AR Dairy, established in 1995 and based in Dindigul, Tamil Nadu, transitioned from liquid oxygen production to dairy manufacturing in 1998. The company produces various dairy products, including milk and ghee, under the brands ‘Raj’ and ‘Milky Choice.’ However, as of September 2024, AR Dairy is facing political and legal challenges regarding allegations of animal fat in ghee supplied for the Tirupati laddu. Despite claims of product safety and a substantial market presence, the controversies have raised concerns about food safety standards and the company’s financial stability. Leadership by Rajasekharan R and others positions the company as a significant player in the Tamil Nadu dairy sector, but its future hinges on navigating these ongoing issues.
Background
AR Dairy, originally founded as Sarayu Cryogenics in 1995 for liquid oxygen production, transitioned to dairy manufacturing in 1998 due to market fluctuations. Based in Dindigul, Tamil Nadu, the company has since expanded into producing a variety of dairy products, including milk, ghee, yogurt, and flavored milk under the brand names ‘Raj’ and ‘Milky Choice.’
Current Controversies
As of September 2024, AR Dairy is embroiled in political and legal controversies surrounding its supply of ghee to the Tirupati Tirumala Devasthanams (TTD), specifically for use in the famous Tirupati laddu. Allegations have surfaced regarding the use of animal fat in the ghee, leading to investigations by the Central Food Safety Authority (CFSA) and the Indian Food Safety and Standards Authority (FSSAI).
A senior official from AR Dairy has asserted that their ghee is “completely safe” and not contaminated, claiming that they have engaged with the Food Safety Authority to clarify these allegations.
Political Dimensions
The controversy escalated when the Telugu Desham Party (TDP) cited a lab report indicating the presence of animal fat in the ghee supplied for the laddu. This has prompted scrutiny not just of AR Dairy but also of the overall governance of food safety and quality standards within the state.
Financial Status
AR Dairy, despite the controversies, maintains a significant market presence. According to an ICRA report, the company operates a milk processing unit with a capacity of 2.0 lakh liters per day. In the financial year 2022-23, AR Dairy’s revenue ranged between ₹100-500 crore. However, it experienced a decline in net worth by 0.62% and a drop in EBITDA by 21.19%, raising concerns about its financial stability amidst the ongoing scrutiny.
Company Leadership
The company is directed by Rajasekharan R, Suriya Prabha R, and Srinivasan SR, with Rajasekharan R also serving as the Secretary General of the Tamil Nadu Dairy Association and President of the Tamil Nadu Packaged Drinking Water Manufacturers Association. This dual role highlights the company’s influential position within the dairy sector in Tamil Nadu.
The ongoing controversies surrounding AR Dairy have significant implications for the dairy industry in the region, particularly regarding food safety standards and consumer trust. As investigations continue, the company’s ability to navigate these challenges will be crucial for its reputation and future in the dairy market.
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