III.1.

AMUL DAIRY

III.2 INDUSTRIAL PROFILE:

Name

Kaira District Cooperative Milk Producers'

Union Ltd. Amul Dairy, Anand
Date of Establishment
14TH December 1946
Type
Cooperative
Industry
DAIRY/FMCG
Product Range
Dairy
products
like
Milk,Butter,Ghee,Paneer etc.
Number of Producer Members
6,80,962
Number of Employees
750 employees of marketing arm. However,
real pool consists of 3 million milk
producing members.
Number of Village Dairy Cooperative 1206
Societies
Total Milk Handling Capacity
4.5 Million liters per day
Milk Collection (Daily Average)
1.8 Million liters
Milk Drying Capacity
100 Mts per day
Whey Drying Capacity
60 Mts per day
Cattle Feed Manufacturing Capacity
1200 Mts per day
Sales Turnover (2013-2014)
Rs. 34410 million
Slogan
The Taste Of India and A toast to the world.
Website
http://www.amuldairy.com/

III.I.2.About the Industry:

It all began when milk became a symbol of protest

Founded in 1946 to stop the exploitation by middlemen

Inspired by the freedom movement.

The Kaira District Co-operative Milk Producers Union (Amul) is headquartered at Anand.
Amul is an Indian dairy cooperative, based at Anand in the state of Gujarat, India. The word
amul () is derived from the Sanskrit word amulya (), meaning rare, valuable. The
co-operative was initially referred to as Anand Milk Federation Union Limited hence the
name AMUL.Formed in 1946, it is a brand managed by a cooperative body, the Gujarat Cooperative Milk Marketing Federation Ltd. (GCMMF), which today is jointly owned by 3

million milk producers in Gujarat. Amul spurred India's White Revolution, which made the
country the world's largest producer of milk and milk products. In the process Amul became
the largest food brand in India and has ventured into markets overseas.Dr Verghese Kurien,
founder-chairman of the GCMMF for more than 30 years (19732006), is credited with the
success of Amul. The seeds of this unusual saga were sown more than 65 years back in
Anand, a small town in the state of Gujarat in western India. The exploitative trade practices
followed by the local trade cartel triggered off the cooperative movement. Angered by unfair
and manipulative practices followed by the trade, the farmers of the district approached the
great Indian patriot Sardar Vallabhbhai Patel for a solution. He advised them to get rid of
middlemen and form their own co-operative, which would have procurement, processing and
marketing under their control. In 1946, the farmers of this area went on a milk strike refusing
to be cowed down by the cartel. Under the inspiration of Sardar Patel, and the guidance of
leaders like Morarji Desai and Tribhuvandas Patel, they formed their own cooperative in
1946.This co-operative, the Kaira District Co-operative Milk Producers Union Ltd. began
with just two village dairy co-operative societies and 247 litres of milk and is today better
known as Amul Dairy. Amul grew from strength to strength thanks to the inspired leadership
of Tribhuvandas Patel, the founder Chairman and the committed professionalism of Dr
Verghese Kurien, who was entrusted the task of running the dairy from 1950.The then Prime
Minister of India, Lal Bahadur Shastri decided that the same approach should become the
basis of a National Dairy Development policy. He understood that the success of Amul could
be attributed to four important factors. The farmers owned the dairy, their elected
representatives managed the village societies and the district union, they employed
professionals to operate the dairy and manage its business. Most importantly, the cooperatives were sensitive to the needs of farmers and responsive to their demands. At his
instance in 1965 the National Dairy Development Board was set up with the basic objective
of replicating the Amul model. Dr. Kurien was chosen to head the institution as its Chairman
and asked to replicate this model throughout the country.

The Amul Model

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

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

III.I.3. History
Over six decades ago the life of a farmer in Kaira was very much like that of farmers
anywhere else in India. His income was derived almost entirely from seasonal crops. Many
poor farmers faced starvation during off-seasons. Their income from milch buffaloes was
undependable. The milk marketing system was controlled by contractors and middlemen. As
milk is perishable, farmers were compelled to sell their milk for whatever they were offered.

Often they had to sell cream and ghee at a throwaway price. They were in general illiterate.
But they could see that the system under which contractors could buy their produce at a low
price and arrange to sell it at huge profits was just not fair. This became more noticeable
when the Government of Bombay started the Bombay Milk Scheme in 1945. Milk had to be
transported 427 kilometers, from Anand to Bombay. This could be done only if milk was
pasteurized in Anand.After preliminary trials, the Government of Bombay entered into an
agreement with Polsons Limited to supply milk from Anand to Bombay on a regular basis.
The arrangement was highly satisfactory to all concerned except the farmers. The
Government found it profitable; Polsons kept a good margin. Milk contractors took the
biggest cut. No one had taken the trouble to fix the price of milk to be paid to the producers.
Thus under the Bombay Milk Scheme the farmers of Kaira District were no better off ever
before. They were still at the mercy of milk contractors. They had to sell their milk at a price
the contractors fixed. The discontent of the farmers grew. They went in deputation to Sardar
Patel, who had advocated farmers co-operatives as early as 1942.Sardar Patel reiterated his
advice that they should market their milk through a co-operative society of their own. This
co-operative should have its own pasteurization plant. His advice was that the farmers should
demand permission to set up such a co-operative. If their demand was rejected, they should
refuse to sell their milk to middlemen. Sardar Patel pointed out that in undertaking such a
strike there should be some losses to the farmers as they would not be able to sell their milk
for some time. If they were prepared to put up with the loss, he was prepared to lead them.
The farmers deputation readily accepted his proposal. Sardar then sent his trusted deputy,
Mr. Morarjibhai Desai, to Kaira District to organize milk co-operative and a milk strike if
necessary. Mr. Desai held a meeting in Samarkha village on January 4, 1946. It was resolved
that milk producers co-operative societies should be organized in each village of Kaira
District to collect milk from their member-farmers. All the milk societies would federate into
a Union which would own milk processing facilities. The Government should undertake to
buy milk from the Union. If this wasnt done, the farmers would refuse to sell milk to any
milk contractor in Kaira District. The Government turned down the demand. The farmers
called a milk strike. It lasted 15 days. Not a drop of milk was sold to the milk merchants.
No milk reached Bombay from Anand, and the Bombay Milk Scheme almost collapsed. After
15 days the milk commissioner of Bombay, an Englishman, and his deputy visited Anand,
assessed the situation and accepted the farmers demand. This marked the beginning of the
Kaira District Co-operative Milk Producers Union Limited, Anand. It was formally
registered on December 14, 1946. Its objective was to provide proper marketing facilities for
the milk producers of the district. The Union began pasteurizing milk in June 1948, for the
Bombay Milk Scheme just a handful of farmers in two village co-operative societies
producing about 250 liters a day. An assured market proved a great incentive to the milk
producers in the district. By the end of 1948, 432 farmers had joined village societies, and the
quantity of milk handled by the Union had increased to 5000 liters a day. In the early stages,
rapid growth brought in its wake serious problems. Their solution provided the stimulus for
further growth. For example, as the co-operative movement spread in the district, it was
found that the Bombay Milk Scheme could not absorb the extra milk collected by the Union
in winter, when buffaloes yielded an average of 2.5 times their summer yield. Thus by 1953,

the farmer-members had no regular market for the extra milk produced in winter. They were
again forced to sell a large surplus at low rate to middlemen.
The only remedy was to set up a plant to process the extra milk into products like butter and
milk powder. The logic of this step was readily accepted by the Government of Bombay and
the Government of India, except for a few doubting Thomases. The government of India
helped the Union to get financial help from UNICEF and assistance from the Government of
New Zealand under the Colombo Plan. Technical aid was provided by F.A.O. A Rs.50 lakh
factory to process milk powder and butter was blueprinted. Its foundation stone was laid by
the then President of India the late Dr. Rajendra Prasad on November 15, 1954. The project
was completed by October 31, 1955, on which day the late Pandit Jawaharlal Nehru, the then
Prime Minister of India, declared it open. The new dairy provided a further fillip to the cooperative movement among milk producers. The union was thus enabled to organize more
village co-operative societies and to handle more and more milk each year. This event also
brought a breakthrough in dairy technology as the products were made processing buffalo
milk for the first time in the world. Kaira Union introduced the brand Amul for marketing
its product range. The word Amul is derived from Sanskrit word Amulya which means
priceless or precious. In the subsequent years Amul made cheese and baby food on a large
commercial scale again processing buffalo milk creating a history in the world.1964 was the
turning point in the history of dairy development programme in India. Late Shri Lal Bahadur
Shastri, the then Prime Minister of India who visited Anand on 31s October for inauguration
of Amuls Cattle Feed Plant, having spent a night with farmers of Kaira and experiencing the
success wished and expressed to Mr. Kurien, then the General Manager of Amul that
replicating Amul model through out our country will bring a great change in the socioeconomic conditions of the people. In order to bring this dream into reality, 1965 The
National Dairy Development Board (NDDB) was established at Anand and by 1969-70
NDDB came out with the dairy development programme for India popularly known as
Operation Flood or White Revolution. The Operation Flood programme, even today,
stands to be the largest dairy development programme ever drawn in the world. This saw
Amul as model and this model is often referred in the history of White Revolution as Anand
Pattern. Replication of Anand Pattern has helped India to emerge as the largest milk
producing nation in the world.
Amul meant different things to different people:
To a Milk Producer A life enriching experience
To a Consumer Assurance of having wholesome milk
To a Mother A reliable source of nourishment for her child
To the Country Rural Development and Self Reliance

III.I.4. Vision and Mission statement:

Mission:

GCMMF endeavors to satisfy the taste and nutrition requirements of the customers of the
world through excellence in marketing by their committed team. Through cooperative
networking they are committed to offer quality products that provide best value for money.
Vision:
Amuls vision is to provide more and more satisfaction to farmers, their customers,
employees and distributors.

III.I.5. Board of Directors:

The following are the 17 union members of GCMMF which form the board of directors of
AMUL.
1. Kaira District Cooperative Milk Producers' Union Ltd., Anand
2. Mehsana District Cooperative Milk Producers' Union Ltd, Mehsana
3. Sabarkantha District Cooperative Milk Producers' Union Ltd., Himatnagar
4. Banaskantha District Cooperative Milk Producers' Union Ltd., Palanpur
5. Surat District Cooperative Milk Producers' Union Ltd., Surat
6. Baroda District Cooperative Milk Producers' Union Ltd., Vadodara
7. Panchmahal District Cooperative Milk Producers' Union Ltd., Godhra
8. Valsad District Cooperative Milk Producers' Union Ltd., Valsad
9. Bharuch District Cooperative Milk Producers' Union Ltd., Bharuch
10.Ahmedabad District Cooperative Milk Producers' Union Ltd.,Ahmedabad
11. Rajkot District Cooperative Milk Producers' Union Ltd., Rajkot
12. Gandhinagar District Cooperative Milk Producers'Union Ltd., Gandhinagar
13. Surendranagar District Cooperative Milk Producers' Union Ltd., Surendranagar
14. Amreli District Cooperative Milk Producers Union Ltd., Amreli
15. Bhavnagar District Cooperative Milk Producers Union Ltd., Bhavnagar
16.Kutch District Cooperative Milk Producers' Union Ltd., Anjar
17. Junagadh District Cooperative Milk Producers' Union Limited,Junagadh

III.I.6. Product Range

Name

Amulspray

Amul Malai Paneer

Amul Pizza Mozarella

Cheese

Amul Butter

Images

Amul Taaza

Amul Bun

AMUL whole wheat

bread

Amul pizza base

Amul avasar kesar peda

Amul Cheese Spreads

Amul Kool Cafe

Amul Ice Cream

III.I.7. Manufacturing Process:

III.I.7.1 AMULSPRAY:
Standardized liquid milk

Vitamins, sugar and necessary ingredients added

Passed through pre-heaters

Passed through evaporators

Spray Drying through nozzle

Packing

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

III.I.7.2 Amul Butter:

Cream is taken

Beating

White butter formed

Butter Blender

Add a grin of Anetone

Production line

Packing

Process:
Take the cream (after storage) then beating of the cream takes place.
After beating butter milk is separated and the 1st product formed is known as
white butter. Now, the butter goes to the butter blender then a grin of anetone
salt is added to give the golden yellow color to butter (known as utterly
butterly delicious). Then the butter moves to the production line from where
according to various segments and sizes it will be going to packaging line.
100g butter has 2 lines for packaging, 500g one line and butter tub etc.

III.I.8. SWOT analysis:

Strengths:
1. Amul has well-built image of excellence and innovation
2. Biggest souring base for milk and milk products in India
3. High brand image of AMUL in the market
4. Offerings new products to customers continuously
5. It has well logistic and distribution channel network

Weaknesses:
1.
2.
3.
4.

Unable to meet the market demand during peak season time

No training schedules for training to Distributor sales man

All the system is automated if one system fails the entire factory gets affected.
The workers are not trained properly and due to this wastage is possible to some
extent.

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

2. By increasing the production capacity, it can fulfill the demand during

the peak season
3. They can diversify into non-dairy products even further as bakery
products (few) have already been started by AMUL there is further more
scope for diversification.
4. Milk and milk products can be exported to European countries as well.

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

III.I.9. Observation:

We observed how the taste of India is manufactured and how the utterly
butterly delicious butter is manufactured.
Everything is manufactured with the help of machines except sending of
white butter for manufacturing of ghee and butter. This is done manually
by workers.
The company uses state of art technology present in the dairy industry for
almost all processes.
The company is not able to meet the demands of customers in peak
season.

III.I.10.Recommendations:

The sending of white butter for manufacturing of ghee and butter from the
cream buffer must be done by the use of machines and not manually.
The least number of hands must be used in the process of manufacturing
everything possible must be done by robotic machines.
AMUL can diversify into other sectors also such as recently done (bakery
items).
AMUL must export in more European countries where currently it has not
entered.
AMUL can collaborate with any major dairy in the Middle East and set up
its manufacturing unit abroad in the Middle East countries.

III.I.11.Conclusions

The demand for dairy products is never going to fall hence this industry is
ever-growing in nature.
AMUL has wide scope for diversification in future.
AMUL has a good supply chain management across different countries.
AMUL is Indias leading dairy products manufacturer.