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AP Dairy facing 25% supply deficit

Itishree Samal  |  Chennai/ Hyderabad 

Andhra Pradesh Dairy Development Cooperative Federation (APDDCF), a statewide enterprise of cooperatives for dairy development and the second-largest milk procurement agency in India, is currently facing a 25 per cent deficit in milk supplies.

“The consumption of milk and dairy-based products has increased tremendously over the years in the state. The demand is so huge that even after we have doubled our milk procurement this year to 400,000 litre per day, we are facing a shortage,” managing director and vice-chairman Mohd. Ali Rafath, told Business Standard.

Milk procurement is growing in the state over the years. For alone, the milk procurement has increased to 113.6 million litre in 2011-12, a growth of 4.16 per cent from 109.1 million litre in 2010-11.

“The milk procurement is expected to see a 20 per cent rise in the coming year with the proposed (NDP) and the State Milk Mission,” he said.

NDP, a World Bank-funded scheme, with a total budget Rs 2,246 crore, will provide around Rs 140 crore to each state in the next five years to facilitate milk productivity. It will support animal nutrition, breeding, cold storage creation and overall increase in milk procurement.

“The State Milk Mission, a proposed Rs 6,000-crore plan to boost milk procurement at the state level, is expected to increase milk productivity by two litre per day per farmer,” Rafath added.

Also, Nabard’s Dairy Development Fund, which was launched this year, is facilitating the dairy business in the state. This year itself, farmers have shifted to dairy from farming, as dairy business does not involve any risks. It also gives good returns, project manager Prabhakar said. “Farmers’ earnings from have grown to Rs 258 crore in 2011-12, from Rs 45 crore in 2004-05,” he added.

APDDCF, started in 1981 to develop milk procurement, processing, packaging and marketing in the state, currently has a network of 5,000 villages, 4,673 milk collection centres, 85 milk routes, covering 11 districts in the state.

Its turnover has grown tremendously over the years – from Rs 177 crore in 2003-04 to Rs 450 crore in 2011-12. “We expect the same growth to continue in the coming years,” Prabhakar said.

APDDCF, which retails its products under the ‘Vijaya’ brand, now enjoys a 70 per cent market share in Hyderabad and 30 per cent across the state in milk-based products, competing with players like Masqati, Jersey and Heritage.

Other initiatives
is planning to expand its ice-cream division in partnership with two private - Continental Food and Meghna Foods. “We are in talks with the South Central Railway (SCR) to provide ice-creams and other milk-based products. We will be covering Andhra Pradesh and Tamil Nadu in Phase-I,” Rafath said.

For the year 2012-13, targets to achieve Rs 3-crore revenues from its Vijaya packaged drinking water, which it had launched in October 2010. This year, Vijaya packaged water recorded a turnover of Rs 1.68 crore, Prabhakar said.

First Published: Sat, May 12 2012. 00:47 IST