Hatsun Agro Products (HAPL), is in the process of investing ₹240 crore in 2017-18 to set up two greenfield projects and an additonal ₹160 crore to expand its facilities.
According to the plan, the owners of popular brands such as Arun ice creams, Arokya milk, Ibaco ice cream and Hatsun curd, will be investing ₹110 crore in marketing, ₹25 crore for expanding its cattle feed plant and ₹25 crore for the manufacture of dairy ingredients.
The greenfield projects are expected to be set up near Coimbatore and Ongole: the cattle feed plant near Ongole and the dairy ingredients unit at Palakode. The investments will be met through internal accruals, it is learnt.
“Preparatory works [for] greenfield projects will commence soon and the plants would go into stream by early 2018,” said R.G. Chandramogan, CMD, HAPL. “These projects will have combined capacity to process seven lakh litres of milk and curd per day, two lakh litres of dairy ingredients per day such as milk powder and fat and 12,000 tonnes of cattle feed per month.”
By March 2018, Hatsun Agro’s total processing capacities would increase to 49 lakh litres per day from 40 lakh litres per day. Cattle field production would increase to 27,000 tonnes per month from the present 15,000 tonnes, he said.
“We are category leaders in all four brands and have been registering compounded annual growth rate of 21% year-on-year. The market size of liquid milk and curd sales in south is 135 lakh litres per day, of which we have 14.5% market share. In the next few years, it would grow to 150 lakh litres per day and we wish to have 20% market share,” he said.
Hatsun Agro is also exploring the possibility of either acquiring a small dairy unit in southern Maharashtra and Odisha or to set up a greenfield project to increase its market share, J. Prasanna Venkatesh, associate vice president, marketing and sales, HAPL said adding it would entail a further investment of ₹100 crore.
“We are looking at southern part of Maharashtra from Kholapur to Pune and cities in and around Cuttack and Bhubaneswar,” he said.
Mr. Chandramogan said they had a 70% market share in the ice cream segment in Tamil Nadu and 30% in other States.
“Recently, we entered Maharashtra, Kerala and Odisha. The initial response has been good,” he said.
