Dairy firm in midst of Tirupati laddu row once made liquid oxygen

Executives of AR Dairy Food met FSSAI officials in Chennai over the controversial issue

A company that began as a manufacturer of liquid oxygen and later shifted to dairy production in the mid-90s has made a mark in that business.

Now, in 2024, the same company, AR Dairy Food, is in the midst of a political storm in Andhra Pradesh.

The Tamil Nadu-based AR Dairy Food is facing scrutiny over the alleged presence of animal fat in the laddoos at Tirupati Tirumala Devasthanams (TTD).

According to sources, AR Dairy Food, which supplied ghee to the temple, has already come under scanner of the Central Food Safety Authority.

However, a senior company executive told Business Standard that its ghee was “uncontaminated.”

“Our executives have gone to meet with the Food Safety Authority officials in Chennai. Our ghee is safe,” the executive said.

This matter falls under jurisdiction of the Food Safety and Standards Authority of India (FSSAI), and it may take necessary steps in this regard, said a state Food Safety department official.

The company was first established under the name Sarayu Cryogenics in 1995 for the manufacture of liquid oxygen.

Due to market volatility, its promoters decided to shift focus to production of milk and milk products. Hence, the name was changed to AR Dairy in 1998.

The company’s directors include Rajasekaran R, Suria Prabha R, and Srinivasan SR.

Interestingly, Rajasekaran, managing director (MD) of AR Dairy, is also general secretary of the Tamil Nadu Dairy Association. He is also president of the Tamil Nadu Packaged Drinking Water Manufacturers Association.
 

Product range and finances

The company is primarily engaged in the manufacturing and marketing of milk. It also sells other products such as milk powder, butter, ghee, curd, buttermilk, flavoured milk, and packaged drinking water, according to an ICRA report.

According to Tofler, its revenue was in the range of Rs 100-500 crore in 2022-23.

On the other hand, net worth fell by 0.62 per cent, earnings before interest, taxes, depreciation, and amortisation (Ebitda) by 21.19 per cent, and total assets by 4.34 per cent during the period. Its liabilities also saw a decline of 0.02 per cent in 2022-23.

The company’s milk and flavoured milk are sold under the brand names ‘Raaj’ and ‘Milky Choice,’ respectively.

The packaged drinking water is marketed under the brand names ‘Raaj’ and ‘Maanus.’

The company’s milk processing unit is located in Dindigul, Tamil Nadu, and has an installed capacity of 2 lakh litres per day (LLPD).

The controversy became public after the Telugu Desam Party cited a lab report that allegedly showed the ghee contained animal fat.

The ghee was supplied for the making of Tirupati laddoos, offered to devotees at the Lord Venkateswara temple in Tirumala.

The company later publicly stated that it supplied ghee in June and July and is no longer a supplier.

FSSAI issues show cause to firm
 

The Food Safety Standards Authority of India (FSSAI) has issued a show cause notice to AR Dairy, asking the firm why action should not be initiated against it for breaching provisions of Food Safety and Standards (Food Product Standards and Food Additives) Act, 2011.  The firm was given time till Monday to reply, with inability leading to suspension of its central licence.