The Hindu : Tamil Nadu News : Aavin making efforts to be competitive

Online edition of India's National Newspaper
Wednesday, Apr 27, 2005

Tamil Nadu

Tamil Nadu

Aavin making efforts to be competitive

T. Ramakrishnan

Aiming to capture major share in northern, northeastern States

CHENNAI: Faced with losses in 2004-05 after two consecutive years of profits, Aavin, a government-controlled body in the dairy sector, is making all-out efforts to remain competitive.

Aavin, the brand of products of the Tamil Nadu Cooperative Milk Producers' Federation (TNCMPF), has commenced exporting milk products. Singapore was its first destination. In the domestic market, it is aiming to capture a major share in northern and northeastern States in addition to fine-tuning its on-going efforts in the south. Cost-cutting and redeployment of manpower are the other measures carried out by Aavin.

The pressure is more on the government body to improve its marketing and strengthen its sales network because Aavin recorded a loss of about Rs. 1.3 crores in the just-concluded financial year. Officials concede that the chief reason for the loss is the increase in the procurement price per litre. In June last, the rate of cow's milk was hiked from Rs. 9.50 to Rs. 10.50 and that of buffalo milk from Rs. 11.44 to Rs.12.50. The Government also decided not to effect any change in the retail price of liquid milk.

Officials recalled that in 2002-03, Aavin ended the eight-year consecutive run of losses by earning a profit of about Rs.1.5 crores. The next year, the profit went up to Rs. 17.2 crores. The accumulated losses were brought down to about Rs. 58 crores in 2004-05 from Rs.76 crores in 2001-02.

Bid to regain market share

The organisation is also experiencing pressure on account of competition. After the entry of private players in the dairy market in the early 1990s, its share went down steeply. For instance, in 2001, Aavin's share accounted for 40 per cent of the Chennai market. "Now, we are selling 8 lakh litres a day, representing 60 per cent of the market," the officials say. A target of 9.1 lakh litres a day has been fixed for the current year.

Exports

As part of its efforts to tap new markets, Aavin appointed an agent for Malaysia and Singapore. Since December last, the body exported 50,000 litres of ultra heat-treated (UHT) milk, 1,000 litres of ghee and 1,250 kg of skimmed milk powder (SMP) to Singapore.

At the national level, Aavin has been selling milk and SMP to Mother Dairy in Delhi and Kolkata besides its sister organisations in Andhra Pradesh and Kerala.

Aavin stepped up its sale of ghee and SMP in recent years. Compared to the annual average sale of ghee of 3,370 tonnes during 1996-2001, the organisation recorded 5,900 tonnes in 2001-05. In respect of SMP, the annual average sale went up from 2,640 tonnes to 9,800 tonnes.

The Government has permitted Aavin to take a loan of about Rs. 35 crores from the Tamil Nadu Urban Finance and Infrastructure Development Corporation to tide over any financial problem, the sources add.

Printer friendly page
Send this article to Friends by E-Mail

Tamil Nadu