REPORT ON INDUSTRIAL VISIT TO

M/s Mother Dairy Ltd.

Patparganj, New Delhi.
On 22nd March 2010.
Under the aegis of:
INSTITUTE OF MANAGEMENT AND SCIENCE

LUCKNOW UNIVERSITY
Submitted To:

DR. ARVIND MOHAN

HEAD OF THE AGRIBUSINESS DEPARTMENT

Submitted By:

PREETI VERMA

MBA AGRIBUSINESS

II SEMESTER
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Contents

Title Page
No.

1. Overview of the Company 3

2. Product Profile 4

3. Financial Status 6

4. Supply Chain Management 6

5. Processing 7

6. Quality Control 7

7. Market 8

8. Product Promotion Strategy 8

9. HR Practices 8

10.Important Observations 11

11. Annexure 12

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Overview of the Company

Mother Dairy – Delhi was set up in 1974 under the Operation Flood Programme, a wholly owned
subsidy of the National Dairy Development Board (NDDB), whose current chairman is Dr.
Amrita Patel. Currently, it is one of the largest milk (liquid/unprocessed) plants in Asia selling
more than 25 lakh litres of milk per day, thereby enjoying a market share of 66% of the branded
milk sales in Delhi. Other important markets include Mumbai, Saurashtra and Hyderabad. Mother
dairy ice-cream was launched in the year 1995 and has shown continuous growth over the years,
and today it boasts approximately 62% market share in Delhi and NCR.

It is Mother Dairy’s constant endeavour to:

(a) Ensure that milk producers and farmers regularly and continually receive market prices by
offering quality milk, milk products and other food products to consumers at competitive
prices. To ensure this Mother Dairy operates such that the farmer gets 85% of the total
cost of sales.

(b) Uphold institutional structures that empower milk producers and farmers through
processes that are equitable.

Mother Dairy is an IS/ISO 9002, IS 15000 HACCP and IS 14001 EMS certified organization.
Moreover, its Quality Assurance Laboratory is certified by National Accreditation Board for
Testing and Calibration Laboratory (NABL)-Department of Science and Technology,
Government of India.

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Product Profile
S.No. Product Name Brand Name Items
1. Milk and its Products Mother Dairy Packaged Milk (Full Cream,
Standardised, Toned, Double Toned
Skimmed and Pro-biotic), Butter, Dahi,
Ghee, Cheese, Ice-Creams, UHT Milk,
Lassi & Flavoured Milk.

2. Edible Oils Dhara Refined Vegetable Oil, Refined

Soybean Oil, Refined Sunflower Oil,
Refined Rice Bran Oil, Kachi Ghani
Mustard Oil and Filtered Groundnut
Oil.
3. Fresh and frozen fruit and Safal Fruits, Vegetables, Rice, Processed
vegetable products items (jams, juices, ketchup, pulp, etc.)

Mother Dairy’s has a varied range of products. The different products categories are
explained below:

MILK:

Packaged Milk is available in 5 different variants:

1. Full Cream milk - milk fat 6%, SNF 9%

2. Standardised milk - milk fat 4.5%, SNF 8.5%

3. Toned milk - milk fat 3%, SNF 8.5%

4. Double toned milk - milk fat 1.5%, SNF 9%

5. Skimmed milk - milk fat 0.5%, SNF 8.7%

Other than packaged milk, Bulk Vended Token Milk is also available which is
distributed through vending machines installed in different regions of the city.

The high quality variant of milk is also available under the brand name ok ‘MILK’.
It is thick & completely natural, containing no preservations. It is referred with
name of UHT (Ultra Heat Treatment) Milk.

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Mother Dairy also manufactures flavoured milk under the brand name of
‘CHILLZ’. It is available in three flavours namely Kesar Elaichi, Vanilla and
Chocolate flavour.

Milk Products:

Various milk products of Mother Dairy are:

1. Mother Dairy Ghee

2. Mother Dairy Butter

3. Mother Dairy Cheese

4. Mother Dairy Dahi (Curd)

5. Mother Dairy Lassi

Except all these milk products Mother dairy also manufactures Ice Cream under
two categories namely CHILLZ and Mother Dairy Ice Cream.

PROBIOTIC:

It is the latest product range launched by Mother Dairy. It mainly contains BB-
12 friendly Bacteria which results in better digestion and absorption of nutrients.
It also contains probiotic fibre which also results in better digestion. The various
products in this category are:

1. b-Activ Probiotic Dahi

2. b-Activ Probiotic Lassi

3. b-Activ Curd

4. Nutrifit (Strawberry & Mango)

SAFAL: Range of fresh foods & vegetables, frozen vegetables, fruit pulps and
fruit juices etc.

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DHARA: It has a popular range of edible oils in different types as refined soya
bean oil, refined sunflower oil and filtered ground nut oil etc.

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Financial Status
Mother Dairy Foods Processing Ltd, also known as Mother Dairy Fruit & Vegetable Private
Limited, Patparganj, Delhi, has a turnover of about $500 million. Mother Dairy’s turnover has
been growing at the rate of 20% (CAGR) over the last 3 years and has crossed the Rs.2700 crores
mark in the fiscal 2007-08. Mother Dairy plans to achieve a turnover of $1 billion USD by end of
2009.

Supply Chain Management

1) Milk Procurement: - Mother Dairy sources its requirement of liquid milk from dairy
co-operatives and producer institutions. Milk is received from farmer cooperatives
through insulated road/rail tankers at very low temperature in order to retain its
freshness.

2) Milk distribution: -79 tankers in the morning and 75 tankers in the evening bring in
milk from the regional collection centres. After collection the same tankers are utilized
for the delivery of the processed milk to the vendors and outlets. Mother Dairy has
over 820 Milk Distribution Outlets in the National Capital Region. Each of these
outlets place their demand by raising an invoice one day in advance. The demand is
also calculated using the ‘Calendar’ Scheme, in this depending on the pre-calculated
seasonal demands the outlets place their orders accordingly. In order to satisfy
immediate demand, 20 to 25 tankers are provided with a buffer stock of 500 litres each
day so that they can be mobilized to cater the demand in an area. To coordinate its
operations all the tankers are equipped with HAM radios.

Distribution Channels:

a) Token Distribution: Also, termed as “Lohe ki bhains” (metal buffalo), is an

automated milk vending machine.

b) COW: Container on Wheels or COW is a manual milk distribution program in

which cycle-rickshaws are employed for milk distribution.

c) Retailers: The packaged milk is distributed via the retailer network throughout the
city.

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Processing
At mother dairy, the processing of milk is done by process automation whereby state of the art
microprocessor technology is adopted to integrate and completely automate all functions of the
milk processing areas to ensure high product quality/reliability and safety. There are four ways of
milk processing –

Firstly, Clarification, in which milk is spun at very high speed, removing all dust particles
that are invisible to the naked eye.

Secondly, Standardisation which help to milk maintain uniformity by raising or lowering

its fat and SNF (solid not fat) percentage to a desired levels, so as to deliver milk to
consumers as per prescribed PFA norms.

Thirdly, it is Homogenization which improves palatability of milk and

Finally, Pasteurization, which kills all pathogenic bacteria present in the milk and thus
making it safe for consumption.

In case of packaged milk, the processing goes through only three processes (excludes
homogenization).

Quality Control
Stringent quality control methodologies are employed in Mother Dairy.

a) The milk is tested for adulterations and quality at the time of collection from the farmers.

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b) The Milk that comes from the collection points to the Mother Dairy plant is ensured to
have a temperature of not more than 7°C and is subjected to 15 product and quality
checks.

c) The Milk quality is checked repeatedly after each processing phase and the temperature is
judiciously maintained less than 5°C always.

d) Before the milk leaves the plant for the delivery/distribution outlets the milk is tested
again.

e) The temperature of milk in the delivery trucks is always maintained less than 7°C.

f) All the trucks that deliver milk have specified guidelines to bring back 100 litres of milk
after distribution. This is done in order to test the delivered milk and to ensure that the
tankers are not adulterated during distribution.

g) Since all the employed processing procedures are automated, no contamination by human
hands takes place.

h) To ensure milk freshness the collection and distribution points are always chosen such that
the travel time between them is always less than 36 hours.

Market
i. Mother Dairy markets approximately 2.8 million litres of milk daily in the markets of
Delhi, Mumbai, Saurashtra and Hyderabad.
ii. It sells 2.3 million litres of milk daily and undertakes its marketing operations through
around 14,000 retail outlets and 845 exclusive outlets of Mother Dairy.
iii. The company’s derives significant competitive advantage from its unique distribution
network of bulk vending booths, retail outlets and mobile units.
iv. The company markets an array of fresh and frozen fruit and vegetable products under the
brand name SAFAL through a chain of 400+ own Fruit and Vegetable shops and more
than 20,000 retail outlets in various parts of the country.
v. Fresh produce from the producers is handled at the Company’s modern distribution
facility in Delhi with an annual capacity of 200,000 MT.
vi. An IQF facility with capacity of around 75 MT per day is also operational in Delhi.
vii. A state-of-the-art fruit processing plant of fruit handling capacity of 120 MT per day, a
100 percent EOU, setup in 1996 at Mumbai supplies quality products in the international
market.
viii. With increasing demand another state-of-the-art fruit processing plant has been set up at
Bangalore with fruit handling capacity of around 250 MT per day.

Product Promotion Strategy

Mother Dairy believes in direct contact with the customer. It organises various seminars for
children from different schools, students from various colleges and even housewives to educate

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and increase awareness about milk and its products. All this is done by the Customer Information
Department wherein consumers are made aware about goodness of milk, various stages of its
processing, Q.A. practices and possible adulterants.

Consumers can themselves see how impurities and adulterants can be easily detected in the
laboratories. The company also has a Mobile Lab that tests milk in residential colonies.

As far as the sales are concerned, in order to increase their reach, Mother Dairy sells its milk both
in bulk vended and sachet forms. Various advertisements both in print and electronic media are
flowed time to time on a regular basis.

HR Practices
Mother Dairy is a unique set up which has the best of both the worlds. Like any other private
sector entity, it enjoys the freedom to appoint the requisite professional talent in key positions and
to take decisions with the flexibility and speed that is required in an increasingly competitive
market. It also gives employees the satisfaction that their work touches the lives of millions of
farmers and aims to enhance the economic status of our rural population.

Mother Dairy has a diverse and welcoming workplace where in values of trust, transparency,
unquestionable commitment to quality, single-minded focus on excellence and respect for the

individual are simply a way of life. It is forging ahead in the market to tap the limitless potential
that lies there. To achieve the vision, they are always looking out for dynamic talented
professionals who have:

• The ability to take initiatives and drive things.

• Are ambitious and self starters.

• Love challenges and have a passion to excel.

• The capability to initiate, lead and manage change in a highly diverse and challenging
environment.

1) The Company strictly follows the guidelines laid in by Quality Control Programmes like
KAIZEN, TPM etc. As a result, all the employees are well aware of their rights and
responsibilities. Also, it is amongst the only companies to follow TPM in not only
production but also in case of Human Resources.

2) The Company has just become ERP enabled by adopting “SAMAVESH” from 1st August,
2008.

3) The Company is also environment conscious as it employs Solar Panels, Rainwater

Harvesting, Effluent Treatment Plants, etc.

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4) Strict health and sanitation measures are employed so as to maintain high quality of
product quality and avoid any product contamination.

Management System Policy

• Apply state of the art technology and processes to enhance productivity that ensures
quality at competitive price.

• Apply processes for clean production, pollution prevention and optimize resource
utilization in all operations

• Follow food safety management system and apply HACCP (Hazard Analysis Critical
Control Points) principles to provide safe products to customers

• Comply with applicable regulations and legislations.

• Mother Dairy pledge to provide quality and safe products under clean and hygienic
environment.

The following steps are taken and ongoing efforts are continuously made as per "Management
Systems Policy"-

•Minimize Waste generation

•Conservation of resources

•Use of renewable energy

•Recycling & re-use

As far as the environment management is concerned it has the following arrangements-

• Solar Panels- In an effort to conserve fuel, Mother Dairy utilizes the solar enegy to
preheat the water going into the boilers. This also minimizes the pollution caused by
burning of fuels like coal.oil etc.

• Rainwater Harvesting- for maintaining groundwater level it has installed the plant in the
premises.
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• Effluent Treatment Plant- The water used for cleaning the equipment and tankers is
treated at the effluent plant in the dairy before being discharged into the sewage system.

Energy Management Policy

Mother Dairy Food Processing Ltd. commit themselves for optimum utilization of energy in all
manufacturing activities as well as in office by:

• Monitoring closely and controlling the consumption of various forms of energy through an
effective Energy Management System.

• All round participation of all employees and educating them about energy conservation.

• Maximum utilization of renewable energy sources.

• Upgradation of processes, technology and use of energy efficient equipments.

• Optimum utilization of plant capacity.

• As a part of energy conservation and environment protection commitments, reduce the

specific energy consumption.

As part of their energy conservation policy they saved Rs. 55 lakh of energy as per the
current data with the help of 1oo% participation from the employees.

They also have a Total Productive Maintenance (TPM) for distribution which says “to
eliminate accidents and breakdowns and increase the overall economic effect of all the
resources by developing a system to enhance the knowledge and skill of employees,
thereby increasing productivity and reducing costs.”

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The main policy which focuses the customer is the Service along with Quality policy
which states that the customer should be served in the best possible manner and should
also get the quality up to the mark.

AWARDS:

Mother Dairy has its own list of achievements as it has been given awards for various
reasons from time to time. It has got ‘Best Productivity Award’ two times for three
consecutive years starting from 1987-88 to 1989-90 and again from 1995-96 to 1997-
1998. It was also awarded ‘Energy Conservation Award’ in 2005-2006 and has also got
‘Innovation Award’.

IMPORTANT OBSERVATION:

The most important observation during the visit was the hygiene factor present there. The
premises and the plant area was clean, the employees have the orders not to touch milk
with bare hands and they get their machines and silos cleaned every weekend to ensure
that the milk produced is safe for the customers.

Moreover, they have a specific TPM (Total Productive Maintenance) policy for everything
like for distribution, energy conservation, environment etc. and KAIZEN policy for all the
employees which they have to follow.

They have these policies as strict code of conduct as they are manufacturing milk which
requires purity and hygiene and to give the best to the customers the company needs to do
this. That is why their policies can be seen at most of the places in the premises.

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(Annexure 1)
The Milk Processing Tree

Milk brought from regional collection centres through

insulated milk vans/trucks.

Milk is then tested on 15 quality standards and is then

stored in refrigerated silos (vertical containers).

Milk is then heated and is then ‘Clarified.’ The Clarifier

spins out (centrifugal force) the physical impurities
present in the milk.

As the milk originates from different animals it is

‘Standardized’ i.e. the total fat and SNF percentages are
brought to desired levels as per the prescribed norms.

Milk is then ‘Homogenized.’ In this process the large fat

globules are broken into tiny fat molecules thus, giving
milk a uniform consistency and making it whiter in
appearance.

Milk is then subjected to the process of ‘Pasteurization.’

The milk is first heated to 75°C for 15 seconds and then is
rapidly cooled to 4°C thus killing all the pathogens in the
milk, without disrupting the taste and nutritive content.

Milk is then fortified with various Vitamins and Minerals

depending on the type of milk. It is then sent back to the
silos or packaged.

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(Annexure 2)

The various departments in Mother Dairy Patparganj milk plant were:

1. Manufacturing Department

2. Production Department

3. MIS Department

4. Utility Department

5. Safety, Health & Environment Department

6. Thermal Department

7. Electrical Department

8. Automation Department

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9. Procurement Department

10. Consumer Information Department

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