Prabhat Dairy’s procurement network made it preferable for acquisition, says Lactalis India

Lactalis, the French dairy major, has been on an acquisition spree since 2014, having acquired Indian dairy companies like Tirumala Dairy, Anik Industries, and more recently, Maharashtra-based Prabhat Dairy for Rs 1,700 crore. CNBC-TV18‘s Jude Sannith caught up with Rahul Kumar, managing director of Lactalis India to talk about the company’s growth strategy.

“Lactalis wants to make a good position in Indian dairy market and for that you have to be present in all geographies, all categories of the product and all channels of the product. So Prabhat Dairy was fitting into it because they are doing very good B2B business and they are very good supplier to all the big institutions in terms of cheese and skimmed milk powder (SMP) and whole milk powder (WMP).

“So it was a good move to acquire Prabhat to have that control on that category and genres also. Apart from that, they have a very good procurement network and Lactalis always prefers to acquire a company which has a solid backward integration and Prabhat was the best fit for that,” he said.

“It will certainly improve our market share in terms of category where Prabhat is working. They are selling less liquid milk, now we are going to increase that category also but it is basically to have good control on all the geographies, on all the channels and on all the categories,” he added.

Key highlights

• Plan to increase Prabhat’s portfolio in the dairy product category
• Want Anik and Prabhat to sell more liquid milk, Tirumala to sell more dairy products
• Want all three Indian brands to have 65:35 ratio in milk-to-dairy-product in sales volume
• Milk-to-dairy products ratio 80:20 since Tirumala accounts for a major chunk of business
• Prabhat Dairy will focus on consumer segment in Mumbai, Pune and Maharashtra’s towns