Parag Milk Foods Ltd, an Indian dairy and nutrition company, plans to invest around ₹100 crore to quadruple its paneer manufacturing capacity from 20 MT/day to 80 MT/day as it looks to strengthen its position in the fast-growing value-added dairy segment.
The company will add 60 MT/day of new capacity at its facilities in Manchar, Maharashtra, and Palamaner, Andhra Pradesh. The expanded facilities, which will produce both regular and high-protein paneer, are expected to be commissioned by June 2027.
Paneer emerges as key growth category
Paneer is one of Parag Milk Foods’ flagship categories and has grown by 28% over the past two years. The company said value-added products currently contribute more than 90% of its turnover.
The capacity expansion is aimed at supporting the company’s pan-India distribution of both standard and high-protein paneer through general trade, modern trade, quick commerce, ecommerce and HoReCa channels.
Parag said the investment comes as demand shifts gradually from unorganised to organised players, with organised brands currently accounting for only around 5-6% of the paneer market.
Technology to support wider distribution
The company said its technology-led manufacturing and packaging capabilities allow its branded paneer to have a shelf life of up to 75 days without preservatives.
The combination of higher manufacturing capacity and packaging technology is expected to enable the company to transport paneer over longer distances while maintaining freshness and quality.
Parag Milk Foods Ltd COO Rahul Kumar Srivastava said, “Paneer is an important part of the Indian consumer’s diet. We have the manufacturing excellence to maintain the freshness and quality of paneer over an extended period. We are pleased to announce our plan to add 60 MT/day of capacity, taking our overall paneer capacity from 20 MT/day to 80 MT/day.”
He added that the scale-up would allow Parag to expand its pan-India distribution and make its paneer available across multiple channels.
Riding the shift towards organised dairy
The company expects rising consumer preference for branded, packaged and standardised dairy products to support the expansion.
According to an IMARC report cited by the company, the Indian paneer market was valued at ₹73,140 crore in 2025 and is projected to reach ₹2.15 lakh crore by 2034, representing a CAGR of 12.34% between 2026 and 2034.
Growth in the category is being driven by demand for protein-rich foods, greater preference for branded and packaged dairy, expansion of organised retail and the growing reach of ecommerce and quick-commerce platforms.
Parag said the investment is part of its broader strategy to build scale in high-growth value-added dairy categories, strengthen its flagship brands and develop differentiated products through technology and innovation.