May 1, 2013
India's prices of milk and milk products may increase by 5-8% in the next three months due to the drought in parts of Maharashtra and Karnataka and international conditions.
Talking to reporters after the national launch of cheese spread in six flavours on Monday (Apr 22), Devendra Shah, Chairman, Parag Milk Foods Pvt Ltd. said the price rise in milk and other dairy products is expected from June-July this year. The company manufactures milk products under the brand-names of "Go" and "Gowardhan".
He said the drought situation in Maharashtra was grim. The dairy companies of the state had recently collected INR4 crore (10,000,000) or US$743,000 for the farmers as part of their corporate social responsibility (CSR) activity.
Parag, which recently opened its exclusive outlets in Mumbai and Pune, plans to open 10-150 such retail outlets in Gujarat alone in the next two years as the state has the highest per capita consumption of cheese, a reason why the company chose to launch its new products nationally in Ahmedabad.
Parag Milk has invested INR165 crore (US$31 million) in expanding its cheese business. It had set up a cheese processing plant with a capacity to produce 40 tonnes of cheese daily. Its own dairy farm has nearly 3,500 specially-bred Holstein Freisens cows. Cheese has a shelf-life of nine months while paneer's life is three months.
Currently, Parag Milk has a capacity to process two million litres of milk annually at its two plants in Maharashtra and Andhra Pradesh and has tied up with 3,200 village-level milk collection centres. This year, it is increasing the number of distribution depots from the existing nine to 20.
In 2012-13, the company's turnover was INR1,000 crore (US$186 million), he said, adding Gowardhan's cow milk ghee was the company's flagship brand.
Replying to questions, Shah said India produces about 25,000 tonnes per annum of cheese, worth INR650 crore (US$121 million), a fourth of which is exported to the West Asia, South East Asia and other regions. This market is growing at a 20% rate annually. Within the milk products industry, cheese comprises 7-9% of market.
