Mother Dairy's Bold Expansion: Rs. 2,000 Crore Investment in New Plants Across India
Mother Dairy Fruits and Vegetables Pvt Ltd, the frontrunner among dairy and food processing companies, has announced an ambitious plan to invest around Rs 2,000 crore in the next three years. This huge investment, it is learnt, will be utilized to establish five new plants across the country with improved processing capabilities, as consumer demand is rising consistently.
History
Mother Dairy was commissioned in 1974 as a wholly owned subsidiary of the National Dairy Development Board (NDDB), under ‘Operation Flood’. It was an initiative under Operation Flood, a dairy development program aimed at making India a milk sufficient nation. Mother Dairy sources a significant part of its requirement of liquid milk from dairy cooperatives and village level farmer centric organizations.
Major Investments and New Projects
A new greenfield dairy plant at Nagpur in Maharashtra is the focal point of Mother Dairy expansion plans. This will be developed at an investment of Rs. 525 crore with an initial handling capacity of 6 lakh litres per day. The plant has been designed to be expanded for scaling up to 10 lakh litres per day. The new site will cater to the central and southern India markets, and it would significantly add much more capacity for the firm to be able to meet the demand in these locations.
Besides the Nagpur dairy plant, Mother Dairy is also establishing a fruit processing plant in Karnataka under its Safal brand. That would be an investment of Rs. 125 crore, and the various types of fruits to be processed at this unit will contribute substantially to the product portfolio of the company, thereby strengthening its position in the fruits and vegetable category also.
It is also spending Rs. 100 crore to increase the capacities of its existing plants. This would enable Mother Dairy to upgrade the existing operations and increase efficiency levels, so that the facilities are able to meet the requirements of a larger consumer market.
Strategic Objectives and Regional Expansion
The total capital expenditure from Mother Dairy for these new projects is at Rs. 750 crore. In all, the company would like to complete these projects in two years, hence marking its intentions of rapid expansion and presence. The strategic focus is on broadening the company’s distribution network and increasing its reach to a larger consumer base.
The company is also contemplating establishing new dairy units in Delhi and Bengal along with other facilities for the production of the Safal brand. The proposed new plant in Bengal will require an investment of around Rs. 400-500 crore. This particular plant will sufficiently cater to the demand for Mother Dairy products in Bengal and the NorthEast region, which has already earned high revenues for the company.
Business Operation and Market Standing
Today, Mother Dairy runs nine wholly company-owned and integrated dairy processing plants, which have an overall installed capacity to process more than 5 million litres of milk per day. The company also complements its dairy business with four horticulture-mechanical plants for fruits and vegetables, and out sources to a large number of third-party facilities to expand the company’s production.
The company has reported a very exciting performance, with its turnover rising to Rs. 15,000 crore in FY24 from Rs. 10,500 crore three years ago. This growth is undeniably indicative of the strong market presence and lucrative business strategies adopted by Mother Dairy. Target increase in the turnover to Rs. 25,000 crore over the next three years highlights the ambitious expansion plans of the company, which should cover the rise in consumer demand.
Product Innovation and Seasonal Preparations
Apart from geographical expansion, product innovation also forms an important thrust area of the company’s strategic expansion. The company has announced plans to launch 30 new products this summer, which are mostly from the ice cream and yoghurt categories. This is at a time when temperatures this summer are expected to soar very high and the demand for these kinds of products will increase by leaps and bounds.
It has invested Rs 50 crore to enhance its production capacities in preparation for this surge in demand. This investment by the company will ensure that when the summer months start, it is sufficiently stocked up to take care of increased consumer demand for its range of products.
Consumer Demand and Market Trends
Managing Director of Mother Dairy Fruits and Vegetables Pvt. Ltd Manish Bandlish is quite upbeat about the summer season. Quoting a prediction by the Indian Meteorological Department, he said that temperatures this summer would be above normal, which is expected to increase the demand for ice creams, curd, and other varieties of its dairy products manifold.
The company is already witnessing an increase in the sale of ice creams over the previous year, which indicates a positive trend in consumer preference. With the added investment and expansion plans, Mother Dairy will be better placed to gain from this emerging demand and improve its market position.
Conclusion
Thus, the new plants at Nagpur and Karnataka will add much value to their manufacturing capacity, given the increasing demands for dairy and food products across the country. This large investment of Rs. 2,000 crore made by Mother Dairy will play a very important role in the growth strategy of the company towards its aim of enhancing the manufacturing capacity and meeting the ever-increasing demand for dairy and food items across India.
Large-scale regional expansion, product innovation, and strategic investments in clear sight would enable Mother Dairy to continue this journey of growth and sustain further leadership in the dairy and food processing businesses. While pursuing such ambitious plans, the company would ensure that high-value products are delivered to its consumers, and growth is propelled across its diversified portfolio.
References:
– Manish Bandlish, Managing Director, Mother Dairy Fruits and Vegetables Pvt Ltd
– Company financial reports and expansion plans
– Indian Meteorological Department (IMD) weather forecasts