Indian dairy giant Amul is planning to set up an ice cream plant within 18 months in the western city of Pune.

Demand for ice cream across India is growing at 15% to 20% per year, K Rathnam, Amul’s managing director, said. However, costs remain a problem because of weak logistics and cool chain facilities within the country.

The planned facility, which will be Amul’s third ice cream plant, will be well located to service southern Indian markets, Rathnam said. “Pune and surrounding areas such as Bangalore and Goa further south are potentially good markets and we hope to supply these from our proposed new plant,” Rathnam told just-food. Amul’s existing ice cream plants are further north in Virar and in Kolkata in the east of India.

The new plant will cost INR1.2bn (US$17.9m) to build and have a processing capacity of 600,000 litres of milk per day.

Amul,owned by the Gujarat Cooperative Milk Marketing Federation, has an existing facility at Rajgurunagar, 10km from the new plant’s planned location. The existing plant processes milk, butter milk and yogurt. Rathnam said some of its operations would be transferred to the new plant once it opens.

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