Parag Milk to raise $17 million from IFC

End of last year the company had raised $13.9 million from IDFC to support investment

IDFC and Motilal Oswal backed Parag Milk Foods Private Limited to raise $17 million from International Finance Corporation (IFC) for its proposed $32.7 million investment. It may be noted, end of last year the company raised $13.9 million from IDFC to support investment, which includes plant for value added products and automation in the existing plants. At present the company has plants in two states Maharastra and Andhra Pradesh.

Parag Milk Foods (Parag), established in 1992, is one of India’s largest private dairy companies. It has a milk processing capacity of upto 2,000,000 litres per day (LPD) - 1,200,000 LPD at Manchar, Maharashtra and another 800,000 LPD at Palamner, Andhra Pradesh.

Parag has a diversified product portfolio ranging from liquid milk to value added products like UHT milk, cheese, butter, ghee (clarified butter), paneer (cottage cheese), yoghurt, curd, lassi, flavored milk, dairy whitener and milk powder, sold under the brands ‘GO’, ‘Gowardhan’ and ‘Top Up’, with value added products being over 60 per cent of sales.

For the next phase of growth, Parag plans to continue with its strategy of shifting to value added products which offer better margins, especially Whey (de-mineralised whey powder), Cheese and UHT milk. Also, the Company plans to strengthen its current operations through plant automation and expanding its procurement and distribution networks, according to Project disclosure.

The total project cost is estimated at $32.7 million, of which $13.9 million or 42 per cent has already been funded through an equity investment by IDFC in September 2012. IFC proposes to invest up to $17 million in the project.

The project involves setting up a Whey plant in Manchar,UHT milk plant in Palamner, plant automation in Manchar and Palamner and chilling centers at both Manchar and Palamner.

Parag, established in 1992, is one of India’s largest private dairy companies. It has a milk processing capacity of up to 2,000,000 litres per day (LPD) - 1,200,000 LPD at its facility in Manchar, and another 800,000 LPD at Palamner.

The Company has a diversified product portfolio ranging from liquid milk to value added products like UHT milk, cheese, butter, ghee (clarified butter), paneer (cottage cheese), yoghurt, curd, lassi, flavoured milk, dairy whitener and milk powder sold under the brands ‘GO’, ‘Gowardhan’ and ‘Top Up’, with value added products being over 60 per cent of sales. It owns one of the largest integrated cheese plants in Asia with capacity of 40 tonnes per day.

Established in 1992 by Devendra Shah who is the main promoter and the Chairman of the Group. His two brothers, Pritam Shah (Managing Director) and Mr. Parag Shah (Director) are also co-sponsors in the Company and responsible for its day to day operations. The Company is privately held, with all local sponsors.

Currently, the three promoters and their family own 58 per cent of Parag. Private equity funds, IDFC and Motilal Oswal own 21 per cent and 12 per cent respectively.