Parag Milk Foods Ltd plans to invest approximately Rs 100 crore to significantly 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 expanded facilities are expected to be commissioned by June 2027 and will manufacture both regular and high-protein paneer. 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.
Paneer Capacity to Quadruple
Parag plans to add 60 MT per day of additional paneer manufacturing capacity, effectively quadrupling its current capacity. The expansion is expected to provide the company with greater production scale and support its efforts to reach consumers across different 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.
Focus on Regular and High-Protein Paneer
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.
Technology Supporting Longer Shelf Life
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 can be particularly important for paneer distribution because it allows packaged products to travel longer distances while supporting 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.
Expanding Distribution Across India
The additional capacity will support Parag’s pan-India distribution strategy. The company plans to make its paneer products more widely available through General Trade, Modern Trade, Quick Commerce, E-commerce and HoReCa channels.
Expanding across these channels could allow the company to reach both household consumers and institutional buyers such as hotels, restaurants and catering businesses.
Greater manufacturing capacity could also help Parag respond to regional demand while improving product availability across different markets.
Strengthening Value-Added Dairy Portfolio
The paneer expansion forms part of Parag Milk Foods’ wider strategy to build scale in value-added dairy products. The company is focusing on innovation, manufacturing efficiency and differentiated products to respond to changing consumer preferences.
The shift from unorganised to organised paneer consumption presents an opportunity for companies that can provide standardised quality, convenient packaging and reliable availability.
Rahul Kumar Srivastava, COO of Parag Milk Foods, said the company plans to add 60 MT per day of capacity, taking total paneer capacity to 80 MT per day. He added that the expansion is intended to strengthen pan-India distribution and increase availability across multiple channels.
Outlook for India’s Paneer Market
The planned investment highlights the growing importance of paneer within India’s value-added dairy segment. As consumers increasingly seek branded, packaged and standardised dairy products, organised manufacturers are expanding their capabilities to meet changing demand.
With its planned investment at Manchar and Palamaner, Parag Milk Foods is positioning itself for higher production volumes and wider distribution of both regular and high-protein paneer.
The expansion is expected to be commissioned by June 2027 and will add substantial manufacturing capacity to the company’s existing paneer operations.