An expansion is also being planned for the existing Salem plant from 1.3 lakh litres to 3 lakh litres, though the company is yet to receive the licence for this additional capacity.

The company is also making a foray into dairy products such as white butter and a milk-based sweet. All these projects are expected to cost Rs 12 crore. The company has already got Rs 7 crore from IDBI. The remaining Rs 5 crore is expected shortly. Civil work is to be started in October and the project is expected to go on stream in June 2000.

Speaking to The Financial Express, Hatsun joint manging director KS Thanarajan said that the Belgaum area was surplus in buffalo milk and this was currently being sold in Goa and Maharashtra.

Hatsun has established a good management and distribution network withits existing brand of standardised milk Arokya and this expertise is to be encashed in Karnataka where the state cooperatives offer only toned milk. The milk will be supplied more along the coastal belt of Karnataka where milk supplies are poor.