Amul turnover Rs 38,000 cr, quadruples milk farmers’ income in 7 years

Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF), which markets the popular Amul brand of milk and dairy products, has successfully quadrupled the income of its dairy farmer-members in the last seven years, demonstrating the efficacy of the Amul model in exceeding the national goal of doubling farmer’s income in six years.

In 2016-17, Amul’s overall turnover touched the Rs 38,000-crore mark ($6 billion).

During the last seven years, Amul’s milk procurement prices paid to its farmer-members more than doubled from Rs 24.30 per litre for buffalo milk (Rs 337 per kg fat) in 2009-10 to Rs. 49 per litre (Rs. 680 per kg fat) in 2016-17. Since the cooperative’s total milk procurement also doubled during this period, from 90.9 lakh litres to 176.5 lakh litres per day, this effectively increased the income of its dairy farmers four-fold in the last seven years, GCMMF said in a statement here on Thursday.

The turnover of GCMMF has registered a quantum growth of 238 per cent in the last seven years, implying a cumulative average growth rate (CAGR) of 19 per cent during this period. The mantra of rapid expansion had yielded rich dividends, with GCMMF’s sales turnover increasing 3.5 times, from Rs 8,005 crore in 2009-10 to Rs 27,043 crore in 2016-17.

Financial results of the apex body of dairy cooperatives in Gujarat, declared in the 43rd Annual General Meeting of GCMMF on Thursday, revealed that the group turnover of GCMMF and its constituent member unions, representing unduplicated turnover of all products sold under the Amul brand in 2016-17 was Rs 38,000 crore ($6 billion). GCMMF aims to achieve a business turnover of Rs 50,000 crore and become the largest FMCG organisation in India by 2020-21.

In the long-term, Amul aims to establish itself as the largest dairy organisation in the world, rising up from its current ranking of 13th largest dairy organisation to number one, said Jethabhai Patel, Chairman, GCMMF.

He said during the last seven years, Amul’s milk procurement has witnessed phenomenal increase of 96 per cent as a result of the high milk procurement price paid to its farmer-members. “This highly remunerative price has helped us retain the farmers’ interest in milk production. Better returns from dairying have motivated them to enhance their investments in increasing milk production.”

“The drive towards digital and cashless payments, which received a huge boost thanks to the Government of India’s demonetisation initiative, has brought about significant benefits to our farmers in rural Gujarat. We have actively helped our farmer-members to open bank accounts and have linked an additional 13 lakh farmers’ bank accounts to our system. Now, milk payments are cashless and directly transferred into their bank accounts.”

R. S. Sodhi, Managing Director, GCMMF, emphasised that Amul’s success has been driven by its ‘3E’mantra – rapid expansion in milk procurement, manufacturing facilities and marketing and distribution network. In the last three years, GCMMF set up several new dairy plants including new dairy factories at Faridabad, Rohtak, Lucknow, Kanpur, Amreli and Kutch. The new cheese factory at Palanpur in Gujarat’s Banaskantha district has led to a three-fold increase in its cheese manufacturing capacity.

He said the upcoming dairy plants at Taloja in Maharashtra, Kolkata, Surendranagar and Ahmedabad will further add to the capacities when commissioned. The processing capacity of AmulFed dairy at Gandhinagar is being enhanced from 35 lakh litres to 50 lakh litres per day. GCMMF is also enhancing milk powder manufacturing capacity with a new factory of 150 mt per day at Gandhinagar, along with another new milk powder plant at Himmatnagar. Amul is also putting into effect significant capacity expansions for chocolates and paneer.