45% rise in milk production in Tamil Nadu in last 10 years

Milk production rose 45% over the past decade in Tamil Nadu, with the number of milch cows also rising 12%. On the market front, Tamil Nadu’s ecosystem allows private players to thrive unlike some states where the cooperative federations have a monopoly.

The Tamil Nadu Co-operative Milk Producers’ Federation Limited, popularly known as ‘Aavin’, and private dairies together buy about 90 lakh litres a day, with Aavin alone accounting for 35 lakh litres. While most of it (60%) is sold as milk, curd (13.3%) and ghee (10.5%) show significant sales.

The western region, particularly Coimbatore and Erode districts, is where the big dairies are. Milky Mist Dairy Food Pvt Ltd has set up the largest paneer manufacturing plant in the country, with a capacity of 60 tonnes a day, in Erode district. Its CEO K Rathnam says the total size of the dairy market in Tamil Nadu was more than Rs one lakh crore in CY2022, and is growing at a CAGR of 13.8%. The company recently forayed into ice-cream and set up capacity to manufacture 2.2 lakh litres a day.

Aavin, which is the state’s largest dairy, offers 200 products including butter, cookies, chocolates, noodles and sweets. It is planning to increase daily milk handling capacity from the current 45-50 lakh to 70 lakh litres and add 10 new plants by CY2024. Aavin managing director N Subbaiyan says its products are also being exported to Singapore, Hong Kong and the UAE. “We continue to introduce new dairy products in the market,” he adds. With a turnover of about Rs 7,000 crore

Dodla Dairy Limited, which has been operating in the state for the past 25 years and has three plants – at Dharmapuri, Vedasundur and Batlagundu — is looking to expand further through acquisition or greenfield projects. Already, Tamil Nadu accounts for 25% of the turnover of the company, which operates in 11 states. Its managing director, Dodla Sunil Reddy, says Tamil Nadu is a vibrant dairy market.

Shashi Kumar, CEO, Akshayakalpa Organic, a certified organic dairy, which established a model organic dairy farm in Chengalpet district earlier this year, says, they currently produce milk and curd but will foray into ghee and butter in a couple of years. “The existing dairies have demonstrated that Tamil Nadu is an excellent market. But the challenge is to tap the potential in several districts, besides Krishnagiri and Dharmapuri, and build a procuring ecosystem,” he says.

According to the National Dairy Development Board, the volume of milk production in the state has increased from nearly seven million tonnes in 2011-12 to more than 10 million tonnes in 2021-22. Data sourced from the Tamil Nadu animal husbandry department states that the population of milch cows stood at 45 lakh in 2019, an increase from around 40 lakh in 2012.

On the flip side, the ‘Basic Animal Husbandry Statistics 2022’ released by the Union ministry of fisheries, animal husbandry and dairying show that Tamil Nadu accounts for just 4.5% of the total milk production in the country. It was 11th among the top 15 major milk producing states in 2021-22. R S Sodhi, president of the Indian Dairy Association, says commercial dairy farming has to be promoted among the rural masses to enhance milk production in Tamil Nadu.