Dairy firm Kwality Ltd plans to invest about Rs 300 crore in the next fiscal to expand its milk procurement operations and launch more value-added products. The New Delhi-based company has six plants in Haryana, Uttar Pradesh and Rajasthan, with a total processing capacity of 30 lakh litre a day.
The company posted a turnover of Rs 3,700 crore in 2012-13 and is looking at a growth of 20-25 per cent in the topline this year. A few years ago, it started selling milk to retail consumers and now sells 3.5 lakh litre a day under the brand name Dairy Best. Of this, about 2.25 lakh litre is sold in Delhi and the National Capital Region (NCR).
“We procure about 28 lakh litre milk per day, of which five lakh litre is purchased directly through our 22 milk chilling centres. We want to strengthen our milk procurement capacity,” stated Sanjay Dhingra, Kwality’s chairman and managing director.
The company plans to increase the number of milk chilling centres to 90 over the next two or three years. Kwality has also decided to expand its product basket through the launch of value-added dairy products like flavoured milk, yoghurt, cheese and ultra-high temperature (UHT) milk. It currently sells ghee and skimmed milk powder (SMP).
Asked about the company’s investment on expansion, Kwality’s director Sidhant Gupta stated that it could be about Rs 250-300 crore. “The launch of value-added products would boost the company's profit margins,” he added.
When quizzed about its fund-raising plans, Gupta said, “The company has taken the shareholders’ approval to raise Rs 1,000 crore through various instruments, including equity, but nothing has been finalised. We export SMP, and have set up a subsidiary in the United Arab Emirates (UAE), which is engaged in the export and import of SMP, ghee, butter and other dairy products.”
