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Amul to invest Rs 5000-crore in expansion to achieve 2020 revenue target: RS Sodhi

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MUMBAI: A household name in India, Amul, will invest Rs 5,000 crore to set up around 10 milk processing plants in the next financial year including two plants in Delhi, three in Uttar Pradesh, one each in Kolkata and Maharashtra and the rest in Gujarat.

“The endeavour is to achieve its revenue target of Rs 50,000 crore by 2020,” said Amul managing director RS Sodhi.

Speaking at an interactive session on the third and final day at the India Food Forum 2015, Sodhi, in conversation with Future Retail CEO Sadashiv Nayak, said, “Amul will be able to achieve annual revenues of Rs 20,000 crore this year.”

While increasing milk productivity and improved breeds and feeding practices in India is a challenge for Amul, Sodhi emphasised on the need to encourage the next generation of the rural farmer to remain in animal husbandry business.

“It is possible to earn Rs 40,000 per month with 30-40 cows and buffaloes at project cost of Rs 21 lakh including a loan component of Rs 15 lakh,” Sodhi said.

Unperturbed about the new entrants in the dairy segment from the private sector and MNCs, Sodhi, welcoming the competition, said, “India’s organised sector only constitutes 20 per cent of the Rs 4 lakh crore market size for dairy products in the country and there is space and scope for everyone.”

“Our philosophy for the past 60 years have been to ensure remuneration prices for our 3.5 million members and value for money for the consumer, using the best ingredient at a fair price,” Sodhi said.

Stating that butter making was not a rocket technology and every housewife knows how to make butter, Sodhi said, that 100 grams of Amul butter was still be cheaper than 100 grams of premium soap, which was possible only because of Amul’s philosophy of keeping in mind the farmer and consumer.

“Unlike industry practices, where you buy raw material cheaper and realised better in sales, Amul ensures that raw material is at the best price and selling price remains lower compared to peers,” he said.

“Hence, we cannot spend more than one per cent of our revenue on advertising while other food companies spend 8-15 per cent annually,” Sodhi said, indicating that its advertising expenditure last year was 0.8 per cent.

Sharing the secret of Amul remaining a youthful brand, Sodhi said, “Most of the top members of the management are at their first job working for over four decades and hence have neither changed their campaign nor their agency. Hence, continuity and consistency in communication has kept Amul young with the butter girl.”

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