The Magnum Ice Cream Company outlines capacity expansion and cold-chain investments in India even as profitability remains weak due to infrastructure spending
India’s growing demand for ice cream is driving capacity expansion plans at Unilever’s demerged unit, The Magnum Ice Cream Company, which intends to increase its manufacturing base in the country from one plant to four.
The plan was outlined by chief executive Peter ter Kulve during an investor call, following changes made to the India business, including a shift to dairy-based products, revised pricing, and expanded cold-chain infrastructure.
“Profitability is still not very good,” ter Kulve told investors, but added that the company needs “to make a supply chain intervention because historically we had one factory and with our current growth rates, we need four factories, and we are working on that.”
Margins remain under pressure despite higher sales, as the company continues to invest in supply chain systems and freezer cabinets in a market where cold-chain infrastructure is still developing.
“Unilever traditionally did not invest in cabinets nor in distributors with cold stores. We basically brought our classic Turkish distribution model to India, and we started to invest behind it,” ter Kulve said.
He said returns are expected to improve as utilisation levels increase and premium products gain share. “At a certain moment, profitability will come,” he said.
India, already the largest dairy market globally, is being positioned by the company as a potential leading ice cream market, supported by rising incomes, urbanisation, and premium consumption trends.
The domestic ice cream market is estimated at about USD 5 billion and is led by Amul.
Over the past year, the company, which owns Magnum and Ben & Jerry’s, has made changes across its India operations, including product reformulation, pricing adjustments, cold-chain expansion, and management restructuring.
Its portfolio has been shifted from vegetable-fat frozen desserts to dairy-based ice creams, alongside product upgrades and pricing aligned with mainstream consumption categories.
Ter Kulve said approximately 50,000 ice cream cabinets were installed and activated across India within two months, contributing to volume growth. Magnum sales in the country are growing at over 50 per cent, supported by demand for premium products.
The expansion follows Unilever’s decision to separate its global ice cream business to provide operational flexibility in key markets.
As part of this strategy, Magnum acquired a 61.9 per cent stake in Kwality Wall’s, which remains listed and operates as a subsidiary.
A mandatory open offer to public shareholders is underway and could raise the company’s holding beyond 75 per cent. If that level is crossed, it will be required to reduce its stake within a year to comply with India’s minimum public shareholding requirements.
