After Surviving 2 Bankruptcy, 4 Friends Turn Their Dairy Startup into Rs.225 crore Business

When four friends from Ranchi, Jharkhand, ditched their well-paying corporate jobs with excellent career prospects and a steady roof over their heads to start a dairy farm, everyone cautioned them about the pitfalls of running a challenging business. 

While some predicted that their enterprise would fail, others counseled them to return to their secure careers since venturing outside of their comfort zones looked like chasing a mirage. Despite the criticism and hurdles, the three friends followed their hearts and embarked on a new entrepreneurial journey. 

Later, a fourth acquaintance who worked at a Fast-Moving Consumer Goods (FMCG) firm joined them. 

As everyone said, the road ahead was filled with obstacles in the initial years. They lost half their capital in the first month and were on the verge of bankruptcy twice. But, determined to make a difference, they gathered funds at the right time to save their company. 

This is the story of four Jharkhand friends whose company, 'Osam Dairy,' milked Rs.225 crore of profit in 10 years. 

The company will complete a decade in April and after expanding business across Bihar, Jharkhand, it now plans to spread its footprint across West Bengal. 

At least 450 employees work at Osam Dairy today. Apart from this, 1,000 dairy farmers are indirectly related to the company. 

The company procures milk regularly from over 20,000 livestock farmers and sells their products via 250 distributors and over 8,000 retailers throughout Bihar and Jharkhand.

Osam Dairy employs around 30,000 people in this way. 

Abhinav Shah, Rakesh Sharma, Abhishek Raj, and Harsh Thakkar, the founders, have been friends since college. They gathered Rs.1 crore in capital by pooling their savings from their 9-to-5 job. 

They established their first dairy farm on one acre of land in Ormanjhi village near Ranchi in April 2012.To learn the technicalities of dairy farming, Abhinav even moved to Kanpur to get a month's training. 

Abhinav, Company Director, told about his ground-breaking idea: "Initially, we bought 40 Holstein Friesian cows from Khanna in Punjab." However, we experienced a major setback within the first month of starting work. Infection killed at least 26 of the 40 cows. We, on the other hand, did not let it affect us. 

"After this, we raised Rs.50 lakh to work on our backup plan next month. We bought cows from Bihar and began distributing door-to-door milk. Initially, we had a target to produce 300 liters of milk daily, which then increased to 1,000 liters in six months. 

"Earlier, our company was known as 'Raya,' and seven to eight people were engaged to deliver milk door-to-door across three areas of Ranchi." The first year turnover was around Rs.26 lakh. 

"We secured funds from a finance company in November 2013, and by March 2015, we had established our first milk chilling plant in Barbigha, Bihar." Cattle farmers and milkmen from 40 villages joined us as a result of this. Two months later, in May, the first processing and packaging plant with a capacity of 50,000 liters were established in Patratu, 35 kilometers from Ranchi. 

"Within a year, we started distributing 25,000 liters of milk in a day and established two processing and packaging plants with a capacity of 80,000 litres at Chandil near Jamshedpur and Arrah district of Bihar." 

However, during this time, two of their partners parted ways for personal reasons. 

The company now provides dairy products such as curd, buttermilk, paneer (cottage cheese), rabri, and peda (milk-based sweets). They also intend to introduce a limited-edition product named 'Salsa Raita.' 

Osam Dairy now sells around 120000 liters of milk and 30,000 gallons of by-products each day. It has also received several entrepreneurship awards, and their business model is discussed in business schools across the country. 

"In times of despair, all our family members and friends, particularly my mother Uma Shah, supported us," Abhinav said of their struggle. The most important thing I've learned in the last decade is that success in any sector does not happen immediately. Failures teach us. Believe in yourself and don't give up on hard work, because no matter how bad the situation gets, there is always light at the end of the tunnel."