INDIA – Dodla Dairy Ltd,a leading dairy company in India’s Telangana states, has acquired its peer Sri Krishna Milks Private Ltd for Rs 50 crore (US$6.6 million).
According to a stock exchange announcement by Dodla Dairy, Sri Krishna Milks (SKMPL) was founded in March 1989 and was the first private sector dairy company in the state of Karnataka.
SKMPL is mainly into procuring milk, manufacturing, and selling dairy products (milk and milk products).
The acquisition on a cash bases was made with the goal of expanding the company’s business, according to Dodla Dairy.
Dodla Dairy is a South India based integrated dairy company that is ranked as the third largest among private players in terms of milk procurement per day (average 1.02MLPD).
The Company’s product portfolio consists of Milk, Butter Milk, Ghee, Curd, Paneer, Flavoured Milk, Doodh Peda, Ice Cream and Milk Based Sweets.
Shares of Dodla Dairy surged 19 per cent to Rs 548 on the BSE in Monday’s intra-day trade after the company announced acquisition of dairy products company Sri Krishna Milks Private Limited (SKMPL).
The acquisition comes at a time when dairy companies in India are spiking prices of their products due to a spike in the cost of production.
The Gujarat Cooperative Milk Marketing Federation (GCMMF) recently increased the price of milk by Rs 2 per litre in all markets across India.
This is the second time this fiscal that the price of milk is being hiked. In June 2021, GCMMF raised the price by Rs 2 per litre.
The dairy cooperative defended its decision by stating, “The increase of Rs 2 per litre translates into 4% increase in MRP which is much lower than average food inflation.”
In the Ahmedabad and Saurashtra markets of Gujarat, Amul Gold will now cost Rs 30 per 500 ml, Amul Taaza will cost Rs 24 per 500 ml and Amul Shakti will be sold at Rs 27 per 500ml.
“This price hike is being done due to rise in costs of energy, packaging, logistics, cattle feeding cost, thus overall cost of operation and production of milk has increased,” the company said in a release.
“Considering the rise in input costs, our member unions have also increased farmers’ price in the range of Rs 35 to Rs 40 per kg fat which is more than 5% over previous year.”
Amul as a policy passes on almost 80 paise of every rupee paid by consumers for milk and milk products to the milk producers.
The company said that price revision shall help in “sustaining remunerative milk prices to our milk producers and to encourage them for higher milk production.
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