A lot of people are ready to work for the rich and powerful, but a very few are ready to work for the have-nots. Besides the salary, the satisfaction you get from working with the 3.5 million marginal farmers of India is something else.
CIO: How are you dealing with competition from profit-focused MNCSs?
R. S. Sodhi: Amul was born out of competition. Right from the start we have been fighting competition from large MNCs such as Unilever and Nestle which is good because when you fight you become more efficient and you learn a lot.
We face competition from two sides; one from the milk procurement side and the other from marketing and distribution. Because of our business strategy which is to give the highest price to the farmer and also value for money to the customer we are able to counter competition to a great extent. We give 15-20 percent more to the farmer than others so we get better quality milk. We are able to sell our products at a very competitive price in the market. We don't compromise when it comes to content, ingredients, or even technology. We have the largest market share wherever we operate.
I believe fighting a national player or an MNC is not difficult. Fighting local competition is a greater challenge for a national player like us. Their overheads are small and they are more flexible.
CIO: Apart from local competition, what is your biggest challenge?
R. S. Sodhi: My biggest challenge is to keep the interest of milk producers and dairy farmers alive. Today's educated rural youth is no longer interested in waking up at 4 AM to bathe, clean, and feed cattle. At the end of a whole day's toil he's just left with Rs 100-150. If we don't encourage milk production, we'll become import-dependent for milk too.
Therefore, our biggest challenge is to ensure that the next generation finds the business of milk farming and production lucrative. They should be able to make money such that at the end of the day they get at least 2 paise more than urban factory workers.
So, in the last three years we have increased the price at which we buy milk from farmers by 50 percent. Today, if a farmer gets a few a little more money he's ready to invest more, but his return on investment must increase.
Besides, people no longer have 2-3 cows, but many more. They need milking machines to make their jobs easier. In fact the joke is, girls in Gujarat don't want to marry into households with more than two cows because that'll increase their workload!
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