Friday, May 11, 2012: 08:59:38 AM

Food Processing Poll Feature

Foreign investors interested in Indian dairy industry

Massive size and rapidly growing nature of the dairy industry makes it an ideal market for foreign investors, reveals survey by FoodProcessing360

India is one of the largest producers of milk in the world and therefore has a massive dairy and milk processing industry. One of the largest dairies in the world, GCMMF, with its brand Amul has been one of the most dominant forces in the industry for decades. However, the entry of new players has been a major game changer and today the dynamic milk industry has also emerged as a lucrative investment destination for foreign investment.

 
In a recent survey conducted by FoodProcessing360, it was found that respondents unanimously agreed that foreign investors would be keen to invest in the Indian dairy industry. The uptake of imported milk products also bears testimony to the market’s reactivity to new products and this should be encouraging for investors.
 
Significant opportunity
 
According to a statement by the Ministry of Food Processing Industries, “Due to the high processing levels, milk products offer a significant opportunity in India. India is the world's largest producer of milk owing to the strong business models formed through cooperative movements in the country. Milk and related products account for 17% of India's total expenditure on food. This segment enjoys liberal regulations as all milk products except malted foods are automatically allowed 51% foreign equity participation and all exports of dairy products are freely allowed.”
 
Ramani Ranjan Mohanty, owner of a small-sized dairy farm in Berhampur, Odisha, “There are a lot of opportunities in the dairy farming industry for small players, investors and professionals. However, to attract foreign investors more there is a need to organise the small players better. I think foreign investors would be keen to invest in dairy products that are boutique and innovative in nature.”
 
In the long run, with foreign investors entering through the single brand and multi-brand retail route, the dairy industry is likely to get a lot more interest from these investors from across the globe.
 
Tias Chakraborty

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