Kenya milk processor to boost output

March 15, 2010
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, NAIROBI, Kenya, Mar 15 – New Kenya Co-operative Creameries (New KCC) is set to boost its current production capacity to 700,000 litres a day in the next one month, according to the government.

The increase in capacity comes as the milk processor services its inactive and faulty machinery that have seen it turn away hundreds of farmers from its depots for lack handling capacity.

Cooperatives Development Minister Joseph Nyagah said on Monday that the move would cushion farmers from the effects of a glut, as was the case earlier in the year.

“We have been able to increase the capacity from 400,000 litres per day to about 600,000. I am confident that in the next one month or so that figure can go up to 700,000 litres,” Mr Nyagah said.

The Minister did not however say how much was being spent on the exercise.

It is also aimed at mitigating the amount of milk being thrown away as New KCC lacks storage and processing capacity for the high volume of milk.

The onset of rains towards the later part of 2009 saw processors report a 50 percent rise in daily intakes to 1.7 million litres compared to the 1.1 million before the rains.

Players in the dairy sector have already called for the establishment of a strategic milk reserve that would handle excess milk.

At the same time, Mr Nyagah added that he would look into the abrupt increase in the price of milk, saying he was not aware of latest development.

“I was not aware that the prices had gone up to the consumer but if what you are saying is true then I will go and look into it,” he told reporters.

Consumers have raised concerns over a Sh4 hike in the price of half a litre of milk from an average of Sh24 to Sh28 shillings in retail outlets.

Reached to comment on the issue, industry regulator Kenya Dairy Board (KDB) also said it was also unaware of the developments.

However, a source at KDB who spoke on condition of anonymity since he was not authorised to comment on the issue said there was no regulation on the pricing of milk.

“The market is very liberal. The principle of supply and demand drives it and processors are at liberty to peg whatever price they deem fit,” he said adding that the glut experienced was slowly easing.

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