Kolkata: Capping 10 years of research and product development at Munger in Bihar, cigarettes and consumer goods maker ITC Ltd on Tuesday launched its dairy products in Kolkata under its flagship Aashirvad brand.

With the introduction of pouched milk in the first metro city after test marketing in Bihar, ITC has set for itself an ambitious target of grabbing at least 8% share of the estimated Rs1,800 crore market in Kolkata within a year. While curd was introduced along with milk, other products such as paneer and milk beverages will follow within months.

“It started 10 years ago with artificial insemination," recalled Hemant Malik, divisional chief executive of the foods business. The aim at that point was to improve cattle health and build capacity, he added.

For the first three years of working with dairy farmers in Munger, ITC did not buy any milk at all, according to Malik. Thereafter, ITC started to buy milk to understand the challenges of building a full-fledged enterprise.

The first challenge was to secure the milk from bacterial growth before it could be despatched to bulk freezing centres, Malik said, adding, to address the problem, the company had to invest in rapid milk freezers.

ITC will conduct around 75 tests to test product consistency and quality, Malik said.

Because of its short shelf life, the distribution chain for pouched milk has been built from scratch, according to Sanjay Singal, chief operating officer of the dairy and beverages division.

Initially, ITC will source milk from Munger and process it at a facility near Kolkata, owned and operated by a partner. In 10 days, the company will start procuring milk from local farmers of West Bengal, Malik said.

Kolkata consumes around 1.2 million litres of pouched milk a year.

ITC aims to scale up sales to around 100,000 litres within a year, distributing pouched milk every day in the morning. It is the only product that ITC will distribute daily — all its other products have longer shelf life.

Though priced competitively, ITC is setting new standards in processing to remove bacteria, according to another executive. “Its standards are way above any competitor."

The fact that ITC is using the Aashirvad brand for its dairy products is an indication of its long-term plans and confidence in the scalability of the enterprise.

Malik, however, said ITC had no immediate plans of rolling out dairy products across India.

ITC has a capacity of producing around 250,000 litres of unprocessed milk at Munger. At present, it is using only around half of its installed capacity. Curd is being produced from milk sourced locally in West Bengal, according to Singal.

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