For Nestle India, 'go for cow' is the new slogan. Even though the country concentrates on buffalo milk, Nestle is now consciously encouraging milk farmers to shift from buffalo to cow milk.
The company now procures both milks in equal quantity and is expanding its Nestle Agricultural Services programme at its 'milk district' in Moga, Punjab.
According to a company official, Nestle has decided to move from buffalo milk to cow milk since the latter's yield is much better.
At present, the company procures a million litres of milk a day from about one lakh farmers. Nestle India says the firming up of skimmed milk powder prices has impacted its business.
Though Nestle uses minuscule quantities of SMPs even in the lean season, fluctuation in the commodities prices affect the company's dairy business.
The main problem is when SMP prices increase globally, traders find export a more lucrative option.
During 2006, milk products generated gross revenues of Rs 1,285 crore (Rs 12.85 billion) to the company, out of its total revenues of Rs 2,944 crore (Rs 29.44 billion).
The rise in SMP prices to around Rs 125 per kg, from Rs 90 levels a year ago, had prompted the Centre to ban export of all milk powders from February. In 2006, Nestle procured 9,806 tonnes of SMP valued at Rs 95 crore (Rs 950 million), which translates into a unit price of around Rs 97 per kg.
