India’s GCMMF eyes expansion as milk sales increase significantly

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The Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF), which markets dairy products under the brand Amul, expects a 12-15 per cent growth in revenue in the current fiscal year over the previous year despite the COVID-19 pandemic and operational hurdles after a nationwide lockdown,

The optimism stems from the growing household demand for branded food products.  In the month of December 2020 and January 2021 so far, leading dairy firms like Amul, Mother Dairy, Parag Dairy have all reported a healthy spike in milk sales.

While Amul saw record milk sales during this period, Mother Dairy too has reportedly stated that its milk sales in the household category has grown to the pre-Covid levels, industry official said.

Sale of ghee and butter have also upped by about 20 percent, and that demand is likely to grow further by 8-10 per cent in the next six months.

Further, the demand for products like butter milk, paneer, cheese have also increased by about 15 per cent in the last 6 months compared with the year-ago period.

While the demand for milk and is still 40 per cent below normal in the institutional category, which includes hotel, restaurant and the canteen segments, household consumption of milk has increased significantly.

“This has led to a year-on-year increase of 9 per cent in sale of liquid milk in January 2021 (so far) and 8 per cent in December 2020, with a total sale of liquid milk setting a record for these months,” said RS Sodhi, managing director, GCMMF.

Amul sells 140 lakh litres of fresh milk per day, mainly in Gujarat, Delhi-NCR and Uttar Pradesh. Its dairy products are sold across the country.

Investment plans

Buoyed, by the increase in demand for milk and milk products, GCMMF is looking to invest significantly over the next two years to extend its operations.

“We will invest around Rs 1,000 crore in the next two years on setting up dairy plants across various states,” Sodhi said.

The plan is to up processing capacity to 420 lakh litres per day from the current 380 lakh litres per day.

The company has also earmarked another Rs 500 crore on facilities for new products like edible oil. It had forayed into edible oil and potato processing segments in an effort to boost farmer’s income from Gujarat and other states.

The edible oils will be marketed under the new brand ‘Janmay’. It will produce groundnut oil, cottonseed oil, sunflower oil, mustard oil and soybean oil.

Besides, the cooperative has started manufacturing sweets as well as bakery items using dairy fats.

“We have a few plants for edible oil, bakery and potato processing. We will invest Rs 400-500 crore on setting up more plants in these new business areas over the next two years,” Sodhi said.

Shampa Bahadur has been a business journalist for more than two decades. She has written for Business India, PTI Media TransAsia and India Infrastructure Publication Ltd among others. She has also written coffee table books. She can be reached at shampa@indoasiancommodities.in

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