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Business News/ Companies / News/  Hatsun Agro plans to expand in Maharashtra
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Hatsun Agro plans to expand in Maharashtra

Hatsun Agro targets acquiring a greenfield project or an existing farm in Maharashtra as part of its expansion plan

Hatsun Agro plans to expand in the state by selling milk under its Arokya brand more widely, starting with southern Maharashtra.Premium
Hatsun Agro plans to expand in the state by selling milk under its Arokya brand more widely, starting with southern Maharashtra.

Bengaluru: Dairy firm Hatsun Agro Product Ltd, the country’s fifth-largest ice cream maker, plans to expand in Maharashtra and may look at acquiring a greenfield project or an existing farm in the state to do so, said a top company executive.

Chennai-based Hatsun, which started off as an ice cream company in the 1970s and later expanded into milk and other dairy products, currently retails a majority of its wares in four states—Tamil Nadu, Karnataka, Andhra Pradesh and Telangana.

It began procuring milk from Maharashtra last year but sells milk only in a few pockets of the state.

It now plans to expand in the state by selling milk under its Arokya brand more widely, starting with southern Maharashtra. The firm is also looking at retailing its oldest brand – Arun ice creams–and Hatsun curd in the state.

“We are looking for a greenfield project, a farm, in Maharashtra. If somebody is available for a takeover there, we may look at it. When we buy a company, we prefer buying a company of a smaller size where restructuring can be done according to our requirements so we can modify the procurement system, the distribution model and advertising," said R.G. Chandramogan, Hatsun’s chairman and managing director.

The firm began selling its Arokya milk in Andhra-Telangana in a similar fashion, i.e. by acquiring a dairy farm. Arokya milk accounts for 60% of the company’s revenue. It earned 946.81 in revenue during the October-December quarter, a 13.93% increase from the same period a year ago.

It held 1.8% market share in India’s organised milk industry in 2016, according to research firm Euromonitor, constant compared with its market share in 2015. India’s milk industry is dominated by co-operatives like Amul, Karnataka Cooperative Milk Producers Federation Ltd and Tamil Nadu Cooperative Milk Producers Federation Ltd.

The only private firm among the top five milk companies, Mother Dairy Fruit and Vegetable Pvt Ltd, also began as a subsidiary of the National Dairy Development Board.

Hatsun ranks fifth in terms of market share when it comes to ice creams. It holds a 4.6% share of the market, which is also led by Amul followed by Hindustan Unilever Ltd’s Kwality Wall’s, Mother Dairy and Vadilal Industries Ltd.

Together Hatsun’s ice cream brand, Arun, and its ice cream parlour brand, Ibaco, account for roughly 9% of revenue.

Arun is an open-market brand that is sold in 16,000 retail outlets. The firm currently operates 117 Ibaco outlets in the four states mentioned earlier and also has a presence in Kerala. And it plans to take Ibaco to Maharashtra and other western markets over the next two years.

The company also has its own Hatsun Daily retail outlets, which sells all its brands. It currently has 1,200 outlets and is adding another 1,800 outlets in a phased manner over the next 15 months.

“This year we’ve already invested about 60 crore. Next year our capex will be about 390 crore – so 850 crore in two years was the expansion plan. This has gone into strengthening our marketing network, expanding production capacities and streamlining of our procurement," said Chandramogan.

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Published: 27 Mar 2017, 01:11 PM IST
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