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Paras Dairy Case Study- Smarter Products, Healthier Lives

Paras Dairy’s main ideology is that milk should taste just like milk- pure and simple without any adulteration. Quality is believed to be a dynamic process which requires continuous monitoring and up-gradation. That’s why it’s the company’s constant endeavour to make quality an integral part of the entire value chain rather than the endpoint.

The Principle that “What you give to the universe comes back to you”, having this quote in mind Ch. Ved Ram Nagar led to the emergence of Paras Dairy long back in 1960.  The Rs 250-crore, New Delhi-based Paras group, known traditionally for the Paras brand of milk and milk products, is foraying aggressively into areas that will pit itself directly against the major players in the field. For example, with the launch of packaged curd, it will be in competition with others like Mother Dairy, Amul and Nestle. Milk gets its unique, great taste from dedication to monitoring quality, special care, and attention to detail in the processing and packaging steps of production. Through careful processing and packaging, the company has been able to retain the great taste. It’s a lifelong commitment to quality and service.

Paras Dairy has built a bigger, better facility, expanded its product line and opened retail stores.  Paras Dairy’s main ideology is that milk should taste just like milk- pure and simple without any adulteration. Quality is believed to be a dynamic process which requires continuous monitoring and up-gradation. That’s why it’s the company’s constant endeavour to make quality an integral part of the entire value chain rather than the endpoint.

Background

PARAS’ history manifests back to 1960 when the procurement of milk commenced with 60 Liters of milk. The only intrinsic that worked right from day one is the quality, which got strengthened day by day. Ch. Ved Ram, the founder and promoter of Paras Dairy is one of the epicures in the dairy farm industry. Ved Ram & Sons started as a partnership company in April 1986. The first unit was established in 1987 under the company’s name VRS Foods Limited and since then it is progressing with the rapidly changing technology, production units are well armed with the latest equipment. These facilities enable the firm to serve the needs of the clients by selling over 2,50,000 litres of milk per day in Delhi Metro.

Paras Network

At the heart of the entire network of Paras are hundreds of Village level collection centres covering 5400 villages across Western U.P., Haryana, Rajasthan, Maharashtra and Gujarat from where the milk is collected every day. The farmers not only get financial help but also get support in buying cattle, feed, providing veterinary services and other infrastructural provision. The trust of the farmers has grown stronger and so has the network. There are continuous monitoring and up-gradation of quality. The stress, therefore, is on ensuring sanitation and hygiene right from the village level. That’s the reason why every Village level collection centre is equipped for field testing, efficient chilling and speedy transport to processing and manufacturing facilities. The large manufacturing capacity at 7 different locations across most part of India is backed by an impressive distribution network, to ensure that Paras products find their way to every household in India.

The Values which the Organization lives by are:- Trust, Opinion, Commitment, Integrity, Growth Orientation, Quality, Value for Money, Customer Orientation.

Achieving Milestone

In 1960, Late chairman Ch. Ved Ram Nagar started milk collection from 60 litres of milk/day. In 1980, Ved Ram Veer Singh was thinking to incorporate in building a Partnership firm. In 1984, he started a firm at Gulaothi for selling milk and milk products like ghee, butter, milk powder etc. and then in 1986, Ved Ram & Sons partnership firm incorporated.

Gradually in 1987, Sahibabad plant was set up for liquid milk processing with a capacity of 3,00,000 litres of Milk/day in NCR. In 1992, another plant at Gulaothi was installed to manufacture SMP (Skimmed Milk Powder) and Ghee.

In around 1996, VRS Foods Limited settled up to take over the running business of Ved Ram Veer Singh. Accordingly, in 1998, Gulaothi plants capacity was enhanced to 2,50,000 ltrs/day.

In the year 1999, a new plant at Sahibabad was established for manufacturing of Casein and Demineralized Whey Powder with a capacity of 8 lakh litres. Then in 2001, Gulaothi’s capacity was further enhanced from 2.5 lakh litres of milk/day to 4 lakh litres of milk/day.

Moving towards the 21st Century

Later in 2003, the UHT plant was established at Sahibabad. Then, in the year 2004, another plant at Gwalior (Manipur) was set up for manufacturing SMP and Desi Ghee. In the year 2006, there were additions in the capacity of casein to 12 lakh litres of milk/day at Sahibabad and setting up of Lactose Plant at Gulaothi. Sahibabad plant liquid milk processing capacity further enhanced up to 6 LLPD of milk per day. In the year, 2007 a new plant at Sandila was set up with a capacity of 4lakh litres of milk/day for manufacturing Ghee and SMP.

Furthermore, in 2008, there was a conversion of Partnership firm M/s Ved Ram & Sons into a joint-stock company namely Ved Ram & Sons Pvt. Ltd. on 15th May 2007. Prior to this, in 2008, Amalgamation of VRS Foods Ltd with M/s Ved Ram & Sons Pvt Ltd. through High Court Order dated 15th July 2008 & change of name from M/s Ved Ram & Sons Pvt. Ltd. on 19th September 2008 through High Court order issued and resulted into Conversion from Private Limited to Limited i.e conversion of VRS Foods Pvt. Ltd. into VRS Foods Ltd. on 26th September 2008.

Recent Advancements

As yet in 2008 Enhancement of capacity of Malanpur plant was made to 10 lakh litres/day for additional product mix of Casein and whey Powder. Further back in 2009, Lucknow “MPD” Milk Project was started with the opening of 14 New Collection Centres.

Ahead in 2011, a new product introduced ‘Flavoured Milk in Four Flavours’. SAP implementation continued to be accorded high priority during the year and GOLIVE from 1st July 2011. In 2012, the brand diversified its brand by launching milk in Mumbai, Kanpur and Lucknow. In 2014, Cow ghee was also launched.

Furthermore, in 2016, a new plant set up at Ahmednagar, Maharashtra for producing Ghee, Butter and SMP took place. In 2017, Paras introduced Milk Shakes in 4 different delicious ice-cream flavours.

Paras Dairy Products

  • Fully Cream Milk
  • Toned Milk
  • Double Toned Milk
  • Skimmed Milk
  • Tea Special Milk
  • Pasteurized Milk
  • UHT Milk
  • Flavoured Milk
  • Dahi Cup
  • Dahi Pouch
  • Chaach
  • Desi Ghee
  • Cow Ghee
  • Paneer
  • Chhena Kheer
  • Dairy Whitener
  • Milk Shake

Synergistic Growth          

                                                 
Realising the growing strength in both milk and milk products, Paras Dairy set up another processing plant in Gulaothi in Uttar Pradesh in addition to its plant in Sahibabad in 1992. From distributing 10,000 litres of milk in 1987, the company now sells 2.5 lakh litres every day. While the flagship Ved Ram & Sons’, had total sales of Rs175 crore and an export of 32 crores in 2001-02, the other group company VRS Foods had a turnover of Rs 70 Crore and an export of 32 crores during the same period. The company exports dairy products to USA, Europe, Egypt, Bangladesh and other countries in the Asia Pacific region. While milk is mostly sold in Delhi and surrounding regions like Ghaziabad, Haridwar, Rishikesh, Panipat, Sonipat etc milk products are sold throughout India and internationally.

The brothers in Paras group believe that what co-operatives did in western India private players like the Paras Dairy have done in northern India. The per capita per day availability of milk has risen from 160 grams in the pre-operation flood days to 220 grams now and this was largely brought about the Amul and other co-operative in western India and players like us in the northern region, says Rajinder Singh, managing director, VRS Foods and also the eldest of the six brothers.

The Paras group has dedicated milk gwalas in villages for collection and dedicated retail stores to distribute. While the company helps the village suppliers in obtaining loans, by supplying fodder and through vaccinating the animals it plans to supply refrigerators to its distributors, who open their shops at 5.30 in the morning to supply milk, to keep milk in good condition. Mr Rajinder Singh adds that Paras has completed the whole journey alone without any aid of the government or any co-operative.

Paras Healthcare

With seven super-speciality hospitals, Paras Healthcare is looking beyond urban India to provide specialist healthcare. For over seven decades, Ved Ram Nagar worked on the principle that what you give to the universe comes back to you. Having started Paras Dairy in 1960, Ved Ram wanted to do something that would help people, which led to the idea for a healthcare facility that was accessible and affordable. Thus, Paras Healthcare was born. Ved Ram offered his son Dr Dharminder Nagar 2.25 acre land in Gurgaon to set up a super speciality hospital. The first Paras Healthcare hospital was started in 2006 and was followed by others in Patna, Noida and Darbhanga. Dharminder says, “ Paras Healthcare currently provides specialised medical care to over 350,000 patients each year.

We perform more than 1,000 complex neurosurgeries, which is at par with well-established governmental hospitals.” The hospital claims it treats over 10,000 cardiac patients and performs more than 2,600 cardiac surgeries and catheterization lab interventions such as angioplasty and pacemaker implantations each year. The hospital also performs more than 30,000 dialysis procedures and 650 joint replacement surgeries annually.  “We have more than 150 specialist doctors, 200 support doctors, more than 2,000 nurses and paramedical staff along with more than 1,000 support and administration staff,” he says.

Speaking on Paras Healthcare’s future plans, Dharminder says, “Our focus is in areas beyond 50 km of the borders of the metropolitan cities. Five years from now, Paras Healthcare projects to have the bed strength of 1,500. This year we expect to have the group revenue cross Rs 400 crore, and that should become Rs 1000 crores to Rs 1200 crores within the next five years with additional beds, services and hospitals being.”

Future Vision

The group has an assembly of products for future launch. For instance, the company wants to introduce flavoured curd, once the marketing of Paras Dahi stabilises. Then they also want to diversify their spectrum into lassi, sweets and confectionery into value-added, tetra-packed and bottled milk in various categories like toned, low fat and full cream and in ice creams and baby foods. Mr Rajinder Singh stated in an interview that, “We have a plan to double the turnover in 3-4 years time growing both through diversification and intensification of existing products”. Adding to the statement,  Mr Gajinder Kumar said, “We want to be a leader in dairy and food sector covering potential areas in every state through improved brand equity. The group has thrust on both domestic and international markets for growth.”

From its self- effacing beginnings in 1960, the Paras group has come a long way. From selling 60 litres of milk per day it now sells 2.5 lakh litre every day besides, other dairy products. Besides, Mr Ved Ram’s entrepreneurial skills the group had another asset base: his six sons, three of whom are active in the milk and dairy businesses. The three brothers spend the forenoon visiting the plants and the afternoon handling papers in the corporate office, every day. This is despite the fact that they have 30 professionals at higher levels. But despite all this, the real test of growth will be its ability in time to survive the scorching competition.

Read: Amul Case Study-Brand Diversification

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