Creamline Dairy plans Rs 400 crore spend

The joint venture company will look to raise the needed funds through multiple channels including debt, internal accruals and others.

By Author  |  Published: 16th May 2018  8:44 pm

Hyderabad: Hyderabd-based Creamline Dairy Products Limited, in which listed entity Godrej Agrovet Limited holds a 52 per cent stake, has drawn up plans to set up three greenfield milk processing plants over the next three years. It will also create facilities for manufacturing more value added products even as it will look for acquisitions.

The company will also make investments in automation at the existing plants. All these along with capex will see investments of about Rs 400 crore, said its managing director K Bhasker Reddy.

Set up in in the 90s, the Creamline has been a major dairy player from the city with operations in Telangana, Andhra Pradesh, Tamil Nadu, Karnataka and parts of Maharashtra.
It currently has nine processing plants. It recently has acquired a processing plant near Tirunelveli near Kanyakumari at an investment of Rs 40 crore. A new plant of one lakh litre per day capacity is being readied near Visakhapatnam at a cost of Rs 35 crore and will serve four coastal districts. All these add up to 12 lakh litre per day and with the proposed three new plants the company’s processing capacity will rise to 15 lakh litre per day, he said.
It has over 100 collection centres.

The joint venture company will look to raise the needed funds through multiple channels including debt, internal accruals and others, he said.

It currently has a turnover of Rs 1,200 crore and about 25 per cent of its comes from value-added products, which it wants to increase by ten per cent in three years by launching more products, he said.

On Wednesday, the company forayed into milkshakes with the launch of `Jersey Thickshakes’ in three flavours- chocolate, strawberry and banoffee (a mix of banana and toffee). They will be priced Rs 25 for a 180 ml container. They will be available across many retail outlets in these markets. More flavours will be added shortly. Other products in the offing include lassi and buttermilk, which have a longer shelf life. All these will be manufactured at its plant at Kesaram near Hyderabad.

According to Reddy, the value added products, like the milkshakes are growing at a faster pace than the liquid milk. The total beverages market is pegged at Rs 22,000 crore and of that dairy is only four per cent. However, dairy, as segment is growing around 15 per cent, the company said.

Godrej Agrovet had taken 26 per cent stake in Creamline around 2005 and has increased the stake in it to 52 per cent in 2015. “For increasing the stake from 26 per cent to 52 per cent, Godrej invested Rs 160 crore,” said Balram Singh Yadav, Managing Director, Godrej Agrovet Limited. He did not elaborate on the total investments that it had made in Creamline.
On a query on its interest on acquiring debt ladden Ruchi Soya, Yadav said the company had made a bid and is waiting for the NCLT’s decision on the matter.