MILMA COMPANY

1.1 THE BRIEF HISTORY OF THE ORGANISATION AND CURRENT BOARD OF DIRECTORS

Well-known by the popular sobriquet ‘milma’, Kerala Co-operative Milk Marketing Federation
(KCMMF) was formed in 1980 as a state adjunct of the National Dairy Programme ‘Operation
Flood’. It is a three-tiered organization. The farmer memberships that stood at 45000 during take
over from the erstwhile KLD&MM Board during 1983 has grown to over 9.77 lakhs through 3315
milk Co-operatives by February 2019. These primary societies are grouped under three Regional
Co-operative Milk Producers’ Unions viz TRCMPU for Thiruvananthapuram region, ERCMPU for
Ernakulam region and MRCMPU for Malabar region. At the apex level KCMMF functions from the
headquarters at Thiruvananthapuram. From the different units managed directly by KCMMF and
the various units under regional unions MILMA produces and distributes paste urized Vitamin – A
enriched milk and various milk-based products as well as mango drink throughout the state.
MILMA has been instrumental in achieving the national goal of self-sufficiency in milk production
in the state. The goal of KCMMF is"The socio-economic progress of the dairy farmer through
procuring, processing and marketing of milk". Still the goal is receding as Kerala enjoys one of the
highest ranges of per capita milk consumption. KCMMF is totally content in the realization of this
vision which was set before it. KCMMF has achieved the distinction in its performance by close
association and bond with National Dairy Development Board, Animal Husbandry Department
and Dairy Development Department of the State and Kerala Livestock Development Board.
Kerala Co-operative Milk Marketing Federation (KCMMF), popularly called ‘milma’ was
established in April, 1980 with is head office at Thiruvananthapuram for the successful
implementation of ‘Operation Flood’ Programme in Kerala.

Operation Flood

A Success story on the Dairy scene in India during the sixties was the farmer-owned AMUL Co-
operative in Anand(Kaira District, Gujarat)with is integrated approach to production,
Procurement, Processing and Marketing on Co-operative line. Over the years, this evolved itself

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into a model, based on self-rule by farmers ensuring maximum returns to them. This model came
to known as ‘ANAND PATTERN’. The efficiency of the Model was worth replication. Therefore, a
dairy programme called “OPERATION FLOOD’ was launched in 1970 under the aegis of the
National Dairy development Board (NDDB). NDDB functioned as the technical consultants and
the erstwhile Indian Dairy Corporation as the funding agency. The ideology followed by
“OPERATION FLOOD’ was the remunerative linking of rural milk producing centres with the
urban demand centres so as to build up a viable diary industry. Kerala was included in the second
phase of ‘Operation Flood’ (OF II 1980-1987). The eight southern districts from Trivandrum to
Trichur were included in the of the project which had a total outlay of Rs. 29 Crores. From 1980
KCMMF was involved in concentrated spearhead team activities, identification of potential milk
collection area, formation of milk Co-operatives and extension activities. MILMA came into its
own on 1-4-1983 when it took over the revenue earning activities of Procurement and Marketing
from the Govt. in April 1983. Encouraged by the response of II, the same areas were included in
the third phase of ‘Operation Flood’ (OF III). This phase had an outlay of Rs.18 crores. The
growing popularity of the concept of Co-operativization Section has spurred the authorities into
exploring new vistas. The uncovered northern areas from Palakkad to Kasargode were thus
brought under the Co-operative umbrella with the inception of the NORTHE KERALA DAIRY
PROJECT. This Project is funded by the Swiss Development Co-operation through the National
Dairy Development Board. The Motto of Co-operation of “of the people, by the people and for the
people” is foundation of the “three tier system” followed by the Organisation. The Power of the
Producer members is felt right from the grass root village Co-operative Society to the Board
governing the State leel Federation through this system of functioning. At the village level we
have the Village Milk Co-operative Societies which have the local milk producers as its members.
The Village Co-operatives unite at regional level to form Regional Co-operative Milk Producers’
Unions. These Regional Unions later federate at the State level to form State Federation. The
KCMMF operate on the truly democratic lines of "of the farmer, by the farmer and for the farmer".
Milk procurement has shown a phenomenal growth from 52000 litres per day during 1983 to
over 12.75 lakh litres per day in 2018-19. The average milk sales per day for the 2018-19 was
12.98 lakh litres.

CURRENT BOARD OF DIRECTORS

1. Shri. JOHN THERUVATH (Chairman, ERCMPU Ltd., Edappally, Cochin, Ernakulam , Kerala-
682024).

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2. Shri. K.S. MANI (Chairman, MRCMPU Ltd., Peringolam, Kunnamangalam PO., Calicut – 673571).

3. Smt. LISSY XAVIER (Representative, ERCMPU Ltd., Edappally, Cochin, Ernakulam, Kerala).

4. Shri. JOHNSON K.K (Representative, ERCMPU Ltd., Edappally, Cochin, Ernakulam).

5. Shri. P. SREENIVASAN (Representative, MRCMPU Ltd., Peringolam, Kunnamangalam P.O.,

Calicut - 673 571).

6. Shri. P.P. NARAYANAN (Representative, MRCMPU Ltd., Peringolam, Ku nnamangalam P.O.,

Calicut).

7. Smt. K.K. ANITHA (Representative, MRCMPU Ltd., Peringolam, Kunnamangalam P.O., Calicut –
673571).

8. Shri. S. RAJEEV (Regional Head (CS), National Dairy Development Board, PB No.9506, 80 Feet
Road, 8th Block, Koramangala, Bengaluru).

9. Smt. TINKU BISWAL I.A.S (Secretary (AH&DD), Govt. of Kerala, Trivandrum, Kerala).

10. Smt. Mini Raveendradas (Dairy Director, Dairy Development Department, Pattom P.O.,
Trivandrum - 695 004).

11. Shri. O.B SURESH KUMAR (Deputy Secretary, Finance Department, Govt. of Kerala,
Trivandrum).

12. DR. PATIL SUYOG SUBHASHRAO IFS (Managing Director, Milma Bhavan, Pattom, Trivandrum
- 695 004).

1.2 MISSION/VISION STATEMENT AND QUALITY POLICY FOLLOWED

To constantly strive to provide valued consumers with the highest quality milk. Milk products
and other products with the best standards of service by our passionate and focused work forces
using state of the art technology ensuring sustained growth and simultaneously ensuring daily
farmers delight by better realization of milk price and offering needed service at his/her
doorstep.

QUALITY POLICY

Organize and develop milk producers’ co-operative societies and encourage production of milk in
its area of operation in order to consistently supply safe, hygienic and healthy milk and milk

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products to the valuable consumers and enhance consumer satisfaction. Continually improve the
quality management systems adopted in this endeavor by arranging training for union
employees and the producer members and meeting all the statutory and regulatory requirements
of the product. In consideration of a common identity for the quality of milk marketed by the Co-
operative Sector milma joined hands with NDDB in adopting a common mnemonic logo ‘device of
drop’ and to strengthen the marketing activity of the organization.

1.3 BUSINESS PROCESS OF ORGANIZATION – PRODUCT PROFILE

The name of “MILMA” and its motto „your health is our concern ‟has become synonymous with
assured quality. This is amply proved by fact of all its product mainly Ghee, selling solely under
the trade name of “MILMA”, Milma has a range of products from wholesome pasteurized milk to
pure ghee, creamy butter, nourishing sterilized flavoured milk and ice-creams. All the products
strictly adhere to the PFA Rules and are sent to the market only after stringent quality checks. In
the market Milma have built up a consumer orientation, which few other organizations can
match. A marketing chain consisting of near 8000 outlets across the state ensures accessibility of
Milma’s products to one and all. Milma is commitment to the quality of milk that they deliver
starts right at the doorsteps of the village producer.

PRODUCT PROFILE

1. Homogenised Pasteurised Toned Milk Fortified with Vitamin A & D

Presenting homogenised pasteurised toned milk which is fortified with Vitamin A & D contains
min. fat: 3.0 percent and min. snf: 8.5 percent.

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2. Skimmed Milk Curd

It contains 10 percent non-fat solid. It is Ideal for making curries it's Prepared under hygienic
conditions by fully mechanized processes and cannot be used as starter-curd for converting milk
into curd. Its available in 500 ml sachets.

3. Milma Ghee

Contains 99.7 percent milk fat. Manufactured by melting fresh cream under hygienic conditions.
Milma ghee has the ideal golden yellow colour due to presence of natural carotene in cow milk.
(In contrast, ghee manufactured from buffalo milk is white in colour). No artificial colours or
flavours are added in Milma ghee. Natural aroma and flavour of ghee is retained since ghee is
produced directly from fresh cream instead of going in for melting stored butter.

4. Paneer

Paneer also called Chenna is a milk product made by coagulating boiled hot whole milk with
citric or lactic acid and subsequent drainage of whey. It is a fresh source of milk protein and has
good flavour and smooth texture.

5. Milma Refresh

In addition to milk drinks, milma also has a mango drink in the market. Refresh, milma's mango
drink is a favourite in the fruit drink sector.

6. Milk Powder

Milma Dairy Whitener is a partially skimmed milk powder with added sugar. It can also be used
as a whitener for tea and coffee. The Dairy Whitener is packed under Nitrogen, and has excellent
solubility and a fine granular texture.

7. Milma Peda

A natural milk toffee manufactured by the heating and removal of a major portion of the water
content of fresh milk and by the addition of sugar. Natural carotene in the milk gives the product
its characteristic colour. Ideal for children and as an after-food sweet.

8. Ice-cream

Made from pure milk cream (unlike many private brands who vend “Frozen desserts” made
from cheap vegetable fats in the guise of Ice–cream. Produced hygienically in ISO 9001-2008 and

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HACCP certified production facility. Milma ice-cream, is available in a range of lip-smacking
flavours: vanilla, chocolate, mango, strawberry and fruit & nut.

1.4 CUSTOMERS OF ORGANISATION

The KCMMF operates on the truly democratic lines of “of the farmer, by the farmer and for the
farmer”. The Organisation has a three-tier structure with the primary milk Cooperative societies
at the village level, Regional Milk Producers Unions at the middle level and an apex body at the
State level which is the Kerala Cooperative Milk Marketing Federation Ltd. There are three
Regional Cooperative Milk Producers Unions operating at present. The revenue districts of
Thiruvananthapuram, Kollam, Alappuzha and Pathanamthitta come under the jurisdiction of the
Thiruvananthapuram Regional Cooperative Milk Producers’ Union (TRCMPU), the districts of
Ernakulam, Thrissur, Kottayam and Idukki under the Ernakulam Regional Cooperative Milk
Producers’ Union (ERCMPU) and the six northern districts of Palakkad, Kannur, Malappuram,
Kozhikode, Wayanad and Kasaragod under the Malabar Regional Cooperative Milk Producers
Union (MRCMPU).

1.5 COMPETITORS OF THE COMPANY

SL NO COMPANIES PRODUCTS
1 A one milk products MILK, CURD, PANEER,
BUTTER
2 Sapins Farm Product Pvt Ltd MILK, CURD, GHEE, BUTTER

3 Rich Dairy Farm MILK, CURD, GHEE, BUTTER

4 PDDP Central Society MILK, CURD, GHEE, ICE-

CREAM
5 Milco dairy, Milk & Ice MILK, CURD, GHEE, BUTTER
Creams
6 Wayanad Milk MILK, CURD, GHEE, MILK
PEDA
7 Muralya Dairy Products Pvt MILK, CURD, GHEE
Ltd

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1.6 STRATEGIES – BUSINESS, PRICING, MANAGEMENT

Kerala Milk Marketing Federation (Milma), which has formed a new marketing venture, Milma
Foods with NDDB subsidiary, Mother Dairy is to evolve new marketing strategies. For
maintenance of uniform quality, the venture would go in for chilling plants and bulk coolers. The
venture would take up diversification after steadying its milk market. Milma would enhance
production of its milk powder, ice cream and butter. It was also considering door delivery.
Among the diversification plans would include distribution of The Motto of Co-operation, “of the
people, by the people and for the people” is the foundation of the “three tier system” followed by
the organisation. At the village level Milma have the Village Milk Co-operative Societies which
have the local milk producers as its members. These Village Co-operatives unite at the regional
level and form Regional Co-operative Milk Producers Unions. These Unions are federated at the
State level to form State Federation namely Kerala Co-operative Milk Marketing Federation
(KCMMF). The state government owed the federation Rs 6 crore through its much-publicised
government programme of a ‘cup of milk and handshake’ for school children.

1.7 CSR ACTIVITIES

Eco-friendly Milk Production

• Automatic Milking Machines by farmers

• Automatic Milk Testing Machines at Societies
• Installation of Bulk Milk Cooling Systems
• Implementation of ISO 9001 at society

Powder of Army

Dudhsagar dairy has actively involved in various quality movement and performed well. We are
the first to supply the milk powder to defence service in 1966 (During Indo-China War) with the
order of 750 MT and we are the regular supplier of Sweetened Condensed Milk and whole milk
powder with strictly following ARMY’S product specifications. We also provide SCM to ITBP as
per their requirements.

Supplies to kuposhit Children

In order to fight against malnutrition, we produce special batch of some product like Amul’s pray
for children suffering from malnutrition and supplied to Gujarat Government.

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1.8 EXPORT/IMPORT

India now has indisputably the world's biggest dairy industry—in terms of milk production; last
year India produced close to 146.31 million tonnes of milk, 50% more than the US and three
times as much as the much-heralded new growth champ, China. Appropriately, India also
produces the biggest directory or encyclopaedia of any world dairy industry. 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.

• BUTTER FRESH
• BUTTER MILK
• BUTTER OIL
• FRESH CHEESE
• MILK & CREAM IN POWDER
• MILK for Babies
• OTHER FAT
• SKIMMED MILK POWDER
• WHOLE MILK
• GHEE

Area of production

Uttar Pradesh, Maharashtra, Himachal Pradesh, Madhya Pradesh, Punjab, Rajasthan, Tamil Nadu
are the major production area of dairy products in India.

India facts and figures

India’s Export of diary product was 51,421.85 MT to the world for the worth of Rs. 1,341.03
Cores/186.71 USD millions during the year 2019-20.

Major Export Destinations (2019-20): UAE, Bhutan, Turkey, Egypt, USA.

1.9 COLLABORATIONS & EXPANSION PLANS

The foIIowing are the project & expansion activities executed in the year 2018-2019.

1. As part of the process up gradation following machineries were procured and its
installation work are in progress.

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 a. ZEUZER make 10KLPH milk pasteurizer.
b. ZEUZER make 5 kL PH Curd pasteurizer.
c. REDA make10 KLPH self-cleaning cream separator.
d. Tetrapak make 2 KL Ghee Clarifier.
e. Ghee storage tank of 5Kl
f. 2 Nos milk pouch filling machine of RMC Packaging systems.
g. 2 Nos new refrigeration system with FRICK VILTER high speed compressor of 45.9
TR each with accessories including new set of IBT tubes, 150 TR PHE Condenser,
cooling tower etc.
2. Constructed a new cold store with one number 6.6 TR Air cooling units of Frick make for
additional storage space in cold store.
3. Constructed a Curd incubation room with electric heater to maintain room temperature at
42 degrees centigrade.
4. Installed a new 6.6 TR Air Cooling unit in anteroom to maintain proper temperature.
5. Modification of old store with PUF panels of SS finish and installation of 2 nos 6,6 TR each
capacity air cooling unit to improve the cooling efficiency of old cold store is in progress.
6. Construction work is in progress for the new campus road with concrete paving block.
7. Construction work is in progress for the rain water gutter along the sides of road to drain
out the flooded water.
8. Construction work is h progress for the metal sheeted roofing over concrete roof to
prevent water leakage and dampness of building.
9. For easy access to take samples from tanker top man hole, construction work is in
progress for a tanker unloading bay with unloading pump, CIP facilities, etc.
10. Administrative block ground floor has modified as a meeting hall with new floor tiles,
gypsum board ceiling, window curtains, etc.
11. Constructed a roofing with poly carbonate sheet for ETP Sludge drying bed for the drying
of sludge and its removal as per the direction of pollution control board.
12. Construction of a treated water polishing unit with 2nos 30Cu.Mtr each capacity concrete
tanks, filter plant with pressure sand filter activated carbon filter, pumps etc. is in
progress as per the direction of Pollution control board.
13. Constructed a room for lab autoclave and to keep samples with storage cupboards
adjacent to OC Lab.

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 14. Replacement of damaged flooring with acid alkali proof floor tiles at sachet filling section
is in progress.

1.10 SWOT ANALYSIS OF THE COMPANY

The main aim for choosing the topic, SWOT analysis and marketing strategies of MILMA is to
analyses the strength, weakness, opportunity, and threats of MILMA and also to know the various
marketing strategies adopted by MILMA. SWOT analysis is a structured planning method used to
evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a
business venture. A SWOT analysis can be carried out for a product, place, industry or person. It
involves specifying the objective of the business venture or project and identifying the internal
and external factors that are Favourable and unfavourable to achieving that objective. The
technique is credited to Albert Humphrey, who led a convention at the Stanford Research
Institute (now SRI International) in the 1960s and 1970s using data from Fortune 500
companies. The degree to which the internal environment of the firm matches with the external
environment is expressed by the concept of strategic fit.

STRENGTH

• Milma has 9th position in the list of top dairy companies in India.
• Milma has and maintains a good brand name in the Kerala dairy market.
• ISO certification.
• It meets the market demand properly.
• Adequate support from NDDB and Government of Kerala.
• Eco- friendly plant.
• Strike free campus.
• Products are available at a reasonable price.
• There are great number of employee benefit scheme.

WEAKNESS
• Increasing cost of procurement of raw milk and material.
• Inadequate sales promotion campaigns.
• Inadequate sales outlets in rural areas.
• Absence of technology up gradation programs.
• Political interference in formulating policies.

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 • Faces milk shortage.
• There is no Research and Development department which is considered as an
important one in any organization.
• Just meeting the demands of the market rather creating more demand.
• Low advertisement and promotional activities for products other than milk.

OPPORTUNITIES
• Scope of product diversification.
• The organization can increase its goodwill and profit if it gives more emphasis on
exports.
• More opportunities to create demand in rural areas. Government support, that is
subsidies tax concession
• Good scope for capturing huge market share in the milk products category.
• Scope to process more milk from other states, thus increasing productivity.
• Increasing level of advertisements and related activities can lead to increase in
sales at a higher rate.

THREATS
• The increasing intervention of milk powders of various companies in market is a
major threat for the organization.
• Faces milks shortage within state.
• The pricing mechanism is not flexible, which may lead to change in preference of
customers.
• New competitors may reduce market share.
• Increasing tension between workers and management.

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1.11 ORGANIZATIONAL CHART

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2.1 BRIEF HISTORY OF THE INDUSTRY

The use of milk as a beverage probably began with the domestication of animals. Goats and
sheep were domesticated in the area now known as Iran and Afghanistan in about 9000B.C., and
by about 7000 B.C. cattle were being herded in what is now Turkey and parts of Africa. The
method for making cheese from milk was known to the ancient Greeks and Romans, and the use
of milk and milk products spread throughout Europe in the following centuries.

Cattle were first brought to the United States in the 1600s by some of the earliest colonists.
Prior to the American Revolution most of the dairy products were consumed on the farm where
they were produced. By about 1790, population centres such as Boston, New York, and
Philadelphia had grown sufficiently to become an attractive market for larger-scale dairy
operations. To meet the increased demand, farmers began importing breeds of cattle that were
better suited for milk production. The first Holstein-Friesens were imported in 1795, the first
Ayrshires in 1822, and the first Guernseys in 1830.

With the development of the dairy industry in the United States, a variety of machines for
processing milk were also developed. In 1856, Gail Borden patented a method for making
condensed milk by heating it in a partial vacuum. Not only did his method remove much of the
water so the milk could be stored in a smaller volume, but it also protected the milk from germs
in the air. Borden opened a condensed milk plant and cannery in Wassaic, New York, in 1861.
During the Civil War, his condensed milk was used by Union troops and its popularity spread.

In 1863, Louis Pasteur of France developed a method of heating wine to kill the
microorganisms that cause wine to turn into vinegar. Later, this method of killing harmful
bacteria was adapted to a number of food products and became known as pasteurization. The
first milk processing plant in the United States to install pasteurizing equipment was the Sheffield
Farms Dairy in Bloomfield, New Jersey, which imported a German-made pasteurizer in 1891.
Many dairy operators opposed pasteurization as an unnecessary expense, and it wasn't until
1908 that Chicago became the first major city to require pasteurized milk. New York and
Philadelphia followed in 1914, and by 1917 most major cities had enacted laws requiring that all
milk be pasteurized. One of the first glass milk bottles was patented in 1884 by Dr. Henry
Thatcher, after seeing a milkman making deliveries from an open bucket into which a child's
filthy rag doll had accidentally fallen. By 1889, his Thatcher's Common Sense Milk Jar had become
an industry standard. It was sealed with a waxed paper disc that was pressed into a groove inside
the bottle's neck. The milk bottle, and the regular morning arrival of the milkman, remained a

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part of American life until the 1950s, when waxed paper cartons of milk began appearing in
markets.

In 1990, the annual production of milk in the United States was about 148 billion lb (67.5
billion kg). This is equivalent to about 17.2 billion U.S. gallons (65.1 billion litres). About 37% of
this was consumed as fluid milk and cream, about 32% was converted into various cheeses,
about 17% was made into butter, and about 8% was used to make ice cream and other frozen
desserts. The remainder was sold as dry milk, canned milk, and other milk products.

2.2 BUSINESS PROCESS OF THE INDUSTRY

Milk is a perishable commodity. For this reason, it is usually processed locally within a few hours
of being collected. In the United States, there are several hundred thousand dairy farms and
several thousand milk processing plants. Some plants produce only fluid milk, while others also
produce butter, cheese, and other milk products.

COLLECTING
• Dairy cows are milked twice a day using mechanical vacuum milking machines. The
raw milk flows through stainless steel or glass pipes to a refrigerated bulk milk
tank where it is cooled to about 40° F (4.4° C).

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 • A refrigerated bulk tank truck makes collections from dairy farms in the area
within a few hours. Before pumping the milk from each farm's tank, the driver
collects a sample and checks the flavour and temperature and records the volume.
• At the milk processing plant, the milk in the truck is weighed and is pumped into
refrigerated tanks in the plant through flexible stainless steel or plastic hoses.

SEPARATING

• The cold raw milk passes through either a clarifier or a separator, which spins the
milk through a series of conical disks inside an enclosure. A clarifier removes
debris, some bacteria, and any sediment that may be present in the raw milk. A
separator performs the same task, but also separates the heavier milk fat from the
lighter milk to produce both cream and skim milk. Some processing plants use a
standardizer-clarifier, which regulates the amount of milk fat content in the milk by
removing only the excess fat. The excess milk fat is drawn off and processed into
cream or butter.

FORTIFYING

• Vitamins A and D may be added to the milk at this time by a peristaltic pump,
which automatically dispenses the correct amount of vitamin concentrate into the
flow of milk.

PASTEURIZING

• The milk—either whole milk, skim milk, or standardized milk—is piped into a
pasteurizer to kill any bacteria. There are several methods used to pasteurize milk.
• The most common is called the high-temperature, short-time (HTST) process in
which the milk is heated as it flows through the pasteurizer continuously. Whole
milk, skim milk, and standardized milk must be heated to 161° F (72° C) for 15
seconds. Other milk products have different time and temperature requirements.
The hot milk passes through a long pipe whose length and diameter are sized so
that it takes the liquid exactly 15 seconds to pass from one end to the other. A
temperature sensor at the end of the pipe diverts the milk back to the inlet for
reprocessing if the temperature has fallen below the required standard.

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HOMOGENIZING
• Most milk is homogenized to reduce the size of the remaining milk fat particles.
This prevents the milk fat from separating and floating to the surface as cream. It
also ensures that the milk fat will be evenly distributed through the milk. The hot
milk from the pasteurizer is pressurized to 2,500-3,000 psi (17,200-20,700 kPa) by
a multiple-cylinder piston pump and is forced through very small passages in an
adjustable valve. The shearing effect of being forced through the tiny openings
breaks down the fat particles into the proper size. The milk is quickly cooled to 40°
F (4.4° C) to avoid harming its taste.

PACKAGING

• The milk is pumped into coated paper cartons or plastic bottles and is sealed. In
the United States most milk destined for retail sale in grocery stores is packaged in
one-gallon (3.8-liter) plastic bottles. The bottles or cartons are stamped with a
"sell by" date to ensure that the retailers do not allow the milk to stay on their
shelves longer than it can be safely stored.
• The milk cartons or bottles are placed in protective shipping containers and kept
refrigerated. They are shipped to distribution warehouses in refrigerated trailers

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 and then on to the individual markets, where they are kept in refrigerated display
cases.

CLEANING

• To ensure sanitary conditions, the inner surfaces of the process equipment and
piping system are cleaned once a day. Almost all the equipment and piping used in
the processing plant and on the farm are made from stainless steel. Highly
automated clean-in-place systems are incorporated into this equipment that allows
solvents to be run through the system and then flushed clean. This is done at a time
between the normal influx of milk from the farms.

2.3 MARKET DEMAND AND SUPPLY

India is one of the major producers of milk in the world and while its population accounts for
most of the consumption of the nation’s produce, there is no doubt that production is standing
strong with a steady growth in the volume over the years. According to market data firm, Statista,
the dairy industry over the years has evolved to include an array of products. Butter, paneer (an
Indian cheese), curd and yoghurt are the building blocks of the processed milk products industry
in India. However, in the organised market, butter and cheese dominated the dairy market.

As shortage of milk looms large over the state, Kerala Co-operative Milk Marketing Federation
(Milma) has initiated steps to bring condensed milk from Maharashtra, to bridge the demand and
supply gap this summer. According to officials, there will be a huge spurt in demand for milk in
the state by mid-April, and considering the current situation, Milma will be unable to meet this
without depending on other states.

Currently, Milma has tied up with Tamil Nadu to ensure a supply of 1.5 lakh litres of milk
everyday to meet the daily demands of Keralites. According to officials, this is for the first time
after 2011 that Milma is taking steps to tie up with Maharashtra and bring condensed milk.

As per statistics, Kerala consumes around 12.5 lakh litres of milk per day. “Currently, we have a
shortage of 1.5 lakh litres per day. We have requested Tamil Nadu authorities to increase the
daily supply. But they haven’t given their nod yet. The shortage is likely to hit new levels by April,
as the authorities are expecting a rise in demand for dairy products. Our team has gone to
Maharashtra to take the plan to the next level,” said a Milma official.

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The official said there would be an additional demand of 50,000 litres of milk per day this
summer season. Milma has a slew of dairy products including buttermilk, curd, ice-cream, ghee,
sip-up, etc. “The demand for these products will be high during summer, and hence we are
exploring more ways to ensure adequate supply to avoid a shortage. Our plan is to use condensed
milk, which would be mixed with milk to make dairy products” said the official.

India is the seventh-largest country by area, the second-most populous country (with over 1.2
billion people), and the most populous democracy in the world. During 2015 India was the
seventh largest economy by nominal GDP (now it has become 4th) and third largest by
purchasing power parity. The Indian economy is one of the fastest growing globally with an
impressive growth rate of 7.1% in 2018. India is a federal republic governed under a
parliamentary system and consists of 29 states and 7 union territories. Agriculture in India dates
back to Indus valley civilization era. Today India stands second in the world in terms of farm
output. India owns the world’s second largest arable lands after USA. The contribution of Indian
agriculture (together with forestry and fisheries) in total national GDP is 17.1%. However, there
is gradual and steady shift in positive direction because of favourable “consumption dynamics”
led by increasing demand for packaged milk and value-added products. Despite being largest
producer and consumer of milk, India’s per capita dairy consumption levels are significantly
lower than developed countries. India is neither an active importer nor an active exporter in Milk
sector. The main challenges faced by dairy industry are in sourcing and logistics. This is because
procurement of the fresh milk is the most crucial element of this business. It is not feasible to
procure milk beyond a 200 kilometres radius; because of perishability of the product. Another
challenge is low productivity and yield.

2.4 LEVEL AND TYPE OF COMPETITION

The organic milk market in India reached a value of INR 4,500 million in 2020. Looking forward,
IMARC Group expects the market to grow at a CAGR of 33.6% during 2021-2026. Keeping in
mind the uncertainties of COVID-19, we are continuously tracking and evaluating the direct as
well as the indirect influence of the pandemic. Under organic farming standards, animals are
restricted for the usage of antibiotics and growth hormones, and are fed with fodder, cultivated
without the use of chemical fertilizers and pesticides. Animals are reared on natural supplements
under humane and hygienic conditions where they are allowed to graze freely within the farm;
their milking are never forced; their diet is altered depending on the health requirements; the

18
udder is cleaned before and after the milking process; human interaction is minimized in order to
avoid any contamination of the milk. Unlike other packaged milk, 'Thripthi' is a straight-from-
the-farm product. It is not pasteurised, but chilled. Our milk is traceable, wholesome, farm fresh
milk from certified cows at Kulathupuzha,'' KLDB Managing Director Ani S Das said. We are
starting off the hi-tech farm with between 200 and 230 cows. Gradually the numbers will be
increased. The milk will be collected from them and cows at the satellite farms, chilled, and sold
to customers in Thiruvananthapuram.

'Thripthi' will come in 500 ml sachets. The price and the method of marketing the milk whether
outlets or mobile units are to be used will be decided on January 10 by a committee of dairy
experts. &quoted We selected 'Thripthi' as the name for our product through a contest held
among KLDB employees. 'Thripthi' was selected since it means 'satisfaction' which the KLDB
intends to provide with its milk,'' Ani S Das said. The farm even has automated milking parlours
for the cows. Kerala consumes around 71 lakh litres of milk a day at present. About 69 lakh litres
are produced in the state, while the rest continues to be imported. MILMA has the largest single
network for distribution and accounts for about 20 percent of the milk supply.

2.5 PRICING STRATEGIES IN THE INDUSTRY

The milk producers who are members of cooperative societies get the price of their milk based
upon two axis methods only. The co-operatives give regular and remunerative price of milk to
their member producers. The price to be paid is decided and revised regularly by the board of
directors of district cooperative union. The milk producers who are supplying milk to large
private dairy plants like Nestle in north India also get price of their milk more or less similar to
the cooperative set up. Those milk producers who supply milk to private traders/middlemen get
their price based upon mutual understanding between the two parties and based upon demand
supply situation. There are various methods of paying for milk procured from producers viz.,

• On the basis of volume or weight

• On the basis of fat content
• On the basis of fat as well as solids-not-fat (SNF) (Two-axes pricing system).

The most popular and prevalent method is two axis system in which both fat and SNF are
considered for providing payment where in the price of SNF is kept 2/3 of the price of fat. The
pricing methods for payment to milk are summarized below:

19
 PRICING METHODS OF MILK

SL NO METHOD CHARACTERISTICS ADVANTAGES DISADVANTAGES

1 Based on volume By using the Simple to No incentive to
or weight. weighing machine calculate milk improve quality of
or spring balance. price. milk.
No expensive
testing
equipment is
required.
2 Based on fat By finding out the Fairly simple to Necessary to
amount. fat percentage of calculate milk purchase fat
milk by conducting price. testing machines.
test. Using directly No benefit to
fat percentage or kg milk producers
fat. adding water to
milk.
3 Based on fat as By using the Provides an Necessary to
well as solids- formula incentive to purchase fat
not-fat content increase fat and testing machine
SNF. and density meter

PRICING STRATEGY FOR MILK PRODUCTS

Milk is a complete food. It is an essential food item for all the households. Apart from liquid milk,
large numbers of traditional and western dairy products are sold in the market. There are no
specified rules for setting the price for consumers just like two axis pricing method for milk
producers. The price of milk and milk products is generally determined based upon market
conditions (type of competition). In India, 'Amul' is the market leader in dairy industry. It is a
cooperative organization. Generally, it is seen that Amul decides the price for a milk product,
particularly liquid milk, and others immediately follow. For setting the liquid milk price the usual
factors considered are.

• Price to be paid to milk producers.

• Other expenses viz. processing, transportation, storage etc.

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For other milk products forces of demand and supply as well as organizations strategy is
important. For example, when Amul introduced their ice cream in the market, they sold it at fairly
low price so as to penetrate the market.

2.6 INDUSTRIAL PERFORMANCE

Dairy is defined as a business enterprise that deals with the processing and harvesting of animal
milk for human consumption. Some of the common milch animals include cow, goat, buffalo,
camel and sheep. The milk obtained from these animals can be consumed directly and processed
into ice cream, cheese, butter, condensed milk and yogurt. These products offer various nutrients
such as calcium, proteins, zinc, magnesium, and vitamin D and B12. With widespread demand for
dairy products and their proactive function in the global food industry, dairy plays a crucial role
in the growth of the economies worldwide. Over the years, the dairy industry has witnessed
improvements in product safety through specialization, modernization and consolidation.
Moreover, advancements in global trade have also influenced the profitability of dairy farms. The
rising demand for milk and milk-based ingredients is one of the primary factors supporting the
market growth. This can be attributed to population growth, rising incomes, health
consciousness and the thriving food and beverage industry. Another major trend in the industry
is the incorporation automation technologies in dairy farms. Farmers now have easier access to
advanced technologies that help in quantifying information to monitor various operations such
as grass and herd management. Other than this, various robotics, smartphone data applications,
satellite systems and drones are also available in the market for farmers to make profitable and
efficient decisions. Besides, there has been a rise in the demand for clean label products which
are free from additives, artificial preservatives or chemicals. Owing to this, manufacturers are
prompted to expand their product portfolio with the introduction of organic dairy products.

A new report released by IMARC Group provides a comprehensive insight into the competitive
structure of the Indian dairy industry. According to the report, the market can be broken into two
key segments – unorganised and organised. The unorganised segment consists of milk sold by
traditional milkmen and vendors who collect milk individually from farmers and sell it to the
consumers. The milk sold by these traditional milkmen is raw or unprocessed. The organized
segment, on the other hand, consists of cooperatives and private dairies. Unlike the unorganized
segment, cooperatives and private dairies have a well, ordered channel of milk procurement and
distribution. Milk is sourced from farmers through their collection centres at the village level.

21
After the milk has been collected; it is processed, packed and then finally distributed.
Cooperatives and private dairies sell their products to the customer through agents and retailers.

The report also finds that even the organised sector remains highly fragmented with most of the
major cooperatives and private players having a presence in specific regions and states with
GCMMF being the only player to have a pan India presence. The report cites various entry
barriers which have enabled GCMMF to become a national player and has limited regional
players to diversify beyond their core markets. Some of these barriers are milk procurement,
transportation, product differentiation, customization, brand image, etc. The report has done a
comprehensive analysis of the competitive landscape of the Indian dairy market and serves as an
excellent guide for investors, consultants, manufacturers, researchers and anyone one who plans
to enter the Indian dairy industry.

Most of the farmers in India depend on agriculture and allied activities. The dairying has been
playing a major role by providing livelihoods to the rural people. The objectives of the study are:
to know the growth in the bovine population in India, analyse the trends in milk production and
per capita availability of milk and analyse the share of livestock production in GDP. The study
reveals that the percentage share of cows declined and that of buffaloes significantly increased. It
is due to high price for buffalo milk. It is observed that the percentage of CB cattle in total cattle
increased and that of indigenous cattle population declined. The per capita availability of milk
increased from 130 grams per day in 1950 to 299 grams in 2012. The share of livestock sector in
agriculture GDP also increased from 13.88% in 1980-81 to 29.20% in 2012-13. Among the top
ten countries in the world India is in 2nd position in cow milk production. It is also evident that
among the top ten countries India is in 1st position in buffalo milk production. It is observed that
the milk yield per head is low in India. Hence there is need to raise the milk yield in order to
enhance the per capita availability of milk and to meet the increasing demand. Measures must
also be taken to protect the cattle and to increase their number.

Census- Wise Live-stock population in India is shown in table 1. Here bovine population includes
cattle and buffaloes. In 1951 there were 155.30 million (78%) cattle and 43.40 million (22%)
buffaloes, by 2012 the population of cattle was 190.90 million (64%) and that of buffaloes was
108.70 million (34%). It means that the percentage share of cows declined and that of buffaloes
significantly increased. It is also evident that the growth of cattle from one census year to another
census year is fluctuating. The growth of cattle was negative in 1997 (-2.78%), 2003 (-6.88%)
and 2012 (-4.10%). In the case of total livestock also the growth was negative in 2003 (-0.08%)

22
and 2012 (3.33%). The population of buffaloes increased due to high price for buffalo milk and
the farmers need not take special care to maintain buffaloes.

In the years between 1964-65 and 1978-79 Kerala witnessed a rapid increase in milk production
which has been attributed to increased productivity of milch animals brought about through
genetic improvements. This evaluation of the organised development of animal husbandry in the
state, which commenced during the First Five-Year Plan, reviews the factors facilitating the
spread of crossbreeding. The paper examines trends such as the extent of utilisation of artificial
insemination services, changes in the composition of cattle population, contribution of breed
improvement to productivity of milch animals, demand for and returns from milk production and
concludes with comments on the prospects for cattle development and milk production.

2.7 PROSPECTS AND CHALLENGES IN THE INDUSTRY

Despite the exponential growth of the dairy industry, India is still facing challenges of poor milk
quality, low yield, lack of infrastructure and a fragmented production. A number of infrastructure
related bottlenecks are still present in both back-end and front-end supply chain. There are many
Opportunities and Challenges in The Indian Dairy Industry. Dairy products are a major source of
cheap and nutritious food to millions of people in India and the only acceptable source of animal
protein for a large vegetarian segment of the Indian population, particularly among the landless,
small and marginal farmers and women. Dairying has been considered as one of the activities
aimed at alleviating the poverty and unemployment, especially in the rural areas in the rain-fed
and drought-prone regions. In India, about three-fourth of the population live in rural areas and
about 38% of them are poor.

SOME CHALLENGES ARE MENTIONED HERE

a. Breeding infrastructure and genetics: The success of Indian dairy was mostly due
to rising number of animals not productivity. When the resources are limited, it is
imperative to increase the productivity per animal. There is a high demand of good
animal genetics, breeding infrastructure and advance breeding methods such as
artificial insemination, embryo transfer etc.
b. Animal feed and fodder: There is an acute and ever-growing shortage of green
fodder and good quality feed. Growing trend of high breed animals is creating a
huge demand for good quality feed and fodder to cater the dietary requirement of

23
 milking animals, also in order to avoid many health and nutrition related
complications prophylactic approach is driving the use of feed pre-mixes.
c. Animal health: Good healthcare and animal disease diagnostic solutions are
required to address the gap. As above high yielding animals demand extra care and
over the years this trend is driving the animal health segment.
d. Farm mechanization: Despite being the country of 1.25 billion population there is
growing shortage and cost of labour. Farm mechanization is being welcomed by
farmers to address the situation.
e. Cold chain infrastructure: There is a lack of required infrastructure of chilling
plants and bulk coolers to prevent contamination and spoilage at village level. This
segment is bound to see growth opportunities as the government and private
sector is investing heavily in it in order to secure sufficient procurements.
f. Power availability: Many chilling plants suffer due to shortage of electricity and do
not run optimally leading to poor quality and shelf life of milk. The opportunity
within this segment could be solar powered milk chillers.
g. Quality testing infrastructure and trained work force: Adequate quality testing
infrastructure is not available at milk collection centres. The problem is
compounded by the lack of trained manpower to undertake quality testing. At the
consumer end, the demand for safe food is emerging fast and thus creating high
opportunity.
h. Processing equipment and food ingredients: Growing consumer awareness and
shifting lifestyle are forcing processors to move towards the product innovation
and thus a growing demand of high-quality equipment and various food
ingredients.

Improving the productivity of farm animals is one of the major challenges. The average annual
milk yield of Indian cattle is 1172 kg which is only about 50 per cent of the global average. The
frequent outbreaks of diseases like Foot and Mouth Diseases, Black Quarter infection; Influenza,
etc. continue to affect Livestock health and lowers productivity. India’s huge population of
ruminants contributes to greenhouse gases emission. Reducing greenhouse gases through
mitigation and adaptation strategies will be a major challenge. Crossbreeding of indigenous
species with exotic stocks to enhance the genetic potential of different species has been
successful only to a limited extent. Limited Artificial Insemination services owing to a deficiency
in quality germplasm, infrastructure and technical manpower coupled with poor conception rate

24
following artificial insemination have been the major impediments. After more than three
decades of crossbreeding, the crossbred population is only 16.6 per cent in cattle, 21.5 per cent in
pigs and 5.2 per cent in sheep. The sector will also come under significant adjustment pressure to
the emerging market forces. Though globalization will create avenues for increased participation
in international trade, stringent food safety, and quality norms would be required.

The livestock sector did not receive the policy and financial attention it deserved. The sector
received only about 12 per cent of the total public expenditure on agriculture and allied sectors,
which is disproportionately lesser than its contribution to agricultural GDP. The sector has been
neglected by financial institutions. The share of livestock in the total agricultural credit has
hardly ever exceeded 4% in the total (short-term, medium-term and long-term). The institutional
mechanisms to protect animals against risk are not strong enough. Currently, only 6 per cent of
the animal heads (excluding poultry) are provided insurance cover. Livestock extension has
remained grossly neglected in the past.

Only about 5 per cent of the farm households in India access information on livestock technology.
These indicate a sub-optimal outreach of the financial and information delivery systems.
Livestock derives a major part of its energy requirement from agricultural by -products and
residues. Hardly 5 per cent of the cropped area is utilized to grow fodder. India is a deficit in dry
fodder by 11 per cent, green fodder by 35 per cent and concentrates feed by 28 per cent. The
common grazing lands to have been deteriorating quantitatively and qualitatively.

1. HUMAN RESOURCES DEPARTMENT

Human resources are regarded as the only dynamic factor of production. Other factors like
material, methods, machine, money etc. are useless without their effective use by the human
resource planning in the organization to use the other resource effectively. Thus labour is
considered to be the most important factor of production in the current scenario. Hence
employees are considered to be most important asset of the organization and are valued lot in
MILMA.

ROLES AND RESPONSIBILITIES

1. Personnel Officer

• Total administration of discipline in the firm.

25
 • Communicating between the management and the employees.
• Solving the problems regarding employees.
• Taking precautionary measures to avoid unrest in the firm.

2. Senior Assistant

• Deals with matters regarding transfers, payments etc.

• Service matters

3. Junior Assistant

• Deals with the primary stages of grievance redressal.

4. Stenographer

• Does secretarial jobs towards the Manager (Dairy) / Personnel Officer.

Functions of HR Department

1. Recruitment and placement

Permanent employees are appointed through test and interview as per the rules and regulations
fixed by the Board of Directors with the consent of Government time to time. Temporary workers
are appointed through employment exchange for a period ranging from 6 to 12 months. When
vacancies fall in the organization Milma registers the requirement of employees to the concerned
post in the employment exchange. This registration is either through directly or sending letters
to the offices. There should be a personal interview which is conducted by a panel of judges
consisting of top officials like Manager, HR Manager and the Head of the concerned Departments.

2. Induction and Orientation

Initially there should be an induction period for about three months during which on on the job
training should be given to the permanent employees. During the training period they will be
taken to all departments so as to understand the working of all departments and understand how
they all are related to one another. At last, they will be placed in their own assigned post.

3. Training

According to T. N. Chhabra, “The purpose of training is to bring about improvement in the

performance of work.it includes the learning of such techniques as are required for the better
performance of definite tasks”. Training is given to the permanent employees. There is on the job

26
training as well as off the job training. For managerial posts, off the job training is provided to the
employees. For temporary employees, on the job training is provided. NDDB is usually in charge
of it. Officers and Veterinary Doctors and other permanent employees are sent to the Institute of
Rural Management (IRM), a training center in Guj arat and also ISO based training is given to all
employees.

4. Performance Appraisal

This organization has the practice of appraising the performance every year for deciding the
promotion. The concerned departmental heads will give the report of employees to the Manager
and according to that performance is appraised. Performance appraisal is done by the basis of
following factors;

• Knowledge of work.
• Attitude towards the work
• Decision making ability.
• Initiative
• Team work and interpersonal relationship with other employees

5. Promotion

There is two level of promotion in this organization. Promotion is given on the basis of seniority
for staff. For standing officer’s departmental promotions are on the basis of seniority and in
connection with TRCMPU conduct personnel interview.

2. MARKETING DEPARTMENT

Marketing department has a key role to play for the survival and development of any
organization. Marketing is the delivery of customer satisfaction at a profit. The main goal of
marketing is to attract new delivering satisfaction.

FUNCTIONS

• Sales of milk and other milk products.

• Distribution of the products.
• Collecting the payments from the agents.
• Doing promotional activities.

27
ROLES AND RESPONSIBILITIES

(1) Marketing Manager

• Coordination of all marketing activities

• Setting marketing target and achievement of the same.

(2) Marketing Officer

• Marketing activities of milk

• Marketing activities of all Milma products including products which are not
produced in Pathanamthitta unit.

(3) Marketing Organizers

• Dealing with the customer complaints.

• Agency promotion.
• Finding potential markets and canvassing.

(4) Marketing Assistant

• Cash collection of agents.

• Milk dispatch activities.

(5) Junior Assistant

• Keeping marketing accounts.

• Issuing invoices.

(6) Salesmen

• Selling process is done in the stall, which located outside Milma unit.
• Maintaining inventories in the stores.

The dairy has Milk and Milk Product Order (MMPO) registration. The processing of the dairy is
60000 liters of milk per day. 35000 liters of double toned milk (DTM) and 25000 liters of Jersey
Milk. The main products of this dairy are milk and other product like ghee, curd, sambharam and
peda. These products are not sold to individual directly. There is a stall “MILMA SHOPPE” which
is near to dairy for selling the product. From this individual buyers can buy the product. All the
MILMA products are available in this MILMA Shoppe. Product such mil, ghee, curd, sambharam,
peda butter, ice cream, chocolate, sip-up, MILMA –plus, refresh, paneer, mango drink, drinking

28
water and milk powder etc. milk, ghee, sambharam, peda, and curd are come from
Pathanamthitta dairy for sales. But other products are come from other units of MILMA for the
sales. But other products are come from other units of MILMA for the sales. MILMA Shoppe is
working at 6am-9pm and it is opening all the day including Sunday. The total sales revenue
around 20000 rupees per day in MILMA Shoppe and in seasonal or festival time it will be
increased.

Distribution

Pathanamthitta Dairy supplies milk and milk products to the whole place of Pathanamthitta
district, chengannur in Alappuzha districts and pathanapuram in Kollam district. There are about
1250 registered agencies in the dairy of which 1000 agencies are functioning.

Selection of Agents

These agents have to approach the plant where they need to fill and give a form which cost ₹25
and the form consists of the details to be filled regarding name, address, phone number, mail id,
location of the shop, type of the shop etc. are collected. The oth er side of the form is the
verification part and an officer of MILMA us sent to the agents place for this purpose. The officer
is inspected to check the shop whether the sales will get divided or not etc. If the officer gets any
wrong information then the sanction is not given to the agent.

The verified details also ensure the following:

• Whether agency can promote marketing

• Whether additional sales can made possible.
• Whether any additional transportation cost will be incurred
• Whether it has cold storage and refrigeration facilities.

Marketing Mix

1. Price

Price of the product is decided on the basis of market share. Sales promotion activities and price
flexibility are also considered while deciding price. Profit motivation is also considered while
deciding price. In addition competitor’s price, purchase price, production cost is also important.
Milk price is estimated on the basis of distribution and also social obligation to the society and
discussion are also held with members.

29
2. Product

The new product to be launched on the basis of survey on consumers for the acceptance of each
and every product, consumer awareness is needed for the product and response is awaited from
the customer.

3. Place

Identify the target market and then establishing the product in the minds of the people, hence the
right kind of people needed to targeted like children. The products like ice-cream, sip up and
chocolate are mainly targeted to children.

4. Promotion

There is less promotional activities from the firm. Usage of posters, calendars, stalls, bill boards
etc. are certain tools used in the promotion activities. Advertisements are used only when the
offers are provided.

5. Marketing strategies

One of the main upcoming strategies to be implemented MILMA is incentive based distribution in
which, the contractors who deliver the product and create extra sales of about 10 to 15 percent.
So that both MILMA and contractors get mutually benefited. Another one such as strategy of
MILMA is to introduce separate agencies for other products of MILMA like milk so that the sales
may go up and more customer awareness is created. MILMA is also used another strategy for
marketing products. They introduce MILMA Shoppe for the distribution of product. All the
MILMA products are available here. They also used MILMA stall in different areas for selling the
product.

6. Upcoming products

Mainly upcoming products of MILMA to be manufactured in the Pathanamthitta dairy are, sip up,
chocolate, kulfi, ice- cream and palada.

7. Milma Outlet

Retail outlet of milk and milk product is functioning near the dairy under it’s of the dairy provide
all the MILMA product cost effective prices. MILMA booths are functioning in most of the railway
stations. Bus stations and other public places in Kerala. A 24-hours retail outlet of milk and other

30
product open here by the Malabar Regional co-operative Milk Producers Union (MRCMPU) under
(KCMMF). Styled MILMA Shoppe is the outlet which sells all MILMA products in public places.

3. PRODUCTION DEPARTMENT

Production is the processes which combines and transforms various resources into value added
product or services. It is the core department of the company. The production department is
headed by the Assistant Manager and is assisted by Technical Officers, Technical Superintendents
and Technicians. There are only two types of milk produced-double toned milk and jersey milk.
The various other products manufactured are sambharam, curd and ghee. Pathanamthitta dairy
provides the sale of other products like chocolate, ice-cream and butter.

Functions

• Processing of milk
• Procures raw materials
• Makes payments for the milk powder.

Production Process

Pathanamthitta dairy produces various products. The main product is milk and there are Mainly
three types of milk produced in the dairy are double toned Milk and Jersey Milk. The other
products are manufactured are ghee, curd, sambharam and peda. Pathanamthitta dairy provides
the sale of other products like chocolate, ice cream, and sip up, drinking water, mango drink,
butter, milk powder and MILMA plus through MILMA Shoppe.

PROCEESSING OF MILK

RECEPTION

At first raw milk from BMMC’s which is bought from the regional societies with the help of
tankers is collected and then through these tankers it is bought to the dairy for processing. At
first a sample of milk is taken to the laboratory and then it is tested for acidity, fat and SNF (solid
not fat). It is then subjected to MBR test (methylene blue reduction test), bacteriological tests etc.
Methylene blue is dropped into milk to test its quality and then the time it stays blue is
calculated. If there are more than 500 litres from one society then two samples are taken for
testing. Then the milk from the tanker is taken and then the weight of milk is recorded using

31
logging machines to test the fat content. Then the milk is pumped into a large tank called SILO
which has a capacity of holding 50,000 litres. There is a daily procurement of about 34.000 litres
in the dairy plant.

There are basically two process involved in production plant:-

• Pasteurization
• Standardization

In pasteurization there are again three different stages.

• Heating section
• Holding section
• Chilling section

The milk is at first transferred to a container which has got steel plates. The container is divided
into 2 sections i.e. pasteurization milk tank- 1 and pasteurization milk tank – 2 namely a heating
section and a cooling section. At first milk is heated at about 76 degree Celsius for about 15
minutes where it is held as much as such and then it is transferred to the chilling section where
milk is chilled at a temperature below 4 degree Celsius. This is done so as to destroy all the
microbes and other harmful bacteria present in milk, the pasteurization unit can pasteurize more
than 1000 litre of milk in four hours. After this other activities like filtration in which small
particles like hair dung etc. are filtered out completely. Processors called clarifiers are used to
separate the invisible particles to make milk more clean and pure.

PACKAGING AND FILLING SECTION

The stored milk is then passed out for packing and then separately packed into yellow and blue
coloured packets. Yellow coloured packets contain double toned milk and blue coloured packets
contain jersey milk. The packaging is done by using thin polythene bags which have thickness of
few microns only Filling machine will itself take the plastic covers and by the use of rollers the
sheets are rolled in a criss cross shape and milk is poured into it which is automatically sealed
and packaged.

CRATE WASHER

The trays used for collecting and moving packets of milk is washed and subjected at high
temperatures of about 72 degree Celsius. The trays are moved and washed by using conveyors.
Then by using plastic covers which are rolled cross manner is used for collecting and storing

32
milk. The milk is then stored in cold storage room which is kept at a temperature of 8 to 10
degree Celsius collected within a tank.

STORAGE ROOM

The milk packed is stored below 7 degree Celsius in a cold storage room. This is done until it is
dispatched through the other end. Here the cold temperature is maintained through the method
of cooling water coming from the refrigerator kept outside.

CIP ROOM (CLEAN IN PLACE)

The tanks used for pasteurization are then cleaned by using alkali and acids. There are 3 tanks
one contains acids nitric acid other contains alkali (caustic soda) and another one tank has acids,
alkali and hard water.

1. Ghee

There are different methods used for preparing ghee namely butter to ghee, direct melting
methods etc. In this dairy cream is melted to form ghee and then collected within other tanks in
which it is stored and allowed to settle after one week the settle ghee was packed.. The cream is
obtained from the cream separation method and then proceeds by the steam which is called the
pre-satisfaction process. Steam is passed over the cream at about 110kg pressure for about three
and a half hours.

2. Curd

Curd is made of skimmed milk or fatless milk. The skimmed milk is heated to about 50degree
Celsius by passing through an autoclave for about 2 hours and passed onto next tank for cooling
this is then taken and a yoghurt culture is added to it and because of the presence of lactobacillus,
the milk gets fermented to curd. This is then kept inside an incubator at 43 degree Celsius and
then added to a big tang in which milk is present. After this curd is formed which is stored at
about 3 degree Celsius. It is a fermented product and is free from cholesterol and available in 500
ml and also in bulk.

3. Sambharam

Butter milk is available in small sachets of 200 ml often and is processed quite easily by
separating out the cream from the milk manually. Curd is thoroughly agitated and to it equally
quantity of chilled water is added. Small proportions of chilly, ginger, salt and curry leaves are
added and mixed. It is covered in plastic covers and dispatched.

33
4. QUALITY CONTROL DEPARTMENT

MILMA works with the aim of giving high quality product to its customer. The quality control-
department is headed by Assistant Manager and is followed by Quality Control Officer,
Bacteriologist, Lab Technician and Lab Assistant. Milma’s products are tested at each and every
stage of production. This department is mainly for checking the quality of products right from the
reception till the final stage of production and thus providing the customers with best products.
Milma collects milk on the APCOS pattern which has been originated from Amul and has been
replicated in Kerala through Milma. It’s mainly for the benefits of the milk farmers. About 34,000
litres of milk is obtained daily at the dairy. High quality is maintained within the dairy by not
touching the milk with hands except at the time of being brought from societies.

FUNCTIONS

• Taking samples at every stage of milk processing and of other milk products.
• Timely testing the quality of milk and other milk products.
• Maintains to keep the standard

MILMA products are tested at each and every stage of production. This departm ent is mainly for
checking the quality of product right from reception till take the final stage of production and
thus providing the customers with best products. MILMA collect milk on the APCOS pattern
which has been originated from Amul and has replicated in Kerala through MILMA. It’s mainly for
the benefit of the milk farmers. High quality is maintained within the dairy by not touching the
milk with hand expect at the time of brought from societies. The dairy has received the MMPO
(Milk and Milk Product Order) standard and is on the verge of attaining ISO 9000 certification.
The quality assurance system in Dairy is to monitor chemical and bacteriological quality of raw
materials to finished products to ensure specified quality. The quality is monitored at all stage in
terms of flavours, temperature, acidity etc. All the physical and chemical properties are also
considered. Various quick tests are conducted like bacteriological test, phosphates test, and
ethane blue reduction test. Usually, tests are conducted to find out whether the milk is neutral or
whether hydrogen peroxide has been added by the farmers. Producers are the shareholders.
Many incentives are provided to these farmers like calf fed provisions, veterinary aids,
employment opportunities to their children etc. The various products available are curd,
sambharam, milk and ghee. About 0.16% acidity should be present in the milk. Once in ten days

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the milk value report is send to the producers and if the report show variations then veterinary
doctors are approached. The products are marketed accordingly which is very comprehensive
procedure being followed. As Milma is having brand loyalty there are very few competitive
strategies formed affecting growth of Milma. Milma is very much quality conscious and hence
customers have lot of faith in its products.

ROLE OF MANAGER

• Coordinate activities of ensuring quality at regular intervals of time.

• Maintaining the prescribed ISO, FSSA quality standards.
• Preparation of quality control reports on a daily and monthly records.

SIGNIFICANT FACTORS FOR SUCCESS

• Coordinate activities of quality measurement at regular time intervals.

• Maintaining the prescribed ISO, FSSI, HACCP quality standards.
• Preparation of quality control reports on a daily and monthly basis.

Period of quality testing

1. When milk is received at the plant its appearance and smell is first its checked
2. Then sample is taken at RMRD (Raw Milk Reception Dock) and test to know the fat
content in order to fix price for the concerned society which supplied the milk.
3. Sample is taken at the processing stage of milk to know temperature of milk.
4. Later sample milk is taken from the processed milk tank to know the fat and acidity.
5. Sample is taken from filled packets
6. Similarly, this is done in cold storage.
7. Sample is taken at dispatching of milk packets.
8. Five packets are taken as samples in a month to know whether the quality is maintained.

5. FINANCE AND ACCOUNTS DEPARTMENT

Management of finance is considered as the life blood of business organization. A firm cannot be
sustained in the absence of an efficient finance department. Financial information of the dairy
supplied by the financial department is prepared by financial statements or accounting reports.
The department consists of total 4 employees headed by Accounts Officer. Finance and Account
department deals the financial aspects of the organization and prepare annual budget, balance

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sheet, estimate the source and application of funds. The main duty of this department is
procurement of funds, determination of sources of funds and utilization of procured funds.

FUNCTIONS

• Providing financial assistance as per the departmental requirements.

• Keeping the monetary transactions in the book of accounts except the marketing
department
• Finance department also deals with the systems department
• Systems department operates with software which is made by KCMMF, MILMA

SOURCES OF FINANCE

LONG-TERM: The source of long-term finance is only term loans. CPD gets its financial assistance
from National Dairy Development Board (NDDB) through KCMMF. There is an agreement
between the federation and NDDB. As per the agreement between them 70 % of the loan amount
should be repayable and the remaining 30 % subsidy.

SHORT-TERM: the source of short-term fund is procured from the SBI at the prevailing interest
rates. It is mainly in terms of overdraft.

MODES OF PAYMENT

HRD department prepares the payment of employees and sends to the Finance department.
Payments are made in two ways, through direct cash which is paid in finance department and
other through in bank i.e., in the SBI. Over time payment is not paid in cash but paid in bank. The
following are different modes of payments at different situations.

CASH PURCHASE: Makes payment within 10 days made to society’s milk purchase.

CREDIT PURCHASE: 15 days get as credit period for film (plastic cover pack) purchase.

ADVANCE PAYMENT: Advance payment is needed for purchase of skimmed milk

ACCOUNTING SYSTEM

The organization follows the double entry system of accounting. All transactions are made up-to-
date. Trial balance and profit and loss account are prepared half yearly. A uniform system is
designed according to the rule and accounting system set by NDDB (National Dairy Development
Board).

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AUDITING PROCESS

The dairy has statutory auditing which is done by the registrar of the co-operative society. For
these purposes, a representative is appointed in the dairy as their Concurrent Auditor. Budget is
an estimation of the revenue and expenses over a specified future period of time. Budget is
prepared every year by considering the procurement of plant and machinery, sales, increment in
salaries, quality control and engineering works, number of agencies and societies registered
depreciation and other types of expenses. All payment and allocations of funds to other
departments are strictly on budget basis. Each department if needed to be renewed should check
the amount allocated to each of these departments. The prepared budget is submitted to the head
office and gets approved. Budgets are prepared considering the annual turnover.

TAX PAYMENT

Tax planning mechanism is practicing in the organization with a view to reduce tax liability.
Apart from this a certain amount is paid to the bank as price different to farmers from profit. Out
of the total revenue about 82% recorded from sale of milk and 18% from milk products. A credit
collecting period of one month is provided to debtors and 45 days for government institution.

Maintenance of Books and Records

The following books of accounts are maintained in the department

1. Cash Book
2. Bank Book
3. General Ledger
4. Journals
5. Direct payment Register
6. Bill Register
7. Advance Register

Profit and loss account is prepared every month while balance sheet and budget is prepared
yearly. Every year auditing takes place. External auditing i.e.; statutory auditing is take place in
the dairy. Register of co-operatives societies come and audit every year. This department is
computerized and hence man power is limited. Cash receipt is prepared through computerized
system that is, by using MIS (Management Information System).

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▪ Milma is a consumer-oriented market.
▪ Everyday increasing demand of products.
▪ Unlimited benefits are enjoyed by the farmers.
▪ There is a financial flow from urban area to rural area.
▪ There are 3 types of milk produced by Milma – double toned milk, toned milk, and jersey
milk.
▪ Milco dairy, PDDP, Royal, A-one, Rich Dairy, Wayanad milk and Amul are the major
competitors of Milma products.
▪ Milma occupies 45% of the market share of milk in Kerala.
▪ The processing of dairy is 60000 litres milk per day, 35000 litres of double toned milk and
25000 litres of toned milk.
▪ 82% of the total revenue of the dairy is from sale of milk and 18% from milk products.
▪ Good brand name, high quality products, ISO certification are the strengths of Milma dairy.
▪ Company is properly auditing the books and accounts in every financial year.
▪ Maintain good employer and employee relationship.
▪ Wastages are not treated.
▪ Recreation of milk.
▪ Milma products enjoy the reputation of high quality and healthy as all of its product are
made with milk collected from farmers in rural area.
▪ There is a good corporation among all the department of milma. The milma has good
organisation structure to help things are going smoothly.
▪ Less employee turnover.
▪ Dealership commission is low compared to competitors.
▪ Better co-ordination among different departments.

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