Start Up Dairy Firm MilkLane Bags Rs 27 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.”

Patanjali Dairy, a subsidiary of Patanjali Ayurved Limited, has introduced toned milk and cow butter at a cheaper rate than the other leading dairy companies. These products will be made available to customers across five major cities in India, including Delhi NCR, Rajasthan, Haryana and Maharashtra.

Baba Ramdev, Co-founder of Patanjali Ayurved, said, “Keeping in view the increasing demand of toned milk in the country, Patanjali is now selling milk at Rs 40 per litre, which is Rs 4 cheaper than what other companies are selling.”

“As of now, our aim is to provide at least 4 lakh litre daily. This has given huge respite to the consumers, as the two leading dairy companies, Amul and Mother Dairy, have increased milk prices,” he added.

Patanjali Dairy has also launched cow milk in tetra pack. The company’s other dairy products such as cow milk, cheese and curd, which it launched earlier, received a good response from the customers.

Ramdev further stated, “We have also launched ‘cow table butter’ in the market, which, unlike other companies, does not have artificial colours in it. It has natural colours and salt, which makes it good for health.”

Gujarat Cooperative Milk Marketing Federation (GCMMF), marketing dairy products under the Amul brand, is eyeing 20% increase in its revenue to Rs 40,000 crore this fiscal, helped by growth in volume and value terms.

The dairy firm reported a 13% rise in its turnover at Rs 33,150 crore during 2018-19 as compared to Rs 29,225 crore in the previous fiscal.

RS Sodhi, Managing Director, Amul, said, “In the last financial year, our revenue growth was because of higher volume and there was no price increase across our product portfolio. But, in this year, we are expecting growth in both volume and value terms. We are expecting 20 percent growth in turnover during 2019-20.”

“The milk procurement prices have gone up in the last few months in states like Maharashtra. We were paying our farmers higher prices when milk procurement prices declined in many states. So there will be no impact on us,” he added.

GCMMF had recently announced that the provisional unduplicated group revenue of Amul Federation and its 18 member unions crossed Rs 45,000 crore in 2018-19, up 13% from the previous year.

Tripura CM Biplab Kumar has asked Amul India to help develop dairy industry in the state.

A delegation of Amul India, headed by senior dairy expert S T Deshai called on Deb at his office and discussed the prospects of developing the dairy industry and milk-based economy in the state, shared a press statement.

The chief minister hoped that help from Amul will help in solving unemployment to some extent besides fulfilling the state's demand for milk, it said.

Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF) is the largest food company marketing milk and milk products under the brand name of Amul. Deb also said his government wants to share experiences in running dairy industry with Amul which has a vast experience in the sector.

The CM sought help from Amul to implement his plan of distributing 10,000 cows to farmers in rural Tripura. The state government had last month that it would launch a scheme for distributing 10,000 cows among 5,000 farmers to combat malnutrition and generate employment in the state.

Kamal Krishna Majumder, Director of Animal Resources Development Department, said that Tripura produced 1,74,260 metric tonnes of milk in 2017.

In April this year, a government notice said that steps would be taken for augmenting milk production at Gomati Milk Cooperative Limited.

Deb said, If Tripura become self-reliant in milk production then there will be no need for importing milk from other states and the money of our state will not go outside. I sought Amul India Limited to help in this sector."

दूध और कुछ दूध उत्पादों के विदेशी शिपमेंट को बढ़ावा देने के लिए, सरकार ने भारत सरकार से मर्चेंडाइज एक्सपोर्ट (एमईआईएस) के तहत इन उत्पादों के निर्यात के लिए शुल्क लाभ बढ़ाने का फैसला किया है।

इससे पहले, सरकार ने एमईआईएस के तहत कुछ कृषि और डेयरी सेक्टर वस्तुओं के लिए कर्तव्य लाभ 10% बढ़ाया था।

सरकारी अधिकारी ने कहा, "अब, एमआईआईएस के तहत अगले वर्ष 12 जनवरी तक दूध और कुछ दूध उत्पादों पर निर्यात इनसेन्टिव को 10 प्रतिशत से 20 प्रतिशत तक बढ़ाने के लिए निर्णय लिया गया है।"

बढ़ाए गए इनसेन्टिव में पनीर, पूरा दूध, स्किम्ड दूध, दूध और बच्चों के लिए दूध से बना भोजन, कन्डेन्स्ड दूध, दही, मक्खन और मट्ठा शामिल हैं।

राजस्व विभाग ने व्यय को पूरा करने के लिए 21.40 करोड़ रुपये का अतिरिक्त वित्तीय आवंटन भी किया है, जो इन इनसेन्टिव पर किया जाएगा।

अधिकारी ने आगे कहा, "इस संबंध में अधिसूचना जल्द ही विदेशी व्यापार महानिदेशालय (डीजीएफटी) द्वारा जारी की जाएगी।"

For boosting overseas shipments of milk and certain milk products, the government has decided to increase duty benefits for exports of these products under the Merchandise Export from India Scheme (MEIS).

Earlier, the government had enhanced the duty benefits to 10% for certain agriculture and dairy sector items under MEIS.

The government official said, "Now, it has been decided to increase export incentives on milk and certain milk products from 10 per cent to 20 per cent for about four months up to January 12 next year under MEIS."

Some of the items that are included under the enhanced incentives are cheese, whole milk, skimmed milk, milk and milk food for babies, condensed milk, yoghurt, buttermilk and whey.

The Department of Revenue has also made the additional financial allocation of Rs 21.40 crore to meet the expenditure, which will be incurred on these incentives.

"Notification in this regard will be released soon by the Directorate General of Foreign Trade (DGFT)," the official further added. 

मोहन सिंह आलूवालिया ने कहा कि 68.7% दूध व दूध से बने उत्पाद फ़ूड सेफ्टी व स्टैंडर्ड्स अथॉरिटी ऑफ़ इंडिया (एफएसएसएआई) के मापदंडों के अनुसार नहीं हैं। उन्होंने कहा कि सामान्य मिलावट डिटर्जेंट, कास्टिक सोडा, ग्लूकोज़, सफेद पेण्ट एवं रिफाइंड आयल द्वारा की जाती है। आलूवालिया ने आगे कहा कि देश में दूध व दूध से बने उत्पादों में मिलावट इतनी है कि 68.71% दूध व इससे बने उत्पाद एफएसएसएआई द्वारा निर्धारित मापदंडों के तहत नहीं बेचे जाते।

31 मार्च 2018 तक भारत में दैनिक दूध उत्पादन 14.68 करोड़ लीटर पंजीकृत है। उत्तर प्रदेश के राज्यों में दक्षिण राज्यों की अपेक्षा दूध में अधिक मिलावट दर्ज की जाती है। आलूवालिया ने आगे कहा कि कुछ वर्ष पूर्व में दूध में मिलावट पर हुए राष्ट्रीय सर्वे में यह पाया गया कि साफ़-सफाई व स्वच्छता कि कमी व दूध की संभाल, पैकेजिंग के लिए धोने वाले टबों में, दूध व दूध उत्पादों में डिटर्जेंट पाउडर मिलाया जाता है।

यद्यपि दूध में डिटर्जेंट पाउडर व दूसरे दूषणकारी तत्व जैसे यूरिया,  स्टार्च,  ग्लूकोज़ व फोर्मलिन इसलिए मिलाया जाता है, चूंकि यह दूध को गाढ़ा बनाते हैं और दूध को लम्बे समय तक सुरक्षित रख सकते हैं। हाल ही में भारत सरकार को जारी विश्व स्वास्थ्य संगठन की परामर्शी के अनुसार यदि दूध व दूध से बने उत्पादों में मिलावट को जल्द नहीं रोका जाता तो 2025 तक 87% नागरिक बहुत गंभीर बीमारियों जिसे कैंसर से ग्रस्त हो जाएंगे।    

Mohan Singh Ahluwalia, a member of Animal Welfare Board of India, said that around 68.7% of milk and milk products sold in India is not as per the standards prescribed by the Food Safety and Standards Authority of India (FSSAI).

He said that the most common adulterants which are being used are detergent, caustic soda, glucose, white paint and refined oil.

"The state of adulteration in milk and milk products in the country is such that 68.7 per cent of milk and milk products sold is not as per the standards laid down by the FSSAI," Ahluwalia further stated.

The production of milk in India is registered at 14.68 crore litres per day till March 31, 2018. The adulteration in milk was more in the Northern states as compared to the southern states of India.

Ahluwalia further said that as per a survey conducted by the National Survey on Milk Adulteration a few years back, it was found that due to lack of hygiene and sanitation in handling and packaging, detergents used in washing containers mix with milk and milk products.

"However, detergent and other contaminants like urea, starch, glucose and formalin are also used to deliberately adulterate milk as they provide thickness and preserve the milk for longer periods," he added.

As per an advisory issued by The World Health Organisation (WHO) recently to the Government of India, if adulteration of milk and milk products is not checked immediately, 87 per cent of citizens would be suffering from serious diseases like cancer by the year 2025.

Dairy firm Ananda is looking for a land to set up a new processing plant in eastern Uttar Pradesh and plans to invest about Rs 50 crore to open 1,100 retail outlets in the national capital by 2020, a top company official said.

Noida-based Ananda Dairy, which achieved a turnover of Rs 1,500 crore in the last fiscal, has three manufacturing plants at Bulandshahr, Gajraula and Pilkhuwa in Uttar Pradesh (UP) with a processing capacity of 12 lakh litre milk per day. The company has also taken on lease two plants at Kanpur and Moradabad with 6 lakh litres capacity.

"We are identifying land in eastern UP to set up a new processing plant. This is part of our commitment to invest Rs 500 crore in the state which was made during an investor's summit held this year," Ananda group CMD R S Dixit told PTI.

The plans would be of 4-5 lakh litre processing capacity, he added.

Dixit said the company is also strengthening its retail presence and has already opened 400 company-owned outlets, of which 400 stores are in the national capital and the rest are in UP and Uttarakhand.

"We plan to have 1,500 outlets in Delhi by 2020 from the current 400 stores. In Delhi, we opened 105 stores on a single day in February and another 200 stores on a single day in June," Dixit said, adding that the company was opening many stores at metro stations.

Asked about investment plans, he said retail stores are taken on lease and it costs anywhere between 3-5 lakh per store depending on the size and location of the outlet.

The rental of each store is below Rs 15,000 per month.

Dixit said the company sells pouched milk and other dairy products except for cheese and ice cream.

On the turnover, he said the company achieved a revenue of Rs 1,500 crore in 2017-18 and is growing at 25-30 per cent annually.

"We are targeting to reach Rs 3,200 crore turnover by 2020-21," Dixit said in a statement.

Ananda Dairy has also started exporting dairy products. It shipped cheese and some other products to the US.

Talking about issues faced by the dairy sector, Ananda's CMD said the government should consider reducing GST on ghee from 12 per cent as it is high.

The branded and packaged cheese attracts 5 per cent GST, while there is no GST on loose cheese, he said and sought that the government should address this anomaly.

With the commitment to provide its customers with quality dairy products at an affordable price and closer proximity, Dairy manufacturer Ananda has unveiled 200 new company outlets in the Delhi/NCR market space.

According to the reports, the company announced an investment worth Rs 10 crore, which reiterates its vision to give its valuable consumers, a direct access to the wide variety of nutritious and pure milk and milk products.

With this extensive expansion, Ananda aims to focus on an overall growth of 30 percent along with descent job creation.

The company, with its focused approach towards rapid expansion is all set to chalk its strategy to eye a bigger piece of the North market. Ananda envisions meeting its target of launching over 500 company outlets whilst achieving a projected turnover of Rs. 1,500 crore by the end of FY18.

“With the inauguration of 200 company outlets, we take pride in breaking our previous record of launching 105 Ananda outlets in one-single day. On achieving this milestone, we are delighted to make available our diverse product range, at a closer access to our consumers,” said Radhey Shyam Dixit, Founder and Chairman, Ananda Group told ANI.

With this massive single-day launch, Ananda is aiming to give its consumers a holistic experience, by opening up the company’s entire fresh and wide dairy produce range, including confectionery and bakery items for them to purchase.

Moreover, well-trained professionals, who are able to guide consumers to the right products, based on their unique dietary requirements, will staff the stores. Ananda’s philosophy is to create happier consumers with its portfolio of 75+ products that adds positive value to their health and contribute to their overall well-being.

Dairy startup Happy Cow Dairy Co has raised a seed funding of about Rs 4 crore from a group of angel investors including the former executive at Citi Bank and serial entrepreneur Mahendra Mehta and others. The Mumbai-based startup will use the capital to further expand operations.

Founded in November 2017 by Sarad Garodia, former Head of Britannia’s Dairy division, Happy Cow Dairy aggregates milk from dairy farmers by building milk collection centres enabled with technology near milk farms in Maharashtra and provides them in bulk to dairy corporations such as Schreiber Dynamix Dairy.

Happy Cow Dairy currently has about 20 milk collection centres in Maharashtra's Pune and Ahmednagar belts, complete with refrigeration units, weighing scales and testing equipment to ensure collection of high-quality milk. The startup has connected procures milk from about 600 farmers across villages in these areas.

Sarad Garodia, Founder of Happy Cow Dairy said, “We currently collect about 20,000 litres per day in our centres while Maharashtra alone collects about 2 crore litres per day. So we have a long way to go,”. Each centre enables a collection of about 2000 litres of milk per day.”

Within 4 months of operations, the firm has racked up Rs 6 crore in revenues and is looking to use the capital to set up to 150 centres over the 2 years. “We will close this year with about 50 centres at least. Eventually, I’d like Happy Cow Dairy to have set up about 250 centres across key milk producing zones in India,” Garodia said.

Happy Cow Dairy is targeting a turnover of Rs 150 crore by FY20.

Ananda Dairy is predicting a total add up of 30 percent rise from its  Rs 2,000 crore revenue in the next financial year as it expands retail footprint as well as product portfolio.

The company is planning to open 500 retail company-owned and company-operated outlets by end of next fiscal at places like Delhi-NCR, Haryana, Uttar Pradesh and Punjab.

Ananda Group Chairman R S Dixit said, "We are targeting over 30 per cent growth in turnover to Rs 2,000 in financial year 2018-19. We expect retail outlets to contribute 15 per cent to sales by then as we increase the number of outlets. It is 10 per cent at present."

The company is expected to report a turnover of Rs 1,500 crore in the current fiscal, ending March 31. Currently, it operates over 200 outlets in the NCR. It sells over 50 products at present and has presence in most of the dairy products, except ice creams.

About the company prospects of introducing ice creams category in the near future, he said: "It is not a priority right now. It will require huge investment". Based on customer need and feedback the company will launch more value-added products especially those with higher protein content.

French foods giant Danone has decided to exit the dairy business in India. The company which entered India in 2010 is rationalising its product portfolio and has discontinued stock keeping units (SKUs), which have been making a minority contribution to its overall business in India that include the UHT (ultra high treatment) and fresh dairy products.

In line with this, Danone’s factory at Rai near Delhi has discontinued production.

Danone under the leadership of its India MD Rodrigo Lima, plans to focus on its nutrition business that it had acquired from Wockhardt in 2012, for about Rs 1,500 crore. In 2015, the company consolidated its India business by merging the two portfolios (dairy and nutrition).

Danone was incurring losses on its dairy business which includes milk, flavoured yogurt, buttermilk, cold coffee, curd and smoothies and could not sustain maintaining its margin. The company was unable to compete with national giants like Amul, Mother Dairy and other regional brands.

In a statement, Danone said it has decided to rationalise its product portfolio in India to allow for accelerated investments and a sharper focus on growing its nutrition portfolio which is more than 90% of the business. The company said Danone has a stated goal to double its nutrition business in India by 2020 in line with its global mission to ‘bring health through food to as many people as possible’ and this renewed focus is key to achieving this goal.

Danone India Spokesperson said “We have great ambitions for our business in India and remain committed to invest and grow in India through well-established brands such as Protinex, Aptamil, Farex, Dexolac and Neocate. In order to maximise growth opportunities, we are continuously analysing our portfolio and sharpening our focus to accelerate investments on the best performing categories and products. For this reason, we will discontinue some of the SKU’s sold in India. Our focus is to bring nutritionally superior and relevant products to India, and 2017 has been a testimony of that with 10 new launches including some from our global portfolio”.

Maharashtra based milk and dairy products company, Prabhat Dairy Limited is exploring the possibility of setting up unit in Assam.

Chief Marketing Officer and Business Head, Prabhat Dairy Limited, Nidhi Nirmal said “We are exploring the possibility of setting up possessing unit and talks are going on in this regard with the state government. We are eyeing to capture 10 percent of market share by financial year 2019 and firm up the scale in institutional business in Northeast India.The market for UHT (ultra-heat treatment) milk is growing exponentially with a compound annual growth rate (CAGR) of 32 percent and the company aims to be a major contributor to the industry. To achieve the growth targets, the Company has planned to leverage its existing presence in the region by expanding its product portfolio. North East India is one of our primary target markets for our national expansion as it is one of the fastest growing in India, especially in Tetra Pak segment. We have strategized our products in line with the local demand as understand the requirements of the region since we already have presence here for a while. The market for UHT is growing fast and so is the demand for Tetra Paks is emerging as a preferred option of milk consumption in the North Eastern states. Our core focus would be to build Strong Consumer Connect as we are looking to launch more products in the region soon. Company will soon launch a range of value added products in Delhi, Punjab, Himachal Pradesh, Assam and firm up its presence in Madhya Pradesh and Maharashtra”.

Company currently has two plants in Maharashtra with a daily capacity to process 10 lakh litres of milk and produce 30 tonnes of cheese.

By the end of FY 2018, the company plans to enter and firm up its presence in various Northern, Eastern, Western and Central Indian markets, mainly Tier II and Tier III towns with higher disposable incomes.

Gujrat Co-operative Milk Marketing Federation Ltd (Amul) has decided to invest about Rs 250 crore in the dairy sector of Odisha.

Gujarat Co-operative Milk Marketing Federation Limited's Managing Director RS Sodhi said “currently there was a supply gap of 30 lakh litres of milk per day in Odisha. State was the second biggest market for Amul in the country”.

Mayank Jalan, MD of Keventer Agro Ltd, during his meeting with the Odisha delegation said “their intent to set up a unit for maize processing, promote banana cultivation and set up a food processing laboratory in the state.”

In the seminar, the representative of the TATA Global Beverages Ltd said that it had shortlisted Odisha as the potential location for setting up of a tea packaging unit over 20 acres of land with an investment of 40 crore and employment to 400 people.

The state MSME Minister Prafulla Samal, who was present in the seminar, had said food processing was a focus sector for the state. In order to promote the industry, Odisha had chalked out food processing policy, developed mega food parks at Deras and Rayagada and single window facilitation for investors.

Odisha's Additional Chief Secretary, MSME, L N Gupta said that with 10 agro climatic zones and 480 km long coastline coupled with surplus production of cereals, rice and vegetables, the state offered an enormous opportunity for food processing industry.

Provider of milk and other milk products prepared by the Orissa State Cooperative Milk Producers' Federation Limited (OMFED) at customers’ doorsteps on Monday signed a MoU with Grozip, a city-based online grocery service. Grozip will make home delivery of various OMFED products on a phone call or click of a mouse.

Odisha government had asked OMFED to start online marketing of milk and milk products in 2015 after the state-owned dairy board failed to sale huge amount of surplus milk. “Online marketing is the need of the hour and more numbers of customers want to buy products online so we tied up with Grozip.

Managing director of OMFED said “It a sizable costumer base who buy various products like grocery and vegetables from them and now the costumers can get milk through it. OMFED is also going to launch its own mobile APP (application) soon through which customers can directly order milk and milk products.

Anand Mishra, CEO and founder of Grozip  said “We have a customer base of around one lakh in the last one and a half years. We have plans to offers attractive schemes for customers like cash back and free delivery on a minimum order. We get around 60 to 100 orders a day from Cuttack and Bhubaneswar for various grocery items including vegetables. We are also planning to include cooked food in our products soon”.

Meanwhile, the online marketing service launched by Odisha State Poultry Products Co-operative Marketing Federation Ltd (OPOLFED) in 2015 has not been working for last several months.

FMCG giant, Nestle India said that it will pass on benefits of reduced tax rate under GST on various products such as milk powder to consumers once the new tax regime kicks in.

There has been considerable reduction in GST rate on milk powders and consequently the price of Nestle Everyday Dairy whitener is expected to undergo commensurate reduction, the company said in a statement.

Under GST, which got implemented from June 30 midnight, there will be no tax on fresh milk.

The company stated, "In categories where there are reductions in taxes, appropriate price reductions would be put into effect for stocks manufactured from July."

Nestle India further said there would be a transition time before new price stocks are available in the market.

Suresh Narayanan, Chairman & MD, Nestle India, said, "We believe that over time, this (GST) will unleash economies of scale and economies of efficiencies that can be quite significant."

He said, "The company is passing on the benefits of lower taxes, wherever applicable, to its consumers."

Dairy-based branded foods manufacturer and marketer Parag Milk Foods has forayed into whey protein range - Avvatar Absolute - and is eyeing 20-22 per cent market share in five years, a top official said.

Devendra Shah, Chairman, Parag Milk Foods, said, "We are entering the Rs 2,500 crore (Rs 1000 crore through organised and rest through unorganised channel) market with an initial 10 per cent market share. In one year we expect to capture 20-22 per cent market share of this premium product category."

Avvatar Absolute is claimed to be the first 100 per cent vegetarian whey protein made in India. It is made during the process of manufacturing cheese using fresh grass fed cow's milk.

"However, through e-commerce we will be available across the country," Shah said.

"We have invested Rs 110 crore in the plant for cheese and whey in Manchar in Maharashtra as we foresee huge demand from the retail consumers. Protein-based foods are becoming popular among people from all walks of life. With changing lifestyle there is growing interest of the younger generation in sports and nutrition," he said.

The manufacturing unit will initially produce 1.5-2 tonne whey and expand to 4-6 tonne in 12 months, he said.

The company is also planning to export Avvatar Absolute to all neighbouring countries.

It is mainly planning business to business marketing strategy for brand building, he said.

"We will reach out to nutrition supplement stores, pharmacies, modern retail stores and e-commerce portals for creating brand awareness and distribution," company's Chief Marketing Officer Mahesh Israni said.

He said, "Educating gym trainers and owners who are the key influencers in this category is going to be our key platform."

The Avvatar Absolute whey protein comes in three flavours - Double Chocolate, Vanilla Snow Creme and Cafe Mocha - in two sizes 2 lbs and 5 lbs.

"After establishing the brand, during our phase three expansion, which is in a couple of year, we are planning for natural extension of the product category like sports drink and energy drink," he said.

Parag Milk Foods, established in 1992, has manufacturing facilities at Manchar in Maharashtra and Palamaner in Andhra Pradesh.

Under brand 'Gowardhan', the company offers traditional products like ghee, dahi, paneer among others and under 'Go', they offer products like cheese, UHT milk and yoghurt.

According to Dilip Rath, Chairman of National Dairy Development Board (NDDB), fortification of foods, which can address nutritional value of millions, provides a huge opportunity to the organised dairy sector to increase their market share.

"The organised dairy sector is the only source for milk powder and condensed milk due to the requirement for specialised equipment.

"High nutritional deficiency disorders can be prevented with fortification of foods with Vitamin A and D, and it represents an opportunity for the organised sector to grow its market share," a release here quoted him saying at Anand in Gujarat.

Focused and continuous research and development, keeping in mind the fast-changing consumer preferences, will also help the organised sector in increasing its market share, he said.

Similarly, he said, development of longer shelf life dairy products, specialised dairy based nutraceuticals and wellness products, probiotics catering to different classes of consumers and niche markets needs, can be undertaken by the dairy industry, especially cooperatives, to increase realisation.

Rath said milk is India's single largest agricultural commodity in value terms and is more than the combined value of paddy and wheat.

As per reports, the value of the Indian market for milk and milk products is expected to grow at 15 per cent annually. Of this, the contribution of milk products like cheese, paneer, fermented milk products, butter and ghee would be significant, representing both an opportunity and challenge to the dairy industry, he added.

Dairy cooperative network should adopt renewable energy, he said. "These renewable energy initiatives include use of concentrated solar thermal for pre-heating of water and solar powered milk collection systems."

Though the Central Government has made its way clear for 100 per cent FDI (Foreign Direct Investment) in animal husbandry (including breeding of dogs), pisciculture, aquaculture and apiculture under automatic route, but unfortunately, the move has not managed to allure many foreign investors. The experts feel that the foreign investors are not ready to put their money on India, mainly because of the ban on cow slaughter.

In India, many states have joined their hands to curb the cow slaughter in their respective states but this has triggered a big controversy around the nation. Most of these states have banned this activity due to religious sentiments attached to the animal (Hindus considered cow as a holy animal). Sharing his views on the subject, Kuldeep Saluja, Managing Director, Sterling Agro Industries Ltd. maker of Nova brand of dairy products said that globally, non-milking cattle goes to slaughter house, which is not the case in India. So it's a big challenge for global dairy companies that want to enter the Indian market. Not being allowed to slaughter certain cattle is a huge drawback in India for global dairies.

In international markets unproductive cattle, most of which are cows, after being in dairies for 14-15 years, go to slaughter houses. A company expects 50-60 per cent return on investment on sale of each cow. Informing further, Saluja stated that 95 per cent of the cattle used in commercial dairy farming globally are cows and not buffaloes, unlike India. Hence, he said, the country is not lucrative for companies to attract FDI in animal husbandry sector.

International firms such as Fonterra of New Zealand, French cheese maker Fromageries Bel, Denmark's Arla, Dutch dairy cooperative Friesland Campina, Mexico's Grupo Lala, and Germany's Hochland Group have been exploring the Indian domain to fish in good opportunities to set up own units or to partner with local players.

RI Bureau

Kwality Limited, India's premier dairy foods company reported net sales of Rs 1441.22 crores up by 12.06 per cent for Q3FY16 as against Rs 1286.11 crores in the corresponding quarter of last year; net profit before tax during the same period stood at Rs 52.92 crores up by 19.70 per cent as against Rs 44.21 crores for the quarter ended 31st December 2014.  The EBIDTA at Rs 97.44 crore is up by 14.19 per cent as against Rs 85.33 crores in the corresponding quarter of last year.

Q3 FY16 Results (Comparisons with Q3 FY15)

• Net Sales at Rs 1441.22 crore vis-a-vis Rs 1286.11 crore

• PBT at Rs 52.92 crore vis-à-vis Rs 44.21 crore

•  EBIDTA at Rs 97.44 crore vis-a-vis Rs 85.33   crore

9M FY16 Results (Comparisons with 9M FY15)

• Net Sales at Rs 4285.09 crore vis-à-vis Rs 3909.21 crore

• PBT at Rs 151.22 crore vis-à-vis Rs 126.69 crore

• EBIDTA at Rs 284.94 crore vis-a-vis Rs 241.41  crore

For nine months ended December 31, 2015, the company reported Net Sales of Rs 4285.09 crores up by 9.62 per cent as against Rs 3909.21 crores in the corresponding nine months period of last year; net profit before tax during the same period stood at Rs 151.22 crores up by 19.36 per cent at as against Rs 126.69 crores for corresponding nine months period of last year. The EBIDTA at Rs 284.93 crore is up by 18.03 per cent as against Rs 241.41 crores in the corresponding period of last year.

Mr. Sanjay Dhingra, Managing Director, Kwality Ltd comments on the same, “We have recorded another quarter of good growth, which is in line with our expectations. We can attribute this growth to our focus towards strengthening the retail segment, which has helped us in registering these strong numbers. With the signing of Akshay Kumar as our brand ambassador and extension of our Palwal plant, we expect the momentum to continue and grow in the coming quarters.

Gujarat Cooperative Milk Marketing Federation (GCMMF), owner of Amul plans to expand its presence in Punjab from 50 collection centres to 1,000, at an investment of Rs 150 crore.

As cooperatives pay at least a rupee a litre over private buyers, it is good news for milk producers in the state.

Amul has branches like Rajasthan, Uttar Pradesh, West Bengal and Haryana (apart from Gujarat) but Punjab is going to be crucial, due to the scale of commercial dairy farming and the highest yield per cattle,‖ said R S Sodhi, managing director of GCMMF.

The huge milk surplus here can help us grow faster than the current 20 per cent annual rate. Nestle is the largest milk processor among private entities in the state, procuring 800,000-900,000 litres a day for its units at Moga (Punjab) and Baddi (Himachal Pradesh).

GlaxoSmithKline Beecham, Wockhardt, Supreme Agro, MilkFed and Rana Food are some of the prominent private milk processors. Punjab‘s average daily production is 26.5 million litres a day and the marketable surplus is 15 million litres a day. Of the latter, private entities take about 1.32 million litres. The bulk of this is by Punjab State Cooperative Milk Producers‘Federation; it procures close to 1.2 million litres a day.

Amul‘s present share is an insignificant 50,000 litres a day. Under the expansion, GCMMF is to have 1,000 collection centres, with infrastructure to procure at least a million litres a day, said Sodhi.

In the processing of milk, setting up of a cluster of procurement centres with state-of-the-art equipment is the most crucial component of investment. A processing plant can be hired through a third party. We have such an arrangement at Batala in Punjab and plan to replicate this at Khamano, near Ludhiana and at Bathinda. The operations at Khamano would commence this month and Bathinda might take some time, he added.

The organised sector in Punjab handles only five per cent of milk processing, said Inderjit Singh, director, dairy development, in the state government. The expansion of brands like Amul, backed by the cooperatives would enhance competition and help farmers both financially and on quality parameters. The cooperatives provide backward integration in the form of good feed, inputs and the latest knowledge to dairy farmers.

A purchase tax of 3.5 per cent on milk in Punjab has been a hurdle in expansion of private entities in milk processing. The farm price of milk is Rs 28-29 a litre for cow milk and Rs 34-35 for buffalo milk. 

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.