Govt asks Amul for detailed proposal on DMS takeover

Amul wants to sign long-term lease with DMS, feels buying assets worth hundreds of crores is not viable

Gujarat Cooperative Milk Marketing Federation (GCMMF), which owns the Amul brand, has been asked to submit a detailed proposal to the government for taking over operations of loss-making DMS.

Delhi Milk Scheme (DMS), which comes under the Agriculture Ministry, has been running losses for the past several years. The ministry had moved a Cabinet proposal for corporatisation of DMS.

"The Chairman of GCMMF has written to the government proposing to take up the operation of DMS. However, GCMMF has been requested to submit a comprehensive and detailed proposal," Agriculture Minister Sharad Pawar said in a written reply to the Lok Sabha.

The Cooperative has to submit the proposal giving details of proposed valuation and monetization of DMS, pending legal and liabilities, infusion of equity and terms of engagement of employees among others, he added.

Amul is keen on signing a long-term lease arrangement with DMS because it feels buying assets worth hundreds of crores of rupees would not be viable. It also thinks the issues related to employees need to be addressed, too.

Besides Amul, Bihar State Cooperative Milk Producers' Federation (COMFED) that owns Sudha brand had also evinced interest in  acquiring processing and distribution units of the DMS on rental basis.

The DMS has milk production and packaging capacity of 500,000 litres per day, besides a network of 1,298 outlets in the NCR. The government-owned dairy unit has 800 employees, but the milk production is only about 2.5 lakh litres per day.