Amul to expand in Punjab

To increase milk collection centres in the state to 1,000 from 50 at an investment of Rs 150 cr

Gujarat Cooperative Milk Marketing Federation (GCMMF), owner of Amul, plans to expand its presence in Punjab from 50 collection centres to 1,000, at an investment of Rs 150 crore.

As cooperatives pay at least a rupee a litre over private buyers, it is good news for milk producers in the state, the country’s fourth largest producer.

“Amul has branches in many states (apart from Gujarat) like Rajasthan, Uttar Pradesh, West Bengal and Haryana, but Punjab is going to be crucial, due to the scale of commercial dairy farming and the highest yield per cattle,” said R S Sodhi, managing director of GCMMF. “The huge milk surplus here can help us grow faster than the current 20 per cent (annual) rate.”

Nestle is the largest milk processor among private entities in the state, procuring 800,000-900,000 litres a day for its units at Moga (Punjab) and Baddi (Himachal Pradesh).

GlaxoSmithKline Beecham, Wockhardt, Supreme Agro, MilkFed and Rana Food are some of the prominent private milk processors. Punjab’s average daily production is 26.5 million litres a day and the marketable surplus is 15 million litres a day. Of the latter, private entities take about 1.32 million litres. The bulk of this is by Punjab State Cooperative Milk Producers’ Federation; it procures close to 1.2 million litres a day.

Amul’s present share is an insignificant 50,000 litres a day. Under the expansion, GCMMF is to have 1,000 collection centres, with infrastructure to procure at least a million litres a day, said Sodhi.

“In the processing of milk, setting up of a cluster of procurement centres with state-of-the-art equipment is the most crucial component of investment. A processing plant can be hired through a third party. We have such an arrangement at Batala in Punjab and plan to replicate this at Khamano, near Ludhiana, and at Bathinda. The operations at Khamano would commence this month and Bathinda might take some time,” he added.

“The organised sector in Punjab handles only five per cent of milk processing,” said Inderjit Singh, director, dairy development, in the state government. The expansion of brands like Amul, backed by the cooperatives, would enhance competition and help farmers both financially and on quality parameters. The cooperatives provide backward integration in the form of good feed, inputs and the latest knowledge to dairy farmers.”

A purchase tax of 3.5 per cent on milk in Punjab has been a hurdle in expansion of private entities in milk processing. The farm price of milk is Rs 28-29 a litre for cow milk and Rs 34-35 for buffalo milk. Prices have been stable this year.