Thursday, November 16, 2006

Reliance Retail’s dairy business strategy might not be easy

Daily News & Analysis reports that Reliance Retail’s mega plans for its dairy business might not as smooth as they would want it to be. So far, the company has acquired milk processing units in Punjab and other close by areas and has a capacity to procure 400,000 litres of fresh milk on a daily basis, which will be increased to 700,000 litres per day.

The company has also started talks with some of the leading dairy companies in India, such as Mother Dairy, Gujarat Cooperative Milk marketing Federation (GCMMF) and Nestle to form a partnership to supply fresh milk to them. The problem lies in the fact that these companies are not likely to want to deal with a middleman and would rather deal with the farmers directly. In this regard, RS. Sodhi, general manager (Marketing) for GCMMF said that, “We have no plans to contract manufacture dairy products for anyone.”

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