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Alka Kshirsagar

Pune, Nov. 11

French cheese-maker Fromageries Bel is in advanced talks with Parag Milk Foods Pvt Ltd for an alliance to produce and market itsbrands of cheese in India, according to market sources.

Based at Manchar, around 60 km from Pune, Parag is a Rs 540-crore company that makes and sells a range of cow milk-based products under its Govardhan brand. It is now ready to scale up with a new facility for the manufacture of cheese, set up with Rs 80-crore investment. Here it will produce mozarella, raw cheddar and seven offerings of premium processed cheese, under a new brand name ‘Go’.

The company also has chalked out an expansion programme to roll out its products pan-India with special focus on the four southern States, and will commission a second milk processing facility at Palamner, near Bangalore, in January 2010.

For Bel, whose flagship brand of cheese ‘Laughing Cow’ is already present in the country, a tie-up with an established player in this space will provide a ready milk procurement and marketing network, as well as facilitating local production of its own products, currently, imported from its Morocco plant, and give it a better foothold in the Rs 450-crore organised cheese market in India.

Declining to comment on any emerging alliance with Bel, Mr Devendra Shah, Chairman, Parag, however, said that the company had aggressive expansion plans both in the domestic and export market. “We want to be the largest player in India in the cheese business,” he said, adding that the company expected to touch Rs 800-crore turnover in FY 10-11.

“We have so far invested Rs 110 crore in our new, fully automated cheese facility which is Asia’s largest, and has a capacity to produce 40 tonnes of raw cheddar daily,” Mr Shah said.

At Palamner, Parag has invested Rs 80 crore in setting up a processing facility and seven chilling plants in Tamil Nadu, Karnataka and Andhra Pradesh. “The plant will go on production on January 15. Over the next 18 months, we plan to set up 55-60 chilling units in three States,” he said, adding that a further Rs 250-crore expenditure was slated during 2010 to upgrade existing facilities and in backward integration.

The company plans to fund this through internal accruals, Rs 120-crore debt and Rs 60-crore infusion received recently through the private equity arm of Motilal Oswal Financial Services Ltd.

More Stories on : Food & Dairy Products | Alliances & Joint Ventures

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