Keventer Agro readies to take Metro Dairy brand outside West Bengal

Currently, the Metro Dairy brand offers pouch milk, curd and ice-cream and is pondering over the launch of Tetra-Pak milk for an eastern foray is currently

After taking full control of Metro Dairy from the West Bengal government last year, Keventer Agro is planning to take the brand to the neighbouring Bihar, Jharkhand, and the northeast states. 

The first product from this brand — Metro ice-cream — has already been launched in Bihar and Jharkhand, and the company plans to foray into the north-eastern zone by January.

“We are also working on more products, which will have a longer shelf life and can be manufactured here and sold to the neighbouring states,” said Mayank Jalan, company’s chairman and managing director. He, however, refused to divulge details on the specific products and categories.

The brand produces pouch milk, curd and ice-cream, and the launch of Tetra Pak milk for an eastern foray is under consideration.

The brand of dairy products account for 40 per cent of the company’s annual turnover of Rs 10 billion. Jalan expects the contribution from the dairy products to scale up to Rs 8 billion in the next two years.

“Market expansion across states and consolidation into existing markets will drive the revenue growth,” he said.

The brand is available across 18,000 touchpoints in eastern India, which the company plans to increase to 25,000.

Citing an AC Nielsen study, Jalan said Keventer was present across 32-36 per cent of the entire retail touchpoints in eastern India, which could be increased to 47 per cent.

In southern Bengal, the market size of the organised packet milk is estimated at around 1 million litre a day, of which the Metro Dairy brand has a 25 per cent market share. In urban markets, packet milk has a penetration level of 88 per cent while that is 30 per cent in rural areas.

Its other businesses, namely banana, manufacturing for Parle and ITC and exports are also poised to grow after Keventer completes its Rs 2.82-billion investment in its plant in West Bengal’s Barasat by the end of December.

“This facility can produce 0.4 million litres of milk a day, which will go up to 0.6 million litre a day,” Jalan said. In turn, he expects the group turnover to increase by 30 per cent to touch Rs 13 billion in the next two years.

To take on competition in the ice-cream space, the company has come up with two parlours in the city and plans to roll out another four. New flavours of ice-cream are also set to be launched in course of its expansion spree. In southern Bengal, it has a market share of 32 per cent in ice-creams.

Last year, the West Bengal government sold its 47 per cent stake in Metro Dairy to Keventer for an estimated Rs 855 million. It was the country's first dairy project in a public-private partnership model that began in the early 1990s and was a tripartite venture between the West Bengal Milk Producers Federation Ltd, Keventer and the National Dairy Development Board (NDDB). NDDB later sold its 10 per cent stake to Keventer.

Post the takeover, private equity firm Mandala Capital pumped in $25 million into this company. Jalan said he was not looking at raising more funds now.