Amul spreads 1200 crore fresh investment from Gujarat to Kolkata

Milk processing facility to be set up in Rajkot in Gujarat, Kolkata to meet increase in demand

Dairy major Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF), which markets Amul brand of food products, has lined up fresh investments to ramp up capacities in major markets including Kolkata and Andhra Pradesh besides its strong-hold Gujarat.

The Federation is set to invest over ₹1,200 crore towards additional milk processing and value-addition capacities in these regions in the next two years.

Of the said investments, GCMMF will invest about ₹250 crore for processing facility in Kolkata with a capacity of 10 lakh litres per day (LLPD), while it has planned about ₹450-500 crore investments for milk processing facility in Rajkot in Saurashtra. In North Gujarat, it is setting up additional dairy products’ processing capacities with an investments of ₹600 crore. RS Sodhi, MD, GCMMF, said that new investments will come up in Rajkot and Banaskantha in Gujarat and Kolkata to augment additional milk processing capacities as the demand is growing for the packaged branded dairy products.

Increased demand

“Even during the Covid-19 lockdown, we have witnessed growth in dairy products consumption. However, there is an adverse impact on HoReCa segment, where the demand is down by about 30 per cent. But overall consumer demand in most markets has recovered,” he said.

Amul had earlier announced its plans to invest about approx ₹1,500 crore over the next two years.

Valamji Humbal, Vice-Chairman of GCMMF and Chairman of Sarhad Dairy, said that capacity addition in Rajkot will be a big push for the region’s dairy farmers, who have to transport the milk to Gandhinagar for processing.

Transport costs

“The Saurashtra region produces milk to the tune of about 35 lakh litres per day, of which about 10-12 LLPD or so gets processed at the local processing centres, whereas a large quantity of about 20-25 LLPD has to be transported to Gandhinagar’s Mother Dairy for further processing. This involves transport costs as well as wastage, additionally due to 12-hour travel, the milk quality also gets impacted,” said Humbal. “This will mean improved margins for the dairy farmers,” he added.

“In order to overcome these challenges, we are setting a processing facility in the centre of Saurashtra region. In the next few months, that will be finalised,” he said.

Amul is also aggressively expanding its presence in Eastern markets, including Kolkata, North-East and Andhra Pradesh. Andhra Pradesh has milk production almost similar to Gujarat and the State government has also extended its support to Amul for developing “Amul-model” of cooperative dairying in the State.