Kenya milk processor in Sh1.7b venture

April 8, 2010
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, NAIROBI, Kenya, Apr 8 – Milk processor Brookside Dairy has announced plans to set up a Sh1.17 billion milk powder plant to boost the company’s processing and storage capacity.

The company’s General Manager for Milk Procurement and Extension Services John Gethi said the facility would be up within the next 18 to 24 months and will improve the company’s milk production by an additional 200,000 litres per day.

“The machinery for the powder plant had already been ordered and will cost some Sh463.8 million, with the remaining Sh695.7 million being invested in other facilities which will be part of the plant,” said the manager.

Kenya has in the past few months seen milk production go up by 30 percent exposing the country’s lack of storage and processing capacity.

In what is an indication that there is still a glut in the market, Mr Gethi said they were currently holding in stock more than 22 million litres of processed milk valued at Sh800 million.

The industry has warned that the glut is likely to get worse with the onset of the long rains which calls for the implementation of urgent intervention measures. The government has also been urged to speed up the process of setting up strategic milk reserves and explore possibilities of reintroducing the school milk programme where the excess product can be channelled.

Brookside’s powder plant however is expected to contribute in mopping up the surplus stock in the market.

Mr Gethi was accompanied by the company’s Group General Manager David Heath during the inauguration of their new Sh20 million milk processing line at their Nairobi Industrial area plant which has a capacity for 200,000 litres daily and will be used to package milk in sachets.

“This new line is aimed at increasing our processing capacity as a short term solution to the current milk glut,” he said adding that this was part of the company’s ongoing strategy to expand its capacity.

The additional line now pushes the company’s daily capacity to just over 0.8 million litres per day, further confirming Brookside Dairy as the largest dairy company in East and Central Africa.

Besides the expansion programs, the company has also been pursuing other strategies such as mergers and acquisitions with rival processors, to ensure that it effectively serves the market.

Brookside in February completed a merger with Spin Knit Dairy; a move that it expects will position the company competitively in the dairy industry.

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