CHAPTER III

COMPANY 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
Farmers 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 Deputy Director Senior Accounts Officer Dairy Managers Asst. Dairy Engineers Quality Control Officers Asst. Dairy Manager Fodder Development Officers Junior Engineer Technical Staff Transport Finance Administration Field Staff Others (Non-technical) 1 2 1 6 2 1 15 1 4 58 30 20 70 55 304 --------TOTAL 570 -----------

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 Processing Marketing IIIrd IVth 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. y y y y y y y y 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 Lassi Butter Milk

Sterilized Flavoured Milk Fresh Milk Products Cooking Butter Milk Cake Skim Milk Powder

Paneer DoodhPeda Ghee

Existing Infrastructural Facilities in KrishnaUnion. Table-3.1

S.NO Name of the FACILITY I 1 2 3 4 5 6 MILK CHILLING Pammarru Verrayalanka Gudlavalleru Hanuman Junction Chillakallu Tiruvuru Total Chilling: II III IV V VI 1 2 MIL PROCESSING Ghee Manufacture Milk Drying U.H.T.Milk CATTLE FEED Budhavaram Gudlavalleru Total: Lakh Liters/day MITs/Day MITs/Day MITs/day MIXING FACILITY MITs/Day MITs?day 30.00 18.00 48.00 Liters/Day Liters/Day Liters/Day Liters/Day Liters/Day Liters/Day 50000 18000 18000 18000 12000 12000 128000 2.50 18.00 22.00 45000 UNIT CAPACITY

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 Value of factory building Money given by UNICEF Investment on equipment : : : : 27.3 Acres 400 Lakhs 53 Lakhs 600 Lakhs

BUILDINGS:
Opened on Workers Date of formation of union Date of transfer of management Of the union Annual turnover : : : : : 11-04-1969 1,538 06-07-1983 08-02-1985 60 Crores

PRODUCTION POWER:
Milk Ghee Butter Milk powder Packet filing : : : : : its/day 17,162 Kgs. Per month 52,940 Kgs. Per month 4 tonnes 1,60,000 packets/day

Refrigeration capacity Contracted maximum demand Processing

: : :

1.5 tonnes 900 Chilling 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 cooperative 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 Veerayyalanka Chillakollu Gannavaram Hanuman junction Gudlavalleru Thiruvuru Vuyyuru

Kaikaluru Table-3.2 TOWN VIJAYAWADA MACHILIPATNAM GUDIVADA TOTAL No. of selling Booths 185 42 25 252 Daily Sales (In Liters) 68,000 4,000 1,200 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:

S. No. 1 2. 3. 4. 5. 6. 7. 8. Name of the Facility Milk Processing Milk dairying Ghee Manufacturing Butter manufacturing UHT Milk packing Milk packing Godown space Butter cold space

Table-3.3.1 Unit Lakhs Lits/day MTs/day MTs/day MTs/day Lts/day Lts/day MTs MTs 2.5 22.0 18.0 22.0 45,000 2,00,000 3,000 500 Capacity

Source Of From Product Is Procured:

Table-3.3.2 S.No. Name of the Centre Unit Capacity

1. 2. 3.

MCC Pammaru MCC Veerankilock MCC Gudlavalleru

Lts/day Lts/day Lts/day TOTAL

50,000 18,000 18,000 86,000 18,000 18,000 12,000 25

4 5. 6 7 8 9 10 11 12 13. 14 15 16 17 18

MCC Hanuman Junction MCC Chillakallu MCC Tiruvuru

Lts/day Lts/day Lts/day

No. computerized milk collection and testing centers

No. of Bulk coolers operating (Planned to establish ten 6 more) DCS having electronic milk testers 450 No. of A 1 centers No. of V F A Centers No. of DCS organized No. of MPAs Exclusive women DCs Farmer members Women members No. of milk routes No. of DCS having its own building 56 240 630 320 103 1,86,689 23,347 35 400

Cattle Feed:
Table-3.3.3 S.No. 1. 2. Name of the Plant EMP Buddavaram FMP Gudlavalleru Unit MTs/day MTs/day 30.0 18.0 Capacity

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 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 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 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 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. y y y y y y y y 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 The union has started its operations

Accountant Superintendent and Finance Staff.

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 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 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 y Milk producers potential in Krishna District substantial y Ability to handle highly perishable product milk y Adequate infrastructure facilities available. y Availability professionals y Ability to meet any consumer demand for milk and milk products y Ability to offer quality products with high profitability y Established bondage with farmers y Access to development funds and grants y Access to other co-operatives THREATS OPPORTUNITIES y Increased purchasing capacity y Rapid urbanization y Growing food sector y Responsive state government y Export opportunities for the long life aseptic milk y Responsible milk producer base y Intense competition in liquid milk market y Entry of organized private section y Increasing competition for the marketable surplus milk in rural areas. y Employees resistance to change of well experienced WEAKNESSES y High fixed costs occupying 15% of business turnover. y Milk and milk products are high priced during competitive edge. y Product manufacturing facilities are out dated due to lack of modern facilities. y Work culture not compatible with

growing for customer service y Employees skills at various levels require up gradation y Business systems anern culture is yet to be adopted y Managers lack of business experience. management

COMPANY PRIDE
y y y y y y y 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. y y y y y y y y y y y y 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 Milk dairying Butter Ghee 2.5 Lakhs its/day 22 MT/day 22 MT/day 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.