Heritage expects Reliance’s dairy business to break even by Q3 FY18

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    Hyderabad, August 22, 2017: Andhra Pradesh N. Chandrababu Naidu-backed Heritage Foods expects its recent acquisition of Reliance’s dairy business to break even by the third quarter of this financial year, informed a senior company official on Monday on an investor call.

    For the first quarter of FY18, the acquired business made a loss of 10% at profit before tax (PBT) level according to Economictimes.com.

    According to M. Sambasiva Rao, president, Heritage Foods, the Hyderabad-based company expects to achieve break even of Reliance’s dairy business which Heritage acquired couple of months back by the end of third quarter of FY18. This will be achieved by closure of milk procurement at loss making routes and shifting the processing and packaging of milk from third party facilities to Heritage’s own facilities.” Reliance’s dairy business generated a revenue of Rs 67 cr revenues in Q1 FY18.

    Economictimes.com also quoted that milk sold beyond 25 km radius of chilling facility is not profitable as the bacteria count starts increasing, company executives said.

    Also, while the company plans to continue with the two brands of Reliance namely Dairy Life and Dairy pure in Punjab and Haryana where it has higher penetration, it will convert to Heritage in Rajasthan and Jaipur.

    According to the reports published in Economictimes.com  heritage Foods had completed the acquisition of Reliance’s dairy business in April this year having announced in October 2016. In a BSE filing, the company informed that post the transaction closure, Reliance Retail will continue to trade in dairy products including Heritage dairy products through its retail and wholesale channels.

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