icai international conference 2019 · icai international conference 2019 accountancy professional:...

ICAI International Conference 2019Accountancy professional: Meeting Stakeholder's Expectations

7th December 2019Dr. R. S. Sodhi, Managing Director, GCMMF (AMUL)

Stakeholders of Cooperative organization

Stakeholders of Cooperative organization

Stakeholders of Cooperative organization

Stakeholders of Cooperative organization

1 0 0 m i l l i o n R u r a l Households in India depend on dairying for livelihood.

More than 70% of them are small & marginal farmers and landless families

18

20

138

186

10 108

13 15

57

8494

154

169

0

20

40

60

80

100

120

140

160

180

200

1961 1971 1981 1991 1996 1998 2000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2013 2015 2016 2017

India Australia Netherlands USA European Union

CAGR India: 4.5%, USA: 1.8%, EU : 1.3%, AUS: 1.3% and Netherland: 2.7%In MMT/year

Milk production of India, Australia and Netherlands was almost similar

India

EU

USA

Netherland

Source: FAO

World 849

MMT

India

176 MM

T

Organized 32

MMT Amul 8.7 MMT(20% of

WORLD)

(18% of India) (27% of organized sector)

MMT: Million Metric Tone

YEAR: 2018-19

Milk Producer

Vill. Dairy Co-op.

Dist. Milk Co-op. Union

The Consumer

State Co-op. Milk Mktg. Fed.

• Establishment of a direct linkage between milk producers and consumers by eliminating middlemen…

• Milk Producers (farmers) control procurement, processing and marketing…

• Professional management…

Amul dairy farmers

to own Rs. 45,000 crore (USD 6.5 Billion) Organization

Amul is ranked 9th among leading dairy companies of the world.

Source: IFCN - International Farm Comparison Network 2018

Source : Brand Finance, UK

4th Most Valuable Dairy brand in the World2nd Strongest Dairy brand in the World in 2017

IndiaI n d i a n d a i r y co o p e ra t ive s e n s u re that their farmers get 80%-86%of Consumers Rupee spent on Milk & Milk Products

Other CountriesIn USA, producers get 38 % of consumers’ money spent on milk

I n U K , p ro d u ce r s g e t only 36 %

Amul ensures that 80% - 86% of consumer’s rupee goes back to its dairy farmers

Amul purchased Milk (Raw material) at the highest possible rate from 3.6 million owners

and supply finish products to billion of consumers at most reasonable rate.

Maximize Bottom-

line

Conventional Business Model

Value for Many

Value for Money

Minimize cost by value-

engineering

Same Taste Same RecipeSix Decades

Conventional Business Model

NPD Experts /

Centralized R&D

Centres

Conventional Product Innovation

Innovation by allAnybody & Everybody

Multiple brands across

portfolio Umbrella branding

Conventional Business Model

Heavy investment in Advertising &

Brand-building ~5-12%

ConventionalAdvertising & Promotion

Never spent more than 1% on Advertising

Get the best talent

available in industry

ConventionalTalent Acquisition

Create our own talent pool from

scratch

Generate employment

opportunities in Urban

Areas

ConventionalSocial Value Creation

Give rural youth, entrepreneurial opportunities in

their own villages

Amul’s initiative for

its stakeholders

Federation

Consumer

Distributor / ADA

Village Societies

Depots/Warehouse

APO / Retailer

Milk Unions

Input Services

7.2 Million transactions per day

18,559 Village milk societies

Transportation of 23 million litres of milk per day

18 Milk Unions, 79 dairy plants

Transportation across 4 distribution highways

63 Branches, 183 warehouses –

10000 Distributors & 1 Million retailers

3.6 Million Families, 18554 Villages

79 Dairy Plants across India

4 High Traffic Distribution HighwaysFROZEN CHILLED AMBIENT FRESH

62 Sales Offices & Stock Points + Exports

10,000 Distributors

10,00,000 Retailers across India

Amul AMCS @ Village

level

Amul AMCS

@ Village

level

Milk payment directly to

milk producers’

bank account

6 lakhs + farmers are using Mobile app

AMUL DMS-SFA: On line order Mechanism

AMUL DMS-SFA: On line order Mechanism

Stakeholders’ Expectation

• No statutory uniform accounting procedure• Cooperative ~ Old and inefficient • Cooperative Vs Corporate.• Lack of depth knowledge of State cooperative Act• How to attract professional in cooperative?

“We have traversed a path few have dared to.

We are continuing on a path still fewer have the courage to follow.

We must pursue the path that even fewer can dream to pursue.

Yet, we must, because we hold in trust the aims and aspirations of millions of our countrymen.”

- Dr V. Kurien

And Finally .

sodhi@amul.coop

THANK YOU