Milk powder firms to add capacity

Lifting of export ban prompts companies to raise daily capacity by 200 tonnes.

The skimmed milk powder (SMP) producers, who had put their expansion plans on hold last year following a ban on exports, are now set to add 200 tonnes a day capacity.

Chennai-based Hatsun Agro Product is investing Rs 85 crore to set up a 60-tonne plant in Tamil Nadu, which will increase the company's SMP capacity to 120 tonnes a day from the existing 60 tonnes. The plant is expected to become operational by October 2008.

"The country has surplus milk, which can be used to produce value-added products such as SMP. We plan to export half of our produce while the rest can be sold within the country," said R G Chandramogan, Hatsun's chairman and managing director.

Delhi-based Sterling Agro Industries, the country's largest SMP exporting company, is undertaking some brownfield expansions at its Etah (Uttar Pradesh) and Malanpur (Madhya Pradesh) units.

This will increase its capacity from 150 tonnes a day to 180 tonnes by July this year, and further to 210 tonnes by mid-2009.

"We have set aside Rs 20 crore to finance the purchase of cattle by the farmers around our plants. This will ensure adequate milk availability for our additional capacities," said Kuldeep Saluja, Sterling's managing director.

Param Dairy, another Delhi-based company, is increasing its capacity at Khurja unit (Uttar Pradesh) from 50 tonnes a day to 100 tonnes. The expansion will be complete by September this year. SMC Foods is setting up a new unit in Uttar Pradesh. This will increase its capacity to 80 tonnes in a year from 50 tonnes now.

The government imposed a ban on SMP exports in February 2007 to contain its rising prices and check inflation.