Gujarat Cooperative Milk Marketing Federation Ltd to spend 1,200 crore to expand capacity

In order to meet the rising demand, milk processing facilities would be set up in Rajkot, Gujarat and Kolkata. 

In addition to its strong-hold in Gujarat, Dairy Giant Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF), which markets Amul food brand, has made fresh investments to expand capability in major markets like Kolkata and Andhra Pradesh. 

In the next two years, the Federation is expected to spend over 1,200 crore in additional milk processing and value-addition capabilities in these areas. 

Of the said investments, GCMMF will spend approximately 250 crore for a 10 lakh litres per day (LLPD) processing facility in Kolkata, while it has scheduled approximately 450-500 crore investments for a milk processing facility in Rajkot, Saurashtra. 

In North Gujarat, with investments of around 600 crore, it is setting up additional manufacturing capabilities for dairy products. New investments will be made in Rajkot and Banaskantha in Gujarat and Kolkata to increase additional capacity for milk processing as demand for packaged branded dairy products rises, said RS Sodhi, MD, GCMMF. 

Increased demand: 

Humbal stated that there even after the Covid-19 lockdown increases in the intake of dairy goods have been seen effectively. However, there has been a negative effect on the HoReCa segment, where demand is down by about 30 per cent. But in most countries, aggregate customer demand has been recovered. 

In the next two years, Amul had previously revealed its intentions to spend over approximately 1,500 crore. 

Valamji Humbal, GCMMF Vice-Chairman and Sarhad Dairy Chairman, said the addition of power in Rajkot will be a huge boost for the region's dairy farmers, who have to transport milk for processing to Gandhinagar. 

Costs of Shipping: 

According to Humbal’s statement the milk farmers have to face lots of difficulties due to the current situations. He further added that about 35 Lakh liters per day of milk are produced by Saurashtra region. From which about 10-12 LLPD approx  is processed at local processing centers, whereas a large amount of about 20-25 LLPD has to be transported for further processing to Gandhinagar Mother Dairy involving the shipping as well as the wastage cost. In addition to all of this because of 12 hours of travel, the consistency of milk is often affected. All of these would mean improved margins for the dairy farmers. 

To overcome the problems, a manufacturing plant is been planned to be set up in the middle of the Saurashtra area and will be completed in the next few months added Humbal. 

Amul, in Kolkata, North-East and Andhra Pradesh, also is rapidly expanding its reach in eastern markets. Andhra Pradesh produces milk almost identical to Gujarat, and the state government has also extended its support to Amul for the implementation of the "Amul-model" in the state of cooperative dairy production.