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1.1 Global Scenario of Industry
Europe remains the largest market in the dairy Industry. US Follows Europe as the second
largest market. Preference for rich, fortified, fat-specific, and organic variants of various
dairy products in the market. India is going to be a major market for international players
Growing population
lot of growth opportunities
It is projected to account for over 1/3 of the global milk consumption by 2020

CAGR(2011-2014) drinking milk sector:
Global : 1.9 % , APAC: 3.5%, Western Europe: 0.2%, Africa: 2.2%, Eastern Europe:2.4,
Latin America: 2.8%

Market Value in Asia Pacific








Category % Share
Japan 37.3%
China 31.2%
India 9.5%
South Korea 8.3%
Rest of Asia-Pacific 13.7%
Total 100%
Source: Data monitor

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In developed dairying countries such as the U.S.A., the year 1850 is seen as the dividing line
between farm and factory-scale production. Various factors contributed to this change in
these countries, viz. concentration of population in cities where jobs were plentiful, rapid
industrialization, improvement of transportation facilities, development of machines, etc.
whereas the rural areas were identified for milk production, the urban centers were selected
for the location of milk processing plants and product manufacturing factories. These plants
and factories were rapidly expanded and modernized with improved machinery and
equipment to secure the various advantages of large-scale production. Nearly all the milk in
the U.S.A. before 1900 was delivered as raw (natural) milk. Once pasteurization was
introduced, it developed rapidly. Mechanical refrigeration helped in the rapid development of
the factory system of market milk distribution.





37.30%
31.20%
9.50%
8.30%
13.70%
100%
0
% Share
Japan
China
India
South Korea
Rest of Asia-Pacific
Total
Source: Data monitor

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Global players






Switzerland , started in 1866
with sales turnover Rs
1,471.30 crore

New Zealand, started in
2001 with sales turnover US
$17 billion.
Denmark , started in
1881with annual turnover
of Danish krone (DKK) 64
billion
Barcelona, Spain started in
1994,

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1.2 History of the Industry
India is the highest milk producer in the entire
globe. India is well known as the 'Oyster' of the
global dairy industry, with opportunities galore
for the entrepreneurs globally. It might be dream
for any nation in the world to capitalize on the
largest and fastest growing milk and milk
products' market. The dairy industry in India has
been witnessing rapid growth with liberalization.
As the economy provides good opportunities for
MNCs and foreign investors to release the full
potential of this industry. The main objective of
the Indian Dairy Industry is to manage the
national resources in a manner to enhance milk
production and upgrade milk processing using
innovative technologies.

The crossbred technology in the Indian Dairy Industry has further augmented with the
viability of the dairy units by increasing the milk production per animal. Then subsequently
milk production has also increased at an exponential rate while the benefits of an increase in
milk production also reached the consumers from a relatively lower increase in the price of
milk. The favorable price environment for milk producers for the Dairy Industry in India
however appeared to have weakened during the 90's, a decline in the real price of milk being
noticed after the year 1992. And then slowly regained it is glory after 1992 to till now.
In India dairying from very much earlier is regarded as an instrument for social and economic
development. The country's milk supply comes from millions of small producers, who are
dispersed throughout the rural areas. All these farmers maintain an average herd of one or
two milk animals, comprising cows and/or buffaloes. Mostly ample labor and a small land
base encourage farmers to practice dairying as an occupation subsidiary to agriculture. As
income from crop production is seasonal instead dairying provides a stable which is a year-
round income and also an important economic incentive for the small farmer.

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The co-operative society was stated about 26years ago in indices while in the foreign country
(Britain). It was established in 1844. I.e. 146 years ago. In Gujarat the first milk producer
union was stated in kheda district were inspire and guided by the Sardar Patel and the
kheda district milk producer union ltd. The co-operative based industry was started in 1946 at
Anand name AMUL DAIRY. Following the footstep of Amul Dairy the milk producer
union was started at Surat in 1951. It is called as Surat in Sumal Dairy. Then in 1957-58,
the other co-operative milk producer union was established in Baroda called Baroda dairy
in 1960. Dhanasura Dairy was started in Mahesana. In Banaskanthadistrict, the Banas
Dairy was established in 1966. Dr. V.Kurien the General Manager of Amul Dairy talked to
Mr. Bhalabhai Patel a prominent of dairy industry is Sabarkantha District and with great task
efforts on the Mr.Bhalubhai Patel the foundation Chairman Mr. C.C. Desai,Mr. Gopalbhai
Patel and Mr. Ambabhai Patel. The Sabarkantha district Co-operative Milk producers union
was established on 27th November 1964. It called as Sabar Dairy. It has got its name as it
is situated in the Sabarkantha district first 19 societies registered their names on 20th October
1965. 5100 liters milk was collected and supplied for Ahmedabad. Ahmedabad municipal
dairy could not accept more quantity of milk during the seasons. For the first seven years the
milk union kept in on supplying raw milk to Ahmedabad municipal dairy and could not
expand its activities due lack of financial sources. Therefore, in 1970 the milk union
submitted proposal to Indian Dairy Corporation for establishment of multiproduct dairy plant
in Sabarkantha district.

History of Indian Market Milk Industry
Beginning in organized milk handling was made in India with the establishment of Military
Dairy Farms.
Handling of milk in Co-operative Milk Unions established all over the country on a
small scale in the early stages.
Long distance refrigerated rail-transport of milk from Anand to Bombay since 1945
Pasteurization and bottling of milk on a large scale for organized distribution was
started at Aarey (1950), Calcutta (Haringhata, 1959), Delhi (1959), Worli (1961),
Madras (1963) etc.

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Establishment of Milk Plants under the Five-Year Plans for Dairy Development all
over India. These were taken up with the dual object of increasing the national level
of milk consumption and ensuing better returns to the primary milk producer. Their
main aim was to produce more, better and cheaper milk.

1.3 Indian Scenario of Industry

Co-operative:
A man takes a muster seeds and sows it in his field. It is the smallest of all seeds, but
when it grows up, it has the biggest of all plants. It becomes a tree, so that birds comes
and make their nest in its shredded branches. This approach of the growing and nesting
birds the spirit of co-operation between the natures, the person who shows the seed is the
true essence of a co-operative. Co-operation amongst competitive is the fundamental
principal. One is reminded of the story where the father tells his five sons to break small
wood stick individually and then trying to breaks them when they are joining. The sticks
do not break.

Co-operative movement in dairy industry:
Milk is perhaps the only agriculture product that a farmer is required to sell twice a day
every day of the year. In view to its extremely limited keeping quality, the farmer has also
got to sell it within few hours of production; otherwise it becomes a total loss. In India as
farming is carried on very small it is not possible for a farmer himself to market what
little milk he produce. The production being small it does not become worthwhile for him
to sell the milk to the consumer himself. Inevitably, therefore draying so developed that
middle man entrench themselves in the milk producing areas to buy the milk from the
farmer transport it to the consuming centers and to sell in to the consumer. We are all
aware of the tremendous exploitation that the middle man indulges in when marketing
agricultural commodities.

Even product like wheat, rice, tobacco, the exploitation of the farmer by middle men is
very important but these are products that are needed to be marketed only once a year.

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These are also products, which the farmer can stock for some time in order to obtain a
good market.
India is one of the largest milk producers in the world
Market size of Indian Dairy Industry stands at around US$4.4 billion
CAGR (2005-2009): 11.9 %
Domestic Market 50% in fluid form, 35% in traditional products (cheese,
yogurt and milk based sweets), and 15% is consumed for production of butter,
ghee, milk powder and other processed dairy products
Forecast 2014: increase by 49.4 % to take market value to US $ 6.5bn

Indian Dairy Industry

Size of the Industry More than 10 million dairy farmers belong to 96,000 local dairy
cooperatives, who sell their product to one of 170 milk
producers' cooperative unions who in turn are supported by 15
state cooperative
Geographical
distribution
Delhi, Punjab, Mumbai, Gujarat, Surat, Lucknow, Bihar,
Hyderabad
Output per annum Growing 5 % per annum
Market Capitalization The industry contributes about Rs 1,15,970 crores (US $ 25,771
million) to the national economy.



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India ranks first in the world in milk production, which went up from 17 million tons in
1950-51 to 121.84 million tons in 2010-11. The per capita availability of milk has also
increased from 112 grams per day in 1968-69 to 281 grams in 2010-11. The world average
per capita availability was 284 grams per day in 2009-10 compared to 273 grams per day
for India.
The Indian dairy sector acquired substantial growth momentum from the Ninth Plan
onwards, achieving an annual output of 121.84 million tons of milk during 2010-11. This
represents sustained growth in the availability of milk and milk products for the growing
population of the country.
Dairying has become an important secondary source of income for millions of rural
families and has assumed an important role in providing employment and income-
generating opportunities next to agriculture.
India ranks first in the world in milk production, which has gone up from 53.9 million tons
in 1990- 1991 to 127.9 million tons in 2012-13. The per capita availability of milk has also
increased from 176 grams per day in 1990s to 290 grams per day in 2012-13. This is
comparable with the world per capita availability of milk at 289.31 grams per day for 2012.
This represents sustained growth in the availability of milk and milk products for the
growing population of the country, apart from being an important secondary source of
income for rural families.

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1.4 Gujarat Scenario
Gujarat has registered an impressive industrial
development since its formation as a separate state
in 1960. The industrial sector at present
comprises of over 1200 large industries and over
3,45,000 micro, small and medium industries. A
As per the results of the Annual Survey of Industry
(ASI), 2005-06 carried out by the Central
Statistical Organization (CSO), under Ministry of Statistics and Program Implementation,
Government of India, Gujarat accounts for 19.69% of fixed capital investment, 16.13% of
gross output and 15.35% of net value added in industrial sector in India. This survey
further reinforced the position of Gujarat as the most industrially developed state in India in
respect of first ranking in industrial investment and second in terms of value of production
and value addition in industrial sector.

Over the years, Gujarat has diversified its industrial base substantially. In the year 1960-61,
textiles and auxiliaries were the major contributor to industrial economy of the state. In the
span of over 49 years, the industrial spectrum has completely transformed and today 12 major
industry groups together account for 86% of factories, 96% of fixed capital investment, 94%
of value of output and 95% of value addition in the states industrial economy. In the
recent years, refined petroleum products has emerged as one of the largest industrial groups
having 33% share, followed by chemicals having 21% share. Other important groups include
agro and food products (8.5%), textiles and apparel (6.9%), basic metals (6.2%), machinery
and equipment (2.7%), non-metallic mineral based products (2.5%), plastic and rubber
products (1.8%), furniture industry (1.4%), fabricated metal products (1.4%), electrical
machinery (1.2%) and paper and paper products (1.1%). The industries in Gujarat produce a
wide variety of products. A The products which have substantial contribution in terms of
production in India include: Soda Ash having 94% share, Salt (80%), Processed Diamond
(80%), Polyester Filament Yarn (63%), Caustic Soda (42%), Phosphate Fertilizers (37%),
Sponge iron (35%), Textile Fabrics (34%), Refined Petroleum Products (33%), Nitrogenous
Fertilizers (19.5%), Cement (10%) and so on.


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Over a period of time, Gujarat has also succeeded in widening its industrial base. At the time
of inception in 1960, the industrial development was confined only to four major cities
namely Ahmedabad, Baroda, Surat and Rajkot and some isolated locations such as Mithapur
and Valsad. Today, almost all the districts of the state have witnessed industrial development
in varying degree. Such a massive scale of industrial development has been possible on
account of judicious exploitation of natural resources, such as minerals, oil and gas, marine,
agriculture and animal wealth. The discovery of oil and gas in Gujarat in the decade of 60s
has played an important role in setting up of petroleum refineries, fertilizer plants and
petrochemical complexes. During the same period, the state government has also established
a strong institutional network.
Gujarat Industrial Development Corporation (GIDC), established industrial estates providing
developed plots and ready built-up sheds to industries all across the state. Institutions were
also set up to provide term finance, assistance for purchase of raw materials, plant and
equipment and marketing of products. Later, District Industries Centers (DICs) were set up in
all the districts to provide assistance in setting up industrial units in the form of support
services. The state also developed infrastructure facilities required for industries, such as
power, roads, ports, water supply and technical education institutions. The Government also
introduced incentive schemes, from time to time, to promote industries mainly in the under-
developed areas of the state to correct regional imbalances. All these initiatives have made
Gujarat to emerge as the highly industrialized state in the country today.

1.5 Growth of the Industry
Over the past five years, the ministry of science and technologys Dairy Industry
Development project has improved technological innovation in the industry, made great
progress in key technology Research and Development, e.g., breeding of milk cows,
feedstuffs, prevention and treatment of epidemic diseases, processing of dairy products,
quality and safety, and initially set up chinas technology pillar system for dairy industry.
The project has established 20 demonstration zones with 1.18 million milk cows,
increased output per cow from 5000 to 6500 kilograms, and fostered a great many
competitive brands driven by the Dairy Industry Development project, chinas dairy

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industry output has maintained a very high average growth rate of 25% a year, and
accounts for 3.7% of the world total.

The National Dairy Development Board (NDDB). At the foundation of dairy industry are
the cows and buffaloes that, during the last three decades, our nations milk producers
have transformed Indian dairying from stagnation to world leadership. During this period
and before, science and technology have played a critical role in supporting our farmers
efforts. During the next decade, that role will be further enhanced as they face a number
of new challenges. The dairy cooperative movement has been central to the development
of dairying in India. The inspiration for this movement was the success of the Kharia
District Cooperative Milk Producers Unionbetter known as AMUL. Founded in 1946
in response to the exploitation of districts dairy farmers, AMUL grow rapidly from it is
one of the most successful and the largest cooperative dairy enterprises in the whole of
Asia.

NDDB has also supported animal nutrition through the financing of 46 cattle feed plants
and supporting these plants with quality control laboratory services. A useful innovation
has been the development of protected feed technology which minimizes the degradation
of protein and fat in the rumen. Mineral deficiencies are also a constraint to improved
animal productivity. NDDB is supporting area surveys resulting area surveys resulting in
profiles that lead targeted mineral mixtures to be used as supplements in cattle feeds sold
to farmers in this regions. Last, but not least, animal diseases cost our nations milk
producers thousands of million rupees are lost annually in production. NDDBs efforts in
this field are matter of great pride.
Latest developments
Indian Dairy Industry is the largest milk producer all over the world, around 100
million MT Indian Dairy Industries value of output amounted to Rs. 1179 billion in
2004-05 which approximately equals combined output of paddy and wheat. With
1/5th of the worlds bovine population
In India the Milk animals constitutes45% indigenous cattle, 55 % buffaloes, and 10%
cross bred cows

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Intensive Dairy Development Programmed (IDDP): The Schemes, modified under these
programmers are on the basis of the recommendation of the evaluation studies which were
launched during Eighth Plan period and are being continued throughout the Eleventh Plan
with an outlay of Rs. 32.49 core for 2009-10.
Strengthening Infrastructure for Quality and Clean Milk Production (CMP): this is a
centrally sponsored scheme which was launched in October 2003, which had the main
objective of improving the quality of raw milk produced at the every village level in the
India.
Dairy Venture Capital Fund- this is introduced in the Tenth Fiver Year Plan to bring about
structural changes in unorganized sector, which would measure like milk processing at
village level, marketing of pasteurized milk in a cost effective manner, quality or the up
gradation of traditional technology to handle commercial scale using modern equipments
and management skills.
1.6 Top Companies in the Industry
The Leading Dairy Product Companies in India, which are under the control of different state
governments, are generally cooperatives. These cooperatives buy milk from the dairy farmers
at minimum support price. Later these cooperatives process it to different high nutritious milk
products. The leading private milk product companies of India are more into producing and
further processing of this milks. Most of the leading dairy product companies in India are
well equipped to handle processing of bulk quantities of cow and buffalo milk. Further, the
technology used by these leading companies of India to process the milk is at par with the
international standards.
National Dairy Development Board towards educating dairy farmers on producing quality
milk, cattle disease control, cattle feeding, genetic improvement of cattle, vaccination and
other allied education on dairy farming.
Some of the leading dairy product companies in India are:
Amul and Gujarat Cooperative Milk Marketing Federation Ltd
The Orissa State Cooperative Milk Producers Federation Ltd (OMFED)
Andhra Pradesh Dairy Development Cooperative Federation Ltd

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Haryana Dairy Development Cooperative Federation Ltd
Kream Kountry
Mother Dairy
Vasudhara Dairy
Lactose (India) Ltd.
Modern Dairies Ltd
Pastonji Ice Cream
Kings Ice Cream Ltd
Param Dairy Ltd
Dhruv Makhan (India) Ltd

1.7 Industry Structure





Indian Dairy
Industry
Organized
(20%)
Private
dairies
Cooperatives
Societies
Government
Unorganized
(80%)

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1.8 Nature of Demand

In dairy industry the demand for dairy products are basic consumption goods its
necessities product for the consumer. The consumption of any single dairy products
depends not only the demand for that product but also on the consumption of the several
other dairy products because for any short period of time combined consumption of all
dairy products must come from the same fixed supply of milk. Prices must be at level
such that the quantities of milk demanded in all outlets equals the total supply of milk.

1.9 Profit potential

2007-08 2006-07
Sales, Profit, Depreciation (Rupees in crores)
Sales 1482 1266
% Increase over Previous year 17% 20%
Profit before depreciation 16 15
Depreciation 12 11
Net Profit 3.55 3.73
Segment sales compared to previous year
Dairy business 1323 1135
% Increase over previous year 17% 20%
Cattle feed business 159 131
% Increase over previous year 21% 18%





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1.10 Entry and Exit barrier and Rivalry among Competitors


According to this model there are five forces which determine the competitiveness of an
industry in the long-run. The five competitive forces are:
1. Potential Entrants
2. Bargaining Power of Buyers
3. Threats of Substitute
4. Bargaining Power of Suppliers
5. Rivarly
1. Potential Entrants:
The row material availability is adequate and thus too many small firms comes into
existence which affect the market share of small and big firms.
Government rules and regulation to be followed are less because of there is free entry and
exit
2. Bargaining Power of Buyers:
Bargaining powers of buyers is very high.
Product of industry is standard.
Industry
Competitors

Rivalry Among
Existing Firms
Potential
Entrants
Buyers
Substitut
e
Products
Supplier
s

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There are low switching cost faced by buyers
3. Threats of Substitute:
Substitute product affect price elasticity as more substitute become available, the demand
become more elastic since customer have more alternatives.
4. Bargaining Power of Suppliers:
Suppliers power is not high, as they are numerous in number.
The companies are purchasing the spices from the farmers.
As there enough availability of raw material, company can purchase it from the place find
its cheaper as compare to other places.
5. Rivarly:
Rivarly is intensive in this industry. Every price cut is matched by subsequent price cut by
other manufacturers.
Increase rivarly because more firms must compete for the same customers and resources.

2.1 Introduction of Organization

The MEHSANA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION LTD.
Mehsana dairy is a Co-operative organization registered under Co-operative Societies
Act.1925 on 08-11-1960 by Registration No. c/-1960.It has about 1241 member villages
milk co-operative societies in Mehsana District from whom it procures milk. The Societies
have over 4, 52,000 producer members. Working with Manpower (force) in the capacity of
Managerial 34, officers 283, Skilled 798, Semi-skilled 346, & Unskilled 27. Total strength
of Manpower comes to 1488.

The MEHSANA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION LTD has
its head Quarters & Dairy plant in Mehsana town. The union has five milk chilling center at
Vihar, Kheralu, Kadi, Hansapur, & Harij, these chilling centers helps to store milk for longer
period. All these centers are located in the rural area. Ithas two cattle feed plants, at Boriavi &

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Ubkhal (capacity 300 M.T) & an animal breeding station at Jagudan,this breeding station
helps to improve milk products animal.

The union provides various technical inputs to its members through village milk co-operative
societies. The milk collected is processed in to various products such as market Milk, Butter,
Ghee, Milk powder &Sweetened condensed milk. The market milk is sold in Mehsana
District directly by the Union, whereas other milk products exported by the Gujarat Co-
operative milk marketing federation into which the union is totally committed to provide
quality & error-free products & services to its customers with the ultimate aim of satisfying
them.

PROGRESSIVE JOURNEY OF DUDHSAGAR DAIRY

Mehsana a largest milk producing district of Gujarat is famous since long for cattle breeding
& animal husbandry practices. Large, small & marginal farmers & landless laborers are
engaged in the practices of animal keeping & milk production. The high yielding well known
Mehsana buffalo breed is native of the district & is known for its potential of economical
milk production. The union makes use of most advanced technologies for manufacture of
various milk products, for providing better animal health care services & for building socio-
economic strength.

Historical Background

1960 - Establishment of the MDCMPU Ltd.
1961 - Started milk supply to Ahmadabad Municipal dairy.
1963 - The MDCMPU ltd has Innograted
1964 - Innogration of the Vihar chilling center.






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2.2 Organization Vision and Mission

Provide maximum customer satisfaction by quality of milk product diversification
Dudhsagar Dairy has a mission to save the surplus and give employment to village
people.
Dudhsagar Dairy sells their items at MRP price and their mission to provide
healthy and happy life

2.3 History and development of the Unit
The dairy was established on 8thNovember 1960. The dairy has been registered under the
leadership of shri. Mansihbhai Pruthviraj Patel in April 1961. He was the founder of the
DUDH SAGR DAIRY


Late Shri. Mansinbhai Pruthviraj Patel (1919-1970)
A visionary step initiated 50 years ago, against all odds,
with only 1125 producer members to start with, by our
founder Chairman Shri. Mansinbhai Pruthviraj Patel has
grown to become Asias largest cooperative society, an
Institution that epitomizes the economic & social
empowerment of about 5 LACS milk producing
members.


Late Shri. Motibhai R Chaudhary (1923-2005)
As an able Leader & Administrator, Shri.. Motibhai R
Chaudhary was Chairman of our Union continuously for a
period of about 34 years. He has taken the Mission forward
to very high peaks of achievement. His contributions to the
progress of the Union, his ideas and beliefs in simple
living and high values, all continue to inspire us in our
activities.


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2.4 Size of the Unit

The Mehsana District Cooperative Milk Producers
Union Ltd., popularly known as Dudhsagar Dairy, is
a member of the state-level Gujarat Cooperative Milk
Marketing Federation Ltd., Anand. Dudhsagar Dairy is
the largest dairy in Asia, processing on an average
1.41 million kilograms of milk each day. It has
established a network for procuring milk from
4,500,000 milk producers through 1150 village milk
cooperatives.
Today, Dudhsagar Dairy has a membership of over 5.2
lakhs(520,000) dairy farmers. Its consolidated turnover in 2012-13 was more than
Rs.3400crores (34 billion). The union procured 6,147 lakh kg of milk during 2012-13 at an
average milk procurement of 32 lakh kg of milk per day during peak season.
The union is ISO 9001:2000, ISO 14000:2004, and ISO 22000:2005 certified and is an
environment-friendly organization.

2.5 Form of Organization

NAME OF THE COMPANY
Mehsana District Co-Operative Milk Producers Union Limited
(Dudhsagar Dairy)

ADDRESS OF THE COMPANY
Dudhsagar dairy
Mehsana District Co-operative Milk Producers Union limited.
Mehsana 384002
Gujarat State, India.
Dudhsagar Dairy
Dudhsagar Dairy - Amul

Dudhsagar Dairy

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REGISTERED OFFICE
Dudhsagar dairy
Mehsana District Co-operative Milk Producers Union limited.
Mehsana 384002
Gujarat State, India.

DATE OF ESTABLISHMENT
Dudhsagar dairy was established as on 8
th
November 1960.The starting date of union is
2
nd
April 1961.

BANKERS
The Mehsana District Central Co-operative bank ltd, Mehsana.
Bank of Baroda, Mehsana.
State Bank of India.
U.T.I. Bank, Mehsana.
H.D.F.C. Bank, Mehsana.

2.6 Profiling of all Departments in the Company





Meaning of PRODUCTION is simply that To use material which is not in form to use but
through systematically process- it converts into finish products which can be used.

Production Department plays a vital role in the industry. In this department different kinds of
milk products are prepared from their raw material. It is called as input output process of the
product.Mr B.K. Rana, A.G.M. (Egg.) is the in-charge of Process-Production Department.
The department handles various processes as RMRD, Processing, and Pouch Filling &
Sterilized Flavored Milk. The milk is received through various CC on Mehsana Dock for
Production Department

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further processing. For processing the milk, they have old and new process facility with
different capacities. The milk is passed through pasteurization, cream pasteurization
transferred to milk storage tank and cream storage tank, same procedure for new process
capacity. For pouch filling, various packing limits are available as per the market requirement
after standardizing the milk at the required Fat & SNF %. Current pouch filling capacity is
sufficient enough to provide for market demand. As per the requirement from the market,
SFM bottles are being filled and dispatch from the plant. As per the standards required for
SFM batch, the pasteurized milk is being standardized and taken in the lot of 1200 liters
batch, sugar and approved. Colors are being added to complete the bottle filling. Daily
inward of milk, pasteurization and standardization of milk, pouch filling and dispatch and
SFM bottle filling and dispatch records are being maintained at this level.

Production Planning

Production planning process is responsible for the overall production planning for all the
products. The planning is based on the dispatch requirement, as specified by GCMMF, other
party orders such as Army and ITBP, capacity of the plant, availability of resources, and
quantity of milk expected to be procured, closing stock of finished goods, local demand.







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Organization Structure of Production Department












Production
Manager
Junior
Officer
Supervisor
Workers
Senior
Officer

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Milk Flow Process


Milk Farmers
Village Milk Co-op Soc.
(collection center)
Chilling center
Raw millk Reception
Dock
Milk Processing Plant
Power section
Butter Ghee
section
Storage
Dispatch
Distribution
channel
Customer
Fedretion
Milk packing
section

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The personnel function is important of any other management function because a good
personnel policy of an organization ensures it of availability of the required type of
employees and the removal of any disputes arising among the management and the
employees.
There are 500 employees working in the plant. As the plant is fully automatic the employees
requirement is less compared to other dairies. The machines are imported so the employees
should be skilled enough to handle them. These are 170 technicians, 110 staff and 230
trainees with average age of 23 years.
Dudhsagar dairy hires these employees on seasonal bases and out of the total 500 employees
these are 190 permanent employees and the rest are seasonal.

Organization Structure of HR Department



HR
Department
General
manager
HR manager
Senior
manager
JR. manager Others
HR Department

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Finance Management is the part of the Managerial activity, which is concerned with
planning, and controlling of the firms financial resources. It is an applied branch of general
management it has to plan to organize and control the finance of the enterprise. Chief duties
of financial management are planning and control of corporate finance.

Financial Management is called upon to take three major decisions viz.Investment decision,
financial decision, and dividend decision. Financial Management involves the
implementation of these three major decisions it is an integral part of overall management
rather than merely a staff activity concerned with fund raising operations without sound
management of financial resources, business cannot achieve its objective and may occur
heavy losses.

The finance is of great importance in business. It is described as lifeblood of business, the
science of money. From establishment of business its termination finance is necessary. The
efficiency of production and marketing operations are directly influenced by the manner in
which the finance functions of the enterprise are performed. Finance is that administrative
area or set of administrative function in an organization, which relates with arrangement of
cash and credit so that the organization may have means to carry out its objectives as
satisfactorily as possible. It has been said that a businessman takes money and you manage it
properly, you will make more money. This management of finance is necessary for all.








Finance Department

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Organization Structure of Finance Department




Chairman
General manager
Deputy General
manager
Assistant general
Manager
Sr. Executive
Executive
Managing
Director

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Process of Finance & Account

The accounting function covering the Mehsana office and plant, the five Chilling centers at
Vihar, Kadi, Harij, Hansapur, and Kheralu and two cattle feed plants at Boriavi and Ubkhal
are performed by the Accounts Department at Mehsana head office of Dudhsagar dairy. All
the purchase and sales forDudhsagar dairy are executed from the Mehsana head office
centrally. The purpose and scope of Account process are Management of Financial resource
of the union accurate and timely payment to societies and supplies, maintain proper books of
the union and advise Dudhsagar dairys management of the performance of the union based
on accounting records, finance process includes the accounting functions of payables,
Receivable, Cash Management, Asset Management, and General Accounting & Reporting
functions including Budgeting. It also covers Costing activities performed at Dudhsagar
dairy. The Audit Budgeting and Costing process are performed by the internal Audit
department in closeness with Accounts Department.

Financial Planning

A firm needs to manage its resource effectively and efficiently to achieve its objective. The
managing of resources in an a effective manner is possible only when the management work
out the future course of action in advance and take decision in professional manner and
rational manner thats why financial planning is very important Financial planning is a
statement estimating the amount of capital and determining its composition. It includes the
determination from and proportionate amount of securities.










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Steps for financial planning



Costing Activities:-

In Dudhsagar Dairy is done on a yearly basis for the financial year. This is too limited to the
product group costing. As the value of asset is not finally known production wise process,
depreciation is avoided for allocation to the product groups. The yearly cost sheets forms an
important basis in the estimation of costs, pack wise prepared, yearly for all products packs.
Of late concept of conversation costing where by the milk purchase price is excluded from
the estimated contribution analyses. The client opinions that as milk purchase price of the last
year does not reflect the current and by comparing the gross contribution and gross profit
visa-a-versa the milk Purchase price existing as on the date, one could as certain the
profitability of the products and packs. The incremental cost of milk for fat, SNF and
moisture are based on standard costing. The unit price is the actual transportation and chilling
post based on the previous years financial data. The wastage is calculated based on actual
content of the milk fat and SNF content in the milk purchased of the previous year less the
standard content of fat and SNF for actual production for which milk had been consumed.
This wastage is applied to the fat and SNF inputs in proportion. Based on the standard inputs
Establishing Objective
Determine Investment Need
Forecasting Cash flow
Financing

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the actual quantity product wise is derived applying the wastage rate on the standard the
consumption.

Capital Structure

Capital is one of the most important factors of production without capital organization cannot
production or other type of the activity. Capital includes share capital reserve and surplus and
long term liabilities. The authorized share capital of the dairy is 2500,000 shares of Rs. 100
each and the capital is2500, 00,000

The major finance is procurement of money needed by the business, keeping and increasing
the invested money through sound financial policies and programs and generating income or
profit for the business.

2.7 Contribution of the unit to the Industry

Total contribution to the economy/ sales
The Indian Dairy Industry engages in the production and processing of milk & cream. This
industry is involved in the manufacture of various dairy products like cheese, curd, yoghurt
etc. The Indian Dairy Industry specializes in the procurement, production, processing, storage
and distribution of dairy products. India as nation stands first in its share of dairy production
in the international scenario. The industry contributes about Rs 1, 15,970 to the national
economy.
Employment opportunities
The Indian Diary industry which is in the developing stage provides gainful employment to a
vast majority of the rural households. It employs about 8.47 million people on yearly basis
out of which 71% are women.
Jobs in Indian dairy industry are mainly in the fields of production and processing of dairy
products. An individual with minimum of 60% marks who has bachelor's degree course in the

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dairy technology can easily be availing an opportunity to work in this industry. For the
graduation course in Dairy technology one has to qualify the All India Entrance Test that is
affiliated to the Indian Council of Agricultural Research. After that the person can continue
with his masters in dairy technology. Jobs would be for the following positions.
Dairy Scientists: The main job of the dairy scientists is to deal with collection of milk
and taking care of the high yielding variety of animals.

Dairy Technologists: the work of Dairy technology requires procurement officers
who take the responsibility of collecting milk from farmers, milk booths and cattle-
reapers. This particular procurement officer should well understand the latest
technology that is applicable in maintaining the quality of milk of the process of
transporting it to the desired location.

Dairy Engineers: dairy engineers are usually appointed is to set up and maintain
dairy plants.

Marketing Personnel: These individuals deal with the sale and marketing of milk
together with milk products.

2.1 Organization of marketing department
The marketing is very broad concepts for the business. We can distinguish between social
and managerial definition of Marketing. Asocial definition saw the role Marketing plays in
society. One market said that Marketings role is to Deliver a higher standard of living.
Here is a social definition that serves our purpose Marketing is a societal process by which
individuals and group obtain of what they need and want through creating, offering and freely
exchanging products and services value with others. For Managerial definition, Marketing
has often being described as the art of selling products.Dudhsagar Dairy, Mehsana covers a
domestic market and now days its marketing is widely spread in foreign countries also. It has
covered major markets in the states like Karnataka, Rajasthan, Maharashtra and many other
states in India including Gujarat.

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Dudhsagar dairy is having its goods reputation in the market because of its best quality.
Quality is the bench mark of Dudhsagar dairy resulting in to raising the graph of consumer
demand and market. At current year Dudhsagar dairy procured more than 20, 00,000
kg/day and its turnover have more than1750 crores for the year 2008-09.Mr.P.A. Mukharji,
Manager is the in-charge of Sales dept. Any kind of sales in the society is being booked
through this dept. Majority of sales are booked through GCMMFL, ANAND, as direct &
Through federation sales, consignment sales, Army sales, member farmer sales, etc.
Federation transaction is ruling at federation decided prices, while rest of pricing is
independent to our union. Our union has also entered in export market, where the price ruling
is under the union control. Federation makes payment to the union on advance bases or
approximately within 10-15 days as per the requirement of union or the fund facility available
at GCMMFL.

Activities


Milk, chhash, flavored milk sales:

The liquid milk is sold in pouches, in cans & tankers. The pouch milk will be supplied as per
the requirement of milk distributing agents. The loose milk in tankers will be supplied to
Mother Dairy, Gandhinagar, other member union other parties & to individual customer as
per their requirement. Mother dairy 7 other member unions are lifting milk as per the
monthly milk dispatch program decided in GCMMF, Anand. Chhash is also sold in
pouches & in cans. Flavored milk is sold in bottles as per the requirements of
GCMMF, milk distributors &approved parties.

The appointment of milk distributing agent:

The sales process of Dudhsagar dairy invites applications from the parties of potential areas,
who are interested in selling milk, chhash, flavored milk. The area may be fixed while
appointing the milk-distributing agent, whenever required. In case of an individual customer,
milk, chhash, chilled water is given in union scans vessel against cash payment basis.


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DEFINITION

Marketing is a social and managerial process by which individuals and groups obtain what
they need and want by way of exchanging things for mutual benefits.

Purpose & scope:-

To supply milk & milk products
To review customer requirement, resolving any requirements differing
from established norms.
To meet customer requirement.

Responsibility & authority:-

Sales coordination of liquid milk, Butter milk & flavored milk within Mehsana milk
shed area.
Sales coordination of milk products to various GCMMF depots & their bulk parties
Sales coordination of milk products to Defense
Liasioning with Government & legal agencies as & when required
Liasioning with National Co-operative Dairy Federation of India Ltd (NCDFI),
GCMMF Ltd.
Complaints redressed.

2.2 Product Planning and Management and Development

Product Planning

Product is a key element in the market offering. Marketing-mix planning begins with
formulating an offering to meet target customers need and wants. The customer will judge
the offering by three basic elements. Product feature Service mix and quality Price a
product is anything that can be offered to satisfy a want or need. Products that are
marketed include physical goods, services, experience, events, persons, places, properties,

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4 Ps of
Marketing
Product
Price
Place
Promotion
organization, information and ideas. In planning its market offering, the marketer needs to
think through five level of the product. Each level adds more customer value and the five
constitute a customer value hierarchy. The most fundamental level is the core benefit; the
fundamental services or benefits that the customer is really buying. A patient is buying
cure for his disease not medicines.
The Art of Selling Products
Essentials of Marketing
Focus on brand name
Effective Differentiation
Effective public relations
Price differentiation

Product mix
Product mix is the set of marketing tools that firm uses to pursue its marketing objectives in
the target market. It consists of everything the firm can to influence the demand for its
product. The many possibilities can be collected into 4 groups of variable known as the four
Ps:
Product mix which is also called as product assortment is the set of all product and items that
a particular seller offers for sale. A companys product mix has certain width, length, depth
and consistency.









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PRODUCT
Marketing is a comprehensive term and it includes all resources and a set of activities
necessary to direct and facilities the flow of goods and services from producers to
customers in process of the distribution. Business regards marketing as a management
function to plant promote and delivered product to the clients or customers.

PRODUCT CLASSIFICATION
Marketers have traditionally classified products on the basis of Characteristic. Durability
Tangibility Use (Customer or Industrial)

Dudhsagar dairy is a production unit located at Mehsana. But the marketing of the Dudhsagar
dairy is being managed by the Gujarat cooperative milk federation.
The three As of marketing is.
Availability,
Acceptability, and
Affordability.

Already, the glass bottle for retailing milk has given way to single use sachets which are
more economical. Another viable alternative to sell small quantities of milk powder in mini
sachets adequate for two cups of tea or coffee. Dudhsagar dairy has also started to produce
favored in tetra pack which was previously used to distribute in bottle. The flavored are
available in variety in Gulab, Ilachi, Kesher.

Name of the Products:-

Amul gold, (Pasteurized full cream milk 6.0% Fat & 9.0% SNF.)
Sagar standard,
Amul Shakti Pasteurized standard milk,
Amul ghee,
Sagar ghee,
Sagar sfurti flavored milk,

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Amul cool flavored milk,
Sagar skimmed milk powder,
Amul whole milk powder
Amul Pasteurized butter,
Amul mithai,
Sagardan (Cattle Feed)

Development

Milk, Butter milk, flavored milk sales: the liquid milk is sold in pouches, in cans & tankers.
The pouch milk will be supplied as per the requirement of milk distributing agents. The loose
milk in tankers will be supplied to Mother Dairy, Gandhinagar, other member union other
parties &to individual customer as per their requirement. Mother dairy 7 other member
unions are lifting milk as per the monthly milk dispatch program decided in GCMMF,
Anand. Butter milk is also sold in pouches& in cans. Flavored milk is sold in bottles as per
the requirements of GCMMF, milk distributors&approved parties.

The appointment of milk distributing agent: - The sales process of Dudhsagar dairy invites
applications from the parties of potential areas, who are interested in selling milk, butter milk,
flavored milk. The area may be fixed while appointing the milk-distributing agent, whenever
required.

In case of an individual customer, milk, butter milk, chilled water is given in union's cans
vessel against cash payment basis. Product sales within district including village co-operative
societies: -the demand for ghee, butter milk, chilled water etc., within the district is being met
by selling the products to the individual customer or institutional customers. The sale may be
done against cash payment or cheque or DD or credit sales depending upon the party.

Export orders: - the export dept. of GCMMDF Ltd. Anand sends the copy of export order for
the various products to the managing director, production process, QA process, purchase
process &sales process. On the receipt of the same, the order details are examined.
Production planning is done as it done as it is mentioned in production process. The dispatch

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of different products is made by dairy against GCMMF Ltd.s Dispatch instruction letter, to
its various depots. Whenever there is demand for products, which is specific & special
requirement from customers, it is received by sales process. Sales process in turn reviews the
requirements with top management &concerned personal. Detail of the reviving and meeting
customers requirement are explained in customer satisfaction sub process. General
housekeeping: Housekeeping is maintained at sales process as per the work instruction of
general housekeeping.

2.3 Market Segment
Market segmentation is a process by which the company dividing the market on the base of
need, features or behavior that require separate product. Market segment means classification
of market on the base of Geographic, Demographic, Psychographic and Behaviorist.

Process

Market segment is a very important function for market department of the Dudhsagar dairy
because the market consists of buyers different in any ways. They are different in their wants
resources, locating buying practices. Because buyers have unique needs and wants each buyer
is potentially separate market Dudhsagar dairy has segmented its market in following
variables.
In the Dudhsagar dairy market segment on the base of Geographic. In the geographic base
market divided in to different geographic units like nations, regions, states, cities.

Survey stage
Analysis stage
Profiling stage

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Geographic
In the Dudhsagar dairy market segment on the base of Geographic in the geographic base
market divided in to different geographic units like nations, regions, states, cities and
neighborhood.

2.4 Pricing Policy

PRICE

Price is the only element in the marketing mix that creates sales revenue; the other elements
are costs.-
-Philip Kotler

It is the value, usually in monetary terms that sellers ask in-exchange for the products they
are offering.

The prices of products of DUDHSAGAR are also decided by the GCMMF; it conducts the
market survey to check the validity and feasibility of prices in the market and accordingly
decides the prices of DUDHSAGAR products. However, the price is inclusive of several
elements like:

Cost of Milk
Raw Material Cost
Labor Cost
Processing Cost
Packaging Cost
Advertising Cost
Transportation Cost
Sales Promotion Cost
Taxes etc.

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The GCMMF considers all these cost aspects and set them up in pricing structure to decide
the jelling price of milk and milk products.

DUDHSAGAR decides prices for the product Milk, Butter Milk and Curd. For that they
mainly focus on commission of retailers.

Pricing Methods and Strategy

The aim of each and every company is the maximum of profit and customer satisfaction. The
level of profit is generally depending on the pricing policy of the company. Prices of the
product are decided evaluating the return of factors of production i.e. interest, rent, wage, and
profit. Also other such as direct and indirect taxes etc. is also considered while deciding the
price. The factors affecting the pricing are as follow.

Cost of production.
Competition
Quality of product
Payment period there are five types of price setting methods.
Value pricing
Target return pricing
Mark-up pricing
Group Pricing
Going rate pricing

In DUDHSAGAR DAIRY, prices are not fixed for the products; there are some regular
changes in price of some products, just like milk and ghee. Prices are more and less depends
upon the cost of the raw materials and other expanses. They can also adjust the price
according to the market price and demand of product




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Place
DUDHSAGAR dairy is classified into large scale industry. Dairy is producing its various
products like milk, ghee, butter and milk powder etc. it is very necessary to have strong
distribution channel. The DUDHSAGAR dairy has its own sales office which is organized by
DUDHSAGAR dairy himself and Gujarat state milk marketing Federation Company
distributes 70% products through GCMMF and 20%through local marketing and remaining
10% to the Army.

Product price

Particular Price
Amul gold Rs. 22
Sagar standard Rs. 21
Amul Shakti Rs. 21
Amul tazza Rs. 21
Amul ghee
Sagar ghee
Sagar sfurti flavored milk Rs. 14
Amul cool flavored milk Rs. 15
Amul Butter Rs. 33









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2.5 Channel of Distribution
Dudhsagar Dairy Mehsana is producing various products like Milk, Butter, Ghee,
Milk powder and Sweetened condensed milk etc. Distribution channel is important
for business. It has two types of Distribution channel like:

Local Distribution channel

The Dudhsagar dairy has its own sales office, which is organized by Dudhsagar dairy itself.
It has different sales office in different cities like Kalol, Kadi, Mehsanaand other
places.








Wholeseller
Dealer
Retailers
Customer

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Federation dairy
union
Federation
Depot
Wholesale
dealer
Retailer
Customer
Nationally Distribution Channel

This Distribution channel decided by Gujarat Co-op Milk Marketing Federation Ltd.






















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2.6 Sales Promotion
Sales Promotion consists of short term incentives to encourage Purchase and Sales
of a product or services whereas advertising offer reasons to by a product or
services, sales promotion offers reason to buy it. Advertising is joined by two other
mass production tools, sales promotion and public relation. Two tools of the
sales promotion
(a) Consumer sales promotion tools and
(b) Trade promotion tools.

The main consumer sales promotion tools include:

Samples
Coupons
Cash refund
Price pack
Premium
Advertising specialties
Contents and games
Patronage reward

For the sales promotion, in the Dudhsagar some stapes are taken like in dipavli festival some
discount is given to the customers. For increase the morale of agent some benefits are given
like bonus, increase commission etc.

PROMOTION MIX
Promotion refers to marketing activities used to communicate positive information about an
organization, its product and activities to directly or indirectly expedite exchange in a target
market. DUDHSAGAR promotes its products through newspaper, hoardings etc. The
GCMMF however uses hoarding for advertising in local areas. Hoarding designed on the
creative basis attract the customer more.

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2.7 Advertisement
Dudhsagar Dairy is do advertisement of its product many different ways, which are under
Advertisement through

Newspaper- Advertisement through
Board and Hoardings- Advertisement through
Posters- Advertisement through
Internet the sales of organization mostly make by Gujarat Co-operative Milk
Marketing Federation (GCMMF).

Local Sales
It is the sales made in the boundaries of Mehsana district. The products mainly sold are
Sagar Milk, Sagar Ghee, Sagar Butter Milk, Amul Butter and Amul Milk Powder.
This local sale is done through distributors. On special occasions like marriage, party big
orders are taken directly from party. Average milk sold locally is 7500 liters, per day.

Army Sales
It is very special selling to Army. There is no intermediate between two. Only Butter,
Sweetened Condensed Milk and Skimmed Milk Powder sold to army. From this, Powder
is negotiated by federation and Sweetened condensed Milk by dairy.

Powder is supply by main three centers
Mehsana District Co-operative Producers Union Ltd. (Amul dairy) Sabar
dairy (Sabarkantha) Whole milk powder is given to Armys supply depot. There total 47
Army supply depot in India. Skimmed milk powder is gives to Armys Military farm.








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2.8 Marketing Research
Marketing Research is a systematic problem analysis model building and fact binding for
the purpose of improves decision making and control in the marketing of goods and service
Marketing Research is a systematic gathering, recording and analysis of date about
marketing problems to facilitate decision-making.
Marketing Research is also raised thought cell four phases of the administration process
selecting strategies developing marketing plans putting the plan in to action, and integrated
their marketing research activities in to miss designed to provide manager the information
they need for recurring problem decisional.
The marketing manager had to take various decision regarding activities of marketing. The
selection of decision depends upon the information available to him. If has to decide about
many matters such as who are dealer, why they sales companys product and ratio of the
product sales etc. are the questions that might spore within managers for answers of such
questions. A new concept establishes in marketing which is called marketing research.
Marketing Research is a continuous activity. It includes product analysis, Market analysis,
distribution analysis and competition analysis.
In Dudhsagar Dairy Clean Milk Production (CMP) programmed in procurement of clean milk
is the first step towards providing quality product to the consumer. Their union has started
focused efforts in this direction. Besides, planning and execution have been initiated to
include all our societies for ISO certification. To begin with, in the first phase, it has been
decided to cover 61 numbers of societies with bulk coolers plus 24 numbers of societies, each
having currently a turnover of over 3 crores rupees.