KMF’s plan to set up milk plant in Mumbai on hold

Rahul Wadke Mumbai | Updated on June 29, 2020 Published on June 29, 2020

The Karnataka Cooperative Milk Producers’ Federation Ltd (KMF), which owns the brand Nandini had drawn up plans for entering the Mumbai market in a big way. It wants to enter the high consumption market with a milk processing plant or at least a milk packing unit.

BC Sateesh, MD of KMF, told BusinessLine that before the pandemic, KMF was selling 2.5 lakh litre of milk in Mumbai. With a new facility, it wants to increase the sale to 5 lakh litre a day and ultimately to 10 lakh litre a day.

The management had come down to Mumbai during January and February and studied the market but due to the pandemic, the plans had been put on hold. Now it is waiting for the tide to turn. With a yearly turnover of ₹15,000 crore, making an investment in the Mumbai market is not very difficult for KMF, he said.

Chilled milk

KMF wants to enter the mega market with a milk plant or at least a milk co-packing unit, where chilled milk transported in tankers could be packed in smaller pouches of 500 and 1,000 ml and sold to the retail customers. At one side KMF has a daily collection of over 88 lakh litres of milk and on the other, there is a large market such as Mumbai, which cannot be served by making the pouches in Karnataka, it has to be done locally. Given the high amount of consumption of milk products such as cheese and paneer around Mumbai, KMF also wants to give thrust on these areas, Sateesh said.

He added that procuring milk from local farmers will take time a long time as it requires winning their confidence, which will happen eventually.

The former President of Indian Dairy Association and board member of Gokul Dairy, Arun Narke, said that KMF has an opportunity for making inroads into Mumbai market because the quality of their milk is good. KMF also has the financial muscle to serve the Mumbai market because it is supported by a good balance sheet, he said.

Published on June 29, 2020
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