How this year Amul achieved fastest

ever growth in their history?

Recently, the company has declared its financial results crossing 18,000 cr in 2013-14
with a jump of 32% from the previous year. The company claims to have clocked the
fastest growth in the history of the four decade-old dairy cooperative and has a vision
to achieve 30,000 crores by 2018-19.Avinder Batra | April 08, 2014, 18:07 IST
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End of Growth?
Debt, underpricing of finite assets are shaky foundations of cracking growthFounded in
1946, Amul is one of those famous brands known to every household of the country.
Recently, the company has declared its financial results crossing 18,000 cr in 2013-14
with a jump of 32% from the previous year. The company claims to have clocked the
fastest growth in the history of the four decade-old dairy cooperative and has a vision to
achieve 30,000 crores by 2018-19.

There have been some exhaustive back-end initiatives in the last 3-4 years that
contributed to Amul's impressive growth results. Four years back, the company started
expanding its wholesale dealers and retailers' network following hub & spoke distribution
model with the aim to reach the maximum tier II & III cities, RS Sodhi,
MD, GCMMF(Gujarat Cooperative Milk Marketing Federation) told ETRetail. Each
town has a super distributor to reach these areas. "We have added eight new branches in
various part of country during last two years (Jabalpur, Surat, Rajkot, Lucknow, Srinagar,
Kharagpur, Aurangabad and Jorhat) so that we can supply our product easily to emerging
cities of India. During 2014-15, we plan to add atleast six new branches so that we can
further expand our range," informs Sodhi.

Another major strategy that added to the growth was expanding the 'product mix' with
attractive packaging materials. After conducting a detailed market research, the products
were launched mainly to attract the young generation of the country such as Amul Kool
beverages in PET bottles, flavoured yoghurt, Amul PRO, cheese spread in various new
flavour, etc. There were products launched for regional demands which included Brown
Ghee, Kadhi Dahi. Amul also took the production at various destinations outside Gujarat
to meet the quick demand of Pouch Milk, Butter Milk and Curd.

The expansion of milk procurement base in Saurashtra region (Amreli, Junagadh, Kutch
and Porbandar), Gujarat widened the base further covering all milk producer members of
these regions in the last four years. Other input services such as veterinary treatment,
cattle feed and mineral mixture supply, co-operative education and co-operative
development programme, artificial insemination programme etc were brought to
practice. Thus, only from Saurashtra region, GCMMF was able to procure around
15-16 lakhs litres of milk per day! This contributes around 13-14% of GCMMF
milk procurement.

Amul also connected its member unions in other states to expand its milk procurement
base and thus, strengthen the co-operative structure in these states under 'Amul Model'.

Programmes such as fertility improvement programme, productivity enhancement

programme help targeting those animals which are infertile and treated by the expert
team of veterinarian. Every year, 0.70 lakhs animals are treated and out of which 0.50
lakhs animals become pregnant.

At village level, more than 4000 bulk milk coolers were installed so that quality of milk
is maintained throughout the supply chain. We have also installed more than 14000
automatic milk collection centres at village so that milk producer members get accurate
rate for milk poured by them.

At international front, exports contributed 3% of its total turnover which recorded a

value wise quantum jump to Rs 530 crores from 140 crores last year. Sodhi says, "We
had huge inventory of milk powder available with us and the global prices for it were
rising. In order to encash this opportunity, we participated in the global auction platform
for dairy trade where only four companies of the world were sellers and Amul became
the fifth company in the world to utilise this platform. This established Amul as the global
player in the international powder market." For export of consumer product, Amul is
focusing well on strong NRI markets in USA, Middle East, Singapore, Australia etc
which helped achieve the target number.

During 2009-10, Amul prepared a detailed planning to invest in back-end operation, plant
expansion, product mix for future plans and market expansions. With the help of member
unions, the company is already investing as per the vision and have started construction
of plants in Haryana, Uttar Pradesh, Maharashtra, West Bengal, Rajasthan and Madhya
Pradesh.

As the market demand would increase for all product category, Amul plans to procure
more milk under "Amul model" from other states also so that milk producer members of
the other states can also be benefited from the cooperative network. It also aims at
increasing its Amul Preferred Outlet (APO) from 7,300 to 10,000 by next year to be
closer to the final consumer. New APOs would be near new residential complex, gardens,
IT centres, educational institutes, colleges and schools.

Thus, by intensifying its efforts in milk procurement, processing and widespread of

distribution network at back-end, and introducing new product mix and its quick reach in
the at front-end through nearby APOs, Amul prepares to achieve its next level of target --
-30,000 cr by 2018-19.

"Expand, Expand and Expand (In terms of milk procurement base, manufacturing
capacity, adding new Wholesale Dealers, APOs and retailers is the mantra to achieve
Rs. 30,000 Crores turnover by 2018-19"---RS Sodhi, MD, GCMMF