Amul going organic
Amul, the country’s largest food brand, may extend into organic foods and other new segments in the entire food spectrum, Vipul Chaudhary , chairman of Gujarat Co-operative Milk Marketing Federation, says. Amul, which plans to invest Rs 3,000 crore in five years, has offered to acquire Delhi Milk Scheme, a loss-making government entity distributing milk in the capital. Chaudhary, who replaced Parthi Bhatol as the chairman of GCMMF just four weeks ago, also plans to grow it into a national cooperative, he told ET in an interview. Excerpts:
How will taking over DMS help Amul?
It’s not exactly a takeover of assets. We are keen to either acquire or forge an alliance with DMS on terms mutually agreeable to the government and us. We are making a proposal to the agriculture ministry for some such arrangement. DMS has close to 350 booths at locations that are strategic…in captive markets in the city. That’s attractive to us and we are keen to service these outlets. We’re optimistic that it will happen. We believe it is not a question of if but when.
You are selling milk, butter, cheese, ice cream, curd, shrikhand…. What next?
Amul will always be our umbrella brand, but there can be multiple sub-brands and segments under it. We are brainstorming and identifying segments our brand can be associated with. We are looking at the entire foods spectrum. Organic foods is an option we may be looking at. The way Hindustan UnileverBSE 0.18 % has leveraged its Lux brand to different categories, we can leverage Amul too. In terms of sales, we have set a target of Rs 14,000 crore this fiscal. At the operations level, I want to take the cooperative model a step forward. The way we operate now, we have cooperatives at the state level. But we could have a cooperative at the central level. We could be an umbrella cooperative, managing others.
What is the biggest challenge you face as new chairman of GCMMF?
In the absence of Dr Verghese Kurien (who passed away last weekend), we have lost an advisor. He had been able to keep us insulated from the government. We could be vulnerable now-the government may have a say in managing the cooperatives. He had been able to synchronise cooperatives. So, I am approaching my role with caution. I see this as a major challenge.
How will the new investments pan out?
The plan is to set up five processing plants outside Gujarat and another four in Saurashtra. Some part of the Rs 3,000 crore investment will also be infused in capacity expansion of existing plants. Our targets are to increase our milk procurement capacity to 125 lakh litres a day in 2012-13, to 200 lakh litres by 2020.
Has Amul been impacted by the slowdown in economy?
I haven’t seen sales of Amul slowing down. We are at very affordable prices and most of our products will continue to be so. We have been meeting all our sales targets.