Parag Milk Foods unveils Rs150-cr expansion

Parag Milk Foods, a leading manufacturer and marketer of dairy-based branded food in India, is planning capital investment of Rs. 150 crore to expand production capacities at its facilities at Manchar near Pune and Palamaner in Chittoor district of Andhra Pradesh as well as to introduce new lines of milk-based beverages.

Part of the funds will be deployed in a research and development facility, which will help the company come out with its unique offerings, a top company executive said.

“We are in the process of raising money from the capital market and will complete the Rs 150-crore expansion in six to 12 months of mobilising the funds. The money will be spent on expansion and modernisation of existing manufacturing facilities at our two facilities,” Devendra Shah, chairman, Parag Milk Foods told The Hindu .

He said part of the money will also be utilised to improve the marketing and distribution infrastructure of the company. The company has plans to set up a facility for manufacturing of milk-based beverages, a new product line in its portfolio, he said.

“We will also be investing in our subsidiary Bhagyalaxmi Dairy Farm to expand its capacity and to modernize it,” Mr Shah said.

The company will raise Rs. 325 crore from the market, out of which Rs. 100 crore will go towards retiring debt. The company has debt of Rs. 420 crore.

The balance Rs 75 crore will be utilised for working capital requirement and this will help the company to scale up its business in the coming years, Mr Shah said.

THE HINDU