Executive Summary:

The basic purpose of in-plant training is to expose myself to the dairy industry and
how it has created to the second place in the world.

In India, the market milk technology may be considered to have commenced in 1950,
with the functioning of the Central Dairy of Aarey Milk Colony, and milk product
technology in 1956 with the establishment of AMUL Dairy, Anand. Beginning in
organized milk handling was made in India with the establishment of Military Dairy
Farms. Establishment of Milk Plants under the Five-Year Plans for Dairy
Development was done all over India with the dual object of increasing the national
level of milk consumption and ensuing better returns to the primary milk producer.
Their main aim was to produce more, better and cheaper milk. Later Operation Flood
had come to existence with the objective to increase the milk production, augment
rural incomes and fair prices for consumers. And to assist with the Finance,
Government had started with The National Dairy Development Board to promote,
finance and support producer-owned and controlled organizations.

There are totally 20-21 Cooperative societies in all over India, which is setup by the
Government and Financed by NDDB. Today, the conditions are such where the
western, central and south states have been forward in the milk production and
distribution.
Karnataka Co-operative Milk Producers Federation Limited (KMF) is the Apex Body
in Karnataka representing Dairy farmers Co-operatives. It is the third largest Dairy
Co-operative amongst the dairy co-operatives in the country. One of the core functions
of the Federation is marketing of milk and milk products. The brand ‘Nandini’ is the
household name for Pure and Fresh Milk and milk products. KMF has 13 milk unions
throughout the State which procure milk from Primary Dairy Co-operative Societies
(DCS) and distribute milk to the consumers in various towns, cities, rural markets in
Karnataka. The Dairy Co-operatives were established under the ANAND pattern in a
three tier structure with the village level Dairy Co-operatives forming the base level,
The District Level Milk Unions at the middle level to take care of the procurement,

1
processing and marketing of milk and the Karnataka Milk Federation as the apex body
to co-ordinate the growth of the sector at the state level. The Karnataka Co-operative
Milk Producers Federation Ltd. came into existence on 1/5/1984 by federating the
milk unions in the state and thus forming the state level apex organization.
BEMUL was set up in the year 1971 with milk handling capacity of 10,000 LPD
under Government Milk Scheme. Now it has the capacity of 60,000 – 1,00,000 LPD,
to serve consumers with pasteurized milk and products such as ghee, Peda, Sweet
Milk, Masala Butter Milk and Belgaum special “Nandini Kunda”.
The primary objective was to study all the departments including the Production,
Administration, Marketing, Procurement and Input, MIS (Management and
Information System), Purchase, etc. along with their disciplined working structure.

2
 Objectives of the Study:

 To study the overall Dairy industry in India

 The existence of Dairy Unions in India
 The growth of Dairy Co-operatives
 History and Growth of the Group (KMF)
 To study the BEMUL and its organization structure
 Study all the departments and working structure

3
Industry Profile
Dairy Industry

4
 Dairy Industry Profile:

Dairy enterprise is an important occupation of the farmer. In India, nearly 70% of the
people depend on agriculture. It is the backbone of India. It is mainly a rural
occupation closely associated with agriculture. More than 2,445 million people
economically active in agriculture in the world, probably 2/3 or even more 3/4 of them
are wholly or partly dependent on livestock farming. India is endowed with rich flora
& fauna & continues to be vital avenue for employment and income generation,
especially in rural areas. The dairy sector in the India has shown remarkable
development in the past decade and India has now become one of the largest
producers of milk and value-added milk products in the world. The dairy sector has
developed through co-operatives in many parts of the State.

5
 History:

Traditionally, in India dairying has been a rural cottage industry. Semi-commercial

dairying started with the establishment of military dairy farms and co-operative milk
unions throughout the country towards the end of the nineteenth century.
In earlier years, many households owned their own ‘family cow’ or secured milk from
neighbors who had one. With the increase in urban population fewer households could
afford to keep a cow for private use & moreover there were other problems also like
the high cost of milk production, problems of sanitation etc. restricted the practice;
and gradually the family cow in the city was eliminated and city cattle were all sent
back to the rural areas.
Gradually farmers living near the cities took advantage of their proximity to the cities
& began supplying milk to the urban population; this gave rise to the fluid milk-sheds
we see today in every city of our country.
Prior to the 1850s most milk was necessarily produced within a short distance of the
place of consumption because of lack of suitable means of transportation and
refrigeration.
The Indian Dairy Industry has made rapid progress since Independence. A large
number of modern milk plants and product factories have since been established.
These organized dairies have been successfully engaged in the routine commercial
production of pasteurized bottled milk and various Western and Indian dairy products.
With modern knowledge of the protection of milk during transportation, it became
possible to locate dairies where land was less expensive and crops could be grown
more economically.
In India, the market milk technology may be considered to have commenced in 1950,
with the functioning of the Central Dairy of Aarey Milk Colony, and milk product
technology in 1956 with the establishment of AMUL Dairy, Anand.
Indian dairy sector is still mainly an unorganized sector as barely 10% of our total
milk production undergoes organized handling.
Beginning in organized milk handling was made in India with the establishment of
Military Dairy Farms.

6
Handling of milk in Co-operative Milk Unions established all over the country on a
small scale in the early stages.
Long distance refrigerated rail-transport of milk from Anand to Bombay since 1945
Pasteurization and bottling of milk on a large scale for organized distribution was
started at Aarey (1950), Calcutta (Haringhata, 1959), Delhi (1959), Worli (1961),
Madras (1963) etc.
Establishment of Milk Plants under the Five-Year Plans for Dairy Development all
over India. These were taken up with the dual object of increasing the national level of
milk consumption and ensuing better returns to the primary milk producer. Their main
aim was to produce more, better and cheaper milk.

7
 Operation Flood:

Launched in 1970, Operation Flood has helped dairy farmers direct their own
development, placing control of the resources they create in their own hands. A
National Milk Grid links milk producers throughout India with consumers in over 700
towns and cities, reducing seasonal and regional price variations while ensuring that
the producer gets a major share of the consumers' rupee.
The bedrock of Operation Flood has been village milk producers’ cooperatives, which
procure milk and provide inputs and services, making modern management and
technology available to members. Operation Flood's objectives included:
 Increase milk production ("a flood of milk")
 Augment rural incomes
 Fair prices for consumers
Programme implementation:
Operation Flood was implemented in three phases:

Phase I: Phase I (1970-1980) was financed by the sale of skimmed milk powder
and butter oil gifted by the European Union then EEC through the World Food
Programme. NDDB planned the programme and negotiated the details of EEC
assistance.
During its first phase, Operation Flood linked 18 of India's premier milk sheds with
consumers in India's four major metropolitan cities: Delhi, Mumbai, Calcutta and
Chennai.

Phase II : Operation Flood's Phase II (1981-85) increased the milk sheds from 18
to 136; 290 urban markets expanded the outlets for milk. By the end of 1985, a self-
sustaining system of 43,000 village cooperatives covering 4.25 million milk producers
had become a reality. Domestic milk powder production increased from 22,000 tons
in the pre-project year to 140,000 tons by 1989, all of the increase coming from
dairies set up under Operation Flood. In this way EEC gifts and World Bank loan

8
helped to promote self-reliance. Direct marketing of milk by producers' cooperatives
increased by several million liters a day.

Phase III: Phase III (1985-1996) enabled dairy cooperatives to expand and
strengthen the infrastructure required to procure and market increasing volumes of
milk. Veterinary first-aid health care services, feed and artificial insemination services
for cooperative members were extended, along with intensified member education.

Operation Flood's Phase III consolidated India's dairy cooperative movement, adding
30,000 new dairy cooperatives to the 42,000 existing societies organized during Phase
II. Milk sheds peaked to 173 in 1988-89 with the numbers of women members and
Woman’s Dairy Cooperative Societies increasing significantly.
Phase III gave increased emphasis to research and development in animal health and
animal nutrition. Innovations like vaccine for Theileriosis, bypass protein feed and
urea-molasses mineral blocks, all contributed to the enhanced productivity of milk
animals.
From the outset, Operation Flood was conceived and implemented as much more than
a dairy programme. Rather, dairying was seen as an instrument of development,
generating employment and regular incomes for millions of rural people.
"Operation Flood can be viewed as a twenty year experiment confirming the
Rural Development Vision" (World Bank Report 1997c.)

9
 National Dairy Development Board (NDDB):

The National Dairy Development Board was created to promote, finance and support
producer-owned and controlled organizations. NDDB's programmes and activities
seek to strengthen farmer cooperatives and support national policies that are favorable
to the growth of such institutions. Fundamental to NDDB's efforts are cooperative
principles and the Anand Pattern of Cooperation.
A commitment to help rural producers help themselves has guided the Dairy Board's
work for more than 30 years. This commitment has been rewarded with achievements
made by cooperative dairies in milk production, employment generation, and per
capita availability of milk, foreign exchange savings and increased farmer incomes.
The National Dairy Development Board (NDDB) has replaced exploitation with
empowerment, convention with modernity, stagnation with growth and transformed
dairying into an instrument for the development of Indian farmers.
The National Dairy Development Board was created in 1964 in response to the Prime
Minister Lal Bahadur Shastri's call to "transplant the spirit of Anand in many other
places". He wanted the Anand model of dairy development - with institutions owned
by rural producers, which were sensitive to their needs and responsive to their
demands - replicated in other parts of the country.
The Board's creation was routed in the conviction that our nation's socio-economic
progress lies largely on the development of rural India.
Thus NDDB's mandate is to promote, finance and support producer-owned and
controlled organizations. NDDB's programmes and activities seek to strengthen
farmer cooperatives and support national policies that are favorable to the growth of
such institutions.

NDDB believes that the Rs. 7,000-crore (Rs. 70-billion) milk cooperative market is
getting much more competitive and wants to strengthen the position of cooperatives
through a multi-pronged action plan with an outlay of Rs. 800 crore (Rs. 8-billion).
This includes using MDFL to enter into 51:49 joint venture companies with state

10
Cooperative federations to assist them with marketing value added products and to
help them in other ways to become self-reliant enterprises.

Formation of Co-operative Unions:

Over almost half a century ago, the life of a farmer in Kaira District was very much
like that of his counterpart anywhere else in India. His income was derived almost
entirely from seasonal crops. The income from selling milk was undependable. The
marketing and distribution system for the milk was controlled by private traders and
middlemen. As milk is perishable, farmers were compelled to sell it for whatever they
were offered. Often, they had to sell cream and ghee at throwaway prices. In this
situation, the one who gained was the private trader. Gradually, the realization dawned
on the farmers that the exploitation by the trader could be checked only if they market
their milk themselves. In order to do that they needed to form some sort of an
organization. This realization is what led to the establishment of the Kaira District
Cooperative Milk Producers' Union Limited (popularly known as Amul) which was
formally registered on December 14, 1946.
Backward integration of the process led the cooperatives to advances in animal
husbandry and veterinary practice.
More than 900 village cooperatives have created jobs for people in their own villages
and that too without disturbing the socio-agro-system and thereby the exodus from the
rural areas has been arrested to a great extent.
The yearly elections of the management committee and its chairman, by the members,
are making the participants aware of their rights and educating them about the
democratic process.
Perpetuating the voluntary mix of the various ethnic and social groups twice-a-day for
common causes and mutual betterment has resulted in eroding many social
inequalities. The rich and the poor, the elite and the ordinary come together to
cooperate for a common cause.
Live exposure to various modern technologies and their application in day-to-day life
has not only made them aware of these developments but also made it easier for them

11
to adopt these very processes for their own betterment. One might wonder whether the
farmer who knows almost everything about impregnating a cow or buffalo, is also
equally aware of the process in the humans and works towards planning it.
The income from milk has contributed to their household economy. Besides, women,
who are the major participants, now have a say in the home economy.
This income is helping these people not only to liberate themselves from the
stronghold of poverty but also to elevate their social status.
The system succeeded mainly because it provides an assured market at remunerative
prices for producers' milk besides acting as a channel to market the production
enhancement package. What's more, it does not disturb the agro-system of the
farmers. It also enables the consumer an access to high quality milk and milk
products. Contrary to the traditional system, when the profit of the business was
cornered by the middlemen, the system ensured that the profit goes to the participants
for their socio-economic upliftment and common good.
Produce an appropriate blend of the policy makers farmers’ board of management and
the professionals: each group appreciating its roles and limitations.
Bring at the command of the rural milk producers the best of the technology and
harness its fruit for betterment.
Provide a support system to the milk producers without disturbing their agro-
economic systems.

Plough back the profits, by prudent use of men, material and machines, in the rural
sector for the common good and betterment of the member producers.
Even though, growing with time and on scale, it has remained with the smallest
producer members. In that sense, Cooperative Movement is an example par
excellence, of an intervention for rural change.
Recently the Indian cooperative movement got a much needed facelift. With
competition snapping at its heels, the sector which has been governed by arcane laws
until the recent past will see a special provision inserted in the Companies Act, 1956.
All the cooperative unions will be re-christened cooperative companies; they will
come under the purview of the registrar of companies, instead of the registrar of
cooperatives.

12
While they will have to adhere by the audit procedures like any corporate, they will
differ from ordinary companies in many ways. Not everyone can join a cooperative.
Only users can enroll as members at a fixed membership fee. Quantum of business
and not equity capital will see an election to the board. And there will be flexibility to
raise capital from members and outside.
Dairy Cooperatives account for the major share of processed liquid milk marketed in
the country. Milk is processed and marketed by 170 Milk Producers' Cooperative
Unions, which federate into 15 State Cooperative Milk Marketing Federations.
The Dairy Board's programmes and activities seek to strengthen the functioning of
Dairy Cooperatives, as producer-owned and controlled organizations. NDDB supports
the development of dairy cooperatives by providing them financial assistance and
technical expertise, ensuring a better future for India's farmers.
The Dairy Cooperative Network:
 includes 170 milk unions
 operates in over 338 districts
 covers nearly 1,08574 village level societies
 Is owned by nearly 12 million farmer members.
Apart from making India self sufficient in milk, these dairy co-operatives have
established our country as the largest milk-producing nation in the world.

13
 India’s Milk Product Mix:
PRODUCT PERCENTAGE
Fluid Milk 46
Ghee 27.5
Butter 6.5
Curd 7
Khoa 6.5
Milk powders 3.5
Paneer (cottage cheese) 2
Others: Including cream, ice cream, etc 1
Total 100

Product Projected Growth Rate:

Projected Growth Rate

Product
Per cent per annum
Milk production 3
Ghee consumption 8
Table Butter consumption 10
Paneer (cottage cheese) 10
Processed cheese 12
Dairy whiteners and condensed milk 8

14
Co-operative Companies playing in Dairy Industry and its
brands:
STATES CO-OPERATIVE UNIONS BRANDS
Andhra Andhra Pradesh Dairy Development Co-
Vijaya
Pradesh operative Federation Limited (APDDCF)

Bihar State Co-operative Milk Producers

Bihar Sudha
Federation Limited (COMPFED)
Gujarat Co-operative Milk Marketing
Gujarat Amul, Sagar
Federation Limited (GCMMF)
Haryana Dairy Development Co-operative
Haryana Vita
Federation Limited (HDDCF)
Himachal Himachal Pradesh State Co-operative Milk
Pradesh Producers Federation Limited (HPSCMPF)
Karnataka Co-operative Milk Producers
Karnataka Nandini
Federation Limited (KMF)
Kerela State Co-operative Milk Marketing
Kerela Milma
Federation Limited (KCMMF)
Madhya Madhya Pradesh State Co-operative Dairy Sanchi,
Pradesh Federation Limited (MPCDF) Shakti, Sneha
Orissa State Co-operative Milk Producers
Orissa Omfed
Federation Limited (OMFED)
Pradeshik Co-operative Dairy Federation
Uttar Pradesh Parag
Limited, Uttar Pradesh (PCDF)
Punjab State Co-operative Milk Producers
Punjab Verka
Federation Limited (MILKFED)
Rajasthan Co-operative Dairy Federation
Rajasthan Saras
Limited (RCDF)
Tamil Nadu Co-operative Milk Producers
Tamil Nadu Aavin
Federation Limited (TCMPF)
West Bengal Co-operative Milk Producers
West Bengal Benmilk
Federation Limited (WBCMPF)
Goa State Co-operative Milk Producers
Goa Goadairy
Union Limited
Jammu Co-operative Milk Producers
Jammu Jamfed
Federation Limited
Pondicherry Pondicherry Co-operative Producers Union Ponlait

15
 Limited
Sikkim Sikkim Milk Producers Union Limited Sikkimilk
Tripura Co-operative Milk Producers Union
Tripura Gomati
Limited

Global players in Dairy Industry (Top 10):

1. Nestle
2. Danone
3. Dean Foods
4. Unilever
5. Lactalis

16
 6. Dairy Farmers of America
7. Arla Foods
8. Kraft Foods
9. Friesland Foods
10. Parmalat

National Statistics:

1. Index Number of wholesale prices:

INDEX NUMBER OF WHOLESALE PRICES

17
 1994 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007-
Particulars
-95 -99 -00 -01 -02 -03 -04 -05 -06 -07 08
All
Commoditie 112.6 140.7 145.3 155.7 161.3 166.8 175.9 187.3 195.6 206.2 215.7
s
Food
112.8 159.4 165.5 170.5 176.1 179.2 181.5 186.3 195.3 210.5 221.9
Articles
Food Grains 114.7 152 176.4 173.8 172.4 174.3 176.3 177.5 187 206 215.5
Fruits &
108 185.4 154.5 160 188.9 190.2 195.6 204.2 218.9 228.2 236.1
Vegetables
Milk 110.3 136 147.6 163.2 166.2 171.7 176 183.6 184.3 196 212.4
Egg, Fish &
116.1 169.4 174 186 190.6 193.5 186.4 194 217.4 226.9 238.6
Meat
Oil seeds 118.5 148.5 133.4 129.3 137.6 160.2 177.8 180.8 167.1 175.7 217.7
Food
114.1 149.7 151.3 145.7 145.4 153 166.7 174.9 176.8 182.5 190.2
Products
Dairy
117 168.6 184.7 181.9 187.1 182.1 196.3 205.9 206.5 217.4 232.2
Products
Edible Oils 110.9 139.1 122.1 103.3 112.9 138 157.9 156.4 146 154.6 175.1
Oil cakes 121.6 133.8 138.6 141.2 146.4 204.2 223.9 213.5 189.7 196.5 255.8

2. Production in India:

18
3. Estimation of milk production for 2007-08:

19
4. Per Capita Availability of Milk by States:

20
Recent highlights:

21
1. The global outlook series on Dairy Products provides a collection of statistical
anecdotes, market briefs, and concise summaries of research findings. The
report provides an aerial view of the dairy products industry, insightful reviews
on noteworthy market trends, and significant growth drivers & stimulants, key
segments, and recent industry/corporate developments. The regional markets
briefly summarized to provide a broad picture of the current, and emerging
scenario include, among the many, the US, Canada, Japan, Czech Republic,
France, Germany, Italy, Russia, Spain, Sweden, Switzerland, The Netherlands,
UK, Australia, New Zealand, China, India, Indonesia, Israel, Saudi Arabia,
UAE, Brazil and Chile. Also included is an indexed, easy-to-refer, fact-finder
directory listing the addresses, and contact details of 539 companies
worldwide. – By Global Industry Analysts, Inc., Sep 2008

2. i. The Global dairy market grew by 3.7% in 2008 to reach a value of $311
billion.
ii. In 2013, the market is forecast to have a value of $373 billion, an increase of
19.6% since 2008.
iii. Sales of cheese generate 36.9% of the market in value terms.
iv. The Americas region accounts for the majority of global revenues with a 44.7%
share.
v. The largest company in the market is Kraft Foods, Inc. with a 6.7% share.
vi. Supermarkets / hypermarkets are the dominant distribution channel. 63.5% of
the markets value is distributed via this channel.
- By Datamonitor, Feb 2009

22
 Company Profile
Karnataka Milk Federation

Karnataka Milk Federation:

23
Karnataka Co-operative Milk Producers Federation Limited (KMF) is the Apex Body
in Karnataka representing Dairy farmers Co-operatives. It is the third largest Dairy
Co-operative amongst the dairy co-operatives in the country. In south India, it stands
first in terms of procurement as well as sales. One of the core functions of the
Federation is marketing of milk and milk products. The brand ‘Nandini’ is the
household name for Pure and Fresh Milk and milk products.
KMF has 13 milk unions throughout the State which procure milk from Primary Dairy
Co-operative Societies (DCS) and distribute milk to the consumers in various towns,
cities, rural markets in Karnataka.
The first ever World Bank funded Dairy Development Program in the country started
in Karnataka with the organization of Village Level Dairy Co-operatives in 1974. The
AMUL pattern of dairy co-operatives started functioning in Karnataka from 1974 – 75
with the financial assistance from World Bank, Operation flood II & III. The Dairy
Co-operatives were established under the ANAND pattern in a three tier structure with
the village level Dairy Co-operatives forming the base level, The District Level Milk
Unions at the middle level to take care of the procurement, processing and marketing
of milk and the Karnataka Milk Federation as the apex body to co-ordinate the growth
of the sector at the state level.
Co-ordination of activities among the Unions and developing market for Milk and
Milk products is the responsibility of KMF. Marketing Milk in the respective
jurisdiction is organized by the respective Milk Unions. Surplus/deficit of liquid milk
among the member Milk Unions is monitored by the Federation. While the marketing
of all the Milk Products is organized by KMF, both within and outside the State, all
the Milk and Milk products are sold under a common brand name NANDINI.

Background:

24
In June 1974, an integrated project was launched in Karnataka to restructure and
reorganize the dairy industry on the co-operative principle and to lay foundation for a
new direction in dairy development. Work on the first ever, World Bank aided dairy
development project covered 8 southern districts of Karnataka and Karnataka Dairy
Development Corporation was set up to implement the project. The Multilevel,
multiunit organization with total vertical integration of all dairy development
activities was set up with dairy co-operative societies at grass root level, Milk unions
at the middle level and a Dairy Development Corporation at the State level as an apex
body, vested with the responsibility of implementing Rs. 51 crore project. At the end
of September 1984 the World Bank – aided project ended and the dairy development
activities continued under Operation Flood – II. The activities were extended to cover
the entire state except coastal taluks of Uttara Kannada district and the process of
dairy development was continued in the second phase from April 1984. KMF came
into existence in May 1984 as a successor to KDDC. After the closure of Operation
Flood – II, the dairy development activities which continued under Operation Flood –
III ended on 31/3/96. The spill over works financed by NDDB from 1/4/96 under
different terms and conditions.

Organization Status

25
As at the end of March 2000. The network of 8363 Dairy Co-operative Societies
(DCS) have been organized and are spread over 166 taluks of the total 175 taluks
in all the 27 districts of Karnataka. These societies have been organized into 13
milk unions. The unions are further federated at state level as Karnataka Milk
Federation. There are 38 Chilling centers (capacity 12.49 LLPD), 4 number of
farm coolers (capacity 0.16). 17 number of liquid milk plants and 2 product dairies
for chilling and processing (21.20 LLPD), conservation (25 TPD) and marketing
of milk. To supply balanced cattle feed three numbers of cattle feed plants of 100
TPD capacities each and one plant of 200 TPD capacity with mineral mixture
production facility in one unit are functioning. To ensure supply of quality germ
plasm, Bull Breeding Farm and Frozen Semen Bank have been established and are
well stocked with exotic quality high pedigree Bull. To impart training, one central
training institute and 3 regional training centers are functioning. Three diagnostic
laboratories have been set up for disease monitoring. Three fodder demonstration
farms at Rajankunte, Kottanahalli, Kudige and one seed production farm at
Shahpur are also operating. Out of the above units, 16 nos. of dairies, 2 nos. of
product dairies, 3 nos. of training centers and 3 nos. of diagnostic labs are
operating under respective unions.
Under Technology Mission for Dairy Development Project, it has been envisaged
to distribute Liquid Nitrogen which is required to store straws. Six Silos of 10,000
lts. Each have been erected at Bangalore, Mysore, Gulbarga, Dharwad, Hassan
and Shimoga Union jurisdiction at a total cost of 3.0 crores. KMF has taken the
responsibility to supply LN2 in Road tankers to the storage silos, for further
distribution to AI Centers of milk Unions and Department of AH and VS.

Manpower Coverage

26
The present level of activities encompasses about 14.69 lakh of dairy farmers as
primary members. Of these, the scheduled caste members are 1,49,389, scheduled
tribes are 84,849 and women members are 2,86,316 nos. A total of about 5525
number of employees are working in various capacities in all the units of KMF
and affiliated milk unions with direct employment. The indirect employment
generated through various project activities of veterinary services, milk
transportation through trucks and tankers, milk sales through agents, parlors,
booths etc., is around 37,000 which cover about 4,500 nos. of milk agents
engaging nearly 13,000 of door delivery boys, 1220 in Parlors/booths and about
400 persons in veterinary services. About 830 route contract vehicles directly
employing about 1800 people are working in milk transportation. About 16,000
numbers of persons are employed as village level functionaries in the Dairy co-
operative Societies.

Milk Federation
(Role):

27
 The Karnataka Co-operative Milk Producers Federation Ltd. came into existence
on 1/5/1984 by federating the milk unions in the state and thus forming the state
level apex organization. The project activities are being implemented by the
federation. When all the project activities are completed, the main role of the
federation will be to market surplus milk products and to produce and supply
centralized inputs.

(Functions):
Presently Mother Dairy and Nandini Milk Products at Bangalore are under the
control of KMF. Four cattle feed plants, a central training institute and a
centralized testing and quality control laboratory are functioning under the direct
control of KMF. Co-ordination of activities between the unions and developing
market for the increasing milk production is the responsibility of KMF. Local milk
market in the area of union is being organized by the respective unions. Surpluses
and deficiencies of liquid milk amongst the member milk unions are managed by
the Federation. However, marketing of products is organized by the milk is sold as
liquid milk. This apart other products like Butter, Ghee, SMP, WMP, Peda,
Flavored milk, Burfi, Mysorepak, Badam Powder and Ice cream are also sold.
‘Nandini Goodlife’ pure cow milk with an ambient shelf life of 45 days has been
introduced by adopting the ultra high temperature treatment technology. The
products are sold under the family brand name of ‘Nandini’. Marketing of liquid
milk and products outside the state is organized by the federation. Excellence in
quality is maintained to lay a solid foundation for widespread acceptance of
Nandini products. This will ensure an assured market for the ever increasing milk
production. Balanced cattle feed, bypass cattle feed, mineral mixture, frozen
semen straws and liquid nitrogen are produced by the federation and supplied to
the unions. Training and developing senior managerial personnel, acquiring and
applying all new relevant technologies, prescribing quality guidelines and norms
are also the functions of the federation.

Objectives:

28
Karnataka Milk Federation (KMF) is a co-operative apex body in the state of
Karnataka representing dairy farmers’ organization and also implementing dairy
development activities to achieve the following objectives:
 Providing assured and remunerative market for the milk produced by the
farmer members.
 Providing quality milk to urban consumers.
 To build village level institutions in co-operative sector to manage the dairy
activities.
 To ensure provision of milk production inputs, processing facilities and
dissemination of know how.
 To facilitate rural development by providing opportunities for self employment
at village level, preventing migration to urban areas, introducing cash
economy and opportunity for steady income.

The philosophy of dairy development is to eliminate middlemen and organize

institutions to be owned and managed by the milk producers themselves,
employing professionals. Achieve economies of scale to ensure maximum returns
to the milk producers, at the same time providing wholesome milk at reasonable
price to urban consumers. Ultimately, the complex network of co-operative
organization should build a bridge between masses of rural producers and millions
of urban consumers and achieve a socio-economic revolution in the hinterland of
the State.

World Bank Study – Observations about KMF

29
The World Bank, in its study on the effect of Co-operative dairying in Karnataka,
has pointed out that:-
 The villages with Dairy Co-operative Societies are much better off than those
without.
 The families with Dairy cattle are economically better than those without dairy
cattle.
 Women who had no control on the household income have better control in
terms of Milk money.
 A single commodity “MILK” has acted as a catalyst in the change in the
Socio-Economic impact of the rural economy.
 There is a positive impact on those at the lower end of the economic ladder
both in terms of landholding and caste

Perspective Plan 2010

30
After the closure of Operation Flood – III project, Government of Karnataka and
NDDB signed and MOU during February 2000, for further strengthening the Dairy
Development Activities in Karnataka with an outlay of Rs. 250 crores. Consequent to
the announcement of new lending terms and Conditions by NNDB through an
evolution of an action plan – Perspective 2010 to enable the dairy co-operatives to
face the challenges of the increased demand for milk and milk products by focusing
efforts in the four major thrust areas of Strengthening the Co-operatives. Enhancing
Productivity, Managing Quality and building a National Information Network, plans
are under implementation. The four Milk Unions viz., Dharwad, Tumkur, Bijapur and
Gulbarga that were having accumulated losses were included for rehabilitation
programme under the Centrally Sponsored Scheme “Assistance to Co-operatives”
which is also under implementation.

Future Vision:
To consolidate the gains of Dairying achieved in the state of Karnataka and with a
view of to efficiently chill, process and market ever developing and increasing milk
procurement with an utmost emphasis on the Quality and in the process conserve the
socio-economic interests of rural milk producers, the Government of Karnataka
through KMF has proposed to undertake several projects with financial and technical
support of NDDB for which an MOU was signed between Government of Karnataka
and NDDB on 10th November, 2004.

Milestones:

31
1955 - First Dairy in Karnataka set up At Kudige, Kodagu Dist.
1965 – Biggest Dairy in Karnataka with 1.5 lakh lts per day liquid milk processing
factory - Setup at Bangalore
1974 -World Bank aided Karnataka Dairy Development project implemented
 Karnataka Dairy Development Corporation (KDDC) is born
1975 – First spear head team is positioned
 First registration of Milk Producers Co-operative Society
 Government Dairies transferred to KDDC
1976 – First registration of Union
1980 – Karnataka Milk Products Limited established
1982 – First Milk product dairy started at Gejjalagere, Mandya
1983 – Corporate brand name ‘NANDINI’ given
 First Cattle Feed Plant commissioned at Rajankunte
 Capacity Expanded from 100MT to 200MT
1984 – Bull Mother Farm & Frozen Semen Bank commissioned
 Operation Flood – II implemented
 Karnataka Milk Federation is born
 KDDC transformed into KMF
 Product Dairy, Dharwad commissioned
 Mother Dairy started functioning
1985 – Remaining Government. Dairies transferred to KMF
1987 – Operation Flood – III implementation starts
 Dairies at Hassan, Tumkur and Mysore transferred to district milk unions
1988 – Dairies at Bangalore, Gejjalagere, Dharwad, Belgaum and Mangalore
transferred to district milk unions
 Training centers at Mysore, Dharwad and Gulbarga transferred to unions
1989 – Milk Supply to Calcutta Mother Dairy through railway tankers from Mother
Dairy, Bangalore
 Centralized Marketing organized

32
  Last milk shed registered as a union (Raichur)
1991 – Karnataka Holstein Friesian Breeders Association (KHAFBA) registered
 Chilling and Processing plants at Bijapur, Gulbarga, Bellary, Shimoga and
Kolar transferred to district milk union
 First Pilot Project on embryo transfer technology implemented
1992 – Commercial production and marketing of NANDINI flavored milk launched
1993 – Milk procurement on a single day cross million Kg lever in Dec. 1986 and
average milk procurement per day for the year crosses million Kg level
1994 – Liquid Milk Sale crosses Million Liters/day
1995 – Varieties of new Nandini Products viz. Nandini Paneer, Burfi, Kova and Sweet
curds launched
1996 – Foundation Stone laid for Cattle Feed Plant at Hassan
 Production started
 Foundation Stone laid for Pouch Film Manufacturing Unit at Munnekolalu
Bangalore Dt.
 Production started
 Foundation stone laid for Mega Dairy and new Powder Plant at Bangalore,
Mini Dairy Schemes and other development programmes
1997 – Inauguration of Ice cream manufacturing unit at Mother Dairy Premises,
Bangalore
1998 – Launching of new Products:
 Jamoon Mix
 Mysore Pak
 Tetra Fino Packaged Nandini “Goodlife” milk
 Badam Powder
 Installation of LN2 distribution system for Karnataka State
2000 – Chilling Centre of 150 TLPD capacity at Hoskote started in Bangalore Union

33
 KMF Pyramid:

KM
F

Milk Unions
(13)

Dairy Co-operative
Societies

34
Milk Unions:

1. Bangalore Urban & Rural Milk Producers’ District Co-operative Societies

Union Limited –
 This is one of the first four Milk Unions to be covered under the First
World Bank Project
 Has chilling centers in Doddaballapur, Anekal, Hoskote, Vijayapur,
Solur, Byrapatna and Kanakapura with total capacity of 5.5 lakh LPD
 There are 82 Bulk Milk Coolers and 442 Automatic Milk collection
units

35
2. Raichur, Bellary & Koppal Districts Co-operative Milk Producers
Societies Union Limited. –
 Established in the year 1989 under the operation flood II covering three
districts viz. Raichur, Bellary and Koppal.
 It has 4 chilling centers at Gangavati, Dadesagur, Ittigi, Kustagi and
Kudilgi with total capacity of .50 lakh LPD.
 There are 5 automatic Milk Collection Units.
 Procuring and marketing Buffalo milk under the brand name
“Shubham”.

3. Bijapur & Bagalkot District Co-operative Milk Producers Societies Union

Limited. –
 Established in the year 1984 and has got 2 dairies – One at Bijapur and
other in Bagalkot.
 It has12 Bulk milk coolers and 13 Automatic Milk Collection units in
the Union.

4. Belgaum District Co-operative Milk Producers’ Societies Union Limited –

 Established under Operation Flood II.
 Have 3 Chilling centers at Gokak, Ramdurg and Athani with a chilling
capacity of .30 lakh LPD.
 Have 5 Bulk milk coolers and 38 Automatic Milk Collection units.
 Special sweet has been prepared here – “Kunda”.

5. Dharwad District Co-operative Milk Producers’ Societies Union Limited.

–
 Established in the year 1986 under the Operation flood II and III.
 Covers the districts of Dharwad, Karwar, Haveri, and Gadag.
 Have Chilling centers at Gadag, Haveri, Sirsi, Ron, Nargund,
Hirekerur, and Kumta with the chilling capacity of .80 lakh LPD.
 Has 7 Bulk Milk Coolers.

36
6. Dakshina Kannada District Co-operative Milk Producers Societies Union
Limited. –
 Established during 1986 covering the Dakshina Kannada and Udupi
Districts jurisdiction.
 It has 2 dairies in Mangalore and Manipal.
 There are 30 Bulk Milk coolers and 186 Automatic Milk collection
Units.
 It has 1 Chilling centre in Puttur with the capacity of 20,000 LPD.

7. Gulbarga–Bidar Milk Producers Societies Union Limited. –

 Established in the year 1985.
 Have 3 Chilling centers – Bidaar with the capacity of 30,000 LPD,
Hudgi and Shapur with the capacity of 10,000 LPD.
 Have 3 Bulk Milk coolers and 9 Automatic Milk collection units.

8. Hassan Co-operative Milk Producers Societies Union Limited. –

 Registered in1977 with operational Jurisdiction extended to 3 districts
namely Hassan, Kodagu and Chikkamagalur.
 It has a dairy in Kudige which was the first dairy in Karnataka State.
 Have 2 Chilling centers at Birur and Holenarasipur with the chilling
capacity of 20,000 LPD.
 Have 13 Bulk Milk Coolers and 43 Automatic Milk collection units.

9. Kolar District Co-operative Milk Producers Societies Union Limited. –

 Formed on bifurcation of the Kolar District from the Bangalore
jurisdiction under the World Bank Assistance.
 Has chilling centers at Gowribidanur, Chintamani and Sadali with the
total capacity of 3 lakh LPD.
 Has 385 Bulk Milk Coolers, 137 Automatic Milk collection units AND
424 Community Centers.

37
10. The Mandya District Co-operative Milk Producers Societies Union
Limited. –
 Established in 1987.
 Have 3 Chilling centers at K.R. Pet and Nagamangala with the total
capacity of .40 lakh LPD.
 Have 23 Bulk Milk Coolers and 260 Automatic Milk collection units.
 Has export license for manufacturing and export of skimmed milk
powder.

11. Mysore Camarajanagar District Co-operative Milk Producers Societies

Union Limited. –
 Established under the World Bank Project.
 Have 3 Chilling centers at Chamarajanagar, Hunsur and Kollegala with
the capacity of 1.1 lakh LPD.
 Has 31Bulk Milk Coolers, 142utomatic Milk collection units and 15
Community Centers.

12. Shimoga District Milk Producers Societies Union Limited. –

 Established in 1963 as a Government Milk Supply Scheme.
 Have 5 Chilling centers at Honnali, Anandpur, Hosadurga, Tadagani
and Chitradurga with the capacity of 1.30 lakh LPD.
 Has 9 Bulk Milk Coolers, 62 Automatic Milk collection units.

13. Tumkur Co-operative Milk Producers Societies Union Limited. –

 Established under World Bank Project in 1975.
 Have 11 Bulk Milk Coolers and 48 Automatic Milk collection units.
 Have 4 Chilling centers at Sira, Madhugiri, Yediyur and Kibbanahalli
with the capacity of .90 Lakh LPD.

38
 Other Plants:

1. Cattle Feed Plant –

 KMF owns 4 cattle feed plants with installed capacity of 500 MTs/day and
are manufacturing 10,000 MTs Cattle Feed on an average per month.
 Plants are located in Rajanukunte, Gubbi, Dharwad and Hassan.
 All these plants are ISO certified.

2. Pouch Film Plant –

 The Project Report was prepared by Institute of Rural Management,
Anand.
 It was established during 1997 with the help of National Co-operative
Dairy Federation of India and Central Institute of Plastics Engineering &
Technology (CIEPT), Mysore, as a technical consultant.
 It is situated in Bangalore.
 The total plant capacity is 1200 tons per annum.

3. Nandini Sperm Station –

 It is engaged in production and supply of superior quality frozen semen to
all the Dairy Co-operative societies through the Milk Unions in the project
area of KMF.
 It is an ISO certified and 2nd best A Grade Semen station in 2005-06.
 It is one of the largest producers and suppliers of quality frozen semen
under the Co-operative Sector and is meeting the entire demand of frozen
semen of the State Co-operative Sector.
 It is situated in Bangalore.

39
 Product Mix of KMF:

1. Milk:

a. Toned Milk –
Nandini Toned Fresh and Pure milk containing 3% fat and 8.5% SNF. Available in
500 ml. and 1 lt. packs.

b. Homogenized Milk –
Nandini Homogenized Milk is pure milk which is homogenized and pasteurized.
Consistent right through, it gives more cups of tea or coffee and is easily
digestible.

c. Full Cream Milk –

Nandini full Cream milk containing 6% fat and 9% SNF. Rich creamier and tastier
milk, ideal for preparing home made sweets and savories.

40
d. UHT Processed Milk –
Nandini Good Life Milk is pure Cow milk. It is UHT processed, bacteria free
in a tamper proof tetra fino pack which keeps the milk fresh for 60 days
without refrigeration until opened. It is available in 500 ml. fino and in 200 ml.
bricks.

e. Double toned UHT processed milk –

Nandini Smart Milk is double toned UHT processed milk, bacteria free in a
tamper proof tetra fino pack which keeps the milk fresh for 60 days without
refrigeration until opened. Available in 500 ml. pack.

f. Slim milk –
Nandini Goodlife Slim Milk is Cow’s pure milk, homogenized and skimmed.
It is UHT processed milk, bacteria free in a tamper proof tetra fino pack which
keeps the milk fresh for 60 days without refrigeration until opened. It is 99.5%
fat free. Available in 500 ml. fino and 200 ml. bricks.

41
 g. Buffalo milk –
Nandini Shubham Milk is 100% pasteurized, processed and packed properly.
Has 5% fat and 9% SNF. Available in 500 ml. and 1 lt. pack.

2. Ghee:
Nandini ghee, a taste of purity. It is made from pure butter. It is fresh and pure
with delicious flavor. Hygienically manufactured and packed in a special pack to
retain the goodness of pure ghee. Shelf life of 6 months at ambient temperatures.
Available in 200 ml. 500 ml. 1000 ml. sachets, 5 lts. tins and 15 kg tins.

3. Curd:
Nandini Curd is made from pure milk. It is thick and delicious giving you all the
goodness of homemade curds. Available in 200 gms. and 500 gms. sachet.

42
4. Set Curd:
Nandini Set curd is made from 3% toned milk with added imported bacterial
cultures, filled with 200 Gms. And 400 gms. and allowed to set into curds. It has a
shelf life of 15 days in refrigerator without curd becoming sour.

5. Sweets:

a. Peda –
Nandini Peda is made from pure milk. Stored at room temperature
approximately 7 days. Available in 250 gms. pack containing 10 pieces each.

43
b. Gulab Jamoon mix –
Nandini Gulab Jamoon Mix is made from Nandini skimmed milk powder,
maida, shoji and Nandini Special Grade Ghee. Available in 100 gms. and 200
gms. standy pouch with a five layer foil lamination. The shelf life of 6 months.

c. Besan Ladoo –
Nandini Besan Ladoo is prepared from pure ghee, gram flour and sugar
added with cashews. Available in 250 gms. pack containing 6 pieces.

d. Cocoa based sweet –

Nandini Bite is a three in one sweet prepared by using Mysorepak, Khova
and Almond. Available in 25 gm., aluminum foil packaging.

44
e. Burfi –
Nandini Cashew Burfi is prepared by using Cashew nuts, Khova and Ghee.
Available in 250 gm., in a P. P. Box, shrink wrapped to preserve its
freshness.

f. Mysore Pak –
Nandini Mysorepak is made from quality Bengal gram, Nandini ghee and
sugar. Available in 200 gm., and 500 gm. P. P. box.

45
6. Milk products:

a. Butter milk –
Nandini Spiced Butter Milk is a refreshing health drink. It is made from
quality curds and is blended with fresh green chillies, green coriander leaves,
asafetida and fresh ginger. Nandini spiced buttermilk promotes health and easy
digestion. It is available in 200 ml. packs and is priced at most competitive
rates, so that it is affordable to all sections of people.

b. Flavored Milk –
Nandini flavored milk is a nutritious and healthy drink and an all season
wholesome drink available in 5 different flavors – Pineapple, Rose, Badam,
Pista and Natural orange. Available in 200 ml.

46
 c. Milk Powder –
Nandini Milk powder is a skimmed milk powder made from pure milk,
processed and packaged hygienically. Available in 500 gm., 100 gm., 200 gm.,
1 kg., and 25 kg. pack.

d. Ice cream –
Nandini ice cream is manufactured at ISO 9002/HACCP certified Mother
Dairy modern plant. Includes range of varieties like Vanilla, Strawberry,
Pineapple, etc. Available in 500 ml. and 1 lt. packs.

7. Butter:
Nandini Butter is made out of fresh pasteurized cream. Rich taste, smooth texture
and the rich purity of cow’s milk makes any preparation a delicious treat.
Available in 100 gms. (salted), 200 gms., and 500 gms. Cartons both salted and
unsalted.

47
8. Cheese:
Nandini Processed Cheese is highly nutritious and excellent source of milk
proteins and rich source of calcium. Available in 100 gms. carton.

9. Khova:
Nandini pure milk Khova is prepared from fresh milk. Used for preparing sweets
at home like Peda, Gulab Jamoon, Kalkand, Burfi, etc.

10. Badam Powder:

Nandini Badam powder is a delicious beverage with hot or cold milk. Used in
preparing sweets and desserts. Available in 200 gms. P. P. box with the shelf life of
6 months under room temperature.

48
11. Paneer:
Nandini Paneer is made by coagulating pure milk, and it is an excellent source of
milk protein. Available in 200 gms. pack.

49
 The Growth of KMF:

1976-77 2007-08
Dairy Co-operatives Nos. 416 11,063
Membership Nos. 37,000 19,56,163
Milk Procurement Kgs./day 50,000 30,25,940
21,29,790/ curd:
Milk Sales Lts./day 95,050
1.77 LKPD
Cattle Feed
Kgs./DCS 220 3,010
Consumed
Daily payment to
Rs. (Lakhs) 0.90 324
farmers
Turnover Rs. (Crores) - 2707

50
Organization Profile
Belgaum Milk Union
Limited

51
 Belgaum Milk Producers Union Limited (BEMUL)

Organization Profile:

NAME OF THE COMPANY

BELGAUM DISTRICT CO-OPERATIVE
MILK PRODUCERS SOCIETIES
UNION LIMITED

Belgaum District Co-operative Milk

Producers Societies Union Ltd.,
Belgaum Dairy Premises,
Address of the Company
Kanbargi Road,
Belgaum – 590016.

Contact
0831 – 2455036/2454107/2453442

JRL/9072/DAY/1985-86
Registration No. Date – 24th December, 1985

Type of Unit
Small Scale

Organization setup
Land – 22 acres

Permanent – 128
Contract – 78
Laborers
Total – 206

BEMUL

52
Government Dairy, Belgaum, was established in the year 1971 with milk handling
capacity of 10,000 LPD under Government Milk Scheme. The BEMUL is union
member of KMF and registered on 24th December 1985. It is a co-operative
organization. The integrated, dairy development activated in Karnataka started on
sound footing with Government of Karnataka initiating diary development project in
1974 with the World Bank Assistance. The AMUL Model Co-operative System was
followed for Dairy Development activities in Karnataka. Initially Dairy Development
was started in 8 districts of Southern Karnataka. Later in 1983, Integrated Dairy
Development activities were started in Northern Districts of Karnataka from October
1984 under Operation Flood – II project of NDDB which gave impetus for further
development in Dairying. Belgaum Milk Union started functioning with effect from
December 1985.

Belgaum District is North Western border district of Karnataka, 512 km. away from
Bangalore and it is on the border of Maharashtra and Goa states. The district is
formerly known as land of sugar, later turned into land of sugar and milk. New dairy
plant was established in the year 1995 with milk handling capacity of 60,000 LPD
expandable to 1,00,000 LPD to serve consumers with pasteurized milk and products
such as ghee, Peda, Sweet Milk, Masala Butter Milk and Belgaum special “Nandini
Kunda”. There are 314 primary Dairy Co-operative societies functioning which are
affiliated to the Union. In all around 15,280 milk producers families supplying milk to
the Union through Primary Milk Producers Co-operative Societies. Around 64,867
families are depending on Dairy activities for their livelihood of which many are land
less laborers and belong to weaker section. The major objectives of the union shall be
to carry out activities conductive to the economic and socio-economic development of
the milk producers by organizing effective promotion, processing and marketing of
commodities.

Principles/Vision of the BEMUL

53
  Honesty
 Discipline and Time management
 Quality at all stages
 Mutual Co-operation and Respect
 Transparency
 Hard work and Sincerity
 Cleanliness
 Sovereignty

Mission Statement
Belgaum Milk Union Limited is committed to provide maximum possible price for
the milk supplied by its members and provide necessary inputs to enhance milk
production while ensuring economic viability of the Union and is also committed to
provide quality milk products to consumers and emerge as one of the top most milk
union of the Co-operative Dairy industry in the country.

Quality Policy
To ensure pure, hygienic milk and milk products through continuous improvement of
quality standards.

54
 Objectives of the BEMUL
 The main objective of BEMUL is to develop the members by procuring
good quality milk.
 To provide high quality milk to the continuous changing market and to
increase the position of Union in introducing milk and milk products.
 Honestly striving to become one of the best dairy in Karnataka State.
 To eliminate the middlemen’s in the business so that the milk products
receive there appropriate share of bread.
 To educate the villages about the adulteration of milk and its harmful effect
on the body.
 To make villagers self viable and build self image.

55
 Functions of BEMUL
 The main function is to procure milk from villagers and pay them the right
price.
 To educate the villagers about milk and its quality.
 To make “Nandini” as a part of daily life.
 To provide good quality of cattle feed, fodder, veterinary properly and in
an efficient manner.
 To see that the milk is brought from DCS’s to the chilling centers in the
prescribed time.
 To look the accounts of the DCS’s, supervise the purchase process and
market the milk and milk products.

56
 Board Members
 Chairman - Shri. Babu . Bassapa. Galagali
 Director - Shri. Sanjaygouda. R. Patil
Shri .Somalingappa. S. Mugali
Shri .Babu. Basavantappa. Katti
Shri . Amar. Iranagouda. Nirali
Shri .Shankar. Malappa.Bolannaver
Smt. Veena . Shrikanth. Desai
Shri. Rajesheker . A. Patil
Shri. Vivekrao. Vasanthrao. Patil
Shri. Narayan . Laxman. Patil
Shri . Udayasimha . Jayashingrao. Shindhe.
Shri. K. N. Venugopal
Dr. Manjunath. Palegar
Shri .G. M. Patil
Shri . C. Balamurugan
 Government Nominee - Shri. Laxaman. V. janvadakar
Shri. Sukadev. N. Jadav
Shri. Girija. B. Bhimarani
 Managing Director - Dr. S. Ameer Ahmed

57
Organization Structure

58
 Department of BEMUL

1. Production/Plant Department
a. Engineering Department
b. Stores Department
2. Procurement and Input Department
3. Marketing Department
4. Administrative Department
5. Finance Department
6. Purchase Department
7. MIS Department

59
Production
Department

60
Production/Plant Department structure:

61
Production is the conversion of raw material into finished product. At BEMUL,
production department is well planned and adequately equipped manufacturing set
up where the entire necessary infrastructure is available.
In BEMUL, the raw milk is processed to form the good quality of milk. During
the processing, the milk is differentiated depending on the contract of FAT and
SNF (Solids Not Fat).
The different types of milk with its FAT and SNF:

TYPES OF MILK FAT (IN %) SNF (IN %)

Full Cream Milk 6 9
Toned Milk 3 8.5
Standardized Milk 4.5 8.5

62
The production procedure at BEMUL is done under different stages. They are as
follows:

→ →
↓

63
 i. Collection of Milk –
In this stage, the milk is brought from the various DCS to the main dairy in a can
containing 40 liters capacity in the vehicles. The cans are marked with two
different colors to differentiate between the Cow and Buffalo milk. The red
colour is used for Buffalo milk and Green or Blue colour is used for Cow milk.
Once the milk is brought to the main dairy, it undergoes for testing of FAT and
SNF.

ii. Testing –
In this stage, the testing goes under three stages:–
 Smelling (odor) test –
A man at the Dock station checks the acidic nature of milk by smelling or
tasting the raw milk. If the tasted milk has bad odors, then the dairy will
pay lower rate to such society members than the normal rate.

 Extraneous Matter Appearances –

This test is conducted by the chemist. The chemist checks for the two
aspects, mainly whether the milk is contaminated or not and milk is in
liquid form or curd form. He also checks for any extraneous matters like
dust, flies, etc. which lead to the spoilage of milk.

 Acidic test –
The payment to the suppliers or DCS depends mainly on FAT and SNF
content in the raw milk. The supplier may add sugar to the milk so as to
increase the FAT and SNF content. Hence, to avoid this adulteration, the
acidic test is conducted.
In this process, 10 ml. of milk is shaken in a test tube and 1 ml. of
hydrochloric acid. Few crystals of resorcinol are mixed into it. The
solution is shaken well and is heated for 5 minutes. If the solution is
turned into orange colour, it is demanded that sugar is mixed to it.

64
iii. Chilling and Storing –
After testing, the milk is allowed to store in the SILOS (storage tank). It is
maintained at cold lever of 4ºC. The Union is having 7 storage tanks, 3 tanks are
vertical with 30,000 liters capacity each and the remaining 4 are horizontal
among which 2 are having the capacity of 10,000 liters each and other 2 of
15,000 liters each.

iv. Pasteurization and Separation –

In this stage, the heating of milk is done at 72ºC in 15 seconds and it is cold in
less than 4ºC. When it is passing through pasteurization, the cream is removed
depending on the quality of the milk required (standardization).

v. Packing and Dispatching –

In this stage, the packing is done by the machine of fluid goods and manually in
case of solid goods like Peda. The machine packs the milk in 500 ml. pouches.
These machines are automatic with a capacity of packing 10,000 to 14,000
pouches per hour. These machines are used to pack all different types of milk in
plastic bags. Same machines are used for flavored milk, lassi, ghee, etc. The
polythene bags required for packing milk is brought from Bangalore.

vi. Storing –
After packing, the milk is arranged in crates. Each cater contain 10 liters of milk.
The caters are stored in cold room which has a temperature of about 5ºC. or
below.

65
 Ghee making process:

Peda and Kunda Making:

PRODUCTS OF
BEMUL

1. Milk Products
 Toned Milk
 Full cream Milk
 Standardized Milk
2. Curds

66
3. Lassi
4. Flavored Milk
5. Ghee
6. Peda
7. Kunda:
Kunda is a sweet meat made of pure milk; it is one of the special sweet items
in Belgaum District. Available in market in tins having self life of 90 day.

a. Engineering Department:
Engineering Department has the major contribution towards the production
unit. It has 20 workers who personally inspect all the machines and take
care of their proper functioning.

Functions:
 To supply hot water to production department.

67
  To supply cold water by ammonia treatment so as to maintain the 4ºC
temperature of milk.
 Diffusion
 Maintenance and repair of motors
 Supply of proper electricity.
 It will clear the water after passing out from the production department
and is reused for plants and to wash the floor (Efflon Treatment)
 To supply steam of 270ºC continuously.

 The Manager and the Technical officer maintains the record

of the fuel consumption, ordering of diesel, etc.
 Supervisors and technicians checks the proper maintenance of
the machines
 Helpers check the fuel consumption, starting of generator.

b. Stores Department:
It is a department where all the raw materials, semi finished and finished
products are stored. Apart from these, stationery and other goods are also
stored.

Function:

68
 Proper classification of material
 Checking all the materials before storing in the godown.
 Maintaining all the records of goods.

 The stores officer checks all the raw materials and plastic films
which has to be there in the particular time after the order is given
 The stores assistant maintains all the records of goods and give the
necessary details to the Administration.
 Helpers check the daily maintenance and cleanliness of the raw
materials

Procurement &
69
Input Department

Procurement and Input Department:

70
Procurement and Input is an important Department in the Organization. It deals
with procurement of milk and takes it as input for final production.

71
The demand for milk and milk products has been increasing and to meet for the
same, only procurement of milk through societies is not sufficient, the Union has
adopted various other sources of procurement life:
 Milk procured from societies 90%
 Milk procured from other dairy 10%

Functions:
 Opening of new dairy Co-operative Societies
 To procure good milk at DCS.
 To check the records maintained at DCS.
 To attend complaints
 To organize meetings at DCS level.

Process:

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The farmers milk the cattle and take the milk to DCS (Dairy Co-operative
Societies) and then the milk is tested for FAT for both cow and buffalo.
The milk collected at DCS centers are picked up by milk vans and taken to the
main dairy. Then it is weighted there and FAT & SNF are again tested and then
send for pasteurization. The money paid by main dairy to the societies based on
the FAT and SNF content of milk.
For more milk procurement and milk production, balanced cattle feed is essential.
For that reason BEMUL is supplying balanced food i.e. Cattle feed and mineral
mixture at reasonable prices in the village itself at their DCS. The price of the
Mineral mixture is Rs. 30/kg. And their another Programs include Amrut Yojana
Program and the program for Tribal people where they finance tribals for cows,
cattle feed, etc.

Mineral mixture:

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 COMPOSITION PERCENTAGE (%)
Calcium 19.80
Phosphorus 9
Zinc 1.62
Copper 0.25

Members who give milk for DCS:

SMALL FARMERS 27,495

Marginal Farmers 19,549
Lenders/Laborers 11,369
Others 11,698
Total 70,111

Average Procurement:

FUNCTIONAL 2006-07 2007-08 2008-09

DISTRICT
DCS (IN RS.) (IN RS.) (IN RS.)
Belgaum 27 4.858 3,478 3,841
Gokak 50 8,161 10,244 13,173

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Raibag 30 5,018 7,818 9,074
Balihongal 62 10,363 9,751 10,136
Savadathi 36 4,789 4,531 5,145
Ramdurg 43 8,677 8,744 8,293
Hukeri 13 1,696 2,149 2,839
Chikodi 9 704 1,065 1,440
Khanapur 51 6,876 7,068 7,902
Athani 13 1,852 1,513 1,899
Total 337 52,994 56,361 63,741

The total procurement till June is 65,585 milk/day.

Marketing
Department

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Marketing Department

76
The marketing Department of BEMUL is the process of planning and executing
the conception, pricing, promotion and distribution of ideas, goods and services to
create exchanges that satisfy individual and organizational goals.

77
It covers an area viz., Goa Uttar Kannada district and Belgaum, and some parts of
Maharashtra.
Marketing of milk and milk products are marketed by KMF, the marketing agency.

Functions:
 To prepare the marketing plan at the beginning of every year, taking
into consideration the demand, sales, production capacity.
 To undertake promotional activities in order to create awareness and to
generate sales.
 To ensure proper supply chain management.

 Manager prepare the marketing and advertising plans, Product prices.

 Clerks and helpers check on the sales, money transactions from their
customers, etc.

Marketing section in BEMUL is divided into three different internal sections:

 Office Work
 Marketing and Production Co-ordination

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 Field Work

 Office Work:
It deals with all daily transactions including checking the daily indents,
collecting the cash from salesman and depositing the same into the bank.
Delegating the work to all assistants and helpers. They also arrange vehicles
for distribution of milk on contract basis.

 Marketing and Production Co-ordination:

Here, the indents collected by the agents, helps in production and packing
of the products. They prepare chart of requirement for the next day and sent to
the production department which helps in taking decisions for the production.

 Field Work:
The marketing officers will go to the fields to study the market and then they
will plan for the strategy. They will plan about Marketing Mix i.e. Product,
Price, Promotion and Place. There are around 15 persons in the field work.

Distribution Process:

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Milk Distribution Routes of BEMUL:

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ROUTES
District Taluka Outsider
Belgaum I Gokak Sawantwadi
Belgaum II Balihongal Goa I
Belgaum III T S Halli Goa IA
Belgaum IV Ramnagar Goa Kundaim
Belgaum V Raibag Goa II
Sulebhavi Castle Rock Goa III
Auto (M1) Itagi MPCS Goa IV
Auto (M2) Bailur Route Goa Navy
Auto (M3)
Parlour
Eve. Sales
Eve. Sales II
Mil. Dairy
Adhok Sales
TOTAL DISTRIBUTORS
216 110 100

Prices of Products:

BELGAUM MILK UNION LIMITED

BELGAUM GOA
Sr.
Particulars Dealers Margin M.R.P. Dealers Margin M.R.P.
No
MILK
1 Toned milk/ ltr. 16.25 0.75 17.00 17.50 1.50 19.00
Standardized
2 17.15 0.85 18.00 19.65 1.35 21.00
milk/ltr.

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 Full cream
3 21.00 1.00 22.00 22.65 1.35 24.00
milk/ltr.

PRODUCTS
Ghee Ghee 200
1 186.36 18.64 205.00 186.36 18.64 205.00
ml.
Ghee 200
2 37.27 3.73 41.00 32.27 3.73 41.00
ml./sachet
3 Ghee 500 ml. 180.90 18.10 199.00 180.90 18.10 199.00
Ghee 500 ml./
4 90.45 9.05 99.50 90.45 9.05 99.50
sachet
5 Peda 100 gm. 13.50 1.50 15.00 13.50 1.50 15.00
6 Peda 250 gm. 30.50 2.50 33.00 30.50 2.50 33.00
7 Peda/kg. 122.00 10.00 132.00 122.00 10.00 132.00
8 Curd 200 ml. 4.40 0.60 5.00 4.00 2.00 6.00
9 Curd 500 ml. 9.25 0.75 10.00
Flavored milk
10 4.00 1.00 5.00 4.00 1.00 5.00
200 ml.
Sterilized
11 10.76 1.24 12.00 10.76 1.24 12.00
flavored milk
Tetra pack
12 10.20 1.80 12.00
flavored milk
Masala Butter
13 3.40 0.60 4.00 3.40 0.60 4.00
milk 200 ml.
Sweet lassi 200
14 4.00 1.00 5.00 4.00 2.00 6.00
ml.
Kunda 250 gm
15 31.00 4.00 35.00 34.00 6.00 40.00
tin
16 Kunda/kg. 124.00 16.00 140.00 136.00 24.00 160.00
Badam powder
17 225.25 24.75 250.00 225.25 24.75 250.00
sachet 10 gm.
Badam powder
18 37.97 4.03 42.00 37.97 4.03 42.00
200 gm./tin
Badam powder
19 189.85 20.15 210.00 189.85 20.15 210.00
200 gm.
Jamoon mix
20 29.45 4.05 33.50 29.45 4.05 33.50
200 gm.
21 Jamoon mix/kg 147.23 20.27 175.50 147.23 20.27 167.50
Ghee 15 kg. tin
22 190.00 5.00 195.00 190 5.00 195.00
(per kg. Rs.)

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Total product sales:

PRODUCT 2005-06 2006-07 2007-08 2008-09

Curd 3,46,341 4,82,870 4,72,743 5,50,555
Lassi 45,895 96,664 1,89,431 2,12,916
Masala Lassi 5,291 9,981 10,081 11,552
Peda 8,972 13,305 17,745 27,235
Ghee 52,267 57,170 67,261 1,25,269
Kunda 2,530 7,704 22,660 27,900
Flavored Milk 33,414 61,490 82,733 1,16,884

Present sales structure:

YEAR SALES (IN RS.) {MILK/DAY}

2006-07 43,185
2007-08 56,936
2008-09 65,585

Share price:

YEAR SHARE PRICE (IN RS.)

2006-07 137.18
2007-08 149.56
2008-09 148.17

83
Total demand:

84
Administration
Department

85
Administration Department:

86
It is the main department in the BEMUL. It covers all the section of the Co-
operative in case of overall administration. This department acts as the HR
department and takes care that the employees are satisfied with their present work
and are working efficiently with their respective authority. It looks after the
welfare schemes of the employees of the whole dairy. There are totally 3
employees working in the Department. One is Supervisor, and the other two are
helpers or subordinates. The employees are given a pair of shoes, uniform,
raincoats, etc. once in a year. All these kind of allowances act as a source of
motivation to the employees. At BEMUL, there are permanent workers and labors
and also contract labors. Contract labors are paid daily wages and a separate
register is maintained for them. The general shift of the dairy is from 9.30 am to
5.30 pm.

Functions:
 Recruit the candidates and select the suitable candidate for the job.
 Conduct the training to the new employees as well as to the existing
employees.
 Maintain shifts timing, etc.
 Maintenance of attendance and service records.
 Establishment of billing.

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  The Establishment officer maintains the records of all departments
and attendance of every employee.
 The clerks and the attainder maintains the bills, service records, etc.

Finance Department

88
Finance Department

89
The main activity of the finance department is to keep all the account of the
financial transactions. It is responsible for maintaining up to date account. The
various activities are collected to different sections.

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Functions:
 Maintaining proper accounts for milk purchased and sold every day.
 Maintaining of general ledgers and store books.
 Maintaining of profit and loss account and balance sheet systematically.
 Make use of available financial resources properly.
 Paying taxes and insurance in time.
 Maintain liquidity of assets properly to earn maximum profit.

 Manager maintains all the records from production to

administration.

 Cashier maintains all clearing transactions and depositing of money

in the banks.

 Clerks and officers record and give money to the DCS, where it is
based on the milk provided

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Profit and Loss account:

PARTICULARS 2006-07 2007-08

Sales 39,46,20,886 45,40,61,224
Other income 49,61,454 55,47,178
Manufacturing &
3,23,69,684 5,46,85,555
Other expenses

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Purchase Department

93
Purchase Department

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Purchase Department purchases all materials required by the organization. Its
main function is to purchase good quality milk at competitive rates from the
milk suppliers.

Function:
 Proper selection of suppliers
 Placing order for purchase
 Obtaining milk at the best price
 Conducting market research for purchase

 The manager maintains and work for the quotation of the products
and raw materials.
 The clerks maintain all the record of stationery products and other
milk products.

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MIS Department

96
MIS Department

97
MIS is a Management Information System. It is a Computer based information
system. MIS at BEMUL is divided into two types, viz.
a. Daily Information Report –
The information is recorded daily regarding the departments, like procurement,
water consumption, ice consumption, etc.

b. Monthly Report –
Monthly records are available here like monthly stock report, monthly progress
report on milk procurement, monthly sales, etc.

Functions:
 To maintain daily reports.
 To maintain information regarding input and output.
 Maintain town wise sales report.
 Reports regarding procurement and input.
 Maintaining accounts of daily purchase.

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 Competitors:

1. Arokya Dairy:

It procures milk from south side of the Belgaum. It procures 10,000 LPD. It is
located near Desur village of Belgaum. They supply most of the procured milk to
the city.

2. Mayur Dairy:

It procures milk mainly from Taluka’s at Belgaum District namely Chikkodi,

Raibag and Athani. They procure 25,000 LPD. It is located in Kolhapur and they
supply milk to Belgaum as well as Kolhapur district. They nearly procure 10,000
LPD.

4. Sahyadri Milk:
The dairy is located in Shinnoli Taluka, Chandgad and Kolhapur District. It
procures 30,000 LPD. It is supplied in the Belgaum city as well as in the
Maharashtra state.

5. Mahalaxmi Dairy:
The plant is located near Kolhapur. It procures around 15,000 – 20,000 LPD. The
targeted market is in Belgaum, Gokak and in Maharashtra.
Some other brands are Krishna, Gopal, and Adityaa.

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 Future Growth and Prospectus:

Government of Karnataka and NDDB has signed a memorandum of understanding

for further strengthening the dairy development activities in Karnataka with an
outlay of Rs. 250 crores. New lending terms and conditions have been set up by
NDDB through an evolution of an action plan – Perspective 2010, to enable Dairy
co-operatives to face the challenges of an increased demand for milk and milk
products. Enhancing productivity, managing quality and building national
information network plans are under implementation.
 Preparing ISO-9001 certification.
 Marketing quality improvement.
 Developing HACCP (Hazard Analysis and Critical Control Points)
 Getting export grade milk powder.
 Expansion of Gokak Chilling centers.

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 SWOT ANALYSIS

1. Strength:
 Nandini enjoys good brand image.
 Wide distribution network leads to regular and timely supply.
 Milk processed is local therefore reduced transportation cost.
 It enjoys highest market shares in the packed milk segment.

2. Weakness:
 Poor retail selling and consumer grievance handling.
 Commission paid is less compared o other brands.
 Inadequate sales promotional activity.

3. Opportunities:
 There is scope for development in new area.
 Availability of buffalo milk improves the milk quality.

4. Threats:
 No entry barriers for private players.
 Low level of consumer awareness.
 Persuaded benefits of competing brands.

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 Conclusion:
In less span of time, many new Companies are entering the market. The employees
and customers may get attracted towards the new Companies. Therefore the ultimate
challenge for BEMUL would be to maintain confidence and trust of its employees and
customers. By doing this it will deliver employee satisfaction as well as customer
satisfaction.
To conclude with it was a nice experience in BEMUL, Belgaum. I really came to
know what it takes to create and maintain an organization and its customers to give
them a satisfaction. Moreover all the staff of the organization provided me with the
relevant information which made a good learning experience.

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 Bibliography:

 www.kmfnandini.coop
 www.nddb.com
 Company manuals
 Annual report
 Company Journals
 Discussion with Department heads

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 Annexure

 Joining report
 Weekly report of four weeks

104