June 30, 2014

Kwality and India's Central Bank to extend financial aid to dairy farmers

Indian dairy company, Kwality Ltd, has signed an agreement with the Central Bank of India to extend financial assistance to the country's dairy farmers.

City-based Kwality Ltd has six plants in Haryana, Uttar Pradesh and Rajasthan with processing capacity of 30 lakh litres a day. Its consolidated net sales rose by 27% at US$83.28 last fiscal, while profit was up 37% at US$2.41.

"Kwality has signed a Memorandum of Understanding (MoU) with Central Bank of India for financing of dairy animals to the Milk Producer Farmers (MPF) and to provide financial assistance for expansion and establishment of their dairy farms," the company said in a statement.

As per the MoU, Kwality will identify farmers who supply milk to the company and are in need of financial assistance. The company will then recommend these individuals to the bank, which would extend its credit facility to the Milk Producer Farmers (MPF) after verifying the farmers' credentials.

Kwality Dairy will help the farmers in the documentation process and also in remitting the sale proceeds of the milk from the farmers directly to the bank for appropriation towards the loan/credit of the farmers' account.

Said Kwality's director, Sidhant Gupta: "This MoU will help us to further procure good quality milk from farmers, which helps us to strengthen our supply side and hence improving our margins".

"We feel that there is a great need of financial inclusion into the dairy sector. This MoU will encourage more people towards the dairy farming sector and this agreement is a first step towards the vision of establishing large-scale dairy farms in India," said R B Gupta, the general manager of the Central Bank of India.