The Hindu Business Line : Amul extends milk outsourcing to hike sales

IN a bid to leverage the Amul brand on a wider national scale, the Gujarat Co-operative Milk Marketing Federation Ltd (GCMMF) has now extended its milk sourcing operations outside Gujarat.

Till recently, the Rs 2,882-crore federation's role was limited to marketing milk and dairy products of its 12 constituent district milk unions. While GCMMF did procure small quantities from co-operatives outside Gujarat such as the unions in Salem (Tamil Nadu), Visakhapatnam (Andhra Pradesh) and even Sikkim, these were, however, essentially for niche products such as long-life milk and Gouda cheese.

But that has now changed. Having launched Amul milk in Kolkata on December 16, GCMMF claims to have already reached a volume of 80,000 litres per day (LPD) — the entire quantity of which it is sourcing from the West Bengal Co-operative Milk Federation and the Visakhapatnam union.

The Managing Director of GCMMF, Mr B.M. Vyas, said: "We hope to touch three lakh LPD in a month's time, which will make us the city's No. 2 player behind the West Bengal federation-owned Mother Dairy (3.5 lakh LPD) and the Metro Dairy (2.5 LLPD)."

Earlier, on December 8, GCMMF also entered the liquid milk market in Jammu and Kashmir through a joint venture with the hitherto defunct State Federation.

Currently, about 13,000 LPD is being procured from the State, of which 9,000 LPD is being marketed within J&K under the `Amul Snowcap' brand and the rest going to the Delhi market.

Although bulk of the 1.8 lakh LPD is still being procured from the Mehsana union in Gujarat, Mr Vyas said that in the coming days, more milk will be sourced from J&K and other neighbouring northern unions.

GCMMF is also looking at Jammu and Kashmir as a sourcing base for supplying Amul milk to the Army.

Apart from these, GCMMF is also procuring from the Maharashtra and Karnataka Milk Federation for supplying to the Mumbai market, where it is now doing sales of three lakh LPD.

The federation is also sourcing milk from the Ujjain Dairy in Madhya Pradesh for catering to the Nagpur and Raipur markets.

"We are planning to launch Amul milk next in Jaipur, Kanpur, Hyderabad and Chennai. And for all these, we would be buying mainly from the concerned co-operative milk federations," Mr Vyas added.

GCMMF's member unions procure, on an average, about 50 lakh LPD of milk, of which around 28 LLPD is marketed as liquid milk, including 8-9 lakh LPD outside Gujarat. An increasing chunk of sales outside Gujarat is expected to come in future from outsourced milk, which also works out as a cheaper option.

GCMMF's new strategy of using Amul's brand equity for marketing the products of not only its own member unions, but also that of other federations, is being seen to be a response to the National Dairy Development Board's (NDDB) efforts to similarly leverage its Mother Dairy brand on a national scale.

Mother Dairy, which markets over 15 lakh LPD of milk procured from various State federations in Delhi, has now entered the Mumbai market.

"We launched our milk only on December 15 and expect our volumes to go up soon," a Mother Dairy spokesperson said. The NDDB-owned subsidiary also plans to set up a dairy near Bangalore.

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