Part a Komul

PART –A

CHAPTER - 1

INDUSTRY PROFILE

Introduction- Dairy Industry

Dairy industry is an important industry in India. The country is the world’s largest

milk producer, accounting for more than 13% of the world’s total milk production. It is

the world’s largest consumer of dairy products, consuming almost 100 percent of its own

milk production. Dairy products are a major source of cheap and nutritious food to

millions of people in India. It is the only acceptable source of animal protein for large

vegetarian segment in Indian population particularly among 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 where it is rain-fed

and drought-prone region.

History of Dairy Industry

The development of Indian dairy industry took its shape after the white

revolution. The white revolution has increased the milk production from 17 million tons

(1950-1951) to 110 million tons (2008-2009)

Dr. Verghese Kurien engineered the white revolution in India. He was the

chairman of the Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF) and his

name was synonymous with the Amul brand. Operation Flood (white revolution), was

done in 3 phases.

Operation Flood:

Operation Flood has helped farmers, direct their own development, placing

control of the resources they create in their own hands. A ‘National Milk Grid’, bridges

milk producers throughout India with consumers in over 700 towns and cities, reducing

seasonal and regional price variations while ensuring that the producer gets a major share

of the price consumers pay.

GCEM, Department of Management Studies Page 1

The bedrock of Operation Flood has been village milk producers’ cooperatives,

which procure milk and provides inputs and services, making modern management and

technology available to members. Operation Flood’s objectives included:

Increase milk production (“a flood of milk”)

Augment rural incomes

Fair prices for consumers

Programme Implementation:

Operation Flood was implemented in three phases.

Phase I

Phase I (1970–1980) was financed by the sale of skimmed milk powder and butter

oil donated by the European Union (then the European Economic Community) through

the World Food Programme. NDDB planned the programme and negotiated the details of

EEC assistance. During its first phase, Operation Flood linked 18 of India’s premier milk

sheds with consumers in India’s major metropolitan

cities: Delhi, Mumbai, Kolkata and Chennai; thus establishing mother dairies in four

metros.

Operation flood, also referred to as “White Revolution” was a gigantic project

propounded by Government of India for developing dairy industry in the country. The

Operation Flood – 1 originally meant to be completed in 1975, actually the period of

about nine years from1970-79, at a total cost of Rs.116 crore.

As start of operation Flood-1 in 1970 certain set of aims were kept in view for the

implementation of the programmers. Improvement by milk marketing was made by

organizing dairy sector in the metropolitan cities including Bombay, Calcutta, Madras,

and Delhi.


The objectives of commanding share of milk market and speed up development of

dairy animals respectively hinter lands of rural areas with a view to increase both

production and procurement.

Phase II

Operation Flood Phase II (1981–1985) increased the milk sheds from 18 to 136;

290 urban markets expanded the outlets for milk. By the end of 1985, a self-sustaining

system of 43,000 village cooperatives with 42.5 lakh milk producers were covered.

Domestic milk powder production increased from 22,000 tons in the pre-project year to

1, 40,000 tons by 1989, and the increase coming from dairies set up under Operation

Flood. In this way EEC gifts and World Bank loan helped promote self-reliance. Direct

marketing of milk by producer’s co-operatives has increased by several million liters a

day.

Phase III

Phase III (1985–1996) enabled dairy cooperatives to expand and strengthen the

infrastructure required to procure and market increasing volumes of milk. Veterinary

first-aid health care services, feed and artificial insemination services for cooperative

members were extended, along with intensified member education.

Operation Flood’s Phase III consolidated India’s dairy cooperative movement,

adding 30,000 new dairy cooperatives to the 42,000 existing societies organized during

Phase II. Milk sheds peaked to 173 in 1988-89 with the numbers of women members and

Women’s Dairy Cooperative Societies increasing significantly.

Phase III gave increased emphasis to research and development in animal health

and animal nutrition. Innovations like vaccine for Theileriosis, bypassing protein feed

and urea-molasses mineral blocks, all contributed to the enhanced productivity of milk

animals.


The market of milk industry in India:

The Beginning of organized milk handling was made in India with the

establishment of the “Military Dairy Farms” (oldest in Allahabad, 1889), the salient

features of the market of milk industry so far have been:

Long distance refrigerator rail-transport of milk from AMUL to Mumbai since 1945.

Handling of milk in co-operative Milk Union (oldest: Allahabad, 1913) established all

over the country on a small scale in the early stages.

Pasteurization and bottling on a large scale for organized distribution was started at

Aarey (1950), Worly (1961), Calcutta (Haringhata, 1959), Delhi (1959), Chennai (1963),

etc.

Establishment of milk plant under the five-year plan for dairy Development all over

India. These were taken up with the dual object of increasing the national level of milk

consumption and ensuring better return to the primary milk producer. Their main aim

was to produce more, better and cheaper milk.

Growth of Dairy Industry in India

India has become the world’s No. 1 milk producing country, with output in 1999-

2000 (marketing year ending March 2000) forecasted at 78 million tonnes. The annual

rate of growth in milk production in India is between 5-6 per cent, against the worlds at 1

per cent. India’s annual milk production has more than trebled in the last 30 years, rising

from 21 million tonnes in 1968 to an anticipated 80 million tonnes in 2000.

The country's estimated milk production for the year 2010-11 is 121 million

tonnes, close to 17 percent of world milk production. Last year, the annual milk

production stood at 112 million tonnes. World milk production increased to 710 million

tonnes in 2010, an increase of 1.6 percent over previous year.


India's milk production increased from 21.2 million MT in 1968-69 to 66.2 million

MT in 1995-96 and to 121.7 million MT in 2010-11.Per capita availability of milk was

around 276 grams per day in 2010-11 increased from 195 grams per day in 1995-96, up

from 112 grams per day in 1968-69.India's milk production increased over 4% annually

during 2000-01 to 2010-11 surpasses the 1.6% growth in population; the net increase in

availability is around 2.4% per year.

Table1.1: Showing the year and estimated milk production.

Year Estimated milk production (million tonnes)

1970 21.2

1980 44.8

1990 63.1

2000 82

2010 121

Chart 1.1: Showing the year and estimated milk production.

1970 1980 1990 2000 20100

20406080

100120140

Estimated Milk Production

estimated milk production (million tonnes)

year

mill

ion

tonn

es


This rapid growth and modernization is largely credited to the contribution of dairy

cooperatives, under the Operation Flood (OF) Project, assisted by many multi- lateral

agencies, including the European Union, the World Bank, FAO and WFP (World Food

Program). In the Indian context of poverty and malnutrition, milk has a special role to

play for its many nutritional advantages as well as providing supplementary income to

some 70 million farmers in over 5, 00,000 remote villages.

Milk is the raw material of the dairy industry, which cannot be created artificially and

stored for a long time. The term “Milk Market” refers to the fluid whole that is sold to

the individuals usually for direct consumption.

The dairy industry has come up to the present stage because of well-planned,

effective and coordinated efforts of the National Dairy Development Board, co-operative

of the Government.

National Dairy Development Board lays down rules and regulations to be followed by

the various co-operative milk societies. Amul (Anand Milk Union Limited) was a

pioneer in starting a co-operative milk producers society and thereafter many co-

operative societies where started. World Bank also had given credit of Rs.78 Crores for

starting another society as AMUL in 1975.

Salient Features of Indian Dairy Sector

In Livestock sector, Dairy is one of the high growth areas. The Dairy sector contributes

68 percent and in order to meet the target of 6 percent growth rate, milk group has to

show a minimum growth rate of 5 percent. Dairying has shown a growth of 3.5 per cent,

and is projected to grow at 3 per cent only during 2009 on account of overall recession.

Despite high growth rate in production, per capita availability of milk in India is only

245 gms / day, which is much lower than world average 285 gms/ day.


India is among the worlds largest and the fastest growing market for milk and milk

products. The market size in value terms is rupees 2000 billion (USD 47.6 billion) and

growing at nearly 7.5% annually.

Organized sector handles 10-12 million tonnes of packed liquid milk & 5-7 million

tonnes of value added milk products while the unorganized sector handles 22-24 million

tonnes of value added milk products.

Due to competitive farm gate prices, huge opportunity exists in export of milk and value

added milk products ,especially milk powders to neighboring countries where domestic

production cannot meet demand.

The production capacities have increased of the Dairy by-products such as Casein, Whey

and Lactose, which are exported.

Growth is organized F & G retail has created the demand for processed milk products

with longer shelf life. This has increased the necessity for large continuous equipment

manufacturers, which could help to increase the scale of operations and reduce the

manufacturing cost.

Dairy Scenario with its growing herd-size, steady rise in herd quality, productivity and

increasing mechanization will attain phenomenal growth in near future. Improved herd

health, productivity and milk output are the need of the day.

Latest Developments in Dairy Industry

Indian Dairy Industry is the largest milk producer all over the world, around 100 million

MT Indian Dairy Industries value of output amounted to Rs. 1179 billion in 2004-05

which approximately equals combined output of paddy and wheat. With 1/5th of the

world’s bovine population.

In India the Milch animals constitutes 45% indigenous cattle, 55 % buffaloes, and 10%

cross breed cows

Intensive Dairy Development Programmed (IDDP): The Schemes, modified under this

programmes are on the basis of the recommendation of the evaluation studies which were


launched during Eighth Plan period and is being continued throughout the Eleventh Plan

with an outlay of Rs. 32.49 core for 2009-10.

Strengthening Infrastructure for Quality and Clean Milk Production (CMP): This is

a centrally sponsored scheme which was launched in October 2003, which had the main

objective of improving the quality of raw milk produced at the every village level in the

India.

Dairy Venture Capital Fund- This is introduced in the Tenth Five Year Plan to bring

about structural changes in unorganized sector, which would measure like milk

processing at village level, marketing of pasteurized milk in a cost effective manner,

quality or the up gradation of traditional technology to handle commercial scale using

modern equipments and management skills.

Evolution of Karnataka Milk Federation

Karnataka Milk Federation (KMF) was instituted in 1984, by federating the 13

milk unions in the state and thus forming the state level apex organization. As a co-

operative apex body of the state of Karnataka, it represents dairy farmer’s organization

and also implements dairy development activities to achieve the following objectives:

To build village level institutions in co-operative sectors to manage the dairy activities

To ensure provision of milk production inputs, processing facilities and dissemination of

know-how

Provides assured and remunerative market for the milk produced by the farmer members

To facilitate rural development by providing opportunities for self-employment at village

level, preventing migration to urban areas, introducing cash economy and opportunity for

steady income

Provide quality milk to urban consumers.

List of Co-operative Milk Producers under Karnataka Milk Federation

1) Kolar Milk Union(KOMUL)


2) Bangalore Milk Union (BAMUL)

3) Mandya Milk Union

4) Mysore Milk Union

5) Hassan Milk Union

6) Belgaum Milk Union

7) Shimoga Milk Union

8) Tumkur Milk Union

9) Gulbarga Milk Union

10) Dharwar Milk Union

11) D K Milk Union

12) Bijapur Milk Union

13) Bellary Milk Union

Bangalore Dairy, a joint venture of UNICEF, Government of India and

Government of Karnataka was dedicated to the people of Karnataka on 23rd January 1965

by the then Hon’ble Prime Minister Late Shri Lal Bahadur Shastriji. Sprawling over an

area of 52 acres, the Dairy had an initial capacity to process 50,000 liters of Milk per day.

This dairy was handed over to the ‘Karnataka Dairy Development Corporation (KDDC)’

in December 1975 as a part of Rural Milk Scheme of Mysore, Hassan and Kudige under

‘Operation Flood-II’ and then transferred to ‘Karnataka Milk Federation (KMF)’ in May

1984 as a successor of SDD.

CHAPTER-2

COMPANY PROFILE


Kolar-Chikkaballapura District Co-operative Milk Producers Union Ltd.,

(KOMUL) is Karnataka’s 2nd highest Milk Producing District organization. It is a

District level apex body of milk cooperatives in Karnataka, which aims to provide

remunerative returns to the farmers by eliminating the middlemen and also serve the

interest of consumers by providing quality Milk & milk products, which are good value

for money.

Once the District was named as Land of Gold & Silk, is making inroads in

Quality Milk Production. It is KOMUL first installed “Bulk Milk Coolers & Community

Milking Machines” at Society level in the state of Karnataka to get the quality milk

required for UHT milk packed at Kolar Dairy under the brand name of Nandini ‘Good-

Life.

“Nandini is a brand name for KOMUL, which is operating under KMF”.

2. A. Background and inception of the company.

Animal Husbandry is the most preferred allied activity in the district, which

contributes substantially to the total income of the district and dairy farming forms the


major activity in this sector. Dairy development activity in the district was initiated

during the year 1975 under IDA assistance as a part of Bangalore Milk Union Ltd.

[BAMUL]. Subsequently, the district was bifurcated from the operational area of

BAMUL to form a separate milk union called Kolar Milk Union [KOMUL] with effect

from 01-04-1987.

The KOMUL has a milk processing plant at Kolar with a handling capacity of

25,000ltrs/ day [LPD] and three chilling at Chintamani, Gowribidanur, Sadli with

handling capacity of 1,00,000 LPD, respectively. At Kolar, the dairy is manufacturing

Butter, Ghee,Peda, Curds, Cheese, Masala Butter Milk, and UHT Milk in addition to

pasteurized toned milk and full cream milk. UHT milk is being sold under the brand

name of “Nandini Good Life” and “Nandini-Smart” while all other products are sold

under the brand name of “Nandini”. The KOMUL started marketing of liquid milk in

polythene sachets in entire Kolar district and in a part of Bangalore City since 1994.

Recently it has entered Chennai market also selling nearly 5,000 LPD.

KOMUL Milestones

1987 Bifurcation of the district from an operational area of Bangalore Milk

Union Ltd. (BAMUL) to form a separate milk union

1987 Establishment of first Women Dairy Co-operative Society in the

Union.

1989 Inauguration of Sadali chilling center.

1990 Initiation of milk marketing at Inter-dairy rate.

1991 Inauguration of Gowribidnur chilling center.

1991 KMF handed over chilling centers at Kolar, Sadali, Chintamani and

Gowribidnur to Kolar Milk Union Ltd.

1994 Inauguration of full-fledged dairy at Kolar with a processing capacity

of 1 Lakh Liter per day.

1995 Inauguration of Administrative Building in the Dairy campus.

1998 Inauguration of Cheese Plant.


1999 Union started marketing Nandini Good life Milk.

1999 Expansion of processing capacity of Chintamani chilling center.

2000 Outside the state, entry into the Chennai for Milk marketing.

2001 Inauguration of Animal Disease Diagnostic Laboratory at Chintamani

chilling center campus.

2001 Installation of AMC Units at DCS level.

2001 For the first-time in the history of Karnataka, inauguration of BMC

centers in the jurisdiction of KOMUL

2001 Kolar-Chikkaballapura Dairy certified for ISO-9002 Quality

management System

2001 Union started marketing MastiDahi.

2001 Expansion of Tetrapak Unit.

2001 Inauguration of Community Machine Milking Parlors (centers).

2002 Started implementation of TIFAC Project.

2003 Union bagged National Productivity Council Award again – 2nd

Place.

2004 Union bagged National Productivity Council Award – 2nd Place.

2004 So far the day maximum milk procurement in the history is 3rd

December 2004(7,38,838 Kgs)

2005 Inauguration of 100th BMC centers in the jurisdiction of KOMUL.

2006 Union bagged Best Co-operative Union Award in the state.

2006 Establishment of Producers Welfare Trust.

2007 Expanded UHT Processing Capacity from existing 0.40 LLPD to 1.5

LLPD.

2008- Sep Union started to supply Goodlife milk to Indian army

2008-Dec Union received Energy Conservation Award both from Central and

State Governments.

2008-Dec KOMUL was renamed to “KOLAR CHIKKABALLAPURA

COOPERATIVE MILK PRODUCERS SOCIETIES UNION LTD”


2009-March Installed and Commissioned the following

TFA-A1 500ml Fino Packing machine – 3600 Ltrs/hour TFA-A1 200ml Fino packing machine – 2100 Ltrs/hour

2009 -April Introduced Good life milk 200ml fino packets to market.2009 -May Launched New 100ml Brik UHT variant Milk called “Sampoorna”

with Fat 4.5% & SNF 8.5% to market.

2009 -June KOMUL Achieved the highest milk procurement of 7, 45,446 Kgs of

Milk on 08/06/2009.

2009 1st Place in National Energy Award and 2nd place in State Energy Conservation

Award.

2010 Enhanced UHT plant for 2.5 lakhs litres per day packing

2. B. Nature of business carried

The nature of business of KOMUL is processing of milk and procuring of milk

from the milk producing co-operative society. The plant carries out its functions of

processing the milk and distributing the milk continuously and regularly.

2. C. Vision, Mission, and Quality Policy

VISION

"Wish to grow into a model milk co-operative in the country"

Vision 2020

Kolar-Chikkaballapura will collect 20 Lakh Lts. of Milk/day. Entire Milk will be collected through Bulk Milk Coolers, Computerized systems

at villages. Kolar-Chikkaballapura Milk Quality will be a Global Benchmark. Milk Products manufactured from Kolar Raw Milk will be of International

Standards.


MISSION

Kolar-Chikkaballapura Milk Union continuously procure good quality milk by

providing remunerative price & technical inputs to producers and supply good

quality of Milk & Milk Products to the consumers. It also strives to achieve top

position in the dairy industry by improving the financial position of the union.

To provide assured and remunerative market for all the milk sold by the

farmer members.

To provide hygienic milk and milk products to urban consumers.

To eliminate middlemen and organize institutions owned and managed by the

milk producers by themselves, by employing professionals.

.

Quality Policy

“KOMUL continuously strives to improve their internal quality & operating system by

educating milk producers & motivating work force to achieve customer satisfaction.”

KOMUL has obtained certification for ISO: 9001-2000 Quality Management

System and they are in the process of upgrading the System to ISO-22000.

Quality Policy Objective Statement of KOMUL is as follows:

“Every job operation will be done by everyone in right time & rightly at first time.

VALUES

Honesty Discipline Quality Hard Work Mutual Trust & Belief Transparency Co-operation & Team Work

2. D. Product Profile.


KOMUL (Nandini) is one of the well-known brand in the country. The union offers few

products to its customers. The products are as follows:

Table 2.d.1: Showing Product Profile of KOMUL.

NANDINI TONED MILK:

Karnataka’s highest selling and most preferred milk.3%

fat and 8.5% SNF content make this milk the best choice

for all purposes.

Available in 250 ml, 500 ml and 1 liter pouches across

Karnataka.

Homogenized variant also available5 litre and 6 litre

pouches available in selected markets.

NANDINI HOMOGENISED MILK:

Badam, Pista, Elachi and Banana. Sterilised flavoured milks with rich creamy feel and great taste.

Available in 200 ml take – away bottles.

FULL CREAM MILK:


The Fresh Full Cream Milk available in the brand name

"Nandini" is rich, creamier and tastier milk that contains

6% Fat and 9 % SNF. The Full Cream Milk is suitable

for preparing home-made sweets and savouries and

comes in 500 ml and 1 litre packs.

CURD:

Fresh curd that tastes just like traditional home – made

curd. Can be consumed as such or in combination with

cooked rice or added as an ingredient in certain dishes.

Available in 200g and 500 g pouches

BUTTER:

Made from fresh pasteurized cream for delectable

taste, smooth texture and butter some delight. Tasty

enough to relish in a variety of ways.

Available in 500 g slabs.

GHEE:

Nandini’ ghee is made from pure butter. It is fresh


and pure will a delicious flavour. Hygienically

manufactured and packed in a special pack to retain

the goodness of pure ghee. Shelf life of 6 months

at ambient temperature.

This is available in 200ml, 500ml, 1-liter sachets,

5-liter tins and 15kg tins.

PEDA:

Mouth-watering peda made from pure milk. One

bite is enough to fill the heart with its creamy milk

flavor.

Available in 25 g, 50 g sachets and 100 g, 250 g

pack.

MASALA BUTTERMILK:

Fresh butter milk blended with quality spices to

give that enlivening spicy tang of traditional spiced

butter milk. A drink recommended after meals, for

easy digestion.

Masala buttermilk is manufactured and sold in the

summer season, especially form month of March to

July, the only period during which it gets demand.

Available in 200 ml Tetra Brik packs and 200 ml

pouches.


MILK POWDER:

Dissolve just 3½ tablespoons full in 180 ml of lukewarm water and your glass of delicious sweetened milk is instantly ready. Processed with ultra modern ‘spray drying’ technology that makes the whitener completely miscible in hot or lukewarm water, leaving no lumps behind.

Available in 25 g, 50 g. tear-away sachets, 200 g, 500 g, 1 kg metalized aluminum bowed laminated film pouches, 10 kg HDPE containers and 25 kg craft paper bags with poly liner.

ICE CREAMS:

Creamy delicacy to excite the most joyous moments.

Available in 100 ml cups and 500 ml, 1250 ml, 5000 ml family packs.


ULTRA HIGH-TEMPERATURE HEAT-TREATED MILK:

It refers to ultra-high temperature heat-treated Milk. The concept of UHT milk is absolute

i.e. bacteria free besides retaining the nutritional quality of milk. During the process,

milk is exposed to a temperature of 137ºc for 4 sec and immediately cooled a room

temperature packing it aseptically.

At present two types of UHT Milk are being produced one “Nandini Good Life” with

3.6% fat and 8.5% SNF and another one is “Nandini Smart” with 1.5% fat and 9% SNF.

Nandini Smart being low fat products good for health conscious people. Both the milks

can be stored for at least 45 days at room temperature. It needs no boiling before

drinking on an average 25,000 of both the Milk is being sold per day.

Constituters Fat Minerals Proteins Lactose Water Total Solids

Nandini

Good Life3.6% 3.5% 10.7% 4.3% 87.5% 12.1%

Nandini

Smart1.5% 3.95% 0.75% 4.3% 89.5% 10.5%

It also includes “GOOD LIFE SLIM” Skimmed milk is 99.5% fat free. Cow’s

pure milk, homogenized, skimmed, UHT processed milk, bacteria free in a tamper proof


tetra-fine pack which keeps this milk fresh for 60 days without refrigeration until opened.

It’s available in 500ml pack.

2. E. AREA OF OPERATION

The major area of operation of Nandini is at National level. Nandini (KOMUL) has a

long tradition of maintaining the highest quality standards, rights from selection of raw

milk to processing and packaging of end products.

The reason why its products are much in demand nationally and are sold and

distributed regularly to states like Andhra Pradesh, Tamil Nadu, Kerala, Maharashtra,

Goa and all over the Karnataka.

In Sep 2008 KOMUL started supplying good life milk to Indian army.

2. F. OWNERSHIP PATTERN

KOMUL is a District level Co-operative society, which operates under KMF

(State level Co-operative society).

SL No. CATEGORY NO. OF SHARES % OF SHARE

HOLDINGS

1 Promoters holdings

Promoters

8,60,00,000 94.16

2 Non-promoters holdings

Institutional investors i.e.

banks,financial

institutions

35,65,000 3.90

3 Others

Public

12,00,000 1.31

4 Employees 5,62,700 0.63

Total 9,13,27,700 100


.

2. G. COMPETITORS INFORMATION

KOMUL has various competitors in the market such as: -

Nandi

Tirumala

Heritage

Swastik

Shruthi

Arokya

Nilgiris

Jersey

Dodla

NANDI:

Nandi milk products Pvt ltd was started in the year 1997. It was under the care of

Sri.S.P.Y.Reddy. The industry is located at Nandyal-kurnool highway road in Kurnool

district. It is an industry that procures milk from four districts. From the year 1997-2009

the company has developed the business day to day. The company not only improves the

brand name but also it is overtaking the competitor’s brands.

TIRUMALA:

Tirumala Milk Products Private Limited is a professionally managed company

engaged in the manufacture of a wide range of Dairy Products which include Milk in

Sachets, Sweets, Flavored Milk, Curd in Cups and Sachets, Milk Powder, Butter, Ghee

and Butter Oil both in bulk as well as in consumer packs.


Established in 1998, Tirumala Milk Products (P) Ltd. is one of the fastest growing

Private Sector Enterprises in India with a team of dedicated professionals. The company

has one of the most modern and versatile plants in the Indian Dairy Industry with state-

of-the-art technology. Tirumala Milk Products (P) Ltd. products meet stringent quality

control tests and cater to the premium segment of the market for Dairy Products.

Tirumala Milk Products (P) Ltd. is presently implementing an expansion programme and

proposes to launch new products in the near future.

Presently Tirumala market presence is in Andhra Pradesh, Karnataka and Tamil

Nadu. They handle 7 Lakh liters of milk per day in our packing stations and dairy plant,

which is the single largest plant inthe state of Andhra Pradesh. Tirumala Registered

Office is located at Narasarao Pet, GuturDist and Corporate Office is located at

Ameerpet, Hyderabad.

Tirumala Milk Products (P) Ltd. sells a rich, varied offering of nutritious, tasty

and healthy food products under well-known brand. Taste, health, convenience, reliability

and vitality for consumers are key characteristics.

HERITAGE:

The Heritage Group, founded in 1992 by Sri Nara Chandra Babu Naidu, is one of

the fastest growing Private Sector Enterprises in India,with four-business division’s viz.,

Dairy, Retail, Agri, and Bakery under its flagship Company Heritage Foods (India)

Limited (HFIL). The annual turnover of heritage Foods crossed Rs.1096 crores in 2010-

2011.

Presently Heritage’s milk products have market presence in Andhra Pradesh,

Karnataka, Kerala, Tamil Nadu, Maharastra and Orissa and its retail stores across

Bangalore, Chennai and Hyderabad. Integrated agri operations are in Chittoor and Medak

Districts and these are backbone to retail operations and the state of art Bakery division at

Uppal, Hyderabad, Andhra Pradesh.

Dodla


Dodla Dairy Limited a Public Limited company established by a well-known family from

Nellore district of Andhra Pradesh in the year 1998. It Procures, Process and sell milk

and milk products across 66 locations in India. The Company Head Quarter is located at

Hyderabad, Andhra Pradesh of India.

Dodla Dairy is an ISO 22000 : 2005 and ISO 50001:2011 (EnMS) Certified

Organization. The company is having 7 state of art technology Processing Plants, 28

chilling centres, 15 Bulk Milk Chillers and 17 Associate Chilling Centers . The company

has a wide distribution network across pan India. The products and services are offered

through 16 Sales offices.

The company offers a wide range of Milk Products Comprising Fresh Milk , Butter,

Ghee, Paneer, Curd, Flavoured Milk, Milk sweets, Ice Cream and Skim Milk Powder. All

the products are conveniently packed in different pack sizes and types to suit various

needs of consumers.The company has grown multifold rapidly during the past one and

half decade and has become a popular dairy company in India. The consistent growth of

the organization reflects the consumer confidence and strength of the company.

The company has gained the competitive advantage over the other players by delivering

the highest Quality dairy products to the consumers. Now, the company is prepared to

face the future challenges by upgrading its systems and infusing new technology .

2. H. INFRASTRUCTURAL FACILITIES

KOMUL dairy is situated in the industrial estate besides the national highway

(NH-4) a prime locality occupying a vast and ample space of 25 acres of land it is noise

free zone.

The main building consists of administrative department, finance department and

MIS department. Beside the main building, a canteen and other building where marketing

and purchase departments are situated. The internal parts of the departments are arranged


in such a way that there is sufficient space for office work and arrangements are made for

proper ventilation.

Other Facilities

Clean milk production

Emergency facility

First aid facility

Mobile veterinary facility

Training and development facility to DCS(Dairy Co-Operative Societies)

Vision programmed-under taken from NDDB(National Dairy Development Board)

Mass Vaccination programme against Foot and Mouth Disease.

Vaccination against Thelariasis.

Animal Disease Diagnostic Laboratory.

Fodder development programmes

2. I. ACHIEVEMENTS/AWARDS

In recognition of the varied initiatives, KOMUL was conferred with several

awards and accolades. Some prominent awards received are as under

KOMUL bagged National Productivity Council Award – 2nd Place.

KOMUL bagged best co-operative union Award in the state.

KOMUL achieved the highest milk procurement of 7, 45,446 Kgs of milk on 8/06/2009.

1st place in National Energy Award and 2nd place in State Energy Conservation Award.


Kolar-Chikkaballapura Dairy with 3 Milk Chilling Centers is certified for ISO-9001:

2000 quality management system and they are in the process of upgrading the system to

ISO-22000.

Winner of “Best Productivity Awards”

Achievements

1. Community Milking Machines first time in India.2. Highest number of BMCS in the village after Gujarat.3. UHT Tetrapak plant first in Karnataka with variants “Good Life”, “Smart”, &

“Slim”.4. Union has implemented ‘Rain-Water’ Harvesting System.5. Union has implemented “Total Energy Management”at Dairy.6. Kolar-Chikkaballapura Dairy with 3 Milk Chilling Centers is Certified for ISO-

9001: 2000.7. Farmers Health Insurance.-”Yashaswini”

2. J. WORK FLOW MODEL

Manufacturing process (End to End)

Chart 2.J.1: Showing Work Flow Model


RAW MILK

MILK INLET

CHILLED WATER INLET

PASTURIZATION COOLING SYSTEM

Preliminarily the raw milk is collected in the stores department. Then the milk

goes through a process in production department where the milk and milk products are

produced. Produced products are clearly checked and packed in accordance to the quality

required. This process will carry on by quality control department. Finally the products

which are ready for sales are sent to sales and marketing department to distribute it to the

consumers through various distribution channels like milk parlors, milk depots, and other

retail outlets.

2. K. FUTURE GROWTH AND PROSPECTS

Future growths of KOMUL are as follows:

To establish a high- tech production plant in chikkaballapura district.


CHILLED WATER INLET

PASTURIZATION COOLING SYSTEM

MILK STORAGE TANK

MILK INLET

CREAM MILK

MILK OUTLET

PACKAGING

BUTTER SECTION

GHEE

To establish hi-tech parlors at chintamani.

To establish ATM (All Time Milk) in all taluk levels.

Expansion of kolar chilling center.

To introduce clean milk production (CMP) at all levels.

To introduce Dairy Animal Management (DAM).

To introduce Total Quality Management (TQM) program in all levels.

To introduce Total Energy Management Program (TEM).

To introduce the cluster concept to increase the consumption.

Comprehensive training programs for DCS (District Co-operative Society) personnel and

milk union personnel.

CHAPTER-3

MCKINSEY’S 7S MODEL

The 7s model is better known as Mc-Kinsey’s 7s, because the two persons who

developed this model, Tom peters and Robert waterman, have been consultants at Mc-

Kinsey’s and co. at that time. They published their 7s model in their article “structure is

not organization” (1980) and in their books “the art of Japanese managements” (1981)

and “In search of exclusive” (1982).

Chart 3.1: Mc-Kinsey’s 7s Frame work


The model consists of seven elements. Those seven elements are distinguished

in so called hard S’s and soft S’s. The hard elements are feasible and easy to identify.

They are strategy, structure and system of the organization. The four soft S’s are hardly

feasible. They are highly determined by the people at work in the organization i.e., style,

staff, skills and shared values

3. a. STRUCTURE:

The structure followed in KOMUL is Functional Structure. It ensures maximum use

of principal of specialization. Since the workers are performing a limited number of

functions, their efficiency would be very high.

Chart 3.a.1: Showing Organization structure


KOMUL mainly has the following departments:

1) Procurement and input department

2) Production department

3) Quality control department

4) Marketing department

5) Finance department


6) Management information system department

7) Administration and Personnel department

1) PROCUREMENT AND INPUT DEPARTMENT

The operational efficiency is reflected on procurement prices paid to the member

producers. KOMUL is offering the most remunerative milk procurement price to member

producers. Annual average Milk procurement for the years 2009-2010 is 7.30 lakhs liters

per day. During the seasonal time it has procured to the peak of 8.0 lakhs liters per day.

2) PRODUCTION DEPARTMENT

The production department of the Kolar dairy performs the function of developing

procedures to transform a set of input elements of raw material like milk, money,

machine into specified output like curds, butter, ghee, Peda, masala butter milk etc. in

assigned quality and best in order to achieve the organizational goals successfully.

3) MARKETING DEPARTMENT

KOMUL has a well established marketing department, under the control of the

marketing manager. The manager is responsible for marketing and sales of milk and milk

products. The manager is responsible for selling to the target markets, framing the plans

and policies to achieve the marketing goals and manager is also responsible for

forecasting the demands for their products in the market.

4) FINANCE DEPARTMENT

Finance department is very important in an organization. It is not just confined to

raising funds, but extends beyond it to control the over utilization of funds and helps to

monitor the utilization of funds rose.

This function influences the operation of other essential functioning areas of the firm

such as production, marketing and personal.


5) ADMINISTRATION AND PERSONAL DEPARTMENT

The administrative manager heads the administration department. The manager comes

under the general manager. The administrative department of KOMUL holds all the

official work. The administrative manager reports to the general manager, then the

general manager to the managing director (who is the chief of administrative

department).

6) QUALITY CONTROL DEPARTMENT

The quality control department in the plant performs the function of using the best raw

materials and other inputs, measuring and checking for maintaining then assured

standards. KOMUL represent quality, purity and freshness. The quality policy of

KOMUL is to maintain a leading position and also to build high level of customers over

their products by providing high consumer surplus.

3. b. SYSTEM:

A system refers to formal process and procedures are used to manage the

organization. The systems followed in KOMUL are as follows.

INVENTORY CONTROL SYSTEM:

KOMUL maintains FIFO (first in first out) method to control the inventory in the

plant. Here the inventory is maintained correctly as it contains only perishable products.


MILK BILLING SYSTEM:

KOMUL maintains a weekly milk billing system. It has four cycles in a month.

They are from 1-7, 8-15, 16-23 and 24 to end of the month.

COLD STORAGE SYSTEM:

KOMUL has a cold storage machine called silo machine where the milk is stored

at 4degree to 5degree Celsius.

3. c. STRATEGY:

Strategy is a plan or course of action in allocating resources to achieve identified

goals over time.

PRICING STRATEGY:

Price is an important element in the marketing mix. The right price can be

determined through research and by adopting test marketing techniques. A price policy is

thus a standing answer of the firm. If competition is mainly on price basis, then each

company prices its product at the same level as its products at same level of prices of

competition.

DISTRIBUTION STRATEGY:

The Union has their own vehicles for distribution of milk to various places which

is an advantage for the company. The milk distribution vehicles supply milk even during

times of lorry strikes without any delay.

PROCUREMENT STRATEGY:

The Union procures milk from the farmers by giving fair prices to them.

Procurement of milk is twice a day, morning and evening. Milk is collected in dairy

which is set up in every village from their milk is taken to the Union.

3. d. STYLE:


Style is the way in which key managers behave in achieving organizational goals,

that is the management style.

The leadership style followed in KOMUL is PARTICIPATIVE STYLE.

Participative leadership style is the styles where the subordinates are given equal

importance in participation of improvising the organization and also in the betterment of

the organization.

The decision taken by the top management is in coordination with the

subordinates. In the organization, some of the decisions are taken with the mutual

consultation of the top management and the middle level management.

These decisions are through mutual exchange of knowledge and the experience of

the employees. The top management consults their immediate subordinates in case of any

important decisions, which are of strategic in nature.

Implementation:

Participation in the meeting: Employees must take part in any meeting conducted by

the company to discuss company’s future plans. And employees are allowed to express

their opinion, view and ideas.

Recognition programme (Office day): Employees who have suggested the best ideas in

making a decision related to any functional area and every year management select best

employee, they will be awarded by both monetary and non-monetary benefits.

3. e. STAFF:

Staff refers to the number and type of people employed by the organization.

The people in the organization are very dedicated and work towards the improvement of

the organization.

Staff members as on 01 January 2012

Type of staff Number of staff Duties and Responsibilities

Managerial staff 98 Manages the funds

Handling the difficult

situations.

Supervising.


Planning.

Getting things done.

Technical staff 362 Providing assistance to lower

cadre.

Manufacturing of products in

time.

Ensuring quality.

Training the staff.

Non-technical staff 760 Ensuring quality.

Examining the work done.

Unskilled 300 Maintaining cleanliness

Providing assistance to superior

staff.

Ensuring safety

Providing information to top

level.

TOTAL 1520

3. f. SKILL:

A skill refers to the fact that employees have the skill needed to carry out the company’s

strategy.

Here the employees are further divided into four categories.

Type of staff Number of employees Skills required


Managerial staff 98 Leadership skills

Conflict resolution skills

Decision making

Communications skills

Managerial skills

Learning skills

Analytical and logical thinking skills

Problem-solving management

Technical staff 362 Computer knowledge

Secretarial skill

Accounting skill

Non-technical

staff

760 Communication

Writing

Managerial skills

Learning skills

Unskilled 300 Follow the instructions

Complete the work which is assigned

in time.

This first category contains the people who are in the top-management level the second

category consists of the supervisor’s office assistants etc. The third category consists of

the employees at the operational level.

The first category consist of the people who are in the decision making process in

KOMUL these people are highly qualified.

The second category is related to office work and fieldwork. These people are also

trained in Computer Applications, secretarial skills, accounting skills etc.


The third level and forth level people consist of the employees who are actually into the

operation these People are also trained into fields like checking the quality of milk

processing packing etc.

STRATEGIES TO COVER SKILL GAPS :

KOMUL co-operative society conducts training program i.e both on the job

training and off the job training which increases the knowledge and skill of the employee

while performing the job.

On-the-job training method

KOMUL provides on the job training according to the need. For this method of training,

they invite experts from various training institutions. This type of training will be

conducted once in three months/six months/a year. On-the-job training method, which is

adopted by KOMUL, is coaching.

Coaching: The trainer is placed under a particular supervision who functions as a

coach in training the individuals according to organization requirements. To give

coaching they invite experts from National Dairy Development Board (NDDB) and

sometimes top managers of the organizations.

Off the job training

Under off the job training method, trainee is separated from the job situation. Here

employees can place his entire concentration to learn rather than spending time in

performing job.

Vestibule training

Under this method, actual work condition is stimulated in a classroom. KOMUL sends its

employees to National Dairy Development Board (NDDB), confederation for Indian


industries (CII) and NDDB Anand for technical training. This type of training is

commonly used for individuals for technical and clerical jobs.

3. g. SHARED VALUES:

The core or fundamental values that are widely share in the organization and serve as

guidelines that are important, these values have great meaning because they focus

attention and provide broader sense of purpose.

The values of the organization are

Honesty

Discipline

Quality

Hard Work

Mutual Trust & Belief

Transparency

Co-Operation & Team Work

CHAPTER - 4

SWOT ANALYSIS

SWOT analysis is the scan of internal and external environment it is an important

part of the strategic planning process. Environmental factors internal to the firm usually

can be classified as Strengths (S) or Weaknesses (W), and that external to the firm can be

classified as Opportunities (O) or Threats (T). Such an analysis of the strategic

environment is referred to as a SWOT analysis.


The SWOT analysis provides information that is helpful in matching the firm's

resources and capabilities to the competitive environment in which it operate. As such, it

is instrumental in strategy formulation and selection. The following diagram shows how a

SWOT analysis fits into an environmental scan:

Chart 4.1: Swot Analysis

STRENGTHS


Biggest milk co-operative union in Karnataka

Established brand of products, providing quality products from a long time.

KOMUL attends to the complaints of consumers immediately.

Strong physical infrastructure to support current and future requirements.

KOMUL pays the highest price for the milk collected from farmers in India and loyalty

among the brand.

Popular brand known from many years.

Various new technologies implemented for production of milk.

Timely delivery.

The company is having functional structure, this helps in effective management and

control, and there is distribution of work.

WEAKNESS

Less focus on innovative new products and no R&D programmes.

Slow decision making process and high manpower overheads.

Rivalry among sister unions.

Promotions strategies are not effective.

Inadequate Knowledge about brand positioning strategies.

Due to Government interference between company management activity there is a delay

in successful strategy

Lack of flexibility in system.

Not concentrating on advertisements.

Lack of personalized service to channel members.

OPPORTUNITIES

The union is facing challenges from the private entrants, who are mainly thriving on


unfair trade practice. They procure milk at less cost, without bothering the welfare of the

producers and without extending any technical inputs for improving milk production.

They market milk by resorting to unhealthy and unethical practice deceiving the

unsuspecting consumers. The union wants to counter this in a positive manner by trying

to improve its efficiency of operation and market promotion. It wants to become well

trenched in the market as a “market leader”

They expand their business because of the wide market for the large number of

customers.

KOMUL Provides employment opportunity for people.

In joint Co-operation with KMF the union is trying to market its UHT Milk to South

Asian Countries like SriLanka, Singapore etc.

THREATS

Competition from private co-operative dairies.

Entry of MNC’S into dairy industry.

Lack of awareness about the various products of KOMUL among the people.

Unethical marketing practices of private brands in the market.



Part a Komul

Documents

community

national energy

estimated

operative

full cream

nandini good

indian dairy

masala butter