Amul to sell bottled water as well

New Delhi: Marketing and supply chain cooperative Amul is planning to get a foothold in the bottled water segment as part of a strategy to hedge the pressures of rising input costs in its dairy products business.

The board of directors of Amul is scheduled to meet on 1 October, to discuss a proposal to diversify into selling bottled water, which has been proposed by the Baroda District Cooperative Milk Producers Union (BDCMPU), one of the 13 district unions of the cooperative giant.

According to BDCMPU chairman Madhu Shrivastava, a roadmap would emerge only after the board meeting.

The board is widely expected to approve the proposal, and optimism about the venture suggests that it may even invite expressions of interest and / or issue a tender for the packaging of bottled water.

Initial investment by Amul is reportedly in the range of Rs 6 crore, with more details to emerge after the board meet concludes.

The entry into the new segment is aimed at providing relief to farmers and dairy cooperatives, since 50 per cent of profits from the new segment would be spent on the welfare of families involved in dairy production.

Another 25 per cent of the profit would go towards the welfare of families involved in distribution and collection of dairy production.

Amul has a huge retail network of around five lakh outlets across India. The packaged water is expected to be branded Narmada Neer to be sold in 200ml pouches, and one, five, and 20 litre pet bottles, with the initial launch scheduled in Vadodara.

Sources estimate the total size of packaged bottled drinking water business in India at about Rs 1,800 crore, with growth rates estimated at 40 per cent annually, which would see the business total Rs 2,200 crore by 2010.