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Danone Lines Up 10 New Products and Eyes to Double India Business by 2020

India: Danone is eyeing to double its business in India by 2020 for which it will bring in more global brands to Indian market. With launch of its global flagship infant nutrition brand ‘Aptamil’ in India, Danone is also focusing to leverage its Indian manufacturing operations for exporting to neighboring countries such as Nepal, Bangladesh and Sri Lanka. Aptamil will be manufactured in India at Danone’s world class facility at Lalru, Punjab. Company has invested USD23.08 million to upgrade the facility that was acquired from Wockhardt in 2012 and the product is priced at around USD9.7 (Rs 640) for a 400 grams pack and will be available in 20 cities in the country.

The nutrition business holds about 80% of the Danone’s overall business in India and the remaining through dairy business. Company is planning to double the nutrition business by 2020 and is focusing to enhance its market share in existing categories and enter new segments. Further, the company has also decided to launch 10 products in 2017, including two products that will be imported from the its global portfolio.

Danone is further planning to launch Neocate, its global brand, by the middle of the year in India. Other items to be launched this year includes a malt-based drink and a range of products for children with in-born errors of metabolism (IEM). In Asia, India and China are the fastest growing markets for Danone. Till now, Danone has invested around USD276.92 million in India including the acquisition of nutrition portfolio from Wockhardt and upgradation of Lalru facility in Punjab. Danone India currently exports to Bangladesh, Sri Lanka and Nepal generating 3 percent of its turnover from exports and is focusing on increasing it to 5 percent by 2020.

TechSci Research depicts that India dairy market has experienced tremendous development over the last five years. The liquid milk segment is propelling better margins as compared to the Value Added Dairy Products (VADP). This has enabled the companies to start concentrating towards supply chain to gain better margins and to decrease the operational costs. FSSAI has recently allowed inclusion of two particular nutrients which supports brain and eye development in infants following which the company could launch the brand in India. Danone is taking Make in India as a central point for its growth strategy. This is expected to increase the market share of Danone in India vis-à-vis the market size of India dairy products market that will in turn boost the growth and expansion of the company.

According to a recent report published by TechSci Research, “India Dairy Products Market By Type, Competition 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.

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