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Monday, Jan 28, 2002

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Hatsun Agro plans to expand market in western region

R. Balaji

CHENNAI, Jan. 27

THE Chennai-based Hatsun Agro Product Ltd is considering further acquisitions and market expansions in the western region, particularly in Karnataka and parts of Maharashtra, according to its Managing Director, Mr R.G. Chandramogan.

Hatsun Agro is among market leaders in the dairy and ice cream segment in the South, and is planning major initiatives to tap the markets in Karnataka and Maharashtra. With a turnover of Rs 149 crore in 2000-01, a 54 per cent increase over the previous year, the company hopes to conclude the current year too with a significant increase in turnover.

Mr Chandramogan told Business Line that with its milk procurement and marketing project taking-off at Belgaum, Karnataka, Hatsun now had access to markets up to Goa and Pune. Marketing of Hatsun's brand of Arokya milk had gained a firm hold in the markets there, and the company was looking at acquisitions in that region to consolidate its position, he said.

The capacity addition through the proposed acquisition is likely to be around 1-1.5 lakh litres milk per day. At Belgaum where Hatsun has invested Rs 7 crore, the company handles about 75,000 litres per day. The company commenced operations in August 2001 in Karnataka, and now has a `dominating presence' in Hubli, Dharwad and Belgaum. In addition to Kolhapur and Jamkhandi in Maharashtra, Hatsun is hopeful of establishing a major presence in Pune. Therefore, the Belgaum project has given Hatsun access to three distinct markets in two States and the Union Territory.

Following its acquisition of Ajith Dairy Industries Ltd, in Tamil Nadu, Hatsun was set to become a market leader in Tamil Nadu, Mr Chandramogan said.

It had a wide distribution network with milk being sourced from 560 villages, and can supply to areas with a population of atleast 50,000, he said.

It may be recalled that Hatsun acquired Ajith Dairy in October 2000, and it was subsequently merged with Hatsun last year.

In Tamil Nadu, the company markets more than 2.5 lakh litres of milk per day under the brand name Arokya and its acquisition has added a further capacity of about 1.75 lakh litres per day of toned milk under the brand name `Komatha'.

The market leader position in milk in Chennai would be further consolidated in the coming months through exploring potential in toned milk, he said.

According to him, milk will continue to be Hatsun's major growth area, and the other will be in ice creams with its flagship brand `Arun'. More flavours will be added in the coming months, he said.

While the company has made forays into by-products as dairy based sweet, khoa under the brand name Dairy Choice and into buttermilk, these would be relatively smaller efforts, he said.

The constraint in mechanisation of khoa production result in a lack of product consistency and limitations in achieving large volumes while the market for buttermilk was purely seasonal, he said.

On the export front the company exports ghee and microwave popcorns to Singapore and there have been some enquiries from Malaysia, and ice creams to Maldives.

While these are on a small scale, there were initial efforts in gaining a foothold in the markets abroad, he said.

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