Case Study: Kwality to acquire mid-sized dairies to expand presence

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Kwality, the Delhi based dairy company is in plans to acquire the mid-sized dairies with capacity to hold milk of 3 lakh litre per day. This move comes after Kwality acquired Pashupati Dairies and Bandhu Foods earlier.

Sidhant Gupta, the Director of Kwality stated that they have made a couple of acquisitions since 2011, and the last one was in the year 2013. He stated that the funding for these fresh acquisitions will be handled by the internal growth of the company.

Kwality Artwork Permit

Lately, the dairy major obtained the permit for the use of Kwality artwork till the time it is confined to its use in the dairy products as well as beverage offerings. This excludes its use in ice lollies, ice creams and frozen desserts. The company got the rights to the Kwality artwork’s use as the firm entered into an agreement with PL Lamba, founder of the group.

Akshay Kumar as Brand Ambassador

Kwality seems to be in an intention to establish a strong B2C relationship as it appointed Bollywood actor Akshay Kumar as the company’s brand ambassador. He has been roped in to endorse the brand for two years, and it will enter into the flavored yoghurt, tetrapack milk, flavored milk, buttermilk as well as cheese product segments. This is the right time for the company as the flavored milk market in the country is expected to reach a Rs 500 crore mark and it is also estimated to witness an annual growth of over 20 percent.

Kwality’s Expansion and Acquisition

Gupta added that they are looking forward to acquire mid-sized dairies as the large ones are not available in the market. The dairy major is all set to expand its capacity across the six plants that it owns in the country. Gupta stated that they are discussing with the retailers to market their value added dairy products. The acquisition deal might get finalized in one and a half months. Initially, Kwality will focus on North India and then expand in the other regions.

Dairy Market Competition

The Indian dairy market is highly competitive as the domestic dairy firms including Umang Dairies, Amrit Foods, Mother Dairy, Amul, and Vadilal Industries exist in the market. Apart from these, multinational dairy firms are also keen on testing the market.

It remains to be seen if the plans of Kwality to acquire the mid-sized dairies with capacity to hold milk of 3 lakh litre per day will help expand its base in the Indian market or Sidhant Gupta would have to do something else.

 

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