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Monday, September 20, 2021

Explained: What Banas Dairy is planning for its new plant in Varanasi

Ahead of the Uttar Pradesh Assembly elections, Banas Dairy has said it will open a third unit in Varanasi, the Lok Sabha constituency of Prime Minister Narendra Modi. Why has it chosen to augment the dairy sector in UP?

Written by Avinash Nair , Edited by Explained Desk |
Updated: September 13, 2021 1:06:12 pm
Banas Dairy, Banas Dairy Varanasi unit, Banas Dairy in Uttar Pradesh, UP milk collection, Indian ExpressUttar Pradesh already has a host of dairies and ice cream manufacturing companies that procure milk. (Express Photo/Representational)

Banas Dairy, one of dairies set up under “Operation Flood” four decades ago, has announced a third unit in Uttar Pradesh’s Varanasi, Lok Sabha constituency of Prime Minister Narendra Modi. Named after its home district Banaskantha, one of Gujarat’s predominantly rural districts on the Indo-Pak border, the dairy is now led by BJP leader Shankar Chaudhary who is driving its expansion into North India.

The plan for Varanasi

Chaudhary, a former MLA and minister in the Gujarat governments headed by Anandiben Patel and Vijay Rupani, says it was the prime minister’s “wish” that the dairy industry which provides a secondary source of income develops in Varanasi. “Also there are a lot of cows in the region, but there were no big dairies to tap the milk being produced,” says Chaudhary.

The plan in Varanasi includes setting up of a milk processing plant that can initially process five lakh litres per day. It will be set up at the cost of Rs 500 crore on a piece of land provided by Uttar Pradesh government. The milk processing capacity of this new unit can be expanded to 10 lakh litres per day. Apart from milk, this plant will also produce ice-creams, Curd (Dahi), butter-milk, paneer and cookies.

The foundation stone for the plant is planned to be laid before Diwali, before the UP Assembly elections next year.

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The work thus far

In August 2021, Banas Dairy had sent Gir cows to 100 families in Varanasi. Gir is an indigenous breed of Cows in Gujarat can give 20-25 litres of milk a day, which is more than the local breed of Gangatiri cows in Uttar Pradesh which gives 5-7 litres, officials said. These families were those who underwent a cattle-rearing workshop with Banas Dairy earlier this year. “These cows have already started giving milk. We are collecting this milk and transporting it through a bulk milk carrier to our existing milk processing facility in Kanpur,” Chaudhary said. Banas Dairy currently collects 30,000 litres of milk from Varanasi and nearby areas which includes milk from Gir Cows and the indigenous Gangatiri.

Why was Banas Dairy chosen to augment the dairy sector in UP?

Banas Dairy has been expanding into other states including Uttar Pradesh since 2016-17. It also has a unit in Faridabad (Haryana) which can process 13.5 lakh litres of milk per day. The expansion of the dairy into Uttar Pradesh has followed Chaudhary’s loss in the Assembly elections in 2017 from Vav. After the defeat he has focused his full attention on building the Dairy and expanding it. Chaudhary has been holding the top post in Banas Dairy since 2015.

Remuneration to farmers

The milk procurement prices paid by milk cooperatives in Uttar Pradesh in April 2021 stood at Rs 43 per kilogram which is an increase by 13.15 per cent compared to last year, states data tabled in Lok Sabha in July. This is more than what was paid in Gujarat (Rs 40.3 per kg) during the same period. Kerala pays the highest remuneration at Rs 46.91 to milk producers.

“Last year, we had deposited Rs 800 crore in the bank accounts of milk producers in Uttar Pradesh and this year we expect the revenue of farmers to cross Rs 1000 crore,” Chaudhary said adding that milk producers in Uttar Pradesh were smaller compared to Gujarat and deposit 2-5 litres a day. “Therefore, the number of such milk producers are more. It is in lakhs,” he said adding that he did not have exact number of milk producers associated with Banas Dairy in the eight districts of Uttar Pradesh from where milk is procured. The Rs 800-crore paid as revenue to milk producers is in addition to the Rs 40 crore paid as profit to them last year.

“When we first entered Uttar Pradesh four years ago, milk producers were getting just Rs 12-13 for every litre of milk. We started paying Rs 28-30 per litre and so competitors also had to increase the prices,” Chaudhary said.

What is the existing infrastructure in Uttar Pradesh for collection of milk?

Uttar Pradesh already has a host of dairies and ice cream manufacturing companies that procure milk. This includes entities like Mother Dairy Food Processing Ltd, Vadilal Industries Ltd and Heinz India Pvt Ltd.

Banas Dairy has started milk procurement from farmers in Uttar Pradesh on the Amul pattern. More than 2000 village-level cooperative societies have been formed to help procure milk from farmers. “Similar to the the model in Gujarat, we are making these groups of women who will come together to form a milk cooperatives and they will be in charge of milk procurement,” Chaudhary said.

The proposed milk processing facility at Varanasi will be the third plant of Banas Dairy in Uttar Pradesh selling milk and milk products under the brand Amul. The biggest plant is at Jaunpur near Kanpur which has a 8 lakh litres per day of producing milk pouches. The plant set up in 2016-17, also manufactures 0.6 lakh litres per day of butter milk, 30 metric tonnes per day of Dahi and 10 metric tonne per day of Ghee.

The second plant with 5 lakh litres per day of milk processing capacity was commissioned in 2017 at Chakgajeria in Lucknow. This plant also has 36 million tonnes per day of Dahi, 10 million tonnes per day of paneer, 0.5 lakh liters per day of butter milk, 50 lakh litres per day of ice creams and 8000 litres per day of flavoured milk manufacturing capacity.

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