This move to manufacture locally is part of Danone’s “Make in India” growth strategy, as it plans to use its manufacturing facility for products to export in neighbouring countries such as Nepal, Bangladesh, and Sri Lanka as well.
Danone also said it would unveil 10 more new products this year to support the company’s target of doubling revenue in India by 2020.
Rodrigo Lima, managing director of Danone India, said this plan would aggressively strengthen its product portfolio. Presently, Danone India offers flavoured yogurt and fresh milk in the dairy segment, while its nutrition brands include Protinex, Dexolac and Farex baby food.
Set also for launch this year is Neocate, a hypoallergenic medical nutrition product for infants and children, plus other milk products for children with inborn errors of metabolism, a rare genetic disorder where the body cannot turn food properly into energy.
Reports said the Neocate launch was delayed due to regulatory hurdles, and it was only in August last year when India’s food regulator Food safety and Standards Authority of India (FSSAI) allowed imports of special nutrition items for children.
The Aptamil infant formula brand is popular in Asian countries. Last year, to control the distribution flow of Aptamil in China, Danone forged a deal with online retailer windeln.de, to make the product available directly from its Chinese website and via its Tmall global flagship store.
This came after reports in Germany claimed Chinese shoppers were emptying supermarket shelves to sell via ecommerce in their homeland.
Chinese demand for Australian and European infant formula such as Aptamil has grown considerably in China due to the 2008 toxic melamine scandal, where this harmful substance was found in a locally produced infant formula brand.
However, the increased demand in China caused shortages in other countries. Chinese ‘daigou’ or professional shoppers, empty supermarket shelves outside China to sell Aptamil at inflated prices in China. This caused Danone to re-look its distribution chain for the infant formula, as customers from other countries complained of the shortage.