Sakthi group to expand its milk operations

India: Coimbatore based Sakthi group’s dairy division which is a part of ABT industries is expanding its operations and planning to invest INR1.8 billion in the coming three years in order to meet the rising demand for milk and dairy products in India. The ABT industries includes the dairy wing of Sakthi group, and is planning to produce 1 million litres a day, currently it is producing 400,000 litres of milk per day, simultaneously they will increase the production of their value added products.

The dairy division will invest around INR300 million in this year and is planning to set up a factory equipped with modern facilities and will manufacture cheese, paneer, yoghurt, sweets, ice creams and flavoured milk, presently they are manufacturing paneer on a very small scale. Currently, the production unit of the dairy is located at pollachi and plans are to set up another factory at Krishnagiri which would produce 500,000 litres of milk per day in order to expand its supply of milk to other southern states which is currently limited to Tamil Nadu and Kerala only. For distribution the company will set up 5 units for milk packing, of which two units will be in Kerala.

The company further have plans to raise the production of ghee which is a flagship product of the company and sell it to all over the country. Currently it is producing 70 tonnes a month and plans are to produce 240 tonnes per month. The division is producing milk powder, butter, curd and other ready to cook mixes. By year 2025 the company has plans to set up 4000 integrated farms and it is owing eight farms at present.

According to TechSci Research, due to continuously increasing population in India the demand for the milk and dairy products is increasing which is pushing the dairies to expand their milk operations in order to meet the demands. Companies are opening such factories which are equipped with modern facilities so that they can offer value added products to the consumers. The companies in order to maximise the profits should offer dairy products which are different from the regular dairy products.

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.