Rise of Banas Dairy in Past Decade

GROUP: 6
Ankur Patel – X05020
Jaypalsinh M. Rahevar – X05028
Company Profile

Type Cooperative

Industry Milk and milk items

Founded 1969

Headquarters Palanpur, Gujarat, India

Key people Shree Shankarbhai Chaudhary (Chairman), Shree Bhava bhai rabari
(Vice Chairman) Shree Sangram Chaudhary (MD)

Revenue INR 18200 crore (2022–23)

Total employees 5000 employees are working at Banas Dairy.

Slogan An oasis in desert

Website www.banasdairy.coop

Address:- Banaskantha District Co-Operative Milk Producers Union Ltd.

Banas Dairy Post box No-20 Palanpur - 385001 Gujarat (India) Phone: 02742-253881-5

Fax: 02742-252723

E mail: projectsatbanasdairy.coop
History:

Late Galbabhai Patel, the founder chairman and a visionary leader, harbored a dream to uplift
the socio-economic status of village farmers. This aspiration materialized through the
establishment of a Cooperative Milk Union for Banaskantha district, inspired by the success of
the "Amul Dairy" model in Kheda district. Consequently, eight village-level cooperative milk
societies were registered in Vadgam and Palanpur taluka of the district. These societies began
collecting and supplying milk to DudhSagar Dairy, Mehsana, starting from 3rd October 1966.

The milk union was officially registered under the Cooperative Act on 31st January 1969, named
as Banaskantha District Co-operative Milk Producers' Union Limited, Palanpur, commonly
known as "BANAS DAIRY". The foundation stone for the dairy plant was laid by Late Galbabhai
Patel on 14th January 1971, on a 122-acre land acquired near Jagana village. This initiative was
part of the Operation Flood program launched by the National Dairy Development Board. The
dairy commenced operations on 7th May 1971, initially with a handling capacity of 1.5 lakh
liters of milk per day, which later expanded to process 4 lakh liters of milk per day.

Thanks to the relentless efforts and dedicated leadership of individuals like founder chairman
Late Galbabhai Nanjibhai Patel and former chairman Late Galbabhai Manjibhai Patel, Banas
Dairy gained the trust of milk producers and transformed into a modern dairy complex,
becoming the largest Dairy Cooperative in India.

What began as a small endeavor in 1966, organizing societies and collecting a few hundred
liters of milk, has evolved into a state-of-the-art automated dairy plant of the Asian continent.
The latest addition, Banas II Dairy Complex, adjacent to the first plant, was constructed at a cost
of Rs. 110 Crore to handle 10.5 lakh liters of milk per day.

Banas II Dairy Complex boasts cutting-edge technology, including three types of Programmable
Logical Controls (PLCs) and over 560 pneumatic valves operated via an intelligent System. The
entire processing plant operates through a Man-Machine Interface (MMI), ensuring
uninterrupted processes and consistent quality of products manufactured to international
standards.

With Banas I (6 LLPD processing capacity), Banas II Dairy Plant (33 LLPD processing capacity),
Banas III (17 LLPD processing capacity), and three milk chilling centers at Khiman, Tharad, and
Radhanpur, Banas Dairy has the capability to process 56 lakh liters of milk per day.

The Banas II dairy plant, constructed by the National Dairy Development Board, includes a
butter plant with a capacity of 40 MTPD and a powder plant with a capacity of 60 MT. These
plants operate efficiently, ensuring consistent quality and reliable operations.

Additionally, with the commissioning of Banas III Dairy plant, the total milk processing capacity
has increased, accompanied by the installation of a new butter plant with an 80 MTPD capacity.
An ice-cream plant with a capacity of 70 KLPD was also commissioned at this new structure.

In addition to the above, Banas Dairy manufactures 50 MT of Ghee, 5.5 LLPD of UHT milk, 30
MT of Cheese and 20 MT of processed cheese, 2.5 LLPD of pouch milk, 1.5 LLPD of Buttermilk,
and 255 MT of powder per day.

Fueling Economic Growth through Cooperative Dairy Farming:

In the past decade, Banaskantha District Cooperative Milk Producers' Union, widely known as
Banas Dairy, has experienced a remarkable surge in turnover, soaring from Rs 3,551 crore to Rs
18,000 crore in the fiscal years from FY13 to FY22. This phenomenal growth trajectory has been
accompanied by a substantial increase in the volume of milk procurement from dairy farmers.
Notably, Banas Dairy stands as the largest contributor, accounting for 25% of the total quantity
of milk procured by the Gujarat Cooperative Milk Marketing Federation (GCMMF), popularly
known as Amul. Looking ahead, Banas anticipates further acceleration in milk procurement,
reflecting its pivotal role in India's dairy sector.

The Banaskantha district, characterized by low rainfall and its proximity to the Kutch desert, has
witnessed a noteworthy transition towards dairy farming as a lucrative economic activity. This
shift can be attributed to the sector's ability to provide a stable income, particularly amidst
unpredictable weather conditions. With minimal industrial presence, dairy farming has
emerged as the primary livelihood option, offering farmers a dependable source of income
without the need to travel long distances to sell their produce. Notably, women play a
significant role in this sector, contributing to its growth and sustainability.

The rising demand for dairy products in the domestic market, driven by increasing health
consciousness among consumers, presents abundant opportunities for growth. Despite the
presence of untapped markets and limited penetration by major dairy brands like Amul, the
dairy business is poised for sustained expansion in the coming years.
Banas Dairy's cooperative structure, organized in three tiers, underscores its commitment to
efficiency and transparency at every level, from farmers to village-level societies and district
unions. Unlike other states, the absence of bureaucratic hurdles and longer tenures for
cooperative workers contribute to the system's success. Transparent transactions, from milk
procurement to the selling of dairy products, foster unwavering loyalty among farmers towards
the federations, cultivated over decades of collaboration.

Economically, dairy farming proves to be beneficial for farmers and cattle owners, providing
them with a steady source of income. Farmers receive fair payment for their milk, with 86 paise
returned to them out of every Rupee earned from dairy product sales. The remaining 14 paise
covers expenses related to processing, packaging, quality control, staff salaries, and other
operational costs, necessitating high efficiency to ensure profitability.

Moreover, dairy farming has positive ripple effects on education, as farmers can afford to invest
in their children's education. Smallholder dairy production contributes significantly to economic
activity in the district, offering high returns on land and labor while also reducing poverty and
improving livelihoods. Additionally, the trade of milk from rural to urban areas facilitates capital
transfer from wealthier cities to poorer rural regions, fostering economic growth and equitable
development.
Beyond Food - A Holistic Approach to Community Welfare and Sustainability

 Banas Dairy has diversified its portfolio beyond the food sector, exemplifying its
commitment to holistic community welfare and environmental sustainability.

 Healthcare Initiatives:

Figure 1 Banas Medical College

 Establishment of Banas Medical College, providing free treatment to all milk

producer families through its 500-bed hospital.

 Accommodation of 200 students per batch at Banas Medical College, with a 50%
education fee subsidy extended to children of milk producers.
  Conducting approximately 300 free medical camps annually, ensuring access to
essential healthcare services for the community.

 Renewable Energy Efforts:

 Establishment of a BIO-CNG plant in Dama, Banaskantha, with plans for replication

at other locations.

 Conversion of 40 MT of gobar per day into fuel gas, contributing to sustainable

energy practices and reducing environmental impact.

Figure 2 Banas Gobar Dhan Project

Figure 3Banas Bio CNG pump
 Sustainable Agriculture Initiatives:

 Implementation of silage production programs on a no-profit-no-loss basis,

providing nutritious fodder for milch animals.

 Introduction of hydroponic fodder cultivation, offering a future-proof solution for

landless farmers and ensuring a consistent supply of quality fodder.

Figure 5 Hydrophobic Grass

 Environmental Stewardship:

Figure 6 Excavation of Ponds

  Excavation of 66 ponds for water harvesting, mitigating water scarcity issues and
promoting environmental conservation.

 Adoption of alternative treatments for antibiotics control, emphasizing Dairy's

commitment to sustainable farming practices and animal welfare

These diversification efforts underscore Banas Dairy's comprehensive approach towards

community development, encompassing healthcare, renewable energy, sustainable agriculture,
and environmental conservation. Through these initiatives, Banas Dairy continues to positively
impact the lives of stakeholders while contributing to a more sustainable future for the region.

Drivers to the success of Banas:

1. Strategic Expansion and Infrastructure Development:

Banas Dairy's journey of success is underpinned by strategic expansion and infrastructure

development. With a network of 4.5 lakh farm producers and 1750 Village Cooperative
Societies, the dairy has established a robust procurement system. Its 8 ultra-modern plants,
equipped with cutting-edge technology, have significantly enhanced milk processing capacity
and efficiency. This strategic expansion has positioned Banas Dairy as a key player in meeting
the growing demand for dairy products.

2. Farmer Empowerment and Welfare Initiatives:

Central to Banas Dairy's ethos is its commitment to farmer empowerment and welfare. The
dairy provides extensive support services to its members, including mobile veterinary clinics
offering free treatment and vaccination services. Additionally, Banas Dairy conducts over 14
lakh artificial inseminations annually to improve per-animal milk production. Moreover,
initiatives such as the distribution of green fodder seeds and organized study tours for milk
producers underscore Banas Dairy's dedication to enhancing farmer livelihoods.

3. Quality Assurance and Product Innovation:

Banas Dairy places a strong emphasis on quality assurance throughout its operations. The
dairy's Katarva Plant, Asia's largest cattle feed plant, and Palanpur Plant ensure the production
of balanced animal food, optimizing livestock health and productivity. Furthermore, Banas Dairy
continuously innovates its product portfolio to meet evolving consumer preferences. Its 'Banas
Fresh' range of flavored milk and other value-added dairy products have garnered widespread
acclaim, reflecting the dairy's commitment to innovation and excellence.

4. Social Responsibility and Stakeholder Initiatives:

Banas Dairy actively engages in social responsibility initiatives aimed at benefiting its
stakeholders. The dairy implements schemes such as Animal Cooling System Assistance, Jan
Shree Education Scheme, and Toilet Construction Scheme to improve the lives of milk
producers and their families. Moreover, Banas Dairy's support during natural disasters, such as
the flood relief operations in 2017-18, highlights its commitment to community welfare and
solidarity.

5. Visionary Leadership and Sustainable Practices:

The visionary leadership of Banas Dairy's chairman has played a pivotal role in steering the
organization towards sustainable growth and success. Under his guidance, Banas Dairy has
embraced eco-friendly practices such as solar energy utilization and wastewater treatment,
reducing its environmental footprint and contributing to sustainable development. Moreover,
initiatives such as the establishment of Banas Medical College underscore the chairman's
strategic vision and commitment to societal development.

6. Market Penetration and Global Outreach:

Banas Dairy has successfully penetrated both domestic and international markets, expanding its
distribution network and strengthening its presence across various regions. The dairy's
collaboration with the Gujarat Cooperative Milk Marketing Federation (GCMMF) has enabled it
to market its products effectively and contribute significantly to India's dairy sector.
Furthermore, Banas Dairy's exports to countries such as the UAE, Saudi Arabia, and Malaysia
reflect its global outreach and competitiveness.

7. Financial Support and Stakeholder Assistance Initiatives:

Banas Dairy provides various financial support and assistance initiatives to its stakeholders.
Through schemes such as the Animal Lifting Travis Assistance Scheme and Electric Chaff Cutter
Assistance Scheme, the dairy empowers farmers with essential tools and resources to enhance
productivity and efficiency. Moreover, initiatives such as the Milk Competition Scheme
incentivize quality production and encourage stakeholder participation.

8. Rural Development and Societal Services:

In addition to its core operations, Banas Dairy actively contributes to rural development and
societal welfare. Initiatives such as the Jan Shree Group Insurance of LIC and Jan Shree
Education Scheme provide financial assistance and educational support to stakeholders,
fostering socio-economic development. Furthermore, Banas Dairy's Swav Lamban - National
Pension Scheme and Beti Bachao Ane Kuposhan Hatao Assistance Scheme demonstrate its
commitment to the well-being of its stakeholders.

Conclusion:
In conclusion, Banas Dairy's success over the past decade epitomizes the transformative
potential of cooperative management and visionary leadership. Through strategic expansion,
farmer empowerment, quality assurance, innovation, social responsibility, and sustainable
practices, Banas Dairy has not only achieved remarkable growth but has also positively
impacted the lives of its stakeholders. As a student of cooperative accounting management,
studying Banas Dairy's success story provides invaluable insights into the principles of
cooperative management and underscores the importance of inclusive development and
sustainable practices in achieving long-term success.

Recommendations:

1. Farmer Empowerment:
 Strengthen existing farmer support programs by providing comprehensive training
and education on modern dairy farming techniques, animal welfare practices,
and sustainable agriculture methods.
 Establish farmer cooperatives or collectives to facilitate collective bargaining
power, resource sharing, and knowledge exchange among local dairy farmers.
 Implement transparent pricing mechanisms to ensure fair and competitive
compensation for dairy farmers, taking into account market dynamics and input
costs.
2. Quality Assurance:
 Invest in state-of-the-art testing facilities and quality control measures to maintain
the highest standards of product quality and safety.
 Implement a robust traceability system to track the entire supply chain, from farm
to table, ensuring transparency and accountability at every stage.
 Regularly audit and certify compliance with industry regulations and international
quality standards to build trust and confidence among consumers and
stakeholders.
3. Social Responsibility:
 Expand corporate social responsibility (CSR) initiatives to address pressing social
and environmental issues in the communities where Banas Dairy operates.
 Collaborate with local NGOs, government agencies, and community leaders to
implement sustainable development projects focusing on education, healthcare,
and rural infrastructure improvement.
  Foster inclusive growth by promoting women's empowerment, supporting
marginalized groups, and enhancing livelihood opportunities for rural
populations.
4. Technology and Innovation:
 Embrace cutting-edge technology solutions such as IoT sensors, data analytics, and
automation to optimize production processes, reduce waste, and enhance
operational efficiency.
 Foster a culture of innovation by incentivizing research and development activities
aimed at developing new dairy products, packaging solutions, and value-added
services.
 Establish strategic partnerships with technology providers, research institutions,
and startups to leverage external expertise and stay ahead of industry trends.
5. Market Diversification and International Expansion:
 Conduct market research to identify emerging trends, consumer preferences, and
untapped opportunities for product diversification and expansion into new
geographical markets.
 Formulate a comprehensive internationalization strategy focusing on market
entry, distribution channels, branding, and regulatory compliance in target
countries.
 Forge strategic alliances, joint ventures, or acquisitions to accelerate market
penetration and establish a strong foothold in key global markets.
6. Government Engagement and Autonomy:
 Engage proactively with state government authorities to advocate for policies that
support the dairy industry's growth, innovation, and sustainability agenda.
 Seek greater autonomy in decision-making processes and regulatory compliance
to enable Banas Dairy to respond swiftly to market dynamics and customer
demands.
 Collaborate with government agencies to streamline bureaucratic processes,
reduce red tape, and create an enabling environment for business expansion and
investment.
7. Competitive Threat Management:
  Conduct a comprehensive competitive analysis to assess the strengths,
weaknesses, opportunities, and threats posed by private players in the Banas
district and neighboring regions.
 Develop strategies to differentiate Banas Dairy's products and services through
branding, product innovation, superior quality, and customer experience
enhancements.
 Enhance customer loyalty programs, distribution networks, and promotional
activities to reinforce Banas Dairy's market leadership position and mitigate
competitive threats effectively.
8. Addressing Farmer Concerns:
 Address farmer grievances regarding the price of Banas dairy products by
conducting a thorough cost analysis and exploring options for price optimization
while maintaining profitability.
 Collaborate with agricultural experts and research institutions to identify cost-
effective solutions for reducing the price of green fodder and enhancing feed
efficiency for dairy cattle.
 Implement farmer feedback mechanisms and participatory decision-making
processes to ensure that farmer concerns are heard, acknowledged, and
addressed promptly.
By implementing these recommendations, Banas Dairy can reinforce its commitment to
sustainable growth, stakeholder value creation, and industry leadership, while navigating the
evolving dynamics of the dairy market effectively.