November 12, 2010

Parag Milk Foods invests US$22.43 million for new dairy facilities

Parag Milk Foods has put in INR100 crore (US$22.43 million) for the building of milk and cheese facilities in Andhra Pradesh and Maharashtra.

The products are sold under the brand name 'Gowardhan' and 'Go' range covering an entire spectrum of milk, skim milk powder, ghee, processed cheese, butter, dahi and proprietary foods like dairy whitener and gulab mix powder.

Of the INR100 crore (US$22.43 million), INR60 crore (US$13.5 million) was sourced through Motilal Oswal Private Equity Advisors Pvt Ltd. to set up the milk plant at Palamner, Chitoor district in Andhra Pradesh. The company invested INR40 crore (US$8.97 million) sourced through internal accruals to establish a cheese facility at Manchar, 60 km from Pune. There was already a milk facility at the location. The company claims the facility is the largest cheese plant in Asia.

The Palamner plant for milk has a capacity of five lakh litres per day with provision to double the capacity. The focus of production other than milk would be its value added versions like ghee and curd (dahi).

The market is pegged at 50 tonnes and Nestle is the key player in the segment with a national presence along with Amul. Nilgiris too has a similar offering marketed out of its own outlets.

In Bangalore, since 70% of the sales occur at modern retail outlets, the company will embark on a product sampling sessions at corporate offices. Sharing the future growth efforts for Parag, Akkara stated now the focus would be the southern markets of Chennai, Hyderabad and Bangalore.

Currently, the company sources milk from the one lakh farmers in Maharashtra and will make efforts to identify many more from the agrarian community.

There are also 3,500 Jersey cows at Manchar and plans are under way to launch premium quality milk in certain parts of the country. It is also offering its facility for contract production of Dahi and cheese for Britannia.