European firm DLG Group enters India with Prabhat Dairy partnership

INDIA – DLG Group, the leading farm supply company in Europe has entered into an agreement with milk products company, Prabhat Dairy for the animal feed business to mark its entry into India.

With the partnership Denmark based agricultural products and retail co-operative is seeking to expand in the fast-growing animal feed market through India, one of the largest milk producers in the world.

An ET Retail report reveals that DLG has been looking to expand its geographic footprint and has been in talks with multiple Indian players.

Prabhat Dairy, which already runs animal feeds business will use the opportunity to leverage its capabilities and further scale up the business which includes animal nutrition products.

DLG, an established supplier of feed, seed grain, fertilizer, agricultural lime, crop protection is banking on cattle feed which forms a major part of animal nutrition in India.

India’s animal feed industry which primarily comprises cattle feed and poultry feed is expected to be worth US$30 billion by 2020.

Founded in 1998, Prabhat produces pasteurised milk, flavoured milk, clarified butter and cheese.

The alliance further strengthens its plans to expand its animal feed business through a backward integration strategy with DLG which produces high-quality vitamin-mineral feeds and farm supplies.

Sources familiar with the matter lauds that Prabhat Dairy plans to launch a separate animal nutrition business which includes cattle feed, nutrition supplements and animal genetics.

This will also help the firm to strengthen its production chain and build its association with the farmers through the supply of superior quality animal nutrition products.

PE fund India Agribusiness holds a 14.37% stake and French development financial institution Proparco holds an 8.68% stake in Prabhat Dairy.

Prabhat said it expects to post US$286.64 million in revenues by FY20 from the present US$214.98 million.

The company has two manufacturing facilities in Navi Mumbai and Srirampur, Ahmednagar and intends to double its general retail reach to 2 lakh (200,000) stores by 2020.

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