Reimaging the dairy industry Patna Dairy Project

Patna was one of the milk shed identified under ‘Operation Flood’ for implementation of the programme. A One hundred thousand litres per day capacity Feeder Balancing Dairy (FBD) and 100 MT per day capacity cattle feed plant (CFP) were set up under this programme.

A Corporation known as Bihar State Dairy Corporation was formed in the year 1972 for speedy and effective implementation of the Operation Flood programme in the state. The Dairy Corporation was to develop the Dairy Cooperatives both at the village level and milk shed level.

It positioned a multi-disciplinary Procurement and Inputs and took help from National Dairy Development Board (NDDB) in organizing and developing the Cooperatives. Though the progress in the initial years was encouraging, the programme, for obvious reasons failed.

Later in October, 1981 NDDB took over the management of the infrastructure under the banner of Patna Dairy Project (PDP). Dr. Varghese Kurien was the Chairman of this organization from 1981 to1988. It was then the Patna Dairy project was, developed and grew under the ambit of good management and guidance of Dr Kurien. Patna Dairy Project was later branded as Sudha Dairy.

Managing Director of Patna Dairy Project, Mr Sudhir Kumar Singh, has been associated with Patna Dairy movement since 1994. The first order of his career was from Patna Dairy. He has contributed immensely to this project and is also an office bearer of industrialist apex body called Bihar Industries Association. He has a vast experience in working in steam engineering, industrial automation & instrumentation, Heat recovery & energy conservation systems & power generation systems.

In a candid conversation with Mr Sudhir Kumar, Ice cream times came to know how he has been closely associated with the dairy industry right from milk procurement, product processing , product marketing & distribution network; and has been very closely following the cooperatives milk society management.

Excerpts from the interview;

Could you please elaborate the Journey of Patna dairy from its inception to present status?

During its inception the Patna dairy, was run and regulated by the corporation for about one and half year under the operation flood.  The Corporation called Bihar State Dairy Corporation was formed in the year 1972 for speedy and effective implementation of the Operation Flood programme in the state. The Dairy Corporation was to develop the Dairy Cooperatives both at the village level and milk shed level and it was expected that the milk shed level cooperative would take over the entire infrastructure created in due course.

But somehow the corporation could not run it in accordance. The plant had a capacity of one lakh, but 6 per cent (6000 litres) of milk was collected and processed. The cooperation had 456 employees, but even after initial attainment the operation failed. Then the Chief Minister of Bihar at that time, contacted Dr. Varghese Kurien via NDDB to straighten out the problems faced by the dairy, which had turned sick.

Before talking over the project Dr. Kurien kept three conditions; firstly there would be no political interference, secondly there should be uninterrupted electricity supply, as milk is a perishable commodity. And thirdly, whatever surplus staff declared by us should be absorbed by the Bihar government.

Dr. Kurien committed that whatever profit that would be gained from the dairy would go to the Bihar government and the loss would be on the NDDB and PDP. It was a win-win situation for the Bihar government.

The CM agreed to the condition and an agreement was drafted. The National Dairy Development Board (NDDB) took over the management of the infrastructure with effect from 6th October, 1981 under the banner of Patna Dairy Project (PDP). Dr. Varghese Kurien was the Chairman of this organization from 1981 to1988.

We have done a lot of work in enhancing PDP and the hard work has been paid. Today we have got the “Best Productivity Performance” Award by National Productivity Council (NPC), best quality mark from NDDB, New Delhi and the SUDHA brand that comes under Patna Dairy is a market leader making Sudha Milk and milk products consumers’ delight and ensuring that the esteemed customers get value for money.

 

After taking over, what did NDDB do to revive the failed Dairy?

I was in the team of NDDB who were given the job to  assess the dairy plant requirement and what was needed for the proper function of the dairy plant. After taking over, first we assess the plant’s capacity, which was 1 lakh litres but processed only 6 per cent of milk in it and with 456 employees.

The first thing that we assessed was over employment, which was one of the reason of  financial unsettlement of the dairy; as in a plant that processed only 6000 litres of milk, only 56 employees were required,. So the surplus 400 employees were absorbed by the Bihar Government as undertaken before. We then brought in new officer team with new recruitments and started this organisation with work culture similar to NDDB.

We restarted the project again on 15th December 1981 and after that never looked back. The dairy organisation just kept on growing. Then the Bihar State Milk Co-Operative Federation Ltd. (COMFED) was established in 1983 as the implementing agency of Operational Flood (OF) programme of dairy. All the operations of erstwhile Bihar State Dairy Corporation were handed over to COMFED.

Today we have around eight milk unions, with 22 lakh litres milk being collected and 16 lakh of it being distributed and marketed.

At the moment Sudha Dairy, as PDP is popularly known, has carved its own niche to become a household name in Bihar. This is because all the board of directors of PDP is milk producers and knows the basics of dairy industry. Also Dr Kurien’s method of operation, where all the people involved was expert in their own precinct.

How did PDP win the farmers confidence again?

We won the farmers confidence, as they realized that the inception of PDP was to, for  and with them. And they also comprehended that this organisation was working for them and with them and not a Pseudo cooperative.

But we did face problems initially with resistance coming from the farmers and villagers as they did not hold a very virtuous opinion about cooperative system. The cooperative, had botched the farmers’ expectation.

We did work hard to gain the farmers confidence, and won their acceptability. Our first work was in Vaishali District; NDDB took special care to develop the Vaishali Patliputra Dugdh Utpadak Sahkari Sangh Ltd. (VPDUSS) and later handed over the arrangements of Patna Dairy Project (PDP) to Vaishali Patliputra Dugdh Utpadak Sahkari Sangh Ltd (VPDUSS) in 1988.

The major tasks before the Vaishali Patliputra Dugdh Utpadak Sahkari Sangh Ltd. (VPDUSS) was to see that the excellent infrastructure developed by the National Dairy Development Board (NDDB) was not only maintained but also to see that the pace of development is not hampered.

Today 10 crore rupees are paid to the farmers every week toward milk payment. Just think if so much of finance is going to the rural, then definitely the economic status of the village must have changed.  And I can proudly say today PDP has reached and spread its work in nearly all the villages.

The formation of PDP provided employment and income sources for the dairy farmers and livestock farmers in Bihar, and being an Agricultural state, the development of dairy cooperative became lucrative for farmers, who were living in paucity.

Before the cooperative movement, the cows here were exported to Kolkata, basically resulting in drain of livestock from Bihar to Bengal, hence the livestock kept depleting. But since Sudha’s development the farmers got assured market and now I see that most farmers want the cooperative to be opened in their villager as our payment system is very apt and on time. Our timely payment is our strength, and 4, 14 and 24 are the fixed dates where we pay the farmers. Hence the farmers are getting money, assured market along with cattle training programmes for them.

In today’s date Sudha has become the biggest dairy industry in Bihar, all because of the cooperative and the confidence and involvement of the farmers.

Sudha is a farmer’s organisation because all the people involved in it from top to the bottom are farmers. They have the knowledge and give correct inputs that are essential for the development of dairy.

PDP started with just 3 districts, but today with expertise and farmers trust, all the 38 districts come under our ambit, with total of 8 unions under COMFED.

Our state of art plant adheres to all the latest development and regulations. We are expanding rigorously and just recently have spent 700 crore in expansions of our ultra-modern plant.

 

Your new plants have State of Art facility; what type of automation does your state of art facility have and what new machineries have you installed?

As the competition is immense, we need to be upfront in the type of machinery we use.  Most of our plants are fully automated; though some are on the brink. For our new plants we have purchased machineries from Italy and some sourced from India; IDMC the leading manufacturer and supplier of a complete range of equipment for the dairy industry has done a great job in installing and automating our upcoming plant to international level.

Currently we are thrusting on automation and hygiene and have qualified NDDB’s stringent quality mark and I can proudly say in whole of the eastern zone, the Patna dairy project is the only dairy project that has the quality mark from the board.

Today Sudha is the Pride of Bihar and we thrive to enhance it to international standards.

 

Branding and marketing are very important to sell any product in today’s competitive world, what type of branding and marketing strategy is Sudha Dairy using?

Branding is definitely important for selling products; with increasing income and growing awareness the consumer are looking for the best product, especially in the agri-food industry.

Our branding initiates from farmers and rural area; for people Sudha is synonymic to pure and hygienic milk that comes from villages with healthy livestock. People now have very little faith in the milk coming to them from local dairies in the towns; they know that the milk is spurious mixed with water or urea. Or the animal that it is coming from has been injected with steroids.

NDDB has given us quality mark, which is a big thing and it is found on the label of our milk and milk product packages. People have given their trust to brand Sudha; which does not compromise with quality.

We are socially connected with our consumers, even during festivals or unnerving riots or curfew, Sudha remained committed to them and has never disrupted its supply of milk. A never ending trust has been formed between us and our customers. And it is our duty to respect and commit to the trust.

Many big brands did try to enter our market space but failed. Sudha itself is a household brand name and it is this branding that has developed our organisation to a new level.

We are expanding and proliferating. Our hold in Delhi and North East has increased manifold and we even supply to Katmandu, Nepal. It is all about team work and hard work.

Milk product are value added products for the dairy industry, how has it contributed to Sudha’s profitability?

To survive in the market it is important to produce indigenous products apart from the main. You would be surprised that most of the sale of our dahi and ghee takes place in rural area. So the buyers are farmers, who sell milk to us; and they can easily make their own Dahi and Ghee!

It is the trust and quality that makes them purchase our products. During marriages and festivals the demand skyrockets.  To further enter the value added products category, on experimental basis we have launched sweet shops in some rural areas equipped with solar fridge. In mithai we manufacture Peda, chamcham, Gulab jamun etc.

We are linked with 2600 villages and my future plan is that we should open our outlets in 200 villages every year and maintain our cold chain. This would increase the farmers’ profitability; as well provide the customers with quality products.

People in India love mithai, but usually compromise with quality; Sudha has solved that problem with bringing about standard quality sweet for the customers. The scope is huge here and we plan to expand it.

Wherever people go their love for their tradition food never ends. We are trying to cash and cater on that part and are concentrating on ethnic products now. There is a product called “Bilgrami”- that has a huge shelf life- we produced it and had unlimited demand for it…same we made “Balushahi” in our Muzzafarpur unit, that became an instant hit.

My experience has taught me that producing indigenous products is the need of the hour.  It connects the people to its root and at the same time we provide them with standardised upgraded quality products that were not available before.

This will also increase the profit range of our farmers; as selling milk does not have much margins but selling milk product increases the profit margins.

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