SUMMER TRAINING PROJECT REPORT

ON

“PREPARE A PROPOSAL FOR THE ENHANCEMENT OF THE

PRODUCT & PERFORMANCE OF MILK RETAILERS”

A report submitted to IIMT, Greater Noida as a partial fulfillment of full time

Postgraduate Diploma in
Management.

Submitted to: Submitted by:

Dr.D.K.GARG Amresh Ranjan
The Chairman PGDMM
IIMT, Greater Noida. MMR3080
Batch-14th

Ishan Institute of Management & Technology

2, Knowledge park-1, Greater Noida, Distt. G.B. Nagar (U. P.)
E-mail: ishan_corporate@yahoo.com
www.ishanfamily.com
Name : Amresh Ranjan
ENR : MMR3080
COURSE : PGDMM
TITLE : “ TO PREPARE A PROPOSAL FOR THE
ENHANCEMENT OF PRODUCT. &
PERFORMANCE OF MILK RETAILERS”

2
 PREFACE
The development makes the knowledge of employees obsolete so every concern has to
arrange some kind of training for preparing worker for job and keeping them acquainted
with advancement.
For getting the right results from the candidate providing the various training
programmes is must for the Organization.
These Training Programmes helps the employees to work better in their related fields and
helps them to achieve their goals by making them expertise in their related work fields.
The purpose of providing the training programmes is also to explain the basic policies of
workings of the organization so that the employees must work according to the policies
of the organization for achieving the best results i.e. for achieving the goals of the
organization.
Management in India is heading towards a better profession as compared to other
professions. The demand for professional managers is increasing day by day. To achieve
profession competence, manager ought to be fully occupied with theory and practical
exposure of management. During the curriculum of management programmes a student
has to attain a practical exposure of an organization on live project in addition to theory
he/she studies. This report is about the practical training done at ‘MAGADH DIARY
PROJECT (SUDHA) GAYA during the curriculum of PGDMM ,from IIMT, Greater
Noida. The whole text is divided into following main parts: Introduction of training,
objectives of the study, methodology, literature review, about company, management
hierarchy, government policy, comparison with other business company, tax aspects,
company assignments, data analysis and finally conclusion with suggestion and
recommendations to the company.

3
 ACKNOWLEDGEMENT

No research can blossom from single person’s mind without proper guidance, assistance
and inspiration from various quarters. My project was given its present shape by
assistance of many people whom I am greatly indebted to. I express my gratitude and
indebtedness toward the people who helped me during my project work.
This project report is a result of endless effort & immense degree of oil by many great
minds. It was pleasure to work in one of the most valuable F.M.C.G Company like
MAGADH DIARY PROJECT (SUDHA)

I express my humble gratitude towards Mr. K.K SHARMA Chief executive of

MAGADH DIARY PROJECT (SUDHA. Gaya who treat me as a guide depot for giving
me a chance to pursue my summer training in a prestigious company.
I am also thankful to Mr. A.K PANDEY (MANAGEMENT REPRESENTATIVE) for
providing me proper inputs and guidance.

I would like to dedicate this work to my revered institute IIMT, Greater Noida where I
am getting the shape of future business manager.

I express my sincere gratitude to Dr. D.K. GARG.(Chairman), Mr. S.K. VARMA (Dean)
and Dr. Guha (Placement co-coordinator) faculty of IIMT, Greater Noida for their
support and guidance on the ground of which I have acquired a new field of knowledge.

Lastly, I express my gratitude to my parents who financed this project and have been a
moral support to me during this project.

4
 DECLARATION
I hereby declare that the project work entitled “MAKE A PROPOSAL FOR THE
ENHANCEMENT OF THE PRODUCT & PERFORMANCE OF MILK RETELERS” is
an authentic work carried out by me at COMPFED. under worthy and esteemed guidance
of Mr. P. MUDGAL. This work has not been submitted to any other university for
Award of any Degree/Diploma and is the whole sole property of ISHAN INSTITUTE OF
MANAGEMENT AND TECHNOLOGY, GREATER NOIDA. Any unauthorized used
of this Project is strictly prohibited. For further use, approval of the concerned authority
is mandatory.

DATE:
AMRESH RANJAN

MMR-3080

PGDMM

BATCH: 14TH

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 TABLE OF CONTENT

TITLE PAGE 01

INTRODUCTORY PAGES

(1) PREFACE 03

(2) CERTIFICATE

(3) ACKNOWLEDGEMENT 04

(4) DECLARATION 05

(5) EXECUTIVE SUMMARY 08

LITERATURE REVIEW 10

1. COMPANY PROFILE: 12

(1) NAME OF THE COMPANY

(2) HEAD OFFICE

(3) BRANCH OFFICE

(4) HISTORICAL BACKGROUND

(5) VISSION AND MISSION STATEMENT

2. TRADE PROFILE: 45

MAIN BUSINESS 48

3. COMPETITORS 84

4. PROMOTERS AND BACKGROUND 108

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5. VENDORS/SUPPLIERS ANALYSIS 116

6. DEMAND – SUPPLY ANALYSIS 119

7. R & D ACTIVITIES 123

8. KEY STAFF 128

(1) MANAGERIAL HIERARCHY 139

(2) DUTY & RESPONSIBILITY OF KEY STAFF 143

9. HR POLICIES 144

10. MARKETING POLICIES 153

11. ATTRACTIVE FEATURES 166

12. SUDHA’S SECREAT OF SUCCESS 180

13. GOVERNMENT POLICIES 185

14. JOB PROFILE/ASSIGNMENT PROFILE 190

15. FINDINGS & LIMITATIONS 215

16. SUGGESTIONS/RECOMMENDATIONS 218

17. LEARNING WHILE EARNING 223

18. OUR ACHIEVEMENTS 224

19. CASE STUDY 225

20. CONCLUSION 226

21. WORDS OF THANKS 228

22. BIBLIOGRAPHY 229

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 EXECUTIVE SUMMARY

The project is regarding, “To prepare aproposal for the enhancement of the product &
Performance report of milk retailers ” which would enable the company to expend the
market of the product of SUDHA and with hold the good position among the
competitors.
SUDHA. ltd. is largest food production marketing organization. It is a state level body of
milk co-operatives in BIHAR & JHARKHAND which aims to provide remunerative
returns to the farmers and also to serve the interest of customers by providing quality
products. It is known as a brand SUDHA.

The company started from the late 60’s and the milk union started its first day with just
247 liters of milk. Basically COMPFED. is a farmer’s co- operative in India. SUDHA is
the flag ship brand ofCOMPFED. which becomes one of the best recognized brand
names in India.

“Bihar state Co-Operative Milk Producers Federation Limited”Magadh diary project

gaya diary gaya sudha (COMPFED), the largest food company inBihar & Jharkhand ,
recorded a turnover of Rs 2882 crore ($ 0.65 bn) in 2003-04. Its flagship brand 'Sudha'
was the market leader in milk, whole milk, cheese, ice cream and dairy whitener.
COMPFED was the largest cooperative movement in Bihar & Jharkhand with 2.2 million
milk producers of bihar & Jharkhand organized in 10,552 cooperative societies.
COMPFED collected 5 million liters of milk per day from its shareholders who owned
3.2 million buffaloes, one million cows and 0.3 million crossbred cows. The Federation's
extensive marketing network comprised 3000 distributors and 500,000 retailers spread
across the country.

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Dr. V. KURIEN whose life long effort & contribution has made Sudha no.1 in the whole
Bihar & Jharkhand. Indian people feel homely and comfortable with every products of
Sudha. All these products are distributed by it determine network of 3000 distributors
and 500000 retailers. In India Sudha have 50 offices and few at abroad to handle the
operation effectively.

In the project the emphasis was given to increase the total sale of distributors and
retailers. Visit to the different retailers in the Bihar & Jharkhand, was to increase the
retail boundaries of Sudha product and to know the problem regarding Sudha product, to
know whether there is any delivery problem by distributor, to know that whether the sales
man of distributor is regularly visiting the retailers in targeted areas, to check the supply
of ordered goods are on time and finally to look on the retailers problem while selling the
Sudha product.

Sudha product is very popular among the customer and the sale of the product of sudha is
not very good in Bihar & Jharkhand. Through my project the problem is short listed i.e.
lack of supply of Sudha product on time by Sudha distributors and very good scheme
were provided from revelries companies. According to me the Bihar State Co-Operative
Milk Producers Federation Ltd (COMPFED). would have to take extra ordinary effort to
capture the market share of Sudha Product.

9
 LITERATURE REVIEW

This is a pure applied part of my two month, summer training. It has been purely a
practical exposure to real business in general and of Marketing in particular. Through the
entire tenure of summer training have learned the practical implication of business. I must
say that after completing one year of my studies was quite familiar with the business
environment, but through this practical exposure that is summer training in Sudha which
enable me to get an in depth sight of the reality show of the business. Here in the
COMPFED., I came to know the real technique of marketing and what is the real picture
of marketing in the corporate world.

Firstly, I had to do a hard core marketing of Product of Sudha with regard to kwality
wall’s and Mother dairy and others. Further I had to chooser a methodology which is
best suitable for Sudha’s market in. Gaya region. In this hard core selling we have to
impress the distributors and retailers to purchase the deep freezer available with schemes
just to increase the market share of the product of Sudha. Through which I could achieve
the market share which was Approved by my guide K.K.SHARMA.
Though Sudha is the choice of consumers but retailers are not satisfied
with the company as they don’t provide any attractive schemes and replacement policy
and if they provide any such type of scheme it had many demerits like in our scheme
installment facility was not provided.

Sudha has a good reputation in the market. On the basis of the observation and
conclusion during the visits to retailers and distributors in Gaya, the suggestion and
recommendation are forwarded to
the company. While making the report almost care is taken though make no
mistake but error is human and to forgive is gaudiness.

10
For this I had to visit the distributor and retailers of Gaya to tell them about the new
scheme launched by the Sudha.

Though Sudha is the choice of consumers but retailers are not satisfied with the company
as they don’t provide any attractive schemes and replacement policy is very poor but the
company like any other.

Sudha has a good reputation in the market. On the basis of the observation and
conclusion during the visits to retailers and distributors in Gaya, the suggestion and
recommendation are forwarded to the company. While making the report almost care is
taken though make no mistake but error is human and to forgive is gaudiness

11
 CHAPTER-1

NAME OF THE COMPANY

BIHAR STATE COOPERATIVE MILK PRODUCERS FEDERATION

FEDERATION LTD (COMPFED) SUDHA

HEAD OFFICE

• Repair and Maintenence of Milk Plant and Accessories

• Repair & Maintenence of Office Equipement
• Civil Work Contractor

CONTACT US
Head Office:

Bihar State Cooperative Milk Producers'

Federation Ltd.
Dairy Development Complex
PO-B.V. College
PATNA - 800 0014
BIHAR, INDIA

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CHAIRMAN: SRI ANIL KUMAR, IAS
MANAGING DIRECTOR: SRI ATISH CHANDRA, IAS

PHONE:
CHAIRMAN: +91-612-2226543
MANAGING DIRECTOR: +91-612-2227451
EPABX: +91-612-2228953,2224083, 2228347, 2220387
PRODUCT MARKETING CELL: +91-612-2222126
FAX: +91-612-2228306
E-MAIL: COMPFED@sify.com
Website: www.COMPFED.co.in

Name and Address of Milk Unions

Dr. S.B.Sinha
Acting Managing Director
VP Milk Union
Feeder Balancing Dairy Complex
PO-Phulwarisharif
Patna – 801505
Tel: 0612-2252542,2252553
2251154
Fax:0612-2250325
Mobile:9835024086

Sri A.K. Sinha

Managing Director Mithila Dugdh Utpadak Sahkari Sangh Ltd.
Samastipur Dairy
Industrial Area
PO-Harpur Alowth
Samastipur-848101
Tel:06274-223680,222172
Fax:06274-223680
Mobile:9431245965

Dr. S.N.Bora
Managing Director
Tihut Dugdh Utpadak Sahkari Sangh Ltd.
Muzaffarpur Dairy
PO-Koluapaigambarpur
Muzaffarpur-843108
Tel:0621-2265549,2235087
Mobile:9431238834

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Dr. D.N.Singh
Acting Managing Director
Deshratna Dr. Rajendra Prasad Dugdh Utpadak Sahkari Sangh Ltd.
Barauni Dairy
Barauni-851112
Tel:06279-232888,232903,232202
Mobile:9431211430

Sri Manoj Pandey

Managing Director
Shahabad Dugdh Utpadak Sahkari
Sangh Ltd.
Arrah Dairy
Katira, Arrah-802301
Tel:06182-239484,236694
Fax:06182-239484
Mobile : 9431053803

Name and Address of Dairy Plants

Sri A.K. Kulkarni
Chief Manager
Jamshedpur Dairy
PO-Gamharia
Jamshedpur – 832108
Tel:0657-2408438,2408907,2201530,
2380845
Fax:0657-2408907
Mobile:9835107911

Sri Milton
Manager
Ranchi Dairy
Liquid Milk Plant
H.E.C. Sector – II
Dhurwa, Ranchi-834004
Tel:0651-2440832,2440723
Fax:0651-2440832
Mobile:9835365011

Sri S.K. Dutta

Chief Executive
Bokaro Dairy

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Sector 12/F
Bokaro Steel City
Bokaro – 827012
Tel:06542-257098,256488
Fax:06542-256488
Mobile : 9431128570

Sri P.K. Verma

Chief Executive
Bhagalpur Dairy
(Near D.M.Kothi)
Mayaganj Road
Bhagalpur-812001
Tel:0641-2400433,2404769
Fax:0641-2400433
Mobile:9431213904

Sri K.K.Sharma
Chief Executive
Gaya Dairy
Katari Hill Road
PO-Karimganj
Gaya-823001
Tel:0631-2425900,2421741
Fax:0631-2427121
Mobile:9334734630

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 HISTORICAL BACKGROUND OF COMPFED

In order to establish dairy industry on SUDHA pattern by involving farmers in organizing

the milk production, and procurement processing and marketing of nearly produced milk,
Bihar state co-operative milk producers federation Ltd (COMPFED) was registered in the
state in April 1983. It is implementing operation Flood program in Bihar now

Operation flood is the dairy development policy which selects to promote SUDHA
pattern in other part of India and outside of India. Operation flood (OF) was the result of
organized attempt towards the development of the dairy industry in India.

The operation flood program has laid emphases on setting of “SUDHA pattern” for rural
milk produces cooperative orgnisation to produce process and market technical input
services for increasing milk production

FACTS ABOUT OPERATION FLOOD

Operation flood first---------1970-1981
Operation flood second-----1981-1985
Operation flood third--------1985-1996

HISTORY OF MAGADH DAIRY PROJECT GAYA DAIRY GAYA

16
In order to establish cooperative dairy on SUDHA pattern towards fulfillment of the
national ob
Sudha: The origin
The mighty Ganges at its origin is but a tiny stream in the Gadgetry ranges of the
Himalayas. Similar is the story of Sudha which inspired 'Operation Flood' and heralded
the 'White Revolution' in India. Father of white revolution is Dr. vargis kurian (1973) It
began with two village cooperatives and 250 liters of milk per day, nothing but a trickle
compared to the flood it has become today. Today Sudha collects processes and
distributes over a million liters of milk and milk products per day, during the peak, on
behalf of more than a thousand village cooperatives owned by half a million farmer
members. Further, as Ganga-ma carries the aspirations of generations for moksha, Sudha
became the symbol of the aspirations of millions of farmers. Creating a pattern of
liberation and self-reliance for every farmer to follow.

The start of a revolution:

The revolution started as awareness among the farmers that grew and
matured into a protest movement and the determination to liberate
themselves. Over four decades ago, the life of a farmer in Kaira District was
very much like that of his counterpart anywhere else in India. Its income was derived
almost entirely from seasonal crops. The income from milk buffaloes 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 marketed 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 Bihar state Cooperative Milk
Producers' federation Limited (popularly known as Sudha) which was formally registered
on December 14, 1946.

17
The Kaira Union began pasteurizing milk for the Bombay Milk Scheme in June 1948. An
assured market proved a great incentive to the milk producers of the district. By the end
of 1948, more than 400 farmers joined in more village societies, and the quantity of milk
handled by one Union increased from 250 to 5,000 liters a day.

Obstacles:
Each failure, each obstacle, each stumbling block can be turned into a success story. In
the early years, Sudha had to face a number of problems.

With every problem came opportunity. A chance to turn a negative into a positive. Milk
by products and supplementary yield which suffered from the same lack of marketing and
distribution facilities became encumbrances.

Instead of being bogged down by their fate they were used as stepping stones for
expansion. Backward integration of the process led the cooperatives to advances in
animal husbandry and veterinary practice.

Milk by products :

The response to these provided stimulus for further growth. For example, as
the movement spread in the district, it was found that the Bombay Milk Scheme could not
absorb the extra milk collected by the Kaira Union in winter, when the production on an
average was 2.5 times more than in summer. Thus, even by 1953, the farmer-members
had no assured market for the extra milk produced in winter. They were again forced to
sell a large surplus at low rates to the middlemen. The remedy was to set up a plant to
process milk into products like butter and milk powder. A Rs 5 million plant
to manufacture milk powder and butter was completed in 1955. In 1958, the
factory was expanded to manufacture sweetened condensed milk. Two years
later, a new wing was added for the manufacture of 2500 tons of roller-dried baby food
and 600 tons of cheese per year, the former based on a formula developed with the
assistance of Central Food Technological Research Institute (CFTRI), Mysore. It was the

18
first time anywhere in the world that cheese or baby food was made from buffalo milk on
a large, commercial scale.

Another milestone was the completion of a project to manufacture balanced cattle feed.
The plant was donated by OXFAM under the Freedom from under Campaign of the
FAO.

To meet the requirement of milk powder for the Defense, the Kaira neon was asked by
the Government of India in 1963 to setup additional milk raying capacity. A new dairy
capable of producing 40 tons of milk powder and 20 tons of butter a day was speedily
completed. It was declared open in 1965. The Mogar Complex where high protein
weaning food, chocolate and malted food are being made was another initiative by Sudha
to ensure that while it fulfilled the social responsibility to meet the demand for liquid
milk, its members were not deprived of the benefits to be had from the sale of high value-
added products.

Cattle: From stumbling blocks to building blocks.

However, the contribution to the farmer's income was not as prominent as his attachment
to dairying as a tradition handed down from one generation to the next. The milk yield
from animals, which maintained mainly on the by products of the farm, was decidedly
low. That together with the lack of facilities to market even the little produced rendered
the scientific practice of animal husbandry irrational as well as unaffordable.
The return on the investment as well as the prospects of being able to market
The product looked very bleak. It was a vicious cycle reinforced by Generations of
beliefs.

The Kara Union broke the cycle by not only taking upon themselves the responsibility of
collecting the marketable surplus of milk but also provided
the members with every provision needed to enhance production. Thus the

19
Kara Union has full-fledged machinery geared to provide animal health care and breeding
facilities. As early as late fifties, the Union started making high Quality buffalo semen.
Through village society workers artificial semi nation service was made available to the
rural animal population. The Union started its mobile veterinary services to render animal
health care at the farmers' doorstep. Probably for the first time in the country, veterinary
first aid services, by trained personnel, were made available in the villages. The Union's
16 mobile veterinary dispensaries are manned by fully qualified staff. All the villages are
visited bi-monthly, on a predetermined day, to provide animal health care. A 24-hour
Emergency Service is also available at a fee (Rs. 35 for members and Rs. 100 for non-
members).

The Union runs a semen production center where it maintains high pedigreed Surti
buffalo bulls, Holstein Friesian bulls, Jersey bulls and 50 % crossbred bulls. The semen
obtained from these bulls is used for artificial breeding of buffaloes and cows belonging
to the farmer members of the district. The artificial insemination service has become very
popular because it regulates the frequency of calving in cows and buffaloes thus reducing
their dry period. Not only that, a balanced feed concentrate is manufactured in the
Union's Cattle Feed Plant and sold to the members through the societies at cost price.

Impressive though its growth, the unique feature of the Sudha sagas did not lie in the
extensive use of modern technology, nor the range of its products, not even the rapid
inroads it made into the market for dairy products. The essence of the Sudha story lies in
the breakthrough it achieved in modernizing the subsistence economy of a sector by
organizing the rural producers in the areas.

The Kaira experiment:

A system which involves participation of people on such a large magnitude does not
confine itself to an isolated sector. The ripples of its turbulence affect other areas of the
society as well. The cooperatives in the villages of Kaira are contributing to various
desirable social changes such as:

20
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 disequilibria.
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 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.

More than 900 village cooperatives have created jobs for nearly 5000 peoplein their own
villages without disturbing the socio-agro-system and thereby the exodus from the rural
areas has been arrested to a great extent.

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. Independent
studies by various individuals and institutions have shown that as high as 48 per cent of
the income of the rural household in Kaira District is being derived from dairying. Since
dairying is a subsidiary occupation for the majority of the rural population, this income is
helping these people not only to liberate themselves from the stronghold of poverty but
also to elevate their social status. The credit for taking India to the top of the International
dairy sector goes to the millions of small dairy farmers dispersed across the country. To
locate each one on a map is a monumental task. Therefore milk production according to
area is shown on this map.

High (above 150g/day)

Medium (150-100g/day)

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Low (Below 100g/day)

Operation Flood

A recent World Bank audit shows that of the Rs 200 crores it invested in Operation Flood
II, the net return into the rural economy has been a whopping Rs 24,000 crores per year
over a period of ten years, or a total of Rs 240,000 crores in all. No other major
development program has matched this input-output ratio.

Operation Flood, launched in 1970, has been instrumental in helping the farmers mould
their own development. Thus helping reach milk to consumers in 700 towns and cities
through a National Milk Grid. It also helped eradicate the need for middlemen thereby
reducing the seasonal price
variations. As a result of the cooperative structure the whole exercise of production and
distribution of milk and milk products has become economically viable for farmers to
undertake on their own. In this manner the farmer himself can enjoy the fruits of his own
labor, instead of surrendering a majority of the profit to corrupt middlemen.

Three Phases of development

The scheme sought to establish milk producers' cooperatives in the villages and make
modern technology available to them. The broad objectives are to increase milk
production (a flood of milk), augment rural incomes and transfer to milk producers the
profits of milk marketing which are hitherto enjoyed by well-to-do-middlemen.

Phase I of Operation Flood was financed by the sale within India of skimmed milk
powder and butter oil gifted by the EC countries via the World Food Program. As
founder-chairman of the National Dairy Development Board (NDDB) of India, Dr Kurien
finalized the plans and negotiated the details of EEC assistance. He looked after the
administration of the scheme as founder-chairman of the erstwhile Indian Dairy
Corporation, the project authority for Operation Flood. During its first phase, the project
aimed at linking India's 18 best milk sheds with the milk markets

22
of the four metropolitan cities of Delhi, Mumbai, Calcutta and Madras.

Phase II of the project, implemented during 1981-85 raised this to some 136 milk sheds
linked to over 290 urban markets. The seed capital rose from the sale of WFP/EEC gift
products and World Bank loan had created, by end 1985, a self-sustaining system of
43,000 village cooperatives covering 4.25 million milk producers. Milk powder
production went up from 22,000 tones in the pre project year to 1, 40,000 tones in 1989,
thanks to dairies set up under Operation Flood. The EEC gifts thus helped to promote
self-reliance. Direct marketing of milk by producers cooperatives resulting in the transfer
of profits from milk contracts increased by several million liters per day.

Phase III of Operation Flood (1985-1996) enabled dairy cooperatives to rapidly build up
the basic infrastructure required to procure and market more and more milk daily.
Facilities were created by the cooperatives to provide better veterinary first-aid health
care services to their producer members. The story of Operation Flood can be seen
through three angles. One is to consider what it did to the dairy industry. Another point of
view is from the eyes of the small farmer. It has revolutionized their way of life.
Operation Flood has also established a pattern of success for other countries to follow.

The Anand Pattern

The milk cooperatives under Operation Flood follow the Anand Pattern, which was
pioneered by Dr Kurien when he was General Manager of the Kaira District Cooperative
Milk Producers' Union Limited, Anand. The success of the operation demonstrated that
democratic institutions in villages within a specific economic sector could help an entire
village community to develop themselves. Dr Kurien nurtured the Union from a daily
collection of 500 liters a day in 1948 to one million liters a day in early 1990. He helped
set up similar District Cooperative Unions in six other districts of Gujarat which
eventually federated to an apex body, the Gujarat Cooperative Milk Marketing Federation
Limited. An establishment which Dr Kurien now heads as Chairman. The Federation
covers more than 1.5 million milk douser families. The Anand Model is essentially an
economic organizational pattern to benefit small producers who join hands forming an

23
integrated approach in order to handle their produce. The system enables them to obtain
the efficiency and economy of a large scale business. The whole operation is
professionally managed so that the individual producers have the freedom to decide their
own policies. The adoption of modern production and marketing techniques help in
providing those services those small producers individually can neither afford nor
manage.

The Anand Model has succeeded largely because it involves people in their own
development and because their interests are safe in their own hands. Under Operation
Flood the entire institutional infrastructure set up at the village level, the district level and
the state level is owned and operated by the farmers themselves. The Anand model
cooperatives have progressively eliminated middlemen, bringing the producers in direct
contact with consumers. In spite of opposition to these projects by middlemen and other
powerful vested interests, Dr Kurien has been able to make major breakthroughs in the
dairy and oilseeds sectors supported by the highest level in the Government of India.

Food Authority clears Sudha on quality

Sudha received a clean chit from FDCA Laboratory on quality of the butter
and its powder products, but the charges of printing wrong dates on butter
packages remains.

The controversy over the seizure of 26,000 tones of Sudha butter from its Patna diary
project factory by Food and Drug Control Administration, FDCA, Gaya region, is far
from over. Though Sudha received a clean chit from FDCA laboratory on quality of the
butter and its powder products, the charges of printing wrong dates on butter packages
remains. While Sudha has been cleared of all the quality concerns, FDCA is expected to
take a final call on further action against Sudha authorities for 'misbranding' by the next
weekend.

24
FDCA had in late January this year, confiscated over 26,000 tones of Sudha butter when
it found packaging material with manufacturing dates of February and March 2007,
during its visit to Sudha premises.

The FDCA booked Sudha under Prevention of Food Adulteration Act. When contacted
by CNBC-TV18, both, FDCA and the Sudha authorities, refused to comment on the issue
at this stage.

The Sudha twist

Mr. Shukla, General Manager (Marketing), Magadh diary project Gaya Bihar, in
conversation with Mr. Santosh sinha explains Sudha’s retailing plans and expansion
strategies. The Bihar State Co-operative milk producers federation limited (COMPFED)
has achieved 18 per cent growth during 2005-06 to close the year with a Rs 2,882 crore
turnover, so it has been an enthusiastic year for Sudha.

The March closing was exceptionally good as an overall growth was witnessed across all
our dairy products. What percentage of this growth would you attribute to business
garnered from the organized retail segment in India? As far as COMPFED is concerned,
the contribution from the organized retail segment would be negligible, say about 2-3 per
cent. Except for a few cities like PATNA and RANCHI, the actual penetration of the
organized retail segment is not really significant in other parts of India. These outlets
would not fall in the organized segment but rather in the traditional unorganized one.
Portfolio would be enhanced if these new products are present in organized retail formats.

More than 900 village cooperatives have created jobs for nearly 5000 people in their own
villages -- without disturbing the socio-agro-system and thereby the exodus from the rural
areas has been arrested to a great extent.

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. Independent
studies by various individuals and institutions have shown thatas high as 48 per cent of
the income of the rural household in Kaira District is being derived from dairying. Since

25
dairying is a subsidairy occupation for the majority of the rural population, this income is
helping these people not only to liberate themselves from the stronghold of poverty but
also to elevate their social status

Sudha has developed wide marketing network to increase its sell in the market. Sudha is
providing quality products to its customers and has gained very good faith and is
appraised very much by the consumers for its good quality products.
Though there are many types of products in the market, this Gaya Dairy is mainly
processes milk. Sometimes according to the need/demand curd, lassi, misthi dahi, and
paneer are also processed.
To sell its products, the firm has divided the whole Gaya district in two zones-
A) North Gaya zone &
B) South Gaya zone.
There are different distributors in these zones. Through these distributors product is
transferred to the 200 retailers and different 47 Sudha outlets and also some other shops.
They provide directly to costumer if they given a special order to marketing section. They
will take a advance order if any function is happening in future. Function like marriage,
govt meeting, fair, or any party occasion
Funds for outlet are provided from district administration.
Milk is supplying in some dist as jehanabad, aara,rangabad, and some part of nawada.
Per month net profit is 3-4 lakhs.
As a marketing point of view they will conduct a market survey in a interval of every two
month .as that they will conduct survey in different zone in every month’s of survey.
Survey regarding to its new product development, availability of product, price
suitability, improvement in product, customer satisfaction, interest of costumer in a
particular product in a particular zone. Due to this they have a com-lined department
they will receive complain from customer after that they will consult directly to customer
area from which they are belong, they will conduct a special survey on that particular
area. Or they will communicate by phone. If customer have a problem regarding to
supply of bad milk, then organisation will consult to that outlet or particular retailer. In

26
a short way any how sudha dairy wants to his customer satisfaction, in a marketing point
of view this is a excellent marketing strategic plan. Because of this sudha dairy has
monopoly in market. on the basis of market it has two seasons.
1st one is on season that means highly milk demanded season, because off marriage
time. The period of this season is April to June month and November to January month.
In this time production of milk is about 40,000 to 60,000 litres per day, which is against
the production capacity of Gaya dairy. Production capacity of milk in Gaya dairy in
approx 25,000 litre per day.
2nd one is off season that means regular milk demanded time. In this milk production is
approx 20,000 to 25,000 litre every day. During the time of season they are facing
scarcity of milk; because of this as time to time they are using milk powder for balancing
the demand and supply in market .I think this is good marketing technique. I hope sudha
dairy will maintain his monopoly in future also.

The White Revolution

Milk production in India increased from 17 million tons in 1950-51 to 84.6 million
tons in 2001-02 and is expected to reach 88 million tons during 2002-03 (GOI,
2003). Therefore, from being a recipient of massive material support from the World
Food Program and European Community in the 1960s, India has rapidly positioned
itself as the world's largest producer of milk. Milk production in India during the last
five decades is shown in Figure 2.1 and Tables 2.1 and 2.2.

Milk production in the country was stagnant during the 1950s and 1960s, and annual
production growth was negative in many years. The annual compound growth rate in
milk production during the first decade after independence was about 1.64 percent;
during the 1960s, this growth rate declined to 1.15 percent. During the late 1960s,
the Government of India initiated major policy changes in the dairy sector to achieve
self-sufficiency in milk production. Producing milk in rural areas through producer
cooperatives and moving processed milk to urban demand centers became the
cornerstone of government dairy development policy. This policy initiative gave a
boost to dairy development and initiated the process of establishing the much-
needed linkages between rural producers and urban consumers

27
The White Revolution consisted of 19 elements that were introduced over a period of 15
years, with the first 6 introduced in 1963 and put to a national referendum on January 26,
1963.

1. Land Reforms Program and Abolishing "Feudalism":

The government bought the land from the feudal land lords at a fair price and sold
it to the peasants at 30% below the market value, with the loan being payable over
25 years at very low interest rates. This made it possible for 1.5 million peasant
families, who had once been little more than slaves, to own the lands that they had
been cultivating all their lives. Given that average size of a peasant family was 5,
land reforms program brought freedom to approximately 9 million people, or 40%
of Iran's population.

2. Nationalization of Forests and Pasturelands:

Introduced many measures, not only to protect the national resources and stop the
destruction of forests and pasturelands, but also to further develop and cultivate
them. More than 9 million trees were planted in 26 regions, creating 70,000 acres
(280 km²) of "green belts" around cities and on the borders of the major
highways.

3. Privatization of the Government Owned Enterprises,

It is manufacturing plants and factories by selling their shares to the public and
the old feudal lords, thus creating a whole new class of factory owners who could
now help to industrialize the country.

4. Profit Sharing

Profit sharing for industrial workers in private sector enterprises, giving the
factory workers and employees 20% share of the net profits of the places where
they worked and securing bonuses based on higher productivity or reductions in
costs.

5. Extending the Right to Vote to Women,

Extending the right to vote to women, who had no voice and were suppressed by
Islamic traditions. This measure was widely criticized by the clergy.

6. Formation of the Literacy Corps,

Formation of the literacy corps so that those who had a high school diploma and
were required to serve their country as soldiers could do so in fighting illiteracy in

28
 the villages. In 1963 aprox. 2/3 of the population was illiterate, with 1/3 found
mainly in the capital city of Tehran.

7. Formation of the Health Corps

Formation of health corps to extend public health care throughout the villages and
rural regions of Iran. In 3 years, almost 4,500 medical groups were trained; nearly
10 million cases were treated by the Corps.

8. Formation of the Reconstruction and Development Corps

Formation of the reconstruction and development corps to teach the villagers the
modern methods and techniques of farming and keeping livestock. Agricultural
production between 1964 and 1970 increased by 80% in tonnage and 67% in
value.

9. Formation of the Houses of Equity

Formation of the houses of equity where 5 village elders would be elected by the
villagers, for a period of 3 years, to act as arbitrators in order to help settle minor
offences and disputes. By 1977 there were 10,358 Houses of Equity serving over
10 million people living in over 19,000 villages across the country.

10. Nationalization of all Water Resources,

Nationalization of all water resources introduction of projects and policies in

order to conserve and benefit from Iran's limited water resources. Many dams
were constructed and five more were under construction in 1978. It was as a result
of these measures that the area of land under irrigation increased from 2 million
acres (8,000 km²), in 1968, to 5.6 million in 1977.

11. Urban and Rural Modernization and Reconstruction

Urban and rural modernization and reconstruction with the help of the
Reconstruction and Development Corps. Building of public baths, schools and
libraries; installing water pumps and power generators for running water and
electricity.

12. Didactic Reforms

Didactic reforms that improved the quality of education by diversifying the

curriculum in order to adapt to the necessities of life in the modern world.

13. Workers' Right to Own Shares in the Industrial Complexes

29
 Workers right to own shares in the industrial complex where they worked by
turning Industrial units, with 5 years history and over, into public companies,
where up to 99% of the shares in the state-owned enterprises and 49% of the
shares of the private companies would be offered for sale to the workers of the
establishment at first and then to the general public.

14. Price Stabilization

Price stablization and campaign against unreasonable profiteering (1975). Owners

of factories and large chain stores were heavily fined, with some being
imprisoned and other's licenses being revoked. Sanctions were imposed on multi-
national foreign companies and tons of merchandise stored for speculative
purposes were confiscated and sold to consumers at fixed prices.

15. Free and Compulsory Education

Free and compulsory education and a daily free meal for all children from
kindergarten to 14 years of age. In 1978, 25% of Iranians were enrolled in public
schools alone. In that same year there were 185,000 students of both sexes
studying in Iran's universities. In addition to the above there were over 100,000
students pursuing their studies abroad, of which 50,000 were enrolled in colleges
and universities in the United States.

16. Free Food for Needy Mothers

Free food for needy mothers and for all newborn babies up to the age of two.

17. Introduction of Social Security and National Insurance

Introduction of social security and national insurance for all Iranians. National
Insurance system provided for up to 100% of the wages during retirement.

18. Stable and Reasonable Cost of Renting or Buying of Residential Properties

(1977).

Stable and reasonable cost of renting or buying of residential properties (1977)

Controls were placed on land prices and various forms of land speculation.

19. Introduction of Measures to Fight against Corruption

Introduction of measures to flight against corruption within the bureaucracy.

Imperial Inspection Commission was founded, consisting of representatives from
administrative bodies and people of proven integrity.

30
 Milk production and consumption trends in India: 1950-51 to 2001-02

ORGANISATIONAL STRUCTURE

COMFED

CHAIRMAN(IAS)

31
 MD(MANAGING DIRECTOR)
(IAS)

GM(GENERAL MANAGER)

ASSISTANT MANAGER MANAGER

DEPUTY ASSISTANT MANAGER DEPUTY MANGER

ASSISTANT MANAGER

 TECHNICAL OFFICER

 MILK PROCUREMENT OFFICER

 FODDER DEVELOPMENT OFFICER

EXECUTIVE MANAGER (HEAD OF BRANCH DAIRY)

PROCESSING MARKETING
EMPLOYEE

OUTLETS

32
GAYA DAIRY ORGANIGATOIN STRUCTURE

K.K. SINHA (EXCUTIVE. OFFICER)

A.K PANDEY (MANAGEMENT REPRESENTATIVE/ FINANCE DEPARTMENT)

SANTOSH KUMAR(MARKETING DEP.)

J. RAI( MARKETING ASST)

NITISH GOSHWAMI(JR. MARKETING OFFICER)

JOB ON CONTRACT: BRAJ BHUSHAN KR. NIRALA(COMPUTER IN CHARGE)

RAJU(COMPUTER OPERATOR)

SUDAM (SERVICE BOY)

33
 INTRODUCTION

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. the State had 73 milk processing plants with an aggregate
processing capacity of 7.2 millionlitres per day. In addition to these processing plants,
123 Government and 33 co-operatives milk chilling centres operate in the State.With the
increase in milk production. Maharashtra now regularly exports milk to neighbouring
states. It has also intiated a free school feeding scheme, benefiting more than three
million school children from over 19,000 schools all over the Stat Dairy is a place where
handling of milk and milk products is done and technology refers to the application of
scientific knowledge for practical purposes. Dairy technology has been defined as that
branch of dairy science, which deals with the processing of milk and the manufacture of
milk products on an industrial scale. In developed dairying countries such as the U.S.A.,
the year 1850 is seen as the dividing line between farm and factory-scale production.
Various factors contributed to this change in these countries, viz. concentration of
population in cities where jobs were plentiful, rapid industrialization, improvement of
transportation facilities, development of machines, etc. whereas the rural areas were
identified for milk production, the urban centres were selected for the location of milk
processing plants and product manufacturing factories. These plants and factories were
rapidly expanded and modernized with improved machinery and equipment to secure the
various advantages of large-scale production. Nearly all the milk in the U.S.A. before
1900 was delivered as raw (natural) milk. Once pasteurization was introduced, it
developed rapidly. Mechanical refrigeration helped in the rapid development of the
factory system of market milk distribution.

34
In India, dairying has been practised as a rural cottage industry since the remote past.
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.

During the earlier years, each household in those countries maintained its ‘family cow’ or
secured milk from its neighbour who supplied those living close by. As the urban
populationincreased, fewer households could keep a cow for private use. 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 within easy driving distance began delivering milk over regular routes
in the cities. This was the beginning of the fluid milk-sheds which surround the large
cities of today. 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. The industry is still
in its infancy and barely 10% of our total milk production under goes organized hand

More than 2,445 million people economically active in agriculture in the world, probably
2/3 or even more ¾ 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. India, which has 66% of economically active

35
population, engaged in agriculture, derives 31% of Gross Domestic Product GDP from
agriculture. The share of livestock product is estimated at 21% of total agricultural sector.

Milk Production

1950 – 17 million tonnes

1996 – 70.8 million tonnes

1997 – 74.3 mT

2008- 148 mT

(Projected) 2020 – 240 mT

Expected to reach- 220 to 250 mT – 2020

India contributes to world milk production rise from 12-15 % & it will increase upto 30-
35% (year 2020)

Average milk production / year

America 6874 Kg/ year

Denmark 6223 Kg/year
Holland 5751 Kg/year
India 552 Kg/year

• Average Productivity
• 2.4 kg/day or 732 kg/lactation/cow

China: 1600 kg/lactation

America 7200 kg/lactation

36
 Percapita availability:
Recommanded – 210 gm
India

1950 132 gm
1997 214 gm
2020 290 gm

India contributes 35% of total Asian milk

Milk yield per breedable bovine in milk 1,250kg

Cattle feed production (organized sector) 1.5 million tonnes
Turnover of veterinary pharmaceuticals Rs 550 crores
Dairy plants throughout 20 mlpd
Throughout as percentage of total milk output 10
Value of output of milk group (1994-95) (Based on producers price) Rs 50,051 crores
Value of output of dairy industry (Based on retail price) Rs 105,000 crores

Projected milk production at different rates of annual growth 1995 to 2000

year @5% @5.5% @6%

1995 66.3 66.3 66.3
1996 69.3 70.0 70.2
1997 73.1 74.0 74.4
1998 76.7 78.0 78.8
1999 80.6 82.3 83.5
2000 84.6 86.8 88.5

37
 Milk Composition

Sr. Constituents Buffalo Cow Goat Liquid skimmed milk

no
1 Moisture (gm) 81.00 87.50 86.80 92.10
2 Protein (gm) 4.30 3.20 3.30 2.50
3 Fat (gm) 6.50 4.10 4.50 0.10
4 Minerals (gm) 0.80 0.80 0.80 0.70
5 Carbohydrates (gm) 5.00 4.40 4.60 4.60
6 Energy calories (kcal) 117.00 67.00 72.00 29.00
7 Calcium (mg) 210.00 120.00 170.00 120.00
8 Phosphorus (mg) 130.00 90.00 120.00 90.00
9 Iron (mg) 0.20 0.20 0.30 0.20

Indian Buffaloes: (Dairy business Directory 1996)

Buffaloes are classified into two categories;

1) reverine (depending upon variation in their habitat & genome)

2) swamp

Swamp buffaloes: - 48 chromosomes

South east asian countries

Stocky animals, marshy land habitat

River Buffaloes: - 50 chromosomes

- massive in size and curled horns- Prefer to enter clear water

World’s Buffalo population:

147 million

38
 about 142 millions in Asia & Pacific

India:

leading most buffalo populated country

78 millions most of reverine

Milk production: About 95% of world buffalo milk (45.3 million tonnes) is produced in
Asia &Pacific, while 64.4% is produced in India (FAO.1992)

From 1950 to 1992 milk production in the world increased by 4.26%

The % of total bovines slaughtered;

Total bovine slaughtered (%)

World 17.1 to 17.4% or - 1.6% per annum

India 15% per annum

Asia 6.6%

Increasing trend of buffalo population in most of the Asian countries in Brazil and Italy

BREEDS

Classified on phenotypic & geographic locations;

Cockril (1982) = Buffalo river type; two sub groups;

1. Horns are closed and set close to head & are down swept ;eg. Murrah, Ravi, Mehasana,
Jaffarabadi, Sambalpur

2. Horns are sickle shaped and unswept: e.g. Bhadawari, Kalahandi, Kanara, Manda,
Nagpuri, Pandharpuri, Surti, Tarai & Toda

39
Breeds of Buffaloes of Indian Origin and Breeding Tracts:

Group Breed Breeding tract

Murrah Murrah Rohtak, Jind,Hisar, Bhiwari, Sonepat
type Nili Ravi (Hariyam)
Ferozepur (Punjab)
Gujarat Surti Kaira and Baroda
Jaffarabadi Kutch, Jungarh & Jamnagar dist
Mehsana Mehsana, sabarkantha, Banaskantha Dist.
Uttar Bhadawari Bhadawari estate, Beh Tehsil in Agra, Gwalior & Etawah dist.
pradesh Tarai Tarai region of U.P.
Central Nagpuri Nagpur, Akola, Amravati dist. South maharashtra, west A.P.,
India Pandharpuri north Karnataka Hilly region of Andra Pradesh and Orissa
Kalahandi Bilaspur dist.
Sambalpur
South Toda Nilgiri Hills
India South Kanara West coast in Kerela

Buffaloes found in the north –eastern states and the eastern coastal region of India & in
China South east Asian countries e.g. Philippines, Thailand, Malaysia, Vietnam, Srilanka,
Burma, Laos, Kampuchea, Bangladesh etc. have been classified as swamp buffaloes on
the basis of their genetic constitution (2n=48) & natural habitat.The breeds includes in
these groups are Manda & Palakhemundi.

Production performance

Growth: The average birth wt.(Indian buffaloes) low 21 kg High 41 kg

Higher in male calves than in females
Average daily gain of 548 gm between 3-6 months 404 gm between birth to 36 months
Body weight at first calving- ranges from 367 kg (Dharwati) to 531 kg (Nili Ravi)
Higher growth rate in reverine breeds than swamp

40
MILK PRODUCTION

Production performance of different breeds of Buffaloes:

Age at 1st calving Lactation. Lactation Length (days)

(months) Yield (kg)
Buffalo Avg. Range Avg. Range Avg (Range)
Murrah 43.0 39.9-54.5 1850 1476-2515 315(267-365)
Nili Ravi 42.0 41.4-47.3 1765 1596-2808 2808 (09)
Surti 39.0 26.5-45.0 1364 1304-1693 313(300-373)
Bhadawari 46.0 44.3-54.2 1181 - 276 (-)
Nagpuri 48.0 44.3-55.6 1103 926-1175 270 (-)

Reproduction Performance: -
Most of the buffaloes are considered to be seasonal breeds with maximum calving taking
place from July to November in almost all breeds
Buffaloes come in oestrus in cold month and are sub-fertile during hot month
Sub-fertility-> due to poor thermoregulaion in buffaloes and
Poor nutrition -> poor heat symptom-low heat detection (only ligno-cellulosic material
straw /dry roughages)

Calving interval Dry period Service period

(days) (days) (days)
Murrah 454 148 133
Nili Ravi 530 198 211
Surti 410 165 103
Bhadawari 460 156 -
Nagpuri - - 98

Analysis of dairy industry

Any dairy industry has some important section as like:-

41
  Milk reception section
 Quality control section
 Processing and packing section
 Store keeping section
 Marketing section
 Administration section
 Cleaning section

So I analysised all those thing in

BIHAR STATE CO-OPERATIVE MILK PRODUCERS FEDERATION LTD.

GAYA SUDHA DAIRY

42
 VISION AND MISSION

VISION

Expanding leadership in business

through people, keeping pace

with market trends and technology.

MISSION

BUSINESS
• Lead the Industry rate of growth
• No. 1 in profit in Industry
• Global Thrust
CUSTOMER
• Trusted Partner
• Reliable & Cost effective Solutions/ services
• Customer acquisition/expansion
EMPLOYEES
• Top 3 preferred employer
• Learning Organization
• Digital way

43
TECHNOLOGY
• Technology Excellence
• Introduction of new Solutions/Services
• World Class Products
PROCESSES
• Best in Class Organization
• Business & Service /Product delivery

CHAPTER-2

TRADE PROFILES

BUSINESS OF PRODUCTS

44
Sudha means "Fresh" in Sanskrit. The brand name "Sudha," from the Sanskrit "sudah"
was suggested by a quality control expert in Patna. Variants, all meaning "Fresh", are
found in several Indian languages. Sudha products have been in use in millions of homes
since 1946. Sudha Butter, Sudha Ghee, Sudha spray, Sudha Cheese, Sudha Chocolates,
Sudha Shrikhand, Sudha Ice cream, NutrSUDHA, Sudha Milk and Sudha have made
Sudha a leading food brand in India. (Turnover: Rs. 29 billion in 2006). Today Sudha is a
symbol of many things. Of high-quality products sold at reasonable prices. Of the genesis
of a vast co-operative network. Of the triumph of indigenous technology. Of the
marketing savvy of a farmers organization. And of a proven model for dairy
development.

Sudha is the larger co-operative movement in India with 2.2 million milk producers
organised in 10,552 co-operative societies in 2005-2006. The country's largest food
company, Sudha, is the market leader in butter, whole milk, cheese, ice cream, dairy
whitener, condensed milk, saturated fats and long life milk. Sudha follows a unique
business model, which aims at providing 'value for money' products to its consumers,
while protecting the interests of the milk-producing farmers who are its suppliers as well
as its owners. Despite being a farmers' co-operative, Sudha has given multinationals a run
for their money. In butter, cheese and saturated fats, Sudha has remained the undisputed
market leader since its inception in 1955, by offering quality products at competitive
prices. In other categories, Sudha has nullified its late mover disadvantage through
aggressive pricing, better quality, innovative promotion, and superior distribution.

Trade policy

The Bihar State Co-operative Milk Federation Ltd (COMPFED), the marketers of sudha,
has approved the continuation of the Sudha-Tata Fellowships for Rural Management
Professionals for a further period of five years. The Board of Directors of COMPFED, at

45
its recent meeting on April 5, took this decision. In 2001, COMPFED and the Sir Ratan
Tata Trust (SRTT) had instituted 30 fellowships in the Institute of Rural Management-
Anand (IRMA), with the objective of financially supporting the students pursuing the
Post-Graduate Programme in Rural Management and encourage them to work with
IRMA's designated organisations, COMPFED said in a release here. The total value of
each fellowship is Rs 1 lakh, awarded on the basis of merit-cum-means. The awarded
students are required to serve at least two years in designated organisations. So far,
COMPFED has provided funds for 62 students.

Sudha reigns in the milk market with a dominant share of almost 35 percent volume
share as per industry estimates.

Sudha announced making its flagship product affordable to everyone, palatable for single
serving and portable for travellers. Unveiling the Rs 2 tubs for the middle class, Bihar
State co-operative milk federation limited(COMPFED) said that the Sudha butter tub
would be catering to 12 national and international airlines.

These are Kingfisher Airlines, British Airways, Jet Airways, Air Mauritius, Korean
Airlines, Royal Nepal Airlines, Air Italia, Malaysian Airlines, Jordanian Airlines, Iran
Air, South African Airlines and Singapore Airlines. Now, similar tubs would be offering
Sudha's cholesterol-free table margarine and Sudha Lite bread-spread, a release said. For
the first time in India, the Sudha dairy plant at Patna is packing 8.1 g of butter in the tub.
Made of PVC and sealed by aluminium foil, the airtight tub prevents any aerial and
microbial contamination or deformation of butter. Hence, the butter in such tubs is safer
and more hygienic for consumption. Packed for single serving, the tub can make for a
healthy breakfast or mid-day meal at a school for children too.

Next time we go shopping for cheese on your overseas trip, don't be surprised to find the
familiar Sudha brand among an array of foreign brands on the store shelves.

For the Bihar state Co-operative Milk Federation limited (COMPFED), which markets
milk products under the Sudha brand, is aggressively focusing on taking the brand to
overseas markets..

46
With an eye on both consumer (which includes products such as cheese, butter, ghee and
shrikhand) and commodity (skim milk and butter oil) exports, COMPFED is targeting
export revenues of about Rs 200 crore this year.

The trde policy or products of Sudha are divided into to categories:

(1) Main Business.

(2) Ancillary Business.

oSo, the products are categorized below:

Main Business :

Check out this vast and ever-growing range of 'tasteful' Sudha delectables!

Fresh Milk
SUDHA Fresh Milk SUDHA Gold Milk
This is the most
hygienic milk
available in the
market. Pasteurised
in state-of-the-art
processing plants

47
and pouch-packed
for convenience.

SUDHA Taaza SUDHA Lite Slim

Double Toned Milk and Trim Milk

SUDHA Fresh SUDHA Kool

Cream Chocolate Milk

SUDHA Kool SUDHA Kool

Flavoured Bottled Flavoured Tetra Pack
Milk

SUDHA Shakti SUDHA Masti

Toned Milk Spiced Buttermilk
SUDHA introduces
the Best Thirst
Quenching Drink

48
SUDHA Pasteurised Butter

SUDHA BUTTER is made from Butter, Common Salt, permitted natural colour-
Annatto.

Composition:

• Milk Fat 80%

• Moisture 16%
• Salt 2.5%
• Curd 0.8%

Calorific Value:

720 kcal./100g

Special Features:

Made from fresh cream by modern continuous butter making machines.

Marketed in India since 4 decades.

Product Specification:

49
Meets AGMARK standard and BIS specifications No.IS:13690:1992

SUDHA Lite Bread Spread

SUDHA LITE BREAD SPREAD is made from a blend of Hydrogenated and

Unhydrogenated Refined Vegetable oils, Milk fat, Skimmed Milk Powder, Common salt,
Emulsifiers, Stabilisers, Class II Preservatives, Sequestering Agent and Antioxidants, Vit
A not less than 30 IU per g and Vit D 2 IU per

Composition:

Total fat: 59%, Milk Fat:10%

Special Features:

Mixed fat spread "Grade-Low Fat"

Product Specification:

Meets Agmark Standards

Bread Spread

50
 SUDHA Butter SUDHA Lite
Utterly Butterly Low fat, low
Delicious Cholesterol Bread
Spread

Delicious Table
Margarine
The Delicious way to
eat healthy

SUDHA Fresh Milk

SUDHA MILK is made from Pasteurised Milk

Composition:

Fat SNF
Variety
(%) (%)*
SUDHA Gold (Whole milk) 6 9
SUDHA Shakti (Standardised
4.5 8.5
milk)
SUDHA Taaza (Toned milk) 3 8.5
SUDHA Lite (Double toned
1.5 8.5
milk)

51
*Every 100 parts of SNF (Solids Not Fat) contains 56 parts of

carbohydrates, 34 parts of protein and 9 parts of minerals.

Special Features:

SUDHA Milk is the most hygenic liquid milk available in the market. It is pasteurised in
state-of-the-art processing plants and pouch-packed to make it conveniently available to
consumers.

SUDHA Gold Milk

SUDHA Gold is Long Life standardised milk. It is fresh and only fresh milk, which has
been processed with a technology called UHT (Ultra High Temperature), hence also
known as UHT milk. Notwithstanding popular misconception, UHT technology does not
involve any use of preservatives.

The UHT treatment ensures zero microbial activation, while preserving the maximum
flavour, taste, and nutritional value. The aseptic packaging system protects the product
from air and light and guarantees a long shelf life of 180 days without refrigeration.

SUDHA Gold contains 4.5% fat and 8.5% SNF minimum and is ideal for making sweet
dishes (like kheer, payasam etc.) and for setting curds. It is also ideal for drinking straight

52
from the pack for kids and adolescents who simply love its creamy taste sans the
inconvenient cream layer!

SUDHA Gold comes in convenient 1 liter and 500ml packs

SUDHA Taaza Double Toned Milk

SUDHA Taaza is Long Life double toned milk. It is fresh and only fresh milk, which has
been processed with a technology called UHT (Ultra High Temperature), hence also
known as UHT milk. Notwithstanding popular misconception, UHT technology does not
involve any use of preservatives. The UHT treatment ensures zero microbial activation,
while preserving the

maximum flavour, taste, and nutritional value. The aseptic packaging system protects the
product from air and light and guarantees a long shelf life of 180 days without
refrigeration.

SUDHA Taaza contains 1.5% fat and 9% SNF minimum and is ideal for tea and coffee
whitening and for setting curds. It is also just right for drinking straight from the pack for
those who would like to enjoy the taste the goodness of natural while avoiding the
hazards of too much fat! SUDHA Taaza comes in convenient 1 liter, 500ml and 200ml
packs

53
SUDHA Lite Slim and Trim Milk

SUDHA Lite is Long Life skimmed milk. It is fresh and only fresh milk, which has been
processed with a technology called UHT (Ultra High Temperature), hence also known as
UHT milk. Notwithstanding popular misconception, UHT technology does not involve
any use of preservatives. The UHT treatment ensures zero microbial activation, while
preserving the maximum flavour, taste, and nutritional value. The aseptic packaging
system protects the product from air and light and guarantees a long shelf life of 180 days
without refrigeration.

SUDHA Lite Milk is a unique offering to health conscious milk lovers. With virtually
zero fat content, nil cholesterol and 8.7% SNF minimum, it gives you all the proteins,
vitamins and minerals of natural milk without your having to imbibe unnecessary flab in
the deal! SUDHA Lite Milk comes in convenient 1 liter, 500ml and 200ml pack

Fresh Cream

54
Chocolate Milk

SUDHA Shakti Toned Milk

SUDHA Shakti is Long Life toned milk. It is fresh and only fresh milk, which has been
processed with a technology called UHT (Ultra High Temperature), hence also known as
UHT milk. Notwithstanding popular misconception, UHT technology does not involve
any use of preservatives.

The UHT treatment ensures zero microbial activation, while preserving the aximum
flavour, taste, and nutritional value. The aseptic packaging system protects the product
from air and light and guarantees a long shelf life of 180 days without refrigeration.

SUDHA Shakti contains 3% fat and 8.5% SNF minimum. It is the ideal ultipurpose milk.
Growing children love its taste while benefiting from its comprehensive nutrition.
SUDHA Shakti comes in convenient 1 liter and 500ml packs.

55
SUDHA Masti Spiced Buttermilk

SUDHA introduces the Best Thirst Quenching Drink which is Free of Colour,
Preservatives, Acids and Sucrose Sugar (unlike Cola drinks)

Product Details:

Product - SUDHA Masti Spiced Buttermilk

Pack - 200ml Tetra Brik

MRP - Rs. 5.00

Ingredients -

Milk Solids, Common Salt, Spices and Condiments, Contains permitted StabilizerMost
importantly, Unlike carbonated soft drinks, SUDHA Masti Spiced Buttermilk is 100%
Natural and Sucrose Free without any color or preservative added.

It is a low fat product with lower sodium salt content. It contains protein with almost
50% lower calorie than soft drinks. The spices and condiments added to the product
enhance its taste and flavour.

Available in convenient and attractive, take-away tamper proof 200 ml Tetra Pak Brik
with 120 days shelf life at ambient temperatures.

56
 Presently available in India only.

Ancillary Business :

This is the secondary business which is carried out by the company as a diversification to
earn more profit and capture the market so the SUDHA also carry out such type of
business and produce the products like dahi, sweets , deserts, milk powder, etc products
which are prepared by the residues left after the main products are prepared.

SUDHA is the largest co-operative movement in India with 2.2 million milk producers
organised in 10,552 co-operative societies in 2003-2004. The country's largest food
company, SUDHA, is the market leader in butter, whole milk, cheese, ice cream, dairy
whitener, condensed milk, saturated fats and long life milk. SUDHA follows a unique
business model, which aims at providing 'value for money' products to its consumers,
while protecting the interests of the milk-producing farmers who are its suppliers as well
as its owners. Despite being a farmers' co-operative, SUDHA has given multinationals a
run for their money. In butter, cheese and saturated fats, SUDHA has remained the
undisputed market leader since its inception in 1955, by offering quality products at
competitive prices. In other categories, SUDHA has nullified its late mover disadvantage
through aggressive pricing, better quality, innovative promotion, and superior
distribution.

So, some products of Ancillary business are :

Delicious Table Margarine

What Is Table Margarine?

Table Margarine is characterized by a physical consistency similar to

butter and is commonly known as butter-substitute.

57
Margarine is prepared exclusively from vegetable oils and fats.

Product Attributes

Prepared from Refined Vegetable Oil. Total fat content is 80% min.

Contains Zero Cholesterol, hence suitable for cardiac patients.

Fortified with Vitamins A & D

Manufactured in an ISO 9000 certified plant under strict hygienic conditions. The
product is completely untouched by human hand Shelf life 6 months under
refrigeration Product ApplicationsFor use as a butter-substitute in all applications.

uitable for use as a cooking medium. Can be heated to high temperatures.

Ideal as a spread on bread/toasts/sandwiches For shallow frying or utéing (frying

quickly in a little fat).

For use as topping on variety of items, viz; pav-bhaji, parathas, khichri,

pulao, soups etc.

Pack Configuration

Delicious Table Margarine Is Available In 100g & 500g Block Packs.

58
 Pricing

100g pack- Rs. 11.00

500g pack- Rs. 54.00

SUDHA Spray Infant Milk Food

SUDHASPRAY INFANT MILK FOOD is made from partially skimmed

milk, sugar, minerals and vitamins.

Composition:

Milk Proteins 22%

Milk Fat 18%

Carbohydrates :

Lactose 32%

Sucrose 18%

Vitamins:

A, D, K B group, C

59
Minerals: Calcium, Magnesium, Phosphorus, Iron, Copper, Iodine,

Manganese, Zinc, Calorific Value: 450 kcal./100g or 1880 KJ/100g.

Special Features:

Product formulated on guidelines set by Codex Commission of WHO/FAO.

Marketed in India since last 25 years.

Product Specification:

Meets Bureau of Indian Standards specification No. IS:1547:1985.

Manufactured under compulsory BIS Certification scheme.

SUDHA Instant Full Cream Milk Powder

SUDHA INSTANT FULL CREAM MILK POWDER (Spray Dried) is made from Toned
Milk, Vitamins A,D

Composition:

Milk Fat 26% to 28%.

Protein 26%

60
 Carbohydrates 37%

Minerals 6%

Moisture 3%

Calorific Value:

500 kcal./100gm - Every 60g of powder contains minimum 1300 I.U.

Vitamin A and 200 I.U. Vitamin D.

Special Features:

The product has more milk fat as compared to normal milk powders. It is packed under
an atmosphere of Nitrogen. The product is creamy white in colour: Marketed in India
since last 3 decades.

Product Specification:

Meets ADPI extra grade standard for quality and BIS Specification No.IS:1165-1992

Sagar Skimmed Milk Powder

SAGAR SKIMMED MILK POWDER (Spray Dried)is made from

Skimmed Milk

61
Composition:

Milk Fat (Max) 1%

Milk Protein 35%

Carbohydrates 51%

Minerals 7%

Moisture 3.5%

Calorific Value:

350 kcal/100 gm

Special Features:

The product is readily soluble in lukewarm water. It is especially useful for diet
preparations or for use by people on low calorie and high protein diet.Product
Specification:

SUDHA Instant Full Cream Milk Powder

62
SUDHA INSTANT FULL CREAM MILK POWDER (Spray Dried) is made

from Toned Milk, Vitamins A,D

Composition:

Milk Fat 26% to 28%.

Protein 26%

Carbohydrates 37%

Minerals 6%

Moisture 3%

Calorific Value:

500 kcal./100gm - Every 60g of powder contains minimum 1300 I.U.

Vitamin A and 200 I.U. Vitamin D.

Special Features:

63
The product has more milk fat as compared to normal milk powders. It is packed under
an atmosphere of Nitrogen. The product is creamy white in colour: Marketed in India
since last 3 decades.

Product Specification:

Meets ADPI extra grade standard for quality and BIS Specification No.IS:1165-1992.

Sagar Skimmed Milk Powder

SAGAR SKIMMED MILK POWDER (Spray Dried)is made from

Skimmed Milk

Composition:

Milk Fat (Max) 1%

Milk Protein 35%

Carbohydrates 51%

Minerals 7%

Moisture 3.5%

64
Calorific Value:

350 kcal/100 gm

Special Features:

The product is readily soluble in lukewarm water. It is especially useful for diet
preparations or for use by people on low calorie and high protein diet.Product
Specification:Meets ADPI extra grade and BIS

Sagar Tea Coffee Whitener

SAGAR TEA & COFFEE WHITENER is made from Milk Solids,

Sugar and Hydrogenated Vegetable Oils

Approximate Composition:

Vegetable Fat 20%

Milk Protein

Carbohydrates 50%

Minerals 5%

USP:

65
Affordable whitener for the health conscious.

Special Features:

Sagar Tea and Coffee Whitener, is a specialty product, to be used primarily

for making rich and tasteful tea and coffee. It is a high value for money offering for the
health conscious

SUDHAya Dairy Whitener

SUDHAYA DAIRY WHITENER is made from partially skimmed milk

and sugar.

Composition:

Milk Fat 20%

Milk Protein 21%

Carbohydrates :

Lactose 33%

Sugar 18%

Minerals 5%

66
 Moisture 3%

Calorific Value:

470 kcal./100gm

Special Features:

Packed under an atmosphere of Nitrogen, has excellent natural miscibility (without the
use of lecithin), has a fine granular texture. A convenient alternative to condensed milk.
Marketed in India since last 6 years.

Product Specification:

Meets BIS specification for sweetened Milk Powder. No.IS:12299:1988

SUDHA Pasteurized Processed Cheddar Cheese

SUDHA PASTEURISED PROCESSED CHEDDAR CHEESE is made from Cheese,

Sodium Citrate, Common Salt, Citric Acid, permitted natural colour Annatto. Emulsifier
and Class II preservatives.

67
Composition:

Fat 27%

Moisture 45%

Proteins 23%

Added salt 2.5%

Calorific Value:

340 kcal./100g

Special Features:

Made from graded cow/buffalo milk using microbial rennet

SUDHA Cheese Spreads

SUDHA CHEES E SPREAD is made from Soft Cheese, Cheddar Cheese and Common
Salt.

Composition:

Fat 18-20%

68
 Moisture 60%

Protein 14-15%

Addes Salt 1.8%

Sodium Citrate 2.5%

Calorific value : 240 kcal./100g

Special Features:

Highly acceptable product made from the most modern dairy plant through a special
formulation.

SUDHA Emmental Cheese

Presenting SUDHA's Emmental Cheese with holesThis famous cheese with a Swiss taste
owes its name to the Emmental valley, near Berne in Switzerland. In this famous valley,
the tradition of Cheese-making has flourished in the skilled hands of sennen, the local
Alpine cowherds. The production of Cheese in Emmental valley can be traced to as far
back as 1290 AD.

One of the most striking features of Emmental is the `holes' or the `eyes', as they are
popularly called. SUDHA Emmental Cheese has a sweet-dry flavour and hazelnut aroma.
This cheese is normally available in the form of awheel, having convex edges and is
covered with a dry-hard rind which is golden-yellow in colour. This rind is to be removed
before consumption. Emmental is a ready to eat platter cheese and goes best with wines
& cocktails. As opposed to the commonly available processed cheddar cheese, Emmental
is actually a `live' cheese, i.e. it has live bacteria, which continue the ripening process,
even after the cheese is packed and placed on the retail shelves. However, it is a 100%
vegetarian coagulating enzyme.

69
Composition:

Moisture 43%

Fat (On dry matter) 46%

Salt 1.5%

Storages & Handling Instructions:

At all levels this product is to be stored at ordinary refrigeration temperature

i.e. 4 degrees Centigrade to 8 degree Centigrade. This is the same temperature at which
SUDHA Butter is storedThe consumers are advised to keep the product outside the
refrigerator for 30 minutes before eating it, in order to get the full aroma and taste.

Pack Sizes Available:

SUDHA Emmental Cheese is available in a 200 gm pack for both the comsumer and
institutional segments.

70
SUDHA Pizza Mozzarella Cheese

Ingredients:

Milk, Common Salt,

100% Vegetarian Coagulating

Enzymes.

Composition:

Fat on dry matter > 30% but < 40%

Moisture > 45% but <52%

Salt > 1.1% - 1.6%

Special Features

SUDHA,which is the largest selling brand of Cheese in India, is introducing genuine

Mozzarella Cheese for the first time in the country.

SUDHA Pizza Cheese has Moist, Soft, Elastic texture and has a very timely surface
sheen and when fresh, it has a slightly salty blandish taste and pleasant aroma.

71
 Because of its stretchability, i.e. ability to form strings when hot, this cheese is ideal
for preparing Lasagna, Veal Cutlet, Alla Parmagnia and as a topping on pizzas.

When baked along with pizzas, it melts uniformly, beautifully engulfing all other
ingredients of the pizza surface.

Mozzarella is an excellent source of milk proteins, which are palatable

SUDHA / Sagar Pure Ghee

SUDHA PURE GHEE is made from Milk Fat

Composition:

Milk Fat 99.7%

Moisture 0.3%

Calorific Value:

900 kcal./100g

Special Features:

Made from fresh cream. Has typical rich aroma and granular texture. An ethnic product
made by dairies with decades of experience. A rich source of Vitamin A, D, E and K.

72
Product Specification: Meets AGMARK SPECIAL GRADE specification of the Agmark
scheme

(1938) of Govt. of India

SUDHA Paneer

Four easy steps for best results Store in freezer compartment of refrigerator.Take out the
required quantity to be cooked from the pack and place balance back in the freezer after
folding the pack.

Thaw the required quantity so you can cook faster. Just place it in the open or in a dish
containing tap water for a few minutes to thaw.

Once thawed, do not refreeze.

Mattar Paneer Recipe

Heat 5-6 tbsps. oil in a pan. Add paneer and fry until golden. Remove from pan. Add 4
tbsps. grated onion and fry till golden brown. Grind 10 gms.

ginger and 6 flakes garlic into a paste and add to pan and stir. Add 1 tsp. turmeric, 2 tsps.
red chilli powder, 1 tbsps. cumin powder, 1 tbsp. salt, 350 gms. chopped tomatoes and
1/4 cup water. Cook for approximately 5mins, stirring occasionally. Add 500 gms. peas
and fry. Add 2 1/2 cups water.

Cover and simmer until peas are almost tender. Add paneer and simmer forabout 5 mins.
Stir in 1 tsp. garam masala powder. Serve hot, garnished with 1 tbsp. chopped coriander.

73
Mithai Mate

SUDHA MITHAI MATE SWEETENED CONDENSED MILK is made from

Sugar & Milk solids

Composition:

Sweetened Condensed Milk

Total Milk Solids 31% minimum

Fat 9.0% minimum

Added Cane Sugar 40.0% minimum

Partly Skimmed Sweetened Condensed Milk

Total Milk Solids 28.0% minimum

Fat 3.0% to 9.0% minimum

Added Cane Sugar 40.0% minimum

Special Features:

Produced on the only continuous condensing plant in the country. The product contains
no preservatives.

74
Product Specification:

Meets BIS standards : IS:1166

Product Characteristic:

Free flowing and smooth texture. White to creamy colour and pleasant flavour.

Use of Product:

The product can be used to manufacture Ice Creams, Confectioneries like Toffees,
Biscuits and Sweets

Dahi

SUDHA MASTI DAHI is made from Pasteurized Toned Milk

Approximate Composition:

Fat 3.5%

SNF 8.5%

75
Special Features:

Only Packed curd available in market, made in the hygienic way in modern processing
plant. Made with special culture to give a smooth, mild acidic taste and pleasant flavour
consistently.

SUDHA Ice Creams

SUDHA ICE CREAM is made from Milk and Milk products, Sugar,

Stabilizers & Emulsifiers.

Composition:

Milk Fat 13.5% to 14.5%

Total Solids 40% to 41%

Sugar 15% Approx.

Acidity 0.17% to 0.19%

Protein 3.9% to 4.1%

76
Food Energy Value:

Calories per 100 ml -196.7 kcal

Flavours:

Vanila, Strawberry, Pineapple, Orange, Rose, Mango, Chocolate, Honey-Dew-Melon,

Tutti Frutti, Litchi, Kesar Pista, Kaju Draksh, Butterscotch, Chocochips, Rajbhog and
Cashew Break.

Packaging:

50 ml cup, 100 ml cup, 500 ml pack,1 litre pack, 4 litre pack, Chocobar, Ice candies,
Cones and Kulfies.

Special Features:

Various varities of Ice Cream can be made from the basic mix by addition of required
amount of permissible colours and flavours. Dry fruits and nuts would be used for
making premium varities of Ice Cream.

Product Specification:

Product meets BIS specification.

SUDHA Shrikhand

SUDHA SHRIKHAND is made from Chakka, Sugar and flavouring agents/fruits

(Elaichi, Saffron, Mango pulp)

77
Composition:

Fat 5.5%

Milk solid-not fat 13.5%

Sugar 40%

Flavouring agent 2.5%

Mango pulp

Calorific Value:

260 kcal./100g

Special Features:

Shrikhand is a traditional sweet. It is the only pasteurized Shrikhand available in the

country with smooth texture and extended shelf life. Made from most modern dairy
equipment.

Gulab Jamun Mix

SUDHA MITHAEE GULABJAMUN MIX is made from Whole Milk

Powder, Tartaric Acid, Sodium Bicarbonate

78
 Approximate Composition:

Moisture: 80%

Fat 12.0%

Special Features:

SUDHA Mithaee Gulabjamun Mix is a mixture of all the required ingredients to produce
tasty, softer and delicious Gulabjamuns. It gives relief from mixing different ingredients.

SUDHA Chocolates

SUDHA CHOCOLATE is made from Sugar, Cocoa Butter, Milk Solids, Chocolate mass

79
Composition:

Milk Fat 2%

Sugar 55%

Total Fat 32.33%

(Milk Fat + Cocoa Fat)

Cocoa Solids 7.5%

Milk Solids 20%

Product Specification:

Meets all requirements under the PFA for boiled sugar confectionary.

NutrSUDHA

NUTRSUDHA MALTED MILK FOOD is made from malt extract, milk solids, sugar,
cocoa powder, emulsifying agents, sodium bicorbonate and added flavour.

80
 Composition:

Fat 6.5%

Carbohydrates 70%

(Starch, sugar)

Moisture 2%

Protein 11.5%

Cocoa 8%

Special Features:

SUDHA's NutrSUDHA has the highest protein content among all the brown beverage
powders sold in India and is the only one in India with BIS certification mark.

Product Specification:

Carries BIS certification mark IS: 1806-1975 Type II.

81
EXPORT

COMPFED is India's largest exporter of Dairy Products. It has been accorded a "Trading
House" status. COMPFED has received the APEDA ward from Government of India for
Excellence in Dairy Product Exports for the last 9 years.

The major export products are:

Consumer Packs

SUDHA Pure Ghee SUDHA Butter

SUDHA Shrikhand

SUDHA Mithaee Gulabjamun

NutrSUDHA Brown Beverage

SUDHA spray Infant Milk Food

SUDHA Cheese

SUDHA Malai Paneer

SUDHA UHT Milk (Long Life)

SUDHA Fresh Cream

Bulk Packs

SUDHA Skimmed Milk Powder

SUDHA Full Cream Milk Powder

82
CHAPTER-3

COMPITITOR

GUJARAT COOPERATIVE MILK MARKETING FEDERATION

(AMUL)
HEAD OFFICE

Gujarat Cooperative Milk Marketing Federation,

PO Box 10, Amul Dairy Road, Anand 388 001, Gujarat, India
Ph. No’s (+91) (2692) 240070, 258506, 258507, 258508, 258509
Fax No’s (+91) (2692) 240208, 240185

BRANCH OFFICE

6 OFFICES

DELHI, CHENNAI, KOLKATA, MUMBAI, AHMEDABAD, GUHAWATI.

6 ZONES ARE:

ZONE 1: CHANDIGARH ZONE 2: BANGALORE

GHAZIABAD HYDRABAD

KANPUR HOBLI

DEHRADUN COMBRTORE

PARVANU COCHIN

KUNDLI KOZHIKODE

VARANASHI VIZAG

JAMMU

GORAKHPUR

83
LUDHIANA

DELHI

ZONE 3: PATNA ZONE 4: MUMBAI

RACHI BOISAR

ASANSOL PUNE

KOLKATA GOA

HOWRAH NAGPUR

CUTTACK

SAMBHALPUR

ZONE 5: AHMEDABAD ZONE 6: N E REGION

VAGHASI GUWAHATI

INDORE JORHAT

JAIPUR

RAIPUR

UDAIPUR

Amul: The origin

84
The mighty Ganges at its origin is but a tiny stream in the Gangotri ranges of the
Himalayas. Similar is the story of Amul which inspired 'Operation Flood' and heralded
the 'White Revolution' in India. It began with two village cooperatives and 250 liters of
milk per day, nothing but a trickle compared to the flood it has become today. Today
Amul collects processes and distributes over a million liters of milk and milk products
per day, during the peak, on behalf of more than a thousand village cooperatives owned
by half a million farmer members. Further, as Ganga-ma carries the aspirations of
generations for moksha, Amul too has become a symbol of the aspirations of millions of
farmers. Creating a pattern of liberation and self-reliance for every farmer to follow.

The start of a revolution:

In the 1940s, in the district of Kaira in the State of Gujarat, India, a unique experiment
was conducted that became one of the most celebrated success stories of India. At that
time, In Gujarat, milk was procured from farmers by private milk contractors and by a
private company, Polson’s Dairy in Anand, the headquarters of the district. The company
had a virtual stranglehold on the farmers, deciding the prices both of the procured as well
as the sold milk. Polson’s Dairy chilled the milk and supplied it to the city of Bombay. It
also extracted dairy products such as cheese and butter.

In 1946, under inspiration from a leading freedom fighter, Mr. Vallabhbhai Patel (who
belonged to Gujarat and who later became the Home Minister of the Central
Government), Mr. Tribhuvandas Patel, a local farmer, freedom fighter and social worker,
organized the farmers into co-operatives. These co-operatives would procure milk from
the farmers, process the milk and sell it in Gujarat and in Bombay. In 1949, purely by
chance, a dairy engineer, named Dr. Verghese Kurien, who had just completed his studies
in dairy engineering in the U.S.A., came to India and was posted by the
Government of India to a job at the Dairy Research Institute at Anand. A chance meeting
between Dr. Kurien and Mr. Tribhuvandas Patel changed Dr. Kurien’s life and the
course of India’s dairy industry. Though the purpose of this meeting was to simply to
elicit some technical help from Dr. Kurien on commissioning some of the equipment just

85
purchased by his co-operative, especially the chilling and pasteurizing equipment, the
two men instantly struck a rapport. After the commissioning problem was solved, Dr.
Kurien’s involvement with the Kaira District Co-operative Milk Producers’ Union
Limited (that was the name of the co-operative registered) grew very rapidly and it soon
extended to the larger sociological issues involved in organizing the farmers into co-
operatives and running these co-operatives effectively. He observed the exploitation of
farmers by the private milk contractors and Polson’s Dairy and understood how co-
operatives could transform the lives of the members.
This experiment of organizing farmers into co-operatives was one of the most successful
interventions in India. A very loyal clientele of member farmers was built up who
experienced prosperity on a scale they could not have dreamt of ten years earlier, since
with good prices paid for their milk, raising milch cattle could become a good
supplementary source of revenue to many households. The co-operatives were expanded
to cover more and more areas of Gujarat and in each area, a network of local village level
co-operatives and district level co-operatives were formed on a pattern similar to that at
Anand (the so called Anand pattern). Kaira District Co-operative Milk Producers’ Union
became better known by the brand name of the
products marketed by it (Amul) than by the name of the co-operative itself. Amul meant
priceless in Sanskrit. It was also a word that was easy to pronounce, easy to remember
and that carried a wholly positive connotation. This became the flagship brand for all the
dairy products made by this Union.

In 1954, Kaira District Co-operative Milk Producers’ Union built a plant to convert
surplus milk produced in the cold seasons into milk powder and butter. In 1958, a plant to
manufacture cheese and one to produce baby food were added. Subsequent years saw the
addition of more plants to produce different products.

Contradictions and Discontinuities

Various issues highlight the contradictions inherent in the process of
replication of a pilot project through top-down bureaucratic methods. As mentioned earlier,
the co-operative at Anand had evolved from below, but in replicating, the NDDB insisted

86
that a federation should be set up first, followed by unions and primary village milk
producers' societies. The historical model was turned upside-down. In the absence of union
or primary societies, it was obvious that the federation would comprise only state
government nominees.

The major objective of the whole programme of `Operation Flood' shifted in favour of
outputs (boosting milk collection) instead of inputs (establishment of farmers'
organizations). The single most important element of the Amul model, which even its worst
critics would admit to be worth replicating, was accountability of organizations to members.
Precisely this feature was lost sight of in the process of replication. The district co-operative
unions or primary village co-operative societies which studied in other states as well as in
parts of Gujarat revealed this practice to be the rule rather than the exception. A meeting of
the general body of some of the oldest unions had not taken place for years. One could
imagine how in the absence of such meetings more complex and difficult participative
processes or norms of accountability
could be developed in the parent organizations.
The methods chosen by the NDDB to replicate were not always participative, democratic, or
flexible. In fact, the NDDB's greatest burden is the success which it has behind it. As Paul
(1982) has suggested, `if one looks for at least one public developmental programme that
has achieved its purpose, undoubtedly one could not mention any programme but Operation
Flood I, in which the strategy aimed at stabilizing milk supplies to the four metropolitan
cities by helping the milk producers to build up their cooperatives' (NDDB, 1980-1). It is
another question whether the success of a developmental programme should be measured by
outputs or by the process and the institutions established to achieve outputs.

The leadership of village societies in most of the villages is in the hands of high-caste
people. The diversification of services through the investment of surpluses is not linked
with the interest of poor cattle-owners. For example, the major problem of the pastoralist is
the availability of dry fodder during lean months, whereas fodder-related research at the
NDDB aims at either improving green fodder production or the nutrient content of available

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dry fodder. No dairy federation in any of the states has attempted the development of some
sort of public distribution system for dry fodder.

Another important feature of the Amul pattern was the assurance of year-round milk
collection that organizations provided to their members. However, several milk routes
which were not found viable in terms of the cost of milk collection were closed in the lean
summer season, breaking this assurance. Given the fact that in low-population-density,
high-risk, backward regions the cost of milk collection would be higher, the uniform
viability norms prescribed by the NDDB provided no choice for the organizations but to
neglect these regions. There was only one case where a dynamic executive officer of a dairy
development corporation pleaded with the state government to be allowed to incur losses in
the short run (Aurora, 1983). This was done to promote dairy development activities in
drought-prone parts of the state where the cost of milk collection was very high. On the
issue of flexibility the contention of the NDDB was that, even if flexibility was allowed, the
state federations did not pass this on to their district unions, partly because they were
dominated by the bureaucrats and not the elected officials.

It is not surprising that the regions chosen by the NDDB for replicating the Amul/Anand
pattern in different states were the regions endowed with most favourable natural resources
and market infrastructure. In that sense, this strategy continued the bias of Green
Revolution strategy where the emphasis was also to concentrate technological change in the
most favourable regions and at the land holdings of the best-endowed farmers. The
contradiction inherent in the statement was that this best one-third of the country did not
have farmers dependent upon dairying as a primary means of subsistence, as was the case in
the most backward, semi-arid and arid part (a little less than one-third) of the country. What
is also interesting is that many multinational corporations have chosen precisely the area
which the NDDB has chosen for replication of the model in the first phase. In a later phase,
the NDDB included many backward regions, but the best pockets have been selected even
in those districts.
Each failure, each obstacle, each stumbling block can be turned into a

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success story. In the early years, Amul had to face a number of problems. With every
problem came opportunity. A chance to turn a negative into a positive. Milk by products
and supplementary yield which suffered from the same lack of marketing and distribution
facilities became encumbrances.
Instead of being bogged down by their fate they were used as stepping
stones for expansion. Backward integration of the process led the
cooperatives to advances in animal husbandry and veterinary practice.
Milk by products: An excuse to expand.
The response to these provided stimulus for further growth. For example, as the
movement spread in the district, it was found that the Bombay Milk Scheme could not
absorb the extra milk collected by the Kaira Union in winter, when the production on an
average was 2.5 times more than in summer. Thus, even by 1953, the farmer-members
had no assured market for the extra milk produced in winter. They were again forced to
sell a large surplus at low rates to the middlemen. The remedy was to set up a plant to
process milk into products like butter and milk powder. A Rs 5 million plant to
manufacture milk powder and butter was completed in 1955. In 1958, the factory was
expanded to manufacture sweetened condensed milk. Two years later, a new wing was
added for the manufacture of 2500 tons of roller dried baby food and 600 tons of cheese
per year, the former based on a formula developed with the assistance of Central Food
Technological Research Institute (CFTRI), Mysore. It was the first time anywhere in the
world that cheese or baby food was made from buffalo milk on a large, commercial scale.

Another milestone was the completion of a project to manufacture balanced cattle feed.
The plant was donated by OXFAM under the Freedom From Hunger Campaign of the
FAO. To meet the requirement of milk powder for the Defense, the Kaira Union was
asked by the Government of India in 1963 to setup additional milk drying capacity. A
new dairy capable of producing 40 tons of milk powder and 20 tons of butter a day was
speedily completed. It was declared open in 1965. The Mogar Complex where high
protein weaning food, chocolate and malted food are being made was another initiative
by Amul to ensure that while it fulfilled the social responsibility to meet the demand for

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liquid milk, its members were not deprived of the benefits to be had from the sale of high
value-added products.

Traditionally dairying was a subsidairy occupation of the farmers of Kaira. However, the
contribution to the farmer's income was not as prominent as his attachment to dairying as
a tradition handed down from one generation to the next. The milk yield from animals,
which
maintained mainly on the by products of the farm, was decidedly low. That together with
the lack of facilities to market eventhe little produced rendered the scientific practice of
animal husbandry irrational as well as unaffordable. The return on the investment as well
as the prospects of being able to market the product looked very bleak. It was a vicious
cycle reinforced by generations of beliefs.
The Kaira Union broke the cycle by not only taking upon themselves the responsibility of
collecting the marketable surplus of milk but also provided the members with every
provision needed to enhance production. Thus the Kaira Union has full-fledged
machinery geared to provide animal health care and breeding facilities. As early as late
fifties, the Union started making high quality buffalo semen. Through village society
workers artificial insemination service was made available to the rural animal population.
The Union started its mobile veterinary services to render animal health care at the
farmers doorstep. Probably for the first time in the country, veterinary first aid services,
by trained personnel, were made available in the villages.The Union's 16 mobile
veterinary dispensaries are manned by fully qualified staff. All the villages are visited bi-
monthly, on a predetermined day, to provide animal health care. A 24-hour Emergency
Service is also available at a fee (Rs. 35 for members and Rs. 100 for non-members). All
the mobile veterinary vans are equipped with Radio Telephones.

The Union runs a semen production center where it maintains high

pedigreed Surti buffalo bulls, Holstein Friesian bulls, Jersey bulls and 50 per cent
crossbred bulls. The semen obtained from these bulls is used for artificial breeding of
buffaloes and cows belonging to the farmer members of the district. The artificial
insemination service has become very popular because it regulates the frequency of

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calving in cows and buffaloes thus reducing their dry period. Not only that, a balanced
feed concentrate is manufactured in the Union's Cattle Feed Plant and sold to the
members through the societies at cost price.

Impressive though its growth, the unique feature of the Amul sagas did not lie in the
extensive use of modern technology, nor the range of its products, not even the rapid
inroads it made into the market for dairy products. The essence of the Amul story lies in
the breakthrough it achieved in modernizing the subsistence economy of a sector by
organizing the rural producers in the areas.
The Kaira experiment: A new beginning in more ways than one. A system which
involves participation of people on such a large magnitude does not confine itself to an
isolated sector. The ripples of its turbulence affect other areas of the society as well. The
cooperatives in the villages of Kaira are contributing to various desirable social changes
such as:
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
inequilibria. The rich and the poor, the elite and the ordinary come together to cooperate
for a common cause.
More than 900 village cooperatives have created jobs for nearly 5000 people in their own
villages -- without disturbing the socio-agro-system – and thereby the exodus from the
rural areas has been arrested to a great extent. 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. Independent studies by various individuals and institutions
have shown that as high as 48 per cent of the income of the rural household in Kaira
District is being derived from dairying. Since dairying is a subsidairy occupation for the
majority of the rural population, this income is helping these people not only to liberate
themselves from the stronghold of poverty but also to elevate their social status. The
credit for taking India to the top of the International dairy sector goes to the millions of
small dairy farmers dispersed across the country.

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KWALITY WALL’S

Kwality is a brand name that is well recognized and respected in today’s fast changing
food & beverage market. Kwality is a brand that is well known and liked by North
Indians. The company being started in Delhi has a strong customer base in the city.

P. L. Lamba, the founder of the company wanted to create a company whose very name
would reflect the service standard of all its future products. Where the highest quality
food products would be served at the best price to satisfy the taste buds of an
experimental Delhi. With this mission in mind, in 1940 he opened the first Kwality
restaurant in Delhi’s famous Connaught Place and thus they started with the company
‘kwality’ a rich legacy that has continued to this day.

After passing 65 successful years, the Kwality restaurant became the most popular food
joint for the people of Delhi.

Today, over 60 years later, that pride is undiminished and from its humble beginnings,
the Kwality Group today successfully runs the famous Asiad Village restaurant complex.
P. L. Lamba’s gen-next Sunil and Dhruv Lamba have taken the family legacy into the
future with pulsating new ideas like the Breads and More café chains in India and the
Express food courts in various malls and hospitals.

Kwality Ice Cream is the pioneer in the Indian ice-cream manufacturing industry and in
1956 became the first company in the country to use imported technology for
manufacturing ice-cream on a commercial scale. As the ice-cream industry exploded in
India, in 1995 Kwality Group joined hands with Hindustan Lever Limited and then there
was no looking back. The Indian consumer market was introduced to “Kwality Walls”,
the result of a collaboration between global brand Walls and the leading Indian ice-cream
brand Kwality. Though the two giants eventually parted ways, the collaboration made
Kwality a household name and created deep in roads for the brand in the consumer
market.

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Today, Kwality is not just a brand – it is the ice-cream associated with the Indian
summer; it’s the first choice in ice-cream for any child or adult during the scorching
Indian summers. Kwality ice-creams are trusted not only for their rich, creamy flavours,
but also for their trusted quality and nutritious food value.

MANAGEMENT HIERARCHY

Chairman P.L.Lamba

Managing director Sunil lamba

Executive Director Dhurva lamba

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VADILAL

Today, the name Vadilal conjures images of lip-smacking ice cream in a whole gamut of
flavours. Vadilal spells quality, availability, variety and state-of-the-art machinery and
equipment. It has, however, been a long journey for the group, which traces its origins
way back to 1907, when a certain unassuming gentleman, by the name of Vadilal Gandhi,
the great-grand father of Virendra R Gandhi, Rajesh R Gandhi and Devanshu L Gandhi,
started a soda fountain. He passed on the business to his son, Ranchod Lal, who ran a
one-man show, and, with a hand cranked machine, started a small retail outlet in 1926.
Eventually, Ranchod Lal's sons, Ram Chandra and Lakshman, inherited the business and
they were instrumental in giving a new direction to the company. The duo imparted a
new vision to the venture and infused a spirit of calculated risk-taking into the company.
As a result, by the 1970s, the Vadilal Company had already evolved into a modern
corporate entity.

In 1972-73, the company had 8-10 outlets in Ahmedabad. Gradually, it moved from the
city to other parts of Gujarat. By 1985, the company moved towards neighbouring states
like Rajasthan and Madhya Pradesh. But the expansion was undertaken very
methodically and the company spent five to six years in spreading their business and then
consolidating it" says Shri Ramchandrabhai Gandhi (Chairman).

VISION

To become an Indian MNC in frozen foods”.

“To provide products and services at an affordable price without compromising the

quality,”

HR Philosophy

Vadilal Group has a progressive and a dynamic Human Resource (HR) philosophy. The
company understands that Human Resource Management is concerned with integrating

94
people into a work environment, motivating them to work together effectively and
providing them social, psychological and financial satisfaction – this is what they exactly
try to do.

The company believes in transforming its human capital into a key source of competitive
advantage because they understand its value when tough competition is ruling the market
scenario. Their strong value system is driven by result orientation, adaptability to
change, humility and respect for subordinates and peers. The company helps the
employees to harmonize their personal growth strategy with the growth strategy of the
group.

Structure that can motivate its employees for putting their best and hence earning the
share of revenue in the form of incentives. Training & Development enables the
employees to hone their skills, think out of box, develop the initiatives, adopt a pro-active
approach, become more productive and have a well-defined career path which is in line
with the overall organizational objectives. Feed back from exit interviews is used for
constant improvements.

Organizational Culture is the easiest thing to comprehend and at the same time the most
difficult thing to define. This is because of the aura of mystique that surrounds
Organizational Culture.

CODE OF CONDUCT FOR DIRECTORS

INTRODUCTION

This Code of Conduct has been adopted by Vadilal Industries Limited to comply with the
applicable rules of the Stock Exchanges where securities of the Company are listed i.e.
The Stock Exchange, Mumbai and Ahmedabad Stock Exchange. The principal duty of
the Board of Directors, along with management, is to ensure that the Company is well
managed in the interests of its shareholders. The Board of Directors plays the central role
in the Company’s governance. It is the Company’s decision-making authority on all

95
matters except those reserved to shareholders or delegated to the management. The Board
of Directors is not expected to assume an active role in the day-to-day management of the
Company. All Board members shall affirm compliance of this Code on an annual basis.
On the basis of affirmation, two Managing Directors of the Company, namely, Shri
Rajesh R. Gandhi and Shri Devanshu L. Gandhi, will give the declaration to this effect
and the declaration will be published in the Annual Report of the Company.

GUIDELINES FOR CONDUCT

Each director should seek to use due care in the performance of his/her duties, be loyal to
the Company, act in good faith and in a manner such director reasonably believes to be
not opposed to the best interests of the Company. A director should seek to also :-

i) make reasonable efforts to attend Board Meetings, Committee Meetings and General
Meetings of the Shareholders ;

ii) dedicate time and attention to the Company; and

iii) seek to comply with all applicable laws, regulations, confidentiality, obligations and
corporate policies of the Company.

CORPORATE BUSINESS OPPORTUNITIES

In carrying out their duties and responsibilities, directors should avoid :

i) appropriating corporate business opportunities for themselves that are discovered

through the use of Company property or information or their position as directors;

ii) using Company property or information, or their position as directors, for personal
gain; and

iii) competing with the Company.

A corporate business opportunity is an opportunity

96
(1) which is in the Company’s line of business or proposed expansion or diversification,

(2) which the Company is financially able to undertake and

(3) which may be of interest to the Company.

A director who learns of such a corporate business opportunity and who wishes to avail
of, it should disclose such opportunity to the Company’s Board of Directors. If the Board
of Directors determines that the Company does not have an actual or expected interest in
such opportunity, then, and only then, may the director avail of it, provided that the
director has not wrongfully utilized the Company's resources in order to acquire such
opportunity.

CONFLICTS OF INTEREST

Each director should endeavor to avoid having his or her private interests interfere with

(i) the interests of the Company ,or

(ii) his or her ability to perform his or her duties and responsibilities objectively and
effectively. Directors should avoid receiving, or permitting members of their immediate
family to receive, improper personal benefits from the Company, including loans from or
guarantees of obligations by the Company. A director should make a full disclosure to the
entire Board of any transaction or relationship that such a director reasonably expects
could give rise to an actual conflict of interest with the Company and seek the Board’s
authorization to pursue such transactions or relationships. It is a conflict of interest to
serve as a Director of any Company that competes with the Company.

COMPANY PROPERTY

In carrying out their duties and responsibilities, directors should endeavor to ensure that
management is causing the Company’s assets, proprietary information and resources to
be used by the Company and its employees only for legitimate business purposes of the
Company.

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CONFIDENTIAL INFORMATION

Directors should maintain the confidentiality of information entrusted to them in carrying

out their duties and responsibilities, except where disclosure is approved by the Company
or legally mandated or if such information is in the public domain.

The Company’s confidential and proprietary information shall not be inappropriately

disclosed or used for the personal gain or advantage of any director or anyone other than
the Company. These obligations apply not only during a Director’s term, but thereafter as
well.

FAIR DEALING

In carrying out their duties and responsibilities, directors should endeavor to deal fairly,
and should promote fair dealing by the Company, its employees and agents, with
customers, suppliers and employees.

Directors should not seek to take unfair advantage of the Company through manipulation,
concealment, abuse of privileged information, misrepresentation of material facts or any
other unfair dealing.

COMPLIANCE WITH LAWS AND REGULATIONS

In carrying out their duties and responsibilities, directors should comply, and endeavor to
ensure that the management is causing the Company to comply, with applicable laws,
rules and regulations. In addition, if any director becomes aware of any information that
he or she believes constitutes evidence of a material violation of any securities or other
laws, rules or regulations applicable to the Company or the operation of its business, by
the Company, any employee or another director, then such director should bring such
information to the attention of the Board of Directors of the Company.

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INSIDER TRADING

Directors should observe all applicable laws and with respect to the purchase and sale of
the Company’s securities. It is the responsibility of each director to become familiar with
and understand these laws and regulations.

Insider Trading generally involves the act of subscribing or buying or selling of the
Company’s securities, when in the possession of any Unpublished Price Sensitive
Information about the Company. It also involves disclosing any Unpublished Price
Sensitive Information about the Company to others who could subscribe or buy or sell the
Company’s securities. Insider Trading invokes severe civil and criminal penalties not
only on the Insider but also on the Company in certain circumstances under the
Regulations issued in India under the Securities and Exchange Board of India (SEBI)
Act, 1992.

“Sensitive information” is information which relates directly or indirectly to a Company

and which if published is likely to materially affect the price of Securities of a Company.
It is important to note that both positive and negative information could be price
sensitive.

RELATED PARTIES

As a general rule, Directors should avoid conducting Company business with related
parties as defined under applicable Accounting Rules, SEBI, Companies Act, 1956 and
Securities Market Rules. If such a related party transaction is unavoidable, director must
fully disclose the nature of the such transaction to the Company.

POLITICAL CONTRIBUTIONS

It is the Company’s policy to comply fully with all local, state, foreign and other
applicable laws, rules and regulations regarding political contributions. The

99
Company’s funds or assets must not be used for or be contributed to political campaigns
or political practices under any circumstances without the prior approval of the Board of
Directors of the Company.

ENCOURAGING THE REPORTING OF ILLEGAL OR UNETHICAL BEHAVIOR

Directors should endeavor to ensure that management is causing the Company to promote
ethical behavior and to encourage employees to report evidence of illegal or unethical
behavior to appropriate Company personnel. Directors should endeavor to ensure that the
Company will not allow retaliation against any employee who makes a good faith report
about a possible violation of the Company’s Code of Conduct.

OTHERS

(i) To observe and guide the Company in maintaining highest degree of Corporate

Governance.

(ii) To inform the Company immediately about the emergence of any situation that may
disqualify him / her from directorship.

(iii) Not to hold any office or place of profits in the company by himself / herself or by
his / her relatives without full disclosure of information in connection therewith.

NON-COMPLIANCE

Suspected violations of this Code may be reported to the Chairman of the Board or the
Chairman of the Audit Committee. All reported violations should be appropriately
investigated. Any waiver of this Directors’ Code must be approved by the Board of
Directors and publicly disclosed if required by any applicable law or regulation.

NO RIGHTS CREATED

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This Directors' Code sets forth guidelines for conduct for the Board of Directors.

NESTLE

Since Henri Nestlé developed the first milk food for infants in 1867, and saved the life of
a neighbor’s child, the Nestlé Company has aimed to build a business as the world's
leading nutrition, health and wellness company based on sound human values and
principles.

While the Nestlé Corporate Business Principles will continue to evolve and adapt to a
changing world, our basic foundation is unchanged from the time of the origins of the
Company, and reflects the basic ideas of fairness, honesty, and a general concern for
people.

Nestle is the world's foremost Nutrition, Health and Wellness company. We are
committed to increasing the nutritional value of our products while improving the taste.
Nestlé (China) Ltd has donated some 10,000 cases of products to the people of Sichuan.
Meanwhile, Nestlé (Thai) Ltd has sent Pure Life water to the survivors of the Myanmar
cyclone, and Nestlé Myanmar medical staff have joined the recovery teams.

BUSINESS PRINCIPLES

• Nestlé is committed to the following Business Principles in all countries, taking

into account local legislation, cultural and religious practices:
• Nestlé's business objective is to manufacture and market the Company's products
in such a way as to create value that can be sustained over the long term for
shareholders, employees, consumers, and business partners.
• Nestlé does not favor short-term profit at the expense of successful long-term
business development.
• Nestlé recognizes that its consumers have a sincere and legitimate interest in the
behavior, beliefs and actions of the Company behind brands in which they place
their trust, and that without its consumers the Company would not exist.

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• Nestlé believes that, as a general rule, legislation is the most effective safeguard
of responsible conduct, although in certain areas, additional guidance to staff in
the form of voluntary business principles is beneficial in order to ensure that the
highest standards are met throughout the organization.
• Nestlé is conscious of the fact that the success of a corporation is a reflection of
the professionalism, conduct and the responsible attitude of its management and
employees. Therefore recruitment of the right people and ongoing training and
development are crucial.
• Nestlé continues to maintain its commitment to follow and respect all applicable
local laws in each of its markets.

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 MOTHER DAIRY

Mother Dairy – Delhi was set up in 1974 under the Operation Flood Programme. It is
now a wholly owned company of the National Dairy Development Board (NDDB).

Mother Dairy markets & sells dairy products under the Mother Dairy brand (like Liquid
Milk, Dahi, Ice creams, Cheese and Butter), Dhara range of edible oils and the Safal
range of fresh fruits & vegetables, frozen vegetables and fruit juices at a national level
through its sales and distribution networks for marketing food items.

Mother Dairy sources significant part of its requirement of liquid milk from dairy
cooperatives. Similarly, Mother Dairy sources fruits and vegetables from farmers /
growers associations. Mother Dairy also contributes to the cause of oilseeds grower
cooperatives that manufacture/ pack the Dhara range of edible oils by undertaking to
nationally market all Dhara products. It is Mother Dairy’s constant endeavor to

Ensure that milk producers and farmers regularly and continually receive market prices
by offering quality milk, milk products and other food products to consumers at
competitive prices and;

(b) Uphold institutional structures that empower milk producers and farmers through
processes that are equitable.

At Mother Dairy, processing of milk is controlled by process automation whereby state-

of-the-art microprocessor technology is adopted to integrate and completely automate all
functions of the milk processing areas to ensure high product quality/ reliability and
safety. Mother Dairy is an IS/ ISO-9002, IS-15000 HACCP and IS-14001 EMS certified
organization. Moreover, its Quality Assurance Laboratory is certified by National
Accreditation Board for Testing and Calibration Laboratory (NABL)-Department of
Science and Technology, Government of India.

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Mother Dairy markets approximately 2.8 million liters of milk daily in the markets of
Delhi, Mumbai, Saurashtra and Hyderabad. Mother Dairy Milk has a market share of
66% in the branded sector in Delhi where it sells 2.3 million liters of milk daily and
undertakes its marketing operations through around 14,000 retail outlets and 845
exclusive outlets of Mother Dairy.

The company’s derives significant competitive advantage from its unique distribution
network of bulk vending booths, retail outlets and mobile units. Mother Dairy ice creams
launched in the year 1995 have shown continuous growth over the years and today boasts
of approximately 62% market share in Delhi and NCR. Mother Dairy also manufactures
and markets a wide range of dairy products that include Butter, Dahi, Ghee, Cheese, UHT
Milk, Lassi & Flavored Milk and most of these products are available across the country.

The company markets an array of fresh and frozen fruit and vegetable products under
the brand name SAFAL through a chain of 400+ own Fruit and Vegetable shops and
more than 20,000 retail outlets in various parts of the country. Fresh produce from the
producers is handled at the Company’s modern distribution facility in Delhi with an
annual capacity of 200,000 MT. An IQF facility with capacity of around 75 MT per day
is also operational in Delhi. A state-of-the-art fruit processing plant of fruit handling
capacity of 120 MT per day, a 100 percent EOU, setup in 1996 at Mumbai supplies
quality products in the international market. With increasing demand another state-of-the-
art fruit processing plant has been set up at Bangalore with fruit handling capacity of
around 250 MT per day.

Mother Dairy has also been marketing the Dhara range of edible oils for the last few
years. Today it is a leading brand of edible oils and is available across the country in over
2,00,000 outlets. The brand is currently available in the following variants: Refined
Vegetable Oil, Refined Soybean Oil, Refined Sunflower Oil, Refined Rice Bran Oil,
Kachi Ghani Mustard Oil and Filtered Groundnut Oil. Mother Dairy has also launched

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extra virgin Olive Oil under the Daroliva brand.
Mother Dairy has over the last 3 decades, harnessed the power of farmer cooperatives to
deliver a range of delicious products and bring a smile on your face. In times to come,
Mother Dairy shall strive to remain one of India’s finest food companies.

Real milk. Abundant toppings. And an utterly delectable taste. That's the secret of Mother
Dairy's fascinating range of rich and creamy ice creams - a lip-smacking array of ice
candies, milk lollies, bars, cones, real fruit ice creams, Sundaes, low fat desserts and take-
home packs.

Mother Dairy ice creams are now being enjoyed across the markets of Delhi/ NCR,
Mumbai, Kolkata, Punjab, Rajasthan, UP & Uttaranchal.

Mother Dairy is inching closer to Hindustan Lever Ltd in the Rs 800-crore ice cream
market. While SUDHA reigns in the ice-cream market with a dominant share of almost
35 per cent, HLL's Kwality Walls brand has been hovering around 16-17 per cent volume
share as per industry estimates.

Mr Paul Thachil, CEO, Mother Dairy, said, "We are looking at having a 14-15 per cent
volume share this year and intend taking our ice creams to the southern markets."

Besides Delhi, Mother Dairy ice creams are currently available in Mumbai and Kolkata.

"The southern markets are dominated by local players in the ice-cream category but we
have the advantage of our cold chain and retailer network due to our frozen foods brand
of Safal.

"Both the products would require the same kind of temperature band," said Mr Thachil.

Mother Dairy ice creams will now enter the markets of Bangalore and Hyderabad before
rolling it out in Chennai. However, Kerala is being avoided by the dairy major primarily
due to the dominance of local ice cream players in the State.

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Segmenting its ice creams under a youth centric brand, Chillz, there are other variants
based on low fat diets in its portfolio.

However, this summer the co-operative is targeting children with the baseline — `Jagaye
Andar ka Bandar' while it is luring adults with the message `Give In'.

Besides, extensions are being planned for each of its flagship brands. Chillz may be
extended into the ready-to-eat category, while Dhara, the edible oil brand may enter new
segments such as pulses, cereals and spices.

Brand extensions

Its foods brand, Safal, has also graduated from frozen peas, corn, juices and mixed
vegetables to ketchups, jams and tomato purees, and will be available as a drink in the
market. As for the umbrella brand of Mother Dairy, it may get stretched to new products
such as paneer and Indian sweets in the near future.

Meanwhile, after capturing the Delhi market, Mother Dairy has been steadily increasing
its franchise in the Mumbai market. It has recently launched its dahi brand in Mumbai,
where it will have competition from SUDHA and Nestle.

The company is targeting a market share between 30 and 35 per cent in Mumbai within a
year of the launch. Curd would complete the existing dairy portfolio in the city," said Mr
Thachil. The Rs 2,800-crore Mother Dairy expects to grow at 20 per cent this year.

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 CHAPTER-4

COMPFED PROMOTER & BACKGROUND

PROMOTOR: NATIONAL DAIRY DEVELOMPMENT BOARD (NDDB)

The National Dairy Development Board was created to promote, finance and support
producer-owned and controlled organisations. NDDB's programmes and activities seek to
strengthen farmer cooperatives and support national policies that are favourable to the
growth of such institutions. Fundamental to NDDB's efforts are cooperative principles
and cooperative strategies.

The Operation Flood (OF) programme initiated by NDDB in 1970 was a planned attempt
to revive India's Dairy Industry from a premature stagnation. The OF programme not
only propelled the growth of dairy development in India, it also helped India become the
world's largest milk producer.

OF enhanced the incomes and quality of life for millions of India's dairy farmers, most of
them poor and many of them women. It has become India's largest Dairy Development
Programme.

OF (1970-1996) created a strong foundation to transform India's dairy sector into a

vibrant business activity. It paved the way to take up new initiatives and create new
conditions to firm up India's world leadership in milk production. The new challenge for
the Dairy Industry was to explore ways to emerge stronger using the network created
under OF. The response is Perspective 2010, a plan that attempts to take the dairy
cooperative movement to its highest potential.

Perspective 2010 focuses on four key areas. These include Strengthening Cooperative
Business, Production Enhancement, Assuring Quality and creating a National
Information Network. The State Milk Marketing Federations and the Milk Producers'
Cooperative Unions, the architects and key beneficiaries have identified the thrust areas.
The plan is designed keeping at helm the benefit to farmers at large. NDDB facilitated the

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planning process and will provide technical support and need-based finance for
implementing Perspective 2010.

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 organisations. NDDB supports the
development of dairy cooperatives by providing them financial assistance and technical
expertise, ensuring a better future for India's farmers.

Over the years, brands created by cooperatives have become synonymous with quality
and value. Brands like SUDHA (COMPFED), Vijaya (AP), Verka (Punjab), Saras
(Rajasthan). Nandini (Karnataka), Milma (Kerala) and Gokul (Kolhapur) are among
those that have earned customer confidence.

The NDDB belive that:

• Cooperation is the preferred form of enterprise, giving people control over the
resources they create through democratic self-governance.
• Self-reliance is attained when people work together, have a financial stake, and
both enjoy the autonomy and accept the account ability for building and managing
their own institutions.
• Progressive evolution of the society is possible only when development is
directed by those whom it seeks to benefit.
• In particular, women and the less privileged must be involved in cooperative
management and decision-making.
• Technological innovation and the constant search for better ways to achieve our
objectives is the best way to retain our leading position in a dynamic market.
• While our methods change to reflect changing conditions, our purpose and values
must remain constant.

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The National Dairy Development Board (NDDB) was founded in 1965 to replace
exploitation with empowerment, tradition with modernity, stagnation with growth,
transforming dairying into an instrument for the development of India's rural people.

NDDB began its operations with the mission of making dairying a vehicle to a better
future for millions of grassroots milk producers. The mission achieved thrust and
direction with the launching of "Operation Flood", a programme extending over 26
years and which used World Bank loan to finance India's emergence as the world's
largest milk producing nation. Operation Flood's third phase was completed in 1996
and has to its credit a number of significant achievements.

As on March 2006, India's 1,17,575 village dairy cooperatives federated into 170 milk
unions and 15 federations procured on an average 21.5 million litres of milk every
day. 12.4 milliion farmers are presently members of village dairy cooperatives.

Since its inception, the Dairy Board has planned and spearheaded India's dairy
programmes by placing dairy development in the hands of milk producers and the
professionals they employ to manage their cooperatives. In addition, NDDB also
promotes other commodity-based cooperatives, allied industries and veterinary
biologicals on an intensive and nation-wide basis.

BACKGROUND:

Even at the time of its formation, COMPFED had three major products in its portfolio:
liquid milk, butter and milk powder. Gradually, many new products were added to its
range, largely milk derivatives. In milk alone, it sold full cream milk, semi toned milk,
and fully toned milk, all with different names and in readily identifiable pouches. By

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reducing the fat, it could not only sell separately fat derivatives such as cream and butter
(which were also products that yielded a higher margin), but also make the resultant milk
available at cheaper prices, so that poorer people also could consume milk. It had
undertaken a unique experiment in the 1970s to supply milk to places as far away as
Delhi and Calcutta through insulated rail tankers, and this was so successful that it had
continued since then. In the 1970s, COMPFED introduced its cheddar cheese and in
1983, a cheese spread. In the same year, it entered also the sweet market (milk based)
through the introduction of SUDHA Shrikhand, a sweetish sour item produced by milk
and curd (a form of yogurt). SUDHAya, a dairy whitener was introduced and was priced
below the prevailing brands and soon became the market leader. In 1990s, COMPFED
introduced a whole lot of new products: a condensed milk called SUDHA Mithaimate;
SUDHA Lite, a low fat, low cholesterol spread butter, and SUDHA ice cream. After
1996, it went on to introduce a still greater variety of products: pizza (mozzarella) cheese,
cheese slice, cheese powder, malai paneer (a form of cottage cheese), gulab jamun (a
sweet primer to be processed by deep frying to make a sweet called gulab jamun),
buttermilk, a chocolate based beverage called NutrSUDHA and chocolates.

In 1996, COMPFED launched its SUDHA brand ice cream. India’s ice cream market was
estimated to be around Rs.8 billion in the year 2000. COMPFED launched its ice creams
in fourteen flavors in the city of Mumbai and the State of Gujarat. It was priced at about
30 percent less than the prevailing prices, and it also emphasized that it was fully
vegetarian, i.e., it did not contain any gelatin. This was an important attribute to many
consumers in Gujarat, which was a predominantly vegetarian state. In less than a year,
SUDHA ice cream commanded a share of about 55 percent in Gujarat and 30 percent in
Mumbai; by the year 2000, its share in India as a whole had reached 30 percent. In 1997,
COMPFED also scored a major achievement when it managed to get some of the co-
operatives in the other States of the country, trying to launch their own ice cream brands,
to sell all their ice creams under the SUDHA brand name. This enabled COMPFED to
leverage the capacity of more than 180 co-operatives in the country, with a milk
procurement of more than 11 million litres per day, and located close to the markets.

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In addition, it also diversified into non-milk products. The most important of this
diversification was into edible oils in 1988. At that time, the prices of edible oils were
being manipulated by oil traders with the result that the prices were shooting up to
unacceptable levels. Even though oil seed growers’ co-operatives existed, most of them
were run badly and losing money. Edible oils have always been a very sensitive subject
in India, leading to even fall of governments. Hence the government persuaded NDDB to
arrange for procurement of clean, unadulterated groundnut oil and sell it through its own
outlets. Thus it was essentially a market intervention operation. Besides, this provided
NDDB to reorganize the groundnut farmers’ co-operatives as it had done with milk
producing farmers four decades earlier. Gujarat was the right State for this experiment,
since more than 60 percent of the country’s groundnut oil production was accounted for
by Gujarat. COMPFED marketed this oil on behalf of NDDB. COMPFED launched a
new brand, named Dhara (literally meaning flow), not wanting to carry over the SUDHA
brand name which was deeply associated in the public mind with milk derivatives. It sold
its oil on a platform of absolute purity, a claim it could justifiably make. Since much of
the edible oil in India was (and continues to be) adulterated, purity could be a
differentiating factor. It also coined a slogan, Dhara, Shudh Dhara, meaning, literally,
flow, pure flow. The launch was also supported by an advertising campaign with a catchy
jingle. Later, mustard and certain other oils were also marketed under the Dhara brand
name. Even though the oil traders fought back bitterly and often violently, and used their
political connections to the full, Dhara was able to hold its own and became the leading
brand of packaged edible oils. However, it must be said that dealing in edible oils was
found to be a far more difficult task as compared to dealing in milk, and the success
achieved in organizing groundnut farmers into co-operatives was limited.

The National Dairy Development Board has been constituted as a body corporate and
declared an institution of national importance by an Act of India's Parliament.

The National Dairy Development Board -- initially registered as a society under the
Societies Act 1860 -- was merged with the erstwhile Indian Dairy Corporation, a
company formed and registered under the Companies Act 1956, by an Act of India's

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Parliament - the NDDB Act 1987 (37 of 1987), with effect from 12 October, 1987. The
new body corporate was declared an institution of national importance by the Act.

In the late 1990s, COMPFED undertook distribution of fruit based products on behalf of
NDDB. This was done under yet another brand name introduced by COMPFED: Safal
(literally meaning fruitful, having achieved). Under this name were launched a mango
drink sold under tetra pack (also in small 100ml. sizes to be served in aircraft), tomato
ketchup, and a mixed fruit jam. In fact, the launches of all these products were completed
during a single year, 1998-99. The success of these products was very limited as on the
year 2000.

By the year 2000, the range of products marketed by COMPFED was truly wide: three
varieties of milk, flavored milk, buttermilk, four varieties of milk powder, two varieties
of butter, five varieties of cheese, two varieties of ghee clarified butter), chocolates,
chocolate drink, sweets, ice cream, edible oils and fruit and vegetable based products.
Exhibit 5 gives the product portfolio of COMPFED as on the year 2000. At the time of
writing this case, COMPFED was launching milk in tetra packs in the market of Mumbai.

Except in ice creams, chocolate and chocolate-based beverages, SUDHA brand was the
market leader in each and every one of its products. Exhibit 5 also shows the market
shares of the various products of COMPFED. Its main sources of competitive advantage
were seen by its executives as: (i) low costs due to the elimination of middle men, a lean
organization and relatively lower pay scales as compared to MNCs (ii) its scale and scope
of operations and (iii) its strong brand name which stood for purity and quality.

Out of the total procurement of 4.6 million litres of milk per day by COMPFED, about
2.2 million liters were sold as liquid milk and the rest as milk products. The milk
consumption in India in 1999 at about 225 grams per day was still way below that in
developed countries, and even less than in many developing countries. The variation in
availability between rural and urban areas was strikingly high: 121 grams vs. 400 grams
per day. Thus there was a need and scope for increasing the consumption of milk in its

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liquid form, especially in rural areas, although for every rupee spent, the nutrition value
of milk was way below other high protein and fat items, both vegetarian and non-
vegetarian. It was expected that by the year 2011-12, the milk production in India would
reach 180.76 million tons, and the per capita consumption would be about 547 grams.
Exports were negligible: about Rs.271 million in 1999-2000.

Out of COMPFED’s total income of Rs.18 billion, approximately Rs.2.75 billion was
accounted for by sale of liquid milk; about Rs.3 billion by the sale of edible oils; Rs.4
billion by butter; about Rs.2.4 billion by ice creams; and the rest by the other products.
The exact breakup of these products was not available. The share of processed fruits and
vegetable items was still quite small.

The growth rates of COMPFED’s sales in different segments were quite different. The
following table gives the approximate growth rates in these segments:

Growth rates in COMPFED’s Businesses

(Percent)
1996-97 1997-98 1998-99
Liquid milk 24.6 3.8 3.6
procurement
Liquid milk N.A. 14 10
Butter 27 8 13
Cheese N.A. 37 39
Ghee 41 31 N.A.
Milk powder 0 0 18
Ice cream N.A. 10 100
0
Edible oils 13 20 18
(N.A. stands for “not applicable”).

Source: COMPFED Annual reports.

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The profit margin in milk was generally low, due to the need to keep down the price of
this essential commodity, which was also consumed by the poor and the lower middle
class. NDDB and COMPFED had, as one of their important objectives, promotion of
milk consumption, especially by the poorer people, and hence to achieve its objective,
COMPFED endeavored to keep the price of liquid milk as low as it could. Edible oils
were also low margin items, their sales prices being controlled rigidly by the government
and input prices being essentially set by the oil traders. In the words of Mr. Kurien, they
were in this business due to larger societal considerations than for the sake of profits.

CHAPTER-5

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 Vendors / Suppliers Analysis

Every day SUDHA collects 447,000 litres of milk from 2.12 million farmers (many
illiterate), converts the milk into branded, packaged products, and delivers goods worth
Rs 6 crore (Rs 60 million) to over 500,000 retail outlets across the country.

Milk vendors, the un-organized sector: Today milk vendors are occupying the pride of
place in the industry. Organized dissemination of information about the harm that they
are doing to producers and consumers should see a steady decline in their importance.

Any investment idea can do well only when you have three essential ingredients:
entrepreneurship (the ability to take risks), innovative approach (in product lines and
marketing) and values (of quality/ethics).

The Indian dairy industry, following its deli censing, has been attracting a large number
of entrepreneurs. Their success in dairying depends on factors such as an efficient yet
economical procurement network, hygienic and cost-effective processing facilities and
innovativeness in the market place. All that needs to be done is: to innovate, convert
products into commercially exploitable ideas. All the time keep reminding yourself:
Benjamin Franklin discovered electricity, but it was the man who invented the meter that
really made the money!

The Federation's extensive marketing network comprised 3000 distributors and 500,000
retailers spread across the country.

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The chart below gives a schematic of the distribution network:

Manufacturing Units

Carrying & Forwarding Agents

3000
Distributors

500,000
Wholesalers Retailers/Super
Markets

Small/Remote
Retailers

Consumer

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Alternate channels

The company has established a superior quality of relationships with supermarket chains
and has embarked on a programme to create infrastructure for a Doctor Contact
operation.

Sales capacity

ATFL believes in training and development of it's sales force as well as the distributor's
sales force for regularly upgrading skill sets.

Information Technology in Sales

SUDHA has recently started making investments to improve supply chain capabilities to
deliver the right SKU at the right time in right quantities resulting in lower inventory
buildups, lower stock-outs and even fresher products to it's consumers.

CHAPTER-6

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 DEMAND SUPPLY ANALYSIS
DEVELOPING DEMAND

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

SUPPLY CHAIN ANALYSIS

Supply Chain Management is the integration of key business processes from end user
through original suppliers that provides pr
oducts and information that add value for Customers (Global Supply Chain Forum).

SUDHA is striving to fulfill these functionalities. Our current focus areas are Demand
Planning, Production Planning, Inbound Logistics (Raw Materials), Outbound Logistics
(Finished Goods), Material Handling, Warehouse Management and Reverse Logistics.

The Logistics Mission is to continuously identify and establish leaner Supply Chains
through use of appropriate technologies and manage operations through these chains to
enhance SUDHA's competitive position.

This is also, to integrate operations across the extended Supply Chains, to reap the dual
benefits of Supply Chain efficiencies and incremental sales.

Its supply chain is easily one of the most complicated in the world. How do managers at
SUDHA prevent the milk from souring?

Walk in to any SUDHA or Gujarat Cooperative Milk Marketing Federation (COMPFED)

office, and you may or may not see a photograph of Mahatma Gandhi, but you will
certainly see one particular photograph. It shows a long line of Gujarati women waiting

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patiently for a union truck to come and collect the milk they have brought in shining
brass matkas.

The picture is always prominently displayed. The message is clear: never forget your
primary customer. If you don't, success is certain. The proof? A unique, Rs 2,200 crore
(Rs 22 billion) enterprise.

SUDHA products are available in over 500,000 retail outlets across India through its
network of over 3,500 distributors. There are 47 depots with dry and cold warehouses to
buffer inventory of the entire range of products.

COMPFED transacts on an advance demand draft basis from its wholesale dealers
instead of the cheque system adopted by other major FMCG companies. This practice is
consistent with COMPFED's philosophy of maintaining cash transactions throughout the
supply chain and it also minimizes dumping.

Wholesale dealers carry inventory that is just adequate to take care of the transit time
from the branch warehouse to their premises. This just-in-time inventory strategy
improves dealers' return on investment (ROI). All COMPFED branches engage in route
scheduling and have dedicated vehicle operations.

Umbrella brand

The network follows an umbrella branding strategy. SUDHA is the common brand for
most product categories produced by various unions: liquid milk, milk powders, butter,
ghee, cheese, cocoa products, sweets, ice-cream and condensed milk.

SUDHA's sub-brands include variants such as SUDHAspray, SUDHAspree, SUDHA and

NutrSUDHA. The edible oil products are grouped around Dhara and Lokdhara, mineral
water is sold under the Jal Dhara brand while fruit drinks bear the Safal name.

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By insisting on an umbrella brand, COMPFED not only skillfully avoided inter-union
conflicts but also created an opportunity for the union members to cooperate in
developing products.

Managing the supply chain

Even though the cooperative was formed to bring together farmers, it was recognised that
professional managers and technocrats would be required to manage the network
effectively and make it commercially viable.

Coordination

Given the large number of organisations and entities in the supply chain and
decentralised responsibility for various activities, effective coordination is critical for
efficiency and cost control. COMPFED and the unions play a major role in this process
and jointly achieve the desired degree of control.

Buy-in from the unions is assured as the plans are approved by COMPFED's board. The
board is drawn from the heads of all the unions, and the boards of the unions comprise of
farmers elected through village societies, thereby creating a situation of interlocking
control.

The federation handles the distribution of end products and coordination with retailers
and the dealers. The unions coordinate the supply side activities.

These include monitoring milk collection contractors, the supply of animal feed and other
supplies, provision of veterinary services, and educational activities.

Managing third party service providers

From the beginning, it was recognised that the unions' core activity lay in milk processing
and the production of dairy products. Accordingly, marketing efforts (including brand
development) were assumed by COMPFED. All other activities were entrusted to third
parties. These include logistics of milk collection, distribution of dairy products, sale of

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products through dealers and retail stores, provision of animal feed, and veterinary
services.

It is worth noting that a number of these third parties are not in the organized sector, and
many are not professionally managed with little regard for quality and service.

This is a particularly critical issue in the logistics and transport of a perishable

commodity where there are already weaknesses in the basic infrastructure.

The main building blocks for the strategy for the next few years are:

• Maximizing Customer Service

• Consensus Forecasting/Lean inventory management / Continuous Replenishment
• Reducing Distribution costs and Damages across the Supply Chains
• Supporting top-line improvement through appropriate Product Availability.

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 CHAPTER-7

R & D ACTIVITIES

Technology and e-initiatives

COMPFED's technology strategy is characterized by four distinct components: new

products, process technology, and complementary assets to enhance milk production and
e-commerce.

Few dairies of the world have the wide variety of products produced by the COMPFED
network. Village societies are encouraged through subsidies to install chilling units.
Automation in processing and packaging areas is common, as is HACCP certification.
SUDHA actively pursues developments in embryo transfer and cattle breeding in order to
improve cattle quality and increases in milk yields.

COMPFED was one of the first FMCG (fast-moving consumer goods) firms in India to
employ Internet technologies to implement B2C commerce.

Today customers can order a variety of products through the Internet and be assured of
timely delivery with cash payment upon receipt.

Another e-initiative underway is to provide farmers access to information relating to

markets, technology and best practices in the dairy industry through net enabled kiosks in
the villages.

COMPFED has also implemented a Geographical Information System (GIS) at both ends
of the supply chain, i.e. milk collection as well as the marketing process.

Farmers now have better access to information on the output as well as support services
while providing a better planning tool to marketing personnel.

Integrated Industry Information Service

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Facilitate decision-making at various levels in cooperative institutions with the help of an
extensive on-line computer network that analyses relevant data obtained from :

- Village Dairy Cooperative Societies

- District Milk Producers' Unions
- State Milk Marketing Federations
- NDDB
- Research Institutions and others

National Database

Generate data on following :

- Milk supply (producer, animal and village data)

- Milk and milk product demand (consumer and urban data)
- Performance data (societies, unions and federations)
- Secondary data (domestic and international)

Geographical Information System

Monitor following field activities :

- Milk procurement
- Veterinary health care
- Artificial Insemination
- Society information

Policy Research

Take up problem specific and area specific need-based special studies for policy support

Conduct regular field studies concerning business interest

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Establishing best practices

A key source of competitive advantage has been the enterprise's ability to continuously
implement best practices across all elements of the network: the federation, the unions,
the village societies and the distribution channel.

In developing these practices, the federation and the unions have adapted successful
models from around the world. It could be the implementation of small group activities or
quality circles at the federation. Or a TQM program at the unions. Or housekeeping and
good accounting practices at the village society level.

More important, the network has been able to regularly roll out improvement programs
across to a large number of members and the implementation rate is consistently high.

For example, every Friday, without fail, between 10.00 a.m. and 11.00 a.m., all
employees of COMPFED meet at the closest office, be it a department or a branch or a
depot to discuss their various quality concerns.

Each meeting has its pre-set format in terms of Purpose, Agenda and Limit (PAL) with a
process check at the end to record how the meeting was conducted. Similar processes are
in place at the village societies, the unions and even at the wholesaler and C&F agent
levels as well.

Examples of benefits from recent initiatives include reduction in transportation time from
the depots to the wholesale dealers, improvement in ROI of wholesale dealers,
implementation of Zero Stock Out through improved availability of products at depots
and also the implementation of Just-in-Time in finance to reduce the float.

Kaizens at the unions have helped improve the quality of milk in terms of acidity and
sour milk. (Undertaken by multi-disciplined teams, Kaizens are highly focussed projects,
reliant on a structured approach based on data gathering and analysis.)

Regional preferences are an important basis, for developing products and their
manufacturing processes. In addition equipment has been designed and commercialised

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for manufacturing indigenous milk products like shrikhand, paneer, khoa, lassi, gulab
jamun, mishti doi and curd as well as popular western products like ice-creams and
cheeses In developing process, product and equipment technology, emphasis is placed on
maintaining high quality standards. To check milk quality, test kits have been
developed. SUDHA also provides services for analysis of dairy product samples.

SUDHA’s Engineering Services Group provides technical assistance and engineering

inputs for execution of projects on either turnkey or on consultancy basis. Clients include
milk producers' and oilseed growers' cooperative unions and federations, the central and
state governments as well as organisations abroad. Services offered include setting up
dairy plants, chilling centres, cattle feed plants, infrastructure facilities for allied and
agro-based industry projects. SUDHA has also exhibited its engineering and project
management expertise in execution of turnkey projects in other areas like Fruit and
Vegetable Project, automatic bulk milk vending system, FMD vaccine plant, High
Security Animal Disease Research Laboratory etc. As of July 2001, more than 500
projects have been successfully completed.

Engineering Services strive to add value to the projects it undertakes by blending the
latest technology with indigenously designed, standard dairy equipment. Vendor
development and standardising specifications of equipment for dairy and allied projects is
undertaken by the Board's well-qualified engineers.

For example, Sabar Union's records show a reduction from 2.0% to 0.5% in the amount
of sour milk/curd received at the union.

The most impressive aspect of this large-scale roll out is that improvement processes are
turning the village societies into individual improvement centers.

SUDHA carries out extensive research and development activities in Biotechnology

aimed at developing formulations and technologies useful for improving the productivity
of milch animals. In 1979, the Dairy Board set up an Animal Disease Diagnostic
Laboratory at Anand to undertake scientific research activiites. NDDB has expanded its

125
research activities to include Animal Genetics, Animal Health and Animal Nutrition for
supporting its Productivity Enhancement programme for dairy cooperatives.

Equipped with in-house research facilities and managed by qualified scientists, the
Animal Health Section of the Laboratory is recognised as a Centre of Excellence for
research on Foot & Mouth Disease and Bovine Tropical Theileriosis.

In addition to its ongoing R&D activities, NDDB offers consultancy services and
training programmes to breeding organisations, cattle feed plants, disease diagnostic
laboratories, vaccine manufacturing units as well as to national and international
government and non-government organisations. Training is offered in the areas of
cytogenetics, molecular genetics, embryo transfer, animal feed formulations, clinical
diagnosis, control of parasitic diseases and other related areas of biotechnology.

In today's increasingly competitive environment, the success of dairy cooperatives

depends on their people. Boards, chief executives, managers, field staff, workers must all
match or exceed the competence and commitment of their counterparts in investor-owned
organisations. Supporting cooperatives with technical training and professional expertise
has long been an NDDB priority. Over the years, the Dairy Board has developed both the
physical infrastructure, the experience, the methods and training skills necessary to fulfill
this responsibility.

SUDHA offers a variety of training programmes as well as on-demand consultancy in

various technical and functional areas. The scope of training and consultancy ranges from
cooperative institution building to market studies and development, from dairy plant
management to feasibility and impact studies. Training programmes are designed in-
house and are conducted by SUDHA personnel who are specialists in the field.

Most training programmes are designed exclusively for cooperative organisations. Some
consultancy services and selected training programmes are also offered to other
organisations.

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 CHAPTER-8

KEY STAFF

ORGANISATION STRUCTURE

Organization structure is a basic frame work within which the manager decision
making behaviors takes place. The structure basically deals with the relation ships. It
is an important scientific concept.

In a simple term, a structure is a pattern in which various parts or components are inter-
related or inter connected. Thus organization structure is the pattern of relationship any
various components or parts of the organization. The prescribes the relationship among
various activities and positions. The structure , being abstract, is not visible in the same
way as a biological or mechanical structure , through it can be inferred or the actual
operation and the behavior of the organization.

The problem identifying a structure from organization processes does not mean that there
is the difference between the two. There is a basic difference between two and distinction
is important in understanding the concept and design of organization structure. The
structure of a system is the arrangement of a sub- system and components at a given
moment of a time.

Process is dynamic change in the matter, energy, or information of te system over time.
Thus the concept of the structure and the dynamic features and both of these aspects
rather than opposite. Thus organization structure can be viewed as established pattern of
relationship among the components of the organization. In the large and complex
organization a structure is set forth initially by the design of major components or sub
systems and then by establishing relationship among the sub-system. It is the patterning
of these relationships which some degree of permanency which is referred to as
organization structure.

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Design of basic structure involves such issues as how the work of the organization will be
divided and assigned among various position, groups division, departments, etc. and how
the co-ordination necessary to accomplish total organization structure people create
relationship in department of the formal relationships, known as informal relationships of
an origination. The organization structure, truly speaking is the totally of both formal and
informal relationships.

Organization structure is of capable of serving many functions to the sometime, but

cannot serve all function equally well over united time. A structure created for one
purpose may not serve other purpose well.

CODE OF ETHICS AND BUSINESS CONDUCT

Introduction

The Company is committed to conducting its business in accordance with the applicable
laws, rules and regulations and with highest standards of business ethics. This code is
intended to provide guidance and help in recognizing and dealing with ethical issues,
provide mechanisms to report unethical conduct, and to help foster a culture of honesty
and accountability. Each officer is expected to comply with the letter and spirit of this
Code.

The officers of the Company must comply with applicable laws, rules and regulations.
They must abide by the policies and procedures that govern the conduct of the
Company's business. They shall act and conduct free from fraud and deception. Their
responsibilities include commitment to compliance, and to maintain a work environment
that encourages the stakeholders to raise concerns to the attention of the management.
They shall act in good faith, responsibility, with due care, competence and diligence
without misrepresenting material facts.

All Officers are expected to read and understand this Code of Business Conduct and
Ethics, uphold these standards in day-to-day activities, comply with all applicable
policies and procedures. Because the principles described in this Code of Business

128
Conduct and Ethics are general in nature, you should also review all applicable
Company’s rules, policies and procedures.

All Officers shall certify annually that they have complied with this Code. On the basis of
certification by all Officers, two Managing Directors of the Company, namely, Shri
Rajesh, R. Gandhi and Shri Devanshu L. Gandhi, will give the declaration to this effect
and the declaration will be published in the Annual Report of the Company.It is also
necessary to circulate this Code to the employees who are working under respective
Officers of the Company to read, understand and comply with this Code and enable them
to use Whistle Blower mechanism as mentioned below.

Conflicts of Interest

A conflict of interest exists where the interest or benefits of one person or entity conflict
with the interests or benefits of the Company. A conflict situation can arises:

A) When an officer takes action or has interests that may make it difficult to perform his
or her work objectively and effectively,

B) Any outside business activity that detracts an individual's ability to devote appropriate
time and attention to his or her responsibilities with the Company,

C) Any significant ownership interest in any supplier, customer, business associate or

competitor of the Company,

D) Any consulting or employment relationship with any supplier, customer, business

associate or competitor of the Company.

The officers should be scrupulous in avoiding 'conflicts of interest' with the Company.
The officers should ensure that their services do not in any manner affect the Company’
interest. In case there is likely to be a conflict of interest, he/she should make full
disclosure of all facts and circumstances thereof to Managing Directors of the Company
and a prior written approval should be obtained.

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It is a conflict of interest to serve as a Director of any Company that competes with the
Company.

Officers and Emplyees must first obtain approval from the Managing Directors before
accepting a Directorship.

Corporate Opportunities

Officers owe a duty to the Company to advance its legitimate interests when the
opportunity to do so arises. Officers are expressly prohibited from :

A) Taking for themselves personally, opportunities that are discovered through the use of
Company's property, information, or position,

B) Competing directly with the business of the Company or with any business that the
Company is considering,

C) Using Company's property, information, or position for personal gain.

Confidentiality

The officers shall maintain the confidentiality of confidential information of the

Company or that of any customer, supplier or business associate of the Company to
which Company has a duty to maintain confidentiality, except when disclosure is
authorized or legally mandated. The Confidential information includes all non-public
information (including private, proprietary, and other) that might be of use to competitors
or harmful to the Company or its associates. The use of confidential information for
his/her own advantage or profit is also prohibited.

Fair Dealing

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Each officer should deal fairly with customers, suppliers, competitors, and mployees of
group companies. They should not take unfair advantage of anyone through
manipulation, concealment, abuse of confidential, proprietary or trade secret information,
misrepresentation of material facts, or any other unfair dealing-practices.

Officers are required not to enter into agreements, discussions with competitors about any
matter relating to competition between the Company and its competitor, such as products,
sales prices, marketing strategies, market shares and allocation of market, territories,
supply and sources or customers, nor enter into any agreement with competitors that
affect prices and constitute illegal price– fixing prohibited under the Competition laws.
Competition laws generally address the following areas: pricing practices (including price
discrimination), discounting, terms of sale,

credit terms, promotional allowances, secret rebates, exclusive dealerships or

distributorships, product bundling, restrictions on carrying competing products,
termination, and many other practices.

In all contacts with competitors, officers should not discuss pricing policy, contract
terms, costs, inventories, marketing and products plans, surveys and studies and other
proprietary and confidential information. Discussion of these subjects or collaboration on
them with competitors can be illegal. Also, officers should ensure that distributors,
dealers, stockist or agents selling the Company’ products, should enter into any accepted
practices, like bundling of products, discounts on the market price, free gifts etc., only
with the express permission of the Company.

Related parties

As a general rule, Officers and Employees should avoid conducting Company business
with a relatives or with a business in which a relative is associated in any significant role.
The Company discourages the employment of relatives of Officers and Employees in
positions or assignments within the same Department. Further, the Company prohibits the

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employment of such individuals in positions that have a financial dependence or
influence.

Protection and Proper Use of Company's Assets

All officers should protect Company's assets and property and ensure its efficient use.
Theft, carelessness, and waste of the Company's assets and property have a direct impact
on the Company's profitability. Company's assets should be used only for legitimate
business purposes. All officers shall have a responsibility to protect the assets of the
Company, ensure optimal utilization of assets and to report and record all transactions.
All officers should protect the Company’ assets from loss, damage, misuse or theft and
assets may only be used for business purposes and other purposes specifically approved
by management and must never be used for

illegal purposes. Officers who have access to proprietary and confidential nformation
must take every precaution to keep it confidential. Every officer should protect the
reputation of the Company, its employees and its products. Officers should never make
any false or artificial entries in any records.

Intellectual Property Policy

All officers have an utmost obligation to themselves to identify and protect the
intellectual properties, trade secrets and other confidential information owned by the
Company and its clients or associates because it is critical to Company’s success. By
"Intellectual Property Rights (IPR), we mean generally patented or potentially patentable
inventions, trademarks, service marks, trade names, copyrightable subject matter, and
trade secrets.

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Compliance with Laws, Rules and Regulations

The officers shall comply with all applicable laws, rules, and regulations. Any officer
who is unfamiliar or uncertain about the legal rules involving Company business
conducted by him/her should consult the legal department of the Company before taking
any action that may jeopardize the Company or that individual. No officers subject to this
Code shall commit an illegal or unethical act, or instruct others to do so, for any reason.

Accounting Practices

The Company’s responsibilities to its stockholders and the investing public require that
all transactions be fully and accurately recorded in the Company’s books and records in
compliance with all applicable laws. All required information shall be accessible to the
Company’s Auditors and government agencies. False or misleading entries, unrecorded
funds or assets, or payments without appropriate supporting documents and approval are
strictly prohibited. There shall be no willful omissions of any Company transactions from
the books and records. All officers shall make full, fair, accurate, timely, and
understandable disclosure in reports and documents that the Company files with, or
submits or makes periodically, to the shareholders, government authorities, and to the
public. Any wilful material misrepresentation of and/or misinformation of the financial
accounts and reports shall be regarded as a violation of the Code.

Policy against Insider Trading

Insider Trading generally involves the act of subscribing or buying or selling of the
Company’s securities, when in the possession of any Unpublished Price Sensitive
Information about the Company. It also involves disclosing any Unpublished Price
Sensitive Information about the Company to others who could subscribe or buy or sell the
Company’s securities. Insider Trading invokes severe civil and criminal penalties not
only on the Insider but also on the Company in certain circumstances under the
Regulations issued in India under the Securities and Exchange Board of India (SEBI)

133
Act, 1992. “sensitive information” is information which relates directly or indirectly to a
Company and which if published is likely to materially affect the price of Securities of a
Company. It is important to note that both positive and negative information could be
price sensitive. All officers subject to this Code must comply with the Insider Trading
Policy. Any violation of this requirement is a violation of this Code.

Maintaining and Managing Records

The Company is required by the central, local, state, federal, foreign and other applicable
laws, rules and regulations, to retain certain records and to follow specific guidelines in
managing its records.

Workplace free of harassment

The Company is committed to providing a work environment free of unlawful

harassment. Company policy porhibits sexual harassment and harassment based on
medical conditions, race, religious creed, colour, national origin or ancestry, physical or
mental disability, marital status, age, or any other basis protected by state or local law or
ordinance or regulation. All such harassment is unlawful.

Drug and Alcohol Abuse

To meet our responsibilities to employees, customers and investors, the Company must
maintain a healthy and produtive work environment. Misusing controlled substances, or
selling,distributing, possessing, using or being under the influence of illegal drugs and
alcohol on the job is absolutely prohibited.

Safety in Workplace

The safety of people in the Workplace is a primary concern of the Company. Each
officers and employees must comply with all applicable health and safety laws. The

134
Company maintain compliance with all local laws to help maintain secure and healthy
work surroundings.

Dress Code

Because each officer and employee is a representative of the Company in the eyes of the
public, each officers and employees must report to work properly groomed and wearing
appropriate clothing. Employees are expected to dress neatly and in a manner consistent
with the nature of the work peformed.

Others

(i) To use reasonable care and skill in the discharge of duties and responsibilities and
exercise of powers for the benefit and prosperity of the Company.

(ii) To have a clear understanding of the aims and objectives, capabilities and capacity
and various policies of the Company.

(iii) To act in accordance with the highest standards of integrity and ethical conduct while
dealing with women employees and the female gender in general and to avoid all actions
or inactions leading to any kind of sexual harassment.

(iv) To promote professionalism in the Company.

(v) Not to charge personal expenses to the Company.

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Compliance with Code of Conduct and Whistle Blower Policy/Mechanism

If any officer who knows of or suspects of a violation of applicable laws, rules or

regulations or this Code of conduct, he/she must immediately report the same to the
Managing Directors of the Company. Such person should as far as possible provide the
details of suspected violations with all known particulars relating to the issue. The
Company recognizes that resolving such problems or concerns will advance the overall
interests of the Company that will help to safeguard the Company's assets, financial
integrity and reputation. Managing Directors of the Company shall determine appropriate
action in response to violations of this Code of Ethics.

This also forms part of Whistle Blower mechanism for employees to report to Managing
Directors of the Company about unethical behaviour, actual or suspected fraud or
violation of the Company’s code of conduct or ethics policy. This mechanism can also
provide for adequate safeguards against victimization of employees who avail of the
mechanism and also provide for direct access to the Chairman of Audit Committee in
exceptional cases.

Interpretation of Code

Any question or interpretation under this Code of Ethics and Business Conduct will be
handled by Managing Directors of the Company. The Managing Directors has the
authority to waive compliance with this Code of business conduct for any officer of the
Company.

Therefore , it is important for managers to determine the put comes desired from
Organization structure and to match the organization with charging needs with
multiple needs to roles of originations structure is balance will have to be struck and
priorities established in the operation of the organization meets. In general there
can be following roles or organization structure.

Facilitating management activities

1. encouraging efficiency

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 2. communication
3. optimum use of organization structure

Features of good organization structure:

1. Simplicity
2. Flexibility
3. Clear line authority
4. Application of ultimate responsibity
5. Proper delegation of authority
6. Minimum possible managerial levels.
7. Principles of unity of direction and communication
8. Proper emphasis on staff.
9. Provision for top manager

Factor effecting organization structure:

There are various factor which determine the effectiveness of an
Organization structure. They are:
1. Environment
2. Strategy
3. Technology
4. Size
5. People

SUDHA: SUDHA has flat structure in their organization. The communication in

the organization is clear as well as the organization structure is also very
clear in all the direction. So, SUDHA having proper way of communication in
the organization so, that is why SUDHA is a successful company in India as
well as in the abroad

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 (1) MANAGERIAL HIERARCHY

In today's increasingly competitive environment, the success of dairy cooperatives

depends on their people. Boards, chief executives, managers, field staff, workers must all
match or exceed the competence and commitment of their counterparts in investor-owned
organisations. Supporting cooperatives with technical training and professional expertise
has long been an NDDB priority. Over the years, the Dairy Board has developed both the
physical infrastructure, the experience, the methods and training skills necessary to fulfill
this responsibility.

SUDHA offers a variety of training programmes as well as on-demand consultancy in

various technical and functional areas. The scope of training and consultancy ranges from
cooperative institution building to market studies and development, from dairy plant
management to feasibility and impact studies. Training programmes are designed in-
house and are conducted by SUDHA personnel who are specialists in the field.

Most training programmes are designed exclusively for cooperative organizations. Some
consultancy services and selected training programmes are also offered to other
organizations.

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The managerial Hierarchy of SUDHA is as following :

CHAIRMAN

DR. K.K.SHARMA (CHAIRMAN)

12. CO-OPERATIVE’S CHAIRMAN

SHRI S.K.CHANDRA (CHAIRMAN)

Kaira dist. Co-operative milk producers’ union ltd. Anand

Shri GOVIND BHAI PATEL. (CHAIRMAN)

Sabarkantha dist. Co-operative milk producers’ union ltd Himatnagar

SHRI NARINDRA BHAI PATEL (CHAIRMAN)

Baroda dist. Co-operative milk producers’ union ltd Baroda

SHRI BHUPENDRA SINGH P. SOLANKI (CHAIRMAN)

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Panchmahal dist. Co-operative milk producers’ union ltd Panchmahal

SHRI GOVIND BHAI S. RAM PARIYA (CHAIRMAN)

Rajkot dist. Co-operative milk producers’ union ltd Rajkot

SHRI PRAHALAD BHAI M. PATEL (CHAIRMAN)

Bharuch dist. Co-operative milk producers’ union ltd Bharuch

SHRI MOTI BHAI R. CHUDHARY (CHAIRMAN)

Mehsana dist. Co-operative milk producers’ union ltd Mehsana

SHRIPARTHI BHAI G. BHATOL (CHAIRMAN)

Banskantha dist. Co-operative milk producers’ union ltd Banaskantha

SHRI MANU BHAI A. PATEL (CHAIRMAN)

Surat dist. Co-operative milk producers’ union ltd Surat

SHRI NAVAGHAN BHAI C. BHARWAD (CHAIRMAN)

Ahmedabad dist. Co-operative milk producers’ union ltd Ahmedabad

SHRI MONGHA BHAI M. DESAI (CHAIRMAN)

Valsad dist. Co-operative milk producers’ union ltd Valsad

SHRI DASHARATH BHAI N. PATEL (CHAIRMAN)

Gandhinagarn dist. Co-operative milk producers’ union ltd Gandhinagar

SHRI B. M. BYAS (MANAGING DIRECTOR)

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 GENERAL MANAGER

MARKETING K. M. JHALA

FINANCE J. M. SONI

TECHNICAL M. M. VYAS

ZONAL INCHARGE MANOJ KARKI

ZONAL ACCOUNTENT H. S. RATHORE

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 (2) DUTIES & RESPONSIBILITIES OF KEY STAFF

In today's increasingly competitive environment, the success of dairy cooperatives

depends on their people. Boards, chief executives, managers, field staff, workers must all
match or exceed the competence and commitment of their counterparts in investor-owned
organisations. Supporting cooperatives with technical training and professional expertise
has long been an NDDB priority. Over the years, the Dairy Board has developed both the
physical infrastructure, the experience, the methods and training skills necessary to fulfill
this responsibility.

SUDHA offers a variety of training programmes as well as on-demand consultancy in

various technical and functional areas. The scope of training and consultancy ranges from
cooperative institution building to market studies and development, from dairy plant
management to feasibility and impact studies. Training programmes are designed in-
house and are conducted by SUDHA personnel who are specialists in the field.

Most training programmes are designed exclusively for cooperative organizations. Some
consultancy services and selected training programmes are also offered to other
organizations.

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 CHAPTER-9
HUMAN RESOURCE POLICY
Policies are the broad guidelines as to how the objectives of a business are to be achieved.
While the objectives provide the ends, which a manager should try to achieve, policies
provide the guidelines which he should keep in mind while achieving the ends. A policy is
an established guiding canon premised on objective devised to govern the activities of the
business enterprise and from which the basic percepts of conduct are derived.

A policy is designed to guide the organizational members to deal with a particular

situation in a particular manner. It delimits the area in which the decision is to be made and
assures that the decision will be consistent with and contributive to business objectives.

The important features of policy can be stated as under:

• BASED ON OBJECTIVES

Policies are based on the objectives of the enterprise, as these are guidelines to achieve the
predetermined objectives.

• GENERAL AND SPECIFIC POLICIES

Policies are general, covering the whole organization, as well as specific, relating to a
particular department or a activity.

• POLICIES MAY BE IMPLIED

All policies may not be statements. Some of policies are based on practices.
Thus, human resource policies can be interpreted as the recognized intentions of top
management with respect to the efficient management of workforce.

Following are the human resource policies with regard to all functions of human resource
management adopted at SUDHA:

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Functions performed by HR division

• Human resource planning

• Recruitment and selection
• Training and development
• Employee assistance
• HR research and audits
• Motivation functions

EMPLOYMENT POLICIES

1.Minimum Hiring Qualifications

Vacancies in SUDHA are filled through direct recruitment from the open market
and through promotions.

The minimum eligibility criteria in SUDHA have been laid down depending upon
the nature of work, responsibilities and duties etc

2. Preferred sources of recruitment

Vacancies in SUDHA are filled through direct recruitment from open market and
through internal promotions and selections.

3. Procedure followed for recruitment

(a) Determination of vacancies

(b) Distribution of vacancies between general and reserved categories.
(c) Issue of employment notice/advertisement inviting application from the
candidates.
(d) Applications received in response to employment notice/advertisement are
screened with reference to eligibility criteria for the post.

4. Reliance on various selection devices such as tests, reference checks

and interviews

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 (a) After preliminary screening of applications the eligible candidates are
Provisionally to appear for written/trait test.

(b) The candidates who qualify the written test/trait test are called for personal
interview.

(c) The interview is conducted by a duely constituted interview board.

(d) The candidates who are found suitable for the posts by interview board
are empanelled in order of their merit.

(e) The candidates are offered appointment for the post subject to their merit in the
panel and availability of vacancies.

(f) Finally the candidates are appointed in the company after completion of pre
employment formalities.

TRAINING AND DEVELOPMENT POLICIES

1. Identification of training needs

Training needs are identified on the basis of organizational analysis, jobAnalysis

and manpower analysis.Specifically the need for training arises

With to the following objectives:

(a) To match employee specification with the job requirements and organisational needs

(b) Organisational viability and transformation process.

(c) Technological advancement

(d) Organisational complexity

(e) Human relations

2. Types of training

Employees posted in different departments in SUDHA viz technical/non technical

undergo following types of training:

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Some of the training programs for technical employees are listed here under:
(a) Basic aviation course
(b) Technician course
(c) Familiarization course in refrigeration and cooling technology etc.

Some of the training program for non technical employees are listed below:

(a) Professional development program

(b) Induction program
(c) Dynamics of production teams

Programs are also conducted for executive development in SUDHA.

TRANSFER AND PROMOTION POLICIES

1. Rational of transfer

SUDHA has well defined transfer policy for its employees. employees are
transferred from one station to another and from one department/section another to
fill the vacancies or shoulder the higher responsibilities.

2. Periodicity of transfer

Normally the employees are transferred from one station to another for a period
ranging from 1-3 years. When employees are transferred from one station to another by
the management they are eligible for transfer benefits as per the rules of the company.

3. Promotion policy
Employees in different cadres are promoted to the higher posts subject to fulfilling
certain conditions viz. seniority, length of service, satisfactory service records etc. In
certain cadres employees are promoted to the higher posts in a time bound manner. For
some posts internal employment notification are issued inviting applications from internal
candidates. These candidates are subjected to written tests/interview before they are
promoted to higher post subject to their suitability and number of vacancies.

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COMPENSATION POLICIES

1. Incentive plans

There are various incentive plans for the employees of NACIL (I) as per their designation
and responsibilities in the organization. The incentive plans include overtime, bonuses
and other various kinds of such benefits. There are certain guidelines to be followed for
working overtime which are as under:

(a)The shift should be so arranged as to ensure that no employee is made to work for
more than 38 hours or 44 hours or 48 hours in a week.

(b)Also a minimum rest period of 11 hours should be there before an employee is called
upon to work in succeeding shifts.

Apart from the overtime various kinds of bonuses are also provided to the employees on
major festivals.

There is a scheme in SUDHA to give incentives to the employees linked to

productivity.

2. Non monetary rewards

Non monetary rewards are those which do not involve any kind of financial benefit to the
employees. Some of the non monetary benefits in SUDHA are recognition of good work,
appreciation letter, providing challenging work assignments to the employees etc.

INTEGRATION AND HUMAN RELATIONS POLICIES

1. Handling of grievances

A grievance is any kind dissatisfaction or disagreement relating to any employee arising

out of the implementation of the policies, rules and regulations, or decisions of the
organization.

An aggrieved employee may not perform the assigned job in the effective manner.
Therefore, grievance redressal machinery is existing in SUDHA to redress the grievances
of the employees.

2. Workers participation in management

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Employees viewpoints and opinions are also often considered to arrive at a major
decision related to the company.

3. Discipline

Discipline is some sort of a strict training or the enforcing of rules, intended to produce
ordered and controlled behavior in oneself or others.

There are two sets of standing orders framed by the company for enforcing discipline
in the company so that production and productivity do not suffer.

In the two sets of standing orders there is a illustrative list of misconducts. When an
employee commits misconduct in the company a departmental enquiry is conducted as
per the laid down procedure. If an employee is found guilty of the charges a punishment
commensurate to the misconduct committed by the employee is imposed upon him.

4. Working conditions and welfare policies

Welfare is basically the efforts made so as to ensure well being status and to help or
facilitate one so that he/she can achieve his highest performance as well as personal
satisfaction.

The following Acts contains the provisions to provide mandatory welfare facilities to the
employees:

(i) Workmen Compensation Act, 1923

In case of a temporary or permanent injury, caused to an employee while in service, the

organization has to provide the compensation to the employee.

(ii) Payment of Wages Act, 1936

Earlier wages were not paid on time. According to this act, the wages and salaries will be
paid on fixed time and all the deductions done would be told to the employees.

(iii) Industrial Disputes Act, 1947

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According to this act, a committee known as works committee is formed which deals
with the welfare of the employees at the grass root level. The members of this committee
are 50% from the employer’s side and 50% from the employee’s side.

(iv) Factories Act, 1948

This act takes care of the service conditions, work environment etc. given to the
employees. It also keeps a check on the working hours and action is taken whenever the
regulations are violated.

(v) Employees State Insurance Act, 1948

According to this act, if the employee or his family members are sick then the company
looks after their health i.e., most of the money is given by SUDHA.

(vii) Payment of Gratuity Act, 1972

SUDHA can pay a maximum of 3.5 lakhs as gratuity. This is statutory and deviation is
possible.

TRAINING PROCEDURE
Training is the organization’s internal agent. The focus of this function is to enhance the
personal qualities of the employees to improve organizational productivity. This function
also counsels the employees and helps them in making a better career choice and in
finding ways to achieve the desired goals.

JBM Auto Limited follows the following procedure for providing training:

Identifying training needs:

To provide training on any topic, initially training needs of the employees are identified
through various methods like competency mapping and skill matrix.

Training Plan:
Based on the above identification of individual training needs, an annual training
calendar is prepared by HRD division that contains competencies and the months in
which the training programmes will be conducted.

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Following the training calendar monthly training plan is formulated to include
Date and time of programme
Venue of programme
Proposed faculty
Proposed course
Number of participants

Evaluation
During the training programme, attendance sheet is being filled by all the participants in
order to maintain a record of the members attended the training.
After the training the participants are given feedback forms so as to know the extent to
which they have taken interest and gained knowledge.

Methods for Identification of Training Need of Employees.

Competency Gap Analysis:

This exercise is undertaken in the organization annually with the help of multi-rater
feedback system. The purpose of this initiative is it identifies developmental needs of
employees. It is a practice for identifying gap of required and existing level of
competencies first one is Technical Competencies, Second one is Behavioral
Competencies among various individuals. This is done for the executives and above
category members of the organization.

Skill Matrix (Staff & Permanent Worker):

This is another method for identifying the present level of skills in the employees
regarding their work needs. This process is followed for the employees below executive
level including the shop floor workers. The skills and the levels are identified by the head
of department

Practical test and recommendation by the HOD:

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In this training needs identified just on the basis of the recommendation of the immediate
supervisor or the immediate HOD.

PERSONNEL AND HR ACTIVITIES:

Human resource development and personnel departments ha very thin line if
differentiation. HRD is concerned with development activities including training and
development, performance appraisal, recruitment, reward management etc.

On the other hand personnel department has control over maintenance and welfare
function inclusive of welfare, safety, security etc.

Company has corporate HRD and plant HRD. Corporate is responsible for the
formulation of Hr policies whereas plant HRD is responsible for the implementation of
these policies

The main HR and personnel activities are:

1. Training and development

2. Recruitment and selection
3. Reward operations
4. Welfare facilities
5. Safety and security
6. Medical facilities
7. Counseling
8. Telephone operating
9. Attendance maintaining
10. Leaves and pension records

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 CHAPTER-10

MARKETING POLICY

" If SUDHA has become a successful brand - if, in the trade lingo, it enjoys brand equity
- then it is because we have honored our contract with consumers for close to fifty years.
If we had failed to do so, then SUDHA would have been consigned to the dustbin of
history, along with thousands of other brands. For close to fifty years now, SUDHA has
honored its contract with the consumer. The contract that is symbolized by the SUDHA
brand means quality. It means value for money. It means availability. And it means
service."

Varghese Kurien, COMPFED

MARKET POLICIES

The moppet who put SUDHA on India's breakfast table 50 years after it was first
launched, SUDHA's sale figures have jumped from 1000 tonnes a year in 1966 to over
25,000 tonnes a year in 1997. No other brand comes even close to it. All because a
thumb-sized girl climbed on to the hoardings and put a spell on the masses.
Bombay: Summer of 1967. A Charni Road flat. Mrs. Sheela Mane, a 28-year-old
housewife is out in the balcony drying clothes. From her second floor flat she can see her
neighbours on the road. There are other people too. The crowd seems to be growing
larger by the minute. Unable to curb her curiosity Sheela Mane hurries down to see what
all the commotion is about. She expects the worst but can see no signs of an accident. It is
her four-year-old who draws her attention to the hoarding that has come up overnight. "It
was the first SUDHA hoarding that was put up in Mumbai," recalls Sheela Mane. "People
loved it. I remember it was our favourite topic of discussion for the next one week!
Everywhere we went somehow or the other the campaign always seemed to crop up in
our conversation."

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Call her the Friday to Friday star. Round eyed, chubby cheeked, winking at you, from
strategically placed hoardings at many traffic lights. She is the SUDHA moppet everyone
loves to love (including prickly votaries of the Shiv Sena and BJP). How often have we
stopped, looked, chuckled at the SUDHA hoarding that casts her sometime as the coy,
shy Madhuri, a bold sensuous Urmila or simply as herself, dressed in her little polka
dotted dress and a red and white bow, holding out her favourite packet of butter.

For 30 odd years the Utterly Butterly girl has managed to keep her fan following intact.
So much so that the ads are now ready to enter the uinness Book of World Records for
being the longest running campaign ever. The ultimate compliment to the butter came
when a British company launched a butter and called it Utterly Butterly, last year.

It all began in 1966 when Sylvester daCunha, then the managing director of the
advertising agency, ASP, clinched the account for SUDHA butter. The butter, which had
been launched in 1945, hadboring image, primarily because the earlier advertising agency
which was in charge of the account preferred to stick to routine, corporate ads.

In India, food was something one couldn't afford to fool around with. It had been taken
too seriously, for too long. Sylvester daCunha decided it was time for a change of image.

The year Sylvester daCunha took over the account, the country saw the birth of a
campaign whose charm has endured fickle public opinion, gimmickry and all else.

The SUDHA girl who lends herself so completely to SUDHA butter, created as a

rival to the Polson butter girl. This one was sexy, village belle, clothed in a tantalising
choli all but covering her upper regions. "Eustace Fernandez (theart director) and I
decided that we needed a girl who would worm herway into a housewife's heart. And
who better than a little girl?" says ylvester daCunha. And so it came about that the
famous SUDHA Moppet was born.

That October, lamp kiosks and the bus sites of the city were splashed withthe moppet on
a horse. The baseline simply said, Thoroughbread, terly Butterly Delicious SUDHA,. It

153
was a matter of just a few hours before the daCunha office was ringing with calls. Not
just adults, even children were calling up to say how much they had liked the ads. "The
response was ]phenomenal," recalls Sylvester daCunha. "We knew our campaign was
going to be successful."

For the first one year the ads made statements of some kind or the other but they had not
yet acquired the topical tone. In 1967, Sylvester decided that giving the ads a solid
concept would give them extra mileage, more dum, so to say. It was a decision that
would stand the daCunhas in good stead in the years to come.

In 1969, when the city first saw the beginning of the Hare Rama Hare Krishna
movement, Sylvester daCunha, Mohammad Khan and Usha Bandarkar, then the creative
team working on the SUDHA account came up with a clincher -- 'Hurry SUDHA, Hurry
Hurry'. Bombay reacted to the ad with a fervour that was almost as devout as the Iskon
fever.

That was the first of the many topical ads that were in the offing. From then n SUDHA
began playing the role of a social observer. Over the years the ampaign acquired that all
important Sudha touch.

India looked forward to Sudha's evocative humour. If the Naxalite movement was the
happening thing in Calcutta, Sudha would be up there on the hoardings saying, "Bread
without Sudha Butter, cholbe na cholbe na (won't do, won't do). If there was an Indian
Airlines strike Sudha would be there again saying, Indian Airlines Won't Fly Without
Sudha.

There are stories about the butter that people like to relate over cups of tea. "For over 10
years I have been collecting Sudha ads. I especially like the ads on the backs of the butter
packets, "says Mrs. Sumona Varma. What does she do with these ads? "I have made an
album of them to amuse my grandchildren," she laughs. "They are almost part of our
culture, aren't they?

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My grandchildren are already beginning to realise that these ads are not just a source of
amusement. They make them aware of what is happening around them."

Despite some of the negative reactions that the ads have got, DaCunhas have made it a
policy not to play it safe. There are numerous ads that are risque in tone.

"We had the option of being sweet and playing it safe, or making an impact. A fine
balance had to be struck. We have a campaign that is strong enough to make a statement.
I didn't want the hoardings to be pleasant or tame. They have to say something," says
Rahul daCunha.

"We ran a couple of ads that created quite a furore," says Sylvester daCunha."The Indian
Airlines one really angered the authorities. They said if they didn't take down the ads they
would stop supplying Sudha butter on the plane. So ultimately we discontinued the ad,"
he says laughing. Then there was the time when the Sudha girl was shown wearing the
Gandhi cap. The high command came down heavy on that one. The Gandhi cap was a
symbol of independence, they couldn't have anyone not taking that seriously. So despite
their reluctance the hoardings were wiped clean. "Then there was an ad during the
Ganpati festival which said, Ganpati Bappa More Ghya (Ganpati Bappa take more). The
Shiv Sena people said that if we didn't do something about removing the ad they would
come and destroy our office. It is surprising how vigilant the political forces are in this
country. Even when the Enron ads (Enr On Or Off) were running, Rebecca Mark wrote to
us saying how much she liked them."Sudha's point of view on the MR coffee controversy
There were other instances too. Heroine Addiction, Sudha's little joke on Hussain had the
artist ringing the daCunhas up to request them for a blow up of the ad. "He said that he
had seen the hoarding while passing through a small district in UP. He said he had asked
his assistant to take a photograph of himself with the ad because he had found it so
funny," says Rahul daCunha in amused tones. Indians do have a sense of humour,
afterall.

From the Sixties to the Nineties, the Sudha ads have come a long way. While most people
agree that the Sudha ads were at their peak in the Eighties they still maintain that the

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Sudha ads continue to tease a laughter out of them.Where does Sudha's magic actually
lie? Many believe that the charm lies in the catchy lines. That we laugh because the
humour is what anybody

Sudha follows a unique business model, which aims at providing 'value for money'
products to its consumers, while protecting the interests of the milk-producing farmers
who are its suppliers as well as its owners. Despite being a farmers' co-operative, Sudha
has given multinationals a run for their money. In butter, cheese and saturated fats, Sudha
has remained the undisputed market leader since its inception in 1955, by offering quality
products at competitive prices. In other categories, Sudha has nullified its late mover
disadvantage through aggressive pricing, better quality, innovative promotion, and
superior distribution .

Expanding Marketing

Assistance in planning, implementation and monitoring of business plans of milk unions

geared to meet the targets envisioned in Perspective 2010

Offering financial and technical help to milk unions and federations in areas such as sales
promotion, consumer education, distribution infrastructure development etc.

Standardisation of artwork, colour, logo and retail outlet design across regional
cooperative brands with a view to promoting better recall by consumers under a common
mnemonic umbrella

Introduction and improvement of marketing systems and processes necessary to perform

better in a competitive marketplace

Training and development of management and staff of milk unions and federations

Targeted at helping pregnant women, growing children and young adults meet their daily
calcium requirements and to help prevent diseases like osteoporosis, Sudha has launched
Calci+, a high calcium milk, its marketer Gujarat Cooperative Milk Marketing Federation

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(COMPFED) said here on Monday. The new product, priced at Rs 35 a litre, contains 100
per cent natural milk calcium and does not contain any preservatives. It is simply
subjected to a special sterilization process cal led ultra-heat treatment (UHT) and stays
fresh for 120 days at room temperature. With its introduction, COMPFED is all set to
strengthen its UHT milk portfolio, the statement said. The one-liter aseptically packed
tetra-pack Sudha Calci+ is being made available at all Sudha Preferred Outlets (APOs),
super markets and major A-class outlets across India this month.

The Gujarat Cooperative Milk Marketing Federation Ltd (COMPFED), which owns and
markets the Sudha brand of milk products, registered a growth of 22.9 per cent to reach a
record turnover of Rs 5,255.41crore in 2007-08, an increase of Rs 1,000 crore over the
previous year.

COMPFED have an impressive growth when viewed from the perspective of 13.4 per
cent growth in 2006-07 Milk procurement by COMPFED’s 13 district milk union
members in the year under review averaged 75.90 lakh kg a day, a growth of 12.9 per
cent over last year’s 67.25 lakh kg a day.

It processed almost one crore litres of milk a day during the peak procurement period.

In the last fiscal , Sudha milk in pouches has been the largest contributor to the turnover
with sales up by 48 per cent in value terms . Despite intense competition in the butter
category, the Federation registered a double-digit growth in value. To make Sudha butter
more affordable, low-unit value packs were introduced and a reduced-salt variety too was
launched, Mr Bhatol pointed out.

COMPFED’s continuous product innovation was accorded global recognition when it

received the prestigious International Dairy Federation Marketing Award 2007 for the
launch of Sudha pro-biotic ice-cream. Despite rapid population growth, the per capita
availability in India has increased to 245 gm a day, which is very close to WHO
standards, he added.

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The Gujarat Cooperative Milk Marketing Federation Ltd (COMPFED), the marketers of
Sudha, has approved the continuation of the Sudha-Tata Fellowships for Rural
Management Professionals for a further period of five years. The Board of Directors of
COMPFED, at its recent meeting on April 5, took this decision. In 2001, COMPFED and
the Sir Ratan Tata Trust (SRTT) had instituted 30 fellowships in the Institute of Rural
Management-Anand (IRMA), with the objective of financially supporting the students
pursuing the Post-Graduate Programme in Rural Management and encourage them to
work with IRMA's designated organisations, COMPFED said in a release here. The total
value of each fellowship is Rs 1 lakh, awarded on the basis of merit-cum-means. The
awarded students are required to serve at least two years in designated organisations. So
far, COMPFED has provided funds for 62 students.

With these launches, the Gujarat Cooperative Milk Marketing Federation Ltd
(COMPFED) is now a leading player in the Indian dairy beverages market with over 90
per cent market share in branded packaged dairy drinks segment.

The milk-based market has been showing a double-digit growth. The Indian soft drink
market is worth about Rs 7,000 crore per annum. The carbonated soft drinks account for
85 per cent of the total soft drink market but their growth has either been stagnant or
declining over the last few years

On marketing and promoting the product, the company would use all media — print, TV
and outdoors. "The focus of our promotions would be on the products' wellness qualities.
The idea is to target the educated masses, young adults through our ads and build the
Sudha ice cream brand further," Mr Sodhi said.

In 2005-06, Sudha sold around 34 million litres of ice cream for an estimated Rs 210
crore and aims at selling around 42 million litres in 2006-07, thus hiking its revenues
from ice cream to Rs 270 crore.

THE next time you go shopping for cheese on your overseas trip, don't be surprised to
find the familiar Sudha brand among an array of foreign brands on the store shelves.

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For the Gujarat Cooperative Milk Marketing Federation (COMPFED), which markets
milk products under the Sudha brand, is aggressively focusing on taking the brand to
overseas markets.

In fact, Sudha products are now available in shelves across several countries including
the US, China Australia, West Asian countries and those in Africa.

With an eye on both consumer (which includes products such as cheese, butter, ghee and
shrikhand) and commodity (skim milk and butter oil) exports, COMPFED is targeting
export revenues of about Rs 200 crore this year.

"Exports of milk products from India have become lucrative now. With most countries
having reduced subsidies on milk products as per the WTO guidelines, milk products
from India have become competitive in international markets. Earlier, international prices
were lower than Indian prices. For our consumer products, we are targeting markets
which have a large population of non-resident Indians," Mr R.S. Sodhi, Head Marketing,
COMPFED, said.

On the commodity exports front, COMPFED has tied up with dairies in other countries.
Most of the exports of skim milk and butter oil are to neighbouring countries, West Asia,
Africa, Afghanistan, China and Singapore.

SUDHA is working on its biggest ever retail network expansion drive. The plan is to add
one lakh ice-cream outlets over and above the existing 45,000.

Speaking to Business Line, Mr R.S. Sodhi, Chief General Manager (Sales) of Gujarat Co-
operative Milk Marketing Federation (COMPFED), said that Sudha ice cream is currently
available at 600 locations across the country excluding the North-Eastern States. A recent
addition to the list is Jammu and Kashmir.

Sudha sells 35 million litres of ice-cream valued at more than Rs 200 crore out of a total
branded ice-cream market of 100 million litres worth Rs 600 crore.

"The Sudha ice cream business is currently growing at the rate of more than 20 per cent.

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"We have now adopted a scheme called `Hamara Apna Deep Freezer' for strengthening
the retail network, following which the ice cream business portfolio is expected to touch
Rs 500 crore," Mr Sodhi said.

The project will cost close to Rs 30 crore.

SUDHA is planning big on retail. The Gujarat Cooperative Milk Marketing Federation-
(COMPFED) owned brand is actively considering retailing fresh and frozen vegetables,
fruits and fruit products to make optimum use of an extensive distribution network across
the country.

While the issue is still being debated within the organisation, as a run-up to its grand
retailing plan, Sudha proposes to set up 10,000 `Sudha Parlours' across the country during
the year. The parlours will be selling the entire product range of the COMPFED , in
addition to the existing retail network for ice cream, milk and other products.

Sudha is now planning a nationwide rollout of such outlets through franchise operators.
At an average expenditure of Rs 50,000 a parlour, the project will cost approximately Rs
50 crore.

Admitting that the parlours may mark Sudha's foray into retailing of non-milk farm and
processed food products in the future, Mr Sodhi said, "Marketing of fresh and frozen
vegetables, fruits and fruit products goes perfectly well with Sudha's strength in
distribution and packaging. However, we are yet to decide on that."

Meanwhile, the federation has firmed up plans for further expansion of its fresh milk
business. Apart from Gujarat, Sudha milk is now available in 12 cities across six States.
Sudha will expand its fresh milk markets to Kanpur and Lucknow this year.

While Gujarat continues to be the biggest sourcing point for milk, Sudha is now
procuring raw milk from Maharashtra, Karnataka, Andhra Pradesh, Madhya Pradesh,
Rajashthan, Orissa, West Bengal, Jammu and Kashmir and Punjab.

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THE butter that you buy in June may have already been manufactured in January, but it
would be perfectly safe to consume it, assure top Sudha officials.

Describing the discovery of butter packets bearing a March 2005 manufacturing date at
one of its cooperative units as a "human mistake", the Gujarat Cooperative Milk
Manufacturing Federation (COMPFED) says that the company takes adequate care to
ensure that quality products reach the consumer.

COMPFED is a federation of different dairy cooperatives in Gujarat and owns the Sudha
brand.

"To the best of our understanding, it was a mistake on the part of one of our employees.
We are awaiting the report of the state FDCA (Food and Drugs Control Administration)
and necessary action will be taken," Mr Ram Singh Parmar, Chairman of the Kheda
District Milk Producers' Union, where the butter packets bearing the wrong date of
manufacture were picked up by the Gujarat FDCA on Tuesday, told Business Line.

Dairy industry experts say that it was common practice for the industry to produce
different milk products and then release them in the markets as the demand arose. "The
milk production peaks in winter months. As it is easier to produce table butter at the time
when the milk is being processed, it is common for companies to store the finished
product in bulk and pack it according to demand," says a dairy expert who did not wish to
be named.

The COMPFED Chief General Manager, Mr R.S. Sodhi, however, denies that Sudha was
putting an advance date of manufacturing on its products. "We put the exact date of
manufacture on the label. You will find in summer months products that do not carry a
very recent date of manufacture. That is due to the seasonal nature of the industry.
Moreover, we recommend a one-year shelf life from the date of manufacture as against
two years in most European countries," Mr Sodhi said.

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The company does not release stocks into the market that have a less than three month
"best before" period and the consumer should not buy products that have already crossed
the date.

"Normally, the stocks stay with the retailers and distributors for less than 10 days. We
ensure that stocks reach the retailer with a sufficient cushion. The consumers can be rest
assured on the issue," Mr Sodhi says.

In fact, the effort to ensure that the products reach the consumer much before the "best
before" date involves a huge logistical challenge for all companies.

Normally, companies voluntarily follow norms that are more stringent than the
mandatory requirements, he says, adding that it presents the biggest challenge of logistics
before the manufacturers.

"We cannot export any products that have less than two-thirds shelf life left. In some
countries, it is mandatory for the products to have over 80 per cent shelf life at the time
they land. For the domestic market, we have now reduced the shelf life to a maximum of
three years for our products that have a normal shelf life of four years," Mr Nayak says

THE butter that you buy in June may have already been manufactured in January, but it
would be perfectly safe to consume it, assure top Sudha officials.

Describing the discovery of butter packets bearing a March 2005 manufacturing date at
one of its cooperative units as a "human mistake", the Gujarat Cooperative Milk
Manufacturing Federation (COMPFED) says that the company takes adequate care to
ensure that quality products reach the consumer.

COMPFED is a federation of different dairy cooperatives in Gujarat and owns the Sudha
brand.

"To the best of our understanding, it was a mistake on the part of one of our employees.
We are awaiting the report of the state FDCA (Food and Drugs Control Administration)
and necessary action will be taken," Mr Ram Singh Parmar, Chairman of the Kheda

162
District Milk Producers' Union, where the butter packets bearing the wrong date of
manufacture were picked up by the Gujarat FDCA on Tuesday, told Business Line.

Dairy industry experts say that it was common practice for the industry to produce
different milk products and then release them in the markets as the demand arose. "The
milk production peaks in winter months. As it is easier to produce table butter at the time
when the milk is being processed, it is common for companies to store the finished
product in bulk and pack it according to demand," says a dairy expert who did not wish to
be named.

The COMPFED Chief General Manager, Mr R.S. Sodhi, however, denies that Sudha was
putting an advance date of manufacturing on its products. "We put the exact date of
manufacture on the label. You will find in summer months products that do not carry a
very recent date of manufacture. That is due to the seasonal nature of the industry.
Moreover, we recommend a one-year shelf life from the date of manufacture as against
two years in most European countries," Mr Sodhi said.

The company does not release stocks into the market that have a less than three month
"best before" period and the consumer should not buy products that have already crossed
the date.

"Normally, the stocks stay with the retailers and distributors for less than 10 days. We
ensure that stocks reach the retailer with a sufficient cushion. The consumers can be rest
assured on the issue," Mr Sodhi says.

In fact, the effort to ensure that the products reach the consumer much before the "best
before" date involves a huge logistical challenge for all companies.

"For us, it takes nearly 45 days to ship our products to our distribution godown at Silchar
in Assam. Yet, we sell butter in Assam at the same price as in Gujarat and make sure that
the stocks reach well in time," Mr Sodhi says.

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Agrees Mr Ganesh Nayak, Executive Director of pharmaceutical and healthcare products
company Zydus Cadila. "We follow all international norms including the Current Good
Manufacturing Practices or CGMP. We even take into account the date of manufacture of
the APIs (active pharmaceutical ingredients) and excipients. You cannot fudge around
with these figures," says Mr Nayak.

Normally, companies voluntarily follow norms that are more stringent than the
mandatory requirements, he says, adding that it presents the biggest challenge of logistics
before the manufacturers.

Distribution in the North will be backed by Sudha's upcoming dairy in Delhi, which also
includes an ice cream plant. Delhi will be the eighth ice cream manufacturing facility of
COMPFED.

In the overseas market, especially in West Asia and the South East Asia, the company has
increased its business from Rs 50 crore in 2003-04 to Rs 117 crore in 2004-05. The two
prime contributors are milk powder and long-life milk.

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 CHAPTER-11

ATTRACTIVE FETURE

SUDHA - THE BEST OF INDIA (COMPFED)

Receives

INTERNATIONAL CIO 100 AWARDS FOR RESOURCEFULNESS

COMPFED is a winner of the prestigious international CIO 100 award from IDG's CIO
Magazine, USA. The 2003 CIO 100 award recognizes the organisations around the world
that excel in positive business performance through resourceful IT management and best
practices.

This CIO International IT excellence Award has recognised the Cooperative Movement
& its Leadership under the "Sudha" brand, initiated by Dr. V Kurien, Milkman of India,
whose main Motto is to build Indian Society economically & literally strong through
innovative cooperative resourceful

network, so as to provide quality service & products to the end consumers and good
returns to the farmer members.

This award has also given direction that IT need to be encouraged & adopted more &
more at grass root level and bridge the digital divide through proper training, re-training
so as to bring radical change & benefit to the Indian society.

It has also recognised the Managing Director, Mr. B M Vyas, who has taken IT initiative
by setting the direction "COMPFED as IT Company in Food business". It has also
inspired all the employees of COMPFED Enterprise to sustain the challenges as a
"Change Agent" by excelling their IT skills in order to transform the people around them
towards IT Integration (e-Vision) on both the ends of supply chain (Village level Farmer

165
to end consumer). This award also motivated the each & every member dairy, Sudha's
wholesale distributors, retailers, transporters and suppliers who have supported whole-
heartedly the IT initiatives of COMPFED.

The Gujarat Co-operative Milk Marketing Federation (COMPFED) has been honoured at
the CIO 100 Symposium & Award Ceremony on August 19, 2003, at the Broadmoor in
Colorado Springs, Colorado, USA. Shri Subbarao Hegde, Head of IT had been to USA
and received the said Award on behalf of COMPFED. The photograph link of the
recipient of the CIO award along with CIO Magazine's Editor in Chief,

Ramkrishna Bajaj National Qality Award-2003

The Gujarat Co-operative Milk Marketing Federation Ltd. has emerged as the top scorer
in the service category of the prestigious IMC Ramkrishna Bajaj National Quality Award
- 2003. The Certificate of Merit was presented at a glittering ceremony held at Mumbai
on March 11 by the Governor

of the Reserve Bank of India, Dr. Y. V. Reddy. According to Shri B. M. Vyas, Managing
Director, COMPFED, this recognition has once again reiterated COMPFED's
commitment to quality and excellence. The biggest strength of COMPFED is the trust it
has created in the minds of consumers regarding the quality of its products. COMPFED
and its brand Sudha stand for guaranteed purity for whatever products it produces, he
added. COMPFED has bagged this award for adopting noteworthy quality management
practices for logistics and procurement. Over the years, it has established an efficient
supply chain that penetrates even the remotest corners of the country. The information
systems of the Federation are comprehensive and include details on product quality,
delivery performance, supplier quality, disaster recovery and all essential commercial
areas, the citation reads.

The Ramakrishna Bajaj National Quality Award is based on framework and principles
almost similar to the Malcolm Baldrige Award that is given by the President of the
United States to businesses - manufacturing and service, small and large - and to
education and healthcare organizations that apply and are judged to be outstanding in

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seven areas: leadership, strategic planning, customer and market focus, information and
analysis, human resource focus, process management, and business results.

SUDHA NOW A $ 1 – BILLION COOPERATIVE

Utterly butterly Sudha has just become more delicious. It is now the first Indian
cooperative to cross the billion-dollar Rubicon.

The Gujarat Co-operative Milk Marketing Federation (COMPFED), the makers of the
Sudha brand of dairy products, reported on Friday that its 2006-07 revenues stood at Rs
4,277.84 crore or $1.04 billion.

The trillion-dollar Indian economy boasts several billion-dollar enterprises, including

Reliance Industries, Bharti, Infosys, TCS, and Wipro. But all these successes stem from
private entrepreneurship. Sudha, in contrast, is the achievement of the pooled efforts of
26 lakh dairy farmers across 13 districts of Gujarat.

COMPFED chairman Parthibhai Bhatol said: "This is an impressive achievement,

considering the ban on exports of skimmed milk powder, which has reduced our export
earnings, and the massive losses suffered by the farmers due to floods last year,
especially in Surat."

The ‘milkman to the nation’, Dr V Kurien, who set up Sudha and ushered in the white
revolution, was not available for comment. After a bitter power struggle in the
COMPFED, Kurien had to quit as chairman last year.

Chairman's Speech: 30th Annual General Body Meeting on 8th June 2004:

Adopted at their meeting held on 8th June, 2004 for presentation at the 30th Annual
General Body MeetingGentlemen,I am appy to welcome all of you to this 30th Annual
General Body Meeting of your Federation.

Thirty years ago the milk producers of Gujarat had come together and decided to create
their own rganisation to enhance the marketing capacity of the dairy cooperative

167
movement. Looking back I think we can agree that they showed remarkable foresight in
creating their own marketing organisation. That is in no small part because this
organisation has delivered results - continuously beating competition of every type in the
dairy business. This has been achieved at he least possible cost, ensuring the benefits
reach both producers and onsumers.

As you all know, Sudha was founded on a sound business model: providing quality
products to consumers at an affordable price. The Pundits have described our model as
"value for money" and it has been adopted by a number of companies. While imitation
may be flattery, most other prices - it means offering the best quality products at the most
reasonable price. As a cooperative, our faith requires that we safeguard the interest of
both our major stakeholders - the farmers - and the consumers whose loyalty is essential
to our continued success.

As I look forward, I foresee business opportunities expanding as never before. The Indian
economy is growing at a very rapid pace. Disposable income in the hands of consumers
has more than kept pace. The result is that our domestic market has been expanding at a
pace that occasionally surprises even the optimist. We now need to challenge our
distribution to reach remote markets with innovative products and services so that more
and more consumers benefit from our wide and expanding range.

Your Federation is taking steps both to deepen our market penetration as well as to
accelerate its growth.

An expanding marke

t inevitably attracts increasing competition. Today, every product category sees new
entrants in our business. Competition may be from existing companies entering new
categories or from new companies. Our experience and marketing prowess has enabled
us to maintain a formidable distance between our competitors and us. However, there is
no room for complacency. We must not only maintain our lead, we must increase it.

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In our business, the technological and financial barriers for new entrants are not high. We
must therefore leverage our experience as well as our procurement, processing,
distribution and branding advantages to establish high entry barriers, continually raising
these by innovation in every area.

On the external front, neither the US nor the EU had shown any willingness o consider
reducing their high subsidies on dairy exports. It is a matter of

some satisfaction that the Indian government has stood by its farmers by withstanding
international pressure to lower tariffs on dairy products. We are grateful for this support.
We are also confident that the government will continue to safeguard the interests of the
Indian farmer by continuing to resist international pressure and domestic lobbying from
vested interests to lower our bulwarks against unfair trade in agricultural and dairy
products. Recently, the EU has introduced some reductions in its dairy sector subsidies
especially on butter oil, Skimmed Milk Powder and white butter. This marginally reduces
the fear of European players competing for our domestic market from a position of price
advantage. It also opens for us the opportunity to compete with European producers on a
level playing field in neighbouring markets. With increased peace, cooperation and
understanding among the SAARC nations, our regional market is expected to grow
manifold across categories. But for us to gain a meaningful share in the emerging
markets, our unions and marketing teams must meet the challenge of performing at levels
that are the prerequisite for success.

You will be pleased to know that your Federation has grown substantially in both volume
and value terms in the last year. That we have grown by over Rs.430 crores in the dairy
line highlights your Federation's versatility and robustness. The icing on the cake has
been a more than 15 percent increase in our farmers' returns.

I now am pleased to present to you your Federation's Annual Report and Audited
Accounts for the year 2003-2004.

MILK PROCUREMENT

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Total milk procurement by our Member Unions averaged 51.13 lakh kilograms per day, a
marginal decline from 52.35 lakh kilograms per day, achieved in 2002-2003. However,
the good monsoons experienced during last year and the better procurement prices on
offer are expected to encourage higher milk production and procurement in the current
year.

SALES

During the year, your Federation's sales registered a growth of 5 percent increase to reach
Rs. 2,881.96 crores including consignment sales of Rs.62.95 crores. The dairy line grew
by about 18% despite the loss of a sizable edible oil business. This year, the sale of Sudha
Milk in pouches increased by 34 percent in value terms. A notable development in the
area of liquid milk in pouches has been the successful launch of Sudha Milk in the Delhi
market during November 2003. Within under 60 days of launch, we had achieved sales of
1 lakh liters per day. UHT Milk has grown in both value and volume terms by 60 percent,
which shows that it has really come upon the high growth stage. Sudha ice cream
achieved a sales value growth of 11 percent, and has come out as the undisputed market
leader.

and Sagar brand pure ghee sales in value increased by 17 per cent over the previous year.
Despite intense competition, sales value of Sudha Butter grew by 19 percent and that of
milk powders has firmed up further. The sales of the Sudha Cheese range increased by 13
percent. Products like Flavoured Milk, Sudha Fresh Cream, Paneer, Mithaimate, Softy
Mix, and fresh curd demonstrated their potential to become dominant brands in the
coming few years.

DISTRIBUTION

During the year, the major development on the distribution front was the development
and alignment of four distribution highways-those of Fresh Products, Chilled Products,
Frozen Products and Ambient Products. This is a significant achievement because it
allows us to develop synergies among all our product lines and to leverage these

170
highways to introduce and distribute new products as per market demand. I take pleasure
in declaring that no other organization in India has been able to develop this kind of
channel synergy so far.

Another major initiative undertaken during the year was the Time-based Military
Technique (TMT) of distribution. This has been deployed to effect a nationally
synchronized mass distribution of our products with the objective of achieving total
channel penetration on a single day. I am pleased

to declare that this initiative has proved to be very successful. Most of our products
launched or re-launched through this technique have seen significant gains in distribution
and availability.

After Distributor Salesmen in the previous year and Distributors in the year before last, it
was the turn of the top Retailers across the country to participate in the Sudha Yatra
Programme. As you are aware, the Sudha Yatra Programme is a unique experiment
conducted by your Federation to bring our channel partners face to face with our
cooperative institutions, activities, culture and achievements through a guided tour in and
around Anand. A total of 114 Distributor Salesmen and 482 top retailers from across the
country participated in the Sudha Yatra this year. With the opening of several new milk
markets and 3 separate Milk Sales Offices at Mumbai, New Delhi and Boisar, the number
of Milk Area Delivery Agents has ncreased. 95 Milk Area Distribution Agents also
visited Anand for Sudha Yatra.

Distributors have further enhanced their infrastructures in terms of installation of cold

storage arrangements, enhanced bank guarantee limits with Federation and introduced
good quality delivery vehicles. An objective evaluation was done in the form of
distributor renewal and Performance appraisal.

For understanding the level of adherence to infrastructural and procedural norms laid out
by Federation and compliance to the same by our Distributors, a pilot initiative of
Distribution Audit was undertaken for 70 Wholesale Distributors. With one of the

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strongest cold chain distribution network in the country today, Federation today owns 13
State-of-the-art cold rooms at various depot locations.

EXPORTS

We will be pleased to know that we have posted more than 50% growth in the volume of
consumer pack exports. This reflects strong and growing consumer faith in our Sudha
brand. As you are aware, during the year Northern India had faced a severe milk crisis.
At the request of our government, we diverted milk powder stocks to Delhi thereby
depriving our export market. As a result, Federation's overall export turnover has dropped
by 40 percent. I am sure you will agree, however, that our first duty is to the Indian
consumer.

I am pleased to inform you that our Long Life milk has been very well accepted in the
UAE and Singapore markets. We have launched UHT milk in Hong Kong and Sri Lanka
market. We have also made a successful beginning in export of ghee to Australia.

INFORMATION TECHNOLOGY INTEGRATION

SUDHA Federation has further advanced our technological leadership by implementing a

Virtual Private Network (VPN) with secured fiber optic connectivity which, with
deployment of the "Sudha Online ERP" System, will facilitate electronic transactions
between member unions and the Federation offices, providing a seamless and smooth
flow of information that enhances operational efficiency. The Federation now enjoys a
significant advantage in rapid reaction to changing business demands.

Your Federation is bolstering our brand identity as a farmers' co-operative through the
Internet based "Sudha.coop" URL and e-mail addresses. This will continually remind the
world's consumers that we are a cooperative, and proud of it. This identity gives us a vital
business advantage and facilitates Sudha brand penetration across the world. It also
strengthens our co-operatives by bringing our members together and closer to consumers.

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Your Federation's achievements have been honoured at the International CIO 100
Symposium and Award ceremony in Colorado Springs, USA where we received the CIO
100 award for its excellence in positive business performance through resourceful IT
management and best practices.

COOPERATIVE DEVELOPMENT PROGRAMME

During the last four years, our Member Unions have implemented an Internal Consultant
Development (ICD) intervention focused on developing leadership among member
producers, helping them to better manage their dairy business.

During the year, Member Unions continued to implement the module on Vision Mission
Strategy (VMS) for primary milk producer members and Village Dairy Cooperatives.
Facilitated by specially trained consultants, 1,073 Village Dairy Cooperative Societies
(VDCS) have conducted Vision Mission Strategy Workshops, and have prepared Mission
Statements and Business Plans for the next five years. The VMS module has prompted
milk producers to initiate activities at villages that have far-reaching effects on the milk
business.

The success of the program has led to Member Unions focusing on implementing this
VMS module and developing Business Plans for all VDCS, thus strengthening them to
face the fierce competition ahead.Continuing the Cleanliness Drive at village level,
Member Unions have trained 8,455 core groups of milk producers and VDCS
management. On October 2nd, 2,970 VDCS celebrated Red Tag Day, an effort to raise
Cleanliness awareness. The Unions also presented awards to the VDCS that raised
cleanliness standards to the highest levels.

As a part of the Breeding Services Improvement Programme, Member Unions have

continued implementation of the second module of Improvement in Artificial
Insemination Services. In the villages, 3,374 core groups have been trained and a decision
has been taken to extend the program to include all the VDCS that offer breeding

173
services. A mass de-worming campaign has been undertaken to fortify the breeding
services.

During the year, Member Unions implemented an Artificial Insemination Audit

Competition that identified the best performing VDCS and Artificial Insemination
Workers who received awards as a motivation for continued improvement.

With the objective of encouraging professional management by Milk Producers and dairy
cooperative societies, Member Unions have initiated Members' Business Development
Programme (MBDP). During the last three years, 2,483 villages and 1,53,108 milk
producers participated in the programme. This has resulted in introduction of new
scientific animal husbandry management methods on a significant scale.

A Chairmen and Secretaries' Orientation Programme is being conducted at Mother Dairy,

Gandhinagar. Member Unions, supported by your Federation, carry out this program to
increase awareness regarding the dairy industry scenario and to develop leadership skills
among Chairmen and Secretaries.

During the year, 5,797 chairmen and secretaries from 2,944 Village Dairy Cooperative
Societies participated in the program.

An ongoing emphasis of our Member Unions has been to encourage increased women
milk producers' participation in their Dairy Cooperative Societies. To develop and
enhance leadership skills and qualities, Member Unions organised three Self Managing
Leadership (SML) workshops at Prajapita Brahmakumaris, Mount Abu which attracted
the participation of 3,100 women resource persons along with the Chairmen and
Secretaries750 VDCS.

WHAT THE FUTURE HOLDS

As you are all aware, there is a steady increase in consumer expectations. Product and
service quality is rapidly becoming the minimum threshold for consumer acceptance. To
achieve and maintain competitive advantage, innovation in product design and delivery

174
are increasingly essential. Innovation must now define us as an organization. We must
innovate at eachstage in our value chain - production, procurement, processing, arketing
and branding.Innovation cannot be mandated or forced out of people. It is everywhere a
function of the quality of people and environment. We need to have enough skilled
people working in a self-actuating environment to produce innovation. In these times of
increasing market opportunities, we need to devise more effective ways of attracting and
retaining skilled human esources. It is to be realized that just as the market is expanding
for our products, so it is opening up new opportunities for the skilled people that we need
to tap the market. Further, it does not suffice merely to retain skilled human resources. It
is also necessary to provide them an adequately self-motivating work environment that
draws out the best out of them on a sustained basis. Therefore, our competitiveness must
also encompass effective human resource management. To this end, we have to find new
strategies.

In the past, our illustrious leaders like the late Shri Tribhuvandas Patel, urabhai Patel,
Jaswantlal Shah - to name only a few - understood the mportance of professionalism in
the management of cooperatives. They always encouraged attitudes and activities geared
towards a results rientation. Today's leaders have a duty and an obligation to carry
forward that tradition of identifying and nurturing professionalism.

You would recall that last year I had shared my feelings and reservations on DDB's
initiative of making joint ventures-and that too with majority holding of the Government.
I am happy to inform you that most of the State Federations of India have declined to
accept such partnerships where the Government is in majority. Even where it was
accepted, the cooperatives are

now changing their minds and reverting to the pure cooperative movement. I

am saying this not because I am happy per say about the failure of the joint ventures, but
because the leaders of cooperatives have understood that they

have a great responsibility towards farmers, consumers & the nation. And in

175
honouring this responsibility they have to work hard with commitment and sincerity.
They should ensure the highest level of professionalism at the cooperative level. They
should give the professionals full freedom to perform instead of interfering in operational
matters-thereby limiting the growth of the organisation. I hope that you would appreciate
my viewpointand see to it that our leaders rise to this level of performance.

From the year 1994, our unions have been engaged in the practice of third party
validation of its practices. Since then, we have been awarded the ISO 9002:2000, the
HACCP, the ISO 14001 and similar marks of our excellence in milk procurement and
processing. We have also been given a certificate

of merit from IMC Ramkrishna Bajaj National Quality Award during last year. I would
stress that we sought such certification not because the Federation needed endorsement
from outside agencies regarding its best practices. Rather, achieving them serves the very
important purpose of encouraging the standardization of our production and marketing
related processes and the infusion of a self-sustaining momentum into these processes.

I find that such certifications are also very necessary in our village dairy cooperative
societies' election processes. The importance of standardization of our village society
election processes lies in their instrumentality in throwing up genuine and visionary
leaders. It determines the future of the cooperative movement. Standardization and
transparency in our village society elections can come only through the continuous and
impersonal adherence to a well documented process that an ISO 9001 recognises.The
year 1994 was an important watershed for your Federation. It marked our bold foray into
the brave new world of portfolio diversification and new product development. It was at
this time when we took our first steps outsidethe security of our traditional products:
powders, butter among thers. Since then, we have emerged as the food organization with
what may well represent the most diversified product portfolio - ranging from ice cream
and dahi to Long Life and Flavoured milk. We have learnt to be on the constant lookout
for changing market requirements and to adapt to these changes proactively.

176
Today, there is no doubt that we are a part of the world market. As everywhere else, the
market trend in India is towards the growing importance of fresh products. The coming
years will see increasing volumesbeing generated from fresh milk, Long Life Milk, curds
and the like. Because our milk procurement and processing capacity is unparalleled in the
country and the region and because we have a brand equity that is nsurpassed in the food
business sector, your Federation is in a position to leverage these assets to effectively
command the market leader's position in

the emerging fresh dairy products market. However, here too we cannot

be complacent. We must constantly create and update our competencies in these products
so as lead, set and exceed market expectations.

Your Federation has now developed competence in distributing fresh products on daily
basis. This is equally true of long life products held at ambient temperature, products
requiring deep-freezing during storage or transportation, and products that require zero
degree temperature. This established competence is, and will continue to be, an essential
element in building synergies among product lines - ultimately creating superior
economies of scale.

Based on the work done in the last decade, the changes that we have built in the
Organisation at all levels, and with the new portfolio of products we have developed, I
feel confident of maintaining our market share growth. I also feel confident that your
Federation will be able to increase its sales further by close to another Rs.500 crores in
the current year.

Your Federation has always tried to be a step ahead of the market. It has always been a
model to which other cooperatives have looked up as an example and inspiration as well
as one from which many have benefited.

Those who had scoffed at the idea of cooperation as a business model are today trying to
emulate it. Thankfully, we need not be remembered for anyof the wrong reasons. Sudha
has always been and remains a movement that stands for the farmer. We have always

177
espoused the values of social justice, integrity and growth with equity. If Sudha deserves
to be remembered for anything, first and foremost it is for the difference we have made
and are making in the lives of millions of farmers. Against all odds, we have managed to
replace a million furrows of hopelessness with at least a faint line of the smile of hope.
That line makes a difference. That puts the real shine on the face of India.

ACKNOWLEDGMENTS

Before closing, I would like to thank all those who have helped to make your Federation's
operations successful.

The National Cooperative Dairy Federation of India has been providing us with
invaluable support in coordination with other agencies and organisations. The National
Dairy Development Board has played an important role in our growth and development.
The Institute of Rural Management, Anand, as always, has contributed to the perspective
building and professionalisation of the management of the co-operative sector. We
express deep gratitude for their support.Our advertising agencies, bankers, insurers,
management consultants, suppliers and transport contractors have been of great help to us
in managing our growth and are partners in our success. We acknowledge their
contributions and commit ourselves to continue and strengthen this fruitful alliance in the
times to come. We depend on the efficiency of our distributors, retailers and most
important of all, the patronage of our consumers, who have come to regard our brands as
synonymous with quality and value. While thanking them for their support, we assure
them that we shall strive endlessly to delight them.Our Member Unions are our strength.
We thank them for their guidance, support and co-operation without which we would not
exist. The Government of India and the Government of Gujarat have continued to offer
support and encouragement, for which we are grateful. Lastly, we thank the officers and
staff of your Federation for their continued perseverance, loyalty and unflinching efforts
devoted to our cause.

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 CHAPTER-12

SUDHA’S SECRET OF SUCCESS

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 farmers.

participants for their socio-economic enlistment and common good. Looking back on the
path traversed by Sudha, the following features make it a pattern and model for emulation
elsewhere. Sudha has been able to:

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 and Even though, growing with time and on scale, it
has remained with the smallest producer members. In that sense, Sudha is an example par
excellence, of an intervention for rural change.

The Union looks after policy formulation, processing and marketing of milk, provision of
technical inputs to enhance milk yield of animals, the artificial insemination service,
veterinary care, better feeds and the like - all through the village societies The village

179
society also facilitates the implementation of various production enhancement and
member education programs undertaken by the Union.

The staff of the village societies have been trained to undertake the veterinary first-aid
and the artificial insemination activities on their own Sudha's success: A model for other
districts to follow.

Sudha's success led to the creation of similar structures of milk producers In other
districts of Gujarat. They drew on Sudha's experience in project planning and execution.
Thus the 'Anand Pattern' was followed not just in Kaira district but in Mehsana,
Sabarkantha, Banaskantha, Baroda and Surat
districts also. Even before the Dairy Board of India was born, farmers and their leaders
carried out empirical tests of the hypotheses that explained Sudha's success. In these
districts, milk producers and their leaders experienced significant commonalties and
found easy and effortless ways to adapt Sudha's gameplan to their respective areas. This
led to the Creation of the National Dairy Development Board with the clear mandate of
replicating the 'Anand pattern' in other parts of the country. Initially the pattern was
followed for the dairy sector but at a later stage oilseeds, fruit and egetables, salt, and tree
sectors also benefited from it's success.

Sudha scouts for alliances in Delhi NCR to increase capacity

Our Corporate Bureau 2 December 2003 New Delhi:

The recent activities of Gujarat Cooperative Milk MarketingFederation (COMPFED),

Paras Dairy and Britannia in the Delhi market indicate that Mother Dairy, the leader of
the milk market in the capital, will soon have a fight on its hands to retain its leadership
position here.

Delhi National Capital Region (NCR), among the biggest milk markets in the country, is
dominated by Mother Dairy currently. Sudha and NDDB's non-compete agreement has
prevented the former from launching its liquid milk in the Delhi market till 2003.

180
With the non-compete agreement having run out this year, Sudha fresh milk was
launched in Delhi last month in two variants — full cream and toned — priced at par
with that of Mother Dairy at Rs 18 and Rs 14 per litre, respectively.

Sudha, to its delight, has seen the demand for its milk going up by leaps and bounds in
the city and is now planning to enter into alliances with dairies located around Delhi such
as Indian Potash and Modern Dairy to cater tothe demand.

Sudha already has a lease agreement with Kwality Dairy's unit in Faridabad where it is
planning to increase capacity and has also decided to set up a new 5-lakh litre per day
dairy plant at an investment of Rs 40 crore in Haryana to cater to the northern market.

COMPFED officials say the company's milk capacity has already touched 80,000 litres
per day (LPD) and have plans to take it to 3 LPD. Sudha is now selling through 2,500
retail outlets and will increase this to 7,500 apart from covering outlets which are selling
Sudha butter.

Another player gearing up to unseat Mother Dairy from the leadership throne is the Rs
400-crore Paras group. The company has hit upon an innovative strategy of introducing
milk vending machines which dispense token milk at Rs 13 per litre. Paras says this
strategy targets the unbranded milk segment which accounts for 45 per cent of the total
milk consumed in Delhi NCR.

The company plans to put up Paras Milk Point (PMP) machines at various fast-moving
consumer goods outlets all over the capital. Over 50 machines each costing over Rs 2
lakh — will be installed in phases over the next four months to cater to toned milk users.

The PMP machines carry about 250 litres of milk and have an in-built refrigerator. Paras
brand currently reaches 9,000 outlets in and around Delhi, and the group is looking at
penetrating fresh markets in the northern region.

Paras' total processing capacity of its three units, one at Haryana and two at Sahibabad in
Uttar Pradesh, is 14 lakh LPD.

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The Bihar market comprises 40 lakh litres currently and is dominated by Mother Dairy,
which sells 10 lakh LPD. The other organised sector players are Paras Dairy, which sells
3 lakh LPD, state-owned Delhi Milk Scheme (2.5 lakh LPD), Gopaljee (1-1.5 lakh LPD)
and Britannia 30-

MARKERING STRATEGIES OF SUDHA

Sudha is based on absolute ground level of marketing company was responsible for the
dairy and milk revolutionary in the late of 1940’s and the villagers and farmers from
different regions of Gujarat and bring the operation flood. Sudha has various products
and has distinction of having every possible dairy products in its product line. The secret
behind Sudha’s success is the constant innovation with superior quality in its products.

Sudha divides its strategic plan in 5 steps :

1) Mapping the market

2) A value identification

3) Segment the market /Audit

4) Understanding the actual customers

5) Also concentrate in Niche marketing

(1) Before starting the production Sudha locate the market of any place in India as
well as abroad. They spot out or highlight that portion of the market at which
demand is reasonable.

2) After mapping it, the second important step, there economical backup or response
from the customers counted on. The market strategy of Sudha is that they calculate
the possible return that may come from the product.

182
3) Segmentation of market is the main source of success for any high rofile business.
A company like Sudha cannot proceed for any production, they have to segment the
market properly & practically. After that their outcome will resemble with the
expected one.

4) Almost the whole Indian market is dominate by Sudha. They are trying to
capitalize, before launching of any product by Sudha they must realize hat what their
potential customers are expecting from them so, in this way Sudha company very
much conscious about their customer.

5) Niche marketing is another innovative outcome of latest concept and which

adopted by Sudha. To be successful in today’s competitive arced, a company must
capture the minute or small segment of any huge market. It order to do that, the
marketing structure of company must be very choosy & intellectual. So that it can
reach upto that small segment.

By capturing such segment Sudha is acquiring huge market.

PULL STRATEGY:

Involves the manufacturer using advertising and promotion to induce consumers to

ask intermediaries for the product there inducing the intermediaries to order it. Pull
strategy is appropiate when there is a high brands loyalty and high involvement in the
category, when people perceive differece between brands and ehen people choose the
brand before they go to the store.

So, Sudha always follow the pull strategy it is totally a customer oriented company
and conern about 100% satisfaction of the customer.

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 CHAPTER-13

GOVERNMENT POLICY

The Indian processed dairy industry has grown and diversified enormously in the last few
years. To ensure the proper development and growth of this industrial sector, the
Government of India has instituted various laws and regulations. The various regulations
that govern the dairy processing industry can broadly be classified into: Compulsory
Legislation

Prevention of Food Adulteration Act, 1954

This Act is the basic statute that is intended to protect the common consumer against the
supply of adulterated food. This specifies different standards for various food articles.
The standards are in terms of minimum quality levels intended for ensuring safety in the
consumption of these food items and for safeguarding against harmful impurities and
adulteration. The Central Committee for Food Standards, under the Directorate General
of Health Services, Ministry of Health and Family Welfare, is responsible for the
operation of this Act. The provisions of the Act are mandatory and contravention of the
rules can lead to both fines and imprisonment

Milk and Milk Product Order (MMPO) 1992

The Milk and Milk Product Order (MMPO), 1992, issued on June 9, 1992 seeks to ensure
the supply of liquid milk, an essential commodity, to consumers by regulating its
processing and distribution. Within eight years of its operation, the Central/State
Registering Authorities have till December 2000 registered 666 units with a total
processing capacity of 65.8 million litres per day (mlpd)

Salient Features of the MMPO Order include the followingRegistrations for units
handling up to 75,000 litres of milk per day are granted by the State Governments and
units with more than 75,000 litres per day capacity are registered by the Central

184
Registering AuthorityThe Certificate also specifies the milkshed area, which, under the
order isdefined as a geographical area demarcated by the Registering Authority for the
collection of milk by the registered unit.

Maintenance of specified hygienic conditions in the premises wheremilk and milk

products are handled, processed, manufactured or stored.

The collection, transportation and processing of milk normally centresround the

operations of a processing plant. The region from which the marketable surplus of milk
production finds its way to a processing plant is called a 'milkshed'. The concept of
milkshed areas is pivotal to the MMPO. For an orderly development of the dairy industry,
a proper assignment/allocation of milkshed is critical.

The dairy industry is regulated in most countries through various ways. Many subsidise
part or whole of domestic production. Imports are commonly restricted, and exports
frequently subsidised. High dairy price

supports in many countries are put in place to stimulate production to the extent that
subsidies forexports are necessitated to maintain domestic dairy programmes.
In the United Kingdom, all the milk produced by farmers is procured by the cooperatives.
Private dairies are required to buy their milk requirement fromcooperatives. New Zealand
has no private sector dairy plants. As many as 90 per cent of dairies in the erstwhile West
Germany and 100 per cent in Denmark, Netherlands and Sweden are in the cooperative
sector.

In the United States, 70 per cent of the dairy industry is cooperative. Dairy programmes
are subject to more Government participation or regulation than most other domestic
agricultural industries in the USA. There are also Federal Milk Marketing Orders and
movement barriers in the USA for "orderly marketing control, which is associated with
stabilising fluid milk prices, providing secured and dependable markets for individual
farmers producingmilk primarily for the fluid market and improving the balance of
market.

185
In the emerging liberalised global scenario, trade-distorting agricultural policies have
been the focus of the GATT multilateral trade negotiations.

With the liberalisation of agricultural trade under the new GATT regime, the
heavy subsidies prevalent in the dairy sector in the countries of the EU as well as in the
USA will have to be brought down in the next few years.

The competitive advantages of the Indian dairy industry are then considered to be
substantial. With substantial and continued investment in building up milk production,
India can emerge as a major exporter of dairy products in the next few decades.
Standards on Weights and Measures (Packaged Commodities) Rules, 1977These Rules
lay down certain obligatory conditions for all commodities that are packed form, with
respect to declarations on quantities contained. These Rules are
Export (Quality Control & Inspection) Act, 1963

The Export Inspection Council is responsible for the operation of this Act. Under the Act,
a large number of exportable commodities have been notified for compulsory pre-
shipment inspection. The quality control and inspection of various export products is
administered through a network of more than fifty offices located around major
production centres and ports of shipment. In addition, organizations may be recognized as
agencies for inspection and /or quality control. Recently, the government has exempted
agriculture and food products, fruit products and fish and fishery products from
compulsory pre-shipment inspections, provided that the exporter has a firm letter from
the overseas buyer stating that the overseas buyer does not require pre-shipment
inspection from official Indian inspection agencies.

Pollution Control No Objection Certificate from Pollution Control Board is a must.

Voluntary Standards

186
There are two organizations that deal with voluntary standardizationand certification
systems in the food sector. The Bureau of Indian Standards looks after standardization of
processed foods and standardization of raw agricultural produce is under the purview of
the Directorate of Marketing and Inspection.

Bureau of Indian Standards (BIS)The activities of BIS are two fold, the formulation of
Indian standards in the processed foods sector and the implementation of standards
throughpromotion and through voluntary and third party certification systems. BIS has on
record, standards for most of processed foods.In general, these standards cover raw
materials permitted and theirquality parameters, hygienic conditions under which
products are manufactured and packaging and labelling requirements.

Manufacturers complying with standards laid down by the BIS can obtain and "ISI" mark
that can be exhibited on product packages. BIS has identified certain items like food
colours/additives, vanaspati, containers for packing, milk powder and condensed milk,
for compulsory certification.

Directorate of Marketing and Inspection (DMI)The DMI enforces the Agricultural

Products (Grading and Marketing) Act, 1937.

Under this Act, Grade Standards are prescribed for agricultural and allied commodities.
These are known as "Agmark" Standards. Grading under the provisions of this Act is
voluntary. Manufacturers who comply with standard

laid down by DMI are allowed to use "Agmark" labels on their products

Other Government Regulations

Import of Capital Goods

Import of capital goods is automatically allowed if it is financed through Foreign Equity.
Alternatively, approval is needed from the Secretariat of Industrial Approvals. The
approval depends on the availability of Foreign Exchange Resources.

187
Import of Second Hand Capital Goods
However Certificate of Registration is required under the Milk and Milk Products Control
Industrial License:
Order (MMPO) 1992.
Foreign Investment
Foreign Investment in dairying requires prior approval from the Secretariat of Industrial
Approvals, Ministry of Industry, as dairying has not been included in the list High
Priority In case of other Industries, proposals will be cleared on case to case basis.
Government may allow 51% without enforcing the old limit of 40% applicable under
Foreign Exchange Automatic approval will be given up to 51% Foreign Investment in
High Priority Industries.

Regulations Act at its discretion

Foreign Technology Agreements:
purchased at market rates Foreign Technicians can be freely hired

ABOUT THE PARTICULAR TOPIN TAKEN IN THE ORANISATION

The project that has been assigned to me under my summer training in COMPFED by my
guide Mr. K.K.SHARMA executive manager division, delegated following
responsibilities.

I had to increase the sales of product in Gaya by making new retailers and distributors the
problems that retailers are facing concessionaires they expect from

Sudha, schemes, replacements if required, delivery problems , visit by the salesman in

their shops i.e. coverage by the salesman is satisfactory or not , supply of ordered goods
are on time. I had to check whether there is any packing problem, the stick that the
retailers are maintaining and selling should not be outdated or too old. I had been given
the responsibilities to develop the marketing of Sudha Ice-cream and recommend
suggestion for improvement accordingly.

188
 CHAPTER-14

JOB PROFILE / ASSIGNMENT FROFILE

INTRODUCTION

TOPIC: “Prepare a proposal for the enhancement of the product &

Performance of milk retailers .”

PRODUCT: SUDHA

PLACE: GAYA

GUIDE: Mr. K.K..SHARMA

DURATION: 2 MONTH

SCOPE: To increase the market of sudha and develop the

marketing strategies in Gaya is the project that has been assigned to
me by my guide Mr. K.K.Sharma Executive of MAGADH DIARY
PROJECT (COMPFED) SUDHA.

189
 Some financial data whatever I collect at the time of summer training for completing
my project as I had to give suggestion for the enhancement of the product so I could
success to collect to financial data of last two year.

After getting experience in FMCG (fast moving consumer goods) company of 40 days I
could learn many thing during summer training, whatever I learned in last one year as a
theoretical knowledge. As where my topic concerned my topic are to make the proposal
for the enhancement of the product & performance report of milk retailers. Till now I
could know the marketing strategies, financial process, about the retailers and many,
more thing. My main motive of summer training to enhance myself after completing
summer training. As we know that practice makes a man perfect but how is it possible
after getting experience. And the more we get experience the more we learn. In 40 days I
could know that how company can maximize the profit as well as sell. I have
accumulated the data which will help me in completing project. I have to complete my
project and I have to submit.
In the period of 40 days I have learn a lot of things, of which I am summarizing in the
weekly fashion.

1st Week & 2nd Week

In these two weeks I have learned about the products detail and the main clients of the
products and also the supplier and distributor’s detail.

3rd & 4th Week

These two weeks are the very crucial for me to learn about the client and agency
relationships. How to motivate and influence the customer about our product is the main
chapter for me which I have learned in these two weeks.
I have meet individually with the distributor of our product and suggesting him the way
through which the customer can switch to my product.

5th & 6th Week

These two weeks are very crucial for my life to learn. As my guide has given me the
target of some fixed amount which I have to achieve within the specified two weeks time
constraints.
After 10 days I have completed my 70% target by awaring the clients and suggesting the
new methodology to the existing distributors of the company.
The another way through which I have achieve this is to enhance the power of influence
of the company. As I have suggested to my guide about rural distributor’s can add more
to our client.
The schedule for next week is most probably is the official work as to how the processing
of an order is converted immediately to the distributor so that the product can reach
timely to the consumer.
And I will hopeful that my guide will make me to move to the head office for the upper
level of conversation with the chairman and the M.D. of the company for the
performance evaluation of mine and for the issuing of the proof certificate for doing
summer training in the organization

190
I also used to meat to distributer in gaya and patna and I could realized many problem
which I am showing following.

Magadh Dairy,
Gaya
Ratio Analysis
01-04-07 to 31-
03- 2008
Principal Principal
Groups Ratios
Working 45,06,047.2
Capital 6 Cr Current Ratio 0.65 :1
3,35,276.3
Cash-in-hand 2 Dr Quick Ratio 0.06 :1
Bank 1,04,94,737.63 Debt/ Equity
Account Cr Ratio 0.40 :1
Gross Profit 5.87 :
0.00Cr
Bank OD A/c % %
Sundry 7,02,344.29 (-)3.59
Debtors Dr Nett Profit % %
Sunndry 14,28,434.25 Oprating 103.59
Creditors Cr Cost % %
Sales 11,73,37,658.78 Recv.Turnover In 33.69
Accounts Cr days days
Purchase 10,02,60,189.18 Return on 20.42
Accounts Dr Investment % %
76,37,944.12 Retur on Wkg. 93.51
Stock-in-hand Dr n Capital % %
42,13,546.21
Nett loss Dr
Wkg. Capital
Turnover 26.04
Inventory
Turnover 15.36

MAGADH DAIRY ,GAYA

PROFIT & LOSS A/C

191
 1 APR 2007 to 31 R200
MAR 8

PARTICULARS PARTICULARS

OPENING 42,04,811.78 SALES 11,73,37,658.78

STOCK 3.58% ACCOUNTS 100%

PURCHASE 10,02,60,189.85 CLOSING 76,37,344.12

ACCOUNTS 45% STOCK 6.52%

.44
1,36,25,556 11.61
DIRECT EXP- .44 %

GROSS
PROFIT 68,85,045.50 5.87%

TOTA TOT 12,49,75,602.

L 12,49,75,602.90 AL 90

1,21,63,447.15 GROSS 68,85,045.50

INDIRECT EX- 10.3% PROFIT b/f 5.87%

10,64,855.44
INDIRECT EX- 5.87 %

42,13,546.21
NETT LOSS 3.59%

TOTA TOT
L 1,21,63,447.15 AL 1,21,63,447.15

192
 MAGADH
DAIRY
PROFIT &
LOSS A/C
1APR 2008 TO 31
MAR 2009

PARTICULAR
S PARTICULARS
OPENING SALES 15,08,26,741.
STOCK 76,37,944.12 ACCOUNTS 76
PURCHASE 13,43,65,515 CLOSING 1,92,17,369.6
ACCOUNTS .47 STOCK 8
1,30,40,797.
DIRECT EXP- 57
17,00,44,111 17,00,44,111.
.44 44
GROSS 1,49,99,854.
PROFIT 28
GROSS 1,49,99,354.2
PROFIT b/f 8

INDIRECT
INDIRECT EX- 97,59,432.39 INCOMES 1,97,563.17

NETT PROFIT 54,37,985.06

TOTA 1,51,97,417. TOTA 1,51,97,417.4

L 45 L 5

Magadh Dairy,
Gaya
Ratio Analysis
1-Apr 2007 to 31- r2009
Mar 2008 )

193
Principal Principal
Groups Ratios
Working 1,72,31,056.9
Capital 4 Dr Current Ratio 2.82:1
Cash-in-hand 72,439,62 Dr Quick Ratio 0.29:1
73,68,766.62 Debt/ Equity
Bank Account Cr Ratio 0.35:1
Bank OD A/c 0.00Cr Gross Profit % 9.95%
Sundry 13,51,688.69
Debtors Cr Nett Profit % 3.61%
Sunndry 27,81,725.69 Oprating Cost
Creditors Cr % 96.40%
Sales 15,08,26,741. Recv.Turnover In 58.55da
Accounts 76 Cr days ys
Purchase 13,43,65,515. Return on Investment
Accounts 47 Dr % 13.04%
1,92,369.68 Retur on Wkg.
Stock-in-hand Dr n Capital % 31.56%
54,37,985.06
Nett loss Cr
Wkg. Capital 8.7
Turnover 5
Inventory 7.8
Turnover 5

Magadh Dairy , Gaya

Balance Sheet
1 APR 2007 TO
31 mar
Liabiliti
es Assets
Capital 2,48,44,496.55 2,19,81,932.46
Account 41.48% Fixed Assets 36.70 0%

Loan(Liabilit 82,73,154.19 1,58,91,151.00 26.53

y) 13.81% Investment 5%

Current 1,28,51,922.20 83,45,874,94

Liabilities 2146 Current Assets 13.93 %

Branch/Divis 1,39,28,043,57 Profit &Loss a/c 13678658.11

194
ion 23.25% 22.84%

5,98,97,616.5 5,98,97,616.51
Total 1 100% Total 100%

Magadh Dairy , Gaya

Balance Sheet
1 APR 2008 TO 31
march2009
Liabiliti Asset
es s
Capital 3,62,68,969.45 Fixed 2,24,51,495.68(2
Account 48.3% Assets 9.9%

1,45,26,354.19(1 1,75,91,151.0092
Loan(Liability) 9.3% Investment 3.4%

Current 94,66,849.89(12 Current 2,66,97,906.83(3

Liabilities .6% Assets 5.5%

Branch/Divisio 1,47,19,053.03(1 Profit &Loss 82,40,673,05(10.

n 9.63 a/c 9%

7,49,81,226.56(1 Tot 7,49,81,226.56(1

Total 00% al 00%

TRAINING-INTRODUCTION

Training is often included as an essential element of an organization’s strategy to gain a

competitive advantage. Every Organization needs the services of trained persons for
performing the activities in a systematic way. The fast changing technological
development makes the knowledge of employees obsolete so every concern has to
arrange some kind of training for preparing workers for job and also keeping them
acquainted with latest technological advancements. In Indian Organizations training

195
activities has assumed high importance because of their contributions to the
organizational objectives.

MEANING

Training may be viewed as a systematic and planned process with a purpose to impart &
provide learning experiences that will bring about improvement in an employee. It is an
organized procedure for increasing the knowledge & skill of people for a specific
purpose. Training improves the performance of employees on present jobs and prepares
them for taking up new assignments in future.

DEFINITION

ACCORDING TO EDWIN B. FLIPPO, “Training is the act of increasing the knowledge

& skill of an employee for doing a particular job”.

ACCORDING TO MICHAEL J. JUCIOUS, “It is a process by which the atitudes, skills

& abilities of employees to perform specific jobs are increased”.

OBJECTIVES OF PROVIDING TRAINING

1. The basic objective of training is to help develop capabilities of the employees by

upgrading their skills and knowledge.
2. Training aims to help the existing employees in improving their level of
performance on their present job assignment.

196
 3. The aim of training is not only providing new knowledge & job skills but creating
in them self consciousness & a greater awareness to recognize their
responsibilities.
4. The main objective of training is to bring about efficiency and effectiveness in the
organization for its existence in competitive market situations.
5. Training is a pre-requisite to prepare human resource for new jobs, promotions &
changeover to modern technology & equipment.
6. Training is also given to establish continual development of workforce in terms of
product quality, attitude etc. with attention to the satisfaction of customer
requirements.
7. As required by TS standards, training is imparted to employees based on
identified technical behavior and organizational needs.

NEED FOR PROVIDING TRAINING TO EMPLOYEES

Training of employees is essential because work-force is a valuable asset to an

organization. Training is important for the following reasons:

1. Increased productivity
2. Higher employee morale
3. Less supervision
4. Less wastage
5. Easy adaptability
6. Reduced absenteeism and employee turnover
7. Employee development
8. Helping in solving problems
9. Increased organizational stability and flexibility
10. Result in quality goods and services
11. Reduces satisfaction, complaints etc.
12. Increased confidence and efficiency
13. Helps employees adjust to change
14. Creates an appropriate climate for growth, communication

197
 15. Reduces outside consulting costs by utilising competent internal consulting.
16. Provides information for future needs in all areas of the organisation.

TRAINING METHODS

Training methods are means of attaining the basis of level in a learning situation. These
methods can be grouped on the basis of level of personnel in the organization the
following types of trainings are generally in use:

Induction training: This type of training is given to help a new entrant for adapting
himself to the new environment. The employee is given a full description of the job he
expected to do & informed about the rules, policies and procedures.

On-the-job training:- In this method the worker is trained on the job and at his work
place. He gets training under the same type of conditions in which he will be working
later on. Success of this method depends upon the quality of trainer so trainers should be
carefully selected.

Off-the-job training:- This consists of lectures, conferences, group discussions, case

studies, program instructions seminars, brainstorming, and mgmt. Games etc. This
method is generally used by govt. and public enterprises by establishing separate schools.

Apprenticeship training:- In this method a worker is attached to an experienced or

senior worker. The worker learns by observing his senior and helping him in his tasks.
This method is mostly used in technical jobs.

Refresher training:- It is helpful in acquainting personnel with latest improvements in

their work. The changing technological methods require fresh training to existing
employees which helps in refreshing the memory of employee.

Vestibule training:- The word vestibule denotes a room between the outdoor & interior
of a building. This term is used to impart training in a classroom on plant. It means

198
workers are trained at some place in factory & special instructors are appointed for this
job.

TRAINING PROCEDURE

Training is a learning experience, which brings about relatively permanent change in an

individual, improving his ability to perform a job. It means changing what employees
know, their way of working, their work attitude or the level of interaction they have with
their superiors or colleagues.

Often an organization will be aware that training needs exist but for one reason or another
will not be in a position to identify specifically what those needs are. Part of
Identification of Training Needs includes providing an action plan for meeting
organization’s Training needs.

Identification of training needs provides the basis on which all other training activities
can be considered. Also requiring careful thought and analysis, it is a process that needs
to be carried out with sensitivity. It is important to know exactly what you are doing.

A particular process should be followed and completed in order to get high results of the
training. A training program essentially involves seven steps:

DISCOVERING/IDENTI
FYING TRAINING
NEEDS

199
DESIGNING THE
PROGRAMME
CREATE TRAINING
MATERIALS & TOOLS

APPLICATION OF
TRAINING
TECHNIQUES

PERFORMANCE TRY
OUT

FOLLOW UP
200
 IMPLEMENT
SUGGESTIONS AND
IDEAS

BENEFITS OF TRAINING:-

Training is beneficial to both the organization as well as to the individuals. They are as
follows:

TO ORGANIZATION:

201
  Leads to improved profitability
 Improves job knowledge at all levels
 Create a batter corporate image
 Fosters authenticity and trust
 Provide information for future needs in all areas of organisation
 Increasing quality of work
 Helps in keeping cost down
 Improves labour-mgmt. Relations
 Aids in improving organizational comm.
 Helps employees adjust to change
 Aids in handling conflict

TO INDIVIDUAL:

1. Better decision making & effective problem solving

2. Encourage self development & confidence
3. Helps a person handle conflicts
4. Improves comm. Skills, attitudes
5. Increasing job satisfaction & recognition
6. Develops a sense of growth in learning
7. Eliminate fear in attempting new tasks

Training needs:

A training need exists when there is a gap between the present performance of an
employee and desired performance. This gap can be determined on the basis of a ‘skill
analysis’ as follows:-

202
 1. Analysis and determination of major requirements of the specific job.
2. Identification of tasks needed to be accomplished to meet job requirements
3. Understanding procedures need to be accomplish each of the job tasks
4. Analysis of knowledge and skills
5. Identification of any special problems & analysis of any particular skills needed to
meet the problem.

THUS,

TRAINING NEEDS = JOB REQUIREMENTS – EXISTING SKILLS

TRAINING POLICIES AND PRINCIPLES:

PRINCIPLES:

Certain training principles are widely followed in building human resource skills
especially at rank and file level. The major psychological principles followed in training
are:-

Learning principles: it refers to modifications in behavior related with experience or

training. The steps necessary for learning to take place are:-

1. Stimulus
2. Response
3. Motivation/ drive
4. Reward/ incentive

Teaching basic work skills and physical movements:- the principles of teaching
work skills include:

1. Employee should be taught only correct methods of work

2. Accuracy should be more stressed than speed
3. Incentives should be used

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 4. Trained trainers should be used

Principles for foreman:- there are training principles for foreman. They activate the
learner, encourage participation, facilitate and assist understanding etc. These reduce
training time & enhance employee motivation.

POLICIES:-

 Training should be formulated by the line personnel with the assistance and
advice of staff.
 The policy should indicate training objectives
 Training policy may emerge from different elements of training needs
 The objective of training policy is to ensure that every employee is offered the
opportunity to attain skill and knowledge
 It should be the policy of enterprise to conduct trainings that is fit to individuals
with their jobs.

TRAINING—THE EMERGING CHALLENGES

Make learning one of the fundamental values of the company

Commit major resources and adequate time to training

Use training to bridge the gap with the external world.

Use training as a developmental tool for individuals

Install training systems that substitute work experience

Use retraining to continuously upgrade employee skills

204
Create a system to evaluate the effectiveness of training.

EFFECTIVE TRAINING

The efficiency of any organization depends directly on the capability of their personnel.
The capability of a person depends upon the ability to work and training he receives so
the training should be taken proper care of so that it must leave high effect on employees
and benefit them. The training is effective if it is helpful to employees to do their work
with more ease and that increase their efficiency as well as interest in doing job.

Training can be more effective in making human resource skills with aid of behavioral
science knowledge

EVALUATION OF TRAINING PROGRAMMES

There are several techniques for assessing effectiveness of training programs like-

 Using checklists
 Rating scales
 Cost account techniques
 Psychological tests
 Learning curves
 By discontinuing them

TRAINING CAN ALSO BE EVALUATED AT FOUR LEVELS:-

Reaction: how well they like the program?

205
Learning: what was learned by the trainee?

Behavior: what learning was transferred to job?

Results: what results were observed & what benefits accrued to organization?

The persistent effects of training on behavior over a long period indicate the
Effectiveness of Program.

EVALUATION OF TRAINING EFFECTIVENESS:-

Evaluation of training effectiveness is a highly desirable step in total training programs

so that one can judge the value of training

Training evaluation is an attempt to obtain information on effect of training program and

access value of training.

Long term training effectiveness can provide more meaningful and qualitative
measurements.

Training Evaluation: Purpose

The training evaluation is a means by which participants express their feedback regarding
the effectiveness of training through a series of quantitative and qualitative survey
questions completed at the end of the training program. Participant reaction to training
can represent instrumental feedback that can drive important changes in any part of the
training delivery process, such as refining of training materials and methods or revisions
to content. This feedback can also be extremely useful in predicting performance after the

206
program. Training evaluation questions on the importance and relevance of the training to
the job have been shown to have a correlation to actual use of skills and knowledge
learned on-the-job.

Classroom Training Evaluations

Classroom training evaluations gather quantitative feedback on the training effectiveness

of the following twelve areas:

 Learning Objectives Met

 Knowledge Increase
 On-the-Job Confidence (in meeting Performance Objectives)
 Business Impact Estimation
 Effectiveness of Materials and Methods
 Overall Reaction
 Program rating
 Pace
 Length
 Relevance
 Importance
 Facilitator Evaluation

HOW TO MAKE TRAINING EFFECTIVE ?

207
Training objectives should be outlined on the basis of type of performance required.

Organizational conditions should be conducive for work and good immanent

There should be major resources & adequate time for training

A comprehensive & systematic approach to training is ensured

IMPEDIMENTS TO EFFECTIVE TRAINING:-

 Mgmt. Commitments is lacking & uneven

 Inadequate spending on training
 Behavioral objectives are often imprecise
 Large scale poaching of trained managers
 Trainers provide ltd. Counseling and consulting services

IMPROVING THE EFFECTIVENESS OF TRAINING:-

There are at least ten issues which improves effectiveness of training:

Training need identification:-

An effective system of training-needs identification ensures that the employee is getting

training in the area required by them

Pre-training activities:-

Every superior s d to explain to his subordinates the rationale and benefits of attending
training.

208
Planning and organizing program:-

A crucial area towards training effectiveness: location, facilities at training venue etc.
have great impact of learning

Designing the module:- training manager should discuss the module with the faculty
otherwise the program fails to achieve its objective

Feedback on the faculty:

Company officials should conduct a course evaluation discussion upon completion of

program.

Feedback from external faculty:-

Seek feedback from external faculty on participation level of trainees, training

infrastructure in company and training support receives from the company. It will be
useful in improving training effectiveness.

Training plan and budgets:

Every organization plans its activities on periodic basis. Thus training calendar should
include details of modules, faculty cost, cost of equipments etc. This gives a tremendous
focus to entire training function.

Development of in-house faculty:

Another thrust area many companies are focusing their attention on is the development of
in-house faculty to conduct various training courses as he is able to provide inputs of the
highest quality to his colleagues & juniors.

209
Quality training focus:-

We need to ensure that quality of training is overriding factor over quantity of training
which is the current fad in the mgmt. Circuit should also be applicable to training
function.

Firstly, I was asked to increase the retail universe of Sudha ice-cream by making the new
Sudha retailers and distributors by providing the deep freezer scheme. I have to go to the
different retailers present in the Greater Noida market and tell them about the new
scheme given by the company. This new scheme helps us to convence them about the
product .

I have taken visited all the retailers outlets of the Gr. Noida to know well about the
market of ice-cream in these areas. I have to collect the report about delivery problem,
replacement, Schemes given by Sudha Company, distribution problem any other problem
facing by the customer or retailers regarding any product of Sudha ice-cream as well as
Sudha Products.

The project is regarding, “To increase retail universe of SUDHA scheme” which would
enable the company to expend the market of SUDHA Product and with hold the good
position among the competitors.

COMPFED. ltd. is largest food production marketing organization. It is a state level

body of milk co-operatives in Gaya which aims to provide remunerative returns to the
farmers and also to serve the interest of customers by providing quality products. It is
known as a brand SUDHA.
In the project the emphasis was given to increase the total sale of distributors and
retailers. Visit to the different retailers in the Gr. Noida region, was to increase the retail
boundaries of SUDHA product and to know the problem regarding Sudha Iproduct, to

210
know whether there is any delivery problem by distributor, to know that whether the sales
man of distributor is regularly visiting the retailers in targeted areas, to check the supply
of ordered goods are on time and finally to look on the retailers problem while selling the
Sudha product.

Sudha product is very popular among the customer and the sale of the product is not very
good in Gaya. Through my project the problem is short listed i.e. lack of supply of
product on time by Sudha distributors and very good scheme were provided from
revelries companies. According to me the COMPFED Ltd. would have to take extra
ordinary effort to capture the market share of Sudha Product.
On the very first day we were provided with the scheme of the deep freezer which is as
below :
This is the scheme provided by the SUDHA to us to increase the retail boundaries of
SUDHA Ice-cream I have taken visited all the retailers outlets of the Gr. Noida to know
well about the market of ice-cream in these areas. I have to collect the report about
delivery problem, replacement, Schemes given by Sudha Company, distribution problem
any other problem facing by the customer or retailers regarding any product of Sudha ice-
cream as well as Sudha Products. To enable the company to expend the market of
SUDHA Ice-cream and with hold the good position among the competitors.
I have taken visited all the retailers outlets of the Gr. Noida to know well about the
market of ice-cream in these areas. I have to collect the report about delivery problem,
replacement, Schemes given by Sudha Company, distribution problem any other problem
facing by the customer or retailers regarding any product of Sudha product as well as
Sudha Products.
In the project the emphasis was given to increase the total sale of distributors and
retailers. Visit to the different retailers in the Gr. Noida region, was to increase the retail
boundaries of SUDHA product and to know the problem regarding Sudha product, to
know whether there is any delivery problem by distributor, to know that whether the sales
man of distributor is regularly visiting the retailers in targeted areas, to check the supply
of ordered goods are on time and finally to look on the retailers problem while selling the
Sudha product.

211
When we visited to the retailers or distributors we start our introduction like this “ good
morning / evening sir , we had come behalf of SUDHA with very attractive scheme for
you, it will surely help to increase your sales with high profit margin, would you like to
lesion the scheme. On this introduction all the retailers were ready to lesion our scheme,
but there were many weak points of this scheme like no availability of installment facility
were provided to them. This was the main problem arises while doing our job. Many had
told that many companies provide freezer free of cost to keep there products.
When we had visited to many retailers about our scheme the mostly had given the
negative response because of the electricity problem .There was also the problem related
to the bad distribution. The response of many retailers was not good towards the
distribution channel of SUDHA there complaint about the timely distribution and the
product in demand is not provided at that time. The many of the retailers had already
having the deep freezer so they haven’t shown the interest for the new one. Many of the
retailers were not interested because of the electricity problem. Many had already
purchased the deep freezer in the month of February and March and there response were
that where was our scheme at that time.

OBJECTIVES

 To increase the market shares of Sudha in Gaya.

212
  To convince the retailers about the Sudha outlet, and take orders for the product.

 To develop the marketing strategies for sudha to increase the sales.

 Problem recognition and discovering ideas to provide new solutions to the

problem.

 To find out the problems and try to point out the cause of the problem.

Specific objectives:

 Convince the distributors to include the untapped retail outlets in their

beats.

213
 To find out the problems and try to point out the cause of the problem.

 To study the satisfaction level of the retailer pertaining to service

offered by Sudha.

 Provide the chance to retailers to get a deepfreezer at discount of 30% less

then market price .

 Sudha brings a chance to get there own deepfreezer.

 Easley availability of Sudha product to the consumers.

 To increase the retail profit boundaries of Sudha product.

CHAPTER-15
FINDING AND LIMITATION

214
FINDING
From the responses got from the survey done through assignment and through my
observations I have been able to find the following facts:

 Not all the members of the organization are aware of the training policies and
procedures.

 No doubt the policies are followed with great efforts but still there is a need to apply
them with more accuracy and strictness.

 The training need identification processes are appropriate in finding the

developmental needs of employees and training programmes are organized
accordingly in order to fulfill those needs.

 Training calendar are also formed on the basis of identified training needs

 Monthly plans for providing training are prepared and followed properly.

 Duration of training programmes is set according to the topic concerned. It is

generally from two to three hours.

 Proper methodology is used while providing training but only on-the-job and off-the-
job training methods are used.

 In case of training personnel, both internal and external faculties are called for
providing training keeping in mind the wideness and importance of training agenda.

 The facilities provided during the training programme like infrastructure and
refreshments are excellent.

215
 Overall the trainings provided to the employees in the company are good and
employees are satisfied with them to a great extent .

LIMITATION

1. All of the retailers were not so co-operative. As they were very busy with direct
selling process, so they hardly get any free time for such discussion.

2. In our project we were suppose to visit every retailer in Gaya market but due to
some unavoidable circumstances like weekly holiday, occasional holiday, we could
not visit all the retail outlets.

3. Lack of proper information and experience also became hurdles for us. Some
particular sectors of Gaya were so crowdie and disarranged that it became quite
impossible for us to visit those retail outlets present there.

4. Off course, money also played a vital factor in the whole project duration.

216
 CHAPTER-16
SUGGESIONS AND RECOMMENDATION

SUGGESTION
Training duration:
 It should be increased
 Sometimes extended it two-three days

Training personnel/faculty:
 Need more expertise
 Should be skilled and knowledgeable
 Must have good communication skills

Training evaluation:
 It is regularly done but methodology need changes
 Should be more realistic

Training facilities:
 Facilities provided are good but venue should be sometimes changed to some
external place.

217
Effectiveness of training:
 Should be monitored on regular basis
 Measures should be taken to improve effectiveness

Training methods:
 New techniques must be adopted
 More of practical demonstrations should be included in training programmes

RECOMMENDATION

After the thorough study of company‘s policies and systems I would like to give
following recommendations:

 Human resource and development department must try to make all the employees
aware of their training policies.

 It should be taken proper care of, that the policies are followed full and fairly.

 Duration of training programmes may sometimes create problems as different

individuals have different thoughts about It so it should be discussed with the
trainer and the trainees.

 Providing various facilities during training is good but hey should not be too
much that the main purpose of training is spoiled.

 Other than Jot’s, some new and advanced methods of raining should also be
adopted.

218
  General awareness programmes should also be conducted at regular intervals as
they make the executives alert of advancement and will be able to enhance the
personal and organizational effectiveness.

 Here must be more of practical demonstrations I provide he workers real

experiences.

 Trainees should be provided with proper assistance when he encounters learning

obstacles.

After completing the project, there are few recommendations, which should be
implemented if possible. It will provide expected and encourage the milk
market of Sudha. It will also help in increasing the market share of Sudha
in Gaya .

According to the 4 p’s of marketing strategies are:

PRODUCT STRATEGY:

1. Sudha company should provide small pack of milk chocolate, Fundoo and
Bindas that increase sale of chocolate because children like small pack of chocolate
so that they can take it daily. It will generate new demand in the Gaya

2. Sudha should start making wafer chocolate because sale of wafer chocolate of
Cadbury and nestle is very high in Gaya.

3. Most of the retailer complaining about the problem regarding the replacement
of Sudha products. So, the company should look into the matter for their good
reputation.

3. In the summer season, the Sudha chocolate is very hard to keep it as it

219
 is so, company should provide a dispensionsary.

PRICE STRATEGY:

1. Sudha don’t provide any scheme to the distributor or retailer but other
company provides scheme.

2. Profit margins of Sudha to the distributor or retailer is less than the Sudha &
any other. So, the Sudha Company provides equivalent profit margins as other company
provide.

PLACE STRATEGY:

1. In Gaya Sudha has only one distributor which having all the retailer outlets,
so, it should be at least one more distributor to release the pressure on the
single distributor.

2. There are number of c- grade area where people are not aware of Sudha’s
product. They are only knowing about milk of any brand. So Sudha should
take special focus on their area to increase the market share of Sudha . Sudha
should provide special campaign to those places to know about Sudha and
Sudha’s product.

3. In different places of Gaya there are many non- listed outlets by Sudha
distributors so, it should be listed by the distributors.

PROMOTIONAL STRATEGY:

220
1. Supply of adequate product regularly to all retailers of Sudha and threats of its
competition so, that it can attract the potential customers.

2. Sudha should provide the lists of its products to all the retailers.

3. There should be more schemes for retailers after completing their sales target
at a given period.

4. In Gaya, Sudha can improve its market share by regular performance of

promotional activities, they should adopt it by canopy , attracting hoardings ,
banners and advertisement in azines and newspaper.

5. Sudha should sponsor for the socio-cultural activities organized in Bihar &
Jharkhand.

6. Sudha should change their packing of milk at regular interval

of year, they should not stick to only one packing.

221
 CHAPTER-18

LEARNING WHILE EARNING

It is very important in organisation to have clarity of roles and unity of command. I

observed that this feature was not focused upon in branch after an organisatinal
restructuring. Employee at the branch was not very clear about the reporting mechanisms,
the flow of command and formal authority. This had an negative effect on employee
moral irrespective of the leadership. Impact on entry level employee was the most, they
ended up being frustrated because unclear authority and command.

Generally organizations focus more on either marketing or finance in the organization

and make the Endeavour to make these functions as efficient as possible. But in the
process they don’t have much focus on operations. I find operation at Magadh dairy
project(sudha) inefficient and wanting. They have serious complication on functioning
and loss of business to competitors. I believe that this function should also be provided be
given more attention and should be equipped with not only better technology but also
more efficient work force.

During my summers at Relegated Securities, I was fortunate enough to experience two

different kind of leadership style. Not commenting on any one it , I just want to say that
they had major impact on the way the branch function, level of satisfaction of
employees , cost cutting, and most important of all revenue generated. So leadership is
one area where top management should be very careful and focused as they form
important part of any organizational success.
Technology plays a major role in organizational functioning.

222
Although it is an established fact that technology helps in smooth functioning of
organization. But I observed it myself at Magadh diary project . The BOS ( back office
support ) system is one of the major strength of Magadh diary project, it is one tool which
keeps kotak ahead of its competitors by helping in better query handing , trouble shooting
and having a more satisfied customer.

ACHIEVEMENTS

During my job profile

 I represented the Bihar State Co-Operative Milk Federation ltd.

 I have learned about the practical knowledge of the market.

 It helps me in improving my communication skill.

 I have got an idea that how to impress the retailers who are a real business man.

 It helps me in making the new contacts.

 I introduced with the various situations which I will face in the future when I will
be in job.

 I have learned how to handle the various conditions.

 I came to know the various conditions of the competitive market.

 Also I collected some big order during my job profile.

 I take the feedback regarding the Sudha products like

(a) Is the quality of product is good.

(b) Is distributor provide timely supply.
(c) Is the rate of products are right.

So these are achievements to me during this summer internship programme.

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 CASE STUDY

DIVERSIFICATION OF PRODUCTS

Across India, every morning, millions wake up to the taste of SUDHA, the flagship brand
name for a variety of dairy products marketed by the Bihar State Co-Operative Milk
producers Federation (compfed)). One could start the day by boiling (as is the traditional
Indian practice) one of the different varieties of liquid milk supplied in pouches and
making one’s morning tea or coffee. If one preferred to use creamer, one could reach for
the SUDHA creamer on the shelf. For the breakfast, butter the toasts with SUDHA
regular butter or, if you are calorie conscious, with SUDHA Lite butter. Drink a cup of
SUDHA chocolate milk. Make sandwiches with one of the different varieties of SUDHA
cheese and take them to the office; add SUDHA ghee (clarified butter) to one’s dishes for
lunch; cook your lunch with a curry containing SUDHA paneer or cottage cheese and
have a sweet dish made from SUDHA gulab jamun mix. If it is a hot day, have an
SUDHA ice cream; and when you return home after the office; relax with tea or coffee,
whitened with SUDHA creamer or SUDHA milk. If you are a pizza fan, bake a pizza and
top it with SUDHA mozzarella cheese, and finally retire for the day with a glass of warm
SUDHA milk. In India, SUDHA was not merely one of the most well known brands, way
ahead of Coca Cola or Pepsi, and even ahead of age old brands such as Dalda, Lifebuoy
and Lux, but a life style range of products, consumed in some form or other by a large
number of Indians of different income and social strata.

COMPFED was the sole marketing agency for the products produced by the different
milk co-operative member societies of the State of Patna (see Exhibit 1 for a brief note on
Patna and Exhibit 2 for a map of India showing Patna) and for those of other States
marketing their products under the SUDHA brand name.

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There was no doubt that from the time of its inception in 1973, COMPFED was a great
success story, as indeed was the co-operative movement in the milk sector initiated and
carried to great heights by the “milkman of India”, Dr. Verghese Kurien. But as on the
year 2000, COMPFED was faced with a question of whether it should stick to its core
business in dairy products, or diversify into other products, in particular into processed
foods such as jams, sauces and fruit juices.

CONCLUSION

After Completing field Study Related to the project, We Draw Following

Conclusion
1. Gaya is very huge market of Sudha’s product and the main
player of this product are :
• SUDHA
• AMUL
• LOCAL PRODUCT
• IMPORTED PRODUCT

2. Among these brands the sale of Sudha’s is very high and it is

followed by Sudha
3. Sudha is top in the list among different brand in Gaya.
4. Most of customer prefers Sudha’s product than other.

5. Share of sudha is increasing very gradually and it is good sign for the Sudha
company.

7. sudha is not properly aware of the promotional activities regarding

Product.

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 8. Due to electricity break down problem in Gaya effects the Sudha’s product or
other’s product very much especially in summer seasons.

9. Best season for Sudha’s product is the time of festival like Durga puja, Dipawali,
id, bakrid, Holi.

10. In the Gaya the sale of Sudha’s milk, chease is very high because of marriage
ceromony.

11. In the month of May and June the school, colleges are usually closed in this
period so, the sale of Sudha Ice-cream is goes decreasing in this period.

12. During our project, we find that the distribution channel of Sudha is not good
in Gaya region.

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 WORD OF THANKS

I take the opportunity to pay hearty regards to Dr. D. K . GARG (Chairman), Mr. M. K.
VERMA (Dean) for lending me their kind support for completion of my project.

I thank all those who directly or indirectly supported me morally, financially and
through providing knowledge by which I could complete my Research.

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 Last but not the least I am thankful to the management of COMPFED. and
specially to my guide Mr. K.K.Sharma whose co-Operation and guidance was a
milestone in completion of my project.

BIBLIOGRAPHY

BOOKS:
AUTHOR: PHILIP KOTLER
TITLE: MARKETING MANAGEMENT
PLACE OF PUBLICATION: DELHI

BOOKS:

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AUTHOR: GUPTA SHASHI K. and
JOSHI ROSY
TITLE: Human Resource
Management
PUBLISHER: Himalaya Publishers

www.COMPFED.com Article:

Our products

About the organization

www.indiadiary.com Articles:

History of Sudha
Government policy

SEARCH ENGINES: Articles:

www.google.com Competitors,

www.yahoo.com Attractive features of the Company

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THANKING YOU

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