Amul's turnover up only 8% in FY18 owing to depressed market conditions

The Gujarat Cooperative Milk Marketing Federation (GCMMF), India’s largest dairy outfit which owns and markets the Amul brand, has posted 8 per cent year-on-year (YoY) growth in turnover for 2017-18 to Rs 292.2 billion.

While releasing the provisional turnover figures for 2017-18, the cooperative said branded consumer products had registered growth of 14 per cent over the previous year, with products like cheese, butter, milk beverages, paneer (cottage cheese), cream, buttermilk and curd having grown at 20-40 per cent. RS Sodhi, managing director, GCMMF, said pouch milk, which has the highest turnover, had shown double-digit value growth. “We are committed to achieving sales turnover of Rs 500 billion by 2020-21,” he added.

The provisional unduplicated group turnover of the Amul brand has crossed Rs 410 billion, up 10 per cent from last year. Most of the member dairies sell milk, ghee, and cattlefeed in their own districts directly. This turnover is not reflected in the GCMMF’s books. Hence, this is added to the GCMMF’s sales to show the unduplicated turnover of the Amul brand as a whole (local sales by dairies as well as GCMMF sales).

The GCMMF's turnover growth rate slowed in 2017-18 to 8 per cent from 18 per cent in 2016-17. The federation said this was largely due to the decline of 60 per cent in commodity sales as a result of depressed market conditions in the global and local markets. The federation has been clocking a compounded annual growth rate of more than 18 per cent for the last eight years because of higher milk procurement, expansion into new markets, addition of processing capacity and new product launches. The GCMMF launched more than 50 new products in the past two years.

The 18 member unions of the GCMMF, with a farmer membership of 3.6 million across 18,700 villages of Gujarat, procured an average of 21.1 million litres of milk per day. This is 20 per cent more than in 2016-17.

Ramsinh Parmar, chairman, GCMMF, said; “Based on estimated growth in market demand for Amul products and our future marketing efforts, we anticipate at least 20 per cent CAGR in the business of the Amul Federation during the next five years.” He also added that Amul planned to increase its milk processing capacity from the current level of 32 million litres per day to 38-40 million litres per day in the next two years.