Amul to invest Rs 5,000 cr to set up 10 milk processing plants

Amul Managing Director R S Sodhi said Amul is on track to achieving annual revenues of Rs 20,000 crore this year

Dairy products giant Amul is planning to invest Rs 5,000 crore to set up around 10 milk processing plants in the next fiscal in order to achieve the revenue target of Rs 50,000 crore by 2020.

"We will invest Rs 5,000 crore to set up around 10 milk processing plants in the next financial year, including two plants in Delhi, three in Uttar Pradesh, one each in Kolkata and Maharashtra and the rest in Gujarat to achieve our revenue target of Rs 50,000 crore by 2020," Amul Managing Director R S Sodhi said at the India Food Forum 2015 here. Further, Sodhi said, Amul is on track to achieving annual revenues of Rs 20,000 crore this year.

Even as increasing milk productivity, improving cattle breeds and feeding practices in the country represent challenges for Amul, still the next generation of rural farmers should remain in the animal husbandry business, Sodhi said.

"It is possible to earn Rs 40,000 per month with 30-40 cows and buffaloes at project cost of Rs 21 lakh including a loan component of Rs 15 lakh," Sodhi said.

On new entrants in the dairy segment from the private sector and MNCs, Sodhi said, India's organised sector only constitutes 20 per cent of the total market size of Rs 4 lakh crore for dairy products and there is space for everyone.

"Our philosophy for the past 60 years have been to ensure remuneration prices for our 3.5 million members and value for money for the consumer, using the best ingredient at a fair price," Sodhi said.

Unlike some in the industry who source raw material at cheaper rate and get better realisation in sales, Amul ensures in getting raw material at best price while keeping selling price lower than its competitors, he asserted.

"Hence, we cannot spend more than 1 per cent of our revenue on advertising, compared to other food companies who spend 8-15 per cent annually," Sodhi said, adding that its advertising expenditure last year was 0.8 per cent. Amul, the dairy cooperative based in Anand district of Gujarat, formed in 1946, is a brand managed by Gujarat Co-operative Milk Marketing Federation.