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The Gujarat Co-operative Milk Marketing Federation Ltd (GCMMF) that owns the Amul brand plans to invest $600 million (Rs 3,000 crore) in doubling its processing capacity for milk and milk products over the next six years.
The co-operative is also enhancing its retail presence to widen market reach by opening more distribution outlets, parlours and cafes, apart from strengthening backward linkages to enhance milk production.
“We are setting up five new dairies in Saurashtra, two in Delhi and one in Mumbai, besides expanding the existing plants. This will double our processing capacity to 22 million litres per day,” said Mr R.S. Sodhi, Managing Director, GCMMF.
Amul, which commands a 25 per cent market share in the pouch milk segment, has a processing capacity of 14 million litres per day.
Its current average milk processed stands at a little over 10 million litres per day. GCMMF, which clocked sales of Rs 9,774 crore in 2010-11, is eyeing a turnover of Rs 30,000 crore by 2020.
Mr Sodhi said GCMMF will finance the bulk of its new expansion plans through borrowings from the National Dairy Development Board and commercial banks.
“We also plan to expand the range of our milk products by setting up new lines to manufacture milk powder, ice-cream, the pro-biotic range of beverages and cheese among others,” he added.
Amul's current milk product range has some 40 products.
TO REACH 3,000 MORE TOWNS
The country's largest food brand is also taking other steps to expand its market reach. “We plan to reach out to 3,000 more small towns this year and are adding 200 super distributors,” he said. Amul will also add about 1,000 parlours to the existing 6,000 that sell all its products under one roof.
Amul, which has voiced its concerns against opening up foreign direct investment (FDI) in the retail sector, said it is prepared to face the challenges as and when they arise. “We are already prepared to face it,” Mr Sodhi said.
Further, the largest co-operative is also strengthening its backward linkages by improving infrastructure. “We are also investing in doubling cattle feed production to 9,000 tonnes per day,” Mr Sodhi said.
Besides, Amul is putting up infrastructure in villages such as bulk milk coolers and automated collection systems.
vishwa@thehindu.co.in
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