The Government is likely to consider handing over assets of loss-making Delhi Milk Scheme (DMS) to the Gujarat Co-operative Milk Marketing Federation (GCMMF) on lease basis.

Agriculture Minister Sharad Pawar is meeting GCMMF officials on Thursday to discuss the modalities of such an arrangement, sources said.

GCMMF, which owns the Amul brand, had recently reiterated its willingness to acquire DMS, which comes under the Agriculture Ministry. DMS has around five per cent market share in Delhi’s pouched milk market.

When asked, GCMMF Chairman Vipul Chaudhary said: “The Agriculture Minister is positive about our move. We will be seeking a long-term lease of the facilities”.

DMS has a milk processing and packaging capacity of six lakh litres a day and has 400 milk vending booths across Delhi.

Chaudhary said that modalities of the takeover arrangement are likely to be discussed on Thursday.

“DMS has some 800 employees and their production is about two lakh litres a day, which is unviable. We will also discuss options to accommodate or absorb DMS employees”

Chaudhary told reporters after inaugurating India’s largest dairy facility at Dharuhera in Haryana.

DMS, launched in 1959 with an objective to provide milk for Delhi citizens, has been running into losses since its inception mainly because it has been operating as a development agency, not as a commercial outfit.

Industry sources said DMS currently sells around two to three lakh litres in pouches in Delhi.

The total market for pouched milk in Delhi is estimated at 50 lakh litres, where Amul sells about 24 lakh litres.

The acquisition of DMS will augment Amul’s direct presence in Delhi and also expand its processing capacity.

Delhi is the largest milk market for Amul, where it has grown its pouched milk sales to around 24 lakh litres a day from around 25,000 litres about six years ago.

(This article was published on October 24, 2012)
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