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Vol. 2, Issue 04, August-September, 2017 20/-
The Rise of the
Robots
Verifying the intregity of
Hygienic equipment design
Reducing Safety Risk In
Dairy Products
Automatically Dry Powder Handling Is The
Production Of Baby Milk Powder
When Process Safety Is Vital !!
Sulfuric Acid Good Enough To Eat
Join us:
www.facebook.com/foodprocessing.india Twitter@BeveragesFood Agro-FoodProcessing India
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Dairy Times
3 Dairy Times
4
Dairy Times
5 Dairy Times
CONTENTS
6
10 Kwality distributes soft loans to Dairy sector in India to grow at very 40 54
dairy farmers for capital formation healthy rate
14 Investment in Dodla Dairy Trouble with digesting dairy; Try A2 41
16 India seeks Rs 20K cr loan from milk
JICA for dairy development IFCN outlook predicted milk price
Dairy companies see no revenue recovery
change after GST
FDA to ease ultrafiltered milk in 42
17 Zero Import duty to hit Indian dairy
cheese-making process
industry Kenya Seeks Removal of Dairy Tariff Robots lend a helping hand
Mehsana Dairy puts Manesar unit on the farm
Ban the term ‘milk’ to describe non- 43
on sale dairy products: Aus dairy farmers
56
18 Flavoured milk was a popular trend
Annual Dairy Output in Iran worth
in India in 2016 anticipated 10m Tons
22 Lot of barriers for global dairy Dairy a good source of protein: 44
players to enter India researchers
WB cabinet approves to dissociate Midwest Dairy Farmers Use Robots
from Metro Dairy stake to Feed and Milk Cows
Reducing safety risks in dairy
24 First IVF calf born to surrogate cow 45
in mobile lab at Pune farm products
Loan waiver demanded by Gujarat
58
dairy farmers
26 Joint Venture between Indian-
French company plans for new
plant
Britannia’s focus to expand its dairy
business
NABARD launches Dairy Anything but trivial: filling
Entrepreneurship Development milk powder into cans Verifying the integrity of
Scheme in Uttar Pradesh hygienic equipment design
47
27 3 centres in Maharashtra to buy 600 60
desi cows
28 Rupeng Patidar elected as
Chairman of RCDF
Dairy products to carry quality mark
logo
Heritage Foods aims for Rs 6,000 cr
turnover by 2022
30 Indian dairy market has strong Automatic Dry Powder Stable colours in yogurts
potential for premium and wellness Handling in the Production
products
of Baby Milk Powder: When 61
ABT Dairy gears to strengthen
product line
Process Safety is Vital
31 PE-VC deal value in dairy double of
last year's 49
32 Indian dairy farmers prefer to
nurture buffaloes than cows
Fortified milk, the latest offering
from Nestle India The rise of the robot
34 Milk procurement by Banaskantha
Dairy picks up after floods
Dairy desserts gel naturally 62
Britannia to rope in partner to focus
on dairy business Sulfuric acid good enough to
eat Hygiene-compliant, flexible 64
35 Misleading to call soya, almond and reliable
beverages ‘milk’, says Parag Foods Keeping the Bugs out of ESL 50
Milk During Bottling Hygienic Designs for 65
36 Dairy firms' Q1 profit margins slip Standard Parts
on high milk procurement cost
51
37 Dodla Dairy to invest Rs. 70 cr in
greenfield plant in Andhra Pradesh
46th Dairy Industry Conference
37
India’s new
generation of
flavours The cheese lovers’ show
Dairy Times
7
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Dairy Times
8
A Bi-Monthly Magazine Devoted to Milk, Milk-Products & Allied Sectors
T
he heartening news is that the country’s first calf delivered by a
dairy
surrogated or recipient cow through In Vitro Fertilisation (IVF)
Times
A Group Publication of Advance Info Media & Events
technology carried out in a mobile laboratory in Indapur, about 140
Km from Pune. In the past few years, indigenous cow breeds have been
www.agronfoodprocessing.com Vol. 02, Issue 04, August-September, 2017 100/-
impured due to cross-breeding. In the case of cows by IVF technology, we
Editor In Chief can protect the breed in its original form. While a similar experiment was
Dr. J.V. Parekh carried out about five years ago by the National Dairy Research Institute at
the lab-level, this is first time the procedure was successfully implemented
Group Editor at a farm with the help of a mobile laboratory.
Firoz H. Naqvi Dr. J.V. Parekh
firoz@advanceinfomedia.com Editor in Chief India has sought a loan from the Japanese International Co-operation Agency
to fund a dairy development project with an outlay of Rs. 20,057 crore. The
Marketing Executive funds will be used to set up 1.05 lakh bulk milk coolers to store 524 lakh kg of milk per day
S.H.Hasni
hasan@advanceinfomedia.com in an additional 1.28 lakh villages. The funding will also be deployed to create milk and milk
product processing infrastructures of 76.5 lakh kg per day. The move would benefit 122 lakh
Production Manager additional milk producers. Part of the fund will also be used to upgrade and expand old milk
Syed Shahnawaz Naqvi and milk product processing plants set up in the past as part of Operation Flood. The proposal
for the funding, which will be routed through the National Dairy Development Board, was
General Manager forwarded to JICA by the Department of Economic Affairs. JICA mission visited India in
Gyanendra Trivedi
February, evinced interest in extending support to the dairy sector, which has grown nine-fold
to 155 mt over the last 65 years.
Graphic Designer A CARE Ratings report showed global multinationals have invested immensely in Indian
Naved H. Kazmi
naved@advanceinfomedia.com dairy over recent years. KKR India, local arm of the New York-based buyout entity, has
invested Rs 600 crore in Kwality, producer of dairy products with the same brand name. The
world’s largest dairy product group, Lactalis, from France has invested Rs 1,750 crore and Rs
Circulation
Seema Hayat Shaikh 470 crore in Tirumala Milk and Anik Industries, respectively. Cargill Ventures has invested Rs
seema@advanceinfomedia.com 110 crore in Dodla Dairy, a Hyderabad-based entity.
The growth in the dairy industry, driven by value added products, largely from the organised
Marketing & Circulation Office players will drive margin growth. In the medium term, players will have to focus on improving
121, 1st floor, Rassaz Multiplex, Station Road, their procurement strategy and initiate capital expenditure for enhancing capacities and
Mira Road (E), Dist. Thane- 401107 investing in the supply chain. Post stabilisation of capex, the return ratios and leverage ratios
Telefax : +91-22-28555069, Tel.: +91-22-28115068
Mob.: +91-9867992299 are expected to improve. We expect the credit profile of private dairy players to remain stable
E-mail: info@agronfoodprocessing.com over the medium term, till the capex phase is complete.
sub@advanceinfomedia.com Union Agriculture Minister Radha Mohan Singh launched National Dairy Development
Board's (NDDB) quality logo, which will signify safe and quality milk and milk products
Vol. 02 Issue 04, August -September 2017 from dairy cooperatives. This reinforces the consumers' recognition that the quality mark is
synonymous with good quality. NDDB's quality mark will provide dairy cooperatives and
Annual Subscription Rs.600/- producer institutions the much-needed brand identity and a competitive edge. This will also
By Normal Post contribute to building consumer confidence in dairy cooperative brands.
Add Rs. 400/-For Courier Charges (Annual)
Add Rs. 50/- For Outstation Charges In order to ensure better dairy products quality, FSSAI has introduced a large number of food
Overseas $80 By Air Mail safety programs at various levels so as to nurture food safety through supervisors for the food
Email:sub@advanveinfomedia.com industry at all levels. These programs are getting implemented through approved Training
Single Copy Cost Rs. 100/-
partners under FOSTAC (Food Safety Training and Certification) initiative of FSSAI.
Indian dairies are increasingly entering into novel and Western-influenced milk-based
Printed, Published & Owned by beverages that offer significantly higher margins than traditional milk drinks. Leading Indian
Firoz H. Naqvi
RNI No. MAHENG13830
dairies Amul and Parag Milk Foods are among the frontrunners in launching nutritional and
fruit-based milk beverages, an area where global aerated drink giants PepsiCo and CocaCola
also made their entry over the past few months. Industry representatives and sector analysts
Regd. Office estimate more players from dairies, aerated drinks and fast moving consumer goods entering
Advance Info Media & Event
the highly attractive and rapidly growing new segment of the market. Dairy beverages as
103, AmarJyot Apartments, Pooja Nagar,
Mira Road (E) a segment is estimated to post sales of $1 billion (Rs. 6,400 crore) in India by fiscal 2021,
Dist.Thane-401107(Mumbai) compared to Rs. 1,280 crore in fiscal 2015, said a report by the Tata Strategic Management
Group.
Printed At
Rolleract Press Services Advisory Board
A-83, Ground Floor,
Naraina Industrial Area Phase-1, Mr. R.P. Banerjee Mr. B.M. Vyas Mr. H.R. Dave Dr. Mukund Naware
SSP Pvt. Ltd- Faridabad Former M.D Amul Anand Deputy M.D Nabard, Mumbai Consultant, Mumbai
New Delhi -110028
Dr. G.S. Rajorhia Dr. Harsev Singh Ms. Racheline Levi Mr. Vivek Nirmal
Former Principal Scientist, NDRI, Karnal Chief Executive Officer Team Expert, Adepta France MD Prabhat Dairy Mumbai
The views expressed in this issue are Mr. Devendra Bhai Shah Dr. B.N. Mathur Dr. K.R. Rao
those of the contributors and are not Chairman, Parag Milk Food, Mumbai Former Director, NDRI, Karnal Former CGM, Nabard, Hydrabad
necessarily those of the magazine.
Mr. Nitin Jain Mr. Subhash Vaidya Dr. Satish Kulkarni
Though every care has been taken to Aurum Equity Partners, Gudgaon CEO Dairy Tech Consultancy Serv Mumbai Consultant,Bangalore
ensure the accuracy and authenticity of
Dr. J.B. Prajapati
the infomation,"Dairy Times" is however Mr. V.K. Ghoda Mr. Dileep Dravid
MD & Agro Dairy & Food CS Anand Principal & Dean, SMC Collage of Dairy
Sr. Consultant, Perfect Solution, Vadodarra
not responsible for damages caused Science
by misinterpretation of information Dr. Ashok Patel
Mr. Vijay jailkhani Dr. Trevor Tomkins
expressed and implied within the pages Team Ldr, Schreiber Dynamix, Baramati
Fr. Princ Scientist & Head, Dairy Technology NDRI
President, Venture Dairy U.S.A
Karnal
of this issue.
All disputes are to be referred to Mumbai Dr. Suresh B. Gokhale
Director Research BAIF
Jurisdiction. Uruli Kanchan Pune
Dairy Times
9 Dairy Times
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Pricing Trends in Dairy Products: 2017
Domestic milk and milk products Price: International milk and milk products Price:
Source: USDA
Source: USDA
Source: USDA
Kwality distributes soft loans to dairy
Source: USDA
farmers for capital formation
K
wality Limited and Bank of 26th May at Sardarshehar
Baroda (BOB) have inked a MOU by the Union Minister of
to provide soft loans to dairy State for Finance Arjun
farmers for purchase of animals, smart Ram Meghwal and at acredit
mobiles and motorcycles. The scheme camp Sirsa & on March 16
is proposed to continue over a period of by the Kwality Limited and
three years and would cover 1,00,000 Bank of Baroda by Dr. RS
dairy farmers in states of Uttar Pradesh, Khanna,Chairman, Kwality
Rajasthan and Haryana. The significant Limited and Arora DGM
aspect of this scheme is that farmers Bank of Baroda Karnal.
have not to provide any guarantee to
take a loan. Insurance policy of the dairy Farmers should purchase
animals would be pledged to the bank as good quality cows and buffaloes; hence Limited. They have given written
a guarantee. Kwality Limited has set up animal undertaking to the bank to continue to
purchase hubs in some 10 suppliers give milk to the Kwality Limited and
The BOB and Kwality Limited are brought cows and buffaloes in locations have opened accounts in the Bank of
working together since the past four close to Ajmer, Fatehabad, Sardarshehar, Baroda. The Kwality Limited has given
months in identification of eligible and Rohtak. About 75 farmers have undertaking to buy milk from these
farmers and have already sanctioned already purchased close to 200 cows and suppliers on a continuing basis and credit
Rs. 27 crores to about 1200 farmers. buffaloes. payment directly into the account of the
The sanction letters were distributed to loanees.
dairy farmers in functions organized at The participating farmers are selected The bank would deduct EMI from the
Fatehabad on June 3rd, by the Haryana from amongst those who have been account of loanees. The loans have to be
Chief Minister Manohar Lal Khattar, on regular suppliers of milk to the Kwality paid over a three year period.
Dairy Times11
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13
14
Investment in Dodla Dairy
Dodla Dairy is receiving a cash infusion to promote sustainable farming practices across India,
according to Joy Basu of The Rise Fund’s food and agriculture sector team
facilitate stronger and more efficient
market links in this food value chain can
help to significantly reduce rural poverty.
With its conscientiously designed
procurement strategy, Dodla Dairy is
helping to meet this important need.”
“Our procurement strategy, working
closely with thousands of local farmers to
bring our product to market, has helped
us not only reach our leading position
in the marketplace, but also positively
impact our local communities,” Sunil
Reddy, founder of Dodla, says. “We feel
proud and fortunate to put forward a
T
he Rise Fund, a global fund, strategy and social impact. Dodla sources high quality product that also helps our
has agreed to invest $50 million milk from 250,000 farmers across 7,000 suppliers thrive. We are excited to partner
(€45.6m) in Dodla Dairy, a fresh villages every day of the year. with the rise Fund to extend our reach and
dairy product company offering a wide accelerate our growth.”
range of milk products throughout South The Rise Fund seeks to support the
India. Dodla Dairy is a dairy company company in operating its procurement “India’s dairy consumption has been
headquartered in Hyderabad, India. The network fairly, transparently and experiencing robust growth, fuelled by
company procures, processes and sells efficiently. For instance, the company has urbanisation, increasing incomes and
dairy products, including fresh milk, created a farmer engagement programme health consciousness among consumers.
butter, ghee, paneer, curd, flavoured milk, that helps many of its supplying farmers The organized dairy market has grown at
doodh peda, ice cream and skimmed gain access to critical inputs, such as an exceptional rate over the last few years
milk powder across 66 regions in South affordable animal feed and veterinary – as consumers increasingly buy milk
India. Dodla was co-founded by D. Sesha services. in stores as well as other dairy products
Reddy and D. Sunil Reddy in 1995. previously made at home (such as yogurt
Moreover, working with regional banks, and ghee),” Vish Narain, partner at TPG
The investment in Dodla, which is subject Dodla has helped more than 2,300 Growth, says, “Dodla is well positioned
to regulatory approval, will be The Rise farmers secure financing to invest in their to capitalise on these growth trends.
Fund’s first in the food and agriculture production capabilities. “India has more It has a strong management team, an
sector, as well as its first in India. The dairy farmers than any other country established presence in local markets and
Rise Fund is managed by TPG Growth, and is the world’s largest and fastest an expanding selection of products. We
the growth equity and middle market growing producer of milk. Yet many of look forward to working with Dodla to
buyout fund of global alternative asset the small farmers who produce that milk enhance its brand and grow its platform
firm TPG. It is said that the Rise Fund do not have access to the basic tools and geographically.”
focuses on investments in seven sectors: networks necessary to sustainably and
education, energy, food and agriculture, reliably generate profits.
financial services, growth infrastructure,
healthcare, and technology, media and As a result,
telecommunications. Each sector is most of India’s
managed by a sector leader who works smallholders
closely with the investing teams. are only earning
a few dollars a
What Dodla does day, surviving
Working with more than 3,000 distributors on the brink of
across nine states, Dodla’s products are poverty,” says Bill
sold by more than 50,000 retail outlets McGlashan, TPG
across the country. Due to the high Growth founder
perishability of dairy products, nearly all and managing
of Dodla’s milk is procured locally from partner, co-
smallholder farmers. Dodla’s partnership founder and CEO
with farmers and local distribution of The Rise Fund.
networks drive the company’s business “Investments that
Dairy Times15 Web: www.harshaenterprises.co Email: sales@harshaenterprises.co/ kiran@harshaenterprises.co
16
India seeks Rs. 20K cr loan from JICA
for dairy development
T
he government has sought Rs National Dairy Development Board for and establish milk and milk product
16,027 crore loan from Japan the development of dairy sector. processing infrastructure of 76.5 lakh kg
International Cooperation Agency per day capacity.
(JICA) for various programmes to About 54 per cent of the milk produced
develop dairy sector and meet rising is surplus for marketing in the domestic Besides, the programme will modify/
domestic demand for milk and milk market, of which only 20.5 per cent is expand old milk and milk product plants
products. Agriculture ministry said in a procured/processed by the organised created 20-30 years ago under Operation
statement, “Government has submitted sector being equally shared by co- Flood and create milk and milk products
a proposal for availing loan from Japan operatives and private dairy organizations. plants for value added products which
International Cooperation Agency for The statement said, “To meet the growing will benefit 160 lakh existing farmers.
'Dairying through Cooperatives-National demand that is estimated to be in the range The animal husbandry, dairying &
Dairy Infrastructure Plan.” of 200-210 million tonnes by 2021-22, the fisheries department has formulated
country needs to upgrade its infrastructure a draft national action plan for dairy
The proposal is in line with the at the village level particularly for milk development.
government's aim to double farmers' procurement and production of high
income in the next five years. The total valued milk products.” The proposal aims
outlay of the proposal is Rs. 20,057 crore
that has been forwarded by Department of
to cover additional 1.28 lakh villages and
121.83 lakh additional milk producers.
Dairy companies
Economic Affairs to JICA. Out of the total see no revenue
outlay of the proposal, Rs 16,027.07 crore
loan has been sought from JICA, sources
It seeks to set up 1.05 lakh bulk milk
coolers at village level, create 524.20 change after GST
said. The fund will be routed through lakh kg per day capacity of milk chilling
A
mul has reduced prices
of cottage cheese, dairy
whitener and baby food,
increased the price of ghee and
left cheese, butter and ice cream
unchanged after the Goods and
Services Tax regime kicked off.
Amul's MD, R.S Sodhi said GST
implementation had been normal.
“We don’t expect any major change
in revenue with implementation of
GST. The consumer gets to gain. As
there was substantial increase in tax
for ghee we have increased prices
by Rs 25-30 a kg. Cheese, butter
and ice cream prices have not been
changed as increase was marginal.
However, we reduced prices of milk
products which came under a lower
slab by 5% like dairy whitener,
paneer, baby food and cream.”
Nitin Seth, MD at GD Foods,
the maker of Tops brand of food
products, said there was a slump in
demand on the first day with modern
retail stores -Kendriya Bhandar,
Easy Day and others not doing
the billing as systems were being
updated for GST, and they were
only selling essential commodities
with manual billing. “Everyone is
trying to understand how things will
work. We have not increased retail
prices yet.”
Dairy Times17
Zero Import duty to hit Indian dairy industry
I
ndian dairy sector that provides FTA involving 16 Asia Pacific nations products ranges from 40 to 60 per cent that
livelihood to 15 crore farmers would including India or any other FTA gives local industry enough protection to
be severely hit if import duties on including those proposed separately with build its competitiveness. Still, if the duty
milk and milk products were eliminated Australia and New Zealand. is drastically reduced or eliminated under
under any Free Trade Agreement (FTA) any FTA, the local industry would find
including the Regional Comprehensive Senior General Manager, GCMMF Ltd. it difficult to compete against producers,
Economic Partnership (RCEP), according (Amul), Jayen Mehta participated in particularly from RCEP members like
to the local dairy cooperative Amul. a stakeholders meeting with officials Australia and New Zealand which control
negotiated the RCEP agreement. It was more than 35% of the global dairy trade
Separately, farmers’ organisations have important for India to ensure that duties and in excess of 50% of the intra-RCEP
threatened to hold nationwide protests if on all Indian dairy products were not trade, Mehta said.
the dairy sector is opened up under the eliminated or reduced under the FTA,
RCEP — the proposed mega-regional as cheaper imports risked threatening Yogendra Yadav of Swaraj Abhiyan and
local farmers’ incomes from dairy. Mehta All India Kisan Sangharsh Coordination
Mehsana Dairy pointed out that as against 15 crore dairy
farmers in India, there were only 12,000
Committee, said, “Any attempt to open
up our milk market to international trade
puts Manesar of them in New Zealand and 6,300 in under an FTA shall be resisted by all
unit on sale
Australia. farmers’ organisations, and we will hold
Currently, the duty on milk and milk nationwide protests.”
I
n a shocking move that goes against
Gujarat's prospering dairy sector, the
Mehsana Dairy has floated tenders
to sell off Dudhmansagar Dairy based
in industrial model township (IMT)-
Manesar in Haryana.
Mehsana Dairy is a member union of the
Gujarat Co-operative Milk Marketing
Federation (GCMMF) - India's largest
food product marketing organisation that
markets brand Amul. First time in the
history of Gujarat's dairy sector, a co-
operative has decided to sell off its assets.
The dairy plant was first state-of-the-
art dairy plant that a Gujarat based milk
union had set up outside Gujarat in 2006
to ensure supply of fresh milk and milk
products to consumers in Delhi-National
Capital Region (NCR) which is India’s
largest milk market.
Manesar plant had become a trendsetter
when Mehsana Dairy set its foot outside
Gujarat and set up its plant in Haryana as
other dairy unions of the state followed
suit and started setting up milk processing
units across the country.
The tender that Mehsana District Co-
operative Milk Producers' Union Limited
popularly known as Dudhmansagar Dairy
has floated the sale of Manesar plant
including its land, building, machineries
and equipment states that the plant has
milk processing capacity of 12 lakh
litres, pasteurized pouch milk capacity of
ten lakh litres, ice cream manufacturing
capacity of one lakh litres apart from
capacity to manufacture 32,000 kilo curd
and 3 lakh litres UHT milk. Its book value
is estimated at Rs 285 crore as per the
tender.
Dairy Times18
Flavoured milk was a popular trend in India in 2016
L
atest fad for Indian consumers is convenience and health benefits. The products, under the Vio brand in India.
milk flavoured and the demand popularity of packaged flavoured milk in Domestic companies are not behind. ITC
for it is rising. Food and beverage India is also due to consumers’ preference Ltd and Tata Global Beverages Ltd have
companies are launching more ready- for assurance of safety. The trend has already announced plans to tap the value-
to-drink flavoured milks in India, unlike caught the attention of multinational non- added dairy segment which will include
experimental products a few years ago. dairy companies and in May, US food ready-to-drink flavoured milk. Biscuit-
In 2016, about 43 per cent of all new and beverages company PepsiCo Inc. maker Britannia Industries Ltd sells
products introduced in the dairy drink ventured into the sector with ready-to- flavoured milk under the Tiger Zor brand.
segment in India were flavoured milk, drink flavoured milk under the Quaker The dominant player in India’s dairy
according to a study. In 2012, the number Oats brand. PepsiCo’s target is to get a market, GCMMF Ltd that owns the Amul
was just around 20 per cent. bigger share of the breakfast market in brand has been selling flavoured ready-
Flavoured milk may outpace ready-to- urban India through these products. to-drink milk under the Amul Cool brand
drink plain milk, in terms of new product The study even stated that about 28 per for the past few years. Other players such
introductions. It already accounts for cent of consumers of packaged ready- as Mother Dairy Fruit and Vegetable
more than 39 per cent of all new products to-drink dairy products have them Pvt Ltd, Heritage Foods Ltd also sell
introduced in ready-to-drink milk segment for breakfast. Breakfast presents an flavoured ready-to-drink milk.
during the first six months of 2017, the opportunity for companies in the dairy The research revealed that about 64%
study noted. People are consuming more industry, but currently very few launches of ready-to-drink dairy drink consumers
of flavoured milk. In 2015, Indians drank highlight this positioning. And, this opens (1,243 adults aged 18-64 years) believe
about 72 million litres of it, up 31% from up quite a few avenues for value-added, that the ready-to-drink products are a
55 million litres in 2012. The retail value fortified, on-the-go dairy innovations healthier option compared to fresh milk,
of flavoured milk sold in India in 2015 that achieve satiety while providing 54% said these are convenient choices
was estimated at Rs800 crore, up from consumers with their breakfast nutritional and 46% said ready-to-drink is hygienic.
Rs570 crore in 2012, it added. needs. There was potential for innovation on
Much of the category’s retail growth in PepsiCo’s rival Coca-Cola already entered flavours, formats and formulations that
India can be attributed to the fact that the ready-to-drink dairy market a year would appeal to children and meet their
urban Indian consumers are opening up before PepsiCo. Coca-Cola sells ready-to- nutritional needs.
to value-added dairy, particularly for its drink flavoured milk, among other dairy
Dairy Times19
20
21
22
Lot of barriers for global dairy
players to enter India
In international private dairies feel that they may find it
markets, unproductive hard to compete with dairy cooperatives
cattle, many of which that get favourable treatment from state
are cows, after being in and central governments. However,
dairies for 14-15 years, some dairy companies in private and
go to slaughter houses. cooperative sectors, said FDI in dairy
A company expects sector will help Indian dairy companies
50-60 per cent return looking for funds, and lead to new dairy
on investment on sale products and better farm practices.
of each cow. Saluja
said 95 per cent of the Managing Director at Gujarat Cooperative
R
estrictions and controversies cattle used in commercial dairy farming Milk Marketing Federation (GCMMF),
over cow slaughter could be a globally are cows and not buffaloes, India's top dairy brand Amul - RS Sodhi
hurdle for the policy initiative unlike India. Hence, the country is not said “Any investment beneficial to Indian
to attract foreign investment to the lucrative for companies to attract FDI in farmers and dairy industry will be good.
animal husbandry (dairy) sector. The animal husbandry sector. I am studying on the FDI in animal
government has allowed 100 per cent husbandry issue and a better picture will
foreign direct investment (FDI) in animal In the past few years, global dairy emerge in the coming days.”
husbandry (including breeding of dogs), firms such as Fonterra of New Zealand,
pisciculture, aquaculture and apiculture French cheese maker Fromageries Bel, Parag Milk Food MD said 100 per cent
under automatic route, the industry feels Denmark's Arla, Dutch dairy cooperative FDI in the sector will boost investment
global dairy players may be reluctant to Friesland Campina, Mexico's Grupo flow in the sector. There will be expansion
come in because of the blanket ban on Lala, and Germany's Hochland Group in dairy products category and we might
cow slaughter. have looked in the Indian market for see more varieties of baby food or cheese
opportunities to set up own units or to products. Significant investments have
Managing Director at Sterling Agro partner with local players. been made by global dairy majors like
Industries Ltd and maker of Nova brand Schreiber (US) with Dynamix Dairy
of dairy products, Kuldeep Saluja said, Globally, dairies would get 50 per cent- (Maharashtra) Lactalis with Tirumala
“Globally, non-milking cattle go to 60 per cent of the cost they paid for the Dairy; Britannia; Nestle and Danone
slaughter house, which is not the case in cattle by selling to slaughter house. In among others in India.
India. So it's a big challenge for global India, dairy companies send old and
dairy companies that want to enter the unproductive cattle to a gaushala or sell As per FDI Policy 2016, the government
Indian market. Not being allowed to them to small farmers at a much lower has done away with the requirement of
slaughter certain cattle is a huge drawback rate. Another reason why foreign players 'controlled conditions' for 100 per cent
in India for global dairies.” may be reluctant to enter the country, FDI in animal husbandry.
WB cabinet approves
to dissociate from Metro Dairy stake
Keventer Agro holding this year and had offered Rs 85.5 crore.
53 per cent stake in
Metro Diary will get Metro Dairy was set up as a tripartite
complete control over venture among the West Bengal Milk
the company, a senior Producers Federation Ltd, Keventer Agro
minister said after the and the National Dairy Development
cabinet meeting. Board (NDDB). NDDB later sold its 10
per cent stake to Keventer Agro.
Metro Dairy is the
country’s first dairy The state government owns majority
W
est Bengal cabinet gave its nod project in public-private partnership share of the West Bengal Milk Producers
to divest the state government’s model that began in the early ’90s. Federation Ltd.
equity in Metro Dairy and sell it Keventer Agro has been the sole bidder at
to Keventer Agro. the e-auction open tender floated earlier
Dairy Times23
24
First IVF calf born to surrogate cow in
mobile lab at Pune farm
tech labs in Maharashtra and and after completion of the pregnancy
Chhattisgarh to facilitate the period, the recipient cow delivered a
production of IVF calves. The healthy male calf on August 20.”
initiative by JK BovaGenix
was conceptualised last He said the farmer feels more confident
year under the guidance when the lab comes to his doorstep to
of Dr Vijaypat Singhania, offer the services. “One can imagine his
Chairman of JK Trust. To happiness when he will see the embryos
popularise advanced assisted produced in the lab develop into calves
reproductive technologies because he has been a witness to the
in cattle for faster genetic entire procedure. Generally, a cow, in its
improvement of indigenous average 15 years of lifetime, can give birth
I
t was great delight when a male calf cattle population, the NGO said. Besides to maximum 10 calves. However, using
was delivered by a surrogate mother Pathan's farm, similar experiments were the IVF technique, the same cow can give
cow through In Vitro Fertilisation carried at a couple of other farms in Pune birth to 20 calves in a year and if you
(IVF) in a mobile laboratory at the farm, district, where the oocytes of donor cows multiply it with 10 years, the same cow
thanks to technological advancement. (Gir, Khillar and Tharparkar breeds) will give birth to 200 calves.” The local
The NGO involved in the process claimed were taken in November last year and the cow breeds like Gir, Tharparkar, Sahiwal,
it to be the first calf delivered through IVF surrogate cows are expected to give birth Khillar and others have been dwindling
at a farmer's doorstep at Indapur tehsil. A in next few days. as cross- breeding is happening on a large
healthy male calf (Gir breed) was born scale, adding there is a need to protect the
on August 20 at Rachana Khillar Farm, Zawar further added, “However, this breeds in their original form.
owned by Pathan, at Loni Deokar village time, we went one step ahead by taking
in Indapur tehsil, said Dr Shyam Zawar, this technology to the doorstep of the The donor cow, Ratan belongs to Gir
the CEO of JK Trust and the chief scientist dairy farmers as the aim was to conduct breed found in Gujarat, Rajasthan and
at JK BovaGenix, led the entire process. the entire procedure in front of the farm Maharashtra. A cow of this breed gives 10
owner. A specially designed mobile to 12 litres milk every day. “The milk from
JK BovaGenix, an initiative of JK Trust, laboratory, the ET-IVF Van was taken to Indian cows falls in A2 category, which is
one of the largest NGOs working for Rachana Khillar Farm, where the oocytes, considered as superior as it has healing
cattle and buffalo breed improvement or immature eggs, were collected from the properties, so it is important to promote
in India considers this to be the first donor cow, named 'Ratan', on November the high-yielding indigenous varieties
calf delivered through IVF technology 9 last year. The aspirated oocytes were in the country. They are hopeful of
at a farmer's doorstep. Zawar said “The fertilised with the semen of high pedigree promoting the usage of IVF technology to
process involved a highly advanced bulls, resulted in the production of good multiply genetically superior indigenous
technique which requires high precision quality viable embryos. These embryos cows at a much faster pace, in line with
and accuracy and is similar to 'test tube were transferred fresh into the recipient the Government of India's Rashtriya
baby' in humans.” The trust has two high cow of the Farm on November 16, 2016 Gokul Mission,” Zawar said.
Loan waiver demanded by Gujarat dairy farmers
A
fter Maharashtra and Madhya two days. After that we will
Pradesh, Gujarat is the next state march from Gandhi ashram
that is demanding loans waiver. to Gandhinagar. Even after
that if government does not
Dairy farmers led by Kshatriya Thakor change anything then on
Sena poured down over hundred litres July 8, 9 and 10, we will
of milk on the SG Highway for loan organise a big protest where
waiver. Protests were led by Thakor thousands of farmers will join
Sena’s Alpesh Thakor who earlier had and demand to waive off our
warned that the farmers will stop selling loans. If government does
milk to the dairies and spill it on the not accept our demands then
streets instead. Authorities tried to pacify whole India should know that
the situation but to no avail, as furious farmers of Gujarat have the capability to from several districts went on indefinite
farmers continued to waste milk. change those in powers.” strike in Maharashtra. The farmers have
demanded a loan waiver after being
Thakor said, “At this time we have On June 1, two tankers of milk were distressed over falling prices of agriculture
announced milk ban in entire Gujarat for spilled on the road in Shirdi as farmers produce and other related issues.
Dairy Times25
26
Joint Venture between Indian-French
company plans for new plant
O
ne of the largest private sector with a capacity of 20 tons per day. It is
dairy firms in South India, expected to be operational by next year.
Heritage Foods has joined hands
with French dairy firm Novandie to set up Executive Director of Heritage Foods,
50:50 joint venture for a new dairy plant Nara Brahmani said, “We are excited
Novandie, a subsidiary of French Food about our joint venture with Novandie,
company Andros, and Heritage Foods a leading yogurt player in France. This
will manufacture flavored yogurts and is one of the major steps we have taken
desserts. on the path to achieving Rs. 6,000 crore
revenues by 2022.”
Chief Minister of Andhra Pradesh, Nara
Chandrababu Naidu established his dairy Heritage Foods Limited (HFL). Currently, Heritage’s milk products have
company in early 1990s with three- The minister said joint venture has come market presence in Telangana, Andhra
business divisions; Dairy, Retail and about following lengthy discussions with Pradesh, Karnataka, Kerala, Tamil Nadu
Agribusiness, under its flagship company the French firm and a plant will be set up and Maharashtra.
Britannia’s focus to expand its dairy business
said in the report, “India has remained products like pasteurised milk are
the largest producer and consumer also growing significantly in absolute
of dairy. Looking at opportunity numbers,” it said.
for growth, existing private and
cooperative players have continued The company indicated that levers of
to invest in the sector. A few private success in dairy were access to quality
industry players have also announced milk, right product value-addition
their entry in the sector” capability and access to cold chain for fresh
dairy products. Similarly, Britannia would
In the past year, Patanjali, Coca-Cola strengthen its position in key categories
M
ajor food industry player and ITC have forayed into the dairy space. within bakery including biscuits, cakes,
Britannia is keen to expand its PepsiCo, too, has expressed interest in rusks and bread, and would enter adjacent
dairy business that contributes the market, nudging existing players into segments for accelerated growth. “We
five to six per cent to its annual turnover action. Apart from Britannia, key players will expand international business with
as they explore this sector aggressively. in India’s dairy industry include Nestle, focus on countries with Indian diaspora.
Amul, Mother Dairy and Danone. India has remained the largest producer
In its annual report for the financial year and consumer of dairy. Looking at
2016-17, the Bengaluru-based company’s In its annual report, Britannia said the opportunity for growth, existing private
FY17 turnover was Rs. 9,054 crore and major growth driver in dairy had been and cooperative players have continued
was evaluating transition of the dairy value-added products, such as cheese, to invest in the sector” Britannia said in
model to a fully integrated one. Britannia dahi and milkbased drinks. “Basic its annual report.
NABARD launches Dairy Entrepreneurship
Development Scheme in Uttar Pradesh
N
ational Bank for Agriculture Scheme is based on subsidy attributed to
and Rural Development the capital investment.
(NABARD) launched Dairy As per letter by NABARD General
Entrepreneurship Development Scheme Manager Rohit Mishra to chairmen of all
(DEDS), an ambitious scheme of the banks, the Government of India has made
Union agriculture ministry aimed at a budgetary provision for subsidy to the
increasing milk production through dairy amount of Rs 240 crore to be disbursed
management, apart from strengthening during the current fiscal year among
the allied activities such as milk marketing of related products. 31 states where the scheme has been
processing, preservation of milk and milk The scheme launched in the name of launched. Uttar Pradesh share has been
products through cold chain as well as the ‘Dairy Entrepreneurship Development fixed at Rs 13.73 crore.
Dairy Times27
Three centres in Maharashtra to buy 600 desi cows
capacity to produce The government along with Bharatiya
large volume of milk. Agro Industries Foundation is finalizing
Officials said that a new insemination method to boost the
even farmers engaged number of calves born.
in animal husbandry
as an allied activity to The progeny will be distributed to farmers
boost their incomes to encourage them to rear Desi breeds.
are interested in these “The insemination will be done only after
high milk-producing identifying and verifying the pedigree of
cow varieties, a purebred male,” said another official
pushing the count from the department.
of their sturdier desi
counter. Officials said that they have also sent a
A
nimal husbandry department proposal involving a technology called
officials said that Desi cattle A number of integrated indigenous cattle sorted semen for approval to the central
breeding project would be centres (Gokul Grams) will be set up government. In this practice, the aim is
undertaken as part of the Rashtriya Gokul under the mission that will also work for to inseminate the female cow with only
Mission, a centrally-funded scheme for improving milk productivity as part of the such semen that has the highest chance of
which the government will spend Rs 15 state government’s cow welfare parts to a producing a female calf—the idea being
crore. In July 2014, the Centre announced few thousands. to increase milk production in the state.
a nationwide Rashtriya Gokul Mission to
protect the ‘indigenous breed of cows’. “We will buy nearly 600 cows for each The demand for milk of Desi cows or A2
centre. Gir is available in Gujarat while milk is increasingly becoming a health
In the last few years, indigenous cows Khillari and Goulav varieties are available fad, with small dairies and big brands like
have considerably reduced, with Holstein with private individuals or farms in Amul entering the market.
Friesian and Jersey varieties possessing a Vidarbha,” said a senior official from the
huge chunk of the market because of their Animal Husbandry deptt.
Dairy Times28
Rupeng Patidar elected as Chairman of RCDF
R
upeng Patidar, who is the controversial tenure as chairman of Dairy chairperson Dr Geeta Patel, Nagaur
Chairman of Banswara Dairy Banswara Dairy and his honesty. It was Dairy chairman Kishanlal were being
has also been given the charge of after considering these qualities that the considered close to Dairy Minister Ajay
chairmanship of Rajasthan Cooperative government gave green signal for his Singh Kilak.
Dairy Federation (RCDF). After several name. The intervention of the government Jaipur Diary Chairman Punia was with
rounds of hectic meeting Patidar’s name also made sure that voting for the post did Patidar during this duration. When it
was finalised by the government as the not happen. became clear that there was no other
consensus candidate. Jaipur Dairy’s This is for the first time that members as candidate in the race and Patidar would
Chairman Om Punia informed Patidar on well as chairman have been elected with be elected unopposed, Punia took him to
call that he was the consensus candidate consensus. Patidar in presence of other 11 the Chairman’s chamber. Later Patidar,
for the post. members of managing committee filed his Punia and rest of the members went to
A simple man, Patidar was never nomination for the post of chairman in the meet Diary Minister Ajay Singh Kilak at
considered in the race for chairmanship. office of election officer in second floor his residence.
He was chosen because of his non- of RCDF. Front runners like Udaipur
Dairy products to carry quality mark logo
A
s AGMARK and ISI marks are manufacturing units based in Karnataka NDDB are providing necessary funding
certified signs that guarantee the that manufacture dairy products under and technical assistance under various
agriculture produce or industrial Nandini brand, four units that manufacture schemes such as National Programme for
products bought are of good quality and Punjab's popular Verka brand, Junagadh Dairy Development and National Dairy
standards, dairy products in the country and Kutch Dairy of Gujarat which Plan to the dairy cooperatives to help
including milk pouches will now have a are makers of Mahi brand and two them bring about process improvements
quality mark logo on them. manufacturing units run by Mother Dairy in their dairy value chain to qualify for
Anand-headquartered National Dairy Fruit and Vegetable Private Limited based award of ‘quality mark’.
Development Board (NDDB) will unveil in Uttar Pradesh and Andhra Pradesh that An eleven member management
the quality mark logo to be launched manufacture Mother Dairy products. committee comprising of DAHDF
by Union Minister for Agriculture and Chairman of NDDB, Dilip Rath said representatives, managing directors of
Farmers Welfare Radha Mohan Singh at "NDDB quality mark will provide dairy four federations, a representative from
Krishi Bhavan in New Delhi. cooperatives and producer institutions the Food Safety and Standards Authority
The dairy products carrying this quality the much needed brand identity and a of India and two experts in dairying will
mark logo will assure consumers that competitive edge". oversee activities of the quality mark.
the products are free from any kind of NDDB official said “This will also As part of the scheme, interested
adulteration. Union Minister will award contribute to building consumer federations, cooperative dairies,
certificates to 14 selected manufacturing confidence in dairy cooperative brands. government dairy units can apply for the
units for adopting food safety and quality It is aimed at bringing about process quality mark.
management systems for milk and milk improvement in the entire value chain Only dairy units that adopt food safety and
products and adhering to quality mark from producer to consumer ensureing quality management systems for milk and
parameters. availability of quality milk and products.” milk products and adhere to parameters
The first 14 manufacturing units selected Department of Animal Husbandry, given in the guidelines of quality mark
for award certificates include six Dairy and Fisheries (DAHDF) and are eligible for it.
Heritage Foods Aims for Rs.6,000 Cr Turnover by 2022
H
eritage Foods Ltd seeks to increase jubilee celebrations in the presence of player after its entry into western markets
their business from value-added various stakeholders. Just like the past and the acquisition of Reliance Dairy.
products to 40 per cent from the 25 years, the company informed that The silver jubilee celebrations began
current 24 per cent. It has charted out in line with its commitment, it would in April wherein it initiated the re-
a strategy to achieve a turnover of Rs. strive for the welfare of farmers without branding exercise of corporate identity
6,000 crore by 2022. compromising on values set out by its along with a complete revamp of its
The company has recently announced founder, Chandrababu Naidu. product packaging launch. Thereafter,
a strategic tie up with French dairy During the first quarter ended June 30, it launched flavoured milk in PP bottles
company Novandie for value-added 2017, Heritage Foods had reported 32 per in Chennai. The company followed it up
products and proposal to set up a new unit cent increase in revenue and attributed with the integration of Reliance Dairy
through the venture. it to rebranding, acquisition of Reliance into it, marking the brand's foray into the
Founded by Nara Chandrababu Naidu, Dairy business and other marketing northern markets.
who is even the Chief Minister of Andhra related push. With a bigger market
Pradesh recently organised its silver presence, they have emerged as a national
Dairy Times29
Schaefer Systems International Pvt Ltd.
P: +91/22/7117 0101 • info.in@ssi-schaefer.com • www.ssi-schaefer.com30
Indian dairy market has strong potential for
premium and wellness products
I
ndian dairy market holds tremendous with the costs for collecting, storing Private companies are dissuaded by
potential that can be harnessed and transporting milk, this squeezes issues like price pressure, low margins,
with focused strategies. Worth INR processors’ profit margins, encouraging and requirement for extensive distribution
5,000 billion in 2016, 80 per cent of the them to diversify into high-margin networks.”
industry remains unorganized. Today products and to improve volumes for
multiple opportunities exist for dairy basic products by using recombined Major competitors in the market
companies, though rural focus and milk. Rural market opportunities will include Amul, Mother Dairy, Nestle,
wellness/premium products will be most involve upgrading consumers to branded Danone, Kwality, Hatsun Agro, Heritage
important. The complexity and indirect products. Urban focus will be on offering Foods, Paras Dairy, Parag Milk Foods,
costs of milk procurement drive private a combination of convenience, indulgence Creamline Dairy, Aavin, and Nandini.
companies towards low-volume, high- and health—a package the dairy industry Trends that support market growth
margin premium products. On the other is well-positioned to provide given the include: a) Urban consumer preference
hand, cooperatives will leverage their ‘healthy’ and ‘nutritious’ tag attached to for convenient, healthy yet indulgent
strength in rural areas. The exceptions are milk and dairy products in India.” products that increase premiumization,
large players like GCMMF (Amul) and b) User disposition toward the taste
Mother Dairy that play across the sphere. The Indian dairy industry examines of dairy-based health products despite
Opportunities in both rural and urban opportunities, trends, drivers and the availability of several non-dairy
markets will be augmented by increasing restraints in the Indian dairy market along substitutes c) Demand for and hence
margin pressures for dairy processors. with key challenges faced by market opportunity to create new categories in
participants. Ramakrishnan added, “Basic functional products and single serving
Consultant, Visionary Science dairy products such as standardized/toned units, d) High acceptance of new brands
(Chemicals, Materials & Foods) Practice, milk, butter, packet curd, ghee, paneer, in the wellness and premium segment,
Frost & Sullivan, Govind Ramakrishnan and branded ice creams, account for 95 which enables easy market entry for new
said “Rising dairy farming input costs per cent of the Indian market, but remain players.
are passed on to processors. Coupled the stronghold of state cooperatives.
ABT Dairy gears to strengthen product line
a herd size of three to five will decommission this plant once the
cows. Our endeavour is new plant is commissioned.
to improve the livelihood
of these farmers; we want This 100 tonne/day curd production plant
to help them increase is scheduled to commence operation in
their holding to eight to September-October.
ten cows and increase
our milk procurement We are also contemplating to roll out
volumes to 10 lakh litres Sakthi brand ice-cream. But this is
a day by 2025. Our planned only during next summer; we are
collection centres cover envisaging 1,200 litres of ice-cream per
16 to 17 taluka in this hour; the plant will operate for 10 hours.”
region at present. We
D
airy division of ABT Industries, intend to expand our area of operation.” Paneer production stands at four tonnes
belonging to Sakthi Group of a day. The company is planning a bigger
companies, looks to strengthen He further added, “Water has been issue cold room facility for storing paneer,
their position across the product line. all over. We want to ensure availability of butter and cheese.
Senior President, ABT Dairy CP Charles feed for the animals. We plan to develop
said that located at Amabarapalayam, seed centres to ensure that there is no The division’s milk procurement grew at
Pollachi, it is gearing up to increase curd shortage of fodder for the animals. CAGR of 7.5 to 8 per cent, while on the
production five-fold from the current turnover front; it was lower at 5 to 6 per
level of 20 tonnes a day, enter ice-cream Our people underwent training in Israel. cent.
production and augment its cold storage We hope this will benefit the farmers.
facility. Acute drought forced some farmers to sell ABT Dairy has sought the services of
their cattle, but we also realised that they project management consultants, NAPL.
He said, the daily procurement of milk returned to our fold after repurchase.” The total cost of the project is estimated
through 730 collection centres is close to at Rs. 35 crore. Also they received a grant
2 lakh litres. “As many as 12,500 farmers ABT Dairy currently has a 20 tonne a day of Rs. 10 crore from the Union Ministry
are registered with us at present, each with curd production facility. Charles said “We of Food Processing Industries.
Dairy Times31
PE-VC deal value in dairy double of last year's
T
he domestic dairy industry has of Products to Le Groupe Lactalis in a mentoring. Abhinav Shah, co-founder
late grabbed the eyeballs of private $72-million deal in which it made 4.5x and chief executive of HR Food (which
equity (PE) funds and venture returns. sells under Osam brand) felt that having a
capitalists (VCs), with the sector bagging But, is dairy as lucrative as it looks, with VC on board has helped in guidance and
$60 million investments in just two deals most of the market with cooperative mentoring, preparing them for the long
so far this year. giants? haul. HR Food had used the funds raised
R.S Sodhi, Managing Director of Amul to expand its capacity up to 200,000 litres
Data from Venture Intelligence show that said, "Dairying is a safe business; demand per day and now aims to take the share
so far in 2017, only two deals in the dairy is set to grow, especially for branded of VAP in its turnover from current 10
space have fetched around $60 million products. If overall milk consumption is per cent to 20 per cent over the next few
(around ~385 crore). The deal values have growing at five-six per cent, demand for years.
been consistently on the rise in the past branded dairy products is clocking a 10-
five years. From $13 million in 2013 to 12 per cent growth rate. Having said that, As such, the value of the dairy industry
$30 million in 2016, and 2017 has already PEs and VCs need to choose their targets at retail level is estimated to be ~4.5 lakh
beat the previous year's cumulative deal carefully; if you look deeper, most private crore, of which nearly 30 per cent lies
value. dairies have an Ebitda margin in the range with organised players, and this segment
of five-six per cent." Ebitda is earnings is clocking 13-15 per cent growth rate per
Venky Natarajan, managing partner, Lok before interest, taxes, depreciation and annum. The VAP segment is doing better,
Capital, a leading VC fund which has amortisation. at 18-20 per cent.
exposure to the dairy sector, feels the
sector has the potential to attract around Having a PE-VC investor on board, Some products like flavoured milk,
~5,000 crore over the next five years however, does not only bring in requisite yoghurt and cheese are growing upwards
easily. In fact, Lok has identified dairy funds, young dairy firms look at them of 20 per cent per annum, given their
as one of its key investment sectors in as harbingers of professionalism and small base.
its Fund III. It had made its maiden
investment in dairy in 2016, when
it led a Series-B funding of $6.7
million in HR Food Processing Pvt
Ltd (brand Osam), a Ranchi-based
dairy brand, along with early-stage
fund Aavishkaar.
Natarajan feels that besides
encouraging growth rate in value
added products (VAP) in dairy, the
sector as such is a safe bet as demand
for milk is estimated to grow with
rising aspirations and population
growth.
The returns upon exits have been
encouraging, too, for PEs and VCs.
For example, data from Venture
Intelligence show IDFC PE made
two times return from the open
market when it made a partial exit
from Parag Milk Foods in March
this year. In January 2014, Carlyle
had sold its stake in Tirumala Milk
www.agronfoodprocessing.com
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