ITC Gears to Introduce Dairy Products in the Market

            After its success in the packaged foods segment and hospitality sector cigarette maker ITC’s branded food division ITC foods is preparing to launch a slew of products over the next fourteen months and give competition to big brands like Amul, Nestle and Britannia. Chitranjar Dar, divisional CEO of ITC’s foods division said that ITC’s first set of dairy products will be shelf-stable. The list of the products that will be coming to the market are fortified milk, milk powder, long-life packaged milk and so on. The company started the dairy business as part of the integrated animal husbandry programme- the firm’s corporate social responsibility (CSR) initiative and company is now in the process of taking it to the next level.

            According to ITC’s sustainability report 2012 in July 2011, thirty one farmers contributed 102 litres milk and the average monthly collection jumped up to 9,400 litres a day in March 2012 with about 1,300 farmers pouring milk on a regular basis. Nearly 1.2 million litres of milk was handled during the year. The company has invested Rs 1.5 billion in milk processing plant which is in construction at Munger in Bihar. However, with big plans on the radar the company is exploring options to scale up the size in a short span of time.

            Dar said the processing plant was a necessity because the good things being done by the company should be capitalised. According to him it’s not good enough to only manufacture. Profit making motive only influenced the company to get into dairy. So from a strategic point of view the company will enter some parts of dairy in the next 14 months. ITC’s current focus is on shelf-stable dairy but Dar said it would have a presence in the entire value chain. As it launches the shelf- stable dairy products, simultaneously, cold chains and cool chains would be set up. The idea is to create differentiated products, that have higher margins and to that extent is inflation-proof.

            The dairy market is estimated to be around Rs. 550 billion of which Rs. 350 billion is regular milk consumption market while the rest caters to the premium product segment. Amul is the leader in this dairy sector. ITC is a brand whose products are liked and trusted by consumers. Its food products till date have been quite successful so it can be well estimated that it will have a good impact in the dairy market as well.

(Dated: 6^th March, 2013)

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