KARNATAKA MILK FEDERATION LTD.

CHAPTER - 1

INTRODUCTION TO THE INDUSTRY

INTRODUCTION

FIG: 1.1

This Organization study report is about the functions and duties in the Manufacturing Company
called Karnataka Milk Federation (KMF) which is situated in Bangalore in a place named
Koramangala, Dairy Circle, Karnataka. This Organization Study program was done in the month of
December-January for a period of 15 working days. The main purpose of doing this Organization
study is to know what are the functions, duties, rules, regulations and responsibilities which were
followed by the company. The departments observed by me in this company were Production,
Animal husbandry, Marketing, Finance, and Quality Departments. This study also helped me to
learn a lot about how the managers manage the organization without any distraction and complete
the production on time with the available resources and how they reduce the wastage of raw
materials in the company with their strategies.

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This Organization study has given me an opportunity to work in the Manufacturing sector and
know the working procedures and functioning of the organizations. Through this report I have
given all the information about my Organization study in the different sectors which is a wonderful
experience to work in the real world and know many simple techniques about working of the
company.

FIG: 1.2: KARNATAKA MILK FEDARATION LTDHAA

When I got into the Company I was thinking that I should be dressed in formals, but there was no
restriction on dressing, they expected me to dress well. On the first day to company I felt very
tensed and afraid to enter the company because everyone in there was new and it was my first
experiencing in a Organization which include different levels of officials, but on seeing the
kindness and excellent polite behaviour of the managers I felt grounded and felt free and relaxed to
ask them all a lot about the company, which in turn helped me a lot in the completion of my
Organization study and compile a report.

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Every day I had to report to my company guide and he used to explain about particular department
and section and later he send to the person in charge in that departments, and with his guidance I
needed to complete my task and submit daily report to the company guide and it would be checked
by him and he would let me know any changes to be made, which later helped me to complete my
Organization study report.
Dairy industry of India has undergone considerable transformation mainly due to the application of
scientific production techniques and greater importance being given to the development of dairy co-
operative infrastructure that has contributed in no small measure towards substantial growth in milk
production since the early seventies. Nevertheless, viewing our dairy spectrum in the light of
variabilities and changes that have taken place over time, it becomes pertinent to ask whether the
future of our cooperatives will remain as bright as in the past if we were only to follow the
principles and practices of the past.
India with about 19.76 per cent of the world's total cattle and buffalo population accounts for only
about 12 per cent of the world's total milk production (Government of India, 1997). Our live stock
are roughly half as efficient as the average milk animals in the world and probably only one-fifth as
efficient as those in the advanced countries. The milk grid in this country is based on the average
produce of millions of small uninformed farmers who are still unaware of modern scientific ways
of dairy farming. This is perceived as a major handicap, as the industry is unable to attain the
quality requirements to compete in the world market. Therefore, technologies should be adopted to
make milk production system viable and sustainable to usher in an era of quality consciousness to
compete internationally.
The moot point to consider over here is whether this is achievable with the kind of animals and
resources poor dairy farmers have at their disposal. India produces 70.8 million tons of milk
annually (Government of India, 1999). The organized sector in our country handles only 13 per
cent of this total milk production fihomkinson, 1995). The consumer prices of milk in India are
comparable to some of the lowest in the world due mainly to unremunerated and unattractive price
offered to our dairy farmers for their milk produce. Our purchasing power, and the demand for milk
are not able to expand in line with the increasing milk production.
In terms of per capita consumption of milk, India compares very poorly among the comity of world
nations. An average per capita availability of only 204 g milk per day pushes our country to the
57th place in the world in terms of milk availability. However if our milk production continues to
grow as it does now we would have newer opportunities for launching a more meaningful

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marketing campaign. The cumulative annual growth of milk in India stood at 1.64 per cent during
the period from 1950-51 to 1960-61, 1.15 per cent from 1960-61 to 1973-74, 4.51 per cent from
1973-74 to 1980- 81, 5.50 percent from 1980-81 to 1990-91, and 4.23 per cent from 1990-91 to
1996-97 (Government of India, 1999). We would then probably be in a position to increase our
local consumption pattern and reach out to world markets or to face a drastic price crash in the local
market and to with stand and absorb the resultant aftereffect of shrinkage in milk production. In the
current context of liberalization and increasing global integration of economies, it would be unfair
on Indian Dairy Industry to compare it with that obtaining in most of the vastly modern and
technologically far advanced western bloc countries in terms of in terms of a produce that is
globally competitive. It should be realized that in Indt4 the dairy industry is dependent on millions
of small farmers who produce only a litre or two of marketable surplus and, it is the milk.

About The Company:

Karnataka Cooperative Milk Producers' Federation Limited (KMF) is the Apex Body for the dairy
co-operative movement in Karnataka. It is the second largest dairy co-operative amongst the dairy
cooperatives 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 16 Milk
Unions covering all the districts of the State which procure milk from Primary Dairy Cooperative

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Societies (DCS) and distribute milk to the consumers in various Towns/Cities/Rural markets in
Karnataka.
Karnataka Dairy Development Cooperation (KDDC), the first ever World Bank/ International
Development Agency funded Dairy Development Program in the country started in Karnataka on
co-operative lines with the organisation 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/IDA, Operation Flood II & III. The Annand Pattern three tier
organisation structure – Dairy Cooperative Societies at the village level, District Milk Unions at the
District level to take care of the procurement, processing and marketing of milk and provide
technical input services for enhancing milk production at producers level and Federation at the
state level to co-ordinate the growth of the sector in the State, are resolutely and harmoniously
working hand-in-hand in creating self-sustaining rural economy based on cooperative dairying.
KMF is one of the few federations in the country, who have converted dairying from a subsidiary
occupation into an industry.

Coordination 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,
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both within and outside the State, all the Milk and Milk products are sold under a common brand
name NANDINI.

The Federation is striving to create a self-reliant and vibrant rural economy in Karnataka by
providing a supportive and conducive environment for the growth of Dairy Cooperatives as
autonomous economic and social institutions. The Federation is largely successful in realizing the
objectives of dairying during the last four decades of dairy development in Karnataka State. It is
by-and-large successful in providing a viable subsidiary occupation to unemployed rural poor so as
to raise their income earning capacities and to supply adequate quantity of quality milk at
reasonable prices to urban consumers.

The results of effective dairy development by KMF have made a far-reaching and extensive impact
on the rural landscape in Karnataka. The best remunerative milk purchase price to farmers, efficient
and timely input services, delivered at the door-steps to farmers, such as, unfailing veterinary health
services to any remote village, quality artificial insemination for breed improvements, supply of
Balanced cattle feed at less than the market price, etc., have made the farmers to increasingly
patronize their cooperative. The extent of patronization by farmers is so complete, that the
dominant share of marketable surplus milk of farmers in Karnataka is procured by KMF dairies and
hardly there is any organized private dairy milk procurement, which is widely prevalent in other
parts of the country.

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Overview:
 The Bengaluru Dairy has come a long way. Initially processing 50,000 liters of milk per day,
it has now expanded to an impressive 8 Lakh Liters per day, with the capacity to further
expand to 10 Lakh Liters per day.
 The dairy covers 12 talukas and functions through more than 2202 societies.
 Notably, the Hoskote facility, located on the outskirts of the city, has a chilling plant with a
capacity of 1.5 LLPD (liters per day), which has been converted into a new dairy of 2 LLPD.
Chilling centers are strategically placed in various locations, including Anekal, Byrapatna,
Doddaballapura, Vijayapura, Sol ur, and Kanakpura, with a total capacity of 1150 TLPD
(tons per day).
 The union procures an average of 16.76 lakh kgs/day of milk and sells approximately 8.91
lakh liters/day of milk and 1.06 lakh kgs/day of curd.
 In addition to milk and curd, the Bengaluru Dairy produces Butter, Ghee, SMP (Skimmed
Milk Powder), Cream, Ladoo, and Mysorepak.
 Excellence: The Bengaluru Dairy is the biggest fully computerized dairy in South India, with
no human handling of milk. It holds the distinction of having the highest procurement and
sale of milk by any dairy in Karnataka. Additionally, it is the highest seller of curds in the
country. The union also boasts the lowest distribution transportation cost.

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Background

The first of the dairy co-operatives that make up KMF started in 1955 in Kudige, Kodagu District.
KMF was founded in 1974 as Karnataka Dairy Development Corporation (KDDC) to implement a
dairy development project run by the World Bank. In 1984 the organisation was renamed KMF.
KMF has 14 milk unions throughout the Karnataka State which procure milk from Primary Dairy
Cooperative Societies (DCS) and distribute milk to the consumers in various urban and rural
markets in Karnataka State with 1,500 members.[2]

The Karnataka Milk Federation (KMF) is a dairy co-operative from Karnataka, India, which
sells products such as milk, curds, ghee, butter, ice cream, chocolates, and sweets under the brand
name Nandini. It is a federation of milk producers under the ownership of Ministry of Cooperation,
Government of Karnataka. Almost every district in Karnataka has milk producing co-operatives.
The milk is collected from farmers who are its members, processed and sold in the market under
the Nandini brand. It is the second-largest milk co-operative in India after Amul.

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Operations

Occasionally, there is spillover from Karnataka Politics into the activities of KMF,including the
elections for the post of chairman, and the timing of the milk price hike.Ahead of Karnataka
Legislative Assembly (M.L.A) elections May 2023, Row erupted over ruling BJP state government
allowing Amul to sell milk and other products in Karnataka with allegations of Union Home and
Co-operative minister Amit Shah's attempt to merge Nandini (KMF) with Amul in Karnataka,
Series of protests both in social media(Internet) like #SaveNandini, #GoBackAmul and in streets
followed at Karnataka state.Some believe it had influence on upcoming Karnataka state assembly
elections held on 10 May 2023.
Nandini milk and curd

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Rajkumar has worked as the ambassador, free of cost and had done his first and last television
commercial in 1996. Later Puneeth Rajkukmar was selected as the ambassador for Nandini
Products. In Dec 2009, Puneeth Rajkumar signed an agreement with KMF, free of cost. In 2014
Shriya Saran was selected as Nandini Good Life Product Ambassador in Tamil Nadu, Kerala,
Telangana, Andhra Pradesh. Some of the products made by KMF under the brand name Nandini
are available in Maharashtra, Goa, Telangana, Andhra Pradesh and Tamilnadu.

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Product range

Karnataka Milk Federation which markets its milk, milk products and sweets under the name of
Nandini has wide range of milk and its products.Pasturised milk, Toned milk ,Standardised milk,
Ghee, Butter milk, Curds, Butter, Paneer, Chocolates, Mysore Pak.

The Karnataka Milk Federation (KMF), headquartered in Bangalore, India, is a dairy cooperative
that plays a vital role in the state’s dairy industry. Let’s delve into its fascinating history:
1. Founding and Early Days:
o The roots of KMF trace back to 1955 when the first dairy cooperative was established in
Kudige, Kodagu District.

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In 1974, the organization was formally founded as the Karnataka Dairy Development
Corporation (KDDC). Its inception was tied to a dairy development project funded by the World
Bank.
o Over time, KDDC evolved into what we now know as KMF.
2. Renaming and Expansion:
o In 1984, the organization underwent a name change, becoming the Karnataka
Milk Federation (KMF).
KMF operates through 14 milk unions spread across various districts in Karnataka. These unions
procure milk from Primary Dairy Cooperative Societies (DCS) and distribute it to consumers in
both urban and rural markets.
o The federation boasts around 1,500 members who contribute to the production
and supply of milk.
3. Nandini Brand:
o KMF sells its dairy products under the brand name Nandini. This iconic brand
encompasses a wide range of offerings:
 Milk: Fresh, pasteurized, toned, and standardized.
 Other Dairy Products: Curds, ghee, butter, paneer, and cheese.
 Sweets and Treats: Chocolates, ice cream, and traditional Indian sweets
like Mysore Pak.
4. Significance and Impact:
o Nandini has become synonymous with quality dairy products in Karnataka.
o It operates as a cooperative, with milk collected from farmers who are members
of the federation.

KMF’s success has made it the second-largest milk co-operative in India, following in the
footsteps of the renowned Amul brand.
5. Influence and Controversies:
o Occasionally, KMF’s activities intersect with Karnataka politics. Elections for the
post of chairman and timing of milk price hikes have seen political spillover.
o In 2023, ahead of the Karnataka Legislative Assembly elections, there were
protests related to the entry of Amul into the state. The issue centered around

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merging Nandini (KMF) with Amul, sparking debates and social media
campaigns. (KMF).

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