Textile firm enters dairy business with Rs2b investment

Interloop Dairies to launch milk brand, sees good prospects for packaged products

FAISALABAD: A renowned textile company has made forays into the dairy business and intends to introduce a new milk brand next year in a bid to grab a slice of the pie in the growing but still underdeveloped sector.

“Interloop Limited, one of the world’s largest socks manufacturer, has poured Rs2 billion into the dairy business and set up a new company named Interloop Dairies Limited. It is going to launch its milk brand next year,” said Navid Fazil, Chief Executive Officer of Interloop Dairies, in an interview with The Express Tribune.

This is happening at a time when Dutch dairy company FrieslandCampina signed an agreement with Engro Corporation for the acquisition of 51% stake in the latter’s subsidiary Engro Foods for $448 million.

Pakistan is said to be the fourth largest milk producer in the world, but only 10% of the milk produced is sold in packages. The packaged milk market is dominated by a couple of players.



In the budget for 2016-17, the government has changed tax structure for the dairy industry that many believe will hurt future expansions.

Coming up with the reason behind the decision to make inroads into the dairy sector, Fazil said Interloop pumped capital into the new area after analysing the rapidly growing population of the country and increased urbanisation. “Packaged dairy products have very good prospects,” he remarked.

“In the initial phase, we have invested Rs2 billion to establish a dairy farm equipped with hi-tech infrastructure and according to international quality standards. It is producing milk on the most modern lines.”

The CEO revealed that the company had imported Holstein-Friesian cows from Australia that were reared at the farm and were now producing milk.

“We plan to inject another Rs500 million to expand the value chain by setting up a milk processing and bottling plant and building a distribution network to sell the milk in packaged form,” he said.

With a qualified team including veterinary doctors and nutrition experts supported by foreign dairy consultants, Interloop Dairies is currently producing 45,000 litres of milk per day that will be enhanced to around 65,000 litres by the end of 2016.

In order to increase the yield and produce top-quality milk, Fazil said, cows were given the best possible nutritional food. “The feed is planned and produced in a scientific manner by our on-farm feeding and nutrition manager.”

Over 20 different feed ingredients, minerals and additives were used in right proportions to take care of feeding needs of the cows, he added.

Currently, Interloop Dairies has a herd of around 3,300 cattle and its farm could house up to 5,200 animals.

Interloop supplies milk to Engro Foods, however, the company intends to venture into other segments of the milk industry from 2017.

“Next year, we will launch our own brand in the market and sell milk and allied products directly to the consumers,” Fazil said. “Interloop is already a recognised brand and is well-respected by the people as we do not compromise on quality.”

Published in The Express Tribune, July 6^th, 2016.

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