Lactalis is said to be close to securing a deal to buy a majority stake in Indian dairy business Tirumala Milk Products.
The French dairy giant is near to an agreement to buy 70% of Tirumala, India’s Economic Times has reported.
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Tirumala is controlled by family members but three years ago secured investment from private-equity group Carlyle, which now has a 20% stake. Earlier this month, Tirumala said its owners were in talks with Lactalis’ domestic rival Danone.
Tirumala is one of the largest dairy processors in southern India. The Hyderabad-based company processes and markets products including milk, butter, paneer (Indian cheese) and ice cream. It turned over INR14.2bn (US$223m) in 2012-13, 21% higher than in the previous year.
Satish Kulkarni, chairman of the Indian Dairy Association’s south zone in Bangalore, told just-food Lactalis’ purported strategy to invest in Tirumala was sound.
Kulkarni noted the Indian dairy sector was a major growth area, with milk production increasing annually by about 4%, while internationally the growth rate is 1.2% to 1.3%. Furthermore, he said India also produces milk at a competitive price and is therefore a potential stable source of raw material for the multinationals. “These companies can also use it as a base for exporting produce to other countries.”
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By GlobalDataLactalis could not be reached for comment at the time of writing.
