About the Company

Organisation structure

It all started in December 1946 with a group of farmers keen to free themselves from
intermediaries, gain access to markets and thereby ensure maximum returns for their efforts.
Based in the village of Anand, the Kaira District Milk Cooperative Union (better known as Amul)
expanded exponentially. It joined hands with other milk cooperatives, and the Gujarat network
now covers 2.12 million farmers, 10,411 village level milk collection centers and fourteen district
level plants (unions) under the overall supervision of GCMMF. There are similar federations in
other states. Right from the beginning, there was recognition that this initiative would directly
benefit and transform small farmers and contribute to the development of society. Markets, then
and even today, are primitive and poor in infrastructure. Amul and GCMMF acknowledged that
development and growth could not be left to market forces and that proactive intervention was
required. Two key requirements were identified.
The first, that sustained growth for the long term would depend on matching supply and demand.
It would need heavy investment in the simultaneous development of suppliers and consumers.
Second, that effective management of the network and commercial viability would require
professional managers and technocrats. To implement their vision while retaining their focus on
farmers, a hierarchical network of cooperatives was developed, which today forms the robust
supply chain behind GCMMF's endeavors. The vast and complex supply chain stretches from
small suppliers to large fragmented markets. Management of this network is made more complex
by the fact that GCMMF is directly responsible only for a small part of the chain, with a number of
third party players (distributors, retailers and logistics support providers) playing large
roles.Managing this supply chain efficiently is critical as GCMMF's competitive position is driven
by low consumer prices supported by a low cost system.

Developing demand

At the time Amul was formed, consumers had limited purchasing power, and modest
consumption levels of milk and other dairy products. Thus Amul adopted a low-cost price strategy
to make its products affordable and attractive to consumers by guaranteeing them value for
money.

Corporate Social Responsibility, The Amul Way

Corporate social responsibility (CSR) has been defined as the “commitment of business to
contribute to sustainable economic development working with employees, their families, the local
community, and society at large to improve their quality of life, in ways that are both good for
business and good for development.”
To meet with the CSR it is expected that a business in its entire procurement-production-
processing-marketing chain should focus on human development involving the producer, the
worker, the supplier, the consumer, the civil society, and the environment.
Indeed, a very tough task. Most businesses would certainly flounder in not being able to achieve
at least one or many of those expectations. But AMUL has shown the way.

CSR-sensitive Organisational Structure

AMUL is a three tier co-operative organisation. The first tier is the co-operative society at the
village,of which; milk producers are voluntary members, managing the co-operative through a
democratically elected 9-member managing committee, and doing business by purchasing milk
from members and selling it to the district level co-operative. There are more than 11,000 co-
operatives in villages of Gujarat.
The second tier is the district co-operative that processes milk into milk products, markets locally
and sells surplus to the state co-operative for national and international marketing. There are 12
district co-operatives each being managed by a 15-member board elected by the college
comprising the nominated representatives or chairmen of the village co-operatives.

Third tier is the state level co-operative - the Gujarat Co-operative Milk Marketing Federation
(GCMMF) responsible for national and international marketing of milk and milk products produced
and sold to it. The GCMMF is managed by the board democratically elected by and from amongst
the chairmen of the district co-operatives.

The entire three-tier structure with the GCMMF at its apex, is a unique institution because it
encompasses the entire chain from production of raw material to reaching the consumer with the
end product. Every function involves human intervention: 23.60 lakh primary milk producers;
35,000 rural workmen in more than 11,400 village societies; 12,000 workers in 15 dairy pla-nts;
750 marketing professionals; 10,500 salesmen in distribution network and 600,000 sal-esmen in
retail network. Accu-mulation of human capital is sine qua non for the development and growth of
any enterprise or economy. The GCMMF is sensitive towards CSR. It believes that technology
and capital are replicable inputs but not the human capital. Since men are the basis for achieving
the CSR, the GCMMF lays emp-hasis on their development into...

AMUL RELIEF TRUST

A devastating earthquake (Richter scale – 7.9) hit Gujarat on 26th
January 2001. The epicenter of the quake was located in Kutch
district. It caused death of thousands of people, tens of thousands
were injured, hundreds of thousands were rendered homeless and
damage of billions of Rupees was done.
GCMMF formed a specific organization named “Amul Relief Trust”
(ART) under the Chairmanship of Dr. V. Kurien in 2001 with a
donation of Rs. 50 Millions for reconstruction of the school buildings
damaged in the 2001 earthquake in the Kutch area.
The Trust reconstructed 6 schools damaged by the above earthquake
at a cost of Rs. 41.1 millions in Kutch area. Four of these schools
started re-functioning from the last two academic sessions and the
other two schools from the current session.