In an interview with CNBC-TV18’s Shruti Mishra, Jayen Mehta, the Managing Director of Amul, shed light on the company's market dominance, strategic approach to competition, and its unique stance on public listing.
Amul, often hailed as the market leader in various dairy product categories, prides itself on not only protecting its turf but also actively expanding its market share.
Mehta stated, "We are very ruthless in protecting our turf and expanding the market share. So we are not worried about competition, we welcome competition. All we need is a level playing field, and that’s about it."
One distinctive aspect of Amul's business philosophy is its commitment to remaining a private company. Mehta explained the contradiction, stating, "Public listing is contradictory to our objective. A private company can show profit by buying the raw material at the lowest price, sell the finished good at the highest price, and the maximum profit is for the owners, investors, and the shareholders."
However, Amul takes a different approach, buying milk at the highest price directly from its owners, the farmers, and ensuring that consumers get Amul products at the most affordable value-for-money prices.
Mehta emphasised that Amul operates with low costs, low margins, and low overheads, enabling the company to keep both sides of the spectrum – farmers and consumers – satisfied.
The Managing Director dismissed the idea of public listing as an option, explaining the delicate balance Amul maintains between fair procurement prices for farmers and affordable prices for consumers.
According to Mehta, the essence of Amul's success lies in being the bridge between farmers and consumers. Beyond traditional dairy products, Amul has diversified its portfolio to include potato snacks, honey, mithai (sweets), premium ice-creams, and cheese.
Mehta revealed, "Anything which the farmer produces, Amul is the bridge between the producer and the consumer." He highlighted recent expansions, including a five-fold increase in the capacity of the potato snacks plant, doubling of ice-cream capacities, and a 50% increase in cheese production within the next year.
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