Samunnati’s Intervention in Prabhat Dairy

Prabhat Dairy is an integrated milk and dairy products company catering to institutional as well as retail customers. The Company produces fresh, dry, frozen, cultured, and fermented dairy products, including pasteurized milk, flavoured milk and various other milk products. It also provides speciality milk powders, processed and concentrated milk, and ice creams. Founded in 1998, the company has been established as one of the most trusted dairy brands in its category. It is also listed in both NSE and BSE with a turnover of INR 1,411 Cr.

Prabhat Dairy collects around 9-10 lakh litres of milk per day through 31 BMCs (Bulk Milk Cooling Units) against their daily capacity of 17 lakh litres. It has engaged a large number of procurement partners, called “Prabhat Mitras” to coordinate the milk procurement process with milk farmers and registered milk vendors. These procurement partners are involved in educating farmers on cattle breeding, cattle feed and medication, cattle finance and insurance, and delivery and storage of milk at collection centres. They also work closely with several veterinary doctors and para-veterinary workers, called “Pashu Mitras” who assist farmers with cattle medication, deworming, vaccination and other health initiatives.

With an intent to increase the processing efficiency by increasing the number of BMCs and number of farmers associated with it and to expand its business, Prabhat Dairy approached Samunnati.

Samunnati reviewed and assessed the case and approved a credit limit for the overall facility with Prabhat Dairy as the aggregator. The BMCs or farmers who had a good vintage (social capital) and track record of supplying milk (trade capital) with the company, were identified as borrowers. In line with Samunnati’s genetic code, repayment was enabled through deduction at source (DAS). Prabhat Dairy would deduct the loan instalment from the amount payable to the supplier farmers/BMC units. This process has mitigated the risk of no or delayed repayment. Below is the structure designed for Prabhat Dairy by Samunnati.

Post-Samunnati’s intervention, Prabhat Dairy has been able to procure an average of 1.5 lakh litres of additional milk every day. This has enhanced the livelihoods of 30 BMCs and the 3,500 farmers directly and indirectly associated with these BMCs.