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DS thinks big on dairy goods

business Updated: Apr 24, 2012 21:01 IST
Vivek Sinha

The Dharampal Satyapal (DS) Group, a Rs 2,200-crore sales conglomeration better known for its pan masala brand Rajnigandha and Catch salt and spices, has entered the dairy business and has prepared a detailed roadmap for a nationwide launch of its products by end of the current fiscal year.

This could potentially mean a spirited home-grown challenge from Noida to giants such as Nestle, Britannia and Amul in addition to stock-market listed milk-based product companies such as Hatsun Agro and Heritage Foods in a growing market based on hundreds of millions of people moving to consumption of richer food products. After starting out with longer shelf-life products like ghee, DS plans to launch cheese, curd and raw milk.

Industry bodies say India's organized dairy sector is growing at a rate of around 7% and estimates suggest India's dairy market to be worth around R500,000 crore by 2015. Also, though India's dairy production is growing at a rate of about four percent per year, consumer demand is growing at approximately double that rate.

The DS group acquired a Rajasthan-based dairy firm Arsh Dairymax last September and expects to acquire more firms provided they are a “strategic fit”.

“Dairy offers a big business opportunity and we feel

the time is right to enter the fray,” Rajiv Kumar, vice- chairman DS Group told Hindustan Times.

He said the group expects to spend around R200 crore over the next two years to establish its dairy business. This would include establishing dairy farms and acquisitions if need be. "We are quite serious about this venture and are preparing a detailed roadmap for our business plans,” Kumar said.

The Group's first company-owned greenfield dairy farm would come up at Guwahati in the North East at an estimated investment of R20 crore. Kumar said the North-east has a high demand for milk and milk-based products but grapple with low milk production, providing a business opportunity for the DS Group. “Eventually, we will set up more dairy farms across the country,” he added.

The company is also working on the branding of its dairy products but for now its products will be available under brand name “Dairymax” in Rajasthan from next month.