Gujarat Co-operative Milk Marketing Federation (GCMMF), which owns and markets dairy products under brand ‘Amul’, is aiming to be India’s leading FMCG player in another two years.
The dairy major is not just expanding its milk processing facilities, but is also looking at a five-fold jump in capacities at its chocolate-making unit in Gujarat.
Capacity addition
According to Rs. Sodhi, Managing Director, GCMMF, around Rs. 150 crore will be spent at Amul’s chocolate-making unit to increase production to 2,000 tonnes per month, up from the present 400 tonnes per month. Capacity addition will be completed in another six months time.
The facility was put up by the late Verghese Kurien – Father of India’s White Revolution – to prevent exploitation of cocoa bean growers of South India by the multinationals.
“Nearly 50 per cent of the capacity will be utilised internally in dairy value adds like ice-cream, flavoured milk and so on, while the remaining will be to push our chocolates portfolio,” Sodhi said. He was in the city to announce the co-operative’s tie-up as principal sponsor of the New Zealand cricket team in the upcoming ICC Champions Trophy.
Amul began with milk chocolates and later expanded the bouquet to include fruit and nut, dark, bitter, orange and coffee-flavoured chocolates. In recent times, the company tasted success with its 150-gram bar of ‘Dark Chocolates’.
GCMMF, Sodhi said, was aiming to be India’s largest FMCG player; overtaking HUL.
“The target is to overtake HUL and be India’s largest FMCG player by 2018-19,” he said, adding that Amul has for the last seven years witnessed a 19 per cent CAGR. GCMMF reported a turnover of around Rs. 27,000 crore in FY-17.
“We are eyeing a turnover of Rs. 50,000 crore by 2021,” Sodhi pointed out.
Rs. 2,500-cr capex
Around Rs. 2,500 crore will be spent over the next three years. Five new milk processing units are expected to come up – two each in Maharashtra and Gujarat and one in Bengal.
A third party unit is also expected to be operational in Jamshedpur (Jharkhand). Processing capabilities will be ramped up to 380 lakh litres per day from the current 300 lakh litres per day.
Procurement from non-Gujarat states that include Rajasthan, Uttar Pradesh, Haryana, Punjab, Maharastra and West Bengal are also being increased.
Currently, 15 per cent of its total daily milk requirements are met from States other than Gujarat.
“Around 13-14 per cent growth in procurement is expected in the coming days,” he added.
South India entry
According to the MD, GCMMF is also mulling an entry into the South, particularly Kerala and Tamil Nadu. Although the dairy major has been marketing its offerings there, the company still does not have procurement and manufacturing facilities in these States.
“So far our reach in the South is restricted to Hyderabad. We are now eyeing entry (procurement and manufacture) into Kerala and Tamil Nadu,” Sodhi said without giving a time-frame.
The Hindu Business Line
