State Bank of India(SBI) has entered into a tie-up with Tirumala Milk Products, a South- based company which was acquired by Groupe Lactalis in 2014, to provide loans to dairy farmers who supply milk to the latter.
France-based Groupe Lactalis, which also acquired Indore-based Anik Dairy in 2016, wants to double the number of dairy farmers under its fold to three lakh and ramp up the amount of milk it procures daily to 25 lakh litres by 2020 from 14 lakh litres now.
“We have to include more farmers in our fold to be successful in this business in the long term and the financing from the bank will help us in this endeavour,” said K Baskara Sethupathy, Head (Milk Procurement), Tirumala Milk Products.
Under its scheme for financing dairy units, SBI offers loans for, among others, construction of shed, and purchase of milch animals, milking machine, and chaff cutter.
Under another scheme, the bank provides loans to dairy societies for modernisation and creation of infrastructure such as purchase of automatic milk collection system, purchase of transport vehicles and bulk chilling unit.
“Whatever payments (towards milk procurement) we make to the dairy farmers, we will deduct from their weekly payments and make the payment (towards loan repayment) directly to the bank once in a month,” explained Sethupathy.
Pablo Beltran, CEO, Lactalis Tirumala, said the tie-up with SBI is his company’s first bank tie-up in India. “This (tie-up) is something that is common in other countries as it facilitates farmers’ growth in terms of new animals or equipment. This is a win-win for everyone — for the farmers, dairy companies and banks,” he said.
Beltran observed that Lactalis India now has around 12 factories and its annual turnover is around ₹3,300 crore.
“Our intention is to be a big player in the Indian market. That is why we made these acquisitions (Tirumala Milk Products in 2014) and Anik Industries (in 2016).
“India is the biggest market in the world in terms of volumes…Definitely this is the place to stay,” he said.