Milkymist plans ₹1,000 crore expansion in the next three years

Milky Mist Dairy Foods Pvt Ltd, a leading dairy based in Erode in western Tamil Nadu, has chalked out a ₹1,000 crore expansion plan in the next three years to double the plant’s capacity and foray into new products like dark chocolate and ice cream.

The company, which had already invested ₹550 crore in its existing plant, will fund the expansion through a combination of debt and equity. “We want to raise Private Equity investment by March, and thereafter kickstart work to come out with an IPO in the next 20 months,” said T Sathishkumar, Founder and Managing Director, Milky Mist.

In November, the company had signed an MoU with the Tamil Nadu government at the Investors Conference held in Coimbatore for an investment of ₹600 crore. “We have decided to add another ₹400 crore to that,” he told BusinessLine at the company’s plant.

New plant

Milky Mist is constructing a new plant adjacent to the existing facility at Perundurai to double the capacity. Every day the plant procures 7 lakh litres of milk from nearly 70,000 farmers from the State’s eight districts, including Erode, Salem, Tiruppur and Jolarpettai. The entire milk is converted into 25 different products, including paneer, curd, desserts, flavoured yoghurt, payasam and cheese.

“The expansion will help us to more than double the intake of milk to around 15 lakh litres a day, and make various products. We are foraying into dark chocolates under the brand name Capella and will also foray into ice creams,” he said, not disclosing the ice cream’s brand name.

Sathishkumar, under the guidance of the company’s CEO K Rathnam, former Managing Director of Amul Dairy, has turned the small town of Perundurai into a major dairy hub of the region with hundreds of Milky Mist trucks and milk tankers shuttling from and to the plant throughout the day.

A school dropout, Sathishkumar at the age of 15, joined his father’s small milk business and founded Milky Mist in 1992 to empower farmers and serve premium quality dairy products with paneer. “We believe in a sustainable rural economy and assure to protect the welfare of our farmers and their cattle by supplying our own cattle food,” he said.

“We are a 100 per cent product company and the only dairy in India to convert all the milk procured into value-added products. We have developed the dairy plant where 150+ SKUs of Milky Mist products are processed across 25 categories,” he said.

With a revenue of just ₹42 crore in 2012, the company is expected to close the year with around ₹1,200 crore. “We have a strong presence in the south with around 60 per cent market share in paneer. Our products are now available from Kashmir to Kanyakumari,” he added.