French dairy group Lactalis eyes buys in North

May 14, 2019

G Balachandar

France’s leading global dairy group Lactalis — which owns Tirumala Milk Products, Anik Industries and Maharashtra-based BSE-listed Prabhat Dairy — has charted an organic-cum-inorganic strategy to become a strong pan-India player in the Indian dairy market.

The group is now scanning acquisition opportunities in the northern region, a strong dairy market, where milk consumption is high. Also, a deal in North India will make it a pan-India player.

Pan-India presence

“We have presence in the South with Tirumala. We went to Central India and acquired Anik. In the West, we have bought Prabhat. Our aim is to become a strong pan-India private player in the dairy market,” Rahul Kumar, Managing Director, Lactalis India, told BusinessLine on the sidelines of the launch of Tirumala’s new milk Champ Up.

He said the company would look at dairy companies having strong procurement strengths in the northern region.

“Prabhat has a solid procurement network and very few companies in India have that. The strength of the dairy business in India lies in procurement. In this business, more than brand, procurement is the key,” he added.

Product range

The company plans to be present in all dairy product categories.

“Our objective is to sell products that are dairy-based. But milk with a differentiated offering will be a key entry point for us to build and expand our dairy products. One needs to build a strong brand for milk to grow the value-added products, said Kumar.

In this direction, Lactalis’ arm Tirumala has introduced its new toned milk Champ Up with 40 per cent calcium, 23 per cent vitamin A and 13 per cent Vitamin D, aimed at fulfilling the daily nutrition needs of children.

Champ Up will be available in 180 ml packet, priced at 10. It has launched the product in Chennai and will launch in other parts of Tamil Nadu and other southern States gradually.

Sales turnover

With the Prabhat deal, Lactalis India’s consolidated turnover will be in the region of 4,000 crore, making it the largest private dairy company in the country.

Kumar said each company of the group had a different business mix. Tirumala’s 85 per cent business is in milk, while the remaining 15 per cent is in value-added products.

For Prabhat, 80 per cent of sales come from milk powder, cheese etc, while 20 per cent from milk.

Anik gets an equal amount of business from milk and value-added products.

“Any good dairy company should have a ratio of 65:35 between milk and value-added products. Our approach will be towards achieving a balance in the portfolio of all our three companies,” he said.

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