Mother Dairy looks at east, west to fight rivals

INDIA – Increased competition from smaller players has prompted Mother Dairy to look beyond Delhi NCR region as it senses growth opportunity in the eastern and western areas of India.

The wholly-owned subsidiary of the National Dairy Development Board (NDDB) with sales of around Rs 7,200 crore ($1.06b), has drawn up a strategy — called ‘purab-paschim’ — to expand into new geographies, starting with Maharashtra.

To begin with, Mother Dairy has bought an old plant in Nagpur and is spending Rs 10-15 crore ($1.47m – $2.21m) to revamp it.

It is also setting up milk procurement facilities in the area that is estimated to cost around Rs 30 crore ($4.4m).

“We are in talks with the Maharashtra government for a new plant in Bhiwandi that may require investment of around Rs 150 crore ($22.08m),” Nagarajan S, MD of Mother Dairy, told TOI.

Apart from these, the company is looking to set up a plant for cut fruits and vegetables in Jharkhand for Rs 80 crore ($11.77m).

This will help Mother Dairy tap into the Rs 1,100-crore ($161.93) frozen fruits and vegetables business.

Plans are afoot to test waters in the juice business in some of the pockets using cold press technology. On the cards are also innovations in fruit pulps, pastes and concentrates.

Mother Dairy is also working to revamp its Safal stores that currently sell fruits and vegetables, aiming to open 250-300 milk booths in these new territories, as well.

The plans are part of the company’s strategy to notch up Rs 10,000 crore ($1.47b) sales.

Partly helped by the demonetization-driven shift, the company is expecting to see 15-20% growth in revenues in next two years and is expected to close the year with sales of around Rs 8,000 crore ($1.17).

January 27, 2017; http://timesofindia.indiatimes.com/business/india-business/mother-dairy-looks-at-east-west-to-fight-rivals/articleshow/56800199.cms

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