Although he could not divulge finer details of the investments since those plans are yet to be officially concluded, Kenya Dairy Board Managing Director Machira Gichohi told reporters on Wednesday that the four processors are keen to set up in areas that produce a lot of high quality milk.
“The processors are about to open up their facilities in the country and that is a basis to show that the dairy industry is growing and is one sector that the government needs to support seriously because it can have a very positive effect on many Kenyans,” he stated.
Combined, the four plants in Meru, Nyeri, Nyandarua and Gatundu are eyeing the capacity to process over 200 million litres of milk per day.
Dairy farming is the fastest growing agricultural sub-sector in the country and has over the years continued to record impressive performances in spite of the erratic weather conditions that impact it negatively.
The expansion is largely attributed to the liberalisation of the sector in 1992 which made keeping cows attractive. The end result was the formation of dairy cooperatives that have mushroomed in the milk producing areas and helped to economically transform people’s lives.
As at December 2011 for instance, the sector produced 5.1 billion litres of milk out of which 555 million litres were processed. This represents a 240 percent increase in processed milk since 2002.
Gichohi disclosed that they are embarking on an aggressive marketing campaign that will help them export local dairy products to more countries especially in West Africa and the Middle East.
A marketing mission will be dispatched to the Middle East in the next two weeks while another will be sent to South Sudan. The government also plans to exploit the inroads made by national carrier Kenya Airways in West Africa to try and capture that market.
“Senegal, Nigeria, Ghana and Liberia usually import a lot of milk products from Europe but we want to follow Kenya Airways and ensure that we sell our products in all the destinations they operate,” the MD said of their strategy.
However, the Board is also looking to tap into the local market where huge potential still abound. This they plan to do with the launch of a revamped school milk program through which conservative figures show four million litres of milk would be consumed per day.
In recognition that the program has to be viable and sustainable, the Board is working with various stakeholders to ensure that processors for instance supply the milk directly to the schools.
A pilot project, which has so far seen 164 schools subscribe to the program, with a 250ml packet of milk sold at Sh12, has already confirmed the viability of this program which is due to be officially rolled out in the next few weeks.
“We have suggested an independent body called the ‘Kenya School Milk Trust Fund’ which will mobilise resources that can be used to supplement the milk that will be sold directly to the schools,” Gichohi revealed.
With about four million litres of milk per day likely to be consumed by a large percentage of the eight million school-going children, the sector will have to devise ways of raising production to meet this demand.
For this reason, Livestock Minister Mohammed Kuti challenged the industry to address the imbalances that exist in the value-chain and ensure that the interests of all stakeholders from the farmers through to the consumers are taken care of.
“We need an organisation where the primary producer, the processor and the consumers are represented to determine what is everybody’s ‘take-home’,” Kuti emphasised.
Currently, the system encourages the proliferation of middlemen who in some parts of the country take over 60 per cent of their daily milk collection.
Besides threatening the survival of these firms, the disparity has provided a breeding ground for the informal sector to thrive as farmers prefer to sell their product to these businessmen who sometimes are willing to pay more to commodity with the hope of recovering the cost from the onward sale to major hotels.