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New french fry manufacturer in India Amul sets up shop near competition in Gujarat

Amul - The taste of India is the brand name used by the Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF),now jointly owned by 3.6 million dairy farmers in Gujarat, India.

In India, the Gujarat Co-operative Milk Marketing Federation (GCMMF) is starting the production of frozen French Fries in October of this year.

They have set up shop in North Gujarat, close to McCain Foods India and Hyfun Frozen Foods

Their entry into the market could be favorable for potato farmers because the co-operative dairy giant is now planning to directly procure potatoes from farmers, just as they do for their 3.6 million dairy farmers that jointly own the cooperative.

GCMMF is launching frozen french fries, potato wedges, hash browns and burger patty (aloo tikki) products under their Amul / Taste of India brand.

RS Sodhi, managing director, Gujarat Co-operative Milk Marketing Federation (GCMMF):

"We will launch potato products such as french fries and burger patty in the second week of October."

Sodhi was speaking to reporters on the sidelines of Red Bricks Summit at Indian Institute of Management, Ahmedabad (IIMA) in the city.

Initially, the cooperation intends to procure 1 lakh (100.000) tonnes of potatoes from farmers in North Gujarat, which is known for quality potatoes.

RS Sodhi:

"Amul has readied a plant for these products near Mehsana and its production capacity will be 50,000 tonnes.”

“For this, we require 1 lakh (100.000) tonnes of potatoes."

Interestingly, two other french fries plants, McCain Foods Limited and Hyfun Frozen Foods are located close to Mehsana on Ahmedabad-Mehsana highway as well.

McCain Foods India, the subsidiary of the Canadian multinational currently procures its potatoes mainly from North Gujarat, which may cause some competition for potatoes for processing.

However, North Gujarat is a major potato growing region and accounts for most of Gujarat's 16 lakh (1.6 million) tonnes potato production.

Though RS Sodhi does not sound like it will be going that easy:

"Despite having good quality, potato farmers are not getting remunerative prices.”

“We have taken this initiative to provide better returns to the potato growers."

After milk, potato is the only commodity which Amul will be procuring directly from farmers.

According to GCMMF MD, the dairy federation is bringing its Amul model to potato farmers and will provide remunerative prices to them as it has done in case of milk producers associated with it.

Amul will procure potatoes through contract farming and provide seed potatoes to farmers as well.

RS Sodhi:

"The plant is soon going to start production and our products will be priced 15%-20% cheaper than those already available in the market"

Amul's move to enter into frozen food segment is a strategic one as the co-operative major enjoys a strong cold-chain as well as retail network across India, which is a crucial pillar of the frozen food industry.