December 28, 2020


Amul marketer to invest US$163 million to boost processing capacity


Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF), which markets the Amul brand of food products, is planning new investments to raise processing capacities in key markets including Kolkata and Andhra Pradesh besides its strong-hold Gujarat, The Hindu Business Line reported.

The Federation would be investing over ₹1,200 crore (~US$163 million; ₹1 = US$0.014)  towards additional milk processing and value-addition capacities in these regions by 2022.

GCMMF will invest about ₹250 crore for a processing facility in Kolkata with a capacity of 10 lakh litres per day (LLPD), while it has planned about ₹450-500 crore investments for a milk processing facility in Rajkot in Saurashtra. In North Gujarat, it is setting up additional dairy product processing capacities with investments of ₹600 crore. RS Sodhi, MD, GCMMF, says the new investments will support growing demand for packaged, branded dairy products.

"Even during the COVID-19 lockdown, we have witnessed growth in dairy products consumption. However, there is an adverse impact on HoReCa segment, where the demand is down by about 30%. But overall consumer demand in most markets has recovered," he says.

Amul had earlier announced its plans to invest about ₹1,500 crore over the next two years.

Valamji Humbal, vice-chairman of GCMMF and chairman of Sarhad Dairy, adds that capacity addition in Rajkot will be a big push for the region's dairy farmers, who have to transport the milk to Gandhinagar for processing.

"The Saurashtra region produces milk to the tune of about 35 lakh litres per day, of which about 10-12 LLPD or so gets processed at the local processing centres, whereas a large quantity of about 20-25 LLPD has to be transported to Gandhinagar's Mother Dairy for further processing. This involves transport costs as well as wastage, additionally due to 12-hour travel, the milk quality also gets impacted," explains Humbal. "This will mean improved margins for the dairy farmers," he adds.

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