Executive Summary

The basic purpose of in-plant training is to expose myself to the dairy industry and how it has created to the second place in the world. In India, the market milk technology may be considered to have commenced in 1950, with the functioning of the Central Dairy of Aarey Milk Colony, and milk product technology in 1956 with the establishment of AMUL Dairy, Anand. Beginning in organized milk handling was made in India with the establishment of Military Dairy Farms. Establishment of Milk Plants under the Five-Year Plans for Dairy Development was done all over India 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. Later Operation Flood had come to existence with the objective to increase the milk production, augment rural incomes and fair prices for consumers. And to assist with the Finance, Government had started with The National Dairy Development Board to promote, finance and support producer-owned and controlled organizations. There are totally 20-21 Cooperative societies in all over India, which is setup by the Government and Financed by NDDB. Today, the conditions are such where the western, central and south states have been forward in the milk production and distribution. Karnataka Co-operative Milk Producers Federation Limited (KMF) is the Apex Body in Karnataka representing Dairy farmers Co-operatives. It is the third largest Dairy Co-operative amongst the dairy co-operatives in the country. One of the core functions of the Federation is marketing of milk and milk products. The brand ‘Nandini’ is the household name for Pure and Fresh Milk and milk products. KMF has 13 milk unions throughout the State which procure milk from Primary Dairy Co-operative Societies (DCS) and distribute milk to the consumers in various towns, cities, rural markets in Karnataka. The Dairy Co-operatives were established under the ANAND pattern in a three tier structure with the village level Dairy Co-operatives forming the base level, The District Level Milk Unions at the middle level to take care of the procurement, 1

processing and marketing of milk and the Karnataka Milk Federation as the apex body to co-ordinate the growth of the sector at the state level. The Karnataka Co-operative Milk Producers Federation Ltd. came into existence on 1/5/1984 by federating the milk unions in the state and thus forming the state level apex organization. BEMUL was set up in the year 1971 with milk handling capacity of 10,000 LPD under Government Milk Scheme. Now it has the capacity of 60,000 – 1,00,000 LPD, to serve consumers with pasteurized milk and products such as ghee, Peda, Sweet Milk, Masala Butter Milk and Belgaum special “Nandini Kunda”. The primary objective was to study all the departments including the Production, Administration, Marketing, Procurement and Input, MIS (Management and Information System), Purchase, etc. along with their disciplined working structure.


Objectives of the Study:
 To study the overall Dairy industry in India  The existence of Dairy Unions in India  The growth of Dairy Co-operatives  History and Growth of the Group (KMF)  To study the BEMUL and its organization structure  Study all the departments and working structure


Industry Profile
Dairy Industry


Dairy Industry Profile:
Dairy enterprise is an important occupation of the farmer. In India, nearly 70% of the people depend on agriculture. It is the backbone of India. It is mainly a rural occupation closely associated with agriculture. More than 2,445 million people economically active in agriculture in the world, probably 2/3 or even more 3/4 of them are wholly or partly dependent on livestock farming. India is endowed with rich flora & fauna & continues to be vital avenue for employment and income generation, especially in rural areas. The dairy sector in the India has shown remarkable development in the past decade and India has now become one of the largest producers of milk and value-added milk products in the world. The dairy sector has developed through co-operatives in many parts of the State.


Traditionally, in India dairying has been a rural cottage industry. Semi-commercial dairying started with the establishment of military dairy farms and co-operative milk unions throughout the country towards the end of the nineteenth century. In earlier years, many households owned their own ‘family cow’ or secured milk from neighbors who had one. With the increase in urban population fewer households could afford to keep a cow for private use & moreover there were other problems also like the high cost of milk production, problems of sanitation etc. restricted the practice; and gradually the family cow in the city was eliminated and city cattle were all sent back to the rural areas. Gradually farmers living near the cities took advantage of their proximity to the cities & began supplying milk to the urban population; this gave rise to the fluid milk-sheds we see today in every city of our country. Prior to the 1850s most milk was necessarily produced within a short distance of the place of consumption because of lack of suitable means of transportation and refrigeration. The Indian Dairy Industry has made rapid progress since Independence. A large number of modern milk plants and product factories have since been established. These organized dairies have been successfully engaged in the routine commercial production of pasteurized bottled milk and various Western and Indian dairy products. With modern knowledge of the protection of milk during transportation, it became possible to locate dairies where land was less expensive and crops could be grown more economically. In India, the market milk technology may be considered to have commenced in 1950, with the functioning of the Central Dairy of Aarey Milk Colony, and milk product technology in 1956 with the establishment of AMUL Dairy, Anand. Indian dairy sector is still mainly an unorganized sector as barely 10% of our total milk production undergoes organized handling. Beginning in organized milk handling was made in India with the establishment of Military Dairy Farms. 6

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. 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.


Operation Flood:
Launched in 1970, Operation Flood has helped dairy farmers direct their own development, placing control of the resources they create in their own hands. A National Milk Grid links milk producers throughout India with consumers in over 700 towns and cities, reducing seasonal and regional price variations while ensuring that the producer gets a major share of the consumers' rupee. The bedrock of Operation Flood has been village milk producers’ cooperatives, which procure milk and provide inputs and services, making modern management and technology available to members. Operation Flood's objectives included:    Increase milk production ("a flood of milk") Augment rural incomes Fair prices for consumers

Programme implementation: Operation Flood was implemented in three phases: Phase I: Phase I (1970-1980) was financed by the sale of skimmed milk powder

and butter oil gifted by the European Union then EEC through the World Food Programme. NDDB planned the programme and negotiated the details of EEC assistance. During its first phase, Operation Flood linked 18 of India's premier milk sheds with consumers in India's four major metropolitan cities: Delhi, Mumbai, Calcutta and Chennai. Phase II : Operation Flood's Phase II (1981-85) increased the milk sheds from 18

to 136; 290 urban markets expanded the outlets for milk. By the end of 1985, a selfsustaining system of 43,000 village cooperatives covering 4.25 million milk producers had become a reality. Domestic milk powder production increased from 22,000 tons in the pre-project year to 140,000 tons by 1989, all of the increase coming from dairies set up under Operation Flood. In this way EEC gifts and World Bank loan


helped to promote self-reliance. Direct marketing of milk by producers' cooperatives increased by several million liters a day. Phase III: Phase III (1985-1996) enabled dairy cooperatives to expand and

strengthen the infrastructure required to procure and market increasing volumes of milk. Veterinary first-aid health care services, feed and artificial insemination services for cooperative members were extended, along with intensified member education. Operation Flood's Phase III consolidated India's dairy cooperative movement, adding 30,000 new dairy cooperatives to the 42,000 existing societies organized during Phase II. Milk sheds peaked to 173 in 1988-89 with the numbers of women members and Woman’s Dairy Cooperative Societies increasing significantly. Phase III gave increased emphasis to research and development in animal health and animal nutrition. Innovations like vaccine for Theileriosis, bypass protein feed and urea-molasses mineral blocks, all contributed to the enhanced productivity of milk animals. From the outset, Operation Flood was conceived and implemented as much more than a dairy programme. Rather, dairying was seen as an instrument of development, generating employment and regular incomes for millions of rural people. "Operation Flood can be viewed as a twenty year experiment confirming the Rural Development Vision" (World Bank Report 1997c.)


National Dairy Development Board (NDDB):
The National Dairy Development Board was created to promote, finance and support producer-owned and controlled organizations. NDDB's programmes and activities seek to strengthen farmer cooperatives and support national policies that are favorable to the growth of such institutions. Fundamental to NDDB's efforts are cooperative principles and the Anand Pattern of Cooperation. A commitment to help rural producers help themselves has guided the Dairy Board's work for more than 30 years. This commitment has been rewarded with achievements made by cooperative dairies in milk production, employment generation, and per capita availability of milk, foreign exchange savings and increased farmer incomes. The National Dairy Development Board (NDDB) has replaced exploitation with empowerment, convention with modernity, stagnation with growth and transformed dairying into an instrument for the development of Indian farmers. The National Dairy Development Board was created in 1964 in response to the Prime Minister Lal Bahadur Shastri's call to "transplant the spirit of Anand in many other places". He wanted the Anand model of dairy development - with institutions owned by rural producers, which were sensitive to their needs and responsive to their demands - replicated in other parts of the country. The Board's creation was routed in the conviction that our nation's socio-economic progress lies largely on the development of rural India. Thus NDDB's mandate is to promote, finance and support producer-owned and controlled organizations. NDDB's programmes and activities seek to strengthen farmer cooperatives and support national policies that are favorable to the growth of such institutions. NDDB believes that the Rs. 7,000-crore (Rs. 70-billion) milk cooperative market is getting much more competitive and wants to strengthen the position of cooperatives through a multi-pronged action plan with an outlay of Rs. 800 crore (Rs. 8-billion). This includes using MDFL to enter into 51:49 joint venture companies with state


Cooperative federations to assist them with marketing value added products and to help them in other ways to become self-reliant enterprises.

Formation of Co-operative Unions:
Over almost half a century 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 selling milk 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 they market 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. Backward integration of the process led the cooperatives to advances in animal husbandry and veterinary practice. More than 900 village cooperatives have created jobs for people in their own villages and that too without disturbing the socio-agro-system and thereby the exodus from the rural areas has been arrested to a great extent. 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 inequalities. 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 11

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. 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. This income is helping these people not only to liberate themselves from the stronghold of poverty but also to elevate their social status. The system succeeded mainly because it provides an assured market at remunerative prices for producers' milk besides acting as a channel to market the production enhancement package. What's more, it does not disturb the agro-system of the farmers. It also enables the consumer an access to high quality milk and milk products. Contrary to the traditional system, when the profit of the business was cornered by the middlemen, the system ensured that the profit goes to the participants for their socio-economic upliftment and common good. Produce an appropriate blend of the policy makers farmers’ board of management and the professionals: each group appreciating its roles and limitations. Bring at the command of the rural milk producers the best of the technology and harness its fruit for betterment. Provide a support system to the milk producers without disturbing their agroeconomic systems. Plough back the profits, by prudent use of men, material and machines, in the rural sector for the common good and betterment of the member producers. Even though, growing with time and on scale, it has remained with the smallest producer members. In that sense, Cooperative Movement is an example par excellence, of an intervention for rural change. Recently the Indian cooperative movement got a much needed facelift. With competition snapping at its heels, the sector which has been governed by arcane laws until the recent past will see a special provision inserted in the Companies Act, 1956. All the cooperative unions will be re-christened cooperative companies; they will come under the purview of the registrar of companies, instead of the registrar of cooperatives.


While they will have to adhere by the audit procedures like any corporate, they will differ from ordinary companies in many ways. Not everyone can join a cooperative. Only users can enroll as members at a fixed membership fee. Quantum of business and not equity capital will see an election to the board. And there will be flexibility to raise capital from members and outside. Dairy Cooperatives account for the major share of processed liquid milk marketed in the country. Milk is processed and marketed by 170 Milk Producers' Cooperative Unions, which federate into 15 State Cooperative Milk Marketing Federations. The Dairy Board's programmes and activities seek to strengthen the functioning of Dairy Cooperatives, as producer-owned and controlled organizations. NDDB supports the development of dairy cooperatives by providing them financial assistance and technical expertise, ensuring a better future for India's farmers. The Dairy Cooperative Network:     includes 170 milk unions operates in over 338 districts covers nearly 1,08574 village level societies Is owned by nearly 12 million farmer members.

Apart from making India self sufficient in milk, these dairy co-operatives have established our country as the largest milk-producing nation in the world.


India’s Milk Product Mix:
PRODUCT Fluid Milk Ghee Butter Curd Khoa Milk powders Paneer (cottage cheese) Others: Including cream, ice cream, etc Total PERCENTAGE 46 27.5 6.5 7 6.5 3.5 2 1 100

Product Projected Growth Rate:
Projected Growth Rate Per cent per annum 3 8 10 10 12 8

Product Milk production Ghee consumption Table Butter consumption Paneer (cottage cheese) Processed cheese Dairy whiteners and condensed milk


Co-operative Companies playing in Dairy Industry and its brands:
Andhra Pradesh Bihar Gujarat Haryana Himachal Pradesh Karnataka Kerela Madhya Pradesh Orissa Uttar Pradesh Punjab Rajasthan Tamil Nadu West Bengal Goa Jammu Pondicherry

Andhra Pradesh Dairy Development Cooperative Federation Limited (APDDCF) Bihar State Co-operative Milk Producers Federation Limited (COMPFED) Gujarat Co-operative Milk Marketing Federation Limited (GCMMF) Haryana Dairy Development Co-operative Federation Limited (HDDCF) Himachal Pradesh State Co-operative Milk Producers Federation Limited (HPSCMPF) Karnataka Co-operative Milk Producers Federation Limited (KMF) Kerela State Co-operative Milk Marketing


Sudha Amul, Sagar Vita


Milma Federation Limited (KCMMF) Madhya Pradesh State Co-operative Dairy Sanchi, Federation Limited (MPCDF) Shakti, Sneha Orissa State Co-operative Milk Producers Omfed Federation Limited (OMFED) Pradeshik Co-operative Dairy Federation Parag Limited, Uttar Pradesh (PCDF) Punjab State Co-operative Milk Producers Verka Federation Limited (MILKFED) Rajasthan Co-operative Dairy Federation Saras Limited (RCDF) Tamil Nadu Co-operative Milk Producers Aavin Federation Limited (TCMPF) West Bengal Co-operative Milk Producers Benmilk Federation Limited (WBCMPF) Goa State Co-operative Milk Producers Goadairy Union Limited Jammu Co-operative Milk Producers Jamfed Federation Limited Pondicherry Co-operative Producers Union Ponlait


Sikkim Tripura

Limited Sikkim Milk Producers Union Limited Sikkimilk Tripura Co-operative Milk Producers Union Gomati Limited

Global players in Dairy Industry (Top 10):
1. Nestle 2. Danone 3. Dean Foods 4. Unilever 5. Lactalis 16

6. Dairy Farmers of America 7. Arla Foods 8. Kraft Foods 9. Friesland Foods 10. Parmalat

National Statistics:
1. Index Number of wholesale prices: INDEX NUMBER OF WHOLESALE PRICES


Particulars All Commoditie s Food

1994 -95 112.6

1998 -99

1999 -00

2000 -01

2001 -02

2002 -03

2003 -04

2004 -05

2005 -06

2006 -07


140.7 145.3 155.7 161.3 166.8 175.9 187.3 195.6 206.2 215.7

112.8 Articles Food Grains 114.7 Fruits & 108 Vegetables Milk 110.3 Egg, Fish & 116.1 Meat Oil seeds 118.5 Food 114.1 Products Dairy 117 Products Edible Oils 110.9 Oil cakes 121.6

159.4 165.5 170.5 176.1 179.2 181.5 186.3 195.3 210.5 221.9 152 176.4 173.8 172.4 174.3 176.3 177.5 187 206 215.5

185.4 154.5 160 136

188.9 190.2 195.6 204.2 218.9 228.2 236.1 183.6 184.3 196 212.4

147.6 163.2 166.2 171.7 176 186

169.4 174

190.6 193.5 186.4 194

217.4 226.9 238.6

148.5 133.4 129.3 137.6 160.2 177.8 180.8 167.1 175.7 217.7 149.7 151.3 145.7 145.4 153 166.7 174.9 176.8 182.5 190.2

168.6 184.7 181.9 187.1 182.1 196.3 205.9 206.5 217.4 232.2 139.1 122.1 103.3 112.9 138 157.9 156.4 146 154.6 175.1 133.8 138.6 141.2 146.4 204.2 223.9 213.5 189.7 196.5 255.8

2. Production in India:


3. Estimation of milk production for 2007-08:


4. Per Capita Availability of Milk by States:


Recent highlights:

1. The global outlook series on Dairy Products provides a collection of statistical anecdotes, market briefs, and concise summaries of research findings. The report provides an aerial view of the dairy products industry, insightful reviews on noteworthy market trends, and significant growth drivers & stimulants, key segments, and recent industry/corporate developments. The regional markets briefly summarized to provide a broad picture of the current, and emerging scenario include, among the many, the US, Canada, Japan, Czech Republic, France, Germany, Italy, Russia, Spain, Sweden, Switzerland, The Netherlands, UK, Australia, New Zealand, China, India, Indonesia, Israel, Saudi Arabia, UAE, Brazil and Chile. Also included is an indexed, easy-to-refer, fact-finder directory listing the addresses, and contact details of 539 companies worldwide. – By Global Industry Analysts, Inc., Sep 2008 2. i. The Global dairy market grew by 3.7% in 2008 to reach a value of $311 billion. ii. In 2013, the market is forecast to have a value of $373 billion, an increase of 19.6% since 2008. iii. Sales of cheese generate 36.9% of the market in value terms. iv. The Americas region accounts for the majority of global revenues with a 44.7% share. v. The largest company in the market is Kraft Foods, Inc. with a 6.7% share. vi. Supermarkets / hypermarkets are the dominant distribution channel. 63.5% of the markets value is distributed via this channel. - By Datamonitor, Feb 2009


Company Profile
Karnataka Milk Federation

Karnataka Milk Federation:


Karnataka Co-operative Milk Producers Federation Limited (KMF) is the Apex Body in Karnataka representing Dairy farmers Co-operatives. It is the third largest Dairy Co-operative amongst the dairy co-operatives in the country. In south India, it stands first in terms of procurement as well as sales. One of the core functions of the Federation is marketing of milk and milk products. The brand ‘Nandini’ is the household name for Pure and Fresh Milk and milk products. KMF has 13 milk unions throughout the State which procure milk from Primary Dairy Co-operative Societies (DCS) and distribute milk to the consumers in various towns, cities, rural markets in Karnataka. The first ever World Bank funded Dairy Development Program in the country started in Karnataka with the organization of Village Level Dairy Co-operatives in 1974. The AMUL pattern of dairy co-operatives started functioning in Karnataka from 1974 – 75 with the financial assistance from World Bank, Operation flood II & III. The Dairy Co-operatives were established under the ANAND pattern in a three tier structure with the village level Dairy Co-operatives forming the base level, The District Level Milk Unions at the middle level to take care of the procurement, processing and marketing of milk and the Karnataka Milk Federation as the apex body to co-ordinate the growth of the sector at the state level. Co-ordination of activities among the Unions and developing market for Milk and Milk products is the responsibility of KMF. Marketing Milk in the respective jurisdiction is organized by the respective Milk Unions. Surplus/deficit of liquid milk among the member Milk Unions is monitored by the Federation. While the marketing of all the Milk Products is organized by KMF, both within and outside the State, all the Milk and Milk products are sold under a common brand name NANDINI.



In June 1974, an integrated project was launched in Karnataka to restructure and reorganize the dairy industry on the co-operative principle and to lay foundation for a new direction in dairy development. Work on the first ever, World Bank aided dairy development project covered 8 southern districts of Karnataka and Karnataka Dairy Development Corporation was set up to implement the project. The Multilevel, multiunit organization with total vertical integration of all dairy development activities was set up with dairy co-operative societies at grass root level, Milk unions at the middle level and a Dairy Development Corporation at the State level as an apex body, vested with the responsibility of implementing Rs. 51 crore project. At the end of September 1984 the World Bank – aided project ended and the dairy development activities continued under Operation Flood – II. The activities were extended to cover the entire state except coastal taluks of Uttara Kannada district and the process of dairy development was continued in the second phase from April 1984. KMF came into existence in May 1984 as a successor to KDDC. After the closure of Operation Flood – II, the dairy development activities which continued under Operation Flood – III ended on 31/3/96. The spill over works financed by NDDB from 1/4/96 under different terms and conditions.

Organization Status

As at the end of March 2000. The network of 8363 Dairy Co-operative Societies (DCS) have been organized and are spread over 166 taluks of the total 175 taluks in all the 27 districts of Karnataka. These societies have been organized into 13 milk unions. The unions are further federated at state level as Karnataka Milk Federation. There are 38 Chilling centers (capacity 12.49 LLPD), 4 number of farm coolers (capacity 0.16). 17 number of liquid milk plants and 2 product dairies for chilling and processing (21.20 LLPD), conservation (25 TPD) and marketing of milk. To supply balanced cattle feed three numbers of cattle feed plants of 100 TPD capacities each and one plant of 200 TPD capacity with mineral mixture production facility in one unit are functioning. To ensure supply of quality germ plasm, Bull Breeding Farm and Frozen Semen Bank have been established and are well stocked with exotic quality high pedigree Bull. To impart training, one central training institute and 3 regional training centers are functioning. Three diagnostic laboratories have been set up for disease monitoring. Three fodder demonstration farms at Rajankunte, Kottanahalli, Kudige and one seed production farm at Shahpur are also operating. Out of the above units, 16 nos. of dairies, 2 nos. of product dairies, 3 nos. of training centers and 3 nos. of diagnostic labs are operating under respective unions. Under Technology Mission for Dairy Development Project, it has been envisaged to distribute Liquid Nitrogen which is required to store straws. Six Silos of 10,000 lts. Each have been erected at Bangalore, Mysore, Gulbarga, Dharwad, Hassan and Shimoga Union jurisdiction at a total cost of 3.0 crores. KMF has taken the responsibility to supply LN2 in Road tankers to the storage silos, for further distribution to AI Centers of milk Unions and Department of AH and VS.

Manpower Coverage


The present level of activities encompasses about 14.69 lakh of dairy farmers as primary members. Of these, the scheduled caste members are 1,49,389, scheduled tribes are 84,849 and women members are 2,86,316 nos. A total of about 5525 number of employees are working in various capacities in all the units of KMF and affiliated milk unions with direct employment. The indirect employment generated through various project activities of veterinary services, milk transportation through trucks and tankers, milk sales through agents, parlors, booths etc., is around 37,000 which cover about 4,500 nos. of milk agents engaging nearly 13,000 of door delivery boys, 1220 in Parlors/booths and about 400 persons in veterinary services. About 830 route contract vehicles directly employing about 1800 people are working in milk transportation. About 16,000 numbers of persons are employed as village level functionaries in the Dairy cooperative Societies.

Milk Federation

The Karnataka Co-operative Milk Producers Federation Ltd. came into existence on 1/5/1984 by federating the milk unions in the state and thus forming the state level apex organization. The project activities are being implemented by the federation. When all the project activities are completed, the main role of the federation will be to market surplus milk products and to produce and supply centralized inputs.

Presently Mother Dairy and Nandini Milk Products at Bangalore are under the control of KMF. Four cattle feed plants, a central training institute and a centralized testing and quality control laboratory are functioning under the direct control of KMF. Co-ordination of activities between the unions and developing market for the increasing milk production is the responsibility of KMF. Local milk market in the area of union is being organized by the respective unions. Surpluses and deficiencies of liquid milk amongst the member milk unions are managed by the Federation. However, marketing of products is organized by the milk is sold as liquid milk. This apart other products like Butter, Ghee, SMP, WMP, Peda, Flavored milk, Burfi, Mysorepak, Badam Powder and Ice cream are also sold. ‘Nandini Goodlife’ pure cow milk with an ambient shelf life of 45 days has been introduced by adopting the ultra high temperature treatment technology. The products are sold under the family brand name of ‘Nandini’. Marketing of liquid milk and products outside the state is organized by the federation. Excellence in quality is maintained to lay a solid foundation for widespread acceptance of Nandini products. This will ensure an assured market for the ever increasing milk production. Balanced cattle feed, bypass cattle feed, mineral mixture, frozen semen straws and liquid nitrogen are produced by the federation and supplied to the unions. Training and developing senior managerial personnel, acquiring and applying all new relevant technologies, prescribing quality guidelines and norms are also the functions of the federation.



Karnataka Milk Federation (KMF) is a co-operative apex body in the state of Karnataka representing dairy farmers’ organization and also implementing dairy development activities to achieve the following objectives:  Providing assured and remunerative market for the milk produced by the farmer members.   Providing quality milk to urban consumers. To build village level institutions in co-operative sector to manage the dairy activities.  To ensure provision of milk production inputs, processing facilities and dissemination of know how.  To facilitate rural development by providing opportunities for self employment at village level, preventing migration to urban areas, introducing cash economy and opportunity for steady income. The philosophy of dairy development is to eliminate middlemen and organize institutions to be owned and managed by the milk producers themselves, employing professionals. Achieve economies of scale to ensure maximum returns to the milk producers, at the same time providing wholesome milk at reasonable price to urban consumers. Ultimately, the complex network of co-operative organization should build a bridge between masses of rural producers and millions of urban consumers and achieve a socio-economic revolution in the hinterland of the State.

World Bank Study – Observations about KMF

The World Bank, in its study on the effect of Co-operative dairying in Karnataka, has pointed out that: The villages with Dairy Co-operative Societies are much better off than those without.  The families with Dairy cattle are economically better than those without dairy cattle.  Women who had no control on the household income have better control in terms of Milk money.  A single commodity “MILK” has acted as a catalyst in the change in the Socio-Economic impact of the rural economy.  There is a positive impact on those at the lower end of the economic ladder both in terms of landholding and caste

Perspective Plan 2010

After the closure of Operation Flood – III project, Government of Karnataka and NDDB signed and MOU during February 2000, for further strengthening the Dairy Development Activities in Karnataka with an outlay of Rs. 250 crores. Consequent to the announcement of new lending terms and Conditions by NNDB through an evolution of an action plan – Perspective 2010 to enable the dairy co-operatives to face the challenges of the increased demand for milk and milk products by focusing efforts in the four major thrust areas of Strengthening the Co-operatives. Enhancing Productivity, Managing Quality and building a National Information Network, plans are under implementation. The four Milk Unions viz., Dharwad, Tumkur, Bijapur and Gulbarga that were having accumulated losses were included for rehabilitation programme under the Centrally Sponsored Scheme “Assistance to Co-operatives” which is also under implementation. Future Vision: To consolidate the gains of Dairying achieved in the state of Karnataka and with a view of to efficiently chill, process and market ever developing and increasing milk procurement with an utmost emphasis on the Quality and in the process conserve the socio-economic interests of rural milk producers, the Government of Karnataka through KMF has proposed to undertake several projects with financial and technical support of NDDB for which an MOU was signed between Government of Karnataka and NDDB on 10th November, 2004.


1955 - First Dairy in Karnataka set up At Kudige, Kodagu Dist. 1965 – Biggest Dairy in Karnataka with 1.5 lakh lts per day liquid milk processing factory - Setup at Bangalore 1974 -World Bank aided Karnataka Dairy Development project implemented  Karnataka Dairy Development Corporation (KDDC) is born First registration of Milk Producers Co-operative Society Government Dairies transferred to KDDC 1975 – First spear head team is positioned  

1976 – First registration of Union 1980 – Karnataka Milk Products Limited established 1982 – First Milk product dairy started at Gejjalagere, Mandya 1983 – Corporate brand name ‘NANDINI’ given   First Cattle Feed Plant commissioned at Rajankunte Capacity Expanded from 100MT to 200MT Operation Flood – II implemented Karnataka Milk Federation is born KDDC transformed into KMF Product Dairy, Dharwad commissioned Mother Dairy started functioning

1984 – Bull Mother Farm & Frozen Semen Bank commissioned     

1985 – Remaining Government. Dairies transferred to KMF 1987 – Operation Flood – III implementation starts  Dairies at Hassan, Tumkur and Mysore transferred to district milk unions 1988 – Dairies at Bangalore, Gejjalagere, Dharwad, Belgaum and Mangalore transferred to district milk unions  Training centers at Mysore, Dharwad and Gulbarga transferred to unions 1989 – Milk Supply to Calcutta Mother Dairy through railway tankers from Mother Dairy, Bangalore  Centralized Marketing organized


Last milk shed registered as a union (Raichur) Chilling and Processing plants at Bijapur, Gulbarga, Bellary, Shimoga and Kolar transferred to district milk union First Pilot Project on embryo transfer technology implemented

1991 – Karnataka Holstein Friesian Breeders Association (KHAFBA) registered 

1992 – Commercial production and marketing of NANDINI flavored milk launched 1993 – Milk procurement on a single day cross million Kg lever in Dec. 1986 and average milk procurement per day for the year crosses million Kg level 1994 – Liquid Milk Sale crosses Million Liters/day 1995 – Varieties of new Nandini Products viz. Nandini Paneer, Burfi, Kova and Sweet curds launched 1996 – Foundation Stone laid for Cattle Feed Plant at Hassan   Production started Foundation Stone laid for Pouch Film Manufacturing Unit at Munnekolalu Bangalore Dt.   Production started Foundation stone laid for Mega Dairy and new Powder Plant at Bangalore, Mini Dairy Schemes and other development programmes 1997 – Inauguration of Ice cream manufacturing unit at Mother Dairy Premises, Bangalore 1998 – Launching of new Products:      Jamoon Mix Mysore Pak Tetra Fino Packaged Nandini “Goodlife” milk Badam Powder Installation of LN2 distribution system for Karnataka State

2000 – Chilling Centre of 150 TLPD capacity at Hoskote started in Bangalore Union


KMF Pyramid:


Milk Unions (13) Dairy Co-operative Societies


Milk Unions:

1. Bangalore Urban & Rural Milk Producers’ District Co-operative Societies Union Limited –  This is one of the first four Milk Unions to be covered under the First World Bank Project  Has chilling centers in Doddaballapur, Anekal, Hoskote, Vijayapur, Solur, Byrapatna and Kanakapura with total capacity of 5.5 lakh LPD  There are 82 Bulk Milk Coolers and 442 Automatic Milk collection units


2. Raichur, Bellary & Koppal Districts Co-operative Milk Producers Societies Union Limited. –  Established in the year 1989 under the operation flood II covering three districts viz. Raichur, Bellary and Koppal.  It has 4 chilling centers at Gangavati, Dadesagur, Ittigi, Kustagi and Kudilgi with total capacity of .50 lakh LPD.   There are 5 automatic Milk Collection Units. Procuring and marketing Buffalo milk under the brand name “Shubham”. 3. Bijapur & Bagalkot District Co-operative Milk Producers Societies Union Limited. –  Established in the year 1984 and has got 2 dairies – One at Bijapur and other in Bagalkot.  It has12 Bulk milk coolers and 13 Automatic Milk Collection units in the Union. 4. Belgaum District Co-operative Milk Producers’ Societies Union Limited –   Established under Operation Flood II. Have 3 Chilling centers at Gokak, Ramdurg and Athani with a chilling capacity of .30 lakh LPD.   Have 5 Bulk milk coolers and 38 Automatic Milk Collection units. Special sweet has been prepared here – “Kunda”.

5. Dharwad District Co-operative Milk Producers’ Societies Union Limited. –    Established in the year 1986 under the Operation flood II and III. Covers the districts of Dharwad, Karwar, Haveri, and Gadag. Have Chilling centers at Gadag, Haveri, Sirsi, Ron, Nargund, Hirekerur, and Kumta with the chilling capacity of .80 lakh LPD.  Has 7 Bulk Milk Coolers.


6. Dakshina Kannada District Co-operative Milk Producers Societies Union Limited. –  Established during 1986 covering the Dakshina Kannada and Udupi Districts jurisdiction.   It has 2 dairies in Mangalore and Manipal. There are 30 Bulk Milk coolers and 186 Automatic Milk collection Units.  It has 1 Chilling centre in Puttur with the capacity of 20,000 LPD.

7. Gulbarga–Bidar Milk Producers Societies Union Limited. –   Established in the year 1985. Have 3 Chilling centers – Bidaar with the capacity of 30,000 LPD, Hudgi and Shapur with the capacity of 10,000 LPD.  Have 3 Bulk Milk coolers and 9 Automatic Milk collection units.

8. Hassan Co-operative Milk Producers Societies Union Limited. –  Registered in1977 with operational Jurisdiction extended to 3 districts namely Hassan, Kodagu and Chikkamagalur.   It has a dairy in Kudige which was the first dairy in Karnataka State. Have 2 Chilling centers at Birur and Holenarasipur with the chilling capacity of 20,000 LPD.  Have 13 Bulk Milk Coolers and 43 Automatic Milk collection units.

9. Kolar District Co-operative Milk Producers Societies Union Limited. –  Formed on bifurcation of the Kolar District from the Bangalore jurisdiction under the World Bank Assistance.  Has chilling centers at Gowribidanur, Chintamani and Sadali with the total capacity of 3 lakh LPD.  Has 385 Bulk Milk Coolers, 137 Automatic Milk collection units AND 424 Community Centers.


10. The Mandya District Co-operative Milk Producers Societies Union Limited. –   Established in 1987. Have 3 Chilling centers at K.R. Pet and Nagamangala with the total capacity of .40 lakh LPD.   Have 23 Bulk Milk Coolers and 260 Automatic Milk collection units. Has export license for manufacturing and export of skimmed milk powder. 11. Mysore Camarajanagar District Co-operative Milk Producers Societies Union Limited. –   Established under the World Bank Project. Have 3 Chilling centers at Chamarajanagar, Hunsur and Kollegala with the capacity of 1.1 lakh LPD.  Has 31Bulk Milk Coolers, 142utomatic Milk collection units and 15 Community Centers. 12. Shimoga District Milk Producers Societies Union Limited. –   Established in 1963 as a Government Milk Supply Scheme. Have 5 Chilling centers at Honnali, Anandpur, Hosadurga, Tadagani and Chitradurga with the capacity of 1.30 lakh LPD.  Has 9 Bulk Milk Coolers, 62 Automatic Milk collection units.

13. Tumkur Co-operative Milk Producers Societies Union Limited. –    Established under World Bank Project in 1975. Have 11 Bulk Milk Coolers and 48 Automatic Milk collection units. Have 4 Chilling centers at Sira, Madhugiri, Yediyur and Kibbanahalli with the capacity of .90 Lakh LPD.


Other Plants:
1. Cattle Feed Plant –  KMF owns 4 cattle feed plants with installed capacity of 500 MTs/day and are manufacturing 10,000 MTs Cattle Feed on an average per month.   Plants are located in Rajanukunte, Gubbi, Dharwad and Hassan. All these plants are ISO certified.

2. Pouch Film Plant –  The Project Report was prepared by Institute of Rural Management, Anand.  It was established during 1997 with the help of National Co-operative Dairy Federation of India and Central Institute of Plastics Engineering & Technology (CIEPT), Mysore, as a technical consultant.   It is situated in Bangalore. The total plant capacity is 1200 tons per annum.

3. Nandini Sperm Station –  It is engaged in production and supply of superior quality frozen semen to all the Dairy Co-operative societies through the Milk Unions in the project area of KMF.   It is an ISO certified and 2nd best A Grade Semen station in 2005-06. It is one of the largest producers and suppliers of quality frozen semen under the Co-operative Sector and is meeting the entire demand of frozen semen of the State Co-operative Sector.  It is situated in Bangalore.


Product Mix of KMF:
1. Milk: a. Toned Milk – Nandini Toned Fresh and Pure milk containing 3% fat and 8.5% SNF. Available in 500 ml. and 1 lt. packs.

b. Homogenized Milk – Nandini Homogenized Milk is pure milk which is homogenized and pasteurized. Consistent right through, it gives more cups of tea or coffee and is easily digestible.

c. Full Cream Milk – Nandini full Cream milk containing 6% fat and 9% SNF. Rich creamier and tastier milk, ideal for preparing home made sweets and savories.


d. UHT Processed Milk – Nandini Good Life Milk is pure Cow milk. It is UHT processed, bacteria free in a tamper proof tetra fino pack which keeps the milk fresh for 60 days without refrigeration until opened. It is available in 500 ml. fino and in 200 ml. bricks.

e. Double toned UHT processed milk – Nandini Smart Milk is double toned UHT processed milk, bacteria free in a tamper proof tetra fino pack which keeps the milk fresh for 60 days without refrigeration until opened. Available in 500 ml. pack.

f. Slim milk – Nandini Goodlife Slim Milk is Cow’s pure milk, homogenized and skimmed. It is UHT processed milk, bacteria free in a tamper proof tetra fino pack which keeps the milk fresh for 60 days without refrigeration until opened. It is 99.5% fat free. Available in 500 ml. fino and 200 ml. bricks.


g. Buffalo milk – Nandini Shubham Milk is 100% pasteurized, processed and packed properly. Has 5% fat and 9% SNF. Available in 500 ml. and 1 lt. pack.

2. Ghee: Nandini ghee, a taste of purity. It is made from pure butter. It is fresh and pure with delicious flavor. Hygienically manufactured and packed in a special pack to retain the goodness of pure ghee. Shelf life of 6 months at ambient temperatures. Available in 200 ml. 500 ml. 1000 ml. sachets, 5 lts. tins and 15 kg tins.

3. Curd: Nandini Curd is made from pure milk. It is thick and delicious giving you all the goodness of homemade curds. Available in 200 gms. and 500 gms. sachet.


4. Set Curd: Nandini Set curd is made from 3% toned milk with added imported bacterial cultures, filled with 200 Gms. And 400 gms. and allowed to set into curds. It has a shelf life of 15 days in refrigerator without curd becoming sour.

5. Sweets: a. Peda – Nandini Peda is made from pure milk. Stored at room temperature approximately 7 days. Available in 250 gms. pack containing 10 pieces each.


b. Gulab Jamoon mix – Nandini Gulab Jamoon Mix is made from Nandini skimmed milk powder, maida, shoji and Nandini Special Grade Ghee. Available in 100 gms. and 200 gms. standy pouch with a five layer foil lamination. The shelf life of 6 months.

c. Besan Ladoo – Nandini Besan Ladoo is prepared from pure ghee, gram flour and sugar added with cashews. Available in 250 gms. pack containing 6 pieces.

d. Cocoa based sweet – Nandini Bite is a three in one sweet prepared by using Mysorepak, Khova and Almond. Available in 25 gm., aluminum foil packaging.


e. Burfi – Nandini Cashew Burfi is prepared by using Cashew nuts, Khova and Ghee. Available in 250 gm., in a P. P. Box, shrink wrapped to preserve its freshness.

f. Mysore Pak – Nandini Mysorepak is made from quality Bengal gram, Nandini ghee and sugar. Available in 200 gm., and 500 gm. P. P. box.


6. Milk products: a. Butter milk – Nandini Spiced Butter Milk is a refreshing health drink. It is made from quality curds and is blended with fresh green chillies, green coriander leaves, asafetida and fresh ginger. Nandini spiced buttermilk promotes health and easy digestion. It is available in 200 ml. packs and is priced at most competitive rates, so that it is affordable to all sections of people.

b. Flavored Milk – Nandini flavored milk is a nutritious and healthy drink and an all season wholesome drink available in 5 different flavors – Pineapple, Rose, Badam, Pista and Natural orange. Available in 200 ml.


c. Milk Powder – Nandini Milk powder is a skimmed milk powder made from pure milk, processed and packaged hygienically. Available in 500 gm., 100 gm., 200 gm., 1 kg., and 25 kg. pack.

d. Ice cream – Nandini ice cream is manufactured at ISO 9002/HACCP certified Mother Dairy modern plant. Includes range of varieties like Vanilla, Strawberry, Pineapple, etc. Available in 500 ml. and 1 lt. packs.

7. Butter: Nandini Butter is made out of fresh pasteurized cream. Rich taste, smooth texture and the rich purity of cow’s milk makes any preparation a delicious treat. Available in 100 gms. (salted), 200 gms., and 500 gms. Cartons both salted and unsalted.


8. Cheese: Nandini Processed Cheese is highly nutritious and excellent source of milk proteins and rich source of calcium. Available in 100 gms. carton.

9. Khova: Nandini pure milk Khova is prepared from fresh milk. Used for preparing sweets at home like Peda, Gulab Jamoon, Kalkand, Burfi, etc.

10. Badam Powder: Nandini Badam powder is a delicious beverage with hot or cold milk. Used in preparing sweets and desserts. Available in 200 gms. P. P. box with the shelf life of 6 months under room temperature.


11. Paneer: Nandini Paneer is made by coagulating pure milk, and it is an excellent source of milk protein. Available in 200 gms. pack.


The Growth of KMF:
1976-77 416 37,000 50,000 95,050 220 0.90 2007-08 11,063 19,56,163 30,25,940 21,29,790/ curd: 1.77 LKPD 3,010 324 2707

Dairy Co-operatives Membership Milk Procurement Milk Sales Cattle Consumed Daily payment farmers Turnover Feed to

Nos. Nos. Kgs./day Lts./day Kgs./DCS Rs. (Lakhs) Rs. (Crores)


Organization Profile
Belgaum Milk Union Limited


Belgaum Milk Producers Union Limited (BEMUL) Organization Profile:

BELGAUM DISTRICT CO-OPERATIVE MILK PRODUCERS SOCIETIES UNION LIMITED Belgaum District Co-operative Milk Producers Societies Union Ltd., Belgaum Dairy Premises, Kanbargi Road, Belgaum – 590016.

Address of the Company


0831 – 2455036/2454107/2453442 JRL/9072/DAY/1985-86

Registration No. Type of Unit Organization setup

Date – 24th December, 1985

Small Scale Land – 22 acres Permanent – 128


Contract – 78 Total – 206



Government Dairy, Belgaum, was established in the year 1971 with milk handling capacity of 10,000 LPD under Government Milk Scheme. The BEMUL is union member of KMF and registered on 24th December 1985. It is a co-operative organization. The integrated, dairy development activated in Karnataka started on sound footing with Government of Karnataka initiating diary development project in 1974 with the World Bank Assistance. The AMUL Model Co-operative System was followed for Dairy Development activities in Karnataka. Initially Dairy Development was started in 8 districts of Southern Karnataka. Later in 1983, Integrated Dairy Development activities were started in Northern Districts of Karnataka from October 1984 under Operation Flood – II project of NDDB which gave impetus for further development in Dairying. Belgaum Milk Union started functioning with effect from December 1985. Belgaum District is North Western border district of Karnataka, 512 km. away from Bangalore and it is on the border of Maharashtra and Goa states. The district is formerly known as land of sugar, later turned into land of sugar and milk. New dairy plant was established in the year 1995 with milk handling capacity of 60,000 LPD expandable to 1,00,000 LPD to serve consumers with pasteurized milk and products such as ghee, Peda, Sweet Milk, Masala Butter Milk and Belgaum special “Nandini Kunda”. There are 314 primary Dairy Co-operative societies functioning which are affiliated to the Union. In all around 15,280 milk producers families supplying milk to the Union through Primary Milk Producers Co-operative Societies. Around 64,867 families are depending on Dairy activities for their livelihood of which many are land less laborers and belong to weaker section. The major objectives of the union shall be to carry out activities conductive to the economic and socio-economic development of the milk producers by organizing effective promotion, processing and marketing of commodities.

Principles/Vision of the BEMUL

 Honesty  Discipline and Time management  Quality at all stages  Mutual Co-operation and Respect  Transparency  Hard work and Sincerity  Cleanliness  Sovereignty

Mission Statement
Belgaum Milk Union Limited is committed to provide maximum possible price for the milk supplied by its members and provide necessary inputs to enhance milk production while ensuring economic viability of the Union and is also committed to provide quality milk products to consumers and emerge as one of the top most milk union of the Co-operative Dairy industry in the country.

Quality Policy
To ensure pure, hygienic milk and milk products through continuous improvement of quality standards.


Objectives of the BEMUL
 The main objective of BEMUL is to develop the members by procuring good quality milk.  To provide high quality milk to the continuous changing market and to increase the position of Union in introducing milk and milk products.  Honestly striving to become one of the best dairy in Karnataka State.  To eliminate the middlemen’s in the business so that the milk products receive there appropriate share of bread.  To educate the villages about the adulteration of milk and its harmful effect on the body.  To make villagers self viable and build self image.


Functions of BEMUL
 The main function is to procure milk from villagers and pay them the right price.  To educate the villagers about milk and its quality.  To make “Nandini” as a part of daily life.  To provide good quality of cattle feed, fodder, veterinary properly and in an efficient manner.  To see that the milk is brought from DCS’s to the chilling centers in the prescribed time.  To look the accounts of the DCS’s, supervise the purchase process and market the milk and milk products.


Board Members
 Chairman - Shri. Babu . Bassapa. Galagali  Director Shri. Sanjaygouda. R. Patil Shri .Somalingappa. S. Mugali Shri .Babu. Basavantappa. Katti Shri . Amar. Iranagouda. Nirali Shri .Shankar. Malappa.Bolannaver Smt. Veena . Shrikanth. Desai Shri. Rajesheker . A. Patil Shri. Vivekrao. Vasanthrao. Patil Shri. Narayan . Laxman. Patil Shri . Udayasimha . Jayashingrao. Shindhe. Shri. K. N. Venugopal Dr. Manjunath. Palegar Shri .G. M. Patil Shri . C. Balamurugan  Government Nominee - Shri. Laxaman. V. janvadakar Shri. Sukadev. N. Jadav Shri. Girija. B. Bhimarani  Managing Director - Dr. S. Ameer Ahmed


Organization Structure


Department of BEMUL
1. Production/Plant Department a. Engineering Department b. Stores Department 2. Procurement and Input Department 3. Marketing Department 4. Administrative Department 5. Finance Department 6. Purchase Department 7. MIS Department


Production Department


Production/Plant Department structure:


Production is the conversion of raw material into finished product. At BEMUL, production department is well planned and adequately equipped manufacturing set up where the entire necessary infrastructure is available. In BEMUL, the raw milk is processed to form the good quality of milk. During the processing, the milk is differentiated depending on the contract of FAT and SNF (Solids Not Fat). The different types of milk with its FAT and SNF: TYPES OF MILK Full Cream Milk Toned Milk Standardized Milk FAT (IN %) 6 3 4.5 SNF (IN %) 9 8.5 8.5


The production procedure at BEMUL is done under different stages. They are as follows:

↓ → ↓ →



Collection of Milk –

In this stage, the milk is brought from the various DCS to the main dairy in a can containing 40 liters capacity in the vehicles. The cans are marked with two different colors to differentiate between the Cow and Buffalo milk. The red colour is used for Buffalo milk and Green or Blue colour is used for Cow milk. Once the milk is brought to the main dairy, it undergoes for testing of FAT and SNF. ii. Testing – Smelling (odor) test –

In this stage, the testing goes under three stages:–  A man at the Dock station checks the acidic nature of milk by smelling or tasting the raw milk. If the tasted milk has bad odors, then the dairy will pay lower rate to such society members than the normal rate. Extraneous Matter Appearances –

This test is conducted by the chemist. The chemist checks for the two aspects, mainly whether the milk is contaminated or not and milk is in liquid form or curd form. He also checks for any extraneous matters like dust, flies, etc. which lead to the spoilage of milk. Acidic test –

The payment to the suppliers or DCS depends mainly on FAT and SNF content in the raw milk. The supplier may add sugar to the milk so as to increase the FAT and SNF content. Hence, to avoid this adulteration, the acidic test is conducted. In this process, 10 ml. of milk is shaken in a test tube and 1 ml. of hydrochloric acid. Few crystals of resorcinol are mixed into it. The solution is shaken well and is heated for 5 minutes. If the solution is turned into orange colour, it is demanded that sugar is mixed to it.



Chilling and Storing –

After testing, the milk is allowed to store in the SILOS (storage tank). It is maintained at cold lever of 4ºC. The Union is having 7 storage tanks, 3 tanks are vertical with 30,000 liters capacity each and the remaining 4 are horizontal among which 2 are having the capacity of 10,000 liters each and other 2 of 15,000 liters each. iv. Pasteurization and Separation – In this stage, the heating of milk is done at 72ºC in 15 seconds and it is cold in less than 4ºC. When it is passing through pasteurization, the cream is removed depending on the quality of the milk required (standardization). v. Packing and Dispatching – In this stage, the packing is done by the machine of fluid goods and manually in case of solid goods like Peda. The machine packs the milk in 500 ml. pouches. These machines are automatic with a capacity of packing 10,000 to 14,000 pouches per hour. These machines are used to pack all different types of milk in plastic bags. Same machines are used for flavored milk, lassi, ghee, etc. The polythene bags required for packing milk is brought from Bangalore. vi. Storing –

After packing, the milk is arranged in crates. Each cater contain 10 liters of milk. The caters are stored in cold room which has a temperature of about 5ºC. or below.


Ghee making process:

Peda and Kunda Making:

1. Milk Products    Toned Milk Full cream Milk Standardized Milk

2. Curds


3. Lassi 4. Flavored Milk 5. Ghee 6. Peda 7. Kunda: Kunda is a sweet meat made of pure milk; it is one of the special sweet items in Belgaum District. Available in market in tins having self life of 90 day.

a. Engineering Department: Engineering Department has the major contribution towards the production unit. It has 20 workers who personally inspect all the machines and take care of their proper functioning. Functions:  To supply hot water to production department.


 To supply cold water by ammonia treatment so as to maintain the 4ºC temperature of milk.  Diffusion  Maintenance and repair of motors  Supply of proper electricity.  It will clear the water after passing out from the production department and is reused for plants and to wash the floor (Efflon Treatment)  To supply steam of 270ºC continuously.  The Manager and the Technical officer maintains the record of the fuel consumption, ordering of diesel, etc.  Supervisors and technicians checks the proper maintenance of the machines  Helpers check the fuel consumption, starting of generator.

b. Stores Department: It is a department where all the raw materials, semi finished and finished products are stored. Apart from these, stationery and other goods are also stored. Function:


 Proper classification of material  Checking all the materials before storing in the godown.  Maintaining all the records of goods.  The stores officer checks all the raw materials and plastic films which has to be there in the particular time after the order is given  The stores assistant maintains all the records of goods and give the necessary details to the Administration.  Helpers check the daily maintenance and cleanliness of the raw materials

Procurement &

Input Department

Procurement and Input Department:


Procurement and Input is an important Department in the Organization. It deals with procurement of milk and takes it as input for final production.


The demand for milk and milk products has been increasing and to meet for the same, only procurement of milk through societies is not sufficient, the Union has adopted various other sources of procurement life:  Milk procured from societies 90%  Milk procured from other dairy 10% Functions:      Opening of new dairy Co-operative Societies To procure good milk at DCS. To check the records maintained at DCS. To attend complaints To organize meetings at DCS level.



The farmers milk the cattle and take the milk to DCS (Dairy Co-operative Societies) and then the milk is tested for FAT for both cow and buffalo. The milk collected at DCS centers are picked up by milk vans and taken to the main dairy. Then it is weighted there and FAT & SNF are again tested and then send for pasteurization. The money paid by main dairy to the societies based on the FAT and SNF content of milk. For more milk procurement and milk production, balanced cattle feed is essential. For that reason BEMUL is supplying balanced food i.e. Cattle feed and mineral mixture at reasonable prices in the village itself at their DCS. The price of the Mineral mixture is Rs. 30/kg. And their another Programs include Amrut Yojana Program and the program for Tribal people where they finance tribals for cows, cattle feed, etc.

Mineral mixture: 73

COMPOSITION Calcium Phosphorus Zinc Copper

PERCENTAGE (%) 19.80 9 1.62 0.25

Members who give milk for DCS: SMALL FARMERS Marginal Farmers Lenders/Laborers Others Total 27,495 19,549 11,369 11,698 70,111

Average Procurement: FUNCTIONAL 2006-07 DCS 27 50 (IN RS.) 4.858 8,161 74 2007-08 (IN RS.) 3,478 10,244 2008-09 (IN RS.) 3,841 13,173

DISTRICT Belgaum Gokak

Raibag Balihongal Savadathi Ramdurg Hukeri Chikodi Khanapur Athani Total

30 62 36 43 13 9 51 13 337

5,018 10,363 4,789 8,677 1,696 704 6,876 1,852 52,994

7,818 9,751 4,531 8,744 2,149 1,065 7,068 1,513 56,361

9,074 10,136 5,145 8,293 2,839 1,440 7,902 1,899 63,741

The total procurement till June is 65,585 milk/day.

Marketing Department


Marketing Department


The marketing Department of BEMUL is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational goals.


It covers an area viz., Goa Uttar Kannada district and Belgaum, and some parts of Maharashtra. Marketing of milk and milk products are marketed by KMF, the marketing agency. Functions:  To prepare the marketing plan at the beginning of every year, taking into consideration the demand, sales, production capacity.  To undertake promotional activities in order to create awareness and to generate sales.  To ensure proper supply chain management.  Manager prepare the marketing and advertising plans, Product prices.  Clerks and helpers check on the sales, money transactions from their customers, etc.

Marketing section in BEMUL is divided into three different internal sections:  Office Work  Marketing and Production Co-ordination 78

 Field Work  Office Work: It deals with all daily transactions including checking the daily indents, collecting the cash from salesman and depositing the same into the bank. Delegating the work to all assistants and helpers. They also arrange vehicles for distribution of milk on contract basis.  Marketing and Production Co-ordination: Here, the indents collected by the agents, helps in production and packing of the products. They prepare chart of requirement for the next day and sent to the production department which helps in taking decisions for the production.  Field Work: The marketing officers will go to the fields to study the market and then they will plan for the strategy. They will plan about Marketing Mix i.e. Product, Price, Promotion and Place. There are around 15 persons in the field work.

Distribution Process:


Milk Distribution Routes of BEMUL:


ROUTES District Taluka Belgaum I Gokak Belgaum II Balihongal Belgaum III T S Halli Belgaum IV Ramnagar Belgaum V Raibag Sulebhavi Castle Rock Auto (M1) Itagi MPCS Auto (M2) Bailur Route Auto (M3) Parlour Eve. Sales Eve. Sales II Mil. Dairy Adhok Sales TOTAL DISTRIBUTORS 216 110

Outsider Sawantwadi Goa I Goa IA Goa Kundaim Goa II Goa III Goa IV Goa Navy


Prices of Products: BELGAUM MILK UNION LIMITED BELGAUM Sr. Particulars Dealers Margin No MILK 1 Toned milk/ ltr. 16.25 0.75 Standardized 2 17.15 0.85 milk/ltr.

GOA M.R.P. 17.00 18.00 Dealers 17.50 19.65 Margin 1.50 1.35 M.R.P. 19.00 21.00



Full milk/ltr.








1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

PRODUCTS Ghee Ghee 200 ml. Ghee 200


18.64 3.73 18.10 9.05 1.50 2.50 10.00 0.60 0.75 1.00 1.24 1.80 0.60 1.00 4.00 16.00 24.75 4.03 20.15 4.05 20.27 5.00

205.00 41.00 199.00 99.50 15.00 33.00 132.00 5.00 10.00 5.00 12.00 12.00 4.00 5.00 35.00 140.00 250.00 42.00 210.00 33.50 175.50 195.00

186.36 32.27 180.90 90.45 13.50 30.50 122.00 4.00 4.00 10.76

18.64 3.73 18.10 9.05 1.50 2.50 10.00 2.00 1.00 1.24

205.00 41.00 199.00 99.50 15.00 33.00 132.00 6.00 5.00 12.00

37.27 ml./sachet Ghee 500 ml. 180.90 Ghee 500 ml./ 90.45 sachet Peda 100 gm. 13.50 Peda 250 gm. 30.50 Peda/kg. 122.00 Curd 200 ml. 4.40 Curd 500 ml. 9.25 Flavored milk 4.00 200 ml. Sterilized 10.76 flavored milk Tetra pack 10.20 flavored milk Masala Butter 3.40 milk 200 ml. Sweet lassi 200 4.00 ml. Kunda 250 gm 31.00 tin Kunda/kg. 124.00 Badam powder 225.25 sachet 10 gm. Badam powder 37.97 200 gm./tin Badam powder 189.85 200 gm. Jamoon mix 29.45 200 gm. Jamoon mix/kg 147.23 Ghee 15 kg. tin 190.00 (per kg. Rs.)

3.40 4.00 34.00 136.00 225.25 37.97 189.85 29.45 147.23 190

0.60 2.00 6.00 24.00 24.75 4.03 20.15 4.05 20.27 5.00

4.00 6.00 40.00 160.00 250.00 42.00 210.00 33.50 167.50 195.00


Total product sales: PRODUCT Curd Lassi Masala Lassi Peda Ghee Kunda Flavored Milk 2005-06 3,46,341 45,895 5,291 8,972 52,267 2,530 33,414 2006-07 4,82,870 96,664 9,981 13,305 57,170 7,704 61,490 2007-08 4,72,743 1,89,431 10,081 17,745 67,261 22,660 82,733 2008-09 5,50,555 2,12,916 11,552 27,235 1,25,269 27,900 1,16,884

Present sales structure: YEAR 2006-07 2007-08 2008-09 SALES (IN RS.) {MILK/DAY} 43,185 56,936 65,585

Share price: YEAR 2006-07 2007-08 2008-09 SHARE PRICE (IN RS.) 137.18 149.56 148.17


Total demand:


Administration Department


Administration Department:


It is the main department in the BEMUL. It covers all the section of the Cooperative in case of overall administration. This department acts as the HR department and takes care that the employees are satisfied with their present work and are working efficiently with their respective authority. It looks after the welfare schemes of the employees of the whole dairy. There are totally 3 employees working in the Department. One is Supervisor, and the other two are helpers or subordinates. The employees are given a pair of shoes, uniform, raincoats, etc. once in a year. All these kind of allowances act as a source of motivation to the employees. At BEMUL, there are permanent workers and labors and also contract labors. Contract labors are paid daily wages and a separate register is maintained for them. The general shift of the dairy is from 9.30 am to 5.30 pm.

Functions:  Recruit the candidates and select the suitable candidate for the job.  Conduct the training to the new employees as well as to the existing employees.  Maintain shifts timing, etc.  Maintenance of attendance and service records.  Establishment of billing.


 The Establishment officer maintains the records of all departments and attendance of every employee.  The clerks and the attainder maintains the bills, service records, etc.

Finance Department


Finance Department


The main activity of the finance department is to keep all the account of the financial transactions. It is responsible for maintaining up to date account. The various activities are collected to different sections.


Functions:  Maintaining proper accounts for milk purchased and sold every day.  Maintaining of general ledgers and store books.  Maintaining of profit and loss account and balance sheet systematically.  Make use of available financial resources properly.  Paying taxes and insurance in time.  Maintain liquidity of assets properly to earn maximum profit.

 Manager








administration.  Cashier maintains all clearing transactions and depositing of money in the banks.  Clerks and officers record and give money to the DCS, where it is based on the milk provided


Profit and Loss account: PARTICULARS Sales Other income Manufacturing & Other expenses 2006-07 39,46,20,886 49,61,454 3,23,69,684 2007-08 45,40,61,224 55,47,178 5,46,85,555


Purchase Department


Purchase Department


Purchase Department purchases all materials required by the organization. Its main function is to purchase good quality milk at competitive rates from the milk suppliers. Function:  Proper selection of suppliers  Placing order for purchase  Obtaining milk at the best price  Conducting market research for purchase  The manager maintains and work for the quotation of the products and raw materials.  The clerks maintain all the record of stationery products and other milk products.


MIS Department


MIS Department


MIS is a Management Information System. It is a Computer based information system. MIS at BEMUL is divided into two types, viz. a. Daily Information Report – The information is recorded daily regarding the departments, like procurement, water consumption, ice consumption, etc. b. Monthly Report – Monthly records are available here like monthly stock report, monthly progress report on milk procurement, monthly sales, etc. Functions:  To maintain daily reports.  To maintain information regarding input and output.  Maintain town wise sales report.  Reports regarding procurement and input.  Maintaining accounts of daily purchase.


1. Arokya Dairy: It procures milk from south side of the Belgaum. It procures 10,000 LPD. It is located near Desur village of Belgaum. They supply most of the procured milk to the city. 2. Mayur Dairy: It procures milk mainly from Taluka’s at Belgaum District namely Chikkodi, Raibag and Athani. They procure 25,000 LPD. It is located in Kolhapur and they supply milk to Belgaum as well as Kolhapur district. They nearly procure 10,000 LPD. 4. Sahyadri Milk: The dairy is located in Shinnoli Taluka, Chandgad and Kolhapur District. It procures 30,000 LPD. It is supplied in the Belgaum city as well as in the Maharashtra state. 5. Mahalaxmi Dairy: The plant is located near Kolhapur. It procures around 15,000 – 20,000 LPD. The targeted market is in Belgaum, Gokak and in Maharashtra. Some other brands are Krishna, Gopal, and Adityaa.


Future Growth and Prospectus:
Government of Karnataka and NDDB has signed a memorandum of understanding for further strengthening the dairy development activities in Karnataka with an outlay of Rs. 250 crores. New lending terms and conditions have been set up by NDDB through an evolution of an action plan – Perspective 2010, to enable Dairy co-operatives to face the challenges of an increased demand for milk and milk products. Enhancing productivity, managing quality and building national information network plans are under implementation.  Preparing ISO-9001 certification.  Marketing quality improvement.  Developing HACCP (Hazard Analysis and Critical Control Points)  Getting export grade milk powder.  Expansion of Gokak Chilling centers.


1. Strength:
 Nandini enjoys good brand image.  Wide distribution network leads to regular and timely supply.  Milk processed is local therefore reduced transportation cost.  It enjoys highest market shares in the packed milk segment.

2. Weakness:
 Poor retail selling and consumer grievance handling.  Commission paid is less compared o other brands.  Inadequate sales promotional activity.

3. Opportunities:
 There is scope for development in new area.  Availability of buffalo milk improves the milk quality.

4. Threats:
 No entry barriers for private players.  Low level of consumer awareness.  Persuaded benefits of competing brands.


In less span of time, many new Companies are entering the market. The employees and customers may get attracted towards the new Companies. Therefore the ultimate challenge for BEMUL would be to maintain confidence and trust of its employees and customers. By doing this it will deliver employee satisfaction as well as customer satisfaction. To conclude with it was a nice experience in BEMUL, Belgaum. I really came to know what it takes to create and maintain an organization and its customers to give them a satisfaction. Moreover all the staff of the organization provided me with the relevant information which made a good learning experience.


 www.kmfnandini.coop  www.nddb.com  Company manuals  Annual report  Company Journals  Discussion with Department heads


 Joining report  Weekly report of four weeks


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