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Sankar Radhakrishnan

THIRUVANANTHAPURAM, Dec. 26

THE Kerala Co-operative Milk Marketing Federation Ltd (Milma) and National Dairy Development Board (NDDB) subsidiary, Mother Dairy Foods Ltd, have entered into a joint venture to market Milma products in Kerala.

The joint venture agreement, signed in Thiruvananthapuram today, stipulates that Milma will continue to be responsible for the procurement, processing and packaging of milk and milk products, while the joint venture company will be in charge of marketing these products.

Speaking to Business Line shortly after the agreement was signed, Mr Arjun Uppal, Managing Director, Mother Dairy Foods Ltd, and Mr T.S. Krishnaswamy, Managing Director, Milma, said that the new marketing company, likely to be called Milma Foods Ltd, would be registered in a month.

They both stressed the fact that the joint venture would work for the betterment of dairy farmers in the State.

"Such joint ventures are intended to promote milk procurement from dairy farmers and improve their welfare," Mr Uppal said.

NDDB's objectives continue to focus on serving the interests of dairy farmers across the country, he added.

Mother Dairy is also looking at setting up similar marketing joint ventures with milk federations in other States. Discussions are on with authorities in Andhra Pradesh, Punjab and Haryana.

Earlier, Mr P.T. Gopala Kurup, Chairman, Milma, said that the decision to embark on a joint venture initiative stemmed from the belief that greater marketing efforts are required to promote the Milma brand.

Any profits earned by the joint venture would be used for the welfare of dairy farmers in Kerala, he added.

According to Mr Uppal, the joint venture will continue to retain the Milma brand as it has a lot of equity in the State.

"The focus of the new marketing company will be on increasing the availability of Milma milk," he said.

"This will involve boosting the brand's distribution and also improving its cold chain."

The marketing company will retain existing Milma distributors, but can also appoint new distributors, according to Mr Krishnaswamy.

Existing approaches to pricing will also be maintained.

"Pricing will be done in such a fashion as to give the consumer the best price, while ensuring that the dairy farmer also gets the best possible price," Mr Uppal said.

There is no proposal to make any change to Milma's existing product line, but new products, if relevant, will be introduced in time.

Similarly, there is no proposal to sell Milma products in other parts of the country, he added.

The new marketing venture will also work on improving the quality of Milma's milk and milk products.

"The focus is on improving and enhancing quality at every level, especially with the entry of a number of large players into the dairy segment."

The new marketing company has a share capital of Rs 1 crore, with Mother Dairy holding a 51 per cent stake and Milma holding the rest.

Employees of the existing marketing department in Milma will be moved to the new venture.

With three regional milk co-operatives and 2,400-odd primary cooperatives affiliated to it, Milma has over 6.7 lakh dairy farmers as members.

In addition to liquid milk, its product range includes unsalted butter, ghee and flavoured milk.

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