The Hindu Business Line : GCMMF aims at Rs 500-cr rise in sales

IN keeping with its target of achieving higher economies of scale through increased market penetration and improved backward linkages, the Gujarat Cooperative Milk Marketing Federation (GCMMF) is looking at about Rs 500-crore increase in sales this fiscal.

The federation, which posted a mere Rs 136-crore increase in total sales at Rs 2,881.96 crore in 2003-04, says the new product portfolio and changes made over the last decade in the way GCMMF operates will ensure that this fiscal sales go up by close to the Rs 500-crore figure.

However, if one were to discount the consignment sales business (GCMMF was the sole selling agent of Dhara cooking oil till April 2003), the federation's sales actually went up by about Rs 478 crore even last fiscal. So, what it is targeting in 2004-05 is actually a repeat performance.

"Based on the work done in the last decade, the changes that we have built in the organisation at all levels and with the new portfolio of products we have developed, I feel confident of maintaining our market share growth. I also feel confident that the federation will be able to increase its sales further by close to another Rs 500 crore in the current year," the GCMMF Chairman, Mr V. Kurien, said in the federation's latest annual report.

While exhorting the federation members to take up challenges thrown up by an increasingly competitive market, Mr Kurien said the recent introduction of some reduction in the subsidies provided by the European Union on products such as butter oil, skimmed milk powder and white butter will marginally reduce the fear of "European players competing for our domestic market from a position of price advantage. It also opens for us the opportunity to compete with European producers on a level playing field in neighbouring markets."

Which is why GCMMF is eyeing Rs 100 crore from exports this fiscal, says the Managing Director, Mr B.M. Vyas.

Asked from where he expects the projected Rs 500-crore sales growth to come, Mr Vyas told Business Line,

"We will continue to deepen market penetration with the existing product portfolio. So, I expect a 100 per cent jump in the long-life (Ultra Heat Treated) milk sales as well as in the sales of Amul Dahi, 150 per cent increase in dairy cream offtake and 20 per cent each growth in ice creams, butter and cheese. Again, in the fresh milk segment, GCMMF is expecting at least 40 per cent growth this year."

Last fiscal, the federation posted a 50 per cent growth in consumer pack export volumes but its overall export turnover fell by 40 per cent since it diverted skimmed milk powder stocks to Delhi at the Government's request to tide over severe milk shortage.

However, this time around it is keen to make its mark not only in the domestic market but also overseas on the strength of its product portfolio and marketing muscle.

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