Marketing cooperative Amul is planning a foray into the bottled water segment as part of its strategy to offset pressure of rising input costs in its dairy products business.
NEW DELHI: Marketing cooperative Amul is planning a foray into the bottled water segment as part of its strategy to offset pressure of rising input costs in its dairy products business.
The Board Amul will meet on October 1 to discuss a proposal in this regard. The proposal has been put up by the Baroda District Cooperative Milk Producers Union (BDCMPU), one of the 13 district unions of the cooperative giant.
"After the Board meeting, we would come out with a concrete roadmap for future course of action, including setting up plant and other details regarding the bottled water venture," BDCMPU chairman Madhu Shrivastava told.
The Board, which is expected to approve the proposal, is in fact expected invite expression of interest and issue tender for the packaging of bottled water.
When asked about the investment Amul is going to made in the segment, he said, "Initially, we are investing around Rs 6 crore but all other things related to investment and the time-frame to launch the brand nationally would be finalized in the meeting."
Speaking about the reason for entering into new the segment, Shrivastava said, "This is aimed to provide relief to farmers and dairy cooperatives as 50 per cent of the profit from the segment would be spent on welfare of families involved in dairy production."
Another 25 per cent of profit from the new venture would be used for welfare of the families involved in distribution and collection of dairy production.
Amul with an extensive retail network of close to five lakh outlets across the country is planning to bring in 'Narmada Neer' brand of water in 200 ml pouches, one litre, five litre and 20 litres pet bottles.
The project would be initially launched in Vadodara.
According to the estimates, the total size of packaged bottled drinking water business in the country is about Rs 1,800 crore and is poised to grow at 40 per cent every year to Rs 2,200 crore by 2010.
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