Hatsun in expansion mode, eyes pan-India market for its diary products

DHARMAPURI: Hatsun Agro Products, a listed entity and a leading player in the milk diary sector in Tamil Nadu, has chalked out plans to have pan-India footprint for its branded dairy products.

The Rs 1013 crore company has already opened 25 company depots across the country to sell dairy whitener, ghee, butter, milk powder, paneer and other milk-related products in small packages varying from 20 ml to 1 kg.

The company’s main products, Arokya milk, Hatsun toned milk and Arun Ice Creams are available only in the South. "We have decided to expand further in the diary ingredients segment and tap country’s retail market aggressively," Hatsun Agro Products MD RG Chandramogan told visiting journalists at the newly built milk powder manufacturing plant at Palacode in Dharmapuri district.

The Rs 150 crore greenfield plant has a capacity to process 9 lakh litres of milk per day. "We will start commercial production of the plant by this month-end," Mr Chandramogan said.

With this new facility, the company’s total milk handling capacity will increase to 26 lakh litres a day, he added. The project was funded through a combination of debt, internal accruals besides Rs 25 crore as convertible debentures.

"In anticipation of building new milk capacity, we have started promoting our branded products across the country," Mr Chandramogan said, adding the company is selling market-specific products like ghee in Rajasthan,
milk powder in Kolkata and diary whitener in North East.

He said, though milk is company’s core business, since this year, it has started promoting diary ingredients and ice creams. In 2008-09, diary ingredients and ice creams contributed Rs 332 crore to its turnover, while the rest came from milk segment, which has Arokya milk, Hatsun toned milk, curd and buttermilk.

As part of expansion, the company has decided to increase the number of its distribution centres from 1250 to 1400 by the end of this fiscal.

These outlets will sell complete range of Hatsun products right from milk, ice cream to milk products. It also has plans to open 50 unlimited ice cream parlours in Tamil Nadu by March 2010. The company is hoping to close the current fiscal with a turnover of Rs 1200 crore.

On the future plans, Mr Chandramogan said, the company currently has extensive capacity and it would try to utilise them fully. "We will invest around Rs 50 to Rs 60 crore next fiscal to set up captive power plants in our three milk processing plants in Kanchipuram, Salem and Palacode," he added.