August 16, 2011

 

Keventer to acquire skimmed milk-makers

 

 

The INR1,800-crore (US$398.6 million) Keventer Group is intending to acquire two Uttar Pradesh based skimmed milk producers to enlarge its product portfolio.

 

The acquisitions will be part of the group's INR350 crore (US$77.5 million) expansion plan. Plans are also afoot to add cheese in the product portfolio and scale up milk production to about two million litres a day.

 

"Foraying into the skimmed milk powder segment is our focus area. We have short-listed two factories in Aligarh and Bulandshahar in Uttar Pradesh and are in final stages of negotiations. We hope to firm up these deals by November this year," Mayank Jalan, Managing Director of Keventer Agro Ltd, said.

 

The total acquisition value of both facilities would be close to INR210 crore (US$46.5 million).

 

In addition, Keventer would invest INR110 crore (US$24.4 million) to upgrade the facilities.

 

The proposed foray would also add to their profitability, as margins on skimmed milk powder are generally higher than liquid milk, he pointed out.

 

Keventer Agro has an alternate plan of greenfield expansion in Delhi, in case its acquisition attempts do not succeed.

 

"We have an alternate plan for putting up a skimmed milk factory near Delhi at an estimated investment of about INR300 crore (US$66.4 million)," Jalan said.

 

The company was exploring the market for high-end cheese in the country.

 

"We are in talks with an Irish company for adding high-end cheese to our product portfolio," he said.

 

Keventer would also look at manufacturing chenna (paneer) to be supplied to the sweetmeat shops.

 

"We have been working on it for the last two years and we are hopeful of launching it soon," he said.