Part - A Chapter - 1: Industry Profile

Organization Study of KOMUL, Kolar
PART –A
CHAPTER - 1
INDUSTRY PROFILE
Introduction- Dairy Industry
Dairy industry is an important industry in India. The country is the world’s largest
milk producer, accounting for more than 13% of the world’s total milk production. It is
the world’s largest consumer of dairy products, consuming almost 100 percent of its own
milk production. Dairy products are a major source of cheap and nutritious food to
millions of people in India. It is the only acceptable source of animal protein for large
vegetarian segment in Indian population particularly among landless, small and marginal
farmers and women. Dairying has been considered as one of the activities aimed at
alleviating the poverty and unemployment especially in the rural areas where it is rain-fed
and drought-prone region.
History of Dairy Industry

The development of Indian dairy industry took its shape after the white
revolution. The white revolution has increased the milk production from 17 million tons
(1950-1951) to 110 million tons (2008-2009)
Dr. Verghese Kurien engineered the white revolution in India. He was the
chairman of the Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF) and his
name was synonymous with the Amul brand. Operation Flood (white revolution), was
done in 3 phases.
Operation Flood:
Operation Flood has helped farmers, direct their own development, placing
control of the resources they create in their own hands. A ‘National Milk Grid’, bridges
milk producers throughout India with consumers in over 700 towns and cities, reducing
seasonal and regional price variations while ensuring that the producer gets a major share
of the price consumers pay.
GCEM, Department of Management Studies Page 1

The bedrock of Operation Flood has been village milk producers’ cooperatives,
which procure milk and provides inputs and services, making modern management and
technology available to members. Operation Flood’s objectives included:
 Increase milk production (“a flood of milk”)
 Augment rural incomes
 Fair prices for consumers
Programme Implementation:
Operation Flood was implemented in three phases.
Phase I
Phase I (1970–1980) was financed by the sale of skimmed milk powder and butter
oil donated by the European Union (then the European Economic Community) through
the World Food Programme. NDDB planned the programme and negotiated the details of
EEC assistance. During its first phase, Operation Flood linked 18 of India’s premier milk
sheds with consumers in India’s major metropolitan
cities: Delhi, Mumbai, Kolkata and Chennai; thus establishing mother dairies in four
metros.
Operation flood, also referred to as “White Revolution” was a gigantic project

propounded by Government of India for developing dairy industry in the country. The
Operation Flood – 1 originally meant to be completed in 1975, actually the period of
about nine years from1970-79, at a total cost of Rs.116 crore.
As start of operation Flood-1 in 1970 certain set of aims were kept in view for the
implementation of the programmers. Improvement by milk marketing was made by
organizing dairy sector in the metropolitan cities including Bombay, Calcutta, Madras,
and Delhi.

The objectives of commanding share of milk market and speed up development of

dairy animals respectively hinter lands of rural areas with a view to increase both
production and procurement.
Phase II
Operation Flood Phase II (1981–1985) increased the milk sheds from 18 to 136;
290 urban markets expanded the outlets for milk. By the end of 1985, a self-sustaining
system of 43,000 village cooperatives with 42.5 lakh milk producers were covered.
Domestic milk powder production increased from 22,000 tons in the pre-project year to
1, 40,000 tons by 1989, and the increase coming from dairies set up under Operation
Flood. In this way EEC gifts and World Bank loan helped promote self-reliance. Direct
marketing of milk by producer’s co-operatives has increased by several million liters a
day.
Phase III
Phase III (1985–1996) enabled dairy cooperatives to expand and strengthen the
infrastructure required to procure and market increasing volumes of milk. Veterinary
first-aid health care services, feed and artificial insemination services for cooperative
members were extended, along with intensified member education.
Operation Flood’s Phase III consolidated India’s dairy cooperative movement,
adding 30,000 new dairy cooperatives to the 42,000 existing societies organized during
Phase II. Milk sheds peaked to 173 in 1988-89 with the numbers of women members and
Women’s Dairy Cooperative Societies increasing significantly.
Phase III gave increased emphasis to research and development in animal health
and animal nutrition. Innovations like vaccine for Theileriosis, bypassing protein feed
and urea-molasses mineral blocks, all contributed to the enhanced productivity of milk
animals.

The market of milk industry in India:

The Beginning of organized milk handling was made in India with the
establishment of the “Military Dairy Farms” (oldest in Allahabad, 1889), the salient
features of the market of milk industry so far have been:
 Long distance refrigerator rail-transport of milk from AMUL to Mumbai since 1945.
 Handling of milk in co-operative Milk Union (oldest: Allahabad, 1913) established all
over the country on a small scale in the early stages.
 Pasteurization and bottling on a large scale for organized distribution was started at
Aarey (1950), Worly (1961), Calcutta (Haringhata, 1959), Delhi (1959), Chennai (1963),
etc.
 Establishment of milk plant under the five-year plan for dairy Development all over
India. These were taken up with the dual object of increasing the national level of milk
consumption and ensuring better return to the primary milk producer. Their main aim
was to produce more, better and cheaper milk.
Growth of Dairy Industry in India

India has become the world’s No. 1 milk producing country, with output in 1999-
2000 (marketing year ending March 2000) forecasted at 78 million tonnes. The annual
rate of growth in milk production in India is between 5-6 per cent, against the worlds at 1
per cent. India’s annual milk production has more than trebled in the last 30 years, rising
from 21 million tonnes in 1968 to an anticipated 80 million tonnes in 2000.
The country's estimated milk production for the year 2010-11 is 121 million
tonnes, close to 17 percent of world milk production. Last year, the annual milk
production stood at 112 million tonnes. World milk production increased to 710 million
tonnes in 2010, an increase of 1.6 percent over previous year.

India's milk production increased from 21.2 million MT in 1968-69 to 66.2 million
MT in 1995-96 and to 121.7 million MT in 2010-11.Per capita availability of milk was
around 276 grams per day in 2010-11 increased from 195 grams per day in 1995-96, up
from 112 grams per day in 1968-69.India's milk production increased over 4% annually
during 2000-01 to 2010-11 surpasses the 1.6% growth in population; the net increase in
availability is around 2.4% per year.
Table1.1: Showing the year and estimated milk production.
Year Estimated milk production (million tonnes)
1970 21.2
1980 44.8
1990 63.1
2000 82
2010 121
Chart 1.1: Showing the year and estimated milk production.
Estimated Milk Production

150
million tonnes
100
50 estimated milk production

(million tonnes)
0
1970 1980 1990 2000 2010
year

This rapid growth and modernization is largely credited to the contribution of dairy
cooperatives, under the Operation Flood (OF) Project, assisted by many multi- lateral
agencies, including the European Union, the World Bank, FAO and WFP (World Food
Program). In the Indian context of poverty and malnutrition, milk has a special role to
play for its many nutritional advantages as well as providing supplementary income to
some 70 million farmers in over 5, 00,000 remote villages.
Milk is the raw material of the dairy industry, which cannot be created artificially and
stored for a long time. The term “Milk Market” refers to the fluid whole that is sold to
the individuals usually for direct consumption.
The dairy industry has come up to the present stage because of well-planned,
effective and coordinated efforts of the National Dairy Development Board, co-operative
of the Government.
National Dairy Development Board lays down rules and regulations to be followed by
the various co-operative milk societies. Amul (Anand Milk Union Limited) was a
pioneer in starting a co-operative milk producers society and thereafter many co-
operative societies where started. World Bank also had given credit of Rs.78 Crores for
starting another society as AMUL in 1975.
Salient Features of Indian Dairy Sector
 In Livestock sector, Dairy is one of the high growth areas. The Dairy sector contributes
68 percent and in order to meet the target of 6 percent growth rate, milk group has to
show a minimum growth rate of 5 percent. Dairying has shown a growth of 3.5 per cent,
and is projected to grow at 3 per cent only during 2009 on account of overall recession.
 Despite high growth rate in production, per capita availability of milk in India is only
245 gms / day, which is much lower than world average 285 gms/ day.

 India is among the worlds largest and the fastest growing market for milk and milk
products. The market size in value terms is rupees 2000 billion (USD 47.6 billion) and
growing at nearly 7.5% annually.
 Organized sector handles 10-12 million tonnes of packed liquid milk & 5-7 million
tonnes of value added milk products while the unorganized sector handles 22-24 million
tonnes of value added milk products.
 Due to competitive farm gate prices, huge opportunity exists in export of milk and value
added milk products ,especially milk powders to neighboring countries where domestic
production cannot meet demand.
 The production capacities have increased of the Dairy by-products such as Casein, Whey
and Lactose, which are exported.
 Growth is organized F & G retail has created the demand for processed milk products
with longer shelf life. This has increased the necessity for large continuous equipment
manufacturers, which could help to increase the scale of operations and reduce the
manufacturing cost.
 Dairy Scenario with its growing herd-size, steady rise in herd quality, productivity and
increasing mechanization will attain phenomenal growth in near future. Improved herd
health, productivity and milk output are the need of the day.
Latest Developments in Dairy Industry
 Indian Dairy Industry is the largest milk producer all over the world, around 100 million
MT Indian Dairy Industries value of output amounted to Rs. 1179 billion in 2004-05
which approximately equals combined output of paddy and wheat. With 1/5th of the
world’s bovine population.
 In India the Milch animals constitutes 45% indigenous cattle, 55 % buffaloes, and 10%
cross breed cows

Intensive Dairy Development Programmed (IDDP): The Schemes, modified under this
programmes are on the basis of the recommendation of the evaluation studies which were
launched during Eighth Plan period and is being continued throughout the Eleventh Plan
with an outlay of Rs. 32.49 core for 2009-10.
Strengthening Infrastructure for Quality and Clean Milk Production (CMP): This is
a centrally sponsored scheme which was launched in October 2003, which had the main
objective of improving the quality of raw milk produced at the every village level in the
India.
Dairy Venture Capital Fund- This is introduced in the Tenth Five Year Plan to bring
about structural changes in unorganized sector, which would measure like milk
processing at village level, marketing of pasteurized milk in a cost effective manner,
quality or the up gradation of traditional technology to handle commercial scale using
modern equipments and management skills.
Evolution of Karnataka Milk Federation

Karnataka Milk Federation (KMF) was instituted in 1984, by federating the 13
milk unions in the state and thus forming the state level apex organization. As a co-
operative apex body of the state of Karnataka, it represents dairy farmer’s organization
and also implements dairy development activities to achieve the following objectives:
 To build village level institutions in co-operative sectors to manage the dairy activities
 To ensure provision of milk production inputs, processing facilities and dissemination of
know-how
 Provides assured and remunerative market for the milk produced by the farmer members
 To facilitate rural development by providing opportunities for self-employment at village
level, preventing migration to urban areas, introducing cash economy and opportunity for
steady income
 Provide quality milk to urban consumers.

List of Co-operative Milk Producers under Karnataka Milk Federation

1) Kolar Milk Union(KOMUL)
2) Bangalore Milk Union (BAMUL)
3) Mandya Milk Union
4) Mysore Milk Union
5) Hassan Milk Union
6) Belgaum Milk Union
7) Shimoga Milk Union
8) Tumkur Milk Union
9) Gulbarga Milk Union
10) Dharwar Milk Union
11) D K Milk Union
12) Bijapur Milk Union
13) Bellary Milk Union
Bangalore Dairy, a joint venture of UNICEF, Government of India and

Government of Karnataka was dedicated to the people of Karnataka on 23rd January 1965
by the then Hon’ble Prime Minister Late Shri Lal Bahadur Shastriji. Sprawling over an
area of 52 acres, the Dairy had an initial capacity to process 50,000 liters of Milk per day.
This dairy was handed over to the ‘Karnataka Dairy Development Corporation (KDDC)’
in December 1975 as a part of Rural Milk Scheme of Mysore, Hassan and Kudige under
‘Operation Flood-II’ and then transferred to ‘Karnataka Milk Federation (KMF)’ in May
1984 as a successor of SDD.

CHAPTER-2
COMPANY PROFILE
Kolar-Chikkaballapura District Co-operative Milk Producers Union Ltd.,

(KOMUL) is Karnataka’s 2nd highest Milk Producing District organization. It is a
District level apex body of milk cooperatives in Karnataka, which aims to provide
remunerative returns to the farmers by eliminating the middlemen and also serve the
interest of consumers by providing quality Milk & milk products, which are good value
for money.
Once the District was named as Land of Gold & Silk, is making inroads in
Quality Milk Production. It is KOMUL first installed “Bulk Milk Coolers & Community
Milking Machines” at Society level in the state of Karnataka to get the quality milk
required for UHT milk packed at Kolar Dairy under the brand name of Nandini ‘Good-
Life.
“Nandini is a brand name for KOMUL, which is operating under KMF”.

2. A. Background and inception of the company.

Animal Husbandry is the most preferred allied activity in the district, which
contributes substantially to the total income of the district and dairy farming forms the
major activity in this sector. Dairy development activity in the district was initiated
during the year 1975 under IDA assistance as a part of Bangalore Milk Union Ltd.
[BAMUL]. Subsequently, the district was bifurcated from the operational area of
BAMUL to form a separate milk union called Kolar Milk Union [KOMUL] with effect
from 01-04-1987.
The KOMUL has a milk processing plant at Kolar with a handling capacity of
25,000ltrs/ day [LPD] and three chilling at Chintamani, Gowribidanur, Sadli with
handling capacity of 1,00,000 LPD, respectively. At Kolar, the dairy is manufacturing
Butter, Ghee,Peda, Curds, Cheese, Masala Butter Milk, and UHT Milk in addition to
pasteurized toned milk and full cream milk. UHT milk is being sold under the brand
name of “Nandini Good Life” and “Nandini-Smart” while all other products are sold
under the brand name of “Nandini”. The KOMUL started marketing of liquid milk in
polythene sachets in entire Kolar district and in a part of Bangalore City since 1994.
Recently it has entered Chennai market also selling nearly 5,000 LPD.
KOMUL Milestones
1987 Bifurcation of the district from an operational area of Bangalore Milk

Union Ltd. (BAMUL) to form a separate milk union
1987 Establishment of first Women Dairy Co-operative Society in the

Union.
1989 Inauguration of Sadali chilling center.
1990 Initiation of milk marketing at Inter-dairy rate.
1991 Inauguration of Gowribidnur chilling center.
1991 KMF handed over chilling centers at Kolar, Sadali, Chintamani and
Gowribidnur to Kolar Milk Union Ltd.

1994 Inauguration of full-fledged dairy at Kolar with a processing capacity

of 1 Lakh Liter per day.
1995 Inauguration of Administrative Building in the Dairy campus.

1998 Inauguration of Cheese Plant.
1999 Union started marketing Nandini Good life Milk.
1999 Expansion of processing capacity of Chintamani chilling center.
2000 Outside the state, entry into the Chennai for Milk marketing.
2001 Inauguration of Animal Disease Diagnostic Laboratory at Chintamani
chilling center campus.
2001 Installation of AMC Units at DCS level.
2001 For the first-time in the history of Karnataka, inauguration of BMC
centers in the jurisdiction of KOMUL
2001 Kolar-Chikkaballapura Dairy certified for ISO-9002 Quality
management System
2001 Union started marketing MastiDahi.
2001 Expansion of Tetrapak Unit.
2001 Inauguration of Community Machine Milking Parlors (centers).
2002 Started implementation of TIFAC Project.
2003 Union bagged National Productivity Council Award again – 2nd
Place.
2004 Union bagged National Productivity Council Award – 2nd Place.
2004 So far the day maximum milk procurement in the history is 3rd
December 2004(7,38,838 Kgs)
2005 Inauguration of 100th BMC centers in the jurisdiction of KOMUL.
2006 Union bagged Best Co-operative Union Award in the state.
2006 Establishment of Producers Welfare Trust.
2007 Expanded UHT Processing Capacity from existing 0.40 LLPD to 1.5
LLPD.

2008- Sep Union started to supply Goodlife milk to Indian army

2008-Dec Union received Energy Conservation Award both from Central and
State Governments.
2008-Dec KOMUL was renamed to “KOLAR CHIKKABALLAPURA
COOPERATIVE MILK PRODUCERS SOCIETIES UNION LTD”
2009-March Installed and Commissioned the following
 TFA-A1 500ml Fino Packing machine – 3600 Ltrs/hour

 TFA-A1 200ml Fino packing machine – 2100 Ltrs/hour
2009 -April Introduced Good life milk 200ml fino packets to market.
2009 -May Launched New 100ml Brik UHT variant Milk called “Sampoorna”
with Fat 4.5% & SNF 8.5% to market.
2009 -June KOMUL Achieved the highest milk procurement of 7, 45,446 Kgs of
Milk on 08/06/2009.
2009 1st Place in National Energy Award and 2nd place in State Energy
Conservation Award.
2010 Enhanced UHT plant for 2.5 lakhs litres per day packing
2. B. Nature of business carried

The nature of business of KOMUL is processing of milk and procuring of milk
from the milk producing co-operative society. The plant carries out its functions of
processing the milk and distributing the milk continuously and regularly.
2. C. Vision, Mission, and Quality Policy

VISION
"Wish to grow into a model milk co-operative in the country"

Vision 2020
 Kolar-Chikkaballapura will collect 20 Lakh Lts. of Milk/day.

 Entire Milk will be collected through Bulk Milk Coolers, Computerized systems
at villages.
 Kolar-Chikkaballapura Milk Quality will be a Global Benchmark.
 Milk Products manufactured from Kolar Raw Milk will be of International
Standards.
MISSION
 Kolar-Chikkaballapura Milk Union continuously procure good quality milk by
providing remunerative price & technical inputs to producers and supply good
quality of Milk & Milk Products to the consumers. It also strives to achieve top
position in the dairy industry by improving the financial position of the union.
 To provide assured and remunerative market for all the milk sold by the
farmer members.
 To provide hygienic milk and milk products to urban consumers.
 To eliminate middlemen and organize institutions owned and managed by the
milk producers by themselves, by employing professionals.
.
Quality Policy
“KOMUL continuously strives to improve their internal quality & operating system by
educating milk producers & motivating work force to achieve customer satisfaction.”
KOMUL has obtained certification for ISO: 9001-2000 Quality Management
System and they are in the process of upgrading the System to ISO-22000.
Quality Policy Objective Statement of KOMUL is as follows:

“Every job operation will be done by everyone in right time & rightly at first time.

VALUES
 Honesty
 Discipline
 Quality
 Hard Work
 Mutual Trust & Belief
 Transparency
 Co-operation & Team Work
2. D. Product Profile.
KOMUL (Nandini) is one of the well-known brand in the country. The union offers few
products to its customers. The products are as follows:
Table 2.d.1: Showing Product Profile of KOMUL.
NANDINI TONED MILK:
Karnataka’s highest selling and most preferred milk.3%

fat and 8.5% SNF content make this milk the best choice
for all purposes.
Available in 250 ml, 500 ml and 1 liter pouches across
Karnataka.
Homogenized variant also available5 litre and 6 litre
pouches available in selected markets.
NANDINI HOMOGENISED MILK:

Badam, Pista, Elachi and Banana. Sterilised

flavoured milks with rich creamy feel and great
taste.
Available in 200 ml take – away bottles.
FULL CREAM MILK:
The Fresh Full Cream Milk available in the brand name

"Nandini" is rich, creamier and tastier milk that contains
6% Fat and 9 % SNF. The Full Cream Milk is suitable
for preparing home-made sweets and savouries and
comes in 500 ml and 1 litre packs.
CURD:
Fresh curd that tastes just like traditional home – made

curd. Can be consumed as such or in combination with
cooked rice or added as an ingredient in certain dishes.
Available in 200g and 500 g pouches

BUTTER:
Made from fresh pasteurized cream for delectable

taste, smooth texture and butter some delight. Tasty
enough to relish in a variety of ways.
Available in 500 g slabs.
GHEE:
Nandini’ ghee is made from pure butter. It is fresh

and pure will a delicious flavour. Hygienically
manufactured and packed in a special pack to retain
the goodness of pure ghee. Shelf life of 6 months
at ambient temperature.
This is available in 200ml, 500ml, 1-liter sachets,

5-liter tins and 15kg tins.
PEDA:
Mouth-watering peda made from pure milk. One
bite is enough to fill the heart with its creamy milk
flavor.
Available in 25 g, 50 g sachets and 100 g, 250 g

pack.

MASALA BUTTERMILK:
Fresh butter milk blended with quality spices to

give that enlivening spicy tang of traditional spiced
butter milk. A drink recommended after meals, for
easy digestion.
Masala buttermilk is manufactured and sold in the
summer season, especially form month of March to
July, the only period during which it gets demand.
Available in 200 ml Tetra Brik packs and 200 ml
pouches.
MILK POWDER:
Dissolve just 3½ tablespoons full in 180 ml of
lukewarm water and your glass of delicious
sweetened milk is instantly ready. Processed
with ultra modern ‘spray drying’ technology
that makes the whitener completely miscible
in hot or lukewarm water, leaving no lumps
behind.
Available in 25 g, 50 g. tear-away sachets,

200 g, 500 g, 1 kg metalized aluminum
bowed laminated film pouches, 10 kg HDPE
containers and 25 kg craft paper bags with
poly liner.

ICE CREAMS:
Creamy delicacy to excite the most joyous
moments.
Available in 100 ml cups and 500 ml, 1250

ml, 5000 ml family packs.
ULTRA HIGH-TEMPERATURE HEAT-TREATED MILK:
It refers to ultra-high temperature heat-treated Milk. The concept of UHT milk is absolute
i.e. bacteria free besides retaining the nutritional quality of milk. During the process,
milk is exposed to a temperature of 137ºc for 4 sec and immediately cooled a room
temperature packing it aseptically.

At present two types of UHT Milk are being produced one “Nandini Good Life” with
3.6% fat and 8.5% SNF and another one is “Nandini Smart” with 1.5% fat and 9% SNF.
Nandini Smart being low fat products good for health conscious people. Both the milks
can be stored for at least 45 days at room temperature. It needs no boiling before
drinking on an average 25,000 of both the Milk is being sold per day.
Constituters Fat Minerals Proteins Lactose Water Total Solids
Nandini
3.6% 3.5% 10.7% 4.3% 87.5% 12.1%
Good Life
Nandini
1.5% 3.95% 0.75% 4.3% 89.5% 10.5%
Smart
It also includes “GOOD LIFE SLIM” Skimmed milk is 99.5% fat free. Cow’s
pure milk, homogenized, skimmed, UHT processed milk, bacteria free in a tamper proof
tetra-fine pack which keeps this milk fresh for 60 days without refrigeration until opened.
It’s available in 500ml pack.
2. E. AREA OF OPERATION
The major area of operation of Nandini is at National level. Nandini (KOMUL) has a
long tradition of maintaining the highest quality standards, rights from selection of raw
milk to processing and packaging of end products.
The reason why its products are much in demand nationally and are sold and
distributed regularly to states like Andhra Pradesh, Tamil Nadu, Kerala, Maharashtra,
Goa and all over the Karnataka.
In Sep 2008 KOMUL started supplying good life milk to Indian army.
2. F. OWNERSHIP PATTERN
KOMUL is a District level Co-operative society, which operates under KMF

(State level Co-operative society).

SL No. CATEGORY NO. OF SHARES % OF SHARE

HOLDINGS
1 Promoters holdings 8,60,00,000 94.16
Promoters
2 Non-promoters holdings 35,65,000 3.90
Institutional investors i.e.
banks,financial
institutions
3 Others 12,00,000 1.31
Public
4 Employees 5,62,700 0.63
Total 9,13,27,700 100
2. G. COMPETITORS INFORMATION
KOMUL has various competitors in the market such as: -
 Nandi
 Tirumala
 Heritage
 Swastik
 Shruthi
 Arokya
 Nilgiris
 Jersey
 Dodla

NANDI:
Nandi milk products Pvt ltd was started in the year 1997. It was under the care of
Sri.S.P.Y.Reddy. The industry is located at Nandyal-kurnool highway road in Kurnool
district. It is an industry that procures milk from four districts. From the year 1997-2009
the company has developed the business day to day. The company not only improves the
brand name but also it is overtaking the competitor’s brands.
TIRUMALA:
Tirumala Milk Products Private Limited is a professionally managed company

engaged in the manufacture of a wide range of Dairy Products which include Milk in
Sachets, Sweets, Flavored Milk, Curd in Cups and Sachets, Milk Powder, Butter, Ghee
and Butter Oil both in bulk as well as in consumer packs.
Established in 1998, Tirumala Milk Products (P) Ltd. is one of the fastest growing
Private Sector Enterprises in India with a team of dedicated professionals. The company
has one of the most modern and versatile plants in the Indian Dairy Industry with state-
of-the-art technology. Tirumala Milk Products (P) Ltd. products meet stringent quality
control tests and cater to the premium segment of the market for Dairy Products.
Tirumala Milk Products (P) Ltd. is presently implementing an expansion programme and
proposes to launch new products in the near future.
Presently Tirumala market presence is in Andhra Pradesh, Karnataka and Tamil
Nadu. They handle 7 Lakh liters of milk per day in our packing stations and dairy plant,
which is the single largest plant inthe state of Andhra Pradesh. Tirumala Registered
Office is located at Narasarao Pet, GuturDist and Corporate Office is located at
Ameerpet, Hyderabad.

Tirumala Milk Products (P) Ltd. sells a rich, varied offering of nutritious, tasty
and healthy food products under well-known brand. Taste, health, convenience, reliability
and vitality for consumers are key characteristics.
HERITAGE:
The Heritage Group, founded in 1992 by Sri Nara Chandra Babu Naidu, is one of
the fastest growing Private Sector Enterprises in India,with four-business division’s viz.,
Dairy, Retail, Agri, and Bakery under its flagship Company Heritage Foods (India)
Limited (HFIL). The annual turnover of heritage Foods crossed Rs.1096 crores in 2010-
2011.
Presently Heritage’s milk products have market presence in Andhra Pradesh,
Karnataka, Kerala, Tamil Nadu, Maharastra and Orissa and its retail stores across
Bangalore, Chennai and Hyderabad. Integrated agri operations are in Chittoor and Medak
Districts and these are backbone to retail operations and the state of art Bakery division at
Uppal, Hyderabad, Andhra Pradesh.
Dodla
Dodla Dairy Limited a Public Limited company established by a well-known family from
Nellore district of Andhra Pradesh in the year 1998. It Procures, Process and sell milk
and milk products across 66 locations in India. The Company Head Quarter is located at
Hyderabad, Andhra Pradesh of India.
Dodla Dairy is an ISO 22000 : 2005 and ISO 50001:2011 (EnMS) Certified
Organization. The company is having 7 state of art technology Processing Plants, 28
chilling centres, 15 Bulk Milk Chillers and 17 Associate Chilling Centers . The company
has a wide distribution network across pan India. The products and services are offered
through 16 Sales offices.

The company offers a wide range of Milk Products Comprising Fresh Milk , Butter,
Ghee, Paneer, Curd, Flavoured Milk, Milk sweets, Ice Cream and Skim Milk Powder. All
the products are conveniently packed in different pack sizes and types to suit various
needs of consumers.The company has grown multifold rapidly during the past one and
half decade and has become a popular dairy company in India. The consistent growth of
the organization reflects the consumer confidence and strength of the company.
The company has gained the competitive advantage over the other players by delivering
the highest Quality dairy products to the consumers. Now, the company is prepared to
face the future challenges by upgrading its systems and infusing new technology .
2. H. INFRASTRUCTURAL FACILITIES
KOMUL dairy is situated in the industrial estate besides the national highway
(NH-4) a prime locality occupying a vast and ample space of 25 acres of land it is noise
free zone.
The main building consists of administrative department, finance department and
MIS department. Beside the main building, a canteen and other building where marketing
and purchase departments are situated. The internal parts of the departments are arranged
in such a way that there is sufficient space for office work and arrangements are made for
proper ventilation.
Other Facilities
 Clean milk production
 Emergency facility
 First aid facility
 Mobile veterinary facility
 Training and development facility to DCS(Dairy Co-Operative Societies)
 Vision programmed-under taken from NDDB(National Dairy Development Board)
 Mass Vaccination programme against Foot and Mouth Disease.

 Vaccination against Thelariasis.

 Animal Disease Diagnostic Laboratory.
 Fodder development programmes
2. I. ACHIEVEMENTS/AWARDS
In recognition of the varied initiatives, KOMUL was conferred with several

awards and accolades. Some prominent awards received are as under
 KOMUL bagged National Productivity Council Award – 2nd Place.

 KOMUL bagged best co-operative union Award in the state.
 KOMUL achieved the highest milk procurement of 7, 45,446 Kgs of milk on 8/06/2009.
 1st place in National Energy Award and 2nd place in State Energy Conservation Award.
 Kolar-Chikkaballapura Dairy with 3 Milk Chilling Centers is certified for ISO-9001:
2000 quality management system and they are in the process of upgrading the system to
ISO-22000.
 Winner of “Best Productivity Awards”
Achievements
1. Community Milking Machines first time in India.

2. Highest number of BMCS in the village after Gujarat.
3. UHT Tetrapak plant first in Karnataka with variants “Good Life”, “Smart”, &
“Slim”.
4. Union has implemented ‘Rain-Water’ Harvesting System.
5. Union has implemented “Total Energy Management”at Dairy.
6. Kolar-Chikkaballapura Dairy with 3 Milk Chilling Centers is Certified for ISO-
9001: 2000.
7. Farmers Health Insurance.-”Yashaswini”

2. J. WORK FLOW MODEL
Manufacturing process (End to End)

Chart 2.J.1: Showing Work Flow Model
RAW MILK
MILK INLET
MILK STORAGE TANK CHILLED WATER INLET
PASTURIZATION COOLING SYSTEM
MILK INLET CHILLED WATER OUTLET
MILK OUTLET
CREAM MILK
BUTTER SECTION
PACKAGING
GHEE

Preliminarily the raw milk is collected in the stores department. Then the milk
goes through a process in production department where the milk and milk products are
produced. Produced products are clearly checked and packed in accordance to the quality
required. This process will carry on by quality control department. Finally the products
which are ready for sales are sent to sales and marketing department to distribute it to the
consumers through various distribution channels like milk parlors, milk depots, and other
retail outlets.
2. K. FUTURE GROWTH AND PROSPECTS

Future growths of KOMUL are as follows:
 To establish a high- tech production plant in chikkaballapura district.
 To establish hi-tech parlors at chintamani.
 To establish ATM (All Time Milk) in all taluk levels.
 Expansion of kolar chilling center.
 To introduce clean milk production (CMP) at all levels.
 To introduce Dairy Animal Management (DAM).
 To introduce Total Quality Management (TQM) program in all levels.
 To introduce Total Energy Management Program (TEM).
 To introduce the cluster concept to increase the consumption.
 Comprehensive training programs for DCS (District Co-operative Society) personnel and
milk union personnel.

CHAPTER-3
MCKINSEY’S 7S MODEL
The 7s model is better known as Mc-Kinsey’s 7s, because the two persons who
developed this model, Tom peters and Robert waterman, have been consultants at Mc-
Kinsey’s and co. at that time. They published their 7s model in their article “structure is
not organization” (1980) and in their books “the art of Japanese managements” (1981)
and “In search of exclusive” (1982).
Chart 3.1: Mc-Kinsey’s 7s Frame work
The model consists of seven elements. Those seven elements are distinguished
in so called hard S’s and soft S’s. The hard elements are feasible and easy to identify.
They are strategy, structure and system of the organization. The four soft S’s are hardly
feasible. They are highly determined by the people at work in the organization i.e., style,
staff, skills and shared values

3. a. STRUCTURE:
The structure followed in KOMUL is Functional Structure. It ensures maximum use
of principal of specialization. Since the workers are performing a limited number of
functions, their efficiency would be very high.
Chart 3.a.1: Showing Organization structure

KOMUL mainly has the following departments:

1) Procurement and input department
2) Production department
3) Quality control department
4) Marketing department
5) Finance department
6) Management information system department
7) Administration and Personnel department
1) PROCUREMENT AND INPUT DEPARTMENT

The operational efficiency is reflected on procurement prices paid to the member
producers. KOMUL is offering the most remunerative milk procurement price to member
producers. Annual average Milk procurement for the years 2009-2010 is 7.30 lakhs liters
per day. During the seasonal time it has procured to the peak of 8.0 lakhs liters per day.
2) PRODUCTION DEPARTMENT
The production department of the Kolar dairy performs the function of developing
procedures to transform a set of input elements of raw material like milk, money,
machine into specified output like curds, butter, ghee, Peda, masala butter milk etc. in
assigned quality and best in order to achieve the organizational goals successfully.
3) MARKETING DEPARTMENT
KOMUL has a well established marketing department, under the control of the
marketing manager. The manager is responsible for marketing and sales of milk and milk
products. The manager is responsible for selling to the target markets, framing the plans
and policies to achieve the marketing goals and manager is also responsible for
forecasting the demands for their products in the market.

4) FINANCE DEPARTMENT
Finance department is very important in an organization. It is not just confined to

raising funds, but extends beyond it to control the over utilization of funds and helps to
monitor the utilization of funds rose.
This function influences the operation of other essential functioning areas of the firm
such as production, marketing and personal.
5) ADMINISTRATION AND PERSONAL DEPARTMENT
The administrative manager heads the administration department. The manager comes
under the general manager. The administrative department of KOMUL holds all the
official work. The administrative manager reports to the general manager, then the
general manager to the managing director (who is the chief of administrative
department).
6) QUALITY CONTROL DEPARTMENT
The quality control department in the plant performs the function of using the best raw
materials and other inputs, measuring and checking for maintaining then assured
standards. KOMUL represent quality, purity and freshness. The quality policy of
KOMUL is to maintain a leading position and also to build high level of customers over
their products by providing high consumer surplus.

3. b. SYSTEM:
A system refers to formal process and procedures are used to manage the
organization. The systems followed in KOMUL are as follows.
INVENTORY CONTROL SYSTEM:

KOMUL maintains FIFO (first in first out) method to control the inventory in the
plant. Here the inventory is maintained correctly as it contains only perishable products.
MILK BILLING SYSTEM:

KOMUL maintains a weekly milk billing system. It has four cycles in a month.
They are from 1-7, 8-15, 16-23 and 24 to end of the month.
COLD STORAGE SYSTEM:

KOMUL has a cold storage machine called silo machine where the milk is stored
at 4degree to 5degree Celsius.
3. c. STRATEGY:
Strategy is a plan or course of action in allocating resources to achieve identified
goals over time.
PRICING STRATEGY:
Price is an important element in the marketing mix. The right price can be
determined through research and by adopting test marketing techniques. A price policy is
thus a standing answer of the firm. If competition is mainly on price basis, then each
company prices its product at the same level as its products at same level of prices of
competition.

DISTRIBUTION STRATEGY:
The Union has their own vehicles for distribution of milk to various places which
is an advantage for the company. The milk distribution vehicles supply milk even during
times of lorry strikes without any delay.
PROCUREMENT STRATEGY:
The Union procures milk from the farmers by giving fair prices to them.
Procurement of milk is twice a day, morning and evening. Milk is collected in dairy
which is set up in every village from their milk is taken to the Union.
3. d. STYLE:
Style is the way in which key managers behave in achieving organizational goals,
that is the management style.
The leadership style followed in KOMUL is PARTICIPATIVE STYLE.
Participative leadership style is the styles where the subordinates are given equal
importance in participation of improvising the organization and also in the betterment of
the organization.
The decision taken by the top management is in coordination with the
subordinates. In the organization, some of the decisions are taken with the mutual
consultation of the top management and the middle level management.
These decisions are through mutual exchange of knowledge and the experience of
the employees. The top management consults their immediate subordinates in case of any
important decisions, which are of strategic in nature.
Implementation:
Participation in the meeting: Employees must take part in any meeting conducted by
the company to discuss company’s future plans. And employees are allowed to express
their opinion, view and ideas.
Recognition programme (Office day): Employees who have suggested the best ideas in
making a decision related to any functional area and every year management select best
employee, they will be awarded by both monetary and non-monetary benefits.

3. e. STAFF:
Staff refers to the number and type of people employed by the organization.
The people in the organization are very dedicated and work towards the improvement of
the organization.
Staff members as on 01 January 2012
Type of staff Number of staff Duties and Responsibilities
Managerial staff 98  Manages the funds
 Handling the difficult
situations.
 Supervising.
 Planning.
 Getting things done.
Technical staff 362  Providing assistance to lower
cadre.
 Manufacturing of products in
time.
 Ensuring quality.
 Training the staff.
Non-technical staff 760  Ensuring quality.
 Examining the work done.
Unskilled 300  Maintaining cleanliness
 Providing assistance to superior
staff.
 Ensuring safety
 Providing information to top
level.
TOTAL 1520

3. f. SKILL:
A skill refers to the fact that employees have the skill needed to carry out the company’s
strategy.
Here the employees are further divided into four categories.
Type of staff Number of employees Skills required
Managerial staff 98  Leadership skills
 Conflict resolution skills
 Decision making
 Communications skills
 Managerial skills
 Learning skills
 Analytical and logical thinking skills
 Problem-solving management
Technical staff 362  Computer knowledge

 Secretarial skill
 Accounting skill
Non-technical 760  Communication
staff  Writing
 Managerial skills
 Learning skills
Unskilled 300  Follow the instructions
 Complete the work which is assigned
in time.

This first category contains the people who are in the top-management level the second
category consists of the supervisor’s office assistants etc. The third category consists of
the employees at the operational level.
The first category consist of the people who are in the decision making process in
KOMUL these people are highly qualified.
The second category is related to office work and fieldwork. These people are also
trained in Computer Applications, secretarial skills, accounting skills etc.
The third level and forth level people consist of the employees who are actually into the
operation these People are also trained into fields like checking the quality of milk
processing packing etc.
STRATEGIES TO COVER SKILL GAPS:

KOMUL co-operative society conducts training program i.e both on the job
training and off the job training which increases the knowledge and skill of the employee
while performing the job.
On-the-job training method

KOMUL provides on the job training according to the need. For this method of training,
they invite experts from various training institutions. This type of training will be
conducted once in three months/six months/a year. On-the-job training method, which is
adopted by KOMUL, is coaching.
Coaching: The trainer is placed under a particular supervision who functions as a
coach in training the individuals according to organization requirements. To give
coaching they invite experts from National Dairy Development Board (NDDB) and
sometimes top managers of the organizations.

Off the job training

Under off the job training method, trainee is separated from the job situation. Here
employees can place his entire concentration to learn rather than spending time in
performing job.
Vestibule training
Under this method, actual work condition is stimulated in a classroom. KOMUL sends its
employees to National Dairy Development Board (NDDB), confederation for Indian
industries (CII) and NDDB Anand for technical training. This type of training is
commonly used for individuals for technical and clerical jobs.
3. g. SHARED VALUES:
The core or fundamental values that are widely share in the organization and serve as
guidelines that are important, these values have great meaning because they focus
attention and provide broader sense of purpose.
The values of the organization are
 Honesty
 Discipline
 Quality
 Hard Work
 Mutual Trust & Belief
 Transparency
 Co-Operation & Team Work

CHAPTER - 4
SWOT ANALYSIS
SWOT analysis is the scan of internal and external environment it is an important

part of the strategic planning process. Environmental factors internal to the firm usually
can be classified as Strengths (S) or Weaknesses (W), and that external to the firm can be
classified as Opportunities (O) or Threats (T). Such an analysis of the strategic
environment is referred to as a SWOT analysis.
The SWOT analysis provides information that is helpful in matching the firm's
resources and capabilities to the competitive environment in which it operate. As such, it
is instrumental in strategy formulation and selection. The following diagram shows how a
SWOT analysis fits into an environmental scan:
Chart 4.1: Swot Analysis

STRENGTHS
 Biggest milk co-operative union in Karnataka

 Established brand of products, providing quality products from a long time.
 KOMUL attends to the complaints of consumers immediately.
 Strong physical infrastructure to support current and future requirements.
 KOMUL pays the highest price for the milk collected from farmers in India and loyalty
among the brand.
 Popular brand known from many years.
 Various new technologies implemented for production of milk.
 Timely delivery.
 The company is having functional structure, this helps in effective management and
control, and there is distribution of work.
WEAKNESS

Less focus on innovative new products and no R&D programmes.

 Slow decision making process and high manpower overheads.
 Rivalry among sister unions.
 Promotions strategies are not effective.
 Inadequate Knowledge about brand positioning strategies.
 Due to Government interference between company management activity there is a delay
in successful strategy
 Lack of flexibility in system.
 Not concentrating on advertisements.
 Lack of personalized service to channel members.
OPPORTUNITIES
 The union is facing challenges from the private entrants, who are mainly thriving on
unfair trade practice. They procure milk at less cost, without bothering the welfare of the
producers and without extending any technical inputs for improving milk production.
They market milk by resorting to unhealthy and unethical practice deceiving the
unsuspecting consumers. The union wants to counter this in a positive manner by trying
to improve its efficiency of operation and market promotion. It wants to become well
trenched in the market as a “market leader”
 They expand their business because of the wide market for the large number of
customers.
 KOMUL Provides employment opportunity for people.
 In joint Co-operation with KMF the union is trying to market its UHT Milk to South
Asian Countries like SriLanka, Singapore etc.

THREATS
 Competition from private co-operative dairies.

 Entry of MNC’S into dairy industry.
 Lack of awareness about the various products of KOMUL among the people.
 Unethical marketing practices of private brands in the market.

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Organization Study of KOMUL, Kolar

History of Dairy Industry

GCEM, Department of Management Studies Page 1

Operation flood, also referred to as “White Revolution” was a gigantic project

GCEM, Department of Management Studies Page 2

The objectives of commanding share of milk market and speed up development of

GCEM, Department of Management Studies Page 3

The market of milk industry in India:

Growth of Dairy Industry in India

GCEM, Department of Management Studies Page 4

Table1.1: Showing the year and estimated milk production.

Year Estimated milk production (million tonnes)

Chart 1.1: Showing the year and estimated milk production.

Estimated Milk Production

50 estimated milk production

GCEM, Department of Management Studies Page 5

Salient Features of Indian Dairy Sector

GCEM, Department of Management Studies Page 6

Latest Developments in Dairy Industry

GCEM, Department of Management Studies Page 7

Evolution of Karnataka Milk Federation

GCEM, Department of Management Studies Page 8

List of Co-operative Milk Producers under Karnataka Milk Federation

Bangalore Dairy, a joint venture of UNICEF, Government of India and

GCEM, Department of Management Studies Page 9

Kolar-Chikkaballapura District Co-operative Milk Producers Union Ltd.,

“Nandini is a brand name for KOMUL, which is operating under KMF”.

GCEM, Department of Management Studies Page 10

2. A. Background and inception of the company.

1987 Bifurcation of the district from an operational area of Bangalore Milk

1987 Establishment of first Women Dairy Co-operative Society in the

GCEM, Department of Management Studies Page 11

1994 Inauguration of full-fledged dairy at Kolar with a processing capacity

1995 Inauguration of Administrative Building in the Dairy campus.

GCEM, Department of Management Studies Page 12

2008- Sep Union started to supply Goodlife milk to Indian army

 TFA-A1 500ml Fino Packing machine – 3600 Ltrs/hour

2. B. Nature of business carried

2. C. Vision, Mission, and Quality Policy

"Wish to grow into a model milk co-operative in the country"

GCEM, Department of Management Studies Page 13

 Kolar-Chikkaballapura will collect 20 Lakh Lts. of Milk/day.

Quality Policy Objective Statement of KOMUL is as follows:

GCEM, Department of Management Studies Page 14

Table 2.d.1: Showing Product Profile of KOMUL.

NANDINI TONED MILK:

Karnataka’s highest selling and most preferred milk.3%

NANDINI HOMOGENISED MILK:

GCEM, Department of Management Studies Page 15

Badam, Pista, Elachi and Banana. Sterilised

Available in 200 ml take – away bottles.

FULL CREAM MILK:

The Fresh Full Cream Milk available in the brand name

Fresh curd that tastes just like traditional home – made

Available in 200g and 500 g pouches

GCEM, Department of Management Studies Page 16

Made from fresh pasteurized cream for delectable

Nandini’ ghee is made from pure butter. It is fresh

This is available in 200ml, 500ml, 1-liter sachets,

Available in 25 g, 50 g sachets and 100 g, 250 g

GCEM, Department of Management Studies Page 17

Fresh butter milk blended with quality spices to