Environmentally Sustainable And Cooperative Dairy Production

AMUL

2. Zero Hunger 8. Decent Work and Economic Growth 10. Reduced Inequalities 12. Responsible Consumption and Production 13. Climate Action

Overview

  • Effective Resource Utilization incorporating the concept of ‘Reduce, Reuse, Recycle’ working on the broader philosophy of working towards the betterment of the marginalized society of milk farmers and achieving the goals of Zero Hunger by making milk accessible and available to everyone across India.
  • Never escaping the need to keep this whole ecosystem profitable and hence, strive to achieve self-sustainability.

Authors

Parth Prajapati

Parth Prajapati

Mohil Bhatt

Mohil Bhatt

Stanton D'Silva

Stanton D'Silva

Siddharth Vijay

Siddharth Vijay

Abhinav Dutta

Abhinav Dutta

Vaibhav Barapatre

Vaibhav Barapatre

School

Goa Institute of Management

Goa Institute of Management

Professor

Divya Singhal

Divya Singhal

Innovation

Beginning with a quote from Mr. Anil Bayati, “Whenever you talk about anything being sustainable, be it a business or be it the environment, it has to be ‘long-term’, and it has to be 'profitable'. Anything that puts you at a loss will defeat the purpose of sustainability.” This resonates with the methods of resource utilization incorporated by AMUL. Mr. Anil focused mainly on the most used resources of the organization, Water and Energy, and how technology is being currently leveraged to optimize the utility of these resources.

Water is used in all aspects of the production process, however, Mr. Anil stressed that AMUL is a zero-discharge industry. This is achieved by the reuse of water from the various processes. He stressed how the water extracted from the milk, in the milk factory, is fully utilized in other processes and not wasted. As he said, “When using 5 million liters of milk, the groundwater usage is only 1 to 1.5 million liters of water whereas normally groundwater usage can go as high as 5 million liters of water.” This is one aspect of reuse at the source.

Another system implemented is in the cleaning process where the water used to clean is mixed with chemicals and usually discharged or drained. However, in AMUL, this water is filtered and the chemicals reused and only the initial materials cleaned/first flushing goes to the drain. Mr. Anil stressed the water and milk recovery systems in place to prevent any wastage of either as both are very important resources. This is done by even putting instruments in the drains to separate clean and bad water so that the clean water can be recovered and used for other processes. He further drove the point, “The use of efficient technology to reduce the wastage of water without compromising quality.” The bad water or wastewater which was in the drain further undergoes a process at the treatment plant after which it is used in the toilets for flushing activities where normally freshwater is used. Also, the surrounding areas of the plant have been turned from a barren desert area into a lush green garden using this treated water.

Another source of wastewater is the refrigeration system where a lot of water is usually used and is sent into the atmosphere. AMUL uses a different technology, where a special condenser allows for the water to be reused thereby reducing the consumption of freshwater in the cooling towers. This use of technology brings down the consumption of groundwater to 1/3rd of the natural requirement in the entire plant. And Mr. Anil very positively spoke about targeting zero usage of groundwater especially since they have implemented Rainwater Harvesting techniques extensively in their plants. These techniques have had a positive impact on the factory as the rainwater harvesting procedure has resulted in reduced TDS and increased the water table.

Moving on to the second most widely used resource, Energy. Mr. Anil stressed how Plant Layout / Engineering and planning was of prime importance. “Simplify the Operations so that all operations run smoothly and with minimal use of power,” said Mr. Anil as he further explained how the design of the building also played a major role in the conservation of energy by incorporating the usage of natural light and ventilation in the design of the premises.

The second most important aspect of energy conservation is in the selection of equipment. Motors consume the most electricity as they are used in fans, pumps, and blowers. One aspect of the selection of equipment is with regards to the purchase of new equipment, another is with regards to the modification/ up-gradation of the existing setup, for which they have internal and external periodic energy audits.

Thirdly is the use of renewable energy, As Mr. Anil says is the most critical aspect of energy conservation to AMUL. They have placed solar cells on all their rooftops which generate 5000 kWh of power and 30000 kWh amongst all the factories in total. They are also using biofuels for all their heating processes.

One particular aspect that Mr. Anil spoke about which much pride was that their Boilers’ condensing system allowed for zero wastage of heat to the environment. On NCV (Net Calorific Value) basis, their Boiler systems were running on 100% efficiency.

The next aspect of energy consumption was in the refrigeration plant, which is naturally supposed to consume 60% of the power in a processing plant. However, Mr. Anil explained with the help of the example of making ‘Yoghurt’, how the milk is heated and then cooled using a newly adopted technology of heat exchange before the addition of culture. Steam is used as a medium of transfer for the heat. The heat from the milk, while it cools, is used to heat the milk as well, in the form of a regenerative system.

It was with great pride that Mr. Anil spoke of how all this was possible only because of the collaboration between AMUL and its farmers who might have been illiterate back when AMUL was established but never once questions methods of development. Another important reason for these innovations was the Japanese value system and philosophies of TQM (Total Quality Management), TEI (Total Employee Involvement), TWE (Total Waste Elimination), and TPM (Total Productive Maintenance).

Another person who was credited with the major push for innovation and growth was Dr. Verghese Kurien. Mr. Anil gave two anecdotes of Dr. Verghese Kurien and how he did not stress much on skill and talent in the batch of Management graduates he took in but said that all he looked for was ‘Integrity, Integrity, and Integrity’. This sustainable business model was all the brainchild of Dr. Verghese Kurien, who understood that a market linkage was needed for the cooperative model to succeed. This model is scalable and replicable at all stages.

Mr. Anil did not fail to shift the topic to Zero Hunger and how ‘Operation Flood’ was initiated during the time of Dr. Verghese Kurien, which transformed India from a milk deficient nation into the world’s largest milk producer, surpassing the USA in 1998 with about 17 percent of global output in 2010-11. This made dairy farming India’s largest self-sustainable rural employment generator. It helped farmers direct their development and gave them control of the resources they created. All this was not achieved by mass production but by the production of the masses.

To conclude Mr. Anil touched upon how the starting of AMUL and the cooperative movement helped created decent work and catalyzed economic growth. The helping of marginalized farmers by improving their income status helps reducing inequalities in the rural parts of India. AMUL helped in bringing India back from the brink of being a Net Import country to that of a self-sustainable country in terms of milk which Mr. Anil said is “The most wholesome food. It has everything the human body needs.”

Environmentally Sustainable And Cooperative Dairy Production

Inspiration

As we know that water is the most basic necessity for the existence of human life, the water crisis, and its conservation is one of the major concerns in India. India accounts for 17% of the world population and has access to only 4% of global freshwater. India ranks 120th out of 122 countries in the Global Water Quality Index. India is currently water-stressed and is on the brink of an acute water crisis. A crisis of continuous flood and drought assumes lethal extremities and lead to the unpredictable weather pattern, and it leads to uneven rain pattern. Every year, 15,000 farmers commit suicide because of agrarian distress on farming. India’s $2.6 trillion economies are primarily into agriculture. India’s farming sector contributes approximately 17% of its GDP and employs over 60 % of the population.

After seeing the above situation, businesses need to use resources carefully. Also, they have to run their businesses profitably to sustain in the long-run. AMUL has taken this responsibility by applying the principle of 'Reduce, Reuse, and Recycle.' The company has always been recognized as an organization that has a concern for mankind. They have maintained it by making AMUL a Zero-Discharge industry. By using its water judiciously, they are trying to be less dependent on the environment. Due to these efforts, they are trying to fight against the exploitation of the environment and its weather cycle. These steps also create an impact on the people who are part of this agrarian industry.

Overall impact

Coming to the impact of Effective Resource Utilization in place, AMUL can substantially reduce the wastage of water & energy hence saving a lot of cash. From the companies point of view, the reuse of water after few processes helped in saving 70% water in comparison to its core competitors. By following the model of the Cleaning In Place (CIP) in the filtration process, the company recorded a 33% reduction in its freshwater consumption, and a whopping 85% reduction in wastewater generation.

Using various techniques and Solar powered factories, AMUL can reduce its energy requirements. These initiatives helped AMUL to become independent on other sources for power and want to expand in more sustainable energy to others society as well. The reusing techniques of water to use at multiple fronts and only draining bad water slashed the cost associated with it, helping businesses to keep the cost minimum and reach maximum people. Owing to all these efforts AMUL has increased the per capita consumption to 400ml and recorded sales of 38,544 crores in 2019-2020.

Since 2007, AMUL and its registered dealers have initiated reforestation in the state of Gujrat of about 1 lac sapling per year and can manage planting more than 20 Lacs saplings/plants which reinstated the approach of reducing carbon footprint and deforestation in Gujrat. As these eco-friendly efforts’ in a dairy plant, the Government of Andhra Pradesh has teamed up with AMUL to set up a plant in their state and bring revolution to the 4th largest milk-producing state by organizing the sector. AP government agreed to pay 11,000 crores in these two schemes for women in this dairy sector. After this team-up, AMUL will not only service in Gujarat, Maharashtra & Rajasthan but will start to cater in southern India as well.

Business benefit

The Gujarat Cooperative Milk Marketing Federation Ltd., responsible for marketing AMUL milk and dairy items, revealed a 13% expansion in its turnover to Rs 33,150 crores in the fiscal year finished March 31. The AMUL gathering's turnover surpassed Rs 45,000 crores which is 13% higher than a year ago, i.e., in 2019-20.

The AMUL Federation has accomplished a compound yearly development pace of over 17.5% for as long as nine years because of higher milk obtainment, extension in business sectors, and the dispatch of new items.

AMUL is a self-sufficient organization with over 30 lakh farmers as its owners. They have been taking care of its operations, financing, and investing. They have enough funds to expand and progress. They are a global brand now.

Kaira Can Company, the one who produces cans only for AMUL, is listed in BSE. It has a market cap of 60 crore rupees. The growth of certain AMUL products would mean the growth of Kaira Can Company as well.

Social and environmental benefit

Thanks to the White Revolution, India is contributing about 20% of the world's milk production at around 182 million metric tonnes and are growing at a rate of 4.5%. Also, millions of consumers have seen an improvement in their quality of life. This is the result of the more than 3.6 million producer members in 33 districts in 18,600 villages in Gujarat, India. Low-income farmers who were compelled to sell their milk, to contractors and middlemen, for whatever they were offered in the early 1940s, today have a safer recreational working environment and co-owners of the largest dairy major in the country. Amul has also created awareness of sustainable practices helping the cooperative society to grow to a $7 billion business in July 2020.

Benefit to Society

It is reported that about 860 million people go to bed hungry every night. That is, one in eleven people on the planet are starving, malnourished or stunted. Each one of these people could be sufficiently fed on less than a quarter of the food that is wasted in the USA, UK, and Europe each year. At Amul, the company sees hunger as not just a problem that is happening across the globe but right in the face of it. They reported that over 5 million liters of milk per day were being accessed by the citizens of India last year.

We could hear the passion in Mr. Anil Bayati’s voice when he spoke of the social impact that Amul has created by meeting the demand over and above the dairy supplies in the country. In his words “According to the World Health Organisation, a healthy person would consume on an average 210 ml of milk to survive. In 1971, with one-third of the current population, the country’s per capita milk consumption was 90 ml per person. With the efforts of Mr. Verghese Kurien and Mr. Tribhuvandas Patel, today Amul supplies 5 million liters of milk per day, increasing the average per capita consumption of milk from 90 ml to 400 ml.”

As Mr. Anil Bayati says, “We, here at Amul, are continuously thriving to provide employment opportunities across various industries. It is not just the farmers who are benefiting from Amul, but also the people of villages and towns across Gujarat, by helping them set up Amul Counters.” Amul has real tangible impacts by fulfilling pressing needs and driving the shift away from a top-down model of aid to investment in local capacity across the state of Gujarat.

Benefit to the Environment

Amul is environmentally conscious in all aspects of production with a focus on the quality of the product for both the customer and the planet. As Mr. Anil states, “India is a tropical country having huge potential for solar power.” All the products that are manufactured in the Amul factories run completely on solar energy, saving nearly 5,000 kWh of electricity per factory per day. The company also draws one-third of its competitors’ actual capacity of water for its dairy production It has also reduced its groundwater consumption by efficiently using technology for the treatment of water for multiple uses, and not exploit more natural resources for different activities. This efficient use of resources like water and energy improves the lives of humans and protects the environment.

The company has also decided to repurchase and recycle its milk pouches when packaging its core product – milk, in a bid to contain the rampant use of plastic. This will make its delivery process entirely sustainable in the long-run. Lastly, Amul’s support for the reforestation of the cities and villages in Gujarat contributes to the reduction of greenhouse gas in the atmosphere and protects the precious biodiversity.

Interview

Mr. Anil Bayati, General Manager of AMUL

Photo of interviewee

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AMUL

AMUL

Anand, Gujarat, IN

Business Website: http://www.amuldairy.com/

Year Founded: 1946

Number of Employees: 10000+

AMUL is an Indian dairy cooperative society, based in Anand in the Indian state of Gujarat. Formed in 1946, it is a cooperative brand managed by a cooperative body, the Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF), India’s largest food product marketing organization with an annual turnover (2019-20) US$ 5.1 Billion. Its daily milk procurement is approx. 23 million liters per day from 18600 village milk cooperative societies, 18-member unions covering 33 districts, and 3.6 million milk producers. AMUL aims to provide remunerative returns to the farmers and also serve the interest of consumers by providing quality products which are good value for money. Its success has not only been emulated in India but serves as a model for the rest of the World. It is an exclusive marketing organization of ‘AMUL’ and ‘Sagar’ branded products. It operates through 61 Sales Offices and has a dealer network of 10,000 dealers and 1 million retailers, one of the largest such networks in India. Its product range comprises Milk, Milk powder, Health Beverages, Ghee (Clarified Butter), Butter, Cheese, Pizza Cheese, Ice-Cream, Paneer (Indian Cottage Cheese), Chocolates, and Traditional Indian Sweets.