KKR invests $77m in Indian dairy firm Kwality

The Indian unit of US-based private investment firm KKR has invested Rs5.2bn ($77m) in Kwality, a New Delhi-based private dairy company.

This capital injection will help the dairy firm to foray into new product categories.

In a Bombay Stock Exchange filing, the dairy firm stated: "Kwality has received capital commitment of up to Rs5.2bn via structured finance from KKR India to fuel its aggressive growth plans as the company continues to rapidly shift its business model towards B2C/retail segment."

"The proceeds shall be utilised to fund capex to further strengthen milk procurement infrastructure solely for high-margin value-added product categories, including cheese, paneer, table butters, tetra-packs, flavoured milk and yoghurt among others. The company intends to roll out a series of such products in the near future."

Kwality plans to utilise the investment to repay loans, improve cashflows and undertake brand building programmes.

The firm also plans to raise its daily processing capacity by 950,000l.

The Indian dairy industry is currently dominated by cooperatives such as Amul, but it has been attracting the attention of  global firms such as French dairy company Lactalis, which purchased Tirumala, the second-largest dairy firm in southern India, reported The Economic Times.