Tirumala Milk to set up largest dairy plant at Rs 6 000 crore in Andhra

Source: FNBNews (Akshay Kalbag, Mumbai)

Tirumala Milk Products Pvt. Ltd (TMPPL), the second-largest private dairy player in south India, is gearing up to set up the country's largest integrated dairy plant at an investment of about Rs 6,000 crore near Vinukonda in Guntur district of Andhra Pradesh. It is expected to start operations five years from now.

“The proposed dairy farm will accommodate over 20,000 cows and buffaloes, whose milk will be immediately used to produce value-added products. We will not only produce it, but will also take care of the marketing aspect,” E N Rao, executive director, TMPPL, told FnB News over the telephone.

“The plant will have a milk processing unit, units catering to the production of milk powder and milk products such as yoghurt (which is a very popular product in these parts) and a two-megawatt captive power project,” he said.

Carlyle, the global private equity giant, is backing the project and has taken a stake of 20 per cent by investing Rs 110 crore in June this year. “It has also expressed its willingness to invest in TMPPL's expansion plans,” he revealed.

When asked if any banks and financial institutions are also coming forward to fund the project, Rao said, “Yes, we have had a number of banks expressing their interest in this project.”

Incidentally, at the time of speaking, TMPPL had already procured over 2,900 acres of land and Rao said it would have a capacity of about 10 lakh litre of organic milk processing a day. This chemical-free milk be produced on organic farms, and no animal will be injected. In fact, the feed fed to each and every cow and buffalo will be 100 per cent organic.

“In fact, there was a meeting in Hyderabad on Wednesday to launch milk in Tetra Pak packages,” he informed. TMPPL is Rs 1, 200 crore rural-based organisation, which has been growing at a rate of about 30 per cent per year.

“This growth rate is amazing and could not have been possible without being aggressive. TMPPL was, indeed: it added about half the capacities in terms of the procurement of milk, its processing and marketing. The company now aims to reach Rs 2,000 crore in terms of annual sales for the next years, and ploughing back profits is a part of the plan,” he added.

TMPPL currently has six milk processing centres, in addition to about 150 chilling centres. These are spread across Andhra Pradesh. It sells about 13 lakh litre of milk per day in the southern state alone.

The neighbouring states of Karnataka and Tamil Nadu also account for a sizeable slice of the pie as far as the market share is concerned. Both states have a share of about 10 per cent of TMPPL's total market share. The outlay on the Tetra Pak packaging centre in Hyderabad is about Rs 40 crore. It will have a capacity of about a lakh litre of milk and two lakh litre of milk powder per day.
On a concluding note, Rao said, “We are looking at tapping into the national and international markets. Organic milk is catching up at a rapid rate in the developing countries of the world. The sales of organic milk and other dairy derivative products are picking up very rapidly in the West.”

Source: FNBNews (http://www.fnbnews.com/article/detnews.asp?articleid=31035&sectionid=1)