Amul Dairy, a posterchild for the success of the cooperative production movement in India, and a household name on the subcontinent, is planning to manufacture some of its dairy products in the U.S. over the coming months, in a move to cut export costs and boost sales overseas.
The initiative, which has been in the works since 2011 and is the first of its kind for an Indian cooperative unit, is likely a preliminary step for Amul and the Gujarat Cooperative Milk Marketing Federation, or GCMMF, to set up its own manufacturing facility in the U.S. at a later date.
“The production is expected to commence in next six to eight months, and thereafter the federation will undertake marketing of the dairy products range there,” GCMMF Managing Director R.S. Sodhi told the Press Trust of India. “With this arrangement in place, the federation expects sales to get a big push in the U.S.”
“Initially we will begin manufacturing products like paneer (cottage cheese) and ghee (clarified butter) etc there. Slowly other dairy product range would also be rolled out from there,” he said.
Amul, or the Kaira District Cooperative Milk Producers Union, as the company is also known, will begin production in the state of New Jersey through an agreement with a third party, PTI reported.
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The federation, which is India's largest exporter of dairy products, currently sells its products to the U.S., Middle East, Europe and Asia, and earns export revenues of around 1 billion rupees ($18 million) annually, of which $6 million comes from exports to the U.S.
Shifting its manufacturing base overseas would also help the federation cut duties and taxes on dairy exports from India, which is the world’s largest milk producer, a feat largely credited to the success of dairy cooperatives in the country.
GCMMF is India’s largest food product marketing organization and has an annual turnover of $2.5 billion.