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Mother Dairy fans out with national ambition

business Updated: May 21, 2007 19:42 IST
Narayanan Madhavan
Narayanan Madhavan
Hindustan Times
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It is not your father's Mother Dairy any longer.

Delhi's ubiquitous brand that sells daily milk through vending machines and pouches is stepping up its corporate role nationwide, aiming to be a big growth story as a country-wide brand in milk, milk products, and fruits and vegetables.

"We have been growing at 20 per cent for the last three or four years, and should hit Rs 2,800 crore in this financial year," Paul Thachil, chief executive officer of Mother Dairy India Limited told Hindustan Times on Monday. Mother Dairy's revenues were Rs 2200 crore last year.

Mother Dairy, a subsidiary of the National Dairy Development Board, picked Thachil - then with Hindustan Lever's - as its head five years ago.

Some of Mother Dairy's national ambitions lie in the power struggle between NDDB's former chairman Verghese Kurien and his one time protégé Amrita Patel, who now heads the board and wants to use modern methods to boost the farm sector.

After a bitter feud, Kurien exited last year as the chairman of the Gujarat Cooperative Milk Marketing Federation (GCMMF), which controls the Amul brand, and which is now a rival to Mother Dairy in many respects.

Milk, bought from farmers' cooperatives and processed, packaged and distributed by Mother Dairy, accounts for 55 to 60 per cent of its revenues, dairy products 10 per cent, and edible oil sold under NDDB's Dhara brand 15 to 18 per cent, Thachil said.

Fruits and vegetables sold under the Safal brand now makes up only about 10 per cent, but offer growth potential as an emerging consumer category of frozen produce, Thachil said. Safal has a 65 per cent market share now, but operates in a segment that accounts for only Rs 70 crore in national sales.

But Mother Dairy is betting on both the retail revolution led by groups like Reliance and Bharti to fan sales. "You will see a lot of growth happening here," Thachil said.

Safal's juices are now in 10 big cities, while Safal has reached about 70 towns.

Thachil said Mother Dairy was mainly focusing on the North, West and East, but has a key processing facility in Bangalore, which helps exports worth about Rs 100 crore, mainly of fruit pulps and processed foods.

New brands are a key part of the strategy.

The company is now selling frozen foods like French Fries and burger patties under its Hot Snacks brand, while it plans to sell potato tikkis soon. The fries are currently imported by Mother Dairy which plans to make its own in about a year.

Apart from selling bulk ice cream under its flagship brand, Mother Dairy is actively promoting its Chillz brand, targeting youth with cones and fancier variants in which Mother Dairy hopes to soon overtake the frozen dessert brand Walls, Thachil said.

"We are getting seriously large in ice creams, the growth was 40 per cent this year," he said. The organised market in this segment is worth about Rs 750 crore in annual sales, and Mother Dairy's market share is about 15 per cent.

"We will hit about 20 to 25 per cent share in the next two years," Thachil said.