The company can increase production on its existing facilities by another 25,000 to 50,000 litres. Industrial Development Bank of India (IDBI) is investing Rs 9 crore for the expansion outlay, 80 per cent of which will go for plant and machinery. On the milk procurement front, the company has an established relationship with 18,000 farmers.

On account of the company's presence in the segment for the last few years, it would not have problems in milk procurement, said Hatsun chairman and managing director RG Chandramogan. Besides the company has the licence to procure the same from adjoining districts as well. The company was the first to introduce pathogen free milk in the country (which could be consumed straight off the satchet). It is planning one more technology improvement - reduce all unwanted smells (such as those emanating from milk cans) to make the product more appealing. Hatsun Agro will also be commissioning its milk processing plant in Belgaum, Karnataka in July having a capacity of 75,000 litres per day. This would take the brand `Arokya' milk outside of Tamil Nadu to another state. Initially Hatsun will sell standardised milk. It will expand operations in the field of toned milk if the market conditions are appropriate. Hatsun has introduced the milk khoa in 200 gm pack, which is currently being test marketed.

On the ice-cream front, the company is planning to penetrate into the interiors of Karnataka and Andhra Pradesh by widening its distribution network.