PARAG MILK FOODS PVT. LTD.April 14

PARAG MILK FOODS AND COLOPLUS AB:

ENDEARING PARTNERSHIPS FOR HEALTH & NUTRITION

BRIEF ON PARAG MILK FOODS

BACKGROUNDFounded by Mr. Devendra Shah and his family in 1992, Parag is strategically located atManchar and Palamner (in the cow milk belts of Maharashtra and Andhra Pradeshrespectively). Parag is one of India’s largest private dairies.

PRODUCTSProducts include Fresh Milk, UHT Milk, Milk Powders, WheyPowder, Cheese, Paneer, Butter, Ghee, Butter Oil, Gulab Jamun Mix, Yoghurt, Curd, Lassiand Flavoured Milk.

MILK PROCUREMENT

Installed milk processing capacity of 2 million litres per day (mLPD) (Manchar – 1.2mLPD , Palamnar- 0.8 mLPD).

Tie-ups with ~4,300+ village level collection centres, 77 Chilling centres (including 37chilling centres owned by the company), 37 Bulk Cooling units across Manchar /Palamner

DISTRIBUTION

Strong distribution network of over 70+ super stockists, 1,700+ dealers servicing 140,000retail counters; having a pan-India presence through both traditional and modern trade.

Currently has 9 depots and plans to add another 10 depots in this year to have pan-IndiaDistribution coverage.

100% COW MILKParag offers 100% cow’s milk. Cow’s milk has superior health benefits.

PARAG, A PROFILE

A Fully Integrated Dairy Company

DAIRY FARMING

MILK COLLECTION

PROCESSINGMULTI-BRANDS

DISTRIBUTION NETWORK

Commodity Player1992-1998

• Primarily involved in collection & distribution of liquid milk

Product Player 1998-2008

• Developed the ‘Gowardhan’ Brand • Started manufacturing of Ghee, Butter & Milk Powders• Started exports of dairy commodities to various countries• Backward integration - started Bhagyalakshmi Dairy Farms (2005)

Branded Player2008 to present

• Established 40T/day capacity Cheese plant at Manchar• Commissioned a New Dairy Plant in South India – Palamner• Evolved into a prominent branded player with ‘Gowardhan’ & ‘Go’ brands• Initiated new concept of Farm-to-Home with niche brand ‘Pride of Cows’• Developed & launched new brand for Beverages, “Topp-up”

EVOLUTION IN THREE PHASES

Processing Facilities

Dairy Plant at Manchar

Dairy Plant at Palamner (AP)

• Two Dairy Plants• Installed milk

processing capacity of 2 million litres per day.

BHAGYALAKSHMI DAIRY FARMS

OWN FARM - R&D

Equipped with the latest technology for milk processing, packaging and distributionwith product traceability and own R&D facility.

One of the largest cow farms in India over 35 acres housing ~3,000+ cows. Ultra modernfarm with the latest rotary parlor for milking (avg. yield of 25 litres per day vs. normalIndian yields between 2-6 litre per day ).

The farm doubles up as an R&D unit with continuous work on improving the yield andthe quality of milk. The results and benefits are passed on to the farmer to enhancetheir yield.

INTEGRATED DAIRY FARM

• Groups acc to Lactation• Scrapping, Cleaning &

disinfection of sheds• Undermat cleaning• Soft Music for cows

• Vaccination• Preventive Cure• Deworming• Mastitis & tick Control• Curative & Follow-up

Treatment• De-horning, Tail

trimming, Foot Bath

• Colustrum & Calf-starter for Calves

• Growing of Green Fodder

• Mixing Green Fodder, Dry Fodder & Concentrates in feed-mixer

• Feed-sheet according to groups

• Artificial Insemination• Heat Synchronization• Pregnancy Diagnosis• Calving• Dry Treatment

Breeding Feeding

Animal Mgmt.Healthcare

The New Cheese Plant

CHEESE PLANT

Parag has set up one of Asia’s largest and one of world’s most advanced cheese plant at Manchar Pune with a capacity of 40 TPD.

The plant uses Ultra High Treatment technology for first time in India, taking care of cold chain and enhancing penetration.

Product Mix

Fresh Products Milk Powders

Fat Products

Product Mix

Product Mix

Product Mix

PRODUCT INNOVATION

New Products

Parag today

• Revenues 2013-14 : Rs 1050 cr (USD 175 million)• No of employees:

– Manufacturing & Admin: 900– Sales & Marketing: 350

CAGR (%)Milk Procurement: 23.2%Sales Turnover: 36.3%

111.3

0.0

200.0

400.0

600.0

800.0

1000.0

1200.0

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14Milk Procurement (TKgPD) Sales Turnover (Rs. Crores)

What we see…

A large market. Largely unorganized

A country that is young, growing -> will

consume more VA products + Exportability

Opportunity to create a niche position through

value added products in the USD 60 billion milk

industry.

Identified ‘cheese’ as a ‘niche’ category, to

dominate and become number one in the next

24 months

Focus value-addFocus marginFocus growthFocus ROCE

Be the fastest growing value added milk

products company in India

A large market. Largely unorganized

A country that is young, growing -> will

consume more VA products + Exportability

VISION 2020• Parag group shall work to serve best interest of all stake holders

such as customers, milk produces, investors and employees; • by creating and marketing top quality milk & value added milk

products using state-of-the-art technologies, research & development in areas of

– breeding, – procurement, – processing, – marketing and – information technologies.

• Parag group intends to emerge as one of the top five value based modern and rapidly expanding food business of India.

PARAG’S PLANS FOR HEALTH & NUTRITION

HEALTH & NUTRITION BUSINESS PLAN• Since last 2 years, Parag has been focusing on

creating more value-added Health & Nutrition business to move up on the growth curve.

• In this direction, we have been investing and planning to enter following businesses:– Whey Protein Powders, Whey Protein Drinks and Whey

Protein Isolates (which would start within next 4-5 months)

– In later stage, we would be going for more whey protein fractionates like Lactulose, Lactoglobulins, glycomacropeptides, etc.

– We are also entering infant nutrition powder business in near future.

PARAG COLLABORATION WITH COLOPLUS AB

PARAG COLLABORATION WITH COLOPLUS• Our next plan for Health & Nutrition business is to

enter into value-added Colostrum products and derivates.

• We have been selling Colostrum Powder with high Igg contents since last few months.

• With Coloplus’ superior product offering and inherent benefits, Parag intends to further its ambitions in this space.

• Parag also intends to work jointly with Coloplus to develop more such mutually beneficial products.

THANK YOU