Mother Dairy to Expand Into New Geographies

Mother Dairy is looking forward for expanding its business into new geographies.

India: Mother Dairy, a wholly-owned subsidiary of National Dairy Development Board (NDDB) is looking forward for expansion into new geographies. Growth opportunity in western and eastern areas and increased competition from smaller players has prompted the company to look beyond Delhi NCR region. The company has drawn up a strategy called `purab-paschim’ to expand its business into new geographies. Mother Dairy will be starting with Nagpur, as the company has bought an old plant in the city and will be spending around USD1.47-2.20 Million to revamp it.

Further, Mother Dairy will be setting up a milk procurement facility in the area which is estimated to cost around USD4.41 Million. The company will also set up a new plant in Bhiwandi which may need an investment of around USD22.03 Million and for that the company is in talks with Maharashtra government. Mother Dairy is planning to open around 250-300 milk booths in these new territories. 

Mother Dairy is also looking to set up a plant for cut vegetables and fruits in Jharkhand for around USD11.75 million and this will help the company to tap into the frozen fruits and vegetables business. Apart from this, the company is working to revamp its Safal stores that currently sell vegetables and fruits. In order to bring in modern retail practices in the stores, the company will be spending around USD0.01-1.02 Million. Presently, Safal is operating around 300 stores in Delhi NCR, which contributes around 10% of its revenues, while milk, edible oil and value-added dairy products make up rest of its portfolio.

According to TechSci Research, the investment by the company would help in expanding its base in the country and capture a better market share in the country’s dairy market. The company is also looking to increase the expansion of its frozen food market by increasing its penetration in other states such as Jharkhand. This will boost the company’s performance in coming years as the frozen food market in the country is set to witness a significant growth during the forecast period.

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.

According to a recent report published by TechSci Research, “India Frozen Food Market By Product Type, By Organized Vs Unorganized, Competition Forecast and Opportunities, 2011 - 2021”, frozen food market in India is projected to register a CAGR of 15% during 2016-2021. In 2015, frozen food products market in India was dominated by frozen snacks segment. Further, with increasing availability through online sales channels such as Amazon, Big Basket etc., frozen snacks are projected to continue dominating India frozen food market through 2021. McCain, Godrej Tyson, Venky’s, Darshan Foods, National Dairy Development Board (Mother Dairy), Al Kabeer Exports and Innovative foods are few of the leading players dominating India frozen food market.