From bankruptcy to Rs 225 cr business! Know the story behind Osam Dairy

When three friends from Jharkhand`s Ranchi ditched their well-paying corporate jobs, excellent career prospects and a steady roof above, to start a dairy farm, everyone warned them about the precarity of owning a challenging business.

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While some said that their venture would never take off, others advised them to go back to their cushy jobs as stepping out of their comfort zones seemed like chasing a mirage. However, despite all the criticism and obstacles, the three friends, followed their heart and decided to set out on a new entrepreneurial journey.

A fourth friend, who worked at an Fast-Moving Consumer Goods (FMCG) company, also joined them later.

As everyone said, the road ahead was filled with obstacles in the initial years. In the first month itself, they lost half their capital and were on the verge of bankruptcy twice. But determined to do something different, they raised money at the right time to save their company.

This is the story of four friends from Jharkhand, whose company `Osam Dairy` milked a turnover of Rs 225 crore in 10 years.

The company will complete a decade in April and after expanding business across Bihar, Jharkhand, it now plans to spread its footprint across West Bengal.

At least 450 employees work at Osam Dairy today. Apart from this, 1,000 dairy farmers are indirectly related to the company.

The company procures milk regularly from about 20,000 livestock farmers and distributes their products via 250 distributors and over 8,000 retailers across Bihar and Jharkhand. This way, around 30,000 people work for Osam Dairy.

The founders -- Abhinav Shah, Rakesh Sharma, Abhishek Raj and Harsh Thakkar -- have been friends since college. They raised a capital of Rs one crore by combining their savings from their nine-to-five job.

In April 2012, they set up their first dairy farm on one acre land in Ormanjhi village near Ranchi. To learn the technicalities of dairy farming, Abhinav even moved to Kanpur to get a month`s training.

Talking about his groundbreaking idea, Company Director, Abhinav, told IANS: "Initially we bought 40 cows of Holstein Friesian breed from Khanna in Punjab. But the very first month after starting work, we faced a huge setback. At least 26 out of 40 cows died from infection. However, we did not let that affect us.

"After this, we raised Rs 50 lakh to work on our backup plan next month. We bought cows from Bihar and began distributing door-to-door milk. Initially, we had a target to produce 300 litres of milk daily, which then increased to 1,000 lts in six months.

"Earlier, our company was called `Raya` and seven to eight people were hired to deliver door-to-door milk across three areas of Ranchi. The first year turnover was around Rs 26 lakh.

"In November 2013, we received funding from a finance company and by March 2015, we had set up our first milk chilling plant at Barbigha in Bihar. With this, cattle farmers and milkmen from 40 villages, got associated with us. Then two months later, in May, the first processing and packaging plant with a capacity of 50,000 litres was set up at Patratu, which is 35 kms from Ranchi.

"Within a year, we started distributing 25,000 litres of milk in a day and established two processing and packaging plants with a capacity of 80,000 litres at Chandil near Jamshedpur and Arrah district of Bihar."

However, during this time, two of their partners parted ways for personal reasons.

Currently, the company also sells dairy products like curd, buttermilk, paneer (cottage cheese), rabri and peda (milk-based sweets). They are also planning to launch a special product called `Salsa Raita`.

As of today, Osam Dairy sells about 1,20,000 litres of milk and 30,000 litres of its by-products daily. It has also received many awards for entrepreneurship, and their business model is discussed in B-schools across the country.

Sharing the story of their struggle, Abhinav said: "In times of despair, all our family members and friends, including my mother Uma Shah, supported us. My biggest lesson of this decade is that you cannot achieve success overnight, in any field. Failures guide us. Believe in yourself and don`t give up on hard work, because no matter how bad the situation gets, there is always light at the end of the tunnel."