The Nilgiris unit of Aavin has started to make profit in the last four months after it changed its procurement strategy, reduced procurement price by Rs 20 per litre, and through better promotion of its products. Over the last three months, the unit has made a profit of Rs 1.5 lakh (June), Rs 2.5 lakh (July), and Rs 5 lakh (August), respectively, sources said. This after Aavin started procuring full cream milk from Tiruppur instead of Coimbatore. The procurement price has also come down from Rs 60 to Rs 40 per litre.

The 12-acre unit was inaugurated in 1985 by the then President Giani Zail Singh. Due to continuous losses, the employee strength went down from 250 permanent employees to 50, including 39 temporary workers. The unit procures 21,000 litres of milk. This includes 11,000 litres of milk procured from dairy farmers in Nilgiris district and 10,000 litres of full cream milk from Aavin Coimbatore. Of the 11,000 litres procured from local farmers, 4,000 litres are being used to make byproducts such as milk khova, butter, cheese, and buttermilk.

General Manager of Nilgiris Aavin M Jayaraman said, “We used to procure one litre of full cream milk from the Coimbatore Aavin unit at Rs 60. After enriching it, we sell it for Rs 70. Despite pricing it Rs 10 more than our purchase cost, we could not make profit as the amount was spent on transporting milk.

Moreover, we have to take care of distribution to Gudalur, which is 50 km away. So, we started procuring from Tiruppur district milk producers’ union at a cost of Rs 35 and Rs 37 per litre. We get it enriched in Coimbatore at Rs 3- Rs 4 per litre.”

Sources said Aavin is forced to procure from Coimbatore and Tiruppur due to several factors including reduction in local supply. “The yield from milch cattle in Nilgiris went down and many farmers quit the trade. Moreover, farmers’ children have also moved to other well-paying jobs. Several farmers have lost their cattle to wild animal attack too,” Jayaraman said.

“We are supplying 3,000 litres of raw chilled milk to Arya Vaidya Sala Kottakkal in Kerala. We were struggling to disburse salaries to workers, but the situation has improved,” Jayaraman added.

This business improvement after Jayaram took charge as GM in the last one year has helped officials to hike wages to temporary workers from Rs 250 to Rs 420 per day. Sources said out of Rs 2 crore dues, Aavin has also cleared Rs 50 lakh worth of commission arrears and leave-surrender benefits of retired employees.

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