India-based Banas Dairy, a member of the union of the Gujarat Cooperative Milk Marketing Federation, is set to invest around INR2bn ($33.6m) to build a new dairy processing plant in Varanasi, Uttar Pradesh state, India.

The plant is expected to initially process about 0.5 million litres per day, but will have scope for further expansion, which will double the production.

Banas Dairy chairman Parthi Bhatol was quoted by TOI as saying, "We’ve completed the process with UP State Industrial Development Corporation Ltd for land acquisition at Karkhianv industrial area near Varanasi airport."

Uttar Pradesh chief minister Akhilesh Yadav has offered 30 acres of land in Varanasi to Banas Dairy to increase its footprint in the state.

Earlier, Yadav had also supported Banas by facilitating land in Kanpur and Lucknow for the construction of new dairy facilities.

Banas acquired 40 acres land in Kanpur and another 20 acres land in Lucknow to construct new dairy processing plants, after the Akhilesh government invited Amul for dairy development in UP.

"Since Banas Dairy began procuring milk locally in UP based on Amul model of co-operatives, farmers in UP are getting better remuneration for their milk."

Similar to the Varanasi plant, both plants are being established with an investment of INR2bn ($33.6m), will have the capacity to process 0.5 million litres per day, and can be expanded to process 1 million litres per day.

Gujarat Cooperative Milk Marketing Federation managing director R S Sodhi said that Amul is the most preferred milk brand in all milk markets in UP, including Varanasi, which consumes 75,000 litres milk per day.

"Since Banas Dairy began procuring milk locally in UP based on Amul model of co-operatives, farmers in UP are getting better remuneration for their milk," Sodhi added.

Banas Dairy, a leading milk union in Asia, produces a large number of dairy products under Amul, Sagar and Banas brands.