Kwality's net profit for Q1 decreases to Rs 1.04 crore

Dairy major Heritage Foods Pvt Ltd is planning to increase the business share of value-added products (VAP) from the present 22% in its current portfolio to 40% within four years. In order to achieve this, the company looks to come up with new varieties of yogurts, butter milk, lassi, flavoured milk and ice cream.

Recently, Heritage Foods signed a joint venture with Nova Dine, the French dairy company, to foray into the fruit flavored yoghurt domain for increasing its VAP range.

Brahmani Nara, ED, Heritage Foods, said, “As a leading dairy brand with a strong presence in South India, we strengthened our presence in the northern region after acquiring Reliance Dairy. We believe Heritage is smartly straddling the high-returns pouch milk segment and high-growth and margin accretive medium shelf life curd and yogurt segment. We plan on focusing on segments that entail high margins and low working capital.”

The company achieved consolidated revenues of Rs 16.8 crore for the quarter period ending 31st December 2018.

“The company’s vision is to achieve a turnover of Rs 6000 crore by FY 2022. This would require a 20% to 25% growth rate,” Nara stated.

She added, “We have undertaken various strategies to achieve this goal. This includes setting up a greenfield yoghurt plant by 2019 to improve the contribution from the VAP segment to 40% by 2022. Additionally, we want to increase our market presence by increasing our capacities in procurement, processing and packaging.”

KKR India Financial Services Pvt Ltd has dragged Dairy major Kwality Ltd to the National Company Law Tribunal (NCLT) on loan default of more than Rs 1,200 crore.

KKR & Co's non-banking finance unit has filed a petition against the Kolkata-headquartered company before NCLT under the Insolvency and Bankruptcy Code (IBC).

Kwality has a debt of about Rs 2,000 crore, of which 80% had gone bad because of poor business decisions. Its market value and financial performance have also declined considerably over the past year.

Kwality Ltd is a processor and producer of several types of dairy products, which include milk, ghee, butter, milk powder, curd, yogurt and cheese under the brand 'Dairy Best'.

RI Bureau

The Gujarat Co-operative Milk Marketing Federation (GCMMF), which operates its brand under Amul, has requested the government not to allow other countries to dump their dairy products in India under the Free Trade Agreement (FTA). Talking at a conference organised by CII, R S Sodhi expressed concerns over the possible entry of foreign players in the Indian dairy market under the FTA and registered his strong objections to such a move. “There are important lessons from the dairy sector for other food processing sector. Demand for processing and packed foods will increase manifold over the years to come driven largely by rising income levels and changing lifestyles,” added Sodhi. According to Sodhi, countries like New Zealand, Australia and European Union (EU) nations are under pressure to sell their surplus products in the Indian market. "Some countries are lobbying hard for access to the Indian dairy market through bilateral Free Trade Agreement (FTA) negotiations. We request our policy makers to ensure that dairy products are completely kept out of the ambit of FTAs with major dairy product exporting nations," Sodhi told.

Though the central government has not included dairy products in the FTA yet, Sodhi said that GCMMF has been cautioning the government against this move.

"We know that the government has never favoured the inclusion of dairy products under FTA, but it is our duty to caution them from time to time, since these countries still lobby for it. We believe that the entry of foreign players will severely hit the livelihood of millions of Indian farmers," added concerned Sodhi.