Parag Milk Foods commissions the Lactose Plant with a capacity of 40 MT/day

Parag Milk Foods Ltd., a leading manufacturer and marketer of dairy-based branded products in India, plans to add further value to its cheese and whey business through the introduction of high potential Lactose products, thereby expanding its Health & Nutrition portfolio.

As one of the leading cheese producers in the country and with ambitions to grow the business further, the Company has ventured into whey protein powders, a by-product in the cheese manufacturing process. The Company established India's first and only manufacturing facility to produce high quality whey protein and introduced various whey protein products in the market including "Avvatar", a branded B2C product. Through the commissioning of the Lactose plant, the Company is now intending to add higher value to Whey Permeates that are generated during the filtration process of whey protein.

Whey Permeate contains a high concentration of lactose, a natural milk sugar with fat and minerals,that is normally sold as a substitute to Skimmed Milk Powder (SMP). Pure lactose, which largely consists of edible lactose used in confectionaries and food additives, and pharma grade lactose used by the pharmaceutical and nutrition industries, garners a higher value and has a vast potential for growth. The Company has therefore established state-of-theart facilities with a capacity to manufacture 40 MT of lactose per day. The Company's expertise in dairy ingredients has allowed it to create lactose that is ideal for multiple segments such as food applications, infant nutrition and clinical nutrition products.

Globally, the lactose market size stood at USD 1.2 billion in 2018 and is projected to grow to USD 1.5 billion by 2026, exhibiting a CAGR of 3.7% during this period. The Indian lactose market size is ~40,000-45,000 MT and is valued at INR 5,000 million (~USD 70 million), with a major part of the requirement being met through imports. This provides a huge opportunity for import substitution for players like Parag Milk Foods Ltd. that has end-to-end manufacturing capabilities to tap into.

The Company has a fully integrated value chain with control over key processes from procurement and supply chain to processing and distribution, maintaining highest standards of quality and delivery throughout. The Company's best practices and state-of-the-art infrastructure makes it the partner-of-choice for leading MNC players and isthereby confident of reaping the benefits of further value addition in its Health & Nutrition business.

Commenting on this development, Mr. Devendra Shah, Chairman said "Being a large cheese player, we always had whey protein and therefore lactose as a by-product, to which we want to further value-add to tap into high quality ingredients for the Indian market. With our end-to-end manufacturing capabilities across the value chain, we are well placed to support the PM's impetus towards 'Atmanirbhar Bharat' by reducing the import dependence of the country on Lactose.

Being agile in our response to market changes, we are constantly innovating our product offerings and concentrating on tie-ups with partners focused on quality. Consumers have become increasingly conscious about nutrition and there is a big shift and preference for trusted brands. As the market is shifting towards premiumization with a clear thrust towards value-added dairy products, we are the forerunners with more than two-thirds of our portfolio comprising of value-added products. With the addition of Lactose to our portfolio, we are expecting our Health and Nutrition portfolio to grow further in the next 2 years, which will also improve our profitability."

Shares of Parag Milk Foods Ltd was last trading in BSE at Rs.105.45 as compared to the previous close of Rs. 106.6. The total number of shares traded during the day was 101001 in over 2019 trades.

The stock hit an intraday high of Rs. 109.5 and intraday low of 102.35. The net turnover during the day was Rs. 10620275.

Source : Equity Bulls

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