Parag Milk Foods has acquired Danone's manufacturing facility at Sonipat in Haryana, which will help it expand its footprint in the north and Northeast India.
"The acquisition is a strategic investment in strengthening our fresh category distribution in the north and northeast regions of the country, and cost us Rs 300 million together with its refurbishment. The additional amenities in the plant will increase our product portfolio in the region," Parag Milk Foods Chairman Devendra Shah said.
The addition of the new facility will add 6-7 per cent to the company's overall top line in two years, he added.
"We are expecting the plant to generate 14-15 per cent revenue in the north and northeast region. And overall, it will add 6-7 per cent our revenue," he added.
Parag Milk Foods total revenue in 2017-18 stood at Rs 17.3 billion. This plant will only produce fresh products like milk and curd, he added.
Further, he expects it to strenghten product offerings and distribution. Currently, the products that are sold in the northern part of India are supplied from the company's Manchar plant in Maharashtra.
"This will bring us closer to the end consumer and will give us an edge to understand the consumer preference in northern India," he added. The plant is spread across 5,500 square metre on the outskirts of Delhi NCR.
Its current milk processing capacity is 0.75 LLPD (lakh litre per day) along with curd processing capacity of 15 tonne.
"We aim to educate farmers on best practises and help enhance their income. Initially we have associated with over 2,000 farmers (to procure cows milk) and we will keep on adding to these numbers going forward," he added.
In the coming months, the company is planning to expand the new manufacturing facility by installing processing units for pouch milk, flavoured milk, pouch butter milk, cup curd, misthi dahi as well as expand the existing yoghurt facility.