New direction

New Delhi, Jan. 2: Reliance Retail is in talks with several food manufacturers in India to enter the dairy business. It is looking at several options, including acquisitions, buyouts, leasing and capacity sharing.

Last month, Himalaya International signed an agreement with Reliance Retail, which will sell Himalaya’s products in the domestic market. Sources from Reliance Retail said, “We will soon be sourcing yogurt and flavoured milk from Himalaya International. We will also be buying cheese from them for our stores.”

Reliance has also started pilot projects in Punjab and Andhra Pradesh where it is buying milk directly from farms. The milk is sold under the Dairy Pure brand name at its Reliance Fresh outlets. It may expand this project to other states at a later date.

Reliance is also planning to source other dairy products such as butter, cheese, paneer, ice cream and flavoured yoghurt. However, Reliance officials said, “We are in no tearing hurry to expand. We plan to roll out the milk brand in a phased manner across the country.”

The national plans of Reliance Retail include launching three variants of milk — family milk, low fat and whole milk. It would also diversify into a range of value-added dairy products.

The company plans a milk procurement target of 1 crore litre per day over the next four years, when its retail stores are rolled out across the country.

Reliance Retail is going to set up a number of farm hubs all over India. Both the farm products and milk will be brought to these hubs before being processed and sent to retail outlets.

Mukesh Ambani, chairman and managing director of Reliance Industries, had earlier indicated that the retail venture would invest up to Rs 25,000 crore and aim at a sales target of Rs 100,000 crore over the next four years. However, officials refused to place a figure on the amount to be invested in the dairy business.