Milkfood Ltd - Stock Valuation and Financial Performance

Milkfood Limited was set up in the year 1973 with the first Plant at Bahadurgarh, on the Rajpura Patiala Road in the State of Punjab. The company is promoted by Karamjit Jaiswal. The Jaiswal family are also promoters of Jagatjit Industries Limited, which has interests in Alcoholic Beverages (AC Black, Aristocrat Premium, ACP , Bonnie Scot) , Malted Foods, Plastic and Glass Bottling and Real Estate. The Group has a Gross Turnover in excess of INR 5500 Million.

The company manufactures Pure Ghee, Skimmed Milk Powder , Whole Milk Powder, and Dairy Whitener . From the intial installed capacity of 80 MT of milk processing per day at Patiala during 1974 the Company at has enhanced the processing capacity from time to time and the present milk processing capacity of all Plants is 1500 MT per day.

In the year 1987 the company commissioned its second plant at Gurgoan in the State of Haryana for the manufacture of Cultured Desserts like Long Life Yoghurts, UHT Milk , Juices etc. and Frozen Desserts Yoghurts like Ice Creams. The Ice Cream brand 'Milkfood 100% Ice cream' still conjurs up memories even years after it's sale to Hindustan Lever.

The company has taken on lease a Dairy Plant in 2003 at Hamira, Distt. Kapurthala, in the State of Punjab to supplement the production capacities by 200 MT of milk processing per day. The capacity has since been enhanced to 500 MT of Milk Processing per day.

In 2005, the company has taken expansion plans further to the State of Uttar Pradesh where a fully modernised facility has been set up at Village Agwanpur, Tehsil Moradabad to add capacity of 500 MT of milk processing per day. The plant has commenced production in November 2005.

Further expansion plans for manufacture of Export Oriented and Value added products like Casein , Demineralised Whey Powder , Whey Protien Concentrates has been initiated at the Bahadurgarh facility, which is likely to be commissioned by end of 2006. Capacity expansion will enable the Bahadurgarh plant to process 700 MT of milk per day.

Milkfood has three plants:

Patiala Plant- The plant has facilities to manufacture Anhydrous Milk Fat (Ghee) , Milk powders (Skimmed Milk Powder, Whole Milk Powder). The plant is being upgraded to manufacture value added products like Casein, Demineralised Whey powder, Lactose and Whey Protein Concentrate powders of different percentages.

Hanira Plant- The plant has facilities to manufacture Anhydrous Milk Fat (Pure Ghee) , Milk Powders (Skimmed Milk Powder , Whole Milk Powder, Dairy Whitener & Infant Foods). The plant has facility to produce powder with disc and nozzle atomization resulting into powders of low or high density. A Three stage spray drying system with facility of Lecithination helps in production of instant powders. A separate facility for production of malted food is available.

Moradabad Plant- The plant has facilities to manufacture Anhydrous Milk Fat (Pure Ghee), Milk Powders (Skimmed Milk powder, Whole Milk Powder).Among the private sector corporations in India the company is one of the largest supplier for Milk Powders to the institutions i.e Glaxo Smithkline , Cadburys, Nestle , Mother Dairy , Metro Dairy , Lotus Chocolate.

The company also exports Skimmed Milk Powder and Whole Milk Powder to the South Asian countries of Pakistan, Bangladesh , Nepal, Sri Lanka , Afghanistan and Myanamar.

For distribution of products, Redistribution depots are established at Gurgoan , Delhi , Kolkatta , Chandigarh and Mumbai apart from Agents spread over almost all states.

Products manufactured by the company include:

• Pure Ghee
• Skimmed Milk Powder
• Whole Milk Powder
• Dairy Creamer
• Dairy Whitener

Future plans

A 100% Export Oriented Unit is being set up at the existing facilities at Bahadurgarh, Patiala to manufacture Casein which commands a premium price in Export markets of USA, Europe and Japan. India being the largest and cheapest producer of Milk holds comparative price advantage in the product which has varied applications from Food Products, Pharma to Technology products. Demineralised Whey Powder is a by product which has both a Domestic and Export market.