milk production management and to motivate them to implement scientific milch animal breeding, feeding and management methods for their animals, the Federation, with technical collaboration and resources of the Anand Agriculture University, has initiated an animal husbandry programme for women resource persons of the Member Unions. During the year, 464 women resource persons have been trained under this programme. As envisaged last year, our Member Unions have successfully initiated Fertility Improvement Programme in their milkshed area, to improve fertility of milch animals. During the year Member Unions have implemented this programme in 892 villages. With a mission of planting one tree per member, our Member Unions celebrated the 60th year of Independence on 15th August, 2007 in a unique way. Our 18 lakh members have planted one sapling each across 19 districts of Gujarat and demonstrated their commitment towards preserving and contributing to the improvement of the environment. INFORMATION TECHNOLOGY INTEGRATION To strengthen business linkages with the business partners, GCMMF has enhanced its “Amul e-Groupware System” by adding more features like e-mailing the invoices and ledgers to business partners, announcing various schemes online, calendar facility etc. “Video conferencing” is rapidly gaining in popularity, which provides business with the ability to meet and to work with others over a distance. For real time communication, better brainstorming, knowledge sharing and information gathering, we have installed and implemented Video conferencing System at our Head Office, Zonal Offices and a few Sales Offices. The world is moving towards virtual reality by creating virtual world on the Internet. Our Federation has taken the initiatives towards virtual commerce by creating an online virtual Amul Parlor in the Second Life, an online virtual world. GCMMF has further advanced the use of Geographical Information systems by implementing GIS based Sales Analytics solution across various offices. ACCELERATING ON A TRAJECTORY OF PROSPERITY During the last 62 years, our Amul cooperative movement has served as an effective catalyst in transforming the socio-economic landscape of rural India. In the process of enhancing the nutritional and economic health of our nation, we have also ensured prosperity for 2.7 million families, spread across 13000 villages in rural Gujarat. During the peak winter months, this year, we have ably demonstrated our efficacy and efficiency in processing as much as 10 million litres of milk per day. Through creative marketing and innovative product launches, we have been able to leverage effectively on the rising income levels and growing affluence among Indian consumers. While ensuring easy availability of „value-for-money‟ milk and dairy products to all our citizens across the country, we have also been able to tap the growing demand for value-added milk products which provide higher remuneration to our farmers. Having successfully countered the competitive challenge posed by multinational corporations, as well as the domestic private sector, we are well poised to steer the dairy cooperative sector into an era of further prosperity and growth. While a glorious future certainly beckons us, our ability to actually realize its promising potential, depends entirely on the efficacy with which we are able to overcome the external and internal challenges that we face today. Globalization is a phenomenon that we cannot wish away and its politico-economic impact on our business needs to be clearly understood. We are more vulnerable to global changes than ever before. Remote events such as adverse agro-climatic conditions in Australia, diversion of maize-crop from feed to fuel in U.S., reduction in subsidies given to dairy farmers in EU, can deeply impact prevailing conditions in the domestic Indian market. Enhanced competition and proliferation of imported brands on our Indian retail shelves is a reality that we will have to embrace. Innovative technologies, creative ideas and new products that emerge on the global horizon are swiftly making a beeline for the Indian market. In order to effectively counter such challenges, the entire dairy cooperative sector will have to be even more adaptive, flexible and responsive to market realities. We need to be more agile and fleet- footed in terms of adopting cutting-edge technologies and investing in accelerated product innovation. We will also have to ensure that we continue keeping our finger on the pulse of Indian consumers. As we have done in the past, we shall have to continue incorporating the best emerging industry practices, from around the world, into our key business processes. We need to explore new avenues of further leveraging on information technology to streamline our business systems. To enhance our efficacy and competitiveness, we need to be more pro-active at all stages of our value-chain. Adoption of new breeding practices and focused approach towards increasing productivity of our milch-animals should be the highest priority for all dairy cooperatives. Effective use of latest inputs and best technology for enhancing milk production will be of immense benefit to our farmers. Through process re-engineering, we will have to maintain and further increase our operational efficiencies, so that our costs remain under control. The current leaders of dairy cooperatives in India have an enormous responsibility on their shoulders. The entire nation expects us to exemplify virtues of selfless dedication and visionary leadership. Like our illustrious predecessors such as Shri Tribhuvandas Patel, Dr. Verghese Kurien and Shri Motibhai Choudhary, we will also have to personify our core values of integrity, excellence, customer- orientation, quality-consciousness, innovation, commitment to farmers and employee-satisfaction. The success of our Amul cooperative movement can also be attributed to the culture of professional excellence that we have nurtured and encouraged in our organization. It is our responsibility to ensure that this culture of professionalism continues to prevail in all aspects of our business operations. Ultimately, it is our obligation towards our nation, to propel the Indian dairy sector towards a position of dominance on the global dairy map. Various Articles taken from various newspapers Amul hopes to flow into Japanese market Sindhu Bhattacharya Friday, December 30, 2005 NEW DELHI: Amul is going places. Literally. After having established its presence in China, Mauritius and Hong Kong, Gujarat Cooperative Milk Marketing Federation (GCMMF), India‟s largest milk cooperative, is waiting to flood the Japanese market.The milk cooperative, which markets Amul brand of products, is hopeful of bagging a major export order from Japan. In keeping with the popularity of the brand abroad, GCMMF has revised its export target for this fiscal by Rs 50 crore to Rs 200 crore. Says GCMMF managing director B M Vyas, “We have had a distributor in Japan since 1994 but no major presence in that country. But a few days ago a delegation from Japan, under the aegis of Agriculture and Livestock Industry Corp (ALIC), visited our facilities at Anand (Gujarat) and were pleasantly surprised with the sheer scale of our dairy operations. I am hopeful that some of our products, such as milk powder and cheese, could be exported to Japan soon.” Then, GCMMF is also looking at Sri Lanka as one of its next export destinations. Amul products are already available on shelves across several countries, including the US, China, Australia, West Asian countries and Africa. While Vyas declined to reveal other overseas markets that the federation is targeting now, he said that demand for dairy products from India is expected to grow in many overseas markets. Claiming that buoyant exports help the company maintain prices in the domestic market, Vyas said that in times of milk surplus, having ready export markets allow the federation to save itself from making any distress sales. GCMMF recorded a turnover of Rs 2,922 crore last fiscal. Its products include pouch milk, ultra heat treated (UHT) milk, ice-cream, butter, cheese and buttermilk. Taken From The Financial Express Amul ready to take on Pepsi, Coke in sports drink segment LALITHA SRINIVASAN Posted online: Wednesday, January 11, 2006 at MUMBAI, JAN 10: Swadeshi FMCG major Gujarat Co-operative Milk Marketing Federation Ltd (GCMMF) is getting ready to launch India's first sports drink 'Stamina' in two weeks.On the other hand, videshi major Coca-Cola India is planning to introduce its global sports brand 'Powerade' in India and PepsiCo India is preparing for a national roll- out of 'Gatorade', which is available only in select metros now. According to industry analysts, this nascent segment will witness a lot of action in 2006--with the entry of new players. "Most companies now want to cash in on the growing consumerism in India. As lifestyles change, consumers opt for energy and sports drinks to stay fit. At present, Red Bull which is priced at Rs 75 is the only major player in this segment," said analysts. On Amul's foray into the sports drinks sector, RS Sodhi, general manager, GCMMF informed the company plans to launch 'Stamina' in select metros, which include Mumbai, Chennai, Delhi and Ahmedabad - to start with." Stamina will the first sports drink from India. With lemon flavour, it will be available in Tetra Paks and is priced at Rs 12(for 200 ml). Two years ago, we entered flavoured milk segment,"said Mr Sodhi. According to analysts, with competitive pricing strategy, Amul will score over other sports drinks in India, which are priced above Rs 75. As for Coca-Cola's strategy for 'Powerade' in India, the company spokesperson was reluctant to divulge details on coke's new initiatives. "We are exploring opportunities to bring in new beverages targeted at different segments in the new year," he said. The vital question is -Will a swadeshi brand like Amul take on global brands in the sports drinks sector in India? News Articles: Amul, now a billion dollar Co-Operative enterprise The Economic Times: June 23, 2008 Gujarat: Gujarat Co-operative Milk Marketing Federation (GCMMF) popularly known for its products brand name Amul has become India's first billion dollar co-operative unit after touching the record annual turnover of Rs. 5,255.41 crores (52.554 bn rupees). It has registered quantum growth of 22.9 pc with an increase of nearly Rs.1,000 crores (10 bn rupees) in absolute terms over the previous fiscal year. Besides, the GCMMF, the apex marketing body of 13 district milk unions of Gujarat having a membership of at least 27 lakh (2.7 mn) milk producers has reached another milestone by processing almost one crore litres of milk in a single day. This success was announced on the 34th annual General Body meeting by GCMMF held at Anand recently while reviewing the annual performance. "Last fiscal (2006-07) our milk procurement represented a growth of average 13 to 14 pc with average milk collection of 7.5 mn litres per day. During peak procurement period, we have successfully demonstrated to process almost 10 mn litres of milk per day. With this, our sales turnover has gone up by 15 to 20 percent and we have crossed a sales turnover by almost rupees 52.55 bn. This shows an increase of rupees 1,000 crores (10 bn rupees). We are constantly doing equally well and hope to post similar growth in the upcoming years," said B.M. Vyas, Managing Director of Gujarat Co-operative Milk Marketing Federation (GCMMF). During the fiscal year, Gujarat Co-operative Milk Marketing Federation has done remarkably well in most value added consumer products in which Amul milk pouches have been considered the largest contributor to the turnover with sales up by 48 per cent in value terms. Ultra Heat Treated (UHT) milk has also shown an impressive growth of 60 pc. Sales in the flavoured milk segment rose by 39 pc while the processed Amul cheese and Amul cheese spread recorded a growth of 27 pc and 39 pc respectively. The dairy whitener Amulya also recorded a growth of 20 pc and the infant milk powder named Amulspray recorded higher sales of 19 pc. Despite a stiff competition from multi national companies (MNCs) in butter category, Amul managed to register double-digit growth in value. In tune with the lifestyle trends, GCMMF has focussed on healthier life products. Amul calci plus and Amul shake are new innovative UHT milk category which will hit the market soon. "Level playing is that our farmers should be protected from subsidies export which may take place from developed world into India. If the duties are lowered, a lot of export subsidies exist in agriculture and when you allow such commodities to come into India with duty free it damages Indian agriculture where our production falls down. And we need the shelter to import and maintain supply," said Vyas. "So we need to correct things if the exporting country subsidizing their agriculture corresponding import duty should be there so that Indian farmers have level playing field," he added. Today, being the largest milk-producing nation in the world, India is also self-reliant in terms of milk products. However, we do not have buffer stock mechanism for dairy commodities in India. Vyas suggested if the country can maintain and consolidate this achievement, the policy makers must put in place an effective buffer stock mechanism for dairy commodities alongside proper management of demand and supply equation from milk products. Another secret of GCMMF's success could be attributed to its policy of supporting farmer owned organisations and giving them all their dues. Recently World Bank has initiated to replicate Amul's model in African countries for their co-operative dairy development, which has shown a remarkable growth. Corporate Social Responsibility, The Amul Way 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. Indeed, a very tough task. Most businesses would certainly flounder in not being able to achieve at least one or many of those expectations. But AMUL has shown the way. CSR-sensitive Organizational Structure AMUL is a three tier co-operative organization. The first tier is the co- operative society at the village, of which; milk producers are voluntary members, managing the co-operative through a democratically elected 9-member managing committee, and doing business by purchasing milk from members and selling it to the district level co- operative. There are more than 11,000 co-operatives in villages of Gujarat. The second tier is the district co-operative that processes milk into milk products, markets locally and sells surplus to the state co- operative for national and international marketing. There are 12 district co-operatives each being managed by a 15-member board elected by the college comprising the nominated representatives or chairmen of the village co-operatives. Third tier is the state level co-operative - the Gujarat Co-operative Milk Marketing Federation (GCMMF) responsible for national and international marketing of milk and milk products produced and sold to it. The GCMMF is managed by the board democratically elected by and from amongst the chairmen of the district co-operatives. The entire three-tier structure with the GCMMF at its apex, is a unique institution because it encompasses the entire chain from production of raw material to reaching the consumer with the end product. Every function involves human intervention: 23.60 lakh primary milk producers; 35,000 rural workmen in more than 11,400 village societies; 12,000 workers in 15 dairy plants; 750 marketing professionals; 10,500 salesmen in distribution network and 600,000 salesmen in retail network. Accumulation of human capital is sine qua non for the development and growth of any enterprise or economy. The GCMMF is sensitive towards CSR. It believes that technology and capital are replicable inputs but not the human capital. Amul (Gujarat Co-operative Milk Marketing Federation), India is the largest food production organisation in India and have contributed their growth and success to their co-operative culture, co-operative networking, market acumen, respect for both producer and the consumer and their contribution to social integration among members of different backgrounds. They aim to provide remunerative returns to farmers and members. When the 2001 Gujarat earthquake struck, the Amul Relief Fund donated 50 million Indian rupees to reconstructing schools. AMUL RELIEF TRUST A devastating earthquake (Richter scale – 7.9) hit Gujarat on 26th January 2001. The epicenter 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. 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 in Mandvi Taluka of Gujarat A school reconstructed by Amul Relief Trust in the earthquake affected Devpar Village in Mandvi Taluka of Gujarat Future Plans Amul to foray into bottled water To capitalise on its tremendous brand equity and offset the margin pressure on the dairy business, Amul is planning to foray into the bottled water segment starting with its home state, Gujarat. The brand name of the water shall be „Narmada Neer‟ to capitalise on the sacred status of Narmada river in Gujarat. It would be available in 200ml pouches, 1 litre, 5 litre and 20 litre PET bottles. If the product get accepted in Gujarat, the venture would be extended to other states in Indian and then Amul could piggy back on its extensive retail network of five lakh outlets across the country. Bottled water could otherwise provide good margins and the profits from the venture would be primarily used for welfare of families in the Amul‟s dairy trade. 10 years back, Amul did take a shot at bottled water through „Jaldhara‟ which was produced by NDDB. However the venture failed owing to less demand for packaged water in market. But with this market growing bigger and expected to grow at 40% every year, Amul is surely going to benefit. Another positive for the company is that 40% of total national market for packaged bottled drinking water is in western India, which Amul is exploring initially. But going by scale and investments of Amul, it would seem that the venture would be albeit on a shorter scale and done only to fulfill corporate social responsibility. BIBLIOGRAPHY WEB SITES SERVED: WWW. GOOGLE.COM. WWW.AMUL.COM. WWW.WIKIPEDIA.COM. BOOKS REFERED: BOOKLET OF AMUL BY KHAIRA UNION DISTRICT. PLACES VISITED: ANAND (GUJARAT). AMUL KHAIRA UNION DISTRICT.
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