R S Sodhi wants to take up advisory roles in dairy industry

RS Sodhi was heading India’s leading dairy cooperative GCMMF, which markets its products under Amul brand

Sales of Gujarat Cooperative Milk Marketing Federation (GCMMF), known for the Amul brand, grew by at least five times during the tenure of R S Sodhi as Managing Director, which ended this week. Sodhi told Moneycontrol that he now wants to take up advisory roles in the dairy industry and reminisced about the eventful years he spent at the cooperative giant.

Under Sodhi’s watch, GCMMF also started sourcing milk from states other than Gujarat, increased its total milk purchases manifold, strengthened the distribution and sales network and entered new product categories.

Sodhi stepped down earlier this week as the buzz around the sudden decision by GCMMF to force him out grew.

The cooperative’s Chief Operating Officer Jayenbhai Mehta has been given temporary charge as MD till a suitable candidate is found to succeed Sodhi.

Sodhi had been on an extension for about two years and his departure was not entirely unexpected. It is just that the mystery surrounding the sudden decision by the GCMMF board, asking him to put in his papers, has been growing ever since, with neither the GCMMF nor Sodhi talking about the events that led to his departure.

Sodhi told Moneycontrol that he had been on an extension and now wants to work in advisory roles across the dairy industry. He remains president of the Indian Dairy Association as well as a member on the board of the International Dairy Federation.

“I do not want to take up other roles as of now,” said Sodhi, who was with GCMMF for nearly 41 years.

Eventful tenure

Sodhi joined GCMMF in March 1982 and became its MD in June 2010. In such a long stint, Sodhi held various positions: Group Product Manager, Assistant General Manager (Marketing) , General Manager ( Marketing) and Chief General Manager, before being appointed Managing Director.

He recalled that in 1982, when he had first joined the cooperative, GCMMF’s turnover was just Rs 121 crore and it was procuring only 1.2 million litres of milk daily. The Father of the White Revolution, Dr Verghese Kurien, was MD and Chairman.

“I was posted in Jaipur to take over the distribution of Amul products from Voltas. Not many people remember that at that time, Amul had no distribution of its own. It was marketing baby food, butter, cheese and ghee. Voltas was doing the distribution for baby food, whole milk power etc. We took over this function from Voltas and began establishing a distribution network”.

By 2009-10, GCMMF’s turnover had grown exponentially, to about Rs 8,000 crore, before Sodhi took over as MD. One of the biggest turning points in the GCMMF or Amul journey came after he assumed charge as MD – when the cooperative decided to begin milk procurement from outside Gujarat.

“Till then, GCMMF had been procuring milk from Gujarat only and selling it throughout the country. We realised that we are unable to meet the rising demand for milk, specially from markets like Delhi, and decided to step out of Gujarat to procure milk directly from farmers in other states. We first went to Rajasthan — it was adjoining Delhi, so this was a logistically sound decision. This was followed by Haryana and Maharashtra — for the Mumbai market. We faced some initial hesitation of local cooperatives in these states but eventually, the farmers realised that their realisation will increase through our procurement,” Sodhi recalled.

While Sodhi credited the stellar success of GCMMF in expanding its bottomline and reach to team efforts, he also referred to the “three E strategy” helmed by him since FY11 — “Expansion, Expansion and Expansion”.

“The first E was expansion in milk procurement within and outside Gujarat; the second E was expansion in milk processing capacity within and outside Gujarat and we built processing plants in Manesar, Kanpur, Mumbai, Pune etc. The third E was expansion in distribution – from just about 30 hubs then, GCMMF now has more than 80 hubs. These hubs store all products, have cold storage and frozen storage facilities etc.”

The emphasis throughout Sodhi’s tenure has been on putting in place an unbeatable distribution network for the large array of products which now sell under the Amul brand name. Sodhi said GCMMF decided to have a distribution point in all towns with 10,000 plus population (the earlier metric was towns with 50,000 or 100,000 population).

From five zonal offices, the cooperative now has 13 zonal offices. “We wanted to be competitive in the market – especially to keep both farmers and consumers happy. So we emphasised supply chain efficiency under my tenure,” Sodhi said.

GCMMF now procures 280 lakh litres of milk daily versus just 88 lakh litres in 2010.

Amul’s transformation

Not just increasing milk procurement and beefing up the distribution network, many dairy industry watchers credit Sodhi with transforming GCMMF to a food products company.

Apart from milk and milk products, the Amul brand now also houses frozen foods, non-milk beverages, honey, flour etc. And the performance of the cooperative on the exports front has also been remarkable. Another important factor in Sodhi’s journey seems to have been an increase in retail prices of milk and the channelling of almost the entire quantum of this price increase back to farmers.

To a question on whether his sudden departure had anything to do with reports of GCMMF merging with other cooperatives to form a mega dairy cooperative with an export focus, Sodhi said no merger was happening.“The only thing which is happening is that some milk cooperatives may form a new, bigger cooperative to focus on milk products’ exports or market organic products. There is no merger of GCMMF with others. The status of GCMMF is not being altered,” Sodhi said.