Dairy units in Bengal plan major expansion

Line up investments of Rs 200 crore over the next few years in backward and forward integration

Emboldened by the growing consumer preference for value-added dairy products, mid-sized dairy companies in West Bengal are investing close to Rs 200 crore over the next few years in backward and forward integration.

For instance, Thacker Dairy, which sells Farm Fresh milk, curd and Cold Rush ice-cream, is investing Rs 10 crore in revamping its manufacturing plant at Andul in Howrah to make room for an integrated 10 metric tonne plant.

Nishit Thacker, director of Thacker Dairy, said, “We are expanding the scope of forward integration at the Howrah plant, where we are making value-added milk products in bulk.”

 

The company is also investing close to Rs 100 crore in its backward integration programme. It has been allotted 184 acres by the state government at Haringhata, 50 km from Kolkata.

The investments will go into setting up an integrated cattle shed on the land allotted, bulk milk coolers, direct milk procurement from farmers, and a skimmed milk powder plant in order to utilise excess milk for other value-added products.

Dinesh Thacker, managing director of the company, said, “We will build the facility in phases. The cattle shed will start with 200 cows per month and the target is to have 5,000 cows in the integrated cattle shed, where all activities will be managed through computer networking systems to ensure hygienic conditions. The idea is to get into backward integration.”

The cattle shed will process close to 20,000 litres of milk per day. Thacker is also setting up bulk milk coolers in West Bengal, covering around 450 villages in Nadia and North 24 Parganas districts, from where it will directly procure milk from the farmers.

Each bulk milk cooler will entail an investment of Rs 15 lakh, and will be located within five km of each other. The idea is to do away with middlemen and help farmers get a better price for their milk. Also, since middlemen often alter the composition of fresh milk by adding preservatives and water, doing away with them will enable Thacker to procure fresh and pure milk.

Each bulk milk cooler will cover 12 villages and handle 2,500-5,000 litres of milk at a time. Gradually, Thacker plans to move away from the chilling centres and use the bulk milk coolers for direct milk procurement from farmers.

Likewise, Amrit Group, which is primarily in the animal feed business, is investing Rs 30 crore in a computerised cattle farm and in buying modern equipment.

Harish Bagla, managing director of Amrit Group, said, “We are launching three varieties of milk comprising cow’s milk, toned milk and double toned milk under the flagship brand ‘Amrit Fresh’. The range will initially be available in Kolkata and greater Kolkata in packs of 1,000 ml, 500 ml and 250 ml for cow’s milk only.”

“We test-marketed our milk a month ago in various parts of the city and received a good response, so we hope to capture a reasonably good market share by 2010-11,” said Bagla.

With a dairy farm of about 1,000 animals (buffaloes and cows) and a current production facility of 50,000 litres per day, the company is investing Rs 50 crore to achieve a production capacity of 100,000 litres per day by 2010-11.

West Bengal consumes nearly three million litres of milk daily and the industry is growing at 3-4 per cent a year. “Of this only one million litres per day is processed, and the state’s per capita consumption is also low at 126 gm as against a national average of 230 gm. So, we see huge potential for growth,” added Bagla.

Amrit Group is also in talks with various European firms and is exploring the possibility of launching value-added milk, with nutrition for infants and the aged.