Reliance to foray in dairy biz

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Reliance Retail is in talks with food manufacturer and exporter- Himalaya International , for a strategic alliance or a possible buyout. CNBC-TV18's Bushra Bhushan says it promises to be a white 2008 for Reliance Retail.

 

Reliance is chalking out its dairy plans to grab a chunk of the Rs 2.5 lakh crore dairy pie, which is expected to more than double by 2011. Reliance already sells liquid milk under the Dairy Pure brand name across its Reliance Fresh outlets. The company has now started a pilot project in Delhi, to explore tying up with other grocery stores and even milk booths. It may even look at home delivery.

 

Reliance is expected to invest approximately Rs 3,000-4,000 crore towards five agri hubs in Punjab, where it may set up its main dairy base. This will be similar to the Nestle model in Moga, with farm inputs, collection centers and chilling points. So, while RIL's supply chain from collection to processing will be in the north, it will scout for acquisitions in west and east India. The company is currently procuring milk directly from the producers while packaging is outsourced.

 

After liquid milk, processed dairy products like butter, cheese, paneer and ice creams too are in the pipeline. Reliance Retail is in talks with Himalaya International for supply of cheese, ice cream and flavoured yogurt. An official announcement is expected in the middle of 2008. However, we may have to wait a little longer than that to get a taste.

 

Other beverage players like Dabur and even the Cola giants are looking at launching milk-based drinks. So, the growing health conscious Indians can get ready to welcome a white 2008!