Creamline Dairy to close fund raising deal in a few months
Jan 30 2014
“The process is on and we will look to close the deal in four to five months. It would be a stake dilution and not an exit,” said its managing director K Bhasker Reddy.
The dairy segment in Andhra Pradesh is buoyed by the recent deals- Lactalis acquiring 100 per cent stake in Tirumala Milk Products and Chennai-based Hatsun Agro Product Limited (HAPL) acquiring the business of Hyderabad-based Jyothi Dairy.
”Andhra Pradesh has always been ahead on the dairy curve. The recent developments will bring in consolidation of small players. Also, more entrepreneurs would look at dairy segment,” he said adding that Creamline, in which animal feed manufacturing company Godrej Agrovet has a 26 per cent stake, could look at acquiring processing facilities of small players as it has chalked out a growth plan.
It is looking to raise about Rs 250 crore. The funds would be used for deepening its presence, particularly in South India, adding procurement centres, strengthening facilities for value-added products. “There will be a lot of demand for value-added products. We are working on products with longer shelf life,” he said adding that the demand for value-added products would grow more than three times in four to six years.
The demand for cultured milk products, butter, ghee, flavoured milk, sweets, paneer and milk powder would increase. The prices of milk powder have increased to about Rs 250 a kg from Rs 180 last year, he said.
It currently has seven lakh litre per day capacity and has plans to increase it to about 12.5 lakh litre per day in two years. In the process, it is eyeing to be a Rs 1,000 crore company by March 2015. It now crossed Rs 800 crore in turnover. It is hopeful of a 20 per cent growth on a yearly basis and revenues touching Rs 1,600 crore by 2017-18, he said.
The current demand for milk India was about 127 million tonne and could increase to 200 million by 2019-20, said Reddy.