CHAPTER – IIICOMPANY PROFILE

COMPANYPROFILE

Introduction to Krishna District Milk Producers Mutually Aided Cooperative

Union Limited:

The Krishna District has great potential for milk production with a

substantial marketable surplus to tap. The market oriented milk production is the key livestock

activity to generate stable income for the farmer. About 90 percent of rural households are

directly concerned with livestock production. 40 percent are mainly dairy oriented. It is

livelihood security to the rural poor and buffers the risks due to crop failure

The Original dairying in Krishna District commenced in 1965 by the state

Government with the assistance of UNICEF.(United Nations International Children Emergency

Fund). Under a pilot project named INTEGRATED MILK PROJECT – HYDERABAD AND

VIJAYAWADA (1960) a Milk supply scheme was introduced in 1965 to organize milk

collection from the Villages, to process at chilling at Vijayawada and Hyderabad. The milk

supply Scheme was a great success with its services to the producers and quality supplies to the

consumers. The initial procurement network was gradually extended to all over the district with

in a span of 5 years. The “Milk Products Factory” first of its kind in south India was established

and commissioned in Vijayawada by 1969.

The company got ISO 22000-2005 and ISO 14000 Trademark for its quality of

milk. The company recently made record sales of 1.64 Lakhs its/day where as its previous sales

record was 1.45 laksh its/day.

VISION

“Farmer’s prosperity through technical innovations and customer orientation with

specific focus on quality and cost.”

MISSION

“ Dairying in the district to be the major instrument of strengthening rural economy and

making available safe milk and milk products.”

QUALITY POLICY:

“Aiming to be a technologically advanced dairy with global outlook providing products

and services of highest quality delighting the customers.”

Most of the Village Dairy Cooperative societies are viable and managed by the producer

members receiving better technical know-how. The Government has enacted APMACS Act,

1995. (Andhra Pradesh Mutually Aided Cooperative Societies Act, 1995), which provides

autonomy to the cooperatives. As pr the policy and directives from the state

Government/Federation, The Dairy Cooperatives registered under APCS Act, 1964 were

converted in to APMACS ACT, 1995. The Krishna Milk Union in July 2001 in consonance with

the wishes of its member producers.

Elections are being held as per byelaws to the Board of Management of Krishna Milk

Union under APMACS Act, 1995.

ORGANISATION STRUCTURE:

Staff Position

Managing Director 1

Deputy Director 2

Senior Accounts Officer 1

Dairy Managers 6

Asst. Dairy Engineers 2

Quality Control Officers 1

Asst. Dairy Manager 15

Fodder Development Officers 1

Junior Engineer 4

Technical Staff 58

Transport 30

Finance 20

Administration 70

Field Staff 55

Others (Non-technical) 304

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TOTAL 570

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ORGANISATION CHART:

Diagram-3.1

General Body

Board of Management

Managing Director

Production PM Finance Personal QC Stores MIS APS

Organization:

Integrated Milk Project (1960)

Dairy Development Department (1971)

AP Dairy Development Corporation Ltd (1974)

AP Dairy Development Co. op Federation Ltd (1981)

There was a big retinue of 1850 staff in different categories working under the dairy units

in the District under the administrative control of AP Dairy Development Corporation (APDDC)

a stat Government Undertaking in 1974.

The nationwide strategic and structural changes organized for Dairy Development activities

across the nation have brought the dairy units under the cooperative set up in Andhra Pradesh in

1981.

The replication of Anand Pattern Dairy Cooperatives in Krishna District has its beginning

with the all out support of NDDB. Primary Milk Producers cooperative Union at district level

and AP Dairy Development Cooperative Federation at State level have come in to being.

Enormous infrastructure financed by NDDB under Operation, processing and marketing in the

District.

RANKING OF THE DISTRICT IN ANDHRA PRADESH :

Milk production - IIIrd

Processing - IVth

Marketing - IIIrd

Krishna District has milk procurement ranging from 45,000 Kgs per day from 1969 to 1998

District being buffalo concentrated has wide procurement functions. The District Co-Operative

Milk Union provides the following inputs to the farmers for increasing milk production.

Premixed cattle feed

Cattle insurance at 2/3 subsidies

Eternity first aid facilities

Fodder seeds at subsidized rates

Animal vacancies and medicines at subsidize prices.

A1 facilities

Breading bulls

Extension services.

PRODUCT MIX OF KRISHNAUNION

Market Milk:

Vijaya Gold Vijaya Special Vijaya Premium

Vijaya Economy Vijaya Low Fat

Long Life Products

UHT Milk in 1pack UHT Milk in200ml pack

UHT Low Fat Milk

Fresh Milk Products

Basundi Curd LassiButter Milk

Sterilized Flavoured Milk

Fresh Milk Products

Cooking ButterMilk Cake Skim Milk Powder

PaneerDoodhPedaGhee

Existing Infrastructural Facilities in KrishnaUnion.

Table-3.1

S.NO Name of the

FACILITY

UNIT CAPACITY

I MILK CHILLING

1 Pammarru Liters/Day 50000

2 Verrayalanka Liters/Day 18000

3 Gudlavalleru Liters/Day 18000

4 Hanuman Junction Liters/Day 18000

5 Chillakallu Liters/Day 12000

6 Tiruvuru Liters/Day 12000

Total Chilling: 128000

II MIL PROCESSING Lakh Liters/day 2.50

III Ghee Manufacture MITs/Day 18.00

IV Milk Drying MITs/Day 22.00

V U.H.T.Milk MITs/day 45000

VI CATTLE FEED MIXING FACILITY

1 Budhavaram MITs/Day 30.00

2 Gudlavalleru MITs?day 18.00

Total: 48.00

MILK PROCUREMENT:

Milk is being procured twice a day from about 830 villages in the district organized

through 29 routes and 6 chilling besides getting raw milk directly to the factory from certain

villages in a radius of 150 KM around Vijayawada. Among 480 centers, about 431 are registered

societies and under Anand Pattern.

MILK PRODUCT FACTORY – VIJAYAWADA:

DATA SPECIFICATIONS:

Area occupied by the factory : 27.3 Acres

Value of factory building : 400 Lakhs

Money given by UNICEF : 53 Lakhs

Investment on equipment : 600 Lakhs

BUILDINGS:

Opened on : 11-04-1969

Workers : 1,538

Date of formation of union : 06-07-1983

Date of transfer of management : 08-02-1985

Of the union Annual turnover : 60 Crores

PRODUCTION POWER:

Milk : its/day

Ghee : 17,162 Kgs. Per month

Butter : 52,940 Kgs. Per month

Milk powder : 4 tonnes

Packet filing : 1,60,000 packets/day

Refrigeration capacity : 1.5 tonnes

Contracted maximum demand : 900 Chilling

Processing : 1,50,000

COMPANY GROWTH :

As an integral part of the above project the milk products factory,

Vijayawada was commenced on 11-04-1969. The Factory ha got an initial handling capacity of

1,25,000 liters in the first stage with provision of handle 2,50,000 liters milk in the second stage.

It has crossed the mark of 1, 00,000 liters in the very first year of its operation getting admiration

from the UNICEF officials.

The women has been playing a greater role in the rural dairying i.e., feeding

of animals, washing and milking etc., To enourage this activity in an organized way the

APDCFL of foundation three district viz., Nalgonda, Krishna and Chittoor already 8 women co-

operative societies are organized and 200 new members have been enrolled a part from 1000

women members enrolled in other societies.

Chilling Centers:

The milk products factory Vijayawada has set up 10 chilling centers which are

given producing chilled milk for the compsotion of the various segments in the consumers.

Chilling centers are very useful to milk products factory following centers are in Krishna District

under the location of Milk products Factory, Vijayawada.

Pamarru Hanuman junction

Veerayyalanka Gudlavalleru

Chillakollu Thiruvuru

Gannavaram Vuyyuru

Kaikaluru

Table-3.2

TOWN No. of selling Booths Daily Sales (In Liters)

VIJAYAWADA 185 68,000

MACHILIPATNAM 42 4,000

GUDIVADA 25 1,200

TOTAL 252 73,200

Infrastructure and Facilities:

Milk products factory Vijayawada is located on 27.3 acres of land which houses

of dairy plant, Aseptic packing station. Administration office, effluent treatment plant, Electric

sub station and residential quarters. Following are the facilities available in Milk Product

Factory, Vijayawada and its field centers.

Milk Products Factory, Vijayawada: Table-3.3.1

S. No. Name of the Facility Unit Capacity

1 Milk Processing Lakhs Lits/day 2.5

2. Milk dairying MTs/day 22.0

3. Ghee Manufacturing MTs/day 18.0

4. Butter manufacturing MTs/day 22.0

5. UHT Milk packing Lts/day 45,000

6. Milk packing Lts/day 2,00,000

7. Godown space MTs 3,000

8. Butter cold space MTs 500

Source Of From Product Is Procured:

Table-3.3.2

S.No. Name of the Centre Unit Capacity

1. MCC Pammaru Lts/day 50,000

2. MCC Veerankilock Lts/day 18,000

3. MCC Gudlavalleru Lts/day 18,000

TOTAL 86,000

4 MCC Hanuman Junction Lts/day 18,000

5. MCC Chillakallu Lts/day 18,000

6 MCC Tiruvuru Lts/day 12,000

7 No. computerized milk collection and testing centers 25

8 No. of Bulk coolers operating (Planned to establish ten more)

6

9 DCS having electronic milk testers 450

10 No. of A 1 centers 56

11 No. of V F A Centers 240

12 No. of DCS organized 630

13. No. of MPAs 320

14 Exclusive women DCs 103

15 Farmer members 1,86,689

16 Women members 23,347

17 No. of milk routes 35

18 No. of DCS having its own building 400

Cattle Feed:

Table-3.3.3

S.No. Name of the Plant Unit Capacity

1. EMP Buddavaram MTs/day 30.0

2. FMP Gudlavalleru MTs/day 18.0

Processing and Production:

One process of producing milk processing is supervised by Dairy managers (I/C.

Production) is heading the production division supported by four dairy managers, 11 Asst. Dairy

Managers and other production staff engaged in milk production on his process involves

manufacturing finished goods storage, milk processing, Butter making, Ghee making, Powder

making by-products

Milk Reception:

As soon as milk is arrived at the reception dock either through cans or tankers, the

laboratory authorities conduct all the platform/Bacteriological / chemical test and after its quality

confirmation the milk is received and sent to storage.

Raw Milk :

Milk products factory, Vijayawada is directly connected by around 175 villages a radius

of around 50 KMs around Vijayawada. The milk collected from these villages is collected

directly last Milk products factory, Vijayawada for which it equipped with a can conveyer, an

electrical weighing machine, a dump tank and a straight through can washer with cleaning

capacity of 600 cans per hour.

Chilled Milk:

Chilled milk from chilling centers and other stations through milk tankers are received at

the end after receiving quality confirmation from laboratory the milk is sent for storage.

Milk Processing Section:

It has 12 storage tanks each of 15,000 its. Four creams vats each of 500 ltrs capacity. It

is equipped with 13 milk pasteurizer of 20,000 ltrs capacity/hour, 15,000 ltrs/hour and 10,000

ltrs/hour respectively. It also has cream pasterizers with a capacity of 500 ltrs/hour. Altogether

it has milk storage of four lakh liters.

Operations:

Separation of required quantity of whole milk to the extent of demand and with

admixture of whole milk/cream and skim milk in required proportions, milk is standardized to

their composition and sent them to the packing or products manufacturing divisions.

Butter Sections:

It is equipped with three butter churns with drum capacity of 1500 lts. Each. The cream

loaded the drums in churned for about three hours for separation of liquid butter milk from cream

after setting of butter. It was washed with chilled water to remove solids from it. The butter

formed is collected and sent back to processing section while the solids in liquid form of butter

milk is sent back to processing section or further usage. To the extent of usage the butter is

packed in ½ kg packs and 20 Kgs packs and remaining is utilized for ghee making.

Ghee Section :

There are 7 ghee boilers in ghee section each with 1000 lts. Capacity in which butter is

melted for 3 hours at 120 Deg. C. After attaining satisfactory flavor, color etc., the ghee is

pumped to ghee setting tanks where it is allowed for eight hours for setting of sediment at the

bottom of the tank. There are settling tanks each 8000 ltrs. Capacity and low storage tank each

3000 ltrs. Capacity. Then the ghee is clarified and filtered with fine filters. After obtaining

satisfactory report from lab authorities the final filtered ghee is packed in 5 ltrs, 2 ltrs and 1 ltr

and ½ ltr. Etc., The total capacity of ghee packing is 18.0 MT per day.

By-Product Section:

All the fresh milk products like buttermilk, sweet lssie, khova, paneer, yoghurt, milk cake

are manufactured under strict hygienic and aseptic conditions.

Powder Section:

It has two powder plants. An Alfa level makes single effects gravity flow milk

evaporation plant with drying capacity of 8.0 MT per day and another Vulcan level double effect

gravity flow milk evaporator plant with drying capacity of 14.0 MTs per day are under operation.

Fine and superior quality ISI gerade SMP is packed in 25 Kgs. 1 Kg and ½ Kg.

Milk Packing:

It has the capacity of pack 2,00,000 ltrs. Of various varieties of milk per day. It is

equipped with eight sachet packing machines each capacity of 150 tubs per hour. Five varieties

of milk in ½ it sachets for directs consumers. Cans for institutions are being packed.

Aspetic Packing Station (APS) :

Special officer is heading the APS Unit. The APS was established in 1988 with the

financial assistance of NDDB in the existing campus of milk product factory, Vijayawada with a

total outlay 22 crores. Milk is treated in high temperature plant for 203 seconds at about 1400

Deg. C under low pressure followed by rapid cooling. This enables milk free of micro organisms

which are liable to proliferate during storage. Tetra Brick is a campact, sterile, pilfer proof,

unbreakable and long shelf life pack that retains freshness and goodness of milk for 3-4 months.

PERSONNEL AND HRD:

Personnel Officer is heading the personnel department. HRD activities are carried out for

the befit of the employees. It is looking after the service/administration matter of the staff of

this union besides implementation of the following Act for their welfare.

Industrial Dispute Act 1947

Payment of wages Act 1936

Minimum wage Act 1948

Equal remuneration Act

Gratuity 1972

Workmen compensation Act

ESI Act 1948

Trade Union Act 1926 etc.,

Finance:

Senior Accounts Officer is heading the finance who is assisted by four Assistant

Accountant Superintendent and Finance Staff. The union has started its operations

independently from 08-02-1985 onwards after taking the fixed assets from the State Federation

at their book values as on that date.

Share capital:

Authorised Share Capital Rs.500 Lakhs. Then unions paid up share capital at present are

Rs.106.24 Lakhs and Rs.31.87 Lakhs are share suspense waiting for conversion.

Long term loans:

The National Dairy Development Board has provided loans to the Union Order O.F. 2/3

program for capital projects in the union total Rs. 707.20 Lakhs was finished for various projects

to the union under 70:30 loans cum grant basis.

MARKETING OF COMPANY PRODUCTS:

Deputy Director (S & M) is heading the sales and marketing wing supported by a Sales

Manager and three Assistant Sales Managers with a network of 700 booths, 300 round the cold

chain parlors. The sales and marketing wing of the union functions round the clock for the

distribution and marketing of milk and milk production.

Ghee Section :

There are 7 ghee boilers in ghee section each with 1000 ltrs. Capacity in which butter is

melted for 3 hours at 120 Deg. C. After attaining satisfactory flavor, color etc., the ghee is

pumped to ghee setting tanks where it is allowed for eight hours for setting of sediment at the

botto m of the tank. There are settling tanks each 8000 ltrs. Capacity and low storage tank each

3000 ltrs. Capacity. Then the ghee is clarified and filtered with fine filters. After obtaining

satisfactory report from lab authorities the final filtered ghee is packed in 5 ltr, 2 ltr and 1 ltr and

½ ltr etc., The total capacity of ghee packing is 18.0 MT per day.

By-Products Sections :

All the fresh milk products like buttermilk, sweet lassie, khova, pannier, yoghurt, milk cake are

manufactured understrict hygienic and aseptic condition.

Powder Section:

It has two powder plants. An Alfa level makes single effects gravity flow mi9lk

evaporation plant with drying capacity of 8.0 MT per day and another Vulcan level double effect

gravity flow milk evaporator plant with drying capacity of 14.0 MTS per day are under

operation. Fine and superior quality ISI Grade SMP is packed in 25 Kg, 1 Kg and ½ Kg.

Deputy Director ( S & M) is heading the sales and marketing wing supported by a sales

manager and three Assistant Sales Managers with a network of 700 booths, 300 round the cold

chain parlors. The sales and marketing wing of the union functions round the clock for the

distribution and marketing of milk and milk production.

Distribution Network:

Liquid milk distribution:

VijayawadaCity is divided into 24 zones, each zone is connected by a separate milk route

operating booth morning and evening to distribute the milk to the commission agents and cold

chain points.

Product Distribution:

a. Local distribution within the district. Through distributors, stockiest and retailers.

Products are delivered to these distributors/stockiest/retailers.

b. Distribution to outside district : Through stockiest and Ex Factory direct sales through

out the country.

S.W.O.T. ANALYSIS:

Table-3.4

STRENGTHS WEAKNESSES

Milk producers potential in Krishna District

substantial

Ability to handle highly perishable product

milk

Adequate infrastructure facilities available.

Availability of well experienced

professionals

Ability to meet any consumer demand for

milk and milk products

Ability to offer quality products with high

profitability

Established bondage with farmers

Access to development funds and grants

Access to other co-operatives

High fixed costs occupying 15% of

business turnover.

Milk and milk products are high priced

during competitive edge.

Product manufacturing facilities are out

dated due to lack of modern facilities.

Work culture not compatible with

growing for customer service

Employee’s skills at various levels require

up gradation

Business systems anern management

culture is yet to be adopted

Managers lack of business experience.

OPPORTUNITIESTHREATS

Increased purchasing capacity

Rapid urbanization

Growing food sector

Responsive state government

Export opportunities for the long life

aseptic milk

Responsible milk producer base

Intense competition in liquid milk market

Entry of organized private section

Increasing competition for the marketable

surplus milk in rural areas.

Employee’s resistance to change

COMPANY PRIDE

Daily averge milk procurement 1,63,794 its.

Turnover of business has reached to 200 crores

Daily milk sales average reched to 1,60,000 its

Obtained ISO 9001. 2000, 14000 and HA.A.C.C.P. Certification

Earning profits and distributing bonus to its members.

Paying Rs.68crores per year to farmers as cost of milk procured from them.

Strengthened the rural economy by avoiding middlemen and making available safe milk

products to the customers.

Provided self-employed to the rural women.

First powder plant established in South India.

Largest democratic functionary in the District serving the farming community.

Having more than Rs.1000 crores grass root level production base.

Providing direct and indirect employment to people

First dairy to introduce free varieties of liquid milk

First dairy to introduce liquid ice cream in tetra brick pack

First dairy co-operative to introduce curd in cups in South India

First dairy to introduce butter milk and lassies in tetra brick pack

Annual turnover more than Rs.121 crores with a continuous growth rate

First dairy to introduce Basundi in cups and milk cake

Distribution network with 27 milk distribution routes.

Summary:

Starting with a tiny procurement of 243 liters of milk on 11-2-1965 under the milk

chilling center, pamarru, the collection in the district has surpassed one lakh installed capacity of

milk Products Factory, Vijayawadawith in two years i.e. in 1971 necessitating additional

capacities. The Units were under Dairy Development Departments (1971).

The products manufactured at Milk Products Factory, Vijayawada such as Butter, Ghee,

Skim Milk Powder, Whole Milk Powder and Infant Milk Food with the brand name VIJAYA

earned appreciation of consumers all over the country. The VIJAYA becomes synonym for

superior quality competing AMUL. The Milk Project is a buzz word among the public all over

the region. The expansion of Milk Product Factory, to meet the increased handling needs has

been taken up later under OPERATION FLOOD programmed by National Dairy Development

Board (NDDB).

Union collects milk from about 1 Lakh milk producers covering 800 villages organized

through 20 routes. District union has 6 milk chilling centers one each operating at Pamaru,

Hanuman Junction, Veerankilack, Gudlavalleru, Chillakollu and Tiruvuru with total processing

capacity of 1.22 Lakhs/day. It has milk products factory with the factory with the facilities to

manufacture different milk products.

Milk processing 2.5 Lakhs its/day

Milk dairying 22 MT/day

Butter 22 MT/day

Ghee 18 MT/day

The milk products factory at Vijayawada handles surplus milk from all coastal districts.

About 1.73 lakh kgs/day with peak touching 3.18 lakh kgs/day. The factor conserves fat in the

shape of white butter usually to the extent of 1000 MT per year.

An Aseptic Packing Station (APS) was set up in the Milk Products Fatory to pack 50,000

liters of long the milk (UHT MILK) per day. Union has also 2 cattle feed mixing plants with a

total of 50 Mt/day.