Amul setting up five plants to increase reach

The Gujarat Co-operative Milk Marketing Federation (GCMMF) is setting up five new plants to expand Amul's foothold.

R S Sodhi, managing director, said it was considering opening its first plant in south India. Amul has a target of Rs 50,000-crore annual sales by 2020 and the new plants will be crucial.

A plant is coming up in Guwahati and another one in Kolkata. South India is supplied by two third-party manufacturers in Karnataka and Puducherry.

"We are considering setting up our own plant in the south," Sodhi said.

The co-operative is also building plants in Kanpur and Lucknow with an investment of Rs 450 crore, a cheese manufacturing unit in Palanpur and expanding one of its two plants in Gujarat.

Cheese, yogurt, lassi and sweetened milk generate nearly 45 per cent of Amul's Rs 23,000 crore revenue. Profit margins for value-added products are higher for most milk co-operatives, which pay 80 per cent of their revenue from milk to farmers. Recently, Mother Dairy Fruit and Vegetable, too, increased its focus on such products.

Consumers are also switching to milk-based drinks from carbonated ones because of increased health awareness. Improved availability of ready-to-consume dairy products has helped this trend.

AIMING BIG
n Amul aims to achieve 36 million litres/day capacity by 2020 from 28 mn l/day now
n It is mulling options to set up plants in South India, where its presence remains low

n A plant under construction in Guwahati will be the first one for the co-operative in the Northeastern region
n Increased distribution and local procurement will help Amul achieve targeted Rs 50,000-cr annual sale by 2020 from Rs 23,000 cr in 2015-16