The Hindu Business Line : MDFL pulls out of JV with Milma

MOTHER Dairy Foods Ltd (MDFL), a subsidiary of National Dairy Development Board (NDDB), on Wednesday called off its joint venture with the Kerala Cooperative Milk Marketing Federation (Milma), citing `continuing discordance amongst the milk unions.'

"The JV will cease business operations on close of day of June 30. With effect from July 1, the operations will revert to the Kerala Milk Federation/Regional Milk Unions," a statement from MDFL said.

The marketing personnel assigned to the joint venture will stand repatriated to Milma or milk unions, the statement said.

Though the State Government and Ernakulam Milk Union were in favour of continuance of the venture, the continuing discordance among the milk unions has led to MDFL deciding to disengage itself from the venture, it said.

Milma had earlier announced its decision to call off the joint venture after a general body meeting of the co-operative adopted a unanimous decision to this effect.

The joint venture, Milma Foods Ltd (MFL), was set up in June last year in order to handle the marketing for Milma. MDFL had a 51 per cent stake in the venture with Milma holding the balance.

Milk producers' unions in Thiruvananthapuram and Malabar had attributed the operations losses they incurred to the joint venture arrangement with MDFL.

Mother Dairy said issues relating to transfer of the marketing staff of the milk unions to the joint venture, and access of the quality control staff to the union dairy plants were hindering the alliance with Milma.

The Milma Chairman had requested for time till June 30 to take a decision on all outstanding issues.

Even as a response from the Chairman was awaited, there were press reports that unfairly targeted the joint venture, said the MDFL statement.

"In view of the Federation's official clarification, stating the factual position, MDFL has decided to part on an amicable note," it said.

Despite various limitations, the joint venture performance was creditable, MDFL claimed. Liquid milk sales grew by 7.5 per cent in volume and by 12 per cent in value.

Ghee sales grew by 21 per cent and curd sales 13 per cent, while total sales increased by 13 per cent to Rs 395 crore from Rs 350 crore.

More Stories on : Dairy & Dairy Products | Alliances & Joint Ventures | Kerala

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