Hatsun Agro Products Ltd. has opted for a gradual pace of expansion in new markets before competing aggressively with established rival brands, according to its Managing Director, RG Chandramogan.
“We are gradually expanding (in new markets). We are not expanding very aggressively in large cities like Mumbai,” Chandramogan told BloombergQuint. “We'll start with small towns like Solapur and Latur and then move to larger cities like Pune and Mumbai.”
The Arun ice cream maker's long-term performance remains impressive, but frequent changes in milk prices and regulatory policies such as subsidies have made high volatility in yearly returns unavoidable for co-operatives like Arun, a research note by ICICI Securities read.
The company's board approved setting up of an ice cream plant in Telangana which is expected to be commissioned by the third quarter of next financial year, according to an exchange filing.
“The established business is sizeable enough, and the expanded business is only about 5-6 percent, this can be easily absorbed,” Chandramogan said. “There is going to be a challenge in just getting the product into the market.”
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