Bureaucratic hurdles and lack of flexibility in the decision making process has put brakes on the aggressive growth plans of Punjab State Cooperative Milk Producers Federation Ltd, popularlyknown as Milkfed.

During the last fiscal, the federation failed to achieve the Rs 1,500-crore turnover target.

The cooperative clocked a turnover of Rs 1,350 crore during 2009-10, as against Rs 1,111 crore in 2008-09. In 2007-08, the cooperative had generated a turnover of Rs 931 crore against Rs 760 crore in 2006-07.

Talking to FE, managing director, Milkfed, V K Singh said, ?In a bureaucratic system, it becomes difficult to implement new ideas and respond quickly to changing market situations.?

The cooperative will face tough financial situation during the current fiscal too. This is because from April, it has implemented the recommendations of the new Pay Commission, Singh said.

?We have a task force of about 3,500 employees. In order to give them revised salaries, Milkfed will have to bear an additional burden of Rs 13 crore per annum,? he said.

The budget of the cooperative for staff salaries earlier stood at Rs 85 crore. Singh said with revised salary structures, the salary budget is likely to touch Rs 100 crore.

Interestingly, Singh observed the employees of Milkfed are paid more than the employees of Gujarat Cooperative Milk Marketing Federation. ?We are trying to mobilise our resources and also finding new ways to keep the prices of products low. In addition, we are now increasing our product base to increase our revenue. We cannot load all our expenses on milk,? he pointed out.

In addition to being the leading supplier of packaged fresh milk in Punjab and Chandigarh, Verka also has a range of products like desi ghee, lassi, kheer, pinni, milk cake, juices etc. It is now launching ?Verka nimbupani?, and sweets without added sugar like milk cake and ?peda?.

?In the juices category, we have mango and pineapple juice, which sell well. We now plan to launch litchi juice too. To expand our customer base, we have tied up with Central Food Technology Research Institute (CFTRI) at Mysore. We have acquired technology to make sugar-free sweets from the same institute. Now, we have asked them to give us the technology for making other items like a nutritious cereal bar and a multi-grain breakfast cereal,? Singh said.