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August 12, 2013

Verghese Kurien- Success Behind Amul

Inception of Amul

In the industrial state of Gujarat, there is a small town called Anand in a largely rural part of the state, which is nearly hundred kilometers from the city of Ahmedabad.  This town is known as the milk capital of India; largely because India’s biggest dairy company Amul Dairy is located here.  Amul, the well-known dairy brand of India was launched in 1946.  Prior to this, the British dairy company Polson Dairy, which was the biggest dairy company in India at the time, ruled the roost here.  Though, Polson Dairy was offering quality products in the Indian market, it was engaged in exploitation of Indian farmers and milkmen.  It never paid them the sufficient amount and also prohibited them to supply milk to other vendors.

A noncooperation movement was started under the leadership of Indian nationalist leader Sardar Patel in 1946, to protest against Polson Dairy’s discriminatory policies.  It culminated into the inception of KDCMPUL (later on Amul), by the end of the year 1946.  It started with supplying milk and other dairy products, but it did not have any form of distribution network or supply-chain management in place.  Even the brand name Amul was not used at the time.  It was started as a district cooperative union and was comprised of just two of the societies, which supplied only 250L of milk daily.

Dr. Verghese Kurien and his arrival at KDCMPUL (now Amul)

In 1949, a young master’s degree holder in dairy engineering came to Anand to work towards a service agreement with government to make up for his scholarship loan.  This guy was Verghese Kurien, who later on became famous as Dr Verghese Kurien.   In the beginning, the purpose for this “apprenticeship” for Mr Kurien was to complete the required period as per the contract.  But, when Kurien was just about to leave Amul for better prospects outside, he was persuaded by Mr. Tribhuvandas Patel, the founder of this Indian version of Polson Dairy, to continue his stint.  At the time, Amul was known as KDCMPUL. 

Beginning of the brand Amul

He began working upon expanding the cooperatives in Kheda district.  The cooperatives were assigned the task to procure milk from farmers directly and pay them according to the quality of the milk.  So, first of all, he began by renaming the KDCMPUL, so that it can become a household name and can be pronounced by the consumers easily.  Soon, he sent the message to farmers and employees to suggest a name for the company.  A quality control officer came up with a name “Amulya,” which is a Sanskrit word and it means priceless, unique and having unmatched experience.  Later on it was modified to “Amul” and the union was renamed as AMUL- Anand Milk Union Limited.   

The functioning of the co-operative model

Amul’s success lies in working effectively with the cooperatives across a wide region.  Dr. Kurien formed group of villages and developed several cooperatives, so that consistent supply of milk can be maintained.  The farmers and milkmen were paid according to the fat content in the milk.  Other measures were also taken to maintain quality of milk such as using fat measurement machines, farmers’ education plans, and surprise checks.  This effectively reduced malpractices and streamlined the processes.

A milk chiller unit was established and the milk cans obtained from the farmers were transferred to the unit the same day.  After storing the milk there for a couple hours, it was transferred to get pasteurized and then it was cooled and packaged.

The bulk packets were delivered to the wholesalers, who in turn distributed it to retailers to make it available for the consumers in almost every area and locality.  Therefore Dr. Kurien implemented a two level distribution system, in which the upstream supply-chain was fully developed and supervised by him.  It improved the overall mechanism of cooperatives and led to the emergence of Amul as a historic success in the state of Gujarat in the 60s.

Operation Flood – The white Revolution

Prime Minister Lal Bahadur Shastri also had a great interest in the working style of cooperatives, so when he was invited in 1964 to inaugurate a new Amul plant in Anand, he decided to stay there for a couple days, though his actual program was just for one day.  Dr Kurien took the PM to most of the cooperatives and he was thrilled to know how Amul was not only sourcing the milk in an organized way, but also empowering the farmers to raise their lifestyle.    

When the PM went back to national capital Delhi, he asked Dr. Kurien to take charge of expanding the cooperative-culture in the entire country and duplicate Amul’s success everywhere.  This led to the establishment of the National Dairy Development Board (NDDB) the very next year.  Dr Kurien was appointed the head of NDDB and he not only replicated the Anand “pattern” in the length and breadth of the country, but also facilitated the milk production to match the growing demand.  Despite financial issues NDDB managed to save India from importing milk, which was inevitable at the time, in view of the great demand and little supply. 

To meet the growing demand for funds, NDDB approached World Bank to offer loan with no strings attached.  In 1969, the WB president visited India and had a conversation with Dr Kurien and a “no condition” loan was approved for NDDB.  This eventually paved the way for Operation Flood, which comprised of 1 lakh cooperatives and 50 lakh milk producers.  Dr. Kurien did not stop there; he also introduced milk powder and an entire range of dairy products, butter being the most popular.  He also took measures to ensure better health for cattle and vaccination thereof.

Marketing of Amul

Dr Kurien established the independent marketing unit of Amul, Gujarat Co-operative Milk Marketing Federation to make Amul a national and global brand.   He also initiated Institute of Rural Management Anand (IRMA) to impart the acquired professional, social and industrial knowledge of rural India at Amul to the next generation. 

Awards and historic contribution of Dr Kurien

After this Herculean exercise, Amul has become a leading dairy company with 1 crore and 50 lakh milk producers and almost 1.5 lakh cooperatives in India.  This makes India the largest milk producer in the world.  So, this Calicut born young engineer wrote the destiny of India as the largest milk producer and was called the father of White Revolution.  He is the recipient of various national awards such as Krushi Ratna, Padma Vibhushan and Ramon Magsaysay etc.  He left this world in December 2012, but he became immortal in the heart of 1.3 billion Indians and farmer through his immense contribution to brand Amul and prosperity among the farmers.   

Tags : Operation Flood, The white Revolution, Amul, Amulya, Polson Dairy, National Dairy Development Board (NDDB)

About Nashaat Quadri

Freelance Content Writer (Compare Infobase, New Delhi.) Ex Sr Content Writer, Western Software, New Delhi. Ex Relationship Manager, Mashreq Bank, Dubai.