Orissa, India-based dairy Milk Mantra has made its first acquisition, with the purchase of Sambalpur-based Westernland Dairy for $1.6m.
Milk Mantra, founded five year ago by ex-Tata Administrative Services executive Srikumar Misra, is looking to increase its product offerings as well as expand further into Orissa, and enter Chhattisgarh and Jharkhand.
“This acquisition gives us the ability to increase our immediate processing capacity in western Orissa and other states, where we can extend our Milky Moo franchises,” Misra, managing director and chief executive, Milk Mantra, said.
This is the first acquisition by Milk Mantra. The company, which is backed by impact investment firm Aavishkaar and private equity heavyweight Fidelity Growth Partners India, which led a Rs 80-crore investment in the venture earlier this year, is scouting for more buyout opportunities.
“We are looking at, both, acquisitions and greenfield opportunities, particularly in eastern India for our fresh dairy platform,” Misra said.
The Bhubaneshwar-headquartered venture will also be launching a slew of dairy-based, value-added products, such as functional milkshakes and probiotic drinks, by the quarter ending March through modern trade outlets.
“We are in the process of augmenting our processing facility to 2.5 lakh litres per day, up from 75,000 litres per day, while the new plant has a capacity of 50,000 litres per day. This should be complete by mid-2015,” Misra said.
The development comes at a time when several emerging dairy start-ups, heavily backed by venture capital, are beginning to create a strong presence for themselves in the space, which has been traditionally dominated by government-owned entities, such as Mother Dairy and co-operatives, such as Gujarat Cooperative Milk Marketing Federation, which owns and operates the Amul brand.
“The industry is becoming more organised… Consumption has risen radically. You will find a lot of private equity getting into the space,” said Abhinav Sinha, managing director, Fidelity Growth Partners India.
Over the past 18 months firms such as Sequoia Capital, International Finance Corporation and Rabo Equity, have invested in ventures, such as Milky Mist, Parag Milk Foods and Prabhat Dairy, respectively.
Source: Economic Times
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