Cargills forms joint venture company with India’s NDDB and Amul

• Cargills will hold 49 percent shareholding in the joint venture company
• Speculation rife that govt. considering divesting NLDB and Milco to Cargills-Indian JV

Cargills (Ceylon) PLC yesterday said it has formed a joint venture company with National Dairy Development Board of India (NDDB) and Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF), which markets the famous Amul brand.

A stock market filing by Cargills said it will hold 49 percent shareholding in the joint venture company.
The formation of the joint venture is the result of a joint declaration of intent (JDI) signed in July 2023 between the Department of Animal Husbandry and Dairying of the Ministry of Fisheries, 

Animal Husbandry and Dairying of the Republic of India, and the Ministry of Agriculture of Sri Lanka for the cooperation in the field of animal husbandry and dairying.

The JDI envisaged the formation of a joint venture company to implement the objective set out in the JDI with the participation of the relevant entities from India and Sri Lanka.

Local media reports quoting unnamed sources reported that the Sri Lankan government was considering the divestment of National Livestock Development Board (NLDB) and Milco (Pvt)Ltd. to an Indian-Cargills joint venture.

One media report said the move had been approved by the Cabinet of Ministers and the valuation process of NLDB and Milco has already begun.

Following the divestiture, the government is expected to retain the ‘golden share’ without rights for dividends and liabilities, and will have no control over the affairs of the two companies, the media report said.
It also said the JV company is expected to invest US$ 35 million in the two entities over the next 10 years.
Cargills remains the largest value-added dairy company and the largest private sector milk collector in Sri Lanka. Its ‘Magic’ and ‘Kotmale’ have been able transform the Sri Lankan dairy industry and become leading national brands.

According to President Ranil Wickremesinghe’s office, the agreement signing of the joint venture was carried in the presence of India’s Minister of External Affairs, Dr. S. Jaishankar, who flew to Colombo this week for the Indian Ocean Rim Association (IORA) 23rd annual meeting.

“The primary objective of this new project is to increase milk production by 53 percent within the first five years and achieve self-sufficiency in milk production for Sri Lanka within 15 years. As part of this endeavour, it is anticipated that approximately 200,000 local farmers will be empowered through the provision of facilities such as high-quality medicine, animal nutrition and technical support,” the President’s office said.