Marketing crisis for Kenyan milk farmers

February 12, 2010
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, NAIROBI, Kenya Feb 12 – The Former Managing Director of the New KCC Francis Mwangi has faulted the marketing strategy of the current management, saying it is to blame for the milk glut in the country.

Mr Mwangi said claims that the company’s capacity was overstretched were not genuine since it had handled higher volumes of milk. He said to address the crisis, the company needs to adopt a more proactive and ambitious approach to market the products in and out of the country.

“I expect someone to be talking from the Middle East after clinching a deal not from Industrial Area (company headquarters),” he said on Friday.

Owing to increased production, farmers across the country have been forced to pour thousands of litres if milk as the company and other private creameries turn them down.

“People should go out of their way to market the produce. It is sad to note that you might walk into some estates and find that there is no milk in a kiosk,” he regretted.

New KCC has closed some of its depots and farmers have been pouring thousands of litres of milk claiming production has outweighed processing capacity.

Over the last one month the company reduced its prices to Sh20 per litre down from Sh26. Dairy farmers especially in Rift Valley and Central provinces have incurred heavy losses in the last month.

“Since the crisis started has someone gone out of the country to negotiate with those people who used to import our milk even if it is on reduced profit margins?” the former MD wondered.

Cooperatives Development Minister Joseph Nyagah has in the last few days accused Mr Mwangi and the former board of failing to plan for the production rise.

Mr Mwangi, who had become a darling of the farmers for his turnaround strategy, left the company late last year after a three year stint.

Mr Nyagah declined to heed a board recommendation to renew his contract after a successful tenure.

When at the helm, Mr Mwangi managed to transform the public company from a loss making entity to an annual profit of Sh500 million. He grew turnover sales by over 80 percent and brought the company from being the third to the first in market share at 40 percent.

Mr Nyagah however claimed the former MD had outdone his potential and needed to be replaced with a more proactive person maintaining that the company’s potential was worth over Sh1 billion in profits and Mr Mwangi had failed to deliver.

But the Minister has been in the spotlight for the current tribulations of the farmers.

“Give me two weeks there and I will sort out that problem. For me I would actually want to see more milk coming in so that I go out there and grow the market,” Mr Mwangi asserted.
 

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