Hyderabad: The year was 1998 and D Sesha Reddy, a serial entrepreneur was on the lookout to start a new venture in collaboration with his son D Sunil Reddy. After dabbling with many options, the father-son duo set their heart on the milk production business – Dodla Dairy — which was at that time largely owned by cooperatives. They have recently opened a modern state-of-the-art production facility in Hyderabad, while their first plant was set up in Nellore in united Andhra Pradesh and have about 12 plants in total all over India.
“The milk business got opened up for private investments only in 1992 and there were only two private players operating at that time with most of the market being dominated by cooperatives making it a very one-sided market. That was when I thought about starting a new venture after running paper mill business for almost 20 years. Someone suggested that dairy business is a good option as private players are less in this field. So with an initial investment, I started the business along with my son and set up a big production plant in Nellore as large number of dairy farmers is from that region,” recalls D Sesha Reddy, chairman, Dodla Dairy, who is a graduate of Nizam College in Hyderabad in 1963.
While setting up of the plant was one part of the story, the other important step was procurement of milk from farmers and to be able to gain that trust in terms of continuous supply. One of the key factors for their growth, according to Reddy, was the trust that they have been able to build and sustain among the dairy farmers. The fact that they paid the farmers on time even if the company was suffering losses was the reason why they have been in the business for over 20 years now.
“Another major factor for our growth has been the right investment that we have made in the right place and time which has given us success. When our plant in Nellore was proving to be a liability for us as we had to supply to metro cities like Bengaluru and Hyderabad, we decided that we will set up a plant in Chittor which is close to Bengaluru. Similarly, recently we acquired a company in Tamil Nadu called KC Diary so as to increase our penetration in that region. Likewise, we have constantly reimagined and recreated ourselves so as to serve our customers good quality milk at all times,” D Sunil Reddy, MD, Dodla Dairy told Telangana Today.
The company has also expanded its operations into international market by setting up a plant in Africa in 2014. It supplies 11.5 lakh litres of milk per day in India and with the recent acquisition of KC Dairy in Tamil Nadu, it is confident of increasing this to 12.5 lakh litres of milk per day. Apart from milk, it also has by products like Ghee, Ice-creams, and different varieties of milk, buttermilk, lassi and sweets. Along with supplying its products in large retail stores and distributors, the company also has its own 250 standalone outlets in India out of which 130 are in Hyderabad.
One of the biggest strengths of the company, according to Sesha Reddy, has been the upholding the strength of farmers and backing of right people in the company. This can be sensed from the fact that the company’s CEO B V K Reddy has been part of the business since its inception.
Dodla Dairy had recently filed draft documents with the Securities and Exchange Board of India between July and August seeking its clearance to float initial public offers (IPO). The IPO comprises fresh issuance of shares worth up to Rs 150 crore, besides, an offer for sale of up to 95.4 lakh equity shares by TPG Dodla Dairy Holdings Pte Ltd and Dodla Deepa Reddy, according to the draft papers filed with Sebi.