CHAPTER 1

1.1 INTRODUCTION ABOUT THE INDUSTRY

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.

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. During
1997-98, the State had 60 milk processing plants with an aggregate processing capacity of 5.8
million litres per day. In addition to these processing plants, 123 Government and 33 co-
operatives milk chilling centers operate in the State.

Also India today is the lowest cost producer of per litre of milk in the world, at 27 cents,
compared with the U.S' 63 cents, and Japan’s $2.8 dollars. Also to take advantage of this lowest
cost of milk production and increasing production in the country multinational companies are
planning to expand their activities here. Some of these milk producers have already obtained
quality standard certificates from the authorities. This will help them in marketing their products
in foreign countries in processed form.

The urban market for milk products is expected to grow at an accelerated pace of around 33%
per annum to around Rs.43,500 crores by year 2005. This growth is going to come from the
greater emphasis on the processed foods sector and also by increase in the conversion of milk
into milk products. By 2005, the value of Indian dairy produce is expected to be Rs 10,00,000
million. Presently the market is valued at around Rs7,00,000 mn.

Milk Production from 1950 to 2020

1950 – 17 million tonnes

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 1996 – 70.8 million tonnes

1997 – 74.3 million tonnes

(Projected) 2020 – 240 million tonnes

Expected to reach- 220 to 250 mt – 2020

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

World's Major Milk Producers (Million MTs)

2002-03 2003-04 (Approx.)

Country
India 81 84.5
Brazil 75 77
Russia 34 33
Germany 27 27
France 24 24
Pakistan 21 22
USA 71 71
UK 14 14
Ukraine 15 14
Poland 12 12
New Zealand 11 12
Netherlands 11 11
Italy 10 10
Australia 9 10

Research and Development in Dairy Industry:

The research and development need to the dairy industry to develop and survives for long
time with better status. The various institute and milk dairy companies R&D results provide base
for today’s industry growth and development. The research and development of products of
dairy, like yogurt and cheese market research and company reports provides insights into product

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and market trends, analysis opportunities, sales and marketing strategies will help local milk
unions to develop and spread world wide through obtaining this knowledge. Specific on market
share, segmentation, size and growth in the US and global markets are also helps industry to
expand its market worldwide even small union also.

Today, India is 'The Oyster' of the global dairy industry. It offers opportunities galore to
entrepreneurs worldwide, who wish to capitalize on one of the world's largest and fastest
growing markets for milk and milk products. A bagful of 'pearls' awaits the international dairy
processor in India. The Indian dairy industry is rapidly growing, trying to keep pace with the
galloping progress around the world. As he expands his overseas operations to India many
profitable options await him. He may transfer technology, sign joint ventures or use India as a
sourcing center for regional exports. The liberalization of the Indian economy beckons to MNC's
and foreign investors alike.

India’s dairy sector is expected to triple its production in the next 10 years in view of expanding
potential for export to Europe and the West. Moreover with WTO regulations expected to come
into force in coming years all the developed countries which are among big exporters today
would have to withdraw the support and subsidy to their domestic milk products sector. Also
India today is the lowest cost producer of per litre of milk in the world, at 27 cents, compared
with the U.S' 63 cents, and Japan’s $2.8 dollars. Also to take advantage of this lowest cost of
milk production and increasing production in the country multinational companies are planning
to expand their activities here. Some of these milk producers have already obtained quality
standard certificates from the authorities. This will help them in marketing their products in
foreign countries in processed form.

The urban market for milk products is expected to grow at an accelerated pace of around 33%
per annum to around Rs.43,500 crores by year 2005. This growth is going to come from the
greater emphasis on the processed foods sector and also by increase in the conversion of milk
into milk products. By 2005, the value of Indian dairy produce is expected to be Rs 10,00,000
million. Presently the market is valued at around Rs7,00,000mn

3
Background

India with 134mn cows and 125mn buffaloes, has the largest population of cattle in the
world. Total cattle population in the country as on October'00 stood at 313mn. More than fifty
percent of the buffaloes and twenty percent of the cattle in the world are found in India and most
of these are milch cows and milch buffaloes.

Indian dairy sector contributes the large share in agricultural gross domestic products.
Presently there are around 70,000 village dairy cooperatives across the country. The co-operative
societies are federated into 170 district milk producers unions, which is turn has 22-state
cooperative dairy federation. Milk production gives employment to more than 72mn dairy
farmers. In terms of total production, India is the leading producer of milk in the world followed
by USA. The milk production in 1999-00 is estimated at 78mn MT as compared to 74.5mn MT
in the previous year. This production is expected to increase to 81mn MT by 2000-01. Of this
total produce of 78mn cows' milk constitute 36mn MT while rest is from other cattle.

While world milk production declined by 2 per cent in the last three years, according to
FAO estimates, Indian production has increased by 4 per cent. The milk production in India
accounts for more than 13% of the total world output and 57% of total Asia's production. The top
five milk producing nations in the world are India ,USA, Russia, Germany and France.

Although milk production has grown at a fast pace during the last three decades
(courtesy: Operation Flood), milk yield per animal is very low. The main reasons for the low
yield are

Lack of use of scientific practices in milching.

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Inadequate availability of fodder in all seasons.

Unavailability of veterinary health services.

The transition of the Indian milk industry from a situation of net import to that of surplus
has been led by the efforts of National Dairy Development Board's Operation Flood. programme
under the aegis of the former Chairman of the board Dr. Kurien.

Launched in 1970, Operation Flood has led to the modernization of India's dairy sector
and created a strong network for procurement processing and distribution of milk by the co-
operative sector. Per capita availability of milk has increased from 132 gm per day in 1950 to
over 220 gm per day in 1998. The main thrust of Operation Flood was to organize dairy
cooperatives in the milkshed areas of the village, and to link them to the four Metro cities, which
are the main markets for milk. The efforts undertaken by NDDB have not only led to enhanced
production, improvement in methods of processing and development of a strong marketing
network, but have also led to the emergence of dairying as an important source of employment
and income generation in the rural areas. It has also led to an improvement in yields, longer
lactation periods, shorter calving intervals, etc through the use of modern breeding techniques.
Establishment of milk collection centers, and chilling centers has enhanced life of raw milk and
enabled minimization of wastage due to spoilage of milk. Operation Flood has been one of the
world's largest dairy development programme and looking at the success achieved in India by
adopting the co-operative route, a few other countries have also replicated the model of India's
White Revolution.

Fresh Milk

Over 50% of the milk produced in India is buffalo milk, and 45% is cow milk. The buffalo milk
contribution to total milk produce is expected to be 54% in 2000. Buffalo milk has 3.6% protein,
7.4% fat, 5.5% milk sugar, 0.8% ash and 82.7% water whereas cow milk has 3.5% protein, 3.7%
fat, 4.9% milk sugar, 0.7% ash and 87% water. While presently (for the year 2000) the price of
Buffalo milk is ruling at $261-313 per MT that of cow is ruling at $170-267 per MT. Fresh

5
pasteurized milk is available in packaged form. However, a large part of milk consumed in India
is not pasteurized, and is sold in loose form by vendors. Sterilized milk is scarcely available in
India.

Packaged milk can be divided according to fat content as follows,

Whole (full cream) milk - 6% fat

Standardized (toned) milk - 4.5% fat

Doubled toned (low fat) milk - 3% fat

Another category of milk, which has a small market is flavoured milk.

The Indian Market - A Pyramid

Consumer Habits And Practices

Milk has been an integral part of Indian food for centuries. The per capita availability of milk in
India has grown from 172 gm per person per day in 1972 to 182gm in 1992 and 203 gm in 1998-
99.This is expected to increase to 212gms for 1999-00. However a large part of the population
cannot afford milk. At this per capita consumption it is below the world average of 285 gm and
even less than 220 gm recommended by the Nutritional Advisory Committee of the Indian
Council of Medical Research.

There are regional disparities in production and consumption also. The per capita availability in
the north is 278 gm, west 174 gm, south 148 gm and in the east only 93 gm per person per day.
This disparity is due to concentration of milk production in some pockets and high cost of
transportation. Also the output of milk in cereal growing areas is much higher than elsewhere
which can be attributed to abundant availability of fodder, crop residues, etc which have a high
food value for milch animals.

In India about 46 per cent of the total milk produced is consumed in liquid form and 47
per cent is converted into traditional products like cottage butter, ghee, paneer, khoya, curd,
malai, etc. Only 7 per cent of the milk goes into the production of western products like milk
powders, processed butter and processed cheese. The remaining 54% is utilized for conversion to

6
milk products. Among the milk products manufactured by the organized sector some of the
prominent ones are ghee, butter, cheese, ice creams, milk powders, malted milk food, condensed
milk infants foods etc. Of these ghee alone accounts for 85%.

It is estimated that around 20% of the total milk produced in the country is consumed at
producer-household level and remaining is marketed through various cooperatives, private
dairies and vendors. Also of the total produce more than 50% is procured by cooperatives and
other private dairies.

While for cooperatives of the total milk procured 60% is consumed in fluid form and rest
is used for manufacturing processed value added dairy products; for private dairies only 45% is
marketed in fluid form and rest is processed into value added dairy products like ghee, makhan
etc.

Still, several consumers in urban areas prefer to buy loose milk from vendors due to the
strong perception that loose milk is fresh. Also, the current level of processing and packaging
capacity limits the availability of packaged milk.

The preferred dairy animal in India is buffalo unlike the majority of the world market,
which is dominated by cow milk. As high as 98% of milk is produced in rural India, which caters
to 72% of the total population, whereas the urban sector with 28% population consumes 56% of
total milk produced. Even in urban India, as high as 83% of the consumed milk comes from the
unorganized traditional sector.

Presently only 12% of the milk market is represented by packaged and branded
pasteurized milk, valued at about Rs. 8,000 crores. Quality of milk sold by unorganized sector
however is inconsistent and so is the price across the season in local areas. Also these vendors
add water and caustic soda, which makes the milk unhygienic.

India's dairy market is multi-layered. It's shaped like a pyramid with the base made up of
a vast market for low-cost milk. The bulk of the demand for milk is among the poor in urban
areas whose individual requirement is small, maybe a glassful for use as whitener for their tea
and coffee. Nevertheless, it adds up to a sizable volume - millions of litres per day. In the major

7
cities lies an immense growth potential for the modern sector. Presently, barely 778 out of 3,700
cities and towns are served by its milk distribution network, dispensing hygienically packed
wholesome, quality pasteurized milk. According to one estimate, the packed milk segment would
double in the next five years, giving both strength and volume to the modern sector. The narrow
tip at the top is a small but affluent market for western type milk products.

Growing Volumes

The effective milk market is largely confined to urban areas, inhabited by over 25 per
cent of the country's population. An estimated 50 per cent of the total milk produced is consumed
here. By the end of the twentieth century, the urban population is expected to increase by more
than 100 million to touch 364 million in 2000 a growth of about 40 per cent. The expected rise in
urban population would be a boon to Indian dairying. Presently, the organized sector both
cooperative and private and the traditional sector cater to this market.

The consumer access has become easier with the information revolution. The number of
households with TV has increased from 23 million in 1989 to 45 million in 1995. About 34 per
cent of these households in urban India have access to satellite television channel.

Potential for further growth

Of the three A's of marketing - availability, acceptability and affordability, Indian

dairying is already endowed with the first two. People in India love to drink milk. Hence no
efforts are needed to make it acceptable. Its availability is not a limitation either, because of the
ample scope for increasing milk production, given the prevailing low yields from dairy cattle. It
leaves the third vital marketing factor affordability. How to make milk affordable for the large
majority with limited purchasing power? That is essence of the challenge. One practical way is to
pack milk in small quantities of 250 ml or less in polythene sachets. Already, the glass bottle for
retailing milk has given way to single-use sachets which are more economical. Another viable
alternative is to sell small quantities of milk powder in mini-sachets, adequate for two cups of tea
or coffee.

Marketing Strategy for 2000 AD

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 Two key elements of marketing strategy for 2000 AD are: Focus on strong brands and,
product mix expansion to include UHT milk, cheese, ice creams and spreads. The changing
marketing trends will see the shift from generic products to the packaged quasi, regular and
premium brands. The national brands will gradually edge out the regional brands or reduce their
presence. The brand image can do wonders to a product's marketing as is evident from the words
of Perfume Princess Coco Channel: In the factory, we pack perfume; in the market, we sell hope!

Emerging Dairy Markets

Food service institutional market: It is growing at double the rate of consumer market

Defense market: An important growing market for quality products at reasonable prices

Ingredients market: A boom is forecast in the market of dairy products used as raw material in
pharmaceutical and allied industries

Parlour market: The increasing away-from-home consumption trend opens new vistas for ready-
to-serve dairy products which would ride piggyback on the fast food revolution sweeping the
urban India.

India, with her sizable dairy industry growing rapidly and on the path of modernization, would
have a place in the sun of prosperity for many decades to come. The one index to the statement is
the fact that the projected total milk output over the next 15 years (1995-2010) would exceed
1457.6 million tonnes which is twice the total production of the past 15 years!

Penetration of milk products

Western table spreads such as butter, margarine and jams are not very popular in India.
All India penetration of butter/ margarine is only 4%. This is also largely represented by urban
areas, where penetration is higher at 9%. In rural areas, butter/ margarine have penetrated in
2.1% of households only. The use of these products in the large metros is higher, with
penetration at 15%.

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 Penetration of cheese is almost nil in rural areas and negligible in the urban areas. Per
capita consumption even among the cheese-consuming households is a poor 2.4kg pa as
compared to over 20kg in USA. The lower penetration is due to peculiar food habits, relatively
expensive products and also non-availability in many parts of the country. Butter, margarine and
cheese products are mainly manufactured by organized sector.

Similarly, penetration of ghee is highest in medium sized towns at 37.2% compared to

31.7% in all urban areas and 21.3% in all rural areas. The all India penetration of ghee is 24.1%.
In relative terms, penetration of ghee is significantly higher in North and West, which are milk
surplus regions. North accounts for 57% of ghee consumption and West for 23%, South & East
together account for the balance 20%. A large part of ghee is made at home and by small/ cottage
industry from milk. The relative share of branded products in this category is very low at around
1-2%.

Milk powder and condensed milk have not been able to garner any significant consumer
acceptance in India as indicated by a very low 4.7% penetration. The penetration is higher at
8.1% in urban areas and lower at 3.5% in rural areas. Within urban areas, it is relatively higher in
medium sized towns at 8.5% compared to 7.7% in a large metros.

Market Size And Growth

Market size for milk (sold in loose/ packaged form) is estimated to be 36mn MT valued
at Rs470bn. The market is currently growing at round 4% pa in volume terms. The milk surplus
states in India are Uttar Pradesh, Punjab, Haryana, Rajasthan, Gujarat, Maharashtra, Andhra
Pradesh, Karnataka and Tamil Nadu. The manufacturing of milk products is concentrated in
these milk surplus States. The top 6 states viz. Uttar Pradesh, Punjab, Madhya Pradesh,
Rajasthan, Tamil Nadu and Gujarat together account for 58% of national production.

Milk production grew by a mere 1% pa between 1947 and 1970. Since the early 70's, under
Operation Flood, production growth increased significantly averaging over 5% pa.

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About 75% of milk is consumed at the household level which is not a part of commercial dairy
industry. Loose milk has a larger market in India as it is perceived to be fresh by most
consumers. In reality however, it poses a higher risk of adulteration and contamination.

The production of milk products, i.e. milk products including infant milk food, malted food,
condensed milk & cheese stood at 3.07 lakh MT in 1999. Production of milk powder including
infant milk-food has risen to 2.25 lakh MT in 1999, whereas that of malted food is at 65000 MT.
Cheese and condensed milk production stands at 5000 and 11000 MT respectively in the same
year.

(Source: Annual Report 1999-2000, DFPI)

Major Players

The packaged milk segment is dominated by the dairy cooperatives. Gujarat Co-operative
Milk Marketing Federation (GCMMF) is the largest player. All other local dairy cooperatives
have their local brands (For e.g. Gokul, Warana in Maharashtra, Saras in Rajasthan, Verka in
Punjab, Vijaya in Andhra Pradesh, Aavin in Tamil Nadu, etc). Other private players include J K
Dairy, Heritage Foods, Indiana Dairy, Dairy Specialties, etc. Amrut Industries, once a leading
player in the sector has turned bankrupt and is facing liquidation.

Packaging Technology

Milk was initially sold door-to-door by the local milkman. When the dairy co-operatives
initially started marketing branded milk, it was sold in glass bottles sealed with foil. Over the
years, several developments in packaging media have taken place. In the early 80's, plastic
pouches replaced the bottles. Plastic pouches made transportation and storage very convenient,
besides reducing costs. Milk packed in plastic pouches/bottles have a shelf life of just 1-2 days ,
that too only if refrigerated. In 1996, Tetra Packs were introduced in India. Tetra Packs are
aseptic laminate packs made of aluminum, paper, board and plastic. Milk stored in tetra packs

11
and treated under Ultra High Temperature (UHT) technique can be stored for four months
without refrigeration. Most of the dairy co-operatives in Andhra Pradesh, Tamil Nadu, Punjab
and Rajasthan sell milk in tetra packs. However tetra packed milk is costlier by Rs5-7 compared
to plastic pouches. In 1999-00 Nestle launched its UHT milk. Amul too re-launched its Amul
Taaza brand of UHT milk. The UHT milk market is expected to grow at a rate of more than 10-
12% in coming years.

Export Potential

India has the potential to become one of the leading players in milk and milk product
exports. Locational advantage : India is located amidst major milk deficit countries in Asia and
Africa. Major importers of milk and milk products are Bangladesh, China, Hong Kong,
Singapore, Thailand, Malaysia, Philippines, Japan, UAE, Oman and other gulf countries, all
located close to India.

Low Cost Of Production : Milk production is scale insensitive and labour intensive. Due to low
labour cost, cost of production of milk is significantly lower in India.

Concerns in export competitiveness are

Quality : Significant investment has to be made in milk procurement, equipments,

chilling and refrigeration facilities. Also, training has to be imparted to improve the quality to
bring it up to international standards.

Productivity : To have an exportable surplus in the long-term and also to maintain cost
competitiveness, it is imperative to improve productivity of Indian cattle.

There is a vast market for the export of traditional milk products such as ghee, paneer,
shrikhand, rasgolas and other ethnic sweets to the large number of Indians scattered all over the
world

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India's exports of milk products

What does the Indian Dairy Industry has to Offer to Foreign Investors?

India is a land of opportunity for investors looking for new and expanding markets. Dairy food
processing holds immense potential for high returns. Growth prospects in the dairy food sector
are termed healthy, according to various studies on the subject.

The basic infrastructural elements for a successful enterprise are in place.

Key elements of free market system

raw material (milk) availability

an established infrastructure of technology

supporting manpower

An entrepreneur's participation is likely to provide attractive returns on the investment in a fast

growing market such as India, along with an export potential in the Middle East, Singapore,
Malaysia, Indonesia, Korea, Thailand, Hong Kong and other countries in the region.

Among several areas of potential participation by NRIs and foreign investors, the following list
outlines a few promising opportunities:

Biotechnology:

Dairy cattle breeding of the finest buffaloes and hybrid cows

Milk yield increase with recombinant somatotropin

Recombinant chymosin, acceptable to vegetarian consumers

Dairy cultures, probiotics, dairy biologics, enzymes and coloring materials for food processing

Fermentation derived foods and industrial products alcohol, citric acid, lysine, flavor
preparations, etc.

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Biopreservative ingredients based on dairy fermentation, viz., Nisin, pediococcin, acidophilin,
bulgarican contained in dairy powders.

Dairy/food processing equipment:

Potential exists for manufacturing and marketing of cost competitive food processing
machinery of world-class quality.

Food packaging equipment:

Opportunities lie in the manufacturing of both machinery and packaging materials that
help develop brand loyalty and a clear edge in the marketing of dairy foods.

Distribution channels:

For refrigerated and frozen food distribution, a world class cold chain would help in
providing quality assurance to the consumers around the region.

Retailing:

There is scope for standardizing and upgrading food retailing in major metropolitan cities
to meet the shopping needs of a vast middle class. This area includes grocery stores of European
and North American quality, warehousing and distribution.

Product development:

Dairy foods can be manufactured and packaged for export to countries where Indian food
enjoys basic acceptance. The manufacturing may be carried out in contract plants in India. An
option to market the products in collaboration with local establishments or entrepreneurs can also
be explored. Products exhibiting potential include typical indigenous dairy foods either not
available in foreign countries or products whose authenticity may be questionable. Gulabjamuns,
Burfi, Peda, Rasagollas, and a host of other Indian sweets have good business prospects.

14
Products typically foreign to India but indigenous to other countries could also be developed for
export. Such products can be manufactured in retail package sizes and could be produced from
milk of sheep, goats and camel. Certain products are characteristically produced from milk of a
particular species. For example, Feta cheese is used in significant tonnage, in Iran. Sheep milk is
traditionally used for authentic Feta cheese. Accordingly, India's goat and sheep herds can be
utilized for the manufacture of such authentic products.

Ingredient manufacture:

Export markets for commodities like dry milk, condensed milk, ghee and certain cheese
varieties are well established. These items are utilized as ingredients in foreign countries. These
markets can be expanded to include value-added ingredients like aseptically packaged cheese
sauce and dehydrated cheese powders.

Cheese sauce: Canned cheese sauce is made from real cheese to which milk, whey, modified
food starch, vegetable oil, colorings and spices may be added. Cheese sauce is useful in kitchens
for the preparation of omelet, sandwiches, entrees, and soups. In addition, cheese sauce is used as
a topping on potatoes and vegetables and may be incorporated in pasta dishes.

Cheese powders: Cheese powders are formulated for dusting or smearing of popular snacks like
potato chips, crackers, etc. They impart flavor and may be blended with spices.

With the globalization of food items, an opportunity should open up for food service and
institutional markets.

Technology-driven manufacturing units:

These plants would fulfil an essential need by providing a centralized and specialized facility for
hire by the units which cannot justify capital investment but do need such services. Potential
areas for state-of-the-art contract-pack units may conceivably specialize in cheese slicing, or
dicing line, cheese packaging, butter printing, and aseptic packaged fluid products.

Training centers for continuing education:

15
NRIs could set up technology transfer and updating centers for conducting seminars and
workshops - catering to the needs of workers at all levels of the dairy industry. Here technical,
marketing and management topics can be offered to ensure that the manpower continues to
acquire the latest know-how of their respective fields.

The entrepreneurs need powerful tools to implement their plans. Appropriate investment and
involvement by NRIs can serve as a catalyst for India's dairy food industry leading to exploration
of business potential in domestic and export trade. Risk factors must be identified and managed
by in-depth study of chosen areas so that chances of rewards are maximized under the current
liberalization climate.

Indian (traditional) Milk Products

There are a large variety of traditional Indian milk products such as

Makkhan - unsalted butter.

Ghee - butter oil prepared by heat clarification, for longer shelf life.

Kheer - a sweet mix of boiled milk, sugar and rice.

Basundi - milk and sugar boiled down till it thickens.

Rabri - sweetened cream.

Dahi - a type of curd.

Lassi - curd mixed with water and sugar/ salt.

Channa/Paneer - milk mixed with lactic acid to coagulate.

Khoa - evaporated milk, used as a base to produce sweet meats.

The market for indigenous based milk food products is difficult to estimate as most of these
products are manufactured at home or in small cottage industries catering to local areas.

16
 Consumers while purchasing dairy products look for freshness, quality, taste and texture,
variety and convenience. Products like Dahi and sweets like Kheer, Basundi, Rabri are
perishable products with a shelf life of less than a day. These products are therefore
manufactured and sold by local milk and sweet shops. There are several such small shops within
the vicinity of residential areas. Consumer loyalty is built by consistent quality, taste and
freshness. There are several sweetmeat shops, which have built a strong brand franchise, and
have several branches located in various parts of a city.

Branding Of Traditional Milk Products

Among the traditional milk products, ghee is the only product, which is currently
marketed, in branded form. main ghee brands are Sagar, MilkMan (Britannia), Amul (GCMMF),
Aarey (Mafco Ltd), Vijaya (AP Dairy Development Cooperative Federation), Verka ( Punjab
Dairy Cooperative), Everyday (Nestle) and Farm Fresh (Wockhardt).

With increasing urbanization and changing consumer preferences, there is possibility of large
scale manufacture of indigenous milk products also. The equipments in milk manufacturing have
versatility and can be adapted for several products. For instance, equipments used to manufacture
yogurt also can be adapted for large scale production of Indian curd products (dahi and lassi).
Significant research work has been done on dairy equipments under the aegis of NDDB.

Mafco Limited sells Lassi under the Aarey brand and flavoured milk under the Energee
franchise (in the Western region, mainly in Mumbai). Britannia has launched flavored milk in
various flavors in tetra packs.

GCMMF has also made a beginning in branding of other traditional milk products with the
launch of packaged Paneer under the Amul brand. It has also created a new umbrella brand
"Amul Mithaee", for a range of ethnic Indian sweets that are proposed to be launched The first
new product Amul Mithaee Gulabjamun has already been launched in major Indian markets.

17
Western Milk Products

Western milk products such as butter, cheese, yogurt have gained popularity in the Indian
market only during the last few years. However consumption has been expanding with increasing
urbanization.

Butter

Most Indians prefer to use home made white butter (makkhan) for reasons of taste and
affordability. Most of the branded butter is sold in the towns and cities. The major brands are
Amul, Vijaya, Sagar, Nandini and Aarey. Amul is the leading national brand while the other
players have greater shares in their local markets. The latest entrant in the butter market has been
Britannia. Britannia has the advantages of a wide distribution reach and a strong brand recall.
Priced at par with the Amul brand, it is expected to give stiff competition to the existing players.
In 1999-00 the butter production is estimated at 4 lakh MT of this only 45K MT is in the white
form used for table purposes rest all is in the yellow form.

Cheese

The present market for cheese in India is estimated at about 9,000 tonnes and is growing
at the rate of about 15% per annum. Cheese is mainly consumed in the urban areas. The four
metro cities alone account for more than 50% of consumption . Mumbai is the largest market
(accounting for 30% of cheese sold in the country), followed by Delhi (20%). Calcutta (7%) and
Chennai (6%). Mumbai has a larger number of domestic consumers, compared to Delhi where
the bulk institutional segment (mainly hotels) is larger.

Demand for various types of cheese in the Indian market

Type of cheese % of total consumption

Processed
50
Cheese spread

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30
Mozzarella
10
Flavoured/Spiced
5
Others
5
The major players are Amul, Britannia, and Dabon International dominating the market.
Other major brands were Vijaya, Verka and Nandini (all brands of various regional dairy
cooperatives) and Vadilal. The heavy advertising and promotions being undertaken by these new
entrants is expected to lead to strong 20% growth in the segment. Amul has also become more
aggressive with launch of new variants such as Mozzarella cheese (used in Pizza), cheese
powder, etc.

The entry of new players and increased marketing activity is expected to expand the market. All
the major players are expanding their capacities.

1.2 COMPANY PROFILE

E.I.D-Parry (India) Limited is part of the Tamil Nadu-based INR 269 Billion Murugappa
Group and the largest sugar producer in South India and is one of the top five sugar producers in
the country.

E.I.D-Parry, a dominant player in sugar with interests in promising areas of bio -

pesticides and nutraceuticals, is one of the oldest companies in India. It retains a significant
presence in the farm inputs business through its subsidiary Coromandel International Ltd. E.I.D-
Parry has another subsidiary - Silkroad Sugar Private Limited , which has set up sugar refinery at
Kakinada, Andhra Pradesh.

19
Sugar

E.I.D-Parry along with its subsidiaries has nine sugar plants spread across South India of
which four are in Tamil Nadu, one in Puducherry, three in Karnataka and one in Andhra Pradesh.
The Company has sugarcane crushing capacity of 34, 750 TCD and coegeration capacity of 146
MW across its sugar mills. The integrated sugar units have been designed to optimize process
efficienecies, increase sugarcane recovery ratio and increase energy efficiency through reduced
steam and power consumption.

E.I.D-Parry continues to be one of the low cost producers of international quality sugar,
through its innovative process and farmer centric practices.

E.I.D-Parry is the only sugar manufacturer in India with a dedicated R&D wing and
breeding programme. E.I.D-Parry continues to produce new, high yielding cane varieties which
are sucrose-rich and pest-resistant, thereby increasing yield and returns for the farmer.

E.I.D-Parry also promotes sustainable agricultural practices by helping farmers to start

trichogramma centers across villages which breed bio-control agents to contain sugarcane pests.
This green, pest control initiative, not only contributes to rural prosperity, but also ensures that
the sugarcane supplied to its manufacturing plants are free from chemical pesticides.

Cane R&D

E.I.D-Parry pioneered sugarcane research and probably runs the only private R&D centre
for sugarcane and tissue culture to develop new and improved cane varieties. It has also been
aggressively promoting Eco-friendly pest management systems. Parry's varieties have
comparatively higher average sucrose yield as compared to other benchmark varieties. The R&D
division is focuses on developing sugarcane varieties having high yields, better sucrose content
and greater pest resistance.

E.I.D-Parry has enhanced the usage of biological pesticides in cane fields

Vision

"Enrich life by creating value from agriculture"

20
We at E.I.D-Parry, have a long history in the agricultural sector. We are one of the very few
companies in India, and probably worldwide, who can boast of a 170 year history. We are a
company with a long and very rich heritage that has, at the same time, been at the forefront of
technology and innovation in the agriculture sector. While we have been in the sugar business for
around two centuries, we are also into the emerging agri-related products like nutraceuticals and
bio-pesticides. We are constantly striving for more efficient and effective ways to create value
from agriculture to enrich lives.

Mission 2011- To crush 50 lakh tons of cane in a year.

We at E.I.D-Parry, have always believed in pushing boundaries. We crushed around 30 lakh tons
of cane in FY 2010 - 11 and are now pushing ourselves to achieve our ambitious target of
crushing 50 lakh tons of cane. This is a goal that we are striving to reach with missionary zeal.
Our entire operations are being re-organised and focused around achieving this target - right
from cane planting, to factory operations and marketing.

Mr. A. Vellayan, Chairman

Mr. A. Vellayan (62) is a Non-Executive Promoter Director. He holds a diploma in Industrial

Administration from Aston University, Birmingham, U.K and Masters in Business Studies from
the University of Warwick Business School, U.K. He joined the E.I.D-Parry Board in the year
1999. He has 30 years of industrial experience.

Mr. V. Ravichandran, Vice Chairman

21
Mr. V. Ravichandran (59) is a Non-Independent Non-Executive Director has over three decades
of experience and has served in the Murugappa Group for past 29 years. He holds a Bachelor's
degree in Engineering and a Post Graduate Diploma in Management from the prestigious Indian
Institute of Management (Ahmedabad). He is also a qualified Cost Accountant and Company
Secretary. 
He began his career at the Murugappa Group as Executive Assistant to Chairman. He has also
worked in the Corporate Division of V.K.A Milk and in its businesses such as Confectionery. In
1994, he assumed a general management role as GM-Pesticides. In 2003, with the merger of
FIND with Coromandel International Ltd (CIL), he moved to CIL as Vice President - Farm
Inputs Division (FIND). He was promoted to Whole-time Director in 2004 and he became the
Managing Director of Coromandel International Limited in 2006. He is now a Director in the
Murugappa Corporate Board and plays the role of Lead Director for the Fertilizer and Sugar
business. He joined E.I.D.- Parry Board in the year 2009. Additionally, he also serves the board
of Coromandel International Limited (CIL).

Mr. V. Ramesh, Managing Director

Mr. V Ramesh (58), is an Executive, Non-Independent Director and has been associated with
Murugappa Group since 2006 as Sr. VP - Finance (CFO) of Carborundum Universal Limited and
with the Company since 2014. He started his career as a Management Accountant with Mukand
Iron and Steel. After three years, he moved to Hindustan Unilever Ltd in 1982, a company he
served for two decades mainly in the Finance and Commercial functions. In the intervening
period he worked in TVS Finance & Services Limited. He is a B Com and an ICWA. He
completed his post graduation in Management (PGDM) from IIM-Bangalore. He joined the
E.I.D.-Parry Board in the year 2014.

22
Mr. S. Suresh, Deputy Managing Director

Mr.S. Suresh (50) is an Executive, Non- Independent Director and has been associated with
Murugappa Group since August 2014 as Executive Vice President and Head of Parry Sugars
Refinery India Private Limited.

He is a Mechanical Engineering Graduate with a Post Graduate Diploma in Industrial

Engineering and an MBA with specialization in Finance. He has 26 years of experience across
different industries in the areas of Sales & Marketing, Manufacturing, Industrial Relations,
Supply Chain, Management of Special Projects, Industrial Engineering and business
turnarounds.

Mr. Anand Narain Bhatia, Director

Mr. Anand Narain Bhatia (68) is an Independent Director. He was educated at Delhi University
and Cambridge where he graduated with a degree in Economics. He joined Hindustan Lever
(HLL) in 1970 as a Management Trainee. In 1984, he moved to Lipton India Limited (LIL) as
Vice President of Foods, and was appointed as Director of Foods and Beverages on the Board of
LIL in 1990. In 1992, he assumed charge as Managing Director of Lipton. He became Chairman
of Unilever Caribbean and successfully established Unilever business in the Caribbean. He
joined the E.I.D-Parry Board in the year 2004. He has 40 years of industrial experience. He is
also the Chairman of the Stakeholders Relationship Committee.

23
Mr.V. Manickam, Director

Mr. V. Manickam (63) is an Independent Director. He is a Chartered Accountant. He has put in

more than 29 years of service in Life Insurance Corporation of India in various notable
capacities. He retired as Managing Director and CEO of LIC Pension Fund. He is now the
Secretary General of Life Insurance Council. He joined E.I.D-Parry Board in the year 2013. He
is the Chairman of Corporate Social Responsibility Committee of the Board.
He is now the Secretary General of Life Insurance Council

Mr. M.B.N. Rao, Director

Mr. M.B.N. Rao (67) is an Independent Director. He is the former Chairman and Managing
Director of Canara Bank. He was also Chairman and Managing Director of Indian Bank during
the period from 2003 to 2005. He is a Graduate in Agriculture and an Associate of the Chartered
Institute of Bankers and a Fellow of the Indian Institute of Banking & Finance. He was a Banker
with over 38 years of hands on experience, with over nine years of overseas experience and as
the Board level appointee for about eight years and at Chairman Level for about five years. He
joined the E.I.D-Parry Board in the year 2009. He is the Chairman of the Audit Committee,
Nomination & Remuneration Committee and Risk Management Committee of the Board.

24
Dr. Rca Godbole, Director

Dr. Rca Godbole (46) is a trained plant molecular biologist with a PHD from Freiburg, Germany
and a post graduate in Biochemistry (MSc.) from University of Bombay. In December 1998, she
was awarded Dr rer nat from Albert Ludwig Universitat of Freiburg, Germany for her Doctoral
work in the Hertel Lab. 
She worked for Syngenta Seeds (India) Limited from January, 1999 till March, 2002 and was
involved in various research aspects of the seed business. 
She is the co- founder of a Biotech firm SaliCrop in Israel, commercializing technology which
enables crops to cope with abiotic stresses better. She has over seven years of rich experience in
Research. She has won many scholarships for her projects over the years. She has also authored
many scientific publications. She also had done her participation and poster presentation in
various Symposia and Congresses, among others the Gordon Conference, Gravitational effects
on the living systems during 1996 in Boston. She Joined E.I.D. – Parry Board during November,
2015.

Mr. V.Suri, Sr. Vice President & CFO

Mr. V. Suri has been associated with Murugappa Group since 2007 and with the Company since
mid 2013. He had earlier worked with Parry from being a Management Trainee for 7 years. In
the intervening period he worked in Hitachi Home & Life Solutions and TVS Finance &
Services Limited.

25
At E.I.D-Parry, Suri heads the Finance function. He is an FCA & Graduate CWA. He has also
done the Business Leadership Program from IIMC. He has over 27 years of rich experience in
Finance and Business Management, out of which 18 years he worked as CFO or equivalent
position

Mr. S.K.Sathyavrdhan, Sr. Vice President - Human Resources

Mr. S.K. Sathyavrdhan is the Vice President Human Resources for E.I.D-Parry. He is a Post
Graduate in Commerce, has a PGDPM&IR and a PGDBM. He is a certified Lead Assessor in
Quality systems and is also a certified Executive Coach. He has a rich experience of over 22
years and is with E.I.D-Parry from 2000. He is responsible for all aspects of Human Resources
function of V.K.A Milk.

Ms. G. Jalaja, Sr. Vice President - Management Audit & Company Secretary

Ms. G. Jalaja, a Chartered Accountant with FCS has been associated with Murugappa Group
since 1983. She has over 30 years of rich experience in Secretarial, Corporate Finance, Legal and
Treasury.

Jalaja joined Parry & Company Ltd in the year 1983 as Assistant Manager and was the Company
Secretary of the Company during the year 1992 to 2010. She re-joined as Company Secretary of
the Company in the year 2013. In the intervening period she was CFO of Parrys Sugar Industries
Limited.

Mr. T. Rajasekhar, Sr. Vice President & Head - Manufacturing

26
A honours graduate in Engineering with 29 years of experience in managing Thermal power
plants, Desalination plants, Chemical & Petrochemical plants in both public and Private sectors.
Prior to joining V.K.A Milk (I) Ltd., he was with M/s Asian Paints Ltd., managing their
chemicals division. Has extensive exposure to Energy conservation and Environment
management systems.

Mr. Shankar TM, Vice President (Commercials & Corporate Affairs)

Shankar TM is the Vice President, Commercial & Corporate Affairs. He joined the company
during April 2012. He is a Commerce Graduate and a Chartered Accountant. He started his
career in Bannari Amman Sugars Limited and was working in Muscat for Seven years in
Insurance company. During 1995 he again joined in Bannari Amman Group in their Chennai
Office looking mainly their Export Activities for 17 years. He brings his lot of exposure in
Export Activities and his Commercial Experience.

Mr. L.K. Baburaj, Sr. Associate Vice President & Head - Bio-Products

He is a Post Graduate in Agriculture with specialisation in Agricultural Extension & Rural

Sociology. He has 22 years of experience in Sales & Marketing. After a brief stint as Junior
Scientist – Transfer technology in ICRI, he started his sales and marketing career with Bayer
(India) Limited. Prior to joining V.K.A Milk in 2005, he served as Business Leader & Marketing
Specialist in Dow Agro Sciences Limited.
27
Mr. Muthu Murugappan, Business Head - Nutraceuticals

Muthu Murugappan has completed his Masters in Business Administration from The London
Business School (LBS). He has over 11 years of experience. He started his career with Cavin
Kare Pvt Ltd in 2004 as an Area Sales Manager in the Western and Southern regions and has
worked in the states of Maharashtra, Chattisgarh, Andhra Pradesh and Madhya Pradesh. He
subsequently moved into a Brand Management role and served as Product Manager for the
International Business Unit covering GCC and ASEAN regions.

Muthu joined the Murugappa Group in 2007, as an Exports Manager at Carborundum Universal
Ltd (CUMI) – Abrasives. In 2010 he moved to head The Wear Ceramics business of CUMI –
Industrial Ceramics. In 2015 , Muthu joined V.K.A Milk as The Head of the Nutraceuticals
business, post a 2 year sabbatical where he pursued his higher studies and got himself an MBA.

VISION

To excel as trusted, socially responsible and customer driven organization providing

maximum value to all stake holders.

MISSION

To manufacture quality products at competitive cost through technology and team work.

VALUES

 Ethical practices

 Customer focus

 Commitment to society, Safety and environment

28
 Professional and transport management

 Empowerment and accountability

 Adaptability to “change”

 Innovation and creativity

 Emphasis on human resource development, cost reduction, productivity enhancement and

resource conservation

E.I.D-Parry has always been a pioneer- be it in developing and introducing quality

products in the market or conforming to environmental standards even before they
become mandatory. Given below are some of the prestigious awards and achievements
won by the company:

Sugar Division:

Nellikuppam has been recognized as a zero-waste plant with a strict adherence to quality
and high productivity. They have been the recipients of several awards and certifications
in the course of time. Some of the most significant achievements by E.I.D-Parry are:

ISO 9001 certification @ Pondy, Nellikuppam, Pugalur, Pudukottai, Haliyal and Sankili
units

ISO 14000 certification @ Nellikuppam, Pugalur, Pudukottai and Sankili units

ISO 22000 certification @ Nellikuppam and Haliyal units

OHSAS 18001 certification @ Pudukottai and Sankili units

Nutraceuticals:

E.I.D-Parry is among the very few nutraceutical manufacturers to haveE.I.D-Parry has

always been a pioneer- be it in developing and introducing quality products in the market
or conforming to environmental standards even before they become mandatory. Given
below are some of the prestigious awards and achievements won by the company:

29
Sugar Division:

Nellikuppam has been recognized as a zero-waste plant with a strict adherence to quality
and high productivity. They have been the recipients of several awards and certifications
in the course of time. Some of the most significant achievements by E.I.D-Parry are:

ISO 9001 certification @ Pondy, Nellikuppam, Pugalur, Pudukottai, Haliyal and Sankili
units

ISO 14000 certification @ Nellikuppam, Pugalur, Pudukottai and Sankili units

ISO 22000 certification @ Nellikuppam and Haliyal units

OHSAS 18001 certification @ Pudukottai and Sankili units

Nutraceuticals:

E.I.D-Parry is among the very few nutraceutical manufacturers to have the highest
number of international certifications. Parry's Nutraceutical is the only Spirulina producer
in the world to get the prestigious US Pharmacopeia certification, for consistent product
quality and the first and only one in India to get USP certification in the entire dietary
supplement / herbal product category.

SISSTA Awards

The South Indian Sugar and Sugarcane Technologist's Association (SISSTA)

presents awards during its annual conventions to promote, recognize and acknowledge
best scientific development and technical performance in the field and factory in South
India. The awards have been instituted in memory of the renowned sugar technologist
Late Shri S.V. Parthasarathy.

SISSTA's annual convention for 2004 was held in Chennai and awards were
given on 27th September 2004. E.I.D-Parry Pudukkottai sugar factory bagged the Best
Cane Development Award. The award was presented by Mr. Nainar Nagendran, Minister
for Industries in the presence of Mr. Pandurengan, Minister for Agriculture and was

30
 received by Mr. Ramesh Ponnuswami, General Works Manager and Mr. M. Krishnan,
Senior Manager.

PRODUCTS OF V.K.A MILK

1.Pure Refined Sugar From E.I.D-Parry

Parry Pure Refined Sugar 

 Best in class refinement-Refined to 99%

 A premium product-conforms to European quality standards

 Uniform grain size

 Leaves no Residue

 Convenient packaging and easy availability

31
2. Flavoured Sugar From E.I.D Parry

Flavoured sugars are an existing culinary trend,combining the natural sweetness of

sugar with delicious flavours.We directly infuse the finest crane sugar with the
highest quality flavour to deliver full,consistent flavour in every spoonful.

 Convenient use-since it comes along with sugar

 Natural/Nature identical flavours

 It brings out of a natural flavour in your cup of tea/milk

3.Sugar Cubes Sugar From E.i.d-parry

32
At Parrys we believe consumer should enjoy the sugar experience.Our expertise in
producing value added sugar extend to cubes

 Sparkling white sugar cubes

 Dissolves instantly

 Hygienically packed

 Conforms to European standard

 ISO 9001:2008,ISO 14001:2004 and FSMS 22000:2004 certified

 100% vegetarian

4. White Label Sugar From E.i.d-parry

33
Ask Price

Parry White Label sugar

 Plantation white sugar

 Hygienically packed at the factory

 Free flowing

 Convient packaging and easy availability

CHAPTER 2

MAIN THEME OF THE PROJECT

34
2.2SCOPE OF THE STUDY

This study helps the management to know the various department of

employees to rectify their problems.it is helpful for the present employees to have
more information about the past performance of the employees and their attitudes
in the work place.
This present study highlights the problem area and the like benefits of an
Human resource information system of this organization in order to carry out the
employees benefits to increase accuracy and correction of errors.
For future study, this project will be helpful for the management to improve
their policies in the organization for the development of employees.

35
 1. To study the level of job satisfaction of employees of ponnisuars(erode)
Ltd.
2. To make a detailed study about the work environment.
3. To know the opinion of the employees regarding their relationship with
supervisors.
4. To study the employees motivation and morale in the organization.
5. To know the opinion of employees about training and development program.

CHAPTER-3

ORGANIZATION CHART

Board of Directors

Managing Director

Director customer 36 Executive Director

Support
 Production Production Sales
Management Services

Material management System Sales and Accounts Work Accounts Officer

Services Exports Department

System Engineering-1 System Incoming Material Finished Goods

Engineering-2 stores Stores

37
 CHAPTER-4
ORGANZATIONAL DEPARTMENT STUDY

ACCOUNTING AND FINANCE FUNCTION

STRUCTURE OF FINANCE FUNCTION

Managing Director

General Manager

Finance Manager

Supervisor

Accountants Clerks

38
WORKING CAPITAL MANAGEMENT

Working capital management is concerned with the problem of that arise in

attempting to manage. The current assets and current liabilities relationship that
exists between them. The term current assets refers to those assets, which in the
ordinary course of business can be or will be converted into cash within one year
without undergoing a diminution in value and without disruption of operation. The
goal of working capital management is to manage the firm’s current assets and
liabilities in such a way a satisfactory that level of working capital is maintained.
The company avail the working capital from the nationalized Bank in the form of
over draft account.

TRADE CREDIT
Trade credit refers to the credit extended by the suppliers of goods and services in
the normal course of transaction/business/ sale of the firm according to trade
practices; cash is not paid immediately for purchases but after an agreed period of
time. In case of V.K.A Milk Sugar credit the suppliers allow period with in 30days.

ACCCOUNTS RECIVABLE/ RECIVABLE MANAGEMENT

The term receivable is defined as dept owes to the firm by the customers arising
from sale of goods or services on ordinary course of business when a firm makes
an ordinary sale of goods or services and does not receive payment. The firm
grants trade credit and creates accounts receivable, which could be collected in
feature.

39
TYPES OF SOFTWARE FOR ACCOUNTING PROCEDURE
The software which is used for the purpose of accounts they use Tally software of
7.1 version which covers all recent updates accounting standards and also tally
software of 7.1 version covers VAT concept which marks very easy for company
to fill the tax according rules and regulation.
ACCOUNTING POLICIES OF V.K.A MILK
1. FIXED ASSETS
Fixed assets are stated at cost of acquisition less depreciation except land at
Attibele, which is shown at revalued cost
2. DEPRECIATION
Depreciation on fixed assets has been calculated on the straight line method at the
rates specified in schedule XIV of the companies Act 1956
3. INVENTORIES
Raw materials & work in process are valued at cost. Finished goods are valued at
cost or net realizable value whichever is less
4. INVESTMENT
Investment are valued at cost
5. RETIREMENT BENEFITS
Gratuity is provided as per opinion 2 of the LIC group gratuity scheme PF payable
is accounted and paid to the provident fund commissioner
6. BORROWING COSTS
Borrowing cost including interest and other expenses for specific borrowing of
funds that are attributing to acquisition, construction and fabrication of fixed assets
are capitalized till they are put to use.

40
 7. GENERAL
Accounting policies not specifically referred to conform to the generally
accounting practices.

PRODUCTION FUNCTION

STRUCTURE OF PRODUCTION

Managing Director

General manager Technical

Manager Production Manager Manager- Manager Manager

Production R&D Quality Dispatch HRI

S W H Production Dept R&D Production Dept

41
For each and every category different planning is made. All the category raw
material they will prepare indent and give it to purchase department.
Then the purchase dept, material dept and other dept of production dept will
discuss with general manager technical then will take decision about the
procurement. Material requisition note is given to purchase department for the
procurement process.
Purchase department will select the suppliers who are approved by ISO for the
selected the suppliers. The orders will be placed, whatever material procured it will
be the inspected then whatever defected material found will be rejected note will
be issued.

MATERIAL DEPARMENT & STORES DEPARTMENT

Material department in V.K.A Milk Sugar holds a special significance because of
various categories of products and models are use in the production process.
Material department will discuss with other department in the production dept and
according to the previous requirement and production advancement, decision is
made procure material.
Stores department has separate storerooms in which materials, finished goods are
stored and also storerooms designed such a way that raw material can be used
easily.

RESEARCH AND MANAGEMENT

For the purpose of R&D they have separate place, and all the expenses are made
with respect to the process of R&D and special engineers and experts are hired for
the process.

42
For the purpose of motivation they have made approach called “team leader” i.e. in
each production process a team leader is made and testing him responsibility and
authority to achieve standard goals.
Every day the performance is evaluated with the chart including the standard
production rate and actual production rate.

STUDY OF MARKETING FUNCTION

STRUCTURE OF MARKETING DEPARTMENT

Managing Director

General Manager MKT

AGM MKT
Assistant Manager
Christopher B

MKT Dept

Sales Executives

43
CHANNELS OF MARKETING
Direct marketing is done by the sales force
They use dealers and distributers
They also have for online service or transaction basically the company follows two
types of marketing channels they are direct selling and marketing with L&T
Company.
Direct selling-
The company is recruiting their own marketing executives on salary basis, target is
allocated to them they sale product to the customer directly.
.
PACKAGING
Sticking company’s name to that product does packaging of the product very
prominently and also attractively.
PRICING STRATEGIES
Pricing will made according to the market situation and market demand for the
product.
Price will also depend on the cost of the raw material in the present market and the
overheads of the company. They also do not compromise quality and customer
satisfaction.
PROMOTIONAL STRATEGIES
Advertisement is the main tool for the purpose of promotion. Those are
Magazines
Newspaper
Hoardings

44
MARKET INFORMATION AND INTELLEGENCE
Basically marketing information and intelligence is done by the sales force and
AGM of marketing department of the company.

CUSTOMER RELATIONSHIP MANAGEMENT

Customer relation is maintained at a good faith in the V.K.A Milk Sugar. They
maintain constant touch and interaction with customer and they will receive
feedback and they attend to it.

45
HUMAN RESOURCE FUNCTION

INTRODUCTION
To develop an organizational culture where superiors subordinate relations,
teamwork and collaboration among different sub units must be strong and
contribute to the organization health, dynamism and employees pride.
In short Human Resource Department aims at helping people to acquire
competencies required performing their functions well and make their organization
do well. Thus the Human Resource Department has become very popular in the
last decade and especially the Human resource network of human resource
development. In an organization and a profession body the advancement of
knowledge skill, value and attitude in human resource development are done
through education, training and sharing experience.

Human Resource Department in an organization context is a process where

employee of a organization are continuously helped in a planned way to acquire
capabilities required for performing various tasks or functions associates with their
present or future expected roles. To develop they’re general enabling capabilities
as individual so that they are able to discover and utilize their own inner potential
for organizational development purpose.

Now a day’s human resource development departments are known as personnel

department. In organizations the human resource development functions are taken
care by the personnel department. The main functions of the personnel department
are
46
Administration
Welfare measures
Good industrial relations.

ADMINISTRTION
The administration activities are as follows:
Recruitment
The main sources of recruitment are
Open advertisement
Management trainees
Campus selection
Vacancies to be filled by recruitment in department will be notify to the personnel
department in employment requisition form, on respect of which personnel
department will take steps for recruitment of personnel after obtaining approval, if
any from the competent authorities.

A.1. Interview and selection

The personnel department in consultation with the head of the departments
concerned scrutinize application received in response to advertisements and list of
candidates to be called for interview will drawn up.
The human resource development manger will constitute the selection committee.
Once the candidate is selected he as to go through a performance test after six
months.
Wages and salary administrative.

47
The salary for the employee is given according to their qualification, designation
and experience. They are being given an annual increment every year. Almost 65%
of the salary to employees is given through IDBI bank. Job categorization
according to work force.
Group A- general manager
Group B-manager
Group C- section in charge.
Group D- Operators/workers.
Grievance
A grievance means a complaint affecting an individual workman in regard to
payment wages, overtime, leave, transfer, promotion, seniority, work assignments,
working condition, designation, and non extension of any welfare, amenity or
benefit due shall be dealt by human resource development department.
Settlements regarding Retirement, Death etc
Settlement such as provident fund, gratuity, leave etc on the date of retirement,
resignation, death, termination and voluntary retirement will be dealt in this
section.

Gratuity for the service rendered by the employee according to the gratuity Act is
15 days salary for every completed year of services. The entire employees who
come under provident fund Act must contribute minimum 12%. The employee
should at least a minimum period of 5years in the organization only he will be
eligible, provident fund of Rs 100 per year.

WELFARE MEASURE
Consistent with the policy of the company through its employee and their families
happy and contended, it is operating a number of schemes to promote their welfare.
48
Employees labors welfare fund scheme.
A fee of 2% is given to the children of employees. Other facilities like medical and
transport facility is provided.
Canteen facilities:
The canteen facility is on a contract basis. For the conveyance of the employees.
Workings in the factory division’s canteens are run where food, coffee, tea and
snacks are served.
Transport facilities:
For all the employees they provide conveyance through bus, vans cabs etc, and to
who these facilities are not there, to them travelling allowances is provided.
Safety equipment:
Employees are provided safety equipments such as rubber pads, hand gloves,
safety boots etc to ensure complete safety of employees from the risks involved
arising out of accidents during performance of duties

PERFORMANCE APPRAISAL:
A performance appraisal system is a strong tool in the development of human
resources in the organization. It is consider as a mutual feedback to the
management and thereby help to decide the carrier growth, training needs and
other human resources development interventions required for each of them there
by aiding their self-development.

Performance is the way forward for every individual and for the company as a
whole. It is therefore vitally important that every individual has a clear
understanding of his or her work, objectives and responsibilities, because
performance will measure against these..
49
Performance management must create a shared vision of purpose and aims of the
organization. It must help each individual to understand and recognize their part of
contribution to the organization success and there by managing and improving the
performance of the both individual and organization. High performance by way of
performance management is the only guarantee for survival in an unpredictable
and dynamic world.

Managers have to continuously motivate their employees besides considering other

factors that enables superior’s level of performance.

Infrastructure
It is the responsibility of the department heads to identify, defines, provide and
maintain appropriate work facilities that are required for the performance of
activities, processes and service in order to ensure conformance and specified
requirements. Facilities shall include adequate workspace and associated utilities,
equipments, hardware and software, suitable maintenance and other necessary
supporting services. To achieve the performance of activities, processes, end
products, delivery and service to the customer’s satisfaction the necessary quality
plans, work instructions, drawings, test procedures and checklist are being
prepared and adopted.

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Work Environment
MCPL management recognizes that the most valuable asset is its people.
Therefore, the management and head of departments consider the work
environment as corporate criteria and endeavors to provide its employees of a
conducive work environment. This criterion of work environment includes
regulation and statutory requirements such as safety and health, ambient working
condition etc., and MCPL consider the above as the minimum requirements of all
departments.

OPERATING PROCEDURE OF TRAINING IN V.K.A MILK

Purpose of the training program
 To establish a procedure for providing training to V.K.A Milk private
limited personals and customers.
 To give suitable knowledge to the employee.

Total number of employees are in V.K.A MILK

The company is having skilled and unskilled personnel’s approximately 230
number of employees are working, it includes factory workers and casual factory
workers. In those more than 40 employees are executive employees means
engineers, and department heads, and also managers are there.

Method of training program is using by V.K.A MILK

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The V.K.A Milk is using the method of training program is On-the-Job training
method. In that in house trainers will give training to the employees. Some time the
V.K.A MILK is arranging for guest lecture for their employees they’re all
12members of in house trainers are there in the company.

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 CHAPTER-6

SWOT ANALYSIS

While conducting strategic planning for any of the company it is useful to

complete an analysis that takes into account not only your own business but also
your competitors business and the current business well. The following description
will highlight the strength, weakness, opportunity and threats of the V.K.A Milkpvt
ltd

STRENGTHS
Strengths means what the V.K.A Milkpvt ltd does well, the following are some of
the important strengths are
 The world 3rd largest Sugars manufacturing company
 Competitive price of products is a most powerful weapon of the
company
 Highly equipped and modern technological manufacturing plant
 Quality control of products in each stages and technological quality
checking of each products
 Using the highly qualitative raw materials
 Sufficient human resource power
 Customer satisfaction through supplying products at in time
 Providing the good services to customers for standard and non-
standard products

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  Skilled and highly experienced departmental heads
 L&T is the major customer to the products

WEAKNESS
It is the area where the V.K.A Milk has to struggle
 Capacity of the plant is not fully utilized
 There is less scope for diversification of the products
 Employees and workers are not satisfied in their work, salaries and working
nature
 The company is not able to get enough grants from various financial
institutions
 Lack of good relationship between the management and workers
 There is no unity between the workers and there is any workers union in the
company

OPPORTUNITIES
 Growing power industry
 Availability of skilled workers and policy support
 Huge export opportunities and government support
 All types of industries tries to minimum use energy, Sugars main function is
to save the energy
 Having great opportunity to become a number one leading company in the
Asia
 Availability well connected road network
 There is good scope for company to grow in the present market because of
the benefits given by the government to use Sugars.

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 THREATS
These are inside and outside things that there could be damage the business of
industry they are
 Fluctuating policies of the government and ecological imbalance
 There is a fluctuating the product design for standard and non-standard
products
 Economic crisis and high cost for installation of plant
If in case L&T stop the marketing of the products Mission and objectives of V.K.A
Milk Pvt Ltd

MISSION
To be a leader in the field of development and manufacturing. For this the
management is trying their level best to be consistent in quality, continual
improvement and safety of company’s operation and employees. The company
works with a mission quality, efficiency and customer satisfaction, which is being
met through teamwork and continual quality improvement.
 The world third largest manufacturing of Sugars
 Quality assurance to all types of heavy duty Sugars.

VISION
Helps to India reduce consumption of power by providing better power factory
correction deceives of production

To save the energy and increasing efficiency of working condition

Providing more number of employment opportunities

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 OBJECTIVES

Development of skilled personnel

To contribute towards HRD
Look after employees welfare
Reward for best performance

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 V.K.A MILK INDIA LTD

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED

Balance Sheet of V.K.A Milk (India) ------------------- in Rs. Cr. -------------------

Mar '16 Mar '15 Mar '14 Mar '13 Mar '12

12 mths 12 mths 12 mths 12 mths 12 mths

Sources Of Funds

Total Share Capital 17.58 17.58 17.58 17.58 17.37

Equity Share Capital 17.58 17.58 17.58 17.58 17.37

Reserves 1,268.00 1,346.50 1,256.74 1,324.04 1,194.86

Networth 1,285.58 1,364.08 1,274.32 1,341.62 1,212.23

Secured Loans 551.02 1,012.15 1,285.80 1,126.78 422.07

Unsecured Loans 258.32 589.96 500.53 596.31 367.64

Total Debt 809.34 1,602.11 1,786.33 1,723.09 789.71

Total Liabilities 2,094.92 2,966.19 3,060.65 3,064.71 2,001.94

Mar '16 Mar '15 Mar '14 Mar '13 Mar '12

12 mths 12 mths 12 mths 12 mths 12 mths

Application Of Funds

Gross Block 2,471.94 2,436.02 2,382.58 2,003.43 1,306.83

Less: Revaluation Reserves 5.10 5.10 5.10 5.26 5.40

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Less: Accum. Depreciation 1,048.59 955.40 901.22 773.66 541.84

Net Block 1,418.25 1,475.52 1,476.26 1,224.51 759.59

Capital Work in Progress 33.21 24.16 48.89 62.01 49.17

Investments 778.38 682.93 544.78 871.10 682.78

Inventories 688.49 1,078.84 1,049.66 782.53 255.43

Sundry Debtors 243.77 264.50 247.39 215.44 220.36

Cash and Bank Balance 79.58 42.09 63.22 16.92 34.57

Total Current Assets 1,011.84 1,385.43 1,360.27 1,014.89 510.36

Loans and Advances 228.25 322.43 393.91 456.75 437.09

Total CA, Loans & Advances 1,240.09 1,707.86 1,754.18 1,471.64 947.45

Current Liabilities 1,360.74 894.07 752.31 554.24 428.78

Provisions 14.27 30.21 11.15 10.31 8.27

Total CL & Provisions 1,375.01 924.28 763.46 564.55 437.05

Net Current Assets -134.92 783.58 990.72 907.09 510.40

Total Assets 2,094.92 2,966.19 3,060.65 3,064.71 2,001.94

Contingent Liabilities 1,646.85 610.97 319.26 231.08 367.35

Book Value (Rs) 73.12 77.59 72.49 76.33 69.80

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 CHAPTER-7
FINDINGS
SUGGESTIONS AND RECOMMENDATIONS
CONCLUSION

INDINGS

During the course of study it was found that,

 V.K.A Milk is one of the fast growing sugar companies. It has a good
technical support from their employees. They are all well qualified personnel
and also they are well trained personnel
 The company should give good training facilities to their employees
 The company having highly equipped modern manufacturing plant
 V.K.A Milk strength is quality control and quality assurance

SUGESSIONS AND RECOMMENDATION

 Company has to give the preference for the six sigma concept
 Build the relationship between workers and management
 Solve the employees problems frequently
 Human resource management should be properly organized
 Company should take more promotional activities in which add plays a
crucial role, it can used to boost the sales figure
 Providing the recreational facility to the workers to reduce the boredom from
long duration of work
 The company must substantiate the pricing of its product and use new
technology

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 The company using only on-the-job training but they should provide of-the-
training
 The company doesn’t have any management personnel they are having only
the technical personnel’s so they have to recruit some management
personnel’s to increase their fare in administrative level
 Company must be utilize the human resource and technological resource
effectively

CONCLUSION
 V.K.A Milk policy is to service continuously for improvement of their
products, services and also to give quality products to their customer to
increases their creditability in the field of Sugars
 Training is being conducted for the entire staff especially for the workers
to train them in all the field for job rotation
 V.K.A Milk has highly qualified and talented departmental heads that is
specialized is advanced field of mechanical design, system engineering,
and production technology
 V.K.A Milk is having big market representation and a good customer
relation with the help of L&T
 V.K.A Milk has established good network all over india and abroad
 To reach the global demand effectively, the company has to strengthen
its functional areas
 Keeping in mind the increasing demand for quality products they have
produced a wide range of Sugars

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 CHAPTER-8

BIBLIOGRAPHY
1. Quality system manual of V.K.A Milk
2. ISO9000 manual 1998
3. V.K.A MILK brochures and manuals
4. Website- http://www.eidparry.com/
5. News papers – industrial manual , Business line, Financial daily
6. Search magazines
7. Sugar india

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