Dairy firm, Prabhat Dairy Ltd, aims to draw 50 per cent of its business from B2C products by 2020, as it hopes to increase its capacity utilisation in the coming years. At present, the company draws 30 per cent of its business from the segement.
Prabhat Dairy's B2C products include liquid milk, cheese, paneer, curd and the recently launched ice-cream which it sells through retail outlets and modern trade. However, at present, 70 per cent of its business comes from B2B segment, which includes supply of products to players like Mondelez, Abbott, Parle, Nestle and Future Group, among others.
Vivek Nirmal, joint managing director, Prabhat Dairy Ltd, "Currently, our cheese plant is running at a 20 per cent capacity, though we are the third largest cheese manufacturer. We are expecting higher capacity utilisation of our products in the coming days where the share of value added products will continue to grow. Our aim is that by 2020, 50 per cent of our business should come from the B2C segment including products like milk, ghee, curd, paneer, cheese, and ice-cream."
The company also looks to expand and plans to market its products through 2,00,000 retail outlets in the next two years, up from 1,00,000 outlets right now.
Nirmal added, "At present, the company has a capacity utilisation of 60 per cent. The company intends to take this up to 85-90 per cent in next two years."
The Competition Commission of India (CCI) has given approval to Tirumala Milk Products to buy Sunfresh Agro Industries, a subsidiary of Prabhat Dairy.
The fair trade regulator said, "CCI approves acquisition by Tirumala Milk Products Pvt. Ltd of (a) Prabhat Dairy Limited's subsidiary Sunfresh Agro Industries Private Limited; and (b) dairy business of Prabhat Dairy."
In January, Prabhat Dairy said that Tirumala Milk Products, France-based Lactalis' Indian subsidiary, was buying its dairy business for Rs 1,700 crore, which is 1.09 times their sale in 2017-18 of Rs 1,554 crore.
Apart from the dairy business, the transaction further involves the sale of 100% shareholding in Sunfresh Agro Industries through a share purchase agreement.
DLG, Europe’s second-largest farm products brand is entering India in partnership with Prabhat Dairy.
Headquartered in Copenhagen, Denmark, DLG has been looking to expand its geographic footprint and has been in talks with multiple Indian players. However, discussions with Prabhat progressed significantly with the two now joining hands for the animal feed business.
Prabhat already has a presence in this space and the alliance with DLG will help the former to scale up the business. Besides, superior quality animal nutrition products will help in increasing milk yield, something that will boost Prabhat’s mainstay dairy business, which includes pasteurised milk, flavoured milk, clarified butter and cheese. Prabhat declined to comment.
DLG’s India foray follows the recent consolidation deals in the global animal feeds business with Archer Daniels Midland (ADM) acquiring France’s Neovia, Tyson buying Proteins Inc and Cargill snapping up Integral Nutricao in Brazil. All the three companies — ADM, Tyson and Cargill have a play in India’s animal nutrition sector, which is expected to touch $30 billion by the end of this decade.
Started in 1998, Prabhat, has a turnover of Rs 1,557 crore in fiscal 2018, and is aiming at Rs 2,000 crore by the end of this decade.
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