Parag Milk Foods to invest US$12M to expand paneer capacity

INDIA – Parag Milk Foods Ltd has planned to invest about US$12 million to expand its paneer manufacturing capacity as demand for branded and value-added dairy products continues to grow in India.

The company plans to increase its overall paneer production capacity from the existing 20 MT per day to 80 MT per day through expansions at its Manchar facility in Maharashtra and Palamaner facility in Andhra Pradesh.

The investment is part of Parag Milk Foods’ strategy to increase its presence in high-growth value-added dairy categories and strengthen distribution of its flagship products across India.

It plans to add 60 MT per day of additional paneer manufacturing capacity, effectively quadrupling its current capacity.

The expansion is expected to give the company greater production scale and support its efforts to reach consumers across regions and sales channels.

Paneer is one of India’s major dairy categories, with demand increasingly shifting toward branded and organised products.

According to the company, organised players currently account for only around 5–6% of the overall paneer category.

Growing consumer interest in consistent quality, packaging, convenience and standardised products is contributing to opportunities for organised dairy companies.

The expanded manufacturing facilities will produce both standard paneer and high-protein variants. The move reflects increasing interest in value-added and nutrition-focused dairy products.

Parag said paneer has been one of its flagship categories, recording annual growth of around 28% over the last two years.

Value-added products account for more than 90% of the company’s turnover, making the expansion strategically significant for its broader portfolio.

The company plans to use its manufacturing capabilities and distribution network to increase the availability of branded paneer in markets across the country.

Parag’s investment builds on its technology-focused approach to fresh paneer manufacturing. The company’s branded paneer has a shelf life of up to 75 days without preservatives, according to the company, supported by its manufacturing and packaging technology.

Extended shelf life is particularly important for paneer distribution because it lets packaged products travel longer distances and support supply across geographically dispersed markets.

The company intends to combine its production expansion with packaging capabilities to distribute paneer through multiple channels while maintaining the freshness and quality expected by consumers.

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