BAMUL plans setting up another milk processing facility

India: Bangalore Cooperative Milk Union (BAMUL) is planning to set up another milk processing facility in Kanakapura which is about 60 km from the city and the unit will be operational in about 18 months. The increasing milk demand prompts BAMUL to set up another facility. BAMUL is planning to invest Rs 426 crore in setting up the facility and it will be a fully automated dairy which will process milk and make other dairy products like cheese, paneer and other products.

The milk is sold under the brand name Nandini, and Nandini brand captures four-fifth market of the city by selling 2.2 million liters, but the existing facility do not seem capable enough to handle the influx of milk therefore the urgency of opening another facility occurs. Presently 64 products are sold under the Nandini brand and the company officials and Karnataka Cooperative Milk Producers' Federation (KMF) believes that opening up another unit will expand the market share of BAMUL by 5%. BAMUL will soon open around 1,000 Nandini outlets in Bangalore as it aims at making more by-products in order to earn healthy margins and better serve the interests of dairy sector.

The Karnataka Cooperative Milk Producers' Federation (KMF) is encouraged by the healthy growth rate of its special ultra high temperature (UHT) milk, which promises a 12-24-week shelf life. The production of this product started around 18 years ago but the growth has paced up in last 3-4 years. Further, the federation has plans to convert a significant ratio of its milk into UHT milk.

According to TechSci Research, the milk procurement in Karnataka is growing at about 12% annually as the Chief Minister Siddaramaiah has doubled the incentive paid to dairy farmers, the daily procurement in July last year was around 7.2 million litres as CM initiated to provide milk to anganwadi and school children six days a week. Moreover, the growth of UHT category of milk will be another driver as many professional who do their shopping once in a week prefer UHT milk as it has longer shelf life.

According to a recent report published by TechSci Research, “India Dairy Products Market Forecast and Opportunities, 2011 – 2021”, the market for dairy products in India is projected to grow at a CAGR of over 7% during 2016 - 2021. In 2015, North India dominated the country’s dairy products market, on account of increasing per capita expenditure, rising youth population, introduction of value added dairy products, changing consumption patterns, and growing penetration of international players. India dairy products market is witnessing a shift towards healthier products such as probiotic drinks, yogurts, etc. Few of the leading players operating in India dairy products market include Gujarat Cooperative Milk Marketing Federation Ltd., National Dairy Development Board, Karnataka Cooperative Milk Producers Federation Ltd., and Tamil Nadu Co-operative Milk Producers' Federation Limited, among others.