Post on 28-Mar-2015
transcript
Operation Flood & AmulIndia Story
Symposium on Trade Networking for Cooperatives,
International Cooperative Alliance
26 July 2007 – Bali, Indonesia
Empowering the Milk Producer
Amul is owned by farmers –the milk producers
Amul symbolises faith in the Co-operative system which places the instruments of development in the hands of farmers
Amul is the brand of 2.6 million milk producers of GujaratAnnual Turnover – Rs. 5500 crores (US $ 1.25 billion)
Dairying occupation of women mainlyDairying provide women with means of sustenanceEnables them to make most household expenditures without having to ask husbands for moneySaves small amounts for emergenciesLead role played by all women dairy societies
Beyond a Brand But Amul is much more than a brand
A vehicle for economic and social transformation
Amul signifies our farmers’ determination to manage their own resources
Amul has a glorious tradition and legacy of more than 60 years
The GenesisIt all began when milk became a symbol of protest
Inspired by the freedom movement
Guidance from Sardar VallabhbhaiPatel and Morarji Desai
Implemented by local committed and selfless farmer leaders like Tribhuvandas Patel
Founded in 1946 to stop the exploitation of milk producers at the hands of middlemen
The Birth of Amul
A humble beginning with 2 village societies and 247 litres of milk...
Registered on December 14, 1946, as the Kaira District Co-operative Milk Producers’ Union Ltd.
Became role model for Co-operative Dairy development
The Turning PointVisit of Prime Minister LalBahadur Shastri in 1964
Impressed by the AmulModel, he wanted to “transplant the spirit of Anand (Amul)” to other places
At his instance, the National Dairy Development Board was set up in 1965 to replicate the Amul Model across the country
The Amul Model The Consumer
State Co-op. Milk Mktg. Fed.Establishment of a direct
linkage between milk producers and consumers by eliminating middlemen
Milk Producers (farmers) control procurement, processing and marketing
Professional management
Dist. Milk Co-op. Union
Vill. Dairy Co-op.
Milk Producer
The Village Dairy Co-op. SocietyVoluntary Association of Milk ProducersAny one owning Cow/Buffalo can become memberOne member – One VoteManaging Committee elected by members who elect ChairmanManaging Committee hires employeesMilk Collection, testing for milk fat, sale of cattle feed – key tasks Payment to milk producers on the basis of quality and quantity
The District UnionPrimary Milk Producers Societies affiliated to a District UnionOwns and operates a feeder/balancing dairy plant Fixing milk prices for village co-operatives a key taskProcessing milk/milk products and managing macro-level inputs like vet. health clinics, semen banks and cattle feed distribution to village dairy co-op. societies – major activitiesChairpersons of village societies elect Board of Directors Board of Directors elect the Chairman of the District UnionUnion managed by professional team headed by Managing Director
Federal Body at the state level – Apex body of District Co-operative Milk UnionsMarketing of Milk/Milk Products of Member Unions – key taskCommon brandingCentralised marketing, Quality Control and PurchasesEfficient Pooling of MilkChairmen of Milk Unions are Board MembersBoard Members elect Chairman of FederationCEO is a Professional
The State Federation
12.6 million in India
1,13,152 Villages in India
176 District Unions in
India
22 State Fedns. in India
AMUL MODEL
SALES REVENUE
SALES REVENUE
BONUS
DIVIDEND ON
SHARES
ADDL. PRICE DIFF.
CATTLE FEED
VET. & AH SERVICES
RURAL HEALTH
SCHEMES
GCMMF in
Gujarat
13 District Unions in Gujarat
12,792 Villages
in Gujarat
2.6 million in Gujarat
Amul and the Regional Avatars
Operation Flood
Launched in 1970
World’s largest Food & Development Programme
Producers’ Cooperatives Central Plank
Linking Dairy Development to Milk Marketing
Innovative Use of Commodity aid as investment to finance dairy development
Three phases – 1970 to 1996
Operation Flood - IAim to capture a commanding share of the milk market in the 4 metro cities
Financed by sale of Skimmed Milk Powder and Butter Oil gifted by the EEC through the World Food Programme
Gifted commodities – 1,27,000 tonnes of Skimmed Milk Powder and 40,000 tonnes of Butter Oil recombined as Liquid Milk and sold in 4 metros
Sold at prevailing market prices generating Rs. 1154 million
Stimulated milk production in hinterland areas
Operation Flood - IIObjective to establish modern, viable and self-sustaining dairy industry
Extended to cover 136 major milksheds linked to 386 urban consumption centresNational Milk Grid formed to eliminate imbalances
5 fold increase in domestic Milk Powder production
Seed capital raised from sale of gifted commodities –242,000 tonnes of SMP; 68,000 tonnes Butter Oil and 23,000 tonnes Butter
Soft loan from World Bank worth Rs. 1536 million
Operation Flood - IIIConsolidating achievements of OF- I and OF- II
Rise in Milk Production leads to significant drop in commodity aid
Significant funding from internal resources obtained by recycling and reinvesting initial commodity aid
World Bank Loan of Rs. 7550 million
Sale of EC donated commodities yield Rs. 1893 million
Salient Features of Operation Flood
9.952.8Liquid Milk Marketing (Million Ltrs. Per day)
842508261Drying Capacity ) MTS per day)
19.28.83.6Processing Capacity in Rural Dairies (Million Ltrs. Per Day)
10.95.82.6Average Milk Procurement (Million Kg. Per Day)
9.33.61.8No. of Members (Million)
72.734.513.3No. of Amul Pattern DCs set up (‘000)
17013639No. of Milksheds covered
1985-1996
1981-1985
1970-1981Period
OF - IIIOF - IIOF - IFeatures
Operation Flood – Heralding ChangesDairying made a remunerative occupation for millions of India’s rural poor
More than Rs. 70 billion flows back annually to nearly 12.6 million members of dairy cooperatives
Enormous Urban Market stimulus leads to substantial production increase
Self-sufficiency in Milk Production
Modernisation and expansion of dairy industry Incremental return of Rs. 400 billion against a total investment of Rs. 20 billion
Milk Production : India
17 20 21.2 23.231.6
53.966.370.8 74.378.1 84 88 91
94 100
0
20
40
60
80
100
120
1950 1968 1980 1995 1997 2002 2004 2007
MMT
Per Capita Availability: India
132 127 113 111128
178199 208 214 217 225 235
0
50
100
150
200
250
1950 1968 1980 1995 1997 2002
gms/day
Statistics
Milk Production – 94.5 MMTs, Expected 135 MMTsby 2015
278 Million Livestock – 180.5 million cattle, 82.8 million Buffaloes
4 Million Sheep, 9.2 million Goats
Livestock population to rise to 322 million by 2015
Definition of milk should be enlarged to include SMP, WMP, White Butter
Lessons from the Amul Model ….
Study demand system first rather than production systemFirst mount successful marketing strategy rather than organising producersSuperior design concept required to avoid mismatchMember control and professional mgmnt
Lessons from the Amul Model ….
Capturing commanding share of milk market must precede growth of Village Dairy Co-operativesImportant to capture market through external intervention and then increase procurement commensurate with withdrawal of interventionMilch animals must remain in hinterland Different interventions needed for Dairy Development
Key LearningsDairying has provided gainful employment to millions, primarily women, in the villagesAn investment of Rs 2000 Crores under Operation Flood Program over 25 years is yielding annual returns amounting to Rs 90,000 Crores every yearThe producer price of milk has not dropped despite four fold increase in productionVibrant dairy industry has provided nutrition to the masses Self Sufficiency has been achieved in the vital food sector !
Coops Empower Farmers through:
Strong BrandsMarket Access to Rural produceIncentive PricesEmployment to womenNutrition to massesDemocracy in actionEducation – focus on the girl child
World Bank observed that the Amul Model has demonstrated that :
Rural development involves more than agricultural productionHigh value of national “ownership” in developmentThe beneficial effects of dairy incomes in relieving worst aspects of poverty even during droughtsThe capacity of dairying to benefit the poor at low cost
Source : World Bank Operations Evaluation Dept. ReportIndia : The Dairy Revolution, 1998
Amul Model has also demonstrated :
The capacity of single-commodity projects to have multi-dimensional effectsThe importance of commercial approach to developmentThe importance of getting Government out of commercial enterprises
Source : World Bank Operations Evaluation Dept. ReportIndia : The Dairy Revolution, 1998
AMUL TODAY
The Market Leader
India’s largest Food Products Marketing OrganisationA Billion Dollar OrganisationAnnual turnover over Rs. 4278crores (US$ 1.1 billion)Milk Procured from 2.6 million farmer members12792 Village Dairy Co-op. Societies
The District Unions
AMUL DAIRY, ANAND SABAR DAIRY, HIMATNAGAR
BANAS DAIRY, PALANPURDUDHSAGAR DAIRY, MEHSANA
The District Unions
DUDHDHARA DAIRY, BHARUCH UTTAM DAIRY, AHMEDABAD
SURSAGAR DAIRY, SURENDRA NAGAR
RAJKOT DAIRY, RAJKOT GANDHINAGAR DAIRY, G’NAGAR
The District Unions
SUMUL DAIRY, SURAT BARODA DAIRY, VADODARA
PANCHAMRUT DAIRY, GODHRA VASUDHARA DAIRY, VALSAD
Mother Dairy, Gandhinagar
A Unit of Gujarat Co-operative Milk Marketing Federation Ltd.
Commissioned in September 1994
New 100 MTS per day Powder Plant installed in March 2006
State of the art dairy
Manufacturing FacilitiesOwn Dairy Plants : 30
Outsourcing from Dairies across India:9
Total Milk Handling Capacity : 10.16 mlpd
Milk Collection in 2006-07 : 2.38 billion ltrs
Plants with one mlpd Capacity : 5
Milk Drying Capacity: 600 tpd
Cattle Feed Mfg. Capacity : 3200 mtd
GCMMF – Member VDCS
55806240
8690
10180 1085211200114001161512340 12792
-1000
1000
3000
5000
7000
9000
11000
1300084
-85
88-8
9
93-9
4
97-9
8
'01-
02
'02-
03
'03-
04
'04-
05
'05-
06
'06-
07
GCMMF : Milk Producer Members(Million)
11.23
1.67
2.22 2.27 2.36 2.4 2.5 2.6
0
0.5
1
1.5
2
2.5
3
84-85
88-89
93-94
'01-02
'02-03
'03-04
'04-05
'05-06
'06-07
GCMMF:Average Milk Procurement(Million kgs. per day)
1.72.5
3
44.6
5.2 5.15.8
6.3 6.7
0
1
2
3
4
5
6
784
-85
89-9
093
-94
97-9
8'01
-02
'02-0
3'03
-04
'04-0
5'05
-06
'06-0
7
The Largest Exporter
India’s Largest Exporter Of Dairy ProductsUHT Milk, Ghee, Cheese, Butter, Paneer, etc. exported in consumer packsWhole Milk Powder, Skimmed Milk Powder in bulkMajor Markets : Gulf, SAARC Region, USA, Singapore, Hong Kong, The Philippines, Cambodia, Japan, Vietnam, China, Australia and Africa
IT Company in Food BusinessAdopted Information Technology Integration as a Strategic Thrust in 1995
I.T. right from Automatic Milk Collection Systems, e-mail and internet connectivity at village level
Customized enterprise resource planning for manufacturing units
Introduction of cyber-shops all over India and in some parts of USA, Singapore and Dubai
Geographical Information System with digital city maps at major cities implemented for distribution planning
All sales offices spread over the country have e-mail connectivity and send daily reports on sales and inventory to Anand
Growing from Strength to Strength
47 Sales Offices3,000+ Dealers
500,000 + Retailers
Reach extends to all parts of the country and many parts of the world
GCMMF bags Rajiv Gandhi National Quality Award -1999 in Best of All Category
Award a tribute to vision, commitment and professionalism in journey towards quality
The IMC Ramkrishna BajajNational Quality Award –2003 for adopting noteworthy quality management practices for logistics and procurement
Awards
APEDA Export Award continuously for 10 years
BRAND BUILDING OF AMUL
Origin of the Brand
CreateCreateBrand Brand IdentityIdentity
SynergizeSynergizeBrand Brand SystemSystem
11
66
Building Building a Stronga StrongBrandBrand
Brand Responsibility
1010Know Know ValueValue
Proposition22
Proposition
Track BrandEquity
Have Have Brand Brand
Position88
Position33
ExecuteExecuteCommunicationCommunication
ProgramProgram
44
Leverage onExisting Brands
77ConsistencyConsistency
OverOverTime
5Time
5
SourceSource-- David David AakerAaker
Create an Identity for the Brand
BRAND AS SYMBOLBRAND AS SYMBOL
Create an Identity for the Brand
BRAND AS PERSON BRAND AS PERSON –– ‘‘CCC’CCC’