₹2,973-crore dairy development plan aims to lift procurement to 52 lakh kg and processing capacity to 63.3 lakh litres per day in five years
BHOPAL — Madhya Pradesh’s Sanchi dairy cooperative is preparing for a major expansion, with the state government setting a five-year target to increase daily milk procurement more than fourfold to 52 lakh kg and raise packet milk sales fivefold to 35 lakh litres.
The ambitious targets form part of a ₹2,973-crore dairy development plan aimed at transforming Sanchi into a much larger dairy-processing and marketing network across Madhya Pradesh.
The expansion comes after the National Dairy Development Board (NDDB) took over management of Sanchi under an MoU with the Madhya Pradesh State Cooperative Dairy Federation (MPCDF) signed last year.
Milk procurement target rises from 12 lakh kg to 52 lakh kg
Under the cabinet-approved roadmap, daily milk procurement through Sanchi’s cooperative network is targeted to rise from the current 12 lakh kg to 52 lakh kg within five years.
That represents an increase of more than four times.
The scale-up will require a substantial expansion of the cooperative’s farmer network. Sanchi plans to extend its cooperative presence to nearly 19,000 additional villages, creating a wider procurement base for the increased milk volumes.
The expansion is expected to strengthen the connection between dairy farmers and organised milk markets while increasing the quantity of milk available for processing.
Processing capacity to nearly quadruple
Sanchi’s processing infrastructure is also set for a major expansion.
Daily processing capacity is targeted to increase from approximately 17.8 lakh litres to 63.3 lakh litres over the next five years.
The first phase is expected to take capacity to around 32.5 lakh litres per day, followed by further expansion as milk procurement increases.
The five new dairy plants planned under the programme will be located in:
- Bhopal
- Ujjain
- Sagar
- Jabalpur
- Gwalior
The phased approach is intended to ensure that processing infrastructure keeps pace with the rapid increase in milk procurement.
Five-fold increase in packet milk sales
Sanchi also aims to increase daily packet-milk sales from the current 7 lakh litres to 35 lakh litres.
To achieve this, the cooperative may look beyond Madhya Pradesh and explore adjoining states where additional demand exists.
Sanchi is an established and prominent brand in Madhya Pradesh, but reaching the desired scale will require much greater effort. The target is difficult, but not impossible. In future, we may enter adjoining states wherever there is demand for milk,” said Jaidev Biswas, managing director of the MP State Cooperative Dairy Federation
The strategy will include expansion of retail outlets, stronger distribution infrastructure and increased marketing activity.
₹332 crore earmarked for marketing and dairy products
The plan allocates ₹332 crore for marketing and milk products, highlighting the importance of demand creation alongside increased production and processing.
Also Read: Bihar Dairy Unions Must Focus on Value-Added Products: NDDB Chief
Sanchi intends to expand its outlet network and strengthen distribution while also increasing sales of value-added dairy products.
This is particularly important because a rapid rise in milk procurement without corresponding market expansion could create surplus-milk management challenges.
The cooperative could therefore use a combination of liquid milk, value-added products, institutional sales and inter-state markets to absorb the additional production.
Third-party processing may bridge capacity gap
The rapid increase in procurement could temporarily outpace Sanchi’s own processing infrastructure.
To manage this transition, the federation is considering the use of third-party dairy plants to process surplus milk until the new Sanchi facilities become operational.
This could allow the cooperative to expand procurement without having to wait for all planned processing infrastructure to be completed.
From an operational perspective, such a strategy could help maintain milk utilisation while new plants are constructed and commissioned in phases.
Government pushes dairy as rural-growth engine
The expansion plan aligns with Madhya Pradesh Chief Minister Mohan Yadav’s broader push to establish the state as a major dairy hub.
The state is promoting cattle rearing and milk production through incentives for livestock purchases and other measures aimed at encouraging rural dairy farming.
The government is also working toward providing cooperative-affiliated dairy farmers with a direct milk bonus of around ₹5 per litre, which could improve the attractiveness of organised milk procurement.
Higher procurement prices and stronger cooperative infrastructure could encourage farmers to increase herd productivity and participate more actively in the organised dairy sector.
From regional dairy brand to larger dairy network
The scale of the Sanchi expansion is significant because it seeks to simultaneously address the three major components of dairy-sector growth:
Increasing procurement from 12 lakh kg to 52 lakh kg a day will require thousands of additional collection points and stronger farmer participation.
At the same time, processing capacity must expand from 17.8 lakh litres to 63.3 lakh litres per day, while packet-milk sales need to grow from 7 lakh to 35 lakh litres.
The success of the strategy will therefore depend not only on infrastructure investment but also on farmer productivity, milk quality, cold-chain capacity, distribution efficiency, brand strength and value-added product development.
The bigger picture
Sanchi’s five-year roadmap represents one of the more aggressive expansion plans among state-linked dairy cooperatives.
If implemented successfully, the programme could transform Sanchi from a predominantly Madhya Pradesh-focused dairy brand into a much larger regional dairy player.
The real test, however, will be whether procurement, processing and consumer demand can grow together. With NDDB now involved in management, five new plants planned and nearly 19,000 villages targeted for cooperative expansion, Sanchi is effectively attempting to build a much larger milk-to-market ecosystem around Madhya Pradesh’s dairy farmers.
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