This is the story of a youth from western Tamil Nadu who transformed his father’s failing milk supply business into a thriving producer of paneer that sells even in north India.
Sathishkumar T was 17 when he joined his farmer-father in 1991, buying milk locally and after a bit of processing selling it in Bengaluru. It was an unorganized market. Maintaining quality was an issue, as was collecting cash from the small establishments they sold milk to.
“When my father decided to shut down his small operation, I ventured into it in 1993. But instead of selling milk, I sold paneer. From the beginning, I wanted operations to be organized and branded,” recalls Sathishkumar, founder and managing director, Milky Mist Dairy.
From making small quantities by hand, the company now has a fully automated plant that can produce 60 tonnes of paneer a day. “This is the world’s largest fully automated plant for paneer. We want to make paneer the vegetarian equivalent of meat and chicken for proteins and become India’s No. 1 brand,” he says.
Unlike in north India, paneer was not popular in the south when Satishkumar launched his venture. But social media, especially YouTube, changed perceptions with recipes and cooking videos readily available. “Even after almost 30 years, I do not know anything other than milk and paneer. Value-added products will remain our focus. We do not sell liquid milk, which accounts for 40%-70% of the business for other dairies including Amul,” says Satishkumar.
His focus on value-added products – paneer, curd, cheese, butter and ghee – has helped the company grow from a turnover of `12 crore in 2008 to hopefully close this year at `1,100 crore.
The company has established a 75-acre campus at Perundhurai near Erode, with production and processing plants alone sprawling over 40 acres. It procures on an average six lakh litres of milk a day from close to 60,000 farmers from eight districts in and around Erode.
“We do not sell even one litre of liquid milk. The market for liquid milk, sold in sachets, is growing at 6% every year in India, while value-added products, depending on categories, grow at 15%-20%. Over the last five years, we have been growing at 29%-30% per annum. In the next 2-3 years, we will become a pan India company,” says K Rathnam, CEO, who joined the company in August 2019 after a long stint with Amul, where he was the MD for more than four years.
“Earlier, we were limited by capacities and had outsourced production of high value items such as lassi and milkshakes. But with new and upgraded plants, we produce them on our own. We have more than 25 different categories and will soon launch condensed milk and chocolates to offer the entire gamut of value-added dairy products,” says Rathnam.
The company has drawn up a two-pronged growth strategy – to reach more interior areas in the southern region, where its products were not available, and expand aggressively across the country. “We constantly update and upgrade ourselves and our facilities to bring out better value-added products,” says Satishkumar.
Not just that. “We are also environmentally conscious and reuse 93% of the water discharged. And, in another 10 days, we will become a green energy company with our entire power requirement to be met by our own solar and wind energy projects (16MW),” he says.
Despite the phenomenal growth, this school dropout has managed to run the business without raising any external capital. “Milky Mist Dairy continues to be 100% fully owned by my family,” Satishkumar signs off.
