Visakha dairy to step up presence in Orissa

The arrival of value-added tax (VAT) seems to be fuelling Visakha Co-operative Dairy's expansion plan and now Orissa is on its radar. The dairy, which already has a strong foothold in Orissa is planning to increase it further.

Pre-VAT, the dairy used to sell milk in the Orissa market and pay 10 paise tax per litre of milk but with the implementation of VAT, the tax has been scrapped.

"In the new VAT regime, we need not pay any tax on inter-state transfer of milk. Keeping this benefit in mind, we are planning to supply more milk to the Orissa market under the 'Visakha' brand," NV Venkata Rao, managing director of Visakha Dairy, the largest cooperative dairy in the state, told Business Standard.

Currently, the dairy sells about 3,000 litres of milk per day in the Orissa market under the Visakha brand. "By the end of this fiscal, we plan to increase it to 10,000-12,000 litres a day," Rao said.

Rao said that the Orissa Milk Federation (Omfed) has been supplying cow milk to Visakha dairy for the manufacture of milk powder.

"Visakha dairy's facility at Visakhapatnam has the capacity to produce 13 tonnes of milk powder per day. Omfed supplies 10,000-20,000 litres of milk to us for which we charge Rs 20 on every kg of milk powder as conversion charges. Now, we are contemplating creating infrastructure facilities in Orissa in a phased manner for marketing its products in that state," he added.

This apart, Visakha dairy is giving more thrust on the rural market in the four coastal districts namely Visakhapatnam, Vizianagaram, Srikakulam and East Godavari.

"At present, we sell about 3.2 lakh litres of packaged milk a day of which 80 per cent is being sold in the urban and semi-urban areas while the remaining is being sold in the rural market. In our recent study, we found that there is a lot of scope for selling packaged milk in rural areas too. Hence, we are concentrating more on the rural market. We plan to increase our rural market share by 10 per cent in the next one year," Rao said.