Dairy giant Amul reports slowest growth in 8 years

NEW DELHI: Amul has reported its slowest growth in the past eight years for 2014-15 due to a fall in global milk prices that impacted the rate of revenue increase at India's largest dairy brand for bulk commodities such as skimmed milk powder, whole milk powder and ghee.
Gujarat Cooperative Milk Marketing Federation ended the fiscal with revenue of Rs 20,730 crore, an increase of 14.2% over the previous year while it achieved a compounded growth rate of 20% over the past five years in marketing its Amul brand of milk and milk products."We have achieved volume sales growth in all product categories.
The consumer product line has grown by 21% especially in the beverages, small milk powder pouches and ice-cream," Amul's managing director RS Sodhi told ET. He added, though, that the company suffered a 77% drop in revenue in sale of bulk commodities. The total turnover of the Amul group, owned by close to 32 lakh farmers from 17 district cooperatives, including sale of liquid milk by member unions, other dairy products and cattle feed in their respective districts, is estimated at almost Rs 29,000 crore, Sodhi said.
The cooperative dairy, which processes 154 lakh litres of milk procured from Gujarat and other states daily, is focusing on expanding its plant capacity by 14% to process 175 lakh litres of milk per day.
"With the current expansion in setting greenfield projects and expanding existing units, we should achieve a turnover of Rs 25,000 crore (for Amul brand) in 2015-16," said Sodhi. The dairy cooperative is expanding the market for liquid milk under the Amul brand in new markets while it is pushing the sales of value-added products to earn higher margins.
To expand its export market, which slumped by 53% to Rs 250 crore in 2014-15, Amul plans to focus on the SAARC and Middle East countries. "Pakistan, Afghanistan, Middle East are good markets to expand. Apart from bulk commodities, branded Amul products are also in demand in these markets," said Sodhi.
In the domestic market the dairy plans to add 1,000 retail outlets during the current fiscal year, taking the total number of exclusive parlours across the country to 9,000. In addition, to expand the distribution network, it will add 900 wholesale distributors this year to the existing 4,800.