The Hindu Business Line : NDDB winds up Mother Dairy Foods

THE National Dairy Development Board (NDDB) has wound up Mother Dairy Foods Ltd, the granddaughter company created by it to forge marketing joint ventures with individual State co-operative dairy federations.

Mother Dairy Foods has been merged with NDDB's direct subsidiary, Mother Dairy Fruit and Vegetable Ltd, which itself has been re-christened as Mother Dairy Fruit and Vegetable Private Ltd.Mother Dairy Fruit and Vegetable was set up as a 100 per cent owned subsidiary company of NDDB in April 2000, by corporatising the Mother Dairy plant in Delhi and the fruit and vegetable project (which marketed horticultural produce under the `Safal' brand), which were both until then simply `managed units' of the Anand-headquartered board. Subsequently, it was made into a holding company for three other companies — Mother Dairy Foods Processing Ltd, Mother Dairy India Ltd and Mother Dairy Foods. While all the manufacturing units of Mother Dairy Fruit and Vegetable (including the dairy in Delhi and horticultural processing facilities in Delhi and Mumbai) were transferred to Mother Dairy Foods Processing, Mother Dairy India was made the marketing arm for the `Mother Dairy' brand products on an all-India scale. Mother Dairy Foods, in turn, was created for establishing 51:49 joint ventures with state-level co-operative dairy federations to enable better marketing of the latter's products.

The 2003-04 annual report of NDDB, however, lists only two subsidiaries of Mother Dairy Fruitand Vegetable Private Ltd . These are Mother Dairy Food Processing and Mother Dairy India.

Mother Dairy Food's role has been taken over by the holding company, i.e Mother Dairy Fruit and Vegetable Private Ltd, which has four joint ventures.

These include Milma Foods Ltd, Aanchal Milkfoods Ltd, Parag Milkfoods (UP) Ltd and Maathasri Milk Products Ltd, which have been formed in partnership with the respective dairy federations of Kerala, Uttaranchal, Uttar Pradesh and Andhra Pradesh.

NDDB officials, who did not wish to be identified, said the decision to wind up Mother Dairy Foods had been taken "as it is not serving any real purpose". Even the joint ventures, which were originally established by it and are now under the holding company, have made little headway on the ground, with federations such as Kerala pulling out on grounds that the new marketing arrangements had not delivered the desired results.

Significantly, for the first time, the annual report has explicitly referred to the `Mother Dairy Group', with its turnover being put at Rs 1,331 crore during 2003-04.

Apart from Mother Dairy Fruit and Vegetable , NDDB's other `direct' subsidiaries are Dhara Vegetable Oil and Foods Company Ltd (DOFCO), IDMC Ltd and Indian Immunologicals Ltd (IIL).

DOFCO's turnover during 2003-04 amounted to Rs 283 crore, which is below the Rs 338 crore recorded in 2002-03 and the peak Rs 382-crore achieved in 1998-99. On the other hand, the respective sales figures of IDMC and IIL have risen from Rs 40.19 crore and Rs 54.7 crore in 2002-03 to Rs 46.50 crore and Rs 65.7 crore during 2003-04.

The latest annual report also provides data on the total investment of NDDB in its own subsidiary companies vis-à-vis the various milk and oil co-operatives. As on end 2003-04, NDDB's outstanding investment in its subsidiaries totalled Rs 747.84 crore, comprising loans of Rs 460.45 crore and Rs 287.39 crore by way of subscription of shares. This is as against the corresponding investment figure of Rs 655.83 crore in 2001-02 (Rs 435.95 crore loans and Rs 219.88 crore equity).

Over the same period, NDDB's outstanding investment in co-operatives has dipped from Rs 1,227.58 crore to Rs 946.70 crore, indicative of the increased profile of subsidiary companies in its operations.

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